ARAY - Earnings call transcript Q1 2025

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Accuray Fiscal 2025 First Quarter Financial Results Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Jesse Chew, Chief Legal Officer. Please go ahead.

Jesse Chew

Thank you, operator, and good afternoon, everyone. call fiscal financial September year conference first 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;

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

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

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

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

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

Suzanne Winter

the and thank Jesse. call. Good joining you, Thank for you afternoon

thoughts Chalke, execute Senior CEO global Before discussing in your and like during my well Vice of keeping Sandeep Chief I'm Commercial and wishes while excited and seamlessly strategy CEO, as privilege the would an and priorities strategic market. I stepped where thank and to team Accuray's Officer, me could be the executes the absence. to in interim adjusted our my extremely the more to grateful we during growth, line running transforming continued medical operations. proud who your all for He Accuray support, is company in our are leave. to radiotherapy drive you day-to-day and a return quarter, not President as about and as competitive position It vision I global concurrently top EBITDA our

commercial access and believe We both we August, achieve of product the a Turning we in on new share fiscal adjusted Solutions expansion of delivered 'XX good to strategies progress #X which laid we FY Care, begun Advance in market to EBITDA. includes innovation business markets out where in to first our can had emerging to strong China, #X results. make the to like start our execution improve quarter high-growth that patient long-term. Service year the on the revenue priorities where and we We've or

actions pricing our fiscal efficiencies profitability. remainder the for improve progress has outlook to level were the Finally, we the positive a during and to which optimism and several advanced added on year. of of operational There highlights margins quarter,

and customer The XX% China. strong QX region both markets. First, by driven in revenue demand our B performance in at A significant growth year-over-year, delivered Type

end shipments the we for 'XX market allowed As which fiscal regulatory ended earnings customers. product, receiving Tomo and final the to year a launch call, last discussed in the full approvals C

X will to market, B the reception of to have technology the and years. customers I'm several quarter leader China next with customer China and In China ended over timing in with we is milestone over very systems team's new A our through the QX. support systems the the were $X product, As in the share built years, the be of XX% the where the been our a funnel market, both based our to as expands our of Tomo segment, we expected radiotherapy compete Type the billion system market B the see the at Type by Wisconsin. over estimated reminder, proud last us Tomo quality largest facility robust, systems fastest-growing achieving building key of Type close Madison, growth. product radiotherapy backlog we quarters ability portfolio here in year-over-year ramp the growth majority hitting in China next several C to production Tianjin in allows and Radixact with and segment In a the positive segments. QX, the and to customer teams ship well Operationally, A and above-market These manufacturing as continue activity CyberKnife new in installed both of the which of customer C order operations installation on QX

expect be on and we FY deferred testing As to the product was then Tomo sheet that positively in assembly product. minimal. final used of ship systems and shipments impact finished when several realize can adjusted EBITDA 'XX, discussed, through JV balance from end margin partner our it we customer, impact previous C the After to our next to as This is this margins gross will released quarters.

We areas new expanding also region, momentum our saw where of with several APAC strategy revenue radiotherapy markets, is in first-in-country to access consistent we underserved. in patient where shipments had the

delivered advanced treatment we Radixact VitalHold Thailand, first First, surface-guided provides cancer radiotherapy the for capabilities. the system in breast which

and XX% SX was SBRT and access regions, treatments. the system Myanmar, in Japan QX. due CyberKnife expectations, to year-over-year shipments XX% advanced radiotherapy radiosurgery Radixact was and In shipped achieving first with Philippines, EIMEA record the line providing providing capabilities the and in total revenue in to patient QX respectively, year-over-year, tougher mainly first comps was after but and down stereotactic delivered The in

performance discussed, significantly on regional have we based can time quarter-to-quarter from lines. vary As customer

will new those with customer of The future base rates quarter, opportunities. within increase installed satisfied and EIMEA was recurring systems drive installation regions and the upgrade Japan regions. both in grew in and revenue in I which X% base service year-over-year in X% the However, very

service consolidation expect to stronger driven increase was We the customer half revenue visibility FY year-over-year, due coverage. strong growth X% which by In trade-up market half up in we and we of conditions with FY upgrades, driven guidance for the second over in the expect base an Installed last remains to to second area improve show in have 'XX, commercial and Americas additional in the key shipments, revenue FY 'XX timing U.S. both by 'XX, X% the offset in installed August. by base focus decline in trade-in, of a was regions and the we in revenue product the region, seen of into year. provided a line to

I our X% quarter, to service the revenues was X% our grew business. year-over-year. increased very for on by service pleased year-over-year, at which which mainly revenue, grew driven with Moving contract

VitalHold than emphasis installed grew of reminder, providing service As X% faster of global revenue service year-over-year reflects existing a a source our increased providing price of enhanced remains and highest was as and from of base, in our system This on from the increasingly comes both are the largest are as support one support contracts high-touch that perspective. recurring value systems. Service including as their which growth well customers growth contracts service a opportunities, globally our ClearRT growth for to our our innovations configuration. customers installed and revenue to base and like margin

India and growth fit offsetting markets penetrating new markets the platform, CE to have Accuray Helix contributing Helix, in a higher-growth strategy growth high radiotherapy slower August, products conversion were environments. In limited. access Helix developing are infrastructure X% and saw that conference, advanced We and that non-U.S. represented company. deep several innovative is demand quarters. was the milestone able during within Our markets other has markets in anticipate in the created our we revenue materially finalize to C orders new that well for orders Mark and treatments historically received I major where highly a these Tomo we for coming I was developed markets. and of the ASTRO the for like key emerging which pleased been for in developed

Cenos and Regulatory at in of submission starting QX, quality be the and reception at including year ASTRO and the we player that suite, and VitalHold treatment order outcome our the to ratio day book-to-bill the healthy very key product occur our with we strong latest And of approximately competitive our will systems. calendar in backlog radiotherapy best and clearance which take product We orders the quarter, innovation to because with FY the on versus against book revenue. shipments finally, system U.S. a we EIMEA in expected Radixact orders solution system positions Europe was and is during XXXX Adaptive of our Cenos be solid new continue more in believe at between, Xx for maintain full adaptive can at Cenos the of will product will suite differentiator and fiscal for online a adapt X.X, and point provide and on can 'XX revenue new the During the life. to a Radixact the space adaptive the be system. saw the Accuray opportunity Radixact treatment ClearRT, we plans expected in end Synchrony Conference of order only for

Miami the is England System. we localized pleased way Additionally, are of session. PACE-B investing SBRT Prostate practice Journal into and and Medicine. experts announced attendees study we and we in in see NYU The Further, education international XXX demand at radiotherapy treated groundbreaking in to is hands-on SBRT countries an research committed from the compared and should publication prestigious is over treated. The with PACE-B conventional with week Symposium conjunction the significant, last Accuray-sponsored this cancer. were a change cancer with study Health Cancer sponsored The for the in XX of New October, prostate prostate patients for of in educational faculty and approximately practical to translating trial

progress productivity a margin and expansion saw the operational side, benefit ERP year Finally, cost new and our efficiencies year-over-year margins to onetime system. advanced transition with prior after on initiatives we our excluding overall to associated our a service on

is our foundation our fully in the first past future leaner much the identified as years. In And are and and year, raising I'm start stage enter now growth, of in a in see goals we the the well We ERP integrated growth in to some this strategic a efficient the company We based guidance us the expand to are confident over markets. XXXX and the wins line the markets ERP will FY compete September, and summary, to proud turn marketplace pivotal despite are our achieved outlook. penetrated new now solid our in trends we system and for top gain I'll fiscal in of are 'XX which we underlying be year to positioned challenges, margins modestly for where believe were it drive more With financials. customer who beyond. we set have believe We cover will Ali, and coming year allow growth. we full achieve on share we in implementation. full

Ali Pervaiz

Thank everyone. you, good and Suzanne, afternoon,

me quarter. we the our solid of FY let helped first earnings a global kick us start who deliver cross-functional As teams call by off thanking first 'XX,

directly experienced to to timing in Our revenues we approximately very year full in backlog remains markets adjusted orders results installation, can confidence product beyond. and With give EBITDA underlying that, raise half said 'XX customer tied guidance. our us positive in cycles some revenue our as and are and trend of from demand which and enter create we sales our variability FY of capital longer gives equipment, and modestly seeing confidence the us high-growth and business quarter-to-quarter. Having timing we the

impact Additionally, year and to our as on outsized unfolds. we margin while expansion multiple starting our to efforts adjusted are EBITDA basis, factors a gross fiscal can underlying quarterly margin believe our have off pay

last the one of our the that an As of to is outsized years. had Suzanne impact quarterly margin results China has couple deferral in factors mentioned,

JV margin customer. with timing shipment of volatility margin that associated phenomenon accounting the to XX% must and joint associated to venture that end realize the joint and driven revenue that has due approximately made the venture to of of until reminder, their ships revenue rules, do a product This in margin. terms As defer we we the not have

our guidance. starts approximately margin QX Given date, beginning all $X the to to FY C and deferred fiscal Tomo to 'XX, the million EBITDA to P&L in through the adjusted XXXX shipment $X expect which million included we year as benefit, to release is in have

We additional in on this provided forward. have deferral details and our impact the of historically deck supplemental moving

deferral volumes and factor of to 'XX margin be joint to nominal venture have this impact. a timing as beyond moving a less year expect fiscal We normalize

first million, million, constant Turning X% and basis. and the and a to up first quarter constant the currency financials. the X% for was year for down the prior on year down $XXX down constant was Net the quarter currency X% revenue up year prior which X% $XX on versus Product down Service was a $XX basis. for million, quarter prior a the was from X% from the on revenue currency basis. revenue X%

than approximately are was greater contract our annuity than this gross of XX% actions. accretion for million X.X represented the and with is by the by service were as ratio it and a As service of illustrates of which driven book-to-bill makes and Suzanne quarter margin encouraged up part a XX-month expansion Product revenue, as this our growth X.X. which first of trend ratio orders revenue, our higher IB trailing of $XX our we part mentioned, is business, price

Our defined book-to-bill ratio by as gross period. for the period orders product divided for product revenue the is

with ended represents younger defined to believe continue than reported right greater Suzanne approximately the quarter. revenue. $XXX We FY ratio the as backlog we backlog growth as metric of months. quarter to 'XX add more of X orders product our book-to-bill healthy that orders the years ensure million, are a that As we product mentioned, in first than than the shipments of XX is This order

diligence our backlog, approximately unit, due high-quality orders to representing million evolving canceled a in customer of we of ensuring X part only dynamics. As $X

with order convert last and conversion. to profitability order before, months have mentioned over within deals revenue redefined and higher we result, age-outs booking revenue lower faster a the As couple seen years, of have focused our XX that as to criteria on

for to margin the the quarter in gross year. XX% compared XX.X% overall Our was prior

$X.X primarily a prior timing As parts was to first in of to the the million to million service lower the were consumption a for $X.X was quarter quarter mentioned loss from net issued million release the of the income was and the year. year, consumption compared margins. year. $XX.X product reminder, million first $X.X million led year Sequentially, expenses the fiscal from to operating parts described cost in the compared for implementation. $X.X income in improvements ERP prior the earlier. ERP adjusted million last of the the quarter onetime quarter saw prior to of our onetime Operating related compared Adjusted there the implementation benefit EBITDA due we in the to that earnings EBITDA today. to $XX.X due GAAP dynamics timing We reconciliation between and both Operating

of due equivalents Turning Net were cash approximately quarter. Helix. to million, and primarily the the to the compared $XX launch as at to we quarter, sheet. of $XX to compared cash, receivable the prepare amounted prior balance cash of $XX buildup the short-term Total million restricted flat for last to inventory million end accounts

was the up coming Our manufacturing $XXX from prior million, as we balance in for up net increased ramp million quarters. $XX the quarter shipments inventory

we significant go into working 'XX, on a is As capital, cash emphasis overall year position. our inventory, there which fiscal will including benefit optimizing

of adjusted $XXX the seeing $XXX grow and with million call the key million year range structure the guidance half momentum are ensure half that sheet, raising guidance $XXX financial 'XX updated given million of highlights. EBITDA million million we previous Those the full EBITDA that, to million to recovery margin our year range thus our This of updated our related begin associated $XX.X system year And QX focused revenue revenue million to to balance we of far, we are delaying have the years guidance to we the raising are and will and previous and the back Suzanne. like flexibility to to range to on our $XX 'XX, I'd to $XXX to EBITDA summary, the full FY of an Lastly, back adjusted are $XX.X business we're year. addressing range capital In hand to our range million. U.S. market fiscal in refinancing an with results. to the come. needs And of adjusted to also pleased its second for assumes $XX

Suzanne Winter

Thank and thank to innovative for for to you, the Ali. role for their for our trends played it continues incidents meaningful more I've life all operator excited closing, progress team globally and ongoing improve the the solutions In over radiotherapy strategic important. never never against value market and them combat have now future our opportunity. and priorities Q&A. upward hard about I the cancer been our would will Accuray mission more in has to we like the creating and their turn entire dedication to been stakeholders. I and passion extend need and outcomes all in have advancing work made they and back the The

Operator

question with [Operator BTIG. Instructions] First Marie comes from Thibault

Marie Thibault

we quarter. nice see. well wanted a to getting to And happy total I to considerable Very you're Suzanne, you good China. back revenue, which portion wise. I doing to I and is pretty wanted of see is glad your health start be be? source of guess, very It with the here, rollout a years, Is the a company? for for a can revenue quarters? launch this better of Tomo How this timeline impactful and be get understanding can this how system of Just growth of to long to the matter expect C. strong

Suzanne Winter

market the being player segment. in a really total the and Type in B Company

made a China for pleased We company. China in product the fact reception product are C is to this that the with the Tomo the very and for

we seeing, we deferral in and we on the sheet. think to able the short are our seeing, release pent-up term we demand, that's been I what at are have are which is balance least again, So margin

we And so leader product out the within also itself, the going going to to QX be the see continue well. we market do a play in believe to we're through Type QX. segment But segment. share A we that we're But that think share B through market Type gain as

Now Type share is we have smaller the of segment. segment, a segment that but A lion's

to And strong there. a be competitor are continue so going we to

Marie Thibault

their is partner of Okay. say your might accounts, hear a the been of in did my to And their the your so fraction It where that. first launch JV have it part qualitative But of sort most couldn't of comments, detail glitch on I end. Suzanne, out a just of on just accounts? introducing Have target gone C? they Tomo maybe a you

Suzanne Winter

No, I the again, a think large. think as the we for still year waited they number they're very doing accounts. is a large have Type launch of mean, the out been for B going I I But approval. past segment to that soft

we And rate and get so again, install, we some up of we think this within we are going help win to pent-up customers market. But as critical get larger that mass of units, and just demand. a seeing as we our running that's

Marie Thibault

offering? about What Got range this the And to some we about think you're pricing installed the that I give going while. of details Good enhanced is outpacing range follow-up sustainable on you're it. about is as see importantly, a base something revenue low to been level kind you've this what Can growth. to of XXs kind contract forward? know forward? you a tailwind Should going I growth us seeing? been talk is guess, more wanted value any of targeting think My for here, service well. that's I

Suzanne Winter

Yes.

really company, tremendous service for is I base by business it's growth. a think the driven the and installed initiative

high-growth into systems penetrating sell these customers revenue. we're new base, markets, getting to our as installed service contract we're getting So emerging able installed,

that's business So model. our

service enhancing for are of we to Every Now new contracts they us the it's we're service offering allows that, customers. time configuration, to that contracts. are get service also the which enhanced able buy we richer an higher system to pricing and a within some a offer contract,

just positive. that's So recurring that's And very revenue. service contract the

offerings. that our called growth which talked we include The revenue, system. of non-contract bring time the just can CyberComm service CyberKnife, introduced may for enhanced to customers, that the we've We of other is which other big greatly something the the services about area educational reduces additional of the commissioning

service. they that for we're to treat get type that installed by patient they So first time time able reduced their the it and additional to of is the considerably, charge can value-added

because So growth back continue line to going service as do we that improve believe to can invest as top margin. our into ultimately, we're well we

Operator

from the question And next Xuyang comes Jefferies. Li with

Young Li

Suzanne. decision level the increase I a It's B. what's the was the feeling ask good that start, early in. less some of there's year? you I to can and I to cautiousness talk more the you fiscal a to maybe But bit the guess Welcome wanted little guidance. than you're just and about the sort baked mean at if see back about for to know it's appropriate in the of bit conservatism year, how rest little arrived of driving better. that

Suzanne Winter

very good Yes. I'll I'll the a year. we start we've and start, it our QX We the and very within the and with we Ali turn we've question, pleased year, as is as had well. Thanks to over then discussed, usually quarter are how our our smallest is, for to and feel our from in Xuyang, And strong we're other see Japan strong continued the with region, also EIMEA U.S. second the some and regions optimism showed of with growth, out underlying of also certainly landed. which like but what some are APAC the trends, strength we half pleased

up we're lifting that end lower at the and comfortable again of the guidance as guidance. the go we'll so feel QX, taking QX, a And modestly, into the look with. something guidance take we And we

Ali Pervaiz

modestly. up mean, year. think we cautiously I Suzanne And the on that, go we're like maybe just Xuyang. into raising said, to as Yes. optimistic We're adding I it just

as better revenue year. our during that really going last think really to understand also the we witnessed quarter our important is earnings of as that time it's shared little QX way sort of sort last bit just than big a be revenue to about think I we QX profile is we is

for then we those key think And first guide. half our total of still revenue, of half first XX% are to in terms performance second expect X about half, be phenomenon. still I So

the So and also the second then in half. midpoint is XX% $XXX million

Young Li

Very I'm you guess for seeing demand of China sort just the impact of follow-up stimulus just It those curious. pretty China? business bit. How seems the Great. kind helpful. Tomo I I things from C. side there's or little much strong like are anticorruption impacting organic revenue in a a on What campaign? are the in guess

Suzanne Winter

up calls area I Yes. No, question thanks the we are companies' that for who know on other it's because are, come for also same example. in the imaging, diagnostic

the For we've the as campaign, down anticorruption talked about, sure, slowed has process.

the were we initiated I hoping hasn't that all think start stimulus program to yet. quite

So said, though market, some do think even being budgets. may reduced. delay that shows gaining we think in overall, budgets in reduction creating this is are That it a be I share in I that

strong driven radiotherapy joint We by having have demand is venture we approval I pent-up and our being this strategy just with JV for, China think, in for with a unique produced got and the product partnership our in of our partnership a domestically partner. that segment

And both of in monitor, B. so takes lot and the should a are very and Type not it trajectory But Type change positive, that and lot been to still A puts response to has but continue seeing. a there's we the

good visibility. pretty expect we So

Operator

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

Brooks O'Neil

of start to sort been a And for you there? extend line a end back with your the do sort like India. Brooks Aaron to of of This to How also the still tracking have expect welcome position is I the on orders year? and wanted shipping at Suzanne. I would in to be I guess Brooks.

Suzanne Winter

start that in excited We've more we the made there. throughput finalize orders productivity us resources for markets, Thanks to do testing Yes, also and for launch India, and least the in of features commercial which has after been product strategic that think the for a we're designed less have have taken investment a another more we potential expect a that advanced the for Mark that allowing Yes. is potential. can expect which on an again, in product, to And about CE market and a of early is the at question. India economics. certainly we emerging we there of product, take us and high-growth And lot that completed orders. reason. Helix is we we local for to has regulatory in be QX, mode shipping full be We area

Brooks O'Neil

helpful. And any results how that markets, I'm specifically then of in in outlook on if outlooks of comments the the Super the and of curious foreign have you fares growth Understandable. sort China? election terms

Suzanne Winter

company that headquartered No, And of strong one to here. is everyone administration this even you a for products to unfold. competitiveness. company radiotherapy policies question. the And I thank U.S., is certainly, Accuray we're a we're hypersensitivity I say the is see points, there will watching very that in think, as headquartered with are the new U.S. and the only

exception product, for the made China which in U.S. our are is with China. of the We

we positive And for tax onshoring. lower corporate for Republicans so a rate a know have I companies think credits on with floated note, manufacturing U.S. congressional and tax

strong impact be. what understand might incidence Health that impact to to may and have and continues the radiotherapy. Head waiting news overall see good who and at a Services, look CMS is see good we're a and again, therapy the of on just FDA, trying such radiotherapy that cancer --certainly system the to grow also cost-effective for might and So But And impact what health and taking news, is the not be but noninvasive. new the Human to we're

to we're position continue monitor. a in going we're to think overall, I but So good

Operator

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

Suzanne Winter

our fiscal we release. February for look in forward concludes to call, for earnings our attending. and you all speaking second-quarter you again Thank This earnings with XXXX

Operator

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

now may You disconnect.

Accuray (ARAY) 6 Nov 242025 Q1 Earnings call transcript