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Accuray Incorporated ARAY reported breakeven fourth-quarter fiscal 2025 earnings per share (EPS) compared with the year-ago period’s EPS of 3 cents. The bottom line also missed the Zacks Consensus Estimate by 100%.
Accuray registered quarterly revenues of $127.5 million, down 5% year over year. However, the figure beat the Zacks Consensus Estimate by 2.5%.
The overall topline was impacted by lower product revenue in ARAY’s China, EIMEA and Japan businesses.
ARAY’s shares moved south 4.7% in yesterday’s after-market trading. The company’s shares have lost 24.8% in the year-to-date period compared with the industry’s 8.6% decline. The broader S&P 500 Index has gained 9.5 in the same time frame.
Accuray derives revenues from two sources — Products and Services.
In the fiscal fourth quarter, Product revenues decreased 11.3% from the year-ago quarter’s level to $70.7 million.
Services revenues improved 4.1% year over year to $56.8 million.
Gross product orders totaled $84.7 million, down 11.2% year over year. The book-to-bill ratio was 1.2 in the fiscal fourth quarter, unchanged as compared with the year-ago quarter.
In the quarter under review, Accuray’s gross profit improved 1.3% year over year to $38.9 million. Gross margin expanded 200 basis points to 30.6%.
Selling and marketing expenses increased 6.7% year over year to $11.4 million. Research and development expenses increased 20.4% year over year to $11.5 million. General and administrative expenses also increased 3.9% year over year to $11.9 million. Total operating expenses of $34.7 million increased 9.8% year over year.
Operating profit totaled $4.2 million compared with $6.8 million in the prior-year quarter.
Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote
Accuray exited the fourth quarter of fiscal 2025 with cash and cash equivalents of $57.4 million compared with $77.8 million at the end of the third quarter of fiscal 2025.
Total debt (including short-term debt) at the fiscal fourth-quarter end was $136.5 million compared with $173.8 million at the end of the third quarter of fiscal 2025.
Accuray provided guidance for fiscal 2026.
The company expects revenues in the range of $471-$485. The Zacks Consensus Estimate is pegged at $452.7 million.
Accuray’s fourth-quarter fiscal 2025 earnings missed, whereas revenues beat their respective estimates. Per the fourth-quarter earnings call, Accuray’s sales were pressured by lower product revenue in China and EIMEA, tied to early-quarter tariff disruptions in China and late-quarter geopolitical unrest in the Middle East, as well as an 11% drop in Japan due to softer demand. Despite these headwinds, the company delivered revenues in line with expectations, buoyed by a 22% sales surge in APAC and a 24% rebound in the Americas from strong backlog conversions. Service revenue was another bright spot, up 4% year over year, supported by a growing installed base, improved service contract capture rates, and continued market traction for Tomo C in China and Helix in other international markets.
Accuray closed the quarter with a healthy book-to-bill ratio of 1.2, underscoring sustained demand and solid order conversion despite macro and regional challenges. Orders grew notably in APAC, up 50% year over year, and in Japan, up 34%, with China and EIMEA also posting double-digit gains. This momentum was partially offset by softer order activity in the United States, where the replacement market has yet to rebound meaningfully.
Per management, tariffs remained a notable factor in the fiscal fourth quarter, with roughly $4 million in cash impact during the quarter. About half of this was mitigated through initiatives like the duty drawback program, which allows recovery of tariffs on products ultimately shipped outside the United States, while the remainder was capitalized into inventory to flow through the P&L in coming quarters.
The company is also advancing long-term mitigation strategies, including establishing its manufacturing site as a foreign trade zone to limit tariffs to only U.S.-bound products, accelerating dual-sourcing for key components, and adjusting product and service pricing. These actions are aimed at cushioning profitability from tariff volatility, especially given that more than 80% of Accuray’s sales occur outside the United States.
Accuray currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Medpace Holdings, Inc. MEDP, West Pharmaceutical Services, Inc. WST and Boston Scientific Corporation BSX.
Medpace Holdings, sporting a Zacks Rank of 1 (Strong Buy), reported second-quarter 2025 EPS of $3.10, beating the Zacks Consensus Estimate by 3.3%. Revenues of $603.3 million outpaced the consensus mark by 11.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Medpace Holdings has a long-term estimated growth rate of 11.4%. MEDP’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 13.9%.
West Pharmaceutical reported second-quarter 2025 adjusted EPS of $1.84, beating the Zacks Consensus Estimate by 21.9%. Revenues of $766.5 million surpassed the Zacks Consensus Estimate by 5.4%. It currently flaunts a Zacks Rank #1.
West Pharmaceutical has a long-term estimated growth rate of 8.5%. WST’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 16.8%.
Boston Scientific reported second-quarter 2025 adjusted EPS of 75 cents, beating the Zacks Consensus Estimate by 4.2%. Revenues of $5.06 billion surpassed the Zacks Consensus Estimate by 3.5%. It currently carries a Zacks Rank #2 (Buy).
Boston Scientific has a long-term estimated growth rate of 14%. BSX’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 8.1%.
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This article originally published on Zacks Investment Research (zacks.com).
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