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What changed in ACCURAY INC's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ACCURAY INC's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+445 added−408 removedSource: 10-K (2025-08-28) vs 10-K (2024-09-19)

Top changes in ACCURAY INC's 2025 10-K

445 paragraphs added · 408 removed · 336 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

92 edited+20 added−14 removed203 unchanged
Biggest changeThere is an extensive body of published literature supporting the use of the CyberKnife System in the treatment of various targets, including cancers, benign tumors, or functional diseases. Radiosurgery is a commonly used procedure among neurosurgeons, specializing in radiosurgery, who require the high level of precision found with surgery, yet want to offer their brain tumor patients a non-invasive option.
Biggest changeRadiosurgery is a commonly used procedure among neurosurgeons, specializing in radiosurgery, who require the high level of precision found with surgery, yet want to offer their brain tumor patients a non-invasive option. With more than 30 years of clinical evidence, the CyberKnife System offers distinct advantages in the treatment of diseases in the head, base of the skull, and spine.
In addition, because the Radixact System has an integrated radiation beam stop, which shields radiation that passes through the patient, they require less radiation shielding in treatment room walls as compared to traditional systems. We also preassemble, test and commission each Radixact System at our manufacturing facility, and ship the system almost fully assembled.
In addition, because the Radixact System has an integrated radiation beam stop, which shields radiation that passes through the patient, they require less radiation shielding in treatment room walls as compared to traditional systems. We also preassemble, test and commission each system at our manufacturing facility, and ship the system almost fully assembled.
It is a complete planning solution, including multi‑modality image fusion with proprietary deformable image registration algorithm, comprehensive suite of contouring tools, AutoSegmentation auto‑contouring options for head and neck, brain, and prostate, side‑by‑side treatment plan comparison, plan summation and evaluation.
It is a complete planning solution, including multi‑modality image fusion with proprietary deformable image registration algorithm, comprehensive suite of contouring tools, AutoSegmentation and auto contouring options for head and neck, brain, and prostate, side-by-side treatment plan comparison, plan summation and evaluation.
Our competitive position also depends, among other things, on: • Widespread awareness, acceptance and adoption of our products by the radiation oncology, cancer therapy and neurosurgery markets; • Innovations that improve the effectiveness and productivity of our systems’ treatment processes and enable them to address emerging customer needs; • Availability of reimbursement coverage from third‑party payors (including insurance companies, governments, and/or others) for procedures performed using our platforms; • Inclusion of radiotherapy in countries’ cancer treatment policies as an effective treatment modality; • Published, peer‑reviewed data supporting the efficiency, efficacy and safety of our platforms; • Limiting the time required from proof of feasibility to routine production; • Limiting the time period and cost of regulatory approvals or clearances; • The manufacture and delivery of our products in sufficient volumes on time, and accurately predicting and controlling costs associated with manufacturing, installation, warranty and maintenance of the products; • Our ability to attract and retain qualified personnel; 15 Table of Contents • The extent of our intellectual property protection or our ability to otherwise develop and safeguard proprietary products and processes; • Our ability to successfully expand into new and developing markets; • Securing sufficient capital resources to expand both our continued research and development, and sales and marketing efforts; and • Obtaining and maintaining any necessary United States or foreign regulatory approvals or clearances.
Our competitive position also depends, among other things, on: • Widespread awareness, acceptance and adoption of our products by the radiation oncology, cancer therapy and neurosurgery markets; • Innovations that improve the effectiveness and productivity of our systems’ treatment processes and enable them to address emerging customer needs; • Availability of reimbursement coverage from third-party payors (including insurance companies, governments, and/or others) for procedures performed using our platforms; • Inclusion of radiotherapy in countries’ cancer treatment policies as an effective treatment modality; • Published, peer-reviewed data supporting the efficiency, efficacy and safety of our platforms; • Limiting the time required from proof of feasibility to routine production; • Limiting the time period and cost of regulatory approvals or clearances; • The manufacture and delivery of our products in sufficient volumes on time, and accurately predicting and controlling costs associated with manufacturing, installation, warranty and maintenance of the products; • Our ability to attract and retain qualified personnel; • The extent of our intellectual property protection or our ability to otherwise develop and safeguard proprietary products and processes; • Our ability to successfully expand into new and developing markets; • Securing sufficient capital resources to expand both our continued research and development, and sales and marketing efforts; and • Obtaining and maintaining any necessary United States or foreign regulatory approvals or clearances.
The OIG has identified the following arrangements with purchasers and their agents as ones raising potential risk of violation of the federal Anti‑Kickback Statute: • Discount and free good arrangements that are not properly disclosed or accurately reported to federal healthcare programs; • Product support services, including billing assistance, reimbursement consultation and other services specifically tied to support of the purchased product, offered in tandem with another service or program (such as a reimbursement guarantee) that confers a benefit to the purchaser; • Educational grants conditioned in whole or in part on the purchase of equipment, or otherwise inappropriately influenced by sales and marketing considerations; • Research funding arrangements, particularly post‑marketing research activities, that are linked directly or indirectly to the purchase of products, or otherwise inappropriately influenced by sales and marketing considerations; and 20 Table of Contents • Other offers of remuneration to purchasers that are expressly or impliedly related to a sale or sales volume, such as “rebates” and “upfront payments,” other free or reduced‑price goods or services, and payments to cover costs of “converting” from a competitor’s products, particularly where the selection criteria for such offers vary with the volume or value of business generated.
The OIG has identified the following arrangements with purchasers and their agents as ones raising potential risk of violation of the federal Anti‑Kickback Statute: • Discount and free good arrangements that are not properly disclosed or accurately reported to federal healthcare programs; • Product support services, including billing assistance, reimbursement consultation and other services specifically tied to support of the purchased product, offered in tandem with another service or program (such as a reimbursement guarantee) that confers a benefit to the purchaser; • Educational grants conditioned in whole or in part on the purchase of equipment, or otherwise inappropriately influenced by sales and marketing considerations; • Research funding arrangements, particularly post‑marketing research activities, that are linked directly or indirectly to the purchase of products, or otherwise inappropriately influenced by sales and marketing considerations; and • Other offers of remuneration to purchasers that are expressly or impliedly related to a sale or sales volume, such as “rebates” and “upfront payments,” other free or reduced‑price goods or services, and payments to cover costs of “converting” from a competitor’s products, particularly where the selection criteria for such offers vary with the volume or value of business generated.
The long-term success of the CyberKnife platform is dependent on a number of factors including the following: • Continued adoption of our CyberKnife platform, including the CyberKnife M6 System and CyberKnife S7 System, in markets where they are available; • Greater awareness among doctors and patients of the benefits of radiosurgery delivered with the CyberKnife platform, including its robotic architecture and Synchrony technology and VOLO optimizer; 8 Table of Contents • Continued evolution in clinical studies demonstrating the safety, efficacy and other benefits of using the CyberKnife platform to treat tumors in various parts of the body; • Change in medical practice leading to utilization of stereotactic body radiation therapy more regularly as an alternative to surgery or other treatments; • Continued advances in our technology that improve the quality of treatments and ease of use of the CyberKnife platform; • Receipt of regulatory approvals in various countries which are expected to improve access to radiosurgery with the CyberKnife S7 System in such countries; • Medical insurance reimbursement policies that cover CyberKnife platform treatments; and • Our ability to expand sales of CyberKnife M6 and S7 Systems in countries throughout the world where we do not currently sell or have not historically sold a significant number of any CyberKnife platform configurations.
The long-term success of the CyberKnife platform is dependent on a number of factors including the following: • Continued adoption of our CyberKnife platform, including the CyberKnife M6 System and CyberKnife S7 System, in markets where they are available; • Greater awareness among doctors and patients of the benefits of radiosurgery delivered with the CyberKnife platform, including its robotic architecture and Synchrony technology and VOLO optimizer; • Continued evolution in clinical studies demonstrating the safety, efficacy and other benefits of using the CyberKnife platform to treat tumors in various parts of the body; • Change in medical practice leading to utilization of stereotactic body radiation therapy more regularly as an alternative to surgery or other treatments; • Continued advances in our technology that improve the quality of treatments and ease of use of the CyberKnife platform; • Receipt of regulatory approvals in various countries which are expected to improve access to radiosurgery with the CyberKnife S7 System in such countries; • Medical insurance reimbursement policies that cover CyberKnife platform treatments; and • Our ability to expand sales of CyberKnife M6 and S7 Systems in countries throughout the world where we do not currently sell or have not historically sold a significant number of any CyberKnife platform configurations.
Further corporate governance information, including our corporate governance guidelines, board committee charters, and code of conduct, is also available on our investor relations website under the heading “Governance.” The contents of our websites are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 25 Table of Contents
Further corporate governance information, including our corporate governance guidelines, board committee charters, and code of conduct, is also available on our investor relations website under the heading “Governance.” The contents of our websites are not incorporated by reference into this Annual Report on Form 10-K or in any other report or document we file with the SEC, and any references to our websites are intended to be inactive textual references only. 26 Table of Contents
The CyberKnife platform has been cleared by the Food and Drug Administration (“FDA”) to provide treatment planning and image‑guided radiation treatment for tumors anywhere in the body where radiation treatment is indicated.
The CyberKnife platform has been cleared by the Food and Drug Administration (“FDA”) to provide treatment planning and image-guided radiation therapy treatment for tumors anywhere in the body where radiation treatment is indicated.
The TomoTherapy platform’s ring gantry architecture enables precise and efficient treatments with a high degree of dose conformity. The high‑speed binary MLC is integrated with the linac and consists of 64 individual low leakage tungsten leaves that move across the beam to either block or allow the passage of radiation, effectively modulating and shaping the beam as it is emitted.
The ring gantry architecture enables precise and efficient treatments with a high degree of dose conformity. The high‑speed binary MLC is integrated with the linac and consists of 64 individual low leakage tungsten leaves that move across the beam to either block or allow the passage of radiation, effectively modulating and shaping the beam as it is emitted.
These include: • Quality System Regulation (“QSR”), which require manufacturers, including third‑party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process; • Labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off‑label uses; and • Medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur.
These include: • Quality System Regulation (“QSR”), which require manufacturers, including third‑party manufacturers, to follow stringent design, testing, documentation and other quality assurance procedures during product design and throughout the manufacturing process; 19 Table of Contents • Labeling regulations and FDA prohibitions against the promotion of products for uncleared, unapproved or off‑label uses; and • Medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury or malfunctioned in a way that would likely cause or contribute to a death or serious injury if the malfunction were to recur.
Coding The codes that are used to report radiosurgery treatment delivery in 2024 for the hospital outpatient department are Current Procedural Terminology (“CPT”) codes 77372 and 77373 for single fraction intracranial radiosurgery and single fraction extracranial/multi‑session radiosurgery/stereotactic body radiation therapy. For freestanding centers, robotic radiosurgery is billed with robotic radiosurgery Healthcare Common Procedural Codes (“HCPCs”) G0339 and G0340.
Coding The codes that are used to report radiosurgery treatment delivery in 2025 for the hospital outpatient department are Current Procedural Terminology (“CPT”) codes 77372 and 77373 for single fraction intracranial radiosurgery and single fraction extracranial/multi‑session radiosurgery/stereotactic body radiation therapy. For freestanding centers, robotic radiosurgery is billed with robotic radiosurgery Healthcare Common Procedural Codes (“HCPCs”) G0339 and G0340.
We also announced an agreement with TrueNorth Medical Physics LLC to provide radiation oncology departments with third-party support services that are complementary and supplementary to those already supplied by Accuray. Our Products From oncology to radiosurgery and beyond, our solutions enable clinicians to deliver shorter, more personalized, and more effective treatments.
We also announced an agreement with TrueNorth Medical Physics LLC to provide radiation oncology departments with third-party support services that are complementary and supplementary to those already supplied by us. Our Products From oncology to radiosurgery and beyond, our solutions enable clinicians to deliver shorter, more personalized, and more effective treatments.
The CyberKnife Platform The CyberKnife platform is the only robotic, full-body SRS and SBRT delivery device on the market. The latest generation is the CyberKnife S7 System, which combines speed, advanced precision, and real-time AI-driven motion tracking and synchronized treatment delivery for all SRS and SBRT treatments, in as little as 15 minutes.
Robotic Radiation Delivery Solutions The CyberKnife platform is the only robotic, full-body SRS and SBRT delivery device on the market. The latest generation is the CyberKnife S7 System, which combines speed, advanced precision, and real-time AI-driven motion tracking and synchronized treatment delivery for all SRS and SBRT treatments, in as little as 15 minutes.
Our solutions include: • Novel artificial intelligence driven radiation therapy systems that automatically adapt treatment delivery for targets that move, synchronizing the radiation beam with the target’s motion in real-time throughout treatment delivery. • Powerful treatment planning software that reduces the time to create high quality treatment plans and the time it takes to deliver patient treatments as compared to the prior planning software, so clinicians can treat more patients each day. • One-of-a-kind imaging solution designed to produce exceptional diagnostic-like quality CT images, quickly and cost-effectively. • Automated tools that help to identify the interfraction changes for which re-planning is clinically beneficial and facilitate adaptation of the radiation dose to precisely conform to the patient’s tumor. • Distinctive software that accelerates and automates the re-planning process to make re-treatment of a previously irradiated area more efficient for practices and more effective for patients. • Advanced architecture that accommodates third party surface guidance interfaces that can enable deep inspiration breath hold (“DIBH”) for highly accurate and precise breast treatments.
Our solutions include: • Novel artificial intelligence (“AI”) driven radiation therapy systems that automatically adapt treatment delivery for targets that move, synchronizing the radiation beam with the target’s motion in real-time throughout treatment delivery. • Powerful treatment planning software that reduces the time to create high quality treatment plans and the time it takes to deliver patient treatments as compared to the prior planning software, so clinicians can treat more patients each day. • One-of-a-kind imaging solution designed to produce exceptional diagnostic-like quality CT images, quickly and cost-effectively. • Automated tools that help to identify the interfraction changes for which re-planning is clinically beneficial and facilitate adaptation of the radiation dose to precisely conform to the patient’s tumor. • Distinctive software that accelerates and automates the re-planning process to make re-treatment of a previously irradiated area more efficient for practices and more effective for patients. • Advanced architecture that accommodates third party surface guidance interfaces to support effective positioning of the patient and monitoring of the accuracy of that positioning throughout treatment, and enable deep inspiration breath hold (“DIBH”) for highly accurate and precise breast cancer treatments.
Whenever the United States or another foreign governmental authority concludes that we are not in compliance with applicable laws or regulations, such governmental 22 Table of Contents authority can impose fines, delay or suspend regulatory clearances, institute proceedings to detain or seize our products, issue a recall, impose operating restrictions, enjoin future violations and assess civil penalties against us or our officers or employees, and can recommend criminal prosecution to the Department of Justice.
Whenever the United States or another foreign governmental authority concludes that we are not in compliance with applicable laws or regulations, such governmental authority can impose fines, delay or suspend regulatory clearances, institute proceedings to detain or seize our products, issue a recall, impose operating restrictions, enjoin future violations and assess civil penalties against us or our officers or employees, and can recommend criminal prosecution to the Department of Justice.
Backlog For a discussion of our fiscal 2024 backlog, please refer to the section entitled “Backlog,” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. Employees and Human Capital Resources Our employees are critical to the success of our business.
Backlog For a discussion of our fiscal 2025 backlog, please refer to the section entitled “Backlog,” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations. Employees and Human Capital Resources Our employees are critical to the success of our business.
Our suite of radiation delivery devices includes the CyberKnife System and our next generation TomoTherapy platform, the Radixact System. In addition, our portfolio includes comprehensive software solutions to enable and enhance the precise and efficient radiotherapy treatments with our advanced delivery systems.
Our suite of radiation delivery devices includes the CyberKnife System and our next generation TomoTherapy platform-based solutions, including the Radixact System. In addition, our portfolio includes comprehensive software solutions to enable and enhance the precise and efficient radiotherapy treatments with our advanced delivery systems.
The non‑robotic SRS/SBRT codes 77372 and 77373 are also payable codes in the freestanding site of service for non‑robotic SRS/SBRT. In 2024, in the hospital outpatient department, IMRT delivery is billed under CPT code 77385 for simple IMRT and 77386 for complex IMRT.
The non‑robotic SRS/SBRT codes 77372 and 77373 are also payable codes in the freestanding site of service for non‑robotic SRS/SBRT. In 2025, in the hospital outpatient department, IMRT delivery is billed under CPT code 77385 for simple IMRT and 77386 for complex IMRT.
Many of these countries however, are not highly developed at this time and therefore, sales opportunities may be limited. We intend to increase our international revenue by focused additions of direct sales personnel in targeted areas to further penetrate our most promising international markets, and additional distributors, strategic partnerships, or joint ventures where opportune. Strategic partnerships and joint ventures.
Many of the countries in these regions are not highly developed at this time and therefore sales opportunities may be limited. We intend to increase our international revenue by focused additions of direct sales personnel in targeted areas to further penetrate our most promising international markets, and additional distributors, strategic partnerships, or joint ventures where opportune.
Using our Synchrony® real-time target tracking with dynamic delivery technology and computer controlled robotic mobility, the CyberKnife platform is designed to deliver radiation from a wide array of beam angles and autonomously track, detect and correct for even the slightest tumor and patient movement in real‑time throughout the entire treatment.
Using our Synchrony real-time target tracking with dynamic delivery technology and computer controlled robotic mobility, the CyberKnife platform is designed to deliver radiation from a wide array of beam angles and autonomously track, 6 Table of Contents detect and correct for even the slightest tumor and patient movement in real‑time throughout the entire treatment.
As a result, these regulations have had, and could continue to have, an adverse impact on our product sales and therefore, on our business and results of operations. A person who engages in a scheme to circumvent the Stark Law’s referral prohibition may be fined up to $100,000 for each such arrangement or scheme.
As a result, these regulations have had, and could continue to have, an adverse impact on our product sales and therefore, on our business and results of operations. 22 Table of Contents A person who engages in a scheme to circumvent the Stark Law’s referral prohibition may be fined up to $100,000 for each such arrangement or scheme.
The TomoTherapy platform’s size and self‑contained design allow customers to retrofit them into existing treatment rooms previously used for legacy radiation therapy systems and avoid, or reduce, the significant construction costs that can be associated with building new, larger treatment rooms, which are often required of other radiation therapy systems.
The TomoTherapy platform’s size and self‑contained design allow customers to retrofit them into existing treatment rooms previously used for legacy radiation therapy systems and avoid, or reduce, the significant construction costs that can be associated with building new, larger 10 Table of Contents treatment rooms, which are often required of other radiation therapy systems.
Any of the foregoing actions could result in decreased sales as a result of negative publicity and product liability claims, and could have a material adverse effect on our financial condition, results of operations and prospects. International Regulation International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country.
Any of the foregoing actions could result in decreased sales as a result of negative publicity and product liability claims, and could have a material adverse effect on our financial condition, results of operations and prospects. 23 Table of Contents International Regulation International sales of medical devices are subject to foreign government regulations, which vary substantially from country to country.
This, in turn, enables delivery of a highly conformal, non-isocentric dose of radiation to the tumor, minimizing radiation delivered to surrounding healthy tissue. Synchrony is the only technology that uses artificial intelligence, through image guidance, to automatically adapt and synchronize the treatment delivery beam position to the target location precisely and accurately during the delivery of a treatment fraction.
This, in turn, enables delivery of a highly conformal, non-isocentric dose of radiation to the tumor, minimizing radiation delivered to surrounding healthy tissue. Synchrony is the only technology that uses AI, through image guidance, to automatically adapt and synchronize the treatment delivery beam position to the target location precisely and accurately during the delivery of a treatment fraction.
We periodically monitor the activities of our competitors and other third parties with respect to their use of intellectual property. Research and Development Continued innovation is critical to our future success. Our current product development activities include projects expanding clinical applications, driving product differentiation, and continually improving the usability, interoperability, reliability, and performance of our products.
We periodically monitor the activities of our competitors and other third parties with respect to their use of intellectual property. 14 Table of Contents Research and Development Continued innovation is critical to our future success. Our current product development activities include projects expanding clinical applications, driving product differentiation, and continually improving the usability, interoperability, reliability, and performance of our products.
In the case of our former placement program, certain services and upgrades were provided without additional charge based on procedure volume. In the past, we have also provided loans to our customers. We also provide research or educational grants to customers to support customer studies related to, among other things, our CyberKnife and TomoTherapy platforms.
In the case of our former placement program, certain services and upgrades were provided without additional charge based on procedure volume. In the past, we 21 Table of Contents have also provided loans to our customers. We also provide research or educational grants to customers to support customer studies related to, among other things, our CyberKnife and TomoTherapy platforms.
Devices deemed by the FDA to pose the greatest risks, such as life‑sustaining, life‑supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k) devices, are placed in class III, requiring pre‑market approval. All of our current products are class II devices requiring 510(k) clearances. 510(k) clearance pathway.
Devices deemed by the FDA to pose the greatest 18 Table of Contents risks, such as life‑sustaining, life‑supporting or implantable devices, or devices deemed not substantially equivalent to a previously cleared 510(k) devices, are placed in class III, requiring pre‑market approval. All of our current products are class II devices requiring 510(k) clearances. 510(k) clearance pathway.
The FDA has issued draft guidance that, if finalized and implemented, 18 Table of Contents will result in manufacturers needing to seek a significant number of new clearances for changes made to legally marketed devices. The FDA reviews the manufacturer’s decision to file a 510(k) or PMA for modifications during facility audits.
The FDA has issued draft guidance that, if finalized and implemented, will result in manufacturers needing to seek a significant number of new clearances for changes made to legally marketed devices. The FDA reviews the manufacturer’s decision to file a 510(k) or PMA for modifications during facility audits.
For example, our platforms may compete with other equipment required by a radiation therapy department for financing under the same capital expenditure budget, which is typically limited. A purchaser, such as a hospital or cancer treatment center, may be required to select between the two items of capital equipment.
For example, our platforms may compete with other equipment required by a radiation therapy department for financing under the same capital expenditure budget, which is typically 16 Table of Contents limited. A purchaser, such as a hospital or cancer treatment center, may be required to select between the two items of capital equipment.
FDA regulations govern the following activities that we perform and will continue to perform to ensure medical products distributed domestically or exported internationally are safe and effective for their intended uses: • Product design and development; • Document and purchasing controls; • Production and process controls; • Labeling and packaging controls; • Product storage; • Recordkeeping; 17 Table of Contents • Servicing; • Corrective and preventive action and complaint handling; • Pre‑market clearance or approval; • Advertising and promotion; and • Product sales and distribution.
FDA regulations govern the following activities that we perform and will continue to perform to ensure medical products distributed domestically or exported internationally are safe and effective for their intended uses: • Product design and development; • Document and purchasing controls; • Production and process controls; • Labeling and packaging controls; • Product storage; • Recordkeeping; • Servicing; • Corrective and preventive action and complaint handling; • Pre‑market clearance or approval; • Advertising and promotion; and • Product sales and distribution.
The Synchrony Skull, Spine and Lung Tracking Systems allow for tracking of tumors without the need for implanted markers in the skull, spine and the lung. Lung Optimized Treatment. An integrated suite of tools that provides a complete fiducial‑free clinical solution for lung cancer patients and optimizes non‑invasive lung SBRT treatments. InTempo Imaging System.
The Synchrony Skull, Spine and Lung Tracking Systems allow for tracking of tumors without the need for implanted markers in the skull, spine and the lung. Lung Optimized Treatment. An integrated suite of tools that provides a complete fiducial free clinical solution for lung cancer patients and optimizes noninvasive lung SBRT treatments. InTempo Imaging System.
The Synchrony technology makes it possible and practical for clinicians to deliver radiation dose with accuracy and precision, 9 Table of Contents even for tumors that move. Synchrony helps to maximize treatment effectiveness and minimize dose to surrounding healthy tissue because it accounts for the current and changing conditions of the patient during treatment delivery.
The Synchrony technology makes it possible and practical for clinicians to deliver radiation dose with accuracy and precision, even for tumors that move. Synchrony helps to maximize treatment effectiveness and minimize dose to surrounding healthy tissue because it accounts for the current and changing conditions of the patient during treatment delivery.
For more information on the JV, see Note 11, “Joint Venture,” of the Notes to the consolidated financial statements. Manufacturing We purchase major components for each of our products from outside suppliers, including the robotic manipulator, treatment couches, gantry, magnetrons and computers.
For more information on the JV, see Note 11, “Joint Venture,” of the Notes to the consolidated financial statements. 13 Table of Contents Manufacturing We purchase major components for each of our products from outside suppliers, including the robotic manipulator, treatment couches, gantry, magnetrons and computers.
The Iris Variable Aperture Collimator enables delivery of beams in 12 unique sizes with a single collimator, which significantly reduces treatment times and the total radiation dose delivered to the patient. Fixed Collimators. The Fixed Collimators enables delivery of beams in 12 unique sizes with 12 different collimators, usually used for radiosurgery. InCise Multileaf Collimator.
The Iris Variable Aperture Collimator enables delivery of beams in 12 unique sizes with a single collimator, which significantly reduces treatment times and the total radiation dose delivered to the patient. 8 Table of Contents Fixed Collimators. The Fixed Collimators enables delivery of beams in 12 unique sizes with 12 different collimators, usually used for radiosurgery. InCise Multileaf Collimator.
As a result of the finalization of these regulations, some 21 Table of Contents existing CyberKnife platform operators have modified or restructured their corporate or organizational structures. In addition, certain customers that planned to open CyberKnife centers in the United States involving physician ownership have restructured their legal ownership structure.
As a result of the finalization of these regulations, some existing CyberKnife platform operators have modified or restructured their corporate or organizational structures. In addition, certain customers that planned to open CyberKnife centers in the United States involving physician ownership have restructured their legal ownership structure.
Synchrony is the only technology that uses artificial intelligence, through image guidance, to automatically adapt and synchronize the radiation beam to the position of the tumor if and when it moves during treatment. The beams of radiation are delivered continuously throughout the treatment session as the patient behaves naturally.
Synchrony is the only technology that uses AI, through image guidance, to automatically adapt and synchronize the radiation beam to the position of the tumor if and when it moves during treatment. The beams of radiation are delivered continuously throughout the treatment session as the patient behaves naturally.
The main components and options of the CyberKnife platform include: compact X‑band linear accelerator; robotic manipulator arm, real‑time image‑guidance system with continuous target tracking and correction. Key features of the main components include: Compact X-band linear accelerator. The CyberKnife S7 System utilizes a compact X-band linear accelerator (linac) mounted on a robotic manipulator arm.
The main components and options of the CyberKnife platform include compact 7 Table of Contents X‑band linear accelerator; robotic manipulator arm, real‑time image‑guidance system with continuous target tracking and correction. Key features of the main components include: Compact X-band linear accelerator. The CyberKnife S7 System utilizes a compact X-band linear accelerator (linac) mounted on a robotic manipulator arm.
Assemblers of diagnostic X‑ray 19 Table of Contents systems are also required to certify in reports to the FDA, equipment purchasers, and where applicable, to state agencies responsible for radiation protection, that diagnostic and/or therapeutic X‑ray systems they assemble meet applicable requirements.
Assemblers of diagnostic X‑ray systems are also required to certify in reports to the FDA, equipment purchasers, and where applicable, to state agencies responsible for radiation protection, that diagnostic and/or therapeutic X‑ray systems they assemble meet applicable requirements.
The long-term success of the TomoTherapy platform is dependent on a number of factors, including the following: • Continued adoption of our TomoTherapy platform, including the Radixact System, in markets where it is available; • Greater awareness among doctors and patients of the unique benefits of radiation therapy using the TomoTherapy platform, including its ring gantry architecture that enables treatment delivery from multiple 360 degree rotations around the patient, and ClearRT helical kVCT imaging for the Radixact System, which are designed to produce exceptional diagnostic-like quality CT images, quickly and cost-effectively; • Advances in our technology that improve the quality of treatments and ease of use of the TomoTherapy platform; • Greater awareness among doctors of the reliability of the TomoTherapy platform; and • Our ability to expand sales of the TomoTherapy platform in countries throughout the world where we do not currently sell or have not historically sold a significant number of any TomoTherapy platform configurations.
The long-term success of the TomoTherapy platform is dependent on a number of factors, including the following: • Continued adoption of our TomoTherapy platform, including the Radixact System, Accuray Helix, and Tomo C System, in markets where they are available; • Greater awareness among doctors and patients of the unique benefits of radiation therapy using the TomoTherapy platform, including its ring gantry architecture that enables treatment delivery from multiple 360 degree rotations around the patient, and ClearRT helical kVCT imaging for the Radixact System, which are designed to produce exceptional diagnostic-like quality CT images, quickly and cost-effectively; 11 Table of Contents • Advances in our technology that improve the quality of treatments and ease of use of the TomoTherapy platform; • Greater awareness among doctors of the reliability of the TomoTherapy platform; and • Our ability to expand sales of the TomoTherapy platform in countries throughout the world where we do not currently sell or have not historically sold a significant number of any TomoTherapy platform configurations.
Certificate of need laws are the subject of continuing legislative activity, and a significant increase in the number of states regulating the acquisition and use of one of our systems through certificate of need or similar programs could adversely affect us.
Certificate of need laws are the subject of continuing 24 Table of Contents legislative activity, and a significant increase in the number of states regulating the acquisition and use of one of our systems through certificate of need or similar programs could adversely affect us.
Efficient clinical workflow for Image-Guided Radiation Therapy and adaptive radiation therapy. The TomoTherapy platform integrates into a single system all of the key elements for radiation therapy, including treatment planning, CT image‑guided patient positioning, treatment delivery, quality assurance and adaptive planning.
The TomoTherapy platform integrates into a single system all of the key elements for radiation therapy, including treatment planning, CT image-guided patient positioning, treatment delivery, quality assurance and adaptive planning.
The imaging and treatment planning capabilities of many traditional systems are more modular or require cumbersome add‑ons or separate treatment planning systems that result in clinicians taking more steps between scanning, planning and treatment of patients. Conversely, the integrated imaging and treatment features of the Radixact System allows clinicians to scan, plan and treat cancer patients efficiently.
The imaging and treatment planning capabilities of many traditional systems are more modular or require cumbersome add‑ons or separate treatment planning systems that result in clinicians taking more steps between scanning, planning and treatment of patients. Conversely, the integrated imaging and treatment features allow clinicians to scan, plan and treat cancer patients efficiently.
This flexibility 7 Table of Contents enhances the ability to diversify beam trajectories and beam entrance and exit points, helping to minimize risks of radiation damage to healthy cells near the tumor. Furthermore, the rapid response time of the manipulator arm allows tracking of tumors that are prone to movement. Real‑time image‑guidance system with continuous target tracking and correction.
This flexibility enhances the ability to diversify beam trajectories and beam entrance and exit points, helping to minimize risks of radiation damage to healthy cells near the tumor. Furthermore, the rapid response time of the manipulator arm allows tracking of tumors that are prone to movement. Realtime image guidance system with continuous target tracking and correction.
With both imaging and radiation delivery capabilities integrated on a ring gantry, the Radixact System requires less space than other linac systems, which use large moving arms to position the linac or incorporate adjacent imaging equipment used for treatment planning.
With both imaging and radiation delivery capabilities integrated on a ring gantry, the systems require less space than other linac systems, which use large moving arms to position the linac or incorporate adjacent imaging equipment used for treatment planning.
Evolving interpretations of current laws or the adoption of new federal or state laws or regulations could adversely affect many of the arrangements we have with customers and physicians.
Evolving interpretations of current 20 Table of Contents laws or the adoption of new federal or state laws or regulations could adversely affect many of the arrangements we have with customers and physicians.
Our marketing activities also include efforts to inform and educate patients with cancerous or benign tumors, or neurologic and/or endocrine disorders, about the benefits of the CyberKnife and TomoTherapy platforms. 12 Table of Contents Under our standard distribution agreement, we generally appoint a distributor for a specific country.
Our marketing activities also include efforts to inform and educate patients with cancerous or benign tumors, or neurologic and/or endocrine disorders, about the benefits of the CyberKnife and TomoTherapy robotic and helical platforms. Under our standard distribution agreement, we generally appoint a distributor for a specific country.
In December 2015, the Patient Access and Medicare Protection Act (PAMPA) stopped the 16 Table of Contents IMRT and 3D CRT delivery codes from being implemented and prevented reimbursement reductions in the freestanding center setting through calendar year 2019.
In December 2015, the Patient Access and Medicare Protection Act (PAMPA) stopped the IMRT and 3D CRT delivery codes from being implemented and prevented reimbursement reductions in the freestanding center setting through calendar year 2019.
The VOLO solution features high‑speed processing for both dose calculation and optimization that empowers clinicians to create highly customized treatment plans in less time, with greater flexibility to work interactively and in real time to efficiently develop the best IMRT treatment plans for even the most complex cases.
The VOLO and VOLO Ultra solutions feature high-speed processing for both dose calculation and optimization that empowers clinicians to create highly customized treatment plans in less time, with greater flexibility to work interactively and in real time to efficiently develop the best IMRT treatment plans for even the most complex cases.
In 2024, the primary treatment delivery codes for robotic radiosurgery are priced by the regional Medicare Administrative Contractors. In 2024, the robotic SRS/SBRT delivery codes remain contractor priced for providers paid under the traditional fee-for-service methodology. Payment rates for IMRT and 3DRT procedures are set by CMS with adjustments to account for geographic market variations.
In 2025, the primary treatment delivery codes for robotic radiosurgery are priced by the regional Medicare Administrative Contractors. In 2025, the robotic SRS/SBRT delivery codes remain contractor priced for providers paid under the traditional 17 Table of Contents fee-for-service methodology. Payment rates for IMRT and 3DRT procedures are set by CMS with adjustments to account for geographic market variations.
ClearRT offers excellent uniformity and low noise across the entire image, improved soft tissue visualization while maintaining exceptional spatial resolution, which is intended to enhance the versatility and efficiency of the Radixact System in the radiation therapy department. Integrated treatment system for precise radiation delivery.
ClearRT offers excellent uniformity and low noise across the entire image, improved soft tissue visualization while maintaining exceptional spatial resolution, which is intended to enhance the versatility and efficiency of the Radixact System in the radiation therapy department.
In addition, the Accuray iDMS enables connectivity between Accuray platforms with other systems in radiation oncology departments, encompassing the entire radiotherapy workflow. iDMS offers several key capabilities: OIS Connect Option .
In addition, the Accuray iDMS enables connectivity between Accuray platforms with other systems in radiation oncology departments, encompassing the entire radiotherapy workflow. iDMS offers several key capabilities: 12 Table of Contents OIS Connect Option .
As of June 30, 2024, we had 987 employees, including 438 employees employed outside of the United States. We also engage part-time employees and independent contractors to supplement our workforce. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
As of June 30, 2025, we had 990 employees, including 432 employees employed outside of the United States. We also engage part-time employees and independent contractors to supplement our workforce. None of our employees are represented by a labor union or covered by a collective bargaining agreement.
We typically also retain the right to distribute the CyberKnife and TomoTherapy platforms in such territories. In most territories, our distributors generally provide the full range of service and sales capabilities, although we may provide installation and service support for certain distributors.
We typically also retain the right to distribute our full portfolio of solutions in such territories. In most territories, our distributors generally provide the full range of service and sales capabilities, although we may provide installation and service support for certain distributors.
The PreciseART software's streamlined re‑planning capabilities leverage full integration of treatment delivery, planning and database systems to allow clinicians to efficiently generate new treatment plans based on 11 Table of Contents previous plan data. It is also designed to maintain the integrity of original treatment plans to ensure tumor coverage, preserve Organ‑At‑Risk (“OAR”) doses and reduce toxicity. PreciseRTX Retreatment Option.
The PreciseART software's streamlined re‑planning capabilities leverage full integration of treatment delivery, planning and database systems to allow clinicians to efficiently generate new treatment plans based on previous plan data. It is also designed to maintain the integrity of original treatment plans to ensure tumor coverage, preserve OAR doses and reduce toxicity. PreciseRTX Retreatment Option.
We endeavor to achieve this goal by expanding the clinical options for healthcare providers, helping them offer the best radiation treatment for each patient and by providing patients with treatment tailored to their specific needs. Our vision is to expand the curative power of radiation therapy to improve as many lives as possible.
We endeavor to achieve this goal by expanding the clinical options for healthcare providers, helping 4 Table of Contents them offer the best radiation treatment for each patient tailored to their specific needs. Our vision is to expand the curative power of radiation therapy to improve as many lives as possible.
The Radixact System, the Next-Generation TomoTherapy Platform The Radixact System, the next generation TomoTherapy platform, allows for fully integrated radiation treatment planning, delivery and data management, enabling clinicians to deliver ultra-precise treatments to more than 50 patients per day.
The system allows for fully integrated radiation treatment planning, delivery and data management, enabling clinicians to deliver ultra-precise treatments to more than 50 patients per day.
We believe the Radixact System is uniquely positioned to enable truly adaptive radiation therapy because of its ability to provide daily, quantitative images, high speed delivery of radiation from fixed beam angles or helically from 360 degrees around the body and real time verification of the dose received by the patient.
We believe the helical delivery systems are uniquely positioned to enable truly adaptive radiation therapy because of their ability to provide daily, quantitative images, high speed delivery of radiation from fixed beam angles or helically from 360 degrees around the body and real time verification of the dose received by the patient.
Several of our prospective customers currently are involved in appeals of certificate of need determinations. If these appeals are not resolved in favor of these prospective customers, they may be precluded from purchasing and/or performing services using one of our systems.
If these appeals are not resolved in favor of these prospective customers, they may be precluded from purchasing and/or performing services using one of our systems.
The CyberKnife S7 System has the option of fixed collimators plus the Iris Variable Aperture Collimator and/or InCise multi-leaf collimators (“MLC”). With the addition of the InCise MLC, the CyberKnife S7 System is designed to enable the treatment of larger tumors that were previously thought untreatable with radiosurgery and SBRT.
The CyberKnife S7 System comes in a variety of radiation oncology suited configurations, with the option of fixed collimators plus the Iris Variable Aperture Collimator and/or InCise multi-leaf collimators (“MLC”). With the addition of the InCise MLC, the CyberKnife S7 System is designed to enable the treatment of larger tumors that were previously thought untreatable with radiosurgery and SBRT.
In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems.
In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024.
As of June 30, 2024, we held an exclusive field of use licenses or ownership of 504 U.S. and foreign patents, and 104 U.S. and foreign patent applications.
As of June 30, 2025, we held an exclusive field of use licenses or ownership of 530 U.S. and foreign patents, and 84 U.S. and foreign patent applications.
We have entered into collaboration agreements with a variety of industrial partners within the fields of radiation oncology and medical imaging to provide us with opportunities to accelerate our innovation capability and bring complimentary products and technologies to market.
We have entered into collaboration agreements with a variety of industrial partners within the fields of radiation oncology and medical imaging to provide us with opportunities to accelerate our innovation capability and bring complimentary products and technologies to market. We continue to seek out new partnerships to complement our internal developments and implement our product strategies.
Additionally, the Radixact System offers two treatment delivery modes - TomoHelical™ and TomoDirect™ - providing flexibility in the types of indications that can be treated with radiation - from the simplest to the most complex cases, multiple tumors and recurrent tumors.
Additionally, the system offers two treatment delivery modes - TomoHelical™ and TomoDirect™ - providing flexibility in the types of indications that can be treated with radiation - from the simplest to the most complex cases, multiple tumors and recurrent tumors. Accuray Helix™ combines affordability with automation and tools for enhancing the speed of planning and delivery of radiation.
In fiscal 2022, we signed an agreement with C-RAD to provide customers with a solution for deep inspiration breath hold (“DIBH”) using the C-RAD Catalyst+ HD and 5 Table of Contents Radixact System and with Limbus AI (now Radformation) to augment our adaptive radiotherapy capabilities by leveraging Limbus’ artificial intelligence (“AI”)-driven autocontouring algorithms. • In fiscal 2023, we announced a global, commercial partnership with GE Healthcare, intended to enable both companies to advance personalized cancer care and offer solutions throughout the care pathway from precision diagnostics, precision treatment planning and delivery to precision monitoring post-treatment. • In fiscal 2024, we announced a collaboration agreement with Oncopole Claudius Regaud (IUCT-Oncopole) in France, and Airbus SAS, a leader in the aerospace industry, to develop an artificial intelligence driven solution for predicting radiotherapy system performance.
Additionally, we entered into an agreement with Limbus AI (now Radformation) to augment our adaptive radiotherapy capabilities by leveraging Limbus’ AI-driven autocontouring algorithms. • In fiscal 2023, we announced a global, commercial partnership with GE Healthcare, intended to enable both companies to advance personalized cancer care and offer solutions throughout the care pathway from precision diagnostics, precision treatment planning and delivery to precision monitoring post-treatment. • In fiscal 2024, we announced a collaboration agreement with Oncopole Claudius Regaud (IUCT-Oncopole) in France, and Airbus SAS, a leader in the aerospace industry, to develop an AI-driven solution for predicting radiotherapy system performance.
In addition, we also rely upon trade secrets, know‑how, trademarks, copyright protection, as well as confidentiality agreements with employees, consultants and other third parties, to protect our proprietary rights and to develop and maintain our competitive position.
We may also in‑license the technology, inventions and improvements that we consider important to the development of our business. In addition, we also rely upon trade secrets, know‑how, trademarks, copyright protection, as well as confidentiality agreements with employees, consultants and other third parties, to protect our proprietary rights and to develop and maintain our competitive position.
ClearRT helical kVCT images are also available within the Accuray PreciseART ® automated dose trending tool for clinicians to evaluate if plan adaptation would be beneficial, enabling the most personalized patient care. Low barriers to installation and implementation.
ClearRT helical kVCT images are also available within the Accuray PreciseART ® automated dose trending tool for clinicians to evaluate if plan adaptation would be beneficial, enabling the most personalized patient care. Integrated treatment system for precise radiation delivery.
The system seamlessly integrates with ClearRT helical kilovoltage computerized tomography (“kVCT”) high-fidelity imaging, providing clinicians with an option to produce exceptional diagnostic-like quality CT images, quickly and cost-effectively, to improve patient care.
ClearRT helical kVCT enables high-fidelity imaging, providing clinicians with an option to produce exceptional diagnostic-like quality CT images, quickly and cost-effectively, to improve patient care.
Our quality assurance program includes various quality control measures from inspection of raw material, purchased parts and assemblies through on‑line inspection. We have also incorporated lean manufacturing techniques to improve manufacturing flow and efficiency.
Our quality assurance program includes various quality control measures from inspection of raw material, purchased parts and assemblies through on‑line inspection. We have also incorporated lean manufacturing techniques to improve manufacturing flow and efficiency. Lean manufacturing techniques include reducing wasteful and extraneous activities, balancing assembly and test flow, as well as better utilizing production assets and resources.
Our future success will depend in large part on our ability to establish and maintain a competitive position in current and future technologies. Rapid technological development may render the CyberKnife and TomoTherapy platforms and their technologies obsolete.
Successful developments that result in new approaches for the treatment of cancer could reduce the attractiveness of our products or render them obsolete. Our future success will depend in large part on our ability to establish and maintain a competitive position in current and future technologies. Rapid technological development may render the CyberKnife and TomoTherapy platforms and their technologies obsolete.
All SEC filings are also available at the SEC’s website at www.sec.gov. We also use our investor relations website as a channel of distribution for material company information in compliance with Regulation FD. For example, webcasts of our earnings calls and certain events we participate in or host with members of the investment community are on our investor relations website.
All SEC filings are also available at the SEC’s website at www.sec.gov. 25 Table of Contents We also use our investor relations website as a channel of distribution for material company information in compliance with Regulation FD.
Our Madison facility, where we manufacture the finished TomoTherapy and CyberKnife Systems, was most recently inspected by the FDA in August 2017. The August 2017 inspection resulted in no observations. We believe we are in substantial compliance with the QSR.
Our Madison facility, where we manufacture the finished TomoTherapy and CyberKnife Systems, was most recently inspected by the FDA in August 2017. The August 2017 inspection resulted in no observations. We voluntarily participate in the Medical Device Single Audit Program (“MDSAP”).
Furthermore, many government, academic and business entities are investing substantial resources in research and development of cancer treatments, including surgical approaches, radiation treatment, MRI‑guided radiotherapy systems, proton therapy systems, drug treatment, immunotherapy, gene therapy, and other approaches. Successful developments that result in new approaches for the treatment of cancer could reduce the attractiveness of our products or render them obsolete.
Furthermore, many government, academic and business entities are investing substantial resources in research and development of cancer treatments, including surgical approaches, radiation treatment, MRI-guided radiotherapy systems, 15 Table of Contents proton therapy systems, drug treatment, immunotherapy, gene therapy, and other approaches.
We believe the combination of these design features and our integrated treatment planning and optimization software will allow us to continue to enhance the Radixact System’s adaptive capabilities to enable clinicians to routinely and easily adjust a patient’s treatment as needed, thereby remaining true to the intent of the original treatment plan. 10 Table of Contents In addition to the functionality listed above, the Radixact System may be enhanced with the following product options: TomoDirect Mode and TomoEDGE Delivery.
We believe the combination of these design features and our integrated treatment planning and optimization software will allow us to continue to enhance our systems adaptive capabilities to enable clinicians to routinely and easily adjust a patient’s treatment as needed, thereby remaining true to the intent of the original treatment plan.
We believe our 4 Table of Contents current technologies and our future innovations can help to achieve this. Some of the key elements of our strategy include the following: Increase physician adoption and patient awareness to drive utilization.
We believe our current technologies and our future innovations can help to achieve this. Some of the key elements of our strategy include the following: Increase physician adoption and patient awareness to drive utilization. We are continually working to increase adoption and awareness of our systems and demonstrate their advantages over other treatment methods, including more conventional approaches.
We manufacture the linear accelerator for our CyberKnife and TomoTherapy platforms at our Chengdu, China facility. Our facilities employ state‑of‑the‑art manufacturing techniques and equipment. The components manufactured at our Chengdu facility are produced under the International Standard Organization (“ISO”), 13485:2016 certified quality management systems.
We manufacture the linear accelerator for our CyberKnife and TomoTherapy platforms at our Chengdu, China facility. Our facilities employ state‑of‑the‑art manufacturing techniques and equipment.
Additionally, we announce investor information, including news and commentary about our business and financial performance, SEC filings, notices of investor events, and our press and earnings releases, on our investor relations website. Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts and RSS feeds.
Investors and others can receive notifications of new information posted on our investor relations website in real time by signing up for email alerts and RSS feeds.
To support awareness of all our product offerings, we assist our customers with increasing patient awareness in their communities by providing them with tools to develop marketing and educational campaigns. Continue to expand the radiosurgery market. The CyberKnife System is a robotic radiosurgery system capable of treating tumors throughout the body.
We are continuously expanding our digital and social presence to reach and educate a broader audience of physicians and patients. To support awareness of all our product offerings, we assist our customers with increasing patient awareness in their communities by providing them with tools to develop marketing and educational campaigns. Continue to expand the radiosurgery market.
This process typically allows radiation “beam on” within four days after delivery and first patient treatments to begin within 14 to 28 days after delivery. Platform for further technological advancements in adaptive radiation therapy.
This process typically allows radiation “beam on” within four days after delivery and first patient treatments to begin within 14 to 28 days after delivery. Enhance precision and reduce treatment time. TomoEDGE Delivery.
Because our products often have long development and regulatory approval cycles, we must anticipate changes in the marketplace and the direction of technological innovation and customer demands.
Competition The medical device industry in general and the non‑invasive cancer treatment field in particular, are subject to intense and increasing competition and rapidly evolving technologies. Because our products often have long development and regulatory approval cycles, we must anticipate changes in the marketplace and the direction of technological innovation and customer demands.
We regularly meet with clinicians to educate them on the expanded versatility that our systems offer in comparison to more traditional radiation therapy products or surgery. We are continuously expanding our digital and social presence to reach and educate a broader audience of physicians and patients.
We hold and sponsor symposia and educational meetings and support clinical studies to demonstrate the clinical benefits of our systems. We regularly meet with clinicians to educate them on the expanded versatility that our systems offer in comparison to more traditional radiation therapy products or surgery.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur operating results may also be affected by a number of other factors, some of which are outside of our control, including: • delays in business operations of our customers or vendors, construction at customer sites and installation, including delays caused by supply chain delays; • timing and level of expenditures associated with new product development activities; • regulatory requirements in some states for a certificate of need prior to the installation of a radiation device or foreign regulatory approvals, such as Class A or Class B user licenses in China; • delays in shipment due to, among other things, unanticipated construction delays at customer locations where our products are to be installed, cancellations by customers, natural disasters, global or regional health pandemics or epidemics, or labor disturbances; • delays in our manufacturing processes or unexpected manufacturing difficulties, including due to supply chain and logistics challenges; • the timing of the announcement, introduction and delivery of new products or product upgrades by us and by our competitors; • timing and level of expenditures associated with expansion of sales and marketing activities such as trade shows and our overall operations; • the timing and level of expenditures associated with our financing activities; • the effects of foreign currency adjustments; • changes in accounting principles, such as those related to revenue recognition, or in the interpretation or the application thereof; and • fluctuations in our gross margins and the factors that contribute to such fluctuations, as described in Management’s Discussion and Analysis of Financial Condition and Results of Operations and the risk factor entitled, “Our ability to achieve profitability depends in part on maintaining or increasing our gross margins on product sales and services, which we may not be able to achieve.” Because many of our operating expenses are based on anticipated sales and a high percentage of these expenses are fixed for the short term, a small variation in the timing of revenue recognition can cause significant variations in operating results from quarter to quarter.
Biggest changeFactors that may affect whether these orders become revenue (or are cancelled or deemed aged‑out and reflected as a reduction in net orders) and the timing of revenue include: • economic or political instability, including volatility related to the current global economic environment; • delays in the customer obtaining or inability of a customer to obtain funding or financing; • delays in construction at the customer site and delays in installation; • delays in the customer obtaining or inability of such customer to obtain local or foreign regulatory approvals such as certificates of need in certain states or Class A or Class B user licenses in China; • the terms of the applicable sales and service contracts of the CyberKnife and TomoTherapy platforms; and • the proportion of revenue attributable to orders placed by our distributors, which may be more difficult to forecast due to factors outside our control. 34 Table of Contents Our operating results have previously and may in the future also be affected by a number of other factors, some of which are outside of our control, including: • delays in business operations of our customers or vendors, construction at customer sites and installation, including delays caused by supply chain delays; • timing and level of expenditures associated with new product development activities; • regulatory requirements in some states for a certificate of need prior to the installation of a radiation device or foreign regulatory approvals, such as Class A or Class B user licenses in China; • delays in shipment due to, among other things, unanticipated construction delays at customer locations where our products are to be installed, cancellations by customers, natural disasters, global or regional health pandemics or epidemics, or labor disturbances; • delays in our manufacturing processes or unexpected manufacturing difficulties, including due to supply chain and logistics challenges; • the timing of the announcement, introduction and delivery of new products or product upgrades by us and by our competitors; • timing and level of expenditures associated with expansion of sales and marketing activities such as trade shows and our overall operations; • the timing and level of expenditures associated with our financing activities; • our ability to satisfy the covenants associated with our indebtedness and our ability to generate sufficient cash flow or obtain additional financing to satisfy our obligations as they come due; • the effects of foreign currency adjustments; • the effects of macroeconomic factors, including the effects of enhanced international tariffs; • changes in accounting principles, such as those related to revenue recognition, or in the interpretation or the application thereof; and • fluctuations in our gross margins and the factors that contribute to such fluctuations, as described in Management’s Discussion and Analysis of Financial Condition and Results of Operations and the risk factor entitled, “Our ability to achieve profitability depends in part on maintaining or increasing our gross margins on product sales and services, which we may not be able to achieve.” Because many of our operating expenses are based on anticipated sales and a high percentage of these expenses are fixed for the short term, a small variation in the timing of revenue recognition can cause significant variations in operating results from quarter to quarter.
Due to frequently changing attack techniques, along with the increased volume and sophistication of the attacks, including the increasing use of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders our ability to identify, investigate, and recover from incidents, we could be adversely impacted by cybersecurity attacks or other security breaches.
Due to frequently changing attack techniques, along with the increased volume and sophistication of the attacks, including the increasing use of tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence, all of which hinders our ability to identify, investigate, and recover from incidents, we could be adversely impacted by cybersecurity attacks or other security breaches or incidents.
For example, Virginia, Colorado, Utah, and Connecticut all have enacted state laws that became effective in 2023; Texas, Montana, Oregon, and Florida have adopted laws that have become or will become effective in 2024, Delaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey and Tennessee have adopted laws that will become effective in 2025; and Indiana Kentucky, and Rhode Island have adopted laws that will become effective in 2026.
For example, Virginia, Colorado, Utah, and Connecticut all have enacted state laws that became effective in 2023; Texas, Montana, Oregon, and Florida have adopted laws that became effective in 2024, Delaware, Iowa, Maryland, Minnesota, Nebraska, New Hampshire, New Jersey and Tennessee have adopted laws that have become or will become effective in 2025; and Indiana, Kentucky, and Rhode Island have adopted laws that will become effective in 2026.
Our existing and future levels of indebtedness could have important consequences to stockholders and note holders and may adversely affect our financial conditions and future financial results by, among other things: • affecting our ability to satisfy our obligations under the Notes and Credit Facilities; • requiring a substantial portion of our cash flows from operations to be dedicated to interest and principal payments, which may not be available for operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; • impairing our ability to obtain additional financing in the future; • limiting our flexibility in planning for, or reacting to, changes in our business and industry; and • increasing our vulnerability to downturns in our business, our industry or the economy in general.
Our existing and future levels of indebtedness could have important consequences to stockholders and note holders and may adversely affect our financial conditions and future financial results by, among other things: • affecting our ability to satisfy our obligations under the 2026 Notes and Credit Facilities; • requiring a substantial portion of our cash flows from operations to be dedicated to interest and principal payments, which may not be available for operations, working capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; • impairing our ability to obtain additional financing in the future; • limiting our flexibility in planning for, or reacting to, changes in our business and industry; and • increasing our vulnerability to downturns in our business, our industry or the economy in general.
Risks Related to Our Business and Results of Operations We face risks related to the current global economic environment, including risks arising in connection with inflation, recession or currency fluctuations, any of which could adversely affect our business, financial condition and results of operations by, among other things, delaying or preventing our customers from obtaining financing to purchase our products and services or implementing the required facilities to house our systems.
Risks Related to Our Business and Results of Operations We face risks related to the current global economic environment, including risks arising in connection with tariffs, inflation, recession or currency fluctuations, any of which could adversely affect our business, financial condition and results of operations by, among other things, delaying or preventing our customers from obtaining financing to purchase our products and services or implementing the required facilities to house our systems.
A “make‑whole fundamental change” is generally a sale of Accuray not for stock in another publicly traded company. In addition, the applicable indentures for the Notes prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the Notes.
A “make‑whole fundamental change” is generally a sale of Accuray not for stock in another publicly traded company. In addition, the applicable indentures for the Notes prohibits us from engaging in certain mergers or acquisitions unless, among other things, the surviving entity assumes our obligations under the 2026 Notes.
Furthermore, if a “fundamental change” (as such term is defined in the applicable indenture of the Notes) occurs, holders of the Notes will have the right, at their option, to require us to repurchase all or a portion of their convertible notes.
Furthermore, if a “fundamental change” (as such term is defined in the applicable indenture of the 2026 Notes) occurs, holders of the 2026 Notes will have the right, at their option, to require us to repurchase all or a portion of their convertible notes.
In the event of a “make‑whole fundamental change” (as such term is defined in the applicable indenture of the Notes), we may also be required to increase the conversion rate applicable to the Notes surrendered for conversion in connection with such make‑whole fundamental change.
In the event of a “make‑whole fundamental change” (as such term is defined in the applicable indenture of the 2026 Notes), we may also be required to increase the conversion rate applicable to the 2026 Notes surrendered for conversion in connection with such make‑whole fundamental change.
If we fail to attract and retain employees with the expertise required for our business, we may be unable to continue to grow our business. 26 Table of Contents • Disruption of critical information technology systems, infrastructure and data or cyberattacks or other security breaches or incidents could harm our business and financial condition. • Any actual or perceived failure by us to comply with legal or regulatory requirements related to privacy, cybersecurity and data protection could result in proceedings, actions or penalties against us. • If third-party payors do not provide sufficient coverage and reimbursement to healthcare providers for use of our product platforms or if the number of patients covered by health insurance reduces, demand for our products and our revenue could be adversely affected. • The safety and efficacy of our products for certain uses is not yet supported by long‑term clinical data, and our products may therefore prove to be less safe and effective than initially thought. • Failures or disruptions at our logistics providers have occurred and could occur in the future, which could adversely impact our business. • Third parties may claim we are infringing their intellectual property or that we are operating outside the scope of or violating a license or other agreement relating to their intellectual property. • It is difficult and costly to protect our intellectual property and our proprietary technologies and we may not be able to ensure their protection. • We have identified material weaknesses in our system of internal controls as of June 30, 2024 and are in the process of remediation.
If we fail to attract and retain employees with the expertise required for our business, we may be unable to continue to grow our business. • Disruption of critical information technology systems, infrastructure and data or cyberattacks or other security breaches or incidents could harm our business and financial condition. 27 Table of Contents • Any actual or perceived failure by us to comply with legal or regulatory requirements related to privacy, cybersecurity and data protection could result in proceedings, actions or penalties against us. • If third-party payors do not provide sufficient coverage and reimbursement to healthcare providers for use of our product platforms or if the number of patients covered by health insurance reduces, demand for our products and our revenue could be adversely affected. • The safety and efficacy of our products for certain uses is not yet supported by long‑term clinical data, and our products may therefore prove to be less safe and effective than initially thought. • Failures or disruptions at our logistics providers have occurred and could occur in the future, which could adversely impact our business. • Third parties may claim we are infringing their intellectual property or that we are operating outside the scope of or violating a license or other agreement relating to their intellectual property. • It is difficult and costly to protect our intellectual property and our proprietary technologies and we may not be able to ensure their protection. • We previously identified material weaknesses in our system of internal controls as of June 30, 2024.
These and other factors, including the following, may affect the rate and level of market acceptance of the CyberKnife and TomoTherapy platforms: • the CyberKnife and TomoTherapy platforms’ price relative to other products or competing treatments; • our ability to develop new products and enhancements and receive regulatory clearances and approval, if required, to such products in a timely manner; • increased scrutiny by state boards when evaluating certificates of need requested by purchasing institutions; • perception by patients, physicians and other members of the healthcare community of the CyberKnife and TomoTherapy platforms’ safety, efficacy, efficiency and benefits compared to competing technologies or treatments; • willingness of physicians to adopt new techniques and the ability of physicians to acquire the skills necessary to operate the CyberKnife and TomoTherapy platforms; • extent of third‑party coverage and reimbursement rates, particularly from Medicare, for procedures using the CyberKnife and TomoTherapy platforms; and • development of new products and technologies by our competitors or new treatment alternatives.
These and other factors, including the following, may affect the rate and level of market acceptance of the CyberKnife and TomoTherapy platforms: 30 Table of Contents • the CyberKnife and TomoTherapy platforms’ price relative to other products or competing treatments; • our ability to develop new products and enhancements and receive regulatory clearances and approval, if required, to such products in a timely manner; • increased scrutiny by state boards when evaluating certificates of need requested by purchasing institutions; • perception by patients, physicians and other members of the healthcare community of the CyberKnife and TomoTherapy platforms’ safety, efficacy, efficiency and benefits compared to competing technologies or treatments; • willingness of physicians to adopt new techniques and the ability of physicians to acquire the skills necessary to operate the CyberKnife and TomoTherapy platforms; • extent of third‑party coverage and reimbursement rates, particularly from Medicare, for procedures using the CyberKnife and TomoTherapy platforms; and • development of new products and technologies by our competitors or new treatment alternatives.
Our ability to successfully develop and introduce new products, treatment systems and product enhancements and simplifications, and the revenues and costs associated with these efforts, will be affected by our ability to: • properly identify and address customer needs; • prove feasibility of new products in a timely manner; • educate physicians about the use of new products and procedures; • comply with internal quality assurance systems and processes timely and efficiently; • manage the timing and cost of obtaining regulatory approvals or clearances; • accurately predict and control costs associated with inventory overruns caused by phase‑in of new products and phase‑out of old products; • price new products competitively; • manufacture and deliver our products in sufficient volumes on time and accurately predict and control costs associated with manufacturing, installation, warranty and maintenance of the products; • meet our product development plan and launch timelines; • enter into collaborations with third parties.
Our ability to successfully develop and introduce new products, treatment systems and product enhancements and simplifications, and the revenues and costs associated with these efforts, will be affected by our ability to: • properly identify and address customer needs; • prove feasibility of new products in a timely manner; • educate physicians about the use of new products and procedures; • comply with internal quality assurance systems and processes timely and efficiently; • manage the timing and cost of obtaining regulatory approvals or clearances; • accurately predict and control costs associated with inventory overruns caused by phase‑in of new products and phase‑out of old products; • price new products competitively; 39 Table of Contents • manufacture and deliver our products in sufficient volumes on time and accurately predict and control costs associated with manufacturing, installation, warranty and maintenance of the products; • meet our product development plan and launch timelines; • enter into collaborations with third parties.
In the event the conditional conversion features of the Notes are triggered, holders of the Notes, as applicable, will be entitled to convert such notes at any time during specified periods at their option.
In the event the conditional conversion features of the 2026 Notes are triggered, holders of the 2026 Notes, as applicable, will be entitled to convert such notes at any time during specified periods at their option.
In addition, any increase in days sales outstanding could also negatively affect our cash flow. 51 Table of Contents We have entered into certain relationships with collaborators, partnerships, strategic alliances, joint venture partners and other third parties, which are outside of our full control and may harm our existing business if we fail to realize the expected benefits of such relationships.
In addition, any increase in days sales outstanding could also negatively affect our cash flow. 52 Table of Contents We have entered into certain relationships with collaborators, partnerships, strategic alliances, joint venture partners and other third parties, which are outside of our full control and may harm our existing business if we fail to realize the expected benefits of such relationships.
Any further disruptions or difficulties that may occur in connection with our ERP system or other systems (whether in connection with the regular operation, periodic enhancements, modifications or upgrades of such systems or the integration of any acquired businesses into such systems, or due to cybersecurity events such as ransomware attacks) could adversely impact the effectiveness of our internal control over financial reporting as well as affect our ability to manufacture products, process orders, deliver products, provide customer support, fulfill contractual obligations, track inventories, or otherwise operate our business, in particular as a result of our limited experience implementing such systems and the 53 Table of Contents complex nature of the system itself.
Any further disruptions or difficulties that may occur in connection with our ERP system or other systems (whether in connection with the regular operation, periodic enhancements, modifications or upgrades of such systems or the integration of any acquired businesses into such systems, or due to cybersecurity events such as ransomware attacks) could adversely impact the effectiveness of our internal control over financial reporting as well as affect our ability to manufacture products, process orders, deliver products, provide customer support, fulfill contractual obligations, track inventories, or otherwise operate our business, in particular as a result of our limited experience implementing such systems and the complex nature of the system itself.
The California research credits have no expiration date, but if not utilized, the federal research credits and other non-California state research credits will begin to expire in 2025. Federal net operating losses arising in tax years beginning after December 31, 2017 are subject to an 80% of taxable income limitation (as calculated before taking the net operating losses into account).
The California research credits have no expiration date, but if not utilized, the federal research credits and other non-California state research credits will begin to expire in 2026. Federal net operating losses arising in tax years beginning after December 31, 2017 are subject to an 80% of taxable income limitation (as calculated before taking the net operating losses into account).
Further, the imposition of additional tariffs by the U.S. could result in the adoption of additional tariffs by other countries, as well as further retaliatory actions by any affected country. Any resulting trade war could negatively impact the global market for medical devices, including radiation therapy devices, and could have a significant adverse effect on our business.
Further, the imposition of additional tariffs by the U.S. could result in the adoption of additional tariffs by other countries, as well as export controls and further retaliatory actions by any affected country. Any resulting trade war could negatively impact the global market for medical devices, including radiation therapy devices, and could have a significant adverse effect on our business.
Also, because we purchase major components and software for each of our products from third party suppliers and manufacturers, we face the additional risk that infringement claims may be brought against us based on patents and other intellectual property rights that are embodied or contained in, or practiced by, those components (including software components) that we obtain from third parties, and any such claims against us, such as by our direct and indirect suppliers, may additionally allege that we are operating outside the scope of or violating a license or other agreement relating to their intellectual property.
Also, because we purchase major components and software for each of our products from third party suppliers and manufacturers, we face the additional risk that infringement claims may be brought against us based on patents and other 48 Table of Contents intellectual property rights that are embodied or contained in, or practiced by, those components (including software components) that we obtain from third parties, and any such claims against us, such as by our direct and indirect suppliers, may additionally allege that we are operating outside the scope of or violating a license or other agreement relating to their intellectual property.
In addition, our employees, third-party service providers, strategic partners, or other contractors or consultants may input personal or confidential information, or other business data of ours, into an artificial intelligence system (in particular, a system that is managed, owned, or controlled by a third party), which may disrupt and otherwise compromise our business operations, divert the attention of management and key information technology resources, potentially lead to security breaches or incidents or other unauthorized access to, or other use or processing of, personal information, our confidential information or other business data.
In addition, our employees, third-party service providers, strategic partners, or other contractors or consultants may input personal or confidential information, or other business data of ours, into an AI system (in particular, a system that is managed, owned, or controlled by a third party), which may disrupt and otherwise compromise our business operations, divert the attention of management and key information technology resources, potentially lead to security breaches or incidents or other unauthorized access to, or other use or processing of, personal information, our confidential information or other business data.
Although the SEC issued an order implementing a stay of its final climate-related disclosure rules, there have also been substantial legislative and regulatory developments on climate-related issues, including proposed, issued and implemented legislation and rulemakings that would require companies to 63 Table of Contents assess and/or disclose climate metrics, risks, opportunities, policies and practices by both the Securities and Exchange Commission and California.
Although the SEC issued an order implementing a stay of its final climate-related disclosure rules, there have also been substantial legislative and regulatory developments on climate-related issues, including proposed, issued and implemented legislation and rulemakings that would require companies to assess and/or disclose climate metrics, risks, opportunities, policies and practices by both the Securities and Exchange Commission and California.
If our past or present operations are found to be in violation of any of these “anti‑kickback,” “false claims,” “self‑referral” or other similar laws in foreign jurisdictions, we may be subject to the applicable penalty associated with the violation, which 57 Table of Contents may include significant civil and criminal penalties, damages, fines, imprisonment and exclusion from healthcare programs.
If our past or present operations are found to be in violation of any of these “anti‑kickback,” “false claims,” “self‑referral” or other similar laws in foreign jurisdictions, we may be subject to the applicable penalty associated with the violation, which may include significant civil and criminal penalties, damages, fines, imprisonment and exclusion from healthcare programs.
We cannot predict what healthcare reform legislation or regulations, if any, including any potential repeal or amendment of the ACA, will be enacted in the United States or elsewhere, what impact any legislation or regulations related to the healthcare system that may be enacted or adopted in the future might have on our business, or the effect of ongoing uncertainty or public perception about these matters will have on the purchasing decisions of our customers.
We cannot predict what healthcare reform legislation or regulations, if any, including any potential repeal or amendment of the ACA, will be 61 Table of Contents enacted in the United States or elsewhere, what impact any legislation or regulations related to the healthcare system that may be enacted or adopted in the future might have on our business, or the effect of ongoing uncertainty or public perception about these matters will have on the purchasing decisions of our customers.
We generally do not maintain large volumes of inventory, which makes us even more susceptible to harm if a single source supplier fails to deliver components on a timely basis or we experience quality issues with the components we do have in inventory, and maintaining our historical levels of inventory has been adversely impacted by the macroeconomic environment.
We generally do not maintain large volumes of inventory, which makes us even more susceptible to harm if a single source supplier fails to deliver components on a timely basis or we experience quality issues with the components we do have in inventory, and maintaining our historical levels of inventory has been adversely impacted by the macroeconomic 41 Table of Contents environment.
Generally, Section 203 prohibits stockholders who, alone or together with their affiliates and associates, own more than 15% of the subject company from engaging in certain business combinations for a period of three years following the date that the stockholder became an interested stockholder of such subject company without approval of the board or 66 2 / 3 % of the independent stockholders.
Generally, Section 203 prohibits stockholders who, alone or together with their affiliates and associates, 63 Table of Contents own more than 15% of the subject company from engaging in certain business combinations for a period of three years following the date that the stockholder became an interested stockholder of such subject company without approval of the board or 66 2 / 3 % of the independent stockholders.
In addition, many countries limit the enforceability of patents against certain third parties, including government agencies or government contractors. In these countries, patents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time consuming process with uncertain outcomes.
In addition, many countries limit the enforceability of patents against certain third parties, including government agencies or government contractors. In these countries, patents 49 Table of Contents may provide limited or no benefit. Patent protection must ultimately be sought on a country-by-country basis, which is an expensive and time consuming process with uncertain outcomes.
Our failure to take prompt and satisfactory corrective action in response to an adverse inspection or our failure to comply with applicable standards could result in enforcement actions, including a public warning letter, a shutdown of our manufacturing operations, a recall of our products, civil or criminal penalties, or other sanctions, which would cause our sales and business to suffer.
Our 38 Table of Contents failure to take prompt and satisfactory corrective action in response to an adverse inspection or our failure to comply with applicable standards could result in enforcement actions, including a public warning letter, a shutdown of our manufacturing operations, a recall of our products, civil or criminal penalties, or other sanctions, which would cause our sales and business to suffer.
A number of countries, as well as organizations such as the Organization for Economic Cooperation and Development, support the 15% global minimum tax initiative, and have adopted or intend to adopt laws to implement this initiative.
A number of countries, as well as organizations such as the Organization for Economic Cooperation and Development, support the 15% global minimum tax initiative ("Pillar Two"), and have adopted or intend to adopt laws to implement this initiative.
If economic conditions worsen, or new legislation is passed related to the healthcare 28 Table of Contents system, trade, fiscal or tax policies, customer demand may not materialize to levels we require to achieve our anticipated financial results, which could have a material adverse effect on our business, financial condition and results of operations.
If economic conditions worsen, or new legislation is passed related to the healthcare system, trade, fiscal or tax policies, customer demand may not materialize to levels we require to achieve our anticipated financial results, which could have a material adverse effect on our business, financial condition and results of operations.
If our financial results fall below the expectation of securities analysts and investors, the trading price of our common stock would almost certainly decline. 33 Table of Contents We report our orders and backlog on a quarterly and annual basis. Unlike revenues, orders and backlog are not defined by United States generally accepted accounting principles (“U.S.
If our financial results fall below the expectation of securities analysts and investors, the trading price of our common stock would almost certainly decline. We report our orders and backlog on a quarterly and annual basis. Unlike revenues, orders and backlog are not defined by United States generally accepted accounting principles (“U.S.
Furthermore, on October 25, 2018, President Trump signed into law the “Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act” which in part (under a provision entitled “Fighting the Opioid Epidemic with Sunshine”) extends the reporting and transparency requirements for physicians in the Physician Payments Sunshine Act to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives.
Furthermore, on October 25, 2018, President 59 Table of Contents Trump signed into law the “Substance Use-Disorder Prevention that Promoted Opioid Recovery and Treatment for Patients and Communities Act” which in part (under a provision entitled “Fighting the Opioid Epidemic with Sunshine”) extends the reporting and transparency requirements for physicians in the Physician Payments Sunshine Act to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives.
In addition to competition from technologies performing similar functions as our platforms, competition also exists for the limited capital expenditure budgets of our customers. For example, our platforms may compete with other equipment required by a radiation therapy department for financing under the same capital expenditure budget, which is typically 34 Table of Contents limited.
In addition to competition from technologies performing similar functions as our platforms, competition also exists for the limited capital expenditure budgets of our customers. For example, our platforms may compete with other equipment required by a radiation therapy department for financing under the same capital expenditure budget, which is typically limited.
Such sanctions and measures, as well as existing and potential further responses from 36 Table of Contents Russia or other countries, could adversely affect the global economy and financial markets, as well as our business, financial condition and results of operations, which may also magnify the impact of other risks described in this “Risk Factors” section.
Such sanctions and measures, as well as existing and potential further responses from Russia or other countries, could adversely affect the global economy and financial markets, as well as our business, financial condition and results of operations, which may also magnify the impact of other risks described in this “Risk Factors” section.
The QSR is a complex regulatory scheme that covers the methods and documentation of the design, testing, production process and controls, manufacturing, labeling, quality assurance, packaging, storage and shipping of our products. Furthermore, we are required to 37 Table of Contents verify that our suppliers maintain facilities, procedures and operations that comply with our quality requirements.
The QSR is a complex regulatory scheme that covers the methods and documentation of the design, testing, production process and controls, manufacturing, labeling, quality assurance, packaging, storage and shipping of our products. Furthermore, we are required to verify that our suppliers maintain facilities, procedures and operations that comply with our quality requirements.
Failures at banks and other financial institutions, or issues in the broader U.S. financial system, including uncertainty related to the debt ceiling, increased interest rates, and lack of availability of credit, which may have an impact on the broader capital markets and, in turn, our ability to access those markets.
Failures at banks and other financial institutions, or issues in the broader U.S. financial system, including uncertainty related to the debt ceiling, 55 Table of Contents increased interest rates, and lack of availability of credit, which may have an impact on the broader capital markets and, in turn, our ability to access those markets.
It remains unclear, however, whether this new framework will be appropriate for us to rely upon. The DPF has already faced a legal challenge and it may be subject to additional challenges.
It remains unclear, however, whether this framework will be appropriate for us to rely upon. The DPF has faced a legal challenge and it may be subject to additional challenges.
As the number of competitors in the market for less invasive cancer treatment alternatives grows, and as the number of patents issued in this area grows, the possibility of patent infringement claims against us increases. 47 Table of Contents Regardless of the merit of infringement claims, they can be time‑consuming and result in costly litigation and diversion of technical and management personnel.
As the number of competitors in the market for less invasive cancer treatment alternatives grows, and as the number of patents issued in this area grows, the possibility of patent infringement claims against us increases. Regardless of the merit of infringement claims, they can be time‑consuming and result in costly litigation and diversion of technical and management personnel.
Reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have also negatively impacted our revenue during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
Reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have also negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
For example, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our revenue during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
For example, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
We anticipate a portion of our open contracts may never result 50 Table of Contents in revenue recognition primarily due to the long sales cycle and factors outside of our control including changes in customers' needs or financial condition, changes in government or health insurance reimbursement policies or changes to regulatory requirements.
We anticipate a portion of our open contracts may never result in revenue recognition primarily due to the long sales cycle and factors outside of our control including changes in customers' needs or financial condition, changes in government or health insurance reimbursement policies or changes to regulatory requirements.
We cannot be certain 39 Table of Contents that our personnel, systems, procedures and internal controls will be adequate to support our future operations and any expansion of our systems and infrastructure may require us to commit significant additional financial, operational and management resources. If we cannot manage our growth effectively, our business will suffer.
We cannot be certain that our personnel, systems, procedures and internal controls will be adequate to support our future operations and any expansion of our systems and infrastructure may require us to commit significant additional financial, operational and management resources. If we cannot manage our growth effectively, our business will suffer.
If any such matters are adjudicated against us, in whole or in part, we may be subject to substantial monetary damages, disgorgement of profits and injunctions that prevent us from operating our business, any of which could materially and adversely affect our business and financial condition.
If any such matters 50 Table of Contents are adjudicated against us, in whole or in part, we may be subject to substantial monetary damages, disgorgement of profits and injunctions that prevent us from operating our business, any of which could materially and adversely affect our business and financial condition.
In addition to achieving market acceptance of our products and the need to educate physicians and others about the benefits of our products, the CyberKnife and TomoTherapy platforms are major capital purchases, and purchase decisions are 29 Table of Contents greatly influenced by hospital administrators who are subject to increasing pressures to reduce costs.
In addition to achieving market acceptance of our products and the need to educate physicians and others about the benefits of our products, the CyberKnife and TomoTherapy platforms are major capital purchases, and purchase decisions are greatly influenced by hospital administrators who are subject to increasing pressures to reduce costs.
There can be no assurance that any efforts we make to prevent against such privacy or security breaches or incidents have been or 42 Table of Contents will be able to prevent breakdowns or breaches or incidents in our systems or those of our third-party service providers that could adversely affect our business.
There can be no assurance that any efforts we make to prevent against such privacy or security breaches or incidents have been or will be able to prevent breakdowns or breaches or incidents in our systems or those of our third-party service providers that could adversely affect our business.
We do not have measures to configure or secure our customers’ equipment or any information stored in our customers’ systems or at their locations, which is the responsibility of our customers. Our customers are also continually updating their cybersecurity standards for the products that they purchase.
We do not have measures to configure or secure our customers’ equipment or any information stored in our customers’ systems or at 43 Table of Contents their locations, which is the responsibility of our customers. Our customers are also continually updating their cybersecurity standards for the products that they purchase.
Any cyberattacks or other security breaches or incidents we suffer could expose us to a risk of lost, unavailable, or corrupted information, unauthorized disclosure or other processing of information, claims, litigation and possible liability to employees, customers and others, and investigations and proceedings by regulatory authorities.
Any cyberattacks or other security breaches or incidents we suffer could expose us to a risk of lost, unavailable, or corrupted information, unauthorized disclosure or other processing of information, claims, litigation and possible liability to employees, customers and others, and investigations and proceedings 42 Table of Contents by regulatory authorities.
If circumstances change over time or interpretation of the revenue recognition rules change, we could be required to adjust the timing of recognizing revenue and our financial results could suffer. We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future.
If circumstances change over time or interpretation of the revenue recognition rules change, we could be required to adjust the timing of recognizing revenue and our financial results could suffer. 65 Table of Contents We have not paid dividends in the past and do not expect to pay dividends in the foreseeable future.
If we are unable to protect our intellectual property rights, we may be unable to prevent competitors from using our own inventions and intellectual property to compete against us and our business may be harmed. 49 Table of Contents Unfavorable results of legal proceedings could materially and adversely affect our financial condition.
If we are unable to protect our intellectual property rights, we may be unable to prevent competitors from using our own inventions and intellectual property to compete against us and our business may be harmed. Unfavorable results of legal proceedings could materially and adversely affect our financial condition.
In Europe, the GDPR imposes several 43 Table of Contents stringent requirements for controllers and processors of personal data that impose substantial obligations and, in the event of violations, may impose significant fines of up to the greater of 4% of worldwide annual revenue or €20 million.
In Europe, the GDPR imposes several stringent requirements for controllers and processors of personal data that impose substantial obligations and, in the event of violations, may impose significant fines of up to the greater of 4% of worldwide annual revenue or €20 million.
For example, the European Union has adopted directives that may lead to restrictions on the use of certain hazardous substances or other regulated substances in some of our products sold there, unless such products are 59 Table of Contents eligible for an exemption.
For example, the European Union has adopted directives that may lead to restrictions on the use of certain hazardous substances or other regulated substances in some of our products sold there, unless such products are eligible for an exemption.
We cannot assure you that our backlog will result in revenue on a timely basis or at all, or that any cancelled contracts will be replaced. Our industry is subject to intense competition and rapid technological change, which may result in products or new tumor treatments that are superior to the CyberKnife and TomoTherapy platforms.
We cannot assure you that our backlog will result in revenue on a timely basis or at all, or that any cancelled contracts will be replaced. 35 Table of Contents Our industry is subject to intense competition and rapid technological change, which may result in products or new tumor treatments that are superior to the CyberKnife and TomoTherapy platforms.
If we do not allocate and effectively manage the resources necessary to build, sustain and secure the proper technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions or the loss, unavailability of or damage to data and intellectual property through a cyberattack (including ransomware and other attacks) or other security breach or incident.
If we do not allocate and effectively manage the resources necessary to build, sustain and secure the proper technology infrastructure, we could be subject to transaction errors, processing inefficiencies, the loss of customers, business disruptions or the loss, unavailability of or damage to data and intellectual property through a cyberattack (including ransomware and other attacks) or other security breaches or incidents.
In addition, U.S. and international laws that have been applied to protect consumer privacy (including laws regarding unfair and deceptive practices in the U.S. and GDPR in the EU) may be subject to evolving interpretations or applications in light of privacy developments.
In addition, U.S. and international laws that have been applied to protect consumer privacy (including laws regarding unfair and deceptive practices in the U.S. and GDPR in the EU) may be subject to evolving interpretations or applications in light of privacy 45 Table of Contents developments.
Such risks could negatively affect the performance of our products, services, and business, as well as our reputation and the reputations of our customers, and we could incur liability through the violation of laws or contracts to which we are a party or civil claims.
Such risks could negatively affect the performance of 46 Table of Contents our products, services, and business, as well as our reputation and the reputations of our customers, and we could incur liability through the violation of laws or contracts to which we are a party or civil claims.
We also have limited clinical data directly comparing the effectiveness of the CyberKnife platform to other 46 Table of Contents competing platforms. Future patient studies or clinical experience may indicate that treatment with the CyberKnife platform does not improve patient survival or outcomes relative to other platforms.
We also have limited clinical data directly comparing the effectiveness of the CyberKnife platform to other competing platforms. Future patient studies or clinical experience may indicate that treatment with the CyberKnife platform does not improve patient survival or outcomes relative to other platforms.
General Risks • Our liquidity could be adversely impacted by adverse conditions in the financial markets. 27 Table of Contents Risk Factors We operate in a rapidly changing environment that involves significant risks, a number of which are beyond our control.
General Risks • Our liquidity could be adversely impacted by adverse conditions in the financial markets. Risk Factors We operate in a rapidly changing environment that involves significant risks, a number of which are beyond our control.
While management is committed to identifying and improving data security risks through oversight of data security by our Chief Information Security Officer and implementation of various technical safeguards, procedural requirements and policies, regardless of the resources we allocate and the effectiveness with which we manage them, we face a risk of cyberattacks and other security breaches and incidents.
While management is committed to identifying cybersecurity risks and working to address them through oversight of data security by our Chief Information Security Officer and implementation of various technical safeguards, procedural requirements and policies, regardless of the resources we allocate and the effectiveness with which we manage them, we face a risk of cyberattacks and other security breaches and incidents.
As of June 30, 2024, customer contracts with extended payment terms of more than one year amounted to approximately 3% of our total accounts receivable balance. While we qualify customers to whom we offer longer or extended payment terms, their financial positions may change adversely over the longer time period given for payment.
As of June 30, 2025, customer contracts with extended payment terms of more than one year amounted to approximately 4% of our total accounts receivable balance. While we qualify customers to whom we offer longer or extended payment terms, their financial positions may change adversely over the longer time period given for payment.
District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Act. Additionally, on December 18, 2019, the U.S.
District Court Judge ruled that the ACA is unconstitutional in its entirety because the “individual mandate” was repealed by Congress as part of the Tax Cuts and Jobs Act. Additionally, on December 18, 2019, the U.S.
In addition to the other information contained in this Form 10‑K, the following discussion highlights some of these risks and the possible impact of these factors on our business, financial condition and future results of operations.
In addition to the other information contained in this Form 10‑K, the following discussion highlights some of these risks and 28 Table of Contents the possible impact of these factors on our business, financial condition and future results of operations.
The failure to successfully consummate such strategic transactions and effectively integrate and execute following such consummation may have an adverse impact on our growth, profitability, financial position and results of operations. We have identified material weaknesses in our system of internal controls as of June 30, 2024 and are in the process of remediation.
The failure to successfully consummate such strategic transactions and effectively integrate and execute following such consummation may have an adverse impact on our growth, profitability, financial position and results of operations. We previously identified material weaknesses in our system of internal controls as of June 30, 2024.
Future changes in our stock ownership, including future offerings, as well as changes that may be outside of our control, could result in an ownership change under Section 382 of the Internal Revenue Code. In addition, the use of our net operating losses and other tax attributes may be subject to other limitations under applicable law.
Future changes in our stock ownership, including future offerings, as well as changes that may be outside of our control, could result in an ownership change under Section 382 of the IRC. In addition, the use of our net operating losses and other tax attributes may be subject to other limitations under applicable law.
In addition, the EU and Switzerland failed to establish a Mutual Recognition Agreement (“MRA”) for medical devices to include Switzerland within the MDR and as a result, Switzerland has initiated its own medical device regulation similar to the EU MDR, which will require additional registrations for economic operators and products within Switzerland for our devices.
In addition, the EU and Switzerland failed to establish a Mutual Recognition Agreement (“MRA”) for medical devices to include Switzerland within the MDR and as a result, Switzerland has initiated its own 60 Table of Contents medical device regulation similar to the EU MDR, which will require additional registrations for economic operators and products within Switzerland for our devices.
We cannot assure you that the FDA will agree with our decisions not to seek approvals or clearances for particular device modifications or that we will be successful in obtaining premarket approvals or 510(k) clearances for modifications in a timely fashion, if at all.
We cannot assure you that the FDA will agree with our decisions not to seek approvals or clearances for particular device 57 Table of Contents modifications or that we will be successful in obtaining premarket approvals or 510(k) clearances for modifications in a timely fashion, if at all.
Any ban or other restriction on our transfer of data to the JV in China may increase costs as we seek operational and data processing alternatives. New and proposed privacy, cybersecurity, and data protection laws are also providing new rights to individuals and increasing the penalties associated with non-compliance.
The DOJ Sensitive Personal Data Transfer Limitations Rule, and any other ban or other restriction on our transfer of data to the JV in China, may increase costs as we seek operational and data processing alternatives. New and proposed privacy, cybersecurity, and data protection laws are also providing new rights to individuals and increasing the penalties associated with non-compliance.
Our inability to overcome these obstacles could harm our business, financial condition and operating results. Even if we are successful in managing these obstacles, our partners internationally are subject to these same risks and may not be able to manage these obstacles effectively. In addition, our partners internationally are subject to these same risks.
Our inability to overcome these obstacles could harm our business, financial condition and operating results. Even if we are successful in managing these obstacles, our partners internationally are subject to these same risks and may not be able to manage these obstacles effectively. 37 Table of Contents In addition, our partners internationally are subject to these same risks.
A number of factors have adversely impacted or could impact gross margins, including: • lower than expected manufacturing yields of high cost components leading to increased manufacturing costs; • low production volume, which will result in high levels of overhead cost per unit of production; • lower selling pricing; • our ability to sell products and services, recognize revenue from our sales and the timing of revenue recognition and revenue deferrals; • increased labor costs or other costs as a result of increased inflation and supply chain constraints; • delays in receipt of or increased costs related to critical components parts, including as a result of supply chain disruptions; 30 Table of Contents • increased inventory costs and liabilities for excess inventory resulting from inventory held in excess of forecasted demand; • increased service or warranty costs or the failure to reduce service or warranty costs; • increased price competition; • variation in the margins across products installed in a particular period; • changes to U.S. and foreign trade policies, including enactments of tariffs on goods imported into the U.S. and any retaliatory tariffs imposed by other countries on U.S. goods, including our products; and • how well we execute on our strategic and operating plans.
A number of factors have adversely impacted or could impact gross margins, including: • lower than expected manufacturing yields of high cost components leading to increased manufacturing costs; • low production volume, which will result in high levels of overhead cost per unit of production; • lower selling pricing; • our ability to sell products and services, recognize revenue from our sales and the timing of revenue recognition and revenue deferrals; • increased labor costs or other costs as a result of increased inflation and supply chain constraints; • delays in receipt of or increased costs related to critical components parts, including as a result of supply chain disruptions; • increased inventory costs and liabilities for excess inventory resulting from inventory held in excess of forecasted demand; • increased service or warranty costs or the failure to reduce service or warranty costs; • increased price competition; • variation in the margins across products installed in a particular period; • changes to U.S. and foreign trade policies, including imposition of tariffs on goods imported into the U.S. including, but not limited to, tariffs on goods imported from China and other countries, and any retaliatory tariffs imposed by other countries on U.S. goods, including our products, and retaliatory export controls that could impact our supply chain; 31 Table of Contents • fluctuations in foreign currency exchange rates; and • how well we execute on our strategic and operating plans.
Currently, the majority of our international sales are denominated in U.S. Dollars. As a result, an increase in the value of the U.S. Dollar relative to foreign currencies could require us to reduce our sales price or make our products less competitive in international markets. Foreign exchange continues to be a significant headwind as the U.S.
Currently, the majority of our international sales are denominated in U.S. Dollars. As a result, an increase in the value of the U.S. Dollar relative to foreign currencies could require us to reduce our sales price or make our products less competitive in international markets.
Dollar has continued to strengthen, which affect our results of operations and could cause potential delays in orders and we may see our sales and margins outside of the U.S. decline as we may not be able to raise local prices to fully offset the strengthening of the U.S. Dollar.
Dollar strengthens, which could affect our results of operations and could cause potential delays in orders and we may see our sales and margins outside of the U.S. decline as we may not be able to raise local prices to fully offset any strengthening of the U.S. Dollar.
If we need to accept less favorable terms, it could increase our cost of capital, reduce our cash balances or otherwise restrict our ability to grow. We may not be able to fully utilize certain tax loss carryforwards. As of June 30, 2024, we had approximately $281.9 million and $124.5 million in federal and state net operating loss carryforwards, respectively.
If we need to accept less favorable terms, it could increase our cost of capital, reduce our cash balances or otherwise restrict our ability to grow. We may not be able to fully utilize certain tax loss carryforwards. As of June 30, 2025, we had approximately $260.9 million and $119.9 million in federal and state net operating loss carryforwards, respectively.
Any exports or sales of our products into Russia and Belarus may be impacted by these restrictions. For instance, we are not able to ship certain spare or replacement parts into Russia and Belarus, which impacts our distributor's ability to service our installed base in such countries.
Any exports or sales of our products into Russia and Belarus may be impacted by these restrictions. For instance, we are not able to ship certain spare or replacement parts into Russia and Belarus, which impacts our distributor's ability to service our installed base in such 33 Table of Contents countries as we have distributors in Russia.
General Risks Our liquidity could be adversely impacted by adverse conditions in the financial markets. At June 30, 2024, we had $68.6 million in cash and cash equivalents. The available cash and cash equivalents are held in accounts managed by third-party financial institutions and consist of cash in our operating accounts and cash invested in money market funds.
General Risks Our liquidity could be adversely impacted by adverse conditions in the financial markets. At June 30, 2025, we had $57.4 million in cash and cash equivalents. The available cash and cash equivalents are held in accounts managed by third-party financial institutions and consist of cash in our operating accounts and cash invested in money market funds.
In addition, unauthorized persons may attempt to hack into our products or systems to obtain personal data relating to patients or employees, our confidential or proprietary information or confidential information we hold on behalf of third parties, which, if successful, could pose a risk of loss, unavailability, or corruption of, or unauthorized access to or acquisition of, data, risk to patient safety and risk of product recall.
In addition, adversaries might attempt to gain unauthorized access to our products or systems to obtain personal data relating to patients or employees, our confidential or proprietary information or confidential information we hold on behalf of third parties, which, if successful, could pose a risk of loss, unavailability, or corruption of, or unauthorized access to or acquisition of, data, risk to patient safety and risk of product recall.
The uncertain macroeconomic environment, including volatile credit markets and concerns regarding the availability and cost of credit, increased interest rates, inflation, reduced economic growth or a recession, instability in the banking and financial services sector and concerns relating to the upcoming U.S. presidential election, in any of the geographic areas where we do business, could impact consumer and customer demand for our products and services, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors, including financial institutions, and the ability of our customers to meet their obligations to us.
The uncertain macroeconomic environment, including volatile credit markets and concerns regarding the availability and cost of credit, increased interest rates, inflation, reduced economic growth or a recession, instability in the banking and financial services sector, and changes in government administration policy positions, in any of the geographic areas where we do business, could impact consumer and customer demand for our products and services, as well as our ability to manage normal commercial relationships with our customers, suppliers and creditors, including financial institutions, and the ability of our customers to meet their obligations to us.
Our ability to achieve profitability depends in part on maintaining or increasing our gross margins on product sales and services, which we may not be able to achieve. As of June 30, 2024, we had an accumulated deficit of $517.7 million.
Our ability to achieve profitability depends in part on maintaining or increasing our gross margins on product sales and services, which we may not be able to achieve. As of June 30, 2025, we had an accumulated deficit of $519.3 million.
The credit agreement governing the Credit Facilities (the “Existing Credit Agreement”) also includes certain restrictive covenants that limit, among other things, our ability and our subsidiaries’ ability to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in 31 Table of Contents each case, subject to certain exceptions.
The Financing Agreement also includes certain restrictive covenants that limit, among other things, our ability and our subsidiaries’ ability to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in each case, subject to certain exceptions.
Risks related to our common stock • The price of our common stock is volatile and may continue to fluctuate significantly, which could lead to losses for stockholders. • Future issuances of shares of our common stock could dilute the ownership interests of our stockholders. • The conditional conversion features of the Notes, if triggered, may adversely affect our financial condition and operating results. • Provisions in the indenture for the Notes, the credit agreement for our Credit Facilities (as defined below), our certificate of incorporation and our bylaws could discourage or prevent a takeover, even if an acquisition would be beneficial in the opinion of our stockholders.
Risks related to our common stock • The price of our common stock is volatile and may continue to fluctuate significantly, which could lead to losses for stockholders. • Future issuances of shares of our common stock could dilute the ownership interests of our stockholders. • The exercise of outstanding warrants for our common stock would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. • The conditional conversion features of the 2026 Notes, if triggered, may adversely affect our financial condition and operating results. • Provisions in the indenture for the 2026 Notes, the financing agreement for our Credit Facilities (as defined below), our certificate of incorporation and our bylaws could discourage or prevent a takeover, even if an acquisition would be beneficial in the opinion of our stockholders.
As a result of our international operations, in addition to similar risks we face in our U.S. operations, we are affected by economic, business, regulatory, social, and political conditions in foreign countries, including the following: • economic or political instability in the world or in particular regions or countries in which we do business, including the market volatility resulting from conflicts or war, such as the Russia-Ukraine and Israel-Hamas conflicts, and the upcoming U.S. presidential election; • import delays; • changes in foreign laws and regulations governing, among other matters, the clearance, approval and sales of medical devices; • compliance with differing foreign regulatory requirements to sell and market our products; • U.S. relations with the governments of the foreign countries in which we operate, which may, among other things, affect our access to such markets, including China, where our JV is located; • longer payment cycles associated with many customers outside the United States; • inability of customers to obtain requisite government approvals, such as customers in China, including customers of the JV, obtaining one of the limited number of Class A or Class B user licenses available in order to purchase our products; • effective compliance with privacy, data protection and information security laws, such as the European Union (“EU”) General Data Protection Regulation (the “GDPR”) and new regulations in China; • adequate coverage and reimbursement for the CyberKnife and TomoTherapy platform treatment procedures outside the United States; • failure of local laws to provide the same degree of protection against infringement of our intellectual property; • protectionist laws and business practices that favor local competitors; • U.S. trade and economic sanctions policies that are in effect from time to time and the possibility that foreign countries may impose additional taxes, tariffs or other restrictions on foreign trade; • trade restrictions that are in effect from time to time, including U.S. prohibitions and restrictions on exports of certain products and technologies to certain nations and customers; • the unfamiliarity of shipping companies and other logistics providers with U.S. export control laws, which may lead to their unwillingness to ship or delays in shipping, our products to certain nations and customers despite such shipments being permitted under such laws; • the inability to obtain required export or import licenses or approvals; 35 Table of Contents • risks relating to foreign currency, including fluctuations in foreign currency exchange rates possibly causing fewer sales due to the strengthening of the U.S.
In addition, we have employees engaged in R&D, manufacturing, administration, manufacturing, support and sales and marketing activities. 36 Table of Contents As a result of our international operations, in addition to similar risks we face in our U.S. operations, we are affected by economic, business, regulatory, social, and political conditions in foreign countries, including the following: • economic or political instability in the world or in particular regions or countries in which we do business, including the market volatility resulting from conflicts or war, such as the Russia-Ukraine and the Middle East conflicts including with respect to Iran, and changes in government administration policy positions; • import delays; • changes in foreign laws and regulations governing, among other matters, the clearance, approval and sales of medical devices; • compliance with differing foreign regulatory requirements to sell and market our products; • U.S. relations with the governments of the foreign countries in which we operate, which may, among other things, affect our access to such markets, including China, where our JV is located; • protectionist laws, policies, business practices and nationalistic campaigns that favor local competitors, which could slow our growth, increase our costs, or make our products less competitive in our international markets; • U.S. trade and economic sanctions policies that are in effect from time to time including, but not limited to, tariffs on goods imported from China and other countries, and the possibility that foreign countries may impose additional taxes, tariffs or other restrictions on foreign trade; • longer payment cycles associated with many customers outside the United States; • inability of customers to obtain requisite government approvals, such as customers in China, including customers of the JV, obtaining one of the limited number of Class A or Class B user licenses available in order to purchase our products; • effective compliance with privacy, data protection and information security laws, such as the European Union (“EU”) General Data Protection Regulation (the “GDPR”) and new regulations in China; • adequate coverage and reimbursement for the CyberKnife and TomoTherapy platform treatment procedures outside the United States; • failure of local laws to provide the same degree of protection against infringement of our intellectual property; • trade restrictions that are in effect from time to time, including U.S. prohibitions and restrictions on exports of certain products and technologies to certain nations and customers; • the unfamiliarity of shipping companies and other logistics providers with U.S. export control laws, which may lead to their unwillingness to ship or delays in shipping, our products to certain nations and customers despite such shipments being permitted under such laws; • the inability to obtain required export or import licenses or approvals; • risks relating to foreign currency, including fluctuations in foreign currency exchange rates possibly causing fewer sales due to any strengthening of the U.S.
Our operating results, including our cash flows, quarterly orders, revenues and margins fluctuate from quarter to quarter and may be unpredictable, which may result in a decline in our stock price. We have experienced and expect in the future to experience fluctuations in our operating results, including gross orders, revenues and margins, from period to period.
Our operating results, including our cash flows, quarterly orders, revenues and margins fluctuate from quarter to quarter and may be unpredictable. We have experienced and expect in the future to experience fluctuations in our operating results, including gross orders, revenues and margins, from period to period.
For example, the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, imposes stringent data privacy and data protection requirements regarding the personal information of California residents, and provides for penalties for noncompliance of up to $7,500 per violation, as well as a private right of action from individuals in relation to certain security breaches. 44 Table of Contents The California Privacy Rights Act (“CPRA”), approved by California voters in November 2020, became effective on January 1, 2023.
For example, the California Consumer Privacy Act (the “CCPA”), which became effective on January 1, 2020, imposes stringent data privacy and data protection requirements regarding the personal information of California residents, and provides for penalties for noncompliance of up to $7,500 per violation, as well as a private right of action from individuals in relation to certain security breaches.
From time to time, we have not been in compliance with such covenants or other terms governing the Credit Facilities and we have been required to obtain waivers or amendments to the Existing Credit Agreement from our lenders in order to maintain compliance.
From time to time, we have not been in compliance with certain similar covenants or other terms governing the prior credit facilities and we have been required to obtain waivers or amendments to the previous credit agreement from our lenders in order to maintain compliance.
Additionally, the European Commission’s adequacy decision regarding the DPF provides that the DPF will be subject to future reviews and may be subject to suspension, amendment, repeal, or limitations to its scope by the European Commission.
Additionally, the European Commission’s adequacy decision regarding the DPF provides 44 Table of Contents that the DPF will be subject to future reviews and may be subject to suspension, amendment, repeal, or limitations to its scope by the European Commission. Additionally, the U.S.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Board of Directors receives periodic briefings on the outcome of our cybersecurity risk management program, including steps that we are taking to mitigate risks that the program identifies, and each quarter, the Audit Committee reviews cybersecurity incidents, metrics and the state of the program. 65 Table of Contents Our cybersecurity risk management program is principally managed by our Global Information Systems team, which is led by our Chief Information and Security Officer, who reports directly to our Chief Executive Officer, as well as our deputy Chief Information Security Officer (deputy CISO).
Biggest changeOur Board of Directors receives periodic briefings on the outcome of our cybersecurity risk management program, including steps that we are taking to mitigate risks that the program identifies, and each quarter, the Audit Committee reviews cybersecurity incidents, metrics, and the state of the program.
These policies also govern the security of our products and the protection of customer and patient data, provide for vulnerability remediation, regular system updates and patches, employee training on cybersecurity and HIPAA best practices, incident reporting, and the use of encryption to secure sensitive information.
These policies also govern the security of our products and the protection of customer and patient data and provide for vulnerability remediation, regular system updates and patches, employee training on cybersecurity and HIPAA best practices, incident reporting, and the use of encryption to secure sensitive information.
In the event a service provider does not have a current and available SOC-2 or equivalent report, we review of the service provider’s cybersecurity risk management and advise relevant business stakeholders of any significant identified risks.
In the event a service provider does not have a current and available SOC-2 or equivalent report, we review the service provider’s cybersecurity risk management and advise relevant business stakeholders of any significant identified risks.
Risk Factors in the risk factor entitled “Disruption of critical information technology systems, infrastructure and data or cyberattacks or other security breaches or incidents could harm our business and financial condition.” Governance Our Board of Directors, both directly and through the delegation of responsibilities to the Audit Committee, oversees the proper functioning of our cybersecurity risk management program and ensures strategic alignment and governance of our cybersecurity efforts at the highest level.
Risk Factors in the risk factor entitled “Disruption of critical information technology systems, infrastructure and data or cyberattacks or other security breaches or incidents could harm our business and financial condition.” Governance Our Board of Directors, both directly and through the delegation of responsibilities to the Audit Committee, oversees the functioning of our cybersecurity risk management program and ensures strategic alignment and governance of our cybersecurity efforts at the highest level.
In addition, the risk oversight responsibility of our Board of Directors and its committees is supported by our cybersecurity risk assessment program, which include policies and processes that are designed to provide visibility and information about the identification, assessment, and management of critical risks and management’s risk mitigation strategies, to our Board of Directors and personnel that are responsible for risk assessment.
In addition, the risk oversight responsibility of our Board of Directors and its committees is supported by our cybersecurity risk assessment program, which includes policies and processes that are designed to provide visibility and information about the identification, assessment, and management of critical risks and management’s risk mitigation strategies to our Board of Directors and personnel that are responsible for risk assessment.
The results of such assessments, audits, and reviews are reported to the Audit Committee and the Board of Directors, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews.
The results of such assessments, audits, and reviews are reported to the Audit Committee and the 66 Table of Contents Board of Directors, and we adjust our cybersecurity policies, standards, processes, and practices as necessary based on the information provided by these assessments, audits, and reviews.
Our cybersecurity risk assessment 64 Table of Contents program provides the underlying basis for the activities of our team to identify and mitigate risks from, as well as develop risk management and response strategies for, evolving and emerging cybersecurity threats.
Our cybersecurity risk assessment program provides the underlying basis for the activities of our team to identify and mitigate risks from, as well as develop risk management and response strategies for, evolving and emerging cybersecurity threats.
Under the direction of our Chief Information and Security Officer and deputy CISO, we monitor developments that could affect our long-term organizational cybersecurity strategy based on threats globally and to enhance our cybersecurity program as needed in response to such developments.
Under the direction of our Chief Information and Security Officer and Deputy CISO, we monitor developments that could affect our long-term organizational cybersecurity strategy based on threats globally and work to enhance our cybersecurity program as needed in response to such developments. 67 Table of Contents
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Our cybersecurity risk management program is principally managed by our Global Information Systems team, which is led by our Chief Information and Security Officer, who reports directly to our Chief Executive Officer, as well as our Deputy Chief Information Security Officer (Deputy CISO) .

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES Facilities Our corporate headquarters are in Madison, Wisconsin. We lease approximately 187,000 square feet in Madison, Wisconsin for product development, manufacturing, administrative, training and warehouse space. We lease approximately 59,000 square feet in Sunnyvale and Santa Clara, California for administrative and product development functions.
Biggest changeItem 2. PROPERTIES Facilities Our corporate headquarters are in Madison, Wisconsin. We lease approximately 460,000 square feet world-wide. We lease approximately 289,000 square feet in Madison, Wisconsin for product development, manufacturing, administrative, training and warehouse space. We lease approximately 59,000 square feet in Sunnyvale and Santa Clara, California for product research and development and administrative functions.
We lease approximately 20,000 square feet in Morges, Switzerland, for administrative functions, and lease approximately 5,000 square feet in Genolier, Switzerland for training. We lease approximately 42,000 square feet of space in a manufacturing facility in Chengdu, China.
We lease approximately 20,000 square feet in Morges, Switzerland, for administrative functions, and lease approximately 5,400 square feet in Genolier, Switzerland for training. We lease approximately 42,000 square feet of space in a manufacturing facility in Chengdu, China.
We also lease offices in Solon, Ohio and Chapel Hill, North Carolina for research and development functions; and lease international offices in China; Hong Kong; Japan; Korea; India; Spain; and Belgium.
We also lease offices in Solon, Ohio for research and development functions; and lease international offices in China; Hong Kong; Japan; Korea; India; and Spain.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. LEGAL PROCEEDINGS Refer to Note 8, Commitments and Contingencies , to the Consolidated Financial Statements for a description of certain legal proceedings currently pending against the Company. From time to time, we are involved in legal proceedings arising in the ordinary course of our business. Item 4. MINE SAFETY DISCLOSURES Not applicable. 66 Table of Contents PART II
Biggest changeItem 3. LEGAL PROCEEDINGS Refer to Note 8. Commitments and Contingencies , to the consolidated financial statements for a description of certain legal proceedings currently pending against the Company. From time to time, we are involved in legal proceedings arising in the ordinary course of our business. Item 4. MINE SAFETY DISCLOSURES Not applicable. 68 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFiscal year ending June 30. Copyright© 2019 Standard & Poor's, a division of S&P Global. All rights reserved 67 Table of Contents The comparisons shown in the graph above are based upon historical data.
Biggest changeFiscal year ending June 30. Copyright© 2019 Standard & Poor's, a division of S&P Global. All rights reserved Item 6. [RESERVED]
Because many of our shares of common stock are held by brokers or other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders and believe the number of stockholders of record underestimates our total number of stockholders.
Because many of our shares of common stock are held by brokers or other institutions on behalf of stockholders, we are unable to estimate the total number of beneficial stockholders and believe the number of stockholders of record underestimates our total number of stockholders. We have never paid cash dividends on our common stock.
Our Board of Directors intends to use any future earnings to support operations and reinvest in the growth and development of our business. There are no current plans to pay cash dividends to common stockholders in the foreseeable future. As of August 31, 2024, there were 165 stockholders of record of our common stock.
Our Board of Directors intends to use any future earnings to support operations and reinvest in the growth and development of our business. There are no current plans to pay cash dividends to common stockholders in the foreseeable future.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “ARAY.” We have never paid cash dividends on our common stock.
Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stock Information Our common stock is traded on the Nasdaq Global Select Market under the symbol “ARAY.” As of August 22, 2025, there were 164 stockholders of record of our common stock.
Removed
Stock Performance Graph The graph set forth below compares the cumulative total stockholder return on our common stock between June 30, 2019 and June 30, 2024, with the cumulative total return of (i) the S&P Healthcare Index and (ii) the Nasdaq Composite Index, over the same period.
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This graph assumes the investment of $100 on June 30, 2019 in our common stock, the S&P 500 Health Care Index and the Nasdaq Composite Index, and assumes the reinvestment of dividends, if any.
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We caution that the stock price performance shown in the graph above is not necessarily indicative of, nor is it intended to forecast, the potential future performance of our common stock. Item 6. [RESERVED]

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeIf such funds were repatriated, there will be additional foreign tax withholdings imposed, depending on the country from which the funds were repatriated. 75 Table of Contents Cash Flows Years Ended June 30, 2024 2023 2022 Net cash provided by (used in) operating activities $ (11,904 ) $ 15,539 $ (2,400 ) Net cash used in investing activities (3,601 ) (12,681 ) (4,717 ) Net cash used in financing activities (3,951 ) (2,112 ) (15,369 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (1,354 ) 302 (5,561 ) Net increase (decrease) in cash, cash equivalents and restricted cash $ (20,810 ) $ 1,048 $ (28,047 ) Cash Flows From Operating Activities Net cash used in operating activities was $11.9 million during the year ended June 30, 2024, resulting primarily from a $21.9 million decrease from the net changes in assets and liabilities, and a net loss of $15.5 million offset by a $25.6 million increase in non-cash items. • Non-cash items primarily consisted of share-based compensation expense of $9.5 million, provision for inventories write-down of $6.0 million, depreciation and amortization expense of $5.9 million, and a $4.1 million increase in the net deferred profit margin on sales to the JV, partially offset by income from our equity method investment of $1.8 million. • The major contributors to the decrease in net changes of assets and liabilities during the year ended June 30, 2024 were as follows: a $16.5 million decrease in accrued liabilities primarily due to the payment of value added tax payables and a decrease in accrued bonus compensation; a $15.8 million increase in accounts receivable primarily due to an increase in system sales during the fourth quarter of fiscal year 2024; a $6.6 million decrease in customer advances due to delivery of orders, a $4.0 million increase in inventories primarily due to increased costs for parts; a $2.5 million decrease in deferred revenue primarily due to the timing of revenue recognition, partially offset by a $17.4 million increase in accounts payable due to the timing of payments, and a $6.1 million decrease in prepaid and other assets primarily due to a decrease in value added tax receivables partially offset by a $2.5 million dividend receivable from our JV.
Biggest changeCash Flows Years Ended June 30, 2025 2024 Net cash provided by (used in) operating activities $ 2,860 $ (11,904 ) Net cash used in investing activities (8,523 ) (3,601 ) Net cash used in financing activities (4,252 ) (3,951 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,657 (1,354 ) Net decrease in cash, cash equivalents and restricted cash $ (8,258 ) $ (20,810 ) Cash Flows From Operating Activities Net cash provided by operating activities was $2.9 million during the year ended June 30, 2025, resulting primarily from an increase of $22.7 million in non-cash items partially offset by a decrease of $18.2 million in the net changes in assets and liabilities. • Non-cash items primarily consisted of share-based compensation expense of $10.2 million, a $7.7 million increase in the net deferred gross profit on sales to the JV, $6.2 million in depreciation and amortization expense, partially offset by $4.7 million in income from our equity method investment. 77 Table of Contents • The major contributors to the decrease in net changes of assets and liabilities during the year ended June 30, 2025 were as follows: a $18.7 million decrease in accounts payable due to the timing of payments, and a $9.1 million increase in inventories primarily due to increased costs for parts, partially offset by a $13.4 million decrease in accounts receivable primarily due to improved collections fiscal year 2025.
GAAP”). The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as revenue and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis.
The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as revenue and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis.
In addition, our order-to-revenue conversion cycle for international distributor orders has been generally longer, compared to that of direct channel sales and could cause fluctuations in our age-outs from period to period. Net Orders Net orders are defined as gross orders, less cancellations, age-outs net of age-ins, foreign exchange and other adjustments during the period.
In addition, our order-to-revenue conversion cycle for international distributor orders has been generally longer, compared to that of direct channel sales and could cause fluctuations in our age-outs from period to period. 72 Table of Contents Net Orders Net orders are defined as gross orders, less cancellations, age-outs net of age-ins, foreign exchange and other adjustments during the period.
The length of time between receipt of a signed contract and revenue recognition is generally governed by the time required by the customer to build, renovate or prepare the treatment room for installation of the platform. We report our customer revenues in four geographic regions: the Americas, EIMEA, Asia Pacific and Japan.
The length of time between receipt of a signed contract and revenue recognition is generally governed by the time required by the customer to build, renovate or prepare the treatment room for installation of the platform. We report our customer revenues in five geographic regions: the Americas, EIMEA, Japan, China and Asia Pacific.
Our book to bill ratio for the year ended June 30, 2024, was 1.5 as compared to 1.3 for the year ended June 30, 2023. A book-to-bill ratio greater than 1.2 indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time.
Our book-to-bill ratio for the year ended June 30, 2025, was 1.2 as compared to 1.5 for the year ended June 30, 2024. A book-to-bill ratio greater than 1.2 indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time.
In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our revenue during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
For a discussion of the year ended June 30, 2023 compared to the year ended June 30, 2022, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2023, as filed with the SEC on September 7, 2023.
For a discussion of the year ended June 30, 2024 compared to the year ended June 30, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2024, as filed with the SEC on September 19, 2024.
Our backlog includes contractual agreements with our customers for the purchase of our CyberKnife or TomoTherapy platforms, including the Radixact Systems and related upgrades. The amount of backlog recognized into revenue is primarily impacted by three items: cancellations, age-outs and age-ins, and foreign currency fluctuations.
Our backlog includes contractual agreements with our customers for the purchase of our CyberKnife or TomoTherapy platforms, including the Radixact Systems and related upgrades. The amount of backlog recognized into revenue is primarily 71 Table of Contents impacted by three items: cancellations, age-outs and age-ins, and foreign currency fluctuations.
Operating and Capital Expenditure Requirements and Contractual Obligations Our purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which we have not received the goods or services and acquisition and licensing of intellectual property.
Operating and Capital Expenditure Requirements and Contractual Obligations 78 Table of Contents Our purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which we have not received the goods or services and acquisition and licensing of intellectual property.
The SSP is determined based on observable prices at which we separately sell the products and services. If the SSP is not directly observable, then we will estimate the SSP considering market conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available.
The SSP is determined based on observable prices at which we separately 79 Table of Contents sell the products and services. If the SSP is not directly observable, then we will estimate the SSP considering market conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available.
Additionally, the undistributed earnings of our foreign subsidiaries at June 30, 2024, for all countries except Japan, France, Switzerland and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes.
Additionally, the undistributed earnings of our foreign subsidiaries as of June 30, 2025, for all countries except Japan, France, Switzerland and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes.
Overview Company Accuray Incorporated is a radiation therapy company that develops, manufactures, sells and supports market-changing solutions that are designed to deliver radiation treatments for even the most complex cases, while making commonly treatable cases even more straightforward, to meet the full spectrum of patient needs.
Overview Company We are a radiation therapy company that develops, manufactures, sells and supports market-changing solutions that are designed to deliver radiation treatments for even the most complex cases, while making commonly treatable cases even more straightforward, to meet the full spectrum of patient needs.
These factors include but are not limited to the following: • Revenue generated by sales of our products and service plans; • Our ability to generate cash flows from operations; • Costs associated with our sales and marketing initiatives and manufacturing activities; • Facilities, equipment and IT systems required to support current and future operations; • Rate of progress and cost of our research and development activities; 76 Table of Contents • Costs of obtaining and maintaining FDA and other regulatory clearances of our products; • Effects of competing technological and market developments; • Number and timing of acquisitions and other strategic transactions; • Servicing and maturity of our current future indebtedness, including interest rates; • The implementation of our cost savings initiatives, including the reduction of our workforce; • The impact of inflation on our expenses; and • The unpredictable impact of the macroeconomic environment, including on collections, supply chain, and logistics.
These factors include but are not limited to the following: • Revenue generated by sales of our products and service plans; • Our ability to generate cash flows from operations; • Costs associated with our sales and marketing initiatives and manufacturing activities; • Facilities, equipment and IT systems required to support current and future operations; • Rate of progress and cost of our research and development activities; • Costs of obtaining and maintaining FDA and other regulatory clearances of our products; • Effects of competing technological and market developments; • Number and timing of acquisitions and other strategic transactions; • Our ability to refinance our current indebtedness in a timely manner, and servicing and maturity of our current and future indebtedness, including interest rates; • The implementation of our cost savings initiatives, including the reduction of our workforce; • The impact of inflation on our expenses; and • The impact of the macroeconomic environment, including on collections, supply chain, and logistics.
If our demand forecast for specific products is greater than 78 Table of Contents actual demand and we fail to reduce purchasing and manufacturing output accordingly, we could be required to write off inventory beyond the current reserve, which would negatively impact our gross margin.
If our demand forecast for specific products is greater than actual demand and we fail to reduce purchasing and manufacturing output accordingly, we could be required to write off inventory beyond the current reserve, which would negatively impact our gross margin.
This section generally discusses the results of our operations for the year ended June 30, 2024, compared to the year ended June 30, 2023.
This section generally discusses the results of our operations for the year ended June 30, 2025, compared to the year ended June 30, 2024.
Inflation and the ongoing supply chain challenges and logistics costs have materially affected our gross margins and net income (loss), and we expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistic expenses through at least the remainder of calendar year 2024, and potentially longer.
Inflation and the ongoing supply chain challenges and logistics costs have materially affected our gross margins and net income (loss), and we expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer.
A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services. Our long-term material cash requirements include lease obligations.
A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services.
In recent years, the percentage of gross orders received from our distribution partners in the international markets represented 74%, 76%, and 71% of gross orders for fiscal year ended June 30, 2024, 2023 and 2022, respectively. We anticipate that distributor orders from international markets will continue to represent a significant portion of our gross orders in the foreseeable future.
In recent years, the percentage of gross orders received from our distribution partners in the international markets represented 81% and 74% of gross orders for fiscal year ended June 30, 2025 and 2024, respectively. We anticipate that distributor orders from international markets will continue to represent a significant portion of our gross orders in the foreseeable future.
We also continue to evaluate our operating expenses, including our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets.
We also continue to evaluate our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets.
In addition to these products, we also provide services, which include post-contract customer support (warranty period services and post-warranty services), installation services, training, and other professional services.
In addition to these products, we also 69 Table of Contents provide services which include post-contract customer support (warranty period services and post-warranty services), installation services, training, and other professional services.
Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold.
Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold. We also continue to evaluate our operating expenses.
The determination of obsolete or excess inventory requires us to estimate the future demand for our products. We regularly review inventory quantities on hand and adjust for excess and obsolete inventory based primarily on historical usage rates and our estimates of product demand to support future sales and service.
We regularly review inventory quantities on hand and adjust for excess and obsolete inventory based primarily on historical usage rates and our estimates of product demand to support future sales and service.
The Americas region includes the United States, Canada and Latin America. The EIMEA region includes Europe, India, the Middle East and Africa. The Asia Pacific region consists of Asia, Australia and New Zealand.
The Americas region includes the United States, Canada and Latin America. The EIMEA region 70 Table of Contents includes Europe, India, the Middle East and Africa. The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand.
In particular, we are continuing to navigate supply chain and inflation challenges and adverse foreign currency exchange rate fluctuations, all of which continues to have a negative impact on our results of operations. 68 Table of Contents We expect that our customers’ business and our business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues.
In particular, we are continuing to navigate supply chain and inflation challenges both of which continues to have a negative impact on our results of operations. We expect that our customers’ business and our business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues.
In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least the remainder of calendar year 2024, if not longer.
In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least calendar year 2025.
Management believes the critical accounting policies and estimates are those related to revenue recognition and the assessment of stand-alone selling price ("SSP"), allowance for credit losses, valuation of inventories, and the valuation of equity method investments.
Management believes the critical accounting policies and estimates are those related to revenue recognition and the assessment of stand-alone selling price ("SSP"), and the valuation of inventories.
Products net revenue was negatively impacted by reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the Americas region during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026.
In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted net revenue since fiscal year 2024, and we expect that this will continue to have an impact through fiscal year 2026.
See Note 11. b) Includes sales of services to the JV, an equity method investment, of $15,039 during the year ended June 30, 2024, $10,919 during the year ended June 30, 2023, and $10,332 during the year ended June 30, 2022, respectively.
See Note 11. b) Includes sales of services to the JV, an equity method investment, of $18,521 during the year ended June 30, 2025, and $15,039 during the year ended June 30, 2024, respectively. See Note 11.
Current Economic Conditions We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including rising interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russian-Ukraine and Israel-Hamas conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; the upcoming U.S. presidential election; as well as other factors that may emerge.
Current Economic Conditions We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russian-Ukraine and the Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; as well as other factors that may emerge.
Accordingly, there remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future.
Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty. There remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future.
Cash from operations could be affected by various risks and uncertainties, including, but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, instability in the banking sector and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least the remainder of calendar year 2024, if not longer.
Cash from operations could be affected by various risks and uncertainties, including, declines in our revenue, particularly without a corresponding decrease in our expenses, the 75 Table of Contents timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least calendar year 2025.
Liquidity and Capital Resources At June 30, 2024, we had $68.6 million in cash and cash equivalents.
Liquidity and Capital Resources At June 30, 2025, we had $57.4 million in cash and cash equivalents.
See Note 4, “Leases” to the Notes to the consolidated financial statements for further information. Inflation We experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations for fiscal years 2023 and 2024.
Inflation In recent years, we experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations.
We expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistic expenses in fiscal year 2025 as we are unable to pass all of these increased costs to our customers.
Gross margins and net income (loss) may continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer, as we are unable to pass all of these increased costs to our customers.
As a result, we are unable to predict with certainty the impacts of these factors on our ability to maintain compliance with the financial covenants contained in the credit and security agreements related to our credit facilities.
As a result, we are unable to predict with certainty the impact of these factors on our ability to maintain compliance with the financial covenants contained in the Financing Agreement (as defined below).
Provision for income taxes Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Provision for income taxes $ 3,725 49 % $ 2,492 (26 )% $ 3,345 Provision for income taxes increased by $1.2 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to an increase in foreign earnings and deferred tax liability on unremitted foreign earnings.
Provision for income taxes Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Provision for income taxes $ 2,725 $ 3,725 (27 )% Provision for income taxes decreased by $1.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to lower foreign earnings and lower deferred tax liabilities on unremitted foreign earnings not considered permanently reinvested.
Cash Flows From Investing Activities Net cash used in investing activities was $3.6 million during the year ended June 30, 2024, was due to the purchase of property and equipment.
Cash Flows From Investing Activities Net cash used in investing activities was $8.5 million during the year ended June 30, 2025, was due to spending $4.3 million for the purchase of property and equipment and $4.2 million in costs for capitalized investments for software to be sold.
Services net revenue decreased by $2.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to a $10.5 million decrease in revenue from the purchase of spare parts from customers, lower installation activity and systems activation at customer locations and certain upgrades, partially offset by a $8.5 million increase in revenue from service contracts as a result of an increase in our installed base.
Services net revenue increased by $8.5 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to a $4.0 million increase in revenue from service contracts as a result of growth in our installed base and a $3.8 million increase in revenue from the purchase of spare parts from customers.
Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition. 77 Table of Contents Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition.
Our liquidity and cash flows have been and could continue to be materially impacted by current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, the upcoming U.S. presidential election, instability in the banking sector, tightening of credit markets which could 74 Table of Contents impact debt availability.
Our liquidity and cash flows have been and could continue to be materially impacted by factors other than our cash from operations and factors that are not in our control, such as current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, changes in government administration policy positions, recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries, and tightening of credit markets which could impact debt availability.
In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B 69 Table of Contents device was approved by the NMPA in June 2024. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems.
We believe this strategy will allow us to best maximize both near and longer-term opportunities in China. In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024.
Backlog is stated at historical foreign currency exchange rates, and revenue is released from backlog at current exchange rates, with any difference recorded as a backlog adjustment. 70 Table of Contents A summary of gross orders, net orders, and order backlog is as follows (in thousands): Years Ended June 30, 2024 2023 2022 Gross orders $ 342,148 $ 311,094 $ 332,268 Age-ins 21,726 39,435 34,884 Age-outs (127,113 ) (152,573 ) (183,753 ) Cancellations (14,504 ) (6,670 ) (11,348 ) Currency impacts and other (11,343 ) (8,354 ) (4,735 ) Net orders $ 210,914 $ 182,932 $ 167,316 Order backlog at the end of the period $ 487,319 $ 510,641 $ 563,684 Gross Orders and Book to Bill Ratio Gross orders are defined as the sum of new orders recorded during the period, adjusted for any revisions to existing orders during the period.
A summary of gross orders, net orders, and order backlog is as follows (in thousands): Years Ended June 30, 2025 2024 Gross orders $ 288,035 $ 342,148 Age-ins 25,753 21,726 Age-outs (125,529 ) (127,113 ) Cancellations (7,725 ) (14,504 ) Currency impacts and other (3,301 ) (11,343 ) Net orders $ 177,233 $ 210,914 Order backlog at the end of the period $ 426,972 $ 487,319 Gross Orders and Book-to-Bill Ratio Gross orders are defined as the sum of new orders recorded during the period, adjusted for any revisions to existing orders during the period.
However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions. On October 25, 2023, we informed affected employees of the 2024 restructuring initiative. During the year ended June 30, 2024, we incurred a charge of $2.6 million.
However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions.
Net orders increased by $28.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to an increase in gross orders partially offset by unfavorable foreign exchange rate fluctuations. 71 Table of Contents Results of Operations Fiscal 2024 results compared to fiscal 2023 Net revenue Net revenue by sales classification is as follows: Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Products (a) (c) $ 234,164 0 % $ 233,192 9 % $ 214,715 Services (b) 212,387 (1 )% 214,413 (0 )% 215,194 Net revenue $ 446,551 (0 )% $ 447,605 4 % $ 429,909 Products revenue as a percentage of net revenue 52 % 52 % 50 % Service revenue as a percentage of net revenue 48 % 48 % 50 % a) Includes sales of products to the JV, an equity method investment, of $77,497 during the year ended June 30, 2024, $55,658 during the year ended June 30, 2023, and $45,545 during the year ended June 30, 2022, respectively.
Results of Operations Fiscal 2025 results compared to fiscal 2024 Net revenue Net revenue by sales classification is as follows: Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Products (a) $ 237,580 $ 234,164 1 % Services (b) 220,925 212,387 4 % Net revenue $ 458,505 $ 446,551 3 % Products revenue as a percentage of net revenue 52 % 52 % Services revenue as a percentage of net revenue 48 % 48 % a) Includes sales of products to the JV, an equity method investment, of $101,563 during the year ended June 30, 2025, and $77,497 during the year ended June 30, 2024, respectively.
Operating Expenses Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Research and development $ 49,732 (13 )% $ 57,129 (1 )% $ 57,752 Selling and marketing 42,619 (8 )% 46,178 (7 )% 49,664 General and administrative 50,066 4 % 48,271 9 % 44,391 Total operating expenses $ 142,417 $ 151,578 $ 151,807 Research and development as a percentage of net revenue 11 % 13 % 13 % Selling and marketing as a percentage of net revenue 10 % 10 % 12 % General and administrative as a percentage of net revenue 11 % 11 % 10 % Total operating expenses as a percentage of net revenue 32 % 34 % 35 % Research and development expenses decreased by $7.4 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to a $5.0 million decrease in compensation and benefit costs as a result of lower headcount from the 2024 restructuring initiative in the second quarter of fiscal year 2024 and lower bonus compensation expense in fiscal year 2024.
Operating Expenses Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Research and development $ 47,942 $ 49,732 (4 )% Selling and marketing 43,315 42,619 2 % General and administrative 47,871 50,066 (4 )% Total operating expenses $ 139,128 $ 142,417 Research and development as a percentage of net revenue 10 % 11 % Selling and marketing as a percentage of net revenue 9 % 10 % General and administrative as a percentage of net revenue 10 % 11 % Total operating expenses as a percentage of net revenue 30 % 32 % Research and development expenses decreased by $1.8 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to $2.5 million in lower compensation and benefits resulting from a reduction in headcount in fiscal year 2025 driven by our restructuring program in fiscal year 2024, and $1.7 million for the capitalization of internal labor for software development to be sold, partially offset by $1.1 million in higher spending for research and development projects and an a $1.0 million increase in facility and information system costs.
Selling and marketing expenses decreased by $3.6 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to $2.7 million in lower compensation and benefit costs as a result of the restructuring initiative in fiscal year 2023 and lower bonus compensation expense in fiscal year 2024, and a $0.6 million decrease in consulting costs due to cost-cutting efforts, partially offset by a $0.4 million increase in trade show expenses.
Selling and marketing expenses increased by $0.7 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to investments in our sales operations infrastructure and an increase in travel costs, partially offset by a $1.6 million decrease in commissions due to lower sales in the Americas and EIMEA regions in fiscal year 2025.
Products net revenue was negatively impacted by reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the Americas region during fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. 72 Table of Contents Gross profit Gross profit by sales classification is as follows: Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Gross profit $ 142,921 (7 )% $ 153,960 (4 )% $ 159,955 Total gross profit as a percentage of net revenue 32.0 % 34.4 % 37.2 % Gross profit decreased by $11.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, due to an increase of $6.2 million in service parts consumption which was partially from a supplier quality issue in fiscal year 2024, and a $4.1 million increase in the net deferred profit margin on sales to the JV.
The decrease in net revenue from EIMEA was due to lower product sales in fiscal year 2025, which was impacted by geopolitical disruptions in the region. 73 Table of Contents Gross profit Gross profit is as follows: Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Gross profit $ 146,967 $ 142,921 3 % Total gross profit as a percentage of net revenue 32.1 % 32.0 % Gross profit increased by $4.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, due to an increase in net revenue, partially offset by a $3.6 million increase in the net deferred gross profit on sales to the JV.
Other expense, net Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Foreign currency transaction loss $ (2,046 ) 133 % $ (878 ) (66 )% $ (2,618 ) Other, net (492 ) 112 % (232 ) (165 )% 356 Total other expense, net $ (2,538 ) $ (1,110 ) $ (2,262 ) Other expense, net, increased by $1.4 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily driven by foreign currency transaction losses.
Other income (expense), net Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Interest income $ 1,192 $ 1,231 (3 )% Foreign currency exchange gain (loss) 1,573 (2,046 ) 177 % Costs for foreign currency forward contracts (2,376 ) (1,811 ) 31 % Other, net 170 88 93 % Total other income (expense), net $ 559 $ (2,538 ) 122 % Other income (expense), net, increased by $3.1 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily driven by foreign currency transaction gains in fiscal year 2025.
The increase in gross orders were primarily due to an increase in system gross orders from the EIMEA region and Latin America. Our book to bill ratio is defined as gross orders for the period divided by product revenue for the period.
Gross orders decreased by $54.1 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, mostly due to a decrease in gross orders from the Americas region. Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period.
Products net revenue increased by $1.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, mostly driven by a higher average sale price per unit and certain upgrades, partially offset by lower volume of shipments of system units of our TomoTherapy System and CyberKnife System.
Products net revenue increased by $3.4 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, mostly driven by a $5.9 million increase in revenue from upgrades, partially offset by lower revenue from unit sales due to product mix.
General and administrative expenses increased by $1.8 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to an increase of $2.9 million in support consulting costs and $1.4 million in amortization expenses, both related to the implementation of our enterprise resource planning system in the first quarter of fiscal year 2024, a $1.3 million increase in facility expenses, a $0.6 million increase in legal and accounting expenses, and a $0.5 million increase in travel expenses, which were partially offset by $3.0 million decrease in compensation and benefit costs due to lower bonus compensation and stock-based compensation expenses in fiscal year 2024, and a decrease in bad debt expense due to a $2.0 million bad debt reserve for a specific customer recorded in the fourth quarter of fiscal year 2023.
General and administrative expenses decreased by $2.2 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to a $2.1 million decrease in consulting costs driven by the completion of the implementation of our ERP system in fiscal year 2024 and a $1.9 million reduction in rental expense due to cost savings measures, partially offset by a $1.9 million increase in compensation and benefits that was driven by merit increases and stock-based compensation.
Net revenue by geographic region, which is based on the shipping location of our customer, is as follows: Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Americas $ 90,156 (26 )% $ 122,335 (3 )% $ 126,005 EIMEA 168,611 8 % 155,879 16 % 134,640 China 103,412 36 % 75,762 (13 )% 86,935 Japan 55,682 (10 )% 61,962 16 % 53,376 Asia Pacific, excluding China 28,690 (9 )% 31,667 9 % 28,953 Net revenue $ 446,551 (0 )% $ 447,605 4 % $ 429,909 Net revenue decreased $1.1 million during the year ended June 30, 2024, as compared to the same period in the prior fiscal year primarily due to a lower volume of shipment of systems and service revenues from the Americas region, mostly offset by increase in the volume of shipment of systems from China as well as India and the Middle East within our EIMEA region.
Net revenue by geographic region, which is based on the shipping location of our customer, is as follows: Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Americas $ 88,768 $ 90,156 (2 )% EIMEA 144,264 168,611 (14 )% China 124,475 103,412 20 % Japan 53,622 55,682 (4 )% Asia Pacific 47,376 28,690 65 % Net revenue $ 458,505 $ 446,551 3 % Net revenue increased $12.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024.
Gross orders increased by $31.1 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to a $34.3 million increase in CyberKnife System gross orders and upgrades partially offset by a $3.2 million decrease in TomoTherapy System gross orders and upgrades.
Net orders decreased by $33.7 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to the decrease in gross orders, partially offset by $6.8 million in lower cancellations and $8.0 million in favorable foreign exchange currency impacts.
Cash Flows From Financing Activities Net cash used in financing activities was $4.0 million during the year ended June 30, 2024 and was due to the scheduled payment of $6.0 million of the principal amount outstanding on our Term Loan Facility partially offset by $2.2 million in proceeds from the issuance of common stock to employees from employee stock plans.
Cash Flows From Financing Activities Net cash used in financing activities was $4.3 million during the year ended June 30, 2025 and was due to paying $13.1 million in debt financing costs, which included $4.8 million in debt discount costs, for the new Term Loan Facility.
Accuray Asia has a 49% ownership interest in the JV and the CIRC Subsidiary has a 51% ownership interest in the JV. With the receipt of the necessary permits and licenses to operate, the JV has begun selling products in China, much like a distributor.
Accuray Asia has a 49% ownership interest in the JV and the CIRC Subsidiary has a 51% ownership interest in the JV. The JV sells our products in China, much like a distributor and also manufactures and sells a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category.
If our evaluation of our customers’ financial conditions does not reflect our future ability to collect all outstanding receivables, additional provisions may be needed and our operating results could be negatively affected. Valuation of Inventories The valuation of inventory requires us to estimate obsolete or excess inventory as well as damaged inventory.
Valuation of Inventories The valuation of inventory requires us to estimate obsolete or excess inventory as well as damaged inventory. The determination of obsolete or excess inventory requires us to estimate the future demand for our products.
We borrowed $5.0 million on our Revolving Credit Facility in May 2024, and then repaid the $5.0 million in June 2024. Operating Capital and Capital Expenditure Requirements Our future capital requirements depend on numerous factors.
As part of the refinancing, the Company paid $68.5 million to settle a portion of the Convertible Notes, and $58.0 million and $17.0 million to fully settle the outstanding balances of the Prior Term Loan Facility and Prior Revolving Credit Facility, respectively. Operating Capital and Capital Expenditure Requirements Our future capital requirements depend on numerous factors.
Removed
Delays in deliveries and installations that originated from the COVID-19 pandemic as well as its effects on the global economic environment have occurred and are expected to continue, to some degree, through the remainder of calendar year 2024, which could have a negative impact on our revenue during such period.
Added
In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through at least calendar year 2025.
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The JV has recently begun to manufacture and sell a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category. We believe this strategy will allow us to best maximize both near and longer-term opportunities in China.
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As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world.
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Restructuring On October 25, 2023, we informed affected employees of a cost savings initiative (the “2024 restructuring initiative”) to reduce operating costs resulting in the elimination of approximately 5.9 percent of our global workforce. In the year ended June 30, 2024, we incurred restructuring charges of $2.6 million.
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There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. If existing tariffs increase, we would expect minimal shipments to China despite customer demand.
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These charges are cash-based and are primarily related to severance expenses and other one-time termination benefits. We recorded the restructuring charges of the affected employees in their respective department cost center.
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We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026.
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The restructuring charges recorded during the year ended June 30, 2024 are as follows: cost of sales $0.2 million, research and development $1.7 million, sales and marketing $0.1 million, and general and administrative $0.6 million. At June 30, 2024, we have completed the 2024 restructuring initiative.
Added
Our Board of Directors and our Compensation Committee determined that no payouts pursuant to the company bonus plan would be paid for fiscal year 2025 given that we would not have been compliant with the debt covenants in effect at the beginning of fiscal year 2025 and to reduce operating expenses and conserve cash in light of the uncertain macroeconomic environment due to tariffs.
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See Note 11. c) The year ended June 30, 2024 includes revenue from certain upgrades that were recorded in services net revenue during the years ended June 30, 2023 and June 30, 2022.
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The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and CyberKnife S7 Systems, which received NMPA approval in January 2025. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems.
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During the year ended June 30, 2024, Japan net revenue included a $4.9 million unfavorable impact from foreign currency exchange rate fluctuations and EIMEA net revenue had a $4.2 million favorable impact from foreign currency exchange rate fluctuations.
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There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company.
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Income on equity method investment Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Income from equity method investment $ 1,838 (29 )% $ 2,572 967 % $ 241 73 Table of Contents Income on equity method investment decreased by $0.7 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to the JV having higher operating expenses, partially offset by an increase in the JV service revenue.
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We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026.
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Interest expense Years Ended June 30, (Dollars in thousands) 2024 Percent Change 2023 Percent Change 2022 Interest expense $ (11,624 ) 9 % $ (10,632 ) 31 % $ (8,129 ) Interest expense increased $1.0 million during the year ended June 30, 2024, as compared to the year ended June 30, 2023, primarily due to higher interest rates on the outstanding balances on our Credit Facilities.
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Backlog is stated at historical foreign currency exchange rates, and revenue is released from backlog at current exchange rates, with any difference recorded as a backlog adjustment.
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As of June 30, 2024, we have completed the 2024 restructuring initiative.
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Products net revenue increased primarily due to a higher volume of the shipment of systems in our China and APAC regions, partially offset by a decrease in the volume of the shipment of systems in our EIMEA region.
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Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty and, in fiscal 2023, we increased our bad debt reserve to account for potentially uncollectible revenue.
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Services net revenue increased primarily in our EIMEA, China and Japan regions, partially offset by a decrease in services net revenue in our Americas region.
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For example, in the United States, one customer declared bankruptcy in fiscal 2023 causing us to increase our bad debt reserve due to the expectation that they will be unable to pay us.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe interest on the borrowings under the Credit Facilities is payable at an annual interest rate of reserve-adjusted, 90-day term SOFR (subject to a 0.50% floor) plus a margin between 2.50% and 3.25%.
Biggest changeThe interest on the borrowings under the Financing Agreement is payable at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00% per annum floor), plus an applicable margin of 8.50%, per annum or (ii) a base rate (subject to a 3.00% per annum floor), plus an applicable margin of 7.50% per annum .
For the years ended June 30, 2024, and 2023, there was one customer that represented 10% or more of total net revenue. We had one customer as of June 30, 2024 and June 30, 2023, respectively, that accounted for more than 10% of our total accounts receivable, net.
For the years ended June 30, 2025, and 2024, there was one customer that represented 10% or more of total net revenue. We had one customer as of June 30, 2025 and June 30, 2024, respectively, that accounted for more than 10% of our total accounts receivable, net.
Upon conversion, we can settle the obligation by issuing our common stock, cash or a combination thereof at an initial conversion rate equal to 170.5611 shares of common stock per $1,000 principal amount of the 3.75% Convertible Senior Notes due 2026, which is equivalent to a conversion price of approximately $5.86 per share of common stock, subject to adjustment.
Upon conversion, we can settle the obligation by issuing our common stock, cash or a combination thereof at an initial conversion rate equal to 170.5611 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $5.86 per share of common stock, subject to adjustment.
As of June 30, 2024, we had open currency forward contracts to purchase or sell foreign currencies with stated, or notional value, of approximately $88.0 million. The purpose of these foreign currency forward contracts is to mitigate the risk associated with foreign exchange rate fluctuations. We have developed a foreign exchange policy to govern our forward contracts.
As of June 30, 2025, we had open currency forward contracts to purchase or sell foreign currencies with stated, or notional value, of approximately $43.5 million. The purpose of these foreign currency forward contracts is to mitigate the risk associated with foreign exchange rate fluctuations. We have developed a foreign exchange policy to govern our forward contracts.
If the amount outstanding under the Credit Facilities remained at this level for the next 12 months and interest rates increased or decreased by a 50 basis point change, our annual interest expense would increase or decrease, respectively, approximately $0.4 million.
If the amount outstanding under the Financing Agreement remained at this level for the next 12 months and interest rates increased or decreased by a 50 basis point change, our annual interest expense would increase or decrease, respectively, approximately $0.8 million.
Refer to Note 9, Debt to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion regarding our debt obligations. Equity Price Risk On May 13, 2021, we issued approximately $100.0 million aggregate principal amount of 3.75% Convertible Senior Notes due 2026.
Refer to Note 7, Debt to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion regarding our debt obligations. Equity Price Risk On May 13, 2021, we issued approximately $100.0 million aggregate principal amount of Convertible Notes.
For every $1 that the share price of our common stock exceeds $5.86, we expect to issue an additional $17.1 million in cash or shares of our common stock, or a combination thereof, if all of the 3.75% Convertible Senior Notes due 2026 are converted. 80 Table of Contents
For every $1 that the share price of our common stock exceeds $5.86, we expect to issue an additional $3.1 million in cash or shares of our common stock, or a combination thereof, if all of the remaining Convertible Notes are converted. 81 Table of Contents
Our foreign currency forward contract valuation inputs are based on quoted prices and quoted pricing intervals from public data and do not involve management judgment.
Our foreign currency forward contract valuation inputs are based on quoted prices and quoted pricing intervals from public data and do not involve management judgment. 80 Table of Contents Interest Rate Risk Our debt obligations consist of a variety of financial instruments that expose us to interest rate risk, including, but not limited to the Financing Agreement and our Convertible Notes.
There is no equity price risk if the share price of our common stock is below $5.86 upon conversion of the 3.75% Convertible Senior Notes due 2026.
On June 5, 2025, as part of the Financing Agreement, we paid $82.0 million to the Convertible Note holders. As of June, 30, 2025, the Company currently has $18.0 million Convertible Notes outstanding. There is no equity price risk if the share price of our common stock is below $5.86 upon conversion of the Convertible Notes.
As of June 30, 2024, the Credit Facilities included borrowings under the Term Loan Facility of $64.0 million, and borrowings under the Revolving Credit Facility of $10.0 million.
The interest rates on the Convertible Notes are fixed and the interest rate on the Term Loan Facilities are tied to a variable rate. As of June 30, 2025, the Financing Agreement included borrowings under the Term Loan Facility of $150.0 million.
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Interest Rate Risk 79 Table of Contents Our debt obligations consist of a variety of financial instruments that expose us to interest rate risk, including, but not limited to the Credit Facilities and our 3.75% Convertible Senior Notes due 2026.
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The interest rates on the 3.75% Convertible Senior Notes due 2026 are fixed and the interest rate on the Credit Facilities are at variable rates, which are tied to a “prime rate” and the Secured Overnight Financing Rate (“SOFR”).

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