Revenue and Profit Growth - Total net revenues increased to $763.8 million for the six months ended December 31, 2024, up from $652.4 million in the same period in 2023[11] - Net income rose to $55.8 million for the six months ended December 31, 2024, compared to $49.4 million in the same period in 2023[11] - Earnings per share (diluted) increased to $3.27 for the six months ended December 31, 2024, up from $2.87 in the same period in 2023[11] - Net income for the six months ended December 31, 2024 increased to $55.8 million from $49.4 million in the same period in 2023[18] - Basic earnings per share for the six months ended December 31, 2024 increased to $3.33 from $2.92 in the same period in 2023[22] - Diluted earnings per share for the six months ended December 31, 2024 increased to $3.27 from $2.87 in the same period in 2023[22] - Total consolidated revenues for the six months ended December 31, 2024, were $763.827 million, up from $652.445 million in the same period of 2023, a 17% increase[89] - Total net revenues for Q2 fiscal 2025 increased by $46.7 million (12.5%) compared to Q2 fiscal 2024, reaching $419.9 million[112] - Total net revenues for YTD Q2 fiscal 2025 increased by $111.5 million (17.1%) compared to YTD Q2 fiscal 2024, reaching $763.9 million[122] Cash and Liquidity - Cash and cash equivalents decreased to $95.4 million as of June 30, 2024, down from $101.6 million as of December 31, 2024[10] - Cash and cash equivalents totaled $101.6 million at December 31, 2024, with approximately 77% held by foreign subsidiaries[24] - Cash and cash equivalents totaled $101.6 million at December 31, 2024, an increase of $6.2 million (7%) from June 30, 2024[132] - Cash provided by operating activities for YTD Q2 fiscal 2025 was $15.4 million, compared to cash used in operations of $6.4 million in the prior-year period[135] - Net cash used in investing activities for YTD Q2 fiscal 2025 was $97.6 million, including $75.5 million for a business acquisition in September 2024[136] - Net cash provided by financing activities for YTD Q2 fiscal 2025 was $89.2 million, driven by $340.5 million net proceeds from the 2029 Notes[137] - Cash and cash equivalents totaled $101.6 million at December 31, 2024, with 77% held by foreign subsidiaries[139] Balance Sheet Changes - Accounts receivable, net decreased to $648.2 million as of June 30, 2024, down from $703.9 million as of December 31, 2024[10] - Inventories decreased to $397.9 million as of June 30, 2024, down from $441.8 million as of December 31, 2024[10] - Total current liabilities increased to $814.6 million as of June 30, 2024, up from $703.7 million as of December 31, 2024[10] - Long-term debt, net decreased to $129.4 million as of June 30, 2024, down from $466.6 million as of December 31, 2024[10] - Accounts receivable, net increased from $648,155 thousand as of June 30, 2024, to $703,933 thousand as of December 31, 2024[41] - Intangible assets increased from $139,529 thousand as of June 30, 2024, to $181,954 thousand as of December 31, 2024[43] - Contract assets decreased by $59.8 million due to a $85.2 million decrease in unbilled revenue, partially offset by a $25.4 million increase from a business acquisition[50] - Remaining performance obligations as of December 31, 2024, were approximately $776.1 million, with 61% expected to be recognized within the next 12 months[51] - Operating lease liabilities totaled $29.9 million as of December 31, 2024, with a weighted average remaining lease term of 3.6 years and a weighted average discount rate of 4.6%[54] Expenses and Costs - Research and development expenses increased to $36.0 million for the six months ended December 31, 2024, up from $32.3 million in the same period in 2023[11] - Comprehensive income decreased to $46.3 million for the six months ended December 31, 2024, down from $49.7 million in the same period in 2023[13] - Restructuring and other charges for the six months ended December 31, 2024, totaled $1.4 million, including $0.6 million for acquisition-related costs and $0.6 million for employee terminations[56] - Research and development expenses increased by $2.0 million (12.3%) in Q2 fiscal 2025, primarily due to new product development initiatives in the Security division[117] - Selling, general and administrative expenses increased by $11.5 million (8.8%) in YTD Q2 fiscal 2025, primarily due to increased employee compensation[126] - Gross profit increased by $5.8 million in Q2 fiscal 2025, but gross margin decreased to 35.0% from 37.9% in Q2 fiscal 2024[114] - Gross profit for YTD Q2 fiscal 2025 increased by $28.7 million, but gross margin decreased to 35.2% from 36.8% in YTD Q2 fiscal 2024[125] Debt and Financing - Long-term debt, net decreased to $129.4 million as of June 30, 2024, down from $466.6 million as of December 31, 2024[10] - The company had $236 million of borrowings outstanding under the revolving credit facility, $78.6 million under the letters of credit sub-facility, and $131.9 million under the term loan as of December 31, 2024[59] - In July 2024, the company issued $350.0 million principal amount of 2.25% convertible senior notes due in 2029, with net proceeds of $340.4 million[60] - The 2029 Notes have a principal amount of $350,000, with a net carrying amount of $341,245 and a fair value of $380,069 as of December 31, 2024[65] - Total interest expense for the 2029 Notes was $2.4 million for the three months ended December 31, 2024, consisting of $2.0 million in contractual interest and $0.4 million in amortization of debt discount and issuance costs[66] - Long-term debt as of December 31, 2024, totaled $474.8 million, with $341.3 million attributable to the 2029 Notes[68] - Credit facility includes a $600 million revolving credit facility with $300 million sub-facility for letters of credit, with $131.9 million outstanding under the term loan and $236.0 million under the revolving credit facility as of December 31, 2024[134] Acquisitions and Investments - The company acquired a provider of critical military, space, and surveillance solutions for approximately $76.0 million, plus up to $24.0 million in potential contingent consideration in September 2024[38] - The preliminary acquisition date fair value of total assets acquired was $114.0 million, including goodwill of $31.7 million and other intangible assets of $43.9 million[38] - Revenue from the acquired business was $21.7 million from the acquisition date through December 31, 2024[38] - The company acquired a contract manufacturer for approximately $6.3 million in cash in December 2023[39] - The company acquired a provider of radiation detection technology for approximately $2.8 million in cash, plus up to $3.6 million in potential contingent consideration in October 2023[40] - Capital expenditures for YTD Q2 fiscal 2025 were $13.2 million, up from $8.7 million in the prior-year period[136] - Expenditures for intangible and other assets for YTD Q2 fiscal 2025 were $9.1 million, compared to $8.4 million in the prior-year period[136] Stock and Equity - The company repurchased 531,314 shares of common stock for approximately $80 million during the six months ended December 31, 2024, with 1,190,556 shares remaining available for repurchase[74] - Stock-based compensation expense for the six months ended December 31, 2024, was $14.9 million, with $20.6 million in unrecognized compensation cost related to restricted stock units (RSUs)[70] - The company granted 80,682 performance-based RSUs during the six months ended December 31, 2024, with potential payouts ranging from zero to 376% of the original award[72] - Repurchase of common stock during YTD Q2 fiscal 2025 totaled $80.4 million[137] - Taxes paid related to net share settlement of equity awards were $22.6 million during YTD Q2 fiscal 2025[137] - No shares of common stock were repurchased during the second quarter of fiscal year 2025[140] Contingent Liabilities and Warranty - The company's contingent consideration liabilities were $23.6 million as of December 31, 2024[27] - The company has a contingent consideration liability of $23.6 million as of December 31, 2024, related to acquisition-related earnout obligations[77] - Warranty provisions increased to $11.4 million as of December 31, 2024, up from $10.5 million at the end of 2023[82] - The company has a remaining maximum potential payment of $56.5 million for capped contingent consideration obligations related to acquisitions as of December 31, 2024[76] Division Performance - Security division revenues increased to $289.987 million in Q4 2024, up from $249.975 million in Q4 2023, representing a 16% growth[89] - Optoelectronics and Manufacturing division revenues grew slightly to $100.743 million in Q4 2024, compared to $98.097 million in Q4 2023[89] - Healthcare division revenues rose to $44.854 million in Q4 2024, up from $41.850 million in Q4 2023, a 7.2% increase[89] - Security division accounted for 67% of total consolidated revenues for the six months ended December 31, 2024, up from 64% in the same period of 2023[100] - Optoelectronics and Manufacturing division accounted for 22% of total consolidated revenues for the six months ended December 31, 2024, down from 24% in the same period of 2023[101] - Healthcare division accounted for 11% of total consolidated revenues for the six months ended December 31, 2024, down from 12% in the same period of 2023[102] - Security division revenues increased by $40.0 million (16.0%) in Q2 fiscal 2025, driven by growth in checkpoint screening systems and trace detection systems[112] Tax and Currency Impact - The effective tax rate for the six months ended December 31, 2024, was 22.9%, up from 21.0% in the same period of 2023[87] - Currency exchange rates negatively impacted reported sales by approximately 0.8% for the six months ended December 31, 2024, due to the strengthening of the U.S. dollar[110] Customer Concentration - One customer in the Security division accounted for 12% of consolidated net revenues for the six months ended December 31, 2024[91] - Two customers in the Security division accounted for 37% and 13% of accounts receivable, net as of December 31, 2024[91] Derivatives and Hedging - The company held foreign currency forward contracts with notional amounts totaling $79.4 million as of December 31, 2024[29] - The fair value of the company's interest rate swap contract was $2.7 million as of December 31, 2024[27] - The company's interest rate swap agreement matures in December 2026 and is considered an effective cash flow hedge[30] - The notional amount of derivative instruments designated as an interest rate swap hedge was $175 million as of June 30, 2024, and December 31, 2024[31] - The fair value of the interest rate swap contract was recorded in Other assets within the consolidated balance sheet as of June 30, 2024, and December 31, 2024[31] - The effect of cash flow hedges on other comprehensive income (loss) and earnings for the six months ended December 31, 2024, was a loss of $15,978 thousand[31] Credit Facilities and Letters of Credit - The company has $68.0 million outstanding under letter-of-credit facilities, with $22.8 million available under these credit facilities as of December 31, 2024[67] - Credit facility includes a $600 million revolving credit facility with $300 million sub-facility for letters of credit, with $131.9 million outstanding under the term loan and $236.0 million under the revolving credit facility as of December 31, 2024[134]

Momentum Investing Overview - Momentum investing focuses on following a stock's recent trend, aiming to buy high and sell even higher [1] - The Zacks Momentum Style Score helps identify stocks with strong momentum potential [2] OSI Systems (OSIS) Momentum Analysis - OSIS currently has a Momentum Style Score of B and a Zacks Rank of 2 (Buy) [3][4] - Stocks with Zacks Rank 1 or 2 and Style Scores of A or B tend to outperform the market over the following one-month period [4] Price Performance - OSIS shares are up 8 61% over the past week, outperforming the Zacks Electronics - Miscellaneous Components industry's 1 74% gain [6] - Monthly price change for OSIS is 8 96%, compared to the industry's 0 22% [6] - Over the past quarter, OSIS shares have increased 46 02%, and have gained 43 65% in the last year, significantly outperforming the S&P 500's 5 86% and 27 32% gains, respectively [7] Trading Volume - OSIS's average 20-day trading volume is 181,755 shares, indicating strong investor interest [8] Earnings Outlook - Over the past two months, 1 earnings estimate for OSIS has moved higher for the full year, boosting the consensus estimate from $9 12 to $9 13 [10] - For the next fiscal year, 1 estimate has moved upwards with no downward revisions [10] Conclusion - OSIS is a strong momentum pick with a Zacks Rank of 2 (Buy) and a Momentum Score of B, making it a promising near-term investment [12]

Financial Data and Key Metrics - The company issued a press release announcing its fiscal 2025 second quarter financial results [4] - The discussion will include both GAAP and non-GAAP financial measures [5] Business Line Data and Key Metrics - No specific data provided in the content Market Data and Key Metrics - No specific data provided in the content Company Strategy and Industry Competition - No specific data provided in the content Management Commentary on Operating Environment and Future Outlook - The company includes forward-looking statements in its discussion, based on currently available information, and does not undertake to update these statements based on subsequent events or new information [4][5] Other Important Information - The company reminds participants that the discussion includes forward-looking statements and takes advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 [4] Q&A Session Summary - No Q&A session details provided in the content

Financial Performance - Revenue for Q4 2024 was $419.82 million, up 12.5% YoY [1] - EPS for Q4 2024 was $2.42, compared to $2.21 in the year-ago quarter [1] - Revenue surpassed the Zacks Consensus Estimate of $405.17 million by +3.62% [1] - EPS exceeded the consensus estimate of $2.35 by +2.98% [1] Key Metrics and Divisional Performance - Healthcare division revenue: $44.85 million, +7.2% YoY, beating the two-analyst average estimate of $42.85 million [4] - Intersegment eliminations revenue: -$15.76 million, -5.5% YoY, compared to the estimated -$14.97 million [4] - Optoelectronics and Manufacturing division revenue: $100.74 million, +2.7% YoY, exceeding the two-analyst average estimate of $96.55 million [4] - Security division revenue: $289.99 million, +16% YoY, surpassing the two-analyst average estimate of $281.24 million [4] Stock Performance and Market Outlook - OSI shares returned -4% over the past month, underperforming the Zacks S&P 500 composite's +2.7% change [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Earnings Performance - OSI Systems reported quarterly earnings of $2 42 per share, beating the Zacks Consensus Estimate of $2 35 per share, representing a 2 98% earnings surprise [1] - The company's earnings increased from $2 21 per share a year ago, with adjustments for non-recurring items [1] - In the previous quarter, OSI Systems delivered a 17 92% earnings surprise, posting $1 25 per share against an expected $1 06 per share [1] - Over the last four quarters, the company has consistently surpassed consensus EPS estimates [2] Revenue Performance - OSI Systems posted revenues of $419 82 million for the quarter ended December 2024, exceeding the Zacks Consensus Estimate by 3 62% [2] - This represents an increase from year-ago revenues of $373 24 million [2] - The company has topped consensus revenue estimates in each of the last four quarters [2] Stock Performance and Market Comparison - OSI shares have gained 0 9% since the beginning of the year, underperforming the S&P 500's gain of 3 5% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Earnings Outlook and Estimate Revisions - The current consensus EPS estimate for the coming quarter is $2 47 on $435 93 million in revenues [7] - For the current fiscal year, the consensus EPS estimate is $9 13 on $1 68 billion in revenues [7] - The estimate revisions trend for OSI is favorable, translating into a Zacks Rank 2 (Buy) [6] - Empirical research shows a strong correlation between near-term stock movements and earnings estimate revisions [5] Industry Context - OSI Systems belongs to the Zacks Electronics - Miscellaneous Components industry, which is currently in the bottom 43% of Zacks industries [8] - The top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [8] Peer Performance - TTM Technologies, another company in the same industry, is expected to report quarterly earnings of $0 47 per share, a year-over-year increase of 14 6% [9] - The consensus EPS estimate for TTM Technologies has been revised 1 7% higher over the last 30 days [9] - TTM Technologies' revenues are expected to be $627 67 million, up 10 3% from the year-ago quarter [10]

Financial Performance - Q2 FY25 revenues reached $419.8 million, a 12% increase year-over-year[3] - Q2 FY25 net income was $37.8 million, or $2.22 per diluted share, compared to $36.6 million, or $2.11 per diluted share in the prior year[3] - Non-GAAP net income for Q2 FY25 was $41.2 million, or $2.42 per diluted share, compared to $38.3 million, or $2.21 per diluted share in the prior year[3] - Six-month revenues for FY25 were $763.8 million, up from $652.4 million in the same period last year[4] - Six-month net income for FY25 was $55.8 million, or $3.27 per diluted share, compared to $49.4 million, or $2.87 per diluted share in the prior year[4] - Updated FY25 revenue guidance is $1.685 billion to $1.710 billion, representing a growth rate of 9.5% to 11.1%[8] - Updated FY25 non-GAAP diluted EPS guidance is $9.10 to $9.40, representing a growth rate of 11.9% to 15.6%[8] - Total revenue for the company grew from $373.235 million in Q3 2023 to $419.820 million in Q3 2024, a 12.5% increase[18] - Non-GAAP net income grew from $38.254 million in Q3 2023 to $41.233 million in Q3 2024, a 7.8% increase[22] Division Performance - Security division revenues increased 16% year-over-year, with an adjusted operating margin of 19.9% in Q2 FY25[6] - Security division revenue increased from $249.975 million in Q3 2023 to $289.987 million in Q3 2024, a growth of 16%[18] - Operating income for the Security division rose from $51.856 million in Q3 2023 to $54.053 million in Q3 2024, a 4.2% increase[18] - Healthcare division operating income significantly improved from $0.429 million in Q3 2023 to $1.722 million in Q3 2024, a 301% increase[18] - Non-GAAP operating income for the Security division increased from $55.359 million in Q3 2023 to $57.775 million in Q3 2024, a 4.4% rise[23] - Non-GAAP operating margin for the Security division improved from 22.1% in Q3 2023 to 19.9% in Q3 2024[23] - Total non-GAAP operating income grew from $58.027 million in Q3 2023 to $62.870 million in Q3 2024, an 8.3% increase[23] - Optoelectronics and Security Division's GAAP operating income for the six months ended December 31, 2023, was $72,465, representing 17.5% of sales[24] - Manufacturing Division's GAAP operating income for the six months ended December 31, 2023, was $23,058, representing 11.9% of sales[24] - Healthcare Division's GAAP operating income for the six months ended December 31, 2023, was $593, representing 0.7% of sales[24] - Total GAAP operating income for the six months ended December 31, 2023, was $74,880, representing 11.5% of sales[24] - Optoelectronics and Security Division's Non-GAAP operating income for the six months ended December 31, 2023, was $78,867, representing 19.0% of sales[24] - Manufacturing Division's Non-GAAP operating income for the six months ended December 31, 2023, was $25,452, representing 13.1% of sales[24] - Healthcare Division's Non-GAAP operating income for the six months ended December 31, 2023, was $1,196, representing 1.5% of sales[24] - Total Non-GAAP operating income for the six months ended December 31, 2023, was $84,759, representing 13.0% of sales[24] - Optoelectronics and Security Division's GAAP operating income for the six months ended December 31, 2024, was $82,909, representing 16.1% of sales[24] - Manufacturing Division's GAAP operating income for the six months ended December 31, 2024, was $22,891, representing 11.5% of sales[24] Cash Flow and Debt - Q2 FY25 cash from operations was $52.5 million, a significant improvement from $23.5 million used in operations in the same quarter of the prior year[5] - Total assets increased from $1.936 billion in June 2024 to $2.131 billion in December 2024, a 10.1% growth[20] - Long-term debt surged from $129.383 million in June 2024 to $466.560 million in December 2024, a 260.6% increase[20] Backlog and Book-to-Bill Ratio - The company's book-to-bill ratio was 1.2 for Q2 FY25, with a backlog of over $1.8 billion as of December 31, 2024[5]

Earnings and Revenue Projections - Wall Street analysts expect OSI Systems to post quarterly earnings of $2 35 per share, indicating a year-over-year increase of 6 3% [1] - Revenues are projected to be $402 85 million, up 7 9% from the year-ago quarter [1] - Over the last 30 days, there has been no revision in the consensus EPS estimate for the quarter, reflecting stability in analysts' forecasts [1] Key Metrics Analysis - Revenues from the Healthcare division are projected to reach $42 85 million, a year-over-year increase of 2 4% [4] - Revenues from the Optoelectronics and Manufacturing division, including intersegment revenues, are expected to be $96 55 million, a year-over-year decline of 1 6% [4] - Revenues from the Security division are forecasted to reach $281 24 million, a year-over-year increase of 12 5% [5] Stock Performance and Market Outlook - Over the past month, OSI shares have recorded returns of -4 9%, underperforming the Zacks S&P 500 composite's -0 4% change [6] - Based on its Zacks Rank 2 (Buy), OSI Systems is likely to outperform the overall market in the upcoming period [6]

Stock Analysis: OSI Systems (OSIS) - The stock of OSI Systems, an airport security and full-body scanner manufacturer, has shown a solid price increase of 22.4% over the past 12 weeks, reflecting investor confidence in its potential upside [9] - Over the past four weeks, the stock has maintained a price increase of 1.5%, indicating a sustained upward trend [3] - OSIS is currently trading at 82.6% of its 52-week High-Low Range, suggesting it may be on the verge of a breakout [10] Fundamental Strength - OSIS carries a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 stocks ranked based on earnings estimate revisions and EPS surprises [4] - The company has an Average Broker Recommendation of 1 (Strong Buy), indicating high optimism among brokerage communities about its near-term price performance [5] Investment Strategy - The Zacks Rank stock-rating system, which classifies stocks into five groups, has a strong track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [11] - Investors can use the "Recent Price Strength" screen to identify stocks on an uptrend, trading in the upper portion of their 52-week high-low range, which is typically a bullish indicator [8] - Timing entries into a trend is crucial for short-term investing success, and ensuring the sustainability of a trend can increase the odds of profitability [7] Additional Resources - Zacks Premium Screens offer over 45 predefined strategies to help investors find winning stock picks based on their personal investing style [6] - The Zacks Research Wizard allows investors to backtest the effectiveness of their stock-picking strategies and provides access to some of the most successful strategies [14]

Trend Analysis and Stock Selection - The trend is crucial for short-term investing or trading, but ensuring its sustainability is challenging [1] - A stock's price movement can reverse quickly, leading to short-term capital losses, so factors like sound fundamentals and positive earnings estimate revisions are essential to maintain momentum [2] - The "Recent Price Strength" screen helps identify stocks on an uptrend with strong fundamentals, trading in the upper portion of their 52-week high-low range, indicating bullishness [3] OSI Systems (OSIS) Analysis - OSIS has shown a solid price increase of 10% over 12 weeks, reflecting investor confidence in its potential upside [4] - A 22.7% price increase over the past four weeks confirms the stock's upward trend, particularly for an airport security and full-body scanner manufacturer [5] - OSIS is trading at 92.7% of its 52-week High-Low Range, suggesting it may be on the verge of a breakout [6] Fundamental Strength of OSIS - OSIS holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 stocks based on earnings estimate revisions and EPS surprises [6] - The Zacks Rank system has a strong track record, with Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7] - OSIS has an Average Broker Recommendation of 1 (Strong Buy), indicating high optimism among brokerage firms about its near-term performance [7] Additional Stock Opportunities - Several other stocks pass the "Recent Price Strength" screen, offering potential investment opportunities [8] - Over 45 Zacks Premium Screens are available to help investors find winning stocks based on their personal investing style [8] Strategy Validation - A successful stock-picking strategy should have a history of profitable results, which can be validated using tools like the Zacks Research Wizard [9]

Company Comparison - OSI Systems (OSIS) has a Zacks Rank of 2 (Buy), indicating strong earnings estimate revision activity and an improving analyst outlook [3] - nVent Electric (NVT) has a Zacks Rank of 4 (Sell), suggesting less favorable earnings estimate revisions [3] - OSIS has a forward P/E ratio of 14.50, significantly lower than NVT's forward P/E of 22.88 [5] - OSIS has a PEG ratio of 1.23, compared to NVT's PEG ratio of 1.52, indicating better valuation relative to earnings growth [5] - OSIS has a P/B ratio of 2.81, lower than NVT's P/B ratio of 3.77, suggesting a more attractive valuation based on book value [6] Valuation Metrics - The Value category grades stocks based on key metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] - OSIS has a Value grade of B, while NVT has a Value grade of C, indicating OSIS is more attractive from a value perspective [6] Investment Recommendation - OSIS stands out in both Zacks Rank and Style Scores models, making it a better option for value investors compared to NVT [6]