Accuray Incorporated

Good afternoon and welcome to the Accuray second quarter fiscal 2022 financial results conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Ken Mobeck, Vice President of Finance. Please go ahead.

Thank you, Gary, and good afternoon, everyone. Welcome to Accurate's conference call to review financial results for the second quarter of fiscal year 2022, which ended December 31, 2021. During our call this afternoon, management will review recent corporate developments. Joining us on today's call are Josh Levine, Accurate's Chief Executive Officer, Suzanne Winter, Accurate's President, and Brandy Green, Accurate's Interim Chief Financial Officer. Before we begin, I would like to remind you that our call today includes forward-looking statements. Actual results may differ materially from those contemplated or implied by these forward-looking statements. Factors that could cause these results to differ materially are set forth in the press release we issued just after the market closed this afternoon, as well as in our filings with the Securities and Exchange Commission. The forward-looking statements on this call are based on information available to us as of today's date, and we assume no obligation to update any forward-looking statements as a result of new information or future events, except to the extent required by applicable securities law. Accordingly, you should not put undue reliance on any forward-looking statements. A few housekeeping items for today's call. First, during the Q&A session, we request that participants limit themselves to two questions and then re-queue with any follow-ups. Second, all references we make to a specific quarter in the prepared remarks are to our fiscal year quarters. For example, statements regarding our second quarter refer to our fiscal second quarter ended December 31, 2021. Additionally, there will be a supplemental slide deck to accompany this call, which can be accessed by going directly to Accuray's investor page at investors.accuray.com. With that, let me turn the call over to Accuray's Chief Executive Officer, Josh Levine. Josh?

Thanks, Ken, and thanks to everyone joining us on today's call. I'm joined today by Suzanne Winter, our president, and Brandi Green, our interim CFO. Accurate fiscal 2022 second quarter performance continues to reflect the strong revenue momentum our business is generating, but also highlighted the operational headwinds and associated costs created by the COVID environment. Driving our accelerated revenue growth is the continued adoption of our new technology upgrades on the RataZak platform, which are having a positive impact across all regions. Revenue in fiscal Q2 was $116.3 million, which represented 19.3 percent year-over-year growth. Gross order volume for the quarter was $85.4 million, which represented 13.3 percent year-over-year growth. Suzanne will provide more specifics regarding the regional performance details during her prepared remarks. On the operational end of our business, Like many companies across a broad range of industries, in Q2, we saw increasing pressures related to global supply chain headwinds and logistics constraints, and collectively, these challenges had a negative impact on cost inputs to our income statement. Despite these impacts, our sourcing and production teams successfully mitigated many risks in these areas that allowed us to overachieve our production forecast, which resulted in product revenue growth for the quarter of 45% over prior year. Following our guiding principle of prioritizing patient continuity of care above all else, we also executed successfully in support of our commitments to maintaining availability and delivery of critical service parts for our installed base customers to ensure device uptime and patient treatment continuity. Brandi will be providing greater detail in her prepared remarks about the collective impact of service margins for the quarter, which is where these impacts were most strongly felt. While service margins were impacted, the overall support and cross-functional teamwork that took place in the quarter was extraordinary, and I'm extremely proud of our team and what they accomplished. We believe Q3 and Q4 will remain challenging in terms of the intensity of parts shortages, and we will continue to see pressure on our service margins. With that said, our teams are working cross-functionally to preserve production capacity and identify and mitigate risks to stay ahead of supply gaps that could impact production. And at present, we are maintaining line of sight to be able to fulfill our latest revenue forecast requirements. We will continue to prioritize and focus on our installed base customer needs to ensure that we have service parts at the necessary stocking levels and in the right locations globally to maintain existing devices and minimize the risk of treatment disruption for patients. And now I'll turn the call over to Suzanne Winter for more details on commercial highlights during the quarter.