Accuray (ARAY) Q4 Earnings and Revenues Lag Estimates
Accuray Incorporated ARAY reported loss per share of 3 cents for the fourth quarter of fiscal 2023, narrower than the year-ago period’s loss of 4 cents per share. However, the metric lags the Zacks Consensus Estimate of a breakeven earnings per share (EPS).
Full-year adjusted loss per share was 10 cents, wider than the loss of 6 cents per share at the end of the comparable fiscal 2022 period. The loss per share was also wider than the Zacks Consensus Estimate of a loss of 7 cents per share.
Revenues in Detail
Accuray registered revenues of $118.3 million in the fourth quarter of fiscal 2023, up 7.5% year over year. However, the figure lagged the Zacks Consensus Estimate by 2.6%.
The overall top-line growth was aided by robust segmental revenues and performances by the majority of geographies.
At constant exchange rate (CER), net revenues were $120.1 million, representing a 9.1% increase from the prior-year period.
Full-year revenues were $447.6 million, reflecting a 4.1% improvement from the comparable fiscal 2022 period. However, the figure lagged the Zacks Consensus Estimate by 0.7%.
Segmental Details
Accuray derives revenues from two sources — Products and Services.
In the fiscal fourth quarter, Product revenues improved 7.6% from the year-ago quarter to $62.5 million. This figure compares to our Product revenues’ fiscal fourth-quarter projection of $65.2 million.
At CER, Product revenues improved 9%.
Services revenues rose 7.4% from the year-ago quarter to $55.8 million. This figure compares to our Services revenues’ fiscal fourth-quarter projection of $56.9 million.
At CER, Services revenues were up 9%.
Gross product orders totaled $88.4 million, up 0.1% year over year. This figure compares to our gross orders’ fiscal fourth-quarter projection of $99.5 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 fell 12.4% to $37.7 million. Gross margin contracted 725 basis points to 31.9%.
Selling and marketing expenses fell 25.7% to $10.7 million. Research and development expenses fell 2.6% year over year to $14.2 million, while general and administrative expenses went up 10.3% year over year to $13.3 million. Total operating expenses of $38.1 million decreased 6.9% year over year.
Operating loss totaled $0.5 million in the fiscal fourth quarter against the prior-year quarter’s operating profit of $2 million.
Financial Position
Accuray exited fiscal 2023 with cash and cash equivalents of $89.4 million compared with $88.7 million at the end of fiscal 2022.
Total debt (including short-term debt) at the end of fiscal 2023 was $177.3 million compared with $180.5 million at the fiscal 2022-end.
FY24 Guidance
Accuray has initiated its outlook for fiscal 2024 based on current expectations.
The company expects its fiscal year revenues to be $460 million-$470 million, reflecting year-over-year growth of 3-5%. The Zacks Consensus Estimate for the same is pegged at $474.9 million.
Our Take
Accuray ended the fourth quarter of fiscal 2023 with solid overall top-line results, which were encouraging. Robust Product and Services revenues and performances in the majority of geographies were impressive. The uptick in gross orders and the global installed base also look promising. Continued strong demand for Accuray’s Radixact innovations, including ClearRT, Synchrony and VitalHold, buoy optimism.
During the reported quarter, Accuray booked several strategic and multi-system orders from key institutions globally. Per Accuray’s management, the company entered several strategic partnerships over the past few months. These look promising for the stock.
However, lower-than-expected results and dismal bottom-line performances were disappointing. The fall in revenues from Japan was also worrying. The gross margin contraction also does not bode well. The current global supply-chain shortages and geopolitical and inflationary pressure are other challenges the company is navigating through, which is another concern.
Zacks Rank and Key Picks
Accuray currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space that have announced quarterly results are DexCom, Inc. DXCM, Integer Holdings Corporation ITGR and Intuitive Surgical, Inc. ISRG.
DexCom, carrying a Zacks Rank of 2 (Buy), reported second-quarter 2023 adjusted EPS of 34 cents, beating the Zacks Consensus Estimate by 54.6%. Revenues of $871.3 million outpaced the consensus mark by 4.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
DexCom has a long-term estimated growth rate of 42.9%. DXCM’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 28.8%.
Integer Holdings reported second-quarter 2023 adjusted EPS of $1.14, beating the Zacks Consensus Estimate by 15.2%. Revenues of $400 million surpassed the Zacks Consensus Estimate by 8.9%. It currently carries a Zacks Rank #2.
Integer Holdings has a long-term estimated growth rate of 12.1%. ITGR’s earnings surpassed estimates in all the trailing four quarters, the average surprise being 8.4%.
Intuitive Surgical reported second-quarter 2023 adjusted EPS of $1.42, beating the Zacks Consensus Estimate by 7.6%. Revenues of $1.76 billion surpassed the Zacks Consensus Estimate by 1.4%. It currently carries a Zacks Rank #2.
Intuitive Surgical has a long-term estimated growth rate of 15.7%. ISRG’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 4.2%.
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