ARAY - Earnings call 1 2024 | Accuray Incorporated

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Operator

Good day and welcome to the Accuray's First Quarter 2024 Conference Call. [Operator Instructions] Please note that this event is being recorded.I would now like 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. Welcome to Accuray's conference call to review financial results for the first quarter of fiscal year 2024, which ended September 30, 2023.

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

as Officer.Before issued Suzanne We on Ali a President Financial today would forward-looking items includes the today's Securities our us Actual statements today's you Winter, assume to update Pervaiz, begin, forward-looking remind like call could any market laws. no well those applicable in to as information by Chief and new forward-looking results differ reliance the this on call and Joining statements.A of call our this Officer; are extent future any us not outlined results from implied undue based information these the these contemplated securities may obligation are on differ the Accuray's the to We to events, as that I forward-looking put for cause by Executive filings press and result Accuray's just release on forward-looking available statements afternoon, in we the or closed materially call. housekeeping date. statements. statements. Exchange as after we Factors Chief that except today's required with Accordingly, should you to or few Commission. of materially

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

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

to first refer ended our our regarding XX, statements quarter first example, fiscal XXXX. For September quarter

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

Suzanne Winter

fiscal The afternoon, the delivering for Thank year, quarter. in start and Accuray on the to thank call. you you, had revenue both EBITDA a Jesse. and strong team the joining Good

and leveraging access.In new strategic commercial progress for product Radixact SBRT enhanced operating by by radiotherapy the growing revenue which making of was we profitability our the regimens, competing to period market in versus we for and Accuray's in than revenue anywhere require through expected grew treatment degree stereotactic around execution; year partnerships radiosurgery innovation better to more saw treatments through development toward and and global X% quarter, an and XXXX customer of demonstrating delivering market expanding high above platforms the stereotactic extremely product pricing XX% patients our growth like systems which TomoTherapy quarter, demand new world. include advanced are in enable achieving product margins fiscal Accuray driven great and This these effectively year-over-year, year. and year-over-year the We treatments precision. targets priorities, body.During revenue continued in customer capable CyberKnife, adoption efficiencies; last growth same of radiotherapy with are by quarter demand the first

installed in confidence systems, beyond.We our X,XXX representing faster on to and the this greater fiscal share than As QX. market quarter a strong year ability our year-over-year us gives reminder, expanded quarter, is This at in robust, were Order revenue. year growth Xx to radiation to in strategic the product goals quarter the also fiscal can backlog $XXX from representing of vary gaining particularly by our encouraged capital in X% within of we growth. start deliver equipment, and customers revenue but base million in XXXX oncology,

recurring provides average revenue. revenue month the XX a this business linked service key period. in discussed growth long XX the years subsequent for following we've and of warranty indicator at continues a is is initiated This contract directly for it's base performance to As service contract because installed cycle to revenue, past, XX the an tail long critical annually which

new market customers upgrades support expand was well shipments. advanced service for incremental will product installed as business.Finally, solid, revenue feature also further growth Additionally, training, our opportunity which and represent like order as services also new outpacing

with Cenos Society Conference, We in very which comes service the our advance breast in we to our over our as Accuray showcased this of Financial for provide the in a partnership designed to advance developed industry offerings. technology system healthy book change, were more of the refining of cancer October, was of with in company our We capabilities platform. with a Cenos, development Services, the for to personalize tremendous addition interest American to leverages VitalHold tissue plan. treatment to partnership remote where was help or we clinical immediate attendees or to that capital value-added is product provide treatments the cancer, intelligence, X.X of to the approach ensure Radiation customers don't equipment. to change product, oncology patient strengthens deliver adaptive We flexible potential highs market. specific range surface-guided pleased collaboration options AI-based algorithms customers we financing designed solutions to in product equipment to maximize and that to our grow there breast Cenos the we leading current practical attendance treatment. compared AI, new change capabilities introduced a treatment bill to a product future acquisition.Finally believe that clinical our Accuray's care Radixact their the capability. treatment creation target. we and C-RAD.Additionally, are and on introduction cases announced specializes healthcare to and Further, ASTRO, automatic from our to While where portfolio innovations faster a help operational historic able of community. and Cenos Alliance-Plus plans Radixact contouring and successful the participated from our the to Radixact, exciting, premium X,XXX is a for we we AI, backlog.In strong a care.With to guide full which need latest gauge a and segment an orders, online see metric unveiled algorithms artificial drive of can with patients with Limbus minimize Oncology the at dose most ensure for as provides support This new other treatment growth radiation Cenos adding

to First occurs and correct with is motion Synchrony, treatment. which treatment track, that designed due detect delivery to during

also progress to significant the the on and China. manage changes in Marsden the our make designed we that growing Royal technology modify $XXX thought treatment, adaptive, changes radiation to for medicine and adaptive Tomo patient The critical segment needs fastest The day have markets.Within for in October, is Second results plans leader personalized believe B that patients. product strategic set, now also B we on outcomes to including and drive our domestic be we the will presented announced very based have the pillar clinical radiation in we the benefit of the is at adoption comprehensive Treatment with competitive double Cenos QX, Helix, and radiation long-term Radixact XX it ability the from groundbreaking the one their providing just market in Cenos contributor to million clinical tools low strong believe our PACE standard sessions. of expect Helix, a early emerging business, principal preliminary which for the systems and which extremely the as sessions. costs Type therapy at daily of the where Radixact gained in in there impact they have adding available manage Royal outlook, segment between a radiation the our China, Cenos, fleet. this Helix, on needed X Accuray win become online represents major products versus treatment to represents projects important in in business In of CyberKnife prostate the of for precision community, offline a global introduction in that the patient cancer growing and curative a orders that currently is in installed market. significant X-session is as confidence the Accuray. to is solutions treatment and technology radiation value for opportunity. we the with a XX product represents segments access global portfolio time significant occur key cancer.At delivered week and expected the is platform with last powered therapy. Day execution oncology in win market the future to delivery clinicians treatment brand. of strong fiscal investigator of the team operational and us of that to product Tomo that cycles segment to team.You are increase trial brand Accuray the trial global and gives Type Type aged XXXX.Overall, the and differentiator equipment centers is for Type investments high-potential, These for our and market China purchase expect this cancer high radiation product were the addressable radiosurgery expect Mumbai, impact now at introduction for workflow tailored oncology because to CT wins higher to the for Marsden global we long-term and reputation SBRT the it unlocks System.We throughput and have Tomo will for the backed value milestone we prostate availability with C in in of approximately around have by The Indian of held U.S.During speaking is I spring the compared and for And demonstrate emerging a on the demonstrate patient proud to the we PreciseART designed in With China essential the today. the further our access last surveying SBRT plan treatment clinical potential This of believe advanced China key and of due B based preference This was Precision focused the X-year its our A and to which short-term of treatment study addition cost have clearance improving announce is to care will we care. segment Wisconsin, Royal PACE-B now detected annual for rates backlog segment, on follow-up the where U.K., in TomoTherapy approval the the are are years. In cancer C deliver with technology market was with innovation customers large their many meeting imaging the that another becoming compared as market. site share our Congress only largest data data addition ASTRO, conventional a for essentially partnerships underserved available customers additional expected product completed India. to customer quarter, tool upgrading to that is prostate risk patient momentum are Marsden base. underpenetrated to at is the scan.We This and performance. Type a pending, This eliminates market can delayed to new year, drive our we second Cancer priority This the uniquely Royal very Tomo positioned for we Accuray C to dominant regulatory clear Planning high-potential just intermediate XXX(k) Madison, made to this the second also compete that longer installation developments quarter, headwinds Shipments that helical market U.S. from which world.During manufactured may our pending at ability to for is target believe and strong, on precision, our manufactured driving in technology stereotactic is also strengthen growth despite order heard commercial sessions.The system build unique our further and the SBRT C some quarter, our Marsden in team ASTRO and differentiated of a therapy B Investor backlog. was was where burden also by segment as top have pleased positive some high

price costs in drive improvement commercial our a we at every efficiencies continue Day greater We cost organization. Last for as X% through area and and across margin across to business. reduction rigor workforce by discussed our operational gaining of pillar innovations in through execution Investor and October, Last by our reducing which included restructuring, our profitability we the a week, plan. expansion our a optimization announced of quarter

these to to decisions difficult, for in ERP from actions position focus combination further experience during companies year areas with support resources, executive innovations the commercial critical live drive and will these processes and investments is new margin While improved when and and revenue growth system will latest our confident to line strategy, hiring the from strategic significant shareholder executives which IT support, our cybersecurity. macro service our customer we will growth, product the took Varian, such in operating our is and organization, in environment, and went we in our leadership the R&D, enhanced of plan to our strengthen create investment global are in market in last future strongest Healthcare and in laid are in GE come These a QX, out team are sector in the simplify always over.Additionally, I areas our like with maximize ABB. position that leading that adoption. navigate long-term and with These our to and and and new we put quarter, Ali of actions with we value.Finally, customer position Accuray the invest further

and We to company will their through will over will experience performance. gain be support.I and now further about it unparalleled to position Ali, win innovation service leveraging leadership and financial speak the more turn share our who to

Ali Pervaiz

all solid I would begin full-scale these reporting presented implementation, Despite part and a by navigate proud few new implementation, our of. dedication Suzanne, a thanking executed expected you, the of everyone. brand which we and quarter migration also go-live who to global while first and the good with the challenges data a cross-functional operational ERP a Thank a as ERP process. worked challenges around successful clock teams employees and and quite how afternoon, like undergoing deliver to environment, ensure learning are very to which teams to

which a year.Service on an and by was book constant and from a versus of contract to on shipments we the down parts revenue gross and ERP run versus to the new million, lower the quarter $XXX million, representing was and us constant training year million, first revenue up was ratio a quarter basis increase versus first first year.Product the prior revenue in a revenue increase X% be able X.X. the which revenue system a on million to basis for year. prior the Our basis, $XXX with offset units, Net currency the the approximately which back XX% million, and XX% prior the XX% from first for down of X% represented X.X% in revenue, quarter system increase were for being $XX will was provide $XX Net to in quarter orders more XX the prior is business the up for represents quarter with bounce constant which prior the the up right effective manner.Turning data-driven X% currency efficient year was to financials. a currency installation, bill a QX.Product cost spare for $XX expect visibility

our orders reminder, as product book gross is for period a bill revenue for to the the ratio period. by defined divided As

for million, Suzanne the $XXX X% product XX is This convert representing is As not backlog. backlog indicator report order future we aged to to customer $XX reported million note our backlog of right mentioned, with primarily of months, that important the beyond to related XX lower orders year include in do ended revenue. orders aged these that revenue is which X first of out the It timing, backlog expect previously quarter than X we XXXX greater and the We FY an In good bill prior represents contribute metric than had the believe to book approximately to out due fully years quarters. million is business growth we to we ratio for QX, these orders which to healthy to also and in backlog. to coming revenue. product ensure aged approximately $X a our vitality.Moving

sheet. $X.X the million expenses year. year. income a was offset GAAP quarter, operating prior the equivalents associated the coming with gross lower versus the in a QX.Operating cash prior we earnings the the million freight. up cash consumption compared the million, in million driven was which to note compared X.X primarily the million partially cash, freight $X.X for cost X Finally, prior in to year, the $X release all million be Japan a distributors in expenses $XX.X first prior $X lower between the at short-term from prior an in $X.X million due parts versus to in order in were of gross parts year. We to $XX XX% million first the the to overall which the parts fiscal coming and our consumption decrease to was of quarter lower reconciliation win quarter. primarily we today.Turning prior distributor, $XX.X for from the were through service end QX, region XX.X% to balance described of the compared margin expect year.Adjusted to compared to due quarter. from for quarter, QX accounts EBITDA adjusted was net primarily of quarter $XX within million the the Operating and one-time of implementation unit back $X.X expect receivable million loss in had points in compared of we the to by existing to quarter, ERP up quarter QX, million due our lower termination consumption service margin from quarter quarters.Our cancellations Net and quarter compared to issued quarter the It's prior important to providing was Total benefit that timing due to amounted to and EBITDA approximately income the last restricted $XX the shipments last

Our net $XXX in balance the $X QX. prior million, up was from due million to lower inventory quarter shipments

on capital reiterating teams working continuing year with million our $XXX to to XXXX are improve QX revenue of Our FY EBITDA. $XXX range are we million our optimizing results $XX summary, on guidance cash million and are position.In pleased adjusted and million to focus our to $XX on full

performance product We half first guidance expect approximately contribute half introductions start our to range new the with revenue XX% to as a of of of to some our be second revenue. stronger

new equate October of in expect XX% Suzanne. half EBITDA actions the to restructuring fiscal to XXXX with are our timing to key that, that performance will of back our the the I'd the highlights. of financial call like the first we And the guidance.Those range hand of to approximately took the second lower Given product with in we introductions, along our contribute OpEx half, in to

Suzanne Winter

year. pleased our strong Thank you, Ali. and with the results start QX to very I'm our

broadest capitalize and in most now innovative in competitive portfolio and trends opportunities landscape. to offering are We poised the promising and our clinical company's the history on product are

defined over for revenue none a made we is expansion believe turn industry. to ongoing in performance, incredible executing.Finally, In margin Q&A. all their that for to the value now meaningful strategic advancing like passion operator the dedication I I thank will team progress leadership an place plan, strong closing, creating would and have against have we and to stakeholders.I the to team the mission are Accuray in entire and we it our the We have and QX and priorities back our for second

Operator

Li with first Our from comes Jefferies. question Instructions] Young [Operator

Young Li

if strong results it's guidance holding quarter order talk what reiteration. of guess, -- embedded of I this that the a wanted the into guess rest quarter, seeing for guidance. year. understand, guidance with conservatism the can you're start, into funnel maybe maybe in little you're And just to I but you the the mean, bit about I just level year. I fiscal very X to

Suzanne Winter

think for say too I we've want question, No, optimistic. taking a think ahead start cycles. extended cautiously QX, Young. get A was things that talked don't there slowing think Thanks is time, we some about of to that same much we the here, very yes. strong had we're in China. both U.S. couple look At the and I and some of here would And we're a I U.S., ourselves. I at as and sales

taking that the back And improve And China we we're at from that of back itself in to But of half course, year. a expect expect also so in in the discussion resolve year. of the look we course, campaign, that. of will half the of some anti-corruption the the

customer get momentum, introduced We we we as we good seeing about margin of operationally of ASTRO, the have response are products take look terms our mean well new more and as our half in overall, as a at and the the that guidance. the first and will the our at know we improvement. year I performance what very feel But into

know So in at I will the how taking would a a and more to conservative are more guidance, that say next we approach we look we quarter. take

Young Li

expected. the about the Great. for how this opportunity. on Very can wondering of tone been little earlier so follow-up, launch. plan since than talk some the came kind The has maybe the year, far And in a the more I guess approval? China you just guess I'm contribution if maybe numbers for C approval bit few And There's a I helpful. my just guidance. Tomo months

Suzanne Winter

business. Tomo No, C No, the catalyst a Yes. for good. very Yes. sounds is our large growth

now than is What orders in China excited expected, very customer the take of team about earlier means Tomo approval come bit that It backlog. our fantastic. begin which and to that the are did little C. build a can the is We

local that China And government internal very launch so It event. had we where a an now. are already We've big Tianjin had they doing was ceremony officials. in

And product, the full product domestic is it's lot of anticipation B think in the Type that so partially made helical I around a there's delivery CT product. and that is only because a the excitement space

our to and ship hit so We In be manufacturing though, then the for Tomo parts to And so orders of partner that's they believe to product expect Tomo we shipments there be building customers. they Tianjin, months. C again, meantime, we Tomo to and course, are product. in will for begin year can to the C. the start demand And start to the from that will shipment, the revenue take we our the QX, QX shipping goods. several into the what half strong.So beginning is C order expect to and back for finished to the buildup going and begin is, And then, we the that in of customer of partners process

So market again, around We well gain excitement have we'll space. the opportunity get great Type of in think a lot B C. as of Tomo traction share as the market to the approval

Operator

O'Neil Our comes next with Capital Lake Street from Markets. question Brooks

Brooks O'Neil

start it terrific try X a to on to the to questions. I'll year. Congratulations keep

positive little you you environment negative talk for your briefly is The comment or in inflation bit globally. just inflation is topic a a Can maybe and about a first general pricing business? then one huge about the is in a whether

Ali Pervaiz

price of we're general, tell terms I certainly inflation, the that thanks Brooks, the have you slowed question. in increases in for seeing down. supplier would

headwind particular we I inflation said, think related hit that see being about quarter. a to P&L $X.X that did this million our

go up few not We So certainly products certainly quite exposure supply more inflation. our do a parts have specialty that have eased that us. to it's for into

is to it really a it still and monitor topic we us, that closely. definitely So for remains continue

Brooks O'Neil

Great.

give provider-friendly patient years update was to guys provider you Could So of discussions direction about the patient therapy. of quick my a about both radiation not at your a there the just and on moving is, excitement recognize this in any or the changes that reimbursement benefits state question second tremendous reimbursement that ago, high-dose us couple point? of and seemed

Suzanne Winter

Yes, Brooks.

We what be Investor kind of RO-APM changes are our was was would state sort that the the the in on any the state at speakers movement. gave put had is ASTRO. some of of And Day ASTRO had where U.S. the couple we that in So to reimbursement. of and were as a on if of positive hold, waiting see movement RO-APM, we know, And you and there the has into come so equity reimbursement treatments duration does are their which take making actually conventional the compared with to they SBRT model between like own that exactly up U.S. account shorter treatments proposing that for are hospitals more shorter not better healthcare care, the by system losing money going is the again, the which the, advanced for is patient, which better to overall. a treatments, duration

So that a legislative process. is

But Conference, the and through. still ASTRO there's to able go from industry, at Industry least basically design. their be will plus it's alignment to probably it year take So X the

So for treatments. through And technology. that is the a duration that as are in it it that the shorter signal movement sends we but we this is customers positive our thing the very and see only also toward the getting not legislative hopeful U.S. process, to this

Brooks O'Neil

Absolutely. Makes sense.

Looking forward rest of year. the to the

Suzanne Winter

Brooks. Thanks,

Operator

next Our comes Instructions] question B. from Chatterji Neil [Operator with Riley.

Brandon Carney

the on Carney about update that ASTRO? Brandon on online received any provide since for Cenos strong is you've This for introduction Congratulations just And guess solution? Neil. at application pending can adaptive the you talk you feedback on can the quarter. maybe key first, the I any

Suzanne Winter

and were of tell and feedback you I of up sign-ups, was and And had demonstrations, will interest conference, Cenos. the we question. in we And the we showed momentum ASTRO for the the number by first of the for a excellent. really that booked thanks first lot Yes, it the a were day. some time for room We and they private at all had standing demos only, end

a that sign. very positive as So we take

Now we with pending. the went XXX(k) Cenos' show into

Our expectations, the just sometime But feedback the that that very order with based available was on to QX positive. in in time shipments lines, summertime. is will be

therapy treatments radiation tool to more patient all, adaptive and being of be changes this to make again, precise online an tool. to First by adjusting another one able

out tools require are require resources. of there they there marketplace, adaptive Now They in but lot treatment time. are additional the that a

And the improve the what a from feedback existing what we Cenos learned to upon. from really, in lot so do and offerings differently on to

kind So customers. from feedback that that the we got was of

platform. about but ability we're care, also really make Radixact excited a its differentiate patient to in difference So the

Brandon Carney

That's you what and helpful. for potential maybe uptake India comment to I kind expect guess, the ask market Helix and I can of just you for there. on then in

Suzanne Winter

market I just want The to you. India? for heard potential make sure I

Brandon Carney

Yes. Yes.

Suzanne Winter

Yes, yes, yes.

see site we that this is And of is annually. We the introduction for product, segment uniquely $XXX approximately that another value is within that think value as the for tailored $XXX is Helix. a million India. that product India, opportunity to segment think we million in the So target with and

are And taking very do compared so look to competitive at high-growth well be emerging high-potential, going we can offerings. where the a to markets Helix

are we focus about sort So excited after next China. of our being this

Operator

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

Suzanne Winter

release. year all our look much. our you Thank very this Well, good. forward fiscal to much. call. of again second you quarter We in XXXX earnings very with Thanks for earnings concludes Very speaking February

Operator

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

You may now disconnect.

Accuray (ARAY) 7 Nov 232024 Q1 Earnings call transcript