Varex Imaging | 10-Q: FY2026 Q2 Revenue Misses Estimate at USD 216 M

Revenue: As of FY2026 Q2, the actual value is USD 216 M, missing the estimate of USD 216.92 M.EPS: As of FY2026 Q2, the actual value is USD -0.19, missing the estimate of USD 0.14.EBIT: As of FY2026 Q2, the actual value is USD 31.2 M.Segment RevenueThree Months Ended April 3, 2026Medical segment revenue was $156.2 million.Industrial segment revenue was $59.8 million.Total revenues were $216.0 million.Three Months Ended April 4, 2025Medical segment revenue was $153.8 million.Industrial segment revenue was $59.1 million.Total revenues were $212.9 million.Six Months Ended April 3, 2026Medical segment revenue was $301.0 million.Industrial segment revenue was $124.6 million.Total revenues were $425.6 million.Six Months Ended April 4, 2025Medical segment revenue was $298.4 million.Industrial segment revenue was $114.3 million.Total revenues were $412.7 million.Operational MetricsGross ProfitThree Months Ended April 3, 2026Medical segment gross profit was $50.6 million, with a gross margin of 32.4%.Industrial segment gross profit was $22.0 million, with a gross margin of 36.8%.Total gross profit was $72.6 million, with a gross margin of 33.6%.Three Months Ended April 4, 2025Medical segment gross profit was $55.9 million, with a gross margin of 36.3%.Industrial segment gross profit was $20.8 million, with a gross margin of 35.2%.Total gross profit was $76.7 million, with a gross margin of 36.0%.Six Months Ended April 3, 2026Medical segment gross profit was $96.6 million, with a gross margin of 32.1%.Industrial segment gross profit was $45.8 million, with a gross margin of 36.8%.Total gross profit was $142.4 million, with a gross margin of 33.5%.Six Months Ended April 4, 2025Medical segment gross profit was $105.4 million, with a gross margin of 35.3%.Industrial segment gross profit was $39.8 million, with a gross margin of 34.8%.Total gross profit was $145.2 million, with a gross margin of 35.2%.Operating ExpensesThree Months Ended April 3, 2026Research and development expenses were $22.2 million (10.3% of total revenues).Selling, general, and administrative expenses were $36.0 million (16.7% of total revenues).Total operating expenses were $58.2 million (26.9% of total revenues).Three Months Ended April 4, 2025Research and development expenses were $22.0 million (10.3% of total revenues).Selling, general, and administrative expenses were $32.6 million (15.3% of total revenues).Total operating expenses were $54.6 million (25.6% of total revenues).Six Months Ended April 3, 2026Research and development expenses were $43.9 million (10.3% of total revenues).Selling, general, and administrative expenses were $68.7 million (16.1% of total revenues).Total operating expenses were $112.6 million (26.5% of total revenues).Six Months Ended April 4, 2025Research and development expenses were $45.5 million (11.0% of total revenues).Selling, general, and administrative expenses were $66.4 million (16.1% of total revenues).Total operating expenses were $111.9 million (27.1% of total revenues).Net (Loss) Income Attributable to Varex Imaging CorporationThree Months Ended April 3, 2026: - $8.1 million.Three Months Ended April 4, 2025: $6.9 million.Six Months Ended April 3, 2026: - $5.8 million.Six Months Ended April 4, 2025: $6.6 million.Interest and Other Expense, NetThree Months Ended April 3, 2026Interest income: $0.4 million.Interest expense: - $17.2 million.Other expense, net: - $4.0 million.Total interest and other expense, net: - $20.8 million.Three Months Ended April 4, 2025Interest income: $2.9 million.Interest expense: - $10.2 million.Other expense, net: - $4.0 million.Total interest and other expense, net: - $11.3 million.Six Months Ended April 3, 2026Interest income: $1.0 million.Interest expense: - $25.1 million.Other expense, net: - $8.3 million.Total interest and other expense, net: - $32.4 million.Six Months Ended April 4, 2025Interest income: $5.0 million.Interest expense: - $18.2 million.Other expense, net: - $6.8 million.Total interest and other expense, net: - $20.0 million.Income Tax ExpenseThree Months Ended April 3, 2026: $1.6 million.Three Months Ended April 4, 2025: $3.7 million.Six Months Ended April 3, 2026: $3.0 million.Six Months Ended April 4, 2025: $6.3 million.Cash FlowNet Cash (Used in) Provided by Operating ActivitiesSix Months Ended April 3, 2026: - $17.6 million.Six Months Ended April 4, 2025: $26.1 million.Net Cash (Used in) Provided by Investing ActivitiesSix Months Ended April 3, 2026: - $10.8 million.Six Months Ended April 4, 2025: $11.7 million.Net Cash (Used in) Provided by Financing ActivitiesSix Months Ended April 3, 2026: - $30.9 million.Six Months Ended April 4, 2025: $124.2 million.Cash and Cash Equivalents and Restricted Cash at End of PeriodApril 3, 2026: $87.7 million.April 4, 2025: $332.2 million.Unique MetricsCustomer Concentration: Canon Medical Systems Corporation accounted for 19.2% of revenues for the three months ended April 3, 2026, and 19.0% for the three months ended April 4, 2025. For the six months ended April 3, 2026, it was 17.5%, and for April 4, 2025, it was 17.9%. As of April 3, 2026, Canon Medical Systems Corporation represented 13.3% of accounts receivable, compared to 14.0% as of October 3, 2025.Equity Method Investments: For the six months ended April 3, 2026, Varex Imaging Corporation recorded a loss of - $4.5 million from its equity investment in dpiX Holding, compared to a loss of - $3.6 million for the six months ended April 4, 2025. The carrying value of this investment was $18.0 million as of April 3, 2026.Product Warranty: Accrued product warranty at the end of the six months ended April 3, 2026, was $8.1 million, with new accruals of $7.6 million charged to cost of revenues during the period. For the six months ended April 4, 2025, the accrued product warranty was $10.1 million, with new accruals of $7.0 million.Future Outlook and StrategyVarex Imaging Corporation anticipates its recent debt refinancing will reduce annual interest expense by over $7 million, lower total outstanding debt, and improve financial flexibility to support continued business investment. The company aims to maintain long-term research and development expenses at approximately 8% to 10% of annual revenues to foster innovation and bring new products to market for its global OEM customers. To mitigate trade uncertainty, Varex Imaging Corporation monitors tariff-related actions and policy developments, taking steps such as working with customers, evaluating operational, supply chain, and pricing measures, and localizing manufacturing.