ACCURAY INC
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
ARAY$0.11-11.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-02.
0000950170-25-062744
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-05.
0001193125-25-266985
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 107 current paragraphs.
58 unchanged; 26 reworded; 23 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (23)
Current report
As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. If existing tariffs increase, we would expect minimal shipments to China despite customer demand. We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026.
Current report
There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results are expected to be adversely impacted through fiscal year 2026.
Current report
Restructuring
Current report
In the first quarter of fiscal year 2026, we informed affected employees of a cost savings initiative to reduce operating expenses which resulted in the elimination of approximately 3 percent of our global workforce. We recorded a restructuring charge of $1.5 million during the three months ended September 30, 2025, for severance benefits related to the reduction in workforce. In addition, we recorded $1.3 million during the three months ended September 30, 2025 for third-party consulting activities directly related to the development and execution of the restructuring plan. The cost-saving initiative is expected to be substantially completed by the fourth quarter of fiscal year 2026.
Current report
The restructuring charges for the affected employees are recorded in their respective department cost center. These restructuring charges recorded during the three months ended September 30, 2025, are as follows: cost of products $0.2 million, cost of services $0.2 million, research and development $0.1 million, sales and marketing $0.3 million, and general and administrative $0.7 million. The $1.3 million of third-party consulting costs were recorded in general and administrative expense.
Current report
We paid approximately $0.9 million in cash for the restructuring charges during the three months ended September 30, 2025. At September 30, 2025, we have a remaining accrual of $1.9 million, which is included in accrued compensation on the unaudited condensed consolidated balance sheets, and expects to pay the remaining amounts over the remainder of fiscal year 2026.
Current report
Gross orders decreased by $15.8 million during the three months ended September 30, 2025, respectively, as compared to the same period in the prior fiscal year, primarily due to the timing of system gross orders from the EIMEA and China regions, partially offset by an increase in system gross orders from the Americas region.
Current report
Products net revenue decreased $11.2 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year. The decrease in products net revenue was mostly driven by a lower volume of shipments to China.
Current report
Gross profit decreased by $7.9 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a decrease in net revenues. The decrease in gross profit as a percentage of revenue was due to both geographic and product sales mix, and incremental costs associated with tariffs during the three months ended September 30, 2025.
Current report
Research and development expenses decreased by $0.7 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to $1.7 million in capitalized labor costs for software development projects in the current period, partially offset by higher spending for research and development projects.
Current report
Selling and marketing expenses increased by $0.3 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a $0.5 million increase in trade show costs that resulted from the timing of trade show in the current period.
Current report
General and administrative expenses increased by $1.7 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year primarily due to $1.3 million in costs from third-party consulting firms to advise with the cost-saving initiative, a $0.5 million increase in severance costs related to the cost-saving initiative, and a $0.4 million increase in bad debt expense.
Current report
Interest expense increased during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to higher interest payments and financing costs for the Term Loan Facilities. In addition, we accrued $2.3 million for paid-in-kind interest on the Term Loan Facilities.
Current report
Loss from change in fair value of warrant liability
Current report
Our Penny Warrants are accounted for as a liability with the changes in the fair value of the warrants recognized in the statement of operations and comprehensive loss. During the three months ended September 30, 2025, we recorded a loss of $1.9 million due to an increase in the share price of our common stock during the period.
Current report
Other (expense), income net
Current report
Other (expense) income decreased during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due foreign currency transaction losses in the first quarter of fiscal year 2026.
Current report
On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for (a) $150 million of new five-year term loan facilities (the “Term Loan Facilities”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the
Current report
“Revolving Credit Facility” and, together with the Term Loan Facilities and Delayed Draw Facility, the “Facilities”). The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding 3.75% Convertible Senior Notes (“2026 Notes”).
Current report
On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share (“Penny Warrants” and together with the Premium Warrants, the “Warrants”), exercisable immediately and expiring on June 6, 2032. No Penny Warrants were exercised as of September 30, 2025. Pursuant to the terms of the Financing Agreement, if the Company uses the Delay Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the Warrants to certain of its lenders under the Financing Agreement.
Current report
Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00%per annum floor), plus an applicable margin of 8.50%, per annum or (ii) a base rate (subject to a 3.00%per annum floor), plus an applicable margin of 7.50% per annum. The agreement provides the option for payment-in-kind (“PIK”) interest up to 6.00% per annum (subject to an increase in applicable margin of 1/3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loan. In June 2025, we accrued $0.6 million in PIK interest and we elected the maximum PIK option for the first interest payment date of fiscal year 2026. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility. See Note 7. Commitments and Contingenciesof our Annual Report on Form 10-K filed with the SEC on August 28, 2025 for future cash payments related to the Term Loan Facilities.
Current report
As of September 30, 2025, $18.0 million aggregate principal amount of the 2026 Notes remain outstanding and will be due on June 1, 2026. We intend to use operating cash to pay the remaining balance of the 2026 Notes. The 2026 Notes are classified as short-term debt on consolidated balance sheets.
Current report
Non-cash items primarily consisted of $2.5 million of share-based compensation expense, $2.3 million for non-cash paid-in-kind interest expense, $1.9 million for the amortization of debt issuance costs, $1.9 million for the loss on the fair value of warrants, and $1.7 million of depreciation and amortization expense.
Removed paragraphs (13)
Previous report
Additionally, in light of the uncertainty surrounding tariffs imposed by the United States and China and trade relations between the two countries, we expect the volume of product sales in China to decrease and costs associated with tariffs to increase.
Previous report
Gross orders decreased by $17.9 million and $43.4 million during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year. CyberKnife System gross orders and upgrades decreased by $21.9 and $48.5 million during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year, partially offset by an increase to TomoTherapy System gross orders and upgrades of $4.0 million and $5.1 million, during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year. Gross orders primarily decreased in the EIMEA region, the Americas region and Japan during the three months ended March 31, 2025, as compared to the same period in the prior fiscal year. Gross orders primarily decreased in the Americas region and Japan during the nine months ended March 31, 2025, as compared to the same period in the prior fiscal year.
Previous report
Products net revenue increased $7.7 million and $12.4 million during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year. The increase in products net revenue during the three months ended March 31, 2025, was mostly driven by a higher volume of shipments of our TomoTherapy Systems. The increase in products net revenue during the nine months ended was primarily due to a higher volume of shipments of both our TomoTherapy Systems and CyberKnife Systems.
Previous report
Gross profit increased by $2.6 million and $3.5 million during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year. The increase in gross profit during the three and nine months ended March 31, 2025 was primarily due to an increase in net revenues, partially offset by a $2.6 million and $2.0 million increase in net deferred gross profit on sales to the JV during the three and nine months ended March 31, 2025, respectively.
Previous report
Research and development expenses decreased by $0.2 million during the three months ended March 31, 2025, as compared to the same period in the prior fiscal year. Research and development expenses decreased by $3.7 million during the nine months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to lower compensation and benefits, severance costs in fiscal year 2024 for the restructuring initiative in the second quarter of fiscal year 2024 and the capitalization of internal labor for software development to be sold, partially offset by higher spending for research and development projects and an increase in facility and information system costs.
Previous report
Selling and marketing expenses decreased by $1.2 million during the three months ended March 31, 2025, as compared to the same period in the prior fiscal year was primarily due to lower compensation and benefits. Selling and marketing expenses were flat during the nine months ended March 31, 2025, as compared to the same period in the prior fiscal year.
Previous report
General and administrative expenses decreased by $1.7 million during the three months ended March 31, 2025, as compared to the same period in the prior fiscal year primarily due to a decrease in consulting costs in the current period due to the completion of the implementation of our ERP system in fiscal year 2024 and an overall focus on disciplined expense management. General and administrative expenses decreased by $2.7 million during the nine months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to a decrease in consulting costs due to the completion of the implementation of our ERP system in fiscal year 2024 and a decrease in facility costs, partially offset by an increase in compensation and benefits.
Previous report
Interest expense remained flat during the three and nine months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to lower average interest rates mostly offset by higher average outstanding balances on our revolving credit facility in fiscal year 2025.
Previous report
Other Income (Expense), net
Previous report
Other expense increased during the three months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to unfavorable changes in the fair value of foreign currency forward contracts. Other income increased during the nine months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to favorable changes in the fair value of foreign currency forward contracts, partially offset by increased costs for hedging activities.
Previous report
In May 2021, we issued $100.0 million aggregate principal amount of 3.75% Convertible Senior Notes due 2026 (the 'Notes") under an indenture between us and The Bank of New York Mellon Trust Company, N.A., as trustee. Concurrently, with the issuance of the Notes, in May 2021, we entered into a senior secured credit agreement with Silicon Valley Bank, individually as a lender and agent, and the other lenders (the “Credit Agreement”), which provides for a five-year $80 million term loan facility (the “Term Loan Facility”) and a $40 million revolving credit facility (the “Revolving Credit Facility”). As of March 31, 2025, we had an outstanding balance under the Term Loan Facility of $58.0 million and Revolving Credit Facility of $17.0 million. Refer to Note 8. Debt to our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q for discussion of the Term Loan Facility, the Revolving Credit Facility and our Convertible Notes outstanding as of March 31, 2025.
Previous report
In addition, our Credit Facilities will mature on May 6, 2026, and our Notes mature on June 1, 2026, both of which will need to be paid or refinanced by maturity. On the maturity date, we will be required to pay $50.0 million on the Term Loan Facility, any unpaid balance on the Revolving Credit Facility and $100.0 million on the Notes. If we are unable to repay or refinance the amounts outstanding under the Credit Facilities and the amounts due on the Notes by the time such amounts become current on May 6, 2025 and June 1, 2025, respectively, or we do not have committed financing or available liquidity to meet such debt obligations if they were to become due in accordance with their current terms, our ability to continue as a going concern may be adversely affected, as more fully described the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q under the risk factor entitled “If we are unable to refinance our debt, specifically our Credit Facilities and our Notes, in a timely manner, or at all, we may not be able to generate enough cash flow to meet our debt obligations and, our ability to continue as a going concern may be adversely affected.” If we are unable to refinance our debt prior to such debt becoming current, it could significantly reduce our cash as well as our ability to continue to support our business growth and to respond to business challenges and, our business and ability to continue as a going concern may be adversely affected.
Previous report
Non-cash items primarily consisted of $7.4 million of share-based compensation expense, $4.6 million of depreciation and amortization expense, $4.1 million in deferred gross profit on sales to the JV and $2.3 million for the provision for write-down of inventories, partially offset by $3.8 million in income from equity investment.
Reworded paragraphs (26)
Previous wording
The following discussion and analysis of our financial condition as of March 31, 2025, and results of operations for the three and nine months ended March 31, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included in this report. Statements made in this Form 10-Q report that are not statements of historical fact are forward-looking statements that are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report relate, but are not limited, to: our future results of operations and financial position, including the sufficiency of cash resources and expected cash flows to fund future operations, including the next 12 months; our expectations regarding backlog, age-ins and age-outs, cancellations of contracts and foreign currency impacts; the anticipated drivers of our future capital requirements; expectations regarding our strategy in China and our China joint venture as well as its expected impact on our business; expectations regarding the market in China for radiation oncology systems; expectations regarding the effects of the global macroeconomic conditions, such as the COVID-19 pandemic on our financial results and business as well as the business of our customers and suppliers; expectations regarding the impact of changes in government administration policy positions; expectations regarding delays in deliveries and installations and its impact on our business; expectations regarding inflation, supply chain challenges and heightened logistics costs and its impact on our business, including gross margins and net income (loss); expectations regarding revenue from the Americas region; expectations regarding the timing of deliveries and revenue conversion; our expectations regarding the adequacy of our manufacturing facilities; the anticipated risks associated with our foreign operations and fluctuations in the U.S. Dollar and foreign currencies as well as our ability to mitigate such risks; tariffs and trade policies; expectations related to the effect of the GILTI tax on our taxable income position; expectations related to our convertible notes and credit facility; expectations related to our leases; the amount of unrecognized tax amounts; the sufficiency of our cash, cash equivalents and investments to meet our anticipated cash needs for working capital and capital expenditures and our business strategy, plans and objectives. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “may,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, actual results could differ materially from the results expressed o…
Excerpt shortened here; the source contains the full paragraph.
Current wording
The following discussion and analysis of our financial condition as of September 30, 2025, and results of operations for the three months ended September 30, 2025 and 2024 should be read together with our unaudited condensed consolidated financial statements and related notes included in this report. Statements made in this Form 10-Q report that are not statements of historical fact are forward-looking statements that are subject to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report relate, but are not limited, to: our future results of operations and financial position, including the sufficiency of cash resources and expected cash flows to fund future operations, including the next 12 months; our expectations regarding backlog, age-ins and age-outs, cancellations of contracts and foreign currency impacts; the anticipated drivers of our future capital requirements; expectations regarding our strategy in China and our China joint venture as well as its expected impact on our business; expectations regarding the market in China for radiation oncology systems; expectations regarding the effects of the global macroeconomic conditions on our financial results and business as well as the business of our customers and suppliers; expectations regarding the impact of changes in government administration policy positions; expectations regarding delays in deliveries and installations and its impact on our business; expectations regarding inflation, supply chain challenges and heightened logistics costs and its impact on our business, including gross margins and net income (loss); expectations regarding revenue from the Americas region; expectations regarding the timing of deliveries and revenue conversion; our expectations regarding the adequacy of our manufacturing facilities; the anticipated risks associated with our foreign operations and fluctuations in the U.S. Dollar and foreign currencies as well as our ability to mitigate such risks; tariffs and trade policies; expectations related to the effect of the GILTI tax and the One Big Beautiful Bill Act on the company; expectations related to our convertible notes and credit facilities; expectations related to our leases; the amount of unrecognized tax amounts; the sufficiency of our cash, cash equivalents and investments to meet our anticipated cash needs for working capital and capital expenditures and our business strategy, plans and objectives. Forward-looking statements generally can be identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “projects,” “may,” “will be,” “will continue,” “will likely result,” and similar expressions. These forward-looking statements involve risks and uncertainties. If any of these risks or uncertainties materialize, or if any of our assumptions prove incorrect, actual results could differ materially from the results expressed or implied b…
Excerpt shortened here; the source contains the full paragraph.
Previous wording
We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russian-Ukraine and the Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; as well as other factors that may emerge. In particular, we are continuing to navigate supply chain and inflation challenges and adverse foreign currency exchange rate fluctuations, all of which continues to have a negative impact on our results of operations.
Current wording
We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russia-Ukraine and Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; and other factors that may emerge. We are also continuing to navigate supply chain and inflation challenges, both of which continues to be a significant headwind that affects the Company’s results of operations.
Previous wording
We expect that our customers’ business and our business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues. Inflation and the ongoing supply chain challenges and logistics costs have materially affected our gross margins and net income (loss), and we expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistic expenses through calendar year 2025. In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through calendar year 2025. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time.
Current wording
We expect that the business of our customers and our own business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues. In addition, ongoing supply chain challenges and logistics costs, including difficulties in obtaining a sufficient supply of component materials and increased component costs, have adversely affected our gross margins and net income (loss), and we currently expects that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least fiscal year 2026, and potentially longer. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time.
Previous wording
Our past results may not be indicative of our future performance, and historical trends including conversion of backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially. Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold. We also continue to evaluate our operating expenses, including our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets. The risks related to our business, including further discussion of the impact and possible future impacts of current economic conditions on our business, are further described in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Current wording
Our past results may not be indicative of our future performance, and historical trends including conversion of backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially. Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold. We also continue to evaluate our operating expenses to conserve cash in light of the uncertain macroeconomic environment due to tariffs, and to evaluate our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets. The risks related to our business, including further discussion of the impact and possible future impacts of current economic conditions on our business, are further described in the section titled “Risk Factors” in Part II, Item 1A of this Quarterly Report on Form 10-Q.
Previous wording
With the receipt of the necessary permits and licenses to operate, the JV has begun selling products in China, much like a distributor. The JV has begun to manufacture and sell a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category. We believe this strategy will allow us to best maximize both near and longer-term opportunities in China. In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and CyberKnife S7 Systems, which received NMPA approval in January 2025.
Current wording
The JV sells our products in China, much like a distributor and also manufactures and sells a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category. We believe this strategy will allow us to best maximize both near and longer-term opportunities in China. In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and CyberKnife S7 Systems, which received NMPA approval in January 2025.
Previous wording
Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio was 1.2 for both the three and nine months ended March 31, 2025, respectively, as compared to 1.8 and 1.6 during the three and nine months ended March 31, 2024, respectively. A book-to-bill ratio greater than 1.2 generally indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time.
Current wording
Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio was 1.1 for the three months ended September 30, 2025, as compared to 1.1 for the three months ended September 30, 2024, respectively. A book-to-bill ratio greater than 1.2 generally indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time.
Previous wording
Net orders are defined as gross orders less cancellations, age-outs net of age-ins, foreign currency impacts and other adjustments during the period. Net orders decreased by $14.1 million and $15.2 million, respectively, during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to a decrease in gross orders and an increase in age-outs, partially offset by an increase in age-ins and favorable foreign currency impacts.
Current wording
Net orders are defined as gross orders less cancellations, age-outs net of age-ins, foreign currency impacts and other adjustments during the period. Net orders decreased by $23.7 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a decrease in gross orders, an increase in age-outs, and no age-ins during three months ended September 30, 2025.
Previous wording
Results of Operations — Three and nine months ended March 31, 2025 and 2024
Current wording
Results of Operations — Three months ended September 30, 2025 and 2024
Previous wording
Includes sales of products to the joint venture, an equity method investment, of $17,967 and $76,333 during the three and nine months ended March 31, 2025, and $15,662 and $55,504 during the three and nine months ended March 31, 2024, respectively. See Note 12.
Current wording
Includes sales of products to the joint venture, an equity method investment, of $8,847 and $28,644 during the three months ended September 30, 2025, and 2024, respectively. See Note 12.
Previous wording
Includes sales of services to the joint venture, an equity method investment, of $5,351 and $14,588 during the three and nine months ended March 31, 2025, and $3,982 and $10,970 during the three and nine months ended March 31, 2024, respectively. See Note 12.
Current wording
Includes sales of services to the joint venture, an equity method investment, of $5,515 and $4,058 during the three months ended September 30, 2025, and 2024, respectively. See Note 12.
Previous wording
Services net revenue increased $4.4 million and $6.3 million during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to an increase in the sale of spare parts and higher contract revenues as a result of an increase in our installed base.
Current wording
Services net revenue increased $3.6 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to higher contract revenues as a result of an increase in our installed base.
Previous wording
Net revenue increased $12.1 million during the three months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to a higher volume of shipments to the APAC and China regions, and increases in service revenue from the EIMEA and China regions, partially offset by a decrease in the volume of shipments to Japan. Net revenue increased $18.7 million during the nine months ended March 31, 2025 as compared to the same period in the prior fiscal year, primarily due to a higher volume of shipments to the China and the APAC regions and an increase in service revenue from the EIMEA and China regions, partially offset by a lower volume of shipments to the EIMEA and Americas regions. Additionally, revenues from the Americas region are being negatively impacted by reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines which we expect will continue to have an impact on net revenue through fiscal year 2026.
Current wording
Net revenue decreased $7.6 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to a lower volume of shipments to China, partially offset by higher volume of shipments to the EIMEA and Americas regions.
Previous wording
Income from equity method investment, net
Current wording
Income (loss) from equity method investment, net
Previous wording
Income from equity method investment, which relates to our JV, increased by $1.3 million and $2.8 million during the three and nine months ended March 31, 2025, respectively, as compared to the same periods in the prior fiscal year, primarily due to a higher volume of shipments of system units by the JV and higher service revenue due to the increase in installed base in China.
Current wording
Income from equity method investment, which relates to our JV, increased by $0.5 million during the three months ended September 30, 2025, as compared to the same period in the prior fiscal year, primarily due to an increase in gross profit and a decrease in operating expenses.
Previous wording
On a quarterly basis, we provide for income taxes based upon an estimated annual effective income tax rate. The provision for income taxes was flat during the three months ended March 31, 2025 as compared to the same period in the prior fiscal year. The provision for income taxes decreased $1.5 million during the nine months ended March 31, 2025, as compared to the same period in the prior fiscal year, primarily due to an additional expense in the prior year period relating to higher deferred tax liability on unremitted foreign earnings.
Current wording
On a quarterly basis, we provide for income taxes based upon an estimated annual effective income tax rate. The provision for income taxes is primarily related to foreign income taxes.
Previous wording
At March 31, 2025, we had $77.8 million in cash and cash equivalents. Cash from operations could be affected by various risks and uncertainties, including, declines in our revenue, particularly without a corresponding decrease in our expenses, the timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through calendar year 2025. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted net revenue since fiscal year 2024, and we expect that this will continue to have an impact through fiscal year 2026. Based on our cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.
Current wording
At September 30, 2025, we had $63.3 million in cash and cash equivalents, excluding restricted cash. Cash from operations could be affected by various risks and uncertainties, including, declines in our revenue, particularly without a corresponding decrease in our expenses, the timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. Based on our cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.
Previous wording
Our liquidity and cash flows have been and could continue to be materially impacted by factors other than our cash from operations and factors that are not in our control, such as current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, changes in government administration policy positions, recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries, and tightening of credit markets which could impact debt availability. These factors have and could continue to negatively impact our business operations and cash flows for the foreseeable future, including reductions in revenue, decreases in gross margin and delays in payments from customers, as well as declines or delays in the conversion of backlog to revenue. Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty. There remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future. As a result, we are unable to predict with certainty the impacts of these factors on our ability to maintain compliance with the financial covenants contained in the credit and security agreements related to our credit facilities or our ability to refinance our existing debt.
Current wording
Our liquidity and cash flows have been and could continue to be materially impacted by factors other than our cash from operations and factors that are not in our control, such as current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, changes in government administration policy positions, recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries, and tightening of credit markets which could impact debt availability. These factors have and could continue to negatively impact our business operations and cash flows for the foreseeable future, including reductions in revenue, decreases in gross margin and delays in payments from customers, as well as declines or delays in the conversion of backlog to revenue. Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty. There remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future. As a result, we are unable to predict with certainty the impact of these factors on our ability to maintain compliance with the financial covenants contained in the Financing Agreement (as defined below).
Previous wording
Additionally, the undistributed earnings of our foreign subsidiaries as of March 31, 2025, for all countries except Japan, France, Switzerland and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of March 31, 2025, we had $11.5 million of cash and cash equivalents at our foreign subsidiaries. If such funds were repatriated, there will be additional foreign tax withholdings imposed depending on the country from which the funds were repatriated.
Current wording
Additionally, the undistributed earnings of our foreign subsidiaries as of September 30, 2025, for all countries except Japan, France, Switzerland, Germany and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of September 30, 2025, we had $8.8 million of cash and cash equivalents at our foreign subsidiaries. If such funds were repatriated, there will be additional foreign tax withholdings imposed depending on the country from which the funds were repatriated.
Previous wording
Our cash flows for the nine months ended March 31, 2025 and 2024 are summarized as follows (in thousands):
Current wording
Our cash flows for the three months ended September 30, 2025 and 2024 are summarized as follows (in thousands):
Previous wording
Net cash provided by operating activities during the nine months ended March 31, 2025, was due to $15.5 million from non-cash items offset by a net loss of $2.7 million and a $0.2 million decrease from the net changes of assets and liabilities.
Current wording
Net cash provided by operating activities during the three months ended September 30, 2025, was due to $21.1 million from the net changes of assets and liabilities and $12.8 million from non-cash items, and offset by a net loss of $21.7 million.
Previous wording
The major contributors to the decrease from the net changes of assets and liabilities during the nine months ended March 31, 2025 were as follows: a $14.6 million increase in inventories that was primarily due to increased purchases of materials to meet expected demand; $5.2 million decrease in accounts payable that was primarily due to the timing of payments and a $3.8 million increase in prepaid and other assets, partially offset by a $14.7 million decrease in accounts receivable due to increased collections, and a $10.2 million increase in deferred revenue.
Current wording
The major contributors to the increase from the net changes of assets and liabilities during the three months ended September 30, 2025 were as follows: a decrease of $28.3 million in accounts receivable due to increased collections from China and a $9.6 million increase in accounts payable that was primarily due to the timing of payments, partially offset by a $16.6 million increase in inventories that was primarily due to increased purchases of materials to meet expected demand.
Previous wording
Net cash used in investing activities was $5.1 million during the nine months ended March 31, 2025, due to spending $2.9 million for the purchase of property and equipment and $2.2 million in costs for capitalized investments for software to be sold.
Current wording
Net cash used in investing activities was $3.8 million during the three months ended September 30, 2025, due to spending $1.9 million for the purchase of property and equipment and $1.9 million in costs for capitalized investments for software to be sold.
Previous wording
Net cash provided by financing activities was $1.6 million during the nine months ended March 31, 2025, was due to $7.0 million in net borrowings on our Revolving Credit Facility, partially offset by the scheduled payments of $6.0 million for the principal amount outstanding on our Term Loan Facility.
Current wording
Net cash used in financing activities was $0.5 million during the three months ended September 30, 2025, was due to payments on the outstanding principal of our Term Loan Facility.
Previous wording
We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2024. Our contractual obligations consist of debt, operating leases, purchase commitments, and other contractual obligations. There have been no material changes to these obligations outside the ordinary course of business during the nine months ended March 31, 2025 as compared to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended June 30, 2024.
Current wording
We presented our contractual obligations in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025. Our contractual obligations consist of debt, operating leases, purchase commitments, and other contractual obligations. There have been no material changes to these obligations outside the ordinary course of business during the three months ended September 30, 2025 as compared to the contractual obligations disclosed in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K for the year ended June 30, 2025.
Previous wording
We experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations for fiscal years 2023 and 2024. We expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses in calendar year 2025 as we are unable to pass all of these increased costs to our customers. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through calendar year 2025. Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition.
Current wording
In recent years, we experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations. Gross margins and net income (loss) may continue to be adversely affected by increased material costs and freight and logistics expenses through at least fiscal year 2026, as we are unable to pass all of these increased costs to our customers. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least fiscal year 2026. Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition.
Previous wording
During the nine months ended March 31, 2025, there were no material changes to the critical accounting policies and estimates, previously disclosed in Part II, Item 7, of our Annual Report on Form 10-K filed with the SEC on September 19, 2024.
Current wording
During the three months ended September 30, 2025, there were no material changes to the critical accounting policies and estimates, previously disclosed in Part II, Item 7, of our Annual Report on Form 10-K filed with the SEC on August 28, 2025.