OSI Systems Inc

XMUN:OS2

Revenue timing: OSI reported full-year revenue of $1.79 billion, but results came in below guidance because about $50 million of Security deliveries were pushed past year-end due to conflict-related delays in the Middle East.

Strong profitability: Despite the revenue miss, the company posted record fourth-quarter operating cash flow of $182 million, record Q4 EPS of $3.78, and record full-year adjusted EPS of $10.35.

Backlog and visibility: Backlog ended at a record approximately $1.9 billion, and management said recent DHS/CBP awards and RF wins give it strong visibility into fiscal 2027 and beyond.

Fiscal 2027 outlook: Guidance calls for revenue of $1.875 billion to $1.93 billion and adjusted EPS of $11.13 to $11.49, with growth expected to be strongest in the second half.

Cash flow and capital return: Management expects strong fiscal 2027 free cash flow, likely above 100% of net income, and highlighted continued buybacks after repurchasing 565,000 shares in Q4.

Segment momentum: Optoelectronics posted broad-based demand and better margins, Healthcare improved sharply in Q4, and Security is expected to benefit from stronger service revenue growth over time.