Total revenue was approximately $105 million, up 3% sequentially, down 7% year-over-year. Additionally, our business in China continues to face headwinds that we discussed during our last earnings call, which pertained to geopolitical tensions and ongoing tariff uncertainty. Given such uncertainty, we believe the responsible approach is to withdraw our financial guidance at this time. This plan was designed to sharpen accountability, tighten cost control, and accelerate execution while positioning Accuray for sustainable, profitable growth over the long term.
We will provide an updated view on these annualized improvements on our fourth quarter earnings call. We will launch packages to add software solutions to our service agreements, which we believe strengthens recurring revenue opportunities and improves customer engagement over time. During the quarter, we have made enhancements to our service systems, which are designed to improve cash conversion and margin quality. This work is designed to support competitive wins at appropriate margins and is expected to translate into stronger sales quality and margin expansion over time.
Paul brings more than two decades of experience leading and scaling global capital medical device businesses across the Americas, EMEA, and APAC regions. In prior roles, his leadership helped drive the reversal of revenue decline trends and helped deliver double-digit annual growth. Each bring distinct capabilities across imaging, software, workflow innovation, clinical research, treatment continuity, and operational execution. Together, these partnerships allow us to deliver more comprehensive solutions to radiation medicine teams while improving speed to market and capital efficiency.
| Metric | Period | Current guidance |
|---|---|---|
| Fiscal 2026 financial guidance | FY2026 | Withdrawn -- management withdrew guidance given Middle East and China unpredictability; an update to come with fiscal Q4 results |
| Transformation savings | FY2026 / FY2027 | ~$10 million already achieved by end of Q3; on track to exceed $12 million in FY2026 and at least $25 million annualized in FY2027 |
| Restructuring charges | FY2026 | Expected to decrease sequentially from the $6.5 million Q3 level, with a significant portion recognized by fiscal year-end |
| Multi-year financial inflection | FY2027-FY2028 | 2027 and 2028 financial performance expected to reflect the benefits of current transformation actions |
| Metric | YoY | Note |
|---|---|---|
| Net revenue | -7% to $104.8 million (-10% cc, +3% sequential) | Indefinite Middle East/North Africa/Pakistan shipment delays and continued China headwinds. |
| Product revenue | -13% to $49.7 million | Majority of the year-over-year decline; China macro headwinds and Middle East geopolitical disruption. |
| Service revenue | -1% to $55.1 million (-5% cc) | ~$1.2 million Middle East impact, partly offset by $0.6 million of renewal price favorability; capture rate ~90%. |
| Overall gross margin | 24.1% vs. 27.9% | Service margin fell to 26.1% on higher net parts consumption (~600 bps) and logistics/duties; tariffs hurt both service and product. |
| Adjusted EBITDA | $3.8 million vs. $6.0 million | Revenue decline and gross-margin pressure, partly offset by ~18% lower adjusted operating expenses. |
| Backlog / book-to-bill | ~$356 million backlog; 1.0x book-to-bill (1.2x TTM) | ~$49 million of product gross orders in the quarter amid the disrupted demand environment. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Guidance withdrawal | $440-$450M revenue / $22-$25M adjusted EBITDA | Withdrawn due to indefinite Middle East shipment delays (EMEA is Accuray's largest region) and China unpredictability; update promised with Q4 results. | — |
| Transformation execution | ~$12M FY2026 target | Ahead of plan with ~$10M achieved; expects to exceed $12M in FY2026 and at least $25M annualized in FY2027; restructuring costs to taper. | — |
| Service monetization | Solutions-oriented tiers | Launched new training/education solutions (bundled or standalone), added software packages to service agreements, and improved systems/controls for billing and cash conversion; ~90% contract capture. | — |
| Commercial leadership and distributors | CCO appointment signaled | Paul Miele joined as CCO; a new VP of distributor partnerships was appointed to elevate distributor performance and accountability globally. | — |
| Partnership-driven model | UW-Madison MOU | Building an ecosystem including a Radiosurgery Society motion-tracking registry, University of Wisconsin-Madison and Tata Consultancy Services, to turn real-time motion-tracking data into a clinical evidence engine and speed time-to-market. | — |
| Pricing optimization | Value-based pricing initiative | Renewal pricing delivered $0.6 million of service price favorability in the quarter, with multi-year benefit expected to build over the next two to three years. | — |