Varex Imaging Stock Earnings Reports

Varex reported a solid Q2 FY2026: revenue $216M (within guidance), 34% non-GAAP gross margin, and non-GAAP EPS $0.21. Medical remains the largest segment (72% of revenue, $156M) with continued strength in CT and solid design-win momentum for new X-ray sources and detectors. Industrial (28%, $60M) continues to grow, driven by tubes, linear accelerators, detectors for NDI, cargo security system implementations, and photon-counting demand (notably food inspection). Management completed debt refinancing in March, reducing outstanding debt and annual interest expense (gross debt $351M; cash & equivalents $88M; net debt ~$263M) to improve financial flexibility. Inventory increased to $347M (220 days) driven by cargo system builds, India ramp and some component/tariff effects; management expects to reduce inventory by ~$20–25M over the next two quarters. The India detector factory is ramping slowly due to regulatory approvals and is expected to be materially utilized by year-end; a separate India tube facility will ramp next fiscal year. Regional performance: Americas +13%, APAC +8%, EMEA -16% (partly lumpy timing tied to prior large shipments of linear accelerators). Adjusted EBITDA was $27M (12% of sales); trailing 12-month adj. EBITDA $118M; net debt/adj. EBITDA ~2.2x. New guidance: FY2026 revenue $860–880M and non-GAAP EPS $0.80–1.00. Q3 guidance: revenue $210–225M, non-GAAP EPS $0.15–0.30. Management will resume providing annual guidance going forward. Key risks called out: component cost pressure (memory), some inflationary input costs, lumpy tender-driven industrial business, and geopolitical/logistics concerns (but limited direct impact so far).