Accuray(ARAY) - 2025 Q2 - Quarterly Results

Executive Summary & Company Overview Accuray reported strong Q2 FY2025 financial performance, driven by strategic execution and growing demand Key Fiscal Q2 Highlights Accuray reported strong Q2 FY2025 results, with revenue up 8% to $116.2 million, achieving net income and raising guidance - Strong Q2 performance reflects outstanding execution of strategies, growing demand for solutions, particularly in fast-growing emerging markets, and breakthrough wins for the new Helix system[1] - Company is raising fiscal year 2025 guidance due to strong second quarter and first half results[7] Key Fiscal Q2 Financial Highlights (YoY) | Metric (in millions) | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Total Net Revenue | 116.2 | 107.2 | +8% | | Net Income (Loss) | 2.5 | (9.6) | Improved | | Adjusted EBITDA | 9.6 | 2.0 | +380% | About Accuray Accuray is a global leader in radiation therapy, expanding its potential to improve cancer care with unique solutions - Accuray is committed to expanding the powerful potential of radiation therapy to improve as many lives as possible, inventing unique, market-changing solutions for complex and commonly treatable cases[20] - The company is dedicated to continuous innovation in radiation therapy for oncology, neuro-radiosurgery, and beyond, partnering with clinicians and administrators[20] Financial Performance Review This section reviews Accuray's Q2 and H1 FY2025 financial performance, including revenue, profitability, and orders Fiscal Second Quarter Results (Q2 FY2025) Accuray's Q2 FY2025 saw significant revenue growth, positive net income, and increased Adjusted EBITDA Q2 Revenue Breakdown This section details Accuray's Q2 FY2025 revenue performance, showing growth in total net revenue driven by product sales Q2 FY2025 Revenue Breakdown (YoY) | Revenue Type (in millions) | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :------------------------- | :-------- | :-------- | :----------- | | Total Net Revenue | 116.2 | 107.2 | +8% | | Product Revenue | 61.2 | 51.5 | +19% | | Service Revenue | 55.0 | 55.7 | -1% | Q2 Profitability Metrics This section outlines Accuray's Q2 FY2025 profitability, highlighting improved net income and increased Adjusted EBITDA Q2 FY2025 Profitability Metrics (YoY) | Metric (in millions) | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Gross Profit | 41.9 | 35.9 | +16.7% | | Gross Profit Margin | 36.1% | 33.5% | +2.6 pp | | Operating Expenses | 37.2 | 39.9 | -7% | | Net Income (Loss) | 2.5 | (9.6) | Improved | | Net Income (Loss) per Share | 0.03 | (0.10) | Improved | | Adjusted EBITDA | 9.6 | 2.0 | +380% | Q2 Orders, Backlog & Book-to-Bill This section presents Accuray's Q2 FY2025 orders, backlog, and book-to-bill ratio, showing a year-over-year decrease Q2 FY2025 Orders and Backlog (YoY) | Metric (in millions) | Q2 FY2025 | Q2 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Gross Product Orders | 76.8 | 93.9 | -18% | | Book to Bill Ratio | 1.3 | 1.8 | -0.5 | | Order Backlog (as of Dec 31) | 463.1 | 492.1 | -6% | Q2 Cash and Equivalents This section provides Accuray's cash, cash equivalents, and short-term restricted cash balances across recent quarters Cash, Cash Equivalents, and Short-term Restricted Cash | Metric (in millions) | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | | :------------------- | :----------- | :----------- | :----------- | | Cash, Cash Equivalents, and Short-term Restricted Cash | 64.0 | 59.7 | 69.0 | Fiscal Six Months Results (H1 FY2025) H1 FY2025 saw total net revenue increase by 3%, with reduced net loss and improved Adjusted EBITDA, despite decreased orders H1 Revenue Breakdown This section details Accuray's H1 FY2025 revenue performance, showing modest growth in total net revenue, products, and services H1 FY2025 Revenue Breakdown (YoY) | Revenue Type (in millions) | H1 FY2025 | H1 FY2024 | Change (YoY) | | :------------------------- | :-------- | :-------- | :----------- | | Total Net Revenue | 217.7 | 211.1 | +3% | | Product Revenue | 109.6 | 104.9 | +4% | | Service Revenue | 108.2 | 106.2 | +2% | H1 Profitability Metrics This section outlines Accuray's H1 FY2025 profitability, showing a reduced net loss and improved Adjusted EBITDA H1 FY2025 Profitability Metrics (YoY) | Metric (in millions) | H1 FY2025 | H1 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Gross Profit | 76.4 | 75.4 | +1.3% | | Gross Profit Margin | 35.1% | 35.7% | -0.6 pp | | Operating Expenses | 73.8 | 77.1 | -4% | | Net Loss | (1.4) | (12.6) | Reduced | | Net Loss per Share | (0.01) | (0.13) | Reduced | | Adjusted EBITDA | 12.8 | 8.5 | +50% | H1 Orders and Book-to-Bill This section presents Accuray's H1 FY2025 gross product orders and book-to-bill ratio, indicating a year-over-year decrease in orders H1 FY2025 Orders and Book-to-Bill (YoY) | Metric (in millions) | H1 FY2025 | H1 FY2024 | Change (YoY) | | :------------------- | :-------- | :-------- | :----------- | | Gross Product Orders | 132.1 | 157.6 | -16% | | Book to Bill Ratio | 1.2 | 1.5 | -0.3 | Fiscal Year 2025 Financial Guidance Accuray updated its FY2025 financial guidance, projecting increased total revenue and Adjusted EBITDA, with market recovery assumptions Updated Guidance for FY2025 Accuray is raising its FY2025 guidance, projecting total revenue between $463M-$475M and Adjusted EBITDA between $28.5M-$31.0M - The Company is raising guidance for fiscal year 2025[12] - Guidance assumes minimal tariff impact and that the U.S. market will begin its recovery in the second half of fiscal 2025[12] Fiscal Year 2025 Financial Guidance | Metric | FY2025 Guidance (Revised) | | :----- | :------------------------ | | Total Revenue | $463 million to $475 million | | Adjusted EBITDA | $28.5 million to $31.0 million | Guidance Reconciliation (Non-GAAP) This section reconciles projected GAAP net loss to Adjusted EBITDA for FY2025, detailing adjustments for non-GAAP items Projected GAAP Net Loss to Adjusted EBITDA Reconciliation (FY2025) | Metric (in thousands) | Twelve Months Ending June 30, 2025 (From) | Twelve Months Ending June 30, 2025 (To) | | :-------------------- | :---------------------------------------- | :-------------------------------------- | | GAAP net loss | $(4,000) | $(1,500) | | Depreciation and amortization | $6,500 | $6,500 | | Stock-based compensation | $10,000 | $10,000 | | Interest expense, net | $13,000 | $13,000 | | Provision for income taxes | $3,000 | $3,000 | | Adjusted EBITDA | $28,500 | $31,000 | Non-GAAP Financial Measures Explanation This section clarifies Accuray's use of non-GAAP financial measures, particularly Adjusted EBITDA, explaining its purpose and limitations Use of Non-GAAP Financial Measures Accuray uses Adjusted EBITDA as a non-GAAP measure to supplement GAAP results, providing useful information by excluding non-cash items - Accuray supplements its GAAP financial statements with non-GAAP measures like Adjusted EBITDA, which excludes depreciation and amortization, stock-based compensation, interest expense, provision for income taxes, and ERP/ERP related expenditures[15][18] - Management believes Adjusted EBITDA provides useful supplemental information for performance and comparison, but acknowledges limitations as it is not prepared in accordance with GAAP and should not be considered in isolation[18][19] Corporate Information This section provides details on Accuray's conference call, safe harbor statement, and contact information for investor and public relations Conference Call Details Accuray hosted a conference call on February 5, 2025, to discuss Q2 FY2025 results, with webcast information for access and replays - Accuray hosted a conference call on February 5, 2025, at 1:30 p.m. PT/4:30 p.m. ET to discuss fiscal Q2 2025 results and recent corporate developments[13] - Live webcast and accompanying slide presentation were available on the Investor Relations section of Accuray's website, with a taped replay and archived webcast also provided[13][14] Safe Harbor Statement This press release contains forward-looking statements subject to 'safe harbor' provisions, involving risks where actual results may differ - Statements in this press release that are not historical facts are forward-looking statements subject to the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995[21] - Forward-looking statements relate to future results, guidance, strategies, market conditions, product introductions, and financial performance, involving risks and uncertainties that could cause actual results to differ materially[21] - The company assumes no obligation to update forward-looking statements, and investors should not put undue reliance on any forward-looking statements[22] Investor Relations Contact Contact information for investor relations (Aman Patel, ICR-Westwicke) and public relations (Beth Kaplan, Accuray) is provided for inquiries - Investor Relations contact: Aman Patel, CFA, ICR-Westwicke, +1 (443) 450-4191, aman.patel@westwicke.com[23] - Public Relations contact: Beth Kaplan, Accuray, +1 (408) 789-4426, bkaplan@accuray.com[23] Condensed Consolidated Financial Statements This section presents Accuray's unaudited condensed consolidated financial statements, including operations, balance sheets, and reconciliations Statements of Operations This section presents unaudited condensed consolidated statements of operations for Q2 and H1 FY2025, detailing revenue, gross profit, and net income (loss) Condensed Consolidated Statements of Operations (in thousands, except per share) | Metric | 3 Months Ended Dec 31, 2024 | 3 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2024 | 6 Months Ended Dec 31, 2023 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net revenue: | | | | | | Products | 61,189 | 51,538 | 109,558 | 104,888 | | Services | 54,985 | 55,700 | 108,161 | 106,242 | | Total net revenue | 116,174 | 107,238 | 217,719 | 211,130 | | Gross profit | 41,892 | 35,902 | 76,361 | 75,395 | | Total operating expenses | 37,185 | 39,866 | 73,803 | 77,146 | | Net income (loss) | 2,537 | (9,621) | (1,417) | (12,590) | | Net income (loss) per share - basic | 0.03 | (0.10) | (0.01) | (0.13) | Balance Sheets This section provides unaudited condensed consolidated balance sheets as of December 31, 2024, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Metric | Dec 31, 2024 | Jun 30, 2024 | | :-------------------- | :----------- | :----------- | | Total current assets | 325,891 | 323,236 | | Total assets | 478,382 | 468,627 | | Total current liabilities | 201,453 | 195,267 | | Total liabilities | 430,491 | 423,543 | | Total stockholders' equity | 47,891 | 45,084 | Summary of Orders and Backlog This table presents gross orders, net orders, order backlog, and book-to-bill ratio for Q2 and H1 FY2025 Summary of Orders and Backlog (in thousands, except ratio) | Metric | 3 Months Ended Dec 31, 2024 | 3 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2024 | 6 Months Ended Dec 31, 2023 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Gross orders | 76,762 | 93,856 | 132,127 | 157,590 | | Net orders | 55,639 | 54,606 | 85,295 | 86,346 | | Order backlog | 463,056 | 492,100 | 463,056 | 492,100 | | Book to bill ratio (a) | 1.3 | 1.8 | 1.2 | 1.5 | Reconciliation of GAAP Net Loss to Adjusted EBITDA This section reconciles GAAP net income (loss) to Adjusted EBITDA for Q2 and H1 FY2025, detailing non-GAAP adjustments Reconciliation of GAAP Net Loss to Adjusted EBITDA (in thousands) | Metric | 3 Months Ended Dec 31, 2024 | 3 Months Ended Dec 31, 2023 | 6 Months Ended Dec 31, 2024 | 6 Months Ended Dec 31, 2023 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | GAAP net income (loss) | 2,537 | (9,621) | (1,417) | (12,590) | | Depreciation and amortization | 1,513 | 1,546 | 2,977 | 2,797 | | Stock-based compensation | 2,284 | 2,314 | 4,638 | 4,706 | | Interest expense, net | 2,605 | 2,713 | 5,257 | 5,341 | | Provision for income taxes | 695 | 878 | 1,320 | 2,810 | | Restructuring charges | — | 2,633 | — | 2,633 | | ERP and ERP related expenditures | — | 1,545 | — | 2,815 | | Adjusted EBITDA | 9,634 | 2,008 | 12,775 | 8,512 | Forward-Looking Guidance Reconciliation This table reconciles projected GAAP net loss to Adjusted EBITDA for FY2025, as part of the company's financial guidance Projected GAAP Net Loss to Adjusted EBITDA Reconciliation (FY2025, in thousands) | Metric (in thousands) | Twelve Months Ending June 30, 2025 (From) | Twelve Months Ending June 30, 2025 (To) | | :-------------------- | :---------------------------------------- | :-------------------------------------- | | GAAP net loss | (4,000) | (1,500) | | Depreciation and amortization | 6,500 | 6,500 | | Stock-based compensation | 10,000 | 10,000 | | Interest expense, net | 13,000 | 13,000 | | Provision for income taxes | 3,000 | 3,000 | | Adjusted EBITDA | 28,500 | 31,000 |