FARO Announces Fourth Quarter and Full Year 2024 Financial Results

Q4 revenue of $93.5 million, at the upper end of our guidance range
Q4 net loss of $1.0 million, or $(0.05) per share; Non-GAAP EPS of $0.50, at the high end of guidance range
Significant improvement in cash flow, which results in positive Q4 and FY2024 cash flow from operations

LAKE MARY, Fla., Feb. 24, 2025 (GLOBE NEWSWIRE) -- FARO® Technologies, Inc. (Nasdaq: FARO), a global leader in 4D digital reality solutions, today announced its financial results for the fourth quarter and full year ended December 31, 2024.

“We are proud to conclude the year with strong momentum, surpassing targets across all of our metrics in the fourth quarter and achieving a decade-high adjusted EBITDA margin of 18% along with our fifth consecutive quarter of positive operating cash flow,” said Peter Lau, President & Chief Executive Officer. “2024 was a milestone year for FARO, marking our first double-digit adjusted EBITDA margin since 2018 and the first time in over a decade to exceed 11% adjusted EBITDA margins for the full year, driving a $29.6 million year-over-year increase in operating cash flow. As we enter 2025, we are confident that our multi-phase strategy, focused on operational excellence, organic growth, and strategic investments, positions us for sustained market leadership and long-term value creation for our shareholders.”

Fourth Quarter 2024 Financial Summary

Total sales of $93.5 million, down 5% year over year
Gross margin of 56.7%, compared to 50.9% in the prior year period
Non-GAAP gross margin of 57.4%, compared to 51.3% in the prior year period
Operating expenses of $48.4 million, compared to $48.9 million in the prior year period
Non-GAAP operating expenses of $39.9 million, compared to $41.3 million in the prior year period
Net loss of $1.0 million, or $(0.05) per share compared to net income of $1.6 million, or $0.08 per share in the prior year period
Non-GAAP net income of $9.5 million, or $0.50 per share compared to net income of $5.8 million, or $0.31 per share in the prior year period
EBITDA of $8.2 million, or 8.8% of total sales compared to $3.7 million, or 3.7% of total sales in the prior year period
Adjusted EBITDA of $16.7 million, or 17.9% of total sales compared to $11.9 million, or 12.1% of total sales in the prior year period
Cash, cash equivalents & short-term investments of $98.7 million, compared to $88.9 million as of September 30, 2024.

* 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”.

Full Year 2024 Financial Summary

Total sales of $342.4 million, down 5% compared to the prior year period
Net loss of $9.1 million, or $(0.47) per share compared to net loss of $56.6 million, or $(2.99) per share in the prior year period
Non-GAAP net income of $18.5 million, or $0.97 per share compared to non-GAAP net loss of $9.9 million, or $(0.52) per share in the prior year period

Outlook for the First Quarter 2025

For the first quarter ending March 31, 2025, FARO currently expects:

Revenue in the range of $77 to $85 million
Gross margin in the range of 54.5% - 56.0%. Non-GAAP gross margin in the range of 55.0% - 56.5%
Operating expenses in the range of $45.0 - $47.0 million. Non-GAAP operating expenses in the range of $38.5 - $40.5 million
Net loss per share in the range of ($0.36) - ($0.16). Non-GAAP earnings per share in the range of $0.10 to $0.30

Conference Call

The Company will host a conference call to discuss these results on Monday, February 24, 2025, at 4:30 p.m. ET. Interested parties can access the conference call by dialing (800) 579-2543 (U.S.) or +1 (785) 424-1789 (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 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 from operations, non-GAAP net income and non-GAAP net income per share, exclude the impact of purchase accounting intangible amortization expense and fair value adjustments, 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 fair value adjustments, 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.

In our fourth quarter reporting, 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 first 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.

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