Financial Data and Key Metrics Changes - Revenue for the third quarter was $113 million, up 12% year over year and up 14% on a constant currency basis [18] - Adjusted EBITDA for the quarter was $6 million compared to $1.1 million from the prior year, driven by higher volume, pricing, and operational improvements [10][21] - The overall gross margin for the quarter was 27.9%, down from 28.7% in the prior year, primarily due to incremental net margin deferral associated with shipments to China [20] Business Line Data and Key Metrics Changes - Product revenue for the third quarter was $57 million, up 16% from the prior year, reflecting a 23% increase in unit volume [19] - Service revenue for the quarter was $56 million, up 9% from the prior year [19] - The service business represented approximately 49% of total revenue and 59% of gross margin for the quarter [10] Market Data and Key Metrics Changes - The book to bill ratio was over 1.2, indicating healthy customer demand across both developed and emerging markets [11] - Order growth was driven largely by new customer expansion and approximately 35% from the replacement of aged equipment [11] - The company reported a backlog of approximately $452 million, with zero order cancellations in the quarter [20] Company Strategy and Development Direction - The company aims to be the most reliable global partner in radiation therapy treatment technology, focusing on operational efficiency and customer partnerships [9] - Investments in ERP and talent are expected to enhance adaptability and capabilities in a rapidly changing global market [9] - The company is exploring avenues to strengthen its capital structure to achieve long-term goals and deliver value to shareholders [24] Management's Comments on Operating Environment and Future Outlook - Management noted that visibility on near-term growth in revenues and earnings is lower than a month ago due to global trade circumstances [6] - Despite challenges, management expressed confidence in emerging stronger and more resilient from the current environment [7] - The company anticipates a potential negative impact of $10 million to $15 million in Q4 revenue due to tariffs affecting product sales in China [14] Other Important Information - Approximately 70% of raw materials and product components are sourced within the U.S., with over 80% exported globally [12] - The company is implementing multiple mitigation actions to offset the impact of tariffs, including establishing a foreign trade zone and developing secondary domestic sources [13] Q&A Session Summary Question: Impact of deferred China adjusted EBITDA - Management confirmed that product margins were affected by higher margin deferral on China, with product margins at 22.7% for the quarter [27] Question: Potential impact in markets like India and South America - Management indicated that while the China impact is significant, there is strength in other regions, particularly IMEA, which includes India [29] Question: Scenarios regarding tariff exemptions in China - Management is working closely with their China JV to seek a medical device exemption, but clarity on timing and probability remains uncertain [34] Question: Future shipping capabilities if exemptions are granted - Management stated that shipping could resume relatively quickly if an exemption is granted [36] Question: Overall impact of tariffs on future quarters - Management is conducting internal scenario planning and will provide more clarity in future earnings calls [39]