Varex Imaging (VREX) Q4 2024 earnings summary

Executive summary

• Q4 FY24 revenue reached $206 million, at the high end of guidance, but declined 10% year-over-year due to medical segment destocking and lower China sales; Industrial segment showed continued strength.

• Non-GAAP EPS was $0.19, down 58% from Q4 FY23, but exceeded guidance.

• Cash, cash equivalents, and marketable securities totaled $213 million at quarter-end, up 9% year-over-year.

• Fiscal 2024 revenue totaled $811 million, reflecting technological progress and expansion into new industrial verticals.

• Cash flow from operations was $26 million in Q4.

Financial highlights

• Q4 non-GAAP gross margin was 33%, at the low end of guidance, down 170–270 basis points year-over-year.

• Adjusted EBITDA for Q4 was $23 million (11% margin), down 41% year-over-year.

• Q4 GAAP net loss was $50 million, or $(1.22) per diluted share, mainly due to a $52 million non-cash tax charge.

• Full-year 2024 gross margin was 32%, down 110 basis points from 2023; operating income was $52 million (6% margin).

• Ended Q4 with $213 million in cash, cash equivalents, and marketable securities.

Outlook and guidance

• Q1 FY25 revenue expected between $195 million and $215 million, including an extra week contributing ~$15 million.

• Non-GAAP EPS for Q1 expected between a loss of $0.05 and a profit of $0.10 per share; non-GAAP gross margin expected at ~31%.

• Destocking by medical customers expected to subside by Q2 FY25; China sales projected to remain stable.

• FY25 initiatives focus on expanding CT tubes, dynamic detectors, and driving adoption of photon counting and nanotube technologies.

• No significant China stimulus impact assumed in FY25 outlook.