Security and healthcare technology company OSI Systems (NASDAQ: OSIS) missed Wall Street’s revenue expectations in Q4 CY2025, with sales flat year on year at $419.8 million. Its non-GAAP profit of $2.58 per share was 2.3% above analysts’ consensus estimates.
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OSI Systems (OSIS) Q4 CY2025 Highlights:
- Revenue: $419.8 million vs analyst estimates of $453.1 million (flat year on year, 7.3% miss)
- Adjusted EPS: $2.58 vs analyst estimates of $2.52 (2.3% beat)
- Management slightly raised its full-year Adjusted EPS guidance to $10.43 at the midpoint
- Operating Margin: 13.8%, in line with the same quarter last year
- Market Capitalization: $4.61 billion
Company Overview
With security scanners deployed at airports and borders worldwide and patient monitors used in hospitals across the globe, OSI Systems (NASDAQ: OSIS) designs and manufactures specialized electronic systems for security screening, patient monitoring, and optoelectronic applications.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $1.75 billion in revenue over the past 12 months, OSI Systems is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale. On the bright side, it can still flex high growth rates because it’s working from a smaller revenue base.
As you can see below, OSI Systems grew its sales at an impressive 9.8% compounded annual growth rate over the last five years. This is a great starting point for our analysis because it shows OSI Systems’s demand was higher than many business services companies.
We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. OSI Systems’s annualized revenue growth of 13.3% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated. 
We can dig further into the company’s revenue dynamics by analyzing its most important segment, Security. Over the last two years, OSI Systems’s Security revenue (inspection systems) averaged 23.2% year-on-year growth. This segment has outperformed its total sales during the same period, lifting the company’s performance. 
Looking ahead, sell-side analysts expect revenue to grow 7.6% over the next 12 months, a deceleration versus the last two years. Still, this projection is noteworthy and indicates the market is baking in success for its products and services.
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Operating Margin
OSI Systems has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 11.5%, higher than the broader business services sector.
Analyzing the trend in its profitability, OSI Systems’s operating margin rose by 2.3 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, OSI Systems generated an operating margin profit margin of 13.8%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.
Earnings Per Share
Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
OSI Systems’s EPS grew at a spectacular 14.9% compounded annual growth rate over the last five years, higher than its 9.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of OSI Systems’s earnings can give us a better understanding of its performance. As we mentioned earlier, OSI Systems’s operating margin was flat this quarter but expanded by 2.3 percentage points over the last five years. On top of that, its share count shrank by 6.4%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth. 
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
For OSI Systems, its two-year annual EPS growth of 15.4% is similar to its five-year trend, implying strong and stable earnings power.
In Q4, OSI Systems reported adjusted EPS of $2.58, up from $2.42 in the same quarter last year. This print beat analysts’ estimates by 2.3%. Over the next 12 months, Wall Street expects OSI Systems’s full-year EPS of $9.68 to grow 11.8%.
Key Takeaways from OSI Systems’s Q4 Results
It was good to see OSI Systems beat analysts’ EPS expectations this quarter. On the other hand, its revenue missed by a wide margin. the company did, however, raise full-year EPS guidance. Overall, this was mixed. The stock remained flat at $269.39 immediately following the results.
Is OSI Systems an attractive investment opportunity right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).
