Core Insights - Varex Imaging reported a strong start to fiscal year 2026, with first-quarter revenue of $210 million, a 5% increase year-over-year, driven by a 17% increase in the Industrial segment and stable performance in the Medical segment [5][16] - The company highlighted a favorable product sales mix contributing to a non-GAAP gross margin of 34%, and non-GAAP EPS of $0.19, up from $0.10 in the previous year [6][20] - Engagement with customers at the RSNA conference indicated a positive outlook for future demand, particularly in the Medical segment, with a focus on innovation and integration of technologies [10][12] Financial Performance - First-quarter revenue was $210 million, with Medical segment revenue at $145 million (69% of total) and Industrial segment revenue at $65 million (31% of total) [16] - Non-GAAP EBITDA for the quarter was $29 million, reflecting a 12% increase year-over-year [6] - Operating income was reported at $19 million, with an operating margin of 9%, up from 7% in the same quarter last year [20] Segment Performance - The Industrial segment showed strong growth, particularly in cargo security systems, which benefited from global demand [8][14] - The Medical segment remained stable, with solid demand for X-ray sources and digital detectors, although some modalities like dental and oncology were below sales trends [7][10] - The company is focusing on a modality-based approach to enhance customer engagement and drive long-term recurring revenue [11][12] Customer Engagement and Market Outlook - Increased customer engagement at RSNA, with over 150 meetings focused on design win opportunities and system upgrades [9][10] - The company is optimistic about future demand, particularly in the Medical segment, as customers shift from maintenance to new product development [13][29] - The India manufacturing strategy is seen as critical for future growth, with local production resonating well with customers [12][34] Inventory and Cash Flow - Inventory increased by $29 million to $328 million, driven by anticipated demand in the Industrial segment and qualification cycles for new products [21][62] - Net cash outflow from operations was $16 million, primarily due to inventory increases, with cash and marketable securities totaling $126 million [22][62] Guidance and Future Expectations - Guidance for the second quarter anticipates revenues between $210 million and $225 million, with non-GAAP EPS expected between $0.15 and $0.25 [23] - The company expects to continue seeing strong order activity in both Medical and Industrial segments, with a focus on securing new design wins [24][31]

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Core Insights - Varex Imaging reported a strong start to fiscal 2026, with first-quarter results at the high end of guidance, driven by growth in industrial markets and stable medical performance [4][3] Financial Performance - On a GAAP basis, gross margin was 33%, operating income was $15 million, net income was $2 million, and GAAP EPS was $0.05 per diluted share [1] - Non-GAAP gross margin was 34%, with non-GAAP EBITDA of $29 million, up 12% year over year, and non-GAAP EPS of $0.19, an increase from $0.10 in the previous year [2] - Total revenue for the first quarter was $210 million, reflecting a 5% year-over-year increase, with industrial segment revenue rising 17% [3][6] Revenue Breakdown - Medical revenue accounted for $145 million (69% of total revenue), while industrial revenue was $65 million (31% of total revenue) [1] - Regionally, the Americas grew by 17%, EMEA rose by 7%, and APAC declined by 7% year over year [1] Industrial Segment Insights - The industrial segment's growth was attributed to demand in cargo security systems and non-destructive testing (NDT) [11][12] - Management noted that orders in the industrial segment are "tender-driven" and can be lumpy, with potential for double-digit growth contingent on wins and shipment timing [12] Medical Segment Insights - The medical segment showed stable performance, with strong demand for X-ray sources, particularly in high-end CT, and increasing customer engagement on next-generation system designs [7][8] - Mammography exceeded sales trends, while CT, fluoroscopy, and radiography were in line with sales trends [10] Balance Sheet and Cash Flow - Inventory increased by $29 million to $328 million, leading to a $16 million operating cash outflow [5][15] - Varex ended the quarter with $126 million in cash and gross debt of $370 million, with a net leverage of approximately 1.9x [16] Future Outlook - For the second quarter, Varex guided revenue between $210 million and $225 million, with non-GAAP EPS expected to be between $0.15 and $0.25 [18] - Management expressed confidence in customer engagement across both segments, highlighting innovation in medical imaging and expanding industrial applications [17]

Core Insights - VAREX IMAGING reported revenue of $209.6 million for the quarter ended December 2025, marking a year-over-year increase of 4.9% and a surprise of +0.22% over the Zacks Consensus Estimate of $209.15 million [1] - The company achieved an EPS of $0.19, which is a significant increase from $0.07 a year ago, resulting in an EPS surprise of +35.71% compared to the consensus estimate of $0.14 [1] Revenue Performance - Industrial revenues reached $64.8 million, exceeding the estimated $61.61 million, reflecting a year-over-year increase of +17.4% [4] - Medical revenues totaled $144.8 million, slightly below the estimated $147.5 million, with a minimal year-over-year change of +0.1% [4] Profit Metrics - Gross profit from Industrial operations was reported at $23.8 million, surpassing the average estimate of $21.27 million [4] - Gross profit from Medical operations was $46 million, which fell short of the average estimate of $48.32 million [4] Stock Performance - VAREX IMAGING shares have returned +5.5% over the past month, while the Zacks S&P 500 composite remained unchanged [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - VAREX IMAGING reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and showing significant growth from $0.07 per share a year ago, indicating a strong performance in the recent quarter [1][2]. Financial Performance - The company achieved revenues of $209.6 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.22% and reflecting an increase from $199.8 million in the same quarter last year [2]. - Over the last four quarters, VAREX IMAGING has consistently exceeded consensus EPS estimates, achieving this four times [2]. Stock Performance - VAREX IMAGING shares have increased approximately 20.5% since the beginning of the year, significantly outperforming the S&P 500, which gained 1.7% during the same period [3]. - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.20, with projected revenues of $214.15 million, while the estimate for the current fiscal year stands at $0.89 on revenues of $870.27 million [7]. - The outlook for the Medical - Products industry, to which VAREX IMAGING belongs, is currently in the bottom 29% of Zacks industries, suggesting potential challenges ahead [8].

Varex Imaging (NasdaqGS:VREX) Q1 2026 Earnings call February 10, 2026 05:00 PM ET Company ParticipantsChristopher Belfiore - Director of Investor RelationsLarry Solow - PartnerSam Maheshwari - CFOSunny Sanyal - President and CEOSuraj Kalia - Managing DirectorYoung Li - SVP and Equity ResearchConference Call ParticipantsJames Sidoti - AnalystOperatorGreetings and welcome to the Varex first quarter fiscal year 2026 earnings conference call and webcast. At this time, all participants are in listen-only mode. A ...

Financial Data and Key Metrics Changes - First quarter revenue was $210 million, up 5% year-over-year, driven by a 17% increase in the industrial segment revenue [5][17] - Non-GAAP gross margin was 34%, at the high end of guidance, benefiting from a favorable product sales mix [6][20] - Non-GAAP EBITDA was $29 million, up 12% compared to the same quarter last year [7] - Non-GAAP EPS in the first quarter was $0.19, up from $0.10 in the previous year [7][22] Business Line Data and Key Metrics Changes - Medical segment revenue was stable year-over-year at $145 million, while industrial segment revenue increased to $65 million, representing 69% and 31% of total revenues respectively [17] - The industrial segment showed broad-based strength, particularly in cargo security inspection systems and components [9][16] - Demand for X-ray sources and digital detectors in the medical segment remained strong, particularly in high-end CT [7][8] Market Data and Key Metrics Changes - Americas revenue grew 17%, driven by strength in the industrial segment related to cargo systems [18] - EMEA revenue rose 7%, while APAC revenue decreased by 7% year-over-year [18] - Sales volume to China remained steady, contributing 17% of total revenues, indicating resilience in the healthcare market position [18] Company Strategy and Development Direction - The company is focusing on a modality-based approach to enhance customer engagement and drive long-term recurring revenue [12] - Increased collaboration with customers is aimed at addressing complex inspection problems using X-ray imaging in real-time manufacturing [9][12] - The company is investing in innovation and technology integration into next-generation imaging systems, particularly in the medical segment [26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medical segment, indicating that previous headwinds are behind them, with strong demand for CT continuing [30][31] - The industrial segment's order pipeline and customer engagement are strong, particularly in food inspection and security screening [32] - Management noted that customer interactions at RSNA indicated a shift towards new product development and commercialization [15][34] Other Important Information - The company modified its non-GAAP policy to exclude gains and losses from equity method investments, reflecting a strategic shift [19] - Inventory increased by $29 million to $328 million, driven by anticipated demand across the industrial segment [22][23] - The company ended the quarter with cash and marketable securities of $126 million, down $30 million from the previous quarter [23] Q&A Session Summary Question: General outlook for the business - Management indicated optimism about both medical and industrial segments, with strong order activity and customer engagement [29][30] Question: Progress on India operations - Management confirmed that the India factory is operational, producing detectors and tubes, with positive customer feedback regarding local manufacturing [36][37] Question: Guidance for the next quarter - Management provided guidance for revenues between $210 million and $225 million, with non-GAAP EPS expected between $0.15 and $0.25 [24][25] Question: Inventory increase explanation - Management explained that the inventory increase is intentional to prepare for cargo systems ramp-up and qualification cycles for products in India [80][81] Question: Refinancing plans - Management is working on refinancing high-yield debt due in October 2027, aiming to complete it before October 2026 [82][84]

Financial Data and Key Metrics Changes - First quarter revenue was $210 million, up 5% year-over-year, driven by a 17% increase in industrial segment revenue [5][15] - Non-GAAP gross margin was 34%, at the high end of guidance, benefiting from a favorable product sales mix [5][17] - Non-GAAP EBITDA was $29 million, up 12% compared to the same quarter last year [6] - Non-GAAP EPS in the first quarter was $0.19, up from $0.10 in the previous year [6][18] - GAAP gross margin was 33%, down 100 basis points year-over-year [16] Business Line Data and Key Metrics Changes - Medical segment revenue was stable year-over-year at $145 million, while industrial segment revenue increased to $65 million, representing 69% and 31% of total revenues respectively [15] - Medical segment performance was stable, with strong demand for X-ray sources and digital detectors [6][8] - Industrial segment delivered a 17% growth, driven by cargo security inspection systems and components [5][15] Market Data and Key Metrics Changes - Americas revenue grew 17%, driven by strength in the industrial segment [15] - EMEA revenue rose 7%, while APAC revenue decreased by 7% year-over-year [15] - Sales volume to China remained steady, contributing 17% of total revenues [15] Company Strategy and Development Direction - The company is focusing on a modality-based approach to enhance customer engagement and drive long-term recurring revenue [10][11] - Increased collaboration with customers is aimed at addressing complex inspection problems using X-ray imaging [8][10] - The company is investing in innovation and technology integration into next-generation imaging systems [23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the medical segment, indicating that previous headwinds are behind them and customer order activity is strong [27] - The industrial segment's order pipeline remains robust, particularly in food inspection and security screening [27] - Management noted that customer engagement at RSNA was significantly more positive compared to previous years, indicating a shift towards new product development [29][30] Other Important Information - The company modified its non-GAAP policy to exclude gains and losses from equity method investments, reflecting a strategic shift [16][17] - Inventory increased by $29 million to $328 million, driven by anticipated demand and qualification cycles for new products [19][72] Q&A Session Summary Question: General outlook for the current environment - Management indicated that headwinds faced in previous years are behind them, with strong order activity in the medical segment and stability in China [27][28] Question: Progress on India operations - Management confirmed that the India factory is operational, producing detectors and tubes, with strong customer interest in locally sourced products [32][34] Question: Guidance for the upcoming quarter - Management provided guidance for Q2 revenues between $210-$225 million and non-GAAP EPS between $0.15-$0.25, citing a conservative approach [21][22] Question: Cargo orders and industrial segment growth - Management noted strong traction in cargo systems, with potential for double-digit growth in the industrial segment, contingent on customer demand [42][45] Question: Inventory increase and future plans - Management explained that the inventory increase is intentional to support cargo systems ramp-up and qualification cycles in India, with plans to normalize inventory levels [70][72] Question: Refinancing plans - Management is working on refinancing high-yield debt due in October 2027, aiming to complete it before October 2026 [73][74]

Q1 FY26 Earnings Presentation February 10, 2026 Forward Looking Statements / Non-GAAP Measures Forward Looking Statements This supplement contains "forward-looking" statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning unaudited financial results; revenue and earnings guidance; industry or business outlook; product demand environment; expected future financial results or performance; and any statements using the terms "believe," "expect," "anticipate," ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ____________________________________________________________ FORM 10-Q ____________________________________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended January 2, 2026 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-37860 __________ ...