FARO Technologies(FARO) - 2025 Q1 - Quarterly Results

Financial Performance - Revenue for Q1 2025 was $82.9 million, down 1.6% year-over-year, but at the upper end of guidance range[5] - Net income for Q1 2025 was $0.9 million, or $0.05 per share, compared to a net loss of $7.3 million, or $(0.38) per share in the prior year[6] - Adjusted EBITDA reached $12.5 million, representing 15.0% of total sales, up from $5.6 million, or 6.6% of total sales in the prior year[6] - Gross profit increased to $47,237,000 in Q1 2025, up from $43,307,000 in Q1 2024, resulting in a gross margin of 57.0% compared to 51.4% year-over-year[27] - Total sales to external customers for Q1 2025 were $82,863,000, a decrease of 1.6% from $84,244,000 in Q1 2024[32] - Total recurring revenue increased to $17,299,000 in Q1 2025, representing 20.9% of total sales, compared to 19.8% in Q1 2024[32] Operational Efficiency - Operating expenses decreased to $43.4 million from $48.6 million in the prior year period[6] - Non-GAAP net income for Q1 2025 was $6,419,000, compared to $1,696,000 in Q1 2024, highlighting improved operational efficiency[27] - The company’s accounts receivable decreased by $3,305,000 in Q1 2025, indicating improved cash flow management[25] - Cash flow from operations was $5.0 million, with cash, cash equivalents, and short-term investments totaling $102.6 million[5][7] Future Outlook - The company expects Q2 2025 revenue in the range of $79 to $87 million, with gross margin between 56.5% to 58.0%[11] - The company expects GAAP gross margin for Q2 2025 to be between 56.5% and 58.0%[36] - Non-GAAP diluted earnings per share for Q2 2025 is projected to range from $0.20 to $0.40[36] Product Development and Market Strategy - Recent product launches include the Leap ST for metrology workflows and Blink for digital reality workflows, aimed at expanding market opportunities[3] - FARO signed two impactful partnerships contributing to a 6% year-over-year net orders growth[3] - The company remains focused on executing its growth strategy despite ongoing macroeconomic uncertainties[3] Restructuring and Innovation - The company has completed substantial activities under its restructuring plans aimed at improving operational performance and streamlining operations[28] - The company is implementing a restructuring plan aimed at improving operating performance and streamlining operations[34] - Research and development expenses for Q1 2025 were reported at $9,485,000, compared to $9,024,000 in Q1 2024, indicating a focus on innovation[27] Cash Flow and Financial Position - Cash and cash equivalents rose to $92,445,000 at the end of Q1 2025, compared to $88,703,000 at the end of 2024, reflecting a cash increase of $3,742,000 during the quarter[25] - Total assets increased to $495,029,000 as of March 31, 2025, up from $483,005,000 at the end of 2024[23] - The company’s total liabilities were $234,862,000 as of March 31, 2025, slightly up from $233,395,000 at the end of 2024[23] - Net cash provided by operating activities for Q1 2025 was $5,031,000, down from $6,575,000 in Q1 2024[34] - Free cash flow for Q1 2025 was $2,237,000, a decline from $3,810,000 in Q1 2024[34] Sales Composition - Hardware sales accounted for 63.5% of total sales in Q1 2025, up from 62.5% in Q1 2024[32] - Software sales as a percentage of total sales decreased to 12.5% in Q1 2025 from 13.0% in Q1 2024[32] - Total sales in constant currency for Q1 2025 were $84,056,000, compared to $83,957,000 in Q1 2024, indicating a slight increase[32]