OSI Systems OSIS is riding on an expanding order book across its Security division. In the second quarter of fiscal 2025, Security revenues jumped 16% year over year to roughly $290 million and accounted for 69% of total revenues, which surged 12% to $419.8 million. The company’s book-to-bill ratio for the second quarter of fiscal 2025 was 1.2, and the backlog was more than $1.8 billion as of Dec. 31, 2024.
The strong performance of the Security division has benefited OSIS shares, which have appreciated 17.5% year to date, outperforming the Zacks Electronics-Miscellaneous Components industry and industry peers, including Fabrinet FN, TE Connectivity TEL and Universal Display OLED.
While Universal Display and TE Connectivity shares have returned 1.4% and 0.6%, respectively, Fabrinet declined 9.5%. Industry dropped 7.7% over the same timeframe.
Security order book continues to increase, with OSI Systems recently announcing an order worth $76 million to provide airport screening solutions for a major international airport. RTT 110 (Real-Time Tomography) explosive detection system for screening hold baggage and Itemiser 5X for detecting trace amounts of explosives and narcotics are among the solutions to be deployed.
The latest order followed a February international order worth $32 million to provide radio frequency (RF) based critical systems that are designed for long-range secure communications. OSI Systems is expected to support the systems integration and deployment activities for this program.
In January, the Security division received multiple orders, including an international award valued at roughly $12 million, to provide multiple units of the Eagle M60 ZBx multi-energy, mobile cargo and vehicle inspection system with combinational imaging, including follow-on maintenance and support. An international customer placed an order worth $81 million for multiple units of the Eagle M60 mobile high-energy cargo and vehicle inspection system.
Apart from these, OSIS received an order worth $23 million to assist in the deployment and integration of long-range RF critical communication systems. Another order worth $27 million was to provide a range of checkpoint and hold baggage screening solutions, including RTT 110, Orion 920CT checkpoint screening system integrated with Rapiscan TRS (Tray Return System) for inspecting carry-on items, Orion 928DX for screening air cargo and pallets, and Itemiser 5X.
For fiscal 2025, revenues are now expected between $1.685 and $1.71 billion, better than the previous guidance range of $1.67-$1.695 billion. Revenues are now expected to grow in the 9.5%-11.1% range.
Non-GAAP earnings are now expected between $9.10 and $9.40 per share, up from the previous guidance range of $9-$9.30 per share. Earnings are expected to grow between 11.9% and 15.6%.
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