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Revenue: $229 million for Q4, up 11% year over year; $845 million for fiscal year 2025, up 4% from fiscal 2024.

Medical Segment Revenue: $152 million for Q4, up 5% year over year; $593 million for fiscal year 2025, up 2% year over year.

Industrial Segment Revenue: $77 million for Q4, up 25% year over year; $252 million for fiscal year 2025, up 10% year over year.

Non-GAAP Gross Margin: 34% for Q4, up 130 basis points year over year; 35% for fiscal year 2025, up 230 basis points year over year.

Non-GAAP Earnings Per Share (EPS): $0.37 for Q4, up $0.21 year over year; $0.90 for fiscal year 2025, up $0.35 year over year.

Net Income: $12 million for Q4; net loss of $70 million for fiscal year 2025.

Cash and Cash Equivalents: $155 million at the end of fiscal year 2025, down from $213 million the previous year.

Operating Income: $20 million for Q4; $80 million for fiscal year 2025, up $28 million year over year.

Adjusted EBITDA: $35 million for Q4; $122 million for fiscal year 2025, up from $89 million the previous year.

R&D Spending: $24 million for Q4, representing 10% of revenues; $91 million for fiscal year 2025, representing 11% of revenues.

SG&A Expense: $31 million for Q4, representing 14% of revenues; $122 million for fiscal year 2025, representing 14% of revenues.

Debt: Gross debt of $370 million; net debt of $215 million after accounting for cash and cash equivalents.

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Release Date: November 18, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Varex Imaging Corp (NASDAQ:VREX) reported a strong finish to the year with fourth-quarter revenue of $229 million, up 11% year over year, reaching the high end of their guidance.

The Industrial segment posted its highest revenue quarter ever at $77 million, driven by strong demand for security inspection systems and components.

Non-GAAP gross margin in the fourth quarter was 34%, above the high end of guidance, benefiting from higher volume and favorable product sales mix.

Non-GAAP earnings per share in the fourth quarter was $0.37, up $0.21 compared to last year, indicating strong profitability growth.

Varex Imaging Corp (NASDAQ:VREX) advanced key growth initiatives, including the introduction of innovative technologies like Photon Counting for CT and expansion in India, which are expected to drive future growth.

The company ended the year with $155 million in cash, cash equivalents, and marketable securities, down from $213 million last year, primarily due to debt retirement.

Operating expenses increased by $94 million compared to fiscal year 2024, driven by a noncash goodwill impairment charge.

The Medical segment saw some softness, with oncology modality sales below their sales trend.

The geopolitical situation has led to challenges in maintaining consistency between China and ex-China sales within the Medical segment.

Tariffs continue to impact gross margins, with an estimated negative effect of 100 to 150 basis points.

Q: Can you provide insights into the sustainability of sales given the concentration among your top 10 customers, which account for 52% of sales? A: Shubham Maheshwari, CFO: The concentration of our top 10 customers has been consistent over the years, typically in the 50-55% range. Most of these customers are in the Medical segment, and we do not break it down further to avoid disclosing sensitive commercial information.

Q: With Medical being soft and Industrial compensating, are there structural shifts in these segments as we enter 2026? A: Sunny Sanyal, CEO: Industrial sales are growing and could reach mid-30% of total sales. Medical sales fluctuate due to geopolitical factors, with non-Chinese OEMs increasingly sourcing from our Chinese facilities.

Q: How might potential divestitures by companies like GE and Siemens impact Varex? A: Sunny Sanyal, CEO: Our business in China primarily involves Chinese OEMs, so these divestitures have minimal impact. Our strategy focuses on building a global OEM partner network, which mitigates regional risks.

Q: Can you provide an outlook for fiscal year 2026, considering the Q1 guidance? A: Shubham Maheshwari, CFO: We expect growth in both Medical and Industrial segments, with Medical ex-China growing and China remaining stable. The demand environment is solid, and we anticipate normal growth patterns throughout the year.

Q: What drove the strong Industrial segment performance and margins in Q4? A: Shubham Maheshwari, CFO: The quarter benefited from a higher proportion of service revenues, which have higher margins than hardware. This is not typical, but we expect long-term margin improvements as more hardware enters service.

Q: Was there anything unusual in Q4 that led to revenue exceeding guidance? A: Shubham Maheshwari, CFO: No unusual factors; strong demand in both segments and shipments of cargo systems, which can significantly impact revenue due to their high value.

Q: How is the India expansion progressing, and what impact will it have on margins? A: Shubham Maheshwari, CFO: Detector shipments from India have started, with ramp-up expected in FY26. Tube production is 12-15 months away. India will improve margins for transferred products but is a small revenue portion.

Q: What is the current impact of tariffs on gross margins, and how might this change? A: Shubham Maheshwari, CFO: Tariffs impact margins by 100-150 basis points. We are mitigating this through supply chain adjustments and passing costs to customers. The India facility will help reduce tariff impacts once operational.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.