SUNNYVALE, Calif., Jan. 23, 2018 /PRNewswire/ -- Accuray Incorporated (NASDAQ: ARAY) today reported financial results for the second fiscal quarter ended December 31, 2017.
Fiscal Second Quarter Highlights
Revenue increased 15 percent year-over-year to $100.3 million driven by product revenue growth of 33 percent
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Gross orders were $77.9 million; net orders were $52.6 million. Ending backlog increased 10 percent year-over-year to $470.5 million
Gross margin expanded approximately 340 basis points year-over-year to 39.2 percent driven by improvements in product gross margins
Entered a $40 million term loan to facilitate retirement of the remaining February 2018 convertible debt, which could reduce potential share dilution to the extent settled with cash
"We have made solid progress towards achieving consistent operating performance during the first half of the fiscal year and we believe we are well on track to achieve our fiscal 2018 guidance, which was originally provided in August," said Joshua H. Levine, president and chief executive officer. "Our 33 percent year-over-year product revenue growth during the second quarter was primarily driven by solid implementation of our strategies to improve distributor order to revenue conversion and increased Radixact contribution. As the fiscal year progresses, we believe that we will see the initial signs of commercial momentum in the U.S., which could enable us to expand our growth rate in fiscal 2019. We are building this momentum through the market's increased recognition of the clinical benefits of our radiation therapy solutions."
Fiscal Second Quarter Results
Total revenue was $100.3 million compared to $87.5 million in the prior fiscal year second quarter. Product revenue totaled $47.1 million compared to $35.4 million in the prior fiscal year second quarter, while service revenue totaled $53.2 million compared to $52.1 million in the prior fiscal year second quarter. The increase in product revenue was primarily due to improved backlog conversion of orders to revenue from the EIMEA and APAC regions.
Total gross profit for the 2018 fiscal second quarter was $39.4 million or 39.2 percent of sales, comprised of product gross margin of 43.0 percent and service gross margin of 35.9 percent. This compares to total gross profit of $31.4 million or 35.9 percent of sales, comprised of product gross margin of 35.1 percent and service gross margin of 36.4 percent for the prior fiscal year second quarter. The increase in product gross margin was due to product volume and mix, as well as intangible amortization expiring in the fourth quarter of the prior fiscal year.
