Executive Summary

Q3 2022 delivered a clean top-line beat with revenue of $26.5M vs ~$25.5M Zacks consensus (+~4% surprise) and EPS in-line at $(0.14); gross margin expanded to 16.8% from 4.9% in Q2 and 9.9% in Q3’21, reflecting mix and execution .
Management raised the low end of FY22 revenue guidance to $94–$104M (from $90–$104M) and increased FY22 cash usage guidance to $78–$92M (from $68–$83M) due to timing of large system-related payments (collections expected in 2023) .
Commercial momentum remains solid: eight new orders ($47.5M), backlog up 26% YoY to $370.5M, and four revenue units recognized in Q3 .
Narrative and potential stock catalysts: revenue beat, raised revenue guidance floor, visible gross margin inflection, and strengthening clinical/innovation story (SMART Pancreas; MIRAGE; A3i) that management says is driving demand .

What Went Well and What Went Wrong

What Went Well
- Revenue beat and margin inflection: $26.5M (+38% YoY) with gross margin 16.8% vs 9.9% in Q3’21 and 4.9% in Q2’22, aided by four revenue units and execution .
- Orders and backlog: Eight new orders ($47.5M) drove backlog to $370.5M (+26% YoY), supporting forward visibility .
- Positive management tone on demand catalysts: “Our clinical data are driving demand for MRIdian therapy… very pleased by the customer response to our A3i launch” — Scott Drake, CEO .
What Went Wrong
- Cash usage guidance moved higher: FY22 cash usage raised to $78–$92M (from $68–$83M) due to timing of a few large system-related payments (collections expected in 2023), highlighting working capital timing risk .
- Operating expense growth vs. prior year: Total opex rose to $28.4M (+13% YoY), reflecting commercial investments (selling & marketing up) .
- Losses remain sizable: Net loss $(26.1)M, EPS $(0.14), little YoY improvement despite revenue growth, as opex and other items offset gross profit gains .

Financial Results

Sequential performance (FY2022)

Metric	Q1 2022	Q2 2022	Q3 2022
Revenue ($USD Millions)	$18.876	$22.149	$26.490
Gross Profit ($USD Millions)	$0.094	$1.091	$4.454
Gross Margin %	0.5%	4.9%	16.8%
Operating Expenses ($USD Millions)	$27.568	$30.881	$28.370
Net Loss ($USD Millions)	$(25.774)	$(27.633)	$(26.107)
Diluted EPS ($)	$(0.14)	$(0.15)	$(0.14)

YoY comparison (Q3)

Metric	Q3 2021	Q3 2022
Revenue ($USD Millions)	$19.177	$26.490
Gross Margin %	9.9%	16.8%
Diluted EPS ($)	$(0.15)	$(0.14)

Segment breakdown (FY2022)

Metric	Q1 2022	Q2 2022	Q3 2022
Product Revenue ($USD Millions)	$13.426	$16.457	$20.865
Service Revenue ($USD Millions)	$5.331	$5.573	$5.507
Distribution Rights ($USD Millions)	$0.119	$0.119	$0.118

Key KPIs

KPI	Q1 2022	Q2 2022	Q3 2022
MRIdian Orders (# / $USD Millions)	7 / $40.9	8 / $46.3	8 / $47.5
Backlog ($USD Millions)	$330.9	$352.8	$370.5
Revenue Units Recognized (count)	3	3 (+1 upgrade)	4
Cash Usage (quarter) ($USD Millions)	$35.2	$22.5	$15.3
Cash & Equivalents incl. restricted ($USD Millions)	$183.2	$160.7	$146.9

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2022	$90M – $104M	$94M – $104M	Raised (higher floor)
Growth (YoY)	FY 2022	28% – 48%	34% – 48%	Raised (higher floor)
Cash Usage	FY 2022	$68M – $83M	$78M – $92M	Raised due to AR timing; collections expected 2023

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2022)	Current Period (Q3 2022)	Trend
Clinical evidence as demand driver	Emphasis on SMART Pancreas and MIRAGE interim data; clinical pipeline highlighted in decks	CEO: “clinical data are driving demand”; SMART Pancreas endpoint met; MIRAGE 12-month data well-received	Strengthening
Product/Innovation (A3i, Brain)	A3i went live at Henry Ford/Miami; workflow enhancements; brain program noted	“Very pleased” with A3i customer response; innovation roadmap reiterated at Investor Day	Positive adoption
Supply chain/working capital	Noted macro headwinds; guidance included cash usage range	Cash usage guidance raised due to timing of large system-related payments; collections expected 2023	Timing risk persists
Market awareness	Partnership with Katie Couric Media launched in Q2	Continued emphasis on awareness to accelerate therapy adoption	Ongoing
Regional trends (China)	—	Slides highlight China opportunities across major cancers	Building optionality
R&D execution	Pipeline breadth and planned trials reiterated (LAP-ABLATE, LUNG STAAR, FORT/SHORTER)	Investor Day expands detail on trials and endpoints	Advancing

Management Commentary

“Our team delivered another solid quarter on orders, revenue growth, gross margin expansion, and operating expense discipline… Our clinical data are driving demand for MRIdian therapy. We’re also very pleased by the customer response to our A3i launch which we are now broadening.” — Scott Drake, President & CEO .
Investor Day reiterated a multi-pronged strategy: clinical data, innovation (A3i/BrainTx), market awareness, and therapy adoption, with a path to >30% revenue CAGR and margin expansion toward adj. EBITDA/cash flow breakeven in 2025–2026 .

Q&A Highlights

The company clarified FY22 cash usage guidance increased due to inter-quarter timing of certain large system-related payments; management expects to collect these in 2023, benefiting 2023 cash — implying no change to shipment expectations but timing risk in receivables .
Note: The full Q3’22 call transcript is hosted externally (e.g., GuruFocus/Seeking Alpha). Key themes above are consistent with the press release and Investor Day materials .

Estimates Context

S&P Global consensus data was not available via our feed for VRAYQ during this period. We therefore reference Zacks-sourced consensus via AP and Nasdaq.

Metric	Consensus (Zacks)	Actual Q3 2022	Surprise
Revenue ($USD Millions)	~$25.5	$26.490	+~$1.0 (+~4.0%)
EPS ($)	$(0.14)	$(0.14)	In line

Note: S&P Global consensus was unavailable; we used Zacks/AP/Nasdaq as a proxy and cited those sources .

Key Takeaways for Investors

Execution improving: sequential revenue growth (Q1→Q2→Q3) and gross margin expansion support the thesis that installations and mix can drive P&L leverage into 2023+ .
Demand signals intact: eight orders in Q3 and +26% YoY backlog growth underpin forward visibility despite macro/supply chain noise .
Clinical/innovation flywheel: SMART Pancreas and MIRAGE data, plus A3i adoption, are cited as catalysts for therapy adoption and competitive differentiation .
Working capital watch item: FY22 cash usage raised on timing of large payments; management expects collections in 2023 — monitor receivables and conversion in Q4/Q1 .
FY22 guide more confident on top-line: raised revenue floor to $94M, implying stronger H2 execution; watch installation cadence and service attachment .
Medium-term framework: Management targets >30% revenue CAGR through 2025 with >2,000 bps gross margin expansion and adj. EBITDA/cash breakeven in 2025–2026 — progress hinges on cost-down, service efficiency, and installed base scaling .
Trade setup: Near-term catalysts include conversion of backlog to shipments, further clinical milestones (LAP-ABLATE, LUNG STAAR, prostate/breast trials), and any incremental orders; risks center on supply chain, construction/permitting timing, and AR collection cadence .

Appendix: Prior Quarters Snapshot (for trend context)

Q2 2022: Revenue $22.1M; gross margin 4.9%; backlog $352.8M; eight orders ($46.3M); cash usage ~$22.5M; cash $160.7M; FY22 revenue guide raised floor to $90M (from $84M) .
Q1 2022: Revenue $18.9M; gross margin 0.5%; backlog $330.9M; seven orders ($40.9M); cash usage ~$35.2M; cash $183.2M; reiterated FY22 revenue guide $84–$104M .

ViewRay, Inc. (VRAYQ)·Q3 2022 Earnings Summary