Accuray (ARAY) Q1 Earnings In-Line With Estimates, Revenues Top
Accuray Incorporated ARAY reported loss per share of 3 cents for the first quarter of fiscal 2024, narrower than the year-ago period’s loss of 6 cents per share. The metric was in line with the Zacks Consensus Estimate.
Revenues in Detail
Accuray registered revenues of $ 103.9 million in the first quarter of fiscal 2024, up 7.7% year over year. The figure topped the Zacks Consensus Estimate by 6.3%.
The overall top-line growth was aided by robust Products revenues.
At constant exchange rate (CER), net revenues were $102.7 million, representing a 6.5% increase from the prior-year period.
Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal first quarter, Product revenues improved 19.6% from the year-ago quarter to $53.4 million. This figure compares to our Product revenues’ fiscal first-quarter projection of $50.6 million.
At CER, Product revenues improved 15%.
Services revenues declined 2.6% from the year-ago quarter to $50.5 million. This figure compares to our Services revenues’ fiscal first-quarter projection of $47 million.
At CER, Services revenues were down 1%.
Gross product orders totaled $63.7 million, down 8.8% year over year. This figure compares to our gross orders’ fiscal first-quarter projection of $76.2 million.
Accuray Incorporated Price, Consensus and EPS Surprise
Accuray Incorporated price-consensus-eps-surprise-chart | Accuray Incorporated Quote
Margin Trend
In the quarter under review, Accuray’s gross profit rose 14.2% to $39.5 million. Gross margin expanded 216 basis points to 38%.
Selling and marketing expenses fell 5.1% to $10.2 million. Research and development expenses fell 0.6% year over year to $14 million, while general and administrative expenses went up 9.5% year over year to $13 million. Total operating expenses of $37.3 million increased 1.4% year over year.
Operating profit totaled $2.2 million in the fiscal first quarter against the prior-year quarter’s operating loss of $2.2 million.
Financial Position
Accuray exited first-quarter fiscal 2024 with cash and cash equivalents of $76.9 million compared with $89.4 million at the end of fiscal 2023. Total debt (including short-term debt) at the end of first-quarter fiscal 2024 was $176 million compared with $177.3 million at the fiscal 2023-end.
Cumulative net cash used in operating activities at the end of third-quarter 2023 was $8.6 million against cumulative net cash provided by operating activities of $0.1 million a year ago.
FY24 Guidance
Accuray has reiterated its outlook for fiscal 2024 based on current expectations.
The company continues to expect its fiscal year revenues to be $460 million-$470 million, reflecting year-over-year growth of 3-5%. The Zacks Consensus Estimate is pegged at $465.7 million.
Our Take
Accuray ended the first quarter of fiscal 2024 with an in-line loss per share and better-than-expected revenues. The company’s solid overall top-line results and robust Product revenues were encouraging. Geographically, Accuray’s performance was strong in EIMEA (Europe, India, the Middle East and Africa), China and Japan, which was impressive. The expansion in the global installed base also looks promising. Continued strong demand for Accuray’s CyberKnife, Radixact and TomoTherapy platforms buoy optimism. The gross margin expansion also bodes well.
On the earnings call, management confirmed that with the addition of Cenos, the Radixact system will likely ensure that treatments change per the requirement to minimize dose to healthy tissue and personalize treatment. Management also stated that in early October Accuray gained regulatory clearance for its domestic manufactured Tomo C platform focused on the Type B segment in China. These look promising for the stock.
However, dismal bottom-line performances and a decline in gross orders were disappointing. The fall in revenues from the Americas and Asia Pacific (excluding China) and Services revenues were also worrying. The current global geopolitical and inflationary pressure are other challenges the company is navigating through, which is another concern.
Zacks Rank and Stocks to Consider
Accuray currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Abbott Laboratories ABT, DexCom, Inc. DXCM and Integer Holdings Corporation ITGR.
Abbott, carrying a Zacks Rank of 2 (Buy), reported third-quarter 2023 adjusted earnings per share (EPS) of $1.14, beating the Zacks Consensus Estimate by 3.6%. Revenues of $10.14 billion outpaced the consensus mark by 3.6%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Abbott has a long-term estimated growth rate of 5.1%. ABT’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 6.8%.
DexCom reported third-quarter 2023 adjusted EPS of 50 cents, beating the Zacks Consensus Estimate by 47.1%. Revenues of $975 million surpassed the Zacks Consensus Estimate by 4%. It currently carries a Zacks Rank #2.
DexCom has a long-term estimated growth rate of 33.6%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 36.4%.
Integer Holdings reported third-quarter 2023 adjusted EPS of $1.27, beating the Zacks Consensus Estimate by 20.9%. Revenues of $404.7 million surpassed the Zacks Consensus Estimate by 8.7%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 15.8%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 11.9%.
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