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FARO Nasdaq· FARO Technologies Inc.
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FARO Nasdaq· FARO Technologies Inc.
Earnings report Q4 2023

FARO Technologies Reports Revenue Growth in Latest Quarter

Segments of revenue

In the latest quarter, FARO Technologies reported total sales of $358.8 million. This consisted of $278.6 million in product sales and $80.3 million in service sales. Product sales have shown a consistent increase over the past three years, with a growth from $251.1 million in 2021 to $265.3 million in 2022, and finally reaching $278.6 million in 2023. Service sales, on the other hand, have remained relatively stable, with a slight decrease from $86.7 million in 2021 to $80.3 million in 2023.

Strengths

FARO Technologies' revenue growth in the latest quarter can be attributed to the success of their software products. Revenue from current software products reached $45.1 million in 2021, $44.4 million in 2022, and $44.4 million in 2023. Additionally, recurring revenue, which includes hardware service contracts, software maintenance contracts, and subscription-based software applications, showed a consistent increase, reaching $64.1 million in 2021, $68.3 million in 2022, and $67.5 million in 2023. This shift towards increased levels of recurring revenue indicates a positive trend for the company's future financial performance.

Challenges

Despite the overall revenue growth, FARO Technologies reported a net loss of $56.6 million in the latest quarter. This can be attributed to various factors, including operating expenses and restructuring costs. The company's operating expenses increased from $136.2 million in 2021 to $146.7 million in 2022, and further to $157.3 million in 2023. Additionally, restructuring costs amounted to $7.4 million in 2021, $4.6 million in 2022, and significantly increased to $15.4 million in 2023. These challenges highlight the need for the company to effectively manage its expenses and streamline its operations.

Noteworthy

FARO Technologies announced the release of FARO Sphere XG, the next generation of their cloud-based software environment. This consolidation of their cloud-based offerings into a single unified software environment is expected to enhance the user experience and drive revenue growth in the future.

Summary

FARO Technologies reported revenue growth in the latest quarter, driven by the success of their software products and increased levels of recurring revenue. However, the company also faced challenges with operating expenses and restructuring costs, resulting in a net loss. The release of FARO Sphere XG indicates the company's commitment to innovation and future growth. Moving forward, FARO Technologies should focus on optimizing expenses and leveraging their software offerings to drive profitability.

Source documents

Form 10-K  filed on Feb 27, 2024
118 pages scanned

Reference data

Company financials Q4 revenue 98.8M
Analyst estimates Q4 EPS missed by -250.00%
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