Varex Imaging (NasdaqGS:VREX) Q4 2025 Earnings Call November 18, 2025 05:00 PM ET Company ParticipantsSam Maheshwari - CFOSunny Sanyal - President and CEOChris Belfiore - Director of Investor RelationsConference Call ParticipantsLarry Solow - Managing Director and Healthcare AnalystJim Sidoti - Research Analyst of Medical DevicesAnderson Schock - MedTech Equity Research AnalystSuraj Kalia - Managing Director and Senior Analyst of Medical Technology and DevicesOperatorGreetings and welcome to the Varex Fourt ...

Group 1 - The research commissioned by the Hong Kong Trade Development Council highlights the impact of geopolitical tensions, evolving trade policies, environmental pressures, and technological advancements on supply chain reforms, significantly affecting the global economy [1] - Companies are actively adjusting their operational models, emphasizing both resilience and cost control, while redefining Asia's role in the new supply chain landscape [1] - Sean Randolph from the Bay Area Council Economic Institute notes that global companies are accelerating strategies such as reshoring, nearshoring, and establishing backup supply routes, leading to regionalization of supply chains [1] Group 2 - The latest US-China trade agreement indicates that from November 10, 2025, to November 10, 2026, Chinese exports to the US will face a 20% tariff, which positions Chinese suppliers competitively against Southeast Asian counterparts [2] - Mainland companies are proactively enhancing supply chain diversification, with Hong Kong emerging as a key supply chain management hub due to regional economic integration and new supply chain networks [2] - The research shows that Hong Kong plays a dual role as a super connector and value-added entity, crucial for mainland companies expanding overseas and for global firms entering the Chinese market [2]

Core Insights - The core motivation behind the U.S. government's tariff policies is domestic political considerations rather than economic efficiency [1][4][5] - Tariff policies are leading to increased costs for imported components, which suppresses competition and raises domestic production costs, ultimately weakening market demand [1][4] - The uncertainty surrounding these policies is causing stagnation in investments in key industries such as automotive and steel [6][10] Trade Policy and Economic Impact - The U.S. government aims to attract foreign investment into manufacturing and agriculture to bolster Trump's political base [1][6] - Current tariffs are expected to be passed on to consumers, which will squeeze corporate profits and reduce investment willingness, creating a vicious cycle [1][4] - The concept of "national security" has been overly extended to include ordinary commercial activities, undermining international trade rules and providing a convenient excuse for protectionist policies [2][5] Multilateral Trade System Challenges - The absence of the U.S. would make a multilateral trade system like the WTO ineffective, necessitating a combination of multilateral, regional, and bilateral trade frameworks [2][8] - The WTO's credibility is being challenged as the U.S. employs unilateral trade policies, making it less reliable as a mechanism for market openness [7][8] - Short-term strategies should focus on controlling damage to the multilateral system while allowing for the development of new effective policies [8][9] Regional Trade Agreements and Supply Chains - Regional agreements like CPTPP and RCEP are becoming new testing grounds for trade rules, with the potential to influence future multilateral frameworks [3][10] - The trend of regionalization in supply chains is particularly evident in the Asia-Pacific region, with mechanisms like RCEP reshaping supply chain dynamics [3][10] - Developing countries need to implement more productive domestic economic policies to attract international investment and avoid resource misallocation [11]

Group 1: Sustainable Global Leadership Conference - The 2025 Sustainable Global Leadership Conference will be held from October 16 to 18 in Shanghai, focusing on "Collaborating to Address Challenges: Global Action, Innovation, and Sustainable Growth" [1] - The conference is co-hosted by the World Green Design Organization (WGDO) and Sina Group, with support from the Shanghai Huangpu District Government [1] - Approximately 500 prominent guests are expected, including around 100 international guests, featuring political figures, Nobel laureates, and leaders from Fortune 500 companies [1] Group 2: Global Supply Chain Dynamics - The chief economist of The Economist Intelligence Unit, Su Yue, discussed the evolution of globalization, noting a shift towards regional supply chains and the restructuring of global supply chains post-COVID-19 [3] - Despite existing trade conflicts, there is a notable "high degree of policy consistency" among countries, particularly in the rise of protectionism [3][4] - Trade barriers are increasingly shifting from traditional tariffs to non-tariff barriers, particularly those related to product standards [3] Group 3: Green Supply Chain Trends - The green supply chain landscape is showing signs of divergence, with potential policy rollbacks in the U.S. favoring traditional energy sectors [5] - Geopolitical conflicts, such as the Russia-Ukraine conflict, have paradoxically boosted China's green product exports, aiding Europe's energy transition [5] - Companies are encouraged to adopt a more nuanced perspective on global green supply chain development, recognizing both the existing divides and emerging cooperation opportunities [5]

Group 1 - The global trade system is under significant pressure from unilateralism and trade policy uncertainty, threatening long-term growth and economic stability [1][2] - The WTO has drastically lowered its global goods trade growth forecast for 2026 to 0.5%, down from 1.8% predicted in August, indicating potential stagnation in global trade [1][2] - The IMF warns that the full impact of tariff policies has yet to be felt, suggesting that the global economy's resilience is about to be tested [1][2] Group 2 - Unilateral tariff barriers set by the U.S. are directly damaging the global trade order, with potential long-term consequences for economic growth and trade rules [2] - Developing countries may face severe repercussions from U.S. tariff policies, risking marginalization in global value chains due to high transportation costs and tariffs [2] - Structural changes in the global trade system are underway, with warnings that further tariff increases could lead to decreased global output and rising inflation [2] Group 3 - The maintenance of a rules-based multilateral trade system is essential for addressing the current crisis, with various countries advocating for WTO reform and commitment to its principles [3] - Many countries are opting for enhanced international cooperation to counteract uncertainty, with businesses adjusting supply chain strategies to focus on regional markets [3] - Emerging areas such as digital trade and green transformation present new opportunities for sustainable global trade development, with China playing a stabilizing role [3]

Core Viewpoint - The "Phoenix Bay Area Finance Forum 2025" held in Guangzhou focuses on exploring new paths and opportunities in the context of a changing global economic landscape, emphasizing the importance of international cooperation and cultural exchange [1][3]. Group 1: Global Economic Trends - The global economic landscape is undergoing profound changes due to the interplay of rule restructuring, geopolitical tensions, and technological revolutions, leading to a rise in protectionism and increased operational uncertainties for businesses [5][7]. - Experts highlighted the need for Chinese enterprises to reshape their strategies and enhance competitiveness through technological innovation and brand development in response to the evolving economic environment [5][7]. Group 2: Financial Dynamics - Financial systems are crucial drivers of changes in global trade patterns, with a focus on understanding financial principles to navigate future challenges effectively [7][9]. - The forum discussed the role of high-level foreign professional services in supporting mainland enterprises' international expansion, particularly through Hong Kong's resources [9]. Group 3: Digital Economy and AI - Digital technology is recognized as a core force in reshaping financial systems, with discussions on the implications of central bank digital currencies (CBDCs) and private digital currency regulations for cross-border payments and financial security [12]. - Artificial intelligence is seen as a key driver of industrial transformation, with opportunities for integration and application across various sectors [12]. Group 4: Investment Opportunities - The potential for a new growth cycle in the Chinese market has become a focal point for global investors, with discussions on the macro trends and investment practices that could lead to a significant revaluation of Chinese assets [13]. - The forum concluded with insights into capital market trends and the importance of traditional cultural reassessment in asset logic transformation [14].

Core Viewpoint - The smartphone industry is witnessing a shift from a traditional "buyer-supplier" relationship to a collaborative model where manufacturers engage deeply in the definition, development, and production of display technologies, reshaping the competitive landscape of the display panel industry [2][4][8]. Group 1: New Collaboration Paradigm - Smartphone manufacturers are no longer passive purchasers but are becoming strategic partners with panel manufacturers, engaging in joint research and deep customization [2][4]. - OPPO has invested over 1 billion in establishing its own "display science production line," allowing it to control the entire process from design to production [4][5]. - The collaboration between Xiaomi and TCL Huaxing has evolved into a long-term partnership, creating an "innovation display joint laboratory" to streamline technology development and production [5][8]. Group 2: Industry Dynamics - The traditional supply chain structure is being transformed from a linear model to a networked "industry alliance," enhancing the bargaining power of smartphone manufacturers [8][9]. - Chinese panel manufacturers are expected to capture over 70% of the global smartphone panel market by 2025, providing manufacturers with more options and stronger negotiation capabilities [8][10]. - The shift to deep collaboration is accelerating technological iteration and redefining market competition rules, moving the focus from macro parameters to underlying technologies [10][11]. Group 3: Technological Advancements - The competition in the smartphone market is increasingly centered around display technology, with companies like OPPO and Tianma developing advanced features such as precise light control at ultra-low brightness [10][11]. - The joint development model allows manufacturers to align market needs with technological paths early in the research phase, significantly reducing the time from lab to market [10][11]. - The relationship between Apple and Samsung exemplifies a unique "co-opetition," where stringent standards and large orders from Apple drive Samsung to innovate continuously [6][10].

Core Insights - The article discusses the emergence of a new collaboration paradigm between smartphone manufacturers and panel suppliers, moving from a traditional "buyer-supplier" relationship to a more integrated "co-creation" model [2][9] - This shift is driven by the need for differentiation in a saturated smartphone market, where screen quality and experience are critical competitive factors [1][10] Group 1: Industry Dynamics - Smartphone manufacturers are increasingly engaging in the definition, research, and production of display technologies, forming strategic partnerships with panel manufacturers for joint development and exclusive supply [2][10] - The traditional supply chain structure is evolving from a linear "pyramid" model to a more networked "industry alliance," allowing for greater collaboration and shared risk [9][10] - The rise of Chinese panel manufacturers like BOE, TCL Huaxing, and Tianma is changing the competitive landscape, with predictions that their market share in the global smartphone panel market will exceed 70% by 2025 [9][10] Group 2: Case Studies - OPPO has invested over 1 billion yuan to establish its own "display science production line," allowing it to control the entire process from design to production, thus creating a significant technological barrier [5][10] - Xiaomi and TCL Huaxing have developed a "Joint Innovation Laboratory" to streamline the process from technology research to mass production, enhancing their collaborative capabilities [5][10] - The relationship between Apple and Samsung exemplifies a unique "co-opetition" dynamic, where Apple drives Samsung to innovate through stringent standards and large orders, influencing industry-wide technology trends [7][10] Group 3: Technological Advancements - The focus of competition has shifted from macro parameters like resolution and refresh rates to micro-level technologies, such as precise light control algorithms developed by Tianma and OPPO [10][11] - The collaborative model allows for faster alignment of market needs with technological capabilities, significantly reducing the time from research to market [11] - However, the deep customization and joint development require substantial upfront investment, raising questions about potential impacts on product pricing and consumer repair costs [11][12]

Group 1: Economic Cycle and Currency Performance - The economic cycle consists of four phases: recovery, overheating, stagflation, and recession, each affecting currency performance differently [1][2][3] - In the recovery phase, commodity currencies like AUD and CAD benefit from increased demand for resources, exemplified by China's infrastructure stimulus leading to an 18% rise in iron ore prices [1] - During the overheating phase, high-interest currencies such as USD and BRL gain from aggressive central bank rate hikes, with Brazil's rate reaching 13.75% and BRL yielding an annualized return of 21% [2] - Stagflation sees safe-haven currencies like JPY and CHF perform well due to capital flight to safer assets, with EUR/CHF hitting a ten-year low of 0.94 [3] - In recession, sovereign currencies like USD and SGD strengthen as global deleveraging occurs, with the DXY index rising amid a U.S. tech recession [3] Group 2: Impact of Cycle Transitions on Forex Market - Structural reshaping of interest rate expectations occurs, where USD may depreciate initially during a recession but often rebounds later due to safe-haven demand, with an average increase of 6.2% during recessions from 1970 to 2025 [4] - Cross-market volatility transmission is evident, with significant impacts on JPY and CHF during high VIX periods and a strong correlation between AUD and oil prices during oil price fluctuations [5] - Sovereign currency credit differentiation is highlighted, with strong currencies like USD and CHF attracting capital inflows, while weaker currencies like GBP and TRY face sell-offs when debt-to-GDP exceeds 100% [6] Group 3: Trading Strategies for Economic Cycles - A combination of leading, synchronous, and lagging indicators can be used to capture phases, such as a copper-to-gold ratio below 0.25 indicating a potential recession [7] - Arbitrage strategies can be designed based on mismatched cycles, such as going long on USD/JPY and USD/EUR during U.S. overheating against European and Japanese recession, with a projected annual return of 23% [7] - Tail risk hedging involves buying USD call options and gold futures if recession or stagflation probabilities exceed 65% [8] Group 4: Future Outlook and Currency Dynamics - New variables like digital currency interest rates and supply chain regionalization are expected to impact traditional models, with the digital dollar rate reaching 5% attracting capital back [9] - Climate inflation factors, such as El Niño affecting agricultural output, may increase food CPI and pressure the Australian central bank to raise rates, leading to increased AUD volatility [9] Group 5: Trading Principles for Cycle Strategies - Maintain a low position (<15%) during phase ambiguity, such as fluctuating PMI around the threshold [10] - Focus on policy discrepancies rather than economic discrepancies, as seen with the European Central Bank lagging behind the Federal Reserve by an average of four months [10] - Utilize options to create asymmetric risk profiles, such as buying deep out-of-the-money USD call options at low premiums for high potential returns [10] - Market misjudgments regarding cycle phases can significantly influence currency movements, as demonstrated by the EUR's 7% drop followed by a sharp rebound in June 2025 [10] Group 6: Conclusion - The influence of economic cycles on forex is complex, driven by policy expectations, capital flows, and market reflexivity [11] - Identifying early signals and utilizing a "volatility prism" can lead to sustained profitability in the evolving landscape of sovereign credit shaped by digital currencies [11]

Jabil (JBL) 2025 Conference Summary Company Overview - Jabil is a US domiciled company with **$30 billion** in revenue and **50,000** employees [2][3] - The company is described as an engineering-led supply chain enabled manufacturing company, with **10,000 engineers** contributing to its operations [3][4] Key Industry Insights - Jabil operates in **30 countries**, manufacturing for top brands across various end markets including healthcare, intelligent infrastructure, semi cap, communications, and consumer products [4][8] - The company emphasizes the importance of supply chain management, especially in the context of tariffs and macroeconomic challenges [8][11] Strategic Priorities 1. **Margin and Free Cash Flow Accretion**: Focus on improving margins and generating free cash flow, with a history of share buybacks [7][8] 2. **Support for Customers Amid Tariffs**: Assisting clients in navigating tariff challenges, leveraging a long-standing presence in various countries [8][9] 3. **Investment in Capabilities**: Continuous investment in engineering, supply chain systems, and capability-based acquisitions [10][11] Competitive Advantages - Jabil's engineering-led approach differentiates it from competitors, allowing it to assist customers from concept to market [13][14] - The company employs a unique work cell model, assigning dedicated teams to individual customers, enhancing customer relationships [14][15] - Long-tenured management team with an average of **23 years** of experience among direct reports, fostering strong customer relationships [17][19] Tariff and Supply Chain Dynamics - The company notes that the **Trump administration's tariffs** have accelerated the regionalization of supply chains, with many companies hesitant to move production due to regulatory uncertainties [21][22] - **90%** of Jabil's business in Mexico is USMCA compliant, minimizing tariff impacts [23][24] Market Trends and Growth Areas - **Healthcare**: Strong demand for auto-injector pens and insulin pens, with plans to ramp up production in Europe [72][73] - **Intelligent Infrastructure**: Significant growth in data cloud infrastructure and semiconductor testing, with a **40% year-on-year** increase in guidance [32][33] - **EV and Automotive**: Despite short-term challenges, long-term growth is expected as EV penetration increases [80][82] - **Renewables**: Positioned well to benefit from supply chain consolidation and the Inflation Reduction Act, despite current low demand [84] Financial Guidance and Capital Allocation - Jabil projects **$1.2 billion** in free cash flow for the year, with **80%** allocated to share buybacks and **20%** for tuck-in acquisitions [88][89] - The company aims for a **6% operating margin**, with strategies in place to improve capacity utilization and cost optimization [41][45] Conclusion - Jabil's ability to assist companies in manufacturing and supply chain management is underappreciated, with a strong presence in North America and capabilities to support engineering and manufacturing locally [91][92]