Varian Medical Systems (VAR) 25 Apr 182018 Q2 Earnings call transcript

Greetings and welcome to the Varian Medical Systems' Fourth Quarter 2017 (sic) [Second Quarter 2018] Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mike Bruff, Vice President of Investor Relations for Varian Medical Systems. Mr. you, Thank Bruff.

begin. You may

operator. quarter Good to you, and afternoon year XXXX second fiscal webcast. Varian's conference Thank welcome call and

today will and in strategy share and are financial call thoughts on Officer, results Chief on will and and his Officer, me long-term results Financial Dow Executive and Dow cover Varian's Bischoping. more Gary Gary detail. our Chief Wilson; Joining President the our operating

of reconciliation web is non-GAAP quarter of comparisons We deck, Relations of GAAP Investor growth months and quarter. growth gross and our financial Unless business you find currency non-GAAP provide report months press website, excluding from provide release performance, financial all unusual second that items. perspective the in the measures. allowing are and XX differences trailing orders. continuing between are the On details. operational currency effect note references fiscal references of are excluding assessment refer fluctuations. the to Varian additional All otherwise rates to are which Also completed our in non-GAAP constant operations, can trailing XX discussed to last the earnings intended day provide of ending to rates the Included stated, orders may fiscal and results foreign all year-over-year we on and to these documents recently most the any

this Codification beginning forward-looking XXX reminder, any year disclose the guidance, results fiscal fiscal Standard a XXXX. Revenue include that at XXXX Accounting statements, standard. The we including As reflect today, Varian adopted year of results new and

could I'll will based subject statements that filings. future predictions, expectations statement. assumptions do on factors be to with events. and of all results any today's we These differ are and Dow. forward-looking making to undertake this are other are statements about risks forward-looking Actual update in that it call, projections, And We over any turn not because current and uncertainties. our statements conference said, release, to discussed and During earnings this SEC which call, duty materially

I'll we Thanks, contributed this Today, quarter everyone. Mike, and past good the how day, long-term and achieved they key to strategy. share our milestones

results. First, Oncology XX%. Total integrated best-in-class grew hardware, platform increased revenues on $XXX million our by of XX%, touch let company revenues software, services. our me driven with and

business GAAP us expenses $XXX $X.XX in Our GAAP XX%. and $X.XX refinancing rates Cash grew will working EPS EPS in discuss capital grew helped We Gary efficiencies. impairment on Particle was X% flow currency provide operating detail that up Therapy XX.X% operations earnings an Operating impacted additional Proton expected by of grew these some million the detail of income grew minute. performance acquisition-related revenues tailwinds quarter EPS Maryland X%. currency the as will charge and of Treatment XX%. Center. the was constant non-GAAP of million, from or saw growth a XXX%, related $XX more to driven well. Gary by in and and of

initiatives. growth our three we progress and of strategy, terms creation across growth long-term value made In our

first extending over quarter the our In business, growing grew year. X% of in strengthening Varian XXXX. in orders share in an leadership and that gross therapy our worldwide X% Oncology half orders radiation X% the basis grew orders and Based filings, therapy. the time, the ending grew December XX market market our X% the First, radiation leadership. months trailing public on over on through

units. installed is X,XXX X% Our now XXX up worldwide or net base units,

firm, radiation XXXX an that fully pleased to we're in was independent therapy KLAS, category report. side, image-guided its named integrated system surgery, announce hardware research the TrueBeam, therapy and On for radio for our radio leader by

orders sites. in May for XX% incremental Additionally, and and of have greenfield orders orders our XX quarter. taken than of been now second since XXXX Halcyon we out are the XX new roll greater Most have global made progress since launch, with the our launch including

replacing Additionally, systems. replacements this tomotherapy XX team in orders using interest these well and America are growing Operationally, more publications of Included is Halcyon momentum Over Halcyon take-outs take-outs representing has XX% quarter. cobalt patients over per of and with succeeded field about number in leading base one-third and with day. to worldwide and clinically, installed in from reporting with as grows growing a were along institutions. sites or now competitive the sites product papers some and of the the were of executed North orders XX treating XXX has machines

in at patients installation Clinique imaging, XX per now to pleased eight also on beam ready-to-treat days We're a kilovoltage an just CT in of Halcyon to on is achieved France, treating provide approximately day. Lyon, Charcot cone-beam platform. example, For to extension from the update Halcyon start valuable and

acquisition quality, cone-beam on images at feedback this image In processing. acquisition, human were The was in kV Washington speed done first study, image positive of XX CT a on with half Halcyon imaging with image last seconds, of patient technique and University image acquired at in ESTRO week quality. kilovoltage a improved CT standard imaging cone-beam compromised launched for enabling We Barcelona. hold breath an easy and times, Halcyon X.X

positive feedback On software our see software we demand front, continue for the strong to solutions. and

positive XX%. Varian the grew make approximately X%. customers installed unique grew grew the to on software and revenues continues The base of market. RapidPlan for impact a Software RapidPlan X% number

approved Hospital now RapidPlan North RapidPlan of For example, are at in radiation planned replanning. Royal Australia, and are patients oncologist plans without of XX% any the Sydney, attending with generated XX% by Shore

treatment integrated just Championships of in of four ARIA hosted time has and demonstrated Eclipse further the to information quarter, using system in category when five Report. solutions straight treatment first-ever system and advanced was the selected Eclipse as of for our The patients category cancer, in ARIA, placed from most days World years. terms planning the were treatment highest the the and in now TrueBeam, resonating both the planning Treatment planning top system recognition In were time leaders in named is oncology Best our the savings customers gynecological Also Planning validate overall KLAS for the to commitment market. in been Eclipse oncology clinicians KLAS's software two ProKnow. hours. XXXX planning that capabilities by of Eclipse the provide with reduced

addition three In the six top top four customers and the to VMAT of in had Eclipse the top category, plans. overall positions the XX also scoring

government's program. EHR edition meaningful bonus CMS under designation an of received payment ARIA to Program. the requirements incentive use with most qualify This Compliance Certification Additionally, U.S. allows Payment for the our recent meet from of customers to the Quality requirements adoption the ongoing of

a assurance company, software Systems. Medical quality we February, acquired small Mobius in privately-held Finally,

have impact existing technology of global market high-quality including plan key products MobiusXD of leading We through and and machine to the our QA designed long and our QA to provided QA as to leveraging treatment We patient our with enhancements portfolio for solutions technologies. software Mobius channel more look view treatment. to DoseLab Mobius' quality patients forward software, assure

take industry proton one revenues orders superior Therapy In Radiotherapy and in services and business, we've recently driven growing a installed the machines were the and China. new of Award services not our solid. we trailing medical to our and efficient XX%, conducted contract for the provide Products. quarter. pipeline evaluations higher influential Particle performance Varian to attach in sales taken Best forward services did we any continuing our newer In XX recognized After-Sales mix also base Service won We by China of the higher where rate innovate value. six worldwide. which look was months, Our in by awarded grew most This remained Performance typically have to orders

in Our School their been over Proton educational are of training that Medicine in University reached completed more sites operating there. first seven therapy therapy around professionals Center practices. we access ones milestone first proton to treatments the expanding proton March, executing We of Proton therapy and to at in in Maryland Varian world Petersburg well successful announced best XXX And and Maryland treatment operational University have than Pennsylvania an Treatment the recently continued Maryland how XX% of the proton from and Varian component of step at Therapy have to medical around deliver the remain world. the with the proton Russia, the we and patient like the at and Center clinicians growth build announced experienced allow and have a training customers Education St. the learn as now important partnerships vital uptime.

is initiative to extend growth our second Our footprint. global

Our growth orders-based was global EMEA. gains by in market share share driven

Karolinska eight systems the was TrueBeam contract new installations the with in at begin For in expected example, Stockholm, Hospital to coming Sweden, for weeks. awarded Varian a

luminary and Elsewhere most on our a Karolinska. also this in ARIA is Instituto look addition agreement, legacy to Mexicano Social Varian advanced and forward of to and completed stereotactic image-guided treatment global XXXX. equip expected technologies deal with selected the plus in provide support In software solutions. seven Eclipse to full and The the VitalBeam with the committed multi-year commitment suite systems. our of to to del systems, system will services installations partnership best-in-class country to by building December Varian for six Mexico, centers we first Seguro the strong oncology Varian's provide are of to fulfilling be we radiosurgery, includes treatment All Edge Mexico's Varian a information planning software. service

over Of XX% since the have from front, incremental Halcyon taken to markets the and have On been over XX% of these continues grow. emerging global for been units. momentum Halcyon launch, orders

addressable made our on Lastly, to expand third into this and initiative meaningful we markets progress growth is front. other

X.X strategy transaction we interventional close of enables is interventional company market. end January, of creation in signed Sirtex, the AUD fast-growing with as an consistent to expected approximately on is value focused acquisition This acquire The May. an agreement it billion. to to Australian-based the us long-term oncology our Sirtex oncology for enter by therapies First,

the small, physicians the With Montreal-based the capabilities Evinance clinical on Oncology more announced XXX in of cancer of around leading decision software. Innovation, integrate acquisition support management based acquisition, clinical and challenge we we support XXX a use specializing to Oncology will decision Second, tightly key a care company the this enhance platform, care to Varian world. workflow platform guidelines, privately-held for

global are a received one meaningful second we context MD it with turn including over made network. we care the Overall, in over progress our become results. Anderson Oncology solutions. strategy Gary the leader made begin quarter the towards we And long-term from orders, Additionally, that, provide in on We financial XXXX. Tyler, coming which year with pleased to I'll of Installations who'll with cancer the fiscal to second the integrated multi-disciplinary our affiliated UT quarter XXX months. more is will strides

Dow. Thanks,

creation in balancing includes As always, value I'll frame the consistently long-term our liquidity. growth, my context growth and of which strategy, comments and profitability,

in orders X% revenues Oncology quarter Oncology, in backlog, revenues XX% constant were $XXX with our timing, lumpiness in ended XX% and dollars second $XXX in X% Company-wide driven were currency. business in in So Taking up were the on currency. Americas declined Year-to-date constant and in start $X.X basis, and results, and are growth. dollars million X% up grew across revenues look in X% the Year-to-date revenue X%. closer in based growth constant and currency. both dollars let In XX% up and X% quarter software, X% XX-month and dollars X% currency. up by dollars up million, trailing me in constant constant On $XXX in in revenues currency. X% currency, the dollars at We in X% in million, the in constant and Americas, a both hardware, in in billion dollars services. revenues Orders the a quarter, with constant currency. in grew

in We orders in X% the of in grew for up orders year in Orders the dollars full half trailing were region. for constant million, the Americas and the XX-month year America, constant X% currency. dollars growth in constant grew in in And back in currency. expect for currency. X% growth and a On this revenue and dollars and $XXX basis, North

and X% was trailing XX-month constant saw X% to constant and a constant the share grew increasing Asia-Pacific dollars orders currency. of second the growth see constant dollars Japan, Europe, currency. and Orders XX% XX-month hope dollars continued in we currency. grew revenues constant constant currency. revenues revenues China in Orders Year-to-date in million constant market were On in modest in were lead for XX% in in grew in basis, and We a region and constant Asia-Pacific in flat increasing its currency. dollars Greater and dollars orders revenues $XXX in and XX% in our consecutive basis, $XXX India trend in grew Japanese as in In currency. we dollars the XX% currency. grew East, in in recovery currency. performance trailing a and quarter. And million Year-to-date for growth XX% there. and in and XX% continue. this geography, flat market X% strong continue to Middle in Africa X% X% XX% On dollars grew

Our business is which revenues quarter, in the Therapy million Particle posted of up $XX X%.

gross largely where to excellence. the to of was rate expansion $XXX business by growth by XXX Turning XX% was rate million, of software hardware, and as in Europe basis is XX.X%, revenue expansion. software points. and driven growth increased as Oncology up across of company margin This services at margin profitability, revenue and primarily pricing continue margin from ongoing and rate operational total up rate XX.X% margin gross hardware, discipline was XX% and across we million driven see revenues. services This Oncology a solid our $XXX well

Therapy, million. a of investments million be revenues value Companywide Looking XX.X% expenses $XXX up primarily million. our a up XX%. XX% at to support was revenues the of Company of basis, were million, will business $XX was million was R&D team to creation. of Investment quarter, $X into and earnings or growth were to Particle increase revenues million, $X depreciation The investing growth. operating XX% On long-term amortization $XX $XX driver sales or were or programs. $XXX $XX driven GAAP organic and were increasing million or continue innovation In up X% XX%. gross and by infrastructure SG&A additional million key margins

This quarter, GAAP two we earnings. items significant impacted that had

the First, hedging quarter, $XX relating for driven acquisition-related million purchase totaled to primarily expenses million Australian price for dollar $XX Sirtex by the the acquisition.

us amount in of be is the expected impairment accrued impairment of charge interest $XX refinancing Center. currently and security approximately charge security Maryland to difference due took the the security the we to held refinancing. value by that of the The related new expected the to the us is held between upcoming for the in by will The Proton value part as an million us. issued exchange Second, of the on the Treatment

half Maryland goes the approximately second some continues investments day. in planned, from the as we of recognize our well, the up year. facility to XXX gains As to refinancing Proton the per treating may perform Overall patients

Jobs was on as rate quarter. on some December a tax the our year-to-date GAAP Act, you had enacted for impact the Tax may effective to effective our rate It tax rate second the a our the recall tax second XXXX, taxes, Cuts quarter Turning tax to and first effective XX.X%. quarter. had effective rate impact GAAP the significant in continues GAAP which of After for expected legislation, resulting our of significant was have for and impacts on new impact

diluted earnings share rates also of share was non-GAAP XX.X%, Our Similarly, impact $X.XX. tax earnings and expenses tax diluted rate non-GAAP foreign which effective on was to items. GAAP per our per deferred lower net net corporate assets. these tax the tax includes repatriation due the earnings exclude

earnings related share was XX.X million the Our of with diluted share non-GAAP per quarter. $X.XX in count shares net

XX of cash XX in the acquisition balance to million. by our cash the $X.X flow quarter from days Sirtex. Turning In up DSO the the decreased $XXX facility. the month to income we $XXX with of million and $XX operations brings working facility We portion quarter. XXX use with and operations April, credit to of on and to fund million, efficiencies. to with equivalents sheet replaced credit a days $XXX debt new along intend liquidity. a our This sheet ended credit performance Oncology by of XXX $XXX cash balance We days the facility from existing capital billion million cash from million. XXX%, flow operating Cash was driven trailing and

quarter In CapEx included addition stock. of million million and repurchase to R&D, other the shares to investments in in our $X $XX

authorization. under guidance. it updated I As shares discuss annual the Dow year existing will of remaining our XXXX turn back repurchase over who fiscal quarter, of the we had million X.X to will now end

approach growth $X.XX Gary. resonate considered and maintain now the second, following continue annual products of market to the diluted the operating includes our earnings annual which Thanks, have XXXX XX%. the to we Revenue for range range of $XXX shares fiscal guidance currency of to the earnings XX%. to Thank solutions expected projected updated by average of update third, impact Q&A. the following. Non-GAAP guidance: revenue in consideration implications their our year first, Non-GAAP reflect X%, let's Weighted we May. rate as not close guidance, to diluted share the tailwinds in and acquisition guidance per million. of cuts to of fiscal gains; range recent the believe the prudent Non-GAAP of our is the our range market of our tax growth; you. factors pragmatic of does million. currency tax rate. With operations the to fourth, a to end Sirtex impact continued effective operator, is $X.XX. markets; Cash XX it XXXX flow driving year. a which After $XXX careful of million these year from This factors, and X% to continue our percentage now, remainder respect XX% the share regarding impact from to to to tax of and go And of

At will a time, conduct we session. question-and-answer this

with with Jefferies. Please question first your proceed Our Anthony is with question. Petrone

bit orders couple and afternoon. one I'll just on Maybe, a a Dow, start and on then you Sirtex. with good little questions Thank guidance and

range currency is here and today? guidance on segregate X% within to where what maybe X% the X%, X% to just from revised issued guidance, currency constant the actually out settles So you to just

Yeah.

that let one Yeah. me Anthony, quick. grab

from X about basically So the right. X% to currency, X% points percentage catches

saw capturing the half of we in here the for kind that's what and first the so And half. same second equivalently

a And question. currency answer so back would X% your basically on that basis come X% to X% X% to to to constant

I guess to going X% quarter, backlog growth the in of recognition just that. cadence the revenue, And to the just on revenue backlog from rate the of

a better that than seems expecting. cleaner number little bit was now, So hardware. number we were a pure It it's like

is on potential have the then sort and at year the relates do X% cycle say of growth it as how look to the backlog where one we And installation growth? of back revenue half Sirtex. So, for that trending I'll

clean it, Oncology so And X% here, up referred Overall we Sure. talking X%. backlog is that company you is just up we're backlog right. apples-to-apples to.

it So we progress We've really good out revenue revenue to cycle. with in some as relates oncology, We've seen order saw of an seen to the of orders good quality Europe the acceleration orders sales flow prior we good and discipline through discipline those period six versus take good and operational from then it And the revenue. good orders into it's prior months year. discipline, there. as

the So of you reflected in Europe really growth revenue the has in saw acceleration rate out been that Europe as and well.

the little strategy pipeline. is helpful. on with on maybe, one last the the bit me for Dow, but That's know I just just Sirtex. clinical And close, a we're approaching

was design, study the clinical HCC. for forward I hurdles. But pipeline Sirtex? broader The maybe again. think, the had Thanks high HCC So a outlook for there just out in read is and what going

a just this be view. radiation out which we of Maybe strengthens at enables position interventional our really to us the an importance level, oncology And build point in starting channel, it medicine two, from our market. medicine. It growing it'll of radiation Yeah. in highest like

is I EBITDA, a position. with everybody, $XXX year good – think is of franchise so guidance their and for for reminder very $XX their million-ish million-ish Sirtex a as Just about about fiscal

no have colorectal has were it great news our no the we're of That for in some should as terms was evidence. we evidence impact. ongoing Certainly, position things and got do do news cancer. on liver. primary we and marketplace there was mets due their of their to Product the of liver kind work We've aware conducted to see diligence. We there work some trial, really we all In for going to have on new of the provide to to like that there.

you. Thank

Citi. proceed with question is your Please Amit Hazan question. with with next Our

Hey. Good Thanks. guys. afternoon,

Hey, Amit.

– side APAC Just on maybe side; hey. the the start on the the order Americas tackle and I'll pieces. order

in XX-month kind you in Americas, If take trends, of now last up the think, I up APAC. X% X%

a slowdown those they've a around look I'm growth. you it's months? And and the just slowed XX markets two secondly, if like wondering So color right what's and market last sense they or then, with more in why that's going some think the on

order we say, rate I'd first some remains We've that look the is lumpiness very, at got quarter going that. is that's Funnel good. on. overall, you our all, There X%. very in when XX-month of the see overall nothing changing trailing

we say I'd overall much terms don't So see of in change.

is and of but bullish maybe funnel one to On the the we we funnel pretty little a bit our piece what market in of the the might color for about see specific have be Asia, Halcyon and we there. geographies, continue market weighting otherwise

Okay. All right.

kind I'm guidance And whether And to implication flow is back that non-cash think I some quarter through where of (XX:XX) but an that for that seeing you're more this cash the that's so are move guidance flows? I you've or it in no flow somehow related offsets is the year. from not cash to way over guidance the now wondering a raised to if and perspective, flow at row cash change in a look the maybe second

Yeah. use growing inventory currency, than faster Receivables working we payables. Amit, as more we or grow faster capital. and local in are dollars

capital And you there's our working that. complicated grow share you in so It's usage lift than per see we'll as any more earnings as not faster. of saw the just guidance It's raise. more

doing last then as there? is comment; on more talk SG&A you are infrastructure additional making. just What and you're sales little about specifically investments And Okay. bit me that a for color you quick your one

specifically we in emerging for us India as as quarter. returns continue software we'll investment around see there. see and invest good both past around both advantage to and greater teams on we options sales say sales the to the look, options that but And, in we take markets, and this the that capitalize software across would growth growth are India activity I Yeah. of

we'll have small the a acquisitions. mean piece small I from also

Yeah.

in I'll guys. jump Thanks, right. All back queue.

Thanks.

next JPMorgan. is Our with question your with Peterson Tycho question. proceed Please with

on maybe you can dynamic war Halcyon, update of Dow, still pent-up kind this there timing Maybe kind further? up there's and Any trade on things Thanks. you mentioned on – hold Hey. does China, just demand. of some talk

Yeah. turning study. No, to finished clinical things if the of We're our We've said track. I'd over regulatory say We've on still year is kind bodies. goes of this everything well. plan end

think they to the on I we're year. that end move. uncertainty fast on this of of some how There's we're still still But around depending plan track with end our year.

right. but similarly talked there, potentially I cycle Japan, you've mean, post-approval All the about past opportunity? could hasn't how think fact about think big the do that then in And happen, I yet. we replacement it the in there's

So we think how about...? do

Yeah.

We it yet. haven't seen

I of that there's in single have one very is market lot of old and a a customers the lot market think of things them vault that about equipment.

oncology We the have show. So, and hopeful. interest trade did ITEM I short Japan the just trade was cycle, the installation And high show. we very especially very the with That's the radiation high in product. really machine turnover of the had

So that to good see. was very

well, ones then, two the we On Gary. on close All as there guidance next included is comment right. And month? for what's you get near in Sirtex, anything quick could –

Yeah.

for As there's Sirtex. we guidance in stated, nothing

Nothing.

had guys an to And then, on Flatiron investment Okay. Roche? sale them, right? the did book You equity in you anything

No.

we No. I did don't bookings. believe

just was partnership. That Okay. the

Okay.

Yeah. was It equity. partnership. was just the There no

Okay. you. Thank

Henry with Brandon RBC question. Capital with is your Markets. with proceed next Please Our question

hear you. Hey, Brandon. We can't

me now? Can hear you

go. There you. got We we

how just The company fiscal guidance. couple that taking discuss a year just raised question. for Thanks was and to follow-ups. led my And right. then I Can the much you range All of raise that factors that EPS from have FX? you

of couple outlined. a was things, which There Yeah. Dow

market the year. for the growth We are talked had we seeing about that

We are share. our therefore resonate and products taking seeing continue to

is about it I certainly then – of part clearly there rate. the opening are That's think we with comment. the tax currency and talked here factors as

market. see, that in by solutions strong revenue our So of we it's outlined, as X%, the kind the market good we growth, to X% combination and driven

software we right need expansion, from the to rate to talked in at continue have sales continue We then investing we'll rates some invest in but capacity Brandon, seen And Oncology perspective. XXX invest, we order about, the that the margin move forward. investing in R&D an to we capacity

balancing and and order it's investments in we're of growth. long-term right long-term making the short-term level So the deliver sure making structural to the the right

a that here And so first us and what's you've believe, embedded as of reflects I revenue kind as operating half. well. that guidance that's in percent in the the made outlined our half we've investments XX.X% first of seen income the and was our we've so in far as

Okay. operating pretty range was are reiterated and me or margin halfway guidance just the that year understand help the the for And through just The you on side, guys looks so. there. full wide the fiscal year fiscal

year. range that of help back of would for kind of half you the that Just the factors or to the understand get me of kind the lower the the end upper

margin you see discipline this That favorability currency-driven expansion like on usually has that tell nice market that happens to been hold and in to the to would the on front. pricing rate we I a Yeah. see. currency good

a definitely tailwind that's So us. for

growth the are ongoing sales we I we've and are what which in options talked in R&D. see and think innovation the about headwinds ongoing investing

said, we'll And and continue XX.X% we've invest like to performed options I first half at so here the over in in time. growth

those All Trump to from XX% China. and discussing tariffs equipment right. with And some just goods imported potential Can exposure tariffs? a President quick other out spend and come time have couple devices some obviously items other certain medical Varian's The you on for questions. the

comments is only U.S. devices as the seen a And, stage, still It and industry AvMed list representative working closely of that. to on cancer in included. to will seeking of proposal. monitoring the medical and and We're is trade removal (XX:XX) advocating this are it lifesaving been final address and list parts potentially are not trade important very note They be we're is the has component other and that for Sure. representative organizations issue clearly, clearly the that Remains At to that. with preserve part treatment. to finalized. proposal U.S. form are be what access products

a nor in the big environment I don't of et share. and dynamic it and cetera, watch it's process. broad moves impact guess continue How play have we're through watch having from a cost, as on it perspective, market, is So that really tariff it. kind impacts see market to a we to going it to our

All on one Sirtex. for right. last then just me And

You impact versus understand thoughts targets months the guys of you're help deal any you to announcement about to Thanks. of think how a terms finance have about debt the had cash post kind us financial mix deal? and thinking Can the the the the ROIC then for deal. couple of from in

Yeah.

me financial back accreting for and about Let this think here turn to capital X% our broader here the we or last clearly average think quick grab two over we of range. will comments. so the weighted in time and be real cost points look, value some But, Dow it

see so we our to that ability And over time, beat number.

we're fund close. cash that As communicate balance combination anything how when it'll We'll be have and some clearly else on to about it facility to we more to we going then. add? know of this, the credit Dow, it relates and the we'll sheet

steps regulatory been have the completed. just Maybe

to get where late there. through And like vote. May. in seen we that. So going. a it surprises be that the And shareholder acquisition we we to position It's any point, expect about lot the progressing. as we'll to a working close see Sirtex We're Haven't more we talk

you. Thank Okay.

use currency back basic at for start question the and be want second And, half. at the will second half to third Brandon, guidance around what to imply of kind impact come your spot basic, assumption to before we looked the and you think our quarter of rates that currency we've jump, I for just the just

Thank Okay. you.

with is proceed your question. with with Evercore next Please Our ISI. Kumar question Vijay

taking my for question. Thanks guys. Hey,

So, growth versus because at fast at of I proportion really next Like those I'm that I know quarter. recognized get – revenues implication this like on end are revenue revenues base sort look being market fiscal you converted of what backlog a clip? Dow, they are an right? – been from just product quarter asking on half guess revenues, one is regions. guys the and have if up been where if higher maybe the future rate. But any issue strong of maybe, have feels just same proportion get came burning not mix does first I is slower a the installed has if It like trending, a orders how revenues, this emerging developed revenues in from revenues last had right, of developed regions we converted at

thanks Vijay, the for question.

the in I synopsis. is very ability One right. we think and six in it's in high really for took And Europe that out were us quality kind months there, turned to fast a earlier stated orders what I of versus turn the last trend here is lumpy operational one in are lumpy orders a order And or over like things execution, because read and that those quick. I turn prior pretty process that's good said into quality that year. quarter. wouldn't any sales the given another I and we way

So, continue. will our we'll have stick to continue actual months having ongoing within that next governance to an process date delivery around to and booking the XX governance and

really read like a are Europe, and across wouldn't again trend nice to lumpy. execution I see things it. So But

that's No, currently? we if Halcyon number. on I do don't And How orders caught Gary. have I the many know Halcyon, helpful,

the on XX quarter, had since XX launch. We

trended, Halcyon or a Thank just is this you. or a an sort are function guys if And, we orders trending is back need how China how like then Dow, we those like inflection? approval happy in adoption curve is historical this year-one, now we see and maybe of given of TrueBeam with the right, just within you Halcyon look

confident were plan. plan We we our product. at product. it's are that confident approvals we on We happened right Where the said have is the regulatory the beginning. the about Hey. very track about to The remain on very

incremental. it sites all, or all incremental is percentage not huge that but want. fact the them of what We are the a love achieving So are we

road. And so our growth. Again upgrade it's our business the expanding for installed base and especially up installed new pleased to and base, grow sockets We're physician enhancing business our to of leverage in position our business market down the service software emerging see the setting service.

CT upgrade we've to call, on at The we now already that attract taken. and well kilovoltage product. us give X.X mentioned market was outstanding. customers last the introduced had will If anything, to XX more have an as reception I sell in week. Halcyon As orders the cone-beam developed that ESTRO We

achieved it we the that and It's about product. and love the confident we for that very we're it's marketplace is seeing kind right believe on had that in the So plan that momentum growing. of the

this and, you then, so, last does Gary, revenues is? contribution Mobius any Understood. And acquisition, can if one what the The housekeeping. acquisition have give us

Yeah. of across to right. It so strategic, for number, via we of it's space But certainly channel the it's the not rapidly product. as actual does a the in that the with quarter. the nice and we're going to us It's what QA our pretty grow part see size small channel overall company, relative leverage disclose to

team's off been about we're So a nice really start. excited good to it, great, integration,

Thank you, guys.

your with Jeff Baird. Robert Please with W. question next Johnson is Our question. with proceed

guys. I over UK evening, on over this Thank of number or Linac I'm the any feel in and here been Good repeating the hopefully just and here, couple but I out questions at ask jumping change at Elekta of months calls, thoughts it, question. been past that all so abstracts got for A a doesn't an updated orders watching time? between ESTRO multisystem you a compete MR anything recently. Linac point. I few week how large here I've Saw any MR know to wanted last at on over Varian but ViewRay, think, need mean you. the we've order needs market I not think has in to market. XX you've

continue is that big would an It's effectiveness watch I mark. question a clear play cost in pricing is What not our Jeff. got changed. and for long-term it's academic value-based broader niche. a that's say position it, market We to stressed has its

are Those is market Our market spite orders share share of. included in numbers. our in growing

growth seeing without our we're So even performance. share that continue

sense. purchases, little historically Yeah. a level, here. rise we're question there from thinking so change? a about of or them issues? like we hedgy get on we away anything And right of Is seen you've rate to now, Gary, Thanks, a long ways anything interest kind capitally of just that there are about to That Dow. worry We've an when any a hospitals those Is still lows having be near seen historical then, rates. absolute makes should for on start you

funding. the a of low, And here would and say nature the the here, historically hit matters I head, are of on nail yield sure. curve Yeah. very capital too, I where kind to constraint and you as the access Jeff, overall for hospitals don't see

Yeah. makes guys. sense. That Thanks,

Our Isaac proceed next Sachs. question your with with question. Ro with Please Goldman is

we that kind Thank time more incremental Halcyon. you. almost those little to America, have of a earlier guys. are of a wanted percentage spend think, or you you time to on in customers. If on spend afternoon, are I there book some I Dow, of were order Good large mentioned the that – kind North orders

clarify the that for of the versus the who or Just to book want in to get sense global a order in been. the that have trying customers U.S. O-U.S., was U.S. incremental just

it is of global. make Well, numbers outside I point U.S. that I with other in U.S. and we're markets, the both And the earlier places seeing it take-outs. And one seeing is gave the in think the were that I'd we're U.S. competitive market the

and QX, them took are taken that So the we believe in XX XX% markets. impact market. U.S. Of in the XX from of incremental emerging we seeing we were are orders

an on software; people to maybe business? up Okay. have of would Where that's not a spent the just and resources that this on you. guys That's on And part appreciate quarter, update quarter building you Thank but on an your of something guys then maybe know the lot that helpful. this update working I there. impactful strategy you super

Yeah.

do more both historically on meantime, business faster. license We in Software-as-a-Service are Software-as-a-Service and, of the as rates growing we model from positive. invest go The the continue to bit growing to are change a We a little But is aggressively in software. going growth have a strong business.

to a investments treatment in got our to product. to, base have also pay there. us the We installed other features And nice in that with for RapidPlan off opportunity. planning and multi-criteria penetration Our so continue optimization, opportunities sell yet we XX% big big of

vision where still customers. and continues drive It momentum product kind we're enterprise ARIA We're well with to to Oncology describes Our kind the the very very XXX, going. in marketplace. see really installing how resonating sale. the It's it's those Relative story. evidence good of of getting and to the

As for KLAS, on the I receive mentioned Best both we of Gartner third-party of and kind in our did ARIA. the call, Eclipse industry,

position. a So good very we've got competitive

It tools pretty guidelines. track for It's there decision invest clinical support to acquisition. the those small continue has keep strongly Evinance, We markets. acquisition but on people in We a of important. announce very that capability did is

help right We're platform going guidelines product of the consistently kind our is people out to Oncology and this the efficiently drive So and into that excited on quality. the around having working deliver product. care and help of more variation XXX the standard about

Thanks the for it. detail. all I appreciate

Jefferies. Our next your question question. with Please Anthony is with from proceed Petrone

multi-year revisit here think Thanks. just a sort just Maybe spend follow-up and on just of of the get that light the SG&A announced today. time years, quick be over progression, light mean was investments to in three I increased XX% here you and announced was today. on target margin maybe adjusted you margin increased but to to I it multi-year the think almost overall outlook operating of the I in Gary, that, for

Yeah.

gross see, is You to profile right. know encouraging margin what the overall

We've into time in be. we're environment think to we've get And to invest I dollars in pricing to growth that and chose over currency good some able be sustain of to it's operational right those talked future about the to we where attributable field. want to it which growth here. take options, that's of rate got execution answer to order to that is that of also And but in, the we and take discipline there that advantage out some

still sales but and that range, R&D right want So do to here sales to growing can make about drive going the can would rate. we into we We're sure in think we invest we've in while to top-line R&D. long-term continue to and XX% at Anthony, the that talked investing growth. we sustainable get

Yeah.

about that So, it's our that work balance I will growth profitability ongoing over and of time. way that through here talked

no change long-term the But in goals.

No.

you. Thank

closing question-and-answer we to the Ladies would reached for session the of like call remarks. over I management back and have gentlemen, to and end turn our

quarter the with on pleased strides our very we've I'm the made operator. you, Thank executing towards creation Yeah. strategy. in value long-term second

extend our continue faster-growing entering about are in enthusiastic our leadership radiation global oncology. to traditional We footprint, markets therapy, strengthen radiation and beyond

And, fast-growing interventional us in product. coordination us a to medicine the oncology expands as of will broader the leader signing radiation quality market. acquire capabilities. outside enhances recent beam our development Sirtex finally, portfolio and software Oncology Our external Mobius agreement care enter therapy to the of our assurance position enables enables radiation XXX to improve our of us on and existing Evinance

victory, committed without forward, our Looking ultimate we'll on today. the drive technologies of to new fear innovating continue you for growth to remain cancer. us Thank world the to joining and a focus towards initiatives

teleconference. concludes This today's

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