ACCURAY INC Q2 FY2025 earnings call

• Advancing cancer care through innovation, expanding service solutions business, and improving patient access in developing markets.
• Revenue grew 8% YOY with adjusted EBITDA of $9.6M, driven by pricing, operational improvements, and Tomo C System deliveries from the joint venture in Tianjin.
• Book-to-bill results were encouraging, with EIMEA leading orders growth at 7%. Gained CE Mark for the Accuray Helix platform, booking 12 new Helix system orders in Q2.
• CyberKnife system revenue grew well above 50% YOY. China had over 50% revenue growth YOY, gained 10 points of market share in China according to Ipsos.
• Service revenue grew modestly, but service business is a long-term growth opportunity with recurring revenue potential. Welcomed Leonel Peralta as Chief Operations Officer to drive operational excellence.

For the second quarter, net revenue was $116 million, up 8% YOY. Product revenue was $61 million, up 19% YOY (20% on constant currency basis), accounting for approximately 52.5% of total revenue. Service revenue was $55 million, down 1% YOY (2% on constant currency basis, adjusting for one-time items), accounting for approximately 47.4% of total revenue. China saw over 50% revenue growth YOY. CyberKnife system revenue grew well above 50% YOY. Japan had over 40% growth YOY in the quarter. EIMEA and AMS regions had revenue down YOY compared to the prior year.

• Raised full year fiscal 2025 revenue guidance to $463M-$475M from $462M-$472M.
• Adjusted EBITDA guidance raised to $28.5M-$31M from $28M-$30M.
• Expect second half seasonality with more revenues and earnings in Q4. Minimal tariff impact expected in the second half, with U.S. market recovery anticipated in the second half of FY25.

• Tariffs imposed by the new U.S. administration could impact the business, currently considered a de minimis risk for the second half but monitored closely.
• Inflationary trends impacting margins.

Q: Marie Thibault asked about China revenue and its sustainability.

A: Suzanne Winter discussed China's strong performance due to a strategic JV partner and a robust product portfolio, noting market share gain but mentioned specific revenue numbers would be shared in one-on-one calls.

Q: Marie Thibault asked about U.S. market recovery and FX impact.

A: Suzanne Winter discussed expected gradual recovery in the U.S. business in the second half, and Ali Pervaiz talked about monitoring inflation and FX, noting the Japanese yen recovery and euro impact but minimal factor in current guidance.

Q: Brooks O'Neil asked about Japan performance and India opportunity.

A: Suzanne Winter said Japan's first half was stronger due to customer timing, and discussed EIMEA including India, expecting strong second half growth, with Helix platform awaiting local regulatory approval in India for meaningful impact.