FARO TECHNOLOGIES, INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP

(UNAUDITED)

Three Months Ended March 31,

(dollars in thousands, except per share data)

2022

2021

Gross profit, as reported

$                      41,026

$                      40,407

     Stock-based compensation ⁽¹⁾

199

66

     Non-GAAP adjustments to gross profit

199

66

Non-GAAP gross profit

$                      41,225

$                      40,473

Gross margin, as reported

53.5%

52.9%

Non-GAAP gross margin

53.8%

53.0%

Selling, general and administrative, as reported

$                      35,490

$                      33,348

     Stock-based compensation ⁽¹⁾

(2,221)

(1,682)

     Purchase accounting intangible amortization

(201)

(185)

Non-GAAP selling, general and administrative

$                      33,068

$                      31,481

Research and development, as reported

$                      12,128

$                      11,973

     Stock-based compensation ⁽¹⁾

(447)

(346)

     Purchase accounting intangible amortization

(545)

(328)

Non-GAAP research and development

$                      11,136

$                      11,299

Operating expenses, as reported

$                      48,218

$                      46,845

     Stock-based compensation ⁽¹⁾

(2,668)

(2,028)

     Restructuring costs ⁽²⁾

(600)

(1,524)

     Purchase accounting intangible amortization

(746)

(513)

Non-GAAP adjustments to operating expenses

(4,014)

(4,065)

Non-GAAP operating expenses

$                      44,204

$                      42,780

Loss from operations, as reported

$                      (7,192)

$                      (6,438)

     Non-GAAP adjustments to gross profit

199

66

     Non-GAAP adjustments to operating expenses

4,014

4,065

Non-GAAP loss from operations

$                      (2,979)

$                      (2,307)

Net loss, as reported

$                      (9,687)

$                      (3,221)

     Non-GAAP adjustments to gross profit

199

66

     Non-GAAP adjustments to operating expenses

4,014

4,065

     Income tax effect of non-GAAP adjustments

(967)

(1,478)

     Other tax adjustments ⁽³⁾

3,937

—

Non-GAAP net loss

$                      (2,504)

$                         (568)

Net loss per share - Diluted, as reported

$                        (0.53)

$                        (0.18)

     Stock-based compensation ⁽¹⁾

0.16

0.12

     Restructuring costs ⁽²⁾

0.03

0.08

     Purchase accounting intangible amortization

0.04

0.03

     Income tax effect of non-GAAP adjustments

(0.05)

(0.08)

     Other tax adjustments ⁽³⁾

0.21

—

Non-GAAP net loss per share - Diluted

$                        (0.14)

$                        (0.03)