Core Insights - Accuray Incorporated is undergoing a significant organizational, strategic, and operational transformation to enhance competitiveness and drive sustainable growth [1][3] - Steve La Neve has been appointed as the new CEO, succeeding Suzanne Winter, who will retire after six years [2][3] - The transformation plan aims to increase operating margins and improve organizational agility, with most initiatives set to be implemented in the current fiscal year [1][3] Leadership Changes - Steve La Neve brings over 40 years of medical-technology experience and a proven track record in operational excellence and revenue growth [3][4] - Steven F. Mayer has been appointed as Transformation Board Sponsor to oversee the execution of the transformation initiatives [5][6] - Chan W. Galbato has been nominated to the Board of Directors, bringing over 30 years of operational and strategic leadership experience [7] Financial Performance - Accuray expects total revenues for the fiscal 2026 first quarter to be between $92.5 million and $94 million, with service revenues exceeding plans but product revenues falling short in EIMEA and China [8][9] - The company anticipates reaching a high single-digit adjusted EBITDA margin run-rate within twelve months, aiming for double-digit margins in the medium to long term [6][8]

Core Insights - 5D Clinics and Icon Group are collaborating to enhance access to advanced radiation treatments in Australia, specifically through the introduction of the CyberKnife S7 System [2][3][4] - The first patient treatments using the CyberKnife S7 System have commenced in Melbourne, marking a significant step in improving cancer care accessibility [2][3] - The projected increase in new cancer cases in Australia from 212,332 in 2022 to 318,285 by 2045 highlights the urgent need for innovative treatment options like the CyberKnife System [3] Company Developments - Accuray Incorporated has partnered with 5D Clinics and Icon Group to operate CyberKnife System centers across Australia, focusing initially on the East Coast [2][3] - The CyberKnife S7 System is designed to deliver high doses of radiation with precision, reducing treatment sessions from 30-40 to just 1-5 outpatient sessions [6] - The partnership aims to improve patient outcomes and quality of life by providing advanced cancer care closer to home, eliminating the need for interstate travel for treatment [5][6] Industry Context - The introduction of the CyberKnife System addresses a significant unmet need in Australia for personalized and precise cancer care [3][4] - The collaboration between 5D Clinics, Icon Group, and Accuray is expected to transform cancer management in the region, responding to the growing demand for effective treatment options [3][5] - The CyberKnife System's advanced technology, which incorporates artificial intelligence for treatment precision, positions it as a leading solution in the radiation therapy market [6]

Core Viewpoint - Accuray Incorporated and the University of Wisconsin School of Medicine and Public Health have signed a memorandum of understanding (MOU) to collaborate on advancing online adaptive radiotherapy (OART) using Accuray's helical radiation treatment delivery platform, aiming to enhance personalized cancer care [1][2]. Group 1: Collaboration Details - The collaboration will focus on clinical research, education, training, and adaptive technology development to improve the personalization and precision of cancer treatment [1][2]. - Mu Young Lee, SVP of Research & Product Development at Accuray, emphasized the mutual goal of expanding the curative power of radiotherapy and making advanced treatment options feasible for clinical departments of all sizes [2]. Group 2: Technological Background - The University of Wisconsin–Madison developed the first helical radiation delivery platform, the TomoTherapy System, which introduced integrated 3D daily image-guidance with intensity-modulated radiation therapy (IG-IMRT) [3]. - Accuray has continued to enhance the helical platform to improve precision, accuracy, image quality, speed, versatility, and workflow efficiencies since the TomoTherapy System's introduction [3]. Group 3: Institutional Background - The University of Wisconsin School of Medicine and Public Health is recognized as a leading institution in health sciences education and research, employing over 5,600 faculty and staff and providing educational opportunities for nearly 3,000 students [5]. - The school ranked 9 among public medical schools for NIH funding in federal fiscal year 2024, highlighting its strong research capabilities [5].

Group 1 - The core focus of Accuray is to advance medicine through partnerships with clinicians and researchers, emphasizing the importance of setting the standard of care in radiation oncology [2] - The discussion at the ASTRO conference will center on trends in adaptive radiation medicine treatment, highlighting the integration of clinical insights and patient outcomes with investment perspectives [2] - Accuray aims to deliver both clinical and economic value to patients and healthcare systems, indicating a commitment to innovation in medical technology [2]

Core Viewpoint - Accuray Incorporated has introduced the Accuray Stellar Solution, a comprehensive tool set designed to enhance adaptive radiotherapy, allowing clinical teams to tailor treatments to individual patient needs [1][3]. Product Overview - The Accuray Stellar solution is a configuration of the Radixact Treatment Delivery System and will be showcased at the 2025 American Society for Radiation Oncology (ASTRO) Annual Meeting [2]. - This solution integrates with existing Accuray software and hardware, as well as vendor partner technologies, to expand radiation delivery options and streamline treatment workflows [4]. Clinical Benefits - The Accuray Stellar solution enables clinicians to deliver a full range of radiation therapy modalities, including image-guided radiation therapy (IMRT), stereotactic body radiation therapy (SBRT), and surface-guided radiation therapy (SGRT), optimizing outcomes for various cancer types [5]. - It offers capabilities for real-time motion tracking and correction, as well as offline adaptive protocols, providing a foundation for adaptive care that evolves with patient needs [6]. Innovative Features - The Adapt LTE tool, exclusive to Accuray Stellar, allows for retrospective evaluation of treatment plans against original therapy objectives, aiding in clinical decision-making and training [7]. - ClearRT helical kVCT imaging technology underpins the adaptive radiotherapy capabilities, providing high-resolution images that enhance treatment planning and patient care [8]. Company Commitment - Accuray is dedicated to continuous innovation in radiation therapy, aiming to improve patient outcomes and expand the potential of radiation treatments for complex cases [9].

Core Insights - Accuray Incorporated will host a discussion with analysts and investors on September 29, 2025, during the American Society of Radiation Oncology (ASTRO) Annual Meeting in San Francisco, California [1][2] - The event will feature global thought leaders discussing the role of adaptive radiotherapy in radiation medicine, covering various relevant topics [2] Company Overview - Accuray Incorporated (NASDAQ: ARAY) focuses on advancing radiation therapy to improve patient outcomes, offering innovative solutions for complex cases and enhancing treatment for commonly treatable cases [3] - The company is dedicated to continuous innovation in radiation therapy for oncology and neuro-radiosurgery, collaborating with clinicians and administrators to facilitate patient recovery [3] Event Details - The discussion will be available both in-person and virtually, with presentations starting at 1:30 pm PT (4:30 pm ET) [1] - Participants must register in advance by September 25, 2025, to attend the Accuray meeting [2]

PART I [Item 1. Business](index=5&type=section&id=Item%201.%20Business) Accuray specializes in radiation therapy, developing and supporting CyberKnife and TomoTherapy platforms for cancer treatment and market expansion - **Accuray Incorporated** develops, manufactures, sells, and supports **market-changing radiation therapy solutions**, including CyberKnife and TomoTherapy platforms, for precise and accurate treatments [15](index=15&type=chunk)[16](index=16&type=chunk) - Key strategic elements include increasing **physician adoption and patient awareness**, expanding the radiosurgery market, fostering **innovation**, and growing **international sales** through various channels [20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company's solutions aim for **better accuracy, flexibility, and control**, fewer and shorter treatments, and technology expansion beyond cancer to improve patient care [15](index=15&type=chunk) [Company Overview](index=5&type=section&id=The%20Company) Accuray, reincorporated in 2007, specializes in radiation therapy, providing CyberKnife and TomoTherapy platforms for precise advanced treatments - Accuray Incorporated, founded in 1990 and reincorporated in Delaware in 2007, develops, manufactures, sells, and supports **radiation therapy solutions** [15](index=15&type=chunk)[17](index=17&type=chunk) - Their core technologies, CyberKnife and TomoTherapy platforms (including Radixact System), deliver advanced treatments like SRS, SBRT, IMRT, IGRT, and ART, aiming for **precision and minimal healthy tissue dose** [16](index=16&type=chunk) - These systems serve radiation oncology and neurosurgery, treating cancerous/benign tumors and neurologic/endocrine disorders [16](index=16&type=chunk) [Our Strategy](index=5&type=section&id=Our%20Strategy) Accuray's strategy focuses on expanding clinical options and the curative power of radiation therapy through innovation and global market growth - Accuray's goal is to develop equipment and technology for **precise, accurate, customized, and leading-edge treatments** for cancerous/benign tumors and neurologic/endocrine disorders [18](index=18&type=chunk) - Strategic elements include increasing physician adoption and patient awareness, expanding the radiosurgery market, **continuous innovation** through clinical development and collaboration, and expanding international sales [20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) - The company pursues **strategic partnerships and joint ventures**, such as with CNNC High Energy Equipment (Tianjin) Co., Ltd. in China, to complement growth, increase sales, and broaden technology [24](index=24&type=chunk) [Our Products](index=9&type=section&id=Our%20Products) Accuray offers robotic (CyberKnife) and helical (TomoTherapy, Radixact) radiation delivery systems, complemented by comprehensive software solutions - Accuray's product suite includes robotic (CyberKnife System) and helical (TomoTherapy platform, Radixact System, Accuray Helix, Tomo C System) radiation delivery devices, along with **comprehensive software solutions** [25](index=25&type=chunk)[26](index=26&type=chunk)[50](index=50&type=chunk)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk) - The CyberKnife S7 System offers **real-time AI-driven motion tracking** and synchronized treatment delivery for SRS and SBRT, with sub-millimeter accuracy and frameless options for neuro-radiosurgery [26](index=26&type=chunk)[28](index=28&type=chunk)[30](index=30&type=chunk)[35](index=35&type=chunk) - Helical systems feature **ClearRT™ kVCT imaging** for diagnostic-like quality, integrated treatment planning, and adaptive radiation therapy capabilities (Synchrony, VitalHold Solution) to enhance precision and efficiency [57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk)[65](index=65&type=chunk)[66](index=66&type=chunk) [Our Software Solutions](index=18&type=section&id=Our%20Software%20Solutions) Accuray's software solutions provide integrated treatment planning and data management, enhancing workflow and patient care across its platforms - Accuray Precision TPS and iDMS Data Management Systems offer **integrated treatment planning and data management** for all compatible Accuray delivery platforms [69](index=69&type=chunk)[73](index=73&type=chunk) - Key features include multi-modality image fusion, auto-segmentation, VOLO Optimizer for faster plan creation and delivery, **PreciseART for adaptive radiotherapy**, and PreciseRTX for efficient retreatment planning [70](index=70&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) - iDMS provides a **centralized platform for patient treatment data**, user/privilege management, secure data storage, customizable report generation, and connectivity with other radiation oncology department systems [73](index=73&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) [Sales and Marketing](index=19&type=section&id=Sales%20and%20Marketing) Accuray utilizes a direct sales model in key markets and distributors elsewhere, with a strategic joint venture in China to expand its global reach - Accuray markets directly in the U.S. and key international regions (Western Europe, Japan, India, Canada), and through distributors in other regions, including Europe, Russia, the Middle East, Africa, Asia Pacific, and Latin America [78](index=78&type=chunk) - Sales and marketing efforts focus on educating radiation oncologists, neurosurgeons, and hospital administrators on the **clinical and economic benefits** of their robotic and helical platforms [80](index=80&type=chunk) - The **CNNC Accuray joint venture in China** manufactures and sells the locally branded Tomo® C system (Class B license) and distributes other Accuray systems (Radixact, CyberKnife S7), targeting China's underserved radiation oncology market [82](index=82&type=chunk)[83](index=83&type=chunk) [Manufacturing](index=21&type=section&id=Manufacturing) Accuray manufactures its platforms in Wisconsin and linear accelerators in China, relying on single-source suppliers for critical components - Accuray manufactures CyberKnife and TomoTherapy platforms in **Madison, Wisconsin**, and linear accelerators in **Chengdu, China** [87](index=87&type=chunk) - The company relies on **single-source suppliers** for critical components (e.g., robot, couch, magnetron) and mitigates supply risks through long-term contracts and forecasts [86](index=86&type=chunk) - Manufacturing processes comply with **ISO 13485:2016 and FDA Quality System Regulations**, with facilities expected to be adequate for growth over the next three years [87](index=87&type=chunk) [Intellectual Property](index=21&type=section&id=Intellectual%20Property) Accuray protects its proprietary technology through a robust portfolio of patents, trade secrets, trademarks, and confidentiality agreements - Accuray protects its proprietary products, components, processes, and know-how through **patents, trade secrets, trademarks, copyrights, and confidentiality agreements** [89](index=89&type=chunk) - As of June 30, 2025, the company held **530 U.S. and foreign patents** and 84 U.S. and foreign patent applications, covering CyberKnife and TomoTherapy platforms and new technologies [90](index=90&type=chunk) [Research and Development](index=22&type=section&id=Research%20and%20Development) Accuray's R&D focuses on expanding clinical applications, product differentiation, and improving product performance through internal efforts and collaborations - Accuray's R&D activities focus on expanding clinical applications, driving product differentiation, and improving usability, interoperability, reliability, and performance of existing products [92](index=92&type=chunk) - Research aims to enable new product development by advancing core technologies such as **next-generation linear accelerators, adaptive therapy, patient imaging, motion management**, and treatment planning [92](index=92&type=chunk) - A key component of their R&D program involves **collaborations with research programs** at hospitals, cancer treatment centers, academic institutions, and industrial partners worldwide [94](index=94&type=chunk)[95](index=95&type=chunk) [Competition](index=22&type=section&id=Competition) The medical device and non-invasive cancer treatment industries are highly competitive, with Accuray competing against major players and alternative treatments - The medical device and non-invasive cancer treatment industries are **intensely competitive** with rapidly evolving technologies [96](index=96&type=chunk) - Accuray competes with established leaders like **Varian Medical Systems and Elekta AB**, as well as other radiosurgical and radiation therapy companies, and alternative treatments such as traditional surgery, chemotherapy, and immunotherapy [97](index=97&type=chunk)[98](index=98&type=chunk) - Competitive factors include product reliability, treatment quality, service capabilities, patient throughput, price, payment terms, and supplier viability, with Accuray aiming to compete on **technology and value** [101](index=101&type=chunk) [U.S. Reimbursement](index=26&type=section&id=U.S.%20Reimbursement) U.S. healthcare providers rely on government and private payors for reimbursement of Accuray's treatments, with rates influencing purchasing decisions - U.S. healthcare providers rely on government (Medicare, Medicaid) and private third-party payors for **reimbursement of treatments** using Accuray's products [104](index=104&type=chunk) - Medicare coverage for CyberKnife, TomoTherapy, and Radixact treatments is based on Local Coverage Determinations or 'reasonable and necessary' criteria, covering various tumor indications [105](index=105&type=chunk) - Radiosurgery treatments are coded with **CPT codes 77372 and 77373**, while IMRT uses 77385 and 77386; payment rates are established by CMS and reviewed annually, influencing customer purchasing

Core Insights - Accuray Incorporated (ARAY) reported breakeven earnings per share (EPS) for the fourth quarter of fiscal 2025, missing the Zacks Consensus Estimate by 100% compared to the previous year's EPS of 3 cents [1][5] - The company's quarterly revenues were $127.5 million, a decrease of 5% year over year, but exceeded the Zacks Consensus Estimate by 2.5% [2][5] Revenue Breakdown - Product revenues fell by 11.3% year over year to $70.7 million, primarily due to weaker sales in China, EIMEA, and Japan [4][10] - Service revenues increased by 4.1% year over year to $56.8 million, supported by a growing installed base and improved service contract capture rates [4][10] Financial Performance - Gross profit improved by 1.3% year over year to $38.9 million, with gross margin expanding by 200 basis points to 30.6% [6] - Operating profit was $4.2 million, down from $6.8 million in the prior-year quarter [7] Financial Position - At the end of the fourth quarter, Accuray had cash and cash equivalents of $57.4 million, down from $77.8 million at the end of the previous quarter [8] - Total debt decreased to $136.5 million from $173.8 million in the prior quarter [8] Future Guidance - For fiscal 2026, Accuray expects revenues in the range of $471 million to $485 million, which is above the current consensus estimate of $452.7 million [9][10] Market Dynamics - The company faced challenges from lower product revenue in China and EIMEA due to tariff disruptions and geopolitical unrest, but saw a 22% sales surge in APAC and a 24% rebound in the Americas [10][11] - The book-to-bill ratio remained healthy at 1.2, indicating sustained demand despite regional challenges [11] Tariff Impact and Mitigation Strategies - Tariffs had a notable impact, costing approximately $4 million during the quarter, with half mitigated through a duty drawback program [12][13] - Long-term strategies include establishing a manufacturing site as a foreign trade zone and accelerating dual-sourcing for key components to cushion profitability from tariff volatility [13]

Company Performance - Accuray (ARAY) reported break-even quarterly earnings per share, compared to the Zacks Consensus Estimate of $0.03, and earnings of $0.03 per share a year ago, resulting in an earnings surprise of -100.00% [1] - The company posted revenues of $127.54 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.49%, but down from year-ago revenues of $134.29 million [2] - Over the last four quarters, Accuray has surpassed consensus EPS estimates two times and topped consensus revenue estimates four times [2] Stock Performance - Accuray shares have lost about 25.3% since the beginning of the year, while the S&P 500 has gained 9.6% [3] - The current consensus EPS estimate for the coming quarter is -$0.03 on revenues of $103.7 million, and -$0.04 on revenues of $452.65 million for the current fiscal year [7] Industry Outlook - The Zacks Medical - Instruments industry is currently in the bottom 39% of over 250 Zacks industries, indicating potential challenges for stocks within this sector [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact Accuray's stock performance [5]

Financial Data and Key Metrics Changes - Total revenue for Q4 was approximately $128 million, down 5% year over year, driven by lower product revenue in China and EIMEA [10][21] - For the full fiscal year, total revenue reached a record $459 million, up 3% from last year, with international business growing 4% year over year [22] - Adjusted EBITDA for Q4 was $9.4 million, and for the full year, EBITDA was $28.3 million, up 44% year over year [26] Business Line Data and Key Metrics Changes - Product revenue in Q4 was $71 million, down 11% year over year, while service revenue was $57 million, up 4% year over year [22][23] - Full year service revenue was $221 million, up 4% from last year, with contract revenue now making up about 90% of total service revenue [23][16] - Service gross margins improved by nine points driven by lower parts consumption and successful pricing initiatives [25] Market Data and Key Metrics Changes - Revenue in China declined 14% year over year, while EIMEA saw a 34% decline [10] - APAC region revenue was up 22%, and The Americas saw a 24% increase, indicating strong performance outside the challenged regions [11] - For the full year, China product revenue grew 20% year over year, while EIMEA was down 32% [15] Company Strategy and Development Direction - The company aims to penetrate emerging markets and improve operational models with a focus on adjusted EBITDA and profitability [36] - A significant focus is on driving further adjusted EBITDA margin expansion through cost productivity and pricing actions [35] - The company is working on establishing a foreign trade zone to mitigate tariff impacts and enhance operational efficiency [32][29] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the U.S. market, expecting gradual improvement in fiscal year 2026 [19][50] - The geopolitical environment has created challenges, but the company has successfully navigated these through strategic actions [5][10] - Guidance for fiscal year 2026 includes a revenue range of $471 million to $485 million and an adjusted EBITDA range of $31 million to $35 million [39] Other Important Information - The company completed a comprehensive debt refinancing, enhancing financial flexibility and supporting long-term growth initiatives [28][19] - The company incurred approximately $4 million in cash tariffs in Q4, with half mitigated through various initiatives [34][54] Q&A Session Summary Question: Update on China market conditions - Management indicated that conditions in China have improved but have not fully returned to normal, with strong customer demand still present [42][43] Question: U.S. market improvement assumptions - Management noted that Q4 performance in The Americas was strong, with a focus on converting backlog and accelerating installations [50] Question: Outlook for Helix in India and other emerging markets - Management confirmed solid performance for Helix in its first year and expects growth in India and surrounding regions [52][53] Question: Tariff impact run rate for the upcoming fiscal year - Management confirmed a $4 million cash impact from tariffs, with expectations for similar run rates in fiscal year 2026 [54][55]