Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals several negative factors: a decline in net revenue and gross margins, geopolitical tensions affecting product revenue, and reduced revenue guidance. Additionally, workforce reductions and restructuring charges highlight financial strain, while cash flow concerns further dampen sentiment. Although there are some positive aspects, such as service revenue growth and potential new initiatives, the overall picture is negative due to financial challenges and uncertainties.
Net Revenue $102.2 million, down 12% year-over-year and down 13% on a constant currency basis. The decline was primarily due to lower product revenue in China, impacted by geopolitical tensions and tariffs.
Product Revenue $45 million, down 26% year-over-year and down 28% on a constant currency basis. The decline was attributed to lower revenue in China due to geopolitical tensions and tariffs.
Service Revenue $57.2 million, up 4% year-over-year and up 3% on a constant currency basis. Growth was driven by efforts to diversify offerings and expand the global installed base.
Product Gross Margin 19.7%, compared to 43.5% in the prior year. The decline was due to lower China margin releases, higher tariffs, and a lack of CyberKnife shipments in the current quarter.
Service Gross Margin 26.6%, compared to 27.7% in the prior year. The slight decline was driven by higher net parts consumption.
Operating Expenses $35.6 million, compared to $37.2 million in the prior year. This includes $6.1 million of one-time restructuring expenses. Excluding these, operating expenses declined by almost 21%.
Operating Loss $11.6 million, compared to income of $4.7 million in the prior year. The loss includes $6.1 million in restructuring charges.
Adjusted EBITDA Loss of $1.9 million, compared to positive $9.6 million in the prior year. The decline was influenced by restructuring expenses and lower gross margins.
Cash, Cash Equivalents, and Short-term Restricted Cash $41.9 million, down from $63.9 million in the prior quarter. The decrease was due to working capital usage, cash interest, and restructuring payments.
Service Portfolio Expansion: Shifting towards a comprehensive solutions-oriented offering to increase customer uptime, enhance system performance, and drive higher-margin recurring revenue.
Pricing Optimization: Optimizing pricing across product and service portfolio to reflect clinical and economic value, facilitating competitive bids at appropriate margins.
Distributor Partnership Program: Implementing structured distributor partnerships with robust systems, clear performance standards, and better support models to ensure high-quality commercial execution in global markets.
Cost Structure Rightsizing: Targeting $25 million improvement in annualized operating profitability, including a 15% workforce reduction and $10 million restructuring charges.
Operational Simplification: Centralizing functions, outsourcing non-core activities, and reallocating engineering resources to focus on high ROI programs.
Service Business Resilience: Service revenue increased by 4% year-over-year, driven by diversification of offerings and global installed base expansion.
Strategic Transformation Plan: Comprehensive plan to sharpen accountability, tighten cost control, and accelerate execution for sustained profitable growth.
Focus on High-Margin Growth: Reallocating resources to areas with the greatest value and improving commercial execution to build a predictable, higher-margin growth engine.
Geopolitical tensions and tariffs: Ongoing geopolitical tensions, particularly with China, and the impact of tariffs have negatively affected demand patterns and the timing of commercial activity, leading to lower-than-expected product revenue in China.
Revenue and EBITDA guidance reduction: The company has revised its fiscal 2026 revenue and adjusted EBITDA guidance downward due to external pressures, including geopolitical instability and tariffs, indicating financial challenges.
Workforce reduction and restructuring costs: The company is undergoing a workforce reduction of about 15% and expects approximately $10 million in restructuring charges, which could impact employee morale and operational stability in the short term.
Decline in product gross margins: Product gross margins have significantly declined, primarily due to lower China margin releases, higher tariffs, and unfavorable product mix, which could affect overall profitability.
Service gross margin fluctuations: Service gross margins have been impacted by higher parts consumption and other operational costs, leading to variability in profitability.
Cash flow and liquidity concerns: Total cash, cash equivalents, and short-term restricted cash have decreased significantly, raising potential concerns about liquidity and working capital management.
Revenue Guidance: The company has revised its fiscal 2026 revenue guidance to a range of $440 million to $450 million, down from the previous guidance of $471 million to $485 million. This adjustment reflects ongoing volatility in China, persistent tariff structures, and other headwinds.
Adjusted EBITDA Guidance: The adjusted EBITDA guidance for fiscal 2026 has been revised to a range of $22 million to $25 million, compared to the previous guidance of $31 million to $35 million.
EBITDA Margin Expectations: The company expects to achieve a high single-digit adjusted EBITDA margin run rate within the next 9 months and expand this margin to double digits over the medium to long term.
Service Business Growth: The service business is expected to continue benefiting from efforts to diversify offerings and expand the global installed base, contributing to recurring revenue growth.
Operational Simplification: The company is implementing operational simplifications, including cost reductions and efficiency improvements, to offset pressures such as tariffs and to improve margins.
Strategic Transformation Plan: The transformation plan targets a $25 million improvement in annualized operating profitability, with $12 million expected to be realized in fiscal 2026. This includes workforce reductions and restructuring charges.
The selected topic was not discussed during the call.
The earnings call reveals several negative factors: a decline in net revenue and gross margins, geopolitical tensions affecting product revenue, and reduced revenue guidance. Additionally, workforce reductions and restructuring charges highlight financial strain, while cash flow concerns further dampen sentiment. Although there are some positive aspects, such as service revenue growth and potential new initiatives, the overall picture is negative due to financial challenges and uncertainties.
The earnings call summary reveals a decline in net and product revenues, a significant drop in gross margins, and an increased operating loss. Despite a strong order backlog and stable cash position, geopolitical issues in key markets and unclear management responses in the Q&A section contribute to negative sentiment. The guidance suggests a back-loaded fiscal year, but current challenges overshadow potential future improvements. The lack of clarity in management's answers, particularly regarding tariffs and order cancellations, further exacerbates concerns, leading to an overall negative outlook for stock price movement.
The earnings call reveals mixed results: strong service revenue growth and improved gross margins are positives, but declining product revenue and geopolitical tensions are concerning. Tariff impacts and economic slowdowns add uncertainty. The Q&A highlights optimism for the U.S. market and emerging markets, yet cautiousness remains. Overall, the sentiment is balanced with no clear catalyst for significant short-term stock movement.
The earnings call presents mixed signals. Positive factors include raised revenue and EBITDA guidance, strong revenue growth, and increased cash flow. However, concerns about tariffs impacting Q4 revenue, declining gross margins, and unclear management responses on China issues balance the sentiment. The lack of a shareholder return plan also adds to the neutral outlook. Given these mixed factors, the stock price is likely to remain stable over the next two weeks.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.