Accuray Incorporated (ARAY): Business Model Canvas [Dec-2025 Updated]

You're looking to cut through the noise and see the actual mechanics of Accuray Incorporated's business, and frankly, the key is understanding the balance between selling big-ticket hardware and locking in recurring revenue. As of their fiscal 2025 close, they generated $\mathbf{\$458.5}$ million in total net revenue, with their service contracts bringing in a massive $\mathbf{\$220.9}$ million-almost neck-and-neck with the $\mathbf{\$237.6}$ million from new CyberKnife and Radixact system sales. This dual focus, backed by a $\mathbf{\$427.0}$ million order backlog, defines their model, even as they initiate a restructuring in Q1 fiscal 2026 for better efficiency. Dive in below to see precisely how Accuray Incorporated builds these relationships and manages the costs behind their precise radiation delivery systems.

Accuray Incorporated (ARAY) - Canvas Business Model: Key Partnerships

You're looking at the core relationships Accuray Incorporated built or solidified through fiscal 2025 to drive its strategy. These aren't just handshake agreements; they involve real capital moves and market access plays. Here's the quick math on the most significant ones.

The refinancing completed in June 2025 with TCW Asset Management Company LLC was a major structural move, essentially swapping out old debt for new facilities and equity. This wasn't a partnership in the traditional sense, but it brought in a key financial partner and reshaped the balance sheet.

Partnership/Transaction Type	Partner Entity	Key Financial/Statistical Metric	Fiscal 2025 Data Point
Debt Refinancing	TCW Asset Management Company LLC	Convertible Notes Exchanged	$82.0 million principal amount
Debt Refinancing	TCW Asset Management Company LLC	Cash paid to exchanging holders	Approximately $68.6 million
Debt Refinancing	Lenders via Financing Agreement	New Term Loan Facility	$150 million
Joint Venture (JV)	China Isotope and Radiation Corporation (CIRC)	Accuray Subsidiary Ownership Stake in JV	49%
Joint Venture (JV) Impact	China Market (via JV)	Revenue Growth (Q2 FY2025 YoY)	Over 50%
Joint Venture (JV) Impact	China Market (via JV)	Market Share Gain (Q2 FY2025)	10 points

The China Isotope and Radiation Corporation (CIRC) joint venture, CNNC Accuray (Tianjin) Medical Technology Co., Ltd., where CIRC holds the majority stake at 51%, is clearly a growth engine. That partnership was directly linked to raising the full-year FY2025 revenue guidance to a range of $463M-$475M, showing how critical local alignment is in that market.

Also, you saw the formalization of the collaboration with the University of Wisconsin School of Medicine and Public Health (UW SMPH) on September 30, 2025. This MOU focuses on advancing online adaptive radiotherapy (OART) on Accuray Incorporated's helical platform. This builds on the history, since UW-Madison researchers invented the TomoTherapy System, which is a core Accuray product.

The expansion in Australia involves a joint venture with 5D Clinics and the Icon Group, which is Australia's largest dedicated private provider of cancer care. This JV is focused on expanding access to the CyberKnife System centers, with the first new center planned for Melbourne in mid-2025. The goal is to ease the burden of travel for patients needing precision therapy.

When you look at the operational side, you can't ignore the foundational supply chain ties. Accuray Incorporated depends on external partners for critical components to manufacture systems like the CyberKnife and TomoTherapy platforms. For instance, in the broader market context, companies like Nordion Inc. supply medical-grade Cobalt-60 sources used in radiation therapy. Any disruption here directly impacts Accuray Incorporated's ability to fulfill orders and meet its revenue targets, like the $458.5 million net revenue reported for fiscal 2025.

Here are the stated objectives from the Australian expansion:

• Offer hope to people diagnosed with cancer to live longer, better lives.
• Improve patient access to world-class, personalised, robotic stereotactic radiotherapy.
• Foster opportunities to improve patient outcomes through research collaborations.
• Help further develop the Accuray CyberKnife System to advance precision medicine.

Finance: draft 13-week cash view by Friday.

Accuray Incorporated (ARAY) - Canvas Business Model: Key Activities

You're looking at the core actions Accuray Incorporated is taking right now, late in calendar year 2025, to drive its business forward. It's a mix of launching new tech, managing a tough product sales quarter, and aggressively cutting costs to hit future targets. Honestly, the numbers from the first quarter of fiscal 2026 tell a clear story about where the focus is shifting.

Continuous innovation and development of radiation therapy systems

Accuray Incorporated's value proposition hinges on developing systems that offer precision and efficiency in cancer treatment. This activity is evidenced by recent product introductions and strategic research partnerships.

• Introduced the Accuray Stellar Solution, a configuration of the Radixact Treatment Delivery System, initially for the U.S. market, at the ASTRO annual meeting in late 2025.
• Announced a memorandum of understanding with the University of Wisconsin School of Medicine and Public Health to advance online adaptive radiotherapy on the Accuray helical radiation treatment delivery platform.
• The CyberKnife S7 system continues to be a focus, providing stereotactic radiosurgery (SRS) and stereotactic body radiation therapy (SBRT) with real-time motion synchronization.

Manufacturing and global installation of CyberKnife and Radixact systems

Getting these complex, high-unit-price systems installed globally is a major activity, though it faces long sales cycles. The current order book reflects the pipeline for future manufacturing and installation revenue recognition.

The order backlog as of September 30, 2025, stood at $395.7 million. This figure is approximately 16 percent lower than at the end of the prior fiscal year's first quarter.

Metric	Q1 Fiscal 2026 (Ended Sept 30, 2025)	Fiscal Year 2025 (Ended June 30, 2025)
Gross Product Orders	$39.6 million	N/A (FY Total: Product Revenue $237.6 million)
Book to Bill Ratio	1.1	1.2
Ending Order Backlog	$395.7 million	$427.0 million

Expanding the high-margin service solutions business globally

Service revenue is a critical component, providing more stable, recurring income compared to lumpy product sales. The growth in this segment is a key operational focus, especially when product revenue is soft.

For the first quarter of fiscal 2026, service revenue showed positive momentum, increasing by 7 percent year-over-year. This growth contrasts with the product segment's performance in the same period.

Looking at the full fiscal year 2025, service revenue totaled $220.9 million, representing an increase of 4 percent over the prior fiscal year.

Execution of commercial strategies in high-growth emerging markets

Commercial execution involves pushing products like the CyberKnife and Radixact systems into markets with increasing cancer incidence and willingness to adopt advanced technology. While Q1 FY2026 product revenue was down, past performance in emerging markets shows where commercial focus has been applied.

For instance, in the second quarter of fiscal 2025, management highlighted that China saw over 50 percent revenue growth year-over-year, driven by strong adoption of the Tomo C System and a strengthened partnership with China Isotope and Radiation Corporation, where Accuray gained 10 points of market share.

The current commercial strategy must now navigate the 23 percent year-over-year drop in product revenue seen in Q1 FY2026.

Streamlining operations and cost reduction efforts (restructuring in Q1 FY26)

To improve profitability, Accuray Incorporated initiated significant operational changes at the start of fiscal 2026. This is a direct activity aimed at aligning resources and reducing the cost base.

During the first quarter of fiscal 2026, the Company recorded $2.8 million in restructuring charges. This total included $1.5 million in severance related costs and $1.3 million in consulting costs directly related to the plan.

The goal of these efforts is reflected in the reaffirmed fiscal year 2026 guidance, which projects Adjusted EBITDA in the range of $31 million to $35 million, a notable step up from the $28.3 million Adjusted EBITDA achieved in the full fiscal year 2025.

Operating expenses in Q1 FY2026 were $37.9 million, which included the $2.8 million restructuring charge and $0.4 million in one-time post close financing expenses.

Accuray Incorporated (ARAY) - Canvas Business Model: Key Resources

You're looking at the core assets that power Accuray Incorporated's value delivery, the tangible and intangible things they absolutely must have to make this business run. Honestly, the hardware itself is front and center here.

The proprietary radiation delivery systems are the bedrock. You're talking about the CyberKnife, the Radixact, and the Tomo C systems, which represent their unique approach to image-guided radiosurgery and helical delivery. To be fair, they've kept innovating; just recently, in September 2025, they announced the launch of the Accuray Stellar Solution, which is an all-in-one system built right on that Radixact platform, designed for adaptive treatment workflows.

That installed base is what turns a product sale into a long-term revenue stream. As of early 2025, Accuray Incorporated had taken its installed base to over 600 commercially released systems globally, with installations spanning 33 countries. This installed base directly feeds the recurring service revenue, which is a key financial anchor for the business. Here's the quick math on how that service component performed in the last full fiscal year:

Metric	Value (Fiscal Year Ended June 30, 2025)
Total Net Revenue	$458.5 million
Service Revenue	$220.9 million
Product Revenue	$237.6 million

What this estimate hides is that service revenue growth, at 4 percent year-over-year for fiscal 2025, often carries better margins than the initial product sale, so that installed base is a true asset.

Next up are the intangible assets and the people who make it all work. Accuray Incorporated relies heavily on its intellectual property and patents covering stereotactic radiosurgery (SRS/SBRT) to maintain its differentiation in precision delivery. Also crucial is the specialized clinical and technical talent required for system installation, complex service, and ongoing support across those global sites. They have more than 900 colleagues globally dedicated to this mission.

Finally, you need the liquidity to fund operations, R&D, and manage the sales cycle. As of the end of the last reported fiscal period, Accuray Incorporated reported cash, cash equivalents, and restricted cash of $58.0 million as of June 30, 2025. Finance: draft 13-week cash view by Friday.

Accuray Incorporated (ARAY) - Canvas Business Model: Value Propositions

You're looking at the hard numbers that define what Accuray Incorporated offers to its customers as of late 2025. Here's the quick math on the value delivered across their key platforms and services.

Deliver radiation treatments for the most complex cancer cases (CyberKnife).

The CyberKnife system demonstrated strong revenue momentum in the second quarter of fiscal 2025.

Metric	Value	Period
CyberKnife System Revenue Growth (YoY)	More than 50 percent	Q2 Fiscal 2025
Total Net Revenue	$458.5 million	Fiscal Year 2025

Highly precise, personalized, and efficient radiation therapy (Radixact).

The Radixact System is positioned with features for adaptation and precision.

• Radixact System introduced ClearRT AI software in 2025 for automatic daily treatment plan adjustments.
• The Radixact System combines helical delivery with real-time delivery adaptation technology.

The fiscal year 2025 performance shows the overall scale of the business supporting these platforms.

Financial Component	Amount	Percentage of Net Revenue
Product Revenue	$237.6 million	51.8 percent
Service Revenue	$220.9 million	48.2 percent
Total Gross Profit	$147.0 million	32.1 percent

Expanding access to advanced radiotherapy in emerging markets (Tomo C, Helix).

Emerging markets, particularly China, showed significant growth contributions in the first half of fiscal 2025.

• China revenue growth year-over-year was over 50 percent in Q2 Fiscal 2025.
• The Tomo C System and Helix system were noted for significant demand in emerging markets.
• The Accuray Helix system is intended for emerging markets with accelerator availability well below World Health Organization recommended guidelines.
• It is estimated that approximately 2,000 systems will be needed in China over the next five years following key approvals.
• It is estimated that as much as 60 percent of patients who would benefit from radiotherapy do not currently have access.

Online adaptive radiotherapy capabilities (Accuray Stellar, Radixact platform).

The focus on adaptive capabilities is supported by the overall service revenue stream.

Metric	Value	Period
Service Revenue (YoY Increase)	4 percent	Fiscal Year 2025
Service Revenue (Q3 YoY Increase)	9 percent	Q3 Fiscal 2025
Order Book-to-Bill Ratio	1.2	End of Fiscal Year 2025

Comprehensive service and support to maximize system uptime and clinical use.

Service revenue is a substantial and growing part of Accuray Incorporated's total revenue base.

• Service revenue for Fiscal Year 2025 was $220.9 million.
• Service revenue increased by 4 percent for the full Fiscal Year 2025 compared to the prior fiscal year period.
• Adjusted EBITDA for Fiscal Year 2025 was $28.3 million.
• Cash, cash equivalents, and short-term restricted cash as of June 30, 2025, was $58.0 million.

Accuray Incorporated (ARAY) - Canvas Business Model: Customer Relationships

You're looking at how Accuray Incorporated keeps its customers engaged after a system sale, which is crucial in this high-value medical device space. It's not just about the initial installation; it's about locking in that recurring revenue stream.

Dedicated service solutions business with high contract revenue.

Accuray Incorporated definitely leans into the recurring revenue from service, which provides a nice, steady base. For the full fiscal year 2025, service revenue hit $220.9 million, marking a solid 4 percent increase compared to the prior fiscal year. To be fair, product revenue growth was only 1 percent that same year, so that service component is defintely a key anchor. This revenue comes from tailored agreements designed to align with your specific operational and financial needs, ensuring predictable costs and higher uptime for their complex machines.

Here's a quick look at how the revenue streams stacked up in fiscal year 2025:

Revenue Component	FY 2025 Amount	Year-over-Year Growth (FY 2024 to FY 2025)
Total Net Revenue	$458.5 million	3 percent
Service Revenue	$220.9 million	4 percent
Product Revenue	$237.6 million	1 percent

Direct, long-term partnerships with clinicians and hospital administrators.

The relationship model is built on direct engagement. Accuray Incorporated partners with clinicians and hospital administrators at every step, aiming to empower treatment teams and help them build strong, profitable practices. They maintain a global presence with primary offices in the United States, Switzerland, China, Hong Kong, and Japan, which supports this direct, localized relationship strategy. They see this as a partnership, not just a transaction.

Training and clinical support for complex technology adoption.

Adopting technology like the CyberKnife or Radixact systems requires significant hand-holding, so the support structure is robust. They offer proactive system monitoring for their customers' radiation therapy systems. Plus, you get 24/7 phone support and preventive maintenance built into the service structure. They also focus on rapid implementation, using dedicated project management and proven commissioning workflows to help you launch quickly. This support is tiered, adapting to factors like patient volume and the tech preferences of the clinical staff.

• Proactive system monitoring.
• 24/7 phone support availability.
• Tailored service agreements.
• Proven commissioning workflows.

Customer-centric approach to product portfolio expansion.

Product expansion is clearly informed by customer needs and technological integration potential. For instance, in September 2025, Accuray Incorporated launched the Accuray Stellar Solution, created to set a new standard in cancer care. Furthermore, they build relationships with other technology leaders to create seamless workflows for their shared customers. This means integrating their systems with planning software from partners like RaySearch or enhancing interoperability with platforms like Brainlab's Snke OS. This strategy ensures that as the portfolio grows, the technology remains deeply embedded and valuable within the customer's existing clinical ecosystem.

• Integration with RaySearch planning systems.
• Interoperability with Brainlab health tech platform.
• Launch of Accuray Stellar Solution in September 2025.

Finance: draft 13-week cash view by Friday.

Accuray Incorporated (ARAY) - Canvas Business Model: Channels

You're looking at how Accuray Incorporated gets its sophisticated radiation therapy systems and ongoing service to the hospitals and clinics that need them, as of late 2025. It's a mix of direct control and strategic partnerships, which is typical for high-value medical devices.

The backbone for global reach is the direct sales force, which handles both the initial product sales and the subsequent service contracts. Accuray Incorporated maintains primary offices and direct sales staff in key markets like the United States, Switzerland, Japan, India, and Canada, alongside international offices in China (Hong Kong and Shanghai). This direct approach is crucial for complex capital equipment sales.

For the massive, yet underserved, China market, Accuray Incorporated uses a joint venture structure, CNNC Accuray (Tianjin) Medical Technology Co., Ltd.. Accuray Asia Limited holds a 49% stake in this entity, with the local partner, a subsidiary of China Isotope and Radiation Corporation (CIRC), holding 51%. This JV is strategically positioned to manufacture and sell locally-branded products, aiming for alignment with the 'Made in China 2025' initiative. This channel proved highly effective, as China saw over 50% revenue growth year-over-year in Q2 of fiscal 2025. To put the market need in perspective, China has only two radiotherapy devices per million people, compared to twelve per million in the US.

Clinical and administrative conferences remain a vital channel for product introductions and thought leadership. For example, Accuray Incorporated exhibited at the American Society of Radiation Oncology (ASTRO) Annual Meeting in 2025, specifically at Booth 525. They also hosted an analyst event in conjunction with the ASTRO meeting on September 29, 2025, and offered a recorded symposium on case-based contouring and treatment planning. These events are where new technology demonstrations and key opinion leader endorsements happen.

Post-installation maintenance and recurring revenue rely on local service and support teams. This channel is a significant financial component for Accuray Incorporated. For the full fiscal year 2025, service revenue reached $220.9 million. This compares to product revenue of $237.6 million for the same period. Service revenue showed sequential growth in Q4 fiscal 2025, hitting $56.8 million, an increase of 4% year-over-year for that quarter.

Here's a quick look at the revenue split for the full fiscal year 2025, which shows the importance of the recurring service stream:

Revenue Category	Fiscal Year 2025 Amount (USD)	Percentage of Total Net Revenue
Total Net Revenue	$458.5 million	100.0%
Product Revenue	$237.6 million	51.8%
Service Revenue	$220.9 million	48.2%

Outside the direct sales force and the China JV, Accuray Incorporated also uses a network of distributors and sales agents in regions like Europe, Russia, the Middle East, Africa, the Asia Pacific region, and Latin America. The company also records sales of services to its China joint venture, which amounted to $5,351 thousand for the three months ended March 31, 2025.

• Direct sales staff cover most of Western Europe, Japan, India, and Canada.
• The China JV is governed by a Board with four CIRC-appointed members and three Accuray-appointed members.
• For Q4 fiscal 2025, product revenue was $70.7 million.
• Accuray Incorporated's headquarters remain in Madison, Wisconsin.

Finance: finalize the Q1 FY2026 service contract renewal rate projection by next Tuesday.

Accuray Incorporated (ARAY) - Canvas Business Model: Customer Segments

You're looking at the core buyers for Accuray Incorporated's high-precision radiation therapy systems as of late 2025. These are the entities and professionals who purchase and operate the CyberKnife, Radixact, and TomoTherapy platforms.

Global hospitals and comprehensive cancer treatment centers.

These institutions represent the primary capital expenditure customers for Accuray Incorporated's core product lines. The company's fiscal year 2025 total net revenue reached $458.5 million, with product revenue, which includes system sales to these centers, at $237.6 million.

Clinicians (Radiation Oncologists, Physicists) seeking advanced tools.

The clinical staff drives the demand for systems that offer ultra-precision and advanced capabilities. Accuray Incorporated's focus on innovation supports these users, as evidenced by the NMPA approval for the Radixact SynC System and CyberKnife S7 System in China, which directly impacts the tools available to clinicians there.

Emerging markets (China, India) focused on expanding cancer care access.

These regions are critical growth territories. Accuray Incorporated maintains primary offices in China and Hong Kong, and has a joint venture partner in China. The company's fiscal 2026 priority includes targeted initiatives to meaningfully expand Adjusted EBITDA, which is supported by momentum in these markets, following a fiscal year 2025 Adjusted EBITDA of $28.3 million.

Large hospital networks and government health systems.

These large-scale purchasers often commit to multi-system contracts or are part of national health procurement plans. The company's strong future demand is suggested by an order book-to-bill ratio of 1.2 as of June 30, 2025. Accuray Incorporated also supports these customers through a significant recurring revenue stream from service contracts, which totaled $220.9 million in fiscal year 2025.

The following table summarizes key financial metrics relevant to the scale and operational context supporting these customer segments as of the end of fiscal year 2025:

Metric	Value (FY2025 Ended June 30, 2025)
Total Net Revenue	$458.5 million
Product Revenue	$237.6 million
Service Revenue	$220.9 million
Adjusted EBITDA	$28.3 million
Order Book-to-Bill Ratio	1.2
Cash, Cash Equivalents, and Short-Term Restricted Cash	$58.0 million

The customer base relies on Accuray Incorporated's installed base, which is supported by operations in multiple countries. The company has primary offices in the United States, Switzerland, China, Hong Kong, and Japan, with LINAC operations based in Chengdu, China.

• Global reach spans 50+ countries.
• Primary operational locations include Madison, WI, and Santa Clara, CA.
• Key technology platforms include CyberKnife, TomoTherapy, and Radixact.
• Service revenue growth was 4 percent year-over-year in fiscal 2025.
• The company's fiscal 2026 priority is revenue growth and installed base expansion.

Accuray Incorporated (ARAY) - Canvas Business Model: Cost Structure

You're looking at the expense side of Accuray Incorporated's operations, which is heavily weighted toward the physical creation and maintenance of complex medical hardware. This structure is typical for a company building high-precision radiation therapy systems.

The High cost of goods sold (COGS) is a primary driver, reflecting the intricate engineering and specialized components required for devices like the CyberKnife® and Radixact® Systems. For the full fiscal year 2025, net revenue was $458.5 million, resulting in a total gross profit of only $147.0 million, or 32.1 percent of net revenue. That means the implied COGS for fiscal 2025 was approximately $311.5 million.

Overall, the company's fixed and variable overhead, captured in operating expenses, was substantial but managed down in the last full fiscal year. Operating expenses were reported at $139.1 million for fiscal 2025, which was a 2 percent decrease from the prior fiscal year's $142.4 million.

To give you a clearer picture of where that money goes, here's the breakdown from the first quarter of fiscal 2026, which shows the ongoing investment in innovation and sales efforts:

Expense Category (Q1 FY2026)	Amount (in thousands)	Percentage of Total OpEx
Research and development	$11,369	30.0%
Selling and marketing	$11,973	31.6%
General and administrative	$14,519	38.3%
Total Operating Expenses	$37,861	100.0%

You can see the significant investment in Research and Development (R&D), which totaled $11.4 million in Q1 FY2026 alone, supporting the development of new solutions like the Accuray Stellar™ Solution. Selling and marketing (SG&A) is also a major component, necessary for a global capital equipment sales cycle.

Costs related to the global service infrastructure are critical, as recurring service revenue helps stabilize the business. In Q1 FY2026, service revenue grew 7 percent to $56.8 million, but the associated service gross margin was 33.5 percent. This margin was slightly lower than the prior year, partly due to fluctuations in parts consumption, which is a direct variable cost in supporting installed systems.

To streamline operations and align resources, Accuray Incorporated initiated efficiency efforts. During the first quarter of fiscal 2026, the Company recorded $2.8 million in restructuring charges. That charge was composed of $1.5 million in severance related costs and $1.3 million in consulting costs directly related to the restructuring plan.

Here are the key cost components for the first quarter of fiscal 2026:

• Total Operating Expenses were $37.9 million.
• Restructuring charges included in OpEx were $2.4 million.
• Cost of products was $29.6 million on product revenue of $37.1 million.
• Cost of services was $37.8 million on service revenue of $56.8 million.

Finance: draft 13-week cash view by Friday.

Accuray Incorporated (ARAY) - Canvas Business Model: Revenue Streams

You're looking at how Accuray Incorporated (ARAY) actually brings in the cash, which is key for any valuation work you're doing. Honestly, their revenue mix shows a solid balance between big upfront sales and sticky recurring income. For fiscal 2025, the total net revenue hit $458.5 million.

The hardware side, the big-ticket items, is driven by sales of their core systems. Product revenue, which covers the CyberKnife and Radixact systems, came in at $237.6 million for fiscal 2025. That's the upfront capital expenditure from hospitals and treatment centers.

Service revenue is where the long-term stability lives. This stream, which includes maintenance contracts and parts sales, totaled $220.9 million in fiscal 2025. If onboarding takes 14+ days, churn risk rises, but strong service keeps the base happy. Here's the quick math on how those two major streams stack up:

Revenue Component	Fiscal 2025 Amount (USD)	Percentage of Total Net Revenue
Product Revenue	$237.6 million	51.8%
Service Revenue	$220.9 million	48.2%
Total Net Revenue	$458.5 million	100.0%

Digging into that service number, the recurring maintenance contracts are the most dependable part. Contract revenue makes up about 90% of that total service revenue. This predictable income stream is what analysts really watch for stability.

You can see the components of that service revenue breakdown like this:

• Maintenance Contracts (approx. 90% of service)
• Parts Sales (the remaining portion)

Also, look at the order backlog as a leading indicator for future product revenue conversion. As of June 30, 2025, Accuray Incorporated (ARAY) had a strong order backlog of $427.0 million. That backlog represents future revenue that is booked but not yet recognized, so it gives you a good runway for the next few quarters, assuming timely installations.