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Michael Joshua Nichols

Research Analyst at B. Riley Securities

Michael Joshua Nichols is a Senior Research Analyst in B. Riley Securities' Discovery Group, specializing in technology, communications, automotive, electronic components, gaming, industrial services, light & vision controls, and software. He covers specific companies including 8x8 (EGHT), Cantaloupe (CTLP), Crexendo (CXDO), Digi International (DGII), DoubleDown Interactive (DDI), Gauzy (GAUZ), Genius Sports (GENI), Gentex (GNTX), Hudson Technologies (HDSN), Inspired Entertainment (INSE), Nayax (NYAX), Ooma (OOMA), OSI Systems (OSIS), Red Violet (RDVT), RF Industries (RFIL), and Vishay Precision Group (VPG), with a proven track record on TipRanks featuring a 45% success rate (131 out of 291 profitable ratings), average return of +12.20% per rating, and a top performer ranking at #923 out of 9,230 Wall Street analysts, highlighted by a +586.80% return on Kemet (KEM). Nichols joined B. Riley Securities in 2014, bringing over nine years of firm experience after roles as Vice President of Credit Analytics at OneWest Bank and analyst at Ares Management, and holds a CFA charter along with a Bachelor of Arts in Economics and Business from the University of California, Santa Barbara.

Michael Joshua Nichols's questions to OSI SYSTEMS (OSIS) leadership

Question · Q2 2026

Michael Joshua Nichols asked for more details on the 'big beautiful bill' and RFP timing, specifically whether award activity is expected in calendar 2026 or later, given the government shutdown. He also inquired about the Mexico DSO improvement and its role as a significant free cash flow driver in the fiscal second half, and the guidance outlook for margin and service revenue growth relative to hardware, considering easing Mexico comps.

Answer

Ajay Mehra, EVP and CEO of OSI Systems, explained that the government shutdown shifted timelines, with some money flow expected in the first half of calendar 2026 but most towards the latter part and beyond. Alan Edrick, EVP and CFO, confirmed Mexico remains the largest receivable, anticipating outsized free cash flow conversion in fiscal 2026 and 2027 as it normalizes, significantly reducing DSO. He expressed encouragement about margin expansion, driven by outstanding service revenue growth (which carries higher margins), with more significant expansion expected in Q4 and beyond as Mexico comps ease.

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Question · Q2 2026

Michael Joshua Nichols inquired about the guidance outlook for operating margins and the growth potential of service revenue relative to hardware, especially as challenging Mexico comps ease by the end of the fiscal year.

Answer

Alan Edrick, EVP and CFO, expressed encouragement about margin trends, noting outstanding service revenue growth (which carries higher margins) and anticipating significant operating margin expansion in Q4 and beyond as Mexico comps become less challenging. Ajay Mehra, EVP and CEO, reiterated the Q4 tilt for margin expansion.

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