OSI Systems (OS2) Q1 2027 Earnings Report
DE:OS2 Q1 2027 EPS Results
- Actual EPS
- EUR 1.48
- Consensus EPS
- EUR 1.47
- Beat/Miss
- Beat by +EUR 0.01
- One Year Ago EPS
- EUR 1.27
DE:OS2 Q1 2027 Revenue Results
- Actual Revenue
- EUR 360.75M
- Expected Revenue
- EUR 354.16M
- Beat/Miss
- Beat by +EUR 6.59M
- YoY Revenue Growth
- +4.90%
Earnings Announcement Details
- Quarter
- Q1 2027
- Date
- 10/29/2026
- Time
- After Close
- Conference Call
- Thursday, October 29, 2026
OSI Systems's next earnings date is estimated for January 28, 2027, based on past reporting schedules.
Q1 2027 Earnings Call Audio
Q1 2027 Earnings Slide Deck
No slide deck is available for this earnings event.
Q1 2027 Earnings Call Summary
The call was broadly positive. OSI reported record first-quarter revenue and adjusted EPS, strong bookings, a record $2.1 billion backlog, improved cash generation, robust Opto and RF momentum, and raised EPS guidance. These strengths were partly offset by the 14% Healthcare revenue decline, Healthcare's operating loss, lower consolidated margins, the Mexico transition headwind, Middle East-related order delays, and an expected modest Q2 revenue decline. Management nevertheless maintained full-year revenue guidance and expressed confidence in stronger second-half performance.
For fiscal 2027, OSI reaffirmed revenue guidance of $1.875 billion to $1.930 billion and raised non-GAAP EPS guidance to $11.28 to $11.64, representing 9% to 12.5% year-over-year growth, while continuing to expect revenue growth to be strongest in the second half and free cash flow to exceed net income for the full fiscal year. Q2 revenues are expected to be modestly down year-over-year, the Mexico program headwind is expected to be less than $25 million in fiscal '27 and approximately $11 million in Q2, and service revenues are expected to deliver strong double-digit growth in fiscal 2027 with growth accelerating throughout the year, commencing really this quarter in Q2 and getting even stronger in the second half. The company expects gross margin to increase over the balance of the year and stronger operating margins for the balance of fiscal '27 in each division and for OSI overall; Healthcare is expected to return to growth in the upcoming quarters.
- Record Quarterly Revenue and Adjusted EPSFirst-quarter revenue reached a record $403 million, up 5% year-over-year. Adjusted earnings per diluted share reached a first-quarter record of $1.66, up 17% year-over-year.
- Strong Cash Flow GenerationOperating cash flow was $37 million, more than double the $17 million generated in the prior-year quarter. Free cash flow was approximately $30 million, equal to about 120% of GAAP net income.
- Record Bookings and BacklogQ1 bookings were strong, with a 1.4 book-to-bill ratio. Backlog increased to a record $2.1 billion from approximately $1.9 billion at June 30, providing visibility into fiscal 2027 and beyond.
- Security Revenue Growth and Record BacklogSecurity revenue was $264 million, up 4% year-over-year despite the challenging geopolitical environment and the transition of the Mexico program. The division ended the quarter with a record backlog.
- New U.S. Customs and Border Protection ContractsSecurity announced two five-year IDIQ contracts with U.S. Customs and Border Protection: approximately $200 million for relocatable Rapiscan passenger vehicle inspection systems and about $85 million for van-mounted mobile X-ray inspection systems. Initial delivery orders totaled approximately $21 million, and only firm orders—not ceiling values—are included in backlog.
- RF Business MomentumOSI continued executing on its Homeland Defense Over-The-Horizon Radar contract, which has a not-to-exceed value of approximately $235 million and is the company's largest RF award to date. Together with participation in the SHIELD IDIQ, the award supports additional Golden Dome-related opportunities. The RF business also announced approximately $90 million of additional Q1 bookings.
- Positive RF Competitive PositionManagement said customers regard the RF offerings favorably, that the company has unique products that others do not have, and that it dominates the market in certain areas. Customer engagement across the RF portfolio remains at very high levels.
- Expected Double-Digit Service Revenue GrowthManagement continues to expect strong double-digit service revenue growth in fiscal 2027, led by Security, with growth accelerating throughout the year. Drivers cited include products rolling off warranty, aviation services, CertScan SaaS revenue, and increasing RF services.
- Optoelectronics and Manufacturing Record QuarterOptoelectronics and Manufacturing revenue, including intercompany sales, reached a first-fiscal-quarter record of $120 million, up 9% year-over-year. Sales to third-party customers increased 16% year-over-year.
- Opto Margin Expansion and Backlog GrowthOpto paired revenue growth with operating margin expansion. Bookings were robust across EMS, flex circuit, and Optoelectronics product lines, and the division ended the quarter with its highest quarter-end backlog.
- Investment in Innovation and RF CapacityThe company continues to invest substantial resources in R&D and intends to keep investing in future RF products. OSI has moved into a second new facility, believes current capacity can support its robust pipeline, and said it can add a second shift or another facility if necessary.
- Improved Operating Expense EfficiencySG&A was $69 million, or 17.0% of sales, compared with 17.4% a year ago. Total operating expenses excluding restructuring and other costs declined to 21.8% of sales from 22.7% in the prior-year quarter.
- Lower Net Interest and Other ExpenseNet interest and other expenses declined to $3.3 million from $7.4 million in the prior-year quarter, a $4.1 million improvement driven primarily by reduced borrowing costs and increased investment income on higher cash and short-term investment balances.
- Share Repurchases and Reduced Share CountOSI repurchased approximately 306,000 shares at an average price of about $204 per share for approximately $62 million. Diluted shares declined to 16.3 million from 17.5 million a year ago, a 7% reduction. The board also increased repurchase authorization by 1 million shares, leaving approximately 773,000 shares available at quarter-end.
- Solid Liquidity and Debt StructureThe company ended the quarter with $236 million in cash and cash equivalents and $66 million in short-term investments, or approximately $302 million in total. Total debt was approximately $1.0 billion, no amounts were drawn under bank lines of credit, and over 90% of debt was at fixed rates.
- Raised Fiscal 2027 EPS GuidanceOSI raised fiscal 2027 non-GAAP EPS guidance to $11.28-$11.64, representing 9% to 12.5% year-over-year growth. The increase primarily reflects the favorable EPS impact of first-quarter stock repurchases.
- Revenue Guidance Reaffirmed and Second-Half Growth ExpectedFiscal 2027 revenue guidance was reaffirmed at $1.875 billion to $1.930 billion. Management continues to expect revenue growth to be strongest in the second half, supported by backlog conversion, a healthy funnel of new opportunities, and significant year-over-year growth in Security service revenue.
- Free Cash Flow Expected to Exceed Net IncomeManagement reiterated its expectation that full-year fiscal 2027 free cash flow will exceed net income. The company also expects the receivable from its largest customer in Mexico to decrease significantly by the end of fiscal 2027.
- LA28 Olympic and Paralympic Games OpportunityOSI is preparing to serve as the official physical screening and security technology hardware and software solutions provider for the LA28 Olympic and Paralympic Games and as an official supporter of Team USA. Management described LA28 as a platform to showcase its offerings and pursue future large-venue and event-security opportunities.
- Capital Allocation FlexibilityManagement said organic growth remains the number-one priority while the company continues to evaluate strategic acquisitions that could increase market penetration or add complementary markets. OSI also remains opportunistic regarding share repurchases.
DE:OS2 Earnings History
| Report Date | Fiscal Quarter | Forecast / EPS | Last Year's EPS | EPS YoY Change | Press Release |
|---|---|---|---|---|---|
| Jan 28, 2027 | 2027 (Q2) | 2.35- | 2.31 | ― | ― |
| Oct 29, 2026 | 2027 (Q1) | 1.471.48 | 1.27 | 16.90% (+0.21) | |
| Aug 20, 2026 | 2026 (Q4) | 3.383.38 | 2.9 | 16.67% (+0.48) | |
| May 04, 2026 | 2026 (Q3) | 2.272.32 | 2.18 | 6.56% (+0.14) | |
| Jan 29, 2026 | 2026 (Q2) | 2.252.31 | 2.16 | 6.61% (+0.14) | |
| Oct 30, 2025 | 2026 (Q1) | 1.231.27 | 1.12 | 13.60% (+0.15) | |
| Aug 21, 2025 | 2025 (Q4) | 2.852.90 | 2.54 | 14.08% (+0.36) | |
| May 01, 2025 | 2025 (Q3) | 2.152.18 | 1.93 | 12.96% (+0.25) | |
| Jan 23, 2025 | 2025 (Q2) | 2.082.16 | 1.98 | 9.50% (+0.19) | |
| Oct 24, 2024 | 2025 (Q1) | 0.961.12 | 0.81 | 37.36% (+0.30) |
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
