0001104659-14-007551 | 10-Q | XBRL Viewer

Document and Entity Information - shares	6 Months Ended
Dec. 31, 2013	Jan. 31, 2014
Document and Entity Information
Entity Registrant Name	ACCURAY INC
Entity Central Index Key	0001138723
Document Type	10-Q
Document Period End Date	Dec. 31, 2013
Amendment Flag	false
Current Fiscal Year End Date	--06-30
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		76,350,097
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2013	Jun. 30, 2013
Current assets:
Cash and cash equivalents	$ 70,447	$ 73,313
Short-term investments	89,202	101,084
Restricted cash	2,956	2,728
Accounts receivable, net of allowance for doubtful accounts of $1,575 and $2,160, respectively	73,777	55,458
Inventories	88,153	81,592
Prepaid expenses and other current assets	13,304	12,595
Deferred cost of revenue	12,522	9,165
Total current assets	350,361	335,935
Property and equipment, net	35,569	34,733
Goodwill	58,163	59,368
Intangible assets, net	27,494	31,896
Deferred cost of revenue	2,309	2,149
Other assets	11,307	11,848
Total assets	485,203	475,929
Current liabilities:
Accounts payable	15,111	15,920
Accrued compensation	17,713	12,461
Other accrued liabilities	23,583	22,893
Customer advances	21,239	17,692
Deferred revenue	96,527	86,893
Total current liabilities	174,173	155,859
Long-term liabilities:
Long-term other liabilities	5,603	5,382
Deferred revenue	9,168	9,085
Long-term debt	201,082	198,768
Total liabilities	390,026	369,094
Commitment and contingencies (Note 5)
Stockholders' Equity:
Preferred stock, $0.001 par value; authorized: 5,000,000 shares; no shares issued and outstanding
Common stock, $0.001 par value; authorized: 200,000,000 shares as of December 31, 2013 and June 30, 2013, respectively; issued and outstanding: 75,926,276 and 74,587,231 shares at December 31, 2013 and June 30, 2013, respectively	76	75
Additional paid-in capital	433,257	424,524
Accumulated other comprehensive income	2,464	1,882
Accumulated deficit	(340,620)	(319,646)
Total stockholders' equity	95,177	106,835
Total liabilities and stockholders' equity	$ 485,203	$ 475,929

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2013	Jun. 30, 2013
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 1,575	$ 2,160
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, authorized shares	200,000,000	200,000,000
Common stock, issued shares	75,926,276	74,587,231
Common stock, outstanding shares	75,926,276	74,587,231

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Net revenue:
Products	$ 45,148	$ 33,170	$ 74,716	$ 73,798
Services	48,486	44,609	95,559	86,729
Total net revenue	93,634	77,779	170,275	160,527
Cost of revenue:
Cost of products	24,980	18,564	43,581	42,573
Cost of services	30,483	32,589	62,045	67,652
Total cost of revenue	55,463	51,153	105,626	110,225
Gross profit	38,171	26,626	64,649	50,302
Operating expenses:
Research and development	13,435	17,239	26,385	35,813
Selling and marketing	14,262	15,761	28,716	28,650
General and administrative	11,190	15,892	22,550	28,734
Total operating expenses	38,887	48,892	77,651	93,197
Loss from operations	(716)	(22,266)	(13,002)	(42,895)
Other expense, net	(3,775)	(2,580)	(6,235)	(3,284)
Loss before provision for income taxes	(4,491)	(24,846)	(19,237)	(46,179)
Provision for income taxes	950	667	1,737	1,264
Loss from continuing operations	(5,441)	(25,513)	(20,974)	(47,443)
Loss from discontinued operations (Note 9):
Loss from operations of a discontinued variable interest entity		(1,400)		(3,505)
Impairment of indefinite lived intangible asset of discontinued variable interest entity				(12,200)
Loss from deconsolidation of a variable interest entity		(3,442)		(3,442)
Loss from discontinued operations, net of tax of $0		(4,842)		(19,147)
Loss from discontinued operations attributable to non-controlling interest		(1,184)		(13,289)
Loss from discontinued operations attributable to stockholders		(3,658)		(5,858)
Net loss attributable to stockholders	$ (5,441)	$ (29,171)	$ (20,974)	$ (53,301)
Loss per share attributable to stockholders
Basic and diluted - continuing operations (in dollars per share)	$ (0.07)	$ (0.35)	$ (0.28)	$ (0.65)
Basic and diluted - discontinued operations (in dollars per share)		(0.05)		(0.09)
Basic and diluted - net loss (in dollars per share)	$ (0.07)	$ (0.40)	$ (0.28)	$ (0.74)
Weighted average common shares used in computing loss per share
Basic and diluted (in shares)	75,280	72,870	74,990	72,433
Net loss attributable to stockholders	$ (5,441)	$ (29,171)	$ (20,974)	$ (53,301)
Foreign currency translation adjustment	58	171	223	(364)
Unrealized gain on investments, net of tax	69		359
Comprehensive loss	$ (5,314)	$ (29,000)	$ (20,392)	$ (53,665)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Cash Flows From Operating Activities
Loss from continuing operations	$ (20,974)	$ (47,443)
Loss from discontinued operations		(19,147)
Adjustments to reconcile net loss to net cash used in operating activities
Depreciation and amortization	10,576	13,920
Impairment of indefinite lived intangible asset		12,200
Share-based compensation	4,983	4,051
Amortization of debt issuance costs	692	225
Accretion/(Amortization) of investment premiums/discounts	930
Accretion of interest on long-term debt	2,314	2,099
Provision for (recovery of) bad debt	(244)	(373)
Provision for write-down of inventories	1,482	408
Loss on disposal of property and equipment		391
Gain on previously held equity interest in Morphormics		(662)
Loss from deconsolidation of a variable interest entity		3,442
Changes in assets and liabilities:
Restricted cash	(169)	(1,050)
Accounts receivable	(16,924)	5,415
Inventories	(7,709)	(7,308)
Prepaid expenses and other assets	(648)	1,871
Deferred cost of revenue	(3,502)	(2,951)
Accounts payable	(905)	3,335
Accrued liabilities	6,513	(13,871)
Customer advances	3,158	49
Deferred revenue	7,517	3,588
Net cash used in operating activities	(12,910)	(41,811)
Cash Flows From Investing Activities
Purchases of property and equipment, net	(6,899)	(9,207)
Purchase of intangible asset		(232)
Purchase of investments	(11,517)
Sale and maturity of investments	22,829
Acquisition of business, net of cash acquired (note 6)		(3,861)
Net cash provided by (used in) investing activities	4,413	(13,300)
Cash Flows From Financing Activities
Proceeds from employee stock plans	4,063	5,147
Taxes paid related to net share settlement of equity awards	(199)
Net cash provided by financing activities	3,864	5,147
Effect of exchange rate changes on cash and cash equivalents	1,767	1,233
Net decrease in cash and cash equivalents	(2,866)	(48,731)
Cash and cash equivalents at beginning of period	73,313	143,504
Cash and cash equivalents at end of period	$ 70,447	$ 94,773

Summary of Significant Accounting Policies

6 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

1. Summary of Significant Accounting Policies

Description of Business

Accuray Incorporated (together with its subsidiaries, the “Company” or “Accuray”) is incorporated in Delaware. The Company designs, develops and sells advanced radiosurgery and radiation therapy systems for the treatment of tumors throughout the body. The Company conducts its business worldwide. The Company has its headquarters in Sunnyvale, California, with additional locations in the United States, Europe and Asia.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries and a variable interest entity, Compact Particle Acceleration Corporation (“CPAC”) until its deconsolidation on December 21, 2012 (for further information, see Note 9). All significant inter-company transactions and balances have been eliminated in consolidation.

The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. The results for the three and six months ended December 31, 2013 are not necessarily indicative of the results to be expected for the year ending June 30, 2014, for any other interim period or for any future year.

These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes for the year ended June 30, 2013 included in the Company’s Annual Report on Form 10-K filed with the SEC. The Company’s significant accounting policies are described in Note 2 to those audited consolidated financial statements.

Recently Issued Accounting Standards

In July 2013, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. ASU No. 2013-11 requires that entities with an unrecognized tax benefit and a net operating loss carryforward or similar tax loss or tax credit carryforward in the same jurisdiction as the uncertain tax position present the unrecognized tax benefit as a reduction of the deferred tax asset for the loss or tax credit carryforward rather than as a liability, when the uncertain tax position would reduce the loss or tax credit carryforward under the tax law, thereby eliminating diversity in practice regarding this presentation issue. This new guidance is effective prospectively for annual reporting periods beginning on or after December 15, 2013, although retrospective application in permitted. The Company is currently assessing the impact of this guidance, if any, on its condensed consolidated financial statements.

In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity. This new standard is intended to resolve diversity in practice regarding the release into net income of a cumulative translation adjustment upon derecognition of a subsidiary or group of assets within a foreign entity. ASU No. 2013-05 is effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. The Company is currently reviewing this standard, but it does not anticipate that its adoption will have a material impact on the Company’s condensed consolidated financial statements.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures at the date of the financial statements. Key estimates and assumptions made by the Company relate to revenue recognition, the fair value of assets acquired and liabilities assumed in business combinations, asset impairments, inventories, share-based compensation expense, income taxes, loss contingencies and corporate bonus expenses. Actual results could differ materially from those estimates.

Concentration of Credit and Other Risks

The Company’s cash, cash equivalents and investments are deposited with several major financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances.

For the three and six months ended December 31, 2013 and 2012, there were no customers that represented 10% or more of total net revenue. At December 31, 2013, one customer accounted for 12% of the Company’s total accounts receivable. At June 30, 2013, one customer accounted for 10% of accounts receivable.

Accounts receivable are typically not collateralized. The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. Accounts are charged against the allowance for doubtful accounts once collection efforts are unsuccessful.

Single source suppliers presently provide the Company with several components. In most cases, if a supplier was unable to deliver these components, the Company believes that it would be able to find other sources for these components subject to any regulatory qualifications, if required.

Revenue Recognition

The Company earns revenue from the sale of products, the provision of related services, which include post-contract customer support (“PCS”), installation services, training and other professional services, and the operation of its shared ownership program. The Company records its revenues net of any value added or sales tax. For arrangements with multiple elements, the Company allocates arrangement fees to product and services based upon Vendor Specific Objective Evidence (“VSOE”) of fair value of the respective elements, Third-Party Evidence (“TPE”), or Best Estimate of Selling Price (“BESP”), using the relative selling price method.

Product and Service Revenue

The majority of product revenue is generated from sales of CyberKnife and TomoTherapy systems. If the Company is responsible for installation, the Company recognizes revenue after installation and acceptance of the system. Otherwise, revenue is recognized upon delivery, assuming all other revenue recognition criteria are met.

The Company could sell its systems with PCS contracts, installation services, training, and professional services. PCS contracts provide planned and corrective maintenance services, software updates, bug fixes, as well as call-center support. Service revenue is generated primarily from PCS (warranty period services and post warranty services), installation services, training, and professional services. PCS revenue is deferred and recognized over the service period. Installation service revenue is recognized concurrent with system revenue. Training and professional service revenues that are not deemed essential to the functionality of the systems are recognized as such services are performed.

Costs associated with service revenue are expensed when incurred, except when those costs are related to system upgrades where revenue recognition has been deferred. In those cases, the costs are deferred and are recognized over the period of revenue recognition.

Shared Ownership Program

The Company also enters into arrangements under its shared ownership program with certain customers. These arrangements typically have a term of five years and provide the customer an option to purchase the system during the contractual term at pre-determined prices. Under the terms of this program, the Company retains title to its system, while the customer has use of the system. The Company generally receives a minimum monthly payment and earns additional revenues from the customer based upon its use of the system which are included in product revenue in the condensed consolidated statements of operations and comprehensive loss.

Long-Term Construction and Manufacturing Contracts

The Company recognizes revenue and cost of revenue related to long-term construction and manufacturing contracts using contract accounting on the cost-to-cost percentage-of-completion or the completed contract method. The Company records such revenue under other revenue and cost of such revenue under cost of other revenue in the condensed consolidated statements of operations and comprehensive loss. Any loss provision identified from the total contract in the period is recorded as an increase to cost of revenue.

Net Loss Per Common Share

Basic and diluted net loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of common shares outstanding during the period.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows (in thousands):

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
Numerator:
Loss from operations used in computing loss per share from continuing operations	$	(5,441	)	$	(25,513	)	$	(20,974	)	$	(47,443	)
Loss from discontinued operations used in computing loss per share from discontinued operations	$	—		$	(3,658	)	$	—		$	(5,858	)
Net loss used in computing net loss per share	$	(5,441	)	$	(29,171	)	$	(20,974	)	$	(53,301	)
Denominator:
Weighted average shares used in computing basic and diluted loss per share	75,280			72,870			74,990			72,433

The potential dilutive shares of the Company’s common stock resulting from the assumed exercise of outstanding stock options, the vesting of Restricted Stock Units (RSUs), Market Stock Units (MSUs) and Performance-based Stock Units (PSUs), and the purchase of shares under the Employee Stock Purchase Plan (ESPP), as determined under the treasury stock method, are excluded from the computation of diluted net loss per share because their effect would have been anti-dilutive. The 3.75% Convertible Senior Notes due August 1, 2016 (the “3.75% Convertible Notes”) and the 3.50% Convertible Senior Notes due February 1, 2018 (the “3.50% Convertible Notes”) are included in the calculation of diluted net income per share if their inclusion is dilutive under the if-converted method. For the three and six months ended December 31, 2013 and 2012, the potentially dilutive shares under the Convertible Notes were excluded from the calculation of diluted net loss per share as their inclusion would be anti-dilutive. The following table sets forth all potentially dilutive securities excluded from the computation in the table above because their effect would have been anti-dilutive (in thousands):

	As of
	December 31,
	2013	2012
Stock options	3,911	6,911
Restricted Stock Units	4,263	2,581
3.75% Convertible Notes	10,560	10,560
3.50% Convertible Notes	21,576	—
	40,310	20,052

Segment Information

The Company has determined that it operates in only one segment, as it only reports profit and loss information on an aggregate basis to its chief operating decision maker. Revenue by geographic region is based on the shipping addresses of the Company’s customers. The following summarizes revenue by geographic region (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2013		2012		2013		2012
Americas	$	34,771	$	35,079	$	74,024	$	70,890
Europe, Middle East, India and Africa	34,135		27,838			52,901	52,956
Asia (excluding Japan)	10,367		5,537			17,666	20,658
Japan	14,361		9,325			25,684	16,023
Total	$	93,634	$	77,779	$	170,275	$	160,527

Information regarding geographic areas in which the Company has long lived assets (includes all tangible assets) is as follows (in thousands):

	December 31,		June 30,
	2013		2013
Americas	$	33,042	$	31,797
Europe, Middle East, India and Africa	1,277		1,431
Asia (excluding Japan)	457		498
Japan	793		1,007
Total	$	35,569	$	34,733

Balance Sheet Components

6 Months Ended

Dec. 31, 2013

Balance Sheet Components

Balance Sheet Components

2. Balance Sheet Components

Financing receivables

A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset in the Company’s balance sheet. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year, were $3.1 million and $2.9 million at December 31, 2013 and June 30, 2013, respectively and are included in Other Assets in the condensed consolidated balance sheets. There was no balance in the allowance for doubtful accounts related to such financing receivables as of December 31, 2013 and June 30, 2013, respectively.

Inventories

Inventories consisted of the following (in thousands):

	December 31,		June 30,
	2013		2013
Raw materials	$	36,867	$	33,721
Work-in-process	16,360		20,564
Finished goods	34,926		27,307
Inventories	$	88,153	$	81,592

Property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	December 31,			June 30,
	2013			2013
Furniture and fixtures	$	5,471		$	6,506
Computer and office equipment	10,419			9,481
Software	10,417			9,586
Leasehold improvements	17,931			19,199
Machinery and equipment	39,613			37,371
Shared ownership systems	6,266			4,979
Construction in progress	3,957			3,084
	94,074			90,206
Less: Accumulated depreciation	(58,505		)	(55,473		)
Property and equipment, net	$	35,569		$	34,733

Depreciation expense related to property and equipment for the three and six months ended December 31, 2013 was $2.9 million and $6.2 million, respectively. Depreciation expense related to property and equipment for the three and six months ended December 31, 2012 was $3.9 million and $8.0 million, respectively.

Goodwill and Intangible Assets

6 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3. Goodwill and Intangible Assets

Goodwill

Activity related to goodwill consisted of the following (in thousands):

	Six Months
	Ended			Year Ended
	December 31,			June 30,
	2013			2013
Balance at the beginning of the period	$	59,368		$	59,215
Addition related to acquisition	—			77
Currency translation and other adjustments	(1,205		)	76
Balance at the end of the period	$	58,163		$	59,368

In connection with the acquisition of TomoTherapy in fiscal year 2011, the Company recognized liabilities related to unrecognized tax benefits as part of purchase accounting. During its first quarter of fiscal year 2014, the Company determined that certain of these liabilities related to unrecognized tax benefits were recorded in error. The Company evaluated the effects of this error on the financial statements and concluded that the error was not material to any prior annual or interim periods or the current period. In September of 2013, the Company reduced goodwill and accrued liabilities by $1.3 million to remove the liability recorded in error.

In the second quarter of fiscal 2014, the Company performed its annual goodwill impairment test. Based on this analysis, the Company determined that there was no impairment to goodwill. The Company will continue to monitor its recorded goodwill for indicators of impairment.

Intangible Assets

The Company’s intangible assets associated with completed acquisitions at December 31, 2013 and June 30, 2013 are as follows (in thousands):

		December 31, 2013							June 30, 2013
		Gross							Gross
		Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Useful Lives	Amount		Amortization			Amount		Amount		Amortization			Amount
	(in years)
Developed technology	5 - 6	$	46,747	$	(19,253	)	$	27,494	$	46,747	$	(15,276	)	$	31,471
Distributor license	1.5 - 2.5	2,032		(2,032		)	—		2,043		(1,618		)	425
		$	48,779	$	(21,285	)	$	27,494	$	48,790	$	(16,894	)	$	31,896

In the quarter ended September 30, 2012, the Company recorded an impairment charge of $12.2 million relating to the CPAC in-process research and development (“IPR&D”) asset, which was presented as part of loss from discontinued operations (Note 9).

The Company did not identify any triggering events that would indicate potential impairment of its definite intangible and long-lived assets as of December 31, 2013 and June 30, 2013.

Amortization expense related to intangible assets for the three and six months ended December 31, 2013 was $2.2 million and $4.4 million, respectively. Amortization expense related to intangible assets for the three and six months ended December 31, 2012 was $2.2 million and $6.0 million, respectively.

The estimated future amortization expense of purchased intangible assets as of December 31, 2013 is as follows (in thousands):

Year Ending June 30,	Amount
2014 (remaining 6 months)	$	3,977
2015	7,953
2016	7,953
2017	7,568
2018	43
Thereafter	—
	$	27,494

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References + Details

Financial Instruments

6 Months Ended

Dec. 31, 2013

Financial Instruments

Financial Instruments

4. Financial Instruments

The Company considers all highly liquid investments held at major banks, certificates of deposit and other securities with original maturities of three months or less to be cash equivalents.

The Company classifies all of its investments as available-for-sale at the time of purchase because it is management’s intent that these investments are available for current operations and includes these investments on its balance sheets as short-term investments. Investments with original maturities longer than three months include commercial paper and investment-grade corporate debt securities. Investments classified as available-for-sale are recorded at fair market value with the related unrealized gains and losses included in accumulated other comprehensive income (loss), a component of stockholders’ equity. Realized gains and losses are recorded based on specific identification of each security’s cost basis.

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels of inputs that may be used to measure fair value, as follows:

Level 1— Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date.

Level 2— Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including:

· Quoted prices for similar assets or liabilities in active markets;

· Quoted prices for identical or similar assets in non-active markets;

· Inputs other than quoted prices that are observable for the asset or liability; and

· Inputs that are derived principally from or corroborated by other observable market data.

Level 3— Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

The following tables summarize the amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category for cash, cash equivalents and short-term investments (in thousands):

	December 31, 2013
			Gross		Gross			Estimated Market Value
	Amortized Cost		Unrealized Gains		Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	59,245	$	—	$	—		$	59,245	$	—
Level 1
Certificates of deposit	9,394		—		—			9,394		—
Money market funds	1,808		—		—			1,808		—
	11,202		—		—			11,202		—
Level 2
Commercial paper	3,997		1		—			—		3,998
Corporate notes	85,302		24		(122		)	—		85,204
	89,299		25		(122		)	—		89,202
Total	$	159,746	$	25	$	(122	)	$	70,447	$	89,202

	June 30, 2013
			Gross		Gross			Estimated Market Value
	Amortized Cost		Unrealized Gains		Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	60,082	$	—	$	—		$	60,082	$	—
Level 1
Certificates of deposit	15,365		—		—			12,758		2,607
Money market funds	473		—		—			473		—
	15,838		—		—			13,231		2,607
Level 2
Commercial paper	3,993		—		(1		)	—		3,992
Corporate notes	94,941		—		(456		)	—		94,485
	98,934		—		(457		)	—		98,477
Total	$	174,854	$	—	$	(457	)	$	73,313	$	101,084

The Company’s Level 2 investments in the table above are classified as Level 2 items because quoted prices in an active market are not readily accessible for those specific financial assets, or the Company may have relied on alternative pricing methods that do not rely exclusively on quoted prices to determine the fair value of the investments.

The Company had investments that were in an unrealized loss position as of December 31, 2013. The Company determined that (i) it does not have the intent to sell any of these investments and (ii) it is not likely that it will be required to sell any of these investments before recovery of the entire amortized cost basis. The Company reviews its investments to identify and evaluate investments that have an indication of possible impairment. As of December 31, 2013, the Company anticipates that it will recover the entire carrying value of such investments and has determined that no other-than-temporary impairments associated with credit losses were required to be recognized during the three and six months ended December 31, 2013.

Contractual maturities of available-for-sale securities at December 31, 2013 were as follows (in thousands):

	December 31, 2013
	Amortized Cost		Fair Value
Due in 1 year or less	$	40,284	$	40,275
Due in 1-2 years	26,215		26,214
Due in 2-3 years	22,800		22,713
	$	89,299	$	89,202

The following table summarizes the carrying values and estimated fair values of our long-term debt (in thousands):

	December 31, 2013				June 30, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Convertible Notes	86,082		112,520		83,768		96,560
3.50% Convertible Notes	115,000		199,422		115,000		144,302
Total	$	201,082	$	311,942	$	198,768	$	240,862

The long-term debt is measured on a non-recurring basis using Level 2 inputs based upon observable inputs of the Company’s underlying stock price and the time value of the conversion option, since an observable quoted price of the Convertible Notes is not readily available.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Commitments and Contingencies	6 Months Ended
Commitments and Contingencies	Dec. 31, 2013
Commitments and Contingencies
Commitments and Contingencies	5. Commitments and Contingencies The Company’s contractual obligations were presented in the Annual Report on Form 10-K for the previous annual reporting period ended June 30, 2013. There have been no material changes outside of the ordinary course of business in those obligations during the three and six months ended December 31, 2013. Litigation From time to time, the Company is involved in legal proceedings arising in the ordinary course of its business. Currently, management believes the Company does not have any probable and estimable losses related to any current legal proceedings and claims that would individually or in the aggregate materially adversely affect its financial condition or operating results. For certain legal proceedings, management believes that there is a reasonable possibility that losses may be incurred. Management currently estimates a range of loss (in excess of amounts accrued) between zero and $2 million in the aggregate for such legal proceedings, where it is possible to make such estimates. Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond the Company’s control. Should any of these estimates and assumptions change or prove to have been incorrect, the Company could incur significant charges related to legal matters that could have a material impact on its results of operations, financial position and cash flows. *Best Medical Trade Secret Litigation* On September 3, 2009, Best Medical International, Inc., or Best Medical, filed a lawsuit against the Company in the U.S. District Court for the Western District of Pennsylvania, claiming that the Company induced certain individuals to leave the employment of Best Medical and join the Company in order to gain access to Best Medical’s confidential information and trade secrets. Best Medical is seeking monetary damages and other relief. On October 25, 2011, the court presiding over the case granted summary judgment in favor of the Company on all counts. On November 21, 2011, Best Medical filed a notice of appeal. On December 22, 2011, the Court awarded attorney fees and costs to the Company and ordered the Company to file an accounting of its fees and costs. Following the filing of the accounting of the Company’s fees and costs, the magistrate judge presiding over the case issued a report on the Company’s accounting and recommended an award to the Company in the amount of $512,090 in attorney fees and costs, which was adopted in its entirety by the district court on September 27, 2013. On July 3, 2013, the Court of Appeals for the Third Circuit issued a briefing schedule for the appeal of this case. Best Medical’s brief was filed on September 16, 2013 and the Company’s brief was filed on December 30, 2013. Best Medical filed its reply brief on January 10, 2014. Briefing is now closed on this appeal. Best Medical has filed a second notice of appeal of the District Court’s orders relating to the fee amount. A briefing schedule has not yet been set for this second appeal. *Best Medical Patent Litigation* On August 6, 2010, Best Medical filed an additional lawsuit against the Company in the U.S. District Court for the Western District of Pennsylvania, claiming that the Company has infringed U.S. Patent No. 5,596,619, a patent that Best Medical alleges protects a method and apparatus for conformal radiation therapy. In December 2010, Best Medical amended its complaint by claiming that the Company also infringed U.S. Patent Nos. 6,038,283 and 7,266,175, both of which Best Medical alleges cover methods and apparatus for conformal radiation therapy. In March 2011, the Court dismissed with prejudice all counts against the Company, except for two counts of alleged willful infringement of two of the patents. Following several procedural rulings by the court, Best Medical moved to voluntarily dismiss one of the two remaining patent claims on June 28, 2011, which the court granted on June 30, 2011, leaving only one patent (U.S. Patent No. 6,038,283) at issue in the case. The parties failed to a reach settlement during mandatory settlement conferences held in March and May 2013. Best Medical is seeking declaratory and injunctive relief, as well as unspecified compensatory and treble damages and other relief. The Company will continue to litigate this case, and discovery is expected to be completed by February 2014. *Rotary Systems* On April 28, 2011, a former supplier to TomoTherapy, Rotary Systems Incorporated, filed suit in Minnesota state court, Tenth Judicial District, Anoka County, against TomoTherapy alleging misappropriation of trade secrets, as well as several other counts alleging various theories of injury. Rotary Systems alleges TomoTherapy misappropriated Rotary Systems’ trade secrets pertaining to a component previously purchased from Rotary Systems, which component TomoTherapy now purchases from a different supplier. The suit alleges TomoTherapy improperly supplied the alleged trade secrets to its present supplier, Dynamic Sealing Technologies Inc. (also a named defendant in the suit). Rotary Systems has made an unspecified claim for damages of greater than $50,000. TomoTherapy moved to dismiss the case on May 19, 2011, and on August 29, 2011, the court granted the motion to dismiss with respect to all counts other than the count alleging misappropriation of trade secrets. On May 21, 2012, the court granted the Company’s motion for sanctions, in part, and gave Rotary Systems sixty days to identify the alleged trade secrets with specificity or face dismissal of its claim with prejudice. The court held a hearing on September 20, 2012 to review Rotary System’s amended complaint and set a calendar for discovery. The court ruled on the amended complaint, and the parties have started discovery, which was originally expected to be completed by October 2013. The parties have jointly asked the Court to extend discovery until February 2014. The Company filed a motion for summary judgment, and on December 5, 2013, the court ruled in favor of the Company. Rotary Systems filed its notice of appeal on January 29, 2014. *Sarif Biomedical Patent Litigation* On January 28, 2013, Sarif Biomedical filed a patent infringement complaint against the Company in the United States District Court for Delaware. The complaint alleges the Company’s CyberKnife System directly infringes U.S. Patent No. 5,755,725 and seeks unspecified monetary damages for the alleged infringement. Accuray filed an answer to the complaint in March 2013. The court has not yet issued a scheduling order. Software License Indemnity Under the terms of the Company’s software license agreements with its customers, the Company agrees that in the event the software sold infringes upon any patent, copyright, trademark, or any other proprietary right of a third party, it will indemnify its customer licensees against any loss, expense, or liability from any damages that may be awarded against its customer. The Company includes this infringement indemnification in all of its software license agreements and selected managed services arrangements. In the event the customer cannot use the software or service due to infringement and the Company cannot obtain the right to use, replace or modify the license or service in a commercially feasible manner so that it no longer infringes, then the Company may terminate the license and provide the customer a refund of the fees paid by the customer for the infringing license or service. The Company has not recorded any liability associated with this indemnification, as it is not aware of any pending or threatened actions that represent probable losses as of December 31, 2013.

Acquisition

6 Months Ended

Dec. 31, 2013

Acquisition

Acquisition

6. Acquisition

On July 16, 2012, the Company acquired the remaining 90% of the outstanding shares of Morphormics, Inc., or Morphormics, a privately-held developer of medical imaging software based in North Carolina. This acquisition enables the Company to extend auto-contouring capabilities for both the CyberKnife and TomoTherapy systems to improve disease specific workflows. The Company previously held 10% of the outstanding shares of Morphormics, which had a carrying value of zero prior to the acquisition date and was valued at $0.7 million as of the acquisition date based on the fair value of the consideration paid. The acquisition was accounted for as a business combination, and accordingly, Morphormics’ results of operations were included in the consolidated financial statements from July 16, 2012. This transaction was not considered a material business combination, and Company did not incur significant severance or acquisition-related costs in connection with the transaction.

The fair value of total purchase consideration paid and payable for 100% of Morphormics’ equity interest as of the acquisition date was as follows (in thousands):

Cash paid and payable	$	5,385
Fair value of pre-existing investment in Morphormics	662
Total	$	6,047

The total purchase price was allocated to the net tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date as follows (in thousands):

Cash and cash equivalents	$	668
Accounts receivable	283
Other current assets	7
Amortizable intangible assets - developed technology	5,100
Goodwill	77
Accrued compensation	(88		)
Total purchase price	$	6,047

- Definition

The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable).

+ References

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-Publisher FASB
-Name Accounting Standards Codification
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Reference 6: http://www.xbrl.org/2003/role/presentationRef
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+ Details

Debt

6 Months Ended

Dec. 31, 2013

Debt

Debt

8. Debt

3.75% Convertible Senior Notes due August 2016

On August 1, 2011, the Company issued the 3.75% Convertible Notes to certain qualified institutional buyers, or QIBs. The 3.75% Convertible Notes were offered and sold to the QIBs pursuant to Rule 144A under the Securities Act of 1933, as amended, or Rule 144A. The net proceeds from the $100 million offering, after deducting the initial purchaser’s discount and commission and the related offering costs, were approximately $96.1 million. The offering costs and the initial purchaser’s discount and commission (which are recorded in Other Assets) are both being amortized to interest expense using the effective interest method over five years. The 3.75% Convertible Notes bear interest at a rate of 3.75% per year, payable semi-annually in arrears in cash on February 1 and August 1 of each year, beginning on February 1, 2012. The 3.75% Convertible Notes will mature on August 1, 2016, unless earlier repurchased, redeemed or converted.

The 3.75% Convertible Notes were issued under an Indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. Holders of the 3.75% Convertible Notes may convert their 3.75% Convertible Notes at any time on or after May 1, 2016 until the close of business on the business day immediately preceding the maturity date. Prior to May 1, 2016, holders of the 3.75% Convertible Notes may convert their 3.75% Convertible Notes only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending September 30, 2011, and only during such calendar quarter, if the closing sale price of the Company’s common stock for each of 20 or more trading days in the 30 consecutive trading days ending on the last trading day of the immediately preceding calendar quarter exceeds 130% of the conversion price in effect on the last trading day of the immediately preceding calendar quarter; (2) during the five consecutive business days immediately after any five consecutive trading-day period (such five consecutive trading-day period, the “Note Measurement Period”) in which the trading price per $1,000 principal amount of 3.75% Convertible Notes for each trading day of that Note Measurement Period was equal to or less than 98% of the product of the closing sale price of shares of the Company’s common stock and the applicable conversion rate for such trading day; (3) if the Company calls any or all of the 3.75% Convertible Notes for redemption, at any time prior to the close of business on the business day immediately preceding the redemption date; or (4) upon the occurrence of specified corporate transactions as described in the Indenture. Upon conversion by holders of the 3.75% Convertible Notes, the Company will have the right to pay or deliver, as the case may be, cash, shares of common stock of the Company or a combination thereof, at the Company’s election. At any time on or prior to the 33rd business day immediately preceding the maturity date, the Company may irrevocably elect to (a) deliver solely shares of common stock of the Company in respect of the Company’s conversion obligation or (b) pay cash up to the aggregate principal amount of the 3.75% Convertible Notes to be converted and pay or deliver, as the case may be, cash, shares of common stock of the Company or a combination thereof in respect of the remainder, if any, of the Company’s conversion obligation in excess of the aggregate principal amount of the 3.75% Convertible Notes being converted. The initial conversion rate is 105.5548 shares of the Company’s common stock per $1,000 principal amount of 3.75% Convertible Notes (which represents an initial conversion price of approximately $9.47 per share of the Company’s common stock). The conversion rate, and thus the conversion price, are subject to adjustment as further described below.

Holders of the 3.75% Convertible Notes who convert their 3.75% Convertible Notes in connection with a “make-whole fundamental change,” as defined in the Indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a “fundamental change,” as defined in the Indenture, holders of the 3.75% Convertible Notes may require the Company to purchase all or a portion of their 3.75% Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of 3.75% Convertible Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

On or after August 1, 2014 and prior to the maturity date, the Company may redeem for cash all or a portion of the 3.75% Convertible Notes if the closing sale price of its common stock exceeds 130% of the applicable conversion price (the initial conversion price is approximately $9.47 per share of common stock) of such 3.75% Convertible Notes for at least 20 trading days during any consecutive 30 trading-day period (including the last trading day of such period).

In accordance with Accounting Standards Codification, or ASC 470-20, Debt with Conversion and Other Options, the Company separately accounts for the liability and equity conversion components of the 3.75% Convertible Notes. The principal amount of the liability component of the 3.75% Convertible Notes was $75.9 million as of the date of issuance based on the present value of its cash flows using a discount rate of 10%, our approximate borrowing rate at the date of the issuance for a similar debt instrument without the conversion feature. The carrying value of the equity conversion component was $24.1 million. A portion of the initial purchaser’s discount and commission and the offering costs totaling $0.9 million was allocated to the equity conversion component. The liability component is being accreted to the principal amount of the 3.75% Convertible Notes using the effective interest method over five years.

The following table presents the carrying value of the Convertible Notes as of December 31, 2013 (in thousands):

3.75% Convertible Note
Carrying amount of the equity conversion component	$	23,189
Principal amount of the 3.75% Convertible Notes	$	100,000
Unamortized debt discount (1)	(13,918		)
Net carrying amount	$	86,082

(1)As of December 31, 2013, the remaining period over which the unamortized debt discount will be amortized is 31 months.

3.50% Convertible Senior Notes due February 2018

In February 2013, the Company issued $115.0 million aggregate principal amount of its 3.50% Convertible Notes to certain QIBs. The 3.50% Convertible Notes were offered and sold to the QIBs pursuant to Rule 144A. The net proceeds from the offering, after deducting the initial purchaser’s discount and commission and the related offering costs, were approximately $110.5 million. The offering costs and the initial purchaser’s discount and commission (which are recorded in Other Assets) are both being amortized to interest expense using the effective interest method over five years. The 3.50% Convertible Notes bear interest at a rate of 3.50% per year, payable semi-annually in arrears in cash on February 1 and August 1 of each year, beginning on August 1, 2013. The 3.50% Convertible Notes will mature on February 1, 2018, unless earlier repurchased, redeemed or converted.

The 3.50% Convertible Notes were issued under an Indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. Holders of the 3.50% Convertible Notes may convert their 3.50% Convertible Notes at any time until the close of business on the business day immediately preceding the maturity date. The 3.50% Convertible Notes are convertible, as described below, into common stock of Accuray at an initial conversion rate equal to 187.6877 shares of common stock per $1,000 principal amount of the 3.50% Convertible Notes, which is equivalent to a conversion price of approximately $5.33 per share of common stock, subject to adjustment.

Holders of the 3.50% Convertible Notes who convert their 3.50% Convertible Notes in connection with a “make-whole fundamental change”, as defined in the Indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a “fundamental change,” as defined in the Indenture, holders of the 3.50% Convertible Notes may require the Company to purchase all or a portion of their 3.50% Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of 3.50% Convertible Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

In accordance with guidance in ASC 470-20, Debt with Conversion and Other Options and ASC 815-15, Embedded Derivatives, the Company determined that the embedded conversion components of the 3.50% Convertible Note do not require bifurcation and separate accounting. The $115.0 million principal amount of the 3.50% Convertible Note has been recorded in Long-term Debt on the condensed consolidated balance sheet as of December 31, 2013.

A summary of interest expense related to the Convertible Notes for the three and six months ended December 31, 2013 and 2012 was as follows (in thousands):

	Three months ended December 31,				Six months ended December 31,
	2013		2012		2013		2012
Interest expense related to contractual interest coupon	$	1,944	$	937	$	3,888	$	1,875
Interest expense related to amortization of debt discount	1,166		1,058		2,314		2,099
Interest expense related to amortization of debt issuance costs	349		114		692		225
	$	3,459	$	2,109	$	6,894	$	4,199

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

Recently Issued Accounting Standards

Recently Issued Accounting Standards

Use of Estimates

Use of Estimates

Concentration of Credit and Other Risks

Concentration of Credit and Other Risks

Revenue Recognition

Revenue Recognition

Product and Service Revenue

Shared Ownership Program

Long-Term Construction and Manufacturing Contracts

Net Loss Per Common Share

Net Loss Per Common Share

Basic and diluted net loss per share is computed by dividing net loss attributable to stockholders by the weighted average number of common shares outstanding during the period.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows (in thousands):

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
Numerator:
Loss from operations used in computing loss per share from continuing operations	$	(5,441	)	$	(25,513	)	$	(20,974	)	$	(47,443	)
Loss from discontinued operations used in computing loss per share from discontinued operations	$	—		$	(3,658	)	$	—		$	(5,858	)
Net loss used in computing net loss per share	$	(5,441	)	$	(29,171	)	$	(20,974	)	$	(53,301	)
Denominator:
Weighted average shares used in computing basic and diluted loss per share	75,280			72,870			74,990			72,433

	As of
	December 31,
	2013	2012
Stock options	3,911	6,911
Restricted Stock Units	4,263	2,581
3.75% Convertible Notes	10,560	10,560
3.50% Convertible Notes	21,576	—
	40,310	20,052

Segment Information

Segment Information

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2013		2012		2013		2012
Americas	$	34,771	$	35,079	$	74,024	$	70,890
Europe, Middle East, India and Africa	34,135		27,838			52,901	52,956
Asia (excluding Japan)	10,367		5,537			17,666	20,658
Japan	14,361		9,325			25,684	16,023
Total	$	93,634	$	77,779	$	170,275	$	160,527

Information regarding geographic areas in which the Company has long lived assets (includes all tangible assets) is as follows (in thousands):

	December 31,		June 30,
	2013		2013
Americas	$	33,042	$	31,797
Europe, Middle East, India and Africa	1,277		1,431
Asia (excluding Japan)	457		498
Japan	793		1,007
Total	$	35,569	$	34,733

- Definition

Disclosure of accounting policy regarding (1) the principles it follows in consolidating or combining the separate financial statements, including the principles followed in determining the inclusion or exclusion of subsidiaries or other entities in the consolidated or combined financial statements and (2) its treatment of interests (for example, common stock, a partnership interest or other means of exerting influence) in other entities, for example consolidation or use of the equity or cost methods of accounting. The accounting policy may also address the accounting treatment for intercompany accounts and transactions, noncontrolling interest, and the income statement treatment in consolidation for issuances of stock by a subsidiary.

+ References + Details

- Definition

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

+ References + Details

Summary of Significant Accounting Policies (Tables)

6 Months Ended

Dec. 31, 2013

Summary of Significant Accounting Policies

Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share

A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders follows (in thousands):

	Three Months Ended						Six Months Ended
	December 31,						December 31,
	2013			2012			2013			2012
Numerator:
Loss from operations used in computing loss per share from continuing operations	$	(5,441	)	$	(25,513	)	$	(20,974	)	$	(47,443	)
Loss from discontinued operations used in computing loss per share from discontinued operations	$	—		$	(3,658	)	$	—		$	(5,858	)
Net loss used in computing net loss per share	$	(5,441	)	$	(29,171	)	$	(20,974	)	$	(53,301	)
Denominator:
Weighted average shares used in computing basic and diluted loss per share	75,280			72,870			74,990			72,433

Schedule of all potentially dilutive securities excluded from the computation of net loss per share

The following table sets forth all potentially dilutive securities excluded from the computation in the table above because their effect would have been anti-dilutive (in thousands):

	As of
	December 31,
	2013	2012
Stock options	3,911	6,911
Restricted Stock Units	4,263	2,581
3.75% Convertible Notes	10,560	10,560
3.50% Convertible Notes	21,576	—
	40,310	20,052

Summary of revenue by geographic region

The following summarizes revenue by geographic region (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2013		2012		2013		2012
Americas	$	34,771	$	35,079	$	74,024	$	70,890
Europe, Middle East, India and Africa	34,135		27,838			52,901	52,956
Asia (excluding Japan)	10,367		5,537			17,666	20,658
Japan	14,361		9,325			25,684	16,023
Total	$	93,634	$	77,779	$	170,275	$	160,527

Schedule of geographic areas in which the Company has long lived assets (includes all tangible assets)

Information regarding geographic areas in which the Company has long lived assets (includes all tangible assets) is as follows (in thousands):

	December 31,		June 30,
	2013		2013
Americas	$	33,042	$	31,797
Europe, Middle East, India and Africa	1,277		1,431
Asia (excluding Japan)	457		498
Japan	793		1,007
Total	$	35,569	$	34,733

Balance Sheet Components (Tables)

6 Months Ended

Dec. 31, 2013

Balance Sheet Components

Schedule of inventories

Inventories consisted of the following (in thousands):

	December 31,		June 30,
	2013		2013
Raw materials	$	36,867	$	33,721
Work-in-process	16,360		20,564
Finished goods	34,926		27,307
Inventories	$	88,153	$	81,592

Schedule of property and equipment, net

Property and equipment, net consisted of the following (in thousands):

	December 31,			June 30,
	2013			2013
Furniture and fixtures	$	5,471		$	6,506
Computer and office equipment	10,419			9,481
Software	10,417			9,586
Leasehold improvements	17,931			19,199
Machinery and equipment	39,613			37,371
Shared ownership systems	6,266			4,979
Construction in progress	3,957			3,084
	94,074			90,206
Less: Accumulated depreciation	(58,505		)	(55,473		)
Property and equipment, net	$	35,569		$	34,733

Goodwill and Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2013

Goodwill and Intangible Assets

Schedule of goodwill

Activity related to goodwill consisted of the following (in thousands):

	Six Months
	Ended			Year Ended
	December 31,			June 30,
	2013			2013
Balance at the beginning of the period	$	59,368		$	59,215
Addition related to acquisition	—			77
Currency translation and other adjustments	(1,205		)	76
Balance at the end of the period	$	58,163		$	59,368

Schedule of intangible assets associated with completed acquisitions

The Company’s intangible assets associated with completed acquisitions at December 31, 2013 and June 30, 2013 are as follows (in thousands):

		December 31, 2013							June 30, 2013
		Gross							Gross
		Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Useful Lives	Amount		Amortization			Amount		Amount		Amortization			Amount
	(in years)
Developed technology	5 - 6	$	46,747	$	(19,253	)	$	27,494	$	46,747	$	(15,276	)	$	31,471
Distributor license	1.5 - 2.5	2,032		(2,032		)	—		2,043		(1,618		)	425
		$	48,779	$	(21,285	)	$	27,494	$	48,790	$	(16,894	)	$	31,896

Schedule of estimated future amortization expense of purchased intangible assets

The estimated future amortization expense of purchased intangible assets as of December 31, 2013 is as follows (in thousands):

Year Ending June 30,	Amount
2014 (remaining 6 months)	$	3,977
2015	7,953
2016	7,953
2017	7,568
2018	43
Thereafter	—
	$	27,494

Financial Instruments (Tables)

6 Months Ended

Dec. 31, 2013

Financial Instruments

Summary of amortized cost, gross unrealized gains, gross unrealized losses and fair value by significant investment category for cash, cash equivalents and short-term investments

	December 31, 2013
			Gross		Gross			Estimated Market Value
	Amortized Cost		Unrealized Gains		Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	59,245	$	—	$	—		$	59,245	$	—
Level 1
Certificates of deposit	9,394		—		—			9,394		—
Money market funds	1,808		—		—			1,808		—
	11,202		—		—			11,202		—
Level 2
Commercial paper	3,997		1		—			—		3,998
Corporate notes	85,302		24		(122		)	—		85,204
	89,299		25		(122		)	—		89,202
Total	$	159,746	$	25	$	(122	)	$	70,447	$	89,202

	June 30, 2013
			Gross		Gross			Estimated Market Value
	Amortized Cost		Unrealized Gains		Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	60,082	$	—	$	—		$	60,082	$	—
Level 1
Certificates of deposit	15,365		—		—			12,758		2,607
Money market funds	473		—		—			473		—
	15,838		—		—			13,231		2,607
Level 2
Commercial paper	3,993		—		(1		)	—		3,992
Corporate notes	94,941		—		(456		)	—		94,485
	98,934		—		(457		)	—		98,477
Total	$	174,854	$	—	$	(457	)	$	73,313	$	101,084

Schedule of contractual maturities of available-for-sale securities

Contractual maturities of available-for-sale securities at December 31, 2013 were as follows (in thousands):

	December 31, 2013
	Amortized Cost		Fair Value
Due in 1 year or less	$	40,284	$	40,275
Due in 1-2 years	26,215		26,214
Due in 2-3 years	22,800		22,713
	$	89,299	$	89,202

Schedule of carrying values and estimated fair values of long-term debt that are measured on a non-recurring basis

The following table summarizes the carrying values and estimated fair values of our long-term debt (in thousands):

	December 31, 2013				June 30, 2013
	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Convertible Notes	86,082		112,520		83,768		96,560
3.50% Convertible Notes	115,000		199,422		115,000		144,302
Total	$	201,082	$	311,942	$	198,768	$	240,862

Summary of Significant Accounting Policies (Details 3) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Feb. 28, 2013	Aug. 02, 2011
Numerator:
Loss from operations used in computing loss per share from continuing operations	$ (5,441)	$ (25,513)	$ (20,974)	$ (47,443)
Loss from discontinued operations used in computing loss per share from discontinued operations		(3,658)		(5,858)
Net loss attributable to stockholders	$ (5,441)	$ (29,171)	$ (20,974)	$ (53,301)
Denominator:
Weighted average shares used in computing basic and diluted loss per share	75,280	72,870	74,990	72,433
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)			40,310	20,052
3.75% Convertible Notes
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)			10,560	10,560
Interest rate (as a percent)						3.75%
3.50% Convertible Notes
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)			21,576
Interest rate (as a percent)					3.50%
Stock options
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)			3,911	6,911
Restricted Stock Units
Anti-dilutive securities excluded from computation of earnings per share
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)			4,263	2,581

Balance Sheet Components (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Balance Sheet Components (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013
Financing receivables
Accounts receivable with contractual maturities of more than one year	$ 3,100		$ 3,100		$ 2,900
Allowance for doubtful financing receivable accounts related to financing receivables	0		0		0
Inventories
Raw materials	36,867		36,867		33,721
Work-in-process	16,360		16,360		20,564
Finished goods	34,926		34,926		27,307
Total inventories	88,153		88,153		81,592
Property and Equipment, net
Property and equipment, gross	94,074		94,074		90,206
Less: Accumulated depreciation and amortization	(58,505)		(58,505)		(55,473)
Property and equipment, net	35,569		35,569		34,733
Depreciation and amortization expense	2,900	$ 3,900	6,200	$ 8,000
Furniture and fixtures
Property and Equipment, net
Property and equipment, gross	5,471		5,471		6,506
Computer and office equipment
Property and Equipment, net
Property and equipment, gross	10,419		10,419		9,481
Software
Property and Equipment, net
Property and equipment, gross	10,417		10,417		9,586
Leasehold improvements
Property and Equipment, net
Property and equipment, gross	17,931		17,931		19,199
Machinery and equipment
Property and Equipment, net
Property and equipment, gross	39,613		39,613		37,371
Shared ownership systems
Property and Equipment, net
Property and equipment, gross	6,266		6,266		4,979
Construction in progress
Property and Equipment, net
Property and equipment, gross	$ 3,957		$ 3,957		$ 3,084

Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended		12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013	Sep. 30, 2013
Changes in the carrying amount of goodwill
Balance at the beginning of the period			$ 59,215	$ 59,368	$ 59,215	$ 59,215
Addition related to acquisition						77
Currency translation and other adjustment				(1,205)		76
Balance at the end of the period	$ 58,163			58,163		59,368
Impairment of goodwill	0
Intangible Assets
Goodwill	58,163			58,163		59,368
Total gross carrying amount	48,779			48,779		48,790
Accumulated Amortization	(21,285)			(21,285)		(16,894)
Net Amount, Finite Lived Intangibles	27,494			27,494		31,896
Impairment charge recorded due to a decrease in projected future usage of the technology					12,200
Amortization expense	2,200	$ 2,200		4,400	$ 6,000
Estimated future amortization expense of purchased intangible assets
2014 (remaining 6 months)	3,977			3,977
2015	7,953			7,953
2016	7,953			7,953
2017	7,568			7,568
2018	43			43
Net Amount, Finite Lived Intangibles	27,494			27,494		31,896
TomoTherapy \| Liabilities related to unrecognized tax
Changes in the carrying amount of goodwill
Balance at the beginning of the period	1,300
Intangible Assets
Goodwill							$ 1,300
Accrued liabilities							$ 1,300
IPR&D technology carried out by CPAC
Intangible Assets
Impairment charge recorded due to a decrease in projected future usage of the technology			$ 12,200
Developed technology
Intangible Assets
Gross Carrying Amount, Finite Lived Intangibles	46,747			46,747		46,747
Accumulated Amortization	(19,253)			(19,253)		(15,276)
Net Amount, Finite Lived Intangibles	27,494			27,494		31,471
Estimated future amortization expense of purchased intangible assets
Net Amount, Finite Lived Intangibles	27,494			$ 27,494		31,471
Developed technology \| Minimum
Intangible Assets
Useful Lives				5 years
Developed technology \| Maximum
Intangible Assets
Useful Lives				6 years
Distributor license
Intangible Assets
Gross Carrying Amount, Finite Lived Intangibles	2,032			$ 2,032		2,043
Accumulated Amortization	$ (2,032)			$ (2,032)		(1,618)
Net Amount, Finite Lived Intangibles						425
Estimated future amortization expense of purchased intangible assets
Net Amount, Finite Lived Intangibles						$ 425
Distributor license \| Minimum
Intangible Assets
Useful Lives				1 year 6 months
Distributor license \| Maximum
Intangible Assets
Useful Lives				2 years 6 months

Financial Instruments (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
Financial Instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2013	Jun. 30, 2013	Dec. 31, 2012	Jun. 30, 2012
Cash, cash equivalents and short-term investments
Cash	$ 59,245	$ 59,245	$ 60,082
Amortized Cost	89,299	89,299
Gross Unrealized Gains	25	25
Gross Unrealized Losses	(122)	(122)	(457)
Available-for-sale Securities	89,202	89,202
Total Amortized Cost	159,746	159,746	174,854
Cash and Cash Equivalents	70,447	70,447	73,313	$ 94,773	$ 143,504
Short-term investments	89,202	89,202	101,084
Other-than-temporary impairments associated with credit losses	0	0
Amortized Cost
Due in 1 year or less	40,284	40,284
Due in 1-2 years	26,215	26,215
Due in 2-3 years	22,800	22,800
Amortized cost	89,299	89,299
Fair Value
Due in 1 year or less	40,275	40,275
Due in 1-2 years	26,214	26,214
Due in 2-3 years	22,713	22,713
Available-for-sale Securities	89,202	89,202
Level 1
Cash, cash equivalents and short-term investments
Cash Equivalents	11,202	11,202	13,231
Cash Equivalents and Short-term Investments including Available-for-sale Securities	11,202	11,202	15,838
Available-for-sale Securities			2,607
Fair Value
Available-for-sale Securities			2,607
Level 1 \| Certificates of deposits
Cash, cash equivalents and short-term investments
Cash Equivalents	9,394	9,394	12,758
Cash Equivalents and Short-term Investments including Available-for-sale Securities	9,394	9,394	15,365
Available-for-sale Securities			2,607
Fair Value
Available-for-sale Securities			2,607
Level 1 \| Money market funds
Cash, cash equivalents and short-term investments
Cash Equivalents	1,808	1,808	473
Level 2
Cash, cash equivalents and short-term investments
Amortized Cost	89,299	89,299	98,934
Gross Unrealized Gains	25	25
Gross Unrealized Losses	(122)	(122)	(457)
Available-for-sale Securities	89,202	89,202	98,477
Amortized Cost
Amortized cost	89,299	89,299	98,934
Fair Value
Available-for-sale Securities	89,202	89,202	98,477
Level 2 \| Commercial paper
Cash, cash equivalents and short-term investments
Amortized Cost	3,997	3,997	3,993
Gross Unrealized Gains	1	1
Gross Unrealized Losses			(1)
Available-for-sale Securities	3,998	3,998	3,992
Amortized Cost
Amortized cost	3,997	3,997	3,993
Fair Value
Available-for-sale Securities	3,998	3,998	3,992
Level 2 \| Corporate notes
Cash, cash equivalents and short-term investments
Amortized Cost	85,302	85,302	94,941
Gross Unrealized Gains	24	24
Gross Unrealized Losses	(122)	(122)	(456)
Available-for-sale Securities	85,204	85,204	94,485
Amortized Cost
Amortized cost	85,302	85,302	94,941
Fair Value
Available-for-sale Securities	$ 85,204	$ 85,204	$ 94,485

Acquisition (Details) - USD ($) $ in Thousands		12 Months Ended
Acquisition (Details) - USD ($) $ in Thousands	Jul. 16, 2012	Jun. 30, 2012	Dec. 31, 2013	Jun. 30, 2013
Purchase price allocation
Goodwill		$ 59,215	$ 58,163	$ 59,368
Morphormics
Acquisition
Acquisition of remaining outstanding shares (as a percent)	90.00%
Outstanding shares held prior to acquisition (as a percent)	10.00%
Fair value of outstanding shares prior to acquisition	$ 662	0
Total acquired equity interest (as a percent)	100.00%
Fair value of total purchase consideration paid and payable
Cash paid and payable	$ 5,385
Fair value of pre-existing investment in Morphormics	662	$ 0
Total purchase price	6,047
Purchase price allocation
Cash and cash equivalents	668
Accounts receivable	283
Other current assets	7
Amortizable intangible assets - developed technology	5,100
Goodwill	77
Accrued compensation	(88)
Total purchase price	$ 6,047

Debt (Details) - USD ($)			3 Months Ended		6 Months Ended
Debt (Details) - USD ($)	Feb. 28, 2013	Aug. 02, 2011	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Jun. 30, 2013
Debt
Net carrying amount			$ 201,082,000		$ 201,082,000		$ 198,768,000
Interest expense related to amortization of debt issuance costs					692,000	$ 225,000
3.75% Convertible Note and 3.50% Convertible Note
Debt
Interest expense related to contractual interest coupon			1,944,000	$ 937,000	3,888,000	1,875,000
Interest expense related to amortization of debt discount			1,166,000	1,058,000	2,314,000	2,099,000
Interest expense related to amortization of debt issuance costs			349,000	114,000	692,000	225,000
Total interest expense recognized			3,459,000	$ 2,109,000	$ 6,894,000	$ 4,199,000
3.75% Convertible Notes
Debt
Aggregate principal amount of debt issued		$ 100,000,000
Interest rate (as a percent)		3.75%
Proceeds from debt, net of costs		$ 96,100,000
Debt issuance costs, amortization period		5 years
Conversion rate, number of shares to be issued per $1000 of principal amount (in shares)					105.5548
Principal amount used for debt instrument conversion ratio			$ 1,000		$ 1,000
Conversion price (in dollars per share)			$ 9.47		$ 9.47
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be convertible into common stock					30 days
Number of consecutive business days immediately after any five consecutive trading day period during the note measurement period					5 days
Number of consecutive trading days before five consecutive business days during the note measurement period					5 days
Number of working days preceding maturity date for delivery of shares or payment of cash					33 days
Repurchase price, as percentage of principal amount, if company undergoes change of control					100.00%
Number of consecutive trading days during which the closing price of the entity's common stock must exceed the conversion price for at least 20 days in order for the notes to be redeemable					30 days
Discount rate on liability component (as a percent)		10.00%
Debt issuance costs and discount allocated to equity conversion component		$ 900,000
Carrying amount of the equity conversion component		24,100,000	$ 23,189,000		$ 23,189,000
Principal amount of the Notes		$ 75,900,000	100,000,000		100,000,000
Unamortized debt discount			(13,918,000)		(13,918,000)
Net carrying amount			86,082,000		$ 86,082,000
Amortization period					31 months
3.75% Convertible Notes \| Minimum
Debt
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be convertible into common stock					20 days
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be convertible					130.00%
Percentage of the closing sales price of the entity's common stock that the conversion price must exceed in order for the notes to be redeemable					130.00%
Number of days within 30 consecutive trading days in which the closing price of the entity's common stock must exceed the conversion price for the notes to be redeemable					20 days
3.75% Convertible Notes \| Maximum
Debt
Percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate					98.00%
3.50% Convertible Notes
Debt
Aggregate principal amount of debt issued	$ 115,000,000
Interest rate (as a percent)	3.50%
Proceeds from debt, net of costs	$ 110,500,000
Debt issuance costs, amortization period	5 years
Conversion rate, number of shares to be issued per $1000 of principal amount (in shares)					187.6877
Principal amount used for debt instrument conversion ratio			$ 1,000		$ 1,000
Conversion price (in dollars per share)			$ 5.33		$ 5.33
Repurchase price, as percentage of principal amount, if company undergoes change of control					100.00%

Condensed Consolidated Statements of Operations and Comprehensive Loss (Parenthetical) $ in Thousands	3 Months Ended
	Dec. 31, 2013 USD ($)
Condensed Consolidated Statements of Operations and Comprehensive Loss
Loss from discontinued operations, tax	$ 0

Loss From Discontinued Operations	6 Months Ended
Loss From Discontinued Operations	Dec. 31, 2013
Loss From Discontinued Operations
Loss From Discontinued Operations	9. Loss From Discontinued Operations In April 2008, TomoTherapy established a new affiliate, CPAC, to develop a compact proton therapy system for the treatment of cancer. Between the date of formation of CPAC through December 2012, the Company and TomoTherapy contributed both cash and intellectual property to CPAC, resulting in a combined equity interest of approximately 15.4% of the outstanding stock of CPAC and approximately 16.3% on a fully diluted basis. As of the Company’s acquisition of TomoTherapy on June 10, 2011, the Company determined that CPAC was a variable interest entity or VIE, as CPAC depended on the Company, TomoTherapy and other investors to fund its operations. Under the accounting standards for consolidating variable interest entities, the consolidating investor is the entity with the power to direct the activities of the venture that most significantly impact the venture’s economic performance and with the obligation to absorb losses or the right to receive benefits from the venture that could potentially be significant to the venture. Although the Company and its subsidiary held less than a 50% ownership interest in CPAC, it was determined that the Company met these two characteristics, and therefore, was the primary beneficiary of CPAC. The Company consolidated the results of operations of CPAC from June 10, 2011 to December 21, 2012. On December 21, 2012, the Company and CPAC entered into a Purchase Agreement and Release, or Purchase Agreement, which provided for all the equity and debt investments held by the Company in CPAC to be purchased by CPAC for a nominal consideration. In addition, the Company assigned all its rights to the Dielectric Wall Accelerator, or DWA technology licensed from Lawrence Livermore National Security, LLC to CPAC. As a result of the Purchase Agreement, the Company concluded that it was no longer the primary beneficiary of CPAC since it did not have any variable interest in CPAC. In the second quarter of fiscal 2013, the Company deconsolidated CPAC and recorded a loss of $3.4 million, resulting from the write-down of the carrying value of CPAC’s net liabilities, the write-off of receivables from CPAC and the non-controlling interest in CPAC, net of cash consideration received. The results of operations of CPAC, including the loss on deconsolidation of CPAC and the losses attributable to the non-controlling interest recorded during the three and six months ended December 31, 2012 have been disclosed as discontinued operations in the condensed consolidated statements of operations and comprehensive loss.

Restructuring and Severance Charges	6 Months Ended
Restructuring and Severance Charges	Dec. 31, 2013
Restructuring and Severance Charges
Restructuring and Severance Charges	10. Restructuring and Severance Charges During December 2012, the Company vacated an office facility and recorded a charge of $1.4 million in general and administrative expenses during the three months ended December 31, 2012 for the remaining lease obligations on the facility, net of estimated sub-lease income. The Company also recorded a charge of $0.3 million in general and administrative expenses during the three months ended December 31, 2012 related to the disposition of certain fixed assets and leasehold improvements at this facility. During the three months ended December 31, 2012, the Company also recorded severance related charges of $2.2 million in general and administrative expenses due to the departure of Dr. Euan S. Thomson (former Chief Executive Officer), Mr. Chris Raanes (former Chief Operating Officer) and certain other employees.

Commitments and Contingencies (Details)		1 Months Ended
Commitments and Contingencies (Details)	May 21, 2012	Jun. 30, 2011 claim counts	Apr. 30, 2011 USD ($)	Dec. 31, 2013 USD ($)	Sep. 27, 2013 USD ($)	Mar. 31, 2011 counts patent
Contingencies
Estimated loss, low end range				$ 0
Estimated loss, high end range				$ 2,000,000
Best Medical Trade Secret Litigation
Contingencies
Attorney fees and costs receivable					$ 512,090
Best Medical Patent Litigation
Contingencies
Number of counts of alleged willful infringement of patents \| counts						2
Number of patents against which lawsuit is not dismissed		1				2
Number of patent claims dismissed \| claim		1
Rotary Systems
Contingencies
Period to identify alleged trade secrets with specificity or face dismissal of claim with prejudice	60 days
Rotary Systems \| Minimum
Contingencies
Claim for damages			$ 50,000

Share-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
Share-Based Compensation (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2013	Dec. 31, 2012
Share-based compensation charges
Share-based compensation expense	$ 2,803	$ 2,296	$ 4,983	$ 4,051
Cost of revenue
Share-based compensation charges
Share-based compensation expense	469	319	923	566
Research and development
Share-based compensation charges
Share-based compensation expense	656	477	1,134	993
Selling and marketing
Share-based compensation charges
Share-based compensation expense	543	327	914	547
General and administrative
Share-based compensation charges
Share-based compensation expense	$ 1,135	$ 1,173	$ 2,012	$ 1,945

Summary of Significant Accounting Policies (Details) - Total accounts receivable - Credit concentration risk - Major customers - customer	6 Months Ended	12 Months Ended
	Dec. 31, 2013	Jun. 30, 2013
Concentration of Credit Risk and Other Risks and Uncertainties
Number of significant customers	1	1
Percentage of concentration risk	12.00%	10.00%

Summary of Significant Accounting Policies (Details 4) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2013 USD ($)	Dec. 31, 2012 USD ($)	Dec. 31, 2013 USD ($) segment	Dec. 31, 2012 USD ($)	Jun. 30, 2013 USD ($)
Summary of Significant Accounting Policies
Number of operating segments \| segment			1
Segment Information
Revenue	$ 93,634	$ 77,779	$ 170,275	$ 160,527
Long lived assets	35,569		35,569		$ 34,733
Americas
Segment Information
Revenue	34,771	35,079	74,024	70,890
Long lived assets	33,042		33,042		31,797
Europe, Middle East, India and Africa
Segment Information
Revenue	34,135	27,838	52,901	52,956
Long lived assets	1,277		1,277		1,431
Asia (excluding Japan)
Segment Information
Revenue	10,367	5,537	17,666	20,658
Long lived assets	457		457		498
Japan
Segment Information
Revenue	14,361	$ 9,325	25,684	$ 16,023
Long lived assets	$ 793		$ 793		$ 1,007

Financial Instruments (Details 2) - USD ($) $ in Thousands	Dec. 31, 2013	Jun. 30, 2013	Feb. 28, 2013	Aug. 02, 2011
3.75% Convertible Notes
Fair value measurement
Interest rate (as a percent)				3.75%
3.50% Convertible Notes
Fair value measurement
Interest rate (as a percent)			3.50%
Non-recurring basis \| Carrying Value
Fair value measurement
Long term debt	$ 201,082	$ 198,768
Non-recurring basis \| Carrying Value \| 3.75% Convertible Notes
Fair value measurement
Long term debt	$ 86,082	$ 83,768
Interest rate (as a percent)	3.75%	3.75%
Non-recurring basis \| Carrying Value \| 3.50% Convertible Notes
Fair value measurement
Long term debt	$ 115,000	$ 115,000
Interest rate (as a percent)	3.50%	3.50%
Non-recurring basis \| Fair Value
Fair value measurement
Long term debt	$ 311,942	$ 240,862
Non-recurring basis \| Fair Value \| 3.75% Convertible Notes
Fair value measurement
Long term debt	$ 112,520	$ 96,560
Interest rate (as a percent)	3.75%	3.75%
Non-recurring basis \| Fair Value \| 3.50% Convertible Notes
Fair value measurement
Long term debt	$ 199,422	$ 144,302
Interest rate (as a percent)	3.50%	3.50%

Restructuring and Severance Charges (Details) $ in Millions	3 Months Ended
Restructuring and Severance Charges (Details) $ in Millions	Dec. 31, 2012 USD ($)
Office facility
Restructuring and Severance Charges
Restructuring charges	$ 1.4
Disposition of fixed assets and leasehold improvements
Restructuring and Severance Charges
Restructuring charges	0.3
Employee severance
Restructuring and Severance Charges
Charges for severance and related benefits	$ 2.2

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	Dec. 31, 2013	Jun. 30, 2013
Accumulated Other Comprehensive Income
Net unrealized loss on short-term investments, net of taxes	$ (97)	$ (457)
Cumulative foreign currency translation gain	2,561	2,339
Accumulated other comprehensive income	$ 2,464	$ 1,882