Accuray Incorporated ARAY reported second-quarter fiscal 2025 earnings per share of 2 cents against the year-ago period’s loss of 10 cents. The bottom line surpassed the Zacks Consensus Estimate by 300%.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Revenues in Detail

Accuray registered quarterly revenues of $116.2 million, up 8.3% year over year. The figure beat the Zacks Consensus Estimate by 4.7%.

The overall top-line growth was driven by robust growth in product revenue and solid demand for its CyberKnife system.

ARAY’s shares moved north 6.8% and closed at $2.49 on Wednesday. The company’s shares have gained 66% in the past six months compared with the industry’s 6.7% growth. The broader S&P 500 Index has gained 16.5% in the same time frame.

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Segmental Details

Accuray derives revenues from two sources — Products and Services.

In the fiscal second quarter, Product revenues increased 18.7% from the year-ago quarter’s level to $61.2 million.

Services revenues declined 1.3% year over year to $54.9 million.

Gross product orders totaled $76.8 million, down 18.2% year over year. The book-to-bill ratio was 1.3 in the fiscal second quarter compared with 1.8 in the year-ago quarter. 

Margin Trend

In the quarter under review, Accuray’s gross profit improved 16.7% year over year to $41.9 million. Gross margin expanded 260 basis points to 36.1%.

Selling and marketing expenses decreased 2.2% year over year to $11.1 million. Research and development expenses decreased 10.7% year over year to $13.6 million. General and administrative expenses also went down 6% year over year to $12.4 million. Total operating expenses of $37.2 million decreased 6.7% year over year.

Operating profit totaled $4.7 million against the prior-year quarter’s operating loss of $3.9 million.

Financial Position

Accuray exited the second quarter of fiscal 2025 with cash and cash equivalents of $62.6 million compared with $59.7 million at the end of the first quarter of fiscal 2025.

Total debt (including short-term debt) at the fiscal second-quarter end was $175.5 million compared with $170.2 million at the end of the first quarter of fiscal 2025.

Accuray Incorporated Price, Consensus and EPS Surprise

Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote

Guidance

Accuray has raised its revenue outlook for fiscal 2025 based on current expectations.

The company now expects revenues in the range of $463-$475 million (reflecting year-over-year growth of 3.5-5.7%) compared with the previous guidance of $462-$472 million. The Zacks Consensus Estimate is pegged at $468.6 million.

Our Take

Accuray’s second-quarter fiscal 2025 earnings and revenues beat their respective estimates. Per the second-quarter earnings call, ARAY’s key contributors for growth included significant revenue growth in China, supported by its joint venture with China Isotope and Radiation Corporation and the launch of the Tomo C System, along with new product approvals like the CyberKnife S7 and Radixact Sync. Japan also saw more than 40% growth due to competitive displacements and installations. Operational efficiencies, pricing actions, and the release of deferred margins from China shipments further bolstered performance.

ARAY’s Helix platform, which received CE Mark approval in the fiscal first quarter of 2025, witnessed decent momentum in the fiscal second quarter. Accuray secured 12 new Helix system orders, achieving breakthrough wins in regions such as Pakistan, Northern Africa, and key markets in the Asia-Pacific region.

However, the decline in Services revenues seems a cause for concern.

ARAY’s Zacks Rank and Key Picks

Accuray currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Masimo MASI, ResMed Inc. RMD and Cardinal Health CAH.

Masimo, sporting a Zacks Rank #1 (Strong Buy) at present, has an estimated growth rate of 11.8% for 2025. MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 17.10%. Its shares have risen 51.4% compared with the industry’s 6.8% growth in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

ResMed, carrying a Zacks Rank of 2 (Buy) at present, has an estimated long-term growth rate of 14.8%. RMD’s earnings surpassed estimates in each of the trailing four quarters, with the average being 6.4%.

ResMed has gained 32.4% compared with the industry’s 16.5% growth in the past year.

Cardinal Health, carrying a Zacks Rank #2 at present, has an estimated long-term growth rate of 10.5%. CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 11.2%.

Cardinal Health’s shares have gained 21.7% compared with the industry’s 6.1% growth in the past year.

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