The following is a summary of the Varex Imaging Corporation (VREX) Q4 2024 Earnings Call Transcript:

Financial Performance:

• Varex reported a Q4 revenue of $206 million, towards the high-end of their guidance range, but observed a 10% decrease year-over-year.

• The Non-GAAP gross margin for the quarter was reported at 33%, at the low-end of guidance due to a high proportion of equipment sales in the industrial segment.

• Non-GAAP EPS was $0.19, exceeding the high-end of their guidance.

Business Progress:

• Varex has plans to begin production of components in India during the third-quarter of fiscal 2025 aiming for low-cost manufacturing for radiographic components.

• The company is actively working on expanding and upgrading its product portfolio, including investments in premium CT tube capabilities and Azure dynamic detectors for surgery and cardiology.

• Photon counting technology is projected as a significant future revenue driver, with expanded applications in medical and industrial imaging.

Opportunities:

• Varex sees potential growth in the medical imaging sector in China as economic stimuli are directed towards healthcare.

• Plans to enhance product lines like Azure dynamic detectors and investments in photon counting technologies are designed to capture new market opportunities and meet evolving technological demands.

• Expanding into the cargo inspection systems market with a range of new products tailored for the security inspection industry.

Risks:

• The company acknowledges the possible impact of tariffs and continuing trade tensions which could affect input costs and competitive pricing.

• Varex also highlighted the ongoing destocking by customers, which although expected to subside by the second quarter of fiscal 2025, currently impacts the financial performance.

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