Varex Imaging Corp
For the period ended Apr 3, 2026. Filed May 7, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Apr 3, 2026 · Filed May 7, 2026
VREX$18.440.0%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-01-02; filed 2026-02-10.
0001681622-26-000016
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-04-03; filed 2026-05-07.
0001681622-26-000052
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 96 previous paragraphs and 125 current paragraphs.
57 unchanged; 32 reworded; 31 added; 7 removed; 0 previous and 5 current paragraphs rearranged.
Tables are not compared: 8 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (31)
Current report
•challenges in accurately predicting product demand and delivery schedules;
Current report
•inflation and supply chain disruptions resulting in increased costs and delayed product delivery;
Current report
Debt Refinance
Current report
During the quarter, we entered into a new $490 million secured credit facility, consisting of a $350 million term loan facility, a $100 million revolving credit facility and a $40 million delayed draw term loan facility, collectively the “Credit Facility.” We borrowed the full $350 million term loan facility and used the proceeds, together with cash on hand, to redeem all $368 million aggregate principal amount of our outstanding 7.875% Senior Secured Notes due 2027. We also terminated our prior $155 million senior secured revolving credit facility.
Current report
Borrowings under the Credit Facility generally bear interest, at our option, at a variable rate based on Term SOFR or a base rate, plus an applicable margin. See Note 6 Borrowings to the accompanying Notes to the Condensed Consolidated Financial Statements for additional information regarding the terms of the Credit Facility. We expect the refinancing to reduce annual interest expense by more than $7 million, lower total outstanding debt, improve financial flexibility, and support continued investment in the business.
Current report
The economic and trade environment remains dynamic and unpredictable. Changes to tariff policies in 2025 by the United States and other countries, particularly the bilateral United States and Chinese tariffs, impacted our results of operations and profitability in fiscal year 2025 and the first half of fiscal year 2026. In February 2026, the U.S. Supreme Court held that the International Emergency Economic Powers Act, or IEEPA, does not authorize the President to impose tariffs. The decision invalidated certain IEEPA-based tariffs, but did not resolve all questions about refund timing, refund mechanics, or the potential use of other tariff authorities.
Current report
Although certain IEEPA-based tariffs have been invalidated, the broader trade environment remains uncertain. Tariffs, trade restrictions, retaliatory actions, and related uncertainty have contributed to, and may continue to contribute to, delayed customer purchasing decisions, increased costs, supply chain and logistics disruption, exchange rate volatility, increased shipping and transportation costs, and disputes with customers regarding potential IEEPA tariff refunds.
Current report
Tariffs and trade restrictions that remain in effect or are imposed under other legal authorities, including any tariffs targeting X-ray imaging products, or products shipped from the United States could make our products less competitive and negatively impact our business, financial condition and results of operations.
Current report
As a result of the Supreme Court ruling on IEEPA tariffs, we may be eligible for refunds of tariffs previously paid on imported goods. Because the timing of any such refunds remains uncertain, we have not recognized a receivable or corresponding offset to expense or assets as of April 3, 2026. We continue to evaluate these developments and their potential impact on our results of operations. To the extent we recover amounts previously passed through to customers, we may be required under certain customer arrangements to remit some or all of those recovered amounts to customers to the extent they were initially passed through to our customers.
Current report
Selling, general, and administrative expenses increased $3.4 million, primarily due to increased legal costs of $2.0 million, other administrative costs of $1.5 million and marketing cost of $1.2 million, partially offset by decreased compensation costs and fixed commitment costs to a supplier of $1.5 million. The remaining variance was attributable to other changes in selling, general, and administrative expenses, each of which was individually insignificant.
Current report
Interest expense for the second quarter of fiscal year 2026 increased $7.0 million compared to the second quarter of fiscal year 2025 primarily due to debt extinguishment costs of $9.4 million related to the repayment of our senior secured notes and the closing of our senior secured revolving credit facility, partially offset by reduced interest payments related to a lower debt balance and more favorable rates in fiscal year 2026 compared to fiscal year 2025.
Current report
Taxes on (Loss) Income
Current report
Revenues, Net
Current report
Medical revenues increased $2.6 million, primarily due to increased sales of radiography, CT, mammography and other modalities of $15.3 million, partially offset by decreased sales in fluoroscopic, dental, oncology, and veterinary modalities of $12.7 million.
Current report
Industrial revenues increased $10.3 million, primarily due to increased digital detectors, sales of security inspection products, and other components of $11.9 million, partially offset by decreased sales of X-ray tubes of $1.6 million.
Current report
Revenues, Net by Region
Current report
Overall revenue during the six months ended April 3, 2026 increased as compared to the six months ended April 4, 2025. During the six months ended April 3, 2026, Americas revenues increased $20.2 million due to increased security inspection products sales of $12.9 million, increased X-ray tubes sales of $5.0 million, and increased digital detectors sales of $2.3 million. EMEA revenues decreased $7.8 million primarily due to decreased inspection product sales of $7.4 million, digital detectors sales of $4.4 million, partially offset by increased X-ray tubes sales of $4.0 million. APAC revenues increased $0.5 million primarily due to increased other product sales.
Current report
Gross Profit
Current report
Medical segment gross profit decreased $8.8 million, primarily due to increased material costs $14.2 million, partially offset by increased sales volume, favorable product mix, and improved productivity of $5.4 million.
Current report
Industrial segment gross profit increased $6.0 million, primarily due to improved sales volume and favorable product mix of $12.3 million, partially offset by decreased productivity and increased material costs of $6.3 million.
Current report
Operating Expenses
Current report
Research and Development
Current report
Selling, General, and Administrative
Current report
Interest and Other Expense, Net
Current report
Interest expense for the six months ended April 3, 2026 increased when compared to the six months ended April 4, 2025 primarily due to debt extinguishment costs of $9.4 million related to the repayment of our senior secured notes and the closing of our prior senior secured revolving credit facility, partially offset by reduced interest payments related to a lower debt balance and more favorable interest rates in fiscal year 2026 compared to fiscal year 2025.
Current report
Taxes on (Loss) Income
Current report
For the six months ended April 3, 2026, we recognized an income tax expense of $3.0 million on $2.6 million of pre-tax loss. For the six months ended April 4, 2025, the Company recognized income tax expense of $6.3 million on $13.3 million of pre-tax income. Our tax expense for the six months ended April 3, 2026, was primarily due to increased pre-tax income in profitable jurisdictions.
Current report
•Net loss was $5.6 million for the six months ended April 3, 2026 compared to a net income of $7.0 million for the six months ended April 4, 2025. The change from net income to net loss was primarily due to a $9.4 million loss on extinguishment of debt in the six months ended April 3, 2026.
Current report
•Cash provided by accounts payables was $16.7 million higher in the six months ended April 3, 2026, compared to the six months ended April 4, 2025, primarily due to increased balances related to purchases of inventory.
Current report
Letters of Credit
Current report
The Company uses standby letters of credit as a form of credit support in the ordinary course of business. Outstanding standby letters of credit reduce the borrowing capacity available under the Company’s Revolving Credit Facility and therefore impact available liquidity; however, they do not represent current cash obligations. Management does not expect these standby letters of credit to be drawn. As of April 3, 2026, $2.3 million of standby letters of credit were outstanding.
Removed paragraphs (7)
Previous report
•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;
Previous report
The current economic and trade environment remains dynamic and unpredictable. The uncertain outcome and effect of tariffs and reciprocal actions between the United States and other countries and its impact on the economic and geopolitical environment, supply chain and logistic challenges, as well as geopolitical tensions and local conflicts have contributed to, and may continue to contribute to, delayed customer purchasing decisions, increased tariff costs, higher inflation, fluctuations in interest rates and capital costs, supply chain disruption, increased costs of labor and materials, exchange rate volatility, increased shipping costs, and other similar effects. Additionally, a sustained United States government shutdown could negatively impact the global economy and in turn our financial condition and results of operations.
Previous report
Changes to tariff policies in 2025 by the United States and other countries, particularly the bilateral United States and Chinese tariffs, impacted our results of operations and profitability in fiscal year 2025 and in the first quarter fiscal year 2026. Absent a de-escalation in the current trade environment, these tariffs are expected to continue to make our products less competitive with similar products not imported from the United States, which has had and in the future is expected to have a negative impact on our business and financial results. Increases to existing or additional new tariffs, trade restrictions or other retaliatory actions aimed at specific industries, such as X-ray imaging products, could also materially impact our business. We remain committed to working with our customers to minimize the effects of the tariffs. In this regard, we are actively working to implement a number of options that could reduce the impact, including pursuing commonly utilized mitigation practices and localizing more manufacturing in the region. At this time, however, we do not anticipate these efforts will allow us to fully offset the additional costs or other negative impacts resulting from such tariffs. Considering the mitigation efforts we have in flight at this point, we are not currently planning to do any restructuring in China.
Previous report
In the past, we have experienced supply chain, manufacturing, and logistics challenges but these challenges have largely subsided. However, given the current tariff environment and uncertainty around how it may impact customer purchasing decisions and the timing of those decisions, supply chain and logistics challenges could re-emerge.
Previous report
Taxes on Income
Previous report
•Net income was $2.4 million for the three months ended January 2, 2026 compared to a net loss of $0.1 million for the three months ended January 3, 2025. The increase in net income was primarily due to an increase of $9.8 million in revenues and a decrease of $1.2 million in income tax expense in the three months ended January 3, 2025 compared to the three months ended January 3, 2025.
Previous report
•Cash provided by accounts receivables was $10.6 million lower in the three months ended January 2, 2026, compared to the three months ended January 3, 2025, primarily due to increased days of sales outstanding and increased sales.
Reworded paragraphs (32)
Previous wording
•limitations imposed by operating and financial restrictions of our debt financing agreements that could harm our long-term interests, limit our ability to make payments on our debt obligations, and impact our ability to maintain sufficient liquidity and/or to refinance our debt obligations; and
Current wording
•limitations imposed by operating and financial restrictions of our debt financing; and
Previous wording
Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, linear accelerators, image software processing solutions, and stand-alone X-ray based systems in select application areas. Our components are used in medical diagnostic imaging, security inspection systems, and industrial quality inspection systems, as well as for analysis and measurement applications in industrial manufacturing applications. Global OEMs incorporate our X-ray imaging components into their systems to detect, diagnose, protect, irradiate, and inspect. Varex has approximately 2,400 full-time equivalent employees, located at engineering, manufacturing, and service center sites in North America, Europe, and Asia.
Current wording
Varex Imaging Corporation is a leading innovator, designer and manufacturer of X-ray imaging components including X-ray tubes, flat panel and photon counting detectors and accessories, linear accelerators, image software processing solutions, and stand-alone X-ray based systems in select application areas. Our components are used in medical diagnostic imaging, security inspection systems, and industrial quality inspection systems, as well as for analysis and measurement applications in industrial manufacturing applications. Global OEMs incorporate our X-ray imaging components into their systems to detect, diagnose, protect, irradiate, and inspect. Varex has approximately 2,450 full-time equivalent employees, located at engineering, manufacturing, and service center sites in North America, Europe, and Asia.
Previous wording
Impact of Current Economic and Trade Environment
Current wording
Current Economic and Trade Environment
Previous wording
We continue to monitor potential changes in customer procurement decisions resulting from the current trade climate, along with other tariff-related actions, investigations and activities that might negatively affect our costs or otherwise impact our business and results of operations. Furthermore, if international customers’ negative perceptions of the actions of the United States Administration influence their buying decisions, our business and results of operations could be negatively impacted.
Current wording
We continue to monitor tariff-related actions, investigations, and policy developments, as well as changes in customer procurement decisions resulting from the current trade environment. We also continue to take actions intended to reduce the impact of tariffs and trade-related uncertainty on our business, including working with customers and evaluating operational, supply chain, and pricing measures, as well as pursuing commonly utilized mitigation practices and localizing more in region manufacturing. At this time, however, we do not anticipate these efforts will allow us to fully offset the additional costs or other negative impacts resulting from such tariffs. Furthermore, if international customers’ negative perceptions of United States’ trade policy or other actions by the United States Administration influence their purchasing decisions, our business and results of operations could be negatively impacted.
Previous wording
For additional information on risks related to tariffs and trade wars, supply chain and logistics challenges, cost increases, changes in U.S. and worldwide economic conditions, geopolitical tensions, and other risks that could impact our results, see Item 1A “Risk Factors”.
Current wording
For additional information on risks related to tariffs and trade policy, supply chain and logistics challenges, cost increases, changes in U.S. and worldwide economic conditions, geopolitical tensions, and other risks that could impact our results, see Item 1A “Risk Factors.”
Previous wording
Security applications primarily consist of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for checked baggage and palletized cargo. The end customers for border protection systems are typically government agencies, many of which are in oil-based economies and war zones where there can be significant variation in buying patterns. We have recently expanded our security offerings to include full systems that perform cargo and vehicle inspections. These systems are used for screening cargo at ports and borders.
Current wording
Security applications primarily consist of cargo security for the screening of trucks, trains, and cargo containers at ports and borders as well as airport security for checked baggage and palletized cargo. The end customers for border protection systems are typically government agencies, many of which are in oil-based economies and war zones where there can be significant variation in buying patterns. We have expanded our security offerings to include full systems that perform cargo and vehicle inspections. These systems are used for screening cargo at ports and borders.
Previous wording
Non-destructive testing and inspection verticals utilize X-ray imaging to scan items for inspection of manufacturing defects and product integrity in a wide range of industries including aerospace, automotive, electronics, oil and gas, food packaging, metal castings, and additive manufacturing. In addition, new applications for X-ray sources are being developed, such as sterilization of food and its packaging. We provide X-ray sources, digital detectors, high voltage connectors, and image processing software to OEM customers, system integrators, and manufacturers in a variety of these verticals. We believe that non-destructive testing represents a significant growth opportunity for our business, and we are actively pursuing new potential applications for our products.
Current wording
Non-destructive testing and inspection verticals utilize X-ray imaging to scan items for inspection of manufacturing defects and product integrity in a wide range of industries including aerospace, automotive, electronics, oil and gas, food packaging, metal castings, and additive manufacturing. In addition, new applications for X-ray sources have been developed, such as sterilization of food and its packaging. We provide X-ray sources, digital detectors, high voltage connectors, and image processing software to OEM customers, system integrators, and manufacturers in a variety of these verticals. We believe that non-destructive testing represents a significant growth opportunity for our business, and we are actively pursuing new potential applications for our products.
Previous wording
The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2026 is the 52-week period ending October 2, 2026. Fiscal year 2025 was the 53-week period that ended on October 3, 2025. The fiscal quarters ended January 2, 2026 and January 3, 2025 were a 13-week period and a 14-week period, respectively.
Current wording
The fiscal years of the Company as reported are the 52 or 53-week periods ending on the Friday nearest September 30. Fiscal year 2026 is the 52-week period ending October 2, 2026. Fiscal year 2025 was the 53-week period that ended on October 3, 2025. The fiscal quarters ended April 3, 2026 and April 4, 2025 were both 13-week periods. The six-month fiscal periods ended April 3, 2026 and April 4, 2025 were a 26-week period and a 27-week period, respectively.
Previous wording
Medical revenues increased $0.2 million, primarily due to increased sales of radiography, mammography, oncology, and other modalities of $5.4 million, partially offset by decreased sales in dental, veterinary, CT, and fluoroscopic modalities of $5.2 million.
Current wording
Medical revenues increased $2.4 million, primarily due to increased sales of radiography, CT, mammography, and other modalities of $12.0 million, partially offset by decreased sales in fluoroscopic, dental, veterinary, and oncology modalities of $9.6 million.
Previous wording
Industrial revenues increased $9.6 million, primarily due to increased sales of inspection products of $8.2 million and digital detectors of $2.0 million, partially offset by decreased sales of other components of $0.6 million.
Current wording
Industrial revenues increased $0.7 million, primarily due to increased sales of digital detectors of $4.5 million, partially offset by decreased sales of inspection products and other components of $3.8 million.
Previous wording
Overall revenue during the three months ended January 2, 2026 increased as compared to the three months ended January 3, 2025. Americas revenue increased by $10.9 million due to increased sales of security inspection products of $8.6 million, digital detectors of $2.0 million, X-ray tubes of $1.0 million, and other product sales of $0.6 million, partially offset by decreased veterinary sales of $1.3 million. EMEA revenues increased $4.0 million due to increased sales of X-ray tubes of $2.4 million, security inspection products of $1.1 million, and other products of $0.5 million. APAC revenues decreased $5.1 million primarily due to decreased sales of X-ray tubes of $2.2 million, digital detectors of $2.1 million, and security inspection products of $1.5 million, partially offset by increased sales of other products of $0.7 million.
Current wording
Overall revenue during the three months ended April 3, 2026 increased as compared to the three months ended April 4, 2025. Americas revenue increased by $9.3 million due to increased sales of security inspection products of $4.4 million, X-ray tubes of $4.0 million, and other product sales of $0.8 million. EMEA revenues decreased $11.8 million due to decreased sales of security inspection products of $8.5 million, digital detectors of $4.4 million, and other products of $0.5 million, partially offset by increased sales of X-ray tubes of $1.6 million. APAC revenues increased $5.6 million primarily due to increased sales of X-ray tubes of $2.8 million, security inspection products of $0.9 million, digital detectors of $0.7 million, and other products of $1.2 million.
Previous wording
See Note 2, Revenue, to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.
Current wording
See Note 2, Revenue, to the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.
Previous wording
The Medical segment gross profit decreased $3.5 million during the three months ended January 2, 2026 compared to three months ended January 3, 2025, primarily due to increased material costs of $6.8 million, partially offset by improved productivity, increased sales volume, and a favorable shift in product sales mix of $3.4 million.
Current wording
The Medical segment gross profit decreased $5.3 million, primarily due to increased material costs of $7.4 million, partially offset by increased sales volume, favorable shift in product sales mix, and increased productivity of $2.1 million.
Previous wording
The Industrial segment gross profit increased $4.8 million during the three months ended January 2, 2026 compared to three months ended January 3, 2025, primarily due to both increased sales volume and a favorable shift in product sales mix of $9.2 million, partially offset by increased material costs and decreased productivity of $4.4 million.
Current wording
The Industrial segment gross profit increased $1.2 million, primarily due to both increased sales volume and a favorable shift in product sales mix of $3.2 million, partially offset by increased material costs and decreased productivity of $2.0 million.
Previous wording
We are committed to investing in the business to support long-term growth and believe long-term research and development expenses of approximately 8% to 10% of annual revenues is the appropriate range that will allow us to innovate and bring new products to market for our global OEM customers. Research and development costs decreased to 10.4% of revenues for the first quarter of fiscal year 2026, due to increased revenue, decreased costs, and the final Micro-X technology transfer payment made during the first quarter of fiscal year 2025.
Current wording
We are committed to investing in the business to support long-term growth and believe long-term research and development expenses of approximately 8% to 10% of annual revenues is the appropriate range that will allow us to innovate and bring new products to market for our global OEM customers. Research and development were 10.3% of revenues, in-line with research and development costs in the prior year period.
Previous wording
Interest income decreased primarily due to a decline of our cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the first quarter of fiscal year 2026 to the first quarter of fiscal year 2025. This was due to an accumulation of cash for the repayment of our convertible notes maturing in June 2025.
Current wording
Interest income decreased primarily due to a decline of our cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the second quarter of fiscal year 2026 to the second quarter of fiscal year 2025. This was due to an accumulation of cash in the prior period for the repayment of our convertible notes maturing in June 2025.
Previous wording
Interest expense was flat in the first quarter of fiscal year 2026 compared to the first quarter of fiscal year 2025.
Current wording
Other expense, net was flat in the second quarter of fiscal year 2026 compared to the second quarter of fiscal year 2025.
Previous wording
For the three months ended January 2, 2026, we recognized income tax expense of $1.4 million on $3.8 million of pre-tax income. For the three months ended January 3, 2025, we recognized income tax expense of $2.6 million on $2.5 million of pre-tax income. Our tax expense decreased for the three months ended January 2, 2026, primarily due to higher pre-tax income in certain jurisdictions for which a valuation allowance on deferred tax assets applies and favorable impacts of international tax provisions and tax credits in the U.S., partially offset by losses in certain foreign jurisdictions for which no benefit can be recorded.
Current wording
For the three months ended April 3, 2026, we recognized income tax expense of $1.6 million on $6.4 million of pre-tax loss. For the three months ended April 4, 2025, we recognized income tax expense of $3.7 million on $10.8 million of pre-tax income. Our tax expense for the three months ended April 3, 2026 was primarily due to increased pre-tax income in profitable jurisdictions.
Previous wording
Selling, general, and administrative expenses for the first quarter of fiscal year 2026 decreased $1.1 million when compared to the first quarter of fiscal year 2025 due to decreased compensation costs of $3.3 million partially offset by increased marketing costs of $1.1 million and increased other administrative costs of $1.1 million.
Current wording
Selling, general, and administrative expenses increased $2.3 million, primarily due to increased legal costs of $2.6 million, other administrative costs of $3.4 million and marketing costs of $2.3 million, partially offset by decreased compensation costs and fixed commitment costs to a supplier of $6.0 million.
Previous wording
Other expense, net increased due to increased losses in certain investments in privately-held companies and equity investments of $2.0 million and other expenses of $0.6 million, partially offset by decreased foreign exchange expense of $1.1 million.
Current wording
Other expense, net for the six months ended April 3, 2026 increased $1.5 million when compared to the six months ended April 4, 2025 primarily due to increased losses in certain investments in privately-held companies and equity investments of $2.9 million and other expenses of $0.3 million, partially offset by decreased foreign exchange expense of $1.7 million.
Previous wording
We assess our liquidity in terms of our ability to generate cash to fund our operations, including working capital and investing activities. We believe that our operating cash flow, cash on our balance sheet, availability under our Revolving Credit Facility, and our ability to access the credit and capital markets are sufficient to meet our anticipated operating activities and cash commitments for at least the next 12 months and will be sufficient to allow us to continue to invest in our existing businesses, consummate strategic acquisitions, and manage our capital structure on a short-term and long-term basis. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in or that are reasonably likely to result in a material change to our liquidity needs during the next 12 months. Beyond the next 12 months, our Senior Secured Notes mature in October 2027, which we currently expect to refinance in fiscal year 2026. As of January 2, 2026, the availability under our Revolving Credit Facility was $154.8 million, and we had total debt of $367.6 million, net of deferred issuance costs of $2.1 million.
Current wording
We assess our liquidity in terms of our ability to generate cash to fund our operations, including working capital and investing activities. We believe that our operating cash flow, cash on our balance sheet, availability under our Revolving Credit Facility, and our ability to access the credit and capital markets are sufficient to meet our anticipated operating activities and cash commitments for at least the next 12 months and will be sufficient to allow us to continue to invest in our existing businesses, consummate strategic acquisitions, and manage our capital structure on a short-term and long-term basis. We are currently not aware of any trends or demands, commitments, events, or uncertainties that will result in or that are reasonably likely to result in a material change to our liquidity needs during the next 12 months. As of April 3, 2026, the availability under our Revolving Credit Facility was $95.6 million, and we had total debt of $347.6 million, net of deferred issuance costs of $3.5 million.
Previous wording
Cash and Cash Equivalents, Certificates of Deposit, and Marketable Debt Securities
Current wording
Cash and Cash Equivalents and Marketable Debt Securities
Previous wording
The following table summarizes our cash and cash equivalents, certificates of deposit, and marketable debt securities:
Current wording
The following table summarizes our cash and cash equivalents and marketable debt securities:
Previous wording
Net cash (used in) provided by operating activities. Cash (used in) provided by operating activities was $(16.1) million and $9.5 million for the three months ended January 2, 2026 and January 3, 2025, respectively. Significant changes in operating assets and liabilities affecting cash flows during these periods included:
Current wording
Net cash (used in) provided by operating activities. Cash (used in) provided by operating activities was $(17.6) million and $26.1 million for the six months ended April 3, 2026 and April 4, 2025, respectively. Significant changes in operating assets and liabilities affecting cash flows during these periods included:
Previous wording
•Cash used for inventories was $14.5 million higher in the three months ended January 2, 2026, compared to the three months ended January 3, 2025, primarily due to an increase in quantity of inventory for anticipated future demand.
Current wording
•Cash used for inventories was $30.8 million higher in the six months ended April 3, 2026, compared to the six months ended April 4, 2025, primarily due to an increase in quantity of inventory for anticipated future demand.
Previous wording
•Cash used in accrued liabilities and other current and other long-term liabilities increased by $7.4 million in the three months ended January 2, 2026, compared to the three months ended January 3, 2025, primarily due to the timing of and estimation of certain compensation costs of $11.2 million and the timing of interest payments related to our Senior Secured Notes of $2.5 million, partially offset by activity related to our net investment hedge of $5.9 million.
Current wording
•Cash used in accrued liabilities and other current and long-term liabilities increased by $18.5 million in the six months ended April 3, 2026, compared to the six months ended April 4, 2025, primarily due to payments of accrued interest in excess of current‑period accruals of $21.4 million resulting from the refinancing of our senior secured note. This increase was partially offset by $1.0 million in decreased tax accruals. The remaining variance was attributable to other changes in accrued liabilities and other current and long‑term liabilities, each of which was individually insignificant.
Previous wording
Net cash used in investing activities. Cash used in investing activities was $7.7 million and $3.0 million for the three months ended January 2, 2026 and January 3, 2025, respectively. The increase in cash used in investing activities was primarily due to an increase in purchases of property, plant, and equipment of $6.5 million, partially offset by net cash increases related to marketable debt securities and certificates of deposits activity of $1.9 million in the three months ended January 2, 2026, compared to the three months ended January 3, 2025.
Current wording
Net cash (used in) provided by investing activities. Cash (used in) provided by investing activities was $(10.8) million and $11.7 million for the six months ended April 3, 2026 and April 4, 2025, respectively. This change was primarily due to net cash decreases related to marketable debt securities and certificates of deposits activity of $16.7 million and an increase in purchases of property, plant, and equipment of $5.9 million in the six months ended April 3, 2026, compared to the six months ended April 4, 2025.
Previous wording
Net cash (used in) provided by financing activities. Net cash (used in) provided by financing activities was $(1.6) million and $124.9 million for the three months ended January 2, 2026 and January 3, 2025, respectively. The change in cash (used in) provided by financing activities was primarily due to the issuance of $126.9 million of the Senior Secured Notes Add On during the first quarter of fiscal year 2025.
Current wording
Net cash (used in) provided by financing activities. Net cash (used in) provided by financing activities was $(30.9) million and $124.2 million for the six months ended April 3, 2026 and April 4, 2025, respectively. This change was primarily due to the repayment of the senior secured notes and related fees of $375.2 million during the second quarter of fiscal year 2026, partially offset with proceeds from the issuance of the term loan of $345.5 million during the second quarter of fiscal year 2026, compared to the issuance of $126.9 million of the Senior Secured Notes Add On during the first quarter of fiscal year 2025.
Previous wording
In October 2013, we entered into an amended agreement with dpiX and other parties that, among other things, provides us with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires us to pay for 50% of the fixed costs (as defined in the amended agreement), as determined and approved by the dpiX board of directors at the beginning of each calendar year. In January 2026, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2026. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement).
Current wording
In October 2013, we entered into an amended agreement with dpiX and other parties that, among other things, provides us with the right to 50% of dpiX’s total manufacturing capacity produced after January 1, 2014. The amended agreement requires us to pay for 50% of the fixed costs (as defined in the amended agreement), as determined and approved by the dpiX board of directors at the beginning of each calendar year. In January 2026, the Company's fixed cost commitment was determined to be $13.7 million for calendar year 2026. For the remainder of calendar year 2026, we estimate that we have fixed cost commitments of $10.2 million related to this amended agreement. The amended agreement will continue unless the ownership structure of dpiX changes (as defined in the amended agreement).
Previous wording
The Company enters into purchase agreements with its suppliers in the ordinary course of its business for the purchase of goods and services. Some of these purchase agreements are non-cancellable and thus contractually obligate the Company to future cash payments. As of January 2, 2026, our non-cancellable supplier purchase obligations totaled $2.8 million.
Current wording
The Company enters into purchase agreements with its suppliers in the ordinary course of its business for the purchase of goods and services. Some of these purchase agreements are non-cancellable and thus contractually obligate the Company to future cash payments. As of April 3, 2026, our non-cancellable supplier purchase obligations totaled $2.7 million.
Previous wording
Trade accounts receivable days sales outstanding (“DSO”) was 64 days and 62 days at January 2, 2026 and October 3, 2025, respectively. Our accounts receivable and DSO are impacted by a number of factors, including the timing of product shipments, collections performance, payment terms, the mix of revenues from different regions and the effects of economic instability.
Current wording
Trade accounts receivable days sales outstanding (“DSO”) was 62 days at April 3, 2026 and October 3, 2025. Our accounts receivable and DSO are impacted by a number of factors, including the timing of product shipments, collections performance, payment terms, the mix of revenues from different regions and the effects of economic instability.
Previous wording
Backlog is the accumulation of all orders for which revenues have not been recognized and are still considered valid. Backlog also includes a small portion of billed service contracts that are included in deferred revenue. Our estimated total backlog at January 2, 2026 was approximately $264 million.
Current wording
Backlog is the accumulation of all orders for which revenues have not been recognized and are still considered valid. Backlog also includes a small portion of billed service contracts that are included in deferred revenue. Our estimated total backlog at April 3, 2026 was approximately $266 million.
Rearranged current paragraphs (5)
Current report — wording carried from elsewhere
Discussion of Results of Operations for the Six Months Ended April 3, 2026 Compared to the Six Months Ended April 4, 2025
Current report — wording carried from elsewhere
See Note 2, Revenue, of the accompanying Notes to the Condensed Consolidated Financial Statements for information regarding disaggregated revenue by country.
Current report — wording carried from elsewhere
Research and development costs decreased to 10.3% of total revenue, primarily due to the final Micro-X technology transfer payment made during the first quarter of fiscal year 2025.
Current report — wording carried from elsewhere
The following table summarizes the Company’s interest and other expense, net:
Current report — wording carried from elsewhere
Interest income for the six months ended April 3, 2026 decreased when compared to the six months ended April 4, 2025 primarily due to a decline of our cash, cash equivalents, and marketable securities balances being held in interest bearing deposit accounts when comparing the second quarter of fiscal year 2026 to the second quarter of fiscal year 2025. This was due to an accumulation of cash in the prior period for the repayment of our convertible notes maturing in June 2025.