Varex Imaging Corporation

Varex reported Q2 fiscal 2026 revenue of $216 million, up 1% year over year. Non-GAAP gross margin was 34%, non-GAAP EPS was $0.21, and non-GAAP operating income was $19 million, down $7 million year over year. On a GAAP basis, gross margin was 34% (down 240 basis points year over year), operating income was $14 million, and GAAP EPS was a loss of $0.19. Medical revenue was $156 million and Industrial revenue was $60 million; Americas grew 13%, EMEA declined 16%, and APAC increased 8%. For the second half of FY26, management expects revenue to be up approximately 3% versus the same period of FY25. Full-year FY26 guidance is revenue of $860 million to $880 million and non-GAAP EPS of $0.80 to $1. For Q3, revenue is expected between $210 million and $225 million, non-GAAP EPS between $0.15 and $0.30, and non-GAAP gross margin between 33% and 34%.

Sunny Sanyal said the quarter reflected solid execution in both Medical and Industrial while the company continued shifting toward advanced imaging and higher-growth industrial applications. He highlighted growing OEM engagement, especially around new X-ray source and detector products, photon counting, and integrated imaging solutions that support AI-enabled workflows. His tone was confident but measured: he repeatedly emphasized that the business is more stable than in prior periods, while noting the company remains cautious about the broader environment mainly on costs, materials, and logistics rather than demand.

Shubham Maheshwari said the quarter came in within expectations, with revenue of $216 million, gross margin of 34%, and EPS of $0.21. He cited cost pressure from higher input costs and memory chips, but noted margins were supported by favorable product mix; operating expenses were $54 million, up $3 million year over year, and adjusted EBITDA was $27 million or 12% of sales. He also detailed the balance sheet: cash, cash equivalents and marketable securities of $88 million, gross debt of $351 million, net debt of $263 million, and trailing-12-month adjusted EBITDA of $118 million. Management said the debt refinancing reduced leverage and interest expense, and reiterated a target to reduce inventory by $20 million to $25 million over the next six months.

Analysts pressed on macro and supply-chain risks, including the Middle East conflict, logistics, energy costs, and memory-chip availability. Management said direct logistics impact has been minimal, memory chips are only used in parts of the detector business, and buffer stock plus supply-chain diversification have helped offset the issue, though costs have risen. Questions also focused on the India manufacturing ramp, where management said detector factory utilization is still low but should become materially utilized by year-end, while the tubes factory will ramp later. Other notable topics included inventory buildup tied to cargo systems and India, China demand normalization, and the company’s move to annual guidance, which management said is based on improved forecasting and more stable demand visibility.