ACCURAY INC 10-K

Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion of our consolidated financial condition and results of operations in conjunction with the financial statements and the notes thereto included elsewhere in this report. The following discussion contains forward‑looking statements that reflect our plans, estimates and beliefs. Our actual results could differ materially from those discussed in the forward‑looking statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this report on Form 10‑K, particularly in “Risk Factors.” See “Special Note Regarding Forward‑Looking Statements” for more information. This section generally discusses the results of our operations for the year ended June 30, 2025, compared to the year ended June 30, 2024. For a discussion of the year ended June 30, 2024 compared to the year ended June 30, 2023, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended June 30, 2024, as filed with the SEC on September 19, 2024. Overview Company We are a radiation therapy company that develops, manufactures, sells and supports market-changing solutions that are designed to deliver radiation treatments for even the most complex cases, while making commonly treatable cases even more straightforward, to meet the full spectrum of patient needs. We believe in comparison to conventional linear accelerators, our treatment delivery, planning, and data management solutions provide better accuracy, flexibility, and control; fewer treatments with shorter treatment times; and the technology to expand beyond cancer, making it easier for clinical teams around the world to provide treatments that help patients get back to living their lives, faster. Our innovative technologies, the CyberKnife and TomoTherapy ® platforms, including the Radixact System, our next generation TomoTherapy platform, are designed to deliver advanced treatments, including stereotactic radiosurgery (“SRS”), stereotactic body radiation therapy (“SBRT”), intensity modulated radiation therapy (“IMRT”), image-guided radiation therapy (“IGRT”), and adaptive radiation therapy (“ART”). The CyberKnife and TomoTherapy platforms have complementary clinical applications with the same goal: to empower our customers to deliver the most precise and accurate treatments while still minimizing dose to healthy tissue, helping to reduce the risk of side effects that may impact patients’ quality of life. Each of these systems serves patient populations treated by the same medical specialty, radiation oncology, with advanced capabilities. The CyberKnife platform is also used by neurosurgeons specializing in radiosurgery to treat patients with tumors in the brain and spine, and neurologic and/or endocrine disorders. In addition to these products, we also 69 Table of Contents provide services which include post-contract customer support (warranty period services and post-warranty services), installation services, training, and other professional services. Current Economic Conditions We are subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russian-Ukraine and the Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; as well as other factors that may emerge. In particular, we are continuing to navigate supply chain and inflation challenges both of which continues to have a negative impact on our results of operations. We expect that our customers’ business and our business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues. Inflation and the ongoing supply chain challenges and logistics costs have materially affected our gross margins and net income (loss), and we expect that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer. In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through at least calendar year 2025. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted our net revenue since fiscal year 2024, and we expect this will continue to have an impact through fiscal year 2026. The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time. As a global company, approximately 70% of our raw materials and product components are sourced within the U.S. and finished products are assembled and manufactured within the U.S. with over 80% exported throughout the world. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. If existing tariffs increase, we would expect minimal shipments to China despite customer demand. We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026. Our past results may not be indicative of our future performance, and historical trends including conversion of backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially. Accordingly, management is carefully evaluating our liquidity position, communicating with and monitoring the actions of our customers and suppliers, and reviewing our near-term financial performance as the uncertainty related to these factors continues to unfold. We also continue to evaluate our operating expenses. Our Board of Directors and our Compensation Committee determined that no payouts pursuant to the company bonus plan would be paid for fiscal year 2025 given that we would not have been compliant with the debt covenants in effect at the beginning of fiscal year 2025 and to reduce operating expenses and conserve cash in light of the uncertain macroeconomic environment due to tariffs. We also continue to evaluate our real estate needs and continue to assess our operations and how and to what extent we will continue to utilize our current real estate assets. The risks related to our business, including further discussion of the impact and possible future impacts of current economic conditions on our business, are further described in the section titled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K. Sale of Our Products Generating revenue from the sale of our platforms is a lengthy process. Selling our platforms, from first contact with a potential customer to a signed sales contract that meets our backlog criteria (as discussed below) varies significantly and generally spans between six months and 30 months. The length of time between receipt of a signed contract and revenue recognition is generally governed by the time required by the customer to build, renovate or prepare the treatment room for installation of the platform. We report our customer revenues in five geographic regions: the Americas, EIMEA, Japan, China and Asia Pacific. The Americas region includes the United States, Canada and Latin America. The EIMEA region 70 Table of Contents includes Europe, India, the Middle East and Africa. The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand. In the United States, we primarily market directly to customers, including hospitals and stand-alone treatment facilities, through our sales organization we also market to customers through sales agents and group purchasing organizations. Outside the United States, we market to customers directly and through use of distributors and sales agents. In addition to our offices in the United States, we have international offices in Morges, Switzerland; Hong Kong, China; Shanghai, China and Tokyo, Japan and direct sales staff in most countries in Western Europe, Japan, India and Canada. In addition, we have distributors in Europe, Russia, the Middle East, Africa, the Asia Pacific region, and Latin America. Joint Venture In January 2019, our wholly-owned subsidiary, Accuray Asia Limited (“Accuray Asia”), entered into an agreement with CNNC High Energy Equipment (Tianjin) Co., Ltd. (the “CIRC Subsidiary”), a wholly-owned subsidiary of China Isotope & Radiation Corporation, to form a joint venture, CNNC Accuray (Tianjin) Medical Technology Co. Ltd. (the “JV”), to manufacture and sell radiation oncology systems in China. The JV aims to be uniquely positioned to serve China, which we believe is the world’s largest growth market for radiation oncology systems. China represents a significantly underserved market for linacs based on the country’s population and cancer incidence rates on both an absolute and relative country basis. Accuray Asia has a 49% ownership interest in the JV and the CIRC Subsidiary has a 51% ownership interest in the JV. The JV sells our products in China, much like a distributor and also manufactures and sells a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category. We believe this strategy will allow us to best maximize both near and longer-term opportunities in China. In September 2023, we received approval for our Class B device from the National Medical Products Administration (“NMPA”) and our Accuray Precision Treatment Planning System for the Class B device was approved by the NMPA in June 2024. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and CyberKnife S7 Systems, which received NMPA approval in January 2025. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems. There remains significant tariff uncertainty, including related to existing tariffs associated with U.S.-China trade, which we expect will continue to have incremental costs to the company. We are working to implement mitigations to the tariff policy impacts, however, we cannot predict the full impact or timing of such efforts and expect that sales to China will be adversely impacted, and our financial results will be adversely impacted through at least the first half of fiscal year 2026. Backlog In order for the product portion of a system sales agreement to be included in backlog, it must meet the following criteria: • The contract is properly executed by both the customer and us. A customer purchase order that incorporates the terms of our contract quote will be considered equivalent to a signed and executed contract. The contract has either cleared all its contingencies or contained no contingencies when signed; • We have received a minimum deposit or a letter of credit; or the sale is to a customer where a deposit is deemed not necessary or customary (i.e., sale to a government entity, a large hospital, group of hospitals or cancer care group that has sufficient credit, customers with trade-in of existing equipment, sales via tender awards, or indirect channel sales that have signed contracts with end-customers); • The specific end-customer site has been identified by the customer in the written contract or written amendment; and • Less than 30 months have passed since the contract met all the criteria above. Our backlog includes contractual agreements with our customers for the purchase of our CyberKnife or TomoTherapy platforms, including the Radixact Systems and related upgrades. The amount of backlog recognized into revenue is primarily 71 Table of Contents impacted by three items: cancellations, age-outs and age-ins, and foreign currency fluctuations. We cannot provide assurance that we will convert backlog into recognized revenue, primarily due to factors outside of our control, such as: • Orders could be cancelled for reasons such as, changes in customers’ priorities or financial condition, changes in government or health insurance reimbursement policies, or changes to regulatory requirements. Cancellations are outside of our control and are difficult to forecast; however, we continue to work closely with our customers to minimize the impact of cancellations on our business; • Orders are considered aged-out and removed from reported backlog if we have not been able to recognize revenue on an agreement after 30 months. Agreements may age-out for many reasons, including but not limited to, the inability of the customer to pay, the inability of the customer to adapt their facilities to accommodate our products in a timely manner, or the inability to timely obtain licenses necessary for customer facilities or operation of our equipment. Age-ins represent orders that previously aged-out but have been recognized as revenue in the current period; and • Orders include amounts not denominated in U.S. Dollars and therefore, fluctuations in the U.S. Dollar as compared to other currencies will impact revenue. Generally, strengthening of the U.S. Dollar will negatively impact revenue. Backlog is stated at historical foreign currency exchange rates, and revenue is released from backlog at current exchange rates, with any difference recorded as a backlog adjustment. A summary of gross orders, net orders, and order backlog is as follows (in thousands): Years Ended June 30, 2025 2024 Gross orders $ 288,035 $ 342,148 Age-ins 25,753 21,726 Age-outs (125,529 ) (127,113 ) Cancellations (7,725 ) (14,504 ) Currency impacts and other (3,301 ) (11,343 ) Net orders $ 177,233 $ 210,914 Order backlog at the end of the period $ 426,972 $ 487,319 Gross Orders and Book-to-Bill Ratio Gross orders are defined as the sum of new orders recorded during the period, adjusted for any revisions to existing orders during the period. Gross orders decreased by $54.1 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, mostly due to a decrease in gross orders from the Americas region. Our book-to-bill ratio is defined as gross orders for the period divided by product revenue for the period. Our book-to-bill ratio for the year ended June 30, 2025, was 1.2 as compared to 1.5 for the year ended June 30, 2024. A book-to-bill ratio greater than 1.2 indicates strong demand for our products. This metric allows management to monitor our business development efforts to ensure we grow our backlog and our business over time. In recent years, the percentage of gross orders received from our distribution partners in the international markets represented 81% and 74% of gross orders for fiscal year ended June 30, 2025 and 2024, respectively. We anticipate that distributor orders from international markets will continue to represent a significant portion of our gross orders in the foreseeable future. International orders are affected by foreign currency fluctuation as well as government programs that stimulate the purchase of healthcare products, both of which could affect the demand for our products and timing of orders from period to period. In addition, our order-to-revenue conversion cycle for international distributor orders has been generally longer, compared to that of direct channel sales and could cause fluctuations in our age-outs from period to period. 72 Table of Contents Net Orders Net orders are defined as gross orders, less cancellations, age-outs net of age-ins, foreign exchange and other adjustments during the period. Net orders decreased by $33.7 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to the decrease in gross orders, partially offset by $6.8 million in lower cancellations and $8.0 million in favorable foreign exchange currency impacts. Results of Operations Fiscal 2025 results compared to fiscal 2024 Net revenue Net revenue by sales classification is as follows: Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Products (a) $ 237,580 $ 234,164 1 % Services (b) 220,925 212,387 4 % Net revenue $ 458,505 $ 446,551 3 % Products revenue as a percentage of net revenue 52 % 52 % Services revenue as a percentage of net revenue 48 % 48 % a) Includes sales of products to the JV, an equity method investment, of $101,563 during the year ended June 30, 2025, and $77,497 during the year ended June 30, 2024, respectively. See Note 11. b) Includes sales of services to the JV, an equity method investment, of $18,521 during the year ended June 30, 2025, and $15,039 during the year ended June 30, 2024, respectively. See Note 11. Products net revenue increased by $3.4 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, mostly driven by a $5.9 million increase in revenue from upgrades, partially offset by lower revenue from unit sales due to product mix. Services net revenue increased by $8.5 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to a $4.0 million increase in revenue from service contracts as a result of growth in our installed base and a $3.8 million increase in revenue from the purchase of spare parts from customers. Net revenue by geographic region, which is based on the shipping location of our customer, is as follows: Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Americas $ 88,768 $ 90,156 (2 )% EIMEA 144,264 168,611 (14 )% China 124,475 103,412 20 % Japan 53,622 55,682 (4 )% Asia Pacific 47,376 28,690 65 % Net revenue $ 458,505 $ 446,551 3 % Net revenue increased $12.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024. Products net revenue increased primarily due to a higher volume of the shipment of systems in our China and APAC regions, partially offset by a decrease in the volume of the shipment of systems in our EIMEA region. Services net revenue increased primarily in our EIMEA, China and Japan regions, partially offset by a decrease in services net revenue in our Americas region. The decrease in net revenue from EIMEA was due to lower product sales in fiscal year 2025, which was impacted by geopolitical disruptions in the region. 73 Table of Contents Gross profit Gross profit is as follows: Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Gross profit $ 146,967 $ 142,921 3 % Total gross profit as a percentage of net revenue 32.1 % 32.0 % Gross profit increased by $4.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, due to an increase in net revenue, partially offset by a $3.6 million increase in the net deferred gross profit on sales to the JV. Operating Expenses Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Research and development $ 47,942 $ 49,732 (4 )% Selling and marketing 43,315 42,619 2 % General and administrative 47,871 50,066 (4 )% Total operating expenses $ 139,128 $ 142,417 Research and development as a percentage of net revenue 10 % 11 % Selling and marketing as a percentage of net revenue 9 % 10 % General and administrative as a percentage of net revenue 10 % 11 % Total operating expenses as a percentage of net revenue 30 % 32 % Research and development expenses decreased by $1.8 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to $2.5 million in lower compensation and benefits resulting from a reduction in headcount in fiscal year 2025 driven by our restructuring program in fiscal year 2024, and $1.7 million for the capitalization of internal labor for software development to be sold, partially offset by $1.1 million in higher spending for research and development projects and an a $1.0 million increase in facility and information system costs. Selling and marketing expenses increased by $0.7 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to investments in our sales operations infrastructure and an increase in travel costs, partially offset by a $1.6 million decrease in commissions due to lower sales in the Americas and EIMEA regions in fiscal year 2025. General and administrative expenses decreased by $2.2 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to a $2.1 million decrease in consulting costs driven by the completion of the implementation of our ERP system in fiscal year 2024 and a $1.9 million reduction in rental expense due to cost savings measures, partially offset by a $1.9 million increase in compensation and benefits that was driven by merit increases and stock-based compensation. Income from equity method investment Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Income from equity method investment $ 4,714 $ 1,838 156 % Income from the equity method investment increased by $2.9 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily as a result of an increase in revenues from the JV. 74 Table of Contents Interest expense Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Contractual interest coupon $ (10,221 ) $ (10,552 ) (3 )% Accrued paid-in-kind interest (616 ) - n/a Amortization of debt financing costs and discount for warrants issued to lenders (1,439 ) (956 ) 51 % Other (678 ) (116 ) 484 % Total interest expense $ (12,954 ) $ (11,624 ) 11 % Interest expense increased $1.3 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to interest paid-in-kind accrued on the new Term Loan Facility and additional debt financing costs related to the new Term Loan Facility. Gain on extinguishment of debt We recorded a $1.5 million gain on the extinguishment of a portion of our Convertible Notes and our prior term loan facility. The gain on extinguishment is comprised of a $2.4 million gain on the settlement of shares issued to the holders of the Convertible Notes offset by $0.9 million from the write-off of unamortized debt issuance costs. Loss from change in fair value of warrant liability We recorded a $0.5 million loss due to the change in the fair value of the Penny Warrants from the issuance date through June 30, 2025. Other income (expense), net Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Interest income $ 1,192 $ 1,231 (3 )% Foreign currency exchange gain (loss) 1,573 (2,046 ) 177 % Costs for foreign currency forward contracts (2,376 ) (1,811 ) 31 % Other, net 170 88 93 % Total other income (expense), net $ 559 $ (2,538 ) 122 % Other income (expense), net, increased by $3.1 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily driven by foreign currency transaction gains in fiscal year 2025. Provision for income taxes Years Ended June 30, (Dollars in thousands) 2025 2024 Percent Change Provision for income taxes $ 2,725 $ 3,725 (27 )% Provision for income taxes decreased by $1.0 million during the year ended June 30, 2025, as compared to the year ended June 30, 2024, primarily due to lower foreign earnings and lower deferred tax liabilities on unremitted foreign earnings not considered permanently reinvested. Liquidity and Capital Resources At June 30, 2025, we had $57.4 million in cash and cash equivalents. Cash from operations could be affected by various risks and uncertainties, including, declines in our revenue, particularly without a corresponding decrease in our expenses, the 75 Table of Contents timing of payments from our customers and our expenditures, as well as but not limited to, macroeconomic conditions, inflation, actions taken to counter inflation, foreign currency exchange rate fluctuations, and the risks included in Part I, Item 1A titled “Risk Factors.” In particular, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least calendar year 2025. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted net revenue since fiscal year 2024, and we expect that this will continue to have an impact through fiscal year 2026. Based on our cash and cash equivalents balance, available debt facilities, current business plan and revenue prospects, we believe we will have sufficient cash resources and anticipated cash flows to fund our operations for at least the next 12 months. However, we continue to critically review our liquidity and anticipated capital requirements in light of the significant uncertainty created by macroeconomic conditions. Our liquidity and cash flows have been and could continue to be materially impacted by factors other than our cash from operations and factors that are not in our control, such as current macroeconomic factors, including facility closures, supply chain disruptions, inflation, foreign currency exchange rate fluctuations, increased volatility in the financial markets, uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program, changes in government administration policy positions, recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries, and tightening of credit markets which could impact debt availability. These factors have and could continue to negatively impact our business operations and cash flows for the foreseeable future, including reductions in revenue, decreases in gross margin and delays in payments from customers, as well as declines or delays in the conversion of backlog to revenue. Certain of our revenue may not be collectible to the extent our customers suffer financial difficulty. There remain uncertainties as to how the current macroeconomic environment will impact our business, results of operations, access to sources of liquidity and financial condition in the future. As a result, we are unable to predict with certainty the impact of these factors on our ability to maintain compliance with the financial covenants contained in the Financing Agreement (as defined below). On June 6, 2025, we entered into a senior secured credit agreement (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for (a) $150 million of new five-year term loan facilities (the “Term Loan Facilities”), (b) a new $20 million delayed draw term loan facility (the “Delayed Draw Facility”) and (c) a new $20 million revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facilities and Delayed Draw Facility, the “Facilities”). The proceeds of the Term Loan Facilities were used to fully refinance our existing senior secured indebtedness, which provided for a five-year $80 million term loan facility (the "Prior Term Loan Facility") and a $40 million revolving credit facility (the “Prior Revolving Credit Facility”), and which had $58.0 million and $17.0 million of outstanding balances of the Prior Term Loan Facility and Prior Revolving Credit Facility, respectively, and to fund the aggregate cash payment of approximately $68.5 million as part of the Exchange (as defined below) of a portion of the Company’s 3.75% Convertible Senior Notes due 2026 (the “Convertible Notes”). The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding Convertible Notes. The proceeds of loans drawn under the Revolving Credit Facility will be used to fund the general working capital needs and general corporate purposes of the Company and its subsidiaries. The Facilities’ stated maturity date is June 6, 2030. On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $0.01 per share (“Penny Warrants” and together with the Premium Warrants, the “Warrants”), exercisable immediately and expiring on June 6, 2032. No Penny Warrants were exercised as of June 30, 2025. Pursuant to the terms of the Financing Agreement, if the Company uses the Delay Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the Warrants to certain of its lenders under the Financing Agreement. The Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that we sell stock at a price below $1.00 in the case of the Penny Warrants and $1.25 in the case of the Premium 76 Table of Contents Warrants. We agreed to issue the Warrants in connection with, and to induce the lenders to enter into, the Financing Agreement. Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00% per annum floor), plus an applicable margin of 8.50%, per annum or (ii) a base rate (subject to a 3.00% per annum floor), plus an applicable margin of 7.50% per annum . The agreement provides the option for payment-in-kind (“PIK”) interest up to 6.00% per annum (subject to an increase in applicable margin of 1 / 3 of 1.00% per annum for each 1.00% per annum of interest elected to be paid in kind), which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loan. In June 2025, we accrued $0.6 million in PIK interest and we elected the maximum PIK option for the first interest payment date of fiscal year 2026. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50% per annum of the average unused portion of the Revolving Credit Facility. See Note 8. Commitments and Contingencies to the consolidated financial statements for future cash payments related to the Term Loan Facilities. In addition, on June 5, 2025, we entered into separate, privately-negotiated exchange agreements with a limited number of existing holders of the Convertible Notes (the “Convertible Noteholders”) to exchange (the “Exchange”) approximately $82.0 million aggregate principal amount of the Convertible Noteholders’ existing Convertible Notes for (i) an aggregate of 8,881,579 shares of the Company’s common stock (the “Shares”), valued at $1.52 per share based on the closing stock price on June 5, 2025, or $13.5 million in the aggregate and (ii) an aggregate cash payment of approximately $68.5 million. On June 11, 2025, we issued the Shares to the Convertible Noteholders valued at $1.25 per share based on the closing stock price on June 11, 2025, which resulted in a $2.4 million gain. Following the closing of the Exchange, approximately $18.0 million aggregate principal amount of the Convertible Notes remain outstanding and will be due on June 1, 2026. We intend to use operating cash to pay the remaining balance of the Convertible Notes, but we can also access the $20.0 million Delayed Draw Facility to fund the repayment if necessary. The Convertible Notes are classified as short-term debt on consolidated balance sheets. Additionally, the undistributed earnings of our foreign subsidiaries as of June 30, 2025, for all countries except Japan, France, Switzerland and the United Kingdom are considered to be indefinitely reinvested and unavailable for distribution in the form of dividends or otherwise. Future repatriation of our foreign earnings could be subject to income taxes. As of June 30, 2025, we had $10.5 million of cash and cash equivalents at our foreign subsidiaries that are considered to be indefinitely reinvested. If such funds were repatriated, there will be additional foreign tax withholdings imposed, depending on the country from which the funds were repatriated. Cash Flows Years Ended June 30, 2025 2024 Net cash provided by (used in) operating activities $ 2,860 $ (11,904 ) Net cash used in investing activities (8,523 ) (3,601 ) Net cash used in financing activities (4,252 ) (3,951 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,657 (1,354 ) Net decrease in cash, cash equivalents and restricted cash $ (8,258 ) $ (20,810 ) Cash Flows From Operating Activities Net cash provided by operating activities was $2.9 million during the year ended June 30, 2025, resulting primarily from an increase of $22.7 million in non-cash items partially offset by a decrease of $18.2 million in the net changes in assets and liabilities. • Non-cash items primarily consisted of share-based compensation expense of $10.2 million, a $7.7 million increase in the net deferred gross profit on sales to the JV, $6.2 million in depreciation and amortization expense, partially offset by $4.7 million in income from our equity method investment. 77 Table of Contents • The major contributors to the decrease in net changes of assets and liabilities during the year ended June 30, 2025 were as follows: a $18.7 million decrease in accounts payable due to the timing of payments, and a $9.1 million increase in inventories primarily due to increased costs for parts, partially offset by a $13.4 million decrease in accounts receivable primarily due to improved collections fiscal year 2025. Cash Flows From Investing Activities Net cash used in investing activities was $8.5 million during the year ended June 30, 2025, was due to spending $4.3 million for the purchase of property and equipment and $4.2 million in costs for capitalized investments for software to be sold. Cash Flows From Financing Activities Net cash used in financing activities was $4.3 million during the year ended June 30, 2025 and was due to paying $13.1 million in debt financing costs, which included $4.8 million in debt discount costs, for the new Term Loan Facility. The $150.0 million of proceeds from the new Term Loan Facility was used to refinance the Convertible Notes, Prior Term Loan Facility and Prior Revolving Credit Facility. As part of the refinancing, the Company paid $68.5 million to settle a portion of the Convertible Notes, and $58.0 million and $17.0 million to fully settle the outstanding balances of the Prior Term Loan Facility and Prior Revolving Credit Facility, respectively. Operating Capital and Capital Expenditure Requirements Our future capital requirements depend on numerous factors. These factors include but are not limited to the following: • Revenue generated by sales of our products and service plans; • Our ability to generate cash flows from operations; • Costs associated with our sales and marketing initiatives and manufacturing activities; • Facilities, equipment and IT systems required to support current and future operations; • Rate of progress and cost of our research and development activities; • Costs of obtaining and maintaining FDA and other regulatory clearances of our products; • Effects of competing technological and market developments; • Number and timing of acquisitions and other strategic transactions; • Our ability to refinance our current indebtedness in a timely manner, and servicing and maturity of our current and future indebtedness, including interest rates; • The implementation of our cost savings initiatives, including the reduction of our workforce; • The impact of inflation on our expenses; and • The impact of the macroeconomic environment, including on collections, supply chain, and logistics. We believe that our current cash and cash equivalents balance will be sufficient to meet our anticipated cash needs for working capital and capital expenditures for at least the next 12 months. If these sources of cash and cash equivalents are insufficient to satisfy our liquidity requirements, or we believe market conditions are favorable, we may seek to sell additional equity or debt securities or enter into additional credit facilities. The sale of additional equity or convertible debt securities could result in dilution to our stockholders. If additional funds are raised through the issuance of debt securities, these securities could have rights senior to those associated with our common stock and could contain covenants that would restrict our operations. Additional financing may not be available at all, or in amounts or on terms acceptable to us. If we are unable to obtain this additional financing, we may be required to reduce the scope of our planned product development and marketing efforts. Operating and Capital Expenditure Requirements and Contractual Obligations 78 Table of Contents Our purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which we have not received the goods or services and acquisition and licensing of intellectual property. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allow us the option to cancel, reschedule, and adjust our requirements based on our business needs prior to the delivery of goods or performance of services. Our long-term material cash requirements include principal and interest payments and lease obligations. See Note 4, “Leases” to the Notes to the consolidated financial statements for further information. Inflation In recent years, we experienced rising costs for certain materials, including increased logistics and duties costs that adversely affected our gross margins and net income (loss), and had a material effect on our business, financial condition and results of operations. Gross margins and net income (loss) may continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer, as we are unable to pass all of these increased costs to our customers. In addition, we expect inflation and the ongoing supply chain challenges and logistics costs to impact our cash from operations through at least calendar year 2025. Continued pressure from inflationary factors, such as further increases in the cost of materials for our products, cost of labor, interest rates, overhead costs, logistics and duties costs could further exacerbate these effects and harm our business, operating results, and financial condition. Critical Accounting Estimates The discussion and analysis of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the consolidated financial statements, as well as revenue and expenses during the reporting periods. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on historical experience and on various other factors we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities. The economic uncertainty in the current environment however, could limit our ability to accurately make and evaluate our estimates and judgments. Actual results could therefore differ materially from those estimates if actual conditions differ from our assumptions. All of our significant accounting policies and methods used in the preparation of our consolidated financial statements are described in Note 1, The Company and its Significant Accounting Policies, to the consolidated financial statements. The methods, estimates and judgments that we use in applying our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Management believes the critical accounting policies and estimates are those related to revenue recognition and the assessment of stand-alone selling price ("SSP"), and the valuation of inventories. Revenue Recognition and the Assessment of Stand-Alone Selling Price Our revenue is primarily derived from new system and upgrade sales of CyberKnife and TomoTherapy platforms and services, which include post-contract customer support (“PCS”) contracts (warranty period services and post-warranty services), installation services, training and other professional services. We record our revenue net of any value-added or sales tax. We recognize revenue for certain performance obligations at the point in time when control is transferred, such as delivery of products and the right to use. We recognize revenue for certain other performance obligations over a period of time as control of the goods or services is transferred, such as PCS and construction contracts. Payments received in advance of system shipment are recorded as customer advances and are deferred until product shipment when they are recognized in revenue. We assess the probability of collection based on a number of factors, including past payment history with the customer and creditworthiness of the customer. We generally do not request collateral from our customers but will request advance payments or letter’s of credit when deemed necessary. We frequently enter into sales arrangements that contain multiple performance obligations. For sale arrangements that contain multiple performance obligations, we account for individual products and services separately if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The SSP is determined based on observable prices at which we separately 79 Table of Contents sell the products and services. If the SSP is not directly observable, then we will estimate the SSP considering market conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available. Valuation of Inventories The valuation of inventory requires us to estimate obsolete or excess inventory as well as damaged inventory. The determination of obsolete or excess inventory requires us to estimate the future demand for our products. We regularly review inventory quantities on hand and adjust for excess and obsolete inventory based primarily on historical usage rates and our estimates of product demand to support future sales and service. If our demand forecast for specific products is greater than actual demand and we fail to reduce purchasing and manufacturing output accordingly, we could be required to write off inventory beyond the current reserve, which would negatively impact our gross margin. Item 7A. QUANTITATIVE & QUALITAT IVE DISCLOSURES ABOUT MARKET RISK We do not utilize derivative financial instruments, derivative commodity instruments or other market risk sensitive instruments, positions or transactions. C oncentration of Credit and Other Risks Our cash and cash equivalents are deposited with several major financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. We have not experienced any losses in such accounts and do not believe that we are exposed to any significant risk of loss on these balances. For the years ended June 30, 2025, and 2024, there was one customer that represented 10% or more of total net revenue. We had one customer as of June 30, 2025 and June 30, 2024, respectively, that accounted for more than 10% of our total accounts receivable, net. We perform ongoing credit evaluations of our customers and maintain reserves for potential credit losses. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement with such customer. Accounts receivable balances are charged against the allowance for doubtful accounts once collection efforts are unsuccessful. Single-source suppliers presently provide us with several components. In most cases, if a supplier was unable to deliver these components, we believe that we would be able to find other sources for these components subject to any regulatory qualifications, if required. Foreign Currency Exchange Rate Risk A portion of our net sales are denominated in foreign currencies, most notably the Swiss Franc, Euro and the Japanese Yen. Future fluctuations in the value of the U.S. Dollar may affect the price competitiveness of our products outside the United States. For direct sales outside the United States, we sell in both U.S. Dollars and local currencies, which could expose us to additional foreign currency risks, including changes in currency exchange rates. Our operating expenses in countries outside the United States are payable in foreign currencies and therefore, expose us to currency risk. To the extent that management can predict the timing of payments under sales contracts or for operating expenses that are denominated in foreign currencies, we may engage in hedging transactions to mitigate such risks in the future. We expect the changes in the fair value of the net foreign currency assets arising from fluctuations in foreign currency exchange rates to be materially offset by the changes in the fair value of the forward contracts. As of June 30, 2025, we had open currency forward contracts to purchase or sell foreign currencies with stated, or notional value, of approximately $43.5 million. The purpose of these foreign currency forward contracts is to mitigate the risk associated with foreign exchange rate fluctuations. We have developed a foreign exchange policy to govern our forward contracts. These foreign currency forward contracts do not qualify as cash flow hedges and all changes in fair value are reported in earnings as part of other expenses, net. We have not entered into any other types of derivative financial instruments for trading or speculative purpose. Our foreign currency forward contract valuation inputs are based on quoted prices and quoted pricing intervals from public data and do not involve management judgment. 80 Table of Contents Interest Rate Risk Our debt obligations consist of a variety of financial instruments that expose us to interest rate risk, including, but not limited to the Financing Agreement and our Convertible Notes. The interest rates on the Convertible Notes are fixed and the interest rate on the Term Loan Facilities are tied to a variable rate. As of June 30, 2025, the Financing Agreement included borrowings under the Term Loan Facility of $150.0 million. The interest on the borrowings under the Financing Agreement is payable at the Company’s option, either: (i) a term SOFR-based rate (subject to a 2.00% per annum floor), plus an applicable margin of 8.50%, per annum or (ii) a base rate (subject to a 3.00% per annum floor), plus an applicable margin of 7.50% per annum . If the amount outstanding under the Financing Agreement remained at this level for the next 12 months and interest rates increased or decreased by a 50 basis point change, our annual interest expense would increase or decrease, respectively, approximately $0.8 million. Refer to Note 7, Debt to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion regarding our debt obligations. Equity Price Risk On May 13, 2021, we issued approximately $100.0 million aggregate principal amount of Convertible Notes. Upon conversion, we can settle the obligation by issuing our common stock, cash or a combination thereof at an initial conversion rate equal to 170.5611 shares of common stock per $1,000 principal amount of the Convertible Notes, which is equivalent to a conversion price of approximately $5.86 per share of common stock, subject to adjustment. On June 5, 2025, as part of the Financing Agreement, we paid $82.0 million to the Convertible Note holders. As of June, 30, 2025, the Company currently has $18.0 million Convertible Notes outstanding. There is no equity price risk if the share price of our common stock is below $5.86 upon conversion of the Convertible Notes. For every $1 that the share price of our common stock exceeds $5.86, we expect to issue an additional $3.1 million in cash or shares of our common stock, or a combination thereof, if all of the remaining Convertible Notes are converted. 81 Table of Contents Item 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA ACCURAY INCORPORATED INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page No. Report of Independent Registered Public Accounting Firm (PCAOB ID 248) 83 Consolidated Balance Sheets 85 Consolidated Statements of Operations and Comprehensive Income (Loss) 86 Consolidated Statements of Stockholders’ Equity 87 Consolidated Statements of Cash Flows 88 Notes to Consolidated Financial Statements 90 82 Table of Contents REPORT OF INDEPENDENT REGIST ERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Accuray Incorporated Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Accuray Incorporated (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2025 and 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for each of the two years in the period ended June 30, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated August 28, 2025 expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Determination of standalone selling price As described further in note 1 to the consolidated financial statements, the Company’s contracts with customers often include multiple performance obligations. The Company applies the five steps of Financial Accounting Standards Board Topic 606, Revenue from Contracts with Customers , in the determination of revenue to be recognized, with step four related to the allocation of the transaction price to multiple performance obligations. The transaction price of each contract is allocated to individual performance obligations based upon relative stand-alone selling price (“SSP”). The SSP of performance obligations is determined based on observable prices at which the Company separately sells the products and services. If the SSP is not directly observable, the Company will estimate the SSP considering market conditions, entity specific factors, and information about the customer or class of customer that is reasonably available. We identified the determination of the SSP of performance obligations as a critical audit matter. 83 Table of Contents The principal consideration for our assessment that the determination of the SSP of performance obligations represents a critical audit matter is that the estimates made in determining SSP involve significant judgment due to the absence of directly observable data which requires the Company to make subjective assumptions used to estimate the SSP for each performance obligation. Evaluating the appropriateness of these estimates requires a high degree of auditor judgment and an increased extent of effort. Our audit procedures related to the determination of the SSP of performance obligations included the following, among others: • We tested the design and operating effectiveness of internal controls over the Company’s determination of the SSP of performance obligations, including controls covering the validation of the completeness and accuracy of underlying data used in the analysis. • We evaluated the appropriateness of the overall methodology used by management, including considering whether the methodology maximized the use of observable inputs available. • We tested management’s process by evaluating key assumptions for performance obligations that do not include directly observable sales or for performance obligations that do not include sufficient directly observable sales. Specifically, we: • considered how management determined the disaggregation of distinct customer groups; • determined the appropriateness of discount rates applied to list prices based on the Company’s pricing strategy and target margins for customer groups, including comparing the discount rates to internal pricing policies; • recalculated and validated the inputs used in the calculation; • made inquiries of staff members outside of the accounting department to determine if there are factors that could have indicated a change in the Company’s go-to market strategy; • compared the SSP indicated by management’s analysis to known orders at the performance obligation level for a sample of items; and • compared SSP at the performance obligation level to the prior year and evaluated the reasons for significant relative fluctuations. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2006. San Jose, California August 28, 2025 84 Table of Contents Accuray Incorporated Consolidated B alance Sheets (in thousands, except share and per share amounts) June 30, 2025 June 30, 2024 ASSETS Current assets: Cash and cash equivalents $ 57,416 $ 68,570 Restricted cash 574 485 Accounts receivable, net of allowance for credit losses of $ 369 and $ 2,251 as of June 30, 2025 and June 30, 2024, respectively (a) 83,192 92,001 Inventories 141,020 138,324 Prepaid expenses and other current assets (b) 33,501 23,006 Deferred cost of revenue 1,762 850 Total current assets 317,465 323,236 Noncurrent assets: Property and equipment, net 28,658 24,774 Investment in joint venture 4,612 9,826 Operating lease right-of-use assets, net 33,115 33,773 Goodwill 57,802 57,672 Restricted cash 4,144 1,337 Other assets 24,443 18,009 Total assets $ 470,239 $ 468,627 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 34,033 $ 50,020 Accrued compensation 14,573 17,128 Operating lease liabilities 7,375 6,218 Other accrued liabilities 29,361 28,508 Customer advances 12,197 13,988 Deferred revenue 82,306 71,649 Short-term debt, net 12,734 7,756 Total current liabilities 192,579 195,267 Noncurrent liabilities: Operating lease liabilities 32,482 32,373 Long-term other liabilities 5,160 7,389 Warrant liability 8,497 — Deferred revenue 26,566 24,114 Long-term debt, net 123,786 164,400 Total liabilities 389,070 423,543 Commitments and contingencies (Note 8) Stockholders’ equity: Common stock, $ 0.001 par value; authorized: 200,000,000 shares as of June 30, 2025 and June 30, 2024, respectively; issued and outstanding: 112,643,852 and 100,194,932 shares at June 30, 2025 and June 30, 2024, respectively 113 100 Additional paid-in-capital 602,165 566,887 Accumulated other comprehensive loss ( 1,837 ) ( 4,222 ) Accumulated deficit ( 519,272 ) ( 517,681 ) Total stockholders' equity 81,169 45,084 Total liabilities and stockholders’ equity $ 470,239 $ 468,627 (a) Included accounts receivable from the joint venture, an equity method investment, of $ 28,452 and $ 25,339 at June 30, 2025, and June 30, 2024, respectively. See Note 11. (b) Included other receivable from the joint venture, an equity method investment, o f $ 377 and $ 743 at June 30, 2025, and June 30, 2024 , respectively. The accompanying notes are an integral part of these consolidated financial statements 85 Table of Contents Accuray Incorporated Consolidated Statements of Oper ations and Comprehensive Income (Loss) (in thousands, except per share amounts) Years Ended June 30, 2025 2024 Net revenue: Products (a) $ 237,580 $ 234,164 Services (b) 220,925 212,387 Total net revenue 458,505 446,551 Cost of revenue: Cost of products 162,569 161,061 Cost of services 148,969 142,569 Total cost of revenue (c) 311,538 303,630 Gross profit 146,967 142,921 Operating expenses: Research and development (d) 47,942 49,732 Selling and marketing 43,315 42,619 General and administrative 47,871 50,066 Total operating expenses 139,128 142,417 Income from operations 7,839 504 Income from equity method investment 4,714 1,838 Interest expense ( 12,954 ) ( 11,624 ) Gain on extinguishment of debt 1,475 — Loss from change in fair value of warrant liability ( 499 ) — Other income (expense), net 559 ( 2,538 ) Income (loss) before provision for income taxes 1,134 ( 11,820 ) Provision for income taxes 2,725 3,725 Net loss $ ( 1,591 ) $ ( 15,545 ) Net loss per share - basic and diluted $ ( 0.02 ) $ ( 0.16 ) Weighted average common shares used in computing net loss per share: Basic and diluted 102,768 98,272 Net loss $ ( 1,591 ) $ ( 15,545 ) Foreign currency translation adjustment 1,557 ( 2,445 ) Change in defined benefit pension obligation 828 ( 2,199 ) Comprehensive income (loss) $ 794 $ ( 20,189 ) (a) Includes sales of products to the joint venture, an equity method investment, of $ 101,563 during the year ended June 30, 2025, and $ 77,497 during the year ended June 30, 2024 . See Note 11. (b) Includes sales of services to the joint venture, an equity method investment, of $ 18,521 during the year ended June 30, 2025, and $ 15,039 during the year ended June 30, 2024. See Note 11. (c) Includes cost of revenue from sales to the joint venture, an equity method investment, of $ 74,421 during the yea r ended June 30, 2025, and $ 59,853 during the year ended June 30, 2024 . See Note 11. (d) Includes charge backs to the joint venture, an equity method investment, related to research and development of $ 1,482 during the year ended June 30, 2025 and $ 942 during the year ended June 30, 2024 . The accompanying notes are an integral part of these consolidated financial statements. 86 Table of Contents Accuray Incorporated Consolidated Statement o f Stockholders’ Equity (in thousands) Common Stock Additional Paid-in Accumulated Other Comprehensive Accumulated Total Stockholders’ Shares Amount Capital Income (Loss) Deficit Equity Balance at June 30, 2023 96,535 97 555,276 422 ( 502,136 ) 53,659 Issuance of common stock to employees 3,707 3 2,244 — — 2,247 Tax withholding upon vesting of restricted stock units ( 47 ) — ( 117 ) — — ( 117 ) Share-based compensation — — 9,484 — — 9,484 Net loss — — — — ( 15,545 ) ( 15,545 ) Cumulative translation adjustment — — — ( 2,445 ) — ( 2,445 ) Change in defined benefit pension obligation — — — ( 2,199 ) — ( 2,199 ) Balance at June 30, 2024 100,195 $ 100 $ 566,887 $ ( 4,222 ) $ ( 517,681 ) $ 45,084 Issuance of common stock to employees 3,612 4 1,623 — — 1,627 Tax withholding upon vesting of restricted stock units ( 45 ) — ( 90 ) — — ( 90 ) Share-based compensation — — 10,201 — — 10,201 Fair value of warrants issued with debt — — 12,822 — — 12,822 Stock issued to settle Convertible Notes 8,882 9 10,722 — — 10,731 Net loss — — — — ( 1,591 ) ( 1,591 ) Cumulative translation adjustment — — — 1,557 — 1,557 Change in defined benefit pension obligation — — — 828 — 828 Balance at June 30, 2025 112,644 $ 113 $ 602,165 $ ( 1,837 ) $ ( 519,272 ) $ 81,169 The accompanying notes are an integral part of these consolidated financial statements. 87 Table of Contents Accuray Incorporated Consolidated Statem ents of Cash Flows (in thousands) Years Ended June 30, 2025 2024 Cash flows from operating activities Net loss $ ( 1,591 ) $ ( 15,545 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Depreciation and amortization 6,150 5,905 Share-based compensation 10,201 9,484 Amortization of debt financing costs and discount for warrants issued to lenders 1,439 955 Gain on extinguishment of debt ( 1,475 ) — Non-cash interest paid-in-kind 616 — Loss from change in fair value of warrant liability 499 — Recovery from credit losses ( 101 ) ( 479 ) Provision for write-down of inventories 2,216 6,022 Income from equity method investment ( 4,714 ) ( 1,838 ) Net deferred gross profit on sales to the JV 7,666 4,098 Provision for deferred income taxes 156 1,402 Changes in assets and liabilities: Accounts receivable 13,356 ( 15,826 ) Inventories ( 9,109 ) ( 3,998 ) Prepaid expenses and other assets ( 2,542 ) 6,116 Deferred cost of revenue ( 912 ) ( 275 ) Accounts payable ( 18,674 ) 17,365 Operating lease liabilities, net of operating lease right-of-use assets 620 321 Accrued liabilities ( 5,906 ) ( 16,506 ) Customer advances ( 2,440 ) ( 6,619 ) Deferred revenues 7,405 ( 2,486 ) Net cash provided by (used in) operating activities 2,860 ( 11,904 ) Cash flows from investing activities Purchases of property and equipment, net ( 4,272 ) ( 3,601 ) Capitalized costs for software to be sold ( 4,251 ) — Net cash used in investing activities ( 8,523 ) ( 3,601 ) Cash flows from financing activities Proceeds from the issuance of common stock to employees 1,627 2,247 Taxes paid related to net share settlement of equity awards ( 90 ) ( 117 ) Proceeds from Term Loan due 2030 150,000 — Debt financing costs ( 13,289 ) ( 81 ) Paydown of Prior Convertible Notes ( 68,500 ) — Paydown of Prior Term Loan Facility ( 64,000 ) ( 6,000 ) Borrowings under the Prior Revolving Credit Facility 27,000 5,000 Repayments under the Prior Revolving Credit Facility ( 37,000 ) ( 5,000 ) Net cash used in financing activities ( 4,252 ) ( 3,951 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash 1,657 ( 1,354 ) Net decrease in cash, cash equivalents and restricted cash ( 8,258 ) ( 20,810 ) Cash, cash equivalents and restricted cash at beginning of period 70,392 91,202 Cash, cash equivalents and restricted cash at end of period $ 62,134 $ 70,392 The accompanying notes are an integral part of these consolidated financial statements. 88 Table of Contents Accuray Incorporated Consolidated Statements of Cash Flows (continued) (in thousands) Years Ended June 30, 2025 2024 Supplemental Disclosure of Cash Flow Information Cash paid for income taxes $ 3,870 $ 1,749 Cash paid for interest $ 9,737 $ 10,520 Supplemental non-cash disclosure: Fair value of stock issued to settle Convertible Notes $ 11,102 $ — Fair value of warrants issued with debt $ 21,105 $ — Unpaid purchase of property and equipment at end of year $ 888 $ 445 Unpaid capitalized software costs at end of year $ 258 $ — Transfers from inventory to property and equipment $ 3,709 $ 3,438 Transfer of inventory to other assets $ 1,218 $ — Transfer of lease liabilities to leasehold improvements $ 1,251 $ 2,593 Transfer of other assets to property and equipment $ 242 $ — Dividend receivable from joint venture $ 2,453 $ 2,460 The accompanying notes are an integral part of these consolidated financial statements. 89 Table of Contents Accuray Inc orporated Notes to Consolidated Financial Statements Note 1. The Company and its Significant Accounting Policies The Company Accuray Incorporated (together with its subsidiaries, the “Company” or “Accuray”) designs, develops and sells advanced radiosurgery and radiation therapy systems for the treatment of tumors throughout the body. The Company is incorporated in Delaware and is headquartered in Madison, Wisconsin. The Company has primary offices in the United States, Switzerland, China, Hong Kong, and Japan, and conducts its business worldwide. Basis of Presentation and Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances have been eliminated in consolidation. The accompanying consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”), pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Reclassifications Certain amounts in the notes to consolidated financial statements have been reclassified to conform to current year presentation. Such reclassifications had no impact on the Company’s consolidated financial statements. Risks and Uncertainties The Company is subject to risks and uncertainties caused, directly or indirectly, by events with significant geopolitical and macroeconomic impacts, including, but not limited to, inflation; actions taken to counter inflation, including high interest rates; foreign currency exchange rate fluctuations; uncertainty and volatility in the banking and financial services sector; tightening credit markets; geopolitical concerns, such as the Russia-Ukraine and Middle East conflicts and increasing tension between China and the U.S., including with respect to Taiwan; uncertainty caused by the China anti-corruption campaign and timing of the China stimulus program; changes in government administration policy positions; recent executive orders to impose new tariffs on global imports and uncertainties regarding impact, retaliations and further escalation, including against other countries; and other factors that may emerge. The Company is also continuing to navigate supply chain and inflation challenges, both of which continues to be a significant headwind that affects the Company’s results of operations. The Company expects that the business of its customers and its own business will continue to be adversely impacted, directly or indirectly, by these macroeconomic and geopolitical issues. In addition, ongoing supply chain challenges and logistics costs, including difficulties in obtaining a sufficient supply of component materials and increased component costs, have adversely affected the Company's gross margins and net income (loss), and the Company currently expects that gross margins and net income (loss) will continue to be adversely affected by increased material costs and freight and logistics expenses through at least calendar year 2025, and potentially longer. In addition, the Company expects inflation and the ongoing supply chain challenges and logistics costs to impact its cash from operations through at least calendar year 2025. In addition, reduced budgets and lower capital deployment priority for radiotherapy equipment, along with longer customer installation timelines, in the United States have negatively impacted net revenue since fiscal year 2024, and the Company expects this will continue to have an impact through fiscal year 2026. The extent of the ongoing impact of these macroeconomic events on our business, our markets and on global economic activity, however, is uncertain and the related financial impact cannot be reasonably estimated with any certainty at this time. The Company’s past results may not be indicative of its future performance, and historical trends, including conversion of backlog to revenue, income (loss) from operations, net income (loss), net income (loss) per share and cash flows may differ materially. The Company continues to critically review its liquidity and anticipated capital requirements in light of the significant uncertainty created by geopolitical and macroeconomic conditions. Based on the balance of the Company’s cash and cash equivalents, available debt facilities, current business plan and revenue prospects, the Company believes that it will have sufficient cash resources and anticipated cash flows to fund its operations for at least the next 12 months. The Company, however, is unable to predict with certainty the impact that geopolitical and macroeconomic conditions, including their effect 90 Table of Contents on the global supply chain, inflation and foreign currency exchange rates, will have on its ability to maintain compliance with the covenants contained in the Financing Agreement (as defined below), including financial covenants regarding the consolidated fixed charge coverage ratio, consolidated leverage ratio and minimum liquidity requirements. Failing to comply with the covenants to the Financing Agreement could adversely affect the Company’s ability to finance its future operations or capital needs, withstand a future downturn in its business or the economy in general, engage in business activities, including future opportunities that may be in its interest, and plan for or react to market conditions or otherwise execute its business strategies. The Company’s ability to comply with the covenants and other terms governing the Financing Agreement will depend in part on its future operating performance. In addition, because substantially all of the Company’s assets are pledged as collateral under the Financing Agreement, if the Company is not able to cure any default or repay outstanding borrowings, such assets are subject to the risk of foreclosure by the Company’s lenders. Failure to satisfy the covenants and other terms governing the Financing Agreement in the future could cause the Company to be in default and the maturity of the related debt could be accelerated and become immediately payable. This may require the Company to obtain waivers or additional amendments to the Financing Agreement in order to maintain compliance and there can be no certainty that any such waiver or amendment will be available, or what the cost of such waiver or amendment, if obtained, would be. If the Company is unable to obtain necessary waivers or amendments and the debt under such credit facility is accelerated, the Company would be required to obtain replacement financing. There can be no assurance that the Company would be able to obtain replacement financing on acceptable terms, or at all, on a timely basis. There can be no assurance that the Company would be able to satisfy its obligations if any of its indebtedness is extended. There is no guarantee that the Company would be able to satisfy its obligations if any of its indebtedness is accelerated . Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. The Company assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to the Company. A ctual results could differ materially from those estimates. Foreign Currency The Company’s international subsidiaries use their local currencies as their functional currencies. For those subsidiaries, assets and liabilities are translated at exchange rates in effect at the balance sheet date and income and expense accounts at the average exchange rate. Resulting translation adjustments are excluded from the determination of net income or loss and are recorded in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Net foreign currency exchange transaction gains or losses are included as a component of other expense, net, in the Company’s consolidated statements of operations and comprehensive income (loss). Cash, Cash Equivalents and Restricted Cash The Company considers currency on hand, demand deposits, time deposits, and all highly liquid investments with an original maturity of three months or less at the date of purchase to be cash and cash equivalents. Cash and cash equivalents are held in various financial institutions in the United States and internationally. Restricted cash primarily consists of cash held in bank accounts which are for ce rtificates of deposit held as guarantees in connection with customer contracts and corporate leases, and funds held as guarantees for Value‑Added Tax (“VAT”) obligations in a foreign jurisdiction. Fair Value Measurements The carrying values of the Company’s financial instruments including cash equivalents, restricted cash, accounts receivable, and accounts payable, are approximately equal to their respective fair values due to the relatively short‑term nature of these instruments. The Company’s Term Loan Facilities approximated fair value due to variable interest rate charged on the borrowings, which reprice frequently. The Company’s convertible debt is measured on a recurring basis. The Company’s Premium Warrants were recorded at their relative fair value in additional paid-in capital at the time of issuance, 91 Table of Contents and its warrant liabilities are remeasured to their respective fair value each reporting period. See Note 6, Fair Value Measurements, of the notes to consolidated financial statements for further information. Concentration of Credit Risk and Other Risks and Uncertainties The Company’s cash and cash equivalents are primarily deposited with several major financial institutions. At times, deposits in these institutions exceed the amount of insurance provided on such deposits. The Company has not experienced any losses in such accounts and believes that it is not exposed to any significant risk on these balances. The Company h ad one customer that represented 10 % or more of total net revenue for the years ended June 30, 2025 and 2024 , respectively. The Company had one customer a s of June 30, 2025 and 2024, respectively, that accounted for more than 10 % of accounts receivable, net. Single‑source suppliers presently provide the Company with several components. In most cases, if a supplier was unable to deliver these components, the Company believes that it would be able to find other sources for these components subject to any regulatory qualifications, if required. Accounts Receivable Accounts receivable consist of amounts billed and unbilled from customers and are recorded at the invoiced amount. The Company performs ongoing credit evaluations of its customers and maintains reserves for potential credit losses based upon the expected collectability of all accounts receivable. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. The Company writes off accounts receivable when they are determined to be uncollectible. Inventories Inventories are stated at the lower of cost (on a first‑in, first‑out basis) or net realizable value. Excess and obsolete inventories are written down based on historical sales and forecasted demand, as judged by management. Revenue Recognition The Company’s revenue consists of product revenue resulting from the sale of systems, system upgrades and service revenue. The Company accounts for a contract with a customer when there is a legally enforceable contract between the Company and its customer, the rights of the parties are identified, the contract has commercial substance, and collectability of the contract consideration is probable. The Company’s revenues are measured based on the consideration specified in the contract with each customer, net of any discounts and taxes collected from customers that are remitted to government authorities. The Company’s revenue is primarily derived from sales of CyberKnife and TomoTherapy platforms and services, which include post-contract customer support (“PCS”), installation services, training and other professional services. The majority of the Company's revenue arrangements consist of multiple performance obligations, which can include system, upgrades, installation, training, services, construction, and consumables. For bundled arrangements, the Company accounts for individual products and services separately if a product or service is separately identifiable from other items in the bundled package and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company’s products are generally sold without a right of return, and the Company’s contracts generally provide a fixed transaction price. The Company may offer incentives in the form of discounts, including volume system discounts, which are included in the contract and used to calculate the final fixed price of the arrangement. These discounts may pertain to all performance obligations in a specific contract or may be allocated to a specific performance obligation. The Company reviews payment terms extending beyond one year. If it is determined that a material financing component exists, we recognize this as interest income over time. The Company applies the practical expedient to not adjust for a material 92 Table of Contents financing component if the gap between payment and delivery was expected, at the contract inception, to be less than one year. The Company offers customers the opportunity to trade in their older systems for a discount off the purchase of a new system. The Company generally does not provide specific trade-in prices or upgrade rights at the time of purchase of the original system. Trade-in or upgrade transactions are based on the fair value of the products when sold and are separately negotiated, taking into consideration circumstances existing at the time the trade-in or upgrade is delivered. Accordingly, implied trade-ins and upgrades discounts are not considered separate performance obligations in system sales agreements. During fiscal years 2025 and 2024, no fair value has been assigned to any of the systems that were traded-in. The stand-alone selling price ("SSP") of performance obligations is determined based on observable prices at which the Company separately sells the products and services. If the SSP is not directly observable, then the Company estimates the SSP considering market conditions, entity-specific factors, and information about the customer or class of customer that is reasonably available. The contract consideration allocation is based on the SSP at contract inception and updated should a significant contract modification occur. The consideration (net of any discounts) is allocated among separate products and services in a bundle based on their relative SSPs. Contract modifications typically add additional goods or services or change pricing. For such modifications, the most recent SSP is used for reallocation to the remaining performance obligations. The Company recognizes revenue for certain performance obligations at the point in time when control is transferred, such as the delivery and right to use the products and upgrades occurs. Service revenue is recognized over the term of the service period as the customer benefits from the services throughout the service period. Revenue related to services that are not part of a service contract and performed on a time-and-materials basis are recognized when performed. Service contracts comprise a single stand-ready performance obligation satisfied over time as our customers simultaneously receive and consume benefits from the Company's performance. This performance obligation constitutes a series of services that are substantially the same and provided over time using the same measure of progress. Revenues derived from these arrangements are recognized over time using an output method based upon the passage of time as this provides a faithful depiction of the pattern of transfer of control. The Company recognizes an asset for the incremental costs of obtaining a contract with a customer when the Company expects to generate future economic benefits from the related revenue-generating contracts. The Company capitalizes incremental contract acquisition costs, and amortizes such costs over a five year period, the period which the Company expects to benefit, based on historical service renewal rates, and expectations of future customer renewals. Most of the Company’s contract costs are associated with its internal sales force compensation program and a portion of its employee bonus program. The Company capitalizes and amortizes the incremental costs of obtaining a contract, primarily related to certain bonuses and sales commissions. The capitalized bonuses and sales commissions are amortized over a period of five years commencing upon the initial transfer of control of the system to the customer. The pattern of amortization is commensurate with the pattern of transfer of control of the performance obligations to the customer. The amortization of these contract assets is included in cost of sales, research and development, sales and marketing, and general and administrative expenses based on department headcount allocations in the consolidated statements of operations. The Company elected to use the practical expedient and expense as incurred commissions related to service renewals and upgrades because the amortization period is one year or less. The Company invoices its customers based on the billing schedules in its sales arrangements. Payment terms vary from 30 to 90 days, or longer, from the date of invoice. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative standalone selling price of the related performance obligations satisfied, and the contractual billing terms. Deferred revenue for periods presented primarily relates to service contracts where the service fees are billed up-front, generally quarterly or annually, prior to services being performed. The associated deferred revenue is generally recognized over the term of the service period. The Company did not have any significant impairment losses on its contract assets for any period presented. Deferred Revenue and Customer Advances Deferred revenue represents the amount billed under an arrangement in excess of the amount of revenue recognized. It primarily consists of unfulfilled obligations from open contracts for which performance has already started including short-shipped items, deferred warranty, training, maintenance services and other unperformed or incomplete performance obligations. Service contracts outside of the warranty period, for maintenance services, in general, are considered 93 Table of Contents month-to-month contracts. Deferred revenue includes deferred warranty expected to be recognized over the remaining warranty period for systems already installed. Customer advances represent payments made by customers in advance of product shipment per the agreed upon contract terms. Property and Equipment Property and equipment are stated at cost and are depreciated using the straight‑line method over the estimated useful lives of the related assets. Leasehold improvements are depreciated on a straight‑line basis over the remaining term of the lease or the estimated useful life of the asset, whichever is shorter. Machinery and equipment are depreciated over five years . Furniture and fixtures are depreciated over four years . Computer and office equipment and computer software are depreciated over three years . Repairs and maintenance costs, which are not considered improvements and do not extend the useful life of the property and equipment, are expensed as incurred. Software Capitalization Costs Certain costs for the development of new software products and the substantial enhancements to existing software products for internal use are capitalized when it is considered probable that the software will be fully developed and used to perform its intended function. Capitalized costs for the development of internal use software are included in property, plant and equipment, net on the consolidated balance sheets. Capitalized costs for internal use software are amortized on a straight-line basis over its estimated useful life, which is generally five years. Costs related to the preliminary project stage, post-implementation, training and maintenance are expensed as incurred. Certain costs for the development of software the Company plans to sell, lease or market on its own or as part of another product is capitalized once technological feasibility is achieved. The Company will capitalize costs until the product is ready to be sold, at which time, it will amortize the capitalized costs over the estimated useful life. Costs for the development of software the Company plans to sell is recorded in Other assets on the consolidated balance sheets. Impairment of Long‑Lived Assets The Company reviews long-lived assets, including intangible assets, equity method investment in the JV, property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable using pretax undiscounted cash flows. Impairment, if any, is measured as the amount by which the carrying value of a long-lived asset exceeds its fair value. Goodwill Goodwill is not amortized but is evaluated for impairment on an annual basis and when impairment indicators are present. The Company has assessed that it has one operating segment and one reporting unit, and the consolidated net assets, including existing goodwill and other intangible assets, are considered to be the carrying value of the reporting unit. The Company estimates the fair value of the reporting unit based on the Company’s closing stock price on the trading day closest to the annual review date multiplied by the outstanding shares on that date. If the carrying value of the reporting unit is in excess of its fair value, an impairment may exist, and the Company must perform the second step of the analysis, in which the estimated fair value of the goodwill is compared to its carrying value to determine the impairment charge, if any. If the estimated fair value of the reporting unit exceeds the carrying value of the reporting unit, goodwill is not impaired and no further analysis is required. There was no impairment of goodwill identified in the fiscal years ended June 30, 2025 and 2024 . Shipping and Handling The Company’s billings for shipping and handling for product shipments to customers are included in cost of products. Shipping and handling costs incurred for inventory purchases are capitalized in inventory and expensed in cost of products. 94 Table of Contents Research and Development Costs Costs related to research, design and development of products are charged to research and development expense as incurred. These costs include direct compensation, benefits, and other headcount related costs for research and development personnel, costs for materials used in research and development activities, costs for outside services, and allocated portions of facilities and other corporate costs. The Company has entered into research and clinical study arrangements with selected hospitals, cancer treatment centers, academic institutions and research institutions worldwide. These agreements support the Company’s internal research and development capabilities. Share‑Based Compensation The Company issues share‑based compensation awards to employees and directors in the form of stock options, restricted stock units (“RSUs”), performance units (“PSUs”) and employee stock purchase plan (“ESPP”) awards (collectively, “awards”). The exercise price of stock options granted is equal to the market value of the Company’s common stock on the date of grant. Share‑based compensation for stock options and ESPP awards are measured on the date of grant using a Black‑Scholes option pricing model. Share‑based compensation expense for RSUs and PSUs is measured based on the value of the Company’s common stock on the date of grant. The Company measures and recognizes compensation expense for all stock‑based awards based on the awards’ fair value. Share‑based compensation expense for stock options, RSUs, and the ESPP awards is recognized on a straight‑line basis over the service period of the award. Share-based compensation expense for PSUs is recognized on a straight-line basis over the period of time for the performance conditions to be satisfied and only for those awards expected to vest. Forfeitures are recorded as they occur. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Distinguishing Liabilities from Equity ASC 480 (“ASC 480”) and Derivatives and Hedging ASC 815, (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued warrants that meet all of the criteria for equity classification, the warrants are recorded at their relative fair value in additional paid-in capital at the time of issuance. For issued warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and remeasured at each balance sheet date thereafter. In accordance with the guidance contained in ASC 815, the Premium Warrants (as defined in Note 7) qualify for equity treatment. The fair value of the Premium Warrants was estimated using a Black-Scholes method (see Note 9 “ Stockholders’ Equity ” for more information). The Penny Warrants (as defined in Note 7) do not qualify as equity and are recorded as a liability at fair value. Changes in the estimated fair value of the Penny Warrants are recognized as a non-cash gain or loss on the statements of operations and comprehensive income (loss). Loss Contingencies The Company is involved in various lawsuits, claims and proceedings that arise in the ordinary course of business. The Company records a provision for a liability when it believes that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. The Company reviews these provisions quarterly and adjusts these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. 95 Table of Contents Earnings Per Common Share Basic earnings per share is computed based on the weighted average number of shares of common stock and warrants outstanding during the period. Diluted earnings per share is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. Dilutive potential common shares include outstanding share awards. Potentially dilutive shares of the Company’s common stock are excluded from the computation of diluted net loss per share for loss periods presented because including them would have been anti-dilutive. Dilutive earnings per share is the same as basic earnings per share for the periods in which the Company had a net loss because the inclusion of outstanding common stock would be anti-dilutive. A reconciliation of the numerator and denominator used in the calculation of basic and diluted net loss per share attributable to stockholders is as follows (in thousands): Years Ended June 30, 2025 2024 Numerator: Net loss used to compute basic and diluted loss per share $ ( 1,591 ) $ ( 15,545 ) Denominator: Weighted average shares used to compute basic and diluted loss per share 102,768 98,272 Basic and dilutive net loss per share $ ( 0.02 ) $ ( 0.16 ) Anti-dilutive share-based awards, excluded 12,236 14,052 Anti-dilutive warrants 17,181 — Warrants Issued in Connection with the Long-term Debt The Company issued approximately 6.2 million detachable warrants with an exercise price of $ 0.01 per share (“Penny Warrants”) and 17.2 million detachable warrants with an exercise price of $ 1.68 per share (“Premium Warrants”) to the lenders of our long-term debt (See Note 9. Stockholders’ Equity, for more information). Accounting guidance dictates that shares issuable for little or no cash consideration upon the satisfaction of certain conditions shall be considered outstanding common shares and included in the computation of basic earnings per share. Since the Penny Warrants are issuable for little or no consideration, they are considered outstanding and are included in the weighted average shares to calculate basic and diluted earnings per share for the year ended June 30, 2025. Outstanding Convertible Notes—Diluted Share Impact Due to the optional cash settlement feature and management’s intent to settle the principal amount thereof, in cash, the shares of common stock issuable upon conversion of the outstanding principal amount of the 3.75 % Convertible Senior Notes due 2026 (the “Notes”) are included in the calculation of diluted net income (loss) per share only if their inclusion is dilutive for periods during which the Notes were outstanding. The shares of common stock issuable upon conversion of the outstanding principal amount of the Notes as of June 30, 2025, and 2024 wer e 3.1 million, and 17.1 million, respectively, and were not included in the basic and diluted net loss per common share as the effect of adding the shares were anti-dilutive (See Note 7. Debt, for more information). Leases The Company is the lessee in a lease contract when the Company obtains the right to use the asset. Operating leases are included in the line items right-of-use assets, lease liabilities, current, and lease liabilities, long-term in the consolidated balance sheet. Right-of-use asset represents the Company’s right to use an underlying asset for the lease term and lease obligations represent the Company’s obligations to make lease payments arising from the lease, both of which are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Leases with a lease term of 12 months or less at inception are not recorded on the consolidated balance sheet and are expensed on a straight-line basis over the lease term in the consolidated statements of operations. The Company determines the lease term by agreement with lessor, including lease renewal and extension. As the leases do not provide an implicit interest rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the 96 Table of Contents present value of future payments. The Company elected a practical expedient to account for lease and non-lease components together as a single lease component. Equity Method Investment The Company has an equity investment in CNNC Accuray (Tianjin) Medical Technology Co. Ltd., the Company’s JV. The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company's investment in the JV is measured at cost and adjusted for the Company’s share of the JV's income or loss, intra-entity profits, dividend distributions, currency translation adjustments, and impairments, if any. The Company recognizes its proportionate share of income or loss from the JV on a one-quarter lag due to the timing of the availability of the JV’s financial records. Profit earned by the Company from the JV is eliminated through cost of goods sold until it is realized; such profits would generally be considered realized when the inventory has been sold through to third parties . The JV's equity method goodwill is not amortized but is evaluated for impairment on an annual basis and when impairment indicators are present. Our impairment analysis considers qualitative and quantitative factors that may have a significant impact on the JV's fair value. Qualitative factors include the investee's financial condition and business outlook, industry and sector performance, operational and financing cash flow activities, and other relevant factors affecting the JV. When indicators of impairment exist, we prepare quantitative assessments of the fair value of our non-marketable equity investments, which require judgment and the use of estimates, including discount rates, investee revenue and costs, and comparable market data, among others. Income Taxes The Company is required to estimate its income taxes in each of the tax jurisdictions in which it operates prior to the completion and filing of tax returns for such periods. This process involves estimating actual current tax expense together with assessing temporary differences in the treatment of items for tax purposes versus financial accounting purposes that may create net deferred tax assets and liabilities. The Company accounts for income taxes under the asset and liability method, which requires, among other things, that deferred income taxes be provided for temporary differences between the tax bases of the Company’s assets and liabilities and their financial statement reported amounts. In addition, deferred tax assets are recorded for the future benefit of utilizing net operating losses, research and development credit carryforwards and other deferred tax assets. The Company records a valuation allowance to reduce its deferred tax assets to the amount the Company believes is more likely than not to be realized. Because of the uncertainty of the realization of the deferred tax assets, the Company has recorded a full valuation allowance against its domestic and certain foreign net deferred tax assets. The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. Management regularly assesses the Company’s tax positions in light of legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which the Company does business. The Company anticipates there will be no material changes in uncertain tax positions in the next 12 months. Accumulated Other Compre hensive Income (Loss) The components of comprehensive income (loss) consist of net income (loss), changes in foreign currency exchange rate translation and net changes related to a defined benefit pension plan. The changes in foreign currency exchange rate translation and net changes related to the defined benefit pension plan are excluded from earnings and reported as a component of stockholders’ equity. The foreign currency translation adjustment results from those subsidiaries not using the United States dollar as their functional currency since the majority of their economic activities are denominated in their applicable local currency. Accordingly, all assets and liabilities related to these operations are translated at the current exchange rates at the end of each period, whereas revenues and expenses are translated at average exchange rates in effect during the period. The resulting cumulative translation adjustments are recorded directly to the accumulated other comprehensive loss account in stockholders’ equity. 97 Table of Contents Recent Accounting Pronouncements Accounting Pronouncements - Adopted In November 2023, the FASB issued ASU 2023-07 to improve reportable segment disclosures. The ASU is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. The ASU requires disclosures to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”), a description of other segment items by reportable segment, and any additional measures of a segment's profit or loss used by the CODM when deciding how to allocate resources. The ASU also requires all annual disclosures to be disclosed in interim periods. The update is effective for annual periods beginning after December 15, 2023 and interim periods within annual periods beginning after December 15, 2024. The Company adopted ASU 2023-07 on July 1, 2024. The Company assessed the impact of this update and it did not have a material impact on its consolidated financial statement disclosure requirements. Accounting Pronouncements - Not Yet Effective In November 2024, the Financial Accounting Standards Board (“FASB”) issued accounting standard update (“ASU”) 2024-03 requiring additional disclosure of the nature of expenses included in the income statement. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The update is effective for annual periods beginning after December 15, 2026. The Company plans to adopt ASU 2024-03 on July 1, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently assessing the impact of adopting the updated provisions. In December 2023, the FASB issued ASU 2023-09 to improve the transparency and usefulness of income tax disclosures. The accounting standard expands disclosures to the entity’s income tax rate reconciliation table and requires cash taxes paid disaggregated by jurisdiction. These changes will be applied on a prospective basis. The update is effective for annual periods beginning after December 15, 2024, with early adoption permitted. The Company plans to adopt ASU 2023-09 on July 1, 2025. The ASU requires retrospective application to all prior periods presented in the financial statements. The Company is currently assessing the timing and impact of adopting the updated provisions. Note 2. Revenue Contract Balances The timing of revenue recognition, billings, and cash collections results in trade receivables, unbilled receivables, and deferred revenues on the consolidated balance sheets. The Company may offer longer or extended payment terms of more than one year for qualified customers in some circumstances. At times, revenue recognition occurs before the billing, resulting in an unbilled receivable, which represents a contract asset. The contract asset is a component of accounts receivable and other assets for the current and non-current portions, respectively. When the Company receives advances or deposits from customers before revenue is recognized, this results in a contract liability. It can take two or more years from the time of order to revenue recognition due to the Company’s long sales cycle. 98 Table of Contents Changes in the contract assets and contract liabilities are as follows (dollars in thousands): Change June 30, 2025 June 30, 2024 $ % Contract assets: Unbilled accounts receivable – current (1) $ 11,823 $ 19,131 ( 7,308 ) ( 38 ) Interest receivable – current (2) 284 305 ( 21 ) ( 7 ) Long-term accounts receivable (3) 3,777 2,859 918 32 Interest receivable – non-current (3) 172 432 ( 260 ) ( 60 ) Contract liabilities: Customer advances 12,197 13,988 ( 1,791 ) ( 13 ) Deferred revenue – current 82,306 71,649 10,657 15 Deferred revenue – non-current 26,566 24,114 2,452 10 (1) Included in accounts receivable on the consolidated balance sheets (2) Included in prepaid expenses and other current assets on the consolidated balance sheets (3) Included in other assets on the consolidated balance sheets During the year ended June 30, 2025, contract assets changed primarily due to changes in the timing of billings that occurred after revenues were recognized, and changes in transactions with payment terms exceeding 12 months. During the year ended June 30, 2025, contract liabilities changed due to changes in the timing of revenue recognition as a result of changes in shipping timing, modifications to the transaction price, reduced customer deposits for system sales, and for which the warranty was deferred. During the years ended June 30, 2025 and June 30, 2024, the Company recognized revenues of $ 62.4 million and $ 75.3 million, respectively, which were included in the deferred revenue balances at June 30, 2024, and June 30, 2023, respectively. Remaining Performance Obligations Remaining performance obligations represent deferred revenue from open contracts, for which performance has already started and the transaction price from executed contracts, for which performance has not yet started. Service contracts in general are considered month-to-month contracts. As of June 30, 2025, total remaining performance obligations amounted to $ 818.2 million. Of this total amount, $ 64.1 million related to long-term warranty and non-cancellable post-warranty services, which is the estimated revenue expected to be recognized over the remaining service period and warranty period for systems that have been delivered (the time bands reflect management’s best estimate of when the Company will transfer control to the customer and may change based on timing of shipment, readiness of customers’ facilities for installation, installation requirements, and availability of products). The Company has elected the practical expedient to not disclose the unsatisfied performance obligations of contracts with an original expected duration of one year or less. The following table represents the Company's expected revenue recognition based on the remaining performance obligations related to long-term warranty and non-cancellable post-warranty services as of June 30, 2025 (in thousands): Fiscal years 2026 2027 2028 Thereafter Long-term warranty and service $ 28,029 $ 22,559 $ 10,369 $ 3,160 99 Table of Contents For the remaining $ 64.1 million of performance obligations (open systems sales, upgrades, training and other miscellaneous items), the Company estimates 32 % to 38 % will be recognized in the next 12 months, and the remaining portion will be recognized thereafter. The Company’s historical experience indicates that some of its customers will cancel or renegotiate contracts as economic conditions change or when product offerings change during the long sales cycle. The Company anticipates a portion of its open contracts may never result in revenue recognition, primarily due to the long sales cycle and factors outside of its control, including changes in customers' needs or financial condition, changes in government or health insurance reimbursement policies, or changes to regulatory requirements. Based on historical experience and management's best estimate, approximately 26 % of the Company’s $ 776.9 million open system sales contracts may never result in revenue. Capitalized Contract Costs As of June 30, 2025, and 2024, the balance of capitalized costs to obtain a contract was $ 7.3 million and $ 9.6 mil lion, respectively. The Company has classified the capitalized costs to obtain a contract as a component of prepaid expenses and other current assets and other assets with respect to the current and non-current portions of capitalized costs, respectively, on the consolidated balance sheets. Years Ended June 30, 2025 2024 Capitalized contract costs $ 852 $ 2,958 Amortization of capitalized contract costs 2,726 4,068 Impairment loss on capitalized contracts 421 128 Note 3. Supplemental Financial Information Consolidated Balance Sheets Financing receivables A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset on the Company’s balance sheets. The Company’s financing receivables, consisting of its accounts receivable with contractual maturities of more than one year, are included in other assets on the consolidated balance sheets. The Company evaluates the credit quality of a customer at contract inception and monitors credit quality over the term of the underlying transactions. The Company performs a credit analysis for all new orders and reviews payment history, current order backlog, financial performance of the customers and other variables that augment or mitigate the inherent credit risk of a particular transaction. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the contract term and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits. Actual cash collections may differ from the contracted maturities due to early customer buyouts, refinancing, or defaults. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near‑term risk of non‑payment. The Company performs an assessment each quarter on the allowance for credit losses related to its financing receivables. A summary of the Company’s financing receivables is presented as follows (in thousands): June 30, 2025 June 30, 2024 Financing receivable $ 3,842 $ 2,871 Allowance for credit losses — — Total, net $ 3,842 $ 2,871 Reported as: Current $ 1,082 $ 1,340 Non-current 2,760 1,531 Total, net $ 3,842 $ 2,871 100 Table of Contents Inventories Inventories consisted of the following (in thousands): June 30, 2025 June 30, 2024 Raw materials $ 49,001 $ 57,699 Work-in-process 14,844 13,629 Finished goods 77,175 66,996 Total inventories $ 141,020 $ 138,324 The Company's inventories on the consolidated balance sheets are net of reserves. Prepaid and Other Current Assets Prepaid and other current assets consisted of the following (in thousands): June 30, 2025 June 30, 2024 Value added tax receivables $ 11,381 $ 4,026 Prepaid commissions 4,388 5,288 Capitalized contract costs 1,949 1,876 Income tax receivable 841 368 Debt financing costs 470 — Dividend receivable from JV 2,453 2,460 Other prepaid assets 5,560 5,018 Other current assets 6,459 3,970 Total prepaid and other current assets $ 33,501 $ 23,006 Debt financing costs are related to the $ 20 million delayed draw term loan facility and the short-term financing costs related to the $ 20 million revolving credit facility included in the Financing Agreement (see Note 7. Debt , for more information). Property and Equipment, net Property and equipment, net consisted of the following (in thousands): June 30, 2025 June 30, 2024 Machinery and equipment $ 49,147 $ 45,539 Leasehold improvements 32,491 30,994 Software 11,534 11,308 Computer and office equipment 6,797 6,347 Furniture and fixtures 1,959 1,719 Construction in progress 4,641 2,550 106,569 98,457 Less: Accumulated depreciation ( 77,911 ) ( 73,683 ) Total property and equipment, net $ 28,658 $ 24,774 Depreciation expense related to property and equipment was $ 6.1 million, and $ 5.8 million during the years ended June 30, 2025, and 2024, respectively. 101 Table of Contents Goodwill Activity related to goodwill consisted of the following (in thousands): As of June 30, 2025 2024 Balance at the beginning of the period $ 57,672 $ 57,681 Currency translation adjustment 130 ( 9 ) Balance at the end of the period $ 57,802 $ 57,672 The Company performed its annual goodwill impairment test in the quarter ended December 31, 2024, and determined that there was no impairment to goodwill. The Company did no t identify any triggering events that would indicate a potential impairment of its goodwill as of June 30, 2025. The Company will continue to monitor its recorded goodwill for indicators of impairment every fiscal quarter. Other Assets Other assets consisted of the following (in thousands): June 30, 2025 June 30, 2024 Capitalized software costs to be sold $ 10,252 $ 4,683 Capitalized contract costs 5,359 7,768 Long-term accounts receivable 3,777 2,859 Purchased intangible assets, net 15 59 Deferred tax asset 756 659 Debt financing costs 669 — Other long-term assets 3,615 1,981 Total other assets $ 24,443 $ 18,009 There was no amortization expense or amounts written down to net realizable value for the capitalized software costs to be sold during the years ended June 30, 2025 and 2024, respectively. Amortization expense related to purchased intangible assets during the year ended June 30, 2025, was not material and during the year ended June 30, 2024, was $ 0.2 million. The Company’s purchased intangible assets at June 30, 2025, will be fully amortized in fiscal year 2026 . The Company did no t identify any triggering events that would indicate a potential impairment of its definite-lived intangible and long-lived assets as of June 30, 2025. Debt financing costs are related to the $ 20 million revolving credit facility included in the Financing Agreement (see Note 7. Debt , for more information). Other Accrued Liabilities Other accrued liabilities consisted of the following (in thousands): June 30, 2025 June 30, 2024 Value added tax liabilities $ 12,408 $ 5,048 Commissions due to third parties 573 5,202 Refunds due to customers 3,581 6,079 Accrued royalties 3,082 2,939 Accrued consulting 1,648 1,238 Interest payable 967 485 Income tax payable 973 1,206 Other liabilities 6,129 6,311 Total other accrued liabilities $ 29,361 $ 28,508 102 Table of Contents Consolidated Statements of Operations Interest expense consisted of the following (in thousands) Years Ended June 30, 2025 2024 Contractual interest coupon $ ( 10,221 ) $ ( 10,552 ) Accrued paid-in-kind interest ( 616 ) - Amortization for financing costs and discount for warrants issued to lenders ( 1,439 ) ( 956 ) Other ( 678 ) ( 116 ) Total interest expense $ ( 12,954 ) $ ( 11,624 ) Other income (expense), net, consisted of the following (in thousands): Years Ended June 30, 2025 2024 Interest income $ 1,192 $ 1,231 Foreign currency exchange gain (loss) 1,573 ( 2,046 ) Costs for foreign currency forward contracts ( 2,376 ) ( 1,811 ) Other, net 170 88 Total other income (expense), net $ 559 $ ( 2,538 ) Note 4. Leases The Company has operating leases for corporate offices and warehouse facilities worldwide. Additionally, the Company leases cars and copy machines that are considered operating leases. Some of the Company’s leases are non-cancellable operating lease agreements with various expiration dates through August 2035. Certain lease agreements include options to renew or terminate the lease, which are not reasonably certain to be exercised, and therefore are not factored into the determination of lease payments. The following table provides information related to the Company’s operating leases (in thousands): Years Ended June 30, 2025 2024 Operating lease costs (1) $ 8,980 $ 9,146 Short-term operating lease costs 286 305 Cash paid for amounts included in the measurement of lease liabilities 8,011 9,013 (1) Excludes expenses related to short-term lease operating costs. 103 Table of Contents Operating lease right-of-use assets and operating lease obligations are represented in the table below (in thousands): June 30, 2025 June 30, 2024 Beginning balance operating lease right-of-use assets $ 33,773 $ 25,853 Lease assets added 4,624 14,389 Amortization for the year ( 5,282 ) ( 6,469 ) Ending balance operating lease right-of-use assets $ 33,115 $ 33,773 Beginning balance operating lease obligations $ 38,591 $ 27,753 Lease liabilities added 5,726 16,775 Repayment and interest accretion ( 4,460 ) ( 5,937 ) Ending balance operating lease obligations $ 39,857 $ 38,591 Current portion of operating lease obligations $ 7,375 $ 6,218 Noncurrent portion of operating lease obligations $ 32,482 $ 32,373 The weighted-average remaining lease term and weighted-average discount rate for operating leases were as follows: June 30, 2025 June 30, 2024 Weighted average remaining lease term (in years) 7.8 8.2 Weighted average discount rate 10.4 % 10.4 % Maturities of operating lease liabilities as of June 30, 2025, are presented in the table below (in thousands) : Year Ending June 30, Amount 2026 $ 7,201 2027 8,257 2028 7,135 2029 5,515 2030 4,789 Thereafter 24,948 Total operating lease payments 57,845 Less: imputed interest ( 17,988 ) Present value of operating lease liabilities $ 39,857 Note 5. Derivative Financial Instruments The Company utilizes foreign currency forward contracts with reputable financial institutions to manage its exposure of fluctuations in foreign currency exchange rates on certain intercompany balances and foreign currency denominated cash, customer receivables and liabilities. The Company does not use derivative financial instruments for speculative or trading purposes. These forward contracts are not designated as hedging instruments for accounting purposes. Principal hedged currencies primarily include the Japanese Yen, Swiss Franc, and Euro. The periods of these forward contracts range up to approximately three months and the notional amounts are intended to be consistent with changes in the underlying exposures. The Company intends to exchange foreign currencies for U.S. Dollars at maturity. The Company enters into forward currency exchange contracts to hedge its overseas operating expenses and other liabilities when deemed appropriate. 104 Table of Contents The notional amount of the Company's outstanding forward currency exchange contracts consisted of the following (in thousands): As of June 30, 2025 2024 Swiss Franc $ 7,438 $ 59,392 Japanese Yen 8,700 7,762 Euro 11,431 2,755 Indian Rupee 7,485 8,916 Chinese Yuan 5,491 5,156 Korean Won 1,306 1,735 Canadian Dollar — 1,510 British Pound 1,617 730 Total outstanding forward currency exchange contracts $ 43,468 $ 87,956 The Company entered into the foreign currency forward contracts on June 30, 2025 and June 30, 2024. There is no significant change in our mark-to-market analysis, and therefore, there was no amount recorded on the balance sheets. Gains and losses on the Company's foreign currency forward contracts are recorded in Other expense, net, on the Company's consolidated statements of operations and comprehensive income (loss). The following table provides information about the gain or loss associated with the Company’s derivative financial instruments not designated as hedging instruments (in thousands): Years ended June 30, 2025 2024 Foreign currency exchange gain (loss) on forward contracts $ 655 $ ( 613 ) Note 6. Fair Value Measurements Fair value is an exit price representing the amount that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The fair value hierarchy contains three levels of inputs that may be used to measure fair value, as follows: Level 1— Unadjusted quoted prices that are available in active markets for the identical assets or liabilities at the measurement date. Level 2— Other observable inputs available at the measurement date, other than quoted prices included in Level 1, either directly or indirectly, including: • Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets in non-active markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by other observable market data. Level 3— Unobservable inputs that cannot be corroborated by observable market data and require the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions. Items Measured at Fair Value on a Recurring Basis Warrant Liabilities The Penny Warrants (as defined in Note 7) are accounted for as a liability with the changes in fair value of the warrants are recognized in the statement of operations and comprehensive income (loss). The fair value of the Penny Warrants at issuance date was based on the closing listed stock price on June 6, 2025, and remeasured based on the listed market price of 105 Table of Contents such warrants at June 30, 2025. The estimated fair value of the Penny Warrants liabilities represent Level 2 measurements because the fair value of the warrant is being implied based on market trades of the stock. The following table shows the changes in fair value of the Penny Warrants: Years Ended 2025 2024 Balance at the beginning of the period $ — $ — Issuance of Penny warrants on June 6, 2025 7,998 — Change in fair value 499 — Balance at the end of the period $ 8,497 $ — Other Fair Value Disclosures At June 30, 2025, the Company had open currency forward contracts to purchase or sell foreign currencies with a stated, or notional, value of $ 43.5 million. The fair value of the forward contract based upon the June 30, 2025 exchange rate was $ 43.3 million, which it considers to be a Level 2 fair value measurement. At June 30, 2024, the Company had open currency forward contracts to purchase or sell foreign currencies with a stated, or notional, value of $ 88.0 million. The fair value of the forward contract based upon the June 30, 2024 exchange rate was $ 87.7 million, which it considers to be a Level 2 fair value measurement. The Company’s convertible debt is measured on a recurring basis using Level 2 based upon observable inputs. The Company's Term Loan Facilities due 2030 (as defined in Note 7) reflect the bank quoted market rates, which the Company considers to be a Level 2 fair value measurement. The Company believes that the carrying value of the Prior Term Loan Facility and Revolving Credit Facility approximates its estimated fair value based on the effective interest rate, compared to the current market rate available to the Company at quarter-end. The following table summarizes the carrying value, net of debt financing costs, and the fair value of the 3.75 % Convertible Senior Notes due 2026, Term Loan Facilities due 2030, the Prior Term Loan Facility, and the Prior Revolving Credit Facility, (in thousands): June 30, 2025 June 30, 2024 Carrying Value Fair Value Carrying Value Fair Value 3.75 % Convertible Notes due June 1, 2026 $ 17,893 $ 17,322 $ 98,782 $ 85,762 Term Loan Facilities due 2030 118,627 118,627 — — Prior Term Loan Facility — — 63,374 63,374 Prior Revolving Credit Facility — — 10,000 10,000 Total $ 136,520 $ 135,949 $ 172,156 $ 159,136 The carrying value and fair value of the Term Loan Facilities due 2030 excludes $ 21.0 million for the fair value of the warrants issued to the lenders to purchase the Company’s common stock. The Premium Warrants (as defined in Note 7) met all of the criteria for equity classification and were recorded at their relative fair value in additional paid-in capital at the time of issuance. The fair value of $ 12.8 million is not subject to remeasurement and was estimated using a Black-Scholes method, which incorporates significant unobservable inputs, including expected volatility, risk-free interest rate and expected term. As these inputs are not observable in the market, the fair value measurement of the Premium Warrants represent a Level 3 measurement. 106 Table of Contents Note 7. Debt The Company's outstanding debt as of June 30, 2025 and June 30, 2024 is as follows (in thousands): As of June 30, 2025 2024 Term Loan Facilities due 2030 $ 150,000 $ — Convertible Senior Notes due June 1, 2026 18,000 100,000 Prior Term Loan Facility - 64,000 Prior Revolving Credit Facility - 10,000 Total debt 168,000 174,000 Paid-in-kind interest 616 - Unamortized debt financing costs ( 11,101 ) ( 1,844 ) Unamortized discount for warrants issued to lenders ( 20,995 ) - Total debt, net 136,520 172,156 Reported as: Short-term debt, net $ 12,734 $ 7,756 Long-term debt, net 123,786 164,400 Total debt, net $ 136,520 $ 172,156 A summary of interest expense on the Company’s outstanding debt is as follows (in thousands): Year ended June 30, 2025 2024 Contractual interest coupon $ 10,221 $ 10,552 Accrued paid-in-kind interest 616 - Amortization of debt financing costs and discount for warrants issued to lenders 1,439 956 Total interest expense on debt $ 12,276 $ 11,508 A summary of weighted average effective interest rate on the Company’s debt is as follows: Year ended June 30, 2025 2024 Term Loan Facility due 2030 22.0 % — Convertible Senior Notes due June 1, 2026 4.3 % 4.3 % Prior Term Loan Facility 8.6 % 8.6 % Prior Revolving Credit Facility 9.1 % 9.5 % The weighted average effective interest rate includes coupon interest rates, paid-in-kind interest, the amortization of debt financing costs, and the amortization of the discount for warrants issued to lenders. Financing Agreement June 2025 On June 6, 2025, the Company entered into a new five-year senior secured credit agreement, due June 6, 2030, (the “Financing Agreement”) by and among the Company, as borrower (the “Borrower”), TCW Asset Management Company LLC, a leading global asset manager (“TCW”), as collateral agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Collateral Agent”) and as administrative agent for the lenders (in such capacity, together with its successors and assigns in such capacity, the “Administrative Agent”, and together with the Collateral Agent, each an “Agent” and collectively, the “Agents”), and certain other parties signatory thereto. The Financing Agreement provides for a $ 150 million term loan (the “Term Loan Facility”), a $ 20 million delayed draw term loan facility (the “Delayed Draw Facility”), and a $ 20 million revolving credit facility (“Revolving Credit Facility”). The proceeds of the Term Loan Facilities were used to fully refinance the Company’s existing senior secured indebtedness, which provided for a five-year $ 80 million term loan facility (the "Prior Term Loan Facility") and a $ 40 million revolving credit facility (the “Prior Revolving Credit Facility”), and which had $ 58.0 million and $ 17.0 million of outstanding balances of the Prior Term Loan 107 Table of Contents Facility and Prior Revolving Credit Facility, respectively, and to fund the aggregate cash payment of approximately $ 68.5 million as part of the Exchange (as defined below) of a portion of the Company’s 3.75 % Convertible Senior Notes due 2026 (the “Convertible Notes”). The proceeds of the Delayed Draw Facility may be used to fund any future repurchases of outstanding Convertible Notes. The proceeds of loans drawn under the Revolving Credit Facility will be used to fund the general working capital needs and general corporate purposes of the Company and its subsidiaries. In connection with the repayment of the Prior Term Loan Facility and the Prior Revolving Credit Facility, the Company wrote-off $ 0.4 million in unamortized debt issuance costs which is recorded as a loss on extinguishment of debt . As of June 30, 2025, no proceeds were drawn on the Revolving Credit Facility. The Company will be able to access the Delayed Draw Down Facility from the date financial reports are delivered under the Financing Agreement for the fiscal quarter ending December 31, 2025 through June 6, 2026, if certain the total leverage ratio of the Company is not greater than 5.25 :1.00 and certain other conditions, as described in the Financing Agreement, are met. The proceeds from the Delayed Draw Facility may be used to fund the remaining $ 18.0 million outstanding Convertible Notes due June 1, 2026. The Borrower’s obligations under the Financing Agreement are secured by first-priority liens on substantially all assets of the Borrower, subject to certain exceptions. The Financing Agreement requires the Borrower to cause certain of its direct and indirect subsidiaries to, within 90 days of the closing date of the Financing Agreement, grant first-priority liens on substantially all of their assets, in each case, subject to certain exceptions. Interest on the borrowings under the Facilities is payable in arrears on the applicable interest payment date at an interest rate equal to, at the Company’s option, either: (i) a term SOFR -based rate (subject to a 2.00 % per annum floor), plus an applicable margin of 8.50 %, per annum or (ii) a reference rate ( subject to a 3.00 % per annum floor), plus an applicable margin of 7.50 % per annum . The agreement provides the option for payment-in-kind interest (“PIK”) up to 6.00 % per annum (subject to an increase in applicable margin of 1 / 3 of 1.00 % per annum for each 1.00 % per annum of interest elected to be paid in kind which PIK interest will be capitalized on the applicable interest payment date and will be added to the then-outstanding principal amount of the term loans. The Financing Agreement requires the Borrower to pay the lenders with commitments under the Revolving Credit Facility an unused commitment fee equal to 0.50 % per annum of the average unused portion of the Revolving Credit Facility. On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its lenders (the “Warrant Holders”) under the Financing Agreement. The Warrant Holders were issued warrants to purchase (i) 17,180,710 shares of common stock with an exercise price of $ 1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 (the “Premium Warrants”) and (ii) 6,247,531 shares of common stock with an exercise price of $ 0.01 per share (“Penny Warrants”) exercisable immediately and expiring on June 6, 2032. The Company determined that the Premium Warrants qualified as freestanding instruments that met all of the criteria for equity classification. The Premium Warrants were valued at $ 13.1 million at the issuance date and were recorded as a debt discount to the Term Loan Facility (see Note 9. Stockholders’ Equity, for more information). The Company will amortize the debt discount using the effective interest rate method over the life of the Term Loan Facility as interest expense. The Company determined that the Penny Warrants qualified for liability classification. The Company calculated the fair value of the Penny Warrants to be $ 8.0 million at the issuance date and were recorded as a debt discount (see Note 6. Fair value Measurements, for more information). The Company will amortize the debt discount using the effective interest rate method over the life of the Term Loan Facility as interest expense. The Company pa id $ 13.1 million in debt f inancing fees (including a $ 5.4 million Original Issue Discount Fee). Approximately $ 1.2 million of the debt financing fees are associated with the Delayed Draw Facility and Revolving Credit Facility and are included in prepaid and current assets and other assets on the consolidated balances sheets. The debt financing fees will be amortized using the effective interest rate method over the life of the Term Loan Facility as interest expense. The Financing Agreement contains restrictions and covenants applicable to the Company and its subsidiaries. Among other requirements, the Company may not permit (i) the total leverage ratio (as defined in the Financing Agreement) to be greater than a certain specified ratio for each fiscal quarter during the term of the Financing Agreement, (ii) the fixed charge coverage ratio (as defined in the Financing Agreement) to be less than a certain specified ratio for each fiscal quarter during 108 Table of Contents the term of the Financing Agreement or (iii) liquidity (as defined in the Financing Agreement) to be less than a certain specified threshold for each month during the term of the Financing Agreement. The Company was in compliance with its covenants and other requirements of the Financing Agreement as of June 30, 2025. The Financing Agreement also contains customary covenants that limit, among other things, the ability of the Company and its subsidiaries to (i) incur indebtedness, (ii) incur liens on their property, (iii) pay dividends or make other distributions, (iv) sell their assets, (v) make certain loans or investments, (vi) merge or consolidate, (vii) voluntarily repay or prepay certain indebtedness and (viii) enter into transactions with affiliates, in each case subject to certain exceptions. The Financing Agreement contains customary representations and warranties and events of default. 3.75% Convertible Senior Notes due June 1, 2026 In May 2021, the Company issued $ 100.0 million aggregate principal amount of its 3.75 % Convertible Senior Notes due June 1, 2026 (the “Convertible Notes”) under an indenture between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee. On June 5, 2025, the Company entered into separate, privately-negotiated exchange agreements with a limited number of existing holders of the Convertible Notes (the “Convertible Noteholders”) to exchange (the “Exchange”) approximately $ 82.0 million aggregate principal amount of the Convertible Noteholders’ existing Convertible Notes for (i) an aggregate of 8,881,579 shares of the Company’s common stock (the “Shares”), valued at $ 1.52 per share based on the closing stock price on June 5, 2025, or $ 13.5 million in the aggregate and (ii) an aggregate cash payment of approximately $ 68.5 million. (See Note 9. Shareholders’ Equity, for more information). Holders of the remaining $ 18.0 million aggregate principal amount of the Convertible Notes did not receive cash or shares of common stock in the Exchange mentioned above and the original terms of such Convertible Notes were not modified. In connection with the repayment of the Convertible Notes in the Exchange, the Company wrote-off $ 0.5 million in unamortized debt issuance costs which is recorded as a loss on extinguishment of debt. Holders of the remaining Convertible Notes may convert their notes at any time on or after March 6, 2026 until the close of the business day immediately preceding the maturity date. Prior to June 1, 2026, the remaining h olders of the Convertible Notes may convert their notes only under certain circumstances. Upon conversion, the Company will have the right to pay cash, or deliver shares of common stock of the Company or a combination thereof, at the Company’s election. The initial conversion rate is 170.5611 shares of the Company’s common stock per $ 1,000 principal amount (which represents an initial conversion price of approximately $ 5.86 per share of the Company’s common stock). The conversion rate, and therefore, the conversion price, is subject to adjustment, as further described below. Holders of the remaining Convertible Notes who convert their notes in connection with a “make-whole fundamental change,” as defined in the indenture, may be entitled to a make-whole premium in the form of an increase in the conversion rate. Additionally, in the event of a “fundamental change,” as defined in the indenture, holders of the remaining Convertible Notes may require the Company to purchase all or a portion of their note at a fundamental change repurchase price equal to 100 % of the principal amount of the Convertible Notes, plus accrued and unpaid interest, if any, to, but not including, the fundamental change repurchase date. As of June 30, 2025 and June 30, 2024, the if-converted value of the remaining Convertible Notes did not exceed the outstanding principal amount. Note 8. Commitments and Contingencies Debt Commitments The Company is required to make semi‑annual interest payments on the Convertible Notes, principal and interest payments on the Term Loan Facility. Future minimum principal payments and interest on the Convertible Notes and Term Loan Facility (as defined in Note 7. Debt ), as of June 30, 2025, are as follows (in thousands): 109 Table of Contents Year Ending June 30, Long-Term Debt (1) 2026 $ 33,943 2027 21,787 2028 21,650 2029 21,403 2030 172,186 Total $ 270,969 (1) These amounts represent principal and interest cash payments over the contractual life of the debt obligations, including anticipated interest payments that are not recorded on the Company’s consolidated balance sheet. Any conversion, premium, redemption or purchase of the Convertible Notes that would impact cash payments is noted in the preceding table. Purchase Commitments The Company’s purchase commitments and obligations include all open purchase orders and contractual obligations in the ordinary course of business, including commitments with contract manufacturers and suppliers, for which the Company has not received the goods or services and acquisition and licensing of intellectual property. A majority of these purchase obligations are due within a year. Although open purchase orders are considered enforceable and legally binding, the terms generally allows the Company the option to cancel, reschedule, and adjust its requirements based on the Company’s business needs prior to the delivery of goods or performance of services, and hence, these purchase orders have not been included in the table above. Indemnities and Commitments The Company enters into standard indemnification agreements with its landlords and all superior mortgages and their respective directors, officers’ agents, and employees in the ordinary course of business. Pursuant to these agreements, the Company will indemnify, hold harmless, and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party, generally the landlords, in connection with any loss, accident, injury, or damage by any third‑party with respect to the leased facilities. The term of these indemnification agreements is from the commencement of the lease agreements until termination of the lease agreements. The maximum potential amount of future payments the Company could be required to make under these indemnification agreements is unlimited; however, historically, the Company has not incurred claims or costs to defend lawsuits or settle claims related to these indemnification agreements. The Company has not recorded any liability associated with its indemnification agreements as it is not aware of any pending or threatened actions that represent probable losses as of June 30, 2025. Guarantees As of June 30, 2025 and June 30, 2024, the Company had various bank guarantees totaling approximately $ 1.5 million and $ 1.1 million, respectively, primarily related to a bidding process with customers. Royalty Agreements The Company enters into software license agreements with third parties that may require royalty payments for each license used. The Company records royalty costs in cost of revenue or deferred cost of revenue. The Company had approximately $ 3.1 million and $ 2.9 million accrued liabilities as of June 30, 2025 and 2024 , respectively, related to this agreement. The following table provides information about the Company’s royalty expense and royalty payments (in thousands): Years Ended June 30, 2025 2024 Royalty expense $ 1,716 $ 1,913 Royalty payments 1,573 1,371 110 Table of Contents Software License Indemnity Under the terms of the Company’s agreements with its customers, the Company agrees that in the event the certain Company software sold under such agreement infringes upon any patent, copyright, trademark, or any other proprietary right of a third‑party, it will indemnify its customer licensees against any loss, expense, or liability from any damages that may be awarded against its customer. The Company includes this infringement indemnification in its agreements with customers where Company software is licensed. In the event the customer cannot use the software or service due to infringement and the Company cannot obtain the right to use, replace or modify the license in a commercially feasible manner so that it no longer infringes, then the Company may terminate the license and provide the customer a refund of the fees paid by the customer for the infringing license or service. The Company has not recorded any liability associated with this indemnification, as it is not aware of any pending or threatened actions that represent probable losses as of June 30, 2025. Litigation From time to time, the Company is involved in legal proceedings, including claims, investigations, and inquiries, arising in the ordinary course of its business. The Company records a provision for a loss when it believes that it is both probable that a loss has been incurred and the amount can be reasonably estimated. To the extent that there is a reasonable possibility that a loss exceeding amounts already recognized may be incurred and the amount of such additional loss would be material, we will either disclose the estimated additional loss or state that such an estimate cannot be made. Currently, management believes the Company does not have any probable and reasonably estimable material losses related to any current legal proceedings and claims. Although occasional adverse decisions or settlements may occur, management does not believe that an adverse determination with respect to any of these claims would individually, or in the aggregate, materially and adversely affect the Company’s financial condition or operating results. Litigation is inherently unpredictable and is subject to significant uncertainties, some of which are beyond the Company’s control. Should any of these estimates and assumptions change or prove to have been incorrect, the Company could incur significant charges related to legal matters that could have a material impact on its results of operations, financial position, and cash flows. Note 9. Stockholders’ Equity Common Stock The Company has 200.0 million shares authorized as of June 30, 2025 and 2024 and 112.6 million and 100.2 million shares issued and outstanding as of June 30, 2025 and 2024, respectively. Common stock purchase warrants issued in connection with long-term debt On June 6, 2025, concurrently with its entry into the Financing Agreement, the Company issued detachable warrants to purchase the Company’s common stock to certain of its Warrant Holders under the Financing Agreement. The Warrant Holders were issued warrants to purchase 17,180,710 Premium Warrants with an exercise price of $ 1.68 per share, exercisable on and after December 7, 2025 and expiring on June 6, 2032 and 6,247,531 Penny Warrants with an exercise price of $ 0.01 per share exercisable immediately and expiring on June 6, 2032 . No Penny Warrants were exercised as of June 30, 2025. Pursuant to the terms of the Financing Agreement, if the Company uses the Delay Draw Facility, the Company will be obligated to issue additional detachable warrants on terms substantially similar to the Warrants to certain of its lenders under the Financing Agreement. The Warrants have certain anti-dilution protection provisions, including price protection anti-dilution protection in the event that we sell stock at a price below $ 1.00 in the case of the Penny Warrants and $ 1.25 in the case of the Premium Warrants. We agreed to issue the Warrants in connection with, and to induce the lenders to enter into, the Financing Agreement. The Warrants and the shares of common stock issuable upon the exercise of such Warrants have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and may not be sold absent registration or an applicable exemption from the registration requirements of the Securities Act. Based in part upon the representations of each holder in each warrant, the offering and sale of each warrant is exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act. 111 Table of Contents The Premium Warrants were valued at $ 13.1 million using a relative fair value method and is recorded in additional paid-in capital. Further, $ 0.3 million in financing fees incurred in connection with the issuance of the Premium Warrants is recorded in a contra-equity account. Common shares issued to Convertible Note holders On June 5, 2025, the Convertible Noteholders agreed to Exchange approximately $ 82.0 million aggregate principal amount of the Convertible Noteholders’ existing Convertible Notes for (i) an aggregate of 8,881,579 Shares, valued at $ 1.52 per share based on the closing stock price on June 5, 2025, or $ 13.5 million in the aggregate and (ii) an aggregate cash payment of approximately $ 68.5 million. On June 11, 2025, the Exchange was consummated and the Company issued the Shares to the Convertible Noteholders. On their issuance date, the Shares were valued at $ 1.25 per share based on the closing stock price on June 11, 2025, or $ 11.1 million in the aggregate. The decrease in stock price from the agreement date to the issuance date resulted in a $ 2.4 million gain, which was recorded as a gain on extinguishment of debt. The Company paid approximately $ 0.4 million in fees to issue the common shares which was recorded as a permanent adjustment to paid-in-capital. Treasury Stock The Company records treasury stock at cost. Treasury stock is comprised of shares of common stock purchased by the Company in the secondary market. As of June 30, 2025, and June 30, 2024 , the Company had 3.1 million shares of treasury stock valued at $ 14.1 million. Trea sury stock is included in Additional paid-in capital on the consolidated balance sheets. Accumulated Other Comprehensive Income (Loss) The following table summarizes the changes in accumulated other comprehensive income (loss) by component (in thousands): Cumulative Translation Adjustment Defined Pension Benefit Obligation Total Balance at June 30, 2023 $ ( 2,332 ) $ 2,754 $ 422 Other comprehensive loss ( 2,445 ) ( 2,199 ) ( 4,644 ) Balance at June 30, 2024 $ ( 4,777 ) $ 555 $ ( 4,222 ) Other comprehensive loss 1,557 828 2,385 Balance at June 30, 2025 $ ( 3,220 ) $ 1,383 $ ( 1,837 ) Note 10. Stock Incentive Plan and Employee Stock Purchase Plan As of June 30, 2025 , the Company had two outstanding stock incentive plans: the 2016 Equity Incentive Plan ( “2016 Plan”) and the 2007 Incentive Award Plan (“2007 Plan”). The 2016 Plan permits the granting of stock options, stock appreciation rights, restricted stock awards, performance shares, performance units, and RSUs. The vesting of RSUs granted under the 2016 Plan are primarily service‑based (over the requisite service period) while the vesting of performance units granted under the 2016 Plan consist of PSUs. Only employees of the Company are eligible to receive incentive stock options. Non‑employees may be granted non‑qualified stock options. Stock options granted under the 2016 Plan have an exercise price of at least 100 % of the fair market value of the underlying stock on the grant date. The stock options have 10 -year contractual terms and generally become exercisable for 25 % of the option shares one year from the date of grant and then ratably over the following 36 months. Service‑based RSUs granted generally vest 25 % of the share units covered by the grant on each of the first through fourth anniversaries of the date of the grant, subject to the continued service of the grantee through each such date. RSUs granted to the Board of Directors vest over one year. PSUs granted generally vest at the end of a three year performance period and the amount of shares that vest are based on the Company's actual performance relative to predefined performance conditions. The Board of Directors 112 Table of Contents has the discretion to use different vesting schedules. As of June 30, 2025, the 2007 Plan continued to remain in effect; however, the Company can no longer grant equity awards under such plans. The following table summarizes the share‑based compensation charges included in the Company’s consolidated statements of operations and comprehensive loss (in thousands): Years ended June 30, 2025 2024 Cost of revenue - product $ 634 $ 866 Cost of revenue - service 709 509 Research and development 1,508 1,456 Selling and marketing 2,167 1,905 General and administrative 5,183 4,748 Total $ 10,201 $ 9,484 The following table summarizes the share‑based compensation charges for the Company’s equity awards (in thousands): Years ended June 30, 2025 2024 Stock options $ 344 $ 741 Restricted stock units 7,948 7,307 Performance stock units 1,166 386 Employee stock purchase plan 743 1,050 Total $ 10,201 $ 9,484 Stock Options The Company did not grant any stock options during the years ended June 30, 2025 and June 30, 2024. The fair value of stock options grants are determined by using the Black‑Scholes option‑pricing model. This fair value is then amortized over the requisite service periods of the awards. The Company estimates the expected term of stock option by taking the average of the vesting term and the contractual term of the option. The expected volatility is derived from the Company’s historical stock volatility over a period approximately equal to the expected term of the options. The risk‑free interest rate is based on the U.S. Treasury constant maturity rate on the date of grant. The dividend yield assumption is based on the Company’s history and expectation of no dividend payouts. A summary of option activity under the Company’s incentive plan is presented below (in thousands except per share and term amounts): Options Outstanding Weighted Average Exercise Price Weighted Average Remaining Contractual Life (In Years) Aggregate Intrinsic Value (1) Balance at June 30, 2024 5,270 $ 3.40 2.95 $ — Options granted — — Options exercised — — Options forfeited/expired ( 3,431 ) $ 3.59 Balance at June 30, 2025 1,839 $ 3.03 5.62 $ — Vested or expected to vest at June 30, 2025 1,839 $ 3.03 5.62 $ — Exercisable at June 30, 2025 1,662 $ 3.13 5.48 $ — 1. The aggregate intrinsic value represents the total pre-tax intrinsic value, which is computed based on the difference between the exercise price and the closing price of Accuray common stock of $ 1.37 a nd $ 1.82 on June 30, 2025 and June 30, 2024 , 113 Table of Contents respectively, The amount represents what would have been received by the option holders had all option holders exercised their options and sold the shares received upon exercise as of that date. There were no options exercised during the year ended June 30, 2025. The total intrinsic value of options exercised during the year ended June 30, 2024 was not material. The total cash received from option exercises during the year ended June 30, 2024 was $ 0.3 million. Tax benefits from tax deductions for exercised options and disqualifying dispositions in excess of the deferred tax asset, attributable to share compensation costs for such options was zero for the years ended June 30, 2025, and 2024. As of June 30, 2025, there wa s $ 0.2 million of unrecognized compensation cost related to unvested stock options, which is expected to be recognized over a weighted average period of 0.5 years. The following table summarizes information about outstanding and exercisable options at June 30, 2025 (in thousands, except years and exercise price): Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Number Outstanding Weighted Average Exercise Price $ 1.96 – $ 1.96 200 7.00 $ 1.96 150 $ 1.96 $ 2.08 – $ 2.08 556 6.92 $ 2.08 429 $ 2.08 $ 2.60 – $ 2.60 397 4.34 $ 2.60 397 $ 2.60 $ 4.10 – $ 4.46 553 4.64 $ 4.32 553 $ 4.32 $ 4.52 – $ 4.52 133 6.00 $ 4.52 133 $ 4.52 Total outstanding 1,839 5.62 $ 3.03 1,662 $ 3.13 Restricted Stock and Performance Stock The following table summarizes the activity of RSUs and PSUs (in thousands, except fair value per share): Unvested Restricted Stock Restricted Stock Units Performance Stock Units Total Number of Shares Underlying Stock Awards Weighted Average Grant Date Fair Value Per Share Unvested at June 30, 2024 5,969 2,813 8,782 $ 2.66 Granted 4,343 1,235 5,578 $ 2.13 Vested ( 2,752 ) — ( 2,752 ) $ 2.68 Cancelled/forfeited ( 394 ) ( 817 ) ( 1,211 ) $ 3.39 Unvested at June 30, 2025 7,166 3,231 10,397 $ 2.29 Restricted Stock Units The grant date fair value of the RSUs granted was $ 9.2 million a nd $ 9.7 millio n during the years ended June 30, 2025 and 2024, respectively. The aggregate fair market value of the RSUs that vested during the years ended June 30, 2025 and 2024, was $ 5.5 million and $ 5.9 million, respectively. As of June 30, 2025, there was $ 11.5 million of unrecognized compensation cost related to the RSUs, which is expected to be recognized over a weighted average perio d of 1 .4 years. Performance Stock Units The grant date fair value of PSUs granted w as $ 2.8 million and $ 3.3 million during the years ended June 30, 2025 and 2024, respectively. There were no PSUs that vested during the year ended June 30, 2025 because the performance conditions were not met. The aggregate fair value of the PSUs that vested during the year ended June 30, 2024, w as $ 0.4 million . As of June 30, 2025, there was $ 2.9 million of unrecognized compensation cost related to the PSUs, which is expected to be recognized over a weighted average period of 1.7 years. 114 Table of Contents Employee Stock Purchase Plan Under the Company’s Amended and Restated 2007 Employee Stock Purchase Plan, or ESPP, qualified employees are permitted to purchase the Company’s common stock at 85 % of the lower of the fair market value of the common stock on the commencement date of each six month offering period, or the fair market value on the specified purchase date. Employees’ payroll deductions may not exceed 10 % of their salaries. Employees may purchase up to 2,500 shares per each six month offering period, provided that the value of the shares purchased in any calendar year may not exceed $ 25,000 , as calculated pursuant to the purchase plan. The Company estimates the fair value of ESPP shares at the date of grant using the Black‑Scholes option pricing model. The weighted average assumptions were as follows: Years Ended June 30, 2025 2024 Risk–free interest rate 4.12 % - 4.43 % 5.05 % - 5.39 % Dividend yield — % — % Expected term 0.5 - 1.0 0.5 - 1.0 Expected volatility 44.02 % - 83.32 % 37.22 % - 61.48 % The risk‑free rate for the expected term of the ESPP option was based on the U.S. Treasury constant maturity rate for each offering period; expected volatility was based on the historical volatility of the Company’s common stock; and the expected term was based upon the offering period of the ESPP. The Company issued 1.2 million and 1.1 million shares under the ESPP during the years ended June 30, 2025 and 2024, respectively, at a weighted average purchase price per share o f $ 1.37 and $ 1.79 , respectively. As of June 30, 2025, total unrecognized compensation cost related to the ESPP plan was $ 0.6 million, which the Company expects to recognize over a weighted average period of 0.9 years. Common Stock Available For Issuance In November 2024, the Company’s stockholders approved to increase the number of shares of common stock available for issuance by 5.0 million shares under its Amended and Restated 2016 Equity Incentive Plan, and to increase the number of shares of common stock available for issuance by 2.5 million shares under its Amended and Restated Accuray Incorporated 2007 Employee Stock Purchase Plan. At June 30, 2025, the Company had 5.2 million shares of common stock reserved for issuance under the stock incentive plans and 2.6 million shares of common stock reserved for issuance under the employee stock purchase plan. Note 11. Joint Venture In January 2019, the Company’s wholly-owned subsidiary, Accuray Asia Limited (“Accuray Asia”), entered into an agreement with CNNC High Energy Equipment (Tianjin) Co., Ltd. (the “CIRC Subsidiary”), a wholly-owned subsidiary of China Isotope & Radiation Corporation, to form a joint venture, CNNC Accuray (Tianjin) Medical Technology Co. Ltd. (the “JV”), to manufacture and sell radiation oncology systems in China. As of June 30, 2025 , the Company owned a 49 % interest in the JV, which is reported as an investment in joint venture on the Company’s consolidated balance sheets. The Company applies the equity method of accounting to its ownership interest in the JV as the Company has the ability to exercise significant influence over the JV but lacks controlling financial interest and is not the primary beneficiary. The Company recognizes the 49 % proportionate share of the JV income or loss on a one-quarter lag due to the timing of the availability of the JV’s financial records. The Company recognizes revenue on sales to the JV in the current period of control transfer, eliminating a portion of profit to the extent goods sold have not been sold through by the JV to an end customer by the end of each reporting period. With the receipt of the necessary permits and licenses to operate, the JV has begun to manufacture and sell a locally branded “Made in China” radiotherapy device, the Tomo C radiation therapy system, in the Class B license category. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems, including the Radixact SynC and CyberKnife S7 Systems, which received NMPA approval in 115 Table of Contents January 2025. The JV also distributes other Accuray treatment delivery systems like the Radixact and CyberKnife treatment delivery systems. The following table shows the reconciliation between the carrying value of the Company's investment in the JV and its proportional share of the underlying equity in net assets of the JV (in thousands): June 30, 2025 June 30, 2024 Carrying value of investment in joint venture $ 4,612 $ 9,826 Deferred intra-entity profit margin 17,501 9,835 Dividend declared 2,453 - Equity method goodwill ( 4,720 ) ( 4,720 ) Proportional share of equity investment in joint venture $ 19,846 $ 14,941 As of June 30, 2025 and June 30, 2024, the Company’s carrying value of the investment in the JV for the Company's proportional share of the JV's currency translation adjustment wa s decreased by $ 0.4 million and $ 0.6 million, respectively . In June 2025, the JV declared a $ 2.5 million dividend to the Company that was paid in July 2025. In June 2024, the JV declared a $ 2.5 million dividend to the Company paid in fiscal year 2025. The Company records the dividends as a reduction to its carrying value in the JV. No i mpairment was identified as of June 30, 2025 and June 30, 2024. Summarized financial information of the JV is as follows (in thousands): Statement of Operations Data: Twelve Months Ended March 31, 2025 Twelve Months Ended March 31, 2024 Revenue $ 160,213 $ 114,942 Gross profit $ 29,438 $ 22,137 Net income $ 9,617 $ 3,750 Net income attributable to the Company $ 4,714 $ 1,838 Summarized Balance Sheet Data: As of March 31, 2025 As of March 31, 2024 Assets Current assets $ 172,109 $ 102,500 Non current assets 16,426 12,425 Total assets $ 188,535 $ 114,925 Liabilities and Stockholders' Equity Current liabilities $ 146,587 $ 79,300 Non current liabilities 1,334 113 Stockholder's equity 40,614 35,512 Total liabilities and stockholders' equity $ 188,535 $ 114,925 The following table shows the activity of the Company’s deferred intra-entity profit margin from sales to the JV (in thousands): Years Ended June 30, 2025 2024 Deferred gross profit recognized on sales to the JV $ ( 16,738 ) $ ( 9,061 ) Deferred gross profit on sales to the JV 24,404 13,159 Net deferred gross profit on sales to the JV (1) $ 7,666 $ 4,098 (1) Profit earned by the Company from the JV is eliminated through cost of goods sold until it is realized; such profits would generally be considered realized when the inventory has been sold through to third parties. 116 Table of Contents Note 12. Income Taxes Income (loss) before provision for income taxes on the accompanying statements of operations and comprehensive loss included the following components (in thousands): Years Ended June 30, 2025 2024 Domestic $ ( 12,908 ) $ ( 25,184 ) Foreign 14,042 13,364 Total income (loss) before provision for income taxes $ 1,134 $ ( 11,820 ) The provision for income taxes consisted of the following (in thousands): Years Ended June 30, 2025 2024 Current: Federal $ — $ — State 4 133 Foreign 2,565 2,190 Total current $ 2,569 $ 2,323 Deferred: Federal — — State — — Foreign 156 1,402 Total deferred 156 1,402 Total provision for income taxes $ 2,725 $ 3,725 A reconciliation of income taxes at the statutory federal income tax rate to the provision for income taxes included in the accompanying consolidated statements of operations and comprehensive loss is as follows (in thousands): Years Ended June 30, 2025 2024 U.S. federal taxes (benefit): At federal statutory rate $ 238 $ ( 2,482 ) State tax, net of federal benefit 4 133 Share-based compensation expense 1,028 629 Research and development credits ( 14 ) ( 209 ) Foreign taxes 203 219 Deferred tax on foreign earnings 558 952 Global intangible low-taxed income 1,471 1,335 Equity in earnings of unconsolidated affiliates ( 990 ) ( 386 ) Chane in valuation of warrants 105 — Change in valuation allowance ( 113 ) 3,202 Other non-deductible permanent items 235 332 Total provision for income taxes $ 2,725 $ 3,725 117 Table of Contents Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s net deferred tax assets (liabilities) were as follows (in thousands): June 30, 2025 2024 Deferred tax assets: Federal and state net operating losses $ 61,745 $ 66,463 Accrued expenses and reserves 3,128 4,523 Lease liability 6,475 6,332 Deferred revenue 3,681 3,269 Research and development credits 26,678 26,669 Share-based compensation expense 1,416 1,405 Capitalized research and development 23,795 19,464 Unicap 527 541 Fixed assets and intangibles 250 644 Section 163(j) interest 3,244 2,776 Other 374 6 Total deferred tax assets 131,313 132,092 Deferred tax liabilities: Contract acquisition costs ( 857 ) ( 1,228 ) Right of use assets ( 5,124 ) ( 5,288 ) Deferred tax on foreign earnings ( 2,120 ) ( 2,499 ) Total deferred tax liabilities ( 8,101 ) ( 9,015 ) Valuation allowance ( 125,287 ) ( 125,944 ) Net deferred tax liabilities $ ( 2,075 ) $ ( 2,867 ) As of June 30, 2025, the Company h ad $ 260.9 million and $ 119.9 million in federal and state net operating loss carryforwards, respectively. The federal and state carryforwards expire in varying amounts beginning in 2029 for federal and 2026 for state purposes. In addition, as of June 30, 2025, the Company had federal and state research and development tax cre dits of $ 28.5 million an d $ 22.8 million, respectively. If not utilized, the federal research credits will begin to expire in 2026, the California research credits have no expiration date and the other state research credits will begin to expire in 2026. Under the Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of our net operating loss and research tax credit carryforwards to offset taxable income may be limited based on cumulative changes in ownership. Although ownership changes have occurred in the prior years, the carryovers should be available for utilization by the Company before they expire, provided the Company generates sufficient future taxable income. An analysis of the impact of this provision through March 31, 2022 has been performed and it was determined that no ownership change has occurred after December 2009. Based on the available objective evidence and history of losses, the Company has established a 100 % valuation allowance against its combined domestic net deferred tax assets because of uncertainty surrounding the realization of such deferred tax assets. 118 Table of Contents Certain income earned by controlled foreign corporations (“CFCs”) must be included currently in the gross income of the CFCs United States shareholder. The income required to be included in gross income is referred to as global intangible low tax income (“GILTI”) and is defined under IRC Section 951A as the excess of the shareholder’s net CFC tested income over the net deemed tangible income return. The GILTI inclusion amount has been absorbed by net operating loss carryforwards. The Company has made a policy decision to record GILTI tax as a current-period expense when incurred. One of the provisions under the Tax Cuts and Jobs Act that became effective in tax years beginning after December 31, 2021 required the capitalization and amortization of research and experimental expenditures. The change in this United States tax law did not have an impact on the Company's consolidated financial statements. The Company will continue to evaluate the impact of this tax law change on future periods. At June 30, 2025 , the Company has $ 2.1 million of deferred tax liability related to withholding tax expected to be paid on the remittance of unrepatriated distributable reserves in France, Japan and Switzerland. At June 30, 2025 , the Company has undistributed earnings of certain foreign subsidiaries of $ 11.8 million that it has indefinitely invested, and on which it has not recognized deferred taxes. The aggregate changes in the balance of gross unrecognized tax benefits were as follows (in thousands): Years Ended June 30, 2025 2024 Balance at beginning of year $ 22,044 $ 21,565 Tax positions related to current year: Additions 1,165 1,064 Tax positions related to prior years: Additions — — Reductions ( 560 ) ( 585 ) Balance at end of year $ 22,649 $ 22,044 The calculation of unrecognized tax benefits involves dealing with uncertainties in the application of complex global tax regulations. Management regularly assesses the Company’s tax positions with respect to legislative, bilateral tax treaty, regulatory and judicial developments in the countries in which the Company does business. The reduction in prior year's tax positions primarily relates to lapses of applicable statutes of limitations. The Company anticipates there will be no material changes in uncertain tax positions in the next 12 months. As of June 30, 2025, the amount of gross unrecognized tax benefits was $ 22.6 million, of which $ 21.8 million w ould not affect income tax expense before consideration of any valuation allowance. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. As of June 30, 2025 and 2024, the Company’s cumulative accrued interest and penalties related to uncertain tax positions, was not material. The Company files income tax returns in the United States federal, various states, and foreign jurisdictions. Due to tax attributes being carried forward and utilized during open years, the statute of limitations remains open for the U.S. federal jurisdiction and domestic states for tax years from 2006 and forward. The statutes of limitation with respect to the foreign jurisdictions where the Company files income tax returns vary from jurisdiction to jurisdiction and range from 3 to 10 years and the material foreign jurisdictions are France, Switzerland and Japan. The Company is also subject to examination of its income tax returns by the Internal Revenue Service (“IRS”) and other foreign tax authorities, and in some cases the Company has received additional tax assessments which have not been significant. The Company is under audit by the Indian tax authorities for the fiscal year 2021 and we do not expect a material impact on the consolidated financial statements. On July 4, 2025, new federal tax legislation was enacted, introducing significant changes to U.S. corporate income tax law. Key provisions include the optional expensing of domestic research and development costs under Section 174, modifications to business interest deductions under Section 163(j), and changes to international tax rules such as GILTI. Some provisions are effective retroactively to January 1, 2025, while others phase in through 2027. As the legislation was 119 Table of Contents enacted after the balance sheet date, its effects are not reflected in the financial statements for the fiscal period ended June 30, 2025. The Company is currently evaluating the potential impact, including implications for deferred tax assets and related disclosures in the subsequent period. Note 13. Retirement Plans Employee Benefit Plan The Company’s employee savings and retirement plan is qualified under Section 401(k) of the United States Internal Revenue Code. Employees may make voluntary, tax‑deferred contributions to the 401(k) Plan up to the statutorily prescribed annual limit. The Company makes discretionary matching contributions to the 401(k) Plan on behalf of employees up to the limit determined by the Board of Directors. The Company contribu ted $ 2.2 million an d $ 2.1 million to the 401(k) Plan during the years ended June 30, 2025 and 2024, respectively. Defined Benefit Pension Obligation The Company has established a defined benefit pension plan for its employees in its Switzerland subsidiary. The plan provides benefits to employees upon retirement, death or disability. The Company uses June 30 as the year‑end measurement date for this plan. Obligations and Funded Status The following table presents the funded status of the defined benefit pension plan (in thousands): June 30, 2025 2024 Change in benefit obligation: Benefit obligation—beginning of fiscal year $ 24,059 $ 19,388 Service cost 1,553 1,245 Interest cost 322 381 Plan participants’ contributions 1,806 3,548 Actuarial loss 1,493 2,236 Foreign currency changes 3,275 ( 124 ) Settlements — ( 2,434 ) Amendments ( 131 ) — Benefit and expense payments ( 1,436 ) ( 181 ) Benefit obligation—end of fiscal year $ 30,941 $ 24,059 Change in plan assets: Plan assets—beginning of fiscal year $ 21,329 $ 18,761 Employer contributions 1,353 1,265 Actual return on plan assets 2,502 467 Plan participants’ contributions 1,806 3,548 Foreign currency changes 2,996 ( 97 ) Settlements — ( 2,434 ) Benefit and expense payments ( 1,437 ) ( 181 ) Plan assets—end of fiscal year $ 28,549 $ 21,329 Funded status $ ( 2,392 ) $ ( 2,730 ) Amounts recognized within the consolidated balance sheets: Long-term other liabilities $ ( 2,392 ) $ ( 2,730 ) Net amount recognized $ ( 2,392 ) $ ( 2,730 ) 120 Table of Contents The following table presents the amounts recognized in accumulated o ther comprehensive loss (before tax) for the defined benefit pension plan (in thousands): June 30, 2025 2024 Net actuarial gain $ 1,128 $ 428 Prior service credit 254 127 Total gain recognized in accumulated other comprehensive loss $ 1,382 $ 555 The following table presents the projected benefit obligation, accumulated benefit obligation and fair value of plan assets for this defined benefit pension plan where accumulated benefit obligation exceeded the fair value of plan assets (in thousands): June 30, 2025 2024 Projected benefit obligation $ 30,941 $ 24,059 Accumulated benefit obligation $ 22,747 $ 20,946 Fair value of plan assets $ 28,549 $ 21,329 Components of Net Periodic Benefit Cost and Other Amounts Recognized in Other Comprehensive Loss The following table shows the components of the Company’s net periodic benefit costs and the other amounts recognized in other comprehensive loss, before tax, related to the Company’s defined benefit pension plan (in thousands): Year ended June 30, 2025 2024 Net Periodic Benefit Costs: Service cost $ 1,553 $ 1,245 Interest cost 322 381 Expected returns on assets ( 330 ) ( 284 ) Amortization of prior service credit ( 24 ) ( 24 ) Amortization of net gain — ( 92 ) Gain on settlement — ( 65 ) Net periodic benefit costs 1,521 1,161 Other Amounts Recognized in Other Comprehensive Loss: Net (gain) loss arising during the year ( 715 ) 2,019 Prior service credit 26 24 Amortization of prior service credit ( 139 ) — Amortization of net gain — 91 Effect of settlement — 65 Total (gain) loss recognized in other comprehensive loss ( 828 ) 2,199 Total recognized in net periodic benefit costs and other comprehensive loss $ 693 $ 3,360 The amounts in accumulated other comprehensive loss that are expected to be recognized as components of net periodic benefit cost during fiscal year 2026 related to the Company’s defined benefit pension plan are as follows (in thousands): 2026 Net loss $ — Prior service cost 32 Accumulated other comprehensive income $ 32 121 Table of Contents Assumptions The assumptions used to determine net periodic benefit cost and to compute the expected long‑term return on assets for the Company’s defined benefit pension plan were as follows: Fiscal Years 2025 2024 Net Periodic Benefit Costs: Discount rate 1.20 % 1.30 % Rate of compensation increase 1.75 % 1.75 % Expected long-term return on assets 1.50 % 1.50 % The assumptions used to measure the benefit obligation for the Company’s defined benefit pension plan were as follows: June 30, 2025 2024 Benefit Obligation: Discount rate 1.20 % 1.30 % Rate of compensation increase 1.75 % 1.75 % Contributions and Future Benefit Payments The Company made contributions of approximate ly $ 1.4 million a nd $ 1.3 million to the defined benefit pension plan during fiscal years 2025 and 2024, respectively. The Company expects total contributions to the defined benefit pension plan for fiscal year 2026 will be approximat ely $ 1.5 million. Estimated future benefit payments expected to be paid by the defined benefit pension plan at June 30, 2025 are as follows (in thousands): Year Ending June 30, Future Benefits 2026 $ 1,745 2027 1,530 2028 1,580 2029 1,648 2030 2,564 Thereafter 10,841 Total estimated future benefit payments $ 19,908 Plan Assets The plan assets are invested in insurance contracts with Copré Collective Foundation based in Lausanne, Switzerland at the end of fiscal years 2025 and 2024. In fiscal 2025 and 2024, the risks of death and disability are reinsured with Zurich Life Insurance. The Copré Foundation for Occupational Benefits (“Copré Foundation”) defines and is responsible for the asset strategy and invests the plan assets for the Company. The Copré Foundation invests the plan assets in insurance contracts which can be measured at Level 2 in the fair value hierarchy. In fiscal 2025 and 2024, the expected interest rate for mandatory retirement savings was 1.5 % a nd 1.5 %, respectively. The technical administration and management of the s avings account are guaranteed by the Copré Foundation. Insurance benefits due are paid directly to the entitled persons by the Copré Foundation. Accuray International Sàrl has committed itself to pay the annual contributions and costs due under the pension fund regulations. 122 Table of Contents The contract of affiliation between the Company and the Copré Collective Foundation can be terminated by either side. In the event of a termination, recipients of retirement and survivors’ benefits would remain with the collective foundation. The Company commits itself to transfer its active insured members and recipients of disability benefits to the new employee benefits institution, thus releasing the Copré Collective Foundation from all obligations. Note 14. Segment Disclosure The Company has one operating and reporting segment (oncology systems group), which develops, manufactures and markets proprietary medical devices used in radiation therapy for the treatment of cancer patients. The Company’s Chief Executive Officer , its Chief Operating Decision Maker (“CODM”), assesses financial performance by reviewing a reporting package based on consolidated results of the Company when making decisions about allocating resources and assessing performance. The CODM evaluates performance based on net revenues, gross profit, and operating income which are consistent with what is reported on the consolidated statements of comprehensive income (loss). Significant segment expenses regularly provided to the CODM are consolidated research and development expenses, sales and marketing, and general and administrative expenses as reported on the consolidated financial statements. In addition, the CODM regularly reviews the budget and forecast-to-actual variances to evaluate performance and to make decisions about allocating capital and other resources. The Company does not assess the performance of its individual product lines on measures of profit or loss, or asset-based metrics. Therefore, the information below is presented only for revenues and long‑lived tangible assets by geographic areas. Disaggregation of Revenues The Company disaggregates its revenues from contracts by geographic region, as the Company believes this best depicts how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. The Company reports its customer revenues in five geographic regions: the Americas, EIMEA, Japan, China and Asia Pacific. The Americas region primarily includes the United States, Canada, and Latin America. The EIMEA region includes Europe, India, the Middle East and Africa. The Asia Pacific region consists of Asia (excluding Japan and China), Australia and New Zealand. Additionally, the Company typically recognizes revenue at a point in time for product revenue and recognizes revenue over time for service revenue. Revenues attributed to a country or region are based on the shipping addresses of the Company’s customers. The following summarizes net revenue by geographic region (in thousands): Years ended June 30, 2025 2024 Americas $ 88,768 $ 90,156 EIMEA 144,264 168,611 China 124,475 103,412 Japan 53,622 55,682 Asia Pacific 47,376 28,690 Total net revenues $ 458,505 $ 446,551 The following summarizes countries that represent more than ten percent of the Company’s net revenues (in thousands): Years ended June 30, 2025 2024 United States 16 % 18 % China 27 % 23 % Japan 12 % 12 % Rest of world 45 % 47 % Total net revenues 100 % 100 % 123 Table of Contents Disaggregation of long-lived assets Information regarding geographic areas in which the Company has long-lived assets, which consists of property, plant and equipment, net, and operating lease right-of-use assets are as follows (in thousands): June 30, 2025 June 30, 2024 Americas $ 49,466 $ 46,570 EIMEA 9,220 9,327 China 1,577 1,211 Japan 999 1,304 Asia Pacific 511 135 Total long-lived assets $ 61,773 $ 58,547 The long-lived assets in the Americas region are located in the United States as of June 30, 2025, and June 30, 2024. 124 Table of Contents Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCO UNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. Item 9A. CONTROL S AND PROCEDURES Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a‑15(e) of the Exchange Act) as of the end of the period covered by our Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “Evaluation Date”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of the Evaluation Date, our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Management’s Report on Internal Control over Financial Reporting Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a‑15(f) of the Exchange Act. Under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based upon the guidelines established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) 2013. Based on this evaluation, management concluded that as of June 30, 2025 our internal control over financial reporting was effective. The effectiveness of our internal control over financial reporting as of June 30, 2025 has been audited by Grant Thornton LLP, an independent registered public accounting firm, as stated in their report included herein. Remediation of Previously Disclosed Material Weaknesses As noted in our 2024 Annual Report on Form 10-K (the “2024 Annual Report”), management identified a material weakness within our system of internal control over financial reporting due to our SAP S/4HANA ERP system not being designed for and not maintaining effective controls to ensure that all manual journal entries consistently enforced segregation of duties in the approval process prior to being posted to the general ledger system. Remediation of this material weakness was completed during the three months ended December 31, 2024, and included establishing new controls and procedures to ensure segregation of duties is maintained between the creation, posting and approval of manual journal entries. As of December 31, 2024, these control activities have been appropriately designed and implemented, and have operated effectively for a sufficient period of time to conclude that the previously identified material weakness has been remediated. Also as noted in our 2024 Annual Report, management identified a second material weakness within our system of internal control over financial reporting due to our SAP S/4HANA ERP system not being designed for and not maintaining effective controls to ensure the existence of inventory at the Madison manufacturing warehouse locations because its controls relied on a cycle count program that, due to initial limitations associated with certain ERP system reports, was not sufficiently precise. This material weakness was remediated as of March 31, 2025, which included establishing new controls to allow for full capture of inventory with proper count timing required for an effective cycle count program, inclusive of reinforcement for proper cycle count process through policy statements, regular communications and periodic reviews and meetings with managers and staff. As of March 31, 2025, these control activities have been appropriately designed and 125 Table of Contents implemented, and have operated effectively for a sufficient period of time to conclude that the previously identified material weakness has been remediated. Furthermore, the remediation of the two material weaknesses associated with the aforementioned control activities resulted from the remediation of the deficiency in the risk assessment component of the COSO framework disclosed in our 2024 Annual Report, which we remediated by performing a comprehensive risk analysis of the affected areas and implemented control activities that effectively managed the risks. Management has concluded that the Company’s consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented with accounting principles generally accepted in the United States of America. Changes in Internal Control over Financial Reporting Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated any changes in our internal control over financial reporting that occurred during the year ended June 30, 2025, and has concluded that other than the changes described above under "Remediation of Previously Disclosed Material Weaknesses" there were no changes in our internal control over financial reporting that occurred that have materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Inherent Limitations of Internal Controls Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk. Item 9B. OTHE R INFORMATION Securities Trading Plans of Directors and Executive Officers During the fourth quarter of fiscal 2025, no director or officer, as defined in Rule 16a-1(f), adopted, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” each as defined in Regulation S-K Item 408. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections. None. 126 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Accuray Incorporated Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Accuray Incorporated (a Delaware corporation) and subsidiaries (the “Company”) as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of June 30, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended June 30, 2025, and our report dated August 28, 2025 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP San Jose, California August 28, 2025 127 Table of Contents PART III Item 10. DIRECTORS, EXECUTIVE O FFICERS AND CORPORATE GOVERNANCE Directors, Executive Officers and Corporate Governance The information in our 2025 Proxy Statement regarding directors and executive officers appearing under the headings “Election of Directors,” “Executive Officers” and “Delinquent Section 16(a) Reports” is incorporated herein by reference. In addition, the information in our 2025 Proxy Statement regarding the director nomination process, the Audit Committee financial expert and the identification of the Audit Committee members appearing under the heading “Corporate Governance and Board of Directors Matters” is incorporated herein by reference. There have been no material changes to the procedures by which stockholders may recommend nominees to our Board of Directors. Item 11. EXECUTI VE COMPENSATION The information in our 2025 Proxy Statement appearing under the headings “Executive Compensation,” “Compensation Committee Report,” “Compensation Discussion and Analysis,” “Compensation of Non‑Employee Directors” and “Corporate Governance and Board of Directors Matters—Compensation Committee Interlocks and Insider Participation” is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL O WNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information in our 2025 Proxy Statement appearing under the heading “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATE D TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information in our 2025 Proxy Statement appearing under the headings “Certain Relationships and Related Transactions” and “Corporate Governance and Board of Directors Matters—Director Independence” is incorporated herein by reference. Item 14. PRINCIPAL ACCO UNTING FEES AND SERVICES The information in our 2025 Proxy Statement appearing under the headings “Ratification of Appointment of Independent Registered Public Accounting Firm—Audit and Non‑Audit Services” and “Ratification of Appointment of Independent Registered Public Accounting Firm—Audit Committee Pre‑Approval Policies and Procedures” is incorporated herein by reference. 128 Table of Contents PART IV Item 15. EXHIBITS AND FINA NCIAL STATEMENT SCHEDULES (a) We have filed the following documents as part of this report: 1. Consolidated Financial Statements (as set forth in Item 8) Page No. Report of Independent Registered Public Accounting Firm (PCAOB ID 248 ) 83 Consolidated Balance Sheets 85 Consolidated Statements of Operations and Comprehensive Income (Loss) 86 Consolidated Statements of Stockholders’ Equity 87 Consolidated Statements of Cash Flows 88 Notes to Consolidated Financial Statements 90 2. Consolidated Financial Statement Schedules All financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes thereto included in this Annual Report on Form 10‑K. 3. Exhibits The following exhibits are incorporated by reference or filed herewith. Incorporated by Reference Exhibit No. Exhibit Description Form File No. Exhibit Filing Date Furnished or Filed Herewith 3.1 Amended and Restated Certificate of Incorporation of Registrant. 8-K 001-33301 3.1 02/06/2013 3.2 Amended and Restated Bylaws of Registrant. 8‑K 001‑33301 3.1 09/20/2023 4.1 Form of Common Stock Certificate. S‑1/A 333‑138622 4.3 02/05/2007 4.2 Indenture, dated as of May 13, 2021, between the Registrant and The Bank of New York Mellon Trust Company, N.A., as trustee . 8-K 001-33301 4.1 05/18/2021 4.3 Form of 3.75% Convertible Senior Note due 2026 (included in Exhibit 4.5) 8-K 001-33301 4.1 05/18/2021 4.4 Description of the Registrant’s Securities 10-K 001-33301 4.7 09/07/2023 4.5 Form of Premium Warrant 8-K 001-33301 4.1 06/06/2025 4.6 Form of Penny Warrant 8-K 001-33301 4.2 06/06/2025 4.7 Form of DDTL Premium Warrant 8-K 001-33301 4.3 06/06/2025 4.8 Form of DDTL Penny Warrant 8-K 001-33301 4.4 06/06/2025 10.1 Office Lease between Old Sauk Trails Park Limited Partnership and TomoTherapy Incorporated, dated October 22, 2001. 10-K 001-33301 10.1 09/07/2023 10.2 First Amendment to Lease between Old Sauk Trails Park Limited Partnership and TomoTherapy Incorporated, dated May 1, 2004. 10-K 001-33301 10.2 09/07/2023 10.3 Second Amendment to Lease between Old Sauk Trails Park Limited Partnership and 10-K 001-33301 10.3 09/07/2023 129 Table of Contents Incorporated by Reference Exhibit No. Exhibit Description Form File No. Exhibit Filing Date Furnished or Filed Herewith Accuray, Inc FKA TomoTherapy, Inc., dated October 19, 2016. 10.4 Third Amendment to Lease between Old Sauk Trails Park Limited Partnership and Accuray Incorporated, dated March 27, 2020. 10-K 001-33301 10.4 09/07/2023 10.5 Fourth Amendment to Lease Deming Way Property Group LLC and Accuray Incorporated, dated August 19, 2022. 10-K 001-33301 10.5 09/07/2023 10.6 Accuray Incorporated 1998 Equity Incentive Plan and forms of agreements relating thereto . S‑1 333‑138622 10.4 11/13/2006 10.7* Accuray Incorporated 2007 Incentive Award Plan . 10‑K 001‑33301 10.8 09/19/2011 10.8* Form of Performance Stock Unit Grant Notice and Performance Stock Unit Agreement. 8‑K 001‑33301 99.2 09/02/2014 10.9* Form of Restricted Stock Unit Grant Notice and Restricted Stock Unit Agreement. 8‑K 001‑33301 99.1 09/02/2014 10.10* Form of Stock Option Grant Notice and Stock Option Agreement. 8‑K 001‑33301 99.3 11/23/2011 10.11* Form of 2016 Market Stock Unit Grant Notice and Award Agreement. 8‑K 001‑33301 99.1 10/02/2015 10.12* Accuray Incorporated Amended and Restated 2016 Equity Incentive Plan and forms of award agreements thereunder. 8‑K 001‑33301 10.1 11/15/2023 10.13* Amended and Restated 2007 Employee Stock Purchase Plan. 8-K 001-33301 10.2 11/16/2022 10.14* Accuray Incorporated Company Bonus Plan . 10‑Q 001‑33301 10.6 11/06/2018 10.15* Form of Accuray Incorporated Stand-Alone Inducement Restricted Stock Unit Agreement for Suzanne Winter. S-8 333-234412 99.1 10/31/2019 10.16* Form of Accuray Incorporated Stand-Alone Inducement Stock Option Agreement for Suzanne Winter. S-8 333-234412 99.2 10/31/2019 10.17* Form of Accuray Incorporated Stand-Alone Inducement Restricted Stock Unit Agreement for Jim Dennison . S-8 333-251038 99.4 11/30/2021 10.18* Form of Accuray Incorporated Stand-Alone Inducement Stock Option Agreement for Jim Dennison . S-8 333-251038 99.5 11/30/2021 10.19* Form of Accuray Incorporated Stand-Alone Inducement Restricted Stock Unit Agreement for Sandeep Chalke. S-8 333-265330 99.1 05/31/2022 10.20* Form of Accuray Incorporated Stand-Alone Inducement Stock Option Agreement for Sandeep Chalke. S-8 333-265330 99.2 05/31/2022 130 Table of Contents Incorporated by Reference Exhibit No. Exhibit Description Form File No. Exhibit Filing Date Furnished or Filed Herewith 10.21* TomoTherapy Incorporated 2000 Stock Option Plan, as amended, and forms of option agreements thereunder. S‑8 333‑174952 99.1 06/17/2011 10.22* TomoTherapy Incorporated 2002 Stock Option Plan, as amended, and forms of option agreements thereunder. S‑8 333‑174952 99.2 06/17/2011 10.23* TomoTherapy Incorporated 2007 Equity Incentive Plan, as amended, and forms of option agreements thereunder. S‑8 333‑174952 99.3 06/17/2011 10.24* Form of Indemnification Agreement by and between Registrant and each of its directors and executive officers. 10‑Q 001‑33301 10.7 05/10/2011 10.25* Executive Employment Agreement by and Between Registrant and Jesse Chew, dated February 3, 2025. 10-Q 001-33301 10.5 02/05/2025 10.26* Executive Employment Agreement by and Between Registrant and Suzanne Winter, dated February 3, 2025 10-Q 001-33301 10.2 02/05/2025 10.27* Executive Employment Agreement by and between Registrant and Leonel Peralta, dated February 3,2025. 10-Q 001-33301 10.1 05/02/2025 10.28* Executive Employment Agreement by and between Registrant and Ali Pervaiz, dated February 3, 2025. 10-Q 001-33301 10.3 02/05/2025 10.29* Executive Employment Agreement by and between Registrant and Sandeep Chalke, dated February 3, 2025. 10-Q 001-33301 10.4 02/05/2025 10.30* Letter Agreement for Interim CEO Role by and between Registrant and Sandeep Chalke, dated September 3, 2024. X 10.31* Separation Agreement and General Release by and between Registrant and Michael Hoge, dated January 6, 2025 10-Q 001-33301 10.1 02/05/2025 10.32 Form of Exchange Agreement 8-K 001-33301 10.1 06/06/2025 10.33 Governance Agreement, dated as of June 6, 2025, between the Registrant and TCW Asset Management Company LLC 8-K 001-33301 10.2 06/06/2025 10.34 Financing Agreement, dated as of June 6, 2025, between the Registrant as the Administrative Borrower, the guarantors listed hereto, the lenders from time to time party hereto, as lenders, TCW Asset Management Company LLC, as collateral agent and administrative agent, and Wingspire Capital LLC, as servicing agent X 10.35 Form of Subscription Agreement, dated as of May 6, 2021, between the Registrant and each signatory thereto . 8-K 001-33301 10.2 05/12/2021 19.1 Insider Trading Policy X 21.1 List of subsidiaries. X 131 Table of Contents Incorporated by Reference Exhibit No. Exhibit Description Form File No. Exhibit Filing Date Furnished or Filed Herewith 23.1 Consent of Grant Thornton LLP, independent registered public accounting firm. X 24.1 Power of Attorney (incorporated by reference to the signature page of this annual report on Form 10‑K). X 31.1 Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. X 31.2 Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes‑Oxley Act of 2002. X 32.1 Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes‑Oxley Act of 2002. X 97.1 Compensation Recovery Policy X 101.INS Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document X 101.SCH Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents X 104 Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) * Management contract or compensatory plan or arrangement. † Certain portions of this exhibit have been omitted because they are both not material and would be competitively harmful if publicly disclosed. The certification attached as Exhibit 32.1 that accompanies this Annual Report on Form 10‑K is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Accuray Incorporated under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the date of this Annual Report on Form 10‑K, irrespective of any general incorporation language contained in such filing. Form 10‑K, irrespective of any general incorporation language contained in such filing. Item 16. FORM 10-K SUMMARY None. 132 Table of Contents SIGNAT URES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Madison, State of Wisconsin, on August 28, 2025. ACCURAY INCORPORATED By: /s/ S uzanne W inter Suzanne Winter President and Chief Executive Officer By: /s/ Ali Pervaiz Ali Pervaiz Senior Vice President and Chief Financial Officer 133 Table of Contents POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints Suzanne Winter and Ali Pervaiz, and each of them, as his true and lawful attorneys‑in‑fact and agents, with full power of substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10‑K, and to file the same, with all exhibits thereto and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys‑in‑fact and agents, full power and authority to do and perform each and every act and thing requisite and necessary to be done therewith, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys‑ in‑ fact and agents, and any of them or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following and on the dates indicated. Signature Title Date /s/ S uzanne W inter Suzanne Winter President, Chief Executive Officer and Director (Principal Executive Officer) August 28, 2025 /s/ Ali Pervaiz Ali Pervaiz Senior Vice President and Chief Financial Officer (Principal Financial Officer) August 28, 2025 /s/ Michael J. Murphy Michael J. Murphy Corporate Controller (Principal Accounting Officer) August 28, 2025 /s/ Joseph E. Whitters Joseph E. Whitters Chairperson of the Board and Director August 28, 2025 /s/ Robert C. Kill Robert C. Kill Director August 28, 2025 /s/ Byron C. Scott Byron C. Scott Director August 28, 2025 /s/ Beverly A. Huss Beverly A. Huss Director August 28, 2025 /s/ Anne B. Le Grand Director August 28, 2025 Anne B. Le Grand /s/ James M. Hindman James M. Hindman Director August 28, 2025 /s/ Mika Nishimura Mika Nishimura Director August 28, 2025 /s/ Steven F. Mayer Steven F. Mayer Director August 28, 2025 134