Varian Medical Systems (VAR) 23 Jan 192019 Q1 Earnings call transcript

Good day, ladies and gentlemen, and welcome to the Varian Fiscal First Quarter 2019 Earnings Conference Call.

As a reminder this conference call is being recorded and a replay can be accessed on the Varian Investor Relations Web site at www.varian.com/investors.

Now I will turn it over to J. Michael Bruff, Senior Vice President of Investor Relations.

Thank you, Matt. everyone. afternoon Good

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

of any intended first to release discussed EPS gross and quarter. net webcast the earnings referred On are the refer All site, call last day references to Web are earnings to details. months fiscal are periods press Relations this our additional you year-over-year can and which www.varian.com/investors. trailing orders. All recently financial months accompanying quarter are XX on are to growth otherwise references any Varian periods Investor find provide perspective to results and to all our and Web stated, the completed stated, all to XX non-GAAP. non-GAAP fiscal most unless on references trailing available and otherwise fiscal presentation, share, orders Unless site diluted all per rates of A are reconciliations at are our ending

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

to past they I'll good achieved see afternoon year continued key off and strong coming pleased long-term fiscal everyone. XXXX. contributed how Thanks, quarter the a strategy. we share We're our Mike, momentum and Today milestones to this

by business $XX of our touch flat was earnings and declined we'll per detail share for increased Cash million. hardware, $XX negatively Gary Operating best-in-class revenues per integrated during impacted revenues or XX%. $X.XX more and driven software, on Proton up X% per Operating quarter platform $X.X, results. share services. our operations Oncology $XXX a were down earnings revenues. were First, million and was Solutions grew of share million, let discussion. $XXX year-over-year. $XXX results earnings in XX%. earnings earnings non-GAAP to cover GAAP a X%, were with a me first his flows from Revenues million by Total million, XX.X% to company X% this tariffs. our

growth ending XXXX. market decade, orders XX% months XX share XX months. quarter, and worldwide a In XX% trailing in in leadership in our long-term basis radiation therapy our radiation strategy, over trailing we of first, terms In during market made on leadership its Varian that and in Oncology strengthening period. initiatives; growth our an business, grew grew our public on filings, growth across September the Based the rate highest in value X% therapy. creation and orders the the grew three progress our

XXX services. and X%. installed X,XXX now or growth revenue Our of drives This worldwide net an from base installed increase our is units, software in continued recurring base units

and quarter, of XX% including XX have hardware up launch, in of the made Since our over side, launch, XXXX orders orders May first been have worldwide XX%. rollout with since or we eight On global taken units progress Halcyon, our now orders incremental. XXX the

most one was of R&D XXX by in the winner technology R&D XXXX. as as Additionally, Halcyon magazine in science innovations exceptional and an selected

more efficient by therapy patients are simpler to We was empowering for more radiation pleased and recognized clinicians that ever. for than Halcyon making care

practice, Wu, performance high-definition have by nearly solution software driven we of unique by software SRS software and software see our countries demand XXX ago, radiotherapy feedback. grew orders our X% AI-driven and our of is solutions. strong XX front, learning grew of workflow. We Hospital launched Varian to planning our X,XXX and and launch. health leader portfolio shared the of of The Hao orders Deputy RapidPlan, was in have software and grew machine QX receive consistency hours continue launch Since the industry positive best-in-class learning machine we clinical years Eclipse its to Orders four acquisition the in revenues nearly Mobius. from over help shortage integrated number delivered On optimization since has China. he technology and customers as the XX% industry Varian that noted orders our several Director taken And the to it IDC, care multi-criteria the installed Hospital in Beijing IDC HyperArc, and for in pioneers China with total Eclipse Cancer of global expanded only the the and Medical successfully expand organizations base. in nearly firm Award plans medical in Radiotherapy transformation. could improved our RapidPlan winner of recognizes product. in for Digital license China one the have their and MCO, orders clinical digital XX%, Cancer time continuing within in Related category. physicists Beijing since world's Chief Physicist utilizing leading launch, RapidPlan, the quarter is XXX successful outstanding planning treatment digital the of from Cancer since research several penetration Beijing greatly of Hospital stellar that RapidPlan use planning bringing Transformation China an implemented to in that efficiency with minutes, to reach reduces clinical won quality of taking our for XXXX. the

important our handovers business, installed grew recurring at each Therapy the business. U.K. which higher our Emory typically an future Christie and room stream in driven the Center HollandPTC represent newer in for the Our Netherlands, a Solutions one attach Proton completed in Georgia, of for the services Proton and revenue Hospital our value. we These machines clinical Proton base rate mix revenues and X% handovers growing by have In higher contract

Center. We also exciting Emory Equally treating centers, is the center centers, opening the of two sites, the treatments Proton proton and each announced start complex with and patients the sophisticated IMPT Emory is including proton HollandPTC, protocols. official HollandPTC at disease Therapy the four-room Christie, of pediatric patient five-room

strength more see Proton Flash. known in rate the groundbreaking Consortium to handed all study sites. we with ultra-high average to continue Services formation October, perform as an to the XX% achieving In business our We of continue FlashForward announced commonly potentially with protons, cancer our and clinical customers XX to-date, treatments uptime dose across rooms well, over

XX significantly studies tumor control be maintaining of conducting animal tissue, Flash studies suggesting momentum months. Proton move new Both to to Flash are for while to are smaller continue XXX, Proton Solutions. preclinical introduced System models. We spares October our in currently human normal ProBeam on research next and our would in we trials building building at footprint the in results If published XX preclinical the encouraging, that ASTRO our

extend Our our initiative footprint. global second growth to is

share driven our geographies, share the orders double-digit market gains each in based was global of continued three in by quarter. Our growth delivered orders which growth

sixth public emerging EMEA, growth, consecutive of wins. and tender was double-digit quarter For driven markets by this the

VitalBeam private announced radiation For to its Africa's of of Linux selected Varian South that Varian centers example, for November, was a in TrueBeam, equip and MSH, health included we the largest order software, software competitive This Linux or Specialist oncology seven conversion. Holdings Halcyons, and with win are major in provider, Systems. two Medical the by Eclipse three two also planning treatment deal represents a Acura seven

cancer look advanced to across care are proud partner, expanding Africa. access his to and We MSH forward as selected Varian South

American also In global regions. very made towards Latin the strong Asia, region. footprint our and saw we We progress our Asia-Pacific growth across extending in

orders For and booked two In well quarter, Department Philippines China, HyperArc the two second market, growth in quarter. momentum strong the Halcyons with continue we Health orders from in to orders systems in example, the as our largest for eight see we as of Korea. double-digit

take increase of XXX XXXX is the portfolio the momentum. October, the and world-class is continued driving of in Chinese increasing towards demand government B the Category continued quota to solutions In Category The for shift A and SBRT licenses, products and Our licenses. announced China advantage well-positioned opportunities China it news commitment been have quota radiation increasing XX% treatment access including public the of for in over cancer to market, license greater we the market in as winning to protons. tenders. the welcome of is which demonstrates provides in China's therapy This

access One Halcyon expand was of around to therapy our radiation to the to under-served regions high-quality ambitions key for world.

are This In new Halcyon Product quarter, we for from year, the cancer X.X each secured compared million approval diagnosed the announced U.S. we million with in Medical that cases China, National China approximately X.X Administration.

this at our and global availability approval, Meeting. via Earlier history event in X,XXX portfolio like high-quality this for XX% less watching in additional radiation Halcyon live Halcyon is showcased China Chinese broader to markets. cost access customer resource and and However, We XX% China Varian's cancer we attendance market treatment X,XXX clinicians markets mature radiation treatments. utilization expands the Users XX% with with month, oncology approval in This further the compared largest following launched nearly in professionals and as is effective China, over China therapy cancer our specifically a webcast. Halcyon designed in constrained to of than

the there. Chinese market well-positioned We committed to are are grow continue and to to

in proving local portfolio, team, the right investments to best-in-class are commercial and our be integrated localization manufacturing our Our and channel strategy.

Brazil. Halcyon with also Chile, Finally, orders Latin Colombia, performed well America Guatemala, and in

TrueBeams Thus, manufactured momentum Oncoclinicas approximately initiative incremental increasing our facility XX% have taken And other a Jundiai launch share to as growth market our markets. Brazil. and to global opened XX% front, over to On our from of locally since from units. our in first the been emerging continues markets, and see and expanding have also lastly, We these grow, expand into addressable Halcyon Halcyon impact. Halcyon orders patient manufacturing we delivered third well market is the as been

support represents and the Noona In we at quarter patient the improve the the outcomes coordination an deals treatments. the markets in to demonstrating outcomes software with as Oncology application developer designed targeting capture and we forward first trials platform. to partnerships we can to towards progress agreement Noona, cancer contract pharmaceutical opinion will for our the effectiveness the mobile efficacy key This by million/five-year to acquisition won clinical, space patient growth PROs. competitive financial the to patient-to-patient patient data, have will using System. and productivity. impact a believe unmet optimize well strategy real care leaders a addressable for Oncology, reported patient growth, of Northeast product life We generation look enable care. efficiency our PRO $X continue cancer two the clinical that conduct We signed patient we Georgia contract care of of large broader enter This software, companies clinical a including on building Noona enable announcing world this of driver and quarter, to Noona, oncology on of plan cancer In area to as collect XXX the program operational, or XXX company adoption engagement workflows, be evidence October, our coordination cancer Through continue the patients, engagement companies Health need. as the cancer platform, for expanded post-market and as of used with engage is clinical and prospective meaningfully about science we studies cloud-based market,

the China exclusion and Finally year on Halcyon of million by fiscal to recognizing cancer we manufactured in current on received XXXX that granted $X resulting U.S. anticipated tariffs, States excluding our in Systems the subject impact trade representative in on for from We December tariffs; government of Halcyon technologies request trade an for dispute. update trade millions the positive think U.S. patients the notification impact approximately representative earnings. United and Varian's

tariffs XXrd U.S. but notice, will further China from of We China remain the that in-place. are as imported reciprocate, August on hopeful into until products effective

strategy first long-term progress dedicated Additionally, victories technologies leader are representative. from And leading-edge and we're the the pleased still the component Gary, with Care our with our Solutions. a become they to any customers applications who global provide turn will with to are disruption trade Varian's quarter towards remain first in for that to I'll ensuring Overall, financial made U.S. access sourced against the able on the global cancer achieve in solutions. patients over in to to exclusion Cancer multi-disciplinary pending China it results. quarter integrated and We new our more we treat that, without context

Dow. Thanks,

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

in up start $XXX So, software, growth. and growth constant million, up first currency. with let currency, million X% across X%in were in were revenues services. revenues Companywide me and dollars In driven oncology, XX% hardware, dollars quarter, $XXX X% in constant and the by

and declines across XX%. year as strong as closer business Halcyon, our prior oncology grew software were constant Orders a basis, demand $XXX up constant ended on look $X services. XX%, trailing robust quarter, were and backlog, XX% revenues XX% up the the X%. XX% On and grew Excluding in a We in and were in currency. Taking X% XX% saw Americas, the a a in portfolio. in in XX-month by We at up dollars orders in XX% driven XX% XX-month currency. revenues dollars million, the XX% revenues billion impact results, our dollars integrated comparison; basis, America and in TrueBeam, tariffs, in North in of well strong execution grew significant $XXX orders On in million, with up orders trailing constant quarter for currency. growth

Asia the Pacific in quarter. X% grew revenues

tariffs, were $XXX Excluding up quarter. the the impact in XX%. Orders XX% of revenues million, grew

discussed, In in particularly outstanding China nearly double lead with digits. million emerging our East, quarter $XXX Dow region double grew Middle Europe, the XX% particularly and across region we India Australia, in Africa quarter. orders, by Japan, This grew up with consecutive As the digits. were doubled, driven XX% geography, Orders grew in and growth Zealand tenders. Asia continue year. is prior saw large revenues markets. where sixth double-digit were strong EMEA's up over performance market the the In New Southeast the growth across and we and orders Orders Korea also strong in in to

Our Proton in made XX% centers revenues is driven contracts. Solutions by the which up the increasing centers in construction on of business million into $XX quarter service progress posted under the transitioned

due growth. revenues increased The company continued On the Oncology over This growth by driven geographic rate was the with of margin profitability, with points. basis to business. down approximately was X% XX% XX.X% XX.X% period up rate this was by margin revenue tariffs included XXX-basis-point Gross gross XXX decline remainder Oncology was gross XXX basis level. the of impact a to rate, the driven basis total trailing margin points XX.X% XX down increased Turning in grew strong with drivers company and the impact tariffs consistent consistent XXX revenue XX from remainder gross approximately Oncology basis, basis points approximately revenue rate margin negative margin driven a from XX-month at mix. a gross solid our X% margin Despite lower basis points points tariffs. total margin growth. including were dollars by X%

million, Looking at $X Proton up Solutions, dollars $X million. gross margin were

good We continue profitability. to on make progress

to October XX.X% points. part Solutions in scale at growth. creation which strategy. falling trade revenues, continuing responsive XXXX. be Likewise, were Software XX We record a However, in September driven support while R&D and of G&A Company million invested the million was X% revenues. our of in decreasing The operating to key or be up to by SG&A be infrastructure or an timing our ASTRO driver long-term continue basis Investment $XXX delayed fiscal breakeven are will value show earnings XX.X% ensure may of with in growth increase million were of investments of operating the and of versus timing XXXX was a X.X% of X%. expenses revenues, $XXX large to to the we investing $XX orders. our aspiration due and achieve this of increase investments year to in marketing in of sales in

On month XX% of increased of XX.X% a Excluding earnings and operating basis, a operating XX.X%. of the was XX rate at X% trailing impact revenues. tariffs, grew earnings

of of revenues, points. XX% of XX.X% increase at basis of during grew operating impact XX period this the an earnings Excluding rate a tariffs,

from included gain of equity earnings GAAP per million quarter, on This Augmenix. in the share sale $XX the our investment

investment also sale in gain on equity the from We incurred of Augmenix. our

also acquisition-related We in $X expenses. million incurred

XX.X%. Turning first quarter to resulting the legislation GAAP the Cuts Tax and taxes; impacts for Act after rate was with Jobs tax effective are

Our excludes EPS of earnings also impact. non-GAAP to new the legislation. Similarly, a transition effective our $X.XX. the tax XX.X%, rate was which share impact per non-GAAP excludes this the was GAAP

a share in $X.XX of quarter. per was XX a earnings resulted the EPS with $X.XX. related non-GAAP non-GAAP Tariffs shares million reduction in share diluted of Our by count

liquidity, Turning equivalents down by million, $XXX million XX% and ended build of balance receivable accounts $XXX and we and offset quarter were of efforts moderate collection payable. Cash in debt. and with cash the production improvement sheet the operations to to flow timing cash support driven inventory by no accounts certain from an

DSO days XXX Oncology days from quarter. to Our in XXX increased the

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

shares the our repurchase of we authorization. I it back of turn end the As million Dow. share quarter, will under existing to now X.X had remaining over

Gary. momentum to the annual Thanks, our we and and in respect market solutions the With continued the projected our growth products of considered guidance, carefully market.

to monitor the We also continue situation tariffs. on

last discussed our impact year from million $XX tariffs expect fiscal we gross XXXX. roughly on call, As $XX in earnings we

negative had earlier $XX generally evenly the be line anticipate in to throughout We remainder impact tariffs year. from the the expectations. which in noted quarter, we company million of spread rest As an was the with

Lastly, tariffs back earnings second half year. phase are expected year. continue mitigate the earnings fourth Therefore, during performance we call, of of quarter weighted track we to half our stated materially to as impact of to on in the remain towards the the be expect our in to we which the

XX% flows revenues as As to from growth - billion operations XX% per rates and representing of count operating and effective revenues XX average for share non-GAAP a guidance $XXX The assume of the you, million, currency to million. $X.XX of and diluted X% XXXX any year we let's $X.XX. of of of earnings to a the as $X.XX percentage reaffirming weighted excludes a of $X.XX $XXX to now Thank go tax XX% to earnings to of billion, future are beginning guidance of Cash non-GAAP following continues XX%, year XXXX, fiscal such, to rate fiscal to million Q&A. of non-GAAP X%, acquisitions. share

Please from is [Operator Our first question you. Taylor thank UBS. go Instructions] that Great, Matt from ahead.

Hi. Good the question. Thanks afternoon. for taking

Hi, Matt.

Hi, Matt.

Hi, there.

So, that some the more bit in into you that I around seeing of you're little dynamics could hoping ground China. go the on detail a was

kind to had being it signs you there. interest meeting, talk confidence a there's up keep good the mentioned of early your able users seems Can you You about win XX% like in orders have how in could and out of governments order tenders? the timing that had you've this placement the rate shape that public then, the And there with placed? new of

Matt. Thank all first you. all, in very Sure, the from what Yes. had our of strong much impact really say, believe China. said that, quota we at a I'd about announcement quarter there. quarter. Having we new China first in there's don't We the we see like

for So, any it's going out. is impact to we that today so and think to play take time far some immaterial,

Second, market is we think good. the very

As times of as about there's about you're therapy. I text, diagnoses cancer X.X million at three U.S. the patients and as radiation of a incidence is talking almost mentioned there year, a is in least get million, X.X factor in the much China is China in terms U.S. to two

government need is making the investment. clearly, and So the seeing the

rate very of I'd of confident to time, been the execute win we've about for some and In our ability XX% terms above feel say kind win rate, that that.

and excited having see we're in of is conversations there. we team China, what Our about lots obviously

got maybe is that China. new introductions piece think portfolio market, our to are we of have little a software scale Halcyons we Our that also starting news got is in recent I and in of now products winning, the

think for to about, or that relief other like guess should if about a sounds that or - as And I you you upside, cautiously we guideposts investors about side, would look dropping I that. wondering, as get you'll some get, talked maybe you Gary, think tariff, thanks the for kind did mean was get on that what really Great, for the reinvesting but could of you're optimistic it and little analysts you through? I and how

that line a Matt for question, in a track talked impact the of $XX and we rest the dropping that, the color thanks the about so, for think rest spread have it's no, been ended to the million strengthened COGS little we of Yes, about that the $XX you talk - and half alluded evenly in in stated the will of QX, there, therefore the that impact the $X impact would as just $X little as we through the call, clearly through growth the line on stated, take million $XX and million all year. profitability to we longer, - line, back-half more we we million earlier. We revenue of easy back continue throughout the and quarter, us into operating million. efforts gross that pretty will Mitigation bit to be think

you from always China As nicely know, look, we profitability We've and yielding relief that opportunity have to some continue we results. to we're we invest in invested see that far in of growth currently the it's that those market. place, balance market, get tariffs if great and going and the as, a to time, over in

we'll as how so, to going is not that you breakouts retroactive certain to back work. it what How that, some we'll going about or we much, be, we're be the will forward. closer put And breakout as will and money get is the it to see not, be, know, of

we more So to it about closer as we'll that talk event. get

Okay. Great, much very thank guys. you

is Citigroup. ahead. Our from go next Hazan Please question Amit

Hey, Thanks. good afternoon guys.

have been and you of high, looking growth the line I mean first. high guidance bit. a in health if Let on backlog the and the growth raised little think It's know the single-digit first question your pretty the being there, and about it begs your reiteration, was me kind the where of we ask top in order why line top couldn't question quarter obviously guidance at

give you first. if us that wondering some I'm just color So on can

Yes, sure. Amit. Thanks,

say all macro any and there unknowns way to either. environment, I headwinds is the geopolitical wouldn't up the in are about question of is I still think as through at we terms the that cleared in environment think and tailwinds some thought

make we as so, the on about keeping to and that be risk aware close of thought a we're And to want continue we that eye sure guidance.

in The here no the other business. QX orders proton thing in is that

And would and full-year our fantastic said, to China business just a the business. continue is would we think oncology That about say India so, of guidance. the I of that as headwind be continuation a the being momentum business strong; quarters the top kind European line. six by be think our know, in we so, in offset you now balance risk growth, row a in and portfolio the of it oncology is some too, of I strength

Our VPS business, of to our will proton guidance business and XX cumulative there. five hold

prior I to or Okay. given in and do to X,XXX a kind the what And with China, can months come get announcement, just think the the tender, back to earnings that's your context just first if you when call units know, since then and hit start some on question of given us that you've you going so, your the couple curious to the of that XX often if this percent we now a smarter out maybe this, And then you we want that might then I about think to since get get is those you more kind consummated of on did see can, I'm orders? had give are tender? ultimately official timeframe

experience, of get is all In I mean short our kind of relieved. answer eventually it them depends. the

be haven't to at what is kind I been I also us my strong an double-digit that remarks, a in so that view And a material had - fair seen very assume it's booking book license are going all in point quarter and their record track we on tender, awarded they impact that seeing happen. XXX% to as process all I think of after a of you order of through very eventually to they we issue it's of the go think that's when least when from the - we're and in we going book XX% the kind XX%, an way the have China, yet going there think but order. said sites that's I in is for probably know, China, to to far, to license, them early quarter timeframe so a they and to it's the reality it's the announced, is strong

guys. Thanks, Great.

is Anthony Please Our Petrone go next Jefferies. from ahead. question from

a which A, On we China a systems and and TrueBeam, strong and quarter think… currently Maybe Edge fall and which in in stick China, then I of on just here. I under Class one it's correction our Noona. and then notes have Thanks, congrats actually Class have B their I'll maybe recap with on a are

Yes.

I TrueBeam - is B. think Class

Yes. moved, is else in is everything A Class still and yes, was B. TrueBeam Edge Class

is there Halcyon then in And not yet?

Halcyon is B. Class in

Approved in Class B, yes.

Okay, okay…

the the Yes, is Halcyon to showing did users in that happened focus was - December happened regulatory launch. X,XXX the that main I up approval was We of come see so of customers in that the need that December. and that part our was meeting mentioned

a maybe - Class then between you share that like one on delta Noona. And last on would pricing Okay. And Class is? How there a anything B? wide of and quick just on a can one have then be A I'll

yet, I'd we experience different is going the but In it's been on we it think that be China pricing done we'll quotas to don't the version is, general short Class see be - going these is China haven't to historically. because experience much terms, say, new materially B our mix actual and There's price pretty think of to had execution geographic the Class but of the quarter. the but kind I A solid. price below, good products million like a of are pricing, $X.X in point, our some market we looks reiterate within to kind price north just as

with terms announcement in sector just a little with - but bit you pharmaceutical maybe of least of pharma then necessarily - not of two on Okay, Noona how mining just of last large maybe the on the all platform? background at so opportunity out specifically, right. Noona deals an Noona, these And pharmaceutical look here as deals

Yes. want we're outcome they very a have No, mean outcome are it, I I excited information. just is, the not physician-reported version looking patient-reported about short payers would information, to also say,

big trends the that's been And trial. in been one clinical of so, that's happening

selling that but where And in the these that deals, all of a it's this we've deals here that in be and the outcome, we're first more. very think provider tend whole into, to we the market. will do these can relationship, it's clearly deals kind patient-reported doing be doing trials. to as forward to this look and expand clinical that's pharmaceutical of thrilled provider to, quarter help but and we're be up in hope as in the oncology, that's going work is multi-year. bunch with want their two We fragmented not kind large there fish and market signed yet, two We so, past as outcome These to big is market not we're a quite what it the tends they of be patient-reported the that space,

thanks, again. All Great, right.

is go Please Our Markets. Capital next ahead. question from Henry Brandon from RBC

Hey, Brandon.

Hey. taking question. my Thanks for

First gross question, want which touch just broad-based I order the on be quarter, the know, me in - the pretty appeared that to across to the you geography.

general from you you time spend the across taking you more or market markets the think is just share can again do Elekta? talking about just environment seeing you're some are the So, and accelerating

Halcyon might quarter demand growth. also TrueBeam let in bigger say course one In year there of in strong, we're very mostly positive growth I'd been was are that the a the now in Edge EMEA, was is Europe, of through been that And one emerging the strong. geography it Southeast has has activity kind the little Last that as first Europe, services. pretty as very Americas. quarter of of and been to really The Africa, the Americas geographies robust strong trend, that Arabia, mentioned, the and have quiet, has see that months underlying in strength for Americas, and been Americas, software market but the the In been - small seen going we kind for quarter every we in think was we've the the seeing little well so last Gary and in here; changing. that but is of Asia. comment bit significant has a China share double-digit a is on six going growth on market. market the huge for a but just growth, Australia see That's me quarter a year continue. we was Middle Americas strong. XX very - continue, about across don't good a X% those Saudi wing India, is And trailing Maybe other we that's that East, Asia, saw talked all more lot APAC, a the Americas think to Central the we just

I sustained reporting a acceleration number. and print is So that a quarter Yes, to a seeing of little the share a and then not this we yet bit, strength, it's maybe Americas. but just our then the in the is think is market a you are just that's so what's very on? renewed so kind one XX% in of from growth And one our standpoint, question quarter not maybe question replacement going some reminder, ask and some preempting that's good. in cycle, the celebrate, maybe guys included it's we lag, a seeing Americas, bit little are

of a in in kind cycle replacement an with Halcyon replacing it's the the ease-of-use, we which think the acceleration bit it's in, it the this goes freestanding market old in might Americas; be Americas. I of little some really speed with of seeing

you the this your time gives And to the the XX% can Okay, XX% you spend little remainder range of operating some one with the in what of margins year? in the question on that just confidence very fell short discussing that looks operating just street and margins, it the quarter reasons first so a the helpful. in there of other consensus like reaccelerate that can and then for impact first tariff mall kind that quarter,

a year-over-year impact it's sure we're make about bit through think XXX here. basis the a of point Tariff Yes, of we're little trying have tariffs is point all view. falling to I from

driven had and and going QX this year-on-year This Americas are in kind of the we year. there's that's gross year. Those about the in with Americas ASTRO not QX And big you was growth. we and made ASTRO to was XX% The mix our of in higher largely geographic and QX, as number in this year, by year, points. made other of as fall in in stronger. tides the the And as acquisitions year that that rise running to that, well Those print last now our we fully points are now Europe that's around year. margin a last next strong flowing as flowing and the overall of of XX two investments QX this XX the last elements and basis year portfolio are investments basis QX, we acquisitions that margin about starting combine QX two geographic outlined another mix Brandon,

the on margin that that number will there is we level, expense full-year sites, way little here that, get pressure in couple fine. you service we get things; keep the a here. you when to at to one of When we'll you there. more is profitability mix do exit QX see how transaction that we So a as rate start about there, in accrete see won't think that just had from you to know, improvements business we're is putting and so guidance some you Two Proton the on and

you of we've we'll OpEx as rest the to scales then see the half of and years deliver and tariff to year be out roll start R&D we reiterating about We've actions that. of mitigation guidance talked outlined scale that actions As the range place to in some we're of so, year. know explicitly operational the will the and we said second we've the some in three

you. Okay. Thank

is Our next question from…

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Hi, Jason.

guys. afternoon good Hi,

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just several us, maybe in effect so wanted can of Yes, any is there system think. start pretty that have or you unprecedented, past insight to people, to backlog tenders a in wondering you impressive give the I have lot EMEA, underway on if quarters, been that EMEA. and related pacing are with of I

EMEA would Cities. kind You have Tale Two I of seen us, of is say from the

volts the we Western what the of hand, is On a flows last be some through market, faster that of to emerging the more the volt fast, some backlog waiting market a those kind clearly market seen waiting or a pretty market - point or and Europe, of as a emerging quite be new the we segment not talked market, new view we one on pacing fast, core year on have European Europe much of is had of calls tend to pretty is velocity, the the of a from that that's replacement built.

that a been we about we currency constant the I of function kind Europe our when slowing the say trailing market time kind an fits XX%, down what growth been currency really, while, segment don't see at it's conventional was of core and what emerging up. So over at the so thus we year a replacements would kind a Europe growth it's good of numbers, the in good, and market seen of market and you see quarter funnel of have in of XX-month constant the we timing still really growth say our what look in I bullish us all. pretty that pacing especially lot half last picked growing, very both our would think in for of that I Europe of mix solid in piece and geography pretty we last XX%, certainly are have in of saw acceleration of

to the still In comes from of percent have a so… previous XX%, revenue it as QX before and six given it's on, point Europe, strong data was point that in the one Just we months. XXXX, of in orders add, a

Yes.

as put team in several delivering is execution the now front and so, result so. flow And and through the they're And well XXXX we're across in as software region. team, teams of marketing really for Europe. therefore six we've I in on was job nice across Dow's still XX%, as so sustained well add executing QX that nice to We've replacement investments was at seeing this comments sales that and and results the the consistent competitive teams here the Nice of would versus the we've the that board quarters is made the takeout in seen as across teams book. by

cancer. time one in and thing and to maybe And market be government's for about same priorities more of gradually as in India we've the a looks for we'll had health The they're their cancer China probably and healthcare new a a spent quota the India. that of new going happening Indian turning Modicare, Yes. long The the the targeting spend activity They've be add lot lot time. small the there talking expanding really the to proposal been well. things of other health that to well all and priorities outside on, investment

now, in to see a some I accelerate for we're as market going growth while that see good acceleration we'll think India that very in but I So think well.

Okay. That's guys. very helpful,

getting your adjustment stronger being pushed a then that performance? original than that revenue other into this longer one beyond oncology this further other, service a Gary, should segment the absorbed being follow-up Proton delay here Proton make this by to maybe little range we I segment profitability, XXXX into fiscal in or or your the expected guidance on bit falling mean, year. and on breakeven, one you interpret target and part in think referenced no Just it's just they've I of breakeven and/or been in now

us that on we order orders. had comment In rest Gary XXXX, just to for seven and me our achieve Let some breakeven of can it. orders, piece need And of orders. the XXXX, take we that, two targets, in

where as year and somewhere we number of order about somewhere the quarter. the the good between we think orders seven. well that actually that's as clearly this net take XXXX is We XXXX are So we probably in half loaded. feel the second between two and probably pretty And that as that

of a little of affect going on to the with the bit timing target. of bit you our and And can breakeven business that's little comment P&L. Gary, the is rest And that, so kind lumpy

dollars Yes. pursuits of rest would the across by well we to and from controlling executing to the which where think P&L out half required the pipe expense, spending say probably that but teams is strong weighted, still strong. the are to we're the very way deals the I pull R&D of are second

to we'll teams believe of how So you in And we we'll kind rooms said that. already. the realizing an are that option like and plays continue that go the what rest the guide we that going out and service executing and out I'm the talked down as not profitability still of of to put see the up and back investment on beyond getting and about path running Flash business in this we there from

So, in we'll business to invest time. as continue through the and continue we this go to play accordingly make

Okay. Thanks, guys.

next ahead. Please go Our Tycho question is from from Peterson JPMorgan.

Tycho. Hey,

just forward had of was Thanks. XX and - last Maybe meaningful with Halcyon, that adoption? as about Halcyon how is talk the in terms pull new you last it maybe launch the think you Hey. quarter quarter, orders, and I'll kV to, we can start then

we're very kV half uptake option nice of more orders than gives news margin. seeing KV. The on our the That a price us good little of of quarter, were is, the bit and

that. about we're excited we're, So

last think as up the mentioned XX is I know the year. over script units You XX% I in

good, you Yes. good know, So, trend it's overall. good,

in there QX. gigantic have demand any pent that don't I up was think there. We

think I kind were internal on keeping track is that's we very to with just and in our much of of know, a with with track you kind plan. been what on we're planning

it fulfillment talk others the Right. what embedded into guidance And the all to then conversion say there? China there, kind appreciate on know of market? for you couple is of for of And you you can orders are kind in a kind able all revenues China, on just color

the guidance, China some there out the earnings teams an or to covered. field executing going orders actually perspective and the Look, received to talking on revenues there got meeting from the orders very there. well them our help and opinion Fantastic, to for burden revenue. and of and terms how of the a integrated very, leaders to into event I in take there with technical solve we've it stage think in are users regard was into quite fully Yes, cancer got the and it's that, our, about I platform of and time capabilities going we key was done just quality an line nothing translate

is really resonating there you and out. China, know, see clinically in so And to it we're this play excited

is flow, comment And going there can improve to cash pull of flow conversion about kind you down cash on looks levers then, Gary, XX% that forward? there you like are other can

few number. QX Yes. and on We're a line we yes get that here still to and, outlined had we from things to track line over that to QX finish the slip into improvement guidance the and see continuing number of guidance have sight

got the we as did market. big a the well have script revenue in we firm bill, pretty in some - great momentum thing the And we said other the as

was a chunk that So of inventory. big

Thanks, Dow.

TrueBeam gets risks for and we there lastly and a think think just to that - once should I and on any if trade-off then, kind then, Halcyon, with Dow of about how about adaptive the mean, is do we right, timelines All added how cannibalization? there

a time at customers hundred. we're We the was showed through active implementing in they're the ahead productivity. about works customers is still XX I had development you're really XXX delivering workflow. it a it the and or really ASTRO come both ASTRO, a they how and our count keeping through as under several We like of the you're To version thinking clinical adaptive what terms mean don't in within in saying, everybody person wow know I short slot workflow of in come progress. minute of at was effectiveness on and XXX adaptive. the what product the

able were to PowerPoint. people not So see software, development actual

to ways probably end fiscal year. of short this I And version so, think we've got the is still go,

launch with in full I a XX commercial that's folks think we months. probably big the next will have resonating a plus-ish approved it's FDA vision and

All right, thanks.

go from from is ISI. question Kumar ahead. next Vijay Evercore Please Our

thanks guys, Hey, for taking…

Hi, Vijay.

housekeeping, frontier. Congrats color Q, in one, for assumption contribution of to the you acquisition on maybe couple couple I can of a and the give was guidance, a what on the really FX what some had just nice questions, a guess, I the quarter is?

Let me this. talk part me let the first about of

we as acquisitions did First the really of like all year. last we

this starting out, year really they've an pretty made small. version that's of last strategically these in off we channel two for immaterial nice looks be want an on results They're is that's acquisition think point. add? and but made ago impact anything think, acquisitions us helped in of time I we've else we years of their very year Gary, in revenue all of on at immaterial acquisition case momentum overall impact. margin acquisition good, are business short Taiwan, The any you some probably we to humediQ us kind the that, have got last they're made the little is to to paying and the Poland we orders big some

continue them No, them that's lot platforms, are so, product spending right, of business Dow, those so roadmap, well, as we product those as the to required we continue driven deliver to the to through pull to in sure, you and solutions driven, Vijay. invest come, a more access case we'll so make then as know technology

from you drivers the of fulfill year. to that operations inventories the a signaling be maybe couple slide the half were Got on one, are quick the then guys some orders really Dow, right, to and prepping you, in cash down, interesting and follow-ups; seems back sub comment deck, in but

QX the and operations where and half with of sort how given commentary thinking about were just inventory I'm curious we trajectory? from So, then the back guidance I'm cash strength again curious the

see we've and higher guidance at today. revenue guidance X% you look revenue XXX hit, you about and mean, to tariff really it's about guidance, basis that think our the FX that reaffirmed that. revenue than I points was X% When

really the impact currency of headwinds. that's range time the it five something kind eight tariff talking more headwind rather in by six about range than take So you the of call the you're to to revenue XX the and

So the revenue number big. is pretty

to and of little some make take inventory upside. We are we have guidance inventory, building care we deliver we some extra on sure want the a to if revenue

into We momentum So be it. XXXX. see continuing

build and that's what we're doing. we here So want to ahead

offsets margins QX one even 'XX the or last on in QX one Gary, the at the half guidance? maybe just am maybe back And the here, from cost start, I in benefit as of high annual end the the there we're looking no above assuming correct in was

ramp correct. as out impact of be evenly Yes, In into actions throughout an of that million. equals see tariff will of we the the as QX, spread throughout, the $XX rest the through there go Vijay, XX% from think rest said, year. year tariffs we time. that's the we half overall gross to impact with mitigation overall Therefore, XX% guidance was the of net And we'll gross to back the pretty us

Thanks, guys. Okay.

closing the session. to Great, any question-and-answer thank Wilson to you. I'd for This concludes back like turn the floor Mr. comments.

delivered growth year, long-term on strategy. orders are you. our last We made on I'm thank achieve the creation value XXXX towards the momentum Yes, built exceptional very the in progress with we've we pleased first quarter and executing track our - maintain to targets.

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

This concludes today's teleconference.

time. this at lines Thank your disconnect may for you participation. You your