Varex Imaging Corp (NASDAQ:VREX) Q4 Earnings Nearly Double Estimates, Stock Rises

Varex Imaging Corp (NASDAQ:VREX) has reported financial results for its fourth quarter and fiscal year 2025, concluding the period with a strong performance that notably exceeded analyst expectations on profitability. The company's results and forward-looking guidance have been met with a positive initial reaction in the after-hours market.

Earnings and Revenue Performance Versus Estimates

The company's fourth-quarter performance demonstrated significant strength, particularly on the bottom line. While revenue growth was solid, the standout figure was the substantial beat on non-GAAP earnings per share.

• Q4 FY25 Revenue: $229 million
• Q4 FY25 Analyst Revenue Estimate: Approximately $223.6 million
• Q4 FY25 Non-GAAP EPS: $0.37 per diluted share
• Q4 FY25 Analyst EPS Estimate: $0.19 per diluted share

The revenue of $229 million came in above expectations, representing an 11% increase year-over-year. However, the non-GAAP EPS of $0.37 nearly doubled the analyst consensus estimate of $0.19, highlighting improved operational efficiency and profitability.

Market Reaction

The market responded favorably to the earnings beat and the company's outlook. Following the release, the stock experienced an after-market price increase of approximately 1.7%. This positive movement suggests investor confidence was bolstered by the strong earnings per share performance and the company's guidance for the upcoming quarter. This uptick contrasts with the stock's slight decline of about 4.8% over the past week, indicating the earnings report served as a significant positive catalyst.

Management Commentary and Fiscal Year Summary

Sunny Sanyal, Chief Executive Officer, attributed the strong finish to the fiscal year to robust global CT tube sales in the Medical segment and sustained momentum in the cargo systems business within the Industrial segment. For the full fiscal year 2025, the company reported:

• Total revenues of $845 million, a 4% year-over-year increase.
• Non-GAAP net income of $0.90 per diluted share, a 73% increase from the prior year.
• Non-GAAP EBITDA grew 37% to $122 million.

Sanyal also highlighted advancements in key growth initiatives, including innovative technologies like photon counting for CT and the successful launch of a radiographic detector from a new facility in India.

Balance Sheet and Cash Flow

The company's balance sheet shows a solid liquidity position, with cash, cash equivalents, and marketable securities totaling $155 million as of October 3, 2025. This represents a decrease from $213 million at the end of the prior fiscal year, primarily due to the paydown of the outstanding principal on its Convertible Notes. Cash flow from operations was $42 million for the full fiscal year.

Forward Outlook and Comparison to Estimates

Varex provided guidance for the first quarter of fiscal year 2026, which appears cautious relative to full-year analyst expectations.

• Q1 FY26 Revenue Guidance: $200 million to $215 million
• Q1 FY26 Analyst Revenue Estimate: Approximately $209.6 million
• Q1 FY26 Non-GAAP EPS Guidance: $0.05 to $0.25
• Q1 FY26 Analyst EPS Estimate: $0.14

The company's revenue guidance brackets the current analyst consensus, while its EPS forecast is wide, encompassing the estimate. For the full 2026 fiscal year, analysts have been estimating sales of approximately $876.96 million and earnings per share of around $0.82. The company's Q1 outlook suggests a softer start to the year, but the strong full-year 2025 results may lead to revisions in these full-year analyst projections.

For a detailed look at historical earnings and future analyst estimates for Varex Imaging Corp, you can review the data here.

Disclaimer: This article is for informational purposes only and does not constitute investment advice, financial analysis, or a recommendation to buy or sell any security. The information presented is based on publicly available data and should not be relied upon as the sole basis for making an investment decision. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions.