Executive Summary
Accuray reported a solid QQ2 2025 (fiscal Q2 ended December 31, 2024) with 8% year-over-year revenue growth to $116.2 million and a notable acceleration in product revenue (+19% YoY) driven by China, Japan, and APAC markets. Gross margin rose to 36.1% (from 33.5% prior year) fueled by a China margin release tied to JV shipments and favorable manufacturing pricing; operating income reached $4.7 million and adjusted EBITDA was $9.6 million, up meaningfully from a year ago. Management highlighted aggressive progress in China (over 50% revenue growth YoY, 10-point market-share gain in 2024 calendar year per Ipsos), new Helix orders (12 in the quarter), and continued Tomo C adoption in Type B markets, supported by a CE mark and product improvements in the Type A segment. The company raised full-year guidance for FY25 to $463–$475 million in revenue and $28.5–$31.0 million in adjusted EBITDA, framing a second-half cadence with seasonality and expects margin expansion to continue via pricing actions, product mix, and service growth. Net cash flow from operations was modest at $1.8 million, with free cash flow of $0.9 million, and liquidity remains manageable with cash and equivalents around $64 million against total debt of ~$213.5 million and net debt of ~$150.9 million. A key narrative is Accuray’s pivot toward higher-margin service offerings and recurring revenue, complemented by a growing installed base and strategic partnerships in high-potential markets. Investors should monitor: (1) execution of China/JV normalization post-approval and margin realization, (2) U.S. market recovery timing, (3) FX exposure, particularly the yen, and (4) the sustainability of China and India demand drivers as Helix/CyberKnife/Synchrony/ClearRT across Radixact platforms mature in emerging markets.
Key Performance Indicators
QoQ: 319.03% | YoY:218.74%
QoQ: 164.16% | YoY:126.37%
QoQ: 163.29% | YoY:125.41%
Key Insights
Revenue: $116.174 million, up 8% YoY and 8% CC. Product revenue: $61.0 million, up 19% YoY (up 20% CC), driven by CyberKnife strength and higher unit volumes (+17% YoY). Service revenue: $55.0 million, down 1% YoY (down 2% CC), with normalization expected as ERP-related one-time effects from the prior year roll off.
Gross margin: 36.1% for the quarter, up from 33.5% YoY, aided by a $2.6 million incremental net China margin release and ~2.9 percentage points of gross margin from manufacturing eff...
Financial Highlights
Revenue: $116.174 million, up 8% YoY and 8% CC. Product revenue: $61.0 million, up 19% YoY (up 20% CC), driven by CyberKnife strength and higher unit volumes (+17% YoY). Service revenue: $55.0 million, down 1% YoY (down 2% CC), with normalization expected as ERP-related one-time effects from the prior year roll off.
Gross margin: 36.1% for the quarter, up from 33.5% YoY, aided by a $2.6 million incremental net China margin release and ~2.9 percentage points of gross margin from manufacturing efficiencies, partially offset by ~2.7 percentage points of higher parts/service costs.
Operating income and EBITDA: Operating income $4.71 million; EBITDA $7.63 million; Adjusted EBITDA $9.60 million (vs. $2.0 million prior year).
Backlog and orders: Ended quarter with backlog ≈ $463 million (defined as orders younger than 30 months); gross product orders ≈ $77 million, book-to-bill ≈ 1.3; 12 Helix system orders booked in Q2; 7% region-wide orders growth led by EIMEA.
Liquidity and capital structure: Cash and cash equivalents ≈ $62.6–64.0 million; total debt ≈ $213.5 million; net debt ≈ $150.9 million; working capital actions reflected in a $12.2 million quarter-to-quarter swing in working capital; no material share repurchases in the quarter; ongoing focus on capital structure and refinancing options.
Guidance: FY25 revenue guidance updated to $463–$475 million; adjusted EBITDA guidance updated to $28.5–$31.0 million, reflecting favorable margin dynamics, including China margin release and service mix, plus anticipated tariff neutrality assumption.
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
freeCashFlowPerShare
$0.01
Management Commentary
Key management takeaways from the QQ2 2025 earnings call:
- Suzanne Winter emphasized broad-based YoY revenue strength and margin expansion through pricing actions and higher-margin Tomo C deliveries, with notable China performance: “Revenue for the quarter was solid growing 8% year-over-year with outstanding product revenue performance.” She highlighted China’s 50%+ revenue growth YoY and a 10-point market-share gain in 2024 per Ipsos, driven by a strong JV with CIRC and a diversified product portfolio including Tomo C and Helix.
- Winter also flagged platform and market progress, noting 12 Helix system orders in Q2 and the CE Mark for Helix, with demand in Type B (Tomo C) well above expectations; and that CyberKnife growth remained robust “well above 50% year-over-year.” She framed China margins as a sizeable incremental contributor due to JV shipments and deferred-margin realization that began to unwind in 2024Q4 and 2025Q2.
- Ali Pervaiz confirmed financial outcomes, stating net revenue of $116 million (+8% YoY, +8% CC), product revenue +19% YoY (+20% CC), and service revenue modestly down due to ERP-related one-time effects but stabilizing; gross margin improvement was driven by China margin release and manufacturing efficiencies, with ongoing inflationary pressures and FX considerations.
- Guidance and outlook: Ali announced raised FY25 guidance to $463–$475 million in revenue and $28.5–$31 million in Adjusted EBITDA, assuming minimal tariff impact and U.S. market recovery in H2; the company anticipates seasonality with heavier H2 revenue and earnings, consistent with prior years.
- Strategic emphasis on services and premium technology: Accuray reiterated its intent to expand the service business as a recurring revenue stream and a margin expansion lever, supported by CyberComm accelerated commissioning and ongoing product enhancements across Radixact/Sync platforms.
“Revenue for the quarter was solid growing 8% year-over-year with outstanding product revenue performance compared to the prior year period.”
— Suzanne Winter
“We are raising our full year FY25 revenue guidance range to $463 million to $475 million from the previous range of $462 million to $472 million and full year adjusted EBITDA guidance range to $28.5 million to $31 million from the previous range of $28 million to $30 million.”
— Ali Pervaiz
Forward Guidance
Accuray maintains an upbeat but selective forward view for FY25. The raised revenue target of $463–$475 million and Adjusted EBITDA of $28.5–$31 million reflect stronger-than-expected product demand, particularly from China (Tomo C in Type B and CyberKnife enhancements) and the continued rollout of Helix. Management expects a seasonal second half with a larger revenue/economic contribution in Q4, consistent with historical patterns. Key factors to monitor include: (1) the realization of deferred China margin as JV volumes normalize post-regulatory approvals (margin deferral is expected to be a less material factor beyond FY25), (2) the pace of U.S. market recovery and potential tariff/rate changes (management sees de minimis tariff risk in H2 but remains vigilant), (3) FX exposure, especially yen weakness affecting Japan service revenue and profitability, and (4) the rate of adoption of Helix in India and other Emerging Markets (EMEA/Asia) where CE marks are secured but local approvals remain a gating factor. The margin trajectory will hinge on continued pricing discipline, improved manufacturing efficiency, and higher service mix as the installed base expands. Investors should expect continued emphasis on backlog quality, with a book-to-bill target near 1.3x, and a prudent approach to inventory and working capital in the near term.