For the Three Months Ended
December 31,

For the Twelve Months Ended
December 31,

(in thousands)

2023

2022

2023

2022

Hardware

$       66,640

$       70,322

$     234,124

$     220,919

Software

12,178

12,943

44,448

44,361

Service

20,022

20,594

80,259

80,485

Total Sales

$       98,840

$     103,859

$     358,831

$     345,765

Hardware as a percentage of total sales

67.4 %

67.7 %

65.2 %

63.9 %

Software as a percentage of total sales

12.3 %

12.5 %

12.4 %

12.8 %

Service as a percentage of total sales

20.3 %

19.8 %

22.4 %

23.3 %

Total Recurring Revenue ⁽³⁾

$       17,360

$       18,088

$       67,497

$       68,272

Recurring revenue as a percentage of total sales

17.6 %

17.4 %

18.8 %

19.7 %

⁽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)

2023

2022

2023

2022

Net cash provided by (used in) operating activities

$            18,655

$            (6,700)

$              1,075

$          (24,856)

Purchases of property and equipment

(1,801)

(1,393)

(6,817)

(6,371)

Cash paid for technology development, patents and licenses

(2,106)

(1,413)

(7,177)

(10,567)

Free Cash Flow

14,748

(9,506)

(12,919)

(41,794)

Restructuring and other cash payments ⁽¹⁾

2,665

454

14,380

6,364

Adjusted Free Cash Flow

$            17,413

$            (9,052)

$              1,461

$          (35,430)

⁽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.