Accuray (ARAY) Q4 2015 earnings summary

Executive summary

• FY15 revenue and gross orders grew 3% and 2% reported; at constant currency, growth was 7% and 6%, respectively. Q4 gross orders reached a post-TomoTherapy-acquisition quarterly high.

• Adjusted EBITDA was $11.8M reported and $23.0M at constant currency; operating expenses rose only 2% YoY.

Financial highlights

• FY15 revenue was $379.8M vs. $369.4M in FY14; gross profit was $145.4M, with a 38% gross margin vs. 39%.

• FY15 net loss was $40.2M vs. $35.4M; diluted loss per share was $0.51 vs. $0.47.

• Q4 FY15 revenue was $101.8M, gross profit $40.5M, and net loss $3.0M.

• FY15 adjusted EBITDA was $11.8M; excluding currency impacts at FY14 rates, adjusted EBITDA was $23.0M.

• FY15 gross orders were $267.8M reported and $278.8M adjusted for FY14 currency rates; year-end backlog was $375.0M.

Outlook and guidance

• FY16 R&D expense expected to increase slightly; selling and marketing and G&A expenses expected to decline slightly.

• FY16 Q1 age-outs expected at $20.0M-$23.0M vs. $17.8M in Q1 FY15; age-outs and cancellations expected to remain variable quarter to quarter.

• Approximately 30% of the installed base is expected to reach its likely replacement cycle within 36 months, potentially increasing replacement and trade-in orders.

• Existing cash, cash equivalents, investments, and anticipated cash flows expected to fund operations for at least 12 months.