Did OSI Systems beat or miss consensus estimates last quarter?

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What is OSI Systems's latest dividend and current dividend yield?

What does OSI Systems do and what are its main business segments?

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What factors drove the changes in OSI Systems's revenue and profit?

What were the key takeaways from OSI Systems's earnings call?

What guidance did OSI Systems's management provide for the next earnings period?

- **Revenue Growth**: 11% YoY to $464M, led by Security (15%) and Opto (12%).
- **Key Wins**: $20M radiological threat contract, $30M naval order, and $151B missile defense IDIQ award.
- **Financial Strength**: Non-GAAP EPS $2.58, $62M operating cash flow, and FY26 EPS guidance raised to $10.30-$10.55.
- **Strategic Moves**: Texas expansion for RF, Mexico manufacturing for Opto, and $575M convertible notes refinancing.
- **Future Catalysts**: Mexico receivables collections, Golden Dome orders, and service margin expansion.

**【CEO Summary Section】**
- OSI Systems reported Q2 2026 revenue of $464 million, up 11% year-over-year, driven by double-digit growth in Security (15%) and Optoelectronics (12%).
- Security division secured a $20 million international radiological threat detection contract and a major event security mandate in Europe. RF business won a $30 million naval order and was awarded a $151 billion IDIQ contract for U.S. missile defense.
- Optoelectronics expanded manufacturing in Mexico and Southeast Asia to capitalize on supply chain diversification trends.
- Healthcare division faced challenges but is investing in new product development for future recovery.

**【CFO Financial Commentary】**
- Non-GAAP EPS reached $2.58, a Q2 record, with operating cash flow of $62 million.
- Security division revenue grew 15% to $335 million, excluding a 50% decline in Mexico contracts ($27M vs. $54M prior year). Optoelectronics hit $113 million, a Q2 high.
- Gross margin was 33%, impacted by product mix. Operating expenses decreased 1% to $70.2 million, with R&D up 8% to $19.8 million.
- Updated FY26 non-GAAP EPS guidance: $10.30-$10.55, +10-13% YoY, driven by Q4 growth post-Mexico contract tailwind.
- Cash flow expected to surge in H2 due to Mexico receivables collections and reduced interest expense from debt refinancing.

**【Q&A Highlights】**
- **Security Bookings**: Q2 bookings underperformed due to U.S. government shutdown delays, but high-probability opportunities remain in pipeline.
- **Golden Dome Contract**: Potential orders from $151B IDIQ could materialize in FY26, with Texas expansion supporting production scale.
- **Interest Expense**: Q3/Q4 interest costs expected to stabilize after revolver paydown, enabling share buybacks.
- **Mexico Receivables**: DSO improvement to drive free cash flow, with significant collections anticipated in FY26 H2.
- **Service Revenue Growth**: Service margins higher than products, with Q4 margin expansion expected post-Mexico contract impact.

OSI Systems, Inc. (OSIS) Q2 2026 Earnings Call Transcript

- **Record Q1 Growth**: 12% revenue increase to $385 million, with Security division up 13%.
- **Strong Earnings**: Non-GAAP EPS of $1.42 and record backlog of $1.9 billion.
- **Mexico Transition**: 60% decline in Mexico-related revenue offset by 26% organic growth.
- **Cash Flow Outlook**: Free cash flow expected to exceed net income, driven by Mexico collections.
- **Strategic Momentum**: SIP program wins, RF product expansion, and M&A pipeline development.

**【Management Opening Remarks】**
- Q1 2026 revenue reached $385 million, a 12% year-over-year increase, driven by double-digit growth across all three divisions.
- Non-GAAP EPS was $1.42, marking a new quarterly record.
- Book-to-bill ratio of 1.1 resulted in a record backlog of $1.9 billion.
- Excluding Mexico contracts and acquisitions, organic revenue growth was 26%.

**【CEO Commentary】**
- **Security Division**: 13% revenue growth, with strong service revenue and new contracts (e.g., CBP's SIP program). RF product orders exceeded $60 million.
- **Optoelectronics**: 12% growth, benefiting from nearshore manufacturing trends.
- **Healthcare**: 10% growth, with ongoing operational improvements.
- Emphasis on innovation, recurring revenue streams, and operational efficiency.

**【CFO Commentary】**
- Gross margin of 32%, down due to product mix but offset by higher service margins.
- Operating expenses reduced 7% YoY, with R&D up 12%.
- Updated FY26 guidance: $1.825B-$1.867B revenue (6.5%-9% growth) and EPS of $10.20-$10.48.
- Mexico-related revenue expected to decline 60% YoY, offset by growth in other areas.
- Free cash flow expected to exceed net income, driven by Mexico receivables collections.

**【Q&A Highlights】**
- **Mexico Receivables**: Partial payments received, with significant cash flow expected in FY26.
- **RF Product Line**: Q1 revenue of $19 million, up from $4 million in Q1 2025.
- **Government Shutdown Impact**: Minimal, with essential operations continuing.
- **M&A Strategy**: Focused on complementary technologies and recurring revenue opportunities.
- **Profitability Outlook**: Security division margin expansion expected post-Mexico contract tapering.


OSI Systems, Inc. (OSIS) Q1 2026 Earnings Call Transcript

- **Record Q4 Performance**: $3.24 EPS, 5% revenue growth, $1.8B backlog. FY26 guidance: 5.4%-8% revenue growth, 8%-11% EPS growth.
- **Security Strength**: 7% YoY growth, 50% organic expansion ex Mexico. Major wins in Middle East and U.S., with service revenue up 24%.
- **Cash Flow Catalyst**: $837M receivables (including $100M+ from Mexico) to convert to cash in FY26, driving >100% free cash flow conversion.
- **Strategic Growth**: Big Beautiful Bill unlocks $1B+ CBP opportunities. Service-led model and M&A pipeline position for long-term expansion.

**【CFO Opening Remarks】**
- Q4 2025 revenues grew 5% YoY to $530 million, driven by Security (+7%) and Optoelectronics (+10%) divisions. Excluding Mexico contracts, organic Security revenue growth was 50%.
- Non-GAAP EPS reached $3.24, a record high, with a book-to-bill ratio of 1.0 and year-end backlog of $1.8 billion.
- Fiscal 2026 guidance: Revenue $1.805B-$1.85B (5.4%-8% growth), EPS $10.11-$10.39 (8%-11% growth).

**【CEO Business Update】**
- **Security Division**: Q4 revenue $367M (+7% YoY), with 28% service revenue growth. Major wins include $56M Middle East airport contract and $47M U.S. maintenance deal. Mexico-related revenue declined to $40M from $145M YoY.
- **Optoelectronics**: Q4 revenue $113M (new record), driven by $7B healthcare order and Mexico nearshore manufacturing expansion.
- **Healthcare**: Underperformed but showing improvement with new patient monitoring platform investments.
- **Strategic Opportunities**: Big Beautiful Bill allocates $1B+ for CBP procurements, aligning with OSI's AI/RF detection expertise. Golden Dome program could drive radar solutions growth.

**【CFO Financial Details】**
- Gross margin 33.3% (up 120bps YoY), driven by higher-margin services. Operating expenses controlled at 21.3% of sales (down from 27.6% in 2017).
- Q4 cash flow impacted by $837M receivables (including $100M+ from Mexico delayed payments). Expect FY26 free cash flow >100% of net income.
- Balance sheet: Net leverage 1.8x, expanded $825M credit facility for M&A flexibility.

**【Q&A Highlights】**
- **Mexico Receivables**: FY26 collections expected to reduce DSO and drive cash flow. No credit terms changes; delays due to bureaucracy.
- **Service Growth**: Service revenue (33% of Security) outpaces product, with 24% YoY growth in Q4. Recurring revenue model to sustain margins.
- **M&A Pipeline**: Actively evaluating tuck-in acquisitions for Security and Optoelectronics, with $825M credit line for strategic moves.
- **Golden Dome**: Potential radar solutions orders for border security, aligning with $1B+ Big Beautiful Bill funding for RF detection.


OSI Systems, Inc. (OSIS) Q4 2025 Earnings Call Transcript

- **Record Q3 Performance**: $444M revenue (+10% YoY), $2.44 EPS, and $82M operating cash flow highlight strong execution across divisions.
- **Service Revenue Surge**: Security division service revenue growth reflects higher-margin recurring income from post-warranty maintenance.
- **Backlog Strength**: $1.8B backlog and book-to-bill >1.0 ensure visibility for FY '26 growth.
- **RF Solutions Momentum**: $29M contribution in Q3, with $32M order for secure communication systems driving defense opportunities.
- **Tariff Mitigation**: Global manufacturing footprint and strategic customer discussions position Opto for share gains in tariff-affected markets.
- **Healthcare Turnaround**: New leadership and $4M order signal early progress in patient monitoring solutions.


**【CFO Financial Summary】**
- **Revenue Growth**: Q3 revenue reached $444 million, up 10% YoY, driven by Security (+10%) and Opto (+15%) divisions.
- **Profitability**: Non-GAAP EPS of $2.44, a record high, with operating cash flow of $82 million (vs. -$52 million YoY).
- **Backlog**: Record $1.8 billion backlog, with a book-to-bill ratio >1.0, ensuring visibility for future growth.
- **Margins**: Gross margin 33.8%, stable YoY, with Security division margin 18.1% (down 50bps due to product mix and R&D investments).
- **Cash Flow**: Operating cash flow improved by $134 million YoY, driven by strong profits and working capital management.

**【CEO Business Highlights】**
- **Security Division**: 
  - $350 million in Q3 revenue, including $50 million order for cargo inspection systems and $76 million for airport security systems.
  - Service revenue grew significantly, reflecting higher-margin recurring income from post-warranty maintenance.
  - RF Solutions acquisition contributed $29 million, with momentum in long-range communication systems.
- **Opto Division**: 
  - Q3 revenue $86 million (10% YoY), with operating margin 14.0% (up 180bps YoY) due to scale and efficiency.
  - Diversified global manufacturing footprint (Malaysia, Indonesia, U.S., Mexico) positions for tariff mitigation.
- **Healthcare Division**: 
  - 5% YoY growth, with $4 million order for patient monitoring solutions under new leadership.
  - R&D focus on next-gen platforms expected to drive long-term growth.

**【Q&A Key Takeaways】**
- **Tariff Impact**: Minimal Q4 impact, but ongoing discussions with customers to leverage alternative manufacturing sites (e.g., Mexico, U.S.).
- **Service Revenue Growth**: Driven by expanding installed base, with higher-margin recurring income expected to accelerate.
- **Mexico Contract Transition**: Q3 Mexico-related revenue $69 million (vs. $137 million YoY), but Security division still grew 10% due to strong bookings in cargo and aviation.
- **Fiscal '26 Outlook**: Record backlog ($1.8B) and pipeline suggest continued growth, with focus on converting backlog to revenue.
- **RF Solutions Momentum**: Q3 order of $32 million for secure communication systems, with potential for multiyear growth in defense and government markets.
- **Cash Flow Expectations**: Q4 and FY '26 cash flow expected to remain strong, with DSO improvement and working capital efficiency.


OSI Systems (OSIS)-1 May 25-2025 Q3 Earnings call transcript

- **Record Q2 Growth**: $420M revenue (+12% YoY), $2.42 EPS, $1.8B backlog. 
- **Security Dominance**: 16% division growth, $133M in new security orders. 
- **RF Expansion**: $23M award integrates defense and border security. 
- **Cash Flow Strength**: $53M operating cash flow, 70% debt fixed-rate. 
- **FY25 Guidance**: 9.5%-11.1% revenue growth, 11.9%-15.6% EPS growth. 
- **Service Upside**: 7-10 year product lifecycle drives recurring service margins.

**【CEO Summary Section】**
- **Revenue Growth**: Q2 revenue reached $420 million, up 12% YoY, driven by 16% growth in the Security division. 
- **Key Wins**: Secured $81 million for Eagle M60 systems, $32 million for M60 upgrades, and $23 million for RF communication systems. 
- **Backlog Strength**: Record backlog of $1.8 billion with a book-to-bill ratio of 1.2. 
- **Cash Flow**: Generated $53 million in operating cash flow, up $76 million YoY. 

**【CFO Financial Commentary】**
- **Profitability**: Non-GAAP EPS of $2.42, up 11.9% YoY. Gross margin 35.1%, operating margin 15.0%. 
- **Division Performance**: Security division operating margin 19.9%, Opto 12.8%, Healthcare 12.0%. 
- **Liquidity**: $7.5 million annual term loan payments, 70% debt fixed-rate. 
- **Guidance Update**: FY25 revenue $1.685B-$1.710B (9.5%-11.1% growth), EPS $9.10-$9.40 (11.9%-15.6% growth). 

**【Q&A Highlights】**
- **Border Security**: New admin focus on border tech could boost CBP contracts. $27M airport deal and $81M M60 order highlight international momentum. 
- **RF Solutions**: $23M award for over-the-horizon radar, leveraging OSI's global reach for defense and border security. 
- **Mexico Transition**: Sabina contract revenue moderating, replaced by non-Mexico orders. Service revenue growth expected from installed base. 
- **Aviation Cycle**: TSA checkpoint CT upgrades expected in 2-3 years, aligning with 7-10 year product lifecycle. 
- **Healthcare Innovation**: Next-gen patient monitoring platform in R&D, with potential leasing model for recurring revenue.

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