Question · Q2 2026
Jeffrey Michael Martin asked about the security division's orders activity, questioning if 'not as strong as expected' was a better description than 'soft' given the unchanged backlog. He also inquired about the IDIQ contract with Golden Dome, potential orders in fiscal 2026, future quarterly interest expense, and the potential for additional share repurchases given anticipated strong free cash flow.
Answer
Ajay Mehra, EVP and CEO of OSI Systems, clarified that orders were pushed due to government shutdowns and international delays, but high-probability opportunities remain in the pipeline for the next six months. He noted substantial funding for Golden Dome and OSI's strong position, expecting orders in the foreseeable future, supported by facility expansion in Texas. Alan Edrick, EVP and CFO, stated interest expense would decrease from Q2 to Q3 due to revolver paydown, with Q3 and Q4 being comparable. He confirmed a strong balance sheet and free cash flow, indicating that stock buybacks remain a viable capital allocation option, following a sizable buyback in Q2.
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