Accuray Incorporated ARAY reported third-quarter fiscal 2025 loss per share of a cent compared with the year-ago period’s loss of 6 cents. The bottom line surpassed the Zacks Consensus Estimate by 80%.
ARAY’s Revenues in Detail
Accuray registered quarterly revenues of $113.2 million, up 11.9% year over year. The figure beat the Zacks Consensus Estimate by 10.9%.
The overall top-line growth was driven by robust growth in product revenue and solid demand for its CyberKnife system.
ARAY’s shares moved south 4.3% and closed at $1.55 on Wednesday. The company’s shares have lost 21.7% in the year-to-date period compared with the industry’s 9.1% decline. The broader S&P 500 Index has lost 5.9% in the same time frame.
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ARAY’s Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal third quarter, Product revenues increased 15.6% from the year-ago quarter’s level to $57.3 million.
Services revenues improved 8.5% year over year to $55.9 million.
Gross product orders totaled $71.2 million, down 20.1% year over year. The book-to-bill ratio was 1.2 in the fiscal third quarter compared with 1.8 in the year-ago quarter.
ARAY’s Margin Trend
In the quarter under review, Accuray’s gross profit improved 8.8% year over year to $31.6 million. Gross margin contracted 80 basis points to 27.9%.
Selling and marketing expenses decreased 11.7% year over year to $9.1 million. Research and development expenses decreased 1.8% year over year to $10.7 million. General and administrative expenses also declined 13.3% year over year to $10.8 million. Total operating expenses of $30.6 million decreased 9.1% year over year.
Operating profit totaled $1 million against the prior-year quarter’s operating loss of $4.6 million.
ARAY’s Financial Position
Accuray exited the third quarter of fiscal 2025 with cash and cash equivalents of $77.8 million compared with $62.6 million at the end of the second quarter of fiscal 2025.
Total debt (including short-term debt) at the fiscal third-quarter end was $173.8 million compared with $175.5 million at the end of the second quarter of fiscal 2025.
Accuray Incorporated Price, Consensus and EPS Surprise
Accuray Incorporated Price, Consensus and EPS Surprise
Due to the recent tariff announcements and their estimated impact on product volume, Accuray is adjusting revenue guidance for fiscal 2025.
The company now expects revenues in the range of $452-$460 million compared with the previous guidance of $463-$475 million. The Zacks Consensus Estimate is pegged at $469.8 million.
Our Take
Accuray’s third-quarter fiscal 2025 earnings and revenues beat their respective estimates. Per the third-quarter earnings call, Accuray's growth was primarily driven by strong revenue growth, supported by robust demand across both developed and emerging markets. An increase in product revenue, attributed to a 23% rise in unit volume and strong uptake of their expanded product portfolio, along with growth in service revenue, played key roles.
The company achieved a healthy book-to-bill ratio of over 1.2x, with 35% of orders from equipment replacements and the rest from capacity expansions, indicating sustainable customer demand. Operational improvements, effective pricing strategies, and a focus on working capital efficiency also contributed to profitability.
However, despite strong results, Accuray faced a setback from China tariffs, which caused deferred shipments and a $1.4 million gross margin impact, lowering margins to 27.9%. The company also anticipates a $10–$15 million product volume pressure due to reduced China sales, with ongoing trade policy uncertainty posing short-term risk.
ARAY’s Zacks Rank and Other Key Picks
Accuray currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the same medical industry are Fresenius Medical Care FMS, Masimo MASI and AdaptHealth AHCO.
Fresenius Medical, carrying a Zacks Rank #2 at present, has an estimated growth rate of 28.9% for 2025. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
FMS’ earnings beat estimates in three of the trailing four quarters and met in one, delivering an average surprise of 15.67%. The company is expected to release first-quarter results next month.
FMS’ shares have gained 10.3% so far this year.
Masimo, carrying a Zacks Rank of 2 at present, has an estimated growth rate of 20% for 2025.
MASI’s earnings surpassed estimates in each of the trailing four quarters, delivering an average surprise of 14.41%. Its shares have risen 58.5% compared with the industry’s 3.9% growth year to date. The company is expected to release first-quarter results in May.
MASI’s shares have lost 1.3% so far this year.
AdaptHealth, carrying a Zacks Rank #2 at present, has an estimated earnings growth rate of 16.7% for 2025. The company’s earnings beat estimates in three of the trailing four quarters and missed in one, delivering a negative average surprise of 4.17%. The company is expected to release first-quarter results next month.
AHCO's shares have lost 12.1% so far this year.
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