Accuray (NASDAQ: ARAY) reported fiscal Q4 2026 revenue of $100.9 million, down 21% from $127.5 million a year earlier, while diluted EPS moved to a loss of $0.02 from earnings of $0.01. Product revenue contracted sharply, but service growth, a higher recurring-revenue mix, and lower operating expenses helped expand gross margin and lift adjusted EBITDA. Weaker orders and higher financing costs remained the main pressures.
Core Earnings Results
For the quarter ended June 30, 2026, the decline in product revenue outweighed growth in services and drove the overall revenue contraction. Nevertheless, gross margin rose 4.2 percentage points and operating income increased because gross profit declined by less than revenue while operating expenses fell 15%.
| Metric | Q4 FY2026 | Q4 FY2025 | Year-over-Year Change |
|---|---|---|---|
| Net revenue | $100.9 million | $127.5 million | -21% |
| Gross profit | $35.1 million | $39.0 million | Approximately -10% |
| Gross margin | 34.8% | 30.6% | +4.2 percentage points |
| Operating expenses | $29.6 million | $34.7 million | -15% |
| Operating income | $5.5 million | $4.2 million | Approximately +30% |
| GAAP net income (loss) | $(1.9) million | $1.1 million | Turned to a loss |
| Diluted EPS | $(0.02) | $0.01 | Turned to a loss |
| Adjusted EBITDA | $12.9 million | $9.4 million | Approximately +36% |
Adjusted EBITDA is a non-GAAP measure that excludes interest, taxes, depreciation, amortization, stock-based compensation, restructuring charges, warrant-liability changes, and certain other items.
Product Weakness Outweighed Service Growth
Product and service operations moved in opposite directions. Service revenue increased 6% and accounted for nearly 60% of quarterly revenue, compared with about 45% a year earlier, but the 42% product revenue decline was too large for that growth to offset.
Product demand indicators also weakened substantially, with gross orders falling by more than half and backlog ending 27% below the prior-year level.
| Metric | Q4 FY2026 | Q4 FY2025 | Year-over-Year Change |
|---|---|---|---|
| Product revenue | $40.8 million | $70.7 million | -42% |
| Service revenue | $60.1 million | $56.8 million | +6% |
| Gross product orders | $37.7 million | $84.7 million | Approximately -55% |
| Net product orders | $(2.9) million | $45.3 million | Turned negative |
| Order backlog | $312.5 million | $427.0 million | Approximately -27% |
| Book-to-bill ratio | 0.9 | 1.2 | Down 0.3 |
The 0.9 quarterly book-to-bill ratio means gross product orders were below recognized product revenue. Along with negative net orders and the smaller backlog, this leaves less support for future product revenue unless demand and order conversion improve.
Margin Expansion Reflected Mix and Cost Reductions
Based on the reported revenue and cost figures, product gross margin increased to approximately 31.7% from 27.5%, while service gross margin rose to about 36.8% from 34.4%. The shift toward higher-margin service revenue further supported the consolidated gross-margin increase.
Operating expenses declined by $5.2 million even after including $0.7 million of restructuring charges. Excluding those charges, Accuray said operating expenses would have fallen 17%. Research and development and selling and marketing expenses recorded the largest reductions.
For the full fiscal year, management said its transformation plan generated more than $20 million of cost and margin improvement, exceeding the original $12 million target. That annual progress helped explain the improved Q4 operating performance, although full-year gross margin still declined to 27.7% from 32.1%.
Higher Interest Expense Erased Operating Improvement
Accuray’s operating income increased to $5.5 million, but that improvement did not reach the GAAP bottom line. Interest expense rose to $8.7 million from $4.2 million, and the company recorded $2.4 million of IEEPA refund financing costs.
Those expenses contributed to a $1.5 million pretax loss despite $3.1 million of other income and a $1.2 million gain from the change in fair value of the warrant liability. The difference between the GAAP net loss and higher adjusted EBITDA therefore largely reflects financing and other items excluded from the non-GAAP calculation.
Liquidity and Balance Sheet
Cash, cash equivalents, and short-term restricted cash totaled $41.2 million on June 30, up $2.7 million from March 31, 2026. Accounts receivable declined to $67.4 million from $83.2 million a year earlier, while inventory increased to $147.1 million from $141.0 million despite lower quarterly revenue and orders.
Net long-term debt was $146.4 million, compared with $123.8 million one year earlier, while short-term debt declined to $1.5 million from $12.7 million. Accuray also announced a financing transaction with TCW Asset Management that management said would strengthen liquidity, reduce leverage, and provide relief from certain covenants through December 2027.
Management’s Outlook
CEO Steve LaNeve said Accuray entered fiscal 2027 with greater financial flexibility after improving execution, expanding strategic partnerships, and carrying out its transformation initiatives. CFO Ali Pervaiz attributed continuing product-demand pressure in certain regions to geopolitical developments and tariff uncertainty while emphasizing service growth and operating-efficiency gains.
Management expects continued service revenue growth, better service margins through pricing optimization and operating efficiencies, and continued expense discipline. However, Accuray did not provide formal fiscal 2027 revenue or adjusted EBITDA guidance because of uncertainty involving tariffs, China, the Middle East, geopolitical conditions, and the wider macroeconomic environment.
Recent Insider Transactions
The supplied insider-transaction records identify two February 2026 purchases by director Steven F. Mayer. These transactions are presented without drawing conclusions about management’s outlook.
| Date | Insider | Role | Transaction | Reported Price | Reported Value |
|---|---|---|---|---|---|
| February 20, 2026 | Steven F. Mayer | Director | Purchase | $0.56 | $30,878 |
| February 19, 2026 | Steven F. Mayer | Director | Purchase | $0.53 | $103,797 |
Other recent entries in the supplied data lacked a clear transaction direction or amount and are therefore not included. No valid analyst rating records were available in the provided materials.
Risks Investors Need to Watch
- Product demand and backlog: Product revenue fell 42%, gross orders declined approximately 55%, and backlog was 27% lower. Continued weakness would limit the company’s ability to restore overall revenue growth.
- Tariffs and geopolitical disruption: Management specifically cited trade-policy uncertainty, China, and the Middle East as factors affecting demand, system installations, and transaction timing.
- Financing costs and leverage: Higher interest expense more than offset the improvement in operating income. The new financing provides covenant relief, but debt servicing remains important to GAAP profitability.
- Margin sustainability: Q4 gross margin improved, but the full-year margin remained below the prior-year level. Tariff costs and an unfavorable product environment could complicate further margin expansion.
- Inventory and order conversion: Inventory increased while product revenue, orders, and backlog declined, raising the importance of converting existing backlog and inventory into completed installations and revenue.
Summary
Accuray’s fiscal Q4 2026 showed better operating efficiency beneath a substantial revenue decline. Service growth, a more favorable revenue mix, and lower expenses lifted gross margin and adjusted EBITDA, but weaker product demand and higher financing costs kept GAAP earnings negative. The next phase of the company’s performance will depend on stabilizing product orders, sustaining service growth and margin gains, and reducing the burden of debt-related expenses.
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