UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): |
(Exact name of Registrant as Specified in Its Charter)
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(IRS Employer |
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Registrant’s Telephone Number, Including Area Code: |
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On April 26, 2023, Accuray Incorporated (the “Company”) issued a press release announcing its financial results for the third quarter ended March 31, 2023. A copy of the Company’s press release dated April 26, 2023, titled “Accuray Reports Fiscal 2023 Third Quarter Financial Results” is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The foregoing information (including the exhibit hereto) is being furnished under “Item 2.02 Results of Operations and Financial Condition” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure.
Spokespersons of the Company plan to present the information in the presentation attached hereto as Exhibit 99.2 to analysts and investors from time to time on or after April 26, 2023. The presentation will be available on the Company’s Investor Relations website at: http://investors.accuray.com.
The furnishing of the attached presentation is not an admission as to the materiality of any information therein. The information contained in the presentation is summary information that is intended to be considered in the context of more complete information included in the Company’s filings with the U.S. Securities and Exchange Commission and other public announcements that the Company has made and may make from time to time by press release or otherwise. The Company undertakes no duty or obligation to update or revise the information contained in this report. For important information about forward looking statements, see the slide titled “Forward-Looking Statements” in Exhibit 99.2 attached hereto.
The information set forth under Item 2.02 of this Current Report on Form 8-K is incorporated by reference into this Item 7.01.
The information contained in this Item 7.01 disclosure, including Exhibit 99.1 and Exhibit 99.2, is furnished pursuant to Item 7.01 and shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. |
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Description |
99.1 |
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99.2 |
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Accuray Third Quarter Fiscal 2023 Earnings Call Presentation |
104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ACCURAY INCORPORATED |
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Date: |
April 26, 2023 |
By: |
/s/ Ali Pervaiz |
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Ali Pervaiz |
3
Exhibit 99.1
Accuray Reports Fiscal 2023 Third Quarter Financial Results
Company delivers record quarterly revenue and unit volume in Q3; Reiterates fiscal year guidance
SUNNYVALE, Calif., April 26, 2023 — Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the third quarter of fiscal 2023 ended March 31, 2023.
Third Quarter Fiscal 2023 Summary
Other Recent Operational Highlights
“Accuray delivered strong revenue and EBITDA growth in the third quarter driven by growing global demand for our advanced radiotherapy solutions," said Suzanne Winter, Chief Executive Officer. “Our teams are laser focused on making meaningful progress against our long-term strategic goals. We believe our investments in technology innovation, focus on operational discipline and strategic partnerships, matched with a best-in-class team, will enable us to transform radiotherapy care and bring value to patients and healthcare providers worldwide.”
Fiscal Third Quarter Results
Total net revenue in the third quarter of fiscal 2023 was $118.1 million, compared to $96.2 million in the prior fiscal year third quarter. Product revenue in the third quarter of fiscal 2023 was $62.8 million, compared to $43.2 million in the prior fiscal year third quarter, while service revenue for the third quarter of fiscal 2023 was $55.2 million, compared to $53.0 million in the prior fiscal year third quarter.
Total gross profit in the third quarter of fiscal 2023 was $38.7 million, or 32.8 percent of total net revenue, compared to total gross profit of $34.8 million, or 36.2 percent of total net revenue, in the prior fiscal year third quarter.
Operating expenses in the third quarter of fiscal 2023 were $36.4 million, including non-recurring charges of $0.8 million for restructuring charges and $1.1 million of ERP and ERP related expenditures, compared to $35.1 million in the prior fiscal year third quarter. Excluding these non-recurring charges, total operating expenses were down 1.5 percent compared to the same period in the prior fiscal year third quarter.
Net income in the third quarter of fiscal 2023 was $0.6 million, or $0.01 per share, compared to a net loss of $1.0 million, or $0.01 per share, in the prior fiscal year third quarter. Adjusted EBITDA in the third quarter of fiscal 2023 was $8.3 million, compared to $5.4 million in the prior fiscal year third quarter.
Gross product orders in the third quarter of fiscal 2023 totaled $73.8 million compared to $88.6 million in the prior fiscal year third quarter. Order backlog as of March 31, 2023 was $506.6 million, approximately 12.7 percent lower than at the end of the prior fiscal year third quarter. In the third quarter of fiscal year 2023, there were $5.2 million in order cancellations and $26.4 million in orders aged out as they were more than 30 months in age.
Cash, cash equivalents, and short-term restricted cash were $89.2 million as of March 31, 2023, an increase of $21.3 million from December 31, 2022.
Fiscal Nine Months Results
Total net revenue in the nine months ended March 31, 2023 was $329.3 million, compared to $319.9 million in the same prior fiscal year period. Product revenue for the nine months ended March 31, 2023 was $170.7 million, compared to $156.7 million in the same prior fiscal year period, while service revenue totaled $158.6 million, compared to $163.2 million in the same prior fiscal year period.
Total gross profit in the nine months ended March 31, 2023 was $116.3 million, or 35.3 percent of total net revenue, compared to total gross profit of $116.9 million, or 36.6 percent of total net revenue in the same prior fiscal year period.
Operating expenses in the nine months ended March 31, 2023 were $113.4 million, including non-recurring charges of $2.7 million for restructuring charges and $2.2 million of ERP and ERP related expenditures, compared to $110.8 million in the same prior fiscal year period. Excluding these non-recurring charges, total operating expenses were down 2.1 percent compared to the same prior fiscal year period.
Net loss in the nine months ended March 31, 2023 was $6.7 million, or $0.07 per share, compared to a net loss of $1.9 million, or $0.02 per share, in the same prior fiscal year period. Adjusted EBITDA for the nine months ended March 31, 2023, was $18.7 million, compared to $17.7 million in the same prior fiscal year period.
Gross product orders in the nine months ended March 31, 2023 totaled $222.6 million, compared to $243.9 million in the same prior fiscal year period. Order backlog as of March 31, 2023 was $506.6 million, approximately 12.7 percent lower than at the end of same period in the prior fiscal year period.
Fiscal Year 2023 Financial Guidance
Accuray’s financial guidance is based on current expectations. The following statements are forward-looking and actual results could differ materially depending on market conditions, the impact of the current global economic environment and the Covid-19 pandemic, supply chain disruption, and the factors set forth under “Safe Harbor Statement” below.
The company is reaffirming guidance for fiscal year 2023 as follows:
Guidance for non-GAAP financial measures excludes depreciation and amortization, stock-based compensation, interest expense, provision for income taxes, restructuring charges and ERP and ERP related expenditures. For more information regarding the non-GAAP financial measures discussed in this press release, please see "Use of Non-GAAP Financial Measures" below.
Conference Call Information
Accuray will host a conference call beginning at 1:30 p.m. PT/4:30 p.m. ET today to discuss results for the third quarter of fiscal 2023 as well as recent corporate developments. Conference call dial-in information is as follows:
Individuals interested in listening to the live conference call via the Internet may do so by logging on to the Investor Relations section of Accuray’s website, www.accuray.com. There will be a slide presentation accompanying today’s event which can also be accessed on the company’s Investor Relations page at www.accuray.com.
In addition, a taped replay of the conference call will be available beginning approximately one hour after the call’s conclusion and will be available for seven days. The replay number is (877) 344-7529 (USA), or (412) 317-0088 (International), Conference ID: 3072079. An archived webcast will also be available on Accuray’s website until Accuray announces its results for the fourth quarter of fiscal 2023.
Use of Non-GAAP Financial Measures
Accuray reports its financial results in accordance with generally accepted accounting principles in the United States (GAAP) and the rules of the SEC. To supplement its financial statements prepared and presented in accordance with GAAP, Accuray uses certain non-GAAP financial measures, such as adjusted EBITDA, gross orders on a constant currency basis and net revenue on a constant currency basis.
Accuray has supplemented its GAAP net income (loss) with a non-GAAP measure of adjusted earnings before interest, taxes, depreciation, amortization and stock-based compensation (“adjusted EBITDA”). The calculation of adjusted EBITDA also excludes certain non-recurring, irregular and one-time items, including restructuring charges and ERP and ERP related expenditures. Management believes that this non-GAAP financial measure provides useful supplemental information to management and investors regarding the performance of the company and facilitates a meaningful comparison of results for current periods with previous operating results. A reconciliation of GAAP net income (loss) (the most directly comparable GAAP measure) to non-GAAP adjusted EBITDA is provided in the schedules below.
Accuray has also reported certain operating results on a constant currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of foreign currency exchange rate fluctuations. Management believes disclosure of non-GAAP constant currency results is helpful to investors because it facilitates period-to-period comparisons of the company’s results by increasing the transparency of the underlying performance by excluding the impact of foreign currency exchange rate fluctuations. The GAAP measure most directly comparable to net revenue on a constant currency basis is revenue. The GAAP measure most directly comparable to gross orders on a constant currency basis is gross orders. Accuray calculates the constant currency amounts by translating local currency amounts in the current period using the same foreign translation rate used in the prior period being compared against rather than the actual exchange rate in effect during the current period.
There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.
About Accuray
Accuray Incorporated (Nasdaq: ARAY) is committed to expanding the powerful potential of radiation therapy to improve as many lives as possible. We invent unique, market-changing solutions that are designed to deliver radiation treatments for even the most complex cases—while making commonly treatable cases even easier—to meet the full spectrum of patient needs. We are dedicated to continuous innovation in radiation therapy for oncology, neuro-radiosurgery, and
beyond, as we partner with clinicians and administrators, empowering them to help patients get back to their lives, faster. Accuray is headquartered in Sunnyvale, California, with facilities worldwide.
Safe Harbor Statement
Statements made in this press release that are not statements of historical fact are forward-looking statements and are subject to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release relate, but are not limited, to the company's future results of operations, including expectations regarding: total revenue and adjusted EBITDA; the effect of the global economic environment and the COVID-19 pandemic on the company and the market in general, including with respect to the company’s ability to navigate supply chain, logistics, macroeconomic, and foreign exchange challenges; delivering on the company’s growth agenda, progressing against long-term strategic goals, and executing on strategic partnerships; the company’s ability to transform radiotherapy care and create value for customers, patients, employees, and shareholders; expectations regarding commercial strategy and execution as well as growth opportunities; expectations regarding the market in China as well as with respect to the company’s China joint venture and other strategic partnerships, including expected timing of regulatory clearances; expectations related to the markets in which the company operates; the company’s ability to accelerate profitability in the long run; the impact of strategic pricing actions on revenue and gross margins; and the company’s ability to deliver on its promise to improve the outcome and quality of life of patients. These forward-looking statements involve risks and uncertainties. If any of these risk or uncertainties materialize, or if any of the company’s assumptions prove incorrect, actual results could differ materially from the results express or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the effect of the global macroeconomic environment, including foreign exchange, and the COVID-19 pandemic on the operations of the company and those of its customers and suppliers; disruptions to our supply chain, including increased logistics costs; the company's ability to achieve widespread market acceptance of its products; the company’s ability to realize the expected benefits of the China joint venture and other partnerships; risks inherent in international operations; the company's ability to maintain or increase its gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; the company's ability to meet the covenants under its credit facilities; the company's ability to convert backlog to revenue; and such other risks identified under the heading "Risk Factors" in the company's Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (the "SEC") on February 2, 2023 and as updated periodically with the company's other filings with the SEC.
Forward-looking statements speak only as of the date the statements are made and are based on information available to the company at the time those statements are made and/or management's good faith belief as of that time with respect to future events. The company assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not put undue reliance on any forward-looking statements.
Aman Patel, CFA |
Beth Kaplan |
Investor Relations, ICR-Westwicke |
Public Relations Director, Accuray |
+1 (443) 450-4191 |
+1 (408) 789-4426 |
aman.patel@westwicke.com |
bkaplan@accuray.com |
###
Financial Tables to Follow
Accuray Incorporated
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(Unaudited)
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Three Months Ended |
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Nine Months Ended |
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2023 |
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2022 |
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2023 |
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2022 |
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Net revenue: |
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Products |
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$ |
62,846 |
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$ |
43,198 |
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$ |
170,738 |
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$ |
156,678 |
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Services |
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55,214 |
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52,971 |
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158,575 |
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163,208 |
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Total net revenue |
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118,060 |
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96,169 |
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329,313 |
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319,886 |
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Cost of revenue: |
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Cost of products |
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43,529 |
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28,371 |
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111,627 |
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95,400 |
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Cost of services |
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35,813 |
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33,014 |
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101,404 |
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107,551 |
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Total cost of revenue |
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79,342 |
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61,385 |
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213,031 |
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202,951 |
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Gross profit |
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38,718 |
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34,784 |
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116,282 |
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116,935 |
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Operating expenses: |
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Research and development |
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14,209 |
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14,104 |
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42,942 |
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43,183 |
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Selling and marketing |
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11,130 |
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10,798 |
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35,511 |
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35,302 |
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General and administrative |
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11,063 |
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10,174 |
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34,990 |
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32,350 |
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Total operating expenses |
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36,402 |
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35,076 |
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113,443 |
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110,835 |
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Income (loss) from operations |
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2,316 |
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(292 |
) |
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2,839 |
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6,100 |
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Income on equity method investment, net |
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2,027 |
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1,946 |
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960 |
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774 |
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Other expense, net |
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(3,222 |
) |
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(2,293 |
) |
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(8,611 |
) |
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(7,451 |
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Income (loss) before provision for income taxes |
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1,121 |
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(639 |
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(4,812 |
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(577 |
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Provision for income taxes |
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522 |
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|
407 |
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1,912 |
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1,318 |
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Net income (loss) |
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$ |
599 |
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$ |
(1,046 |
) |
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$ |
(6,724 |
) |
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$ |
(1,895 |
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Net income (loss) per share - basic |
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$ |
0.01 |
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$ |
(0.01 |
) |
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$ |
(0.07 |
) |
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$ |
(0.02 |
) |
Net income (loss) per share - diluted |
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$ |
0.01 |
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$ |
(0.01 |
) |
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$ |
(0.07 |
) |
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$ |
(0.02 |
) |
Weighted average common shares used in computing loss per share: |
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Basic |
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95,522 |
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92,761 |
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94,532 |
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91,780 |
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Diluted |
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97,455 |
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92,761 |
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94,532 |
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91,780 |
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Accuray Incorporated
Condensed Consolidated Balance Sheets
(in thousands)
(Unaudited)
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March 31, |
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June 30, |
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2023 |
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2022 |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
89,057 |
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$ |
88,737 |
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Restricted cash |
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189 |
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204 |
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Accounts receivable, net |
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77,350 |
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94,442 |
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Inventories |
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150,581 |
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142,254 |
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Prepaid expenses and other current assets |
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25,455 |
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23,794 |
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Deferred cost of revenue |
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283 |
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1,459 |
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Total current assets |
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342,915 |
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350,890 |
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Property and equipment, net |
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11,722 |
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12,685 |
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Investment in joint venture |
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12,217 |
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13,879 |
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Operating lease right-of-use assets, net |
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24,408 |
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16,798 |
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Goodwill |
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57,807 |
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57,840 |
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Intangible assets, net |
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257 |
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|
250 |
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Long-term restricted cash |
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1,604 |
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1,213 |
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Other assets |
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24,790 |
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|
19,294 |
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Total assets |
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$ |
475,720 |
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$ |
472,849 |
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Liabilities and equity |
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Current liabilities: |
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Accounts payable |
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$ |
28,647 |
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$ |
31,337 |
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Accrued compensation |
|
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21,434 |
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|
29,441 |
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Operating lease liabilities, current |
|
|
4,009 |
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|
8,567 |
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Other accrued liabilities |
|
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36,811 |
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|
|
30,285 |
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Customer advances |
|
|
22,078 |
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|
|
25,290 |
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Deferred revenue |
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|
73,137 |
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|
75,375 |
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Short-term debt |
|
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5,713 |
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|
|
8,563 |
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Total current liabilities |
|
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191,829 |
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|
208,858 |
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Operating lease liabilities, non-current |
|
|
22,466 |
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|
|
10,453 |
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Long-term other liabilities |
|
|
4,643 |
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|
|
3,748 |
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Deferred revenue, non-current |
|
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29,245 |
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|
24,694 |
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Long-term debt |
|
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172,832 |
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|
171,907 |
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Total liabilities |
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421,015 |
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|
|
419,660 |
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Equity: |
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Common stock |
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|
96 |
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|
94 |
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Additional paid-in capital |
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551,847 |
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|
543,211 |
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Accumulated other comprehensive income |
|
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2,342 |
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|
2,406 |
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Accumulated deficit |
|
|
(499,580 |
) |
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(492,522 |
) |
Total equity |
|
|
54,705 |
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|
|
53,189 |
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Total liabilities and equity |
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$ |
475,720 |
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$ |
472,849 |
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Accuray Incorporated
Summary of Orders and Backlog
(in thousands, except book to bill ratio)
(Unaudited)
|
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Three Months Ended |
|
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Nine Months Ended |
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2023 |
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2022 |
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|
2023 |
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2022 |
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||||
Gross Orders |
|
$ |
73,764 |
|
|
$ |
88,561 |
|
|
$ |
222,647 |
|
|
$ |
243,926 |
|
Net Orders |
|
|
54,737 |
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|
|
43,542 |
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|
|
115,176 |
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|
|
124,488 |
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Order Backlog |
|
|
506,587 |
|
|
|
580,428 |
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|
|
506,587 |
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|
|
580,428 |
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Book to bill ratio (a) |
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1.2 |
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|
|
2.1 |
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|
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1.3 |
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|
|
1.6 |
|
(a) Book to bill ratio is defined as gross orders for the period divided by product revenue for the period
Accuray Incorporated
Reconciliation of GAAP Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation,
Amortization and Stock-Based Compensation (Adjusted EBITDA)
(in thousands)
(Unaudited)
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
GAAP net income (loss) |
|
$ |
599 |
|
|
$ |
(1,046 |
) |
|
$ |
(6,724 |
) |
|
$ |
(1,895 |
) |
Depreciation and amortization (a) |
|
|
1,103 |
|
|
|
1,406 |
|
|
|
3,430 |
|
|
|
4,247 |
|
Stock-based compensation |
|
|
1,559 |
|
|
|
2,695 |
|
|
|
7,601 |
|
|
|
7,906 |
|
Interest expense, net (b) |
|
|
2,707 |
|
|
|
1,975 |
|
|
|
7,605 |
|
|
|
6,081 |
|
Provision for income taxes |
|
|
522 |
|
|
|
407 |
|
|
|
1,912 |
|
|
|
1,318 |
|
Restructuring charges |
|
|
800 |
|
|
|
— |
|
|
|
2,738 |
|
|
|
— |
|
ERP and ERP related expenditures |
|
|
1,057 |
|
|
|
— |
|
|
|
2,178 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
8,347 |
|
|
$ |
5,437 |
|
|
$ |
18,740 |
|
|
$ |
17,657 |
|
(a) consists of depreciation, primarily on property and equipment as well as amortization of intangibles.
(b) consists primarily of interest expense associated with outstanding debt.
Accuray Incorporated
Forward-Looking Guidance
Reconciliation of Projected Net Income (Loss) to Projected Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA)
(in thousands)
(Unaudited)
|
|
Twelve Months Ending |
|
|||||
|
|
From |
|
|
To |
|
||
GAAP net loss |
|
$ |
(7,000 |
) |
|
$ |
(3,000 |
) |
Depreciation and amortization (a) |
|
|
4,500 |
|
|
|
4,500 |
|
Stock-based compensation |
|
|
10,200 |
|
|
|
10,200 |
|
Interest expense, net (b) |
|
|
10,000 |
|
|
|
10,000 |
|
Provision for income taxes |
|
|
2,400 |
|
|
|
2,400 |
|
Restructuring charges |
|
|
2,700 |
|
|
|
2,700 |
|
ERP and ERP related expenditures |
|
|
3,200 |
|
|
|
3,200 |
|
Adjusted EBITDA |
|
$ |
26,000 |
|
|
$ |
30,000 |
|
(a) consists of depreciation, primarily on property and equipment as well as amortization of intangibles.
(b) consists primarily of interest expense associated with outstanding debt.
Q3’FY23 Earnings Call April 26, 2023
Safe Harbor Statement Statements in this presentation (including the oral commentary that accompanies it) that are not statements of historical fact are forward-looking statements and are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this presentation relate, but are not limited, to: expectations regarding fiscal 2023 full-year adjusted EBITDA and revenue; our positioning and strategy for accelerating revenue growth and market share; expectations regarding our strategic areas of focus; expectations regarding market growth rates and market trends; and expectations related to our revenue growth and market share going forward. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “projects,” “may,” “will be,” “will continue,” and similar expressions. These forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from expectations. These risks and uncertainties include, but are not limited to: the effects of the COVID-19 pandemic on our business, financial condition, results of operations or cash flows; disruptions to our supply chain, including increased logistics costs; our ability to achieve widespread market acceptance of our products, including new product offerings and improvements; our ability to develop new products or enhance existing products to meet customers’ needs and compete favorably in the market; our ability to realize the expected benefits of the joint-venture and other partnerships; risks inherent in international operations; our ability to effectively manage our growth; our ability to maintain or increase our gross margins on product sales and services; delays in regulatory approvals or the development or release of new offerings; our ability to meet the covenants under our credit facilities; our ability to convert backlog to revenue; and other risks identified under the heading “Risk Factors” in our quarterly report on Form 10-Q, filed with the Securities and Exchange Commission (the “SEC”) on February 2, 2023, and as updated periodically with our other filings with the SEC. Forward-looking statements speak only as of the date the statements are made and are based on information available to Accuray at the time those statements are made and/or management’s good faith belief as of that time with respect to future events. Accuray assumes no obligation to update forward-looking statements to reflect actual performance or results, changes in assumptions or changes in other factors affecting forward-looking information, except to the extent required by applicable securities laws. Accordingly, investors should not place undue reliance on any forward-looking statements. Non-GAAP Financial Measures This presentation also contains non-GAAP financial measures. Management believes that non-GAAP financial measures provide useful supplemental information to management and investors regarding the performance of the company and facilitates a more meaningful comparison of results for current periods with previous operating results. Additionally, these non-GAAP financial measures assist management in analyzing future trends, making strategic and business decisions, and establishing internal budgets and forecasts. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measure is provided in the Appendix. Accuray has also reported certain operating results on a constant currency basis in order to facilitate period-to-period comparisons of its results without regard to the impact of foreign currency exchange rate fluctuations. Management believes disclosure of non-GAAP constant currency results is helpful to investors because it facilitates period-to-period comparisons of the company's results by increasing the transparency of the underlying performance by excluding the impact of foreign currency exchange rate fluctuations. Accuray calculates the constant currency amounts by translating local currency amounts in the current period using the same foreign translation rate used in the prior period being compared against rather than the actual exchange rate in effect during the current period. There are limitations in using these non-GAAP financial measures because they are not prepared in accordance with GAAP and may be different from non-GAAP financial measures used by other companies. These non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP financial measures. Investors and potential investors should consider non-GAAP financial measures only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP. Medical Advice Disclaimer Accuray Incorporated as a medical device manufacturer cannot and does not recommend specific treatment approaches. Individual results may vary. Forward-looking Statements This presentation is intended exclusively for investors. It is not intended for use in Sales or Marketing. 2 Proprietary and Confidential Property of Accuray
Accuray Overview Global Leader in Precision Radiation Therapy Vision: To expand the curative power of radiation therapy to improve as many lives as possible Systems Installed in Over 60 Countries1 1: As of April 19, 2023 2: Estimated percentage of revenue invested into R&D Installed Base Achieved in March of 2023 Main Manufacturing Facility Madison, WI 22% $430M R&D Spend In FY222 Patents In Portfolio1 14% 417 Key FY22 Financials Total Revenue YOY Product Revenue Growth 1,000+ 1,000+ Global Employee Presence1 2 Precision Platforms Proprietary and Confidential Property of Accuray 3
Executive Team Suzanne Winter President and CEO Ali Pervaiz Senior Vice President, Chief Financial Officer Sandeep Chalke Senior Vice President, Chief Commercial Officer Seth Blacksburg Senior Vice President, Chief Medical Officer Jesse Chew Senior Vice President, Chief Legal Officer Mike Hoge Senior Vice President, Global Operations Patrick Spine Senior Vice President, Chief Administrative Officer Jim Dennison Senior Vice President, Global Quality & Regulatory Affairs
Q3’FY23 Highlights PACE-A trial data indicates SBRT preserves urinary continence and sexual function better than surgery in men with prostate cancer 45% global product revenue growth YOY reflects strong customer adoption Achieved 1,000+ installed system milestone with 4% global installed base growth YOY lifted by 31% growth of installed systems in China Shipped 30 systems setting a new record of quarterly shipments and 67% growth compared to 18 systems shipped in the prior year period
Radiation Therapy Market1 1: ReAnin Radiotherapy Market, Global Industry insights and trends 2017-2027. $3.3B $2.5B $- $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 Proton Therapy Cobalt Brachytherapy Systemic Therapy Software Total: $5.8B $M Accuray Competes in Premium and Specialty Markets Proprietary and Confidential Property of Accuray Accuray competes in $1.6B market 27% share in FY22 Total Addressable Market: $3.3B Linacs MR-linac GammaKnife CyberKnife® Radixact® Addressable Market Total RT Market Size 6
Strongly Positioned for Value-based Care U.S. Cancer Expenditures Estimate ($ Billion)1,2 1: Dieguez G., Ferro C., Pyenson B.S. A multi-year look at the cost burden of cancer care: Milliman research report. https://milliman-cdn.azureedge.net/-/media/Milliman/importedfiles/uploadedFiles/insight/2017/cost-burden-cancer-care.ashx (Published 2017. Accessed August 21, 2020) 2: NIH National Cancer Institute Cancer Trend Progress Report https://progressreport.cancer.gov/after/economic_burden (Data as of April 2022) 3: https://www.cancer.gov/publications/patient-education/radiation-and-you-2021-508.pdf Proven Outcomes Enhanced Patient Experience Non-Invasive Cancer patients treated with radiation therapy3 ~60% $6.30 $23.00 $48.00 7
Strategic Areas of Focus Proprietary and Confidential Property of Accuray Drive market share through disruptive innovation Expand service business Transform through strategic partnerships Drive margin and profitability initiatives 8
Q3’FY23 Financials Strong financial performance Highlights Revenue growth of 23% with record shipments for the quarter amidst continuing FX challenges OPEX includes $1M of SAP implementation related spend and $800k of restructuring charges Reaffirming FY23 full year revenue guidance of $447M to $455M and adjusted EBITDA guidance of $26M to $30M1 $M Q3 Y/Y YTD Y/Y Y/Y XFX2 YTD Y/Y XFX2 Revenues $118.1M 23% 27% $329.3M 3% 8% Product $62.8M 45% 50% $170.7M 9% 13% Service $55.2M 4% 8% $158.6M (3%) 3% Op. Expenses $36.4M 4% $113.4M 2% R&D $14.2M 1% $42.9M (1%) SG&A $22.2M 6% $70.5M 4% Adj. EBITDA1 $8.3M 54% $18.7M 6% KEY FINANCIAL METRICS 1 Adjusted EBITDA is a non-GAAP measure. Please see Slides 13, 14 and 16 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure 2 Percentages shown on a constant currency basis to facilitate period-to-period comparisons without regard to the impact of foreign currency exchange rate fluctuations
Maintaining FY23 Guidance Communicated August 10, 2022 Revenue Adjusted EBITDA1 $429.9M $22.8M FY23 Guidance Range FY22 Actual $ in millions % = YoY Growth $447M - $455M +4% - 6% $26M - $30M +14% - 32% 1 Adjusted EBITDA is a non-GAAP measure. Please see Slides 15 and 16 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure.
In Summary 23% growth in revenue and 54% growth in adjusted EBIDTA in Q3'FY23 Strongest product portfolio and pipeline in company’s history Multiple growth catalysts and global commercial execution Focused on margin expansion and free cash flow Positioned for Long-Term Revenue Growth and Market Share Gain 1 Adjusted EBITDA is a non-GAAP measure. Please see Slides 15 and 16 for a reconciliation of Adjusted EBITDA to the most directly comparable GAAP measure.
Thank you
$K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Three Months Ended March 31, Three Months Ended March 31, 2022 2023 $ $ $ $ 599 1,103 1,559 2,707 522 8,347 (1,046) 1,406 2,695 1,975 407 5,437 ERP and ERP related expenditures 1,057 Restructuring charges 800 0 0 GAAP to Adjusted EBITDA Q3 FY23 and Q3 FY22 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA)
$K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Nine Months Ended March 31, Nine Months Ended March 31, 2022 2023 $ $ $ $ (6,724) 3,430 7,601 7,605 1,912 18,740 (1,895) 4,247 7,906 6,081 1,318 17,657 ERP and ERP related expenditures 2,178 Restructuring charges 2,738 0 0 GAAP to Adjusted EBITDA YTD Q3 FY23 and YTD Q3FY22 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA)
GAAP to Adjusted EBITDA FY22 Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) $K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization Twelve Months Ended June 30, 2022 $ $ (5,347) 5,522 10,600 8,109 3,345 22,823 ERP and ERP related expenditures 594 One-time charge related to debt refinance and convertible exchange 0
$K GAAP net income (loss) Stock-based compensation Interest expense, net Provision for income taxes Adjusted EBITDA Depreciation and amortization To From $ $ $ $ (7,000) 4,500 10,200 10,000 2,400 26,000 (3,000) 4,500 10,200 10,000 2,400 30,000 ERP and ERP related expenditures 3,200 Restructuring charges 2,700 3,200 2,700 GAAP to Adjusted EBITDA FY23 – Forward Looking Guidance Actual Reconciliation of Net Income (Loss) to Adjusted Earnings Before Interest, Taxes, Depreciation, Amortization and Stock-Based Compensation (Adjusted EBITDA) Twelve Months Ended June 30, 2023