Cash generation is hindered by erratic working capital cycles, evidenced by a $35.0 million outflow in 2026Q1 and an OCF/NI ratio that reached a volatile -31.67 in 2025Q1.
| Cash from Operations | -2M | 41.7M | 47.3M | 108.4M | 16.9M | 92.6M | 13.2M | 71.9M | 85.3M | 74.6M | 74.2M | 85.2M | 118.6M |
| Operating CF Margin % | - | 4.94% | 5.83% | 12.13% | 1.97% | 11.32% | 1.79% | 9.21% | 11.03% | 10.69% | 11.97% | 13.47% | 17.31% |
| Operating CF Growth % | -451.76% | -11.84% | -56.37% | 541.42% | -81.75% | 601.52% | -81.64% | -15.71% | 14.34% | 0.54% | -12.91% | -28.16% | - |
| Net Income | -82.7M | -69.9M | -47.2M | 48.7M | 30.8M | 17.9M | -57.4M | 15.8M | 28.3M | 52M | 69M | 80.8M | 110.1M |
| Depreciation & Amortization | 27.1M | 27.2M | 31.1M | 33.2M | 33.6M | 37.3M | 39.5M | 39.2M | 42.2M | 27.4M | 15.3M | 12.3M | 10.1M |
| Stock-Based Compensation | 10.9M | 15M | 15.3M | 13.5M | 14M | 13.9M | 13.4M | 11.7M | 10M | 8.4M | 9.5M | 9.6M | 8M |
| Deferred Taxes | -200K | -500K | 37M | -39.5M | 600K | -3M | -3.1M | -12.9M | -7.7M | -8.9M | 4.2M | -800K | -1.5M |
| Other Non-Cash Items | 116.3M | 101.3M | 9.1M | 29.2M | 25.9M | 18.3M | 34.7M | 13.4M | 6.5M | 2.3M | 2.4M | -1.6M | 100K |
| Working Capital Changes | -73.4M | -31.4M | 2M | 23.3M | -88M | 8.2M | -13.9M | 4.7M | 6M | -6.6M | -26.2M | -15.1M | -8.2M |
| Change in Receivables | -3.7M | 100K | 6.7M | 9.8M | -18.1M | -32.9M | 17.7M | 14.8M | 9M | -23.1M | -4.6M | 19.3M | -9M |
| Change in Inventory | -70.7M | -39.9M | 6.6M | 20.2M | -85M | 42.8M | -42.7M | -11.1M | -2.4M | -4.2M | -23.5M | -25.9M | -4.3M |
| Change in Payables | 22.9M | 6.2M | -3.2M | -15M | 19.7M | -13.6M | 14.3M | -9M | 5.2M | 4.9M | -1.9M | -4.3M | 4.4M |
| Cash from Investing | -12.2M | 10.3M | -27.5M | -44.9M | -48.4M | -16.2M | -26.9M | -93.2M | -25.2M | -292M | -21.6M | -102.1M | -28.6M |
| Capital Expenditures | -28.8M | -22.9M | -26.9M | -20.7M | -21.3M | -15.1M | -23.5M | -19.8M | -20.4M | -20.2M | -28.9M | -34.3M | -23.2M |
| CapEx % of Revenue | 3.36% | 2.71% | 3.32% | 2.32% | 2.48% | 1.85% | 3.18% | 2.54% | 2.64% | 2.89% | 4.66% | 5.42% | 3.39% |
| Acquisitions | 0 | 0 | 900K | -1M | 1.1M | -1.4M | -3.4M | -73.4M | -4.8M | -271.8M | -1.2M | -67.9M | -5.4M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -700K | -800K | -1.1M | 4.4M | -1.9M | 300K | 0 | 0 | 0 | 0 | -100K | 100K | 0 |
| Cash from Financing | -231M | -75.9M | -3.3M | -200K | -23.8M | -32.3M | 83.6M | -100K | -90.4M | 0 | -36.8M | 36.7M | -89.9M |
| Debt Issued (Net) | -224M | -75M | -1.6M | -2.4M | -29.4M | -31.6M | 109.9M | -1.6M | -96M | 494M | 0 | 0 | 0 |
| Equity Issued (Net) | 1.8M | 3.3M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Share Repurchases | -1.5M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -8.8M | -4.2M | -1.7M | 2.2M | 5.6M | -700K | -26.3M | 1.5M | 5.6M | -494M | -36.8M | 36.7M | -89.9M |
| Net Change in Cash | -244.7M | -23.3M | 16.4M | 63.4M | -55.5M | 44M | 70.8M | -22.1M | -30.8M | 47.4M | 15.9M | 20.1M | 100K |
| Free Cash Flow | -30.8M | 18.8M | 20.4M | 87.7M | -4.4M | 77.5M | -10.3M | 52.1M | 64.9M | 55M | 45.3M | 50.9M | 95.4M |
| FCF Margin % | -3.59% | 2.23% | 2.52% | 9.82% | -0.51% | 9.47% | -1.4% | 6.67% | 8.39% | 7.88% | 7.31% | 8.05% | 13.92% |
| FCF Growth % | -156.1% | -7.84% | -76.74% | 2093.18% | -105.68% | 852.43% | -119.77% | -19.72% | 18% | 21.41% | -11% | -46.65% | - |
| FCF per Share | -0.74 | 0.45 | 0.50 | 1.74 | -0.11 | 1.92 | -0.27 | 1.35 | 1.69 | 1.45 | 1.18 | 1.33 | 2.48 |
| FCF Conversion (FCF/Net Income) | 0.37x | -0.59x | -0.99x | 2.29x | 0.56x | 5.32x | -0.23x | 4.64x | 3.10x | 1.45x | 1.08x | 1.07x | 1.08x |
| Interest Paid | 700K | 31.3M | 27.6M | 27.4M | 29.5M | 21.6M | 16.7M | 19.9M | 19.3M | 9.8M | 0 | 0 | 0 |
| Taxes Paid | -10M | 18.6M | 20.2M | 16.7M | 2.2M | 14.1M | 4.2M | 8.2M | 13.8M | 6M | 0 | 0 | 0 |
Working capital volatility risks
Based on Varex's reported quarterly filings, the relationship between net income and operating cash flow is highly erratic, with the OCF/NI ratio swinging from -31.67 in 2025Q1 to 5.71 in 2024Q3, suggesting that GAAP earnings are currently poor proxies for the firm's actual cash-generating capacity.
The extreme variance in conversion ratios indicates that non-cash charges and significant working capital swings frequently decouple accounting profit from liquidity. Investors should interpret this as a signal that the company's core operational cash flow is highly sensitive to timing differences in revenue recognition and inventory management.
As reported in financial statements, Varex's free cash flow trajectory remains inconsistent, with margins fluctuating from a -12.8% deficit in 2026Q1 to a 9.7% peak in 2024Q4, highlighting the difficulty in maintaining positive cash generation amidst ongoing operational and market-driven headwinds.
The inability to sustain positive free cash flow suggests that the business model is currently struggling to cover its capital requirements through internal operations alone. This volatility warrants further investigation into whether the current cash burn is a temporary byproduct of strategic investment or a structural limitation of the current cost base.
According to recent SEC filings, Varex has experienced significant cash outflows related to working capital, including a $35.0 million drain in 2026Q1, which appears to be the primary driver behind the company's periodic inability to convert its operational activities into meaningful free cash flow.
The recurring negative impact of working capital changes suggests that the company may be struggling with inventory accumulation or inefficient collection cycles. This pattern implies that the firm's liquidity is frequently tied up in operational assets, potentially limiting its flexibility to respond to competitive pricing pressures.
Based on Varex's reported figures, capital expenditures have remained relatively contained, averaging roughly 3% of revenue over the last ten quarters, which suggests that the company is not currently engaged in an aggressive, cash-intensive expansion of its manufacturing footprint despite its ongoing operational challenges.
The moderate level of capital intensity indicates that the firm is prioritizing maintenance over significant capacity growth. This approach appears prudent given the current negative operating margins, as it avoids further straining the balance sheet while the company attempts to stabilize its core profitability.
Quick answers to the most common questions about buying VREX stock.
Varex Imaging Corporation (VREX) generated $41.7M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Varex Imaging Corporation (VREX) generated $18.8M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Varex Imaging Corporation (VREX) spent $22.9M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.