OSI Systems, Inc.
Key statistics
from XBRL data in SEC filingsAI briefing
from the latest 10-K, 10-Q and 8-K eventsOSI Systems is a vertically integrated designer and manufacturer of specialized electronic systems for security, healthcare, and defense/aerospace markets.
What they do
OSI Systems operates through three divisions: Security (security screening and high-power RF systems), Optoelectronics and Manufacturing (specialized electronic components and manufacturing services), and Healthcare (patient monitoring and connected care). The company sells globally, with a large percentage of revenue generated outside the United States.
Revenue drivers
- Security Division — Provides security screening products, turnkey screening solutions, and high-power RF systems; accounted for 70% of fiscal 2026 consolidated revenues.
- Optoelectronics and Manufacturing Division — Designs and manufactures optoelectronic devices and provides electronics manufacturing services; accounted for 21% of fiscal 2026 revenues.
- Healthcare Division — Patient monitoring, cardiology, and connected care systems; accounted for 9% of fiscal 2026 revenues.
Recent performance
Fiscal 2026 revenues were $1.79 billion, up 4% from fiscal 2025, with GAAP diluted EPS of $8.95 and record non-GAAP EPS of $10.35. Operating cash flow was a record $275.9 million, up from $97.6 million. Q4 2026 revenues declined 4% year-over-year to $484.1 million due to Middle East conflict-related delivery delays. Backlog reached approximately $1.9 billion as of June 30, 2026.
Strategy
Management emphasizes disciplined execution, cash generation, and growing backlog. They have refined debt, extended maturities, and repurchased shares, ending fiscal 2026 with $359.8 million in cash. The company is investing in operational improvements, particularly in Healthcare, and advancing product development. Expansion opportunities are focused on the large pipeline in Security and broad-based demand in Optoelectronics.
Risks
- Delivery delays from geopolitical conflicts — Middle East conflicts shifted timing of planned deliveries, impacting Q4 2026 revenues, though orders remain in backlog.
- Product liability from detection failures — If security systems fail to detect threats, the company could face significant product liability claims, possibly exceeding insurance coverage.
- Government and trade policy changes — Changes in U.S. and foreign government spending, tariffs, and trade friction (e.g., U.S.-China) could adversely affect demand and operations.
- Macroeconomic and supply chain pressure — Global inflation, interest rate policies, labor shortages, and supply chain disruptions could impact costs and execution.
Outlook
For fiscal 2027, management introduced revenue guidance of $1.875 billion to $1.930 billion and non-GAAP EPS guidance. They cite a substantial backlog, a significant opportunity pipeline, and recent program wins positioning the company for growth. The CEO expects continued strong performance across divisions despite ongoing delivery timing uncertainties.