Accuray Reports Fourth Quarter and Fiscal 2024 Financial Results

Rhea-AI Summary

Accuray Incorporated (NASDAQ: ARAY) reported strong Q4 FY2024 results with 13.5% revenue growth to $134.3 million and a return to profitability with $3.4 million net income. Key highlights include:

- 7.9% increase in gross orders to $95.5 million
- Record quarterly system shipments, up 24% year-over-year
- Adjusted EBITDA of $10.1 million, nearly double the prior year
- Book-to-bill ratio of 1.2

For full FY2024, revenue was relatively flat at $446.6 million with a net loss of $15.5 million. The company achieved 10% growth in gross orders to $342.1 million for the year. Accuray also announced new product approvals and market expansions, positioning for future growth.

Positive

• Q4 revenue increased 13.5% year-over-year to $134.3 million
• Q4 net income of $3.4 million, compared to a loss in the prior year
• Q4 gross orders increased 7.9% to $95.5 million
• Record quarterly system shipments, up 24% year-over-year
• Q4 Adjusted EBITDA nearly doubled to $10.1 million
• Full year gross orders increased 10% to $342.1 million
• Gained approval for Accuray Precision Treatment Planning System in China
• Received CE Mark for Accuray Helix system for India and other high-potential markets

Negative

• Full year revenue decreased slightly by 0.2% to $446.6 million
• Full year net loss widened to $15.5 million from $9.3 million in the prior year
• Full year Adjusted EBITDA decreased to $19.7 million from $23.9 million
• Order backlog decreased 4.6% year-over-year to $487.3 million

Insights

Financial Analyst

Accuray's Q4 results show promising growth, with revenue up 13.5% to $134.3 million and a return to profitability with net income of $3.4 million. The 7.9% increase in gross orders to $95.5 million indicates strong demand. However, the full fiscal year 2024 was more challenging, with a slight revenue decline and increased net loss.

Key positives include record quarterly system shipments and new product approvals. The book-to-bill ratio of 1.5 for FY2024 suggests potential future revenue growth. Concerns include the 4.6% lower order backlog compared to last year, which may impact near-term revenue stability.

Overall, Q4 performance shows a positive trajectory, but investors should monitor if this momentum can be sustained throughout FY2025 given the mixed full-year results.

Medical Technology Expert

Accuray's strategic moves in FY2024 demonstrate a focus on market expansion and technological advancement. The approval of the Accuray Precision® Treatment Planning System in China opens doors to the vast Type B market. The introduction of VitalHold™ SGRT in Japan and the CE Mark for Accuray Helix™ show commitment to innovation and global market penetration.

The record quarterly system shipments indicate growing adoption of Accuray's technology. However, the slight decrease in service revenue ($212.4 million vs $214.4 million) warrants attention, as recurring service revenue is important for stability in the medical technology sector.

The company's focus on customer-driven innovations bodes well for future competitiveness, but execution will be key in translating these initiatives into sustained financial growth.

14% Revenue and 8% Orders Growth in Q4; Company issues FY25 Guidance

MADISON, Wis., Aug. 14, 2024 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the fourth quarter and fiscal 2024, ended June 30, 2024.

Fourth Quarter Fiscal 2024 Summary

• Net revenue of $134.3 million, an increase of 13.5 percent from the same period in the prior fiscal year. Net revenue on a constant currency basis was $136.7 million, which represents a 15.6 percent increase versus the same period in the prior fiscal year.
• GAAP net income of $3.4 million, as compared to GAAP net loss of $2.6 million in the same period in the prior fiscal year. Adjusted EBITDA was $10.1 million in the fourth quarter of fiscal 2024 compared to $5.2 million in the same period in the prior fiscal year.
• Gross orders of $95.5 million, increased 7.9 percent from the same period in the prior fiscal year. The book to bill ratio was 1.2 in the fourth quarter of fiscal 2024, compared to a book to bill ratio of 1.4 in the same period in the prior fiscal year.

Fiscal Year 2024 Summary

• Net revenue of $446.6 million, a decrease of 0.2 percent from the prior fiscal year. Net revenue on a constant currency basis was $447.9 million, which represents an 0.1 percent increase from the prior fiscal year.
• GAAP net loss of $15.5 million, as compared to a GAAP net loss of $9.3 million in the prior fiscal year. Adjusted EBITDA was $19.7 million in fiscal 2024, as compared to adjusted EBITDA of $23.9 million in the prior fiscal year.
• Gross orders of $342.1 million increased 10.0 percent from the same period in the prior fiscal year. The book to bill ratio was 1.5 in fiscal 2024, compared to a book to bill ratio of 1.3 in the prior fiscal year.

Other Recent Operational Highlights

• Achieved record quarterly system shipments with 24 percent increase in systems shipped compared to the same period in the prior fiscal year, resulting in highest revenue quarter in company history.
• Gained approval for the Accuray Precision^® Treatment Planning System (TPS) in China for use with the Tomo^® C radiation therapy system for the Type B market.
• Implemented first installations of the VitalHold™ surface-guided radiation therapy (SGRT) on the Radixact^® System in Japan.
• Gained CE Mark for the Accuray Helix™, a configuration of the Radixact^® Treatment Delivery System designed for India and other high potential markets where treatment versatility, high throughput and access to radiation therapy treatments are paramount.
• Signed agreement with TrueNorth Medical Physics LLC to provide radiation oncology departments with third-party physics, dosimetry and commissioning services.

"Our team finished the year with a solid Q4 performance closing several opportunities that were open from the prior period. We secured new product approvals and significant customer wins, and initiated sales in new markets. These achievements and more have enabled us to establish a strong foundation from which to grow our global business in the years ahead," said Suzanne Winter, President and Chief Executive Officer. "As we look to fiscal 2025, we will continue to focus our investments on innovations driven by the voice of our customers. We remain confident in our ability to provide clinical teams worldwide with a product portfolio that enables them to elevate cancer care both today and into the future."

Fiscal Fourth Quarter Results

Total net revenue was $134.3 million for the fourth quarter of fiscal 2024, as compared to $118.3 million in the prior fiscal year fourth quarter. Product revenue totaled $79.7 million, as compared to $62.5 million in the prior fiscal year fourth quarter, while service revenue totaled $54.6 million, as compared to $55.8 million in the prior fiscal year fourth quarter.

Total gross profit in the fourth quarter of fiscal 2024 was $38.5 million, or 28.6 percent of net revenue, as compared to total gross profit of $37.7 million, or 31.9 percent of net revenue in the prior fiscal year fourth quarter.

Operating expenses were $31.6 million in the fourth quarter of fiscal 2024, as compared to $38.1 million in the prior fiscal year fourth quarter.

Net income was $3.4 million, or $0.03 per share, in the fourth quarter of fiscal 2024, as compared to a net loss of $2.6 million, or $0.03 per share, in the prior fiscal year fourth quarter. Adjusted EBITDA was $10.1 million in the fourth quarter of fiscal 2024 compared to $5.2 million in the prior fiscal year fourth quarter.

Gross orders totaled $95.5 million in the fourth quarter of fiscal 2024, as compared to $88.4 million in the prior fiscal year fourth quarter. Ending order backlog as of June 30, 2024 was $487.3 million, a decrease of 3.2 percent sequentially, and is 4.6 percent lower than at the end of the prior fiscal year fourth quarter.

Cash, cash equivalents, and short-term restricted cash were $69.1 million as of June 30, 2024, an increase of $7.9 million from March 31, 2024.

Fiscal Year 2024 Highlights

Total net revenue was $446.6 million for fiscal 2024, as compared to $447.6 million in the prior fiscal year period. Product revenue totaled $234.2 million, as compared to $233.2 million in the prior fiscal year period, while service revenue totaled $212.4 million, as compared to $214.4 million in the prior fiscal year period.

Total gross profit was $142.9 million for fiscal 2024, or 32.0 percent of net revenue, as compared to total gross profit of $154.0 million, or 34.4 percent of net revenue in the prior fiscal year period.

Operating expenses were $142.4 million for fiscal 2024, as compared to $151.6 million for the prior fiscal year period. 

GAAP net loss was $15.5 million, or $0.16 per share, for the fiscal 2024, as compared to a net loss of $9.3 million, or $0.10 per share, in the prior fiscal year period. Adjusted EBITDA was $19.7 million for fiscal 2024, as compared to $23.9 million in the prior fiscal year period.

Gross orders totaled $342.1 million for fiscal 2024, as compared to $311.1 million in the prior fiscal year period.

Fiscal Year 2025 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 introducing guidance for fiscal year 2025 as follows:

• Total revenue is expected in the range of $460 million to $470 million.
• Adjusted EBITDA is expected in the range of $27.5 million to $29.5 million.

"Our fourth quarter results reflect a concerted effort by our team to drive improvements in our financial performance while delivering world class products and services to our customers. Our operating results were solid with controlled expenses and strong management of working capital that resulted in a significant decline in inventory and increase in cash. Moving into fiscal 2025, I'm excited about the year ahead and the potential of our new products to help generate revenue and growth in service," said Ali Pervaiz, Chief Financial Officer.

Guidance for Adjusted EBITDA, a non-GAAP financial measures excludes depreciation and amortization, stock-based compensation expense, ERP and ERP related expenditures, interest expense and provision for income taxes. 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 fourth 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 (USA), or (412) 317-0088 (International), Conference ID: 3981744. An archived webcast will also be available on Accuray's website until Accuray announces its results for the first quarter of fiscal 2025.

Use of Non-GAAP Financial Measures

Accuray reports its financial results in accordance with generally accepted accounting principles in the United States ("GAAP") and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, Accuray uses certain non-GAAP financial measures, such as adjusted EBITDA and net revenue on a constant currency basis.

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 Madison, Wisconsin, with facilities worldwide. 

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 invest on innovations and provide customers with products that enables them to elevate cancer care; the company's ability to benefit from advances in long-term growth and profitability drivers; the company's ability to navigate supply chain, logistics, macroeconomic, and foreign exchange challenges; the company's ability to deliver on its strategic growth plan, progressing against long-term strategic goals, and continuing adoption and expand access 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 company's China joint venture and the Tomo^® C product as well as expectations with respect to other strategic partnerships and collaborations; expectations related to the markets and regions in which the company operates and its ability to gain share in those markets and regions; expectations regarding new product introductions and innovations and their effect on use and adoption of the company's products; expectations regarding orders growth and its effect on market share as well as revenue, margin and adjusted EBITDA; expectations regarding backlog; expectations regarding the company's addressable market; expectations regarding service contract revenue; and the company's ability to advance patient care through innovation, expanded access to radiotherapy and improvements in overall profitability and working capital. These forward-looking statements involve risks and uncertainties. If any of these risk or uncertainties materialize, or if any of the company's assumptions prove incorrect, actual results could differ materially from the results express or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the effect of the global macroeconomic environment on the operations of the company and those of its customers and suppliers; disruptions to our supply chain, including increased logistics costs; the company's ability to achieve widespread market acceptance of its products; the company's ability to realize the expected benefits of the China joint venture and other partnerships; risks inherent in international operations; the company's ability to maintain or increase its gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; the company's ability to meet the covenants under its credit facilities; the company's ability to convert backlog to revenue; and such other risks identified under the heading "Risk Factors" in the company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on May 8, 2024, and as updated periodically with the company's other filings with the SEC.

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 Condensed Consolidated Statements of Operations (in thousands, except per share data) (Unaudited)
		Three Months Ended June 30,								Twelve Months Ended June 30,
		2024				2023				2024				2023
Net revenue:
Products		$	79,673			$	62,454			$	234,164			$	233,192
Services			54,616				55,838				212,387				214,413
Total net revenue			134,289				118,292				446,551				447,605
Cost of revenue:
Cost of products			55,084				42,000				161,061				153,627
Cost of services			40,753				38,614				142,569				140,018
Total cost of revenue			95,837				80,614				303,630				293,645
Gross profit			38,452				37,678				142,921				153,960
Operating expenses:
Research and development			9,529				14,187				49,732				57,129
Selling and marketing			10,696				10,667				42,619				46,178
General and administrative			11,410				13,281				50,066				48,271
Total operating expenses			31,635				38,135				142,417				151,578
Income (loss) from operations			6,817				(457)				504				2,382
Income on equity investment, net			810				1,612				1,838				2,572
Other expense, net			(3,769)				(3,131)				(14,162)				(11,742)
Income (loss) before provision for income taxes			3,858				(1,976)				(11,820)				(6,788)
Provision for income taxes			471				580				3,725				2,492
Net income (loss)		$	3,387			$	(2,556)			$	(15,545)			$	(9,280)
Net income (loss) per share - basic		$	0.03			$	(0.03)			$	(0.16)			$	(0.10)
Net income (loss) per share - diluted		$	0.03			$	(0.03)			$	(0.16)			$	(0.10)
Weighted average common shares used in computing income (loss) per share:
Basic			99,585				95,945				98,272				94,884
Diluted			101,028				95,945				98,272				94,884

 

Accuray Incorporated Condensed Consolidated Balance Sheets (in thousands) (Unaudited)
		June 30,				June 30,
		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	68,570			$	89,402
Restricted cash			485				524
Accounts receivable, net			92,001				74,777
Inventories			138,324				145,150
Prepaid expenses and other current assets			23,006				27,612
Deferred cost of revenue			850				568
Total current assets			323,236				338,033
Property and equipment, net			24,774				20,926
Investment in joint venture			9,826				15,128
Operating lease right-of-use assets			33,773				25,853
Goodwill			57,672				57,681
Intangible assets, net			59				210
Restricted cash			1,337				1,276
Other assets			17,950				20,107
Total assets		$	468,627			$	479,214
Liabilities and equity
Current liabilities:
Accounts payable		$	50,020			$	33,739
Accrued compensation			17,128				23,793
Operating lease liabilities, current			6,218				4,151
Other accrued liabilities			28,508				38,271
Customer advances			13,988				20,777
Deferred revenue			71,649				72,185
Short-term debt			7,756				5,721
Total current liabilities			195,267				198,637
Operating lease liabilities, non-current			32,373				23,602
Long-term other liabilities			7,389				4,675
Deferred revenue			24,114				27,079
Long-term debt			164,400				171,562
Total liabilities			423,543				425,555
Equity:
Common stock			100				97
Additional paid-in capital			566,887				555,276
Accumulated other comprehensive income (loss)			(4,222)				422
Accumulated deficit			(517,681)				(502,136)
Total equity			45,084				53,659
Total liabilities and equity		$	468,627			$	479,214

 

Accuray Incorporated Summary of Orders and Backlog (in thousands) (Unaudited)
		Three Months Ended June 30,								Twelve Months Ended June 30,
		2024				2023				2024				2023
Gross Orders		$	95,472			$	88,447			$	342,148			$	311,094
Net Orders			63,773				67,756				210,914				182,932
Order Backlog			487,319				510,641				487,319				510,641
Book to bill ratio (a)			1.2				1.4				1.5				1.3

(a) Book to bill ratio is defined as gross orders for the period divided by product revenue for the period

 

Accuray Incorporated Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, Stock-Based Compensation and Other (Adjusted EBITDA) (in thousands)
		Three Months Ended June 30,								Twelve Months Ended June 30,
		2024				2023				2024				2023
GAAP net income (loss)		$	3,387			$	(2,556)			$	(15,545)			$	(9,280)
Depreciation and amortization (a)			1,507				1,097				5,905				4,527
Stock-based compensation			2,042				2,452				9,483				10,053
Interest expense, net (b)			2,686				2,735				10,676				10,340
Provision for income taxes			471				580				3,725				2,492
Restructuring charges			—				—				2,633				2,738
ERP and ERP related expenditures			—				900				2,815				3,078
Adjusted EBITDA		$	10,093			$	5,208			$	19,692			$	23,948

(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 Forward-Looking Guidance Reconciliation of Projected Net Loss to Projected Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization, Stock-Based Compensation and Other (Adjusted EBITDA) (in thousands)
		Twelve Months Ending June 30, 2025
		From				To
GAAP net loss		$	(5,000)			$	(3,000)
Depreciation and amortization (a)			6,500				6,500
Stock-based compensation			10,000				10,000
Interest expense, net (b)			13,000				13,000
Provision for income taxes			3,000				3,000
Adjusted EBITDA		$	27,500			$	29,500

(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

What was Accuray's revenue growth in Q4 2024?

Accuray reported revenue growth of 13.5% in Q4 2024, with net revenue reaching $134.3 million compared to the same period in the prior fiscal year.

Did Accuray (ARAY) report a profit in Q4 2024?

Yes, Accuray reported a GAAP net income of $3.4 million in Q4 2024, compared to a net loss of $2.6 million in the same period of the prior fiscal year.

How did Accuray's gross orders perform in fiscal year 2024?

Accuray's gross orders for fiscal year 2024 increased by 10% to $342.1 million, compared to $311.1 million in the prior fiscal year.

What was Accuray's (ARAY) book-to-bill ratio in Q4 2024?

Accuray's book-to-bill ratio was 1.2 in Q4 2024, compared to 1.4 in the same period of the prior fiscal year.

Did Accuray achieve any significant operational milestones in Q4 2024?

Yes, Accuray achieved record quarterly system shipments with a 24% increase compared to the same period in the prior fiscal year, resulting in the highest revenue quarter in company history.