OSI Systems priced an upsized offering of $500 million in 0.50% convertible senior notes due 2031 on November 17 2025, with settlement scheduled for November 20 2025. The notes are senior, unsecured obligations that can be converted into common stock at a conversion price of $353.82 per share, a 32.5% premium to the closing price of $267.03 on the pricing date.
The company will use up to $175 million of the net proceeds for share repurchases, allocating $146.1 million to buy back 546,945 shares in privately negotiated transactions. The remaining proceeds will be applied to repay a portion of its revolving credit facility, cover related fees and expenses, and support general corporate purposes.
Following the announcement of the proposed $400 million offering, OSI Systems’ shares fell 4.2% in the morning session, reflecting investor concerns about potential dilution from the convertible notes. The share‑repurchase program is intended to offset some of that dilution and support the stock price.
OSIs recent financial performance underscores the company’s strong balance sheet and growth trajectory. In Q4 FY25, the company reported record revenue of $505 million and a record non‑GAAP EPS of $3.24. For the full fiscal year 2025, revenue reached $1.713 billion, up 11% year‑over‑year, and non‑GAAP EPS rose to $9.36, a 15% increase. The backlog exceeded $1.8 billion, and the company expanded its credit facility to $825 million, extending maturity to July 2030. Segment‑level data show the Security division driving the strongest growth, while Optoelectronics and Manufacturing and Healthcare continue to contribute solid revenue streams.
Management emphasized confidence in the company’s outlook. CEO Ajay Mehra noted that robust bookings, a solid backlog, and high visibility into the opportunity pipeline position OSI for success in fiscal 2026 and a strong cash‑flow outlook. Earlier, CEO Deepak Chopra highlighted the company’s robust backlog and high visibility, reinforcing the narrative of sustained growth.
The additional liquidity from the convertible notes will support OSI’s growth initiatives across its three segments. The low 0.50% interest rate makes the financing inexpensive, while the conversion price premium signals management’s expectation of future share price appreciation. The share‑repurchase program mitigates dilution concerns, aligning the financing with shareholder value creation.
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