Saurabh Prasad's questions to Varex Imaging Corp (VREX) leadership • Q2 2025
Question
Saurabh Prasad of Marshall Wace asked for a breakdown of the gross margin impact between China and non-China tariffs. He also inquired how a potential reduction in retaliatory tariffs would be shared between Varex and its customers, and whether all of the company's X-ray tube sales to China originate from the U.S.
Answer
CFO Sam Maheshwari did not provide a direct breakdown but referenced the COGS mix, with 17% of materials from the rest of the world and 3% from China. He reiterated the strategy is to pass on tariff costs. He explained that of Varex's total sales to China, roughly 50% originate from the U.S., 40% are manufactured in China, and 10% come from other regions like Europe and the Philippines.