OSI Systems Reports Fiscal 2026 Fourth Quarter and Fiscal Year Financial Results
HAWTHORNE, Calif.--( BUSINESS WIRE)--OSI Systems, Inc. (the “Company” or “OSI Systems”) (NASDAQ: OSIS) today announced its financial results for the three months and fiscal year ended June 30, 2026.
Ajay Mehra, OSI Systems’ President and Chief Executive Officer, stated, “Fiscal 2026 was a strong year for the Company, capped by record fourth quarter non-GAAP earnings per share and record operating cash flow, despite the impact of revenue headwinds from the Middle East conflicts which shifted the timing of certain planned deliveries. Our teams performed well across our three divisions, delivering solid bookings which led to substantial backlog. As we enter fiscal 2027, our opportunity pipeline, disciplined operating execution and continued focus on cash generation position us well to advance key strategic initiatives and drive long-term value.”
Financial Summary
2025
2026
2025
2026
$
504,985
$
484,058
-4
%
$
1,713,166
$
1,785,984
4
%
$
3.03
$
3.27
8
%
$
8.71
$
8.95
3
%
$
3.24
$
3.78
17
%
$
9.36
$
10.35
11
%
$
561
$
182,110
$
97,592
$
275,904
$
6,119
$
9,298
$
23,832
$
30,570
The Company’s backlog was approximately $1.9 billion as of June 30, 2026 compared to $1.8 billion a year ago.
Mr. Mehra added, “The Security division continued to execute well during the fourth quarter, delivering strong profitability, outstanding cash generation and healthy bookings. While revenues were impacted by disruptions from the Middle East conflicts, underlying demand for our products and services remain encouraging. These delays do not reflect order cancellations and remain in our backlog with updated delivery schedules. The Security division ended the year with a substantial backlog, a significant opportunity pipeline and recent program wins that position the business well for the future.”
Mr. Mehra continued, “The Optoelectronics and Manufacturing division delivered strong results for the quarter with revenues up about 5% year-over-year on broad-based demand across several key end markets. Our ability to support customers with highly engineered products, precision manufacturing capabilities and global operational reach continues to differentiate us in the marketplace. We are excited by the opportunities we see across our aerospace, defense, healthcare, technology and industrial Optoelectronics customer base.”
Mr. Mehra further added, “The Healthcare division delivered an improved fourth quarter, with revenues up approximately 5% and an adjusted operating margin of 10% compared with 1% in the prior-year quarter, demonstrating the impact of operational improvements implemented throughout the year. We are focused on expanding our installed base, supporting healthcare providers with innovative clinical solutions and advancing product development initiatives designed to enhance patient care.”
The Company repurchased 564,880 shares during the fiscal 2026 fourth quarter for an aggregate cash amount of $123.6 million. The Company ended fiscal 2026 with $359.8 million of cash and cash equivalents, up from $106.4 million a year earlier. During fiscal 2026, the Company refinanced and expanded its long-term debt, extended maturities, enhanced financial flexibility to fund growth initiatives, and reduced bank lines of credit to zero while continuing to return capital to shareholders through stock repurchases.
Fiscal Year 2027 Outlook
Guidance
Revenues
$1.875 billion - $1.930 billion
YoY Growth Rate
5.0% - 8.1%
Non-GAAP Diluted Earnings Per Share
$11.13 - $11.49
YoY Growth Rate
7.5% - 11.0%
The Company is introducing its fiscal 2027 guidance for revenues and non-GAAP diluted earnings per share, as indicated above. Actual revenues and non-GAAP diluted earnings per share could vary from this guidance due to factors discussed under “Forward-Looking Statements” or other factors.
The Company’s fiscal 2027 diluted earnings per share guidance is provided on a non-GAAP basis only. The Company does not provide a reconciliation of guidance for non-GAAP diluted EPS to GAAP diluted EPS (the most directly comparable GAAP financial measure) on a forward-looking basis because the Company is unable to provide a meaningful or accurate compilation of reconciling items and certain information is not available. This is due to the inherent difficulty and complexity in accurately forecasting the timing and amounts of various items included in the calculation of GAAP diluted EPS but excluded in the calculation of non-GAAP diluted EPS, such as acquisition costs and other non-recurring items that have not yet occurred, are out of the Company’s control or cannot otherwise reasonably be predicted. For the same reasons, the Company is unable to address the significance of unavailable information which may be material and therefore could result in GAAP diluted EPS being materially different from projected non-GAAP diluted EPS.
Conference Call Information
The Company will host a conference call and simultaneous webcast beginning at 1:30 pm PT (4:30 pm ET) today to discuss its financial results for the 2026 fourth fiscal quarter and full fiscal year. To listen, please visit the Investor Relations section of the OSI Systems website at http://investors.osi-systems.com/index.cfm and follow the link that will be posted on the front page. A replay of the webcast will be available beginning shortly after the conclusion of the conference call for approximately three months thereafter. The replay can be accessed through the Company’s website at www.osi-systems.com.
About OSI Systems
OSI Systems designs and manufactures specialized electronic systems and components for critical applications. The Company operates through three business segments: Security, Optoelectronics and Manufacturing, and Healthcare. Its Security division delivers advanced inspection systems, turnkey screening solutions, and comprehensive support services to protect people and infrastructure. The Optoelectronics and Manufacturing segment serves as a global supplier of high-performance optoelectronic solutions and precision manufacturing services for leading OEMs. The Healthcare segment focuses on patient monitoring, diagnostic cardiology, and related services with the goal of enhancing clinical care and patient outcomes. Serving customers in over 170 countries, OSI Systems strategically positions its sales, service, R&D, and manufacturing capabilities worldwide to provide fast and efficient delivery and support. For more information on OSI Systems or any of its subsidiary companies, visit www.osi-systems.com. News Filter: OSIS-E
Presentation of Non-GAAP Financial Measures
This earnings release includes a presentation of non-GAAP net income, non-GAAP diluted earnings per share, non-GAAP operating income (loss) by segment and non-GAAP operating margin, all of which are non-GAAP financial measures. The presentation of these non-GAAP figures is provided to allow for the comparison of the underlying performance of the Company, excluding the impact of impairment, restructuring and other charges (including certain legal costs), amortization of intangible assets acquired through business acquisitions, and associated tax effects, and discrete income tax items. Although we exclude amortization of acquired intangible assets from our non-GAAP figures, revenue generated from such intangibles is included in determining non-GAAP financial performance of the Company. Management believes that the non-GAAP financial measures presented in this earnings release provide (i) enhanced insight into the ongoing operations of the Company, (ii) meaningful information regarding the Company’s financial results (excluding amounts management does not view as reflective of ongoing operating results) for purposes of planning, forecasting and assessing the performance of the Company’s businesses, (iii) a meaningful comparison of financial results of the current period against results of past periods and (iv) financial results that are generally more comparable to financial results of peer companies than are GAAP figures. Non-GAAP financial measures should not be assessed in isolation or as a substitute for measures of financial performance prepared in accordance with GAAP. Our non-GAAP financial measures may not be the same as measures used by other companies due to possible differences in methods and in the items or events for which adjustments are made.
Reconciliations of GAAP financial information to non-GAAP financial information are provided in the accompanying tables. The financial results calculated in accordance with GAAP and reconciliations from those financial results should be carefully evaluated.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements relate to the Company's current expectations, beliefs, and projections concerning matters that are not historical facts. Forward-looking statements are not guarantees of future performance and involve uncertainties, risks, assumptions, and contingencies, many of which are outside the Company's control and which may cause actual results to differ materially from those described in or implied by any forward-looking statement. Forward-looking statements include, but are not limited to, information provided regarding expected revenues, earnings, growth, cash flow generation, and operational performance in fiscal 2027 and beyond. The Company could be exposed to a variety of negative consequences as a result of delays related to the award of domestic and international contracts; failure to secure the renewal of key customer contracts; delays in customer programs; government shutdowns; delays in revenue recognition related to the timing of customer acceptance; the impact of potential information technology, cybersecurity or data security breaches; changes in domestic and foreign government spending and budgetary, procurement and trade policies adverse to the Company's businesses; the impact of the Russia-Ukraine conflict or conflicts in the Middle East, including the potential for broad economic disruption, increased global tensions, or potential disruptions to customer operations, procurement activities, transportation networks and project timing; global economic uncertainty, including the impact of tariffs; material delays and cancellations of orders or deliveries thereon, supply chain and transportation networks disruptions, plant closures, or other adverse impacts on the Company’s ability to execute business plans; unfavorable currency exchange rate fluctuations; unfavorable interest rate fluctuations; effect of changes in tax legislation; market acceptance of the Company's new and existing technologies, products, and services; the Company's ability to win new business and convert orders received to sales within the current fiscal year; contract and regulatory compliance matters, or actions which, if brought, could result in judgments, settlements, fines, injunctions, debarment, or penalties; and other risks and uncertainties, including, but not limited to, those detailed herein and from time to time in the Company's Securities and Exchange Commission filings, which could have a material and adverse impact on the Company's business, financial condition, and results of operations. For additional information on these and other factors that could cause the Company's future results to differ materially from those in any forward-looking statements, see the section titled "Risk Factors" in the Company's most recently filed Annual Report on Form 10-K and other risks described therein and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Undue reliance should not be placed on forward-looking statements, which are based on currently available information and speak only as of the date on which they are made. The Company assumes no obligation to update any forward-looking statement made in this press release that becomes untrue because of subsequent events, new information, or otherwise, except to the extent required to do so under federal securities laws.
OSI SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended
June 30,
Fiscal Year Ended
June 30,
2025
2026
2025
2026
Revenues:
Products
$
392,633
$
373,240
$
1,323,291
$
1,344,733
Services
112,352
110,818
389,875
441,251
Total net revenues
504,985
484,058
1,713,166
1,785,984
Cost of goods sold:
Products
277,821
251,156
908,997
944,797
Services
58,926
64,948
216,987
248,095
Total cost of goods sold
336,747
316,104
1,125,984
1,192,892
Gross profit
168,238
167,954
587,182
593,092
Operating expenses:
Selling, general and administrative
74,685
69,747
290,879
278,390
Research and development
18,844
19,500
73,444
79,141
Impairment, restructuring and other charges, net
1,687
4,819
5,335
16,591
Total operating expenses
95,216
94,066
369,658
374,122
Income from operations
73,022
73,888
217,524
218,970
Interest and other expense, net
(7,224
)
(4,118
)
(31,430
)
(26,224
)
Income before income taxes
65,798
69,770
186,094
192,746
Provision for income taxes
(13,050
)
(14,530
)
(36,457
)
(38,035
)
Net income
$
52,748
$
55,240
$
149,637
$
154,711
Diluted earnings per share
$
3.03
$
3.27
$
8.71
$
8.95
Weighted average shares outstanding – diluted
17,412
16,910
17,178
17,280
OSI SYSTEMS, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
June 30, 2025
June 30, 2026
Assets
Cash and cash equivalents
$
106,405
$
359,832
Accounts receivable, net
837,743
764,626
Inventories
407,174
415,562
Prepaid expenses and other current assets
71,539
71,671
Total current assets
1,422,861
1,611,691
Property and equipment, net
126,747
129,942
Goodwill
387,393
406,677
Intangible assets, net
183,290
192,355
Other non-current assets
120,966
161,787
Total Assets
$
2,241,257
$
2,502,452
Liabilities and Stockholders' Equity
Bank lines of credit
$
178,000
$
-
Current portion of long-term debt
8,130
2,531
Accounts payable
205,181
168,981
Accrued payroll and related expenses
49,535
51,819
Advances from customers
68,184
42,391
Deferred revenue
77,788
91,036
Other current liabilities
110,120
154,377
Total current liabilities
696,938
511,135
Long-term debt
463,504
998,518
Other long-term liabilities
129,731
159,838
Total liabilities
1,290,173
1,669,491
Total stockholders’ equity
951,084
832,961
Total Liabilities and Stockholders’ Equity
$
2,241,257
$
2,502,452
2025
2026
$
504,985
$
73,022
14.5
%
$
52,748
$
3.03
$
484,058
$
73,888
15.3
%
$
55,240
$
3.27
1,687
0.3
%
1,687
0.10
4,819
1.0
%
4,819
0.29
4,770
0.9
%
4,770
0.27
6,793
1.4
%
6,793
0.40
(1,380
)
(0.08
)
(2,453
)
(0.15
)
(1,373
)
(0.08
)
(485
)
(0.03
)
$
79,479
15.7
%
$
56,452
$
3.24
$
85,500
17.7
%
$
63,914
$
3.78
$
366,971
$
70,538
19.2
%
$
339,733
$
63,422
18.7
%
-
0.0
%
1,919
0.6
%
4,174
1.2
%
5,306
1.5
%
74,712
20.4
%
70,647
20.8
%
112,667
14,999
13.3
%
117,806
15,874
13.5
%
-
0.0
%
184
0.2
%
327
0.3
%
1,216
1.0
%
15,326
13.6
%
17,274
14.7
%
42,684
(1,368
)
-3.2
%
44,751
1,584
3.5
%
1,467
3.4
%
2,620
5.9
%
269
0.7
%
271
0.6
%
368
0.9
%
4,475
10.0
%
(17,337
)
(11,147
)
(18,232
)
(6,992
)
220
96
(10,927
)
(6,896
)
$
504,985
73,022
14.5
%
$
484,058
73,888
15.3
%
1,687
0.3
%
4,819
1.0
%
4,770
0.9
%
6,793
1.4
%
$
79,479
15.7
%
$
85,500
17.7
%
2025
2026
$
1,713,166
$
217,524
12.7
%
$
149,637
$
8.71
$
1,785,984
$
218,970
12.3
%
$
154,711
$
8.95
5,335
0.3
%
5,335
0.31
16,591
0.9
%
16,591
0.97
17,996
1.1
%
17,996
1.05
17,751
1.1
%
17,751
1.03
-
-
4,359
0.25
(5,413
)
(0.32
)
(8,803
)
(0.51
)
(6,717
)
(0.39
)
(5,806
)
(0.34
)
$
240,855
14.1
%
$
160,838
$
9.36
$
253,312
14.2
%
$
178,803
$
10.35
$
1,196,180
$
204,952
17.1
%
$
1,247,949
$
201,463
16.1
%
1,882
0.2
%
7,006
0.6
%
14,882
1.2
%
14,448
1.2
%
221,716
18.5
%
222,917
17.9
%
412,065
51,540
12.5
%
450,817
57,146
12.7
%
619
0.2
%
445
0.1
%
1,862
0.4
%
2,220
0.5
%
54,021
13.1
%
59,811
13.3
%
168,362
2,462
1.5
%
162,729
(33
)
0.0
%
2,246
1.3
%
6,945
4.3
%
1,252
0.7
%
1,083
0.6
%
5,960
3.5
%
7,995
4.9
%
(63,441
)
(41,430
)
(75,511
)
(39,606
)
588
2,195
(40,842
)
(37,411
)
$
1,713,166
217,524
12.7
%
$
1,785,984
218,970
12.3
%
5,335
0.3
%
16,591
0.9
%
17,996
1.1
%
17,751
1.0
%
$
240,855
14.1
%
$
253,312
14.2
%