Accuray Incorporated (ARAY) Market Cap
Accuray Incorporated has a market capitalization of $55.5M.
Financials based on reported quarter end 2025-12-31
Price: $0.47
▲ 0.05 (11.00%)
Market Cap: 55.52M
NASDAQ · time unavailable
CEO: Stephen R. LaNeve
Sector: Healthcare
Industry: Medical - Devices
IPO Date: 2007-02-08
Website: https://www.accuray.com
Accuray Incorporated (ARAY) - Company Information
Market Cap: 55.52M · Sector: Healthcare
Accuray Incorporated designs, develops, manufactures, and sells radiosurgery and radiation therapy systems for the treatment of tumors in the United States, Canada, Latin America, Australia, New Zealand, Europe, the Middle East, India, Africa, Japan, China, and rest of the Asia Pacific region. It offers the CyberKnife System, a robotic stereotactic radiosurgery and stereotactic body radiation therapy system used for the treatment of primary and metastatic tumors outside the brain, including tumors on or near the spine and in the breast, kidney, liver, lung, pancreas, and prostate. The company also provides the TomoTherapy System, including the Radixact System, which allows for integrated radiation treatment planning, delivery, and data management, enabling clinicians to deliver ultra-precise treatments to approximately 50 patients per day; iDMS data management system, a fully integrated treatment planning and data management systems; and Accuray precision treatment planning system, a treatment planning and data management systems. In addition, it offers post-contract customer support, installation, training, and other professional services. The company primarily markets its products directly to customers, including hospitals and stand-alone treatment facilities through its sales organization, as well as to customers through sales agents and group purchasing organizations in the United States; and to customers directly and through distributors and sales agents internationally. Accuray Incorporated was incorporated in 1990 and is headquartered in Madison, Wisconsin.
Analyst Sentiment
Based on 13 ratings
Analyst 1Y Forecast: $2.00
Average target (based on 3 sources)
Consensus Price Target
Low
$2
Median
$2
High
$2
Average
$2
Potential Upside: 327.9%
Price & Moving Averages
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Fundamentals Overview
Management sounded upbeat about the transformation’s intent (cost discipline, service expansion, distributor structure, and margin recovery), but the Q&A revealed the real constraint is China timing uncertainty tied to tariffs and geopolitical instability. The revenue and adjusted EBITDA outlook was materially reset: fiscal 2026 revenue to $440M-$450M from $471M-$485M and adjusted EBITDA to $22M-$25M from $31M-$35M. In Q2, the financial pressure shows up in hard margin math: product gross margin collapsed to 19.7% (from 43.5%), with the decline driven by China JV release timing (~-8.2 pts), tariffs (~-6 pts), unfavorable product mix (~-8 pts), and the loss of CyberKnife shipments (0 vs 5, ~-5.4 pts). Guidance-related candor: product GM is unlikely to stay near ~20% and is expected at 20%-30% going forward, but tariff and mix dependence remain. Analysts probed what changed in the back half; management essentially pointed to China’s slowed licensing/tender/funding workflow extending deal protraction.
Growth Catalysts
- Shift toward solutions-oriented service offerings to increase uptime/system performance and drive higher-margin recurring revenue
- Service portfolio expansion via tiered 'select advantage' / 'optimum' programs (base/mid/premium) including training, quality support, user groups/forums, data management, real-time monitoring, software upgrades, consulting, and workflow analysis
- Pricing optimization across product/service portfolio to better reflect clinical/economic value and win bids at appropriate margins
- Reallocated engineering resources toward high-ROI programs integrating third-party solutions and reflecting customer voice
Business Development
- Structured distributor partnership and management program with tiered pay-for-performance model (better margins/transfer pricing for higher-performing dealers/distributors)
- Installed base expansion targeted across 81 countries (service and distributor/dealer-led go-to-market)
Financial Highlights
- Revenue: $102.2M in Q2 (down 12% YoY; down 13% constant currency)
- Service revenue resilience: $57.2M (+4% YoY; +3% constant currency)
- Product revenue: $45.0M (down 26% YoY; down 28% constant currency), driven by China impact from tariffs/geopolitics
- Book-to-bill: 1.5 (trailing twelve-month ratio 1.2); ending order backlog ~$33M (orders younger than 30 months), representing >18 months of product revenue; no order cancellations
- Gross margin collapse: 23.5% vs 36.1% prior year
- Product gross margin: 19.7% vs 43.5% prior year
- Product gross margin drivers (YoY decline): China JV releases -8.2 pts; incremental tariff costs ~-6 pts; product mix ~-8 pts; CyberKnife shipments: 0 vs 5 prior year impacting ~-5.4 pts
- Service gross margin: 26.6% vs 27.7% prior year (driven by higher net parts consumption; timing-related quarterly variability)
- Adjusted EBITDA: loss of $1.9M vs positive $9.6M prior year
- Operating expenses: $35.6M vs $37.2M prior year; includes $6.1M one-time restructuring charges
- Restructuring/transformational actions: workforce reduction ~15%; expected ~$12M fiscal 2026 benefit; total restructuring charges expected ~$10M across Q2/Q3/Q4
Capital Funding
Strategy & Ops
- Comprehensive operational/organizational transformation plan (mid-December) to sharpen accountability, tighten cost control, accelerate execution
- Rightsizing cost structure + process efficiency + technology use; organizational realignment centralized functions and outsourced non-core activities
- Operational KPI rhythm: weekly financial/operating reviews around orders, revenue, margins, service performance, and cash
- Implementing systems/controls to ensure compensation for services delivered (addressing instances of not billing/collecting)
- Q2 restructuring charges: $6.1M (severance and other one-time costs)
Market Outlook
- Fiscal 2026 revenue reset (due to visibility): $440M-$450M vs prior $471M-$485M
- Fiscal 2026 adjusted EBITDA reset: $22M-$25M vs prior $31M-$35M
- High single-digit adjusted EBITDA margin run-rate expected within next nine months; double-digit margin target over medium-to-long term
- Growth seasonality clarification: typically closer to 45-55% split (vs Q spec asked as 40-60); management stated prior 40-60 may be an oversimplification
Risks & Headwinds
- Tariffs and geopolitical instability—particularly China—reduced demand and protracted commercial activity timelines
- China process friction: slower quota/license/tender/funding process flow leading to deal timing changes
- Product gross margin pressure expected to persist given tariffs as a 'new entrant' vs prior year and ongoing inflation
- Q2 product GM not expected to remain near 20%: management expects 20%-30% depending on product mix and timing of China releases
- China-centric release timing and prior-year anniversary effects (e.g., 2025 released 27 units post-NMPA approval of TOMO C) created abnormal YoY comparison
Sentiment: CAUTIOUS
Note: This summary was synthesized by AI from the ARAY Q2 2026 earnings transcript. Financial data is complex; please verify all metrics against official SEC filings before making investment decisions.