OSI Systems, Inc. designs and manufactures specialized electronic systems and components for critical applications across the United States, Mexico, the rest of the Americas, the United Kingdom, Europe, the Middle East, Africa, and the Asia-Pacific. The company offers security products including baggage and parcel inspection, cargo and vehicle inspection, hold baggage screening, people screening, radiation monitoring, explosive and narcotics trace detection, and optical inspection systems, as well as turnkey security screening services under the S2 brand. It also provides trace detection systems, people screening products such as walk-through metal detectors, digital and analog high-power RF systems, and active components for light detection. In addition, the company offers lasers, passive optical components under the OSI Optoelectronics brand, printed circuit board assemblies, cable and harness assemblies, and complete systems. It provides bedside monitors including the Xprezzon and Qube, telemetry solutions, Spacelabs SafeNSound, predictive analytics clinical decision support, Pathfinder SL and Lifescreen Pro analysis tools, and Eclipse Pro Holter recorders. The company also offers Eclipse Mini Ambulatory ECG recorders, ambulatory blood pressure monitors, Spacelabs OnTrak ambulatory blood pressure systems, Sentinel cardiology information management system, and multivendor compatible accessories. OSI Systems, Inc. was incorporated in 1987 and is headquartered in Hawthorne, California.
OSIS Q4 Revenue Misses on Middle East Delays, but Record Backlog and New Contracts Support Outlook
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Q4 revenue miss and soft FY27 guidance OSI Systems reported Q4 revenue of $484.1 million, down 4.1% and missing estimates by 8.4%, as about $50 million of Security deliveries slipped past fiscal year-end due to Middle East conflict delays. FY27 revenue guidance of $1.875–$1.93 billion came in below the $1.94 billion consensus, sending shares down sharply.
This is the main new negative event that directly explains the stock's recent drop and answers what is driving OSIS now.
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Record backlog and new U.S. Customs contracts Despite the revenue miss, backlog hit a record $1.90 billion, up 5.6% year over year. After fiscal year-end, U.S. Customs and Border Protection awarded two five-year contracts worth up to $200 million and $85 million for vehicle and mobile X-ray inspection systems, supporting future growth.
This is new information that provides a positive counterweight to the revenue miss and supports the long-term demand story.
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Earnings beat on margin gains and strong cash flow Q4 adjusted EPS of $3.78 beat estimates and rose 16.7% year over year, helped by margin gains. The company also reported record Q4 operating cash flow of $182 million and record full-year cash flow of $276 million, showing the business remains profitable and cash-generative.
This new positive detail explains why the stock did not fall further and highlights underlying financial health.
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Healthcare and optoelectronics offset Security weakness Security division revenue fell 7.4% to $339.7 million, missing estimates, but healthcare revenue rose 4.8% to $44.8 million and optoelectronics revenue rose 4.6% to $117.8 million, both beating expectations. This diversification softens the blow from the Security shortfall.
This new segment detail shows the revenue miss was concentrated in one division, giving a fair picture of the drivers.
Q3 2026
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OSIS Q4 Revenue Misses on Middle East Delays, but Record Backlog and New Contracts Support Outlook
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Q4 revenue miss and soft FY27 guidance OSI Systems reported Q4 revenue of $484.1 million, down 4.1% and missing estimates by 8.4%, as about $50 million of Security deliveries slipped past fiscal year-end due to Middle East conflict delays. FY27 revenue guidance of $1.875–$1.93 billion came in below the $1.94 billion consensus, sending shares down sharply.
This is the main new negative event that directly explains the stock's recent drop and answers what is driving OSIS now.
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Record backlog and new U.S. Customs contracts Despite the revenue miss, backlog hit a record $1.90 billion, up 5.6% year over year. After fiscal year-end, U.S. Customs and Border Protection awarded two five-year contracts worth up to $200 million and $85 million for vehicle and mobile X-ray inspection systems, supporting future growth.
This is new information that provides a positive counterweight to the revenue miss and supports the long-term demand story.
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Earnings beat on margin gains and strong cash flow Q4 adjusted EPS of $3.78 beat estimates and rose 16.7% year over year, helped by margin gains. The company also reported record Q4 operating cash flow of $182 million and record full-year cash flow of $276 million, showing the business remains profitable and cash-generative.
This new positive detail explains why the stock did not fall further and highlights underlying financial health.
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Healthcare and optoelectronics offset Security weakness Security division revenue fell 7.4% to $339.7 million, missing estimates, but healthcare revenue rose 4.8% to $44.8 million and optoelectronics revenue rose 4.6% to $117.8 million, both beating expectations. This diversification softens the blow from the Security shortfall.
This new segment detail shows the revenue miss was concentrated in one division, giving a fair picture of the drivers.
News & notes movingOSIS
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OSI Systems Posts Record $1.79B Revenue, $1.9B Backlog
OSI Systems closed fiscal year 2026 with record annual revenues of $1.79 billion and a record $1.9 billion order backlog, up from $1.8 billion a year earlier. Full-year non-GAAP adjusted earnings per share rose 11% year-over-year to a record $10.35, while fourth-quarter non-GAAP diluted earnings per share reached a record $3.78, up 17%. On September 17, the company's Optoelectronics and Manufacturing division secured approximately $8 million in new orders from a global industrial technology customer, a modest slice of the $1.79 billion in annual sales. Fourth-quarter revenue fell 4% year-over-year to $484 million, which management attributed to Middle East conflicts that delayed planned customer deliveries, though those orders remain in the backlog. Full-year GAAP diluted earnings per share grew just 3% to $8.95, and the company retired its bank credit lines while executing $123.6 million in quarterly share buybacks, ending with $359.8 million in cash.
OSI Systems Wins $90 Million US Government RF Contracts
OSI Systems announced on September 16 that its Security division secured approximately $90 million in US government contracts for Very Low Frequency communication systems and high-frequency transmission equipment. CEO Ajay Mehra said momentum is expanding across these Radio Frequency operations, prompting the company to scale labor capacity and expand its operational footprint to meet accelerating defense demand. The award combines upfront infrastructure builds with long-term lifecycle support, a recurring revenue stream that extends well beyond initial equipment deployment. The contracts add to a record $1.9 billion backlog reported on August 20 for fiscal 2026, up from $1.8 billion a year earlier, even after deliveries were delayed by Middle East conflicts; management said those deferred shipments were timing reschedules rather than canceled contracts. The company ended its fiscal year on June 30 with $1.79 billion in revenue, $276 million in operating cash flow, and cash and equivalents of $359.8 million, up from $106.4 million a year earlier, funding $123.6 million in fourth-quarter buybacks while bank credit lines were reduced to zero. For fiscal 2027, management guides to revenue growth of 5% to 8.1% and non-GAAP EPS growth of 7.5% to 11%.
OSIS · Demand · Positive OSI Systems won ~$90M in US government RF contracts for VLF communication systems and HF transmission equipment, adding to its record backlog.
Specialized technology stocks delivered a strong Q2, with the eight tracked companies collectively beating revenue estimates by 1.4% and guiding next quarter's revenue 6% above consensus. Cognex reported revenues of $291.3 million, up 16.9% year on year, but fell short of analysts' expectations by 0.7%, and its stock is down 15.1% since reporting. The best performer was Napco, which reported revenues of $55.81 million, up 10% year on year, outperforming analysts' expectations by 6.2%. The weakest was OSI Systems, with revenues of $484.1 million, down 4.1% year on year, missing expectations by 8.5%. PAR Technology, Zebra, and others also reported strong results, with shares moving accordingly.
OSI Systems Posts Record Cash Flow and Backlog but Misses Revenue Estimates
OSI Systems reported record operating cash flow and backlog for fiscal 2026, but its fourth-quarter revenue fell short of expectations, with revenue declining 4% to $484.1 million, about $45.6 million below the $529.7 million consensus estimate. Full-year revenue of $1.786 billion also missed the company's prior guidance floor by roughly $39 million, while non-GAAP diluted EPS of $3.78 was essentially in line with estimates. Management attributed the shortfall to Middle Eastern delivery delays and site-access constraints, which deferred approximately $50 million of Security orders into the next fiscal year, though these orders remain in the record backlog of about $1.9 billion. Fiscal 2027 guidance projects revenue of $1.875 billion to $1.930 billion and non-GAAP EPS of $11.13 to $11.49, implying growth of 5% to 8.1% and 7.5% to 11%, respectively. Operating cash flow surged to $275.9 million from $97.6 million, aided by a $159 million collection from the company's largest Mexican customer, while net debt rose to approximately $641.2 million following a $575 million convertible-note issuance and $123.6 million in share repurchases.
OSI Systems Falls 9.4% Despite Record Backlog and Buybacks
OSI Systems shares dropped 9.44% over the past week after fourth-quarter revenue of US$484.06 million came in slightly below the prior year due to conflict-related delivery delays. Net income rose to US$55.24 million, full-year earnings hit a record, and backlog climbed to about US$1.90 billion, including new multi-year security contracts with U.S. Customs and Border Protection. The company has retired nearly 22% of its shares since 2020 and expanded its buyback authorization, while management issued new FY2027 revenue guidance. Investors are now focused on how quickly the delayed security contracts convert to revenue, with community fair value estimates ranging from about US$165 to over US$315 per share.
OSI Systems shares fell nearly 10% to about $197.79 on Friday after the company reported fiscal fourth quarter 2026 revenue of $484.1 million, down 4% year over year and well below analysts' estimate of about $529.7 million. The shortfall was driven by roughly $50 million of planned security division deliveries pushed beyond the fiscal year-end due to Middle East conflicts and site-access constraints, which management stressed were delayed rather than canceled. Non-GAAP EPS rose 17% to $3.78, slightly ahead of the $3.77 estimate, and adjusted operating margin expanded to 17.7% from 15.7%. The company ended fiscal 2026 with record operating cash flow of $275.9 million and a record backlog of about $1.9 billion, while repurchasing $123.6 million of stock in the quarter. Management guided fiscal 2027 revenue of $1.875 billion to $1.93 billion and non-GAAP EPS of $11.13 to $11.49, with growth expected to be strongest in the second half and newer DHS-related business contributing from fiscal 2028 onward.
OSI Systems Reports Record Q4 Earnings and Backlog
OSI Systems reported fourth quarter revenues of $484 million, down approximately 4% year over year, while delivering record non-GAAP earnings per share of $3.78, up 17%. Full year revenues reached a record $1.79 billion, up 4%, and adjusted earnings per share grew to a record $10.35, up 11%. The company ended the year with a record backlog of approximately $1.9 billion, and fourth quarter operating cash flow was a record $182 million. Management attributed the revenue shortfall to about $50 million of planned security deliveries deferred beyond the June 30 fiscal year end due to conflict-related delays and site access constraints in the Middle East, emphasizing these are deferred, not lost, orders. For fiscal 2027, OSI Systems guided revenues of $1.875 billion to $1.93 billion and adjusted earnings per share of $11.13 to $11.49.
Ross Stores and Strategy surge while OSI Systems and Aveanna slide
Stock futures edged slightly higher early Friday as markets attempted to rebound from Thursday's steep selloff, with gains supported by a pullback in U.S. Treasury yields. Strategy rallied 10% after the firm returned to profitability on its Bitcoin holdings, swinging to an estimated $1.4B unrealized gain as the cryptocurrency surged nearly 22% over five sessions to around $78,500. Ross Stores jumped 9% after reporting stronger-than-expected quarterly results, with sales up 14% to $6.3B, comparable store sales up 10%, and EPS of $2.66, while raising its FY2026 EPS outlook to $8.61-$8.77 from $7.50-$7.74. OSI Systems plunged 14% after Q4 revenue declined 4.1% Y/Y to $484.1M, missing estimates by $45.6M, and its FY2027 revenue guidance of $1.875B-$1.93B came in below the $1.94B consensus. Aveanna Healthcare Holdings tumbled 9% after existing stockholders priced a 15M-share secondary offering at $11.75 per share, with the company receiving no proceeds. Flowers Foods fell 5% after Q2 revenue declined 4% Y/Y to $1.19B, missing estimates by $40M, and the company cut its FY2026 outlook to $5.07B-$5.14B in sales and $0.75-$0.85 in adjusted EPS, below consensus.
OSI Systems Q4 revenue misses estimates, EPS beats
OSI Systems reported fourth-quarter revenue of $484.06 million, down 4.1% year over year and 8.38% below the Zacks Consensus Estimate of $528.34 million. Earnings per share came in at $3.78, up from $3.24 a year earlier and slightly above the consensus estimate of $3.76. Security division revenue fell 7.4% to $339.73 million, missing the $388 million analyst estimate, while healthcare revenue rose 4.8% to $44.75 million and optoelectronics and manufacturing revenue increased 4.6% to $117.81 million. Non-GAAP operating income in the security division was $70.65 million, below the $81.4 million estimate, but healthcare and optoelectronics divisions both exceeded expectations.
OSI Systems expands stock repurchase program by 1 million shares
OSI Systems announced that its board has approved an additional 1,000,000 shares for repurchase, raising the total remaining authorization to 1,078,731. The company repurchased 564,880 shares during the quarter ended June 30, 2026. CFO Alan Edrick said the increase underscores confidence in the business and its ability to generate robust cash flow while maintaining flexibility for growth investments. Purchases may be made in the open market or privately, with no expiration date, and the program may be modified or terminated at any time.
Cognex Leads Specialized Technology Stocks with Strong Q1 Earnings Beat
Cognex reported first-quarter revenues of $268.4 million, up 24.3% year on year and exceeding analyst expectations by 9.3%, making it the top performer among eight specialized technology stocks tracked. The company also beat earnings per share estimates and raised its revenue guidance above consensus. Overall, the group posted a 4.2% revenue beat and next-quarter guidance 3.9% above estimates, though average share prices have declined 3.7% since reporting. PAR Technology delivered the highest full-year guidance raise, while OSI Systems recorded the slowest revenue growth and weakest guidance update, with its stock falling 25.7%.
StockStory flags OSI Systems as a Russell 2000 buy, warns on Sabre and Inspire Medical
StockStory highlights OSI Systems as a Russell 2000 stock to target this week, citing its 10.9% annual revenue growth over the last two years and 14.5% annual earnings per share growth over five years, while flagging Sabre and Inspire Medical Systems as facing challenges. Sabre is weighed down by sluggish total bookings, cash burn, and a high net-debt-to-EBITDA ratio of 7 times, while Inspire Medical contends with a smaller revenue base of 915.2 million dollars and a projected 8% sales decline over the next 12 months. OSI Systems, with a market cap of 3.81 billion dollars, trades at 20 times forward price-to-earnings, compared to Sabre at 7.1 times forward enterprise-value-to-EBITDA and Inspire Medical at 49.1 times forward price-to-earnings.
Mirion leads specialized tech revenue growth in Q1 but shares flat
Mirion Technologies reported first-quarter revenues of $257.6 million, up 27.5% year on year and beating analyst estimates by 5.2%, making it the fastest-growing among eight specialized technology stocks tracked. The broader group posted a very strong quarter overall, with aggregate revenues exceeding consensus by 4.2% and next-quarter guidance coming in 3.9% above expectations. Despite the strong results, share prices across the group have declined 3.9% on average since reporting. Mirion's stock is flat since its release, trading at $18.50, while Cognex delivered the biggest beat and highest guidance raise, and OSI Systems recorded the slowest growth and weakest guidance update.
OSI Systems Receives $50 Million Services Order for Security Inspection Systems
OSI Systems announced that its Security division received an order for approximately $50 million from a North American customer to provide ongoing maintenance service for its installed base of Rapiscan inspection systems used for screening baggage, cargo and vehicles. The award also includes continued support for the company's CertScan Platform. President and CEO Ajay Mehra stated the company is pleased to extend its long-standing support for this customer's security operations.
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