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.

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. It seems that there is no one in the industry that has been untouched by the disruption of the critical supply chain, and we are no exception. Long lead times, price increases, supply shortages, higher shipping costs and missed shipments by our suppliers continue to make the business more challenging. Our procurement and our engineering teams have been working closely with our sales team to ensure we anticipate our production needs on a constant basis and if needed, find alternatives or pursue other options to meet our revenue objectives. Fortunately, we have been able to leverage our strong cash, limited debt and positive cash flow position to bring in the right products to support our continued growth. More importantly, we have continued to see an acceleration in multiple verticals within the AI transportable market, further validating our strategy implemented last year, including the development and introduction of more scalable standard products. Our flagship Rigel product, a compact and rugged supercomputer introduced last year, and our recently introduced Centauri storage accelerator have been well received. Although these products have generated interest in multiple AI transportable markets, Centauri was co-defined with multiple autonomous truck partners to help address a need in the fast-growing market. It was only seven weeks ago we provided additional color on the autonomous truck opportunity. Progress in this area includes four confirmed program wins in Q1, bringing the total to five for OSS storage and compute platforms in this developing multibillion-dollar vertical. We are currently shipping products to three of the market leaders, and we hope to expand that number as the year progresses. Thomas Trucking is a perfect example of an excellent market that demands performance without compromise and where we can leverage our superior technology or AI deployed in harsh environments. Before I get into the outlook of the rest of the year and provide additional color on further validation of the AI transport strategy, I'd like to turn the call over to our CFO, John Morrison, who will take us through the financial details for the quarter. Then, our Chief Sales and Marketing Officer, Jim Ison, will provide additional insight into our new product introduction, program wins and building pipeline. John?

Thank you, David, and good afternoon, everyone. Thank you for joining us today. Earlier today, we issued a press release with our financial results for the first quarter ended March 31, 2022. The release is available in the Investor Relations section of our website at onestopsystems.com. As David mentioned, for the first quarter, we reported revenue of $17.1 million, which was up 28% from the prior year period. Our core OSS revenue increased 23% to $10.6 million, representing 62% of current quarterly revenue. With revenue from Bressner, our European subsidiary, increasing 37% to $6.5 million, representing 38% of total quarterly revenue. Gross profit in the first quarter of 2022 increased $708,000 to $5.1 million. The gross margin for our core OSS business sequentially improved from 33.2% in Q4 2021 to 35.7%, but a decrease of 2.2 percentage points from the prior year due to continued growth and success of our media and entertainment customer. Bressner's gross margin percentage sequentially improved from 19.4% in Q4 2021 to 21%, but reduced from 24.9% in the prior year due to exchange rates and increases in material and transportation costs. Overall, gross margins were 30.1% for the quarter, a sequential improvement from 28.3% in Q4 2021, but a 3.2 percentage point decrease compared to the prior year of 33.3%. Much of these changes in margins were primarily attributable to the strength of the Media and Bressner business and due to the timing of shipments to our large military customers. Historically, the predominance of these shipments has occurred in Q3 and Q4 and will be consistent with our shipping schedule for this year. However, in the prior year, there were strong shipments in Q1 2021 due to deferred shipments from Q4 2020. Although the margin percentage is lower, profitability is higher. We are continuing to take action to improve margins through price increases, improved quoting capabilities reflecting real-time parts pricing, manufacturing efficiencies, introduction of higher-value standard products, and management's focus on this company imperative. Quarterly revenues increased 28% with our overall quarterly operating expenses only increasing 8% to $4.5 million. Operating expenses as a percentage of revenue decreased to 26.3% compared to 31.1% in the same year-ago quarter. The marginal increase in operating expenses was primarily due to a return to a more normal business environment with fewer COVID-19 restrictions. As such, the Company has returned to participating in trade shows, business travel, marketing activities and adding certain strategic employee hires. GAAP net income totaled $579,000 or $0.03 per basic and diluted share, increasing from net income of $41,000 or $0.00 per basic and diluted share. Now on a non-GAAP basis, net income was $978,000 or $0.05 per basic and diluted share for the quarter, up from $643,000 or $0.03 per basic and diluted share. Adjusted EBITDA, a non-GAAP metric, was $1.4 million or 8.3% of quarterly revenue as compared to $1.1 million or 8% of quarterly revenue in the prior year. All three of these profitable metrics were company records for the first quarter of the year. Now turning to our balance sheet, on March 31, 2022, cash and cash equivalents totaled $2.2 million with short-term investments of $13.6 million, combining for $15.8 million. This compares to cash and cash equivalents and short-term investments totaling $19.6 million on December 31, 2021. While OSS is cash flow positive, we are purposely putting our strong cash position to work with carefully sought out inventory investments. Cash provides us stability and flexibility to be able to be responsive to changes in our business and to issues imposed by external global economic influences. This completes our financial review. And now I'd like to turn the call over to our Chief Sales and Marketing Officer, Jim Ison. Jim?

Thank you, John, and good afternoon, everyone. In Q1, we generated six new major program wins, including four in autonomous trucking, further validating the value OSS brings to this market. We also added 10 new pending major programs during the quarter, which is the largest increase ever in a single quarter. Six of these 10 opportunities are AI transportable programs for autonomous trucks, military aircraft and maritime applications. For reference, our pending major programs have a 60% or greater expectation of closing. Our current pipeline of pending major programs has expanded to a record 34 with 20 involving AI transportable applications because of our focused efforts on this market. Now turning to our thought leader products, our flagship Rigel edge supercomputer continues to provide pull in autonomous truck and military AI applications, adding opportunities at the high end where according to our customers, only our products have both the AI performance and ability to survive at the edge. To complement our Rigel compute system, we have recently introduced the Centauri rugged storage accelerator designed in lockstep with the needs of our autonomous trucking customers. While an autonomous truck is on the road, vast amounts of data are generated from the numerous sensors deployed around the vehicle, including LiDAR, radar, telemetry and video. This information is analyzed by the autonomous driving system to learn or improve its self-driving capability. Centauri is a rugged storage accelerator system that uses the highest performance PCI Express Gen 4 NVMe memory while providing high capacity in a compact, hot-swappable canister that slides into the Centauri chassis. Centauri connects to an OSS Rugged SDS server in the truck cab via PCI Express Gen 4 and stores AI data. Since Centauri is designed to be remote-mounted in an externally accessible compartment, or the saddle bag of a long-haul autonomous truck, the data canister can be quickly removed, replaced and transported to the truck depot, keeping the truck on the road as much as possible. The previously mentioned products are currently based on Gen 4 PCI Express technology, but we are well underway with the next generation. PCI Express Gen 5 will bring product advancements in 2022 to our core accelerator technology that allows us to bring the latest product to the rugged edge without compromise. PCI Express Gen 5 doubles the bandwidth of our current leading-edge Gen 4 products for compute, NVMe storage and accelerator systems such as Rigel and Centauri. We recently posted through social media channels the industry's first known successful Gen 5 PCI Express over 2-meter copper cable data transfer test and look forward to official product releases, demonstrations and product shipments for this leading-edge technology throughout the year. Our ability to lead with technology like PCI Express Gen 5 is one of our differentiating capabilities that distinguishes us from the highly fragmented competitive landscape. Our talented engineering team is progressing on multiple advancements in system management, power and disruptive liquid cooling technologies, allowing our products such as Rigel and our SDS product line to be deployed in more AI transportable applications. On the marketing front, we have exhibited at the Navy Sea Airspace Show and the AUVSI Exponential Autonomous Vehicle Conference this quarter where we also moderated an expert autonomous truck panel. The panel addressed the challenges and market dynamics of the truck market. Many of the same challenges exist in our other AI transportable verticals, including mining, drones and watercraft, where OSS can help customers in these markets generate an immediate and strong ROI. In all, I'm excited about our growing successes, breakthroughs and increasing activity in AI transportable. Now I'd like to turn the call back over to Dave.

Thank you, John and Jim. As we have demonstrated, we have continued to execute, providing solid results, primarily from our traditional customer base and applications. Although our value proposition in some of these historic businesses, like media and entertainment as well as Bressner in Europe, may not generate the margin percentages that we seek in the future years, they generate positive margin dollars and income for OSS. We are pleased that this part of the business continues to grow and help pay for our AI transportable investments. We identified, put together a new strategic plan and have more recently been able to validate this multibillion-dollar opportunity while remaining cash flow positive, profitable and not taking on debt. We have done this during a crazy time in history, and our cash position has allowed us to invest in higher inventory levels to ensure growth and prosperity for OSS. Our objective is clear, leadership in the fast-growing AI transportable market. This includes enabling many of these new verticals with performance without compromise in some of the most challenging environments where the fragmented competitive landscape struggles to participate. This enablement is just the beginning as we have every intention, and we're starting to lay the foundation to be the supplier not only in the early stage, but also when the market develops and high-volume shipments are made. I look forward to sharing with you on a future call our progress on this front. I have personally found immersing myself in the autonomous truck market has been an exciting and rewarding journey. Like my thoughts prior to this crash course NDA on autonomous trucks, most new to the story assume that autonomous trucks are some futuristic looking things that may or may not ever develop and surely will be after the autonomous automobile market develops. What they find is just the opposite, for one fundamental reason, the pure economics of the autonomous truck market. Like a commercial airline, where it only makes money when it is in the air, a truck makes its money being on the road, not sitting in front of the Ramada Inn when its driver is sleeping. The autonomous enabled truck is expected to double its potential return on investment. Unlike your autonomous automobile, these strong economics create pull for solutions to be implemented as soon as possible, even if not at the fully autonomous Level 5 capability. For example, the hub-to-hub model being deployed by several of our customers only tackles autonomous capabilities on the highway. Many are surprised to learn that these autonomous enabled 40-ton vehicles have logged hundreds of thousands of miles on the same highways you may travel on. It is likely that you have passed one on the road. Although we elected not to provide too much information on this front until our earnings call seven weeks ago, OSS products have also traveled over 100,000 miles as the compute and/or storage functions in some of these trucks. Our products provide the hardware needed to perform the autonomous compute and storage working in conjunction with our customers' AI software. While these extremely innovative companies with names like Kodiak Torque, Embark, TuSimple may or may not be familiar to you, they are backed by some of the largest and wealthiest companies that can benefit from this deployment. Well over $10 billion have been invested in this market for this reason. Although the cost of a compute and storage system for these trucks today is very high, we expect the volume, eventual competitive pressures and normal market dynamics will drive the overall solution down in price as with any market like this. Even with these lower price points, the market size for these types of products will offer a range between $0.5 billion and $10 billion over time per year. As I said earlier, it is our intent and our plan to be the leading supplier to this market. Now looking forward to Q2. Our revenue outlook is $17.3 million for the second quarter, which represents 15% growth over Q2 of last year. We would like to remind our investors of our upcoming shareholder meeting on Wednesday, May 18 at 11:00 A.M. Pacific Daylight Time. I encourage you to vote by proxy for the proposals outlined in the Notice of the Annual Meeting of Stockholders and proxy state. We also encourage you to visit our IR website page after this call or tomorrow to view our just released latest corporate presentation with more information and color on the topics we cover today. There will be two versions. One will be your standard PDF and the other has my voice over it in an MP4 file. A link to these two presentations can be found on today's earnings press release. As an alternative, you can go to our standard web page at onestopsystems.com followed by selecting the Investors section in the menu at the top of the page and then clicking on presentations. Now with that, I'd like to open the call to address your questions. Laura?

Thank you. We'll go first to Joe Gomes with Noble Capital.

David, John and Jim, nice quarter. I wanted to kind of start off with your nice quarter. You talked about the skies now running at pre-pandemic levels, Bressner up very nicely. Kind of what does that mean for the rest of the business in terms of its revenues outside of those, Bressner, and the entertainment clients, how are the rest of the businesses holding up there? Are you seeing organic growth there? Is defense just waiting for the third and fourth quarters? Maybe a little more color on some of the other parts of the business would be appreciated.

Our business and our backlog is very strong and there's no business segment I can think of that's decreasing. It's really, as you said, the timing of the military primarily and then it's just a matter of time getting the AI transport automotive business going. That's really the bottom line. And we touched on margins and things like that, and what I want to stress there is that we wish they were higher, but the bottom line is we're making money and it's funding this AI transportable strategy that we feel really good that we're validating. Those are my thoughts.

Just again, on the military, anything new in terms of contracts or awards there? Or any update you can kind of give us on that side of the aisle?

Yes. First of all, we are working on several initiatives, but I want to emphasize the AI transportable projects. This area is really beginning to develop. It's a bit early to provide extensive details, but we are engaged in some exciting and innovative activities in this space. Jim, do you have anything to add?

We just have had additional shipments to some of these diverse Raytheon programs that still fall under Raytheon, GPU-based systems, things like that, that are not under, I'd say, a five-year contract, but do get funded as they go.

Yes, one of the things, let me just add a little color about my comment on the verticals is that there are multiple markets and multiple very large well-known opportunities in the market that we have not been able to participate in. But the presence and the ability to deliver a Rigel and the roadmap we have and our capabilities is really getting noticed. We're feeling good about that because, again, people that did not talk to us before, we couldn't get in, we're inside the door. And now it's our job and we need to continue to execute like we've done on the autonomous truck front.

On the autonomous truck front, you said you're shipping I think to three. Any color on what kind of sale price for a system is there today? And is there major differences between the systems that you're shipping to the various clients? Or are they pretty much all standard on that side? And any timing as to when you think some of the ones that you're speaking with now will go begin to make orders?

Yes. So first of all, the three we're shipping to, we're not waiting for orders. And it is multiple products, and it's kind of like these guys use two or three of our products here, and the next one might be one of the same products or two of them, and maybe one is a little different. But there's a lot of similarity between them all focused in compute and storage. And then we're talking to other ones that we hope to be able to even see revenue later this year on. And just for clarity, we said we have a total of five wins. That's five wins among those three customers that we're shipping to. It's not five customers, but we're working with additional ones.

Thanks for the clarity there. Maybe if I could just get one more in here. You talk about the entertainment customer, again, and we're seeing a return to some of the outdoor events or in-person events let's call them, and that's being layered upon other products, and you're thinking that you should still see continued growth through the rest of the year. What's giving you confidence that you will continue to see growth at the entertainment customer? And maybe can you talk about maybe how big a growth are we talking about here?

First of all, I'd say it's steady growth. It's not like double or triple or anything like that, but they're doing extremely well at the bottom line. And the fact that the virtual product lines, which range anything from creating a virtual like newsroom to virtual music video, to doing some filming or whatever, that continues to do well. And then with the large gathering coming back, that gives us a lot of potential for growth, and that's why we're very comfortable. It looks like we'll really have two vectors driving it the rest of the year. And so that looks attractive to us, and we feel good about it.

Congratulations on a strong quarter. I want to touch on the margin aspect. Last quarter, you expressed more confidence in the margin recovery, anticipating that business might stabilize after a robust fourth quarter. I'm trying to understand the various factors at play. If I remember correctly, the media business had about a 600-basis point effect on the margin, from which you managed to recover around 180 points. How should we view this progress moving forward? Additionally, considering the value delivered through your products, do you see an opportunity to enhance the margin profile in the media and entertainment sector as we advance?

We have been working on this and identified some opportunities to improve efficiency in our production line, and we are implementing measures to achieve that. This will provide us with some benefits, but it won't result in dramatic changes. The reality is that this business has its established limits, and we cannot significantly increase its performance. That said, it remains a solid business for the company, regardless of how it looks with percentage figures. I apologize for not catching part of the question; I’m feeling a bit unwell today, although I don’t have COVID. Sorry for the distraction.

Yes. The one portion there is that obviously as our media and entertainment customer becomes a greater proportion of our revenue, it does put downward margin pressure. I think as we shared in the past that we basically have three segments of our business. We have Bressner that typically represents about 1/3. We have our media and entertainment that represents 1/3, and then we have our AI transportable, more military-type business that represents 1/3. But when you're looking at 66% of your business or 2/3 that are operating more in those lower margins of 20% to 23%, it has an effective on an aggregate basis of reducing that margin on an overall basis. However, that 1/3 portion of the business is where we're really focusing on, where we look like we have margin expansion, and so they have that. The other thing is we're consistent with our historical performance. The military portion of the business is not really kicking in until Q3 and Q4. Those are purchase orders that are in hand, but you won't see the margin improvement significantly until you see that revenue coming into Q3 and Q4.

Yes, and hit it head-on earlier in your question, which I kind of fumbled on. Yes, we said we thought we'd snap back to above the annual level, which our annual level last year was I think 31.7%, so we did fall short of that. But part of that, we did have assumption that there was going to be a little military in there, and we were wrong on that. I mean that's the bottom line.

Great color. I certainly appreciate that. And then maybe just kind of thinking about the platforms on the autonomous vehicles, do you think there's an opportunity to maybe drive a little deeper integration with some of the sensor platforms and work, maybe either co-develop or work together with some of the other platforms to help really drive the value of your products?

We're already looking at that, and we're already engaged and having conversations on many different fronts with many potential different partners and also, maybe down the road, M&A targets. We're very serious about this market. We're not sitting still. We're looking at and trying to be the thought leader and be one that can offer a lot of value where that's headed and do things like you just said.

Fantastic. And then maybe just maybe longer term on the replacement cycle as you kind of think about the life of these units in the vehicle, is this something you think would require replacing once in the life of the vehicle? Or would this be maybe every two years or three years? How do you think maybe about the replacement cycle potential?

That depends on the advancements. Typically, when a system is installed in a vehicle, it's responsible for multiple functions, not just driving. It also influences fuel efficiency and similar factors. As these applications evolve, you might expect a refresh of the technology every three years to incorporate more capabilities. Additionally, there is the consideration of the lifecycle of the GPUs, NVMe drives, and other technologies within the system.

One of the things we're doing is trying to understand that more so that what can we do to extend those lives and be better at it than anyone else. I mean we have a lot of focus in that area.

And just one more, if you don't mind. I just want to see if maybe you could talk a little bit about the development cycle. You had mentioned earlier that you're in discussion with three different customers. How quickly can that move from early conversations to shipping product and receiving revenue?

Are you talking about the autonomous truck space?

Yes.

Well, just to be clear, I may be misinterpreting your question, but we are shipping today to three of them. We are engaged with two more pretty seriously, meaning proposals back and forth, multiple meetings, good dialogue. And we reached out in early discussion with another handful. What I'm saying is, we're already in revenue with three of them, and we'll have most likely multiple autonomous truck people be in our top 10 list in 2022.

Yes. To add to that, it usually takes about 12 to 18 months from a win to production on the military side. On the commercial side, it's more like six to nine months. Some of these are progressing quickly to preproduction, but that six to nine months is likely to remain consistent in this market compared to the rest of the commercial market.

One key dynamic to consider is that the autonomous truck market is projected to reach about a million trucks by 2030, with around 100,000 expected in 2025. These figures represent anticipated production volumes. Our modeling indicates that the business outlook is very promising between now and then, and if we execute our strategy effectively, we could experience significant growth.

We'll go next to Brian Kinstlinger with Alliance Global Partners.

Hello, this is Laura Sorrell calling in for Brian Kinstlinger and thank you for taking our questions. Regarding the companies already within your pipeline, may you just please quantify how many of those companies are actually already in both the autonomous trucking plus the autonomous vehicles within the agriculture markets? And regarding that, may you also please provide a bit of insight on the estimate sales cycle timing.

Yes. First of all, I would say we view both agriculture and mining as future verticals that are not quite developed and ready for that kind of sophistication we have. So we could see a repeat of what we're seeing in autonomous trucks, but we see it out in time. That doesn't mean we're not engaged with them, but we just think the type of level of autonomy that they're going to want is further out. What else would you say to that, Jim? On those particular markets.

Yes. I think nothing current on the agriculture has contributed to any of the wins. So yes, it's more of a 2023 type target.

Got it. And also, as a follow-up, and you touched a bit on this previously with past questions, but how many of the autonomous vehicle companies are currently past the testing phase as it relates to your technology and are now instead moving towards or are presently in the revenue generating or the production phase?

Yes, I would say that we are not in the range of tens of thousands or twenties of thousands of trucks in production. It really depends on how you define that. When you mention testing, we are actually conducting on-the-road testing and on-the-road autonomous driving within fleets. It's considered production, depending on where you choose to draw the line.

Yes. To give you an idea, it might be they're deploying 25 trucks next month kind of thing, and they plan to do 25 more several months from now. And what they're primarily doing is continue to build their database and understand it and start negotiating contracts with potential partners to use their technology.

I appreciate all the color on the call as it relates to AI transportables. I'll bat cleanup here and just get a couple of clarifications. In terms of the media and entertainment customer, I'm not sure if I heard correctly, but it sounds like did you say it would be a record year for them? Or is it returning to normal levels? Just to kind of clarify on that front. And it sounds like, Dave, you're not seeing much if any cannibalization with live events versus virtual. Is that correct?

Yes. I don't see any cannibalization between the different markets. I think they might estimate a 5% overlap, which is a rough figure, but it's definitely not more than that. Regarding the year, they are on track, and we expect to achieve more with them than in any previous year.

Great. Very helpful. And John, on the gross margin front, I just want to clarify, I know there's some near-term headwinds. I don't know if you quantified the impact in the quarter if there was revenue that was left on the table as a result of supply chain issues. I wonder if you could comment on that. And then just as it relates to the overall gross margin profile for core OSS, how are you thinking about that this year? I think it was still a good quarter kind of netting out Bressner and even with the contribution from the skies. Is it in line with the last couple of years? Or are you able to actually increase it? Because it seems like you're doing good despite a difficult environment.

On the first question regarding our revenue, I want to emphasize that we have one of the strongest backlogs we've ever seen. We are managing to adjust our timeline based on the availability of supplies. Although we are encountering some supply chain challenges, we are working to resolve them. There are instances when we need to adjust our plans based on part availability. This consideration is key when setting our revenue expectations for the next quarter. We monitor parts availability closely, but we still experience unexpected changes. We continuously review our backlog to identify opportunities to replace lost revenue. It's a dynamic process we manage on a daily and weekly basis, depending on product availability.

Yes, Scott, I want to add that we've had excellent visibility on our backlog as we entered the quarter. While we believe we have good visibility on supply, unexpected issues can arise with products not arriving as scheduled, leading to delays of several months. We discuss these issues candidly before providing guidance, making it clear that while we hope for everything to come through as planned, we anticipate surprises as we've experienced in previous quarters. We factor these uncertainties into our communications. I believe this approach is prudent at this time.

Dave, not to get too deep into the minutia, but in terms of product redesigns to try and mitigate the impact from those problematic components, have you been able to do that? Or does that create recertification problems with your existing customer base?

It always does, but the customer base is more flexible on that than they've ever been in the history of my too many years in this industry. Because they know if they don't, they're not going to get it. What's crazy about it, it can be a $0.50 connector that's holding up a shipment of a $10,000 system, right? But there's times where you just can't get it. One of the things we'll do, identify it, get engineering to start working on that connector, start talking to the customer and say, look, this is the deal, we can either ship it four months from now or a month from now, let us know what you want to do. And when you put it in that perspective, we get a lot more cooperation.

In response to your second question regarding margin, we mentioned today that the Bressner business experienced a growth of 37%. Additionally, the media and entertainment sector is expanding rapidly and is on track to set a record this year. These two elements, when considered together in terms of their overall impact on margins, are influencing our results. If you keep the volume constant, you would observe an increase in margins. However, the overall picture is different because a greater share of the business, which ranges from 20% to 23%, is being integrated into the company. I don't expect our annual margins to differ significantly from previous years due to the influences of both the media and entertainment sector and the Bressner business.

Scott, there's so many dynamics. For example, one of the things that hit cost of goods was some of our shipping costs tripled on the portion that we bring in because of the dynamics in Ukraine and all the different things in China. Where there's only one way to get the product here, maybe ship it by air rather than normally go by ship, or because they can't fly over, it can't go through Ukraine, it has to go somewhere else. Those things we don't get in a lot of detail on, but there's so many of those little dynamics that we deal with every day.

Got you. Very helpful. Lastly, regarding AI transportables, I appreciate the insights, David and Jim, on autonomous trucking. To clarify, in terms of design wins and engagements, do you expect to have both edge compute and ruggedized storage for most of these customers and design wins? I know it's early since Centauri has just launched, but do you anticipate primarily occupying both of those areas? Also, Dave, you mentioned that multiple autonomous trucking companies are expected to become 10% plus customers this year, which is a significant increase. Looking ahead to 2023, what do you see as the potential contribution range or at least the lower end of expectations for autonomous trucking in that year? Thanks so much.

Yes, I don't want to provide a specific number on that yet. I need to study it further. Some people are saying they'll increase their volume in 2023, while others are suggesting it will be 2025. I'm still trying to understand that aspect of your question. The other part...

If you consider autonomous trucking, along with its application in military vehicles, there are at least five areas we can target for integration with autonomous trucks. This includes the computing components that interface with the sensors and those that handle the autonomous driving, which involves compute acceleration. There are two key computing elements as well as two storage components inside the truck. When we discuss the server and the Centauri, we also highlight the possibility of removability. Having a removable canister means we also need to establish depots. We are identifying opportunities to install the Centauri in the trucks and develop truck depots as well. This could lead to the establishment of 20, 30, or even 40 depots nationwide, each equipped with systems to store data on a server. In total, there are about five distinct areas we can explore within autonomous trucks.

We'll now take our last question from Max with Lake Street Capital.

Nice quarter, nice guide. Most of my questions have been answered. I guess I've just got two quick ones. You guys looked like you had a couple of nice major wins during the quarter. I guess I just had a question on what your expected contribution for these wins are going forward. To the top line.

Well, I guess I would leave it to what I said before, which is the autonomous truck wins, some of those will pop into our top 10 this year. They should all be much larger in '23. And at some point, assuming everything goes as planned and we're the leading guy, which we expect to be, we could see some explosive growth that happens somewhere late '23 to '25 because the size of this market is a size that is so much larger than we are as a company even. And then the other ones, we've already got pretty good revenue from those wins from last quarter, right, Jim, so we're already seeing revenue from those guys.

We're seeing revenue and we have millions in orders.

One point I think I'd like to clarify is that right now, we are in the prototype and test space. We are also ensuring that our products that we have have the capability and the price points to be in the production phase. We aren't here just to look at revenues for prototyping and testing. We're looking to be able to be the option of choice when we go into the production phase and that we can share in that long-term revenue stream.

Well, thank you, Laura, and thank you, everyone, for joining us today. We continue to believe the best is yet to come for sure. And we look forward to meeting with you again for the Annual Stockholder Meeting next week and reporting our progress again in August as we pursue the many opportunities and it's fun to chat with you guys and tell you about the successes that we're seeing. Meanwhile, please continue to stay safe and healthy and feel free to reach out to John, Jim and myself anytime. And my apologies for my stumbling. I'm going to go take a nap. Laura, you can go ahead and wrap it up.

Thank you. Now, before we conclude today's call, I would like to provide the Company's safe harbor statement that includes important cautions regarding forward-looking statements made during today's call. One Stop Systems cautions you that statements in the presentation are not a description of historical facts, are forward-looking statements. These statements are based on the company's current beliefs and expectations. Such forward-looking statements include those regarding the Company's expectations for revenue growth generated by new products, design wins or M&A activity. The inclusion of such forward-looking statements and others should not be regarded as a representation by OSS that any of its plans will be achieved. Actual results may differ from those set forth in the presentation due to the risks and uncertainties inherent in our business, including without limitation, that the market for our products is developing and may not develop as we expect. Global pandemics or other disasters or public health concerns, including COVID-19 in regions of the world where we have operations, customers or source material or sell products may affect such market. Our operating results may fluctuate significantly, which would make our future operating results difficult to predict and could cause operating results to fall below expectations or guidance. Our ability to successfully integrate the operation systems, technologies, product offerings and personnel with acquired companies may prove difficult and adversely affect our financial results. Our products are subject to competition, including competition from the customers to whom we may sell and competitive pressure from new and existing companies, may harm our business sales, growth rates and market share. Our future success depends on our abilities to develop and successfully introduce new and enhanced products that meet the needs of our customers. The likelihood of our design proposals becoming design wins is uncertain and revenue may never be realized. Our products fulfill specialized needs and functions within the technology industry and such needs or functions may become unnecessary or the characteristics of such needs and functions may shift in such a way as to cause our products to no longer fulfill such needs or functions. New entrants in general markets may harm our competitive position. We rely on the limited number of suppliers to support a manufacturer design process. And if we cannot protect our proprietary design rights and intellectual property rights, our competitive position could be harmed or we could incur significant expenses to enforce our rights, our international sales and operations objectives to additional risks that can adversely affect our operating results and financial condition, and we fail to remedy material weaknesses in our internal controls or financial reporting. We may not be able to accurately report our financial results. And other risks described in our prior press release and in our filings with the Securities and Exchange Commission, SEC, including under the heading Risk Factors in our annual report on Form 10-K and any subsequent filings with the SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of the conference call, and we undertake no obligation to revise or update this information to reflect events or circumstances after this date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Before we end today's conference, I would like to remind everyone that this call will be available for replay starting later this evening through May 26, 2022. Please refer to today's press release for dial-in and replay instructions available via the Company's website at ir.onestopsystems.com. Thank you for joining us today. This concludes our conference. You may now disconnect.