What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-05-02 · 203 added, 234 removed, 404 unchanged (52% of the section changed)

4 unchanged sentences

(amounts in thousands, except share amounts and par value)

September 30,

CURRENT ASSETS:

12 unchanged sentences

Advances from customers

Deferred revenue

Other accrued expenses and current liabilities

1 unchanged sentence

Long-term debt, net

Deferred income taxes

Other long-term liabilities

5 unchanged sentences

Common stock, $ 0.001 par value— 100,000,000 shares authorized;

issued and outstanding, 17,055,497 shares at June 30, 2024 and 16,788,617 shares at March 31, 2025

issued and outstanding, 16,794,399 shares at June 30, 2025 and 16,977,595 shares at September 30, 2025

Retained earnings

7 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Net revenues:

5 unchanged sentences

Research and development

Restructuring and other charges, net

Restructuring and other charges

Total operating expenses

10 unchanged sentences

(amounts in thousands)

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Other comprehensive income (loss):

Foreign currency translation adjustment, net of tax

Net unrealized gain (loss) on derivatives, net of tax

Net unrealized loss on derivatives, net of tax

Other, net of tax

Other comprehensive income (loss)

Other comprehensive loss

Comprehensive income

4 unchanged sentences

(amounts in thousands, except share data)

Three Months Ended March 31, 2024

Comprehensive

Balance—December 31, 2023

Exercise of stock options

Vesting of RSUs

Shares issued under employee stock purchase program

Stock-based compensation expense

Taxes paid related to net share settlement of equity awards

Other comprehensive loss

Balance—March 31, 2024

Three Months Ended March 31, 2025

Comprehensive

Balance—December 31, 2024

Exercise of stock options

Vesting of RSUs

Shares issued under employee stock purchase program

Stock-based compensation expense

Taxes paid related to net share settlement of equity awards

Other comprehensive income

Balance—March 31, 2025

OSI SYSTEMS, INC.

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(amounts in thousands, except share data)

Nine Months Ended March 31, 2024

Three Months Ended September 30, 2024

Comprehensive

2 unchanged sentences

Vesting of RSUs

Shares issued under employee stock purchase program

Shares issued under employee stock purchase plan

Stock-based compensation expense

Repurchase of common stock

Taxes paid related to net share settlement of equity awards

Other comprehensive loss

Balance—March 31, 2024

Nine Months Ended March 31, 2025

Balance—September 30, 2024

Three Months Ended September 30, 2025

Comprehensive

2 unchanged sentences

Vesting of RSUs

Shares issued under employee stock purchase program

Shares issued under employee stock purchase plan

Stock-based compensation expense

Repurchase of common stock

Taxes paid related to net share settlement of equity awards

Other comprehensive loss

Balance—March 31, 2025

Balance—September 30, 2025

OSI SYSTEMS, INC.

2 unchanged sentences

(amounts in thousands)

Nine Months Ended March 31,

Three Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES

12 unchanged sentences

Deferred revenue

Other liabilities

Net cash provided by (used in) operating activities

2 unchanged sentences

Proceeds from sale of property and equipment

Proceeds from maturities of certificates of deposit

Acquisition of business, net of cash acquired

11 unchanged sentences

Effect of exchange rate changes on cash

Net increase in cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents—beginning of period

7 unchanged sentences

Basis of Presentation

The condensed consolidated financial statements include the accounts of OSI Systems, Inc.

The unaudited condensed consolidated financial statements include the accounts of OSI Systems, Inc.

and our subsidiaries.

2 unchanged sentences

Certain information and footnote disclosures required for annual financial statements have been condensed or excluded in accordance with SEC rules and regulations and GAAP applicable to interim unaudited financial statements.

Accordingly, the condensed consolidated financial statements do not include all information and footnotes required by GAAP for audited annual financial statements.

In management’s opinion, the condensed consolidated financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented.

Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by GAAP for audited annual financial statements.

In the opinion of management, the condensed consolidated financial statements reflect all adjustments of a normal and recurring nature that are considered necessary for a fair presentation of the results for the interim periods presented.

These unaudited condensed consolidated financial statements and the accompanying notes should be read in conjunction with the audited consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 filed with the SEC.

The results of operations for the three and nine months ended March 31, 2025 are not necessarily indicative of the operating results to be expected for the full 2025 fiscal year or any future periods.

The results of operations for the three months ended September 30, 2025 are not necessarily indicative of the operating results to be expected for the full 2026 fiscal year or any future periods.

Use of Estimates

8 unchanged sentences

The underlying equity component of the 2.25 % convertible senior notes due 2029 (the “2029 Notes”) discussed in Note 8 to the condensed consolidated financial statements will have a net impact on diluted earnings per share when the average price of our common stock exceeds the conversion price of $ 191.98 because the principal amount of the 2029 Notes will be settled in cash upon conversion.

There was no dilutive effect of the 2029 Notes for the three and nine months ended March 31, 2025 as the average price of our common stock was below the conversion price for each of the quarterly periods in fiscal year 2025.

There was a dilutive effect of the 2029 Notes as set forth in the table below for the three months ended September 30, 2025.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Net income available to common stockholders

1 unchanged sentence

Dilutive effect of equity awards

Dilutive effect of 2029 Notes

Weighted average shares outstanding—diluted

4 unchanged sentences

We consider all highly liquid investments with maturities of three months or less as of the acquisition date to be cash equivalents.

Our cash and cash equivalents totaled $ 95.8 million at March 31, 2025.

Our cash and cash equivalents totaled $ 124.4 million at September 30, 2025.

Of this amount, approximately 64 % was held by our foreign subsidiaries and subject to repatriation tax considerations.

These foreign funds were held primarily by our subsidiaries in India, the United Kingdom and to a lesser extent in Singapore, Canada, and Malaysia among other countries.

These foreign funds were held primarily by our subsidiaries in India, the United Kingdom, Singapore, and Canada and to a lesser extent Malaysia, Australia, and Indonesia, among other countries.

We have cash holdings in financial institutions that exceed insured limits for such financial institutions;

2 unchanged sentences

Our financial instruments consist primarily of cash and cash equivalents, insurance company contracts, accounts receivable, accounts payable, debt instruments, an interest rate swap contract and foreign currency forward contracts.

The carrying values of financial instruments, other than long-term debt instruments and the interest rate swap contract, are representative of their fair values due to their short-term maturities.

The carrying values of our long-term debt instruments, other than the 2029 Notes, are considered to approximate their fair values because the interest rates of these instruments are variable or comparable to current rates for financing available to us.

The fair value of the 2029 Notes are based on observable inputs described below under Level 2.

The fair values of our foreign currency forward contracts were not significant as of June 30, 2024 and March 31, 2025.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The “Level 1” category includes assets and liabilities measured at quoted prices in active markets for identical assets and liabilities.

The “Level 2” category includes assets and liabilities measured from observable inputs other than quoted market prices.

The “Level 3” category includes assets and liabilities for which valuation inputs are unobservable and significant to the fair value measurement.

The carrying values of financial instruments, other than long-term debt instruments and our interest rate swap contract, are representative of their fair values due to their short-term maturities.

The carrying values of our long-term debt instruments are considered to approximate their fair values because the interest rates of these instruments are variable or comparable to current rates for financing available to us.

The fair values of our foreign currency forward contracts were not significant as of June 30, 2025 or as of September 30, 2025.

Fair value is the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

The “Level 1” category includes assets and liabilities at quoted prices in active markets for identical assets and liabilities.

The “Level 2” category includes assets and liabilities from observable inputs other than quoted market prices.

The “Level 3” category includes assets and liabilities for which valuation techniques are unobservable and significant to the fair value measurement.

Our contingent payment obligations related to acquisitions, which are further discussed in Note 10 to the condensed consolidated financial statements, are in the “Level 3” category for valuation purposes.

1 unchanged sentence

June 30, 2025

March 31, 2025

September 30, 2025

Assets—Insurance company contracts

Assets – Interest rate swap contract

Liabilities—Convertible debt

Liabilities—Convertible notes

Liabilities—Contingent consideration

1 unchanged sentence

Our use of derivatives consists of foreign currency forward contracts and an interest rate swap agreement.

Our foreign currency forward contracts are utilized to partially mitigate certain balance sheet exposures from short-term foreign currency fluctuations.

Our foreign currency forward contracts are utilized to partially mitigate certain balance sheet exposures or used as a net investment hedge to protect against potential changes resulting from short-term foreign currency fluctuations.

These contracts have original maturities of up to three months.

2 unchanged sentences

We do not use hedging instruments for speculative purposes.

The net gains or losses from our foreign currency forward contracts, which are not designated as hedge instruments, are reported in our consolidated statements of operations.

The amounts reported in the consolidated statements of operations for the three and nine months ended March 31, 2024 and 2025 were not significant.

The net gains or losses from our foreign currency forward contracts, which are not designated as hedge instruments, are reported in the consolidated statements of operations, and the amounts reported for the three months ended September 30, 2024 and 2025 were not significant.

The fair value of our foreign currency forward contracts is estimated using a standard valuation model and market-based observable inputs over the contractual term.

Unrealized gains are recognized as assets and unrealized losses are recognized as liabilities.

As of June 30, 2024 and March 31, 2025, we held foreign currency forward contracts with notional amounts totaling $ 96.4 million and $ 37.4 million, respectively.

Unrealized gains and losses from our foreign currency forward contracts as of June 30, 2024 and March 31, 2025 were not significant.

As of June 30, 2025 and September 30, 2025, we held foreign currency forward contracts with notional amounts totaling $ 99.9 million and $ 113.4 million, respectively.

Unrealized gains and losses from our foreign currency forward contracts as of June 30, 2025 and September 30, 2025 were not significant.

Our interest rate swap agreement was entered into to improve the predictability of cash flows from interest payments related to our variable, Secured Overnight Financing Rate (“SOFR”)-based debt.

2 unchanged sentences

A qualitative and quantitative assessment of the interest rate swap hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate that the hedge may no longer be highly effective.

As of June 30, 2024 and March 31, 2025, the notional amount of the interest rate swap hedge derivative instrument was $ 175 million.

The fair value of the interest rate swap agreement as of June 30, 2024 and March 31, 2025 is recorded in Other assets within the consolidated balance sheet.

As of June 30, 2025 and September 30, 2025, the notional amount of the derivative instruments designated as an interest rate swap hedge was $ 175 million.

The fair value of the interest rate swap agreement as of June 30, 2025 and September 30, 2025 is recorded in Other assets within the consolidated balance sheet.

The effect of the cash flow hedges on other comprehensive income (loss) and earnings for the periods presented was as follows:

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Total interest and other expense, net presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded

Gain (loss) recognized in other comprehensive income (loss), net of tax

Amount reclassified from accumulated other comprehensive income (loss) to interest expense, net

Loss recognized in other comprehensive income (loss), net of tax

Benefit reclassified from accumulated other comprehensive loss to interest expense, net

Recent Accounting Pronouncements

1 unchanged sentence

Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on our Consolidated Financial Statements upon adoption.

There were no new pronouncements adopted in the first nine months of fiscal year 2025.

In November 2023, the FASB issued Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosures of significant expenses by segment and interim disclosure of items that were previously required on an annual basis.

ASU 2023-07 is to be applied on a retrospective basis and is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 with early adoption permitted.

We are evaluating the potential impact of ASU 2023-07 on disclosures in our Consolidated Financial Statements which is effective beginning with our Form 10-K for fiscal year 2025 and interim periods beginning with the first quarter of fiscal year 2026.

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to the income tax rate reconciliations and income taxes paid.

There were no new pronouncements adopted in the first quarter of fiscal year 2026.

Accounting Guidance Not Yet Adopted

In December 2023, the FASB issued Accounting Standards Update 2023-09, “Improvements to Income Tax Disclosures” (“ASU 2023-09”), which provides for additional disclosures primarily related to income tax rate reconciliations and income taxes paid.

ASU 2023-09 requires entities to annually disclose the income tax rate reconciliation using both amounts and percentages, considering several categories of reconciling items, including state and local income taxes, foreign tax effects, tax credits and nontaxable or nondeductible items, among others.

7 unchanged sentences

We are currently evaluating the impact of this standard on our disclosures.

In September 2025, the FASB issued Accounting Standards Update 2025-06 “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software” (“ASU 2025-06”) which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements.

This update is effective for interim and annual periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact of this standard on our accounting for internal-use software and related disclosure requirements.

Business Combinations

3 unchanged sentences

Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from acquired customers, acquired technology, trade names, useful lives and discount rates.

Management’s estimates of fair value are based upon assumptions which are believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

Management’s estimates of fair value are based on assumptions which are believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates.

During the measurement period for fair value, which is up to one year from the acquisition date, as additional information that existed at the acquisition date becomes available, we may record adjustments to the preliminary assets acquired and liabilities assumed.

Upon the conclusion of the measurement period, any subsequent adjustments are included in earnings.

Fiscal Year 2025 Business Acquisition

Fiscal Year 2025 Business Acquisitions

In September 2024, we (through our Security division) acquired 100 % of the shares of common stock of a privately held provider of critical military, space and surveillance solutions to expand our customer base and offer additional products and services for existing customers, for approximately $ 76.0 million, plus up to $ 24.0 million in potential contingent consideration.

We paid $ 75.5 million in cash at the closing of the transaction and recorded a holdback liability of $ 0.5 million which is expected to be released in November 2030.

We paid $ 75.5 million in cash at the closing of the transaction and recorded a holdback liability of $ 0.5 million which is expected to be released in 2030.

The cash paid for this acquisition was financed with borrowings from our credit facility.

The acquisition date fair value of the contingent consideration was $ 9.7 million, therefore, when combined with the amount of cash paid at close and the holdback amount, total purchase consideration was $ 85.7 million which has been allocated to the preliminary fair value of assets acquired and liabilities assumed.

The preliminary acquisition date fair value of total assets acquired, including measurement period adjustments, was $ 115.9 million which comprised accounts receivable of $ 26.6 million, inventory and other current assets of $ 4.5 million, property and equipment of $ 7.0 million, goodwill of $ 31.5 million, other intangible assets of $ 46.2 million and other noncurrent assets of $ 0.1 million.

The acquisition date fair value of the contingent consideration was $ 9.7 million, which, when combined with the amount of cash paid at close and the holdback amount, resulted in total purchase consideration of $ 85.7 million being allocated to the preliminary fair value of assets acquired and liabilities assumed.

The acquisition date fair value of total assets acquired, including measurement period adjustments, was $ 113.9 million which comprised accounts receivable of $ 26.1 million, inventory and other current assets of $ 2.7 million, property and equipment of $ 7.0 million, goodwill of $ 30.7 million, other intangible assets of $ 47.3 million and other noncurrent assets of $ 0.1 million.

Goodwill includes the value of the assembled workforce, new customers and other future economic benefits which do not qualify for separate recognition.

1 unchanged sentence

Other intangible assets include amortizable intangible assets of $ 36.7 million with amortization periods of 7 to 10 years and an indefinite-lived intangible asset of $ 8.1 million.

The preliminary acquisition date fair value of total liabilities assumed, including measurement period adjustments, was $ 30.2 million, which includes a deferred tax liability of $ 9.4 million that was recognized primarily due to the acquisition of other intangible assets.

The preliminary valuation of the assets acquired, liabilities assumed and contingent consideration in the acquisition is subject to revision.

During the nine months ended March 31, 2025, we recorded measurement period adjustments which increased goodwill by $ 3.1 million due to a decrease in net working capital of $ 4.4 million and an increase in deferred income taxes of $ 1.0 million, which were partially offset by an increase in intangible assets of $ 2.3 million.

The acquisition date fair value of total liabilities assumed, including measurement period adjustments, was $ 28.2 million, which includes a deferred tax liability of $ 7.3 million that was recognized primarily due to the acquisition of other intangible assets.

During the three months ended September 30, 2025, we recorded measurement period adjustments which decreased goodwill by $ 1.4 million due to a decrease in deferred income taxes of $ 1.8 million and an increase in intangible assets of $ 0.1 million, which were partially offset by a decrease in accounts receivable of $ 0.5 million.

The measurement period adjustments did not have a significant impact on the consolidated statement of operations.

If additional information becomes available, we may further revise the preliminary purchase price allocation as soon as practical, but no later than one year from the acquisition date.

Revenue from this acquired business was $ 50.7 million from the acquisition date through March 31, 2025.

Fiscal Year 2024 Business Acquisitions

In December 2023, we (through our Optoelectronics and Manufacturing division) acquired a privately held contract manufacturer for approximately $ 6.3 million in cash.

The acquisition was financed with cash on hand.

The goodwill recognized for this business acquisition is deductible for income tax purposes.

In October 2023, we (through our Security division) acquired a privately held provider of radiation detection technology for approximately $ 2.8 million in cash, plus up to $ 3.6 million in potential contingent consideration.

In April 2025, we (through our Security Division) acquired a privately held provider of engineering and structural component services for approximately $ 1.3 million, plus up to $ 0.9 million in potential contingent consideration.

The acquisition was financed with cash on hand.

1 unchanged sentence

Balance Sheet Details

The following tables set forth details of selected balance sheet accounts (in thousands):

September 30,

Accounts receivable, net

1 unchanged sentence

Less allowance for doubtful accounts

September 30,

Raw materials

1 unchanged sentence

Finished goods

The following tables set forth details of selected balance sheet accounts (in thousands):

September 30,

Property and equipment, net

1 unchanged sentence

Leasehold improvements

Equipment and tooling

Furniture and fixtures

Equipment, tooling, furniture and fixtures

Computer equipment

4 unchanged sentences

Property and equipment, net

Depreciation and amortization expense for property and equipment was $ 5.1 million and $ 5.0 million for the three months ended March 31, 2024 and 2025, respectively, and $ 14.6 million and $ 16.7 million for each of the nine months ended March 31, 2024 and 2025.

Depreciation and amortization expense for property and equipment was $ 6.7 million and $ 5.4 million, respectively, for the three months ended September 30, 2024 and 2025.

Goodwill and Intangible Assets

The changes in the carrying value of goodwill by segment for the nine-month period ended March 31, 2025 were as follows (in thousands):

The changes in the carrying value of goodwill by segment for the three-month period ended September 30, 2025 were as follows (in thousands):

Optoelectronics

1 unchanged sentence

Balance as of June 30, 2025

Goodwill acquired during the period (see Note 2)

Goodwill adjustments during the period (see Note 2)

Foreign currency translation adjustment

Balance as of March 31, 2025

Balance as of September 30, 2025

Intangible assets consisted of the following (in thousands):

June 30, 2025

March 31, 2025

September 30, 2025

Amortizable assets:

5 unchanged sentences

Total intangible assets

Amortization expense related to intangible assets was $ 5.5 million and $ 5.6 million for the three months ended March 31, 2024 and 2025, respectively.

For each of the nine months ended March 31, 2024 and 2025, amortization expense related to intangible assets was $ 15.9 million.

During the nine months ended March 31, 2025, intangible assets of $ 46.2 million were from the business acquisition described in Note 2.

At March 31, 2025, the estimated future amortization expense for intangible assets was as follows (in thousands):

Amortization expense related to intangible assets was $ 4.8 million and $ 4.9 million for the three months ended September 30, 2024 and 2025, respectively.

At September 30, 2025, the estimated future amortization expense for amortizable intangible assets was as follows (in thousands):

2026 (remaining 9 months)

1 unchanged sentence

Software development costs incurred after establishing technological feasibility are capitalized on a product-by-product basis until the product is available for general release to customers at which time amortization begins.

Annual amortization, charged to cost of goods sold, is the amount computed using the ratio of current revenues for the developed product divided by total current and anticipated future revenues for that developed product.

Annual amortization, charged to cost of goods sold, is the amount computed using the ratio that current revenues for a product bear to the total current and anticipated future revenues for that product.

In the event that future revenues are not estimable, such costs are amortized on a straight-line basis over the remaining estimated economic life of the product.

Amortizable assets that have not yet begun to be amortized are included in Thereafter in the table above.

For the three months ended March 31, 2024 and 2025, we capitalized software development costs in the amounts of $ 4.3 million and $ 4.2 million, respectively.

For the nine months ended March 31, 2024 and 2025, we capitalized software development costs in the amounts of $ 12.3 million and $ 13.0 million, respectively.

For each of the three month periods ended September 30, 2024 and 2025, we capitalized software development costs of $ 4.2 million.

Contract Assets and Liabilities

1 unchanged sentence

We recognize revenue and corresponding accounts receivable according to ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”).

When we recognize revenue in advance of the point in time at which contracts give us the right to invoice a customer, we record this as unbilled revenue, which is included in accounts receivable, net, on our consolidated balance sheets.

We may also receive consideration, per the terms of a contract, from customers prior to transferring control of goods to the customer.

3 unchanged sentences

We recognize these contract liabilities as sales after all revenue recognition criteria are met.

The table below shows the balance of contract assets and liabilities as of June 30, 2024 and March 31, 2025, including the change between the periods.

The table below shows the balance of contract assets and liabilities as of June 30, 2025 and September 30, 2025, including the change between such dates.

There were no substantial non-current contract assets for the periods presented.

Contract Assets (in thousands)

September 30,

Unbilled revenue (included in accounts receivable, net)

Contract Liabilities (in thousands)

September 30,

Advances from customers

2 unchanged sentences

Contract Assets.

Contract assets decreased by $ 60.9 million due to decreases in unbilled revenue of $ 86.3 million primarily from the achievement of certain milestones in our Security division which gives us the right to invoice customers, partially offset by an increase of $ 25.4 million from the business acquisition described in Note 2.

Contract assets decreased by approximately $ 59.3 million primarily due to achievement of certain milestones in our Security division giving us the right to invoice customers.

Remaining Performance Obligations .

Remaining performance obligations related to ASC 606 represent the portion of the transaction price allocated to performance obligations under an original contract with a term greater than one year which are fully or partially unsatisfied at the end of the period.

As of March 31, 2025, the portion of the transaction price allocated to remaining performance obligations was approximately $ 822.5 million.

As of September 30, 2025, the portion of the transaction price allocated to remaining performance obligations was approximately $ 875.6 million.

We expect to recognize revenue on approximately 55 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter.

During the nine months ended March 31, 2025, we recognized revenue of $ 66.6 million from contract liabilities existing at the beginning of the period.

During the three months ended September 30, 2025, we recognized revenue of $ 36.7 million from contract liabilities existing at the beginning of the period.

Practical Expedients.

3 unchanged sentences

The components of operating lease expense were as follows (in thousands):

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Operating lease cost

4 unchanged sentences

June 30, 2025

March 31, 2025

Operating lease ROU assets, net

September 30, 2025

Operating lease right of use (“ROU”) assets, net

Operating lease liabilities, current portion

6 unchanged sentences

Supplemental cash flow information related to operating leases was as follows (in thousands):

Nine Months Ended March 31,

Three Months Ended September 30,

Cash paid for operating lease liabilities

ROU assets obtained in exchange for new lease obligations

Maturities of operating lease liabilities at March 31, 2025 were as follows (in thousands):

March 31, 2025

Maturities of operating lease liabilities at September 30, 2025 were as follows (in thousands):

September 30, 2025

Less than one year

2 unchanged sentences

Restructuring and Other Charges

We endeavor to align our global capacity and infrastructure with demand by our customers as well as fully integrate acquisitions and thereby improve operational efficiency.

During the three months ended March 31, 2025, we recognized $ 2.3 million in restructuring and other charges, which included $ 1.8 million in employee terminations and $ 0.5 million for facility closure costs.

During the nine months ended March 31, 2025, we recognized $ 3.6 million in restructuring and other charges, which included $ 0.6 million in acquisition related costs, $ 0.8 million for facility closure costs for operational efficiency activities, and $ 2.3 million for employee terminations.

During the three months ended March 31, 2024, we recognized $ 1.0 million in restructuring and other charges, which primarily included $ 0.5 million for facility closure costs for operational efficiency activities, and $ 0.5 million for employee terminations.

During the nine months ended March 31, 2024, we recognized $ 2.5 million in restructuring and other charges, which included $ 0.8 million for facility closure costs for operational efficiency activities, $ 0.8 million for employee terminations, $ 0.4 million in acquisition related costs, and $ 0.4 million in legal charges.

The following tables summarize restructuring and other charges (benefits), net for the periods set forth below (in thousands):

Three Months Ended March 31, 2024

Optoelectronics and

Manufacturing

Security Division

Acquisition-related costs

Employee termination costs

Facility closures/consolidation

Legal costs, net

Three Months Ended March 31, 2025

Optoelectronics and

Manufacturing

Security Division

Acquisition-related costs (recoveries), net

Employee termination costs

Facility closures/consolidation

Nine Months Ended March 31, 2024

We endeavor to align our global capacity and infrastructure with demand by our customers and to effectively integrate acquisitions and thereby improve our operational efficiency.

During the three months ended September 30, 2025, we recognized $ 2.7 million in restructuring and other charges, which included $ 2.4 million primarily for non-recurring charges in the Security and Healthcare divisions and $ 0.3 million for employee terminations.

During the three months ended September 30, 2024, we recognized $ 1.2 million in restructuring and other charges, which included $ 0.6 million in employee terminations, $ 0.2 million for facility closure costs for operational efficiency activities, and $ 0.4 million in acquisition related costs.

The following tables summarize restructuring and other charges for the periods set forth below (in thousands):

Three Months Ended September 30, 2024

Optoelectronics and

4 unchanged sentences

Facility closures/consolidation

Legal costs, net

Nine Months Ended March 31, 2025

Three Months Ended September 30, 2025

Optoelectronics and

3 unchanged sentences

Employee termination costs

Facility closures/consolidation

Legal costs (reimbursements), net

The accrued liability for restructuring and other charges is included in Other accrued expenses and current liabilities in the condensed consolidated balance sheets.

The changes in the accrued liability for restructuring and other charges for the nine-month period ended March 31, 2025 were as follows (in thousands):

The changes in the accrued liability for restructuring and other charges for the three-month period ended September 30, 2025 were as follows (in thousands):

Consolidation

Balance as of June 30, 2025

Restructuring and other charges, net

Restructuring and other charges

Payments, adjustments and reimbursements, net

Balance as of March 31, 2025

Balance as of September 30, 2025

Revolving Credit Facility

Our senior secured credit facility comprises a term loan and a $ 600 million revolving credit facility which matures in December 2026.

The revolving credit facility includes a $ 300 million sub-limit for letters of credit.

Under certain circumstances and subject to certain conditions, we have the ability to increase the revolving credit facility by the greater of $ 250 million or such amount as would not cause our secured leverage ratio to exceed a specified level.

Borrowings under the facility bear interest at SOFR plus a margin of 1.5 % as of March 31, 2025 (which margin can range from 1.0 % to 1.75 % based on our consolidated net leverage ratio as defined in the credit facility).

In July 2025 we amended and extended our revolving credit facility, now maturing in July 2030, to increase the limit from $ 600 million to $ 725 million and replaced the $ 128.1 million term loan with a $ 100.0 million term loan which were accounted for as a debt modification.

The sub-limit for letters of credit was increased from $ 300 million to $ 350 million, which includes up to $ 300 million for borrowings in certain foreign currencies.

Under certain circumstances and subject to certain conditions, we have the ability to increase the revolving credit facility by an amount equal to the greater of $ 300 million or such amount as would not cause our secured leverage ratio to exceed a specified level.

Other enhancements include the permitted securitization of certain qualifying assets of up to $ 100 million.

Borrowings under the facility bore interest at SOFR plus a margin of 1.25 % as of September 30, 2025 (which margin can range from 1.0 % to 1.75 % based on our consolidated net leverage ratio as defined in the credit facility).

Letters of credit reduce the amount available to borrow under the credit facility by their face value amount.

The unused portion of the facility bears a commitment fee of 0.20 % as of March 31, 2025 (which fee can range from 0.10 % to 0.25 % based on our consolidated net leverage ratio as defined in the credit facility).

The unused portion of the facility bore a commitment fee of 0.15 % as of September 30, 2025 (which fee can range from 0.10 % to 0.25 % based on our consolidated net leverage ratio as defined in the credit facility).

Our borrowings under the credit agreement are guaranteed by certain of our U.S.-based subsidiaries and are secured by substantially all of our assets and substantially all the assets of certain of our subsidiaries.

The credit facility contains various representations and warranties, affirmative, negative and financial covenants and events of default.

As of March 31, 2025, there were $ 156.0 million of borrowings outstanding under the revolving credit facility, $ 75.1 million outstanding under the letters of credit sub-facility, and $ 130.0 million outstanding under the term loan.

As of March 31, 2025, the amount available to borrow under the revolving credit facility was $ 368.9 million.

As of September 30, 2025, there were $ 252.1 million of borrowings outstanding under the revolving credit facility, $ 95.4 million outstanding under the letters of credit sub-facility, and $ 98.8 million outstanding under the term loan.

As of September 30, 2025, the amount available to borrow under the revolving credit facility was $ 377.5 million.

Loan amounts under the revolving credit facility may be borrowed, repaid and re-borrowed during the term.

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It is our practice to routinely borrow and repay several times per year under the revolving facility and therefore, borrowings under the revolving credit facility are included in current liabilities.

As of March 31, 2025, we were in compliance with all financial covenants under this credit facility.

As of September 30, 2025, we were in compliance with all financial covenants under this credit facility.

In September 2022, we entered into an interest rate swap agreement in order to mitigate the interest rate risk on a portion of the interest payments expected to be made on the borrowings outstanding under the revolving credit facility and term loan.

Refer to Note 1 for details.

2.25% Convertible Senior Notes Due 2029 (“2029 Notes”)

Refer to Note 1 for further information relating to the interest rate swap agreement.

2.25 % Convertible Senior Notes Due 2029

In July 2024, we issued an aggregate of $ 350.0 million principal amount of 2.25 % convertible senior notes due in August 2029 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended, at an issuance price equal to 97.5 % of the principal amount.

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We may redeem for cash all or any portion of the 2029 Notes, at our option, on or after August 6, 2027 if the last reported sale price of our common stock has been at least 130 % of the conversion price then in effect for at least 20 trading days at a redemption price equal to 100 % of the principal amount of the 2029 Notes to be redeemed, plus accrued and unpaid interest up to the day before the redemption date.

The holders may require us to repurchase the 2029 Notes upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2029 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date.

Holders of the 2029 Notes may convert all or a portion of their 2029 Notes at their option prior to May 1, 2029, in multiples of $ 1,000 principal amounts, only under the following circumstances (i) during any calendar quarter commencing after the quarter ended on September 30, 2024 (and only during such calendar quarter), if our common stock price exceeds 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter;

(ii) during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day;

(iii) upon the occurrence of specified corporate events or certain distributions on our common stock;

or (iv) if we call any or all 2029 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the notes called for redemption.

On or after May 1, 2029, the 2029 Notes are convertible at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

The holders of the 2029 Notes may require us to repurchase the 2029 Notes upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2029 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date.

Holders of the 2029 Notes may, at their option, convert all or a portion of their 2029 Notes prior to May 1, 2029, in multiples of $1,000 principal amounts, only (i) during any calendar quarter if our common stock price exceeds 130 % of the conversion price for at least 20 trading days during the 30 consecutive trading days at the end of the prior calendar quarter, (ii) during the five consecutive business days immediately after any 10 consecutive trading day period in which the trading price per $1,000 principal amount of the 2029 Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price per share of our common stock on such trading day and the conversion rate on such trading day, (iii) upon the occurrence of specified corporate events or certain distributions on our common stock;

or (iv) if we call any or all of the 2029 Notes for redemption, at any time prior to the close of business on the scheduled trading day immediately preceding the redemption date, but only with respect to the 2029 Notes called for redemption.

On or after May 1, 2029, the 2029 Notes are convertible by the holders thereof at any time until the close of business on the second scheduled trading day immediately preceding the maturity date.

Holders of the 2029 Notes who convert the 2029 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2029 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate.

We accounted for the issuance of the 2029 Notes as a single liability measured at its amortized cost, as no other embedded features require bifurcation and recognition as derivatives.

The following table is a summary of the 2029 Notes as of March 31, 2025 (in thousands):

The following table is a summary of the 2029 Notes as of September 30, 2025 (in thousands):

September 30,

Principal amount

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Fair value (Level 2)

The 2029 Notes were not eligible for conversion as of March 31, 2025.

The 2029 Notes were not eligible for conversion as of September 30, 2025.

No sinking fund is provided for the 2029 Notes, which means that we are not required to redeem or retire them periodically.

As of March 31, 2025 we were in compliance with applicable financial covenants under the indenture governing the 2029 Notes.

For the three months ended March 31, 2025, total interest expense for the 2029 Notes was $ 2.4 million, which consisted of $ 2.0 million of contractual interest expense and $ 0.4 million of amortization of debt discount and issuance costs.

For the nine months ended March 31, 2025, total interest expense for the 2029 Notes was $ 6.8 million, which consisted of $ 5.5 million of contractual interest expense and $ 1.3 million of amortization of debt discount and issuance costs.

As of September 30, 2025 we were in compliance with applicable covenants under the indenture governing the 2029 Notes.

For the three months ended September 30, 2025, total interest expense for the 2029 Notes was $ 2.4 million (comprised of $ 2.0 million of contractual interest expense and $ 0.4 million of amortization of debt discount and issuance costs) compared with total interest expense for the 2029 Notes of $ 1.9 million (comprised of $ 1.6 million of contractual interest expense and $ 0.3 million of amortization of debt discount and issuance costs) for the three months ended September 30 2024.

The unamortized debt issuance cost is amortized on the effective interest method over the life of the 2029 Notes.

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dollars, primarily for the issuance of letters of credit.

As of March 31, 2025, $ 68.0 million was outstanding under these letter-of-credit facilities.

As of March 31, 2025, the total amount available under these credit facilities was $ 24.7 million.

As of September 30, 2025, $ 59.9 million was outstanding under these letter-of-credit facilities.

As of September 30, 2025, the total amount available under these credit facilities was $ 35.6 million.

Long-term debt consisted of the following (in thousands):

September 30,

2029 Notes, net

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Long-term portion of debt

Future principal payments of long-term debt by fiscal year as of March 31, 2025 are as follows (in thousands):

Future principal payments of long-term debt by fiscal year as of September 30, 2025 are as follows (in thousands):

2026 (9 months remaining)

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Stock-based Compensation

As of March 31, 2025, we maintained the Amended and Restated 2012 Incentive Award Plan (the “OSI Plan”) as a stock-based employee compensation plan.

As of September 30, 2025, we maintained the Amended and Restated 2012 Incentive Award Plan (the “OSI Plan”) as a stock-based employee compensation plan.

We recorded stock-based compensation expense in the consolidated statements of operations as follows (in thousands):

Three Months Ended March 31,

Nine Months Ended March 31,

Three Months Ended September 30,

Cost of goods sold

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Stock-based compensation expense

As of March 31, 2025, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 1.2 million for stock options and $ 17.4 million for restricted stock units (“RSUs”).

As of September 30, 2025, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 0.9 million for stock options and $ 19.9 million for restricted stock units (“RSUs”).

We expect to recognize these costs over a weighted average period of 1.8 years with respect to the stock options and 2.2 years with respect to the RSUs.

The following summarizes stock option activity during the nine months ended March 31, 2025:

The following summarizes stock option activity during the three months ended September 30, 2025:

Weighted-Average

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Expired or forfeited

Outstanding at March 31, 2025

Exercisable at March 31, 2025

The following summarizes RSU award activity during the nine months ended March 31, 2025:

Outstanding at September 30, 2025

Exercisable at September 30, 2025

The following summarizes RSU award activity during the three months ended September 30, 2025:

Nonvested at June 30, 2025

Nonvested at March 31, 2025

As of March 31, 2025, there were approximately 1.6 million shares available for grant under the OSI Plan.

Under the terms of the OSI Plan, RSUs and restricted stock granted from the pool of shares available for grant reduce the pool by 1.87 shares for each award granted.

RSUs and restricted stock forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited.

We granted 75,988 and 80,682 performance-based RSUs during the nine months ended March 31, 2024 and 2025, respectively.

Nonvested at September 30, 2025

As of September 30, 2025, there were approximately 1.6 million shares available for grant under the OSI Plan.

Under the terms of the OSI Plan, RSUs granted from the pool of shares available for grant reduce the pool by 1.87 shares for each award granted.

RSUs forfeited and returned to the pool of shares available for grant increase the pool by 1.87 shares for each award forfeited.

We granted 54,563 and 48,185 performance-based RSUs during the three months ended September 30, 2024 and 2025, respectively.

These performance-based RSU awards are contingent on the achievement of certain performance metrics.

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This program does not expire unless our Board of Directors acts to terminate the program.

The timing and actual numbers of shares purchased depend on a variety of factors, including stock price, general business and market conditions and other investment opportunities.

The timing and actual numbers of shares to be purchased under this program will depend on a variety of factors, including stock price, general business and market conditions and other investment opportunities.

Repurchases may be made from time to time under the program through open-market purchases or privately-negotiated transactions at our discretion.

Upon repurchase, the shares are restored to the status of authorized but unissued shares, and we record them in our consolidated financial statements as a reduction in the number of shares of common stock issued and outstanding, with the excess purchase price over par value recorded as a reduction of additional paid-in capital.

If additional paid-in capital is reduced to zero, we record the remainder of the excess purchase price over par value as a reduction of retained earnings.

During the nine months ended March 31, 2025, we repurchased 531,314 shares of common stock for an aggregate purchase price of approximately $ 80 million.

As of March 31, 2025, there were 1,190,556 shares remaining available for repurchase under the authorized repurchase program.

We have not paid any cash dividends since the consummation of our initial public offering in 1997 and we do not currently intend to pay any cash dividends in the foreseeable future.

Our Board of Directors will determine the payment of future cash dividends, if any.

Certain of our current bank credit facilities restrict the payment of cash dividends and future borrowings may contain similar restrictions.

If additional paid-in capital were to be reduced to zero, we would record the remainder of the excess purchase price over par value as a reduction of retained earnings.

During the three months ended September 30, 2025, we did no t repurchase any shares of common stock.

As of September 30, 2025, there were 1,190,556 shares remaining available for repurchase under the authorized repurchase program.

We have not paid any dividends since the consummation of our initial public offering in 1997 and we do not currently intend to pay any dividends in the foreseeable future.

Our Board of Directors will determine the payment of future dividends, if any.

Certain of our current bank credit facilities restrict the payment of dividends and future borrowings may contain similar restrictions.

Commitments and Contingencies

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Under the terms and conditions of the purchase agreements associated with certain acquisitions, we may be obligated to make additional payments based on the achievement of certain sales or profitability milestones through the acquired operations.

The potential future payments for two agreements with uncapped contingent consideration through fiscal year 2028 are not expected to be significant.

For agreements that contain contingent consideration obligations that are capped, the remaining maximum amount of such potential future payments is $ 54.5 million as of March 31, 2025.

For agreements that contain contingent consideration obligations, the remaining maximum amount of such potential future payments is $ 42.8 million as of September 30, 2025.

Projections and estimated probabilities are used to estimate future contingent earnout payments, which are discounted back to present value to compute contingent earnout liabilities.

The following table provides a roll-forward from June 30, 2024 to March 31, 2025 of the contingent consideration liability, which is included in other accrued expenses and current liabilities and other long-term liabilities in our consolidated balance sheets (in thousands):

The following table provides a roll-forward from June 30, 2025 to September 30, 2025 of the contingent consideration liability, which is included in Other accrued expenses and current liabilities and other long-term liabilities in our consolidated balance sheets (in thousands):

Beginning fair value, June 30, 2025

Business acquisitions (Note 2)

Foreign currency translation adjustment

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Payments on contingent earnout obligations

Ending fair value, March 31, 2025

Ending fair value, September 30, 2025

We are periodically required to provide performance bonds to do business with certain customers.

These arrangements are common in the industry and generally have terms ranging between one year and ten years .

The bonds are provided by various bonding agencies.

However, we are ultimately liable for claims that may occur against them.

As of June 30, 2025 and September 30, 2025, we had a maximum financial exposure related to performance bonds of approximately $ 104 million and $ 105 million, respectively.

As described in Note 8, we and several of our foreign subsidiaries have issued letters of credit under the revolving credit facility and international bank facilities.

These letters of credit are issued to protect various customers, suppliers and government agencies under contractual arrangements and regulatory requirements.

We have no history of significant claims and there are no pending matters that would require us to perform under any of these arrangements, and we believe that the resolution of any claims that might arise in the future, either individually or in the aggregate, would not materially affect the consolidated financial statements.

Accordingly, no liability for any of these arrangements has been recorded as of June 30, 2025 and September 30, 2025.

Environmental Contingencies

We are subject to various environmental laws.

We conduct environmental investigations at our manufacturing facilities in North America, Asia-Pacific, and Europe, and, to the extent practicable, on new properties in order to identify, as of the date of such investigation, potential areas of environmental concern related to past and present activities or from nearby operations.

We conduct environmental investigations at our manufacturing facilities in North America, Asia-Pacific, and Europe, and, to the extent practicable, on all new properties in order to identify, as of the date of such investigation, potential areas of environmental concern related to past and present activities or from nearby operations.

In certain cases, we have conducted further environmental assessments consisting of soil and groundwater testing and other investigations deemed appropriate by independent environmental consultants.

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It is not possible to determine the maximum potential amount under these indemnification agreements due to, among other factors, the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement.

We have not recorded any liability for costs related to contingent indemnification obligations as of March 31, 2025.

We have not recorded any liability for costs related to contingent indemnification obligations as of September 30, 2025.

Product Warranties

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The following table presents changes in warranty provisions (in thousands):

Nine Months Ended March 31,

Three Months Ended September 30,

Balance at beginning of period

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Legal Proceedings

In February 2023, one of our subsidiaries received a subpoena from the U.S.

Department of Justice (“DoJ”).

The subpoena was issued as part of a DoJ case against a former employee of an OSI Systems subsidiary for embezzlement and other conduct occurring before he was hired by our subsidiary and while he was employed by another company in the United States and Mexico.

The subpoena requests documents and records relating to, among other things, the former employee and the Company’s business dealings in Mexico since 2020.

In February 2024, we received a follow-up subpoena requesting the same categories of documents but extending the relevant time period through to the date of the second subpoena.

We have produced documents in response to these subpoenas and intend to cooperate with any further subpoenas or other requests in connection with this or any ensuing investigation.

In September 2024, we received a subpoena requesting records relating to certain entities in Honduras.

Consistent with past practice, we intend to cooperate with requests arising from this most recent subpoena.

We are involved in various other potential or actual claims and legal proceedings arising in the ordinary course of business.

We are involved in potential or actual claims, litigation and other legal proceedings arising in the ordinary course of business.

In our opinion after consultation with legal counsel, the ultimate disposition of such proceedings is not likely to have a material adverse effect on our business, financial condition, results of operations or cash flows.

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As such, there can be significant volatility in interim tax provisions.

The effective tax rates for three months ended March 31, 2024 and 2025 were 22.6 % and 14.3 %, respectively.

During the three months ended March 31, 2024 and 2025, we recognized net discrete tax benefits of $ 0.2 million and $ 4.5 million, respectively, related to equity-based compensation under ASU 2016-09 and changes in prior year tax estimates and uncertain tax positions.

The effective tax rates for the nine months ended March 31, 2024 and 2025 were 21.7 % and 19.5 %, respectively.

During the nine months ended March 31, 2024 and 2025, we recognized net discrete tax benefits of $ 0.8 million and $ 1.3 million, respectively, related to equity-based compensation under ASU 2016-09 and $ 2.3 million and $ 4.0 million, respectively, for changes in prior year tax estimates and uncertain tax positions.

The effective tax rates for the three months ended September 30, 2024 and 2025 were 21.9 % and 19.9 %, respectively.

During the three months ended September 30, 2024 and 2025, we recognized a net discrete tax benefit of $ 0.5 million and $ 0.9 million, respectively, related to equity-based compensation under ASU 2016-09 and changes in prior-year estimates and uncertain tax positions.

On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law.

Key income-tax related provisions of the OBBBA relevant to our Company include the removal of mandatory capitalization of domestic research and development expenditures, permanent extension of bonus depreciation and revisions to international tax regimes.

We are evaluating the financial impact of OBBBA, which is in effect for the current fiscal year ending June 30, 2026.

The legislation will affect the timing and recognition of certain deductions, which, if implemented, could impact our effective tax rate and deferred tax balances in future periods.

Segment Information

We have determined that we operate in three identifiable industry segments:

We operate in three identifiable industry segments:

(a) security and inspection systems (Security division), (b) optoelectronic devices and manufacturing (Optoelectronics and Manufacturing division) and (c) medical monitoring systems (Healthcare division).

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All other accounting policies of the segments are the same as described in Note 1, Basis of Presentation.

The following tables present our results of operations and identifiable assets by industry segment (in thousands):

Three Months Ended

Nine Months Ended

Revenues (1), (2) —by Segment:

Security division

Optoelectronics and Manufacturing division, including intersegment revenues

Healthcare division

Intersegment revenues elimination

Income (loss) from operations —by Segment:

Security division

Optoelectronics and Manufacturing division

Healthcare division

Intersegment eliminations

We disclose segment income (loss) from operations as our measure of segment profit/loss, reconciled to consolidated income (loss) from operations.

The measure of segment income (loss) from operations excludes restructuring and other charges presented below which are presented to reconcile to consolidated income from operations.

Business segment disclosures consider information used by/provided to our chief operating decision maker (“CODM”).

Our Chief Executive Officer serves as the CODM.

The CODM uses segment income (loss) from operations, as well as the expenses within each segment including cost of sales, selling, general and administrative expenses and research and development expenses, to allocate resources to segments in the budgeting and forecasting process along with periodic ongoing reviews of results and overall activity in the markets where each segment operates.

The following tables present our results of operations and identifiable assets by our three industry segments, along with amounts for Corporate/Eliminations, which are reconciled to consolidated amounts (in thousands):

Three Months Ended September 30, 2024

Optoelectronics

Manufacturing

Revenues (1):

External customer revenue

Revenue between segments

Total revenues

Cost of goods sold

Selling, general and administrative expenses

Research and development expenses

Segment income (loss) from operations

Restructuring and other charges

Income (loss) from operations

Capital expenditures

Depreciation and amortization

Three Months Ended September 30, 2025

Optoelectronics

Manufacturing

Revenues (1):

External customer revenue

Revenue between segments

Total revenues

Cost of goods sold

Selling, general and administrative expenses

Research and development expenses

Segment income (loss) from operations

Restructuring and other charges

Income (loss) from operations

Capital expenditures

Depreciation and amortization

For the three months ended September 30, 2024, one Security division customer accounted for 14 % of consolidated net revenues.

For the three months ended September 30, 2025, no customer accounted for 10% or more of the Company’s consolidated net revenues.

September 30,

Assets (1) —by Segment:

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Healthcare division

Eliminations (4)

(1) For the three months ended March 31, 2024, one Security division customer accounted for 26 % of net revenues.

For the nine months ended March 31, 2024, two Security division customers accounted for 13 % and 12 % of consolidated net revenues, respectively.

(2) For the three and nine-month periods ended March 31, 2025, one customer in the Security division accounted for 14 % and 13 %, respectively, of consolidated net revenues.

(3) As of June 30, 2024, two customers in the Security division accounted for 39 % and 10 %, respectively, of accounts receivable, net.

As of March 31, 2025, one customer in the Security division accounted for 44 % of accounts receivable, net.

Corporate/Eliminations (2)

(1) As of June 30, 2025 and September 30, 2025, one customer in the Security division accounted for 42 % and 44 % of accounts receivable, net, respectively.

(2) Eliminations in assets reflect the amount of inter-segment profits in inventory and inter-segment ROU assets under ASC 842 as of the balance sheet date.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements