OSI Systems, Inc. Q3 FY2026 earnings call

Ajay Mehra stated the company delivered solid third quarter results with a backlog of approximately $1.9 billion. Security had strong bookings despite challenging year - over - year comparisons, with highlights including a $235 million Homeland Defense contract. Optoelectronics and Manufacturing division performed well with 10% growth. Healthcare division faced order timing issues but had growth in EMEA. Alan Edrick discussed financial results such as revenues, margins, SG&A and R&D expenses, and cash flow

Security division revenues in Q3 came in at $319 million. Revenues from large Mexico Security contracts decreased to $11 million in Q3 2026 from $69 million in Q3 of the prior year. Excluding Mexico contracts, Security revenues surged 25% year over year. Optoelectronics and Manufacturing division sales, including intercompany, increased 10% year over year to $111 million, a new Q3 record for the division. Healthcare division sales were soft. Security's revenue contribution was significant, Opto also contributed notably to the overall revenue mix

Maintaining fiscal 2026 guidance for revenues and non - GAAP earnings per share. The DHS shutdown and Middle East conflicts have impacted near - term bookings and could affect Q4 revenues, but resolution of these matters could present future opportunities

Potential impacts from Middle East conflict including delays in programs and activities due to logistics constraints, travel restrictions, etc. DHS shutdown impacted order activity for security products. Uncertainty in timing of cash collections, tariffs, and supply chain disruptions

Q: Where is the 25% growth outside Mexico coming from?

A: Alan Edrick said most of the growth is international, driven by service revenues, aviation revenues, and RF revenues.

Q: Impact of DHS shutdown on bookings?

A: Ajay Mehra said it has impacted some bookings but is a timing issue, and the $1 billion big, beautiful bill is still there.

Q: RF contract revenue?

A: Alan Edrick said it was about $38 million in the quarter.

Q: Growth prospects in fiscal 2027?

A: Alan Edrick said they are optimistic with a strong backlog and robust opportunity pipeline