"Second quarter revenue of $88.2 million, increased 10% year over year or 6% excluding the impact of prior year acquisitions, exceeded our expectations and was enabled by improved shipments of Quantum Max Arms and Vantage Laser Trackers," said Yuval Wasserman, Executive Chairman. "Further, we were able to execute our cost reduction activities one quarter ahead of plan and now expect to realize our lower cost base in the third quarter. We remain focused on the execution of our hardware and software enabled strategy of providing 4D digital reality solutions to our customers in the large and growing 3D Metrology, AECO and Public Safety Analytics end markets."
Second Quarter 2023 Financial Summary
- Total sales of $88.2 million, up 10% year over year or 6% excluding the impact of prior year acquisitions
- Software sales of $10.8 million, up 2% compared to the prior year period
- Recurring revenue of $16.4 million, down 4% year on year
- Gross margin of 37.8%, compared to 50.6% in the prior year period with the reduction primarily as a result of inventory write-offs that resulted from a sharper focus on core hardware products and material cost increases
- Non-GAAP gross margin of 48.0%, compared to 51.0% in the prior year period
- Operating expenses of $58.7 million, compared to $49.4 million in the prior year period with the increase primarily a result of $8.8 million in restructuring and other one-time charges
- Non-GAAP operating expenses of $44.1 million, compared to $43.2 million in the prior year period
- Net loss of $28.2 million, or $(1.49) per share compared to net loss of $8.6 million, or $(0.47) per share in the prior year period
- Non-GAAP net loss of $2.6 million, or $(0.14) per share compared to non-GAAP net loss of $0.6 million, or $(0.03) per share in the prior year period
- Adjusted EBITDA of $0.9 million, or 1.0% of total sales compared to an approximate $0.5 million, or 0.6% of total sales in the prior year period
- Cash and short-term investments of $88.5 million, compared to $88.6 million as of March 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 Third Quarter 2023
For the third quarter ending September 30, 2023, FARO currently expects:
- Revenue in the range of $76 to $84 million
- Gross margin in the range of 45% to 47%. Non-GAAP gross margin in the range of 46% to 48%
- Operating expenses in the range of $50.9 to $53.4 million. Non-GAAP operating expenses in the range of $41.0 to $42.5 million
- Net loss per share in the range of ($1.25) to ($0.71). Non-GAAP net loss per share in the range of ($0.35) to ($0.10)
Conference Call
The Company will host a conference call to discuss these results on Wednesday, August 2, 2023, at 5:00 p.m. ET. Interested parties can access the conference call by dialing (800) 245-3047 (U.S.) or +1 (203) 518-9765 (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 .
