Accuray (ARAY) 6 Nov 24 2025 Q1 Earnings call transcript

In Accuray's first quarter earnings call for fiscal year 2025, the company showcased a robust performance, driven by strategic initiatives and a focus on expanding market share in high-growth regions. Here are the key takeaways from the call.

Strong Start in China

Accuray reported a strong start to the fiscal year with a 30% year-over-year revenue growth in China, primarily attributed to the successful launch of the Tomo C product in the Type B market. The company is aiming to become a market leader in the Type B segment, which is estimated to be $3 billion over the next 5 years. The Tomo C system, a made-in-China product, has received positive customer reception and is expected to drive revenue and margin growth in the coming quarters.

Service Revenue Growth

Service revenue grew by 5% year-over-year, driven by increased contract revenue, which grew by 5% year-over-year. Accuray's service contracts, which provide high-touch support to its installed base of global systems, are a source of recurring revenue. The company's strategy of penetrating new markets and offering enhanced service contracts has led to faster conversion of orders to revenue and improved profitability.

Regional Performance

While the revenue performance varied across regions, the company reported a strong start in the APAC region, with several first-in-country shipments to new markets. In EIMEA and Japan, revenue was down from the previous year, but the company is optimistic about stronger growth in the second half of FY 2025, driven by customer timing and additional commercial coverage.

Financial Highlights

For the first quarter, net revenue was down by 2% year-over-year, but product gross orders represented a book-to-bill ratio of 1.1. The company ended the quarter with a reported order backlog of approximately $469 million, which is greater than 2 years of FY 2024 product revenue. Accuray also announced that it is raising its full-year revenue guidance range to $462 million to $472 million and adjusted EBITDA range to $28 million to $30 million.

Market Opportunities

The earnings call highlighted Accuray's focus on expanding its presence in high-growth markets like China and India, where the need for radiotherapy solutions is growing. The company's strategy of offering made-in-country products and enhanced service contracts is expected to drive revenue and margin growth in these markets.

Outlook

Looking ahead, Accuray is optimistic about the outlook for the rest of the fiscal year, with a focus on driving top-line growth, expanding market share, and improving margins. The company is also investing in translating research into practice and is committed to advancing its mission of creating value for all stakeholders.

Overall, Accuray's first quarter earnings call highlighted a strong start to the fiscal year, driven by strategic initiatives and a focus on high-growth markets. The company is well-positioned for growth, with a solid backlog and a clear focus on expanding its market share in emerging markets.