OSI Systems Reports Record Q2 Earnings Amid Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 30 2026
0mins
Should l Buy OSIS?
Source: seekingalpha
- Revenue Growth: OSI Systems reported Q2 revenues of $464 million, an 11% year-over-year increase, reflecting strong momentum in the Security and Optoelectronics divisions despite delayed orders due to the U.S. government shutdown.
- Security Division Performance: The Security division generated $335 million in revenue, a 15% increase year-over-year, driven by service revenues and RF business integration, although revenues from the Mexico security contract fell by 50% to $27 million.
- Outlook Adjustment: The company raised its fiscal 2026 non-GAAP EPS guidance to a range of $10.30 to $10.55, anticipating a revenue headwind of over $50 million in Q3, yet management remains confident about a strong performance in the second half of the year.
- Operational Efficiency Improvement: Operating expenses for Q2 totaled $70.2 million, representing 15.1% of sales, down from 16.8% in the same quarter last year, indicating ongoing efforts in cost management and operational efficiency.
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Analyst Views on OSIS
Wall Street analysts forecast OSIS stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for OSIS is 287.33 USD with a low forecast of 255.00 USD and a high forecast of 315.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
3 Analyst Rating
2 Buy
1 Hold
0 Sell
Moderate Buy
Current: 258.160
Low
255.00
Averages
287.33
High
315.00
Current: 258.160
Low
255.00
Averages
287.33
High
315.00
About OSIS
OSI Systems, Inc., together with its subsidiaries, is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications. The Company sells its products and provides related services in diversified markets, including homeland security, healthcare, defense and aerospace. It has three operating divisions: Security, providing security and inspection systems and turnkey security screening solutions, Optoelectronics and Manufacturing, providing specialized electronic components for its Security and Healthcare divisions, and to third parties for applications in the defense and aerospace markets, among others, and Healthcare, providing patient monitoring, cardiology and remote monitoring, and connected care systems and associated accessories. It designs and manufactures its optoelectronic devices and value-added subsystems and provides electronics manufacturing services primarily for original equipment manufacturer (OEM) customers.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
OSI Systems Reports Record Q2 Earnings Amid Challenges
- Revenue Growth: OSI Systems reported Q2 revenues of $464 million, an 11% year-over-year increase, reflecting strong momentum in the Security and Optoelectronics divisions despite delayed orders due to the U.S. government shutdown.
- Security Division Performance: The Security division generated $335 million in revenue, a 15% increase year-over-year, driven by service revenues and RF business integration, although revenues from the Mexico security contract fell by 50% to $27 million.
- Outlook Adjustment: The company raised its fiscal 2026 non-GAAP EPS guidance to a range of $10.30 to $10.55, anticipating a revenue headwind of over $50 million in Q3, yet management remains confident about a strong performance in the second half of the year.
- Operational Efficiency Improvement: Operating expenses for Q2 totaled $70.2 million, representing 15.1% of sales, down from 16.8% in the same quarter last year, indicating ongoing efforts in cost management and operational efficiency.
See More
OSI Systems OSIS Q2 2026 Earnings Call Transcript
See More
OSI Systems Set to Announce Q2 Earnings on January 29
- Earnings Announcement: OSI Systems is set to release its Q2 earnings on January 29, with an expected EPS of $2.52, reflecting a 4.1% year-over-year increase, and revenue estimates at $449.51 million, up 7.0% year-over-year, indicating strong growth potential.
- Consistent Outperformance: Over the past two years, OSI Systems has consistently beaten EPS and revenue estimates 100% of the time, showcasing the company's financial stability and market confidence, which may enhance investor expectations for future performance.
- Estimate Revision Trends: In the last three months, EPS estimates have seen three upward revisions and two downward adjustments, while revenue estimates experienced three upward revisions and one downward, reflecting analyst divergence on the company's growth outlook and market interest.
- Increased Market Attention: As the earnings report approaches, investor and analyst attention on OSI Systems is rising, particularly following the recent $30 million naval communications order, which further boosts market expectations for its future performance.
See More
OSI Systems (OSIS) Secures $12 Million Order for Optical Sensors from Healthcare OEM
- Significant Order Value: OSI Systems' Optoelectronics and Manufacturing division has secured an approximately $12 million order from a leading healthcare OEM, indicating strong demand and market recognition in the medical technology sector.
- Optical Sensor Application: The order will be utilized for optical sensors in medical devices, further solidifying OSI's technological strength in the medical equipment market while enhancing its product diversification and innovation capabilities.
- Optimistic Market Outlook: With the ongoing growth in the medical device industry, OSI Systems' order not only boosts short-term revenue expectations but also lays the groundwork for future business expansion and market share enhancement.
- Strategic Partnership Opportunities: The collaboration with a major healthcare OEM may open up more long-term partnership opportunities for OSI Systems, strengthening its competitive edge in the medical device sector and driving sustained growth.
See More
OSI Systems Secures $12 Million Order for Optical Sensors from Healthcare OEM
- Significant Order Value: OSI Systems' Optoelectronics and Manufacturing division has secured an approximately $12 million order from a leading healthcare OEM, indicating strong demand and market position in the medical sector.
- Strong Customer Relationship: CEO Ajay Mehra noted that this repeat order reflects a close collaboration with a long-standing customer, emphasizing their mutual commitment to cutting-edge innovation.
- Business Diversification: OSI Systems showcases its expertise in designing and manufacturing electronic systems and components through its three key segments: Security, Optoelectronics and Manufacturing, and Healthcare, enhancing its competitive edge in the market.
- Global Service Network: Operating in over 170 countries, the company provides sales, service, and R&D support, ensuring fast and efficient delivery capabilities, further solidifying its strategic positioning in the global market.
See More
OSI Systems Secures $30 Million Naval Order for RF Communication Systems
- International Order Secured: OSI Systems' Security division has received an international order worth approximately $30 million to deploy advanced RF communication and surveillance systems over multiple years, showcasing the company's strong competitive position in the defense sector.
- Technology Upgrade Support: This order will facilitate the integration of the latest Very Low Frequency (VLF) station architecture technologies to upgrade existing operations, enhancing naval communication capabilities and solidifying OSI Systems' standing in the high-tech market.
- Strategic Partnership: CEO Ajay Mehra emphasized that this partnership underscores the company's commitment to delivering cutting-edge RF solutions that enhance operational readiness and security, further strengthening its influence in the defense industry.
- Global Market Presence: Serving over 170 countries, OSI Systems demonstrates its global sales and support capabilities through its three key segments: Security, Optoelectronics and Manufacturing, and Healthcare, ensuring fast and efficient delivery that drives future business growth.
See More
OSI Systems Reports Record Q2 Earnings Amid Challenges
- Revenue Growth: OSI Systems reported Q2 revenues of $464 million, an 11% year-over-year increase, reflecting strong momentum in the Security and Optoelectronics divisions despite delayed orders due to the U.S. government shutdown.
- Security Division Performance: The Security division generated $335 million in revenue, a 15% increase year-over-year, driven by service revenues and RF business integration, although revenues from the Mexico security contract fell by 50% to $27 million.
- Outlook Adjustment: The company raised its fiscal 2026 non-GAAP EPS guidance to a range of $10.30 to $10.55, anticipating a revenue headwind of over $50 million in Q3, yet management remains confident about a strong performance in the second half of the year.
- Operational Efficiency Improvement: Operating expenses for Q2 totaled $70.2 million, representing 15.1% of sales, down from 16.8% in the same quarter last year, indicating ongoing efforts in cost management and operational efficiency.
See More
OSI Systems OSIS Q2 2026 Earnings Call Transcript
See More
OSI Systems Set to Announce Q2 Earnings on January 29
- Earnings Announcement: OSI Systems is set to release its Q2 earnings on January 29, with an expected EPS of $2.52, reflecting a 4.1% year-over-year increase, and revenue estimates at $449.51 million, up 7.0% year-over-year, indicating strong growth potential.
- Consistent Outperformance: Over the past two years, OSI Systems has consistently beaten EPS and revenue estimates 100% of the time, showcasing the company's financial stability and market confidence, which may enhance investor expectations for future performance.
- Estimate Revision Trends: In the last three months, EPS estimates have seen three upward revisions and two downward adjustments, while revenue estimates experienced three upward revisions and one downward, reflecting analyst divergence on the company's growth outlook and market interest.
- Increased Market Attention: As the earnings report approaches, investor and analyst attention on OSI Systems is rising, particularly following the recent $30 million naval communications order, which further boosts market expectations for its future performance.
See More
OSI Systems (OSIS) Secures $12 Million Order for Optical Sensors from Healthcare OEM
- Significant Order Value: OSI Systems' Optoelectronics and Manufacturing division has secured an approximately $12 million order from a leading healthcare OEM, indicating strong demand and market recognition in the medical technology sector.
- Optical Sensor Application: The order will be utilized for optical sensors in medical devices, further solidifying OSI's technological strength in the medical equipment market while enhancing its product diversification and innovation capabilities.
- Optimistic Market Outlook: With the ongoing growth in the medical device industry, OSI Systems' order not only boosts short-term revenue expectations but also lays the groundwork for future business expansion and market share enhancement.
- Strategic Partnership Opportunities: The collaboration with a major healthcare OEM may open up more long-term partnership opportunities for OSI Systems, strengthening its competitive edge in the medical device sector and driving sustained growth.
See More
OSI Systems Secures $12 Million Order for Optical Sensors from Healthcare OEM
- Significant Order Value: OSI Systems' Optoelectronics and Manufacturing division has secured an approximately $12 million order from a leading healthcare OEM, indicating strong demand and market position in the medical sector.
- Strong Customer Relationship: CEO Ajay Mehra noted that this repeat order reflects a close collaboration with a long-standing customer, emphasizing their mutual commitment to cutting-edge innovation.
- Business Diversification: OSI Systems showcases its expertise in designing and manufacturing electronic systems and components through its three key segments: Security, Optoelectronics and Manufacturing, and Healthcare, enhancing its competitive edge in the market.
- Global Service Network: Operating in over 170 countries, the company provides sales, service, and R&D support, ensuring fast and efficient delivery capabilities, further solidifying its strategic positioning in the global market.
See More
OSI Systems Secures $30 Million Naval Order for RF Communication Systems
- International Order Secured: OSI Systems' Security division has received an international order worth approximately $30 million to deploy advanced RF communication and surveillance systems over multiple years, showcasing the company's strong competitive position in the defense sector.
- Technology Upgrade Support: This order will facilitate the integration of the latest Very Low Frequency (VLF) station architecture technologies to upgrade existing operations, enhancing naval communication capabilities and solidifying OSI Systems' standing in the high-tech market.
- Strategic Partnership: CEO Ajay Mehra emphasized that this partnership underscores the company's commitment to delivering cutting-edge RF solutions that enhance operational readiness and security, further strengthening its influence in the defense industry.
- Global Market Presence: Serving over 170 countries, OSI Systems demonstrates its global sales and support capabilities through its three key segments: Security, Optoelectronics and Manufacturing, and Healthcare, ensuring fast and efficient delivery that drives future business growth.
See More
