OSI Systems(US:OSIS)2026-01-29 22:25Financial Performance - Total net revenues for the six months ended December 31, 2025, increased to $848.68 million, up from $763.83 million in the same period of 2024, representing an increase of 11.1%[11] - Gross profit for the six months ended December 31, 2025, was $274.81 million, compared to $268.65 million for the same period in 2024, reflecting a growth of 2.4%[11] - Net income for the six months ended December 31, 2025, rose to $59.26 million, compared to $55.76 million in the prior year, marking an increase of 6.7%[11] - The company reported a diluted earnings per share of $3.39 for the six months ended December 31, 2025, up from $3.27 in the same period of 2024, an increase of 3.7%[11] - Basic earnings per share for the six months ended December 31, 2025, was $3.52, up from $3.33 in 2024, reflecting a growth of 5.7%[22] - The company reported a segment income from operations of $97,472 for the six months ended December 31, 2025[100] Cash and Liquidity - Cash and cash equivalents decreased to $106.41 million as of June 30, 2025, down from $336.72 million at December 31, 2024[10] - Net cash provided by operating activities for the six months ended December 31, 2025, was $79.337 million, significantly higher than $15.388 million in 2024[18] - Cash and cash equivalents at the end of the period totaled $336.722 million, with approximately 32% held by foreign subsidiaries[24] - Net cash provided by financing activities was $172.6 million for YTD Q2 fiscal 2026, compared to $89.2 million in the same prior-year period, driven by net proceeds of $562.9 million from the issuance of 2031 Notes[146] - Cash used in investing activities was $21.4 million for YTD Q2 fiscal 2026, a decrease from $97.6 million in the same prior-year period, mainly due to a prior-year business acquisition[145] Expenses and Liabilities - Total current liabilities increased to $696.94 million as of June 30, 2025, compared to $535.36 million at December 31, 2024, indicating a rise of 30.1%[10] - Operating expenses for the six months ended December 31, 2025, were $182.95 million, slightly up from $180.37 million in the same period of 2024, an increase of 1.4%[11] - Total interest and other expense for the six months ended December 31, 2025, was $(18,111) thousand, compared to $(15,978) thousand for the same period in 2024, reflecting a 7.1% increase[31] - The company recognized $5.6 million in impairment, restructuring, and other charges during the six months ended December 31, 2025, including $1.0 million for asset impairment and $1.1 million for employee terminations[55] Research and Development - Research and development expenses for the six months ended December 31, 2025, were $40.19 million, compared to $36.03 million in the same period of 2024, reflecting an increase of 11.9%[11] - Research and development expenses for the three months ended December 31, 2025, totaled $19,759, reflecting the company's commitment to innovation[97] - Research and development expenses rose by $1.5 million to $19.8 million in Q2 fiscal 2026, reflecting increased compensation costs for new product development initiatives[125] Acquisitions and Assets - The company acquired a provider of military and surveillance solutions for approximately $76 million, with total purchase consideration of $85.7 million allocated to assets acquired[38] - The acquisition date fair value of total assets acquired was $113.9 million, including $30.7 million in goodwill and $47.3 million in other intangible assets[38] - Goodwill as of December 31, 2025, was $385,747 thousand, down from $387,393 thousand as of June 30, 2025, reflecting a decrease of 0.4%[42] - Total intangible assets increased from $261,829 thousand as of June 30, 2025, to $268,083 thousand as of December 31, 2025[43] Shareholder Activities - The company repurchased 546,945 shares of common stock for a total price of $146.1 million, with 643,611 shares remaining available for repurchase under the authorized program[80] - Stock-based compensation expense for the six months ended December 31, 2025, was $13.250 million, down from $14.931 million in 2024[75] - As of December 31, 2025, total unrecognized compensation cost related to share-based compensation grants was estimated at $20.4 million[75] Taxation - The effective tax rates for the six months ended December 31, 2024 and 2025 were 22.9% and 19.7%, respectively, with net discrete tax benefits recognized of $1.7 million in 2025[92] - The effective tax rate decreased from 23.3% in Q2 fiscal 2025 to 19.5% in Q2 fiscal 2026, with a provision for income taxes of $9.4 million[128] Market and Economic Factors - The company faces uncertainties related to global economic factors, including inflation, interest rates, and geopolitical tensions, which may impact future performance[113] - The company is evaluating the financial impact of the One Big Beautiful Bill Act, which may affect its effective tax rate and deferred tax balances in future periods[93] Segment Performance - Security division revenues rose by 15.4% year-over-year to $334.7 million, with product revenues increasing by approximately $17.7 million and service revenues by $27.0 million[120] - Security division revenues for the six months ended December 31, 2025, increased by 14.5% to $589.0 million, driven by growth in both product and service revenues[130] - The company reported total revenues of $419.82 million for the three months ended December 31, 2024, with external customer revenue from the Security division at $289.99 million[95]