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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