Accuray Reports Fiscal 2024 Third Quarter Financial Results
Accuray Incorporated (NASDAQ: ARAY) reported a decrease in net revenue for the third quarter and nine-months ended March 31, 2024. The GAAP net loss was $6.3 million, with gross orders increasing by 21%. Despite challenges, the company remains confident in its growth strategy and ability to offer value globally.
Gross orders increased by 21% in the third quarter, indicating strong demand for the company's products.
The company opened a new training center in Switzerland, a positive move to enhance its service business.
Accuray announced a collaboration agreement with Oncopole Claudius Regaud and Airbus SAS to develop an AI-driven solution, showcasing its focus on innovation.
Net revenue decreased by 14% in the third quarter and 5% for the nine-month period, raising concerns about future growth.
GAAP net loss was $6.3 million, a significant decrease from the prior fiscal year, indicating financial challenges.
Adjusted EBITDA decreased to $1.1 million in the third quarter, reflecting a decline in profitability.
Insights
Accuray's reported revenue decline of
Their book to bill ratio, however, improved—indicating healthy future revenue streams if they can manage to navigate the logistical challenges. The reduction in cash reserves over the quarter could strain operational liquidity, necessitating a closer look at cash management strategies. The stock’s performance will likely hinge on the company's ability to address these operational hurdles and capitalize on its order backlog.
Despite the negative financial performance, Accuray's announcement of opening a new training center and introducing CyberComm™ could be pivotal. The training center expansion is indicative of their investment in customer service and potentially, a long-term increase in service revenue. The CyberKnife®S7™ System enhancement could make Accuray's offerings more competitive, potentially improving market share in a sector where technological advancements are key drivers. Collaborations like the one with Oncopole Claudius Regaud and Airbus SAS might not only enhance product efficiency but could also lead to innovative developments in predictive maintenance, offering a strategic edge.
The medical device industry is often driven by innovation and service expansion. Accuray's operational highlights, such as the introduction of a new physics offering and the strategic collaboration aimed at AI-driven solutions, are essential for staying relevant in a high-tech industry. However, investors should weigh these developments against financial underperformance. The industry's competitive landscape requires companies like Accuray not only to innovate but also to efficiently translate innovation into marketable solutions that reflect positively on the bottom line.
Given that Accuray operates in a capital-intensive industry, the financial pressure from the reported net losses may constrain future R&D investments and market penetration efforts. Companies in this sector often need substantial resources to maintain growth momentum and satisfy regulatory demands. Investors should consider these dynamics when evaluating Accuray's future prospects.
Third Quarter Fiscal 2024 Summary
- Net revenue of
$101.1 million decreased 14 percent from the same period in the prior fiscal year. Net revenue on a constant currency basis was$102.4 million - GAAP net loss was
$6.3 million $0.6 million $1.1 million $8.3 million - Gross orders of
$89.1 million
Fiscal Nine Months 2024 Summary
- Net revenue of
$312.3 million $311.2 million - GAAP net loss was
$18.9 million $6.7 million $9.6 million $18.7 million - Gross orders of
$246.7 million
Other Recent Operational Highlights
- Opened new training center in Genolier,
Switzerland , the most recent addition to the Accuray network of training centers and one of the growth drivers for the company's service business. - Introducing at ESTRO a new physics offering, CyberComm™, intended to significantly reduce the CyberKnife®S7™ System's commissioning time and enable customers to begin treating patients substantially faster.
- Announced a collaboration agreement with Oncopole Claudius Regaud (IUCT-Oncopole) in
France , and Airbus SAS, a leader in the aerospace industry, to develop an artificial intelligence driven solution for predicting radiotherapy system performance.
"While I am disappointed in our quarterly results where we faced challenges as a result of multiple factors, including a delay in product shipments and slower than expected
Fiscal Third Quarter Results
Total net revenue in the third quarter of fiscal 2024 was
Total gross profit in the third quarter of fiscal 2024 was
Operating expenses in the third quarter of fiscal 2024 were
Net loss in the third quarter of fiscal 2024 was
Gross product orders in the third quarter of fiscal 2024 totaled
Cash, cash equivalents, and short-term restricted cash were
Fiscal Nine Months Results
Total net revenue in the first nine months of fiscal 2024 was
Total gross profit in the first nine months of fiscal 2024 was
Operating expenses in the first nine months of fiscal 2024 was
Net loss in the first nine months of fiscal 2024 was
Gross product orders in the first nine months of fiscal 2024 was
Fiscal Year 2024 Financial Guidance
Accuray's financial guidance is based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market and economic conditions, supply chain disruption, and the factors set forth under "Safe Harbor Statement" below.
The company is adjusting its guidance for fiscal year 2024 as follows:
- Total revenue is expected in the range of
$432 million $437 million - Adjusted EBITDA is expected in the range of
$19 million $22 million
Guidance for non-GAAP financial measures excludes depreciation and amortization, stock-based compensation, interest expense, provision for income taxes, and ERP and ERP related expenditures. For more information regarding the non-GAAP financial measures discussed in this press release, please see "Use of Non-GAAP Financial Measures" below.
Conference Call Information
Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss results for the third quarter of fiscal 2024 as well as recent corporate developments. Conference call dial-in information is as follows:
U.S. callers: (833) 316-0563- International callers: (412) 317-5747
Individuals interested in listening to the live conference call via the Internet may do so by logging on to the Investor Relations section of Accuray's website, www.accuray.com. There will be a slide presentation accompanying today's event which can also be accessed on the company's Investor Relations page at www.accuray.com.
In addition, a taped replay of the conference call will be available beginning approximately one hour after the call's conclusion and will be available for seven days. The replay number is (877) 344-7529 (
Use of Non-GAAP Financial Measures
Accuray reports its financial results in accordance with generally accepted accounting principles in
Accuray has supplemented its GAAP net income (loss) with a non-GAAP measure of adjusted earnings before interest, taxes, depreciation, amortization, stock-based compensation, ERP and ERP related expenditures and restructuring charges ("adjusted EBITDA"). The calculation of adjusted EBITDA also excludes certain non-recurring, irregular and one-time items. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the company and facilitates a meaningful comparison of results for current periods with previous operating results. A reconciliation of GAAP net income (loss) (the most directly comparable GAAP measure) to non-GAAP adjusted EBITDA is provided in the schedules below.
Accuray has also reported certain operating results on a constant currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of foreign currency exchange rate fluctuations. Management believes disclosure of non-GAAP constant currency results is helpful to investors because it facilitates period-to-period comparisons of the company's results by increasing the transparency of the underlying performance by excluding the impact of foreign currency exchange rate fluctuations. The GAAP measure most directly comparable to net revenue on a constant currency basis is revenue. Accuray calculates the constant currency amounts by translating local currency amounts in the current period using the same foreign translation rate used in the prior period being compared against rather than the actual exchange rate in effect during the current period.
There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the company's consolidated financial statements prepared in accordance with GAAP.
About Accuray
Accuray Incorporated (Nasdaq: ARAY) is committed to expanding the powerful potential of radiation therapy to improve as many lives as possible. We invent unique, market-changing solutions that are designed to deliver radiation treatments for even the most complex cases—while making commonly treatable cases even easier—to meet the full spectrum of patient needs. We are dedicated to continuous innovation in radiation therapy for oncology, neuro-radiosurgery, and beyond, as we partner with clinicians and administrators, empowering them to help patients get back to their lives, faster. Accuray is headquartered in
Safe Harbor Statement
Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release relate, but are not limited, to the company's future results of operations, including expectations regarding: total revenue and adjusted EBITDA; the company's ability to benefit from advances in long-term growth and profitability drivers; the effect of the global economic environment and the COVID-19 pandemic on the company and the market in general, including with respect to the company's ability to navigate supply chain, logistics, macroeconomic, and foreign exchange challenges; delivering on the company's strategic growth plan, progressing against long-term strategic goals, and continuing adoption of its technologies; the company's ability to execute on margin and profitability expansion initiatives; expectations regarding commercial strategy and execution as well as growth opportunities; expectations regarding the market in
Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management's good faith belief as of that time with respect to future events. The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.
Aman Patel, CFA | Beth Kaplan |
Investor Relations, ICR-Westwicke | Public Relations Director, Accuray |
+1 (443) 450-4191 | +1 (408) 789-4426 |
aman.patel@westwicke.com | bkaplan@accuray.com |
Financial Tables to Follow
Accuray Incorporated | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Net revenue: | ||||||||||||||||
Products | $ | 49,603 | $ | 62,846 | $ | 154,491 | $ | 170,738 | ||||||||
Services | 51,529 | 55,214 | 157,771 | 158,575 | ||||||||||||
Total net revenue | 101,132 | 118,060 | 312,262 | 329,313 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Cost of products | 35,945 | 43,529 | 105,977 | 111,627 | ||||||||||||
Cost of services | 36,113 | 35,813 | 101,816 | 101,404 | ||||||||||||
Total cost of revenue | 72,058 | 79,342 | 207,793 | 213,031 | ||||||||||||
Gross profit | 29,074 | 38,718 | 104,469 | 116,282 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | 10,909 | 14,209 | 40,203 | 42,942 | ||||||||||||
Selling and marketing | 10,318 | 11,130 | 31,923 | 35,511 | ||||||||||||
General and administrative | 12,409 | 11,063 | 38,656 | 34,990 | ||||||||||||
Total operating expenses | 33,636 | 36,402 | 110,782 | 113,443 | ||||||||||||
Income (loss) from operations | (4,562) | 2,316 | (6,313) | 2,839 | ||||||||||||
Income from equity method investment, net | 1,024 | 2,027 | 1,028 | 960 | ||||||||||||
Other expense, net | (2,360) | (3,222) | (10,393) | (8,611) | ||||||||||||
Loss before provision for income taxes | (5,898) | 1,121 | (15,678) | (4,812) | ||||||||||||
Provision for income taxes | 444 | 522 | 3,254 | 1,912 | ||||||||||||
Net income (loss) | $ | (6,342) | $ | 599 | $ | (18,932) | $ | (6,724) | ||||||||
Net income (loss) per share - basic | $ | (0.06) | $ | 0.01 | $ | (0.19) | $ | (0.07) | ||||||||
Net income (loss) per share - diluted | $ | (0.06) | $ | 0.01 | $ | (0.19) | $ | (0.07) | ||||||||
Weighted average common shares used in computing loss | ||||||||||||||||
Basic | 99,197 | 95,522 | 97,838 | 94,532 | ||||||||||||
Diluted | 99,197 | 97,455 | 97,838 | 94,532 | ||||||||||||
Accuray Incorporated | ||||||||
March 31, | June 30, | |||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 60,450 | $ | 89,402 | ||||
Restricted cash | 674 | 524 | ||||||
Accounts receivable, net | 73,154 | 74,777 | ||||||
Inventories | 159,566 | 145,150 | ||||||
Prepaid expenses and other current assets | 19,043 | 27,612 | ||||||
Deferred cost of revenue | 1,023 | 568 | ||||||
Total current assets | 313,910 | 338,033 | ||||||
Property and equipment, net | 25,387 | 20,926 | ||||||
Investment in joint venture | 13,586 | 15,128 | ||||||
Lease right-of-use assets, net | 29,127 | 25,853 | ||||||
Goodwill | 57,682 | 57,681 | ||||||
Intangible assets, net | 70 | 210 | ||||||
Long-term restricted cash | 1,030 | 1,276 | ||||||
Other assets | 21,735 | 20,107 | ||||||
Total assets | $ | 462,527 | $ | 479,214 | ||||
Liabilities and equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 44,430 | $ | 33,739 | ||||
Accrued compensation | 21,604 | 23,793 | ||||||
Lease liabilities, current | 5,279 | 4,151 | ||||||
Other accrued liabilities | 30,703 | 38,271 | ||||||
Customer advances | 15,392 | 20,777 | ||||||
Deferred revenue | 73,734 | 72,185 | ||||||
Short-term debt | 7,248 | 5,721 | ||||||
Total current liabilities | 198,390 | 198,637 | ||||||
Lease liabilities, non-current | 28,217 | 23,602 | ||||||
Long-term other liabilities | 4,969 | 4,675 | ||||||
Deferred revenue, non-current | 23,624 | 27,079 | ||||||
Long-term debt | 166,246 | 171,562 | ||||||
Total liabilities | 421,446 | 425,555 | ||||||
Equity: | ||||||||
Common stock | 99 | 97 | ||||||
Additional paid-in capital | 563,958 | 555,276 | ||||||
Accumulated other comprehensive income (loss) | (1,908) | 422 | ||||||
Accumulated deficit | (521,068) | (502,136) | ||||||
Total equity | 41,081 | 53,659 | ||||||
Total liabilities and equity | $ | 462,527 | $ | 479,214 | ||||
Accuray Incorporated | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
Gross orders | $ | 89,086 | $ | 73,764 | $ | 246,676 | $ | 222,647 | ||||||||
Net orders | 60,795 | 54,737 | 147,141 | 115,176 | ||||||||||||
Order backlog | 503,220 | 506,587 | 503,220 | 506,587 | ||||||||||||
Book to bill ratio (a) | 1.8 | 1.2 | 1.6 | 1.3 | ||||||||||||
(a) Book to bill ratio is defined as gross orders for the period divided by product revenue for the period. | ||||||||||||||||
Accuray Incorporated | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2024 | 2023 | 2024 | 2023 | |||||||||||||
GAAP net loss | $ | (6,342) | $ | 599 | $ | (18,932) | $ | (6,724) | ||||||||
Depreciation and amortization (a) | 1,601 | 1,103 | 4,398 | 3,430 | ||||||||||||
Stock-based compensation | 2,735 | 1,559 | 7,441 | 7,601 | ||||||||||||
Interest expense, net (b) | 2,649 | 2,707 | 7,990 | 7,605 | ||||||||||||
Provision for income taxes | 444 | 522 | 3,254 | 1,912 | ||||||||||||
Restructuring charges | — | 800 | 2,633 | 2,738 | ||||||||||||
ERP and ERP related expenditures | — | 1,057 | 2,815 | 2,178 | ||||||||||||
Adjusted EBITDA | $ | 1,087 | $ | 8,347 | $ | 9,599 | $ | 18,740 | ||||||||
(a) Consists of depreciation, primarily on property and equipment as well as amortization of intangibles. | ||||||||||||||||
(b) Consists primarily of interest expense associated with outstanding debt. | ||||||||||||||||
Accuray Incorporated | ||||||||
Twelve Months Ending | ||||||||
From | To | |||||||
GAAP net loss | $ | (17,400) | $ | (14,400) | ||||
Depreciation and amortization (a) | 6,000 | 6,000 | ||||||
Stock-based compensation | 10,300 | 10,300 | ||||||
Interest expense, net (b) | 10,700 | 10,700 | ||||||
Provision for income taxes | 4,000 | 4,000 | ||||||
Restructuring charges | 2,600 | 2,600 | ||||||
ERP and ERP related expenditures | 2,800 | 2,800 | ||||||
Adjusted EBITDA | $ | 19,000 | $ | 22,000 | ||||
(a) Consists of depreciation, primarily on property and equipment as well as amortization of intangibles. | ||||||||
(b) Consists primarily of interest expense associated with outstanding debt. | ||||||||
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SOURCE Accuray Incorporated
FAQ
<p>What was the net revenue for the third quarter of fiscal 2024?</p>
The net revenue for the third quarter of fiscal 2024 was $101.1 million.
<p>What was the GAAP net loss for the third quarter of fiscal 2024?</p>
The GAAP net loss for the third quarter of fiscal 2024 was $6.3 million.
<p>What was the book to bill ratio for the third quarter of fiscal 2024?</p>
The book to bill ratio for the third quarter of fiscal 2024 was 1.8.
<p>What recent collaboration agreement did Accuray announce?</p>
Accuray announced a collaboration agreement with Oncopole Claudius Regaud and Airbus SAS.
