Accuray Reports Fiscal 2024 Third Quarter Financial Results

May 1, 2024 at 4:06 PM EDT

MADISON, Wis., May 1, 2024 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the third quarter and nine-months ended March 31, 2024.

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, which represented a 13 percent decrease from the same period in the prior fiscal year.
  • GAAP net loss was $6.3 million, as compared to GAAP net income of $0.6 million in the same period in the prior fiscal year. Adjusted EBITDA was $1.1 million, as compared to adjusted EBITDA of $8.3 million in the same period in the prior fiscal year.
  • Gross orders of $89.1 million increased 21 percent from the same period in the prior fiscal year. The book to bill ratio was 1.8 in the third quarter of fiscal 2024, compared to a book to bill ratio of 1.2 in the same period in the prior fiscal year.

Fiscal Nine Months 2024 Summary

  • Net revenue of $312.3 million decreased 5 percent from the same period in the prior fiscal year. Net revenue on a constant currency basis was $311.2 million, which represented a 6 percent decrease from the same period in the prior fiscal year.
  • GAAP net loss was $18.9 million, as compared to GAAP net loss of $6.7 million in the same period in the prior fiscal year. Adjusted EBITDA was $9.6 million as compared to adjusted EBITDA of $18.7 million in the same period in the prior fiscal year.
  • Gross orders of $246.7 million increased 11 percent from the same period in the prior fiscal year. The book to bill ratio was 1.6 in the first nine months of fiscal 2024, compared to a book to bill ratio of 1.3 in the same period in the prior fiscal year.

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 U.S. installations, we remain confident in our growth strategy and our ability to offer value to our customers globally," said Suzanne Winter, Chief Executive Officer. "Fiscal 2024 is an important year for the company as we start to make major advances in long-term growth and profitability drivers, which we highlighted at our investor day this past fall. We remain focused on executing on our plan to advance care with innovative solutions, improving patient access by penetrating higher growth emerging markets and investing in our service business. Finally, I am very pleased with customer adoption of our solutions this quarter that led to a 21 percent increase in gross orders year-over-year, fueling future revenue and EBITDA growth."

Fiscal Third Quarter Results

Total net revenue in the third quarter of fiscal 2024 was $101.1 million, compared to $118.1 million in the prior fiscal year third quarter. Product revenue in the third quarter of fiscal 2024 was $49.6 million, compared to $62.8 million in the prior fiscal year third quarter. Service revenue in the third quarter of fiscal 2024 was $51.5 million, compared to $55.2 million in the prior fiscal year third quarter.

Total gross profit in the third quarter of fiscal 2024 was $29.1 million, or 28.7 percent of total net revenue, compared to total gross profit of $38.7 million, or 32.8 percent of total net revenue, in the prior fiscal year third quarter.

Operating expenses in the third quarter of fiscal 2024 were $33.6 million, compared to $36.4 million in the prior fiscal year third quarter.

 Net loss in the third quarter of fiscal 2024 was $6.3 million, or $0.06 per share, compared to a net income of $0.6 million, or $0.01 per share, in the prior fiscal year third quarter. Adjusted EBITDA in the third quarter of fiscal 2024 was $1.1 million, compared to $8.3 million in the prior fiscal year third quarter.

Gross product orders in the third quarter of fiscal 2024 totaled $89.1 million compared to $73.8 million in the prior fiscal year third quarter. Order backlog as of March 31, 2024 was $503.2 million, an increase of approximately 2 percent sequentially, and is approximately 1 percent lower than at the end of the prior fiscal year third quarter.

Cash, cash equivalents, and short-term restricted cash were $61.1 million as of March 31, 2024, a decrease of $12.1 million from December 31, 2023, and a decrease of $28.8 million from June 30, 2023.

Fiscal Nine Months Results

Total net revenue in the first nine months of fiscal 2024 was $312.3 million, compared to $329.3 million in the same prior fiscal year period. Product revenue in the first nine months of fiscal 2024 was $154.5 million, compared to $170.7 million in the same prior fiscal year period. Service revenue in the first nine months of fiscal 2024 was $157.8 million, compared to $158.6 million in the same prior fiscal year period.

Total gross profit in the first nine months of fiscal 2024 was $104.5 million, or 33.5 percent of total net revenue, compared to total gross profit of $116.3 million, or 35.3 percent of total net revenue, in the same prior fiscal year period.

Operating expenses in the first nine months of fiscal 2024 was $110.8 million compared to $113.4 million in the same prior fiscal year period.

 Net loss in the first nine months of fiscal 2024 was $18.9 million, or $0.19 per share, compared to a net loss of $6.7 million, or $0.07 per share, in the same prior fiscal year period. Adjusted EBITDA in the first nine months of fiscal 2024 was $9.6 million, compared to $18.7 million in the same prior fiscal year period.

Gross product orders in the first nine months of fiscal 2024 was $246.7 million, compared to $222.6 million in the same prior fiscal year period.

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 to $437 million.
  • Adjusted EBITDA is expected in the range of $19 million to $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 (USA), or (412) 317-0088 (International), Conference ID: 2071766. An archived webcast will also be available on Accuray's website until Accuray announces its results for the fourth quarter of fiscal 2024.

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 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 China, the company's China joint venture and the Tomo® C product as well as expectations with respect to other strategic partnerships and collaborations, including expected timing of regulatory clearances; expectations related to the markets and regions in which the company operates; 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 new training center; expectations regarding service contract revenue and non-contract service 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 February 7, 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
March 31,



Nine Months Ended
March 31,




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
per share:













Basic



99,197




95,522




97,838




94,532


Diluted



99,197




97,455




97,838




94,532


 

Accuray Incorporated
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)




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
Summary of Orders and Backlog
(in thousands, except book to bill ratio)
(Unaudited)




Three Months Ended
March 31,



Nine Months Ended
March 31,




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
Reconciliation of GAAP Net Income (Loss) to Adjusted EBITDA
(in thousands)
(Unaudited)




Three Months Ended
March 31,



Nine Months Ended
March 31,




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
Forward-Looking Guidance
Reconciliation of Projected GAAP Net Income (Loss) to Projected Adjusted EBITDA
(in thousands)
(Unaudited)




Twelve Months Ending
June 30, 2024




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