0001104659-14-078383 | 10-Q | XBRL Viewer

Document and Entity Information - shares	3 Months Ended
Sep. 30, 2014	Oct. 31, 2014
Document and Entity Information
Entity Registrant Name	ACCURAY INC
Entity Central Index Key	0001138723
Document Type	10-Q
Document Period End Date	Sep. 30, 2014
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		77,850,462
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2014	Jun. 30, 2014
Current assets:
Cash and cash equivalents	$ 107,295	$ 92,346
Short-term investments	45,415	79,553
Restricted cash	1,457	1,492
Accounts receivable, net of allowance for doubtful accounts of $841 and $976 as of September 30, 2014 and June 30, 2014, respectively	52,943	72,152
Inventories	99,994	87,752
Prepaid expenses and other current assets	16,266	17,873
Deferred cost of revenue	12,417	13,302
Total current assets	335,787	364,470
Property and equipment, net	32,733	34,391
Goodwill	58,066	58,091
Intangible assets, net	21,529	23,517
Deferred cost of revenue	2,259	2,899
Other assets	9,263	11,820
Total assets	459,637	495,188
Current liabilities:
Accounts payable	14,695	15,639
Accrued compensation	20,358	32,569
Other accrued liabilities	20,438	24,464
Customer advances	20,034	19,804
Deferred revenue	89,340	92,093
Total current liabilities	164,865	184,569
Long-term liabilities:
Long-term other liabilities	7,425	6,593
Deferred revenue	9,483	9,866
Long-term debt	197,371	195,612
Total liabilities	379,144	396,640
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 September 30, 2014 and June 30, 2014, respectively; issued and outstanding: 77,422,458 and 77,178,365 shares at September 30, 2014 and June 30, 2014, respectively	77	77
Additional paid-in capital	455,928	451,750
Accumulated other comprehensive income	1,232	1,815
Accumulated deficit	(376,744)	(355,094)
Total stockholders' equity	80,493	98,548
Total liabilities and stockholders' equity	$ 459,637	$ 495,188

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2014	Jun. 30, 2014
Condensed Consolidated Balance Sheets
Accounts receivable, allowance for doubtful accounts (in dollars)	$ 841	$ 976
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	77,422,458	77,178,365
Common stock, outstanding shares	77,422,458	77,178,365

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Net revenue:
Products	$ 33,015	$ 29,568
Services	49,366	47,073
Total net revenue	82,381	76,641
Cost of revenue:
Cost of products	20,665	18,601
Cost of services	33,915	31,562
Total cost of revenue	54,580	50,163
Gross profit	27,801	26,478
Operating expenses:
Research and development	14,149	12,950
Selling and marketing	17,974	14,454
General and administrative	10,950	11,360
Total operating expenses	43,073	38,764
Loss from operations	(15,272)	(12,286)
Other expense, net	(5,461)	(2,460)
Loss before provision for income taxes	(20,733)	(14,746)
Provision for income taxes	917	787
Net loss	$ (21,650)	$ (15,533)
Loss per share attributable to stockholders
Earnings Per Share, Basic and Diluted	$ (0.28)	$ (0.21)
Weighted average common shares used in computing loss per share
Basic and diluted (in shares)	77,290	74,700
Net loss attributable to stockholders	$ (21,650)	$ (15,533)
Foreign currency translation adjustment	(442)	165
Unrealized gain on investments, net of tax	(141)	290
Comprehensive loss	$ (22,233)	$ (15,078)

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash Flows From Operating Activities
Loss from continuing operations	$ (21,650)	$ (15,533)
Adjustments to reconcile net loss to net cash used in operating activities :
Depreciation and amortization	4,978	5,448
Share-based compensation	3,273	2,180
Amortization of debt issuance costs	363	343
Amortization and accretion of discount and premium on investments	266	490
Accretion of interest on long-term debt	1,759	1,148
Recovery of bad debt, net	(127)	(10)
Provision for write-down of inventories	259	790
Changes in assets and liabilities:
Accounts receivable	17,726	(4,000)
Inventories	(13,147)	(6,821)
Prepaid expenses and other assets	3,233	(2,084)
Deferred cost of revenue	1,468	(405)
Accounts payable	9	2,219
Accrued liabilities	(13,237)	1,623
Customer advances	751	1,932
Deferred revenue	(643)	1,426
Net cash provided by (used in) operating activities	(14,719)	(11,254)
Cash Flows From Investing Activities
Purchases of property and equipment, net	(2,691)	(3,206)
Purchases of investments	(45,739)	(5,125)
Sale and maturity of investments	79,470	6,851
Net cash provided by (used in) investing activities	31,040	(1,480)
Cash Flows From Financing Activities
Proceeds from employee stock plans	1,886	629
Net cash provided by financing activities	1,886	629
Effect of exchange rate changes on cash and cash equivalents	(3,258)	1,228
Net increase (decrease) in cash and cash equivalent	14,949	(10,877)
Cash and cash equivalents at beginning of period	92,346	73,313
Cash and cash equivalents at end of period	$ 107,295	$ 62,436

Summary of Significant Accounting Policies

3 Months Ended

Sep. 30, 2014

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 worldwide.

Basis of Presentation and Principles of Consolidation

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. 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 months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending June 30, 2015, 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, 2014 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.

Recent Accounting Standard Update Not Yet Effective

In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers: Topic 606 (ASU 2014-09), to supersede nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration that is expected to be received for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, it is possible more judgment and estimates may be required within the revenue recognition process than required under existing U.S. GAAP including identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. ASU 2014-09 is effective for the Company in its first quarter of fiscal 2018 using either of two methods: (i) retrospective to each prior reporting period presented with the option to elect certain practical expedients as defined within ASU 2014-09; or (ii) retrospective with the cumulative effect of initially applying ASU 2014-09 recognized at the date of initial application and providing certain additional disclosures as defined per ASU 2014-09. The Company is currently evaluating the impact of pending adoption of ASU 2014-09 on its 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, assessment of recoverability of goodwill and intangible assets, valuation of inventories, share-based compensation expense, income taxes, allowance for doubtful accounts, 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 months ended September 30, 2014 and 2013, there were no customers that represented 10% or more of total net revenue. At September 30, 2014, no customers accounted for 10% or more of the Company’s total accounts receivable. At June 30, 2014, one customer accounted for 13% 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 and related services. 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 offers its systems with post-contract customer support (“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, parts and upgrades that are sold under service contracts, 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 parts or system upgrades where revenue recognition has been deferred. In those cases, the costs are deferred and are recognized over the period of revenue recognition.

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 September 30,
	2014			2013
Numerator:
Net loss used in computing net loss per share	$	(21,650	)	$	(15,533	)
Denominator:
Weighted average shares used in computing basic and diluted net loss per share	77,290			74,700

The potentially dilutive shares of the Company’s common stock resulting from the assumed exercise of outstanding stock options, the vesting of Restricted Stock Units (RSU), Market Stock Units (MSU) and Performance Stock Units (PSU), and the purchase of shares under the Employee Stock Purchase Program (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. Additionally, the 3.75% Convertible Senior Notes due August 1, 2016 (the “3.75% Convertible Notes”), the 3.50% Convertible Senior Notes due February 1, 2018 (the “3.50% Convertible Notes”) and the 3.50% Series A Convertible Notes (the “3.50% Series A Convertible Notes”) due February 1, 2018 (together, the “Convertible Notes”) are included in the calculation of diluted net income per share only if their inclusion is dilutive. For the three months ended September 30, 2014 and 2013, the potentially dilutive shares under the Convertible Notes were excluded from the calculation of diluted net loss per share as their inclusion would have been 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 September 30,
	2014	2013
Stock options	3,032	4,436
RSUs, PSUs and MSUs	4,024	3,011
3.75% Convertible Notes	—	—
3.50% Convertible Notes	8,378	21,576
3.50% Series A Convertible Notes	3,352	—
	18,786	29,023

Outstanding Convertibles Notes—Diluted Share Impact

The 3.75% Convertible Notes and 3.50% Series A Convertible Notes have an optional physical (share), cash or combination settlement feature and contain certain conditional conversion features. Due to the optional cash settlement feature and management’s intent to settle the principal amount thereof in cash, the conversion shares underlying the outstanding principal amount of the 3.75% Convertible Notes and 3.50% Series A Convertible Notes, totaling approximately 10.6 million shares and 13.2 million shares, respectively, were not included in the potentially diluted share count table above. The Company’s average stock price did not exceed the conversion price of the 3.75% Convertible Notes as of September 30, 2014 and 2013. The 3.4 million potentially dilutive shares of the 3.50% Series A Convertible Notes included in the table above represent the premium over the principal amount due to the higher average share price. The number of premium shares included in the Company’s diluted share count will vary with fluctuations in the Company’s share price. Higher actual share prices result in a greater number of premium shares.

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
	September 30,
	2014		2013
Americas	$	38,478	$	39,253
Europe, Middle East, India and Africa	30,937		18,766
Asia (excluding Japan and India)	4,882		7,299
Japan	8,084		11,323
Total	$	82,381	$	76,641

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

	September 30,		June 30,
	2014		2014
Americas	$	29,099	$	30,542
Europe, Middle East, India and Africa	1,417		1,665
Asia (excluding Japan and India)	423		444
Japan	1,794		1,740
Total	$	32,733	$	34,391

Goodwill and Intangible Assets

3 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets

Goodwill and Intangible Assets

3. Goodwill and Intangible Assets

Goodwill

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

	Three Months			Year
	Ended			Ended
	September 30,			June 30,
	2014			2014
Balance at the beginning of the period	$	58,091		$	59,368
Currency translation and other adjustments	(25		)	(1,277		)
Balance at the end of the period	$	58,066		$	58,091

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. In the three months ended September 30, 2014, there were no indications of impairment.

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.

Intangible Assets

The Company’s unamortized intangible assets associated with completed acquisitions at September 30, 2014 and June 30, 2014 are as follows (in thousands):

		September 30, 2014							June 30, 2014
		Gross							Gross
		Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Useful Lives	Amount		Amortization			Amount		Amount		Amortization			Amount
	(in years)
Developed technology	5 - 6	$	46,747	$	(25,218	)	$	21,529	$	46,747	$	(23,230	)	$	23,517

The Company did not identify any triggering events that would indicate potential impairment of its definite-lived intangible and long-lived assets as of September 30, 2014 and June 30, 2014.

Amortization expense related to intangible assets for the three months ended September, 2014 and 2013 was $2.0 million and $2.2 million, respectively.

The estimated future amortization expense of purchased intangible assets as of September 30, 2014 is as follows (in thousands):

Year Ending June 30,	Amount
2015 (remaining 9 months)	$	5,965
2016	7,953
2017	7,568
2018	43
Thereafter	—
	$	21,529

- 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

3 Months Ended

Sep. 30, 2014

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 papers, U.S. agency securities, non-U.S. government securities 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):

	September 30, 2014
								Estimated Market Value
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	93,041	$	—	$	—		$	93,041	$	—
Level 1
Money market funds	10,255		—		—			10,255		—
	10,255		—		—			10,255		—
Level 2
Commercial paper	21,320		—		(3		)	3,999		17,318
U.S. Agency securities	1,997		—		(5		)	—		1,992
Non-U.S. government securities	3,098		—		(7		)	—		3,091
Corporate notes	23,120		—		(106		)	—		23,014
	49,535		—		(121		)	3,999		45,415
Total	$	152,831	$	—	$	(121	)	$	107,295	$	45,415

	June 30, 2014
								Estimated Market Value
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	91,797	$	—	$	—		$	91,797	$	—
Level 1
Money market funds	549		—		—			549		—
Level 2
Corporate notes	79,535		72		(54		)	—		79,553
Total	$	171,881	$	72	$	(54	)	$	92,346	$	79,553

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 September 30, 2014. 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 September 30, 2014, 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 months ended September 30, 2014.

Contractual maturities of available-for-sale securities at September 30, 2014 were as follows (in thousands):

	September 30, 2014
	Amortized Cost		Fair Value
Due in 1 year or less	$	29,062	$	29,033
Due in 1-2 years	10,307		10,259
Due in 2-3 years	6,167		6,123
	$	45,536	$	45,415

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

	September 30, 2014				June 30, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Convertible Notes	$	89,776	$	106,830	$	88,511	$	115,415
3.50% Convertible Notes	44,654		67,769		44,654		79,388
3.50% Series A Convertible Notes	62,941		106,761		62,447		125,065
Total	$	197,371	$	281,360	$	195,612	$	319,868

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	3 Months Ended
Commitments and Contingencies	Sep. 30, 2014
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, 2014. There have been no material changes outside of the ordinary course of business in those obligations during the three months ended September 30, 2014. 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. Although occasional adverse decisions or settlements may occur, except as described below, management does not believe that an adverse determination with respect to any of these claims 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 $0.5 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. 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 Systems’ 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 jointly asked the court to extend discovery until February 2014. The Company filed a motion for summary judgment and, on September 11, 2013, the court held a hearing on the Company’s motion for summary judgment and to stay discovery pending the ruling on the summary judgment motion. On December 5, 2013, the court ruled in favor of the Company. Rotary Systems filed its notice of appeal on January 29, 2014. On April 14, 2014, Rotary Systems filed its appellant brief with the court. On June 2, 2014, the Company filed its response brief, and on June 27, 2014, Rotary Systems filed its reply brief with the court. The court heard oral argument on September 24, 2014. The Company anticipates that the court will issue its decision by the end of calendar year 2014. Sarif Biomedical Patent Litigation On January 28, 2013, Sarif Biomedical filed a patent infringement complaint against the Company in the U.S. District Court for the District of 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 parties have exchanged initial discovery requests and responses. The court issued a scheduling order on April 29, 2014. Accuray made its first document production on May 30, 2014. Discovery closes on May 5, 2015, and trial is set for April 11, 2016. Cowealth Medical On February 27, 2014, Cowealth Medical Holding Co., Ltd. (“Cowealth”), Accuray’s former distributor in China, submitted a request for arbitration with the International Chamber of Commerce International Court of Arbitration (“ICC”) alleging, among other matters, that Accuray breached its distributor agreement with Cowealth by wrongfully terminating Cowealth as its distributor and misappropriated certain of Cowealth’s confidential information. Cowealth is seeking damages and injunctive relief. Accuray’s answer and counterclaim were submitted to the ICC on May 12, 2014, and Cowealth served its reply on June 27, 2014. A hearing has been set for January 27, 2015. 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 September 30, 2014.

Debt

3 Months Ended

Sep. 30, 2014

Debt

Debt

7. 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.

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.

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, which began on August 1, 2013. The 3.50% Convertible Notes will mature on February 1, 2018, unless earlier repurchased, redeemed or converted.

In April 2014, through a series of transactions, the Company refinanced approximately $70.3 million aggregate principal amount of the 3.50% Convertible Notes with approximately $70.3 million aggregate principal amount of the Company’s new 3.50% Series A Convertible Senior Notes due 2018 (the “3.50% Series A Convertible Notes”). The remaining balance of the 3.50% Convertible Notes was $44.7 million as of September 30, 2014.

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 the Company 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 remaining $44.7 million principal amount of the 3.50% Convertible Note has been recorded in Long-term Debt on the consolidated balance sheet as of September 30, 2014.

3.50% Series A Convertible Senior Notes due February 2018

On April 17, 2014, the Company entered into note exchange agreements with certain holders (the “Participating Holders”) of the 3.50% Convertible Notes to refinance approximately $70.3 million aggregate principal amount of the 3.50% Convertible Notes with approximately $70.3 million aggregate principal amount of the 3.50% Series A Convertible Notes. Pursuant to the note exchange agreements, the Company also paid the Participating Holders an aggregate of approximately $0.4 million in cash in connection with such transactions. The principal amount of 3.50% Convertible Notes refinanced for each $1,000 principal amount of the 3.50% Series A Convertible Notes was $1,000 and the amount in cash paid per $1,000 principal amount of such 3.50% Convertible Notes delivered was determined in individual negotiations between the Company and each Participating Holder. The Series A Convertible Notes have the same interest rate, maturity and other terms as the 3.50% Convertible Notes, except that the 3.50% Series A Convertible Notes are convertible into cash, shares of the Company’s common stock or a combination of cash and shares of common stock, at the Company’s option.

The 3.50% Series A 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% Series A Convertible Notes may convert their Securities at any time on or after November 1, 2017 until the close of business on the business day immediately preceding the maturity date. Prior to November 1, 2017, holders of the 3.50% Series A Convertible Notes may convert their Securities only under the following circumstances: (1) during any calendar quarter after the calendar quarter ending September 30, 2014, 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 3.50% Series A Convertible Notes for each trading day of that Securities 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; or (3) upon the occurrence of specified corporate transactions as described in the Indenture. Upon conversion by holders of the 3.50% Series A 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 17th 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 3.50% Series A 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 3.50% Series A Convertible Notes being converted. The initial conversion rate is 187.6877 shares of the Company’s common stock per $1,000 principal amount of 3.50% Series A Convertible Notes (which represents an initial conversion price of approximately $5.33 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 3.50% Series A Convertible Notes who convert their 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% Series A 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 the 3.50% Series A Convertible Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date.

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 3.50% Series A Convertible Notes. The principal amount of the liability component of the 3.50% Series A Convertible Notes was $62.5 million as of the date of issuance based on the present value of its cash flows using a discount rate of 7%, 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 $7.9 million. In addition, the portion of the cash amount paid to the Participating Holders totaling $370 thousand was allocated to the debt discount with the remaining $47 thousand to equity component. The liability component is being accreted to the principal amount of the 3.50% Series A Convertible Notes using the effective interest method through the maturity in February 2018.

The following table presents the carrying values of all Convertible Notes as of September 30, 2014 (in thousands):

	3.75% Notes			3.50% Notes		3.50% Series A Notes			TOTAL

Carrying amount of the equity conversion component	$	23,189		$	—	$	7,844		$	31,033
Principal amount of the Convertible Notes	$	100,000		$	44,654	$	70,346		$	215,000
Unamortized debt discount	(10,224		)	—		(7,405		)	(17,629		)
Net carrying amount	$	89,776		$	44,654	$	62,941		$	197,371

A summary of interest expense on all Convertible Notes is as follows (in thousands):

	Three months ended September 30,
	2014		2013
Interest expense related to contractual interest coupon	$	1,943	$	1,944
Interest expense related to amortization of debt discount	1,759		1,148
Interest expense related to amortization of debt issuance costs	363		343
	$	4,065	$	3,435

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Sep. 30, 2014

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Recent Accounting Standard Update Not Yet Effective

Use of Estimates

Concentration of Credit and Other Risks

Revenue Recognition

Product and Service 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 September 30,
	2014			2013
Numerator:
Net loss used in computing net loss per share	$	(21,650	)	$	(15,533	)
Denominator:
Weighted average shares used in computing basic and diluted net loss per share	77,290			74,700

	As of September 30,
	2014	2013
Stock options	3,032	4,436
RSUs, PSUs and MSUs	4,024	3,011
3.75% Convertible Notes	—	—
3.50% Convertible Notes	8,378	21,576
3.50% Series A Convertible Notes	3,352	—
	18,786	29,023

Outstanding Convertibles Notes-Diluted Share Impact

Outstanding Convertibles Notes—Diluted Share Impact

Segment Information

	Three Months Ended
	September 30,
	2014		2013
Americas	$	38,478	$	39,253
Europe, Middle East, India and Africa	30,937		18,766
Asia (excluding Japan and India)	4,882		7,299
Japan	8,084		11,323
Total	$	82,381	$	76,641

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

	September 30,		June 30,
	2014		2014
Americas	$	29,099	$	30,542
Europe, Middle East, India and Africa	1,417		1,665
Asia (excluding Japan and India)	423		444
Japan	1,794		1,740
Total	$	32,733	$	34,391

- 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)

3 Months Ended

Sep. 30, 2014

Summary of Significant Accounting Policies

Schedule of reconciliation of the numerator and denominator used in the calculation of basic and diluted 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 September 30,
	2014			2013
Numerator:
Net loss used in computing net loss per share	$	(21,650	)	$	(15,533	)
Denominator:
Weighted average shares used in computing basic and diluted net loss per share	77,290			74,700

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 September 30,
	2014	2013
Stock options	3,032	4,436
RSUs, PSUs and MSUs	4,024	3,011
3.75% Convertible Notes	—	—
3.50% Convertible Notes	8,378	21,576
3.50% Series A Convertible Notes	3,352	—
	18,786	29,023

Summary of revenue by geographic region

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

	Three Months Ended
	September 30,
	2014		2013
Americas	$	38,478	$	39,253
Europe, Middle East, India and Africa	30,937		18,766
Asia (excluding Japan and India)	4,882		7,299
Japan	8,084		11,323
Total	$	82,381	$	76,641

Schedule of geographic areas in which the Company has long lived tangible assets

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

	September 30,		June 30,
	2014		2014
Americas	$	29,099	$	30,542
Europe, Middle East, India and Africa	1,417		1,665
Asia (excluding Japan and India)	423		444
Japan	1,794		1,740
Total	$	32,733	$	34,391

Goodwill and Intangible Assets (Tables)

3 Months Ended

Sep. 30, 2014

Goodwill and Intangible Assets

Schedule of goodwill

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

	Three Months			Year
	Ended			Ended
	September 30,			June 30,
	2014			2014
Balance at the beginning of the period	$	58,091		$	59,368
Currency translation and other adjustments	(25		)	(1,277		)
Balance at the end of the period	$	58,066		$	58,091

Schedule of intangible assets associated with completed acquisitions

The Company’s unamortized intangible assets associated with completed acquisitions at September 30, 2014 and June 30, 2014 are as follows (in thousands):

		September 30, 2014							June 30, 2014
		Gross							Gross
		Carrying		Accumulated			Net		Carrying		Accumulated			Net
	Useful Lives	Amount		Amortization			Amount		Amount		Amortization			Amount
	(in years)
Developed technology	5 - 6	$	46,747	$	(25,218	)	$	21,529	$	46,747	$	(23,230	)	$	23,517

Schedule of estimated future amortization expense of purchased intangible assets

The estimated future amortization expense of purchased intangible assets as of September 30, 2014 is as follows (in thousands):

Year Ending June 30,	Amount
2015 (remaining 9 months)	$	5,965
2016	7,953
2017	7,568
2018	43
Thereafter	—
	$	21,529

Financial Instruments (Tables)

3 Months Ended

Sep. 30, 2014

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

	September 30, 2014
								Estimated Market Value
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	93,041	$	—	$	—		$	93,041	$	—
Level 1
Money market funds	10,255		—		—			10,255		—
	10,255		—		—			10,255		—
Level 2
Commercial paper	21,320		—		(3		)	3,999		17,318
U.S. Agency securities	1,997		—		(5		)	—		1,992
Non-U.S. government securities	3,098		—		(7		)	—		3,091
Corporate notes	23,120		—		(106		)	—		23,014
	49,535		—		(121		)	3,999		45,415
Total	$	152,831	$	—	$	(121	)	$	107,295	$	45,415

	June 30, 2014
								Estimated Market Value
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Cash and Cash Equivalents		Short-term Investments

Cash	$	91,797	$	—	$	—		$	91,797	$	—
Level 1
Money market funds	549		—		—			549		—
Level 2
Corporate notes	79,535		72		(54		)	—		79,553
Total	$	171,881	$	72	$	(54	)	$	92,346	$	79,553

Schedule of contractual maturities of available-for-sale securities

Contractual maturities of available-for-sale securities at September 30, 2014 were as follows (in thousands):

	September 30, 2014
	Amortized Cost		Fair Value
Due in 1 year or less	$	29,062	$	29,033
Due in 1-2 years	10,307		10,259
Due in 2-3 years	6,167		6,123
	$	45,536	$	45,415

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):

	September 30, 2014				June 30, 2014
	Carrying Value		Fair Value		Carrying Value		Fair Value
3.75% Convertible Notes	$	89,776	$	106,830	$	88,511	$	115,415
3.50% Convertible Notes	44,654		67,769		44,654		79,388
3.50% Series A Convertible Notes	62,941		106,761		62,447		125,065
Total	$	197,371	$	281,360	$	195,612	$	319,868

Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Apr. 17, 2014	Feb. 28, 2013	Aug. 02, 2011	Aug. 01, 2011
Numerator:
Loss from operations used in computing loss per share from continuing operations	$ (21,650)	$ (15,533)
Net loss attributable to stockholders	$ (21,650)	$ (15,533)
Denominator:
Weighted average shares used in computing basic and diluted loss per share	77,290,000	74,700,000
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	18,786,000	29,023,000
3.75% Convertible Notes
Denominator:
Interest rate (as a percent)	3.75%				3.75%	3.75%
Debt Instrument Convertible Number of Shares	10,600,000
3.50% Convertible Notes
Denominator:
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	8,378,000	21,576,000
Interest rate (as a percent)	3.50%			3.50%
3.50% Series A Convertible Notes
Denominator:
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	3,352,000
Interest rate (as a percent)			3.50%
Debt Instrument Convertible Number of Shares	13,200,000
Stock options
Denominator:
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	3,032,000	4,436,000
RSUs, PSUs and MSUs
Denominator:
Anti-dilutive securities excluded from the computation of diluted net loss per share (in shares)	4,024,000	3,011,000

Balance Sheet Components (Details) - USD ($)	3 Months Ended
Balance Sheet Components (Details) - USD ($)	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014
Inventories
Raw materials	$ 42,564,000		$ 37,003,000
Work-in-process	23,755,000		17,692,000
Finished goods	33,675,000		33,057,000
Total inventories	99,994,000		87,752,000
Financing receivables
Accounts receivable with contractual maturities of more than one year	700,000		2,800,000
Allowance for doubtful financing receivable accounts related to financing receivables	0		0
Property and Equipment, net
Property and equipment, gross	98,322,000		97,225,000
Less: Accumulated depreciation and amortization	(65,589,000)		(62,834,000)
Property and equipment, net	32,733,000		34,391,000
Depreciation and amortization expense	3,000,000	$ 3,200,000
Furniture and fixtures
Property and Equipment, net
Property and equipment, gross	5,327,000		5,351,000
Computer and office equipment
Property and Equipment, net
Property and equipment, gross	11,307,000		10,540,000
Computer software
Property and Equipment, net
Property and equipment, gross	10,817,000		10,736,000
Leasehold improvements
Property and Equipment, net
Property and equipment, gross	19,313,000		18,991,000
Machinery and equipment
Property and Equipment, net
Property and equipment, gross	46,548,000		45,730,000
Construction in progress
Property and Equipment, net
Property and equipment, gross	$ 5,010,000		$ 5,877,000

Goodwill and Intangible Assets (Details) - USD ($)	3 Months Ended			6 Months Ended	12 Months Ended
Goodwill and Intangible Assets (Details) - USD ($)	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Jun. 30, 2014
Changes in the carrying amount of goodwill
Balance at the beginning of the period	$ 58,091,000		$ 59,368,000		$ 59,368,000
Currency translation and other adjustment	(25,000)				(1,277,000)
Balance at the end of the period	58,066,000	$ 58,091,000		$ 58,066,000	58,091,000
Impairment of goodwill		0
Goodwill	58,066,000	58,091,000		58,066,000	58,091,000
Total gross carrying amount	46,747,000	46,747,000		46,747,000	46,747,000
Accumulated Amortization	(25,218,000)	(23,230,000)		(25,218,000)	(23,230,000)
Net Amount, Finite Lived Intangibles	21,529,000	23,517,000		21,529,000	23,517,000
Amortization expense	2,000,000		2,200,000
Estimated future amortization expense of purchased intangible assets
2015 (remaining 9 months)	5,965,000			5,965,000
2016	7,953,000			7,953,000
2017	7,568,000			7,568,000
2018	43,000			43,000
Net Amount, Finite Lived Intangibles	$ 21,529,000	$ 23,517,000		$ 21,529,000	$ 23,517,000
Minimum
Changes in the carrying amount of goodwill
Useful Lives				5 years
Maximum
Changes in the carrying amount of goodwill
Useful Lives				6 years
TomoTherapy \| Liabilities related to unrecognized tax
Changes in the carrying amount of goodwill
Accrued liabilities			$ 1,300,000

Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Jun. 30, 2014	Sep. 30, 2013	Jun. 30, 2013
Cash, cash equivalents and short-term investments
Cash	$ 93,041	$ 91,797
Amortized Cost	45,536
Gross Unrealized Gains		72
Gross Unrealized Losses	(121)	(54)
Available-for-sale Securities	45,415
Total Amortized Cost	152,831	171,881
Cash and Cash Equivalents	107,295	92,346	$ 62,436	$ 73,313
Short-term investments	45,415	79,553
Amortized Cost
Due in 1 year or less	29,062
Due in 1-2 years	10,307
Due in 2-3 years	6,167
Amortized cost	45,536
Fair Value
Due in 1 year or less	29,033
Due in 1-2 years	10,259
Due in 2-3 years	6,123
Available-for-sale Securities	45,415
Level 1
Cash, cash equivalents and short-term investments
Cash Equivalents	10,255
Cash Equivalents and Short-term Investments including Available-for-sale Securities	10,255
Level 1 \| Money market funds
Cash, cash equivalents and short-term investments
Cash Equivalents	10,255	549
Cash Equivalents and Short-term Investments including Available-for-sale Securities	10,255	549
Level 2
Cash, cash equivalents and short-term investments
Amortized Cost	49,535
Gross Unrealized Losses	(121)
Cash and Cash Equivalents	3,999
Short-term investments	45,415
Amortized Cost
Amortized cost	49,535
Level 2 \| Commercial paper
Cash, cash equivalents and short-term investments
Amortized Cost	21,320
Gross Unrealized Losses	(3)
Cash and Cash Equivalents	3,999
Short-term investments	17,318
Amortized Cost
Amortized cost	21,320
Level 2 \| Agency Securities [Member]
Cash, cash equivalents and short-term investments
Amortized Cost	1,997
Gross Unrealized Losses	(5)
Short-term investments	1,992
Amortized Cost
Amortized cost	1,997
Level 2 \| Foreign Government Debt Securities [Member]
Cash, cash equivalents and short-term investments
Amortized Cost	3,098
Gross Unrealized Losses	(7)
Short-term investments	3,091
Amortized Cost
Amortized cost	3,098
Level 2 \| Corporate notes
Cash, cash equivalents and short-term investments
Amortized Cost	23,120	79,535
Gross Unrealized Gains		72
Gross Unrealized Losses	(106)	(54)
Available-for-sale Securities	23,014
Short-term investments		79,553
Amortized Cost
Amortized cost	23,120	$ 79,535
Fair Value
Available-for-sale Securities	$ 23,014

Debt (Details) - USD ($)			1 Months Ended		3 Months Ended
Debt (Details) - USD ($)	Apr. 17, 2014	Aug. 01, 2011	Apr. 30, 2014	Feb. 28, 2013	Sep. 30, 2014	Sep. 30, 2013	Jun. 30, 2014	Aug. 02, 2011
Debt
Principal amount of the Notes					$ 215,000,000
Carrying amount of the equity conversion component					31,033,000
Unamortized debt discount					(17,629,000)
Net carrying amount					197,371,000		$ 195,612,000
Interest expense related to amortization of debt issuance costs					$ 363,000	$ 343,000
3.75% Convertible Notes
Debt
Aggregate principal amount of debt issued		$ 100,000,000
Interest rate (as a percent)		3.75%			3.75%			3.75%
Principal amount of the Notes					$ 100,000,000
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
Conversion price (in dollars per share)					$ 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
Unamortized debt discount					(10,224,000)
Net carrying amount		$ 75,900,000			$ 89,776,000
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%	3.50%
Principal amount of the Notes			$ 44,700,000		$ 44,654,000
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
Conversion price (in dollars per share)					$ 5.33
Repurchase price, as percentage of principal amount, if company undergoes change of control					100.00%
Net carrying amount					$ 44,654,000
Aggregate principal amount of debt refinanced			$ 70,300,000
DebtConversionRate	$ 1,000
3.50% Series A Convertible Notes
Debt
Aggregate principal amount of debt issued	$ 70,300,000
Interest rate (as a percent)	3.50%
Principal amount of the Notes					$ 70,346,000
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
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
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%
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
Percentage of the trading price to the product of the sale price of the entity's common stock and the conversion rate					98.00%
Discount rate on liability component (as a percent)					7.00%
Carrying amount of the equity conversion component					$ 7,844,000
Unamortized debt discount					(7,405,000)
Net carrying amount					62,941,000
Interest expense related to contractual interest coupon					1,943,000	1,944,000
Interest expense related to amortization of debt discount					1,759,000	1,148,000
Interest expense related to amortization of debt issuance costs					363,000	343,000
Total interest expense recognized					4,065,000	$ 3,435,000
Payment to the convertible note holders to modify the notes	$ 400,000
Portion of cash amount paid allocated to debt discount					370,000
Portion of cash amount paid allocated to equity component					$ 47,000

Summary of Significant Accounting Policies (Details) - Total accounts receivable - Credit concentration risk - Major customers - customer	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Concentration of Credit Risk and Other Risks and Uncertainties
Number of significant customers	0	1
Percentage of concentration risk	10.00%	13.00%

Commitments and Contingencies (Details) - USD ($)	May 21, 2012	Apr. 28, 2011	Sep. 30, 2014
Contingencies
Estimated loss, low end range			$ 0
Estimated loss, high end range			$ 500,000
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
Share-Based Compensation (Details) - USD ($) $ in Thousands	Sep. 30, 2014	Sep. 30, 2013
Share-based compensation charges
Share-based compensation expense	$ 3,273	$ 2,180
Cost of revenue
Share-based compensation charges
Share-based compensation expense	395	454
Research and development
Share-based compensation charges
Share-based compensation expense	894	478
Selling and marketing
Share-based compensation charges
Share-based compensation expense	651	371
General and administrative
Share-based compensation charges
Share-based compensation expense	$ 1,333	$ 877

Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2014	Jun. 30, 2014
Accumulated Other Comprehensive Income
Net unrealized gain (loss) on short-term investments	$ (123)	$ 18
Cumulative foreign currency translation gain	1,922	2,364
Change in defined benefit pension obligation	(567)	(567)
Accumulated other comprehensive income	$ 1,232	$ 1,815

Summary of Significant Accounting Policies (Details 4) $ in Thousands	3 Months Ended
	Sep. 30, 2014 USD ($) segment	Sep. 30, 2013 USD ($)	Jun. 30, 2014 USD ($)
Segment Information
Number of operating segments \| segment	1
Revenue	$ 82,381	$ 76,641
Long lived assets	32,733		$ 34,391
Americas
Segment Information
Revenue	38,478	39,253
Long lived assets	29,099		30,542
Europe, Middle East, India and Africa
Segment Information
Revenue	30,937	18,766
Long lived assets	1,417		1,665
Asia (excluding Japan and India)
Segment Information
Revenue	4,882	7,299
Long lived assets	423		444
Japan
Segment Information
Revenue	8,084	$ 11,323
Long lived assets	$ 1,794		$ 1,740

Financial Instruments (Details 2) - USD ($) $ in Thousands	Sep. 30, 2014	Jun. 30, 2014	Apr. 17, 2014	Feb. 28, 2013	Aug. 02, 2011	Aug. 01, 2011
3.75% Convertible Notes
Fair value measurement
Interest rate (as a percent)	3.75%				3.75%	3.75%
3.50% Convertible Notes
Fair value measurement
Interest rate (as a percent)	3.50%			3.50%
3.50% Series A Convertible Notes
Fair value measurement
Interest rate (as a percent)			3.50%
Non-recurring basis \| Carrying Value
Fair value measurement
Long term debt	$ 197,371	$ 195,612
Non-recurring basis \| Carrying Value \| 3.75% Convertible Notes
Fair value measurement
Long term debt	89,776	88,511
Non-recurring basis \| Carrying Value \| 3.50% Convertible Notes
Fair value measurement
Long term debt	44,654	44,654
Non-recurring basis \| Carrying Value \| 3.50% Series A Convertible Notes
Fair value measurement
Long term debt	62,941	62,447
Non-recurring basis \| Fair Value
Fair value measurement
Long term debt	281,360	319,868
Non-recurring basis \| Fair Value \| 3.75% Convertible Notes
Fair value measurement
Long term debt	106,830	115,415
Non-recurring basis \| Fair Value \| 3.50% Convertible Notes
Fair value measurement
Long term debt	67,769	79,388
Non-recurring basis \| Fair Value \| 3.50% Series A Convertible Notes
Fair value measurement
Long term debt	$ 106,761	$ 125,065