Accuray Incorporated announced a comprehensive transformation plan that is expected to lift operating profitability by roughly $25 million on an annualized run‑rate basis. The plan, which will be fully in place by the end of fiscal 2026, includes a 15% reduction in global headcount, outsourcing of selected non‑core activities, and the establishment of global centers of excellence for service and product development. Key functions will be centralized, and the global heads of service and product development will report directly to the CEO to sharpen accountability and accelerate execution.
The transformation is driven by a need to shift from a razor‑and‑blade model that relies heavily on capital equipment sales to a higher‑margin service‑led model. Recent quarterly results showed revenue of $93.94 million—up 4% from the prior quarter and beating consensus estimates of $91.35 million—yet the company posted an earnings‑per‑share loss of $0.18 versus an expected loss of $0.05. The negative EPS reflects margin compression and the impact of one‑time restructuring charges, which the plan will address by cutting costs and improving operational leverage.
Management explained that the plan is designed to create a more efficient operating rhythm and a higher‑margin cost structure. CEO Steve La Neve said, “The changes sharpen our focus on sales and service in every region around the world, establish a faster, more efficient operating rhythm, and create an efficient, higher‑margin cost structure.” He added, “All of these initiatives will increase our competitiveness, ensure our teams are poised to deliver growth in each market, and, frankly, make us a better company.”
The plan will incur restructuring charges of about $11 million in the second, third, and fourth quarters of the fiscal year, with approximately $12 million of the projected profit improvement expected to be realized in fiscal 2026. The company’s guidance remains unchanged for the full year, but the transformation signals confidence that the cost‑cutting measures will offset the current earnings miss and position Accuray for stronger profitability moving forward.
Accuray’s leadership noted that geopolitical pressures in EIMEA and China, as well as slower order demand in the U.S. due to capital equipment replacement cycles, have contributed to recent headwinds. The company’s focus on service contracts—its higher‑margin revenue stream—aims to mitigate these challenges by providing more predictable recurring income and reducing exposure to cyclical equipment sales.
The transformation plan represents a strategic pivot that addresses both current margin compression and future growth opportunities. By realigning resources toward high‑return programs and streamlining operations, Accuray intends to strengthen its competitive position in the global radiation oncology market and deliver sustainable profitability improvements for shareholders.
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