Varex Imaging Corp (VREX): Results of Operations and Financial Condition
Varex Imaging Corp (VREX) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 VAREX ANNOUNCES FINANCIAL RESULTS FOR THIRD QUARTER FISCAL YEAR 2026 SALT LAKE CITY, August 10, 2026 – Varex Imaging Corporation (Nasdaq: VREX) today announced its unaudited financial results for the third quarter fiscal year 2026. Q3FY26 Summary · Revenues $211 mill
How this was made
The 30-second read
Why it matters
Traders can update near-term expectations using the disclosed Q3 revenue, margin, EPS, cash balance, and the specific IEEPA-related refund/revenue reduction mechanics. The cancellation of the earnings call and explicit lack of financial guidance adds uncertainty for forward estimates, especially with a pending Teledyne transaction.
Market read
Q3 results show revenue growth and improved non-GAAP margins/EPS, but cash declined and tariff reimbursement accounting plus no guidance amid a pending deal can drive volatility.
What to watch
Cash fell to $99M despite $21M operating cash flow, and the company provided no Q4 guidance while a Teledyne transaction is pending, which can increase valuation uncertainty and reduce near-term visibility.
Varex announces financial results for third quarter fiscal year 2026
Third-quarter revenue increased 4% year-over-year, Industrial revenue was $ 76.5 million versus $ 60.9 million, gross-margin measures improved, and the company generated $21 million of operating cash flow. Results also included approximately $10 million of higher gross profit from tariff refunds and customer-reimbursement accruals, while Medical revenue was $ 134.0 million versus $ 142.1 million and the company suspended guidance during the pending Teledyne transaction.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenuesGAAP | $ 210.5 million | – | 4% |
| Medical revenueGAAP | $ 134.0 million | – | – |
| Industrial revenueGAAP | $ 76.5 million | – | – |
| Gross profitGAAP | $ 76.7 million | – | – |
| Gross marginGAAP | 36.4 % | – | – |
| Non-GAAP gross profitnon-GAAP | $ 77.2 million | – | – |
| Non-GAAP gross marginnon-GAAP | 36.7 % | – | – |
| Total operating expensesGAAP | $ 53.9 million | – | – |
| Research and developmentGAAP | $ 23.3 million | – | – |
| Selling, general, and administrativeGAAP | $ 30.6 million | – | – |
| Impairment of goodwillGAAP | — | – | – |
| Operating incomeGAAP | $ 22.8 million | – | – |
| Operating marginGAAP | 11% | – | – |
| Non-GAAP operating marginnon-GAAP | 12% | – | – |
| Interest incomeGAAP | $ 0.9 million | – | – |
| Interest expenseGAAP | $ (5.8 million) | – | – |
| Net income attributable to VarexGAAP | $ 15.7 million | – | – |
| Diluted net income per common share attributable to VarexGAAP | $ 0.37 | – | – |
| Non-GAAP net income per diluted sharenon-GAAP | $0.31 per diluted share | – | – |
| Cash flow from operationsGAAP | $21 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| MedicalNo segment-specific driver was provided. | $ 134.0 million | – | – |
| IndustrialManagement cited strong growth in Industrial and continued expansion in cargo and vehicle inspection systems. | $ 76.5 million | – | – |
What drove it
- Third-quarter product sales before the IEEPA-related customer reimbursement adjustment were approximately $217 million.
- Varex received refunds totaling $17 million from U.S. Customs related to previously paid IEEPA tariffs.
- The Company recorded a corresponding $7 million reduction to revenues reflecting an accrual for expected customer reimbursements of previously billed IEEPA tariffs.
- Together, the tariff-refund and customer-reimbursement items resulted in higher third-quarter gross profit by approximately $10 million.
- Management cited strong growth in Industrial and continued expansion in cargo and vehicle inspection systems.
Concerns
- Medical revenue was $ 134.0 million, compared to $ 142.1 million in the prior-year quarter.
- Third-quarter reported results included approximately $10 million of higher gross profit from IEEPA tariff refunds and customer reimbursement accruals.
- Inventories, net were $ 347.1 million at July 3, 2026, compared to $ 299.4 million at October 3, 2025.
- Varex will not be providing financial guidance in conjunction with its third-quarter fiscal year 2026 earnings release.
- The financial results are preliminary and subject to change prior to the filing of the Form 10-Q.
What to watch
- Industrial growth and continued expansion in cargo and vehicle inspection systems.
- Medical revenue performance.
- The ultimate effect of IEEPA tariff refunds and expected customer reimbursements.
- Working-capital demands associated with inventory.
- Completion of the announced transaction with Teledyne Technologies Incorporated, including stockholder and regulatory approvals and other closing conditions.
- Whether Varex resumes financial guidance following the pending transaction.
Balance sheet and cash flow
- Cash, cash equivalents, and marketable securities were $99 million as of the end of the third quarter, compared to $155 million at the end of fiscal year 2025.
- Cash and cash equivalents were $ 99.2 million at July 3, 2026, compared to $ 145.0 million at October 3, 2025.
- Marketable securities were $ 0.0 million at July 3, 2026, compared to $ 10.1 million at October 3, 2025.
- Inventories, net were $ 347.1 million at July 3, 2026, compared to $ 299.4 million at October 3, 2025.
- Long-term debt, net was $ 328.9 million at July 3, 2026, compared to $ 366.0 million at October 3, 2025.
- Current maturities of long-term debt, net were $ 18.2 million at July 3, 2026, compared to $ 1.5 million at October 3, 2025.
- The change in cash primarily reflects the Company's debt redemption and refinancing completed in March, as well as increased working capital associated with inventory.
- Cash flow from operations was $21 million.
Analysis
Varex reported third-quarter revenue of $ 210.5 million, compared with $ 203.0 million in the prior-year quarter, and characterized revenue as up 4% year-over-year. The revenue composition differed by segment: Medical revenue was $ 134.0 million versus $ 142.1 million, while Industrial revenue was $ 76.5 million versus $ 60.9 million. Management attributed the Industrial performance to strong growth in Industrial and continued expansion in cargo and vehicle inspection systems.
Management, verbatim
Third-quarter product sales before the IEEPA-related customer reimbursement adjustment were approximately $217 million, reflecting strong growth in Industrial and continued expansion in cargo and vehicle inspection systems,
Sunny Sanyal, Chief Executive Officer
The quarter also included the recovery of tariffs that had increased our product costs in prior periods. We generated $21 million of operating cash flow and enter the fourth quarter with continued momentum.
Sunny Sanyal, Chief Executive Officer
Not in the filing
stated, not guessed- Prior-quarter revenue, segment revenue, profit, margin, operating-expense, net-income, EPS, and cash-flow comparisons
- Free cash flow
- Capital-return activity, including share repurchases and dividends
- Non-GAAP operating income amount
- Non-GAAP net income amount
- Non-GAAP operating-expense amount
- Tax rate
- Forward financial guidance
- Prior guidance for comparison
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Varex’s SEC 8-K (Item 2.02) with an earnings release for third quarter fiscal year 2026, including non-GAAP metrics and tariff reimbursement/refund accounting.
Ticker impact
Varex reported Q3 FY2026 results with $211M revenue, margin/EPS changes, $17M Customs refunds tied to IEEPA tariffs, and canceled its earnings call due to a Teledyne deal.
Likely supportive bias from higher non-GAAP gross margin and EPS, partially offset by reduced cash ($99M vs $155M) and the absence of Q4 guidance amid deal pendency.
The filing provides multiple concrete datapoints (revenue up 4% YoY, non-GAAP gross margin 37% vs 34%, non-GAAP EPS $0.31 vs $0.13, $17M Customs refunds, cash down to $99M) plus a specific procedural change (earnings call canceled, no guidance) that can affect expectations and volatility.
Market effects
X-ray imaging component suppliers may see read-through from tariff reimbursement dynamics and industrial/security demand commentary, but the article is company-specific.
Limited direct regional impact; operations and customers are global OEMs.
Tariff and import/export regulatory mechanics (IEEPA) are globally relevant, but the disclosed impact is specific to Varex’s reimbursement/refund accounting.
Counterpoint
Tariff-related reimbursement and customer accruals may inflate reported gross profit and EPS quality, so underlying demand and cost structure could be less favorable than headline margins suggest.
Key entities
- companyVarex Imaging Corporation
Nasdaq-listed X-ray imaging components and systems provider that filed Q3 FY2026 results on Form 8-K and canceled its earnings call due to a pending Teledyne transaction.
- companyTeledyne Technologies Incorporated
Counterparty referenced for an announced transaction with Varex, which drove cancellation of the earnings call and absence of guidance.
- government agencyU.S. Customs
Refunds totaling $17M were received related to previously paid IEEPA tariffs, with a corresponding $7M revenue reduction for expected customer reimbursements.
