Varex Imaging Reports $199.8 Million Revenue, Net Loss of $0.3 Million for January 2025 Quarter

Varex Imaging Corporation reported a net revenue of $199.8 million for the three months ended January 3, 2025, marking a 5.2% increase from $190.0 million in the previous quarter. The company's gross profit also saw a significant rise, reaching $68.5 million compared to $57.1 million in the prior quarter, driven by improved sales volumes and a favorable product mix. Despite these gains, Varex recorded a net loss of $0.3 million, slightly better than the $0.5 million loss reported in the previous quarter. The net loss per share remained unchanged at $(0.01) for both periods.

The increase in revenue was attributed to a 3.4% rise in the Medical segment, which generated $144.6 million, primarily due to higher sales of CT and fluoroscopy products. The Industrial segment experienced a more pronounced growth of 10.2%, with revenues climbing to $55.2 million, largely due to increased sales of security inspection products. The overall gross margin improved to 34.3%, up from 30.1% in the previous quarter, reflecting enhanced profitability across both segments.

In terms of operational developments, Varex's employee headcount stood at approximately 2,300, with a focus on research and development, which accounted for 11.8% of total revenues, up from 10.8% in the prior quarter. The company continues to invest in innovation, with a commitment to maintain R&D expenses at around 8% to 10% of annual revenues. Additionally, Varex's backlog was estimated at $307 million as of January 3, 2025, indicating a solid pipeline of future business.

Strategically, Varex completed the acquisition of a controlling interest in MeVis BreastCare, increasing its ownership to 87.1%. This acquisition was accounted for as a business combination, resulting in a gain on bargain purchase of $1.2 million. The company also issued $125 million in additional Senior Secured Notes during the quarter, bolstering its financial position and providing liquidity for upcoming obligations, including the repayment of $200 million in Convertible Notes due in June 2025.

Looking ahead, Varex remains cautious about the economic environment, particularly regarding supply chain challenges and geopolitical tensions that could impact operations. The company is optimistic about long-term growth opportunities, especially in the Chinese market, where healthcare services are expanding. However, it acknowledges potential risks from pricing pressures and competition, particularly in the context of ongoing trade dynamics.