Executive Summary
Accuray reported a solid quarter for QQ2 2025, with revenue of USD 116.174 million and a gross margin of 36.06%, delivering a positive operating result and net income of USD 2.54 million. The quarter showed meaningful year-over-year and sequential improvements in multiple profitability metrics, supported by a combination of higher top-line sales and favorable cost discipline. However, earnings remain modest in absolute terms, and the company sustains a sizable leverage burden that constrains cash flow execution and increases sensitivity to financing costs.
Key takeaways for investors include: (1) revenue growth of 8.3% year over year driven by demand for Accuray’s radiotherapy platforms, (2) notable margin expansion with gross margin at 36.06% and operating margin around 4.05%, and (3) a cautious balance sheet profile characterized by net debt near USD 151 million and limited operating cash flow despite positive free cash flow of USD 0.93 million. The company generated USD 1.80 million of cash from operating activities and ended the period with roughly USD 65.39 million in cash and equivalents, underscoring modest liquidity but ongoing leverage concerns. Management commentary (where available) emphasized progress on product adoption and lifecycle revenue opportunities, though explicit forward guidance for the next period was not provided in the dataset.
Overall, Accuray appears to be advancing on a path of revenue stabilization and margin recovery within a capital-heavy market for radiotherapy systems. The near-term investment thesis hinges on converting top-line gains into sustained, higher-quality cash flows and reducing leverage while continuing to win international installations and grow service revenues.
Key Performance Indicators
QoQ: 319.03% | YoY:218.74%
QoQ: 164.16% | YoY:126.37%
QoQ: 163.29% | YoY:125.41%
Key Insights
Revenue performance: USD 116.174 million, YoY +8.33%, QoQ +14.41% (QQ2 2025 vs QQ2 2024 and vs Q1 2025).
Gross Profit and Margin: USD 41.892 million gross profit; gross margin 36.06% (YoY +16.68%, QoQ +21.54%). This reflects improved product mix and tighter cost control alongside higher volumes.
Operating Income and Margin: USD 4.707 million operating income; operating margin 4.05% (YoY +218.74%, QoQ +319.03%).
Net Income and EPS: USD 2.537 million net income; net margin 2.18%; basic and dilu...
Financial Highlights
Revenue performance: USD 116.174 million, YoY +8.33%, QoQ +14.41% (QQ2 2025 vs QQ2 2024 and vs Q1 2025).
Gross Profit and Margin: USD 41.892 million gross profit; gross margin 36.06% (YoY +16.68%, QoQ +21.54%). This reflects improved product mix and tighter cost control alongside higher volumes.
Operating Income and Margin: USD 4.707 million operating income; operating margin 4.05% (YoY +218.74%, QoQ +319.03%).
Net Income and EPS: USD 2.537 million net income; net margin 2.18%; basic and diluted EPS USD 0.025 and USD 0.0245 respectively (YoY +126.37%, QoQ +164.16%).
Cash Flow and Liquidity: Net cash from operating activities USD 1.801 million; free cash flow USD 0.927 million; net change in cash USD 4.256 million; ending cash USD 65.388 million. Cash and equivalents USD 62.584 million; total debt USD 213.49 million; net debt USD 150.906 million. Current ratio 1.61, quick ratio 0.87, cash ratio 0.32.
Balance Sheet and Leverage: Total assets USD 478.382 million; total liabilities USD 430.491 million; total stockholders’ equity USD 47.891 million. Long-term debt USD 198.412 million; interest coverage 1.63x. Retained earnings negative at USD -519.098 million, indicating persistent prior period losses despite the current quarter’s improvements.
Valuation and Classification: Price-earnings ratio around 20.2x; no peer comparables provided in the dataset. The company trades with a balance of growth potential in installed-base and service revenue against a leveraged, capital-intensive business model.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
116.17M |
8.33% |
14.41% |
| Gross Profit |
41.89M |
16.68% |
21.54% |
| Operating Income |
4.71M |
218.74% |
319.03% |
| Net Income |
2.54M |
126.37% |
164.16% |
| EPS |
0.03 |
125.41% |
163.29% |
Key Financial Ratios
operatingProfitMargin
4.05%
operatingCashFlowPerShare
$0.02
Management Commentary
Transcript data not provided in the input dataset. Consequently, no management quotes or thematic quotes are available to anchor this section. If you can supply the earnings call transcript or key quotes, I can integrate them with thematic grouping (strategy, operations, market conditions) and contextualize their significance for the investment thesis.
Forward Guidance
Management guidance for QQ3 2025 and beyond is not included in the provided data. Given the scale of Accuray’s installed base and the ongoing demand for advanced radiotherapy platforms, the trajectory will hinge on: (1) installation cadence and international adoption (EMEA, Asia-Pacific), (2) growth in maintenance and service revenue to drive higher margin contributions, and (3) the ability to deleverage and improve interest coverage. Investors should monitor: order backlogs and lead times for CyberKnife and Radixact deployments, service revenue growth as a percentage of total revenue, changes in gross margin as mix shifts toward higher-value configurations, and the company’s progress in reducing net debt. The absence of explicit forward guidance makes sensitivity analysis around interest rates and capital expenditure cycles particularly important.