Varex Imaging Reports Q2 GAAP Net Loss, Reduced Cash, and Lower Non-GAAP EPS Year-Over-Year

summarizeSummary

Varex Imaging Corporation announced its second-quarter fiscal year 2026 results, reporting a GAAP net loss and cash outflows from operations, alongside a year-over-year decline in non-GAAP diluted EPS.

check_boxKey Events

• Q2 FY26 Financial Performance

  Varex Imaging reported a GAAP net loss of $0.19 per diluted share and a non-GAAP net income of $0.21 per diluted share for Q2 FY26. Revenues increased 1% year-over-year to $216 million.

• Cash Flow and Balance Sheet Deterioration

  The company experienced $2 million in cash outflows from operations during the quarter. Cash, cash equivalents, and marketable securities significantly decreased to $88 million from $155 million at the end of fiscal year 2025.

• Updated Fiscal Year 2026 Guidance

  Varex expects full fiscal year 2026 revenue in the range of $860 million to $880 million and non-GAAP EPS between $0.80 and $1.00. Q3 FY26 revenue is projected between $210 million and $225 million, with non-GAAP EPS between $0.15 and $0.30.

• Non-GAAP Policy Change

  The company modified its non-GAAP policy to exclude gains and losses from equity-method investments, applying this change retrospectively to improve comparability of ongoing operations.

auto_awesomeAnalysis

The company's Q2 FY26 financial results indicate a significant deterioration in GAAP profitability, moving from a net income in the prior quarter to a net loss of $8.1 million. Despite a 1% year-over-year revenue increase, non-GAAP diluted EPS decreased to $0.21 from $0.31 in the prior year. Furthermore, Varex experienced $2 million in cash outflows from operations, contributing to a substantial reduction in its cash and marketable securities balance from $155 million at the end of FY25 to $88 million. While management noted solid demand and provided full-year guidance, the overall financial performance and cash burn present a concerning picture for investors. The updated non-GAAP policy to exclude equity-method investment gains/losses aims to improve comparability but should be noted.