Varex Imaging (VREX) Q3 2026 earnings summary

Executive summary

• Revenue for the quarter ended July 3, 2026, was $211 million, up 4% year-over-year, with strong Industrial segment growth and net income of $15.7 million compared to a net loss of $89.1 million in the prior-year quarter.

• Gross margin improved to 36.4% from 33.3% year-over-year, aided by IEEPA tariff refunds and lower material costs.

• The company entered into a merger agreement with Teledyne Technologies, with shareholders to receive $18.90 per share in cash upon closing, expected in early 2027.

• Cash flow from operations was $21 million, and the company ended the quarter with $99 million in cash and equivalents.

• The quarter included a $17 million refund from U.S. Customs for previously paid IEEPA tariffs and a $7 million revenue reduction for expected customer reimbursements.

Financial highlights

• Quarterly revenue increased by $7.5 million year-over-year, driven by a 25.6% rise in Industrial segment sales, offsetting a 5.7% decline in Medical segment revenue.

• Net income for the quarter was $15.7 million, reversing a prior-year net loss of $89.1 million, which included a $93.9 million goodwill impairment.

• Gross profit rose to $76.7 million, up $9.2 million year-over-year.

• Adjusted EBITDA for the quarter was $33.1 million, compared to $27.5 million in Q3 FY25.

• For the nine months ended July 3, 2026, revenue was $636.1 million, up 3.3% year-over-year, with net income of $9.9 million versus a net loss of $82.5 million.

Outlook and guidance

• The merger with Teledyne is expected to close in early 2027, subject to regulatory and shareholder approvals.

• The company expects future cash flows to be impacted by customer reimbursements related to IEEPA tariff refunds.

• Management believes liquidity is sufficient for at least the next 12 months, supported by operating cash flow, cash on hand, and credit facility availability.