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Accuray Incorporated ARAY reported break even adjusted earnings per share (EPS) for the second quarter of fiscal 2022 compared with year-over-year EPS of 5 cents. Adjusted EPS lagged the Zacks Consensus Estimate of earnings of 2 cents per share.
GAAP EPS was also at break-even level against the prior-year quarter’s EPS of 5 cents.
Revenues in Detail
Accuray registered revenues of $116.3 million in the fiscal 2022 second quarter, up 19.3% year over year. The figure surpassed the Zacks Consensus Estimate by 10.8%.
Strength in Product revenues and robust year-over-year growth in Americas and EMEA drove the overall top line in the quarter.
Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal second quarter, Product revenues improved 45.2% from the year-ago quarter to $60.7 million. CyberKnife accounted for around 21% of revenue unit volume in the quarter whereas the TomoTherapy platform accounted for the remaining 79%.
Services revenues dipped 0.2% from the year-ago quarter to $55.6 million.
Gross orders totaled $85.4 million, up 13.3% year over year.
Accuray Incorporated Price, Consensus and EPS Surprise
Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote
Margin Trend
In the quarter under review, Accuray’s gross profit rose 4.4% to $42.6 million. Gross margin contracted 524 basis points (bps) to 36.7%.
Selling and marketing expenses rose 27.9% to $13.2 million. Research and development expenses went up 22.9% year over year to $14.7 million, while general and administrative expenses went up 3.8% year over year to $10.7 million. Total operating expenses of $38.6 million increased 18.4% year over year.
Total operating profit was $3.9 million, reflecting a 51.4% decline from the prior-year quarter. Operating margin in the quarter contracted 499 bps to 3.4%.
Financial Position
Accuray exited the second quarter of fiscal 2022 with cash, cash equivalents, and short-term restricted cash of $123.2 million compared with $104.7 million at the end of fiscal first quarter. Total debt (including short-term debt) at the end of fiscal 2022 second quarter was $182 million compared with $197.8 million at the end of fiscal first quarter.
2022 Guidance
Accuray has revised its financial outlook for fiscal 2022 based on current expectations.
The company now expects its fiscal year revenues to be $420-$430 million, wider from its earlier projection of $420-$427 million. The Zacks Consensus Estimate for the same is pegged at $425.6 million.
Our Take
Accuray exited the fiscal second quarter of 2022 better-than-expected revenues. The company registered uptick in both its overall top line and Products revenues during the period, which is encouraging. Strong demand for the ClearRT Helical kVCT Imaging for the Radixact System is impressive. The CyberKnife Robotic Radiotherapy Platform’s expansion of its range of neurological indications that can be effectively treated with stereotactic radiosurgery and receipt of the Shonin approval to treat Trigeminal Neuralgia (a chronic pain condition affecting a facial nerve) are also promising.