OSI Systems Lifts Fiscal 2027 Non-GAAP Earnings Outlook

The Tip Desk · October 31, 2026 · 3 min read

The electronics maker posted record first-quarter revenue of $403.5 million, a 1.4 book-to-bill and $2.1 billion of backlog, and raised the year's non-GAAP EPS range to $11.28–$11.64.

OSI Systems, Inc. (OSIS) reported record first-quarter fiscal 2027 revenue of $403.5 million, up 5% from $384.6 million a year earlier, and raised its full-year non-GAAP earnings outlook after a 1.4 book-to-bill ratio lifted backlog to a record $2.1 billion.

The electronics maker designs specialized systems for security, optoelectronics and healthcare. GAAP diluted earnings were $1.51 a share, up 28% from $1.18 a year earlier. Non-GAAP diluted earnings were $1.66 a share, up 17% from $1.42.

Bookings of $583 million produced the 1.4 book-to-bill, versus 1.1 a year earlier. Backlog rose from $1.9 billion as of June 30, 2026. President and Chief Executive Officer Ajay Mehra said the company began the fiscal year with record first-quarter revenues and earnings per share, led by Security and Optoelectronics and Manufacturing.

Security revenue was $264.1 million, up from $254.2 million a year earlier. GAAP operating margin was 11.6% and non-GAAP operating margin was 12.6%. Mehra said the division delivered a solid quarter despite continued geopolitical headwinds, that strong bookings led to record divisional backlog, and that the operating margin was impacted by a less favorable mix of revenues. He said the company expects that mix to improve over the remainder of the fiscal year as revenue mix stabilizes and service revenues increase.

Optoelectronics and Manufacturing revenue was $119.7 million, up from $109.5 million a year earlier. GAAP operating margin was 11.9% and non-GAAP operating margin was 12.1%. Mehra said revenues increased 9% year-over-year including intersegment sales and 16% from sales to external customers, and that the division achieved adjusted operating margin expansion. He attributed the result to vertically integrated capabilities, customer relationships and a diversified manufacturing footprint, and said a strong book-to-bill produced record backlog for the division.

Healthcare revenue fell to $35.1 million from $40.7 million a year earlier. The segment swung to a GAAP operating loss of $2.4 million from $1.8 million of operating income. Non-GAAP operating margin was -1.8%, versus 6.0% a year earlier. Mehra said Healthcare performance was soft and that the company anticipates a return to growth this fiscal year.

Consolidated GAAP operating margin compressed to 8.3% of revenue from 8.6% a year earlier. Non-GAAP operating margin compressed to 9.5% from 10.3%. Products revenue was $289.8 million and services revenue was $113.6 million.

Operating cash flow more than doubled to $37.1 million from $17.1 million a year earlier. Capital expenditures were $7.7 million. The company finished the quarter with about $302 million of cash, cash equivalents and short-term investments.

In August 2026 the board authorized an additional 1 million shares to the existing repurchase program. The company repurchased 305,559 shares in the quarter, returning about $62 million. As of September 30, 2026, 773,172 shares remained under authorization.

The company reaffirmed fiscal 2027 revenue guidance of $1.875 billion to $1.930 billion, or 5.0% to 8.1% year-over-year growth. It raised fiscal 2027 non-GAAP diluted EPS guidance to $11.28 to $11.64 from $11.13 to $11.49, or 9.0% to 12.5% growth from 7.5% to 11.0%. Guidance is provided on a non-GAAP basis only.