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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
 
FORM 8-K

  CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 6, 2024
FARO TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
 
Florida 0-23081 59-3157093
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (IRS Employer
Identification No.)
125 Technology Park, Lake Mary, Florida 32746
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (407) 333-9911
N/A
(Former name or former address, if changed since last report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.001FARONasdaq Global Select Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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Item 2.02. Results of Operations and Financial Condition.
On November 6, 2024, FARO Technologies, Inc. (the “Company”) issued a press release announcing its results of operations for the fiscal quarter ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 hereto and is incorporated herein by reference.
The information furnished pursuant to Item 2.02 and Exhibit 99.1 of this Current Report on Form 8-K shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Current Report, regardless of any general incorporation language in the filing.

Item 9.01.     Financial Statements and Exhibits.
(d) Exhibits

The following exhibits are furnished with this Current Report on Form 8-K:
EXHIBIT INDEX
Exhibit
Number		  Description
104Cover Page Interactive Data File (embedded within the XBRL document)


SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
        
     FARO Technologies, Inc.
    
  November 6, 2024  /s/ Matthew Horwath
     By:Matthew Horwath
     Its:Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)




Exhibit 99.1
imagejpg.jpg
FARO Announces Third Quarter Financial Results
•Revenue of $82.6 million, at the upper end of guidance range
•Gross margin of 55.7%; Non-GAAP gross margin 56.1%, above guidance range
•Loss per share of $(0.02); Non-GAAP earnings per share (“EPS”) of $0.21, above guidance range
•Cash flow from operations of $2.6 million
•Share repurchases of $10 million during the quarter

LAKE MARY, FL, November 6, 2024 - FARO® Technologies, Inc. (Nasdaq: FARO), a global leader in 4D digital reality solutions, today announced its financial results for the third quarter ended September 30, 2024.
“I am proud of our ongoing progress in profitability, achieving 55.7% gross margins, GAAP net loss of $0.3 million and $8.9 million of adjusted EBITDA, or 10.7% of revenue, all exceeding our expectations for the third quarter. This marks a significant transformation in our operations over the past year, as its the first time that we have delivered back-to-back double-digit quarterly adjusted EBITDA margins in almost a decade,” said Peter Lau, President & Chief Executive Officer. “Looking ahead, we are committed to executing on our growth initiatives, even in a difficult macroeconomic environment. With our recent product launches, including the Quantum X Arm and next generation Focus Premium Max Laser Scanner, we are excited about the actions we are taking to drive organic revenue growth over the longer term.”
Third Quarter 2024 Financial Summary
•Total sales of $82.6 million, down 5% year over year
•Gross margin of 55.7%, compared to 48.0% in the prior year period
•Non-GAAP gross margin of 56.1%, compared to 48.9% in the prior year period
•Operating expenses of $43.8 million, compared to $48.6 million in the prior year period
•Non-GAAP operating expenses of $40.1 million, compared to $41.5 million in the prior year period
•Net loss of $0.3 million, or $(0.02) per share compared to net loss of $8.8 million, or $(0.46) per share in the prior year period
•Non-GAAP net income of $4.0 million, or $0.21 per share compared to non-GAAP net income of $0.5 million, or $0.03 per share in the prior year period
•Adjusted EBITDA of $8.9 million, or 10.7% of total sales compared to $3.5 million, or 4.1% of total sales in the prior year period


•Cash, cash equivalents & short-term investments of $88.9 million compared to $96.3 million as of December 31, 2023
* 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 $88 to $96 million
•Gross margin in the range of 55.6% to 57.1%. Non-GAAP gross margin in the range of 56.0% to 57.5%
•Operating expenses in the range of $47.4 to $49.4 million. Non-GAAP operating expenses in the range of $40.5 to $42.5 million
•Net (loss) income per share in the range of ($0.15) to $0.05. Non-GAAP net income per share in the range of $0.32 to $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 (U.S.) or +1 (785) 424-1699 (International) and using the passcode FARO. A live webcast will be available in the Investor Relations section of FARO's website at: https://www.faro.com/en/About-Us/Investor-Relations/Financial-Events-and-Presentations
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 U.S. generally accepted accounting principles (“GAAP”). These non-GAAP financial measures, including non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share, exclude the impact of purchase accounting intangible amortization expense, stock-based compensation, restructuring and other charges, and other tax adjustments, and are provided to enhance investors’ overall understanding of our historical operations and financial performance.

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 U.S. dollars are converted to U.S. dollars at the exchange rate in effect during the last day of the prior comparable period.

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.



Investor Contacts
FARO Technologies, Inc.
Matthew Horwath, Chief Financial Officer
+1 407-562-5005
IR@faro.com

Sapphire Investor Relations, LLC
Michael Funari or Erica Mannion
+1 617-542-6180
IR@faro.com



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

 
 Three Months EndedNine Months Ended
(in thousands, except share and per share data)September 30, 2024September 30, 2023September 30, 2024September 30, 2023
Sales
Product$61,461 $66,911 $186,309 $199,754 
Service21,102 19,902 62,583 60,237 
Total sales82,563 86,813 248,892 259,991 
Cost of sales
Product26,246 34,640 82,817 112,691 
Service10,341 10,499 32,003 32,587 
Total cost of sales36,587 45,139 114,820 145,278 
Gross profit45,976 41,674 134,072 114,713 
Operating expenses
Selling, general and administrative34,041 37,970 106,224 117,907 
Research and development9,771 8,188 28,628 32,568 
Restructuring costs— 2,442 616 15,130 
Total operating expenses43,812 48,600 135,468 165,605 
Income (loss) from operations2,164 (6,926)(1,396)(50,892)
Other (income) expense
Interest expense1,023 691 2,615 2,529 
Other (income) expense, net175 (381)157 (125)
Income (loss) before income tax966 (7,236)(4,168)(53,296)
Income tax expense 1,255 1,520 3,912 4,869 
Net loss$(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 - Basic19,266,217 18,953,251 19,218,004 18,899,954 
Weighted average shares - Diluted19,266,217 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,
2024		December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents$88,913 $76,787 
Short-term investments— 19,496 
Accounts receivable, net83,208 92,028 
Inventories, net39,055 34,529 
Prepaid expenses and other current assets34,252 38,768 
Total current assets245,428 261,608 
Non-current assets:
Property, plant and equipment, net19,544 21,181 
Operating lease right-of-use assets17,208 12,231 
Goodwill110,972 109,534 
Intangible assets, net46,325 47,891 
Service and sales demonstration inventory, net21,436 23,147 
Deferred income tax assets, net24,826 25,027 
Other long-term assets3,891 4,073 
Total assets$489,630 $504,692 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$30,438 $27,404 
Accrued liabilities25,208 29,930 
Income taxes payable6,881 5,699 
Current portion of unearned service revenues41,495 40,555 
Customer deposits4,282 4,251 
Lease liabilities4,645 5,434 
Total current liabilities112,949 113,273 
Loan - 5.50% Convertible Senior Notes70,096 72,760 
Unearned service revenues - less current portion20,051 20,256 
Lease liabilities - less current portion15,412 10,837 
Deferred income tax liabilities13,048 13,308 
Income taxes payable - less current portion2,510 5,629 
Other long-term liabilities46 23 
Total liabilities234,112 236,086 
Commitments and contingencies
Shareholders’ equity:
Common stock - par value $0.001, 50,000,000 shares authorized; 20,869,974 and 20,343,359 issued, respectively; 18,908,076 and 18,968,798 outstanding, respectively20 20 
Additional paid-in capital354,765 346,277 
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’ equity255,518 268,606 
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)20242023
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 amortization11,709 11,728 
Stock-based compensation8,471 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 inventory861 1,754 
Amortization of debt discount and issuance costs336 294 
Loss on disposal of assets974 (155)
Provisions for bad debts, net of recoveries966 834 
Change in operating assets and liabilities:
Decrease (Increase) in:
Accounts receivable6,864 1,282 
Inventories(8,097)(544)
Prepaid expenses and other current assets4,298 4,047 
(Decrease) Increase in:
Accounts payable and accrued liabilities(1,722)(2,802)
Income taxes payable(1,884)653 
Customer deposits144 (1,534)
Unearned service revenues778 (1,198)
Other liabilities(1,033)567 
Net cash provided by (used in) operating activities13,355 (17,580)
Investing activities:
Purchases of property and equipment(3,559)(5,016)
Maturity of short-term investments20,009 — 
Cash paid for technology development, patents and licenses(4,822)(5,071)
Net cash provided by (used in) investing activities11,628 (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 5.50% Convertible Senior Notes, due 2028, net of discount, issuance cost and accrued interest— 72,310 
Repayment of 5.50% Convertible Senior Notes, due 2028(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 equivalents12,126 42,107 
Cash and cash equivalents, beginning of period76,787 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)2024202320242023
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 profit381 736 1,087 2,298 
Non-GAAP gross profit$46,357 $42,410 $135,159 $117,011 
Gross margin, as reported55.7 %48.0 %53.9 %44.1 %
Non-GAAP gross margin56.1 %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 profit381 737 1,087 2,298 
Non-GAAP adjustments to operating expenses3,755 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 profit381 737 1,087 2,298 
Non-GAAP adjustments to operating expenses3,755 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 amortization0.08 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 $4.4 million related to the impact of valuation allowance adjustments and $0.5 million related to other discrete items. During the three months ended September 30, 2024, Other tax adjustments were comprised of $0.8 million related to the impact of valuation allowance adjustments and $0.2 million related to other discrete items. In 2023, Other tax adjustments during the nine months ended September 30, 2023 were comprised of $11.2 million related to the impact of valuation allowance adjustments and $6.5 million related to other items, including equity based compensation book to tax differences, non-GAAP adjustments impact on Global intangible low-taxed income and Prepaid tax on intercompany profit. During the three months ended September 30, 2023, Other tax adjustments were comprised of $2.0 million related to the impact of valuation allowance adjustments and $1.4 million related to other items, including equity based compensation book to tax differences, non-GAAP adjustments impact on Global intangible low-taxed income and Prepaid tax on intercompany profit.



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)2024202320242023
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 
EBITDA5,910 (2,742)10,156 (39,039)
Other expense (income), net175 (381)157 (125)
Stock-based compensation2,768 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)2024202320242023
Total sales to external customers as reported
Americas (1)
$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)2024202320242023
Total sales to external customers in constant currency (2)
Americas (1)
$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 North America and South America (“Americas”); Europe, the Middle East, and Africa (“EMEA”); and the Asia-Pacific (“APAC”).

(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 United States dollars are converted into United States dollars at the exchange rate in effect during the last day of the prior comparable period, rather than the actual exchange rates in effect during the respective periods.


 Three Months Ended September 30,Nine Months Ended September 30,
(in thousands)2024202320242023
Hardware$50,301 $55,706 $152,968 $167,484 
Software11,159 11,205 33,341 32,270 
Service21,103 19,902 62,583 60,237 
Total Sales$82,563 $86,813 $248,892 $259,991 
Hardware as a percentage of total sales60.9 %64.2 %61.5 %64.4 %
Software as a percentage of total sales13.5 %12.9 %13.4 %12.4 %
Service as a percentage of total sales25.6 %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 sales21.1 %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)2024202320242023
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
LowHigh
GAAP gross margin55.6%57.1%
Stock-based compensation0.4%0.4%
Non-GAAP gross margin56.0%57.5%

Fiscal quarter ending December 31, 2024
(in thousands)LowHigh
GAAP operating expenses$47,400$49,400
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$40,500$42,500

Fiscal quarter ending December 31, 2024
LowHigh
GAAP diluted earnings per share range$(0.15)$0.05
Stock-based compensation0.210.21
Purchase accounting intangible amortization0.060.06
Restructuring and other costs0.110.11
Non-GAAP tax adjustments0.090.09
Non-GAAP diluted earnings per share$0.32$0.52

v3.24.3
Cover Document
Nov. 06, 2024
Cover [Abstract]  
Document Type 8-K
Entity Registrant Name FARO TECHNOLOGIES, INC.
Entity Incorporation, State or Country Code FL
Entity File Number 0-23081
Entity Tax Identification Number 59-3157093
Entity Address, Address Line One 125 Technology Park
Entity Address, City or Town Lake Mary
Entity Address, State or Province FL
Entity Address, Postal Zip Code 32746
City Area Code 407
Local Phone Number 333-9911
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $.001
Trading Symbol FARO
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Amendment Flag false
Entity Central Index Key 0000917491
Document Period End Date Nov. 06, 2024
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