What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2026-08-21 compared with 2025-08-25 · 343 added, 227 removed, 1214 unchanged (32% of the section changed)

6 unchanged sentences

Under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework and criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013.

Our assessment of, and conclusion on, the effectiveness of internal control over financial reporting did not include the internal controls of a wholly-owned subsidiary acquired in June 2026, which is included in our consolidated financial statements since the date of acquisition, whose financial statements reflect total assets and net revenues constituting 1.5% and less than 0.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2026.

Based on that evaluation, management concluded that our internal control over financial reporting was effective as of June 30, 2026.

In September 2024, we acquired 100% of the shares of common stock of a privately held provider of critical military, space and surveillance solutions (“Acquiree”).

Management has excluded the Acquiree from its assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2025.

The Acquiree represents approximately 6.1% and 4.7% of total assets and net sales, respectively, of the consolidated financial statement amounts as of and for the fiscal year ended June 30, 2025.

The effectiveness of the Company’s internal control over financial reporting as of June 30, 2026 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in its report, which is included in Item 8 of this Annual Report on Form 10-K.

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OTHER INFORMATION

None of our directors or officers informed us during the quarter ended June 30, 2025 of the adoption , modification or termination of a Rule 10b5 - 1 trading arrangement or non - Rule 10b5 - 1 trading arrangement, as those terms are defined in Regulation S - K, Item 408.

During the quarter ended June 30, 2026, none of our directors or Section 16 officers adopted , modified or terminated a Rule 10b5 - 1 trading arrangement or non - Rule 10b5 - 1 trading arrangement, as those terms are defined in Regulation S - K, Item 408.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2026, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated August 21, 2026, expressed an unqualified opinion.

Remaining performance obligations

As discussed in Note 5 to the consolidated financial statements, the Company revised the scope of the disclosure of remaining performance obligations to no longer apply optional disclosure-only exemptions that permit an entity to not disclose information about remaining performance obligations for performance obligations that are part of contracts with an original expected duration of one year or less.

This change affects only the scope of the Company’s remaining performance obligation disclosure and does not affect the Company’s revenue recognition, results of operations, or financial position.

Management believes this method is preferable because it provides more useful information to users of the financial statements by presenting a more comprehensive measure of remaining performance obligations.

Our opinion is not modified with respect to this matter.

Basis for opinion

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Determination of standalone selling price – Security Segment Product Revenue

As described further in Note 1 to the financial statements, the Company’s revenue contracts in the security segment may include multiple performance obligations, which are accounted for separately when they are distinct.

The Company derives revenues in the security segment mainly from sales of products, installation, civil works and training services.

As described in Note 1 to the consolidated financial statements, the Company’s revenue contracts in the security segment may include multiple performance obligations, which are accounted for separately when they are distinct.

The Company derives revenues in the security segment mainly from sales of products, installation, project management and training services.

The Company allocates the transaction price to the distinct performance obligations on a relative stand-alone selling price basis and recognizes revenue when control is transferred.

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We evaluated the Company’s analysis of stand-alone selling price, including inspecting a sample of executed contracts.

For the sample selected we evaluated the contracts to determine the appropriateness of the method used and the underlying data including costs and margin percentages to estimate the stand-alone selling price.

For the sample selected we evaluated the contracts to determine the appropriateness of the method used and the underlying data including cost details and margin percentages to estimate the stand-alone selling price.

/s/ GRANT THORNTON LLP

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We believe that our audit provides a reasonable basis for our opinion.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of a recently acquired wholly-owned subsidiary, whose financial statements reflect total assets and net revenues constituting 6.1% and 4.7%, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2025.

Our audit of, and opinion on, the Company’s internal control over financial reporting does not include the internal control over financial reporting of a recently acquired wholly-owned subsidiary, whose financial statements reflect total assets and net revenues constituting 1.5% and less than 0.1%, respectively, of the related consolidated financial statement amounts as of and for the year ended June 30, 2026.

As indicated in Management’s Report, the acquisition occurred during 2026.

Management’s assertion on the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of this entity.

Management’s assertion of the effectiveness of the Company’s internal control over financial reporting excluded internal control over financial reporting of this entity.

Definition and limitations of internal control over financial reporting

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Research and development

Restructuring and other charges, net

Impairment, restructuring and other charges

Total operating expenses

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Comprehensive

Balance-July 1, 2022

Balance - June 30, 2023

Exercise of stock options

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Stock-based compensation

Repurchase of common stock

Taxes paid related to net share settlement of equity awards

Other comprehensive income

Other comprehensive loss

Balance - June 30, 2024

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Stock-based compensation

Repurchase of common stock

Taxes paid related to net share settlement of equity awards

Other comprehensive loss

Other comprehensive income

Balance - June 30, 2025

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Repurchase of common stock

( 1,111,825 )

Taxes paid related to net share settlement of equity awards

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Proceeds from sale of property and equipment

Purchases of certificates of deposit

Proceeds from maturities of certificates of deposit

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Taxes paid related to net share settlement of equity awards

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Effect of exchange rate changes on cash

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We have three reporting segments:

(i) Security, providing security and inspection systems and turnkey security screening solutions;

(ii) Optoelectronics and Manufacturing, providing specialized electronic components and electronic manufacturing services for our Security and Healthcare divisions, as well as third parties for applications in the defense and aerospace markets, among others and (iii) Healthcare, providing patient monitoring, cardiology and remote monitoring, and connected care systems and associated accessories.

(i) Security, providing security and inspection systems, radio frequency solutions and turnkey security screening solutions;

(ii) Optoelectronics and Manufacturing, providing specialized electronic components and electronic manufacturing services for applications in the defense and aerospace markets, among others, and for our Security and Healthcare divisions and (iii) Healthcare, providing patient monitoring, cardiology and remote monitoring, and connected care systems and associated accessories.

Through our Security segment, we provide security screening products and related services globally.

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Due to the inherent uncertainty involved in making estimates, our actual amounts reported in future periods could differ materially from these estimates.

Reclassifications —Certain prior year amounts have been reclassified within operating activities on the consolidated statements of cash flows as well as within current liabilities on the consolidated balance sheets to conform with the current year presentation.

These reclassifications do not affect previously reported cash flows from operating activities in the consolidated statements of cash flows and total current liabilities on the consolidated balance sheets.

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

OSI SYSTEMS, INC.

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FOR THE THREE YEARS ENDED JUNE 30, 2026

Cash and Cash Equivalents —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 $ 106.4 million at June 30, 2025.

Of this amount, approximately 78 % was held by our foreign subsidiaries and subject to repatriation tax considerations.

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

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

however, we mitigate this risk by utilizing international financial institutions of high credit quality.

Accounts Receivable —We monitor collections and payments from our customers, and we maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments.

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Our estimate of future cash flows is based upon, among other things, certain assumptions about expected future operating performance, growth rates and other factors.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Income Taxes —Deferred income taxes are provided for temporary differences between the financial statement and income tax basis of our assets and liabilities, based on enacted tax rates.

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Income tax accounting standards prescribe a two-step process for the financial statement measurement and recognition of a tax position taken or expected to be taken in a tax return.

The first step involves the determination of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the position.

The first step involves determination of whether it is more likely than not (greater than 50 percent likelihood) that a tax position will be sustained upon examination, based on the technical merits of the position.

The second step requires that any tax position that meets the more likely than not recognition threshold be measured and recognized in the financial statements at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement.

See Note 10 for additional information.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

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.

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Liabilities—Contingent consideration

Derivative Instruments and Hedging Activity —Our use of derivatives consists of foreign currency forward contracts and an interest rate swap agreement.

Derivative Instruments and Hedging Activity — 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 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.

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

We entered into a cross-currency interest rate swap contract in June 2026, which matures in June 2027.

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 fiscal year ended June 30, 2026 was 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 June 30, 2026, the notional amount of this contract was $ 35.0 million.

The unrealized gain from our cross-currency interest rate swap contract as of June 30, 2026 was not significant.

The net interest rate benefit from this contract recognized in interest and other expense, net was not significant for the fiscal year ended June 30, 2026.

OSI SYSTEMS, INC.

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In the circumstance where terms of a product sale include subjective customer acceptance criteria, revenue is deferred until we have achieved the customer acceptance criteria unless such acceptance criteria are perfunctory or inconsequential.

On occasion, the Company receives requests from customers to delay physical transfers of products for the customers’ convenience under bill-and-hold arrangements.

We recognize revenue from these arrangements in accordance with ASC 606, which requires the transaction to meet the following criteria to determine that the customer has obtained control:

(a) the reason for the bill-and-hold is substantive, (b) the product has separately been identified as belonging to the customer, (c) the product is currently ready for physical transfer to the customer, and (d) the Company does not have the ability to use the product or direct it to another customer.

The Company recognized bill-and-hold revenues of $ 19.1 million and $ 5.5 million for fiscal years ended June 30, 2025, and 2024, respectively.

On occasion, customers request that completed products be held for future delivery for the customers’ convenience under bill-and-hold arrangements due to site readiness, installation scheduling, importation, or other customer-specific considerations.

Determining whether control transfers before physical possession in these bill-and-hold arrangements requires significant judgment.

We recognize revenue only when the bill-and-hold criteria in ASC 606 are met, including that the products are separately identified, ready for shipment, and cannot be redirected to another customer.

Any storage provided after control transfers is not a separate performance obligation.

We recognized bill-and-hold revenues of $ 64.7 million, $ 19.1 million and $ 5.5 million for the fiscal years ended June 30, 2026, 2025 and 2024 respectively.

The increase in fiscal year 2026 compared to fiscal year 2025 was primarily attributable to customer-requested shipment delays from site readiness and delivery constraints on certain contracts in the Security division for infrastructure and border security projects.

The increase in fiscal year 2025 compared to fiscal year 2024 was primarily due to customer-requested shipment delays from site readiness and delivery constraints on certain contracts in the Security division for border security projects.

Service Revenue.

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According to the terms of a sale contract, we may receive consideration from a customer prior to transferring goods to the customer, and we record these prepayments as an advance receipt.

We also record deferred revenue, typically related to service contacts, when consideration is received before the services have been performed.

We also record deferred revenue, typically related to service contracts, when consideration is received before the services have been performed.

We recognize contract liabilities and deferred revenue as net sales after all revenue recognition criteria are met.

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See Note 9 to the consolidated financial statements.

Restructuring and Other Charges —We account for certain charges related to restructuring activities, litigation, acquisition-related costs and other non-routine charges as Restructuring and other charges in the consolidated financial statements.

Impairment, Restructuring and Other Charges —We account for certain charges related to restructuring activities, litigation, acquisition-related costs and other non-routine charges as Impairment, restructuring and other charges in the consolidated financial statements.

See Note 7 for additional information about these charges.

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Credit risk on accounts receivable is minimized as a result of the large and diverse nature of our company’s worldwide customer base.

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

As of June 30, 2025, one customer in the Security division accounted for 42 % of accounts receivable, net.

In fiscal year 2024, two Security division customers accounted for 16 % and 11 % of net revenues, respectively.

As of June 30, 2026, one customer in the Security division accounted for 25 % of accounts receivable, net.

In fiscal year 2025, one Security division customer accounted for 11 % of net revenues.

In fiscal year 2026, no customer accounted for greater than 10% of net revenues.

We perform ongoing credit evaluations of our customers’ financial condition and maintain allowances for potential credit losses.

Our cash and cash equivalents totaled $ 106.4 million and $ 359.8 million at June 30, 2025 and 2026, respectively.

Of these amounts, approximately 81 % and 78 % were held by our foreign subsidiaries at June 30, 2024 and 2025, respectively.

For cost, quality control, technological, and efficiency reasons, we purchase certain materials, parts, and components only from single vendors with whom we have ongoing relationships.

We do, however, qualify second sources for many of our materials, parts, and components.

While management believes that relying on key vendors improves the efficiency and reliability of business operations, relying on any one vendor for a significant aspect of business can have a significant negative impact on revenue and profitability if that vendor fails to perform at acceptable service levels for any reason, including financial difficulties of the vendor.

Of these amounts, approximately 78 % and 23 % were held by our foreign subsidiaries at June 30, 2025 and 2026, respectively , and are subject to repatriation tax considerations.

These foreign funds were held primarily by our subsidiaries in India, United Kingdom, Singapore, Canada, and Malaysia.

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

however, we mitigate this risk by utilizing international financial institutions of high credit quality.

OSI SYSTEMS, INC.

2 unchanged sentences

FOR THE THREE YEARS ENDED JUNE 30, 2026

For cost, quality control, technological, and efficiency reasons, we purchase certain materials, parts, and components only from single vendors with whom we have ongoing relationships.

We do, however, qualify second sources for many of our materials, parts, and components.

Foreign Currency Translation and Transactions — We transact business in various foreign currencies.

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Non-monetary assets and liabilities are translated using historical exchange rates.

Transaction gains and losses, which were included in our consolidated statement of operations, amounted to a net gain (loss) of approximately $ 2.0 million, ($ 5.1 ) million and ($ 12.7 ) million for the fiscal years ended June 30, 2023, 2024 and 2025, respectively.

Foreign currency losses which were included in our consolidated statement of operations, amounted to approximately $ 5.1 million, $ 12.7 million and $ 1.6 million for the fiscal years ended June 30, 2024, 2025 and 2026, respectively.

Business Combinations —Under ASC 805, the acquisition method of accounting requires us to record assets acquired and liabilities assumed from an acquisition at their estimated fair values at the date of acquisition.

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We compute diluted earnings per share by dividing net income available to common stockholders by the sum of the weighted average number of common shares and dilutive potential common shares outstanding during the period.

Potential common shares consist of the shares issuable upon the exercise of stock options and restricted stock unit awards under the treasury stock method and shares issued upon conversion of the 2.25 % convertible senior notes due 2029 (the “2029 Notes”) discussed in Note 8.

The underlying equity component of the 2029 Notes 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.

In periods where a net loss is reported, basic and diluted net loss per share are the same since the effect of potential common shares is antidilutive and therefore excluded.

Potential common shares consist of the shares issuable upon the exercise of stock options and restricted stock unit awards under the treasury stock method.

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”) 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 fiscal year ended June 30, 2026.

There was no dilutive impact of the 2031 Notes.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

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

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Weighted average shares excluded from diluted earnings per share due to their anti-dilutive effect

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Warranty Provision —We offer our customers warranties on many of the products that we sell.

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Lease payments are made in accordance with the lease terms, and lease expense, including short-term lease expense, is recognized on a straight-line basis over the lease term.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

We lease facilities and certain equipment under various operating lease agreements.

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We also have finance leases for fleet vehicles that are not material to the consolidated financial statements.

Subsequent Event —In accordance with ASC 855, our management evaluated material events after the balance sheet date through the date of the filing of this report with the SEC, which includes the amendment and extension of our credit facility and paid down the delayed draw term loan in July 2025 as further described in Note 8.

Subsequent Event —In accordance with ASC 855, our management evaluated material events after the balance sheet date through the date of the filing of this report with the SEC.

Other than the increase in the stock repurchase authorization described in Note 9, no subsequent events occurred that required adjustment to, or disclosure in, the consolidated financial statements.

Recent Accounting Guidance

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

Accounting Guidance 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 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.

We adopted ASU 2023-09 in fiscal year 2026 on a prospective basis.

Accounting Guidance Not Yet Adopted

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.

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 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.

OSI SYSTEMS, INC.

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FOR THE THREE YEARS ENDED JUNE 30, 2026

Accounting Guidance Adopted in Fiscal Year 2025

We adopted Accounting Standards Update 2023-07, “Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which requires disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets.

See note 14 for required disclosures.

Interim disclosures will commence 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 the income tax rate reconciliation 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.

ASU 2023-09 also requires entities to disclose net income taxes paid or received the 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 14, 2024 with early adoption permitted.

We are evaluating the impact of ASU 2023-09 on disclosures in our Consolidated Financial Statements.

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

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.

In December 2025, the FASB issued Accounting Standards Update 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

Under Accounting Standards Codification Topic 805, Business Combinations (“ASC 805”), the acquisition method of accounting requires us to record assets acquired less liabilities assumed from an acquisition at their estimated fair values at the date of acquisition.

Any excess of the total estimated purchase price over the estimated fair value of the net assets acquired should be recorded as goodwill.

Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets.

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 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 2026 Business Acquisition

In June 2026, we (through our Security division) acquired a privately held provider of airport screening services for approximately $ 27.0 million, plus up to $ 14.0 million in potential contingent consideration.

We paid $ 26.2 million in cash at the closing of the transaction, with a holdback of $ 0.8 million expected to be paid in July 2028.

The acquisition date fair value of the contingent consideration was $ 9.7 million.

The purchase price of $ 36.7 million was allocated to net working capital of $ 2.3 million, intangible assets of $ 12.5 million and goodwill of $ 21.9 million.

Amortizable intangible assets of $ 10.2 million have estimated lives ranging from 2 years to 10 years .

The acquisition was financed with cash on hand.

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

Revenue and earnings from this acquisition in fiscal year 2026 were not significant.

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.

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 $ 115.7 million which comprised accounts receivable of $ 26.6 million, inventory and other current assets of $ 2.7 million, property and equipment of $ 7.0 million, goodwill of $ 32.1 million, other intangible assets of $ 47.2 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.

The goodwill recognized for this business acquisition is not deductible for income tax purposes.

Other intangible assets include amortizable intangible assets of $ 39.1 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 $ 30.0 million, which includes a deferred tax liability of $ 9.1 million that was recognized primarily due to the acquisition of other intangible assets.

During fiscal 2025, we recorded measurement period adjustments which increased goodwill by $ 3.7 million due to a decrease in net working capital of $ 6.3 million and an increase in deferred income taxes of $ 0.7 million, which were partially offset by an increase in intangible assets of $ 3.3 million.

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

If additional information pertaining to working capital items 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 and net income from this acquired business was $ 80.8 million and approximately $ 8.9 million, respectively,from the acquisition date through June 30, 2025.

The goodwill recognized for this business acquisition is not deductible for income tax

OSI SYSTEMS, INC.

2 unchanged sentences

FOR THE THREE YEARS ENDED JUNE 30, 2026

Other intangible assets include amortizable intangible assets of $ 39.2 million with amortization periods of 7 to 10 years and an indefinite-lived intangible asset of $ 8.1 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.

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.

8 unchanged sentences

The goodwill recognized for this business acquisition is not deductible for income tax purposes.

Fiscal Year 2023 Business Acquisitions

In April 2023, we (through our Optoelectronics and Manufacturing division) acquired a privately held provider of engineering and contract manufacturing solutions for approximately $ 2.5 million, plus up to $ 2.5 million in potential contingent consideration.

The acquisition was financed with cash on hand.

In February 2023, we (through our Healthcare division) acquired a privately held provider of software and solutions for approximately $ 2.1 million plus up to $ 5.0 million in potential contingent consideration.

The acquisition was financed with cash on hand.

Through our Security division, we acquired (i) in December 2022 certain assets of a provider of baggage and parcel inspection systems for approximately $ 1.6 million and (ii) in August 2022 a privately held provider of training software and solutions for approximately $ 1.9 million plus an immaterial amount of potential contingent consideration.

These acquisitions were financed with cash on hand.

BALANCE SHEET DETAILS

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Leasehold improvements

Equipment and tooling

Furniture and fixtures

Equipment, tooling, furniture and fixtures

Computer equipment

5 unchanged sentences

During fiscal 2024, 2025 and 2026, depreciation expense was approximately $ 19.4 million, $ 22.0 million and $ 21.3 million, respectively.

Other accrued expenses and current liabilities included accrued project costs of approximately $ 21.6 million and $ 40.1 million as of June 30, 2025 and 2026, respectively.

Accrued project costs primarily consist of subcontractor, engineering, materials, installation and other direct costs incurred in fulfilling customer contracts that had not yet been paid as of the end of the period.

GOODWILL AND INTANGIBLE ASSETS

9 unchanged sentences

Balance as of June 30, 2026

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

Intangible assets consisted of the following (dollar amounts in thousands):

8 unchanged sentences

Total intangible assets

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Amortization expense related to intangible assets was $ 22.8 million, $ 21.6 million and $ 21.4 million for fiscal 2024, 2025 and 2026, respectively.

6 unchanged sentences

During fiscal 2024, 2025 and 2026, we capitalized software development costs in the amounts of $ 16.6 million, $ 16.9 million and $ 17.2 million, respectively.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

CONTRACT ASSETS AND LIABILITIES

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Contract assets decreased by approximately $ 51.8 million as a result of unbilled revenue primarily from the timing and nature of milestones met in contracts for a number of customers in our Security Division, both within the United States and internationally, where we met the contractual terms to prepare invoices to the customers that reduce unbilled revenue, partially offset by transactions where we met the revenue recognition criteria under ASC 606 in advance of the time when contracts give us the right to invoice customers.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

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 June 30, 2025, the aggregate portion of the transaction price allocated to remaining performance obligations was approximately $ 820.4 million.

We expect to recognize revenue on approximately 53 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter.

Remaining performance obligations related to ASC 606 represent the portion of the transaction price allocated to performance obligations under contracts which are fully or partially unsatisfied at the end of the period.

As of June 30, 2026 and 2025 the aggregate portion of the transaction price allocated to remaining performance obligations was approximately $ 1.8 billion.

During fiscal 2026, we revised the scope of the disclosure of remaining performance obligations to no longer apply the optional disclosure-only exemption in ASC 606-10-50-14(a) that permits an entity to not disclose information about remaining performance obligations for performance obligations that are part of contracts with an original expected duration of one year or less.

We believe this change is preferable under the circumstances because the new disclosure provides more useful information to users of the financial statements by presenting a more comprehensive measure of remaining performance obligations.

The prior year amount has been revised to conform to the current year presentation.

This change only affected the scope of the disclosure of remaining performance obligations and did not affect revenue recognition, results of operations or financial position.

As of June 30, 2026, we expect to recognize revenue on approximately 59 % of the remaining performance obligations over the next 12 months , and the remainder is expected to be recognized thereafter.

During the fiscal year ended June 30, 2026, we recognized revenue of $ 110.0 million from contract liabilities existing as of July 1, 2025.

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We only give consideration to whether a customer agreement has a financing component if the period of time between transfer of goods and services and customer payment is greater than one year.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

The components of operating lease expense for the fiscal years ended June 30, 2025 and 2026 were as follows (in thousands):

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Weighted average discount rate

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Supplemental cash flow information related to operating leases for the year ended June 30, 2026 was as follows (in thousands):

7 unchanged sentences

Total lease liabilities

RESTRUCTURING AND OTHER CHARGES, NET

IMPAIRMENT, 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 fiscal year ended June 30, 2026, we recognized $ 16.6 million in impairments, restructuring and other charges, which included $ 5.1 million for employee terminations, $ 2.1 million in acquisition related costs, $ 1.2 million for impairment of assets, $ 0.2

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

million for facility closure costs for operational efficiency activities, $ 1.6 million in legal charges, $ 2.2 million for non-recurring charges in our Security division, and $ 4.2 million of non-recurring charges in our Healthcare division.

During the fiscal year ended June 30, 2025, we recognized $ 5.3 million in restructuring and other charges, which included $ 0.7 million for facility closure costs for operational efficiency activities, $ 2.7 million for employee terminations, $ 0.6 million in acquisition related costs, and $ 1.3 million in legal charges.

During the fiscal year ended June 30, 2024, we recognized $ 6.4 million in restructuring and other charges, which included $ 3.2 million for facility closure costs for operational efficiency activities, $ 1.4 million for employee terminations, $ 1.0 million in acquisition related costs, and $ 0.8 million in legal charges.

During the fiscal year ended June 30, 2023, we recognized $ 7.6 million in restructuring and other charges, which included $ 3.9 million in legal charges primarily related to class action litigation and government investigations, $ 1.7 million for employee terminations, $ 1.5 million for other 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):

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

Optoelectronics

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Total expensed

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Optoelectronics

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Employee termination costs

Facility closures/consolidation

Legal costs, net

Facility closure/consolidation

Impairment of assets

Legal and other expense (benefit), net

Total expensed

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

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

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Restructuring and other charges, net

Payments, adjustments and reimbursements, net

Payments and adjustments, net

Balance as of June 30, 2026

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

2029 Notes, net

2031 Notes, net

Other long-term debt

Less current portion of long-term debt

Long-term portion of debt

Fiscal year principal payments of long-term debt as of June 30, 2026 are as follows (in thousands):

2032 and thereafter

Less unamortized debt discount and issuance costs

Revolving Credit Facility

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.

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.

OSI SYSTEMS, INC.

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FOR THE THREE YEARS ENDED JUNE 30, 2026

Revolving Credit Facility

As of June 30, 2025, our senior secured credit facility comprised a term loan and a $ 600 million revolving credit facility which was scheduled to mature 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 an amount equal to 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 bore interest at SOFR plus a margin of 1.25 % as of June 30, 2026 (which margin can range from 1.0 % to 1.75 % based on our consolidated net leverage ratio as defined in the credit facility).

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

As of June 30, 2025, there were $ 178.0 million of borrowings outstanding under the revolving credit facility, $ 82.8 million outstanding under the letters of credit sub-facility, and $ 128.1 million outstanding under the term loan.

As of June 30, 2025, the amount available to borrow under the revolving credit facility was $ 339.2 million.

As of June 30, 2026, there were no borrowings outstanding under the revolving credit facility, $ 95.8 million outstanding under the letters of credit sub-facility, and $ 92.5 million outstanding under the term loan.

As of June 30, 2026, the amount available to borrow under the credit facility was $ 629.2 million.

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

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As of June 30, 2026, we were in compliance with all financial covenants under this credit facility.

In September 2022, we entered into an interest rate swap 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.

Subsequent to June 30, 2025, in July 2025 we amended and extended this credit facility, now maturing in July 2030, to increase the limit from $ 600 million to $ 725 million and paid down the balance of the delayed draw term loan from $ 128.1 million to $ 100.0 million which was then converted to a new term loan that matures in July 2030.

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.

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

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 further information relating to the interest rate swap agreement.

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

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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.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

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, 2025 (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;

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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.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

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.

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

0.50 % Convertible Senior Notes Due 2031

In November 2025, we issued an aggregate of $ 575.0 million principal amount of 0.50 % convertible senior notes due in February 2031 in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act at an issuance price equal to 98 % of the principal amount.

The 2031 Notes were issued pursuant to and are governed by an indenture dated November 20, 2025.

The proceeds from the issuance of the 2031 Notes were approximately $ 563.0 million, net of the issuance discount and debt issuance costs.

The 2031 Notes are unsecured obligations which bear regular interest at 0.50 % per annum payable semiannually in arrears on February 1 and August 1 of each year, beginning on August 1, 2026.

The 2031 Notes will mature on February 1, 2031, unless repurchased, redeemed, or converted in accordance with their terms prior to such date.

The 2031 Notes are convertible into a combination of cash and shares of our common stock, at an initial conversion rate of 2.8263 shares of common stock per $1,000 principal amount of 2031 Notes, which is equivalent to an initial conversion price of approximately $ 353.82 per share of our common stock.

The default settlement method is a combination settlement with a specified dollar amount of $ 1,000 per $1,000 principal amount of notes.

The conversion rate is subject to customary adjustments for certain dilutive events.

We may redeem for cash all or any portion of the 2031 Notes, at our option, on or after February 6, 2029 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 2031 Notes to be redeemed, plus accrued and unpaid interest up to the day before the redemption date.

The holders of the 2031 Notes may require us to repurchase the 2031 Notes upon the occurrence of certain fundamental change transactions at a redemption price equal to 100 % of the principal amount of the 2031 Notes redeemed, plus accrued and unpaid interest up to the day before the redemption date.

Holders of the 2031 Notes may, at their option, convert all or a portion of their 2031 Notes prior to November 1, 2030, 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 2031 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 2031 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 2031 Notes called for redemption.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

On or after November 1, 2030, the 2031 Notes will be 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 2031 Notes who convert the 2031 Notes in connection with a make-whole fundamental change, as defined in the indenture governing the 2031 Notes, or in connection with a redemption may be entitled to an increase in the conversion rate.

We accounted for the issuance of the 2031 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 2031 Notes as of June 30, 2026 (in thousands):

Principal amount

Unamortized debt discount and issuance costs

Net carrying amount

Fair value (Level 2)

The 2031 Notes were not eligible for conversion as of June 30, 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 June 30, 2026 we were in compliance with applicable financial covenants under the indenture governing the 2031 Notes.

For the fiscal year ended June 30, 2026, total interest expense for the 2031 Notes was $ 3.2 million, which consisted of $ 1.8 million of contractual interest expense and $ 1.4 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.

Other Borrowings

3 unchanged sentences

As of June 30, 2026, the total amount available under these credit facilities was $ 57.2 million.

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

2029 Notes, net

Other long-term debt

Less current portion of long-term debt

Long-term portion of debt

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Fiscal year principal payments of long-term debt as of June 30, 2025 are as follows (in thousands):

2031 and thereafter

STOCKHOLDERS’ EQUITY

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Stock-based compensation expense

As of June 30, 2025, total unrecognized compensation cost related to stock-based compensation grants under the OSI Plan were estimated at $ 1.0 million for stock options and $ 12.7 million for restricted stock units (“RSUs”).

As of June 30, 2026, total unrecognized compensation cost related to stock-based compensation grants under the OSI Plan was estimated at $ 0.9 million for stock options and $ 13.3 million for restricted stock units (“RSUs”).

We expect to recognize these costs over a weighted-average period of 1.87 years with respect to the stock options and 2.2 years for grants of RSUs.

Awards are granted in the form of incentive options, nonqualified options, restricted stock awards, stock appreciation rights, RSUs, performance shares and stock bonuses, amongst other forms of equity, to qualified employees, directors and consultants.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

Awards are granted in the form of incentive options, nonqualified options, stock appreciation rights, RSUs, performance shares and stock bonuses, amongst other forms of equity, to qualified employees, directors and consultants.

Under the OSI Plan, the exercise price of nonqualified options and incentive stock options may not be less than the fair market value of our common stock on the date of grant.

11 unchanged sentences

Treasuries for a maturity matching the expected holding period.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Expected Volatility.

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Expected holding period (in years)

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

The following summarizes stock option activity for fiscal years 2024, 2025 and 2026:

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The total intrinsic value of options exercised during fiscal 2026 was $ 2.5 million.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Restricted Stock Units —A summary of RSU activity for the periods indicated was as follows:

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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.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

We granted 75,988 , 80,682 , and 49,431 performance-based awards during fiscal 2024, 2025 and 2026, respectively.

13 unchanged sentences

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.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

During fiscal 2023, 2024 and 2025, we repurchased 400,230 shares, zero shares and 531,314 shares, respectively, of common stock under our then current programs.

On August 20, 2026, we announced that our Board of Directors has approved an additional one million shares for repurchase under our stock repurchase program, increasing the total remaining authorization to 1,078,731 shares.

During fiscal 2024, 2025 and 2026, we repurchased zero shares, 531,314 shares and 1,111,825 shares, respectively, of common stock under our then current programs.

As of June 30, 2026, there were 78,731 shares remaining available for repurchase under the authorized repurchase program.

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Total pre-tax income

Our provision (benefit) for income taxes consists of the following (in thousands):

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

Our provision for income taxes consists of the following (in thousands):

Total current provision

1 unchanged sentence

Total provision

Net income tax payments for the year ended June 30, 2026, after the prospective adoption of ASU 2023-09, consisted of the following:

United States – federal (1)

United States – state and local

United Kingdom

Other foreign

(1) The Company’s U.S.

federal payments were reduced by foreign tax credits and research and development credits.

As of June 30, 2025 and 2026, our liability for uncertain tax positions was $ 15.4 million and $ 15.2 million, respectively.

5 unchanged sentences

Future developments, such as the settlement of income tax positions or the expiration of applicable statutes of limitation, could result in changes to our liability for unrecognized tax benefits.

Since the ultimate resolution of uncertain tax positions depends on many factors and assumptions, we are not able to estimate the range of potential changes in the liability for unrecognized tax benefits or the timing of such changes.

OSI SYSTEMS, INC.

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Additions on tax positions from prior years

Reduction in tax positions from prior year

Reduction in tax positions from prior year for dispute settlements

Reductions to prior year tax positions

Reduction to prior year tax positions for statute of limitations closure

Balance at June 30, 2025

1 unchanged sentence

Additions on tax positions from prior years

Reductions to tax positions from prior year for dispute settlements

Reductions to prior year tax positions

Reduction to prior year tax positions

Reduction to prior year tax positions for statute of limitations closure

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Total deferred income tax liabilities

Net deferred income tax liability

The components of the net deferred income tax liability are classified in the consolidated balance sheets as follows (in thousands):

Net deferred income tax assets

The components of the net deferred income tax asset are classified in the consolidated balance sheets as follows (in thousands):

Long term deferred income tax asset, included in other assets

Long term deferred income tax liability

Net deferred income tax liability

Net deferred income tax assets

OSI SYSTEMS, INC.

5 unchanged sentences

Current taxes payable, included in other accrued expenses and current liabilities

Net tax receivable (payable)

Net tax payable

As of June 30, 2026, we had federal, state and foreign net operating losses carryforwards of approximately $ 0.3 million, $ 17.2 million and $ 7.7 million, respectively.

3 unchanged sentences

We have established valuation allowances that relate to the net operating losses of certain subsidiaries, capital losses, and tax credits.

During the year ended June 30, 2025, we recorded a net aggregated increase of $ 1.0 million to these valuation allowances.

During the year ended June 30, 2026, we recorded an aggregate net increase of $ 0.9 million to these valuation allowances.

We evaluate the need for valuation allowances on a jurisdiction-by-jurisdiction basis and release such allowances when sufficient positive evidence exists to conclude that it is more likely than not that the deferred tax assets will be realized.

3 unchanged sentences

Provision for income taxes at federal statutory rate

State tax expense, net of federal income tax benefit (1)

Foreign tax effects:

United Kingdom

Patent box benefit

Other foreign jurisdictions

Effect of cross-border tax laws:

Foreign Derived Intangible Income (FDII) benefit

Other effects of cross-border tax laws

Research and development tax credits

Changes in valuation allowance

Nontaxable or nondeductible items:

Officers’ compensation

Changes in unrecognized tax benefit

Effective income tax rate

Massachusetts, Minnesota, New York, and Texas made up the majority (greater than 50% of the tax expense in this category).

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

The following table provides the disclosures required before adopting ASU 2023-09 and reconciles our effective tax rate with the U.S.

federal tax rate:

Provision for income taxes at federal statutory rate

Research and development tax credits

Foreign income subject to tax at other than federal statutory rate

14 unchanged sentences

Accordingly, the consolidated income tax rate is a composite rate reflecting the earnings in the various locations and the applicable rates.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

COMMITMENTS AND CONTINGENCIES

9 unchanged sentences

Ending fair value, June 30, 2026

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

Advances from Customers —We receive advances from customers associated with certain contracts.

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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 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.

We conduct environmental investigations at our manufacturing facilities in North America, Asia-Pacific, and Europe, and, to the extent practicable, on all new properties 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.

1 unchanged sentence

If one or more of these environmental matters are resolved in a manner adverse to us, the impact on our business, financial condition, results of operations and cash flow could be material.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Indemnifications —In the normal course of business, we have agreed to indemnify certain parties with respect to certain matters.

4 unchanged sentences

We have not recorded any liability for costs related to contingent indemnification obligations as of June 30, 2026.

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.

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

Legal Proceedings — We are involved in various other potential or actual claims and 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.

1 unchanged sentence

If one or more of these matters are resolved in a manner adverse to our company, the impact on our business, financial condition, results of operations and cash flows could be material.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

RELATED-PARTY TRANSACTIONS

2 unchanged sentences

Our initial investment in the joint venture was approximately $ 0.1 million.

For each of the years ended June 30, 2023, 2024 and 2025 our equity earnings in the joint venture were less than $ 0.1 million.

For each of the years ended June 30, 2024, 2025 and 2026 our equity earnings in the joint venture were not significant.

We, our Executive Chairman and our and President and Chief Executive Officer collectively control less than 50 % of the board of directors voting power in the joint venture.

9 unchanged sentences

We contributed approximately $ 7.4 million, $ 8.8 million and $ 9.5 million to the plans for the fiscal years ended June 30, 2024, 2025 and 2026, respectively.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Deferred Compensation Plan

15 unchanged sentences

We measure our pension and postretirement benefit plans’ assets and benefit obligations as of June 30.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

The following provides a reconciliation of the changes in the plans’ benefit obligations and fair value of assets for fiscal years 2025 and 2026, and a statement of the funded status as of June 30, 2025 and 2026 (in thousands):

3 unchanged sentences

Interest costs

Service costs

Plan amendments

Actuarial (gain) loss

13 unchanged sentences

Net long term pension liability (included in other long-term liabilities)

Accumulated other comprehensive income (loss)

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Accumulated other comprehensive loss

One of our defined benefit pension plans is considered a nonqualified plan, therefore we have funded a separate rabbi trust which comprises insurance company contracts with fair values of $ 9.1 million and $ 10.7 million as of June 30, 2025 and 2026, respectively, included in Other Assets on the consolidated balance sheets.

14 unchanged sentences

Rate of compensation increase

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

The long-term return on assets has been derived from the weighted average of assumed returns on each of the major asset categories.

19 unchanged sentences

The equity holdings are maintained in balanced funds under the control of investment managers.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

Day-to-day equities selection decisions are delegated to investment managers, although these are monitored against performance and risk targets.

13 unchanged sentences

Future contributions for the nonqualified plan are expected to be provided by the rabbi trust.

Plan Amendment

In December 2025, a plan amendment was made for our former CEO resulting in $ 4.4 million in prior service costs amortization.

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

SEGMENT INFORMATION

2 unchanged sentences

Factors used to identify our reportable segments primarily reflect our organizational and management structure around differences in products and industry markets.

We also have a corporate segment (Corporate) that includes executive compensation and certain other general and administrative expenses;

expenses related to stock issuances and legal, audit and other professional service fees not allocated to industry segments.

The reconciliation of segment totals to consolidated totals include intersegment eliminations and certain unallocated corporate items that include executive compensation and certain other general and administrative expenses;

expenses related to stock issuances, legal, audit and other professional service fees, depreciation and amortization, and corporate assets.

Both the Security and Healthcare divisions comprise primarily end-product businesses whereas the Optoelectronics and Manufacturing division primarily supplies components and subsystems to external OEM customers, as well as to the Security and Healthcare divisions.

2 unchanged sentences

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.

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

Segment assets represent total current and noncurrent assets for each reportable segment.

6 unchanged sentences

FOR THE THREE YEARS ENDED JUNE 30, 2026

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):

The following tables present our results of operations and identifiable assets by our three industry segments, along with amounts for intersegment eliminations and unallocated corporate items, which are reconciled to consolidated amounts (in thousands):

Optoelectronics

1 unchanged sentence

External customer revenue

Revenue between product segments

Intersegment revenue

Total revenues

2 unchanged sentences

Research and development expenses

Segment income (loss) from operations

Restructuring and other charges

Income (loss) from operations

Segment income from operations

Segment assets

1 unchanged sentence

Depreciation and amortization

Reconciliation to consolidated income from operations – Fiscal 2024

Consolidated segment income from operations

Impairment, restructuring and other charges

Consolidated income from operations

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

Optoelectronics

1 unchanged sentence

External customer revenue

Revenue between product segments

Intersegment revenue

Total revenues

2 unchanged sentences

Research and development expenses

Segment income (loss) from operations

Restructuring and other charges

Income (loss) from operations

Segment income from operations

Segment assets

1 unchanged sentence

Depreciation and amortization

Reconciliation to consolidated income from operations – Fiscal 2025

Consolidated segment income from operations

Impairment, restructuring and other charges

Consolidated income from operations

OSI SYSTEMS, INC.

5 unchanged sentences

External customer revenue

Revenue between product segments

Intersegment revenue

Total revenues

2 unchanged sentences

Research and development expenses

Segment income (loss) from operations

Restructuring and other charges

Income (loss) from operations

Segment income from operations

Segment assets

1 unchanged sentence

Depreciation and amortization

Reconciliation to consolidated income from operations – Fiscal 2026

Consolidated segment income from operations

Impairment, restructuring and other charges

Consolidated income from operations

The following tables present the revenues and identifiable assets by geographical area (in thousands):

6 unchanged sentences

Other Europe, Middle East and Africa

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2026

tangible assets

5 unchanged sentences

Other Europe, Middle East and Africa

OSI SYSTEMS, INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

FOR THE THREE YEARS ENDED JUNE 30, 2025

tangible assets

15 unchanged sentences

Research and development

Restructuring and other charges, net

Impairment, restructuring and other charges

Total operating expenses

11 unchanged sentences

Research and development

Restructuring and other charges, net

Impairment, restructuring and other charges

Total operating expenses

13 unchanged sentences

Form of certificate representing the 2.25% Convertible Senior Notes due 2029 (included as Exhibit A to Exhibit 4.2).

Indenture dated as of November 20, 2025 between OSI Systems, Inc.

Bank Trust Company, National Association, as trustee (20)

Form of certificate representing the 0.50% Convertible Senior Notes due 2031 (included as Exhibit A to Exhibit 4.4) (20)

Description of Capital Stock

1 unchanged sentence

Deferred Compensation Plan (2)

First Amendment to Second Amended and Restated OSI Systems, Inc.

Deferred Compensation Plan

OSI Systems, Inc.

7 unchanged sentences

and OSI Systems, Inc.

Employment Agreement effective as of January 1, 2012 between Deepak Chopra and OSI Systems, Inc.

Amendment to Employment Agreement effective as of July 1, 2015 between Deepak Chopra and OSI Systems, Inc.

Second Amendment to Employment Agreement effective as of December 31, 2017 by and between Deepak Chopra and OSI Systems, Inc.

Amended and Restated Employment Agreement dated April 29, 2024 between Alan Edrick and OSI Systems, Inc.

2 unchanged sentences

Amended and Restated Employment Agreement dated April 29, 2024 between Victor Sze and OSI Systems, Inc.

Employment Agreement effective as of January 1, 2012 between Manoocher Mansouri and OSI Systems, Inc.

Amendment to Employment Agreement effective as of July 1, 2015 between Manoocher Mansouri and OSI Systems, Inc.

Amended and Restated Retirement Benefit Award Agreement effective as of December 31, 2017 by and between Deepak Chopra and OSI Systems, Inc.

2 unchanged sentences

Third Amendment to Amended and Restated Retirement Benefit Award Agreement effective as of October 27, 2021 by and between Deepak Chopra and OSI Systems, Inc.

2025 Amendment to Amended and Restated Retirement Benefit Award Agreement effective as of December 23, 2025 by and between Deepak Chopra and OSI Systems, Inc.

Amended and Restated OSI Systems, Inc.

7 unchanged sentences

Code of Ethics and Conduct effective May 1, 2026 (9)

Preferability Letter of Grant Thornton LLP Regarding Change in Accounting Principle.

OSI Systems, Inc.

18 unchanged sentences

Denotes a management contract or compensatory plan or arrangement.

Filed herewith.

(1) Previously filed with our Current Report on Form 8-K filed on March 8, 2010.

3 unchanged sentences

(5) Previously filed with our Annual Report on Form 10-K filed on August 27, 2010.

(6) Previously filed with our Current Report on Form 8-K filed on April 6, 2012.

(6) Previously filed with our Current Report on Form 8-K filed on January 5, 2018.

1 unchanged sentence

(8) Previously filed with our Registration Statement on Form S-8 filed on August 16, 2013.

(10) Previously filed with our Current Report on Form 8-K filed on May 23, 2016.

(11) Previously filed with our Quarterly Report on Form 10-Q filed on January 28, 2016.

(9) Previously filed with our Quarterly Report on Form 10-Q filed on May 4, 2026.

(10) Previously filed with our Quarterly Report on Form 10-Q filed on April 30, 2024.

8 unchanged sentences

(19) Previously filed with our Annual Report on Form 10-K filed on August 29, 2024.

(20) Previously filed with our Current Report on Form 8-K filed on November 20, 2025.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

13 unchanged sentences

Deepak Chopra

Executive Chairman of the Board,

Chairman of the Board

August 21, 2026

19 unchanged sentences

August 21, 2026

/s/ MEYER LUSKIN

August 25, 2025

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-K

Item 9A. Controls and Procedures