OSI Systems reports record Q4 EPS, backlog, and cash flow

OSI Systems (NASDAQ: OSIS ) reported fourth-quarter financial results on Thursday.

The transcript from the company's fourth-quarter earnings call has been provided below.

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For comprehensive financial data and transcripts, visit Access the full call at Summary OSI Systems reported full-year revenues of $1.79 billion, slightly below guidance due to delays in the Middle East affecting approximately $50 million in Security deliveries, but these are expected to be fulfilled later.

The company achieved record operating cash flow of $182 million in Q4 and grew non-GAAP earnings per share by 17% to $3.78.

The annual adjusted EPS increased 11% to $10.35.

A record backlog of $1.9 billion provides strong visibility for fiscal 2027, with significant opportunities in the pipeline including new IDIQ contracts with the Department of Homeland Security.

The Optoelectronics division saw a 9% revenue growth, and Healthcare division improved its operating margin from 1% to 10% year over year in Q4.

For fiscal 2027, OSI Systems projects revenues between $1.875 billion and $1.93 billion, with adjusted EPS expected to grow by 7.5% to 11%.

Management highlighted ongoing strategic partnerships and program wins, including a role in the LA28 Olympic and Paralympic Games.

Cash flow generation is expected to remain strong in fiscal 2027, with free cash flow potentially exceeding net income.

Full Transcript OPERATOR Thank you for standing by and welcome to the OSI Systems fourth quarter 2026 conference call.

At this time, all participants are in a listen-only mode.

After the speakers' prepared remarks, there will be a question-and-answer session.

To ask a question during this session, you'll need to press star 11 on your telephone.

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As a reminder, today's program is being recorded.

And now I'd like to introduce your host for today's program, Alan Edrick, Chief Financial Officer.

Please go ahead, sir.

Alan Edrick, Executive Vice President and Chief Financial Officer Thank you.

Good afternoon and thank you for joining us.

I'm Alan Edrick, Executive Vice President and CFO of OSI Systems, and I'm here today with AJ Mehra, OSI's President and CEO.

Welcome to the OSI Systems fiscal 2026 fourth quarter and year-end conference call.

We are pleased that you can join us as we review our financial and our operational results.

I'd like to remind everyone that today's discussion will include forward-looking statements and the Company wishes to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 with respect to such forward-looking statements.

All forward-looking statements made in this call are based on currently available information and the Company undertakes no obligation to update any forward-looking statement based on subsequent events, new information or otherwise.

We will also reference both GAAP and non-GAAP financial measures.

Applicable reconciliations are available in today's earnings release.

I will begin with a high-level summary of our financial performance for the fourth quarter and the full fiscal year and then turn the call over to AJ for a discussion of our business and operational performance.

We will then finish with more detail regarding our financial results and our outlook for fiscal 27.

Before I discuss our fourth quarter records, let me address the revenue results.

Full-year revenues of 1.79 billion finished below our guidance range and fourth quarter revenues of 484 million were down approximately 4% year over year.

Importantly, these results were affected by the timing of approximately $50 million of planned Security deliveries that moved beyond our June 30th fiscal year-end because of conflict-related delays and site access constraints in the Middle East.

I want to emphasize that these expected revenues are deferred, not orders lost.

They remain firmly in our backlog and are expected to be delivered on a later schedule.

Setting this aside, we were really pleased with the overall performance as multiple key performance metrics for Q4 and the full fiscal year were extremely strong.