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DATE
Wednesday, August 13, 2025 at 4:30 p.m. ET
CALL PARTICIPANTS
President and Chief Executive Officer — Suzanne Winter
Chief Financial Officer — Ali Pervaiz
Moderator — Steve Monroe
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RISKS
CEO Winter stated, "we remain cautious to continued market uncertainties and macro and geopolitical dynamics, which have historically been a headwind to our performance."
Chief Financial Officer Pervaiz noted, "change at any point. And we certainly don't know how that's gonna end up and take shape throughout the fiscal year."
Management indicated a 34% revenue decline in EIMEA and a 14% decline in China, explicitly attributing these to regional geopolitical tensions and trade policy volatility.
US service revenue declined 7% for the full year, with management noting, "the replacement market has yet to recover in a meaningful way."
TAKEAWAYS
Total Revenue-- $128 million, down 5% year over year, primarily reflecting reduced product sales in China and EIMEA driven by tariffs and regional instability.
Service Revenue-- $56.9 million (up 4% year over year), with full-year service revenue reaching $221 million.
Product Revenue-- $71 million in product revenue, down 11% year over year, with a full-year product revenue of $238 million, up 1.5% from the prior year.
Regional Revenue Shifts-- China revenue declined 14% year over year, EIMEA revenue was down 34% year over year, Japan revenue declined 11%; offset by APAC up 22% and Americas up 24% (component figures offset, do not sum to total).
Gross Margin-- 30.6% gross margin (GAAP), up 200 basis points year over year, but gross margin declined 3.4 points, primarily due to higher margin deferral from China shipments—a timing issue management expects to reverse in 2026.
Book-to-Bill Ratio-- Book-to-bill ratio was 1.2 for both the quarter and the full year, supported by $85 million in gross orders and a year-end backlog of $427 million (over eighteen months of product revenue).
Service Gross Margin-- Service gross margins improved nine points for fiscal 2025, attributed to lower parts consumption and strategic pricing.
Tariff Impact-- $4 million in cash tariffs incurred, with approximately half mitigated through duty drawback and operational initiatives.
Debt Refinancing-- Company exchanged approximately $82 million of notes for approximately 8.9 million shares plus $68.6 million cash and entered a $190 million senior secured credit agreement with TCW in early June 2025, consolidating capital structure and extending maturity by five years.
Service Installed Base-- All regions grew installed base except the US, which remained flat, driving increased contract revenue globally.
2026 Outlook-- Revenue guidance of $471 million to $485 million and adjusted EBITDA range of $31 million to $35 million, with 45% of revenue and 30% of adjusted EBITDA anticipated in the first half; guidance assumes foreign trade zone benefits in the second half.
SUMMARY
Accuray(ARAY 0.68%) reported year-over-year top-line contraction in the fourth quarter due to trade disputes and geopolitical disruptions, particularly affecting China and EIMEA, but partially offset by double-digit regional gains in APAC and the Americas. A $1.7 million China margin deferral and ongoing exposure to tariffs and export volatility shaped near-term profitability, though management expects reversal in future earnings as deliveries are completed. The quarter's service segment expansion and a proactive restructuring of the debt profile with TCW signal an emphasis on sustainable margin growth and longer-term global strategy execution.
Management emphasized the company’s rapid implementation of logistics and supply-chain pivots, including drawback applications and direct shipping to bonded warehouses and customer sites, to preserve revenue flow amid fluctuating tariffs and border risks.
Winter noted, "TomoC had a very solid year" in China and Winter described Helix's growing adoption in India, North Africa, and Latin America.
The company proactively canceled one unit (about $3 million) from its backlog to maintain order quality, distinct from ordinary sales activity.
Volume and margin guidance indicate a heavily weighted second half due to anticipated backlog conversion and timing of operational improvements, with approximately 45% of revenue and 30% of adjusted EBITDA expected in the first half, and 55% of revenue and 70% of adjusted EBITDA expected in the second half, with management stating that roughly 30% of EBITDA coming in the first half and 70% in the back half.
Management confirmed all guidance includes expected benefits of a US foreign trade zone designation in the latter half, but cautioned that underlying market conditions and tariff regimes will remain "a moving target?"
INDUSTRY GLOSSARY
Book-to-Bill Ratio: The metric comparing gross orders received to revenue recognized in a given period; a ratio above 1.0 indicates order backlog is increasing.
Foreign Trade Zone (FTZ): A designated area in the United States considered outside US customs territory, permitting companies to delay or reduce duty payments on goods processed and reexported.
Duty Drawback Program: A government refund program that returns tariffs paid on imported goods which are subsequently exported, reducing net tariff outlays for exporters.
Full Conference Call Transcript
Steve Monroe: Welcome to Accuray's conference call to review financial results for the 2025, which ended 06/30/2025. During our call this afternoon, management will review recent corporate developments. Joining us on today's call are Suzanne Winter, Accuray's President and Chief Executive Officer, and Ali Pervaiz, Accuray's Chief Financial Officer. Before we begin, I would like to remind you that our call today includes forward-looking statements. Actual results may differ materially from those contemplated or implied by these forward-looking statements. Factors that could cause these results to differ materially are outlined in the press release we issued just after the market closed this afternoon, as well as in our filings with the Securities and Exchange Commission.
We base the forward-looking statements on this call on the information available to us as of today's date. We assume no obligation to update any forward-looking statements as a result of new information or future events except to the extent required by applicable securities laws. Accordingly, you should not put undue reliance on any forward-looking statements. A few housekeeping items for today's call. First, during the Q&A session, we request that participants limit themselves to two questions and then requeue with any follow-ups. Second, all references to a specific quarter in the prepared remarks are to our fiscal year quarters. For example, statements regarding our fourth quarter refer to our fiscal fourth quarter ended 06/30/2025.
Additionally, there will be a supplemental slide deck to accompany this call which you can access by going directly to Accuray's investor relations page at investors.accuray.com. With that, let me turn the call over to Accuray's Chief Executive Officer, Suzanne Winter. Suzanne?
Suzanne Winter: Thanks, Steve, and welcome to our fourth quarter earnings call, and thanks all for joining today. Overall, I'm pleased with our performance in the fourth quarter, especially how we navigated a turbulent geopolitical environment, which impacted several key regions at various points in the quarter. Our solid revenue growth overcoming these obstacles was a testament to the resilience and flexibility of our operations and commercial teams to deliver product and provide service to the markets that were open during various periods within the quarter.
Service was a highlight for the quarter with solid service revenue in margin growth as well as the continued positive customer response to our new product innovations like TomoC for China, and Helix in international markets, both of which have been a central part of our growth strategy. Finally, we put a major milestone behind us by successfully completing refinancing of our debt and securing a strong strategic partner that has invested in our long-term success. Before I go into the specifics of the quarter, I'd like to review the macro and geopolitical backdrop we continue to navigate through and provide some context on the guidance we provided last quarter and the resulting impact on our performance.
Recall that in early April, trade negotiations escalated between the US and China. The US government announced a 145% tariff on goods from China entering the US, and China imposed a 125% tariff on goods coming from the US. After evaluating the potential impact to our business, we provided guidance during our fiscal third quarter financial results to reflect these developments in trade policy. Included revenue adjustments to account for an anticipated stall in China revenue, which at the time, we expected would be partially offset by other regions like EIMEA. Fast forwarding to May, the US and China came to an agreement, and each announced reduced 10% reciprocal tariffs, a significant improvement from the original April announcements.
These actions reopened the China market for us, allowing us to resume shipments. Weeks later in June, there was unexpected unrest in the Middle East, which affected trade in a significant portion of the EIMEA region, essentially halting shipments to several countries within the region. All of these events created significant challenges within our supply chain as we pivoted several times within the quarter to deliver product to different regions of the world. The result of all of this was that we were able to shift a portion of sales back into China in May, allowing us to deliver our overall revenues in line with our expectations.
However, due to this regional shift of revenues into China and out of EIMEA, we had a $1.7 million higher margin deferral into future quarters, which impacted adjusted EBITDA. We expect to realize this margin as a positive adjusted EBITDA impact starting in 2026 as these products are delivered to their end customers. Despite these dynamics, I'm incredibly proud of how our team stepped up in a major way to mitigate the impact of the tariff volatility through focused actions, which Ali will speak to in greater detail. These include, first, executing a drawback of duties paid on components, which were subsequently exported. Second, managing logistics to drop ship service parts directly to bonded warehouses and customer sites directly.
Third, establishing dual source capabilities for key components and most importantly, advancing progress in our plans to establish our mass manufacturing site as a foreign trade zone in the second half of the fiscal year 2026, which is expected to mitigate a significant portion of future tariffs. Now turning to the fiscal fourth quarter, total revenue for the quarter was approximately $128 million, down 5% year over year, driven by lower product revenue in our China and EIMEA businesses. As I alluded to earlier, reduced sales in China were linked to the tariff impact in May, resulting in a 14% decline versus last year.
And later in the quarter, the escalating tensions in the Middle East impacted our EIMEA business, resulting in a 34% decline versus last year. Additionally, Japan declined 11% in the quarter. Outside of these regions, we saw outstanding revenue performance in our APAC region, which was up 22% driven by improved demand, and we were pleased to see a return to revenue growth in the Americas at 24% with a solid conversion of backlog. Service revenue was a highlight for the quarter at $56.9 million, up 4% versus the prior year. We see tremendous opportunity in our service business for both revenue and margin expansion as we grow our installed base of customers.
All regions showed installed base growth with the exception of the US, which essentially remained flat. A key area of focus in the quarter was driving improvement in service margins. I was encouraged to see service margins up nicely both year over year and sequentially. This will be a continued area of focus for us in the future, and we believe that we have laid out the foundation, including strategic pricing, development of high-value support and education offerings, and finally, driving efficiencies in our cost to service. Over the last two years, we have focused R&D investment in making our current designs more robust and have started to realize more substantial benefits here.
One of the biggest factors in improving service margin is reducing service parts consumption. We are now positioned well to execute on this initiative and feel it is a big opportunity for us over the next few years. Additionally, order trends continue to support our target book-to-bill ratio of 1.2, a level which we believe to be a healthy balance to grow our company. From a regional perspective, the biggest highlights were a 50% growth in orders in APAC, and 34% year-over-year growth in Japan, followed by a 15% growth in China, and a 12% growth in EIMEA.
These were partly offset by slower order demand in the US, which was down as the replacement market has yet to recover in a meaningful way. Growth in the emerging markets where we have introduced new products like the Helix and TomoC in China are seeing strong demand. These are among the highest growth markets in the world, which we are actively targeting and are an integral part of our growth plan in the next few years.
Reflecting on our fiscal full-year performance, I remain proud of what our team has accomplished this year and remain humbled by our mission, which is centered around advancing care through innovation, expanding patient access to radiotherapy globally, and delivering superior service to our customers. Global revenue for the year grew 3%. I'm very pleased by the strong performance in our international markets. China product revenue grew 20% year over year, whereas the rest of APAC grew over 200% year over year.
Offsetting growth in these regions was a decline in product revenues in some of the developed markets, which had a substantial impact on the year-over-year EIMEA growth, which was down 32%, and a decline in our Japan region where the economy has slowed over the past few quarters and was down 19%. Service was strong with revenue up 4% for the full fiscal year, which represents the highest annual growth we've seen over the last several years and over nearly all regions. Growth was primarily driven by three factors, including expansion of our installed base, increased service contract capture rates following warranty, and additional value-added service offerings like CyberCom, all of which demonstrated meaningful results in nearly all regions.
Leading the way here was China, where we saw 21% year-over-year growth in service revenue. This was followed by 10% growth in Japan, 7% growth in the EIMEA regions, and 3.5% growth in APAC, which were partly offset by the Americas, which declined 7%. While region product revenue varies from quarter to quarter, the growing contribution from our service business, particularly service contract revenue, provides greater revenue predictability and a base to expand margin. During the year, we also kicked off the Accuray Care service initiative with focused R&D investment to further strengthen our existing platform designs to improve system uptime performance, extend service parts life, and improve our customer response times and time to repair.
We're leveraging system data, AI, and predictive analytics to improve costs to serve by reducing parts consumption with a goal of no patient having to be rescheduled for treatment due to system downtime. In summary, I'm proud of what we've accomplished this year. We've built a strong foundation for top-line growth driven by international markets, achieved a strong market position in key markets like Japan and China, grew our installed base of customers, and delivered strong growth in our service business.
Despite the near-term challenges and capital equipment budget cycles, we believe that the long-term potential of developed markets like the US remains intact, with the advanced age of installed base of radiotherapy systems providing a catalyst for upgrade and replacement opportunities. We were pleased to see revenue growth in Q4 from the US and expect to see a gradual improvement from this region accelerating in fiscal year 2026. Before I hand it over to Ali, who will provide more details, I want to take a moment to talk about the refinancing transaction that closed during the quarter and what this means for our company in the long run.
This transaction was driven by our desire to find the right partner for the business and create financial flexibility. We are looking forward to working with TCW and our newly appointed independent board member. I believe they are going to be a tremendous asset to us as we grow our business in the upcoming years. I'll now turn it over to Ali, who will cover our financial performance in Singapore.
Ali Pervaiz: Thank you, Suzanne, and good afternoon, everyone. I'd like to begin by recognizing our global cross-functional teams for their unwavering dedication and execution. Their efforts enabled us to deliver a strong fiscal year 2025 performance navigating a challenging macroeconomic environment. Turning to our financial results for the fourth quarter and full year. Net revenue for Q4 was $128 million, down 5% year over year, $126 million on a constant currency basis, a 6% decrease. For the full fiscal year, total revenue reached a record $159 million, up 3% from last year, with foreign exchange having minimal impact.
While US revenue was affected by softer macroeconomic conditions, our international business remained strong, growing 4% year over year and now representing 80% of total revenue, a clear sign of our global momentum. Product revenue in Q4 was $71 million, down 11% year over year and 12% on a constant currency basis, reflecting the regional dynamics Suzanne described earlier. For the full year, product revenue was $238 million, up 1.5% from the prior year with foreign exchange having a negligible impact. Revenue for the quarter was $57 million, up 4% year over year and 2% on a constant currency basis.
Notably, contract revenue within our service business grew 3% in Q4 and 2% for the full year, as our installed base continues to expand globally. Full year service revenue was $221 million, up 4% from last year with contract revenue now making up about 90% of total service revenue. Gross orders for Q4 were approximately $85 million, resulting in a book-to-bill ratio of 1.2. For the full year, gross orders totaled $288 million, also with a book-to-bill of 1.2. We ended Q4 with a backlog of about $427 million, which represents over eighteen months of product revenue, giving us strong visibility and confidence in future revenue conversion.
As part of our ongoing diligence, we proactively canceled one unit, about $3 million, to maintain a high-quality backlog. Gross margin for the quarter was 30.6%, up 200 basis points year over year. Gross margin declined 3.4 points primarily due to higher margin deferral from China shipments, a timing issue we expect to reverse in 2026. Excluding China margin deferrals, product gross margins would have been 33.2%, nearly flat with the prior year period. On a full-year basis, product gross margins would have been 34.8%, a one-point increase over the prior year when excluding the China margin deferrals. Service gross margins improved by nine points driven by lower parts consumption and successful price initiatives.
For the full year, gross margin had a slight increase of 10 basis points from 32% to 32.1%. Adjusting full-year gross margin for the China margin deferral would have resulted in 33.7% gross margin, which would have been 60 basis points higher than the same adjustment for the prior year. Operating expenses in Q4 were $34.7 million, up from $31.6 million last year, mainly due to the timing of R&D and marketing investments. For the full year, operating expenses were $139.1 million, down 2% year over year, reflecting our ongoing focus on cost control and ROI. Operating income for Q4 was $42 million, down $2.6 million last year due to the timing of investments.
But for the full year, operating income improved to $7.8 million from $500,000 in fiscal year 2024. Adjusted EBITDA for Q4 was $9.4 million. For the full year, adjusted EBITDA was $28.3 million, up 44% year over year. It's important to note that the China JV accounting treatment had a deferred $7.6 million of margin related to FY '25 shipments into future quarters. Turning to the balance sheet highlights. Accounts receivable were $83 million, up $5 million sequentially. Inventory was $141 million, down $5 million versus the prior quarter. Payables were $34 million, down $12 million versus the prior quarter, as we prioritize key supplier payments.
Total cash and cash equivalents were $62 million, down from $80 million last quarter, reflecting $8.9 million in refinancing fees and working capital investments that we spoke about earlier. As Suzanne mentioned, in early June, we completed a comprehensive debt refinancing that we believe better positions Accuray for long-term growth and financial flexibility. The transaction itself has several key elements. The company exchanged approximately $82 million of its 3.75% senior convertible notes due in 2026 for approximately 8.9 million shares of common stock and $68.6 million in cash.
Concurrently, we entered into a new senior secured credit agreement with TCW, securing $190 million in new financing costs across three facilities: a $150 million five-year term loan, a $20 million delayed draw term loan, and a $20 million revolving credit facility. Proceeds were used to fully repay existing debt with Silicon Valley Bank. This refinancing extends our debt maturity by five years and adds meaningful liquidity to support high-return initiatives. Importantly, it consolidates our capital structure under a single counterparty, allowing us to focus on execution with greater clarity and confidence. We view this transaction as a critical milestone that enhances our ability to invest in innovation, drive margin improvement, and deliver long-term value to our shareholders.
Turning to tariffs. As Suzanne noted earlier, we are working on several initiatives to mitigate the potential impact of tariffs on our global business. Our operations and trade compliance and commercial teams quickly responded to both challenges and opportunities and have already activated work in a variety of mitigating action plans. Firstly, there's a significant portion of tariffs on imported goods that can be refunded back by the authorities if the product does not remain in the United States. This is referred to as the duty drawback program and requires an application process and documentation verification with the Customs and Border Protection Agencies that we have already started to engage with and begin to process.
This will give us the ability to recoup these tariff costs for products that will not remain in the United States and reclaim the associated cash. This is important given that greater than 80% of our product sales occur outside the US. And having the ability to recapture any tariffs made of those can lessen the impact of these costs. In the near term, this will be an incremental use of cash given an upfront payment to the customs and border protection associated with these duties. Secondly, we are working with multiple government agencies to establish a foreign trade zone for Accuray.
A foreign trade zone is a designated area within the United States, often near a US port of entry, where goods are considered to be outside of US customs territory. This allows companies to import goods, process them, and potentially reexport them without immediate US customs duties or following standard customs procedures. This would give us the ability to only pay tariffs for goods remaining in the United States and will therefore only limit any cash outlay to those products. Third, we are working with our supply partners to accelerate dual sourcing capabilities for material currently procured outside the United States.
Lastly, commercial teams are working diligently to adjust prices for both products and services to combat the impact of tariffs and protect our profitability and cash flow. As the only pure-play radiation therapy company headquartered in the United States, we are also working with state and federal government to ensure that Accuray is positioned well to weather the impact of these challenging and noxious factors impacting our business. In the fourth quarter, the company incurred approximately $4 million of cash tariffs, and approximately 50% of those tariffs were mitigated through the initiatives described above. Looking ahead, we are well-positioned to accelerate top-line growth in APAC and EIMEA, anticipating a recovery in the US market.
As we go into fiscal year 2026, we are focused on driving further adjusted EBITDA margin expansion through cost productivity, process efficiency, and pricing actions. We look forward to sharing more of these initiatives as we progress through the coming quarters. I will now turn it over to Suzanne for comments on our fiscal year 2026 outlook. Suzanne?
Suzanne Winter: We're proud of our progress in fiscal 2025. We grew revenues from the service portion of our business, which represents a more predictable revenue stream and growing part of our focus. We also refinanced our debt, which brings additional flexibility to our balance as we enter the next phase of our operational improvement. We will be able to further our efforts in high return on investment projects and pursue some targeted areas of improvement. Additionally, when Ali and I took over a few years ago, our biggest initiatives were to penetrate emerging markets and improve Accuray's operational model with a big focus on adjusted EBITDA and profitability. We're already seeing the benefits of our initiatives.
Today, the majority of our revenue comes from emerging markets, and over the last three years, we grew revenues from these markets at a CAGR of approximately 9%. On the operational side, we've completed our ERP, rationalized many areas of our business, including several restructurings, and identified commercial actions that will allow us to attain the highest growth on both top line and margins. Looking ahead, fiscal 2026 represents a new era for the company. We're looking forward to ASTRO in October, where we will showcase new solutions around adaptive radiotherapy.
This offering is targeted for the US and developed markets and is designed to provide our aged installed base with a premium solution that delivers the most advanced radiotherapy capabilities to care for their patients. The CyberKnife S7 momentum is expected to continue to gain traction as the only robotic dedicated SRS SPRT system. Additionally, we'll have a full year of our TomoSeq products in China and plan to enter other high-growth emerging markets with Helix. We expect our installed base to grow substantially in FY 2026 as we are carrying in a strong backlog of installations that were in process from fiscal year 2025.
This installed base growth will feed directly into our service business with installation and training revenue and will serve as a strong growth driver for revenue and margins long term. Finally, as a company, we have launched a focused internal initiative to help us accelerate margin expansion by simplifying our processes and harnessing GenAI tools in all aspects of our operations, reducing our indirect costs, and optimizing pricing tied to customer value so that we're well prepared for the next cycle of growth. Despite these initiatives, we remain cautious to continued market uncertainties and macro and geopolitical dynamics, which have historically been a headwind to our performance.
As we gain greater clarity throughout the year, we will adjust our guidance accordingly and will keep you informed of our progress. Therefore, our guidance for fiscal year 2026, we are guiding to a revenue range of $471 million to $485 million and an adjusted EBITDA range of $31 million to $35 million. In closing, we couldn't be more excited about our next phase of operational performance, where we will further penetrate the fastest-growing markets in the world, expand patient access globally, execute on further operational efficiencies, and improve our profitability while focusing on increasing our cash flow generation. This concludes my prepared remarks. I will now pass it on to the operator for Q&A.
Operator: We will now begin the question and answer session.
Marie Thibault: And our first question today will come from Marie Thibault with BTIG.
Marie Thibault: Hi, good evening. Thanks for taking the questions. And Suzanne and Ali, congrats on a good quarter despite all the external factors you had to navigate through. I wanted to ask a little bit more detail on China. Certainly encouraging to see the tariff rates come down. Where are we now in terms of the temperature on the ground? Are customers eager to take shipments? Are they still hesitant? Could we see further improvement from here? How would you sort of describe that anecdotally?
Suzanne Winter: Yeah. I would say we are in a better position than we were at the end of Q3 earnings call, obviously, but I don't think it's completely returned back to normal. And that is baked into the guidance that we have. I think the demand, the customer demand for our products is still very strong. TomoC had a very solid year, so we're really pleased with the traction. We believe our type B strategy is working. Additionally, we know we have been awarded licenses for the CK, the type A market. But we also see that the funding is a little bit slower coming from the government to fund those licenses.
And so, you know, I would say, you know, we are in a better position, but we are guiding, I think, on our China growth for FY '26. And, you know, hopefully, we think it'll improve throughout the year as conditions improve.
Ali Pervaiz: And, Marie, as you know, the tariffs were extended for another ninety days, and so that's obviously something that we continue to monitor as well because that is, you know, that can change at any point. And we certainly don't know how that's gonna end up and take shape throughout the fiscal year.
Marie Thibault: Yeah. That makes sense, and thanks for that. Now I heard you say that the guidance you will keep us updated as things progress, given all various dynamics going on the macroeconomic front. So I heard that, but I also heard that you are hoping to have this foreign trade exemption zone in place for the second half of your fiscal 2026. Is that being assumed in the guidance today or could that be further upside to the margin as we think about that exemption being put in place?
Suzanne Winter: So that is assumed in the guidance.
Marie Thibault: Okay. All right. I appreciate it. I'll jump back in queue.
Operator: Thanks, Marie. Our next question will come from Jason Wittes with ROTH Capital.
Jason Wittes: Hi, thanks for taking the questions. And also congrats on a solid quarter given all the macro headwinds here. I'll start with actually a domestic question. You did mention optimism about the US improving throughout the fiscal year. Can you just enlighten us in terms of what's behind those assumptions?
Suzanne Winter: Yes. Yeah. Yeah. We were very pleased with the Q4 performance in the Americas. And really a big focus on our teams working with customers to convert our backlog and get installations accelerated at key customer sites. You know? So I think that's the good news, and I think we expect to see that going into FY 2026. You know, where we do want to see more uptick is on the orders side. I think there was some cautiousness in the US market still. We still haven't seen sort of that meaningful uptick from an order's perspective. However, we're very excited going into ASTRO here in the fall.
We've got some new solutions that we're gonna be showing that are targeted for the premium developed markets. And so we, you know, we expect that will be an additional catalyst, especially for some of the older aged installed base in our developed markets, specifically in the US and in Western Europe.
Jason Wittes: Okay. Great. That's helpful. And, also, for Helix, I believe it's launched in India now. Can you give us sort of kind of what the outlook is for that region and also just other emerging markets that might be applicable to? Thanks.
Suzanne Winter: Yes. Absolutely. So, yes, this is the first year of Helix, and I think we had a very solid year with Helix. And I think it is similar to what we saw in the first year of TomoC in China. So we're excited about that. The regulatory approval, the local regulatory approval in India took a little bit longer, but we do now have that in place. And they're on the board with Helix, and we do expect in FY 2026 to see more Helix in India, the surrounding areas like Bangladesh. Morocco also ordered Helix in Northern Africa. And we also think there's tremendous interest in Latin America for Helix.
So it's great that we have a full comprehensive portfolio from, you know, premium to the value segments that we can really address all customer needs.
Jason Wittes: Okay. If I could sneak in one last clarification question. I think you said, this quarter there's about a $4 million impact from tariffs, which I believe you said half you mitigated. Is that the kind of run rate we should expect for the upcoming fiscal year? Or how should we be thinking about the impact on tariffs again, understanding that it's a moving target?
Ali Pervaiz: Yes. That's exactly right, Jason. So we had $4 million of a cash impact, and then as we sort of stated, half of that we were able to mitigate through the actions that we've taken in terms of a duty drawback. And the other half is actually capitalized into inventory, and that's going to come hit the P&L over the course of the next couple of quarters. But that's exactly, I think, how we are thinking about it from a run rate basis as we go into fiscal year 2026. And that's what we've assumed in our guidance as well.
When you're speaking about guidance, you know, as we sort of think about next year, and we've spoken about this in greater detail, Jason, you know, when we think about our revenue profile, we're really thinking our first half of revenue is gonna be roughly about 45% of our total guidance, and then the second half is really gonna be about 55% of our total guidance. And I think it's also important to note that from an EBITDA standpoint and contribution EBITDA, that really comes really based upon how our volume trends. And so since the volume is more towards the back half, that's when our EBITDA is gonna also come into the back half.
So the way that we're thinking about it is roughly 30% of EBITDA coming in the first half and 70% coming in the back half.
Jason Wittes: Great. I appreciate that color. I'll jump back in queue.
Operator: And once again, if you would like to ask your questions, please signal by pressing. And this concludes our question and answer session. I would like to turn the conference back over to management for closing remarks.
Suzanne Winter: Thank you. And I want to thank everyone for joining the call. We look forward to updating all of you on our fiscal first quarter earnings conference call this fall. Thank you.
Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. The host has ended this call. Goodbye.