Varex Imaging (VREX) Q3 2025 earnings summary

Executive summary

• Third quarter revenue was $203 million, down 2.9–3% year-over-year but exceeded the high end of guidance, driven by strong Industrial segment performance and stable or better-than-expected Medical revenue in China.

• Non-GAAP gross margin was 34%, up 100 bps year-over-year, and non-GAAP EPS was $0.18, up from $0.14 last year.

• GAAP net loss was $89–$89.1 million, or $(2.15) per share, due to a $93.9 million non-cash goodwill impairment in the Medical segment.

• $200 million in convertible notes were repaid, reducing cash and equivalents to $153 million and gross debt to $370 million.

• Cash flow from operations was $8 million for the quarter.

Financial highlights

• Medical segment revenue was $142–$142.1 million (70% of total), down 4–4.4% year-over-year; Industrial segment revenue was $60.9–$61 million (30% of total), up 0.7–1%.

• Non-GAAP operating income was $17 million, with non-GAAP operating margin at 8%.

• Adjusted EBITDA was $28.9–$29 million (14% of sales), up from $22.8 million in the prior year.

• Cash and cash equivalents at quarter-end were $136.4–$153 million, down from $168.7–$226 million at the prior fiscal year-end.

• Net debt leverage ratio improved to ~2x adjusted EBITDA.

Outlook and guidance

• Q4 revenue expected between $210 million and $230 million, with non-GAAP EPS guidance of $0.10–$0.30 and non-GAAP gross margin 32–33%.

• Non-GAAP operating expenses expected at ~$51 million; tax rate ~25%.

• Both Medical and Industrial segments expected to grow in Q4, with strong order backlog.

• Fiscal year 2025 sales growth anticipated at approximately 3%.