One Stop Systems, Inc. (NASDAQ:OSS) Q1 2022 Results Conference Call May 12, 2022 5:00 PM ET

Company Participants

David Raun - President and Chief Executive Officer

John Morrison - Chief Financial Officer

Jim Ison - Chief Sales and Marketing Officer

Conference Call Participants

Joe Gomes - Noble Capital

David Williams - The Benchmark Company

Brian Kinstlinger - Alliance Global Partners

Scott Searle - ROTH Capital

Max Michaelis - Lake Street Capital

Operator

Good afternoon, and thank you for joining us today to discuss One Stop Systems' Financial Results for the First Quarter Ended March 31, 2022.

With us today are the Company's President and Chief Executive Officer, David Raun, and Chief Financial Officer, John Morrison, as well as the Company's Chief Sales and Marketing Officer, Jim Ison.

Following their remarks, we will open the call for your questions. Then before we conclude today's call, I will provide some important cautions regarding the forward-looking statements made by management during the call.

I would like to remind everyone that the call will be recorded and made available for replay in the Investors section of the Company's website.

Now I would like to turn the call over to OSS' President and CEO, David Raun. Please go ahead, sir.

David Raun

Thank you, Laura. In Q1, the Company continued to make strong financial progress. Revenue grew 28% year-over-year, setting a record for Q1 at $17.1 million. For the second year in a row, we minimized the seasonality from Q4 to Q1 to about 4% as compared to the 30% plus drops in prior years. This strong year-over-year growth included a record first quarter for our top customer in the media and entertainment space as their large gathering business impacted significantly by COVID starts to layer back in on top of their newer virtual product success. Their revenues are now greater than the pre-COVID environment with an expectation that we will see continued growth throughout the year.

Bressner, our European team, also performed exceptionally well, with revenue growth at 37%. The growth increased our gross profit to $5.1 million from $4.4 million, while also pushing our gross margins back over the 30% mark. While revenue increased 28%, our operating expenses increased only 8%. Execution to the plan and the quarterly performance just outlined, increased GAAP net income to $579,000, non-GAAP net income to almost $1 million, and adjusted EBITDA to $1.4 million. All significant improvements over last year, as John will provide additional color on shortly.