Osi Systems Stock Earnings Reports

OSI Systems reported a strong start to fiscal 2026 with Q1 revenue of $385M, up 12% year-over-year, and record Q1 non-GAAP adjusted EPS of $1.42. All three divisions (Security, Optoelectronics & Manufacturing, Healthcare) delivered double-digit growth, with Security up 13% despite a meaningful reduction in prior-year Mexico program revenue. Service revenues grew 23%, driving higher recurring revenue and margins. Bookings were strong, producing a Q1 book-to-bill of ~1.1 and a record Q1 backlog approaching $1.9B. Management raised fiscal 2026 revenue guidance to $1.825B–$1.867B (growth of 6.5%–9.0%) and adjusted EPS guidance to $10.20–$10.48, citing robust organic demand, a healthy pipeline (including recent RF and NII wins), and improved cash collection progress—particularly on Mexico receivables. Gross margin was 32% (mix-driven variation); SG&A and R&D remain controlled even as R&D investment increases. The company amended and expanded its credit facility, ending the quarter with net leverage ≈1.9x and expects strong free cash flow (management indicated potential free cash flow conversion exceeding 100% of net income). Management is focused on margin expansion as tough Mexico comps lap, continued R&D, selective M&A or capital allocation, and capturing opportunities tied to increased government security spending.