It has been about a month since the last earnings report for Accuray (ARAY). Shares have lost about 32% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Accuray due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Accuray Q2 Earnings & Revenues Beat Estimates, Margins Up

Accuray Incorporated reported second-quarter fiscal 2025 earnings per share of 2 cents against the year-ago period’s loss of 10 cents. The bottom line surpassed the Zacks Consensus Estimate by 300%.

Revenues in Detail

Accuray registered quarterly revenues of $116.2 million, up 8.3% year over year. The figure beat the Zacks Consensus Estimate by 4.7%.

The overall top-line growth was driven by robust growth in product revenue and solid demand for its CyberKnife system.

Segmental Details

Accuray derives revenues from two sources — Products and Services.

In the fiscal second quarter, Product revenues increased 18.7% from the year-ago quarter’s level to $61.2 million.

Services revenues declined 1.3% year over year to $54.9 million.

Gross product orders totaled $76.8 million, down 18.2% year over year. The book-to-bill ratio was 1.3 in the fiscal second quarter compared with 1.8 in the year-ago quarter.

Margin Trend

In the quarter under review, Accuray’s gross profit improved 16.7% year over year to $41.9 million. Gross margin expanded 260 basis points to 36.1%.

Selling and marketing expenses decreased 2.2% year over year to $11.1 million. Research and development expenses decreased 10.7% year over year to $13.6 million. General and administrative expenses also went down 6% year over year to $12.4 million. Total operating expenses of $37.2 million decreased 6.7% year over year.

Operating profit totaled $4.7 million against the prior-year quarter’s operating loss of $3.9 million.

Financial Position

Accuray exited the second quarter of fiscal 2025 with cash and cash equivalents of $62.6 million compared with $59.7 million at the end of the first quarter of fiscal 2025.

Total debt (including short-term debt) at the fiscal second-quarter end was $175.5 million compared with $170.2 million at the end of the first quarter of fiscal 2025.

Guidance

Accuray has raised its revenue outlook for fiscal 2025 based on current expectations.

The company now expects revenues in the range of $463-$475 million (reflecting year-over-year growth of 3.5-5.7%) compared with the previous guidance of $462-$472 million. The Zacks Consensus Estimate is pegged at $468.6 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

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This article originally published on Zacks Investment Research (zacks.com).

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