Executive Summary
- Accuray reported Q3 FY2024 revenue of $101.1 million, down 14% year over year and 5.7% quarter over quarter, as the company faced a slower U.S. capital equipment environment and timing delays that shifted three system shipments into Q4. Gross margin was 28.7% for the quarter, down from 32.8% a year earlier, with 4.5 percentage points of margin headwinds primarily from a China margin deferral (3.2 points) and foreign exchange impact (1.3 points). Net income was -$6.342 million with an EPS of -$0.0639, while adjusted EBITDA totaled $1.1 million, down from $8.3 million a year ago, pressured by lower revenue and timing effects from JV-related margin deferral.
- The company delivered meaningful topline and backlog indicators despite near-term headwinds: orders grew 21% in Q3 (8% on a trailing-12-month basis), and the book-to-bill ratio stood at 1.8 for the quarter. Installed base rose 4% YoY, with service contract revenue up 2% YoY and 4% on a trailing-12-month basis, signaling durable recurring revenue potential as external conditions improve. Product backlog ended at roughly $503 million, up 2% sequentially and down 1% YoY, with no order cancellations in the quarter.
- Management emphasized a constructive longer-term growth trajectory anchored by regulatory progress and geographic diversification: China Tomo C-related approvals (final Precision Treatment Planning System clearance) are expected to unlock deferred margin and accelerate China revenue growth; EIMEA and APAC regions posted healthier momentum, and Japan remains a profitable but FX-pressured market. The company reaffirmed its multi-year goals of 4-6% revenue CAGR and doubling adjusted EBITDA by FY2026, while acknowledging near-term U.S. budget pressures and timing-related revenue recognition. Guidance for FY24 was updated to $432–$437 million in revenue and $19–$22 million of adjusted EBITDA.
- Investors should weigh the near-term softness in the U.S. with the potential for accelerated revenue and margin expansion as Tomo C (China) clears, Helix launches in India, and service-related margins continue to improve through a growing installed base and higher contract pricing. The balance sheet remains cash-light with net debt of approximately $145.9 million and a cash balance of about $61.1 million at quarter-end, signaling ongoing focus on working capital discipline and cost optimization while funding aggressive growth initiatives.
Key Performance Indicators
QoQ: -5.69% | YoY:-14.34%
QoQ: -19.02% | YoY:-24.91%
QoQ: -15.09% | YoY:-296.98%
QoQ: 34.08% | YoY:-1 158.76%
QoQ: 35.06% | YoY:-1 114.29%
Key Insights
Revenue: $101.13 million in Q3 FY2024, down -14.34% YoY and -5.69% QoQ. Gross Profit: $29.07 million; Gross Margin: 28.7% (vs 32.8% prior-year). Operating Income: -$4.56 million; Operating Margin: -4.51%. EBITDA (GAAP): -$1.41 million; Adjusted EBITDA: $1.10 million (vs $8.30 million prior-year). Net Income: -$6.34 million; EPS: -$0.0639. Backlog (product): ~$503 million; Backlog change: up 2% sequentially, down 1% YoY. Cash and equivalents: $61.1 million; Net debt: -$145.87 million. Book-to-bil...
Financial Highlights
Revenue: $101.13 million in Q3 FY2024, down -14.34% YoY and -5.69% QoQ. Gross Profit: $29.07 million; Gross Margin: 28.7% (vs 32.8% prior-year). Operating Income: -$4.56 million; Operating Margin: -4.51%. EBITDA (GAAP): -$1.41 million; Adjusted EBITDA: $1.10 million (vs $8.30 million prior-year). Net Income: -$6.34 million; EPS: -$0.0639. Backlog (product): ~$503 million; Backlog change: up 2% sequentially, down 1% YoY. Cash and equivalents: $61.1 million; Net debt: -$145.87 million. Book-to-bill: 1.8x for the quarter; Installed base: +4% YoY; DSO: 66 days; FX tailwinds/headwinds reflected in gross margin deferrals and revenue mix.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
101.13M |
-14.34% |
-5.69% |
| Gross Profit |
29.07M |
-24.91% |
-19.02% |
| Operating Income |
-4.56M |
-296.98% |
-15.09% |
| Net Income |
-6.34M |
-1 158.76% |
34.08% |
| EPS |
-0.06 |
-1 114.29% |
35.06% |
Key Financial Ratios
operatingProfitMargin
-4.51%
operatingCashFlowPerShare
$-0.08
freeCashFlowPerShare
$-0.09
Management Commentary
- Strategy and long-term targets: Management reiterated the plan to achieve 4-6% revenue CAGR and to double adjusted EBITDA by FY2026. - U.S. market and capital budgets: The company highlighted slower U.S. procurement cycles and tighter capital budgets as a primary near-term headwind, with expectations of a gradual recovery into FY25–FY26. - Tomo C and China: Tomo C shipments obtained regulatory approval in China; marginal earnings are currently deferred until the precision treatment planning system is approved, with management estimating the final step near the end of the fiscal year; shipments to the China JV partner continue, enabling readiness for market introduction. - Regional mix and momentum: EIMEA growth was noted (revenue up 5%, orders up 29% trailing-12 months); APAC revenue up 7%, orders up 14% trailing-12 months; Japan remains profitable but FX is weighing revenue; Americas revenue declined 38% YoY and 15% on trailing-12 months basis, with Q4 expected to be weaker before a potential rebound. - Backlog and service: Product backlog of $503 million; service revenue growth in contract services (+2% YoY, +4% trailing-12-month) supported by a growing installed base; management emphasized the potential margin uplift from service mix and pricing actions. - Margin dynamics and guidance: The gross margin was negatively affected by China deferral and FX; management remains confident in margin expansion as pricing discipline and supplier cost actions take effect. - Near-term guidance: FY24 revenue guidance narrowed to $432–$437 million and adjusted EBITDA guidance to $19–$22 million; management remains focused on converting backlog to revenue and achieving the long-term trajectory as conditions improve.
"We are confident that we remain on track, to achieve the goals that we laid out at our fall 2023 Investor Day, which includes 4% to 6% revenue CAGR and doubling our adjusted EBITDA, by the end of fiscal year '26."
— Suzanne Winter
"21% global order growth in Q3, which is 8% growth on a trailing 12-month basis, as well as the book-to-bill ratio of 1.8 for the quarter, both of which are strong leading indicators for the future growth of our business."
— Suzanne Winter
Forward Guidance
- FY24 guidance updated to revenue of $432–$437 million and adjusted EBITDA of $19–$22 million, reflecting near-term U.S. market softness and the timing of three Q3 shipments shifting to Q4. Management expects these late shipments to contribute to Q4 revenue and to support the full-year margin trajectory as China-related margin deferrals unwind once TOMO C-related approvals are completed. - Long-term objectives remain intact: 4-6% revenue CAGR and doubling adjusted EBITDA by FY2026, driven by geographic diversification (notably EIMEA and APAC), expanding installed base, service-margin improvements, and ongoing product/service innovations (e.g., Helix in India, CyberKnife enhancements, and the ESTRO-driven initiatives). - Key catalysts to monitor: (1) final China Precision Treatment Planning System clearance for Tomo C and related margin recognition; (2) new service offerings and training revenue from the Accuray Innovation and Partnership Hub; (3) progress in Helix regulatory approvals and market adoption; (4) US capital budget cycle improvement into FY25–FY26; (5) sustained order growth and backlog conversion across regions. - Achievability: The revenue CAGR target hinges on the U.S. market stabilization and timely execution of shipments in Q4, China regulatory clearance timing, and continued strength in EIMEA/APAC orders. The margin expansion requires deferrals to unwind and the realization of pricing and COGS improvements, which management indicated are underway but depend on global demand normalization and supplier dynamics.