Accuray (ARAY) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 net revenue was $101.5 million, down 2% year-over-year, with strong China growth, robust service revenue, and a successful Tomo C product launch.

• Service revenue grew 5% year-over-year, outpacing installed base growth and reflecting enhanced contract offerings.

• Adjusted EBITDA for Q1 was $3.1 million, down from $6.5 million in the prior year, mainly due to one-time ERP-related benefits last year.

• Net loss widened to $4.0 million ($0.04/share) from $3.0 million ($0.03/share) year-over-year.

• Raised full-year FY2025 guidance for both revenue and Adjusted EBITDA, reflecting confidence in backlog and market trends.

Financial highlights

• Q1 FY2025 revenue was $101.5 million, down 2% year-over-year; product revenue was $48.4 million (down 9%), service revenue was $53.2 million (up 5%).

• Gross margin was 33.9%, down from 38.0% year-over-year, impacted by deferred gross profit on JV sales and higher costs.

• Operating expenses were $36.6 million, slightly down from $37.3 million year-over-year.

• Book-to-bill ratio for Q1 was 1.1; trailing 12-month ratio was 1.5.

• Order backlog at quarter-end was $468.6 million, down 4% year-over-year.

Outlook and guidance

• FY2025 revenue guidance raised to $462 million–$472 million; Adjusted EBITDA guidance increased to $28 million–$30 million.

• U.S. market recovery expected in the second half of FY2025, with delayed system revenue and margin realization.

• Second half of FY2025 expected to contribute 55% of total revenue, with Q4 as the largest quarter.

• Projected GAAP net loss for FY2025 is $2.5 million–$4.5 million.

• Guidance includes $3 million–$4 million of net margin release from China JV.