Slides
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Making the Invisible Visible 2/10/2026 1Q1 FY26 Earnings PresentationFebruary 10, 2026
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Forward Looking Statements / Non-GAAP Measures 2 Forward Looking StatementsThis supplement contains “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Statements concerning unaudited financial results; revenue and earnings guidance; industry or business outlook; product demand environment; expected future financial results or performance; and any statements using the terms “believe,” “expect,” “anticipate,” “can,” “should,” “would,” “could,” “estimate,” “may,” “intend,” and “potential,” or similar statements are forward-looking statements that involve risks and uncertainties that could cause our actual results and the outcome and timing of certain events to differ materially from those projected or management’s current expectations.While forward-looking statements are based on assumptions and analyses made by management of Varex that it believes to be reasonable under the circumstances, actual results and developments depends on a number of risks and uncertainties which could cause actual results, performance, and financial condition to differ materially from such expectations. Such risks and uncertainties include: changes in import/export regulatory regimes, tariffs, trade wars, and national policies, including exemptions thereto; reduction in or loss of business of one or more of our limited original equipment manufacturing customers; global, regional, and country-specific economic instability, shifting political environments, changing tax treatment, tariffs, trade wars, and other risks associated with international manufacturing, operations and sales; loss of business to, and an inability to effectively compete with, competitors; pricing pressures and other factors that could result in market erosion or loss of customers; failure to meet customers’ needs and demands; supply chain disruptions resulting in delayed product delivery, and increased costs as a result of reliance on a limited number of suppliers for certain key components; disruption of critical information systems or material breaches in the security of such systems; inability to maintain or defend intellectual property rights, and cost associated with protecting our intellectual property and defending such rights and defending against infringement claims; non-compliance with regulations applicable to marketing, manufacturing, labeling, and distributing our products and delays in obtaining regulatory clearances or approvals; limitations imposed by operating and financial restrictions of our debt financing agreements; and the other risks listed from time to time in our filings with the U.S. Securities and Exchange Commission. Any forward-looking statement made by us in this supplement speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. Varex assumes no obligation to update or revise the forward-looking statements in this release because of new information, future events, or otherwise.Non-GAAP MeasuresCertain information provided in this presentation includes financial measurements that are not required by, or presented in accordance with, generally accepted accounting principles in the United States (GAAP). These non-GAAP measures, such as non-GAAP gross margin, non-GAAP operating expense, non-GAAP operating margin, and non-GAAP net earnings per diluted share, should not be considered as alternatives to GAAP measures and may be calculated differently from, and therefore may not be comparable to, similarly titled measures used at other companies. For a reconciliation to the most directly comparable GAAP financial measures, please refer to our Q1FY26 earnings release at www.vareximaging.com and the reconciliation contained at the end of this presentation.
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2/10/2026 3 Q1 FY26 Results Revenue$210M Revenue$210M Non-GAAP Gross Margin134% Non-GAAP Gross Margin134% Non-GAAP Diluted EPS1$0.19 Non-GAAP Diluted EPS1$0.19 Cash, Cash Equiv., & Mkt. Sec.2$126M Cash, Cash Equiv., & Mkt. Sec.2$126MMedical sales stable y/y, CT sales remain strongIndustrial sales up 17% y/y, cargo security momentum continuesGross margin remained strong driven primarily by product mixCash balance lower due to seasonality and increased inventory1For a reconciliation to the most directly comparable GAAP financial measure please refer to the reconciliation at the end of this supplement. We annually review our non-GAAP policy to determine whether any changes to the policy should be made. As part of our review, we considered a strategic shift at one of our equity method investees. Because of this, and because we do not control operations of either of our equity method investments, we believe that the results of these businesses no longer provide investors with information helpful to evaluate our ongoing operations. As such, we have modified our non-GAAP policy to exclude the gains and losses from our equity method investments. The gains and losses on the company's equity-method investments in privately-held companies are recorded to other expense, net, in the company’s Condensed Consolidated Statements of Operations.2 Q1 FY26 Cash & cash equivalents ($120M) + Marketable securities ($6M).
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2/10/2026 Q1 FY26 Performance 4 $200$210Q1FY25 Q1FY26Revenue (Y/Y)+5%35%34%Q1FY25 Q1FY26Gross Margin (Non-GAAP; Y/Y)-90bps$26$29Q1FY25 Q1FY26Adjusted EBITDA1(Non-GAAP Y/Y)+12%$0.10$0.19Q1FY25 Q1FY26Diluted EPS1(Non-GAAP; Y/Y)+90%$155$126Q4FY25 Q1FY26Cash, Cash Equiv. & Mkt. Sec.2(Q/Q)-19%Note: $millions except for per share data1For a reconciliation to the most directly comparable GAAP financial measure please refer to the reconciliation at the end of this supplement. We annually review our non-GAAP policy to determine whether any changes to the policy should be made. As part of our review, we considered a strategic shift at one of our equity method investees. Because of this, and because we do not control operations of either of our equity method investments, we believe that the results of these businesses no longer provideinvestors with information helpful to evaluate our ongoing operations. As such, we have modified our non-GAAP policy to exclude the gains and losses from our equity method investments. The gains and losses on the company's equity-method investments in privately-held companies are recorded to other expense, net, in the company’s Condensed Consolidated Statements of Operations.2Comparing cash, cash equivalents & marketable securities sequentially vs. Q4FY25
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Q1 FY26 Sales Performance1 2/10/2026 5 CTFluoroscopyOncologyDental MammographyRadiography & OthersIndustrial1Sales performance is Q1FY26 sales compared to five quarter average trend
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RSNA 2025: Advancing System-Level Partnerships 2/10/2026 / 6 •Record customer engagement focused on design-in pipeline•Debuted integrated, modality-based value proposition•Customer alignment reinforces long-term growth opportunities
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2/10/2026 7 Q1 FY26 Revenue DetailsSegment MixGeographic Mix Q1 25Q2 25Q3 25Q4 25Q1 26Revenue ($M)6569717275Americas6072708365EMEA7572627470APACQ1 25Q2 25Q3 25Q4 25Q1 26Revenue ($M)145154142152145Medical5559617765Industrial ($ in millions)($ in millions) $145$65 Medical Industrial $75$65$70 Americas EMEA APAC
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2/10/2026 8 Quarterly Results - GAAP Q1 FY25Q4 FY25Q1 FY26$ in Millions, except per share data$200$229$210Revenue34%34%33%Gross Margin$5729%$5825%$5426%Operating Expenses$116%$209%$157%Operating Income (Loss)($0)$12$2Net Earnings (Loss)($0.01)41.1$0.2941.8$0.0542.3EPS, dilutedAvg. shares, diluted
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2/10/2026 9 Quarterly Results – Non-GAAP1 Q1 FY25Q4 FY25Q1 FY26$ in Millions, except per share data$200$229$210Revenue35%34%34%Gross Margin (Non-GAAP)$5527%$5524%$5225%Operating Expenses (Non-GAAP)$147%$2310%$199%Operating Income (Non-GAAP)$4$15$8Net Earnings (Non-GAAP)$0.1041.1$0.3641.8$0.1942.3EPS, diluted (Non-GAAP)Avg. shares, diluted1 Please see slide 15-21 for a reconciliation of non-GAAP financials. Prior quarters can be found on our website at www.vareximaging.com/financial-reports. We annually review our non-GAAP policy to determine whether any changes to the policy should be made. As part of our review, we considered a strategic shift at one of our equity method investees. Because of this, and because we do not control operations of either of our equity method investments, we believe that the results of these businesses no longer provide investors with information helpful to evaluate our ongoing operations. As such, we have modified our non-GAAP policy to exclude the gains and losses from our equity method investments. The gains and losses on the company's equity-method investments in privately-held companies are recorded to other expense, net, in the company’s Condensed Consolidated Statements of Operations.
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2/10/2026 10 Select Balance Sheet Data Q1 FY25Q4 FY25Q1 FY26$ in MillionsAssets$219$155$126Cash, Cash Equiv., Mkt. Sec. & CDs* $138$157$147Accounts Receivable, net$280$299$328Inventories, net$1,332$1,107$1,098Total AssetsLiabilities$66$70$79Accounts Payable$567$368$368Total Debt, net$1,332$1,107$1,098Total Liabilities & Equity Q1 FY25Q4 FY25Q1 FY26Working Capital Performance686264DSO (in days)209180214DOI 494251DPO*Q1 FY26 Cash & cash equivalents ($120M) + Marketable securities ($6M); Q4 FY25 Cash & cash equivalents ($145M) + Marketable securities ($10M); Q1 FY25 Cash & cash equivalents ($176M) + Marketable securities ($43M).
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2/10/2026 11 Q1 FY25Q4 FY25Q1 FY26$ in MillionsDebt$571$370$370Gross Debt1(Ratings: Moody’s B2 / S&P B+)$228$215$244Net Debt2Adjusted EBITDA3 $26$35$29Adjusted EBITDA$97$124$127Adjusted EBITDA (TTM)2.4x1.7x1.9xNet Debt Leverage (TTM)Cash Flow Statement Summary$10$8($16)Cash Flow from Operations($4)($6)($11)Capital Expenditures($14)($1)($15)Cash Interest($6)($2)($4)Cash Taxes1Gross Debt includes Total Debt, net of $370M + unamortized debt issuance cost of $2M in Q1FY26, $2M in Q4FY25, & $4M in Q1FY25. 2Net Debt is defined as gross debt less cash & cash equivalents, and marketable securities.3Adjusted EBITDA is defined as non-GAAP net earnings plus non-GAAP interest expense, non-GAAP taxes, non-GAAP depreciation, non-GAAP amortization and share-based compensation Select Debt and Cash Flow Statement Data
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Guidance Q2 FY26 2/10/2026 12 Non-GAAP EPS, diluted Revenue$0.15 - $0.25$210 - $225MGross Margin:33% – 34% Operating Expense:~$52MInterest & Other Expense, net:($7M) – ($8M) Tax rate:~23%Share count, diluted:~42M sharesAssumptions
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Making the Invisible Visible 2/10/2026 13Q & A
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Making the Invisible Visible 2/10/2026 14Non – GAAP Reconciliation
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2/10/2026 15 Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)Three Months EndedJanuary 3, 2025January 2, 2026(In millions)GROSS PROFIT RECONCILIATION$ 199.8$ 209.6Revenues, net68.569.8Gross profit0.50.6Amortization of intangible assets $ 69.0$ 70.4Non-GAAP gross profit34.3 %33.3 %Gross margin %34.5 %33.6 %Non-GAAP gross margin %
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2/10/2026 16 Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)Three Months EndedJanuary 3, 2025January 2, 2026(In millions)SELLING, GENERAL, AND ADMINISTRATIVE EXPENSE RECONCILIATION$ 33.8$ 32.7Selling, general, and administrative0.40.4Amortization of intangible assets0.70.2Restructuring charges1.22.3Non-ordinary course litigation0.4—Other non-operational costs$ 31.1$ 29.8Non-GAAP selling, general, and administrative expenseOPERATING EXPENSE RECONCILIATION$ 57.3$ 54.4Total operating expenses0.40.4Amortization of intangible assets0.70.2Restructuring charges1.22.3Non-ordinary course litigation0.4—Other non-operational costs$ 54.6$ 51.5Non-GAAP operating expense
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2/10/2026 17 Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)Three Months EndedJanuary 3, 2025January 2, 2026(In millions)OPERATING INCOME RECONCILIATION$ 11.2$ 15.4Operating income0.91.0Amortization of intangible assets (includes amortization impacts to cost of revenues)0.70.2Restructuring charges (includes restructuring impact to cost of revenues)1.22.3Non-ordinary course litigation0.4—Other non-operational costs (includes other non-operational impacts to cost of revenues)3.23.5Total operating income adjustments$ 14.4$ 18.9Non-GAAP operating income5.6 %7.3 %Operating margin %7.2 %9.0 %Non-GAAP operating margin %
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2/10/2026 18 Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)Three Months EndedJanuary 3, 2025January 2, 2026(In millions, except per share amounts)INCOME BEFORE TAXES RECONCILIATION$ 2.5$ 3.8Income before taxes3.23.5Total operating income adjustments1.73.2Loss from equity-method investments0.10.6Other non-operational costs5.07.3Total income before taxes adjustments$ 7.5$ 11.1Non-GAAP income before taxesINCOME TAX EXPENSE RECONCILIATION$ 2.6$ 1.4Income tax expense(0.4)(1.6)Tax effect on non-GAAP adjustments$ 3.0$ 3.0Non-GAAP income tax expenseNET INCOME (LOSS) AND DILUTED NET INCOME (LOSS) PER SHARE RECONCILIATION$ (0.3)$ 2.3Net income (loss) attributable to Varex5.07.3Total income before taxes adjustments8.0 %21.9 %Effective tax rate on non-GAAP adjustments %(0.4)(1.6)Tax effect on non-GAAP adjustments4.38.0Non-GAAP net income(0.01)0.05Diluted net income (loss) per share $ 0.10$ 0.19Non-GAAP diluted net income per share
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2/10/2026 19 Reconciliation between GAAP and Non-GAAP Financial Measures (Unaudited)Three Months EndedJanuary 3, 2025January 2, 2026(In millions)ADJUSTED EBITDA RECONCILIATION$ (0.3)$ 2.3Net income (loss) attributable to Varex7.97.9Interest expense2.61.4Income tax expense6.25.7Depreciation0.91.1Amortization4.13.8Share-based compensation0.70.2Restructuring charges1.22.3Non-ordinary course litigation1.73.2Loss from equity-method investments0.50.6Other non-operational costs$ 25.5$ 28.5Adjusted EBITDA
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2/10/2026 20 Reconciliation of 2025 Non-GAAP Financial Information As Previously Reported to 2025 Non-GAAP Financial Results as per Updated Policy - Excluding gains and losses from equity-method investments(Unaudited)INCOME BEFORE TAXES RECONCILIATIONFY 2025Q4 2025Q3 2025Q2 2025Q1 2025(In millions)$ 48.5$ 17.8$ 10.0$ 14.9$ 5.8Non-GAAP income before taxes (as reported)2.30.1(1.4)1.91.7Loss (income) from equity-method investments$ 50.8$ 17.9$ 8.6$ 16.8$ 7.5Non-GAAP income before taxes (as adjusted)INCOME TAX EXPENSE RECONCILIATIONFY 2025Q4 2025Q3 2025Q2 2025Q1 2025(In millions)$ 10.8$ 2.5$ 2.4$ 3.2$ 2.7Non-GAAP income tax expense (as reported)(0.5)(0.4)(0.9)1.1(0.3)Tax effect on non-GAAP adjustment$ 11.3$ 2.9$ 3.3$ 2.1$ 3.0Non-GAAP income tax expense (as adjusted)NET INCOME (LOSS) AND DILUTED NET INCOME (LOSS) PER SHARE RECONCILIATIONFY 2025 Q4 2025Q3 2025Q2 2025Q1 2025(In millions, except per share amounts)$ 37.3$ 15.3$ 7.6$ 11.5$ 2.9Non-GAAP net income (as reported)2.30.1(1.4)1.91.7Loss (income) from equity-method investments(0.5)(0.4)(0.9)1.1(0.3)Tax effect on non-GAAP adjustment$ 39.1$ 15.0$ 5.3$ 14.5$ 4.3Non-GAAP net income (as adjusted)$ 37.3$ 15.3$ 7.6$ 13.1$ 2.9Non-GAAP net income adjusted for interest add-back (as reported)2.30.1(1.4)1.91.7Loss (income) from equity-method investments(0.5)(0.4)(0.9)1.1(0.3)Tax effect on non-GAAP adjustment$ 39.1$ 15.0$ 5.3$ 16.1$ 4.3Non-GAAP net income adjusted for interest add-back (as adjusted)41.441.841.551.241.1Diluted shares$ 0.90$ 0.37$ 0.18$ 0.26$ 0.07Diluted EPS (as reported)$ 0.94$ 0.36$ 0.13$ 0.31$ 0.10Diluted EPS (as adjusted)ADJUSTED EBITDA RECONCILIATIONFY 2025Q4 2025Q3 2025Q2 2025Q1 2025(In millions)$ 121.9$ 34.9$ 28.9$ 34.3$ 23.8Adjusted EBITDA (as reported)2.30.1(1.4)1.91.7Loss (income) from equity-method investments$ 124.2$ 35.0$ 27.5$ 36.2$ 25.5Adjusted EBITDA (as adjusted)
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2/10/2026 21 This presentation includes non-GAAP financial measures derived from the company’s Condensed Consolidated Statements of Operations. These measures are not presented in accordance with, nor are they a substitute for U.S. generally accepted accounting principles, or GAAP. These measures include: non-GAAP gross profit; non-GAAP gross margin; non-GAAP operating expense; non-GAAP operating earnings; non-GAAP operating earnings margin; non-GAAP earnings before taxes; non-GAAP net earnings; non-GAAP net earnings per diluted share, non-GAAP dilutive shares; and non-GAAP EBITDA. The company is providing a reconciliation above of each non-GAAP financial measure used in this earnings release to the most directly comparable GAAP financial measure. The company is unable to provide without unreasonable effort a reconciliation of non-GAAP guidance measures to the corresponding GAAP measures on a forward-looking basis due to the potential significant variability and limited visibility of the excluded items discussed.The company utilizes a number of different financial measures, both GAAP and non-GAAP, in analyzing and assessing the overall performance of its business, in making operating decisions, and forecasting and planning for future periods. The company considers the use of the non-GAAP measures to be helpful in assessing the performance of the ongoing operation of its business by excluding unusual and one-time costs. The company believes that disclosing non-GAAP financial measures provides useful supplemental data that allows for greater transparency in the review of its financial and operational performance. The company also believes that disclosing non-GAAP financial measures provides useful information to investors and others in understanding and evaluating its operating results and future prospects in the same manner as management and in comparing financial results across accounting periods and to those of peer companies.Non-GAAP measures include the following items:Amortization of intangible assets: The company does not acquire businesses and assets on a predictable cycle. The amount of purchase price allocated to intangible assets and the term of amortization can vary significantly and are unique to each acquisition or asset purchase. The company believes that excluding amortization of intangible assets allows the users of its financial statements to better review and understand the historic and current results of its operations, and also facilitates comparisons to peer companies.Purchase price accounting charges to cost of revenues: The company may incur charges to cost of revenues as a result of acquisitions. The company believes that excluding these charges allows the users of its financial statements to better understand the historic and current cost of its products, its gross margin, and also facilitates comparisons to peer companies.Restructuring charges: The company incurs restructuring charges that result from events which arise from unforeseen circumstances and/or often occur outside of the ordinary course of its on-going business. Although these events are reflected in its GAAP financials, these unique transactions may limit the comparability of its on-going operations with prior and future periods.Acquisition and integration related costs: The company incurs expenses or benefits with respect to certain items associated with its acquisitions, such as transaction costs, changes in fair value of acquisition related hedges, changes in the fair value of contingent consideration liabilities, gain or expense on settlement of pre-existing relationships, etc. The company excludes such expenses or benefits as they are related to acquisitions and have no direct correlation to the operation of its on-going business. The company also incur expenses or benefits with respect to certain items associated with its acquisitions, such as integration costs relating to acquisition costs incurred prior to closing and up to 12 months after the closing date of the acquisition.Impairment of goodwill: The company may incur impairment charges that result from events which arise from unforeseen circumstances and/or often occur outside of the ordinary course of its on-going business and such charges may limit the comparability of its on-going operations with prior and future periods.Non-ordinary course litigation: The company may incur charges that result from non-ordinary course litigation matters such as certain intellectual property disputes and joint venture litigation. Litigation matters that are part of the ordinary course of the company’s business, such as product liability claims, employment related matters and commercial contract disputes, are not excluded.Other non-operational costs: Certain items may be non-recurring, unusual, infrequent and directly related to an event that is distinct and non-reflective of the company’s ongoing business operations. These may include such items as legal settlements, inventory write-downs for discontinued products, cost of facilities no longer in use, extinguishment of debt and hedge costs, environmental settlements, governmental settlements including tax settlements, and other items of similar nature.Non-operational tax adjustments: Certain tax items may be non-recurring, unusual, infrequent and directly related to an event that is distinct and non-reflective of the company’s normal business operations. These may include such items as the retroactive impact of significant changes in tax laws, including changes to statutory tax rates and one-time tax charges.Tax effects of operating earnings adjustments: The company applies its non-GAAP adjustments to the GAAP pretax income to calculate the non-GAAP effective tax rate. This application of its non-GAAP effective tax rate excludes any discrete items, as defined in the guidance for accounting for income taxes in interim periods, or any other non-operational tax adjustments.Dilution offset from convertible notes hedge transaction: In connection with the issuance of the company’s Convertible Senior Unsecured Notes (the Convertible Notes) in June 2020, the company entered into convertible note hedge transactions (the Hedge Transactions) to reduce the potential dilutive effect on common shares upon the potential conversion of the Convertible Notes. GAAP diluted shares outstanding includes the incremental dilutive shares from the company’s Convertible Notes. Under GAAP, the anti-dilutive impact of the Convertible Note Hedge Transactions is not reflected in GAAP diluted shares outstanding. In periods in which the average stock price per share exceeds $20.81 and the company has GAAP net income, the non-GAAP diluted share count includes the anti-dilutive impact of the company’s Hedge Transactions, which reduces the potential dilution that otherwise would occur upon conversion of the company’s Convertible Notes. The company believes non-GAAP diluted shares is a useful non-GAAP metric because it provides insight into the offsetting economic effect of the Hedge Transactions against potential conversion of the Convertible Notes.Gains and losses on equity-method investments: The company’s net income (loss) is impacted by gains and losses associated with its equity-method investments included in Other expense, net on the Condensed Consolidated Statements of Operations. These gains and losses may arise from unforeseen circumstances and/or often occur outside of the ordinary course of the company’s on-going business. By excluding these gains and losses, investors can better evaluate its operating performance period-over-period. Discussion of Non–GAAP Financial Measures
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Making the Invisible Visible