ARAY - Earnings call transcript Q4 2023

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Operator

Hello, and welcome to the Accuray Fourth Quarter and Fiscal 2023 Financial Results Conference Call. [Operator Instructions] Please note, this event is being recorded.

I would like now to turn the conference over to Jesse Chew, Senior Vice President and Chief Legal Officer. Please go ahead.

Jesse Chew

Thank you, operator, and good afternoon, everyone. call fiscal financial June year conference fourth for XX, Accuray's of quarter XXXX, to to results review the XXXX. Welcome which ended

corporate call our this management review During afternoon, recent will developments.

and Suzanne on us President Executive Chief today's Officer. are Ali Joining Winter, Accuray's Pervaiz, call and Accuray's Chief Financial Officer;

cause Before in Factors no implied results issued a results that result materially forward-looking may press except these call required we as any from to like as Commission. We that by us to as includes the this are obligation today Exchange those the forward-looking as market today's extent you securities statements I information remind and would base or statements laws. well these We date. just future closed to available files differ of the or events, statements. forward-looking forward-looking the could begin, update contemplated materially in differ applicable to assume our our statements. the to call with afternoon after of Actual Securities this outlined on we on information new by the release

items on Accordingly, A housekeeping statements. undue for you today's reliance any few call. should put not forward-looking

X then request we participants during Q&A the First, session, requeue follow-ups. limit questions themselves that any to and with

quarter Second, the all our prepared to quarters. a in fiscal references specific remarks year are to

fourth to fiscal our refer fourth our June quarter statements XX, ended regarding XXXX. For example, quarter

Suzanne? Executive over deck be let Chief page to that, by which slide at this Officer, Accuray's Relations call Suzanne a directly to turn can will Investor going supplemental the me Additionally, Accuray's there access accompany you to Winter. call, investors.accuray.com. With

Suzanne Winter

fourth accomplishments Today, my for our all the Thank beyond. both provide from areas you, as focus reflect on call. thank then highlights and 'XX and FY the and Jesse, I on quarter CEO, and will of for first year joining you our

the growth was X% year-over-year. and X% up revenue within X% to and performance Notably, total the company year-over-year, strong services quarter contributed fourth product both materially quarter, Our with respectively. revenue growing

our quarter on for and service mentioned encouraged we that opportunity our a early we a margin growth is was with in believe by we but the what was the revenue seen business As growing region growth, of and X% APAC plan. From fourth stages the X%, EIMEA excluding review, are exchange. huge last long-term year's have X% we the declined led by revenue of call, both XX% region and growth impact and Americas year-over-year. foreign revenue grew year-over-year Japan flat region

impacted this had growth the latest platform, has ratio of exchange strong and VOLO treatment our in a was and solid in an exchange Foreign Tomo significantly was system to shipments for innovations demand book-to-bill order ago. Customer to quarter million Radixact including at strong with performance to X reception continues imaging, platform impact Radixact year in Ultra CT our real-time in planning. X.X. overall revenue, QX negative with on Synchrony product for the ClearRT Radixact a be compared motion correction delivery alone, foreign $X.X the From Japan, especially QX, view, XX% revenue. QX

by year-over-year. growth very and than growth backlog. Orders these building growth pleased more QX with booked shipped the booked XX% as with we led in have we orders it orders was are in are APAC EIMEA our quarter We the results by that we XX% that with during year ended APAC and have followed means EIMEA.

for SX strategic and key multisystem The quarter, booked and X new SBRT orders patient at their institutions we CyberKnife Health several systems System the Georgetown care. radiosurgery stereotactic also purchased globally. MedStar Within from

academic driven chose They Delhi, of their for with over worldwide. hospitals in a a and center their is for Hospital us the purchased to Radixact in Central but confidence margins for declined systems. SRS/SBRT winning will in offerings. Further, deal Bellaria ClearRT highly X new Hospital, India, one sites Hospital Radixact neuro fleet direct both CyberKnife the financials, Service our and top order quarter, will and year. be finally, a innovative temporarily FX. well-respected Macau our competitive more The this that by Hospital with the evaluating Ganga sales the Synchrony. And Our hospital competitive also system. the the Ali health system against situations competitive Italy innovative references significantly customers has in Radixact CyberKnife powerful Ram product become mix challenged X-system of driven that won prior margins a technology. at within discuss these highly system In placed potential SX material as Bologna these campus. we of by are system gives mainly success expanded QX the saw further University influential purchase versus we Winthrop NYU The and inflation systems recognized have the solutions

in us put results important guidance. are were FY year solutions. Adjusted it EBITDA from of within EBITDA the as QX appreciate our XX% to million we 'XX value note QX bankruptcy the however, Care However, a included well impact adjusted $X pricing unplanned these Genesis resulting grew announcement. reserve, to Without demonstrate to grew adjusted onetime place that actions the bad of full reserve improved year-over-year and our encouraged this debt very put starting is EBITDA we customers year-over-year in have X% see

sheet our priority pleased second free flow remain year-over-year generation. positive very strengthening was with position cash quarter grew of cash I the we strong consecutive Free management saw capital and flow and our cash for team. of position Finally, this a as quarter the generation our our balance

dedication I support level and to partners of talent our on was ensure teams as our remain was and around able full year incredibly the people accomplished my first clinician the on see remain tireless of mission. the proud humbled and of products. performance employees our the teams CEO, our saw year, the customers impact have by year our visit I highest and on that what reflecting our from care. with Moving treated I firsthand also to solutions world. Throughout to with customer-facing I incredible to our able

the power $XX and lives million able We greater supply solutions organization enormously resilience cancer. I improve from much to believe foreign and from am year extend believe of were navigate and the revenue. with the of exchange headwind we with to objectives. I significant our Accuray's the radiotherapy is and incredible those scale. our each an strategic proud geopolitical we vision curative to drive made resourcefulness we operational of growth I companies that organization, against pressures showed expected of cornerstone Additionally, diagnosed an culture expand this resilience headwinds And our inflation, chain, demonstrated to as progress we of as

X,XXX of system Wisconsin, milestone by our In company end number of FY of our recurring accomplishments, service unit FY revenue the put the highest future underlying the have installed impact highest systems, base alone guidance the multiple of in shipments company's than year surpassed XX% factory including relative revenue Excluding the FX growth higher 'XX, history. delivering driving demonstrating year-over-year the million strong globally, grew revenue. Madison, the user these representing X% the in 'XX, system we history, We in XXX impressive which $XX our the would business. Despite challenges, ended us growth. to range, shipped we high from

the with exclusion strategic been has generated and our we referred Execution I for reserve laid done the this of to positive the Finally, earlier growth cash GenesisCare underlying major excellent in by drove of XX% environment. At they've X pillars plan. of almost the of flow an year, I our this adjusted free year-over-year year. entire the EBITDA growth flawless and out job believe team beginning high-demand year,

was several that markets in further our pillar new advanced product 'XX, introductions revenue we strengthened first portfolio Our innovative than and executed faster to growing Accuray the solutions by we FY In differentiated radiotherapy. technology. compete driving

customer Notably, and breast treatments Radixact was system VitalHold ESTRO to surface-guided at ASTRO radiotherapy for meetings strong introduced the for cancer reception. both

of to in addition department. comprehensive Radixact of treated radiation the the platform, highest VitalHold we the solution the volume treatments, typically patients most the now breast offer represent which for oncology With

venture, commercialization I the advanced the we pleased the the VitalHold for am ability fully to that for take the and segment U.S. will to full in believe in CNNC-Accuray which market. we Tomo China in with we the C developed joint value of product, Also, us compete we to Union. our European XXX(k) B have Type orders allow received announce jointly which also approval

market Type market highest year-over-year, within result and versus for the B opinion regulatory year, radiotherapy the EIMEA is introduce range was and major and gained These 'XX expect second 'XX products X% Ultra market growth was that discussed, combination XX% on represents but revenue when growth the created leaders region with across regions. we commercialization of China second The the in CyberKnife X% the and product and first the QX. These nearly in FY that events the introductions growth Tomo you APAC on at a half for strong impact growth. followed in during single-digit C C XX% X successfully at interest over medical over X FY half. China opportunity strong all targeted X,XXX in of in As platform for market full new of drove next segment the the the 'XX. in for November potential with Imaging, key grew growth Japan half of allowed product the the revenue for and non-China systems second to course to Tomo us growth in with second major led system 'XX. and over FY and FY SX FX. We last XX% with COVID of fastest-growing by as full exclude in billion VOLO with to revenue submitted significant Synchrony product ended Radixact of approval lockdown a demand half we respectively, XX% half the declined us largest $X potential and ended year and believe ClearRT low and systems grew with and very X% positive share years. a Americas upon capitalize the year in conferences and the

and pillar growing our to next expanding multiyear We revenue plan a opportunity. service stream strategic our service set strengthen and expansion margin business. which Our a was business, recurring represents out

service the across meaningful revenue our Japan been is strong revenue with of impact our global and the foreign region and essentially the 'XX, installation last X% and we driven contract to which Service saw showed capacity represents the growth EIMEA continues growth base. when underlying where base revenue our installed market of The by FY growth very in currently service in growth overall has our XX% saw in the of of XX% activity we global the over FY region, is excluding XX% largely see users positive gated base. In a our exchange, Our growth decline 'XX, U.S. radiotherapy encouraging. X% APAC the revenue. In X% decade flat in consolidation by year-over-year subregion of was in only growing installed in growth China. installed

the of ensuring Our commercial is we U.S. have focused the in customer service highest long-term investment goal focus and approach, satisfaction. our a of a with where level

older is installed early set our to and systems, closely around working these generation offer upgrading strategy the specifically commercial systems, systems. For actively customers our TomoTherapy compelling these legacy solutions with

We will a in conversion. positive IB and revenue net margin the coming growth the to and growth years tailwind expect in U.S. this generate become

customer Those provide Genolier, will CyberKnife from to in building deliver state-of-the-art Wisconsin, new Radixact Madison, the environment we're center to customers we FY and systems. 'XX, Europe, staff on-site continue courses What pain to support experience we're COVID. FY the through world 'XX. and investing and Switzerland, that we're In where will our service those revenue. In 'XX, And added SX which offerings innovation showcase to in points, improved in and for ideal service remote training incremental in training, to around from since high-value incremental education customers is we and value we enhanced pricing including a address offerings. solutions turnover in center. FY training training the shortages both labor contributed Additionally, hearing sites and starting they services captured more

the drive and line top base support value-added We over to impact installed and solutions expect and growth from service expanded time. bottom

foreign year laid and The offerings leaving that goal profitability service margin good and the full stone out multifaceted I actions third plan service efficiencies by incremental to to and of helped exchange. pillar of costs service with full made drive and improved progress with was service navigate reducing year, margins X% expanding impact consumption. goals and our parts us year by logistics year-over-year, business, our a In driven contract cost and balance inflation, improving expansion sheet. no unturned. our multiyear, margin the We against Last we pricing, improved Ali

deal year primarily declined for driven material margins year, mix, versus points last the inflation by FX. direct basis and XXX Product

sales new to encouraged improvement and more Ultra, associated of see Synchrony price we're product allowing value capture the However, VOLO the increase average like innovations to system us with an in ClearRT, inclusion price of chain. and

Additionally, we flat restructuring removed driving despite increase, held and year-over-year unit and operating many by through process efficiencies operating revenue and expenses costs actions.

The Additionally, return our shape as made by year. but simplifying system. This company the reducing a business areas priority. cash new and our Accuray. We're early positive the a with we highest our been greater and growth. that innings durable continued our of focused invested and for support generating we've One transitioning we years. Strengthening of consolidating effective deck foundation endeavor. balance become a to and ERP geographic key position budget aligns 'XX, replaces major strategic where in building Accuray's as in while acquisition the In analytics go, a system empower proud of This our progress that July a capital on old, manual of confidence facilities X. improving our in all durable TomoTherapy we with shining integral new I'm decision-making to more process our expansion XXXX of area is our on FY has remains better execution of fueling in over investment these coming a of goal margin has to live investment that back and began and effort sheet remained further will the that which on take that full of the our legacy largely dating hands free investment was for the was to the the schedule, future XX, went provide we say while organizational footprint of mature Madison on headquarter on location business. solid driving and August more data to teams for just higher-cost flow priorities want and to and cash example building big will contribution profitability and initiatives

several into win improve help bring in Finally, to faster, to partnerships sales enhance market our FY rate. solutions 'XX, and entered we strategic best-in-class our the us funnel

partnership systems. for partnership and partner breast research planning, C-RAD for executed innovative and complement surface-guided agreement our registries an with and CyberKnife. their We're system. proud to We oncology radiation data also We solutions. to And development for adaptive entered strong to for oncology GE continued with into our partnership provide commercial finally, Limbus have treatment. Brainlab with AI capabilities treatment continues therapies information for Healthcare and Planning adaptive be online excited collaboration the a Treatment our planning our on with important neurosurgical solutions precision will Precision

We win our set success of been has market. the partnership oncology with increased positioning to strong strategies the To and to Healthcare GE nearly with GE out funnel near-term total with an Healthcare our actively this opportunity partnership date, improved pipeline. short- teams and and driven Our increase sales driving solutions customer partnership and regional measure FY rates. has long-term in 'XX million $XX funnel sales of

the partnerships customer [ impact. In the set we we're improved our ] our future of systems. for marketplace expect 'XX grow The Additionally, of within more wins continues win have GE partnership the positively wins and several Accuray in and summary, mentioned performance forged the that rate of growth. positioning to the competitiveness. health the strategic to has We key key and by evolve strongly the achieved FY earlier C-suite proud and in QX foundation partnership we influenced contribution

growth, and transformation, early to will the will we end over While and profitability drive now year years. I in positioned coming share we further to are margin the our Ali, expansion gained our financials. cover over who it turn

Ali Pervaiz

on quarter tirelessly strong million, afternoon, increase you, On prior year. fiscal to up million, $XXX fluctuations $XXX versus chain X% which total X% and for was was revenue the deliver year. by the is pressure good headwinds prior versus year. On inflationary was non-U.S. up who year. executed which fiscal a million, Thank currency currency X% basis year in represents revenue a revenue and the and a global increase total $XXX revenue fourth from global was constant want a macroeconomic Suzanne, I including year, Net thanking basis, $XXX which fiscal represents prior an everyone. fiscal the supply quarter in XXXX a for begin basis, quarter for the constant unfavorable and was employees million prior fourth year full faced to markets. Net fourth versus despite shortages, X% our our currency

As the in top earlier, foreign mentioned negative had year line $XX fiscal 'XX. exchange an million Suzanne headwinds impact on

end guidance As a from impact fiscal results the and we exchange, reminder, range was $XX 'XX, $XXX of are million the high where how year a of line. on 'XX with standpoint, foreign coming and operational a execution revenue from by This to fiscal the revenue successful underscores million finished year million. had we provided into $XXX very range pleased an top exceeded we for our that adjusted

the shipments quarter record a revenue thank tremendous shipments year headwinds for increase product was headwinds up of of exchange up X% representing year units. On foreign of X.X. On of revenue year. X% year. foreign year versus system service the X.X. product the flat a prior the adjusted foreign of ratio year. for $XXX the year the million, approximately the book-to-bill basis, full for prior from and year. team Full our and the million, $XXX revenue Gross cross for the and constant ratio and Full XX% full orders basis, year. prior the revenue $XXX any full $XXX in a functional service million, negative representing increase prior for from book-to-bill prior unit represented $XX basis, million revenue XX revenue year was for million a impact X% exchange. On once represented relatively prior compared adjusted gross quarter the representing was impact from Service was the have this exchange impact was versus X% quarter a were a history We fourth company's million, currency accomplishment $XX the Product million, year to of up in were and of $XXX up fiscal X% for revenue on up was fourth when to $XX a million, X% adjusted basis, orders year a

As defined a will reminder, period our period our within backlog orders focus ratio profitable growth the to to orders teams we is as that months. healthy ratio gross is to the for book-to-bill by believe book-to-bill product to the metric revenue and the right build divided convert our of XX ensure for revenue

that backlog primarily a backlog. the the within quarter, the orders to XX due is we months aged $XXX within million, into increase of with the fourth orders. aged Moving X% to representing revenue XX timing. In lower and back sequentially We approximately beyond which of related representing to quarter, ended the customer than a quarter $XX QX, year X had X% $XX million approximately million orders prior

to to will metric simplify look our Given importance further. business, the ways of continue for to this the backlog we

Finally, in order we the had no quarter. cancellations

decline X.X exchange, approximately points driven the by pressure gross Our the pressure million pressure gross X X $X translates decline by gross pressure. inflationary prior overall million prior of approximately foreign impact of a deal our by revenue, year, XX.X% to $X margin and to margin driven to translates of with points basis, with approximately gross driven impact $XX margin the margin overall remaining points and exchange, of XX.X% the which negative approximately point an pressure, gross margin variance XX.X% the of to with year was the margin of in which mainly inflationary foreign compared translates roughly mainly translates had X.X to million, year, was in we of the on compared full gross which of $X XX.X% mix. On which for quarter million to pressure

full bad were a foreign the Our charges of overall nonrecurring in million of included and million which $X year fiscal and unexpected prior year prior the gross of approximately fourth margin quarter $X.X exchange. approximately would of $XX ERP-related in been million, excluding expenditures debt the have by reserve million $XX.X X.X quarter above points, inflation to year. restructuring the and Operating basis impact compared on expenses for fourth

same for bad nonrecurring total compared ERP-related down charges restructuring, expenses included Excluding previous of million the period $XXX.X million $X.X nonrecurring were debt expenditures $X.X which in $XXX.X million for of operating were charges, year. expenses XX% million fiscal full the to to prior unexpected year reserve compared the Operating million, year. and $X of of the

$X.X and related $X.X versus X% for year $X.X includes total control $X million million for were quarter compared the period. million on U.S. prioritize CyberKnife who Adjusted for approximately unexpected negative continue incremental prior United charges, $X.X was customers, $X.X filed EBITDA X, push teams compared as EBITDA to year. Adjusted in million States GenesisCare, bankruptcy our our year was of Operating TomoTherapy/Radixact was nonrecurring to Texas the on quarter reserve focused the income Excluding in one to owns bankruptcy to June full in systems the for in [ of and operating fourth debt million in ] expenses the and for year $X cost year. prior return the income X fiscal the bad down investment. prior million we prior million operates showcasing the XXXX. quarter compared X of the to Operating Systems to

XX of approximately As owed system. date, related GenesisCare due Accuray contracts their of service annual installed million to $X of Accuray amounts this past base for

recoup we to to due in past While reserved we million amounts, $X work QX. diligently the continue

between our adjusted earnings income release impact year, described and EBITDA for would in to the for our without 'XX issued bankruptcy FY today. For the adjusted adjusted million the net and $XX range. EBITDA related within GenesisCare guidance million reconciliation been reserve full unexpected the have GAAP EBITDA the We is $XX

balance $XX approximately Total cash accounts the Net the equivalents restricted sheet. to compared million cash, to of last cash down quarter. and to end million million, $X amounted quarter. $XX million $XX from short-term at last Turning receivable were

inventory cash net to capital challenges significant our we challenges, the we was position. In FY team optimized working these prior improve million, volume this guidance $X summary, within $XXX the able a $XXX from was down to 'XX standpoint, Our some macro balance from quarter million as our posed which deliver revenue is of company unit history. record despite and for its range. delivered revenue outcome, With million, in the

Adjusting have revenue it company. million. really strong been foreign 'XX. we our for bankruptcy From of high of million able associated the was the the finished our for of EBITDA standpoint, $XX again with to unexpected end of the guidance, yen impact with revenue deterioration exchange, adjusted by and an the would guidance illustrates within execution achieve in of exceeded and the to QX, the This in had strong the we FY continued adjusted debt with fundamentals performance $XXX company which bad over would GenesisCare have points $XX not Japanese reserve million EBITDA the

to very our a these I and this structure. The discipline I efforts I'm the our company start fiscal efforts an I'm with the role proud strong our future improve achieving as are 'XX. Last our reflect off to first operating year place able laid operating happy of rigor CFO, for plan and a enormous played Suzanne strong to to across say teams out entire of all year, put in on were As extremely financial from ongoing in my we and we results in integral organization.

the Looking growth drive an forward position period to FY to will of second will I half extended believe us firmly profitability. line innovations product introduce new that top 'XX, in we and nicely the

build we fundamentals our strengthening employees. right shareholders our our and on the addition, FY upon will in key sheet highlights. investments to financial focusing for and further while Those provide value making and established are 'XX In the balance

I'd And to with -- call to Suzanne. like I'd the that, back to like hand call

Suzanne Winter

transformation. phase estimated Radiotherapy manifest. we with are their rise disparity to XX procedures gap FY of cancer next on million enter Accuray's incidence the patient annually vision by continues but Thank Cancer continue by for million care returning helping present care the access continues to treatment conquer Ali. to gaps cases to XX well you, to an to and globally. levels, our challenge. to to In cancer XXXX. Still will pre-COVID globally from cancer to way a in is die radiotherapy close will the 'XX,

care to We this address first innovation do in by solution biggest pain will advancing points through the radiotherapy.

patient to potential regardless in of markets is therapy we where contribute top as that journey. the and patients with customer drive anticipate Accuray drivers important delight line both they that of the support are growth our in Second, And for an access all year will their FY introduction bottom 'XX the multiple performance over of coming care operational underserved level so highest to highest available. and the best the customers access finally, have and years.

which market introduction precision value markets. Tomo C in of emerging introduction full Our introduction select new is new China, includes the online adaptive our planning of system cadence high-potential treatment and targeted for of introduction for market the designed product, product the capability segment

initiatives margin we impact in began million. are range to we expansion which and Accordingly, Additionally, service million revenue 'XX. to guiding growth the a FY adjusted actions, million of and range of million for $XXX profitability $XX $XX EBITDA we greater 'XX, and expect from an to FY $XXX

future first year, of years. single-digit We solutions these second the innovation aligned high conversion coming in strong growth the margin introduction accelerating to flat half the single-digit year in to product up and and growth believe for the in new followed will innovations. the of low with growth our enhance of growth our drivers expect half mid- us by We set the

accomplished for we've this proud I'm what closing, of FY In 'XX beyond. and prospects and year our

turn in the you to it partner years. to the strategic leadership will Day Accuray's join next of can Oncology growth more trusted back operator our new phases our advance of about advance us October held for to phase into of over that Radiation be conjunction with position the we next continue invite to to American so will Investor Q&A. of coming become now I strategic the pillars radiotherapy. I execution for growth the We the our over in will hear Society that

Operator

come Cowen. [Operator Josh will Our question first Instructions] Jennings today from of

Joshua Jennings

positive funnel the but full it of guide I of perspective. you system results the year wanted I from fourth today -- 'XX quarter know that great was to about just hear stands in tailwinds the results. play But to where sales on versus a fiscal -- are and lot Congratulations funnel within year. it guidance, the beginning to last sales orders, our your start, there don't --

a drivers synopsis of we fiscal enter as of growth are of 'XX. new some in into maybe order And here just the place that

Suzanne Winter

question, Josh. in the that customer approval. in Radixact addition VitalHold, product we be innovations, demand Yes, now ClearRT new introducing very feel the innovations continued the Synchrony for including just strong and to we'll 'XX for we the and about now Thanks the XXX(k) which FY have

'XX. that do saw positively So ratio orders. We our we impact expect FY great to in book-to-bill

continue We expect to that grow to see to continue backlog. and our

feel Healthcare our had We So with our overall, the funnel. new that in GE little product a a partnership very sales positive talked strongly. about bit has innovations we impact

for going our new under that as to to we of So orders. relationship belt be think in news product the get innovation, we our good year it's just a addition full

Joshua Jennings

expectations for Excellent. ask to about just relative guide revenue radiation oncology And market. maybe the to the

will here You that 'XX? X% I took share target revenue market share forecast fiscal fiscal 'XX. in X% growth. take that But is it's to with to Accuray again growth hard the in broadly expectation know

Suzanne Winter

low results, we market. Again, while done a a to here look look Josh. share. really gone when overall Yes. expect I flat this we've do for of think the we the overall and business. the there for now dive granularity for to think expect at it, the Ali yes, took guidance. all the within business, isn't to year, a We guidance, And a we take others have as source one good at we is a we single-digit drivers question, and been And this deep the be take realistic a into market, and Thanks into of we've

occurring the second of that have new the innovation is product We in half year.

year. have some product mix We changes this

little a changed well. bit. performed really That -- was mix Radixact product The very the

only so terms same consumption different range. range say revenue taking of into based I made year levels new a we're is and to second progress guidance, on the on we're guidance. would the parts first parts of but assuming the assumptions. We as the result, and the then the incur also then in account revenue half. cost that reducing good range these we productivity half assumptions range, commercialization half also from And revenue impacts in our some going our EBITDA other the first And consumption, includes are the setting And to thing introductions in on that product of

Operator

next comes with Young from question Li Our Jefferies.

Young Li

about what some the pushout I'm financial progress this of the the kind of as the competitive how of just to past it Congrats quarter recently? with cycles macro on more outlook more environment, selling changed has do peer maybe potentially think companies in I the orders team headwinds you approvals? customers wondering all that has some start overall in space you quarter, capital to made health the had relates just on some the guess, And had the year. longer forward and over guess going environment of this recently. Last worldwide, U.S. I

Suzanne Winter

Great. Thanks for the question.

I of each the region. one we're in by dynamics certainly, And understanding the think it regions. varies

have Just our results. competitor to of about talk discussed their companies some that

on with. really issues of to Some that supply had their deal results chain are based they've

market on them see the leader. But to hand, in about comparison feel the good we've procedures handled is about being the U.S. which want part a to in major prioritized especially I the going a grow, very the demand, I hard of as just think we budget. why But wouldn't be They're to to premium possible. chain We to we headwind. procedures, compete it we the upswing. and bigger signal that, in the we for headwinds market terms that, an that talked single-digit still market part time. than last to way looking supply market on in at do on one low we're general, emerging are a that's have sort holding see we which their of good those growing. And is say customers in sweating long growth. are markets think like a to that overall, the time, we They at do China, our And as technology get business as I the increase the do we're see segment, of thing our to markets think within which Again, same positioned. we hypofractionation expect of is assets. So a fight hospital capital

Young Li

on China bit a the the going, can how 'XX I margin latest you update regulators, guess the much maybe approval fiscal then guidance in timing. maybe Tomo hear for revenue the How And the process second if is talk up communication is about wanted contribution? half and confidence to impact. on to with little C, follow Radixact

Suzanne Winter

the Great. to But in hand very to the start, And has conversation and positive. Ali talk I'll margins. in over regulators been about China with general, then I'll

to continue information additional with supply them asked. We when

long a remain regulatory are terms track. I So knows how is but flags major going there delay. there red we think the in take, on never One being to no process of

what at of midrange again, in in have to of a obviously, have FY full are the our half to second and being of guidance, and a impact 'XX an year end assuming So year approval Tomo both we have then And C into the guidance expecting we calendar marketplace China. revenue. the by built orders the the

growth then guidance remains China, strong second And that So then of... the result, same first is standpoint, as part, sort a half. our a of a most the from standpoint, revenue part for double-digit the margin in but in from half flat

Ali Pervaiz

exiting product mid- of it our margin low in back see terms mean growth that single half to in going full expect we prepared in first to guidance, I her like the -- and just I remarks of Yes. had digit the high in half. second think the just then just just overall, overall we Suzanne mentioned least near of dynamics stay here when driven which with term. in the by to year driven then margin, 'XX inflation, And overall to those the certainly exchange. They're foreign the by pertains unfortunately fiscal we're and at challenged, impact is impact are primarily is that

think are least be near margins product so the And term. challenged, to continue probably going at to we in

our effort continue really a margin, expansion has point actually service change lead really our in that's focus up And really to us beyond. our we 'XX that. margin and really what's the been year-over-year. on While been year to highlight which fiscal expansion on for has The teams help going margin trend to think

Operator

next comes Our question from Marie Thibault of BTIG.

Marie Thibault

follow-up -- I I to million. about was the what in you remarks quarter? maybe first Could on headwinds year. fourth your one $XX FX was FX. it from $XX ask Wanted it, tell could a certainly this missed on half full year I fiscal you recall million heard of as us this

would in understand try guide part then And EBITDA that and bad If this the add back for year. I as parcel come about for wanted fiscal you $XX million to adjusted I of 'XX. that. have to at debt,

out certainly look it you've past. quite range So given the the made achievable makes the fiscal 'XX for progress you've set in

I little understand to bit So try that wanted metric to a better.

Suzanne Winter

Yes. [indiscernible]. Sure. Ali

Ali Pervaiz

Marie. Yes,

million. pertains reserve right. then So it of we right. add $X.X have million. And million been you're related to bad was -- year in If that we would $XX 'XX fiscal was GenesisCare, at revenue and foreign The you're as impact specifically, on back, total exchange $XX that in QX, to debt the

So that operational to good certainly points performance.

going million contribute volume. fiscal it segment. $XX as into that just different come margin are like associated that going year I is That the go million. lot we mean, going a I we a value guide, we to there's product think standpoint, dynamics to see to From increased has right? our 'XX, $XX Suzanne are mentioned, of And a As with penetrate with revenue increased volume to that, lower is to

to of a going So we're that much not lift. see

help guidance the the going I same be incremental service our Suzanne historically. And really, our what's we within going to us around going seen that have that volume, EBITDA EBITDA our consumption, mentioned. of is and see range business parts then to parts we're but to had think in to We suggested that like not way and terms the around consumption we going are had drive necessarily see productivity dollars really driving just in

going enjoyed our into expect 'XX more of 'XX. something we're similar some roughly, get have as productivity our base fiscal parts tailwind EBITDA from really I -- has overall 'XX from to year we we in an I'd increased, where and to going year standpoint. say We think fiscal think kind And installed that's consumption

Suzanne Winter

just And to add let that, Marie. too, me

product volume little a about bit and mix. the the Just

growth, to year, service revenue. excited shipped is also that going we're by we significant growth, and the the just So number excited recurring future XX%. of this We're IB that units our drive really about

is our may is we forward. in moving service continue going not service accretive revenue see though to in FY that 'XX, something even the to business So it be

Marie Thibault

and really reopened tech, of China. other here to China. on That's the China I both In med was seen detail Okay. in wanted in side wanted we've tailwinds rebound that whether that, and things helpful. that see as the kind a your Type we there's and that I recovery parts fiscal you. ended might dynamic procedures up you like appreciate been follow of if quarter post-COVID, on in has from fourth of A some installs that here a to hear as

Suzanne Winter

this territory, we China least Type to And to we Type No, of demand product going for revenue Yes. we B product, continue being business. But the standpoint. then that's second we to rate think going but China. half are the to the the pent-up into A going first Thanks, be drive in Marie. second maintain the the at we'll again, really able when Yes. think for I for demand half, to the growth pent-up with be positive from some year a ended there's in the half, think fulfill year

revenue. in it service actually last China overall was So for grew down its but us year

systems, which revenue. they So their grew, wildly Their great. new that's just driving installed was base service were installing

was half. the really important that but because product of So the first lockdowns down in was revenue primarily

coming of C but going are bit little of waiting a sort half, think second see this we'll back, they're see half So get dynamic. I to we Tomo a cleared. the to for do first

Operator

Street Capital The next Wukmir Markets. question Aaron of from comes Lake

Aaron Wukmir

these the How This sort have the long you to on And is these of challenges? sort that quarters. couple of actually, do expect of I past a view been what in Aaron chain for just your going see little forward about talk just want constraint? as sort line a the of on we impacting can bit to supply challenges with Brooks. you get

Ali Pervaiz

dissimilar don't it's I for think too Yes, in we've the discussed from what Aaron, thanks the past. question.

have but we few whack-a-mole what just elements, to up a in to they taking be be make time they to with suppliers. And have problematic chain certainly play continue We able seen our certain improve need it's to of that supply successful. a sure lot

anticipate our That's to And with kind to to have a kudos run perspective. operations of you to make an continue So I as supply sure we what last the working would a make chain happen of on, don't build sure little saw from where secure year. that build inventory parts more early just any need. we are inventory perhaps bit we maybe into suppliers teams we that our challenges that

we as we -- want much to and ahead of Just that want possible. be to try come as

Aaron Wukmir

Congrats on the progress.

Operator

Neil of Riley. B. Chatterji from Our next comes question

Neil Chatterji

guidance 'XX. line mean I with maybe top sticking just the fiscal for

Brainlab [indiscernible] make midyear kind And any GE or Maybe and kind you the color C of or first kind some of we stronger half those dynamic? products big have, the then is Tomo of China of to clearance. Just second any various how just here. think the of puts about of more that Is all understand should around of any maybe benefits that I it's want of sure -- softer kind the these driver takes and dynamics. half, partnerships the VitalHold of whether

Suzanne Winter

question, let little APAC the half. first the bit on growth Thanks revenue in just from Yes, -- we all a expect the except Neil. so the talk me the for regions for of assumptions through

VitalHold expect that expect are benefit regions We is going to that maybe We from being growth. the single-digit be do flat to other cleared. to

which shown what an will frame, get We the Japan, JASTRO time is VitalHold approval in by hopefully expect in we're that's expecting. November

is of to built we to begin we the that see revenue the So revenue in that range the shipments. assumptions VitalHold on impact

that regions to year higher and then the we're but of expectation. end either by the mid China, better being APAC/China. And Tomo with APAC, then We the really than or half exception by expecting at and growth half of and second range first range all expect driven grow, longer in approval, the lower the the

FX remain as to chain we FY and same We 'XX. expect ended the supply

we're So worsening mix but expect end, better low end. And adding we're and managing service trends also these growth. again, Radixact the expecting is at growth ultimately, product anything high is Tomo towards we then high anything more again, the C, unit very the at the and

midrange all are built those into So assumption. our

Neil Chatterji

with Great. about see that. expect would one of follow-up. the better mean I analytics to 'XX. Maybe from to if fiscal just system you kind talked elaborate Maybe you of ERP and kind new what that impact of the you just as kind could progress we

Ali Pervaiz

I we're region from from for think be to right? better level manual better a question. we visibility good it's we able get it's Neil, learn us Yes. just understand a as just deeper channel customer more to perspective going at state. so just the just profitability perspective, think So to been teams I insight first think a very, in profitability, give understand decisions going I better make to very pricing sort the that's can to quarter And to current of mean, to close implementation. our continue I with SAP But that

think piece. one I So that's

think efforts for to beneficial buck. and where to be and bang the where going our it's we're for operations chain think most our to understand I what going COGS be to the kind impact teams very is of able our to get supply focus of product we

that going that's FP&A we able be that have sure It's of spending OpEx very I helpful. It's provide to a going with at be for that be going to we our where just don't think level, that manual to a today. much comes are make helpful to So understand team visibility which lot today. dollars. visibility just we Not my -- to work deeper

to value But to several going that's drive efficiencies. I be think able that's is going the get it really, overnight. So going to quarters think the to happen there. to implementation. of It's take in we a don't lot

Operator

remarks. over the closing session. for like Winter to question-and-answer Suzanne our would I concludes back This any conference to turn

Suzanne Winter

that Thank again earnings speaking in release, Day us you of with growth invite you, in Society for October years. to again Radiation conjunction operator. of more coming you XXXX This for next strategic Oncology join Thank Investor the concludes will to fiscal the our quarter our earnings about in be I over first October call. the with We look our forward hear held you. and phases our to

Operator

The has now concluded. conference today's Thank attending presentation. you for

You may now disconnect.

Accuray (ARAY) 9 Aug 232023 Q4 Earnings call transcript