OSI SYSTEMS REPORTS FISCAL 2027 FIRST QUARTER FINANCIAL RESULTS
OSI SYSTEMS INC (OSIS) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 OSI SYSTEMS REPORTS FISCAL 2027 FIRST QUARTER FINANCIAL RESULTS · Record Q1 Revenues of $403 Million · Record Q1 Earnings per Diluted Share o GAAP EPS of $1.51 (28% year-over-year growth) o Non-GAAP EPS of $1.66 (17% year-over-year growth) · Book-to-Bill Ratio of 1.4
How this was made
The 30-second read
Why it matters
The earnings beat and raised EPS outlook provide fresh, material information for traders.
Market read
First‑report earnings release with raised guidance creates immediate trading opportunity.
What to watch
Potential headwinds from geopolitical tensions affecting the security division could temper upside.
Record Q1 Revenues of $403 Million; Record Q1 Earnings per Diluted Share; Book-to-Bill Ratio of 1.4 Drives Record Backlog of $2.1 Billion; Company Reaffirms Fiscal 2027 Revenue Guidance and Raises Fiscal 2027 Non-GAAP EPS Guidance
Revenue, GAAP diluted EPS, non-GAAP diluted EPS, bookings, backlog and operating cash flow increased year over year, while consolidated GAAP and non-GAAP operating margins declined and Healthcare reported an operating loss.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total net revenuesGAAP | $403.5M | – | 5% |
| Product revenuesGAAP | $289.8M | – | – |
| Service revenuesGAAP | $113.6M | – | – |
| Total cost of goods soldGAAP | $279.7M | – | – |
| Product cost of goods soldGAAP | $213.8M | – | – |
| Service cost of goods soldGAAP | $65.88M | – | – |
| Gross profitGAAP | $123.8M | – | – |
| Selling, general and administrative expenseGAAP | $68.71M | – | – |
| Research and development expenseGAAP | $19.43M | – | – |
| Restructuring and other chargesGAAP | $2.10M | – | – |
| Total operating expensesGAAP | $90.23M | – | – |
| Income from operationsGAAP | $33.57M | – | – |
| Operating marginGAAP | 8.3% | – | – |
| Non-GAAP operating incomenon-GAAP | $38.28M | – | – |
| Non-GAAP operating marginnon-GAAP | 9.5% | – | – |
| Interest and other expense, netGAAP | −$3.32M | – | – |
| Income before income taxesGAAP | $30.25M | – | – |
| Provision for income taxesGAAP | −$5.68M | – | – |
| Net incomeGAAP | $24.57M | – | – |
| Non-GAAP net incomenon-GAAP | $26.95M | – | – |
| Diluted earnings per shareGAAP | $1.51 | – | 28% |
| Diluted earnings per sharenon-GAAP | $1.66 | – | 17% |
| Weighted average shares outstanding - dilutedGAAP | 16.25M | – | – |
| Book-to-bill ratioother | 1.4 | – | – |
| Bookingsother | $583M | – | – |
| Backlogother | $2.1B | – | – |
| Cash flow provided by operating activitiesGAAP | $37.09M | – | >100% |
| Capital expendituresother | $7.66M | – | – |
| Cash and cash equivalentsGAAP | $236.3M | – | – |
| Short-term investmentsGAAP | $65.70M | – | – |
| Long-term debtGAAP | $998.3M | – | – |
| Current portion of long-term debtGAAP | $1.27M | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| SecurityStrong bookings led to record divisional backlog and reflected robust customer demand for security inspection and surveillance products, integrated solutions, and services. | $264.1M | – | – |
| Optoelectronics & ManufacturingThe division benefited from vertically integrated capabilities, broad customer relationships, and a diversified manufacturing footprint. | $119.7M | – | 9% year-over-year including intersegment sales; 16% year-over-year from sales to external customers |
| HealthcareThe Company described Healthcare performance as soft in the quarter and anticipates a return to growth this fiscal year. | $35.13M | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Fiscal Year 2027 outlook
- Revenue$1.875 billion - $1.930 billion
- NoteRevenue year-over-year growth rate: 5.0% - 8.1%
- NoteNon-GAAP earnings per share: $11.28 - $11.64
- NoteNon-GAAP earnings per share year-over-year growth rate: 9.0% - 12.5%
Capital returns
- The board of directors authorized an additional 1 million shares to the existing share repurchase program in August 2026.
- The Company repurchased 305,559 shares during the first quarter of fiscal 2027.
- Total capital returned to shareholders through repurchases was approximately $62 million.
- There were 773,172 shares remaining under the repurchase authorization as of September 30, 2026.
What drove it
- Record first-quarter revenue and diluted EPS were led by the Security and Optoelectronics and Manufacturing divisions.
- Bookings of $583 million produced a book-to-bill ratio of 1.4 and backlog of $2.1 billion.
- Security bookings reflected demand for security inspection and surveillance products, integrated solutions, and services.
- Optoelectronics and Manufacturing achieved adjusted operating margin expansion.
- Operating cash flow more than doubled over the prior-year first quarter to $37 million.
Concerns
- Security operating margin was impacted by a less favorable mix of revenues.
- Healthcare reported GAAP operating income of $(2,388) (in thousands) and non-GAAP operating income of $(617) (in thousands).
- Consolidated GAAP operating margin declined to 8.3% from 8.6%, while non-GAAP operating margin declined to 9.5% from 10.3%.
- The Company cited continued geopolitical headwinds affecting the Security division.
What to watch
- Whether Security revenue mix stabilizes and service revenues increase over the remainder of fiscal 2027.
- Whether Healthcare returns to growth during fiscal 2027.
- Conversion of the record $2.1 billion backlog and expanding opportunity pipeline into revenue.
- Execution against reaffirmed revenue guidance of $1.875 billion - $1.930 billion and increased non-GAAP EPS guidance of $11.28 - $11.64.
Balance sheet and cash flow
- Cash flow provided by operating activities was $37,088 (in thousands), compared with $17,137 (in thousands) for the three months ended September 30, 2025.
- Capital expenditures were $7,655 (in thousands), compared with $7,028 (in thousands) for the three months ended September 30, 2025.
- Cash and cash equivalents were $236,298 (in thousands) and short-term investments were $65,702 (in thousands) as of September 30, 2026.
- Long-term debt was $998,294 (in thousands) and the current portion of long-term debt was $1,275 (in thousands) as of September 30, 2026.
Analysis
OSI Systems began fiscal 2027 with total net revenues of $403,472 (in thousands), compared with $384,623 (in thousands), a reported increase of 5%. GAAP diluted EPS rose 28% to $1.51 and non-GAAP diluted EPS rose 17% to $1.66. Net income was $24,572 (in thousands), compared with $20,556 (in thousands), while non-GAAP net income was $26,953 (in thousands), compared with $24,836 (in thousands).
Demand indicators were strong. Bookings of $583 million produced a 1.4 book-to-bill ratio, compared with 1.1, and backlog reached $2.1 billion from $1.9 billion as of June 30, 2026. Management attributed Security bookings to demand for inspection and surveillance products, integrated solutions, and services. Optoelectronics and Manufacturing revenue reached $119,725 (in thousands), with management reporting 9% year-over-year growth including intersegment sales and 16% growth in external sales.
Profitability was mixed. Consolidated GAAP operating income increased to $33,570 (in thousands) from $33,073 (in thousands), but GAAP operating margin declined to 8.3% from 8.6%. Non-GAAP operating income declined to $38,280 (in thousands) from $39,778 (in thousands), and non-GAAP operating margin declined to 9.5% from 10.3%. Security's non-GAAP operating margin declined to 12.6% from 13.5%, which management attributed to less favorable revenue mix. Healthcare revenue was $35,128 (in thousands) and its GAAP and non-GAAP operating results were losses.
Cash generation improved materially, with cash flow provided by operating activities of $37,088 (in thousands), compared with $17,137 (in thousands). The Company repurchased 305,559 shares and reported approximately $62 million of capital returned through repurchases. Cash and cash equivalents plus short-term investments were approximately $302 million, while long-term debt was $998,294 (in thousands).
The Company reaffirmed fiscal 2027 revenue guidance of $1.875 billion - $1.930 billion and increased non-GAAP EPS guidance to $11.28 - $11.64 from $11.13 - $11.49. The updated non-GAAP EPS growth range is 9.0% - 12.5%, compared with the prior 7.5% - 11.0% range. The key operating focus is whether Security mix improves as service revenue increases, alongside a recovery in Healthcare and conversion of backlog into revenue.
Management, verbatim
We are pleased to begin fiscal 2027 with record first quarter revenues and earnings per share, led by the performance of our Security and Optoelectronics and Manufacturing divisions.
Ajay Mehra, President and Chief Executive Officer
The Security division delivered a solid quarter despite continued geopolitical headwinds.
Ajay Mehra, President and Chief Executive Officer
Operating cash flow more than doubled in the first fiscal quarter over the prior year Q1 to $37 million, and we finished the quarter with approximately $302 million of cash, cash equivalents and short-term investments.
Alan Edrick, Executive Vice President and Chief Financial Officer
Not in the filing
stated, not guessed- Free cash flow was not reported.
- GAAP gross margin was not reported.
- GAAP fiscal 2027 diluted EPS guidance was not provided.
- Fiscal 2027 guidance for gross margin, operating expenses and tax rate was not provided.
- Dividend information was not reported.
- A previous-release outlook was not provided for comparison with reported first-quarter results.
- Prior-year and prior-quarter comparisons were not printed for several individual financial-statement line items and segment revenues.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
OSI Systems filed a Form 8‑K announcing its FY2027 Q1 results and updated guidance.
Ticker impact
OSI Systems reported record Q1 revenue of $403M and raised its FY2027 non‑GAAP EPS guidance.
likely upward pressure as investors price in the raised guidance and record results
The company posted 28% YoY GAAP EPS growth and increased its non‑GAAP EPS outlook, which typically drives buying interest.
Market effects
Strong results may boost sentiment in the security and optoelectronics equipment sector.
Positive for U.S. technology stocks, especially mid‑cap industrial tech names.
Limited to investors tracking industrial and defense‑related equipment makers.
Counterpoint
If the raised guidance is already priced in, the stock could face a short‑term pull‑back.
Key entities
- companyOSI Systems Inc.
Manufacturer of security, optoelectronics, and healthcare equipment.
