What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2026-05-04 compared with 2026-01-29 · 162 added, 134 removed, 586 unchanged (34% of the section changed)

30 unchanged sentences

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

issued and outstanding, 16,794,399 shares at June 30, 2025 and 16,451,106 shares at December 31, 2025

issued and outstanding, 16,794,399 shares at June 30, 2025 and 16,482,544 shares at March 31, 2026

Retained earnings

7 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Net revenues:

18 unchanged sentences

(amounts in thousands)

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Other comprehensive income (loss):

9 unchanged sentences

(amounts in thousands, except share data)

Three Months Ended December 31, 2024

Three Months Ended March 31, 2025

Comprehensive

Balance—September 30, 2024

Balance—December 31, 2024

Exercise of stock options

Vesting of RSUs

Shares issued under employee stock purchase plan

Stock-based compensation expense

Taxes paid related to net share settlement of equity awards

Other comprehensive loss

Balance—December 31, 2024

Three Months Ended December 31, 2025

Other comprehensive income

Balance—March 31, 2025

Three Months Ended March 31, 2026

Comprehensive

Balance—September 30, 2025

Balance—December 31, 2025

Exercise of stock options

Vesting of RSUs

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 income

Balance—December 31, 2025

Other comprehensive loss

Balance—March 31, 2026

OSI SYSTEMS, INC.

2 unchanged sentences

(amounts in thousands, except share data)

Six Months Ended December 31, 2024

Nine Months Ended March 31, 2025

Comprehensive

7 unchanged sentences

Other comprehensive loss

Balance—December 31, 2024

Six Months Ended December 31, 2025

Balance—March 31, 2025

Nine Months Ended March 31, 2026

Comprehensive

7 unchanged sentences

Other comprehensive income

Balance—December 31, 2025

Balance—March 31, 2026

OSI SYSTEMS, INC.

2 unchanged sentences

(amounts in thousands)

Six Months Ended December 31,

Nine Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES

48 unchanged sentences

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 six months ended December 31, 2025 are not necessarily indicative of the operating results to be expected for the full 2026 fiscal year or any future periods.

The results of operations for the three and nine months ended March 31, 2026 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”) and the 0.50 % convertible senior notes due 2031 (the “2031 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 for the 2029 Notes and $ 353.82 for the 2031 Notes because the principal amounts of the respective convertible senior notes will be settled in cash upon conversion.

There was a dilutive effect of the 2029 Notes as set forth in the table below for the three and six months ended December 31, 2025.

There was a dilutive effect of the 2029 Notes as set forth in the table below for the three and nine months ended March 31, 2026.

There was no dilutive impact of the 2031 Notes.

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

Three Months Ended December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Net income available to common stockholders

8 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 $ 336.7 million at December 31, 2025.

Our cash and cash equivalents totaled $ 345.2 million at March 31, 2026.

Of this amount, approximately 25 % was held by our foreign subsidiaries and subject to repatriation tax considerations.

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

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

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

1 unchanged sentence

Fair Value of Financial Instruments

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 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 December 31, 2025.

The fair values of our foreign currency forward contracts were not significant as of June 30, 2025 or as of March 31, 2026.

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.

5 unchanged sentences

June 30, 2025

December 31, 2025

March 31, 2026

Assets—Insurance company contracts

3 unchanged sentences

Derivative Instruments and Hedging Activity

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

Our use of derivatives consists of foreign currency forward contracts, a cross-currency interest rate swap contract and an interest rate swap agreement.

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 foreign currency forward contracts have original maturities of up to three months.

We use a cross-currency interest rate swap contract to hedge our net investment in a foreign subsidiary.

We also manage our risk to changes in interest rates using derivative instruments.

1 unchanged sentence

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 the consolidated statements of operations, and the amounts reported for the three and six months ended December 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 and nine months ended March 31, 2025 and 2026 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, 2025 and December 31, 2025, we held foreign currency forward contracts with notional amounts totaling $ 99.9 million and $ 160.1 million, respectively.

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

As of June 30, 2025 and March 31, 2026, we held foreign currency forward contracts with notional amounts totaling $ 99.9 million and $ 145.7 million, respectively.

Unrealized gains and losses from our foreign currency forward contracts as of June 30, 2025 and March 31, 2026 were not significant.

We entered into a cross-currency interest rate swap contract in March 2026, which matures in June 2026.

The net gains or losses from our cross-currency interest rate swap contract, which is designated as a net investment hedge instrument in a foreign subsidiary, are reported in accumulated other comprehensive loss in the consolidated statements of stockholders’ equity, and the amounts reported for the three and nine months ended March 31, 2026 were not significant.

The fair value of our cross-currency interest rate swap contract 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 March 31, 2026, the notional amount of this contract was $ 35.0 million.

The unrealized gain from our cross-currency interest rate swap contract as of March 31, 2026 was not significant.

The net interest rate benefit from this contract recognized in interest and other expense, net was not significant for the three and nine months ended March 31, 2026.

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, 2025 and December 31, 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 December 31, 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 December 31,

Six Months Ended December 31,

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

As of June 30, 2025 and March 31, 2026, the notional amount of the derivative instrument designated as an interest rate swap hedge was $ 175.0 million.

The fair value of the interest rate swap agreement as of June 30, 2025 and March 31, 2026 is recorded in Other assets within the consolidated balance sheet.

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

Three Months Ended March 31,

Nine Months Ended March 31,

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

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

3 unchanged sentences

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 second quarter of fiscal year 2026.

There were no new pronouncements adopted in the third 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 the 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.

Disclosure of the reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction.

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 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.

Disclosure of reconciling items is subject to a quantitative threshold and disaggregation by nature and jurisdiction.

ASU 2023-09 also requires entities to disclose net income taxes paid to or received from federal, state and foreign jurisdictions, as well as by individual jurisdiction, subject to a five percent quantitative threshold.

ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15, 2024 with early adoption permitted.

We are evaluating the potential impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements which is effective beginning with our Form 10-K for fiscal year 2026.

In November 2024, the FASB issued a new standard to expand disclosures about income statement expenses.

ASU 2023-09 may be adopted on a prospective or retrospective basis.

We are evaluating the potential impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements which is effective beginning with our Form 10-K for the current fiscal year 2026.

In November 2024, the FASB issued Accounting Standards Update 2024-03, “ Income Statement-Reporting Comprehensive Income (Topic 220):

Expense Disaggregation Disclosures”, (“ASU 2024-03”) which requires additional disclosures about income statement expenses.

The guidance requires disaggregation of certain costs and expenses included in each relevant expense caption on our consolidated income statements in a separate note to the financial statements at each interim and annual reporting period, including amounts of purchases of inventory, employee compensation, depreciation, and intangible asset amortization.

The standard will be effective for us beginning with our Form 10-K for fiscal year 2028 and interim periods thereafter, with early adoption permitted.

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

ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

Early adoption is permitted and may be applied either on a prospective or retrospective basis.

We are evaluating the potential impact of ASU 2024-03 on disclosures in our Consolidated Financial Statements which will be effective beginning with our Form 10-K for fiscal year 2028.

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.

This standard is effective for annual reporting periods beginning after December 15, 2027, including interim periods within those annual periods.

Early adoption is permitted.

The amendments are to be applied retrospectively, prospectively, or a modified transition approach may be used based on the status of the project and whether software costs were capitalized before the date of adoption.

We are evaluating the potential impact of ASU 2025-06 on disclosures in our Consolidated Financial Statements which will be effective beginning with our Form 10-K for fiscal year 2029.

In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270):

Narrow-Scope Improvements” (ASU 2025-11”), which clarifies the application, form and content, and required disclosures for interim financial statements prepared in accordance with GAAP.

The ASU improves the organization and clarity of ASU 2025-11 by specifying interim reporting requirements, consolidating required interim disclosures and introducing a disclosure principle for events and changes occurring after the end of the most recent annual reporting period that have a material impact on the entity.

ASU 2025-11 is effective for interim periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

We are evaluating the potential impact of ASU 2025-11 on disclosures in our Consolidated Financial Statements which will be effective for interim periods beginning fiscal year 2029.

In December 2025, the FASB issued Accounting Standards Update 2025-12, “Codification Improvements” (“ASU 2025-12”).

ASU 2025-12 includes changes that clarify, correct, or otherwise improve certain components of the Accounting Standards Codification.

The improvements consist of narrow-scope amendments, technical corrections, clarification of existing guidance, and updates to clarify the appropriate scope and application of certain disclosure requirements.

ASU 2025-12 is effective for annual periods beginning after December 15, 2026.

We are evaluating the potential impact of ASU 2025-12 on disclosures in our Consolidated Financial Statements which will be effective beginning with our Form 10-K for fiscal year 2028.

Business Combinations

8 unchanged sentences

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 scheduled to be paid in 2030.

We paid $ 75.5 million in cash at the closing of the transaction.

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

7 unchanged sentences

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

The measurement period ended in September 2025, accordingly no further purchase price adjustments have been recorded during the three months ended December 31, 2025.

The measurement period ended in September 2025, and no further purchase price adjustments have been recorded since.

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.

19 unchanged sentences

Property and equipment, net

Depreciation and amortization expense for property and equipment was $ 5.0 million and $ 5.2 million for the three months ended December 31, 2024 and 2025, respectively, and $ 11.7 million and $ 10.6 million for the six months ended December 31, 2024 and 2025, respectively.

Depreciation and amortization expense for property and equipment was $ 5.0 million and $ 5.1 million for the three months ended March 31, 2025 and 2026, respectively, and $ 16.7 million and $ 15.7 million for the nine months ended March 31, 2025 and 2026, respectively.

Goodwill and Intangible Assets

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

The changes in the carrying value of goodwill by segment for the nine-month period ended March 31, 2026 were as follows (in thousands):

Optoelectronics

3 unchanged sentences

Foreign currency translation adjustment

Balance as of December 31, 2025

Balance as of March 31, 2026

Intangible assets consisted of the following (in thousands):

June 30, 2025

December 31, 2025

March 31, 2026

Amortizable assets:

5 unchanged sentences

Total intangible assets

Amortization expense related to intangible assets was $ 5.6 million and $ 4.4 million for the three months ended December 31, 2024 and 2025, respectively.

Amortization expense related to intangible assets was $ 10.4 million and $ 9.2 million for the six month ended December 31, 2024 and 2025, respectively.

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

Amortization expense related to intangible assets was $ 5.6 million and $ 4.4 million for the three months ended March 31, 2025 and 2026, respectively.

Amortization expense related to intangible assets was $ 15.9 million and $ 13.6 million for the nine months ended March 31, 2025 and 2026, respectively.

At March 31, 2026, the estimated future amortization expense for amortizable intangible assets was as follows (in thousands):

2026 (remaining 3 months)

4 unchanged sentences

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

For the three months ended December 31, 2024 and 2025, we capitalized software development costs of $ 4.6 million in each of the respective periods.

For the six months ended December 31, 2024 and 2025, we capitalized software development costs in the amounts of $ 8.8 million and $ 8.9 million, respectively.

For each of the three months ended March 31, 2025 and 2026, we capitalized software development costs of $ 4.2 million.

For the nine months ended March 31, 2025 and 2026, we capitalized software development costs in the amounts of $ 13.0 million and $ 13.1 million, respectively.

Contract Assets and Liabilities

7 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, 2025 and December 31, 2025, including the change between such dates.

The table below shows the balance of contract assets and liabilities as of June 30, 2025 and March 31, 2026, including the change between such dates.

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

12 unchanged sentences

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 December 31, 2025, the portion of the transaction price allocated to remaining performance obligations was approximately $ 625.3 million.

As of March 31, 2026, the portion of the transaction price allocated to remaining performance obligations was approximately $ 877.2 million.

We expect to recognize revenue on approximately 37 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter.

During the six months ended December 31, 2025, we recognized revenue of $ 56.9 million from contract liabilities existing at the beginning of the period.

During the nine months ended March 31, 2026, we recognized revenue of $ 81.8 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 December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Operating lease cost

4 unchanged sentences

June 30, 2025

December 31, 2025

March 31, 2026

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

7 unchanged sentences

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

Six Months Ended December 31,

Nine Months Ended March 31,

Cash paid for operating lease liabilities

ROU assets obtained in exchange for new lease obligations

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

December 31, 2025

Maturities of operating lease liabilities at March 31, 2026 were as follows (in thousands):

March 31, 2026

Less than one year

3 unchanged sentences

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 December 31, 2025, we recognized $ 2.9 million in impairment, restructuring and other charges, which included $ 1.0 million for impairment of assets, $ 0.7 million for employee terminations and $ 1.2 million for non-recurring business unit modifications in our Healthcare division.

During the six months ended December 31, 2025, we recognized $ 5.6 million in impairment, restructuring and other charges, which included $ 1.0 million for impairment of assets, $ 1.1 million for employee terminations, $ 1.3 million for non-recurring business unit modifications in our Healthcare division, and $ 2.2 million of non-recurring charges in our Security division.

During the three months ended December 31, 2024, we recognized $ 0.2 million in impairment, restructuring and other charges primarily for acquisition-related costs.

During the six months ended December 31, 2024, we recognized $ 1.4 million in impairment, restructuring and other charges, which included $ 0.6 million in acquisition related costs, $ 0.2 million for facility closure costs for operational efficiency activities, and $ 0.6 million for employee terminations.

During the three months ended March 31, 2026, we recognized $ 6.2 million in impairment, restructuring and other charges, which included $ 0.2 million for impairment of assets, $ 1.7 million for employee terminations, $ 2.0 million for acquisition-related costs, $ 1.2 million for non-recurring business unit modifications and $ 1.1 million for a legal settlement, primarily in our Healthcare division.

During the nine months ended March 31, 2026, we recognized $ 11.8 million in impairment, restructuring and other charges, which included $ 1.2 million for impairment of assets, $ 2.7 million for employee terminations, $ 2.0 million for acquisition-related costs, $ 2.6 million for non-recurring business unit modifications and $ 1.1 million for a legal settlement in our Healthcare division, and $ 2.2 million of non-recurring charges in our Security division.

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.

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

Three Months Ended December 31, 2024

Three Months Ended March 31, 2025

Optoelectronics and

1 unchanged sentence

Security Division

Acquisition-related costs

Acquisition-related costs (recoveries), net

Employee termination costs

Three Months Ended December 31, 2025

Facility closures/consolidation

Three Months Ended March 31, 2026

Optoelectronics and

4 unchanged sentences

Impairment of assets

Six Months Ended December 31, 2024

Legal and other expense (benefit), net

Nine Months Ended March 31, 2025

Optoelectronics and

4 unchanged sentences

Facility closures/consolidation

Six Months Ended December 31, 2025

Legal costs (reimbursements), net

Nine Months Ended March 31, 2026

Optoelectronics and

4 unchanged sentences

Impairment of assets

Legal and other expense (benefit), net

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

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

The changes in the accrued liability for impairment, restructuring and other charges for the nine-month period ended March 31, 2026 were as follows (in thousands):

Consolidation

Balance as of June 30, 2025

Restructuring and other charges, net

Restructuring and other charges (benefit), net

Payments and adjustments, net

Balance as of December 31, 2025

Balance as of March 31, 2026

Revolving 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.

In July 2025 we amended and extended our credit facility, now maturing in July 2030, to increase the revolving 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.

1 unchanged sentence

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 December 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).

Borrowings under the facility bore interest at SOFR plus a margin of 1.25 % as of March 31, 2026 (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 bore a commitment fee of 0.15 % as of December 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 March 31, 2026 (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 December 31, 2025, there were no borrowings outstanding under the revolving credit facility, $ 113.6 million outstanding under the letters of credit sub-facility, and $ 97.5 million outstanding under the term loan.

As of December 31, 2025, the amount available to borrow under the revolving credit facility was $ 611.4 million.

As of March 31, 2026, there were no borrowings outstanding under the revolving credit facility, $ 106.7 million outstanding under the letters of credit sub-facility, and $ 95.0 million outstanding under the term loan.

As of March 31, 2026, the amount available to borrow under the credit facility was $ 618.3 million.

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

2 unchanged sentences

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

As of March 31, 2026, 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.

16 unchanged sentences

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 December 31, 2025 (in thousands):

The following table is a summary of the 2029 Notes as of March 31, 2026 (in thousands):

Principal amount

2 unchanged sentences

Fair value (Level 2)

As of December 31, 2025, one of the conditions allowing holders of the 2029 Notes to convert had been met.

The trading price of our common stock remained above 130 % of the applicable $ 191.98 conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, December 31, 2025 (the last trading day of the quarter ended December 31, 2025), resulting in the right of the holders of the 2029 Notes to convert their 2029 Notes beginning January 2, 2026 through March 31, 2026 (the last trading day of the quarter ending March 31, 2026).

As of March 31, 2026, one of the conditions allowing holders of the 2029 Notes to convert had been met.

The trading price of our common stock remained above 130 % of the applicable $ 191.98 conversion price for at least 20 trading days during the 30 consecutive trading-day period ending on, and including, March 31, 2026 (the last trading day of the quarter ended March 31, 2026), resulting in the right of the holders of the 2029 Notes to convert their 2029 Notes beginning January 2, 2026 through March 31, 2026 (the last trading day of the quarter ending March 31, 2026).

Should the holders of the 2029 Notes elect to convert some or all of the 2029 Notes, we intend to draw on our revolving credit facility to settle the obligation.

2 unchanged sentences

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

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

For each of the three months ended December 31, 2025 and 2024, 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).

For the six months ended December 31, 2025, total interest expense for the 2029 Notes was $ 4.8 million (comprised of $ 3.9 million of contractual interest expense and $ 0.9 million of amortization of debt discount and issuance costs) compared with total interest expense for the 2029 Notes of $ 4.3 million (comprised of $ 3.5 million of contractual interest expense and $ 0.8 million of amortization of debt discount and issuance costs) for the six months ended December 31 2024.

As of March 31, 2026 we were in compliance with applicable financial covenants under the indenture governing the 2029 Notes.

For each of the three months ended March 31, 2026 and 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).

For the nine months ended March 31, 2026, total interest expense for the 2029 Notes was $ 7.3 million (comprised of $ 5.9 million of contractual interest expense and $ 1.4 million of amortization of debt discount and issuance costs) compared with total interest expense for the 2029 Notes of $ 6.8 million (comprised of $ 5.5 million of contractual interest expense and $ 1.3 million of amortization of debt discount and issuance costs) for the nine months ended March 31, 2025.

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

20 unchanged sentences

Fair value (Level 2)

The 2031 Notes were not eligible for conversion as of December 31, 2025.

The 2031 Notes were not eligible for conversion as of March 31, 2026.

No sinking fund is provided for the 2031 Notes, which means that we are not required to redeem or retire them periodically.

As of December 31, 2025 we were in compliance with applicable financial covenants under the indenture governing the 2031 Notes.

For the three and six months ended December 31, 2025, total interest expense for the 2031 Notes was $ 0.6 million (comprised of $ 0.3 million of contractual interest expense and $ 0.3 million of amortization of debt discount and issuance costs).

As of March 31, 2026 we were in compliance with applicable financial covenants under the indenture governing the 2031 Notes.

For the three months ended March 31, 2026, total interest expense for the 2031 Notes was $ 1.3 million (comprised of $ 0.7 million of contractual interest expense and $ 0.6 million of amortization of debt discount and issuance costs).

For the nine months ended March 31, 2026, total interest expense for the 2031 Notes was $ 1.9 million (comprised of $ 1.0 million of contractual interest expense and $ 0.9 million of amortization of debt discount and issuance costs).

The unamortized debt issuance cost is amortized on the effective interest method over the life of the 2031 Notes.

2 unchanged sentences

dollars, primarily for the issuance of letters of credit.

As of December 31, 2025, $ 62.8 million was outstanding under these letter-of-credit facilities.

As of December 31, 2025, the total amount available under these credit facilities was $ 58.3 million.

As of March 31, 2026, $ 64.9 million was outstanding under these letter-of-credit facilities.

As of March 31, 2026, the total amount available under these credit facilities was $ 55.2 million.

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

4 unchanged sentences

Long-term portion of debt

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

Future principal payments of long-term debt by fiscal year as of March 31, 2026 are as follows (in thousands):

2026 (3 months remaining)

2 unchanged sentences

Stock-based Compensation

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

As of March 31, 2026, 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 December 31,

Six Months Ended December 31,

Three Months Ended March 31,

Nine Months Ended March 31,

Cost of goods sold

2 unchanged sentences

Stock-based compensation expense

As of December 31, 2025, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 1.3 million for stock options and $ 19.1 million for restricted stock units (“RSUs”).

As of March 31, 2026, total unrecognized compensation cost related to share-based compensation grants under the OSI Plan were estimated at $ 1.1 million for stock options and $ 16.4 million for restricted stock units (“RSUs”).

We expect to recognize these costs over a weighted average period of 2.0 years with respect to the stock options and 2.2 years with respect to the RSUs.

The following summarizes stock option activity during the six months ended December 31, 2025:

The following summarizes stock option activity during the nine months ended March 31, 2026:

Weighted-Average

4 unchanged sentences

Expired or forfeited

Outstanding at December 31, 2025

Exercisable at December 31, 2025

The following summarizes RSU award activity during the six months ended December 31, 2025:

Outstanding at March 31, 2026

Exercisable at March 31, 2026

The following summarizes RSU award activity during the nine months ended March 31, 2026:

Nonvested at June 30, 2025

Nonvested at December 31, 2025

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

Nonvested at March 31, 2026

As of March 31, 2026, 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 80,682 and 48,392 performance-based RSUs during the six months ended December 31, 2024 and 2025, respectively.

We granted 80,682 and 49,431 performance-based RSUs during the nine months ended March 31, 2025 and 2026, respectively.

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

9 unchanged sentences

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 six months ended December 31, 2025, we repurchased 546,945 shares of common stock for an aggregate purchase price of $ 146.1 million in connection with the issuance of the 2031 Notes.

As of December 31, 2025, there were 643,611 shares remaining available for repurchase under the authorized repurchase program.

During the nine months ended March 31, 2026, we repurchased 546,945 shares of common stock for an aggregate purchase price of $ 146.1 million in connection with the issuance of the 2031 Notes.

As of March 31, 2026, there were 643,611 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.

4 unchanged sentences

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.

For agreements that contain contingent consideration obligations, the remaining maximum amount of such potential future payments is $ 37.9 million as of December 31, 2025.

For agreements that contain contingent consideration obligations, the remaining maximum amount of such potential future payments is $ 37.9 million as of March 31, 2026.

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, 2025 to December 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 March 31, 2026 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

2 unchanged sentences

Payments on contingent earnout obligations

Ending fair value, December 31, 2025

Ending fair value, March 31, 2026

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

2 unchanged sentences

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

As of June 30, 2025 and December 31, 2025, we had a maximum financial exposure related to performance bonds of approximately $ 104 million and $ 107 million, respectively.

As of June 30, 2025 and March 31, 2026, we had a maximum financial exposure related to performance bonds of approximately $ 104 million and $ 100 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.

1 unchanged sentence

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 December 31, 2025.

Accordingly, no liability for any of these arrangements has been recorded as of June 30, 2025 and March 31, 2026.

Environmental Contingencies

10 unchanged sentences

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 December 31, 2025.

We have not recorded any liability for costs related to contingent indemnification obligations as of March 31, 2026.

Product Warranties

6 unchanged sentences

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

Six Months Ended December 31,

Nine Months Ended March 31,

Balance at beginning of period

9 unchanged sentences

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

The effective tax rates for the three months ended December 31, 2024 and 2025 were 23.3 % and 19.5 %, respectively.

During the three months ended December 31, 2024, we recognized a net discrete tax benefit of $ 0.3 million, related to equity-based compensation under ASU 2016-09.

During the three months ended December 31, 2025 we recognized a net discrete tax benefit of $ 0.9 million related to equity-based compensation under ASU 2016-09 and a benefit of $ 1.0 million for changes in prior years estimates.

The effective tax rates for the six months ended December 31, 2024 and 2025 were 22.9 % and 19.7 %, respectively.

During the six months ended December 31, 2024, we recognized a net discrete tax benefit of $ 0.8 million, related to equity-based compensation under ASU 2016-09.

During the six months ended December 31, 2025 we recognized a net discrete tax benefit of $ 1.7 million, related to equity-based compensation under ASU 2016-09 and a benefit of $ 1.0 million for changes in prior-year tax estimates.

The effective tax rates for the three months ended March 31, 2025 and 2026 were 14.3 % and 18.3 %, respectively.

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

During the three months ended March 31, 2026 we recognized a net discrete tax benefit of $ 0.4 million related to equity-based compensation under ASU 2016-09 and a benefit of $ 2.3 million for changes in uncertain tax positions from prior years.

The effective tax rates for the nine months ended March 31, 2025 and 2026 were 19.5 % and 19.1 %, respectively.

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

During the nine months ended March 31, 2026, we recognized net discrete tax benefits of $ 2.1 million related to equity-based compensation under ASU 2016-09 and $ 3.3 million for changes in prior-years tax estimates and uncertain tax positions.

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

15 unchanged sentences

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 December 31, 2024

Three Months Ended March 31, 2025

Optoelectronics

12 unchanged sentences

Depreciation and amortization

(1) For the three months ended December 31, 2024, one customer in the Security division accounted for 10 % of the Company’s consolidated net revenues.

Three Months Ended December 31, 2025

(1) For the three months ended March 31, 2025, one customer in the Security division accounted for 14 % of the Company’s consolidated net revenues.

Three Months Ended March 31, 2026

Optoelectronics

12 unchanged sentences

Depreciation and amortization

(2) For the three months ended December 31, 2025, no customer accounted for 10% or more of the Company’s consolidated net revenues.

Six Months Ended December 31, 2024

(2) For the three months ended March 31, 2026, no customer accounted for 10% or more of the Company’s consolidated net revenues.

Nine Months Ended March 31, 2025

Optoelectronics

12 unchanged sentences

Depreciation and amortization

(3) For the six months ended December 31, 2024, one customer in the Security division accounted for 12 % of the Company’s consolidated net revenues.

Six Months Ended December 31, 2025

(3) For the nine months ended March 31, 2025, one customer in the Security division accounted for 13 % of the Company’s consolidated net revenues.

Nine Months Ended March 31, 2026

Optoelectronics

12 unchanged sentences

Depreciation and amortization

(4) For the six months ended December 31, 2025, no customer accounted for 10% or more of the Company’s consolidated net revenues.

(4) For the nine months ended March 31, 2026, no customer accounted for 10% or more of the Company’s consolidated net revenues.

Assets (1) —by Segment:

3 unchanged sentences

Corporate/Eliminations (2)

(1) As of June 30, 2025 and December 31, 2025 one customer in the Security division accounted for 42 % and 41 % of the Company’s accounts receivable, net, respectively.

(1) As of June 30, 2025 and March 31, 2026, one customer in the Security division accounted for 42 % and 40 % of the Company’s 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.

1 unchanged sentence

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