Accuray (ARAY) Q4 2021 earnings summary

Executive summary

• FY21 revenue rose 3% YoY to $396.3m; operating income increased to $22.2m from $12.5m, while net results shifted to a $6.3m loss from $3.8m income.

• COVID-related delivery and installation delays continued to slow backlog conversion; delays were expected to persist into FY22.

Financial highlights

• Product revenue increased 6% to $176.6m; service revenue increased 2% to $219.6m.

• Gross profit rose 7% to $159.5m; service gross profit increased 9% to $85.0m and product gross profit increased 4% to $74.5m.

• Other expense, net, increased to $27.7m, including $9.9m of debt-extinguishment losses; FY20 included a $13.0m non-cash gain on the China JV contribution.

• Net loss was $6.3m, or $0.07 per diluted share, versus net income of $3.8m, or $0.04 per diluted share, in FY20.

Outlook and guidance

• Delivery and installation delays were expected to continue into FY22 and negatively affect revenue; the duration and financial impact of COVID-19 remained uncertain.

• Management expected cash, available debt facilities, and anticipated cash flows to fund operations for at least 12 months.

• Remaining system performance obligations were $1,009.4m; 20%–27% was estimated for recognition in the next 12 months, while historical experience indicated ~26% may be cancelled.

• Revenue from remaining awarded China Class A licenses was anticipated over the next 12–18 months.