OSI Systems (OSIS) Q4 2026 earnings summary

Executive summary

• Fiscal 2026 delivered record annual revenues of $1.79 billion, up 4% year-over-year, with record Q4 and annual non-GAAP EPS, and record Q4 and annual operating cash flow, despite Middle East conflict-related delivery delays.

• Q4 revenues were $484 million, down 4% year-over-year, mainly due to $50 million in Security deliveries delayed by Middle East conflicts; these revenues are deferred, not lost.

• Ended the year with a record backlog of $1.9 billion, reflecting strong bookings and demand, providing strong visibility into fiscal 2027.

• Bookings were solid across all divisions, with a full-year book-to-bill ratio slightly above one.

Financial highlights

• Full-year revenues grew 4% year-over-year to $1.79 billion; GAAP EPS was $8.95, up 3%; non-GAAP EPS reached $10.35, up 11%; Q4 non-GAAP EPS was $3.78, up 17%.

• Fiscal 2026 net income was $154.7 million, up from $149.6 million in 2025.

• Fiscal 2026 operating income was $219.0 million, up slightly from $217.5 million in 2025.

• Q4 operating cash flow was a record $182 million; full-year operating cash flow was $276 million.

• Gross margin in Q4 expanded to 34.7% from 33.3% year-over-year; fiscal 2026 gross margin was 33.2%.

Outlook and guidance

• Fiscal 2027 revenue guidance: $1.875–$1.93 billion (5%–8.1% growth); adjusted/non-GAAP EPS guidance: $11.13–$11.49 (7.5%–11% growth).

• Guidance assumes conservative timing for Middle East deliveries and U.S. bookings, with most U.S. contract benefits expected in 2028 and beyond.

• Fiscal 2027 growth expected to be strongest in the second half.

• Free cash flow in fiscal 2027 is expected to exceed net income, driven by strong collections.