Accuray Incorporated ((ARAY)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Accuray Incorporated’s recent earnings call projected a positive outlook, bolstered by strong growth in product revenue and significant gains in the Chinese market. While challenges remain, particularly in regional revenue declines and service revenue impacts, the company expressed optimism with increased guidance and strategic market expansions.
Strong Year-over-Year Revenue Growth
Accuray reported an impressive 8% growth in revenue for the quarter compared to the previous year, with product revenue surging by 19%. This growth underscores the company’s robust performance in the current financial landscape.
CyberKnife System Performance
The CyberKnife system proved to be a standout performer, with its revenue increasing by more than 50% year-over-year. This substantial growth highlights the strong demand and market acceptance of this innovative technology.
China Market Success
Accuray achieved remarkable success in the Chinese market, with over 50% revenue growth year-over-year and a gain of 10 points in market share. This expansion is a key driver of the company’s overall positive performance.
Adjusted EBITDA Improvement
The company reported a significant improvement in adjusted EBITDA, reaching $9.6 million, up from $2 million in the previous year. This increase is attributed to pricing and operational improvements.
New Product Launches and Approvals
Accuray continued its momentum with 12 new Helix system orders and recent approvals for the CyberKnife S7 and Synchrony systems in China, positioning the company for further market penetration.
Increased Full Year Guidance
Reflecting confidence in its ongoing success, Accuray raised its fiscal 2025 guidance for revenue to a range of $463 million to $475 million and adjusted EBITDA to between $28.5 million and $31 million.
Revenue Decline in EIMEA and AMS Regions
Despite global growth, Accuray faced revenue declines in the EIMEA and AMS regions, although they anticipate improvements in the second half of the year.
Service Revenue Decrease
Service revenue saw a slight decline of 1% compared to the prior year, influenced by a high base effect from the previous year’s ERP implementation catch-up.
Inventory and Tariff Concerns
Inflation and macroeconomic headwinds continue to pose challenges, with Accuray closely monitoring potential tariff impacts on its operations.
Forward-Looking Guidance
Accuray’s forward-looking guidance reflects strong performance metrics, with an elevated book-to-bill ratio of 1.3, driven by a 7% increase in orders in the EIMEA region. The company projects continued revenue growth in China and Japan, reinforcing its market share expansion and confidence in future performance.
In summary, Accuray’s earnings call exuded a positive sentiment, underscored by robust revenue growth and strategic advancements in key markets like China. While regional challenges persist, the company’s increased guidance and successful product launches position it well for sustained future growth.
