Varex Imaging (VREX) Q1 2026 earnings summary

Executive summary

• Q1 FY26 revenue reached $210 million, up 5% year-over-year, driven by strong industrial segment growth, especially in cargo security, and stable medical segment performance.

• Non-GAAP diluted EPS was $0.19, up 90% year-over-year; GAAP net income was $2.3 million, reversing a prior year loss.

• Customer engagement and pipeline development accelerated, with innovation and new product platforms highlighted.

• Cash, cash equivalents, and marketable securities totaled $126 million, down sequentially due to higher inventory and seasonality.

• Cash outflow from operations was $16 million, mainly due to inventory build.

Financial highlights

• Industrial segment revenue grew 17% year-over-year to $65 million; medical segment revenue was $145 million and remained flat.

• Non-GAAP gross margin was 34%; GAAP gross margin was 33%, down year-over-year.

• Non-GAAP operating margin improved to 9%; GAAP operating margin was 7%.

• Adjusted EBITDA was $29 million, up 12% year-over-year; margin approximately 13.6%.

• Americas revenue grew 17% to $75 million, EMEA 7% to $65 million, and APAC declined 7% to $70 million.

Outlook and guidance

• Q2 FY26 revenue guidance: $210–$225 million; non-GAAP EPS: $0.15–$0.25.

• Non-GAAP gross margin expected at 33–34%, with operating expenses around $52 million and a tax rate of 23%.

• Management expects continued headwinds from tariffs, supply chain volatility, and global economic uncertainty, but remains committed to R&D and operational efficiency.

• Sufficient liquidity is anticipated for at least the next 12 months; plans to refinance high-yield debt before October 2026.