Shares of One Stop Systems Inc (NASDAQ: OSS) climbed 17.1% on Thursday after the Escondido, California-based company disclosed it had been awarded $10.5 million in new contracts related to the P-8A Poseidon reconnaissance aircraft program.
The contracts, secured from the U.S. Navy and a leading U.S. defense contractor, call for delivery of rugged data storage systems. These products incorporate hot-swappable canisters populated with high-capacity NVMe flash storage and are engineered for use in demanding airborne settings where the P-8A’s C5ISR - Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance and Reconnaissance - mission systems require secure, high-speed capture and transfer of sensor data.
According to the company, the newly announced awards constitute the largest aggregate orders to date tied to the P-8A platform. Management expects the contracts to begin contributing to One Stop Systems’ revenue in 2026 and to continue generating revenue into 2027.
The firm said these latest orders raise its lifetime contracted revenue associated with the P-8A program to more than $65 million in total. Of that sum, in excess of $23 million has been awarded since the start of 2025, underscoring a notable run of business related to this specific platform.
"These latest awards represent the largest aggregate orders to date tied to the P-8A platform and, we believe, further reinforces OSS’s role within this important military program," said Mike Knowles, OSS President and CEO, in the company announcement.
One Stop Systems markets rugged enterprise computing solutions intended for AI and sensor processing use cases. In the instance of the P-8A program, the company’s storage assemblies are presented as components that enable secure, rapid handling of data from the aircraft’s advanced sensor suite while operating in airborne environments that impose significant performance and reliability demands.
Below are condensed takeaways and considerations drawn from the company’s announcement and related financial timing stated by management.
Key takeaways
- OSS reported $10.5 million in new P-8A-related contracts from the U.S. Navy and a major defense prime, prompting a 17.1% share price gain.
- The orders cover rugged NVMe flash storage units with hot-swappable canisters to support C5ISR capabilities on the P-8A Poseidon.
- Lifetime P-8A contracted revenue now exceeds $65 million, with over $23 million awarded since early 2025; the latest awards are expected to impact revenue in 2026 and continue into 2027.
Risks and uncertainties
- Timing of revenue recognition - the company states the contracts are expected to contribute to revenue in 2026 and continue into 2027, leaving near-term revenue impact limited.
- Concentration risk - a substantial portion of disclosed lifetime contracted revenue is tied to the P-8A platform, which concentrates program exposure within the defense and aerospace sector.
- Dependence on defense customers - the awards come via the U.S. Navy and a major defense contractor, indicating that future program continuity depends on ongoing decisions by these customers.