It's a privilege to address you on my first earnings call as Accuray's CEO. Today, I'm excited to share why I chose to join Accuray and my high level of conviction in Accuray's success as we enter the next phase of transformational growth. This makes me more confident than ever about the potential to enhance our performance, market position, and our long-term growth prospects. I've come to Accuray with over 40 years of global experience in Medtech and Biotech, including capital equipment.
The common thread across my experience was driving top-line growth profitably while meaningfully improving patients' lives with innovative technology. Turning to the first quarter results, net revenue for the first quarter was $94 million, which was down 7% versus the prior year and down 9% on a constant currency basis. With that said, product revenue for the first quarter was $37 million, which was below expectations, mainly due to slower performance in our EMEA and China regions. Year-over-year product revenue was down 23% and down 24% on a constant currency basis.
On the other hand, as you know, our install base generates a relatively predictable, higher-margin, valuable revenue stream, which continues to grow and which we intend to emphasize strategically. Service revenue was, again, the highlight of the quarter, with revenue of $57 million, up 7% from the prior year and up 4% on a constant currency basis. This increase was driven by contract revenue growth of 10% year-over-year, which was higher than our installed rates growth of 2% over the same period, illustrating that our pricing actions are taking effect. Product orders for the first quarter were approximately $40 million and represented a book-to-bill ratio of 1.1, with a trailing 12-month ratio of 1.2.
| Metric | Period | Current guidance |
|---|---|---|
| Fiscal 2026 revenue | FY2026 | Reiterated $471 million to $485 million |
| Fiscal 2026 adjusted EBITDA | FY2026 | Reiterated $31 million to $35 million |
| Revenue phasing (H1/H2) | FY2026 | Now ~40% first half / 60% second half as product demand shifts to the back half |
| Adjusted EBITDA margin run-rate | Next ~12 months | Expect to reach a high-single-digit adjusted EBITDA margin run-rate within 12 months; double digits over the medium-to-long term |
| Metric | YoY | Note |
|---|---|---|
| Net revenue | -7% to $94 million (-9% cc) | Product revenue weakness in EMEA and China amid geopolitical and macro headwinds. |
| Product revenue | -23% to $37 million | Slower EMEA and China performance; long sales cycles and low unit volumes make quarterly product revenue volatile. |
| Service revenue | +7% to $57 million | Contract revenue up 10% on pricing actions outpacing ~2% installed-base growth. |
| Product gross margin | 20.3% vs. 32.9% | Geographic/product mix (7.8 pts), tariffs (3 pts) and a one-time aged-inventory obsolescence charge (1.7 pts). |
| Adjusted EBITDA | -$4.1 million vs. +$3.1 million | Product gross margin pressure and restructuring/post-financing costs. |
| Backlog | ~$396 million (>18 months of product revenue) | Book-to-bill of 1.1 in the quarter (1.2 trailing 12 months); one ~$2 million unit canceled for backlog quality. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| CEO transition and transformation | Suzanne Winter as CEO | Steve La Neve took over October 2025; launched a transformation to sharpen strategy, expand margins and build a performance culture, with details promised for early 2026 and Steven Mayer as sponsor. | — |
| Adaptive radiotherapy / Stellar | Adaptive solutions previewed | Stellar launched at ASTRO with strong reception; UW-Madison MOU to advance online adaptive radiotherapy on the helical platform. | — |
| Service-led recurring revenue | Service growth strategy | Service +7% with contract revenue +10%; pricing actions clearly taking effect and installed-base growth remains the key driver. | — |
| Geopolitics and tariffs | China tariffs, Middle East unrest | EMEA and China slowed product sales; duty drawback active and foreign trade zone still under evaluation as the tariff environment stays fluid. | — |
| Back-half-weighted year | ~45%/55% phasing | Phasing shifted to ~40%/60% as delayed China/EMEA product demand is expected to convert in the second half. | — |