"Third quarter financial performance with revenue of $86.8 million and non-GAAP EPS of $0.02, exceeded the high-end of our expectations driven by a combination of moderate improvements in end market demand and operational performance," said Peter Lau, President & Chief Executive Office of FARO. "We are excited about the mid to long-term prospects for our business and remain focused on improved execution of our hardware and software enabled strategy, exemplified by the recent launch of the highly differentiated Orbis Mobile Scanner and release of an enhanced version of FARO Sphere XG."
Third Quarter 2023 Financial Summary
- Total sales of $86.8 million, up 2% year over year
- Software sales of $11.2 million, up 6% compared to the prior year period
- Recurring revenue of $17.1 million, up 3% year on year
- Gross margin of 48.0%, compared to 50.7% in the prior year period
- Non-GAAP gross margin of 48.9%, compared to 51.0% in the prior year period
- Operating expenses of $48.6 million, compared to $50.4 million in the prior year period
- Non-GAAP operating expenses of $41.5 million, compared to $44.3 million in the prior year period
- Net loss of $8.8 million, or $(0.46) per share compared to net loss of $6.3 million, or $(0.34) per share in the prior year period
- Non-GAAP net income of $0.5 million, or $0.02 per share compared to non-GAAP net gain of $0.5 million, or $0.03 per share in the prior year period
- Adjusted EBITDA of $3.5 million, or 4.1% of total sales compared to $2.0 million, or 2.3% of total sales in the prior year period
- Cash and cash equivalent of $79.9 million, compared to $88.5 million as of June 30, 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 2023
For the fourth quarter ending December 31, 2023, FARO currently expects:
- Revenue in the range of $92 to $100 million
- Gross margin in the range of 49.5% to 51.0%. Non-GAAP gross margin in the range of 50.5% to 52.0%
- Operating expenses in the range of $47.5 to $49.5 million. Non-GAAP operating expenses in the range of $41.0 to $43.0 million
- Net loss per share in the range of ($0.30) to ($0.15). Non-GAAP net income per share in the range of $0.18 to $0.34
Conference Call
The Company will host a conference call to discuss these results on Thursday, November 2, 2023, at 8:00 a.m. ET. Interested parties can access the conference call by dialing (800) 343-4849 (U.S.) or +1 (203) 518-9843 (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 margin, non-GAAP operating expenses, non-GAAP net loss and non-GAAP net loss per share, exclude the impact of purchase accounting intangible amortization expense and fair value adjustments, stock-based compensation, inventory reserve charge, restructuring and other charges, and other tax adjustments, and are provided to enhance investors' overall understanding of our historical operations and financial performance.
