Orders and Backlog - Gross orders for the three months ended December 31, 2025, were $66.064 million, a decrease of $10.7 million compared to the same period in the prior fiscal year [130]. - Net orders for the three months ended December 31, 2025, were $32.611 million, down from $55.639 million in the same period of 2024 [130]. - The order backlog at the end of December 31, 2025, was $383.332 million, compared to $463.056 million at the end of December 31, 2024 [130]. - Gross orders decreased by $26.5 million for the six months ended December 31, 2025, primarily due to timing issues in the EIMEA and China regions [131]. - Net orders decreased by $23.0 million and $46.8 million during the three and six months ended December 31, 2025, primarily due to a decrease in gross orders and an increase in age-outs [134]. - The book-to-bill ratio was 1.5 and 1.3 for the three and six months ended December 31, 2025, compared to 1.3 and 1.2 for the same periods in 2024, indicating strong demand for products [132]. Financial Performance - Net revenue for the three months ended December 31, 2025, was $102.241 million, a decrease of 12% compared to $116.174 million in 2024; for the six months, it was $196.183 million, down 10% from $217.719 million [135]. - Products net revenue decreased by $16.2 million and $27.4 million during the three and six months ended December 31, 2025, primarily due to lower shipments to China [137]. - Services net revenue increased by $2.2 million and $5.8 million during the three and six months ended December 31, 2025, due to higher contract revenues from an increased installed base [138]. - Gross profit for the three months ended December 31, 2025, was $24.072 million, a decrease of 43% from $41.892 million in 2024; for the six months, it was $51.083 million, down 33% from $76.361 million [140]. - Total operating expenses for the three months ended December 31, 2025, were $35.638 million, a decrease of 4% from $37.185 million in 2024; for the six months, they were $73.962 million, nearly unchanged from $73.803 million [141]. - The company reported a net loss of $35.4 million for the six months ended December 31, 2025 [161]. Restructuring and Charges - Restructuring charges for the fiscal year 2026 are expected to be approximately $13 million, with total restructuring charges during the three and six months ended December 31, 2025, amounting to $6.1 million and $8.9 million respectively [127]. - Restructuring charges totaled $6.075 million for the three months ended December 31, 2025, and $8.886 million for the six months, reflecting costs related to severance and employee-related expenses [145]. Cash Flow and Financing - As of December 31, 2025, the company had $41.3 million in cash and cash equivalents, excluding restricted cash, and expects to have sufficient cash resources for at least the next 12 months [153]. - Net cash used in operating activities was $3.8 million for the six months ended December 31, 2025, compared to $5.5 million in the same period of 2024 [160]. - The company used $9.4 million in investing activities during the six months ended December 31, 2025, primarily for property and equipment purchases and capitalized software investments [162]. - The company entered into a Financing Agreement providing for a $150 million term loan facility and a $20 million revolving credit facility, with amendments made in December 2025 [155]. - The company has $150.0 million in borrowings under the Financing Agreement, with interest rates tied to variable rates, which could lead to an annual interest expense change of approximately $0.8 million for a 50 basis point change [177]. - As of December 31, 2025, $18.0 million of the 2026 Notes remain outstanding, due on June 1, 2026 [158]. Market and Economic Conditions - The company expects gross margins and net income (loss) to continue to be adversely affected by increased material costs and logistics expenses through at least fiscal year 2026 [119]. - The company anticipates that ongoing supply chain challenges and inflation will impact cash from operations through at least fiscal year 2026 [119]. - The company is navigating significant tariff uncertainties related to U.S.-China trade, which are expected to have incremental costs and adversely impact sales to China [126]. - The geographic revenue breakdown showed a significant decline in China, with net revenue of $17.669 million for the three months ended December 31, 2025, down 51% from $35.974 million in 2024 [139]. - The economic uncertainty may limit the company's ability to accurately make and evaluate estimates and judgments regarding financial statements [168]. Risk Management - The company has developed a foreign exchange risk management policy and entered into foreign currency forward contracts to mitigate currency exchange rate fluctuation risk [176]. - The company maintains reserves for potential credit losses and performs ongoing credit evaluations of customers [173]. - Single-source suppliers currently provide several components, but alternative sources are believed to be available if needed [174]. - The company has not experienced significant risk of loss on cash and cash equivalents deposited with major financial institutions [171]. Joint Ventures - The joint venture in China aims to manufacture and sell radiation oncology systems, with the Tomo C radiation therapy system receiving NMPA approval in September 2023 [125]. - Revenue from joint ventures represented approximately 17% of total net revenue for the three months ended December 31, 2025, and 30% for the same period in 2024 [172].

Core Insights - Accuray Incorporated reported an earnings miss with an EPS of -$0.11, below the estimated -$0.02, and revenue of $102.24 million, falling short of the expected $121.19 million [1][6] Financial Performance - The company has a price-to-sales ratio of 0.19, indicating that investors are paying 19 cents for every dollar of sales [3][6] - The enterprise value to sales ratio is 0.45, suggesting a moderate valuation relative to its sales [3][6] - Accuray's enterprise value to operating cash flow ratio is 9, indicating efficient cash flow generation relative to its enterprise value [4] Debt and Liquidity - The debt-to-equity ratio is approximately 2.90, indicating a higher reliance on debt financing [4][6] - The current ratio stands at 1.55, suggesting that the company has adequate liquidity to cover its short-term liabilities [5][6] Strategic Initiatives - CEO Steve La Neve emphasized four key pillars for the company's focus: commercial simplification, global functional alignment, elevation of service and product development, and optimization of cost structure and footprint [2]

Core Viewpoint - Accuray is undergoing a comprehensive transformation plan aimed at improving operational efficiency, accountability, and profitability, while facing challenges from geopolitical instability and tariff impacts, particularly in China. Financial Performance - Accuray reported a net revenue of $102.2 million for Q2, down 12% year-over-year, with product revenue falling to $45.0 million (down 26%) and service revenue increasing to $57.2 million (up 4%) [5][9][10] - The gross margin decreased to 23.5% from 36.1% a year ago, primarily due to a significant drop in product gross margin, which fell to 19.7% from 43.5% [5][12] - The company posted an operating loss of $11.6 million compared to an operating income of $4.7 million in the prior-year quarter, with adjusted EBITDA showing a loss of $1.9 million [13] Strategic Initiatives - The company is targeting an annualized operating profitability improvement of approximately $25 million, which includes a workforce reduction of about 15% and expects around $12 million of benefit in fiscal 2026 [2][5] - Accuray is focusing on expanding its service portfolio to create a "solutions-oriented" offering, enhancing uptime and driving higher-margin recurring revenue [7] - Initiatives include optimizing pricing, improving billing and collections, and building a structured distributor partnership program [6][7][8] Guidance and Outlook - The fiscal 2026 revenue guidance has been revised to $440 million to $450 million, with adjusted EBITDA expectations of $22 million to $25 million, reflecting ongoing volatility in China and tariff pressures [16][22] - Management aims for a high single-digit adjusted EBITDA margin run rate within nine months, with aspirations to reach double digits in the medium to long term [17] Market Dynamics - The decline in product revenue is attributed to geopolitical tensions and tariff impacts, particularly affecting the Chinese market [4][9][14] - Despite the challenges, discussions with customers indicate no significant downturn in hospital capital expenditure appetite [18] Balance Sheet - As of the end of the quarter, Accuray had $41.9 million in total cash and equivalents, down from $63.9 million in the previous quarter, primarily due to working capital usage and restructuring payments [19]

Financial Data and Key Metrics Changes - Net revenue for the second quarter was $102.2 million, down 12% year-over-year and down 13% on a constant currency basis [16] - Product revenue decreased by 26% overall and 28% on a constant currency basis, primarily due to lower-than-expected product revenue in China [16] - Service revenue was $57.2 million, up 4% from the prior year and up 3% on a constant currency basis [16] - Overall gross margin for the quarter was 23.5%, down from 36.1% in the prior year, with product gross margins at 19.7% compared to 43.5% in the prior year [18] - Operating loss for the quarter was $11.6 million compared to an income of $4.7 million in the prior year [21] - Adjusted EBITDA for the quarter was a loss of $1.9 million compared to positive $9.6 million in the prior year [21] Business Line Data and Key Metrics Changes - Product gross orders for the second quarter were approximately $66 million, with a book-to-bill ratio of 1.5x [17] - Service gross margins were 26.6%, down from 27.7% in the prior year, primarily due to higher net parts consumption [19] Market Data and Key Metrics Changes - The company ended the second quarter with a reported order backlog of approximately $383 million, representing over 18 months of product revenue [17] - The decline in product revenue was significantly impacted by ongoing geopolitical tensions and tariffs affecting the China market [13][16] Company Strategy and Development Direction - The company announced a comprehensive strategic, operational, and organizational transformation plan aimed at improving accountability, cost control, and execution [6] - The transformation plan targets an approximately $25 million improvement in annualized operating profitability, including a workforce reduction of about 15% [7] - The company is shifting towards a comprehensive solutions-oriented service offering to increase customer uptime and drive higher-margin recurring revenue [8][10] Management's Comments on Operating Environment and Future Outlook - The management acknowledged that external pressures, including tariffs and geopolitical instability, have affected demand patterns and commercial activity [13][14] - The revised revenue guidance for fiscal 2026 is now in the range of $440 million-$450 million, with adjusted EBITDA guidance of $22 million-$25 million [14] - Despite external headwinds, the company remains focused on delivering against transformation commitments and strengthening its foundation for sustained, profitable growth [15] Other Important Information - The company expects approximately $10 million of restructuring charges across the second, third, and fourth fiscal quarters related to workforce reductions and other implementation costs [8] - The leadership team emphasizes the need for teamwork, cross-functional collaboration, and data-driven decision-making to create a performance-driven environment [12] Q&A Session Summary Question: Revenue guidance cut details - The company clarified that the revenue guidance cut was influenced by ongoing tariffs and an unstable geopolitical environment, particularly in China, which has affected demand patterns and commercial activity [26][27][28] Question: Future product gross margins expectations - Product gross margins are expected to be impacted by tariffs and inflation, with projections indicating they may range between 20%-30% depending on product mix and timing of releases [30][32] Question: New initiatives for returning to growth - The company is focusing on solutions-oriented service offerings and restructuring distributor partnerships to drive growth, with expectations for positive results from these initiatives [36][39]

Financial Data and Key Metrics Changes - Net revenue for the second quarter was $102.2 million, down 12% year-over-year and down 13% on a constant currency basis [16] - Product revenue decreased by 26% overall and 28% on a constant currency basis, primarily due to lower-than-expected product revenue in China [16] - Service revenue was $57.2 million, up 4% from the prior year and up 3% on a constant currency basis [16] - Operating loss for the quarter was $11.6 million compared to an income of $4.7 million in the prior year [21] - Adjusted EBITDA for the quarter was a loss of $1.9 million compared to positive $9.6 million in the prior year [21] Business Line Data and Key Metrics Changes - Product growth orders for the second quarter were approximately $66 million, with a book-to-bill ratio of 1.5 [17] - Service growth margins were 26.6% compared to 27.7% in the prior year, primarily driven by higher net parts consumption [19] - Overall growth margin for the quarter was 23.5% compared to 36.1% in the prior year, with product growth margins at 19.7% compared to 43.5% in the prior year [18] Market Data and Key Metrics Changes - The company noted that external pressures, particularly tariffs and geopolitical instability, affected demand patterns and commercial activity [13][14] - The order backlog at the end of the second quarter was approximately $383 million, representing over 18 months of product revenue [17] Company Strategy and Development Direction - The company announced a comprehensive strategic, operational, and organizational transformation plan aimed at improving accountability, cost control, and execution [6] - The transformation plan targets an approximately $25 million improvement in annualized operating profitability, including a workforce reduction of about 15% [7] - The company is shifting towards a comprehensive solutions-oriented service offering to increase customer uptime and drive higher-margin recurring revenue [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed that the ongoing tariffs and geopolitical environment, particularly regarding China, have impacted business performance [13][14] - The company revised its fiscal 2026 revenue guidance to a range of $440-$450 million, with Adjusted EBITDA guidance of $22-$25 million [15] - Despite external headwinds, management remains focused on delivering transformation commitments and strengthening the foundation for sustained, profitable growth [15] Other Important Information - The company is implementing systems and processes to ensure proper billing for services provided, which had previously been an issue [9] - Management emphasized the importance of teamwork, cross-functional collaboration, and data-driven decision-making to create a performance-driven environment [12] Q&A Session Summary Question: Revenue guidance cut details - Management clarified that the revenue guidance cut was influenced by ongoing tariffs and an unstable geopolitical environment, particularly in China, which has affected demand patterns and commercial activity [26][28][29] Question: Product growth margins expectations - Management indicated that product growth margins are expected to be impacted by tariffs and inflation, with projections of margins between 20%-30% depending on product mix and timing of releases [30][32] Question: New initiatives for returning to growth - Management discussed initiatives focused on service offerings and distributor partnerships, emphasizing a tiered pay-for-performance model to enhance revenue generation [36][40]

Financial Data and Key Metrics Changes - Net revenue for the second quarter was $102.2 million, down 12% year-over-year and down 13% on a constant currency basis [16] - Adjusted EBITDA for the quarter was a loss of $1.9 million compared to a positive $9.6 million in the prior year [21] - Operating loss for the quarter was $11.6 million compared to an income of $4.7 million in the prior year [20] Business Line Data and Key Metrics Changes - Product revenue for the second quarter was $45 million, down 26% overall and down 28% on a constant currency basis, primarily due to lower-than-expected product revenue in China [16] - Service revenue was $57.2 million, up 4% from the prior year and up 3% on a constant currency basis, indicating resilience in the service business [17] - Overall gross margin for the quarter was 23.5%, down from 36.1% in the prior year, with product gross margins at 19.7% compared to 43.5% in the prior year [18] Market Data and Key Metrics Changes - The company reported a product growth order of approximately $66 million, with a book-to-bill ratio of 1.5 [17] - The order backlog at the end of the second quarter was approximately $383 million, representing over 18 months of product revenue [17] Company Strategy and Development Direction - The company announced a comprehensive strategic, operational, and organizational transformation plan aimed at improving accountability, cost control, and execution [5] - The transformation plan targets an approximately $25 million improvement in annualized operating profitability, including a workforce reduction of about 15% [7] - The company is shifting towards a comprehensive solutions-oriented service offering to enhance customer uptime and drive higher-margin recurring revenue [8][10] Management's Comments on Operating Environment and Future Outlook - The company acknowledged that ongoing tariffs and geopolitical instability, particularly related to China, have impacted demand patterns and commercial activity [12][14] - Revised revenue guidance for fiscal 2026 is now in the range of $440-$450 million, with Adjusted EBITDA guidance of $22-$25 million, down from previous estimates [14][15] - Management remains focused on delivering transformation commitments and strengthening the foundation for sustained, profitable growth [15] Other Important Information - Total cash, cash equivalents, and short-term restricted cash amounted to $41.9 million, down from $63.9 million at the end of the last quarter [22] - The company is implementing systems and processes to ensure proper billing for services provided, addressing past issues of not collecting for services rendered [9] Q&A Session Summary Question: Revenue guidance cut details - Management clarified that the revenue guidance cut was influenced by ongoing tariffs and an unstable geopolitical environment, particularly in China, affecting demand patterns and commercial activity [24][25] Question: Product growth margins expectations - Management indicated that product growth margins are expected to be impacted by tariffs and inflation, with expectations to range between 20%-30% depending on product mix and timing of releases [26][27] Question: New initiatives for returning to growth - Management discussed initiatives focused on restructuring for growth, including a tiered service offering and improved distributor partnerships, aiming for steady top-line growth [28][30]

Q2'FY26 Earnings Call Supplemental Presentation February 4, 2026 Forward-looking Statements This presentation is intended exclusively for investors. It is not intended for use in Sales or Marketing. Safe Harbor Statement Statements in this presentation (including the oral commentary that accompanies it) that are not statements of historical fact are forward-looking statements and are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements i ...

Financial Performance - Total net revenue for Q2 fiscal 2026 was $102.2 million, a decrease of 12% from $116.2 million in Q2 fiscal 2025[5] - Product revenue decreased by 26% to $45.0 million, down from $61.2 million in the prior year, while service revenue increased by 4% to $57.2 million[5] - Total gross profit was $24.1 million, representing 23.5% of total net revenue, down from 36.1% in the prior year[6] - Net loss for Q2 fiscal 2026 was $13.8 million, or a diluted net loss of $0.11 per share, compared to a net income of $2.5 million in Q2 fiscal 2025[9] - Total net revenue for the three months ended December 31, 2025, was $102,241,000, a decrease of 12% compared to $116,174,000 for the same period in 2024[30] - Net income (loss) for the three months ended December 31, 2025, was $(13,770,000), compared to a net income of $2,537,000 for the same period in 2024[30] - Adjusted EBITDA for the three months ended December 31, 2025, was $(1,936,000), compared to $9,634,000 for the same period in 2024[36] Revenue Guidance and Projections - Total net revenue guidance for fiscal year 2026 is projected to be between $440 million and $450 million[18] - Adjusted EBITDA is expected to be in the range of $22 million to $25 million for fiscal year 2026[18] - Projected GAAP net loss for the twelve months ending June 30, 2026, is estimated to be between $(39,000,000) and $(36,000,000)[39] Operating Expenses - Operating expenses for Q2 fiscal 2026 were $35.6 million, a decrease of 4% from $37.2 million in the prior year, including $6.1 million in restructuring charges[7] - Total operating expenses for the six months ended December 31, 2025, were $73,962,000, slightly up from $73,803,000 in the same period of 2024[30] Orders and Backlog - Gross product orders were $66.1 million, down from $76.8 million in the prior year, with a book to bill ratio of 1.5[10] - Gross orders for the three months ended December 31, 2025, were $66,064,000, down 14% from $76,762,000 in the prior year[34] - The company reported a book to bill ratio of 1.5 for the three months ended December 31, 2025, compared to 1.3 in the previous year[34] - The order backlog as of December 31, 2025, was $383,332,000, unchanged from the previous year[34] Cash Position - Cash, cash equivalents, and short-term restricted cash were $41.9 million as of December 31, 2025, a decrease of $16.1 million from June 30, 2025[11] - Cash and cash equivalents as of December 31, 2025, were $41,295,000, down from $57,416,000 as of June 30, 2025[32] Research and Development - Research and development expenses for the three months ended December 31, 2025, were $10,650,000, a decrease from $13,644,000 in the same period of 2024[30]

Core Insights - Accuray Incorporated reported a total net revenue of $102.2 million for the second quarter of fiscal 2026, a decrease of 12% compared to $116.2 million in the same quarter of the previous fiscal year [3] - The company is undergoing a transformation plan aimed at improving operational profitability by approximately $25 million annually, with an expected realization of about $12 million in fiscal year 2026 [7] - The CEO expressed confidence in the company's trajectory, emphasizing objectives to accelerate growth, enhance competitiveness, and deliver long-term value [2] Financial Performance - Total net revenue for the second quarter of fiscal 2026 was $102.2 million, down from $116.2 million in the prior year [3] - Product revenue decreased by 26% to $45.0 million, while service revenue increased by 4% to $57.2 million [3] - Gross profit was $24.1 million, representing 23.5% of total net revenue, down from 36.1% in the prior year [4] Operating Expenses and Losses - Operating expenses were $35.6 million, a decrease of 4% from $37.2 million in the previous year, including $6.1 million in restructuring charges [5] - The net loss for the second quarter was $13.8 million, or a diluted net loss of $0.11 per share, compared to a net income of $2.5 million in the prior year [6] - Adjusted EBITDA was negative at $1.9 million, a decline from a positive $9.6 million in the same quarter last year [6] Strategic Initiatives - The transformation plan includes organizational realignment, cost structure optimization, and sales enablement to enhance competitiveness [7] - The company initiated a restructuring plan that recorded $6.1 million in charges, with total expected restructuring charges for fiscal year 2026 projected at approximately $13 million [7] - Gross product orders were $66.1 million, down from $76.8 million in the prior year, with a book-to-bill ratio of 1.5 [8] Cash Position - Cash, cash equivalents, and short-term restricted cash totaled $41.9 million as of December 31, 2025, a decrease of $16.1 million from June 30, 2025 [9] Guidance - The company updated its fiscal year 2026 guidance, expecting total net revenue in the range of $440 million to $450 million and adjusted EBITDA between $22 million and $25 million [17]

Core Viewpoint - Accuray Incorporated will report its financial results for the second quarter of fiscal year 2026 on February 4, 2026, following the end of the quarter on December 31, 2025 [1]. Group 1: Financial Reporting - The financial results conference call will be hosted by company management at 1:30 p.m. PT/4:30 p.m. ET [1]. - Dial-in numbers for the conference call are provided for both the USA and international participants [2]. - A replay of the conference call will be available approximately one hour after its conclusion for one week [2]. Group 2: Webcast Information - A live webcast of the conference call will be accessible from the Investor Relations section of the company's website [3]. - The webcast replay will remain available until Accuray announces its results for the third quarter of fiscal 2026 [3]. Group 3: Company Overview - Accuray is focused on advancing radiation therapy to improve patient lives, offering innovative solutions for complex cases and enhancing treatment for commonly treatable cases [4]. - The company is dedicated to continuous innovation in radiation therapy for oncology and neuro-radiosurgery, collaborating with clinicians and administrators [4]. - Accuray is headquartered in Madison, Wisconsin, and has facilities worldwide [4].