UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  May 8, 2012

ACCURAY INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation)

1310 Chesapeake Terrace
Sunnyvale, California 94089

(Address of principal executive offices, including Zip Code)

Registrant’s telephone number, including area code: (408) 716-4600

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:

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On May 8, 2012, Accuray Incorporated (the “Company”) issued a press release announcing its financial results for the quarter ended March 31, 2012.  A copy of the Company’s press release dated May 8, 2012, titled “Accuray Announces Results for Third Quarter Fiscal 2012” 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, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

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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 hereunto duly authorized.

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EXHIBIT INDEX

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Exhibit 99.1

Accuray Announces Results for Third Quarter Fiscal 2012

Continued Service Margin Improvement Highlights Quarter

SUNNYVALE, Calif., May 8, 2012 — Accuray Incorporated (Nasdaq: ARAY), the premier radiation oncology company, announced today financial results for the third quarter of fiscal 2012 that ended March 31, 2012. The fiscal 2012 financial data presented below reflects Accuray’s consolidated results including the results for TomoTherapy which was acquired by Accuray in June 2011. Non-GAAP results are provided to enhance understanding of Accuray’s ongoing core results of operations.

Highlights from the third quarter of fiscal 2012 include continued improvement in service margins, and effective management of operating expenses. Accuray continued to make progress in its integration of TomoTherapy and met or exceeded the goals originally set out when the acquisition was first announced. The company remains on track to return to profitability on a non-GAAP basis by the latter part of fiscal year 2013, ending June 30, 2013, as forecasted.

“We continue to see healthy growth in our installed base, which has grown 14 percent year on year.  This growth in turn drives our service revenues, which have increased 19 percent over the same period last year,” said Euan S. Thomson, Ph.D., president and chief executive officer of Accuray. “In addition, our service gross margin continues to improve, reaching 16 percent in the third quarter which puts us well ahead of our 10 percent target for fiscal year 2012.”

For the third quarter of fiscal 2012, Accuray reported total consolidated GAAP revenue of $101.8 million and non-GAAP total revenue of $101.6 million. By comparison, for the quarter ended March 31, 2011, the sum of the revenue reported by Accuray and TomoTherapy as separate companies totaled $101.9 million on a pro forma basis. Legacy TomoTherapy’s fiscal year ended December 31. Non-GAAP revenue for the nine-month period ended March 31, 2012 was $300.2 million, which is slightly higher than pro forma total revenue of $299.9 million in the same period of the prior year.

The consolidated GAAP gross margin for the third quarter of fiscal 2012 was 45.9 percent for products and 20.7 percent for services. The consolidated non-GAAP gross margin for the third quarter of fiscal 2012 was 53.5 percent for products and 16.1 percent for services. Positive service gross margins were driven largely by a continued improvement in reliability and reduction of service costs for TomoTherapy Systems. Accuray significantly improved service gross margins and remains well ahead of its plan to achieve at least 10 percent service margins by the fourth quarter of fiscal year 2012 and on track to achieve at least 20 percent by the fourth quarter of fiscal year 2013 on a non-GAAP basis.

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Consolidated GAAP net loss attributable to stockholders for the third quarter of fiscal 2012 was $14.9 million, or $0.21 per share. Non-GAAP net loss for the third quarter of fiscal 2012 was $9.2 million or $0.13 per share. By comparison, for the quarter ended March 31, 2011 the sum of the net losses reported by Accuray and TomoTherapy as separate companies totaled $3.6 million or $0.05 per share on a pro forma basis.

Accuray added $64.2 million of net new system orders to backlog during the period ending March 31, 2012, increasing system backlog to $279.6 million.  During the third quarter, Accuray experienced areas of strength and areas of challenge around the world. While performance internationally was good, the company recently implemented a realignment of its sales organization in the United States designed to enhance performance in this region.

During the third quarter of fiscal 2012, 18 units were shipped and 22 were installed, increasing Accuray’s worldwide installed base to 635 systems.

Accuray’s cash, cash equivalents and restricted cash in total increased $2.8 million to $154.8 million as of March 31, 2012. The cash increase was benefited by favorable changes in working capital.

Outlook

The following statement, among others in this release, is forward-looking and actual results may differ materially. For fiscal year 2012, Accuray maintains its guidance that revenue will be in the range of $409 million to $424 million (GAAP), or $400 million to $415 million (non-GAAP).

Additional Information

Additional information including slides of third quarter highlights which will be discussed during the conference call, is available in the Investor Relations section of the company’s website at www.accuray.com/investors.

Earnings Call Open to Investors

Accuray will hold a conference call for financial analysts and investors on Tuesday, May 8, 2012 at 2:00 p.m. PDT/5:00 p.m. EDT. The conference call dial-in numbers are 1-866-203-3206 (USA) or 1-617-213-8848 (International), Conference ID: 41410037. A live webcast of the call will also be available from the Investor Relations section of the corporate website at www.accuray.com/investors.  In addition, a recording of the call will be available by calling 1-888-286-8010 (USA) or 1-617-801-6888 (International), Conference ID:  59135049, beginning at 5:00 p.m. PDT/8:00 p.m. EDT on May 8, 2012 and will be available through May 14, 2012. A webcast replay will also be available from the Investor Relations section of the Company’s website at www.accuray.com/investors from approximately 5:00 p.m. PDT/8:00 p.m. EDT today through Accuray’s release of its results for the fourth quarter of fiscal 2012, ending June 30, 2012.

About Accuray

Accuray Incorporated (Nasdaq: ARAY), based in Sunnyvale, Calif., is the premier radiation oncology company that develops, manufactures and sells personalized, innovative treatment solutions that set the standard of care with the aim of helping patients live longer, better lives. The Company’s leading-edge technologies — the CyberKnife and TomoTherapy Systems — are designed to deliver radiosurgery, stereotactic body radiation therapy, intensity modulated radiation therapy, image guided radiation therapy, and adaptive radiation therapy. To date, 635 systems have been installed in leading hospitals around the world. For more information, please visit www.accuray.com.

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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 profitability; continuing improvements in service gross margins, including specific targets for fiscal years 2012 and 2013 service gross margins;  expectations regarding TomoTherapy integration goals; expected impact of the US sales reorganization; and expected revenue for fiscal 2012. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations, including but not limited to: the timeliness and success of the integration of TomoTherapy; the company’s ability to convert backlog to revenue; the success of its worldwide sales and marketing efforts; the extent of market acceptance for the company’s products and services; the company’s ability to develop and bring to market new or enhanced products; continuing uncertainty in the global economic environment; and other risks detailed from time to time under the heading “Risk Factors” in the company’s reports on Form 10-Q for the first, second and third quarters of fiscal 2012.

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.

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Accuray Incorporated

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Cost of revenue, selling and marketing, research and development, and general and administrative expenses include stock-based compensation charges as follows:

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Accuray Incorporated

Unaudited Condensed Consolidated Balance Sheets

(in thousands, except share amounts)

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Non-GAAP Financial Measures

This press release includes non-GAAP financial measures, as defined in Regulation G promulgated by the Securities and Exchange Commission, with respect to the three and nine months ended March 31, 2012. “GAAP” refers to generally accepted accounting principles in the United States.

Accuray closed the acquisition of TomoTherapy on June 10, 2011 and TomoTherapy’s operations since that date are included in Accuray’s consolidated results of operations. Accounting for the impact of this acquisition has resulted in changes to the value of assets and liabilities from the amounts reflected by TomoTherapy prior to the acquisition and the creation of incremental assets and liabilities including intangible assets for developed technology and backlog, and unfavorable lease obligations. These changes have impacted revenues and expenses recorded in Accuray’s consolidated statements of operations since the close of the acquisition. In addition, Accuray has incurred significant expenses as a result of the acquisition, some of which are one-time charges while others are expected to be incurred over fiscal 2012 for the integration of TomoTherapy.

To reflect the ongoing core results of operations of the Company, including adjusting for the impact of the acquisition of TomoTherapy, the Company has presented its operating results on an adjusted non-GAAP basis as well as in accordance with GAAP for the three and nine months ended March 31, 2012. We use the following measures shown in the following tables, which are not calculated in accordance with GAAP. All adjustments to reconcile to GAAP relate to the acquisition of TomoTherapy except the adjustment to Other income (expense). The Company believes that the presentation of non-GAAP financial measures provides useful supplementary information to and facilitates additional analysis by investors. The Company uses these non-GAAP financial measures in connection with its own budgeting and financial planning, as well as evaluating management performance for compensation purposes. These non-GAAP financial measures are in addition to, not a substitute for, nor superior to, measures of financial performance prepared in conformity with GAAP.

For comparison purposes, we have also presented our pro forma results for the three and nine months ended March 31, 2011 based on the combined total of the financial results previously reported by Accuray and TomoTherapy as separate companies, excluding expenses related to the acquisition incurred during this period. Please refer to the pro forma financial results tables starting on page 9 for additional details.

(A)   As of the close of the acquisition, TomoTherapy’s deferred product revenue related to products shipped but not yet installed was written down to the fair value of goods and services remaining to be delivered. As a result, during the three and nine months ended March 31, 2012, product revenue recorded by Accuray for the sale of TomoTherapy products was $1.3 million and $1.8 million lower than product revenue that would have been recorded by TomoTherapy if the acquisition had not occurred.

(B)   As of the close of the acquisition, TomoTherapy’s deferred service revenue was written up to fair value. As a result, deferred service revenue recognized by Accuray during the three and nine months ended March 31, 2012 was $1.9 million and $10.7 million higher than the amount that would have been recognized by TomoTherapy if the acquisition had not occurred. Partially offsetting this deferred revenue adjustment, Accuray recorded a reserve for returns of $0.4 million during the three months ended March 31, 2012 to reflect the expected return of spare parts from TomoTherapy distributors who will cease servicing TomoTherapy systems once the integration is complete and Accuray personnel begin to provide service directly to these customers.

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(C)       Products cost of revenue included the following charges arising from the acquisition of TomoTherapy during the three and nine months ended March 31, 2012, respectively: less than $0.1 million and $8.3 million due to the write up of finished goods and work-in-process inventory on hand at the time of the acquisition from cost basis to fair value, $3.8 million and $11.5 million for amortization of intangible assets created by the acquisition, and less than $0.1 million and $0.2 million due to employee severance and retention expenses.

(D)       Services cost of revenue included the following charges and reductions to expenses arising from the acquisition of TomoTherapy during the three and nine months ended March 31, 2012: $-0- and $3.6 million charge due to the write up of service related inventory on hand at the time of the acquisition from cost basis to fair value, $(0.6) million and $(3.1) million reductions in expenses due to the roll out of fair value increases in warranty and loss contracts reserves for the periods of service consumed, $0.1 million and $0.3 million charges for property, plant and equipment revaluation, $0.1 million and $1.9 million charges due to employee severance, integration and retention expenses and $(0.3) million and $(0.3) million of credits to reflect the cost of spare parts expected to be returned by TomoTherapy distributors who will cease servicing TomoTherapy systems once the integration is complete and Accuray personnel begin to provide service directly to these customers.

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(E)   Selling and marketing included the following charges arising from the acquisition of TomoTherapy for the three months ended March 31, 2012: less than $0.1 million charge primarily due to employee severance, integration and retention expenses. For the nine months ended March 31, 2012, $1.2 million charge due to employee severance and retention expenses, and $0.6 million due to preparation for integration of work forces and operations.

(F)   Research and development included the following charges arising from the acquisition of TomoTherapy during the three and nine months ended March 31, 2012: $0.3 million and $1.2 million charges primarily due to employee severance, integration and retention expenses.

(G)   General and administration included the following charges arising from the acquisition of TomoTherapy for the three and nine months ended March 31, 2012: $0.4 million and $2.0 million charge due to employee severance and retention expenses, $0.2 million and $1.3 million charge related to preparation for integration of work forces and operations, and $0.5 million and $1.4 million charge for property, plant and equipment revaluation.

Net Loss Attributable to Stockholders

(H)      Represents impact of all adjustments (A) through (G) on Loss From Operations.

(I)           Represents non-cash interest expense arising from the accretion of interest expense on the long-term debt.

(J)           Represents weighted average common shares outstanding used to compute our basic and diluted net loss per share as disclosed in our Form 10Q for the three and nine months ended March 31, 2011, adjusted to reflect the acquisition of TomoTherapy as if it occurred on July 1, 2010.

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Pro forma financial tables

Tables below represent our pro forma results for the three and nine months ended March 31, 2011 based on the combined total of the financial results previously reported by Accuray and TomoTherapy as separate companies, excluding expenses related to the acquisition incurred during this period.

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(A)   Selling and marketing included the following charges arising from the acquisition of TomoTherapy for the three and nine months ended March 31, 2011: $0.2 million primarily due to preparation for integration of work forces and operations.

(B)   General and administration included the following charges arising from the acquisition of TomoTherapy for the three and nine months ended March 31, 2011: $4.5 million and $4.9 million due to preparation for integration of work forces and operations.