Accuray (ARAY) Q4 2023 earnings summary

Executive summary

• FY23 revenue rose 4% YoY to $447.6M, but gross margin fell to 34.4% from 37.2%; operating income declined to $2.4M and net loss widened to $9.3M.

• Net orders increased to $182.9M from $167.3M and book-to-bill was 1.3, while year-end backlog fell to $510.6M from $563.7M.

Financial highlights

• Product revenue increased 9% to $233.2M; services revenue was $214.4M, down 0% as reported. FX reduced product revenue by $7.0M and service revenue by $10.8M.

• Gross profit declined 4% to $154.0M; product gross profit fell 9% to $79.6M, while services gross profit rose 3% to $74.4M.

• Operating expenses were nearly flat at $151.6M; operating income was $2.4M vs. $8.1M, and net loss was $9.3M vs. $5.3M.

• FY23 included $2.7M in cash restructuring charges and a $2.0M bad-debt reserve tied to a U.S. customer bankruptcy.

• Cash from operations was $15.5M vs. $2.4M used in FY22; cash and cash equivalents were $89.4M at June 30, 2023.

Outlook and guidance

• Cash resources and anticipated cash flows were expected to fund operations for at least 12 months, based on available cash, debt facilities, the business plan and revenue prospects.

• Higher material, freight and logistics costs were expected to pressure gross margins and net income through at least FY24, potentially longer.

• NMPA clearance for the China JV’s locally branded Class B device was expected in H1 CY24, with orders anticipated shortly thereafter.