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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): February 24, 2025
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 February 24, 2025, FARO Technologies, Inc. (the “Company”) issued a press release announcing its results of operations for the fourth fiscal quarter and year ended December 31, 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.
    
  February 24, 2025   /s/ Matthew Horwath
      By:Matthew Horwath
      Its:SVP & Chief Financial Officer
(Duly Authorized Officer and Principal Financial Officer)




Exhibit 99.1
imagejpg.jpg

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, FL, February 24, 2025 - 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.
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 and our 2024 Restructuring Plan, including but not limited to additional impairment charges including existing leasehold improvements and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;
•the effect of any changes in our executive management team 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, including the impact of our 2025 "return to office" policy;
•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, 2024 that will be filed with the SEC following this earnings release, 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
CONSOLIDATED STATEMENTS OF OPERATIONS

 
 Three Months EndedTwelve Months Ended
(in thousands, except share and per share data)December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Sales
Product$73,885 $78,818 $260,194 $278,572 
Service19,650 20,022 82,233 80,259 
Total sales93,535 98,840 342,427 358,831 
Cost of sales
Product30,077 37,781 112,894 150,472 
Service10,377 10,773 42,380 43,360 
Total cost of sales40,454 48,554 155,274 193,832 
Gross profit53,081 50,286 187,153 164,999 
Operating expenses
Selling, general and administrative34,360 39,429 140,584 157,336 
Research and development11,428 9,238 40,056 41,806 
Restructuring costs2,568 263 3,184 15,393 
Total operating expenses48,356 48,930 183,824 214,535 
Income (loss) from operations4,725 1,356 3,329 (49,536)
Other (income) expense
Interest expense (income)936 819 3,551 3,348 
Other (income) expense, net555 1,303 712 1,178 
Loss before income tax3,234 (766)(934)(54,062)
Income tax expense (benefit)4,220 (2,354)8,132 2,515 
Net loss (income)$(986)$1,588 $(9,066)$(56,577)
Net loss (income) per share - Basic$(0.05)$0.08 $(0.47)$(2.99)
Net loss (income) per share - Diluted$(0.05)$0.08 $(0.47)$(2.99)
Weighted average shares - Basic18,938,561 18,961,632 19,151,551 18,917,778 
Weighted average shares - Diluted18,938,561 21,086,277 19,151,551 18,917,778 



FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)December 31,
2024		December 31,
2023
ASSETS
Current assets: 
Cash and cash equivalents$88,703 $76,787 
Short-term investments9,999 19,496 
Accounts receivable, net87,022 92,028 
Inventories, net32,121 34,529 
Prepaid expenses and other current assets30,326 38,768 
Total current assets248,171 261,608 
Non-current assets:
Property, plant and equipment, net18,767 21,181 
Operating lease right-of-use asset15,880 12,231 
Goodwill106,555 109,534 
Intangible assets, net44,133 47,891 
Service and sales demonstration inventory, net22,760 23,147 
Deferred income tax assets, net23,005 25,027 
Other long-term assets3,734 4,073 
Total assets$483,005 $504,692 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$27,336 $27,404 
Accrued liabilities27,735 29,930 
Income taxes payable6,736 5,699 
Current portion of unearned service revenues41,590 40,555 
Customer deposits4,989 4,251 
Lease liability4,474 5,434 
Total current liabilities112,860 113,273 
Loan - 5.50% Convertible Senior Notes70,267 72,760 
Unearned service revenues - less current portion19,886 20,256 
Lease liability - less current portion14,056 10,837 
Deferred income tax liabilities14,809 13,308 
Income taxes payable - less current portion1,485 5,629 
Other long-term liabilities32 23 
Total liabilities233,395 236,086 
Commitments and contingencies
Shareholders’ equity:
Common stock - par value $0.001, 50,000,000 shares authorized; 20,916,723 and 20,343,359 issued; 18,954,956 and 18,968,798 outstanding, respectively20 20 
Additional paid-in capital358,133 346,277 
Accumulated deficit(18,855)(9,789)
Accumulated other comprehensive loss(49,019)(37,247)
Common stock in treasury, at cost - 1,961,767 and 1,376,220 shares held, respectively(40,669)(30,655)
Total shareholders’ equity249,610 268,606 
Total liabilities and shareholders’ equity$483,005 $504,692 


FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
 Twelve Months Ended
December 31,
(in thousands)20242023
Cash flows from:
Operating activities:
Net loss$(9,066)$(56,577)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization15,737 15,377 
Stock-based compensation11,689 17,833 
Inventory write-downs— 9,340 
Asset impairment charges— 5,707 
Provision for bad debts, net of recoveries957 1,030 
Amortization of debt discount and issuance costs507 450 
Loss on disposal of assets1,548 274 
Provision for excess and obsolete inventory1,118 2,361 
Deferred income tax (benefit) and other non-cash charges4,926 (26)
Change in operating assets and liabilities, net of acquisitions:
(Increase) decrease in:
Accounts receivable, net(975)(50)
Inventories(2,773)736 
Prepaid expenses and other assets6,988 3,387 
(Decrease) increase in:
Accounts payable and accrued liabilities(259)4,421 
Income taxes payable(2,931)(3,808)
Customer deposits1,044 (2,533)
Unearned service revenues3,344 2,786 
Other liabilities(1,225)367 
Net cash provided by (used in) operating activities 30,629 1,075 
Investing activities:
Purchases of property and equipment(5,842)(6,817)
Purchases of short-term investments(9,999)(19,496)
Maturities of short-term investments20,009 — 
Cash paid for technology development, patents and licenses(7,358)(7,177)
Net cash used in investing activities(3,190)(33,490)
Financing activities:
Payments on capital leases(155)(154)
Repurchases of common stock(10,014)— 
Cash settlement of equity awards— 217 
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(12,854)71,275 
Effect of exchange rate changes on cash and cash equivalents(2,669)115 
Increase (Decrease) in cash and cash equivalents11,916 38,975 
Cash and cash equivalents, beginning of period76,787 37,812 
Cash and cash equivalents, end of period$88,703 $76,787 


FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP
(UNAUDITED)
Three Months Ended December 31,Twelve Months Ended December 31,
(dollars in thousands, except per share data)2024202320242023
Gross profit, as reported$53,081 $50,286 $187,153 $164,999 
Stock-based compensation (1)
383 364 1,468 1,335 
Restructuring and other costs(2)
262 51 270 1,377 
Non-GAAP adjustments to gross profit645 415 1,738 2,712 
Non-GAAP gross profit$53,726 $50,701 $188,891 $167,711 
Gross margin, as reported56.7 %50.9 %54.7 %46.0 %
Non-GAAP gross margin57.4 %51.3 %55.2 %46.7 %
Selling, general and administrative, as reported$34,360 $39,429 $140,584 $157,336 
Stock-based compensation (1)
(2,347)(4,488)(8,343)(14,198)
Restructuring and other costs (2)
— (1,067)(3,453)(2,273)
Purchase accounting intangible amortization(388)(634)(1,555)(2,658)
Non-GAAP selling, general and administrative$31,625 $33,240 $127,233 $138,207 
Research and development, as reported$11,428 $9,238 $40,056 $41,806 
Stock-based compensation (1)
(488)(705)(1,878)(2,300)
Restructuring and other costs (2)
(1,948)— (1,948)— 
Purchase accounting intangible amortization(688)(475)(2,777)(2,016)
Non-GAAP research and development$8,304 $8,058 $33,453 $37,490 
Operating expenses, as reported$48,356 $48,930 $183,824 $214,535 
Stock-based compensation (1)
(2,835)(5,194)(10,221)(16,498)
Restructuring and other costs (2)
(4,516)(1,329)(8,585)(17,666)
Purchase accounting intangible amortization(1,076)(1,109)(4,332)(4,674)
Non-GAAP adjustments to operating expenses(8,427)(7,632)(23,138)(38,838)
Non-GAAP operating expenses$39,929 $41,298 $160,686 $175,697 
Income (loss) from operations, as reported$4,725 $1,356 $3,329 $(49,536)
Non-GAAP adjustments to gross profit645 415 1,738 2,712 
Non-GAAP adjustments to operating expenses8,427 7,632 23,138 38,838 
Non-GAAP income (loss) from operations$13,797 $9,403 $28,205 $(7,986)
Net (loss) income, as reported$(986)$1,588 $(9,066)$(56,577)
Non-GAAP adjustments to gross profit645 415 1,738 2,712 
Non-GAAP adjustments to operating expenses8,427 7,632 23,138 38,838 
Income tax effect of non-GAAP adjustments(1,824)(2,056)(5,356)(10,852)
Other tax adjustments (4)
3,209 (1,738)8,070 15,962 
Non-GAAP net income (loss)$9,471 $5,841 $18,524 $(9,917)
Net (loss) income per share - Diluted, as reported$(0.05)$0.08 $(0.47)$(2.99)
Stock-based compensation (1)
0.17 0.28 0.61 0.94 
Restructuring and other costs (2)
0.25 0.07 0.46 1.01 
Purchase accounting intangible amortization and fair value adjustments0.06 0.06 0.23 0.25 
Income tax effect of non-GAAP adjustments (3)
(0.10)(0.10)(0.28)(0.57)
Other tax adjustments (3)
0.17 (0.08)0.42 0.84 
Non-GAAP net income (loss) per share - Diluted$0.50 $0.31 $0.97 $(0.52)



(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. Substantially all of our planned activities under the Restructuring Plan and the Integration Plan are complete. On November 1, 2024, our Board of Directors approved a restructuring plan (the “2024 Restructuring Plan”), which is intended to support its strategic plan in an effort to improve operating performance and streamline and simplify operations, particularly around our redundant operations and underperforming countries primarily driven by economic and demand challenges in the manufacturing and construction sectors.
(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 twelve months ended December 31, 2024 were comprised of $2.4 million related to the impact of valuation allowance adjustments, $1.7 million related to equity based compensation book to tax differences, and $4.0 million related to the impact of Income tax effect of non-GAAP adjustments and the effect of deferred adjustments, Global intangible low-taxed income ("GILTI") and Prepaid tax on intercompany profit. In 2023, Other tax adjustments during the twelve months ended December 31, 2023 were comprised of $9.2 million related to the impact of valuation allowance adjustments, $2.1 million related to equity based compensation book to tax differences, and $4.7 million related to the impact of Income tax effect of non-GAAP adjustments and the effect of deferred adjustments, Global intangible low-taxed income ("GILTI") 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 December 31,Twelve Months Ended December 31,
(in thousands)2024202320242023
Net (loss) income$(986)$1,588 $(9,066)$(56,577)
Interest expense, net
936 819 3,551 3,348 
Income tax expense (benefit)
4,220 (2,354)8,132 2,515 
Depreciation and amortization and fair value adjustments
4,028 3,649 15,737 15,377 
EBITDA8,198 3,702 18,354 (35,337)
Other expense, net555 1,303 712 1,178 
Stock-based compensation3,218 5,557 11,689 17,833 
Restructuring and other costs (1)
4,778 1,380 8,855 19,043 
Adjusted EBITDA$16,749 $11,942 $39,610 $2,717 
Adjusted EBITDA margin (2)
17.9 %12.1 %11.6 %0.8 %

(1) 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. Substantially all of our planned activities under the Restructuring Plan and the Integration Plan are complete. On November 1, 2024, our Board of Directors approved a restructuring plan (the “2024 Restructuring Plan”), which is intended to support its strategic plan in an effort to improve operating performance and streamline and simplify operations, particularly around our redundant operations and underperforming countries primarily driven by economic and demand challenges in the manufacturing and construction sectors.

(2) Calculated as Adjusted EBITDA as a percentage of total sales.




FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
KEY SALES MEASURES
(UNAUDITED)
 For the Three Months Ended December 31,For the Twelve Months Ended December 31,
(in thousands)2024202320242023
Total sales to external customers as reported
Americas (1)
$40,563 $42,535 $158,311 $167,269 
EMEA (1)
32,922 33,657 108,418 108,298 
APAC (1)
20,050 22,648 75,698 83,264 
$93,535 $98,840 $342,427 $358,831 
For the Three Months Ended December 31,For the Twelve Months Ended December 31,
(in thousands)2024202320242023
Total sales to external customers in constant currency (2)
Americas (1)
$41,425 $42,678 $159,990 $167,889 
EMEA (1)
34,122 34,490 110,938 109,746 
APAC (1)
20,869 23,088 78,119 83,448 
$96,416 $100,256 $349,047 $361,083 

(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.


 For the Three Months Ended December 31,For the Twelve Months Ended December 31,
(in thousands)2024202320242023
Hardware$62,297 $66,640 $215,265 $234,124 
Software11,588 12,178 44,929 44,448 
Service19,650 20,022 82,233 80,259 
Total Sales$93,535 $98,840 $342,427 $358,831 
Hardware as a percentage of total sales66.6 %67.4 %62.9 %65.2 %
Software as a percentage of total sales12.4 %12.3 %13.1 %12.4 %
Service as a percentage of total sales21.0 %20.3 %24.0 %22.4 %
Total Recurring Revenue (3)
$17,077 $17,360 $68,364 $67,497 
Recurring revenue as a percentage of total sales18.3 %17.6 %20.0 %18.8 %

(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 December 31,Twelve Months Ended December 31,
(in thousands)2024202320242023
Net cash provided by operating activities$17,274 $18,655 $30,629 $1,075 
Purchases of property and equipment(2,283)(1,801)(5,842)(6,817)
Cash paid for technology development, patents and licenses(2,536)(2,106)(7,358)(7,177)
Free Cash Flow12,455 14,748 17,429 (12,919)
Restructuring and other cash payments (1)
3,764 2,665 6,864 14,380 
Adjusted Free Cash Flow$16,219 $17,413 $24,293 $1,461 

(1) 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 cash payments primarily consist of severance and related benefits.


FARO TECHNOLOGIES, INC. AND SUBSIDIARIES
RECONCILIATION OF OUTLOOK - GAAP TO NON-GAAP

Fiscal quarter ending March 31, 2025
LowHigh
GAAP gross margin54.5%56.0%
Stock-based compensation0.5%0.5%
Non-GAAP gross margin55.0%56.5%

Fiscal quarter ending March 31, 2025
(in thousands)LowHigh
GAAP operating expenses$45,000$47,000
Stock-based compensation(3,300)(3,300)
Purchase accounting intangible amortization(1,200)(1,200)
Restructuring and other costs(2,000)(2,000)
Non-GAAP operating expenses$38,500$40,500

Fiscal quarter ending March 31, 2025
LowHigh
GAAP diluted loss per share range$(0.36)$(0.16)
Stock-based compensation0.190.19
Purchase accounting intangible amortization0.060.06
Restructuring and other costs0.110.11
Non-GAAP tax adjustments0.100.10
Non-GAAP diluted loss per share$0.10$0.30

v3.25.0.1
Cover Document
Feb. 24, 2025
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 Feb. 24, 2025
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