Varex Imaging Corporation (VREX): Business Model Canvas [Dec-2025 Updated]

Honestly, when you look at Varex Imaging Corporation, you're seeing the engine room of global X-ray tech, not the final product. As a long-time analyst, I can tell you their Fiscal Year 2025 performance-hitting $593 million in Medical sales against $252 million in Industrial-shows a solid, dual-engine operation. The real strategic meat, though, is in their Key Activities: pouring cash into next-gen photon counting while managing 13 global manufacturing sites and protecting over 635 patents. If you want to know exactly how they lock in giants like Canon and GE, and where the near-term risks lie in that 34% gross margin, check out the full, no-fluff Business Model Canvas breakdown below.

Varex Imaging Corporation (VREX) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Varex Imaging Corporation relies on to get its specialized X-ray components to market and support them afterward. These aren't just vendors; they are deeply integrated partners.

The reliance on major system builders is clear from recent data. For fiscal year 2024, the top five customers-Global Original Equipment Manufacturers (OEMs)-accounted for approximately 41% of Varex Imaging Corporation's total revenue, which was $811 million in FY2024, with FY2025 revenue reaching $845 million.

The manufacturing capacity agreement with dpiX is a significant fixed commitment. Varex Imaging Corporation's fixed cost commitment to dpiX for calendar year 2025 was determined to be $13.7 million.

Here's a look at the key quantitative aspects of these relationships:

The replacement market, serviced through independent service companies and distributors, is underpinned by a substantial installed base, which drives recurring demand for components and service parts. As of the end of fiscal year 2024, this base included approximately:

• Installed X-ray tubes: 160,000 units.
• Installed Detectors: 170,000 units.
• Installed Connect & Control Components: 600,000 units.
• Installed Software Instances: 16,500 instances.

The strategic manufacturing agreement with Nanox involves Varex Imaging Corporation supplying X-ray tubes for the Nanox.ARC system in exchange for a revenue-sharing fee, subject to a minimum annual amount per system.

The joint development projects, such as the one focused on photon counting CT technology with the Technical University of Munich, are critical for future product lines, complementing Varex Imaging Corporation's existing portfolio which includes over 635 patents (with approximately 160 pending) as of early 2025.

Finance: review the Q1 2026 guidance of $0.05-$0.25 EPS against the current OEM concentration risk by next Tuesday.

Varex Imaging Corporation (VREX) - Canvas Business Model: Key Activities

You're looking at the core engine that keeps Varex Imaging Corporation running, the things they absolutely must do well to deliver their value proposition. For Varex Imaging Corporation, these activities are heavily weighted toward complex engineering and global logistics.

Research and Development (R&D) in advanced X-ray technologies like photon counting

Varex Imaging Corporation dedicates significant resources to staying ahead in imaging science. For the full fiscal year 2025, Research and Development costs totaled $91.1 million. As a percentage of total revenues, R&D spending for fiscal year 2025 was 10.8%. This investment is directly tied to advancing key growth initiatives, including the development of innovative technologies like photon counting for CT systems.

The R&D focus supports the entire product portfolio, which includes:

• X-ray tubes and detectors.
• High-voltage connectors.
• Image processing solutions, including AI algorithms.

Global manufacturing and supply chain management across 13 sites worldwide

While the prompt suggests 13 sites, Varex Imaging Corporation maintains a significant global manufacturing footprint across multiple countries. The company operates facilities in the US, the Netherlands, the UK, China, India, Germany, Finland, and the Philippines. Managing this network is a key activity, especially given the need to source and utilize rare earth metals like tungsten, where the company prioritizes using reclaimed materials for both environmental and financial reasons. The overall fiscal year 2025 revenue was $845 million, which relies on the smooth operation of this global chain.

High-precision production of X-ray tubes and digital detectors

The core of the operation is the high-precision manufacturing of components that drive their two main segments. In fiscal year 2025, the Medical segment generated $593 million in revenue, and the Industrial segment brought in $252 million. This production capability is what allows them to deliver on their product promise, which includes manufacturing:

• OEM X-ray tubes and replacement X-ray tubes.
• Flat panel detectors.
• Ionization chambers and bucky systems.

The company's non-GAAP EBITDA for the year grew 37% to $122 million, showing the financial leverage derived from efficient, high-quality production.

Sales and technical support for OEM and replacement customers

Varex Imaging Corporation serves Original Equipment Manufacturers (OEMs) as well as the aftermarket for replacement parts. The structure includes dedicated channels for this engagement. For instance, Varex Imaging NDT Solutions has specific contact paths for Product Sales and Product Support experts. This support is crucial for maintaining relationships, as the company markets components directly to end-users for replacement purposes. The company's overall revenue growth in fiscal year 2025 was 4% year-over-year.

Expansion of manufacturing capacity, notably the new facility in India

A major strategic activity in late 2025 was capitalizing on the Indian manufacturing expansion. Varex Imaging Manufacturing India Private Limited launched its second advanced facility at the Andhra Pradesh MedTech Zone (AMTZ) in Visakhapatnam. This new unit houses India's first manufacturing line for Cesium Iodide (CsI) and a line for medical-grade glass tubes. The strategy for this India facility is explicitly to produce competitively priced radiographic components for the value-tier market globally, helping mitigate tariff risks. The local subsidiary's authorized and paid-up capital stood at ₹85.00 Cr as of October 25, 2025. This expansion directly supported the successful launch of a new radiographic detector.

Here's the quick math on the operational cash flow that funds these activities: Net cash provided by operating activities for fiscal year 2025 was $41.7 million.

Varex Imaging Corporation (VREX) - Canvas Business Model: Key Resources

You're looking at the core assets that let Varex Imaging Corporation operate and compete. These aren't just things they own; they are the deep capabilities that are hard for anyone else to copy quickly. Honestly, for a company like Varex, the IP and the installed base are the real moat.

The foundation of their competitive edge rests on a significant body of protected innovation. Varex Imaging Corporation maintains an extensive Intellectual Property (IP) portfolio, which is a critical barrier to entry for competitors. This portfolio includes:

• IP portfolio with over 635 patents.
• The portfolio also includes approximately 160 pending patents.

Next, you have the physical and human capital that brings those patents to life. The company relies on specialized manufacturing facilities and proprietary production processes to build their complex components. This know-how is built up over decades, making replication a long, expensive process.

The brainpower behind the products is another key resource. Varex Imaging Corporation employs highly skilled R&D and engineering talent. Specifically, they have over 320 engineers dedicated to research and innovation, driving the next generation of imaging technology.

Perhaps the most tangible resource, representing market penetration and recurring service revenue potential, is the sheer scale of their deployed products. Varex Imaging Corporation boasts a massive global installed base:

• Installed base of over 160k X-ray tubes.
• Installed base of over 170k detectors.
• Additionally, the installed base includes 600k connect & control components.

Finally, the balance sheet provides the necessary liquidity to fund operations, R&D, and strategic moves, like paying down debt. As of the end of Fiscal Year 2025 (FY25 end), Varex Imaging Corporation held cash, cash equivalents, and marketable securities of $155 million. This figure is down from $213 million at the end of FY24, primarily due to using cash to pay down the principal of their Convertible Notes on June 2, 2025.

Here's a quick look at some other key financial metrics from the end of FY25 to give you context on the scale of the business these resources support:

The availability under their Revolving Credit Facility as of October 3, 2025, was $154.8 million, which provides an additional layer of financial flexibility. Finance: draft 13-week cash view by Friday.

Varex Imaging Corporation (VREX) - Canvas Business Model: Value Propositions

For Computed Tomography (CT) and oncology applications, Varex Imaging Corporation delivers high-performance X-ray tubes. The demand for these components drove the Medical segment revenue to $152 million in the fourth quarter of fiscal year 2025, representing a 5% year-over-year increase. For the entirety of fiscal year 2025, the Medical segment generated $593 million in revenue.

The company provides advanced digital detectors, a core part of its offering, and is actively developing next-generation technology. Varex Imaging is advancing key growth initiatives, including the development of innovative technologies like photon counting for CT. Furthermore, the company successfully launched a new radiographic detector from its facility in India during fiscal year 2025.

Integrated cargo and vehicle inspection systems for security applications are a major value driver in the Industrial segment. This business saw sustained momentum, contributing to a 25% year-over-year increase in Industrial segment sales in the fourth quarter of fiscal year 2025, reaching $77 million. For the full fiscal year 2025, the Industrial segment revenue was $252 million. The company secured over $55 million in orders within its Industrial segment during fiscal year 2025, including receiving orders for high-energy non-intrusive cargo and vehicle inspection systems valued at approximately $25 million USD in the second quarter of fiscal year 2025.

Reliable replacement components and long-term product service support are embedded within the product lifecycle. The Medical segment components are used across a range of diagnostic radiography uses, including radiation therapy and CT. While specific service revenue figures aren't isolated, the business model supports these offerings through its established product lines.

System integration is supported by image processing software and connecting devices. Varex Imaging designs and manufactures components such as image-processing software and workstations. The product list for the third quarter of fiscal year 2025 specifically mentions IQ Software.

Here's a quick look at the segment performance that underpins these value propositions for the end of fiscal year 2025:

The overall financial performance for the period reflects the strength in these areas:

• Total Varex Imaging Corporation revenue for the fourth quarter of fiscal year 2025 was $229 million.
• Total fiscal year 2025 revenue reached $845 million, a 4% growth year-over-year.
• Non-GAAP EBITDA for fiscal year 2025 grew 37% to $122 million.
• The company held cash, cash equivalents and marketable securities of $155 million at the end of fiscal year 2025.

Varex Imaging Corporation (VREX) - Canvas Business Model: Customer Relationships

You're looking at how Varex Imaging Corporation manages its connections with the entities buying its critical imaging components. It's a mix of deep partnership and transactional sales, which you can see reflected in their $845 million in total revenue for fiscal year 2025.

The relationship structure heavily favors the Medical segment, which generated $593 million in revenue for fiscal year 2025, suggesting deep, long-term collaborative relationships with major global OEMs are central to the business. For context, the Industrial segment brought in $252 million in the same period.

The reliance on established partners is clear when you look at the customer concentration from the prior year. The top 5 customers in fiscal year 2024 included Canon, United Imaging, GE, Rapiscan, and Siemens Healthineers.

This deep integration is supported by a massive installed base that drives recurring replacement and service demand. Here's a look at that installed base as of early 2025:

The transactional sales model is likely most prominent in the replacement components business, which is a key driver for the Medical segment, alongside the direct sales for high-value industrial systems. The Industrial segment showed sustained momentum, with sales increasing 25% year-over-year in the fourth quarter of fiscal 2025, reaching $77 million for that quarter.

For those high-value industrial cargo systems, Varex Imaging Corporation secured over $55 million in orders and shipped more than 15 new cargo systems during fiscal year 2025. This segment also leverages its component expertise to provide differentiated value directly to end customers.

Customer-centric innovation is evidenced by the advancement of new technologies. The company highlighted the launch of a new radiographic detector from its facility in India and continued development of photon counting for CT in fiscal year 2025.

The overall revenue breakdown for fiscal year 2025 shows the scale of the different customer relationship types:

The company supports this global customer base with approximately 2,400 employees located across North America, Europe, and Asia, and protects its innovation through over 635 patents, with approximately 160 pending as of early 2025.

The relationship with distributors for transactional sales is supported by the need for replacement parts across the installed base, which is substantial. The company also has a significant intellectual property portfolio, with over 635 patents, which creates high barriers to entry and supports deep customer relationships due to custom-built hardware and software.

Finance: review Q1 2026 revenue guidance against Q4 2025 actuals by Tuesday.

Varex Imaging Corporation (VREX) - Canvas Business Model: Channels

You're looking at how Varex Imaging Corporation moves its high-tech components and systems to market, which is a mix of direct engagement for large Original Equipment Manufacturers (OEMs) and specialized sales for security applications. Honestly, the channel strategy is deeply tied to the segment performance we saw in fiscal year 2025.

The direct sales force is the backbone for reaching global OEM manufacturers, which is the primary channel for the Medical segment. This effort is supported by a global workforce of approximately 2,300 employees located across North America, Europe, and Asia, who are driving the sales and service of core components like X-ray tubes and detectors.

For the Industrial segment, which includes cargo inspection systems sold to government and security entities, the channel is more direct and tender-driven. This channel showed significant momentum in fiscal year 2025. The Industrial segment revenue reached $252 million for the full year, marking a $22.7 million increase compared to fiscal year 2024. Specifically within this direct sales channel for security, Varex Imaging Corporation secured over $55 million in new orders and shipped more than 15 new cargo systems during fiscal year 2025. The fourth quarter of 2025 was particularly strong here, with Industrial segment revenue hitting $77 million, a 25% increase year-over-year.

The company supports its installed base and aftermarket needs through a network of distributors and independent service organizations, which is key for replacement parts. This complements the direct sales model.

Varex Imaging Corporation maintains a physical global footprint to support these channels. While the exact number fluctuates, the company has established operations spanning multiple continents. You can see this global reach through their listed entities and offices in regions including:

• North America (Headquarters in Salt Lake City, Utah)
• Europe (Locations in Switzerland, Germany, and France)
• Asia (Locations in China and India)
• The Middle East (Saudi Arabia)
• South America (Brazil)

This network supports both OEM integration and aftermarket service delivery across their customer base.

To support the complex equipment sold through these channels, Varex Imaging Corporation offers online and direct customer support for technical documentation. This is crucial for their OEM partners integrating components and for service providers maintaining installed systems. The company's total estimated backlog at October 3, 2025, stood at approximately $262 million, representing orders yet to be recognized as revenue, which flows through these established channels.

Here's a quick look at how the segments that rely on these channels performed in the final quarter and the full fiscal year 2025:

Finance: draft 13-week cash view by Friday.

Varex Imaging Corporation (VREX) - Canvas Business Model: Customer Segments

You're looking at the core customer groups Varex Imaging Corporation serves based on their latest fiscal year reporting. This helps map where the $845 million in total revenue for fiscal year 2025 came from.

Medical OEMs

This group represents the largest portion of Varex Imaging Corporation's business. The Medical segment generated $593 million in revenue for the full fiscal year 2025. Global CT tube sales were a key driver in the fourth quarter of 2025, with Medical segment revenue reaching $152 million for that quarter. Major global manufacturers incorporating Varex Imaging Corporation's components include Canon, GE, and Siemens Healthineers, who were listed among the top 5 customers in fiscal year 2024.

The Medical segment saw an overall revenue increase of $10.9 million in fiscal year 2025 compared to fiscal year 2024. This growth was primarily fueled by increased sales in CT, oncology, and mammography modalities totaling $24.6 million.

Industrial OEMs and System Integrators

The Industrial segment delivered $252 million in revenue for the full fiscal year 2025, showing strength with a 25% year-over-year increase in the fourth quarter of 2025, where it brought in $77 million. Varex Imaging Corporation secured over $55 million in orders within this segment during fiscal year 2025. The segment's success in the fourth quarter was sustained by momentum in cargo systems.

Security and Border Control Agencies

This customer base is served through the Industrial segment, often via system integrators. Increased security inspection products sales of $13.3 million contributed to the Americas revenue growth in fiscal year 2025. Rapiscan was noted as a top 5 customer in fiscal year 2024, aligning with this application area. Varex Imaging Corporation shipped more than 15 new cargo systems during fiscal year 2025.

Independent Service Providers

While specific revenue is not broken out for service-only providers, the installed base drives replacement and service demand. The installed base as of fiscal year 2024 included 160,000 X-ray tubes and 170,000 detectors. The company also has 600,000 connect & control components in the field.

Veterinary and Dental Imaging System Manufacturers

These specific modalities are grouped within the Medical segment but showed a sales decrease in fiscal year 2025. Decreased sales in veterinary and dental modalities accounted for a reduction of $13.7 million in Medical segment sales compared to fiscal year 2024. Specifically, veterinary sales decreased by $4.7 million in the Americas region during fiscal year 2025.

Here's a quick math on the segment revenue contribution for the full fiscal year 2025:

Total revenue for fiscal year 2025 was $845 million. Total revenue for the fourth quarter of fiscal year 2025 was $229 million.

The geographic distribution of sales also impacts these segments, with total sales of medical X-ray tubes imported into China representing approximately 10% of total revenue in fiscal year 2025.

You can see the customer base is heavily weighted toward the Medical side, which is typical for Varex Imaging Corporation.

• Medical Segment Percentage of FY2025 Revenue: ($593M / $845M) $\approx$ 70.18%
• Industrial Segment Percentage of FY2025 Revenue: ($252M / $845M) $\approx$ 29.82%

Finance: draft 13-week cash view by Friday.

Varex Imaging Corporation (VREX) - Canvas Business Model: Cost Structure

You're analyzing the cost side of Varex Imaging Corporation's business, and it's clear that complex engineering translates directly into significant fixed and variable costs. The nature of high-precision X-ray component manufacturing means that the Cost of Goods Sold (COGS) is a major lever on profitability, so you need to watch that gross margin like a hawk.

Significant Cost of Goods Sold (COGS) due to complex manufacturing; GAAP gross margin was 34% in FY25. This figure is consistent across the full fiscal year results announced in November 2025, though it dipped to 33% in the third quarter of FY25, showing some margin pressure during that period.

Manufacturing and operational costs are spread across a wide footprint. Varex Imaging Corporation maintains production facilities in multiple countries to support global scale and leverage regional advantages. These sites include locations in the US, the Netherlands, Germany, China, India, the Philippines, and Finland. The prompt suggests 13 global production sites, reflecting a substantial physical infrastructure investment required to support this complex operation.

High R&D expenses are necessary to fund next-generation technologies like photon counting, which is a key growth initiative. For the first quarter of fiscal year 2025 (1QFY25), Research and Development expenses were $23.5 million. This investment is crucial for maintaining technological leadership against in-house OEM manufacturing operations.

Selling, General, and Administrative (SG&A) expenses support the global sales and service network. For the nine months ended July 4, 2025, SG&A expenses totaled $103.5 million. This covers the overhead for supporting OEM customers and the service centers globally.

Financing costs are also a factor, especially given recent debt management activities. Interest expense on debt was notable in FY25, particularly due to the convertible notes. For the nine months ended July 4, 2025, the reported Interest Expense was $(9.4) million. The company planned to repay the outstanding principal of these Convertible Notes, which bore interest at an annual rate of 4.00%, using $200.0 million in cash on June 1, 2025, which significantly impacted cash flow in the period.

Here's a quick look at some of the key cost and margin figures for context:

The cost structure is heavily weighted toward the direct costs of complex component creation, but the necessary ongoing investment in R&D to maintain product relevance is substantial, defintely impacting the operating margin, which was (3)% GAAP for the full year 2025.

Finance: draft 13-week cash view by Friday.

Varex Imaging Corporation (VREX) - Canvas Business Model: Revenue Streams

You're looking at the core money-makers for Varex Imaging Corporation as of late 2025. Honestly, the business model is straightforward: they sell the critical components that make X-ray machines work, split between the medical world and the industrial/security world.

For the full fiscal year 2025, Varex Imaging Corporation posted total revenues of $845 million. This total revenue was split across two primary operating segments. The Medical Segment Product Sales generated $593 million in FY25, which the company noted was driven by global CT tube sales. Also, the Industrial Segment Product Sales brought in $252 million for FY25, showing sustained momentum in cargo systems. So, the quick math shows that $593 million plus $252 million equals the total $845 million revenue for the year.

Here is a look at the segment revenue contribution for fiscal year 2025:

The product sales are more granular than just the segment totals, covering specific components and markets. Sales of X-ray tubes are central to the business, supplying both OEMs and the replacement market across CT, general radiography, and mammography applications. For example, in the fourth quarter of 2025, Medical segment revenue was $152 million, up 5% year-over-year, driven by CT tube demand.

The Industrial segment's strength in Q4FY25, which hit $77 million (up 25% year-over-year), was tied to cargo systems. Looking at the product mix across regions in FY25, you see revenue derived from:

• Sales of X-ray tubes, with regional increases in Americas of $4.7 million and APAC of $14.7 million.
• Sales of digital detectors and image processing software, with EMEA showing a $4.3 million increase from digital detector sales and APAC showing a $1.8 million increase from digital detector sales.
• Security inspection products, which saw an increase in Americas sales of $13.3 million.
• CT, oncology, and mammography sales within the Medical segment increased by $24.6 million in FY25 compared to FY24.

Finally, Varex Imaging Corporation also generates revenue from service and maintenance from its installed base, which includes over 160,000 X-ray tubes and 170,000 X-ray detectors worldwide as of late 2025. Finance: draft 13-week cash view by Friday.