Executive Summary

Accuray delivered a solid Q2 FY25: revenue $116.2M (+8% YoY), GAAP diluted EPS $0.02, and adjusted EBITDA $9.6M; gross margin expanded to 36.1% aided by China JV deferred margin release .
Product revenue rose 19% YoY to $61.2M on strong China, APAC, Japan, and CyberKnife demand; service revenue declined 1% YoY to $55.0M due to prior-year ERP catch-up effects but grew sequentially .
Guidance raised: FY25 revenue to $463–$475M (from $462–$472M) and adjusted EBITDA to $28.5–$31.0M (from $28–$30M); management assumes minimal tariff impact and a U.S. market recovery in H2 FY25 .
Orders moderated: gross product orders $76.8M (book-to-bill 1.3), backlog $463.1M (~6% lower YoY); near-term narrative hinges on continued China deliveries, Helix traction, and H2 U.S. recovery, with tariffs/FX inflation as watch items .

What Went Well and What Went Wrong

What Went Well

Strong product momentum: product revenue +19% YoY; CyberKnife revenue grew “well above 50% YoY” and 12 Helix orders booked after CE mark, with breakthrough wins in Pakistan, Northern Africa, and APAC .
China execution: ~54% YoY China revenue growth, 10-point market share gain in CY2024; regulatory approvals (CyberKnife S7, Radixact SynC) and significant Tomo C deliveries enabled deferred margin release .
Margin and profitability: gross margin 36.1% (vs. 33.5% YoY) with ~2.4 pts benefit from China margin release and ~2.9 pts from pricing/operational efficiencies; operating expenses fell 7% YoY to $37.2M .

Management quotes:

“Our strong Q2 performance reflects outstanding execution... evidenced by the strong momentum in Tomo C System deliveries... and breakthrough wins of our new Helix system” — Suzanne Winter, CEO .
“We delivered a strong Q2... working both from a top line and margin expansion standpoint” — Ali Pervaiz, CFO .

What Went Wrong

Orders down YoY: gross orders $76.8M vs. $93.9M prior-year quarter; backlog $463.1M (~6% lower YoY), indicating moderation amid strong shipments .
Service revenue −1% YoY; CFO flagged prior-year ERP catch-up inflated the base, normalizing to +2% on a comparable basis, but higher service costs/parts consumption offset margin gains by ~2.7 pts .
Regional variability: EIMEA and AMS revenue down YoY with Japan front-half weighted; management expects stronger H2 but acknowledged quarter-to-quarter swings and FX/inflation pressures .

Financial Results

Metric	Q4 2024	Q1 2025	Q2 2025
Total Net Revenue ($USD Millions)	$134.3	$101.5	$116.2
GAAP Diluted EPS ($)	$0.03	$(0.04)	$0.02
Gross Profit ($USD Millions)	$38.5	$34.5	$41.9
Gross Margin (%)	28.6%	33.9%	36.1%
Operating Expenses ($USD Millions)	$31.6	$36.6	$37.2
Adjusted EBITDA ($USD Millions)	$10.1	$3.1	$9.6

Segment Breakdown

Metric	Q4 2024	Q1 2025	Q2 2025
Product Revenue ($USD Millions)	$79.7	$48.4	$61.2
Service Revenue ($USD Millions)	$54.6	$53.2	$55.0

KPIs

KPI	Q4 2024	Q1 2025	Q2 2025
Gross Product Orders ($USD Millions)	$95.5	$55.4	$76.8
Book-to-Bill (Gross Orders / Product Rev.)	1.2	1.1	1.3
Order Backlog ($USD Millions)	$487.3	$468.6	$463.1
Cash + ST Restricted Cash ($USD Millions)	$69.1	$59.7	$64.0
China JV Margin Release ($USD Millions)	N/A	$(1.993) deferral impact in GM recon	$3.314 release in GM recon

Notes:

China JV margin timing drove Q2 GM uplift; CFO quantified ~2.4 pts contribution with additional ~2.9 pts from pricing/operations, partially offset by service cost headwinds (~2.7 pts) .
Q1 GM excluding China deferral would have been 35.9% per company’s reconciliation .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Total Revenue ($USD Millions)	FY2025	$462–$472	$463–$475	Raised
Adjusted EBITDA ($USD Millions)	FY2025	$28–$30	$28.5–$31.0	Raised
China Deferred Margin Release (Net, $USD Millions)	FY2025	~$3–$4 (expectation)	~$4 (expectation)	Clarified higher end
Assumptions	FY2025	—	Minimal tariff impact; U.S. market recovery in H2 FY25	Qualitative guidance context

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
China growth & JV margin	Q4: Tomo C TPS approval; foundation for growth . Q1: strong China; Tomo C interest; ~$3–$4M margin release expected FY25 .	~54% YoY China revenue growth; earlier-than-expected margin release ($3.3M net in Q2); 10-pt market share gain in CY2024 .	Positive; normalization beyond FY25 .
Product portfolio (CyberKnife, Helix, Radixact)	Q4: Helix CE mark; shipments record . Q1: Helix value segment focus; NEJM PACE-B clinical data .	CyberKnife revenue >50% YoY; 12 Helix orders post-CE with wins in Pakistan/N. Africa/APAC; Radixact Sync approvals in China .	Strengthening mix; international traction.
Orders/backlog quality	Q4: gross orders +8%; backlog down 4.6% YoY . Q1: book-to-bill 1.1; refined booking criteria .	Book-to-bill 1.3; 1 unit (~$2M) canceled; backlog ~$463M (younger than 30 months) .	Healthy book-to-bill; backlog moderated.
U.S. market & tariffs/FX	Q4/Q1: not central; FX/inflation acknowledged .	Minimal tariff impact assumed; U.S. recovery in H2; FX (JPY 150–160) pressures service margin .	Watch items; H2 weighted.
Services & recurring revenue	Q1: service +5% YoY; focus on contract base .	Service −1% YoY (normalized +2%); sequential growth; recurring annuity emphasized .	Building; margin headwinds near term.
Regional trends	Q4: broad strength, record shipments . Q1: China strength .	Japan >40% YoY; EIMEA/AMS down but expected stronger H2 .	Mixed; H2 improvement guided.

Management Commentary

Strategic focus: “Advancing cancer care through innovation, expanding service solutions, and improving access in developing markets… grow faster than the market and achieve #1 or #2 market share long term” — Suzanne Winter .
China JV margin dynamics: “We defer ~50% of margin on shipments to JV and realize it when JV ships to end customers… higher-than-anticipated shipments in Q2 allowed earlier margin release” — Ali Pervaiz .
Profitability drivers: “Favorable pricing and efficiencies contributed ~2.9 pts to GM; higher parts/service costs offset ~2.7 pts” — Ali Pervaiz .

Selected quotes:

“The CyberKnife system… grew revenue well above 50% year-over-year, so great performance here.” — Suzanne Winter .
“We are closely monitoring tariffs… think it is a de minimis risk for the second half.” — Ali Pervaiz .

Q&A Highlights

China sustainability: Management highlighted outperformance amid anticorruption headwinds, driven by JV execution and a strengthened product portfolio; declined to disclose specific China revenue on the call .
U.S. recovery and tariffs: Plan assumes H2 recovery with high-visibility installations; tariffs seen as minimal risk near term; inflation persists, targeted COGS reductions underway .
Japan and India: Japan strength expected to be first-half weighted; awaiting Helix local approval in India to drive penetration in underpenetrated markets .

Estimates Context

Wall Street consensus estimates via S&P Global for Q2 FY25 (revenue/EPS) and FY25 were unavailable at the time of analysis due to data access limits. Values would be retrieved from S&P Global; given the unavailability, we cannot present exact consensus comparisons at this time [GetEstimates error].
Implications: Raised FY25 revenue/EBITDA guidance suggests modest upward pressure on sell-side estimates; margin dynamics depend on normalization of China JV releases and service cost control .

Key Takeaways for Investors

Product-led beat with mix shift: Strong CyberKnife and Helix traction and China contributions drove product revenue and margin expansion; watch sustainability as JV volume normalizes beyond FY25 .
Guidance raised; H2 weighted: FY25 revenue/EBITDA ranges moved up; management expects larger Q4 revenue/earnings contribution, with U.S. recovery assumption and minimal tariff impact .
Orders moderated but quality intact: Book-to-bill 1.3 with limited cancellations and backlog focused on <30-month conversion; near-term shipment pacing supports revenue trajectory .
Services as medium-term margin lever: Despite YoY decline on tough comp, contract base growth and pricing actions aim to scale recurring revenue and operating leverage over time .
FX/inflation headwinds: JPY weakness and parts/service cost inflation temper margin expansion; continued pricing and supply-chain optimization are critical .
Regulatory momentum in China: Approvals (CyberKnife S7, Radixact SynC) and Tomo C delivery cadence underpin growth; net China margin release $3.3M in Q2 aided GM; expect nominal impact beyond FY25 as volumes normalize .
Regional variability: Japan strong (>40% YoY); EIMEA/AMS expected to improve in H2; monitor India Helix approval as incremental growth catalyst .

Additional Q2 FY25 Press Releases and Context

China NMPA approvals: CyberKnife S7 and Radixact SynC systems approved, expanding premium Type A capabilities .
COO appointment: Leonel Peralta named Chief Operations Officer to drive supply-chain and productivity initiatives .
Tomo C clinical adoption: First 100 patient regimens completed on Tomo C, supporting Type B market strategy .

All figures and statements are sourced from Accuray’s Q2 FY25 8-K and press release, prior quarter earnings materials, and the Q2 FY25 earnings call transcript as cited above.

ACCURAY INC (ARAY)·Q2 2025 Earnings Summary