Red Flag Note- OSI Systems Inc. (OSIS)
Accounting-related benefits more than account for Q2’25 quarter’s upside
We first raised concerns about OSIS to our institutional clients in February after analyzing its Q2’25 results. While the company’s non-GAAP EPS exceeded consensus estimates by $0.09 and revenue beat by 3%, we believe the upside was largely driven by accounting-related benefits. Additionally, we identified troubling trends in the company’s revenue recognition accounts.
We get behind OSIS’s number below…
For free readers who missed Wednesday’s note on tech companies that rely heavily on stock-based compensation, you can read it here: The Great Stock Compensation Dilemma.