FARO Announces Third Quarter Financial Results
FARO Technologies reported its third quarter 2024 financial results. The company achieved revenue of $82.6 million, at the upper end of its guidance range. Gross margin was 55.7%, with a non-GAAP gross margin of 56.1%, both above guidance. The net loss was $0.3 million, or $(0.02) per share, while non-GAAP EPS was $0.21, exceeding expectations. Cash flow from operations was $2.6 million, and the company repurchased $10 million in shares. Operating expenses decreased to $43.8 million, with non-GAAP operating expenses at $40.1 million. Adjusted EBITDA improved to $8.9 million, or 10.7% of revenue. Looking forward, FARO expects fourth-quarter revenue between $88 and $96 million and non-GAAP EPS between $0.32 and $0.52. The company remains focused on growth initiatives despite economic challenges.
FARO Technologies ha comunicato i risultati finanziari del terzo trimestre 2024. L'azienda ha raggiunto un fatturato di 82,6 milioni di dollari, al limite superiore della sua previsione. Il margine lordo è stato del 55,7%, con un margine lordo non-GAAP del 56,1%, entrambi superiori alle attese. La perdita netta è stata di 0,3 milioni di dollari, corrispondente a $(0,02) per azione, mentre l'EPS non-GAAP è stato di 0,21 dollari, superando le aspettative. Il flusso di cassa dalle operazioni è stato di 2,6 milioni di dollari e l'azienda ha riacquistato 10 milioni di dollari in azioni. Le spese operative sono diminuite a 43,8 milioni di dollari, con spese operative non-GAAP pari a 40,1 milioni di dollari. L'EBITDA rettificato è migliorato a 8,9 milioni di dollari, ovvero 10,7% del fatturato. Nello sguardo al futuro, FARO prevede un fatturato per il quarto trimestre compreso tra 88 e 96 milioni di dollari e un EPS non-GAAP tra 0,32 e 0,52 dollari. L'azienda rimane concentrata sulle iniziative di crescita nonostante le sfide economiche.
FARO Technologies ha dado a conocer sus resultados financieros del tercer trimestre de 2024. La compañía alcanzó un ingreso de 82,6 millones de dólares, en el extremo superior de su rango de guía. El margen bruto fue del 55,7%, con un margen bruto no-GAAP del 56,1%, ambos por encima de las expectativas. La pérdida neta fue de 0,3 millones de dólares, o $(0,02) por acción, mientras que el EPS no-GAAP fue de 0,21 dólares, superando las expectativas. El flujo de efectivo de las operaciones fue de 2,6 millones de dólares, y la compañía repurchaseó 10 millones de dólares en acciones. Los gastos operativos disminuyeron a 43,8 millones de dólares, con gastos operativos no-GAAP en 40,1 millones de dólares. El EBITDA ajustado mejoró a 8,9 millones de dólares, o 10,7% de los ingresos. Mirando hacia adelante, FARO espera ingresos del cuarto trimestre entre 88 y 96 millones de dólares y un EPS no-GAAP entre 0,32 y 0,52 dólares. La empresa sigue enfocada en iniciativas de crecimiento a pesar de los desafíos económicos.
FARO Technologies는 2024년 제3분기 재무 결과를 발표했습니다. 이 회사는 8천260만 달러의 매출을 달성하여 가이던스 범위의 상한선에 도달했습니다. 총 이익률은 55.7%였으며, 비GAAP 총 이익률은 56.1%로, 두 수치 모두 예상치를 초과했습니다. 순손실은 30만 달러, 즉 $(0.02) 주당으로 나타났고, 비GAAP EPS는 0.21 달러로 예상치를 초과했습니다. 영업으로부터의 현금 흐름은 260만 달러였으며, 회사는 1천만 달러의 주식을 재구매했습니다. 운영 비용은 4천380만 달러로 감소했으며, 비GAAP 운영 비용은 4천100만 달러였습니다. 조정된 EBITDA는 890만 달러로 매출의 10.7%로 개선되었습니다. 앞으로 FARO는 4분기 매출이 8천800만에서 9천600만 달러가 될 것으로 예상하고 있으며, 비GAAP EPS는 0.32에서 0.52 달러 사이로 예상하고 있습니다. 회사는 경제적 도전 과제에도 불구하고 성장 이니셔티브에 집중하고 있습니다.
FARO Technologies a annoncé ses résultats financiers du troisième trimestre 2024. L'entreprise a réalisé un chiffre d'affaires de 82,6 millions de dollars, au niveau supérieur de ses prévisions. La marge brute était de 55,7%, avec une marge brute non-GAAP de 56,1%, toutes deux supérieures aux prévisions. La perte nette s'élevait à 0,3 million de dollars, soit $(0,02) par action, tandis que l'EPS non-GAAP était de 0,21 dollar, dépassant les attentes. Le flux de trésorerie provenant des opérations était de 2,6 millions de dollars, et l'entreprise a racheté 10 millions de dollars d'actions. Les dépenses d'exploitation ont diminué à 43,8 millions de dollars, avec des dépenses d'exploitation non-GAAP à 40,1 millions de dollars. L'EBITDA ajusté s'est amélioré à 8,9 millions de dollars, soit 10,7% du chiffre d'affaires. En regardant vers l'avenir, FARO s'attend à un chiffre d'affaires du quatrième trimestre compris entre 88 et 96 millions de dollars et un EPS non-GAAP compris entre 0,32 et 0,52 dollars. L'entreprise reste concentrée sur des initiatives de croissance malgré les défis économiques.
FARO Technologies hat die Finanzergebnisse für das dritte Quartal 2024 veröffentlicht. Das Unternehmen erzielte Einnahmen von 82,6 Millionen US-Dollar, am oberen Ende der Prognose. Die Bruttomarge betrug 55,7%, mit einer non-GAAP Bruttomarge von 56,1%, beide über den Erwartungen. Der netto Verlust belief sich auf 0,3 Millionen US-Dollar, oder $(0,02) pro Aktie, während das non-GAAP EPS bei 0,21 US-Dollar lag, was die Erwartungen übertraf. Der Cashflow aus operativer Tätigkeit betrug 2,6 Millionen US-Dollar, und das Unternehmen hat 10 Millionen US-Dollar an Aktien zurückgekauft. Die Betriebsausgaben sanken auf 43,8 Millionen US-Dollar, mit non-GAAP Betriebsausgaben von 40,1 Millionen US-Dollar. Das angepasste EBITDA verbesserte sich auf 8,9 Millionen US-Dollar, oder 10,7% der Einnahmen. Blickt man in die Zukunft, erwartet FARO im vierten Quartal Einnahmen zwischen 88 und 96 Millionen US-Dollar und ein non-GAAP EPS zwischen 0,32 und 0,52 US-Dollar. Das Unternehmen bleibt trotz wirtschaftlicher Herausforderungen auf Wachstumsinitiativen fokussiert.
- Revenue of $82.6 million, at the upper end of guidance.
- Gross margin of 55.7%, above guidance.
- Non-GAAP EPS of $0.21, above guidance.
- Operating expenses decreased to $43.8 million.
- Adjusted EBITDA of $8.9 million, or 10.7% of revenue.
- Share repurchases of $10 million.
- Total sales down 5% year-over-year.
- Net loss of $0.3 million.
Insights
FARO's Q3 results show significant operational improvements despite revenue headwinds. The company achieved $82.6 million in revenue, with notably improved profitability metrics. The
The transformation is particularly evident in the bottom line, with non-GAAP EPS of
Q4 guidance suggests continued margin strength but uncertain revenue trajectory, with a wide range of
- Revenue of
, at the upper end of guidance range$82.6 million - Gross margin of
55.7% ; Non-GAAP gross margin56.1% , above guidance range - Loss per share of
; Non-GAAP earnings per share ("EPS") of$(0.02) , above guidance range$0.21 - Cash flow from operations of
$2.6 million - Share repurchases of
during the quarter$10 million
"I am proud of our ongoing progress in profitability, achieving
Third Quarter 2024 Financial Summary
- Total sales of
, down$82.6 million 5% year over year - Gross margin of
55.7% , compared to48.0% in the prior year period - Non-GAAP gross margin of
56.1% , compared to48.9% in the prior year period - Operating expenses of
, compared to$43.8 million in the prior year period$48.6 million - Non-GAAP operating expenses of
, compared to$40.1 million in the prior year period$41.5 million - Net loss of
, or$0.3 million per share compared to net loss of$(0.02) , or$8.8 million per share in the prior year period$(0.46) - Non-GAAP net income of
, or$4.0 million per share compared to non-GAAP net income of$0.21 , or$0.5 million per share in the prior year period$0.03 - Adjusted EBITDA of
, or$8.9 million 10.7% of total sales compared to , or$3.5 million 4.1% of total sales in the prior year period - Cash, cash equivalents & short-term investments of
compared to$88.9 million as of December 31, 2023$96.3 million
* A reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures is provided in the financial schedules portion at the end of this press release. An additional explanation of these measures is included below under the heading "Non-GAAP Financial Measures".
Outlook for the Fourth Quarter 2024
For the fourth quarter ending December 31, 2024, FARO currently expects:
- Revenue in the range of
to$88 $96 million - Gross margin in the range of
55.6% to57.1% . Non-GAAP gross margin in the range of56.0% to57.5% - Operating expenses in the range of
to$47.4 . Non-GAAP operating expenses in the range of$49.4 million to$40.5 $42.5 million - Net (loss) income per share in the range of (
) to$0.15 . Non-GAAP net income per share in the range of$0.05 to$0.32 .$0.52
Conference Call
The Company will host a conference call to discuss these results on Wednesday, November 6, 2024, at 4:30 p.m. ET. Interested parties can access the conference call by dialing (800) 343-4849 (
A replay webcast will be available in the Investor Relations section of the Company's web site approximately two hours after the conclusion of the call and will remain available for approximately 30 calendar days.
About FARO
For over 40 years, FARO has provided industry-leading technology solutions that enable customers to measure their world, and then use that data to make smarter decisions faster. FARO continues to be a pioneer in bridging the digital and physical worlds through data-driven reliable accuracy, precision, and immediacy. For more information, visit www.faro.com.
Non-GAAP Financial Measures
This press release contains information about our financial results that are not presented in accordance with
In addition, we present EBITDA, which is calculated as net income (loss) before interest (income) expense, net, income tax benefit (expense) and depreciation and amortization, and Adjusted EBITDA, which is calculated as EBITDA, excluding other (income) expense, net, stock-based compensation, and restructuring and other charges, as measures of our operating profitability. The most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net income (loss). We also present Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percent of total sales.
We have included non-GAAP total sales on a constant currency basis. The most directly comparable GAAP measure to total sales on a constant currency basis is total sales. We believe constant currency information is useful in analyzing underlying trends in our business and the commercial performance of our products by eliminating the impact of highly volatile fluctuations in foreign currency markets and allows for period-to-period comparisons of our performance. For simplicity, we may elect to omit this information in future periods if we determine a lack of material impact. To present this information, current period performance for entities reporting in currencies other than
Management believes that these non-GAAP financial measures provide investors with relevant period-to-period comparisons of our core operations using the same methodology that management employs in its review of the Company's operating results. These financial measures are not recognized terms under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP.
These non-GAAP financial measures have limitations that should be considered before using these measures to evaluate a company's financial performance. These non-GAAP financial measures, as presented, may not be comparable to similarly titled measures of other companies due to varying methods of calculation. The financial statement tables that accompany this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, such as statements about the outlook for the fourth quarter of 2024, demand for and customer acceptance of FARO's products, FARO's product development and product launches, FARO's growth, strategic and restructuring plans and initiatives, including but not limited to the additional restructuring charges expected to be incurred in connection with our restructuring and integration plans and the timing and amount of cost savings and other benefits expected to be realized from the restructuring and integration plans and other strategic initiatives, and FARO's growth potential and profitability. Statements that are not historical facts or that describe the Company's plans, objectives, projections, expectations, assumptions, strategies, or goals are forward-looking statements. In addition, words such as "is," "will" and similar expressions or discussions of FARO's plans or other intentions identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks, uncertainties, and other factors that may cause actual results, performances, or achievements to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements.
Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to:
- the Company's ability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;
- the Company's inability to successfully execute its strategic plan, restructuring plan and integration plan, including but not limited to additional impairment charges and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;
- the changes in our executive management team in 2023 and 2024 and the loss of any of our executive officers or other key personnel, which may be impacted by factors such as our inability to competitively address inflationary pressures on employee compensation and flexibility in employee work arrangements;
- the outcome of any litigation to which the Company is or may become a party;
- loss of future government sales;
- potential impacts on customer and supplier relationships and the Company's reputation;
- development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete;
- the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products;
- declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions;
- the effect of general economic and financial market conditions, including in response to public health concerns;
- assumptions regarding the Company's financial condition or future financial performance may be incorrect;
- the impact of fluctuations in foreign exchange rates and inflation rates; and
- other risks and uncertainties discussed in Part I, Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 28, 2024, as supplemented by the Company's Quarterly Reports on Form 10-Q, and in other SEC filings.
Forward-looking statements in this release represent the Company's judgment as of the date of this release. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise, unless otherwise required by law.
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) | |||||||
Three Months Ended | Nine Months Ended | ||||||
(in thousands, except share and per share data) | September 30, 2024 | September 30, 2023 | September 30, 2024 | September 30, 2023 | |||
Sales | |||||||
Product | $ 61,461 | $ 66,911 | $ 186,309 | $ 199,754 | |||
Service | 21,102 | 19,902 | 62,583 | 60,237 | |||
Total sales | 82,563 | 86,813 | 248,892 | 259,991 | |||
Cost of sales | |||||||
Product | 26,246 | 34,640 | 82,817 | 112,691 | |||
Service | 10,341 | 10,499 | 32,003 | 32,587 | |||
Total cost of sales | 36,587 | 45,139 | 114,820 | 145,278 | |||
Gross profit | 45,976 | 41,674 | 134,072 | 114,713 | |||
Operating expenses | |||||||
Selling, general and administrative | 34,041 | 37,970 | 106,224 | 117,907 | |||
Research and development | 9,771 | 8,188 | 28,628 | 32,568 | |||
Restructuring costs | — | 2,442 | 616 | 15,130 | |||
Total operating expenses | 43,812 | 48,600 | 135,468 | 165,605 | |||
Income (loss) from operations | 2,164 | (6,926) | (1,396) | (50,892) | |||
Other (income) expense | |||||||
Interest expense | 1,023 | 691 | 2,615 | 2,529 | |||
Other (income) expense, net | 175 | (381) | 157 | (125) | |||
Income (loss) before income tax | 966 | (7,236) | (4,168) | (53,296) | |||
Income tax expense | 1,255 | 1,520 | 3,912 | 4,869 | |||
Net loss | $ (289) | $ (8,756) | $ (8,080) | $ (58,165) | |||
Net loss per share - Basic | $ (0.02) | $ (0.46) | $ (0.42) | $ (3.08) | |||
Net loss per share - Diluted | $ (0.02) | $ (0.46) | $ (0.42) | $ (3.08) | |||
Weighted average shares - Basic | 19,266,217 | 18,953,251 | 19,218,004 | 18,899,954 | |||
Weighted average shares - Diluted | 19,266,217 | 18,953,251 | 19,218,004 | 18,899,954 |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) | |||
(in thousands, except share and per share data) | September 30, | December 31, | |
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 88,913 | $ 76,787 | |
Short-term investments | — | 19,496 | |
Accounts receivable, net | 83,208 | 92,028 | |
Inventories, net | 39,055 | 34,529 | |
Prepaid expenses and other current assets | 34,252 | 38,768 | |
Total current assets | 245,428 | 261,608 | |
Non-current assets: | |||
Property, plant and equipment, net | 19,544 | 21,181 | |
Operating lease right-of-use assets | 17,208 | 12,231 | |
Goodwill | 110,972 | 109,534 | |
Intangible assets, net | 46,325 | 47,891 | |
Service and sales demonstration inventory, net | 21,436 | 23,147 | |
Deferred income tax assets, net | 24,826 | 25,027 | |
Other long-term assets | 3,891 | 4,073 | |
Total assets | $ 489,630 | $ 504,692 | |
LIABILITIES AND SHAREHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 30,438 | $ 27,404 | |
Accrued liabilities | 25,208 | 29,930 | |
Income taxes payable | 6,881 | 5,699 | |
Current portion of unearned service revenues | 41,495 | 40,555 | |
Customer deposits | 4,282 | 4,251 | |
Lease liabilities | 4,645 | 5,434 | |
Total current liabilities | 112,949 | 113,273 | |
Loan - | 70,096 | 72,760 | |
Unearned service revenues - less current portion | 20,051 | 20,256 | |
Lease liabilities - less current portion | 15,412 | 10,837 | |
Deferred income tax liabilities | 13,048 | 13,308 | |
Income taxes payable - less current portion | 2,510 | 5,629 | |
Other long-term liabilities | 46 | 23 | |
Total liabilities | 234,112 | 236,086 | |
Commitments and contingencies | |||
Shareholders' equity: | |||
Common stock - par value 20,869,974 and 20,343,359 issued, respectively; 18,908,076 and 18,968,798 outstanding, respectively | 20 | 20 | |
Additional paid-in capital | 354,765 | 346,277 | |
Retained earnings | (17,869) | (9,789) | |
Accumulated other comprehensive loss | (40,729) | (37,247) | |
Common stock in treasury, at cost - 1,961,898 and 1,374,561 shares held, respectively | (40,669) | (30,655) | |
Total shareholders' equity | 255,518 | 268,606 | |
Total liabilities and shareholders' equity | $ 489,630 | $ 504,692 |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) | |||
Nine Months Ended September 30, | |||
(in thousands) | 2024 | 2023 | |
Cash flows from: | |||
Operating activities: | |||
Net loss | $ (8,080) | $ (58,165) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 11,709 | 11,728 | |
Stock-based compensation | 8,471 | 12,276 | |
Inventory write-downs | — | 8,132 | |
Asset impairment charges | — | 5,333 | |
Deferred income tax (benefit) and other non-cash charges | (1,230) | (82) | |
Provision for excess and obsolete inventory | 861 | 1,754 | |
Amortization of debt discount and issuance costs | 336 | 294 | |
Loss on disposal of assets | 974 | (155) | |
Provisions for bad debts, net of recoveries | 966 | 834 | |
Change in operating assets and liabilities: | |||
Decrease (Increase) in: | |||
Accounts receivable | 6,864 | 1,282 | |
Inventories | (8,097) | (544) | |
Prepaid expenses and other current assets | 4,298 | 4,047 | |
(Decrease) Increase in: | |||
Accounts payable and accrued liabilities | (1,722) | (2,802) | |
Income taxes payable | (1,884) | 653 | |
Customer deposits | 144 | (1,534) | |
Unearned service revenues | 778 | (1,198) | |
Other liabilities | (1,033) | 567 | |
Net cash provided by (used in) operating activities | 13,355 | (17,580) | |
Investing activities: | |||
Purchases of property and equipment | (3,559) | (5,016) | |
Maturity of short-term investments | 20,009 | — | |
Cash paid for technology development, patents and licenses | (4,822) | (5,071) | |
Net cash provided by (used in) investing activities | 11,628 | (10,087) | |
Financing activities: | |||
Payments on finance leases | (135) | (154) | |
Cash settlement of equity awards | — | (89) | |
Repurchases of common stock | (10,014) | — | |
Proceeds from issuance of issuance cost and accrued interest | — | 72,310 | |
Repayment of | (2,685) | — | |
Payment of contingent consideration for business acquisition | — | (1,098) | |
Net cash (used in) provided by financing activities | (12,834) | 70,969 | |
Effect of exchange rate changes on cash and cash equivalents | (23) | (1,195) | |
Increase in cash and cash equivalents | 12,126 | 42,107 | |
Cash and cash equivalents, beginning of period | 76,787 | 37,812 | |
Cash and cash equivalents, end of period | $ 88,913 | $ 79,919 |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP (UNAUDITED) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(dollars in thousands, except per share data) | 2024 | 2023 | 2024 | 2023 | |||
Gross profit, as reported | $ 45,976 | $ 41,674 | $ 134,072 | $ 114,713 | |||
Stock-based compensation (1) | 381 | 280 | 1,085 | 972 | |||
Restructuring and other costs (2) | — | 456 | 2 | 1,326 | |||
Non-GAAP adjustments to gross profit | 381 | 736 | 1,087 | 2,298 | |||
Non-GAAP gross profit | $ 46,357 | $ 42,410 | $ 135,159 | $ 117,011 | |||
Gross margin, as reported | 55.7 % | 48.0 % | 53.9 % | 44.1 % | |||
Non-GAAP gross margin | 56.1 % | 48.9 % | 54.3 % | 45.0 % | |||
Selling, general and administrative, as reported | $ 34,041 | $ 37,970 | $ 106,224 | $ 117,907 | |||
Stock-based compensation (1) | (1,858) | (3,588) | (5,996) | (9,710) | |||
Restructuring and other costs (2) | — | — | (3,453) | — | |||
Purchase accounting intangible amortization | (283) | (663) | (1,167) | (2,024) | |||
Non-GAAP selling, general and administrative | $ 31,900 | $ 33,719 | $ 95,608 | $ 106,173 | |||
Research and development, as reported | $ 9,771 | $ 8,188 | $ 28,628 | $ 32,568 | |||
Stock-based compensation (1) | (529) | 176 | (1,390) | (1,594) | |||
Purchase accounting intangible amortization | (1,085) | (501) | (2,089) | (1,541) | |||
Non-GAAP research and development | $ 8,157 | $ 7,863 | $ 25,149 | $ 29,433 | |||
Operating expenses, as reported | $ 43,812 | $ 48,600 | $ 135,468 | $ 165,605 | |||
Stock-based compensation (1) | (2,387) | (3,411) | (7,386) | (11,304) | |||
Restructuring and other costs (2) | — | (2,495) | (4,069) | (16,337) | |||
Purchase accounting intangible amortization | (1,368) | (1,164) | (3,256) | (3,565) | |||
Non-GAAP adjustments to operating expenses | (3,755) | (7,070) | (14,711) | (31,206) | |||
Non-GAAP operating expenses | $ 40,057 | $ 41,530 | $ 120,757 | $ 134,399 | |||
Income (loss) from operations, as reported | $ 2,164 | $ (6,926) | $ (1,396) | $ (50,892) | |||
Non-GAAP adjustments to gross profit | 381 | 737 | 1,087 | 2,298 | |||
Non-GAAP adjustments to operating expenses | 3,755 | 7,070 | 14,711 | 31,206 | |||
Non-GAAP income (loss) from operations | $ 6,300 | $ 881 | $ 14,402 | $ (17,388) | |||
Net loss, as reported | $ (289) | $ (8,756) | $ (8,080) | $ (58,165) | |||
Non-GAAP adjustments to gross profit | 381 | 737 | 1,087 | 2,298 | |||
Non-GAAP adjustments to operating expenses | 3,755 | 7,070 | 14,711 | 31,206 | |||
Income tax effect of non-GAAP adjustments (3) | (819) | (1,952) | (3,532) | (10,409) | |||
Other tax adjustments (3) | 967 | 3,358 | 4,861 | 17,700 | |||
Non-GAAP net income (loss) | $ 3,995 | $ 457 | $ 9,047 | $ (17,370) | |||
Net loss per share - Diluted, as reported | $ (0.02) | $ (0.46) | $ (0.42) | $ (3.08) | |||
Stock-based compensation (1) | 0.14 | 0.19 | 0.44 | 0.65 | |||
Restructuring and other costs (2) | — | 0.16 | 0.21 | 0.93 | |||
Purchase accounting intangible amortization | 0.08 | 0.06 | 0.17 | 0.19 | |||
Income tax effect of non-GAAP adjustments (3) | (0.04) | (0.10) | (0.18) | (0.55) | |||
Other tax adjustments (3) | 0.05 | 0.18 | 0.25 | 0.94 | |||
Non-GAAP net income (loss) per share - Diluted | $ 0.21 | $ 0.03 | $ 0.47 | $ (0.92) |
(1) | We exclude stock-based compensation, which is non-cash, from the non-GAAP financial measures because the Company believes that such exclusion provides a better comparison of results of ongoing operations for current and future periods with such results from past periods. |
(2) | On February 14, 2020, our Board of Directors approved a global restructuring plan (the "Restructuring Plan"), which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. On February 7, 2023, our Board of Directors approved an integration plan (the "Integration Plan"), which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits associated with the Restructuring Plan, Integration Plan, and executive transitions. |
(3) | The Income tax effect of non-GAAP adjustments is calculated by applying a statutory tax rate to Non-GAAP adjustments, including Stock-based compensation, Restructuring and other costs, non-recurring Inventory reserve charges, and Purchase accounting intangible amortization and fair value adjustments. In addition, when estimating our Non-GAAP income tax rate, we exclude the impact of items that impact our reported income tax rate that we do not believe are representative of our ongoing operating results, including the impact of valuation allowances we are currently recording in certain jurisdictions and certain discrete items such as adjustments to uncertain tax position reserves, as these items are difficult to predict and can impact our effective income tax rate. Specifically, Other tax adjustments during the nine months ended September 30, 2024 were comprised of |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES RECONCILIATION OF NET INCOME (LOSS) TO EBITDA AND ADJUSTED EBITDA (UNAUDITED) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||
Net loss | $ (289) | $ (8,756) | $ (8,080) | $ (58,165) | |||
Interest expense, net | 1,023 | 691 | 2,615 | 2,529 | |||
Income tax expense | 1,255 | 1,520 | 3,912 | 4,869 | |||
Depreciation and amortization | 3,921 | 3,803 | 11,709 | 11,728 | |||
EBITDA | 5,910 | (2,742) | 10,156 | (39,039) | |||
Other expense (income), net | 175 | (381) | 157 | (125) | |||
Stock-based compensation | 2,768 | 3,692 | 8,471 | 12,276 | |||
Restructuring and other costs (1) | — | 2,951 | 4,071 | 17,663 | |||
Adjusted EBITDA | $ 8,853 | $ 3,520 | $ 22,855 | $ (9,225) | |||
Adjusted EBITDA margin (2) | 10.7 % | 4.1 % | 9.2 % | (3.5) % |
(1) | On February 14, 2020, our Board of Directors approved the Restructuring Plan, which is intended to support our strategic plan in an effort to improve operating performance and ensure that we are appropriately structured and resourced to deliver increased and sustainable value to our shareholders and customers. On February 7, 2023, our Board of Directors approved the Integration Plan, which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits associated with the Restructuring Plan, Integration Plan, and executive transitions. |
(2) | Calculated as Adjusted EBITDA as a percentage of total sales. |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES KEY SALES MEASURES (UNAUDITED) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||
Total sales to external customers as reported | |||||||
$ 40,353 | $ 41,033 | $ 117,748 | $ 124,734 | ||||
EMEA (1) | 25,461 | 25,621 | 75,496 | 74,641 | |||
APAC (1) | 16,749 | 20,159 | 55,648 | 60,616 | |||
$ 82,563 | $ 86,813 | $ 248,892 | $ 259,991 | ||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||
Total sales to external customers in constant currency (2) | |||||||
$ 40,707 | $ 40,879 | $ 118,126 | $ 124,682 | ||||
EMEA (1) | 24,278 | 24,954 | 73,127 | 73,060 | |||
APAC (1) | 16,497 | 19,883 | 55,441 | 58,437 | |||
$ 81,482 | $ 85,716 | $ 246,694 | $ 256,179 |
(1) | Regions represent |
(2) | We compare the change in the sales from one period to another period using constant currency disclosure. We present constant currency information to provide a framework for assessing how our underlying business performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||
Hardware | $ 50,301 | $ 55,706 | $ 152,968 | $ 167,484 | |||
Software | 11,159 | 11,205 | 33,341 | 32,270 | |||
Service | 21,103 | 19,902 | 62,583 | 60,237 | |||
Total Sales | $ 82,563 | $ 86,813 | $ 248,892 | $ 259,991 | |||
Hardware as a percentage of total sales | 60.9 % | 64.2 % | 61.5 % | 64.4 % | |||
Software as a percentage of total sales | 13.5 % | 12.9 % | 13.4 % | 12.4 % | |||
Service as a percentage of total sales | 25.6 % | 22.9 % | 25.1 % | 23.2 % | |||
Total Recurring Revenue (3) | $ 17,431 | $ 17,056 | $ 51,287 | $ 50,137 | |||
Recurring revenue as a percentage of total sales | 21.1 % | 19.6 % | 20.6 % | 19.3 % |
(3) | Recurring revenue is comprised of hardware service contracts, software maintenance contracts, and subscription based software applications. |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES FREE CASH FLOW RECONCILIATION (UNAUDITED) | |||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||
(in thousands) | 2024 | 2023 | 2024 | 2023 | |||
Net cash provided by (used in) operating activities | $ 2,568 | $ (4,373) | $ 13,355 | $ (17,580) | |||
Purchases of property and equipment | (1,871) | (704) | (3,559) | (5,016) | |||
Cash paid for technology development, patents and licenses | (1,430) | (1,455) | (4,822) | (5,071) | |||
Free Cash Flow | (733) | (6,532) | 4,974 | (27,667) | |||
Restructuring and other cash payments (1) | 343 | 6,279 | 3,100 | 11,014 | |||
Adjusted Free Cash Flow | $ (390) | $ (253) | $ 8,074 | $ (16,653) |
(1) | On February 7, 2023, our Board of Directors approved the Integration Plan, which is intended to streamline and simplify operations, particularly around our recent acquisitions and the resulting redundant operations and offerings. The Restructuring and other costs primarily consist of severance and related benefits associated with the Restructuring Plan, Integration Plan, and executive transitions. |
FARO TECHNOLOGIES, INC. AND SUBSIDIARIES RECONCILIATION OF OUTLOOK - GAAP TO NON-GAAP | |||
Fiscal quarter ending December 31, 2024 | |||
Low | High | ||
GAAP gross margin | 55.6 % | 57.1 % | |
Stock-based compensation | 0.4 % | 0.4 % | |
Non-GAAP gross margin | 56.0 % | 57.5 % | |
Fiscal quarter ending December 31, 2024 | |||
(in thousands) | Low | High | |
GAAP operating expenses | |||
Stock-based compensation | (3,600) | (3,600) | |
Purchase accounting intangible amortization | (1,100) | (1,100) | |
Restructuring and other costs | (2,200) | (2,200) | |
Non-GAAP operating expenses | |||
Fiscal quarter ending December 31, 2024 | |||
Low | High | ||
GAAP diluted earnings per share range | |||
Stock-based compensation | 0.21 | 0.21 | |
Purchase accounting intangible amortization | 0.06 | 0.06 | |
Restructuring and other costs | 0.11 | 0.11 | |
Non-GAAP tax adjustments | 0.09 | 0.09 | |
Non-GAAP diluted earnings per share |
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SOURCE FARO
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