OSI Systems (OSIS) 24 Oct 242025 Q1 Earnings call transcript

Thank you for standing by, and welcome to the OSI Systems First Quarter 2025 Conference Call. [Operator Instructions].

As a reminder, today's program is being recorded. And now I'd like to introduce your host for today's program, Alan Edrick, Executive Vice President and Chief Financial Officer of OSI. Please go ahead, sir.

you. thank Well, thank and joining us. Good you morning, for

the Vice said, here of CFO Call. Alan Welcome today Quarter 'XX Executive I'm Edrick, President to CEO. OSI and Deepak OSI's and Systems Conference Chopra, Fiscal First As with President OSI Systems, and I'm

financial a quarter pleased are press our 'XX first our release results. can results. Earlier as we join announcing We operational us today, financial you review that and we issued fiscal

everyone of remind today's however, company the I harbor Act would include to with Reform we statements, discussion provisions of Litigation Before these forward-looking respect to will such discuss results, wishes like to the of that and statements. the forward-looking XXXX Securities take Private advantage safe

call and available on to otherwise. this are subsequent no based obligation or All based the any undertakes or forward-looking information, forward-looking statement events update on made currently company information statements new on

both will During financial results. company's to today's measures we the GAAP call, and describing non-GAAP refer when

non-GAAP regarding earnings press GAAP reconciliation please today's to information and measures refer of those further quantitative results company's measures release. a For the figures, of comparable and

turn our will call for performance. a high-level summary then the first to of over I business of quarter and of begin our a XXXX, and financial discussion performance Deepak fiscal our with for the operational

fiscal will finish regarding for We year of outlook with our detail 'XX. financial more discussion then updated results, and our a

'XX started operating robust a Security 'XX and fiscal posting the year-over-year in fiscal we our financial QX Following by increase year-over-year growth EPS, financial revenues performance, significant revenue record in led non-GAAP record featuring resulting division, by income. results, and

reflected momentum in by encouraged financial are We performance. our the QX

'XX summary high-level a results. with QX start of our I'll fiscal So

by year-over-year in $XXX million, increased the Security were year-over-year. where up to of division, record a QX XX% revenues QX performance revenues XX% our First, driven

record growth to $X.XX. share per of non-GAAP revenue significant the Second, earnings adjusted QX led

and the a we were quarter backlog Third, $X.X approximately ended billion. solid, with Bookings again of

we our average Fourth, accretive. this opportunities net shares in provide common completed and of reduced immediately pipeline borrowings July, transaction, financing forward. of good proceeds healthy raising visibility repurchased weighted going and of cost robust stock. our with we of which gross XXX,XXX approximately a backlog Concurrent Our was convertible million, $XXX

we division. acquisition strategic in bolt-on completed a our Security September, in finally, And

the not QX to is 'XX be significantly While did business this non-GAAP acquired deal our to per revenues, enhance accretive share. expected earnings fiscal

results, diving financial and fiscal discussing turn updated outlook, call Before I 'XX deeply into over to more the the will Deepak. our

and pleased Alan, morning good you, company's afternoon. XXXX the robust Thank and with fiscal performance. everybody, I'm first quarter to

leading we are and XXXX XX% and a the with achieved higher growth, mentioned, of high margin. remainder of closed about We optimistic year-over-year impressive near an to revenue beyond. a billion operating Alan $X.X quarter As backlog all-time fiscal the

quarter, where So in for profits. increased X first solid. division, let's dive revenues bookings into and our the were of with highlights were Security operating divisions Also, XX% up QX the each the of performance beginning year-over-year resulting security

$XXX million border on the quarter, the Mexico's and other we contract. port on SEDENA with deliver million-plus defense agency, with continued international customer the contract security and the During initiatives $XXX to on

platform. operations after with along vehicle commencement shortly proprietary addition, inspection cargo our of scan the our In end, search, the utilizing and systems screening announced we and Uruguay, turnkey in of services quarter integration our

We will Uruguay the also provide part management support contract. on maintenance of this as contract training, equipment ongoing and

Puerto security serves in manage of of and our the large-scale and our long-standing program Rico, projects Guatemala as the multiyear potential Uruguay to The now list in breadth capabilities further programs customers evidence for Albania parts successful of world. various of turnkey joins a

during had the quarter. During in wins and security, these QX, we several announced

high-energy vehicle vehicle inspection service trailer-mounted drive-through provide systems, maintenance, order international inspection First, systems a support. Eagle including million TXX to PXX and and and cargo $XX

and maintain million installed its vehicle $XX a existing to inspection systems. service international customer base from Second, services cargo order and of an

mobile yet vehicle Third, Z from million to another service provide ZBV van, Backscatter $XX the order inspection customer and and systems, support. cargo international a including training,

of services installed of base $XX a a The and totaling order million about what And million cargo inspection for $XXX is agreement maintenance, potential support finally, options domestically, technology of vehicle period. to announced and contains up X-year for we orders contract systems. Rapiscan over

Latin make existing project airport existing Aviation, expand infrastructure, In Middle upgrade especially East progress international we to in and as airports and continue our America. awards Europe, on

and Our air to overall cargo facilities airports be robust. continues activity at

We have a pipeline. good

also customers. offerings developing these employee airports new are screening such customers on providing solutions focused We cargo for as for and air

opportunities this some monitoring services or remote possibility. turnkey for hardware services complete In could be instances, sales with

that Alan amplification and first international acquired and we provides communication, during high-power for surveillance transmission both space a navigation of the customers. mentioned, company U.S.-based frequency-based radio solutions 'XX, in communications, critical quarter As the military and fiscal U.S. applications,

Like with numerous our critical and this communication and security utilize technology solutions. that company's legacy offerings, We people infrastructure. work these and defense provide surveillance products safety and help agencies security in for

summary, In frequency-based us proven and manufacturing leverage our portfolio, service to our further to adds sales allowing technology acquisition global and this radio products support infrastructure.

'XX Security strong look XXXX, and beyond. fiscal division in a forward had to level a performance Security, the balance achieving we for Overall, start of and high of again, the

revenues of division. our while notable advanced tech device to strength medical Many saw quarter solid $XX for to circuits reach Opto line. including growth Moving are circuits Manufacturing delivering our sales consumer flex record, of We from customers million, profitability. and the flex product first a industries. and and new Optoelectronics intercompany reported in

into announced systems. I an order sensors million To the that navigation We also we customer advanced that that will size are guidance for this this relatively and leading its customers note should is have who optical defense integrate complex many $X here order for division. of large in OEMs a electronics. end,

been global manufacturing and these the our QX more have and U.S., net OEMs Mexico, alternative presence The capabilities risks. risk existing with began nearshoring. Mexico, continue in benefits viable uncertainty supply up Malaysia provides and in are and India, for Indonesia base and we of to introduce year to significant Our U.K., China-centric to chains the at never we of reducing which ramping customer as a operations end last its our potential

to QX challenging due infrastructure. on Still, the division. the delivered profitability to Finally, part before. due slightly down conditions, year-over-year division mentioned in market a we streamlined improved sales Healthcare have as more to were

patient support predictive continues To its and the management to market Rothman and division offerings safe this analytics Index innovative customers, our like solutions and sound offer software. base differentiation alarm software

generation and continue pipeline. opportunity and focused solutions We the developing an a cost are improved growing patient on structure of next with progress accordingly, monitoring to

'XX. the balance fiscal We expect Healthcare's performance to improve over of

backlog path XXXX near-term prospects to are and we clear increasingly with a confident about significant and opportunities, summary, our beyond. a In for fiscal

footprint sustainable being Our to has created a long-term robust that a its a a while supplier we and continue responsive meets flexible with strategy in with of global customers' and invest business and acquire growth needs vertically strategic capabilities integrated technologies potential.

to society. essential From starting new chapter the Inc. systems, an a unwavering deliver announced what the and company the you my for foundation going XXXX. as the company Though Chairman safety embarked components the know, I that has position on been become at in systems from by I Board. as beginning, the calendar Finally, will my end Executive public Sensors XXXX. health remain Officer OSI we have XXXX, our retirement would of enhance mission of and of Opto as laid Chief as Executive and In of

seasoned OSI I'm our even the significant ascent With in achievements. confident our ability of expertise to current team, more to management

We expect end of before to a announce successor the the quarter.

I has and ahead. been it forward my OSI's look is to last as As earnings my the going be such, lead to CEO, call expected over years this supporting and the journey to company past privilege

With opening financial the you. and to in more call that, guidance before call to over I talk for the questions. turn about updated detail our performance Alan Thank

Deepak. you, Thank

in XX% Now I greater solid largest cargo compared in QX 'XX our quarter will growth in in revenues quarter. financial checkpoint by increase our year. first primarily product led Security. strong sales. and the the were was in inspection detail sales, of the This with the vehicle results The as fiscal aviation revenues year-over-year first revenues Security Again, by division increase driven QX as well review prior growth for division, was our and product fiscal up XX%

from in contract 'XX million-plus the in continued $XXX contract announced and from January revenues March the cargo 'XX. announced shipments $XXX million-plus QX cargo also included

In addition, year-over-year division Security services revenues XX%. increased

driven Third-party an increase X% Opto by our sales from new year-over-year Mexico operations. growth solid, were delivering

little to beyond. certain quarter continue We inventory a which and 'XX the through ordering patterns see Opto levels seeing customers we perhaps and of fiscal adjusting second anticipate

fiscal QX in was the fiscal the the revenues of QX as the we're of fiscal first in in XX.X% 'XX. margin quarter last year. The XX.X% of year, roughly last in with and the Deepak gross 'XX, gross fiscal sequentially revenues the QX in margin Healthcare mentioned, division up as same in XX.X% from line 'XX And QX

mix volume, impacts period in Our factors. generally, gross fluctuate generally of and will other inflation revenue to costs changes supply among and margin based chain from period on

expenses. Moving to operating

sales resulted We XX.X% expenses SG&A million our SG&A were of XX.X% $XX across and continue the weakening in foreign the higher increase growth rates. in compensation support year. unfavorable primarily exchange and in QX QX $XX each our to to divisions dollar, or dollar improve from structure. to diligently of U.S. prior the The costs million compared cost costs work year-over-year of efficiency or of of manage company's creating of sales the

compared fiscal 'XX to million or million were or revenues expenses the X.X% of development of Research in $XX.X year and same X.X% revenues, in of $XX.X quarter. prior QX

the and considerable charges We to $X.X of of prior we We other million focused restructuring in in QX our year. quarter on as R&D, we development, fiscal long-term vital continue and same innovative Security to the our success particularly product compared to to our of the which remain divisions million view of 'XX, as resources $X.X dedicate Healthcare in businesses. recorded

from amount in expenses 'XX, partially which to increased higher due interest QX, borrowers. interest to and offset notes partially borrowings, to million impact cost other by Net convertible the million repay favorable primarily taxes. in Moving and of issued were used a 'XX higher to $X.X in the of during QX and fiscal $X.X fiscal

of tax compared effective to year. XX.X% reported last in in GAAP XX.X% was Our rate QX 'XX, under QX fiscal

in of compared QX tax discrete in the items, to is tax XX.X% 'XX, was Excluding the fiscal in XX% normalized rate of reflected which our of QX 'XX. effective rate, calculation adjusted of non-GAAP EPS impact our

our was Overall, to XX.X% non-GAAP to first the fiscal from margin. quarter division adjusted in adjusted will of QX 'XX comparable of adjusted quarter non-GAAP 'XX of operating a and operating now turn included of the operating increased XX.X% in QX fiscal the the adverse I X.X% absorption in of notable margin The margin our fiscal discussion FX. Security up slightly the from 'XX. year prior

The adjusted year's compared quarter QX. in of fiscal was XX.X% first operating margin the last in division XX.X% in our 'XX, Opto to

was margin in The Healthcare the Excluding the line its nominal operating the relatively adjusted FX impact in adverse division, a of in Opto increase division reported year-over-year. margin.

flow. cash and to was in while in primarily operations inventories Moving $XX support quarter receivables Security amortization and first relation the $X.X first million. depreciation QX was Cash the quarter growth. used in in division's CapEx revenue of to was the expense $XX.X in higher million, in million,

the complete we typically The to products. primarily ultimately and as due international to some With cash deliver flow, to products upon DSO, recognize we ship respect time phase receivables civil GAAP, accounting our on Under which to and as wanted our take revenue significant specific the typically over additional provide construction works, recognize contracts. we or contractual a risen revenue install both of security insight obligations. we moment the I have depending

On the customers' certain achievement sign highly triggered security off. billing of which significant we is contracts, contracts are line project referenced, by influenced the milestones, certain time and our earlier like by international

revenue Therefore, the and such, contracts, related. just not under economics factor normal receivable course GAAP, an to occur cash into timing but collection achievement the unbilled large we elevated and subsequent the resulting billing government DSO is transactions the for milestone. the of AR the recognize recorded As is of cash and is does as

cash DSO of 'XX flow typical to approximately receivables collect half We receivables fiscal Our can, significant for days. early as 'XX. is and strong in remain for trends fiscal potentially could the the second as be anticipate goal stronger billed in quite cash XX billed and is even operating as we

under our Our with calculated is balance facility. of as sheet net solid, leverage credit X.Xx about

in $X.X debt of from bank under required bulk matures annual of principal 'XX. term the Aside repayments million our loan, fiscal our

price notes mentioned As convertible of during and of $XXX. due with million 'XX $XXX conversion QX, X.XX% fiscal initial coupon a earlier, in issued approximately we an of

initiatives liquidity down bank while significant future costs used simultaneously repurchase as proceeds to This reduction The and to of share revolver and as given our count. on strategic capitalize in our XXX,XXX in provides cover a accretive were enhanced to approximately partially our transaction the common shares being transaction pay costs. well interest reduction stock immediately

notes partial completion debt into our and at entered paydown the result was of rate QX. floating approximately we years deal swap convertible of XX% a of the ago, fixed bank of versus As over the of our debt and interest end X

guidance. to turning Finally,

updating guidance. EPS our fiscal are 'XX We and diluted revenues non-GAAP

fiscal revenues a of on the $X.XXX year-over-year For a $X.XX in X.X% X.X% 'XX, year to of range our we to X.X% from billion, guidance XX.X% growth. increasing range of range anticipate to revenue growth to billion

of We adjusted share to increasing to are non-GAAP $X.XX earnings share a also guidance per $X or fiscal range 'XX diluted XX.X% per XX.X% to growth.

this of and Actual from predict and actual nonrecurring believe assets the results reflects the restructuring conversion the charges, the and The non-GAAP significantly in excludes of supply and is changes associated on potential uncertainties non-GAAP This indicated and discussed also in company's other our expected guidance anticipated well acquired discrete revenues other could intangible as in difficult tax to inflation due diluted from timing their risks SEC could and guidance the EPS reflected EPS guidance impact effects and revenues, We estimates. disruptions impairment, items. of vary backlog 'XX our above impact fiscal on currently guidance. to tax other reasonable amortization filings. vary as chain currently to financial

dedication opportunity innovative of the will call to focused solutions. to the We Yankees our and to enable its this global on customers we respect lifelong continue as would continue to Dodgers the OSI our thank fan, businesses. to We supporting with OSI like will believe And while open efforts remain conclude take We a questions. for continued partners. Go team Dodgers. in must growth our we this providing and I the time, products At

Nichols B. today from Josh Certainly. Riley. the from And first question our comes for line of

you this just indeed. backlog the $X.XX is later particularly bit the more Dodgers, color. doing like quarter, million Go million seasonally quite in security usually guess announced mean know I a Security but this, the little kind awards billion $XXX quarter, I months, $XX-plus wanted the you as well. but of did during slower security I The overall revenue. Europe at looking I to backlog get have or [ actually is actually ] increased summer so, sequentially. in about

overall been just Could slower granularity of you seasonally little that we a despite little more driving being a it provide kind as bit bit touched what's on backlog growth on?

Sure, Alan. Josh, this question. is Great

the division. seasonal strength the revenue yes, right, slower So we've across you're lines solutions. with typically And our across seen strength the saw a on in We the the Americas, it saw Pacific in saw geographies, EMEA We really side. the our across businesses. and and our Asia quarter Security we product and aviation cargo sometimes strength region.

as 'XX quarter excellent So of it beyond. to backlog bookings for an look us really was fiscal a out rest the with nice and positioning we us,

clearly lead security, look inspection. at you're vehicle cargo of kind horse the just curious, then you And when

as as you that where inspection market the like things lead potentially on #X cargo share good are vehicle aviation into you're well. What's think that size like on like opportunity the player #X, player note as systems? did increase traditional revenue probably that of do the and you're opportunities to and well piece You business the seeing you on still and

we cargo in strong Definitely, here. international space, again. This expectations Deepak see Good the aviation the sector. and is air question good into pipeline, primarily

upgrading the I is As to the going, is in more next everywhere of much level airports get America, Latin which systems. in and in mentioned, Europe, of their traffic Asia passengers making there

many space that us, time, -- for continue in something do freight what we is cargo grow on air the airports also innovative at we And idea a times and calls, both to before focused want our said screening have different, At our that and very air is employee mentioned, said facilities. business. cargo the same we I to

working TSA. will area I the into At opinion, our next the same are to, know ask all it. and adds comes ready. that up the growth, we be positioned in, And see we'll about So well replacement in are people to with that that cycle U.S., whole whenever us we time, continue

just good to know product last some you Then me, company just adding touching the as it portfolio. I RF for question the the acquisition. see acquisition, to a on described bolt-on

to a I on it's be going or for any huge not you So EPS if assume But could year. to contributor provide color that? revenue this additional

your on that layer synergies could global into for expectations or terms then And or margins potential expand and also footprint sales this up front? potentially of in manufacturing you ramp and sales how

Again, good question.

plus the we technology, is strategic X because company It's in with know more we'll must same that work able put is be international. a that And This X much well customers, go our than together broader As and larger, works with we acquisition. a very we you after but our different be customer both look this with, domestically this that being fits at a strategy footprint to that and base. little able the to customers make X. same it expect

service we've same to time, broadens into has technology platform, with into is doing manufacturing, important our which the our support, been At product or broaden for portfolio. it. our it But it, decade with so last our the definitely more what synergy it

and I appreciate congratulations Deepak again.

of our And Mariana next comes line America. question Perez Bank Mora of from the from

like also on and congratulations the partial more I Deepak, retirement, journey or guess. on the professional

granularity that I Like don't how like, like the think like for understand next, is X should we know, like lot we in opportunities XX big months like my first it, that? should or for call And regions? watchful give about there contracts be about question particular a we there of should the about is reasons, And specific months? think So competitive into of But like how pipeline you the cannot I pipeline. it.

again, we also Well, ourselves the company. but too, that answered question, in cargo Basically, can't long we we a time, specific. have a been very good it, consider you leading as for saying be space

are broad activity. Department base there. that CBP We State much very customers we there's with and domestically, on other a and other the focused it Internationally, with of have, to lot

more And products and as and more have unsafe, broad a very to that becomes it's thing reach. have the But say it. awareness, world requires the we we that for the other tough security

reputation, the our with is. globally. invited we So pipeline, at in strong dance get various definitely we world, very this of services as to our every very parts look a our And and name turnkey strong and there

So into if I in to it a I aftermarket you're how I'm that of assume that like of like a contracts? to -- ask around the to XX were there. to need or were Like like revenues the pipeline not XX% support way. of your you what, me missing next the into to convert like still is let X/X get like, different backlog like is still about then -- If about compared months. going the that? And of the the that to piece strong services is -- going

been Very we've it, time, longer take kind years size the it strong. contracts of saying bigger the is. these And all the time, and

we about Mexico fashion. working that a long for customers timely good we've our with things it U.S. in places, a very feel and with and And our in So and reputation success mature these these will other been time.

those timing at What of opportunities? that of key like the in looking you're risks are terms

I get you Would you repeat -- didn't last said. the again? it what

of delay that these opportunities? could risks some What are the key

risks? Key

Key risk.

Well.

Any yes. challenges,

else change or government obviously, economy, things there, the that, can time a to funding. there time, besides always economy risk. the Well, something from But is world unrest potential

don't itself. specific speaks risk, see history I any for So

East We and in Ukraine Middle this Russia already and in area. are the in both unrest

not has pipeline weakened. our requirement, Our

And the Security, you continue other side to at in go are as as moving from what of China, mentioned, they not up called set parts coin, as is the I is called it. other you of away to manufacturing look what the want people world. look We at

infrastructure crossings for the and be there to and cargo. ports borders, product the for for have air airports, We

look we don't anywhere. look at risk as So at it that, any we

only not the into of just Optoelectronics then you type mentioned, a me opportunity. but but from let And Security Great. of from double point tap what view,

that $X electronics. please type for the give like this million some this of demand, you Could niche mentioned like You the sensors or U.S. around the or color order U.K. us especially received. you in

Again, good question.

subassemblies industry, is So Optoelectronics the we components reliable medical that industry very mentioned defense pipeline is a into for side. and a that we mentioned those in pipeline. industry, OEMs the customers, very significant are what because make is the we consumer in we million Those aerospace pipeline that order. that, other good reason we that designed $X a into that foresight That's have are industry, and in so

looking India, like, global And so more very Mexico manufacturing in and U.K., our at is that customer base in strong opportunity as Malaysia, new helps alternate very us facility a that looks much good a and people our Indonesia, again, strong good the to in China, start visibility.

receivables. of is large some a contracts, that from one works? unbilled payment assets? receivables like can future me think earlier payment on for Thank that you these are contracts last And you down the actually also issues, transferring you're about like from way international when like you there that Like but that on these accounting in customers considering the the your any how color or these or -- request

Great is Alan. questions. this Yes, Mariana, X

the considerable have requested the defray helped past buildup get and often some When of and some We the AR. do. in advances absolutely We of inventory that? we payments, can very down which

whenever can absolutely terms it There that contract, do. customer terms But if strong of in or kind we are ahead take the regards. in by really even certain to sense require keenly The contracts for payment that. customers proceed And advances can with short-term we We're with to get some we that negotiate more are adverse they terms. good though cannot go go might flow are we on economic favorable cash RFP the tune dictate out a basis, and will us where dictated by that. those make us,

line Wells Fargo. And of our comes question the Matt Akers from from next

there's the to the guess, working I'm for on to a however frame Alan. about should to want trying getting think we of you of I business linger capital back like to Or and a there ago? higher of bit change just than up had maybe to target it following get receivables that's is X, of we guess or think if thanks that an has receivables opportunity days color, in little something sort been I at Yes. in level X were to the years it. back the kind going past? the

Yes. Good and in A as get believe we Matt. to the This big question, Yes, contract, relates part earnings levels where the that the past, we from receivable have DSO milestones and a flow is to does of can that And back do as higher Mexico a mentioned. Alan. contract those SEDENA for great great experienced that's from DSO that we sales the referred necessarily cash to. strong. beachhead and the contract unbilled the us big isn't a had you us, perspective we while an it

that relatively to anticipate that speaking, perspective, of than today, in that DSO contracts and our to like band kind have the time. the and us more in you a at of in could operate time future, to get generally look DSO look we it where we impact would historical an that norm much lower narrow is from returning certainly We'll a if adverse from on future. is But

it. Got Yes.

there benefit about Okay. nice And talked -- I I there? some guess with for profit And uptick. in a see business, flattish. know Healthcare -- there, on Is of similar the little sales see we good bit of to seasonality you kind how a of up year-over-year the kind rest? there's guess similar kind the of kind but should a got even you I

Alan. is this Matt, Yes,

right. You're

in healthcare business the the So seasonally is slowest quarter. speaking, QX the September in

his where mentioned rest profits to, some down remarks, revenues on we infrastructure way the enhance costs. we the took or Deepak and was Deepak initiatives out operational similar also we the slightly of got year. improved as that the earlier in expect stronger to through do performance So The referred

margin the business. contribution us business The healthcare highest for is

awful there's big up, So as pull-through income revenues an to operating go EBITDA. and

opportunity with in we being in expansion. they as have, future really QX, structure margin quarters anticipate do the So cost nice were revenues coupled we a than some nice that leaner there's stronger for

could of guess it guidance missed I that? that of acquisition, sort I most if it. Got we of chunk is organic kind or acquisition, possible I but to more. guess size this, of the guess, the I was if Yes. least, maybe a I Or in squeeze think raise the big one at was that? about

Good on question. our mentioned, Sure. from partly in which outlook, guidance raised upon just The acquisition increasing contributions along in based really was the bookings you that the factored strong security the the with confidence offset confidence forecasted the earnings uncertainty. side by factor interest guidance the increased increase maybe a the raise overall market some business. conservatism acquisition based But and and on costs and some in of our general was

CJS next And our from Securities. Larry question comes from of Solow the line

XX-year almost to you not us in best all, luck Great. I a with It's but the I'm transition. run for you. been fast, you, congratulations. anywhere working a good and going And so best Deepak wish first you're a luck of sure

$X.XX. -- increased just first that know on by Just following up on question, the guidance the you I acquisition. last Alan,

of you granularity? the like most that And little more of more Just Is any half to get increase? can. is on the specifics a increase? Just acquisition trying that, it if

Sure.

was So the we in business. between the say acquisition just earlier you bit the probably we to even increase confidence our accretive better. as that conservative business could be increase greater I the both to acquisition guidance own 'XX. And went top and yes, But did contribute increase. know get as that little split organic well as to in our line to the expected bottom in us acquisition is the a the fiscal line mentioned

on ] just security. it above grew the I specifically, the color then was the you Is on last most about Okay. of [ was million any X year -- end more I just And it the ground Can Fair. backlog, book-to-bill of give just that? quarter. us think the and imagine like in quarter? Any it the the bookings $XXX seems over from the

Sure.

X for approximately the the little was the in to bit good The with backlog bookings really entirely business. associated some So was by business. attributable backlog quarter, well. as growth book-to-bill strong Security grew a Security acquired our The

bit you sort think roughly But was things. I a Did margin, little just up of a Got correctly? an few hear mentioned did that was or mention adjusted And I year-over-year you which you. Security. think the one-timers or there down nonrecurring I basis flat in on

an item weakening with OSI impacted both of main the in in strong and able amount. quarter on believe our to FX, dollar to an we margin, to still and operating all results. then, But with a in the that and effect Really, with be that Security absorb us course, that this and what Opto we very not adversely significant [indiscernible] had adverse report were

think upon in the happens So to some based there's FX I future. in that what upside

And you. know nice service portion, a I the increase. on just Got

think. we deals continue I piece to But perhaps get of that's kind whatnot, well, you too. that? don't I think revenue, grew things than Is faster sort that you on sort the of product in XX%. mostly forward, near revenue kind Any much, big kicking to that of grow and fair assuming piece say? hopefully, newly maybe even Again, that that some Security, service grow more larger Do some expect going you service piece these term, -- get off thoughts contracts of these come of service as warranty of installed to faster of in? get

and insight good Excellent Alan. question. it's Larry, Yes.

right. You're

even and some revenue large last we've revenue our to product these year into growth superior contracts. QX, far as fulfilling been of growth Our was service

revenue they really them start do of warranty, But increases. service we off significantly rolling as fulfill when the

revenue, at right, product a we'll revenue balance revenue. our our clip faster of you're than chance service So the that growth, nice through year very good recurring the a there's grow

we we it will. will some expect fully deals product hope right, to we growth. expect too course, revenue nice-sized of But Now revenue very new, to acceleration see get our you're an and -- service do of

we it Got think it. the we in for I inventory just one squeeze Opto still sales, of some out I like had adjust I And the mentioned pretty management. know then actually, looks the intersegment more But growth you nice can in if piece. quarter. some kind just on if

an on growth right, through grew expect external year? been continue that, basis, that is the have X%, would revenue a Do there think you which in I is -- pretty rate. all to nice

part down. and second And there anything that into was to margin the it was that question, offset, little bit that? like a looks little Is of a read

Alan again. It's Sure.

X the sort Opto. of things So on good questions,

right, On fantastic. revenue the X% the external was growth you're revenues,

I our still seeing and rightsizing some think inventory corrections by we're customers.

So into I the moderate the will stronger second here in we Opto. sales into half think that year, number move we But expect of we as QX. move growth as

had some in FX margin by Security hit of in Outside terms on operating in In Opto our where the impacted some well. sense, increased similar margin, that, the notable we impact Opto income of Opto. was FX to as

hit So back we expect profits would to of half in the business, operating the we improved particularly the as as Opto see year well.

line Oppenheimer. Glynn next from the Christopher from of comes Our question

look in First pattern cyclical production Opto seeing that like switch, transition Deepak, shoring and through recovery? of seeing getting on and off, a on end as you the any Are you I you inventory pending actual adjustment congratulations your here. the near the long end or question the to had segment. Are try company success demand tooth. a must see markets to start any customer little reshoring, any be

if of understand of question, any see question Is in Well, don't what end we Opto. your that is? the our any products big I

end No, no, the markets.

perspective? starting Any from favorably to end markets move a cyclical

you it. understand want it, to Yes, I -- are didn't answer we

Alan. this are Chris, seeing Sure. we Sure. strength some defense. is in Yes,

probably and some neutral. So strength overall, in markets some strength the the a continued in But the seeing the with bit markets maybe softness defense we're defense medical being more in markets, other OEMs.

it, now Just Again, that as asked the Defense for that there little for more business. is the bit puts these good area, for we products support in I places. a Opto on understand is requirement a world, product the in unrest to defense very in that And even being have various equipment line it. for optoelectronic add more

at has forecast a look pipeline our that good So we and defense Opto growth some business good it going looks seen forward. like

or projects? acquisition the the that organic of guidance. activity of of of international? lead shorter putting on normal And Is kind revenue aside the Or the some on component -- time reflecting the the more pacing the on Mexico the other Great. raised

It's our world do more the the of much in part other the that strong is wouldn't Mexico. Sure. It's good throughout any other really in to really say of business. on more various business. Chris, relates we product increase the of I This our the Alan. lines security question. business

Instructions]. [Operator

comes Partners. question ROTH Capital next from Our from Jeff Martin

of more dive driver? a I being little driver? Is a intermediate in you wanted to was monitoring that you near-term longer-term to see talked that Do on Aviation. an interesting It more about capabilities. that remote

of longer question I to intermediate think term. a it's

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airports -- We some for are employee to screening. their at some looking talking

is, longer the So it's term. answer a

And a think capable are again, good this that doing is and it. we potential, we of

and from technology learning cargo strength behind the the have it, the We side.

looks a good line product after. a product to -- just like So that to good go

to into respect then strategically the how you that respect your -- lacking this And something up? product you line? pursue? RF was portfolio much open RF needed product is us that might And market within existing fits your Okay. help with technology felt this opportunity to How understand acquisition,

couple contributor if acceleration to years there's could secondarily, been the M&A M&A M&A just with of next I an OSI? just be on forthcoming if historically, more then a curious opportunistic generally And for comment expect you've potentially you the in here. but know your prominent environment, you

Jeff. question, Good

not was internationally. the domestically other the we is customers, both same First, question. acquisition, because our a cater in products. your that complementary On to We this as product looked to first and line particular a that at answer

that at a very looked so customers to and portfolio said and can we technology into So company we a this fits had get where well service be this broader it product. offer to able broader the

And by don't size. can the but have they products that way, a the they proprietary sell, have they

We we globally. have infrastructure the and size have the

a go business. it, and that grow So very the we into base go could broader this fitted to back and well

we products in had in other that base. the they where that, of same can into certain that come we are the customers some customer sell Reverse we think are that now of that we

more it can it than is we we X grows. the that gives call grow X and So what X plus as way, business us

both in the that from like of question, of prominent got going leverage M&A being going significant side part to forward. seems foresee respect in the more potential forward? things. the you've manufacturing you second model With and Is sales to layer It contributor that something

it. at good looked mentioned, have we Like always sheet. strong We've a balance Alan

plus than focus very sense more have to selective. we look X. but X It must very it, at a are make X We big

And to to going at there this Security continue opportunities? not the be say the but time. we focus a side, other question, looking going to at at it. side your We keep look Are all broader on more specifically, Opto are is the the We to answer side. to area also we but focused pick than look

last purely can mean versus Great. the maybe could a working impact perhaps guidance EPS you ride to with one me. interest previous a the quantify I then Alan, relative to the to your here. unwind guidance have if expectations. curious significant you current capital do But And flow you just expense? comment guidance respect the pushed for more detail free little on shift, if of cash

that provided the which there previous $X.XX right to I Yes. the call. in we Jeff. to cash flow guidance say EPS we a to that moving Good was what and bit our $X.XX probably borrowings to to compared impact overall our the additional a question, little would provided, just

the back Thank program. to I'd hand of remarks. any to session further like Chopra you. program question-and-answer This Deepak today's conclude for the does

us. for OSI. to of looking wanted to employees management Thank I'm the us, to continued everybody and to our to forward trusting And in customers growth, thank I'm and thank I want and I all listening the for support there you.

conference. participation conclude the gentlemen, for in and program. Thank today's you, does This your ladies

disconnect. You may now