FARO Announces First Quarter Financial Results

• Revenue of $82.9 million, at the upper end of guidance range
• Gross margin of 57.0%; Non-GAAP gross margin 57.7%, above guidance range
• Earnings per share of $0.05; Non-GAAP earnings per share ("EPS”) of $0.33, above guidance range
• Cash flow from operations of $5.0 million

"We're very pleased with our strong start to the year, with our first quarter financial results exceeding our expectations and reflecting the successful execution of our strategic growth initiatives,” said Peter Lau, President & Chief Executive Officer. "Q1 was an inflection point for FARO, with increasing traction from refreshed products, coupled with the introduction of new solutions and the signing of two impactful partnerships contributing to 6% year-over-year net orders growth. As a result, we delivered GAAP net income of $0.9 million and $12.5 million of adjusted EBITDA, or 15.0% of revenue, surpassing our forecasts. As we look ahead, we remain focused on executing our growth strategy, even amidst continued macroeconomic uncertainty. Our recent product launches, including the Leap ST in January for metrology workflows and Blink last week for digital reality workflows, expand our addressable opportunity and we believe position us well to drive sustained, long-term organic growth.”

First Quarter 2025 Financial Summary

• Total sales of $82.9 million, down 1.6% year over year
• Gross margin of 57.0%, compared to 51.4% in the prior year period
• Non-GAAP gross margin of 57.7%, compared to 51.8% in the prior year period
• Operating expenses of $43.4 million, compared to $48.6 million in the prior year period
• Non-GAAP operating expenses of $38.5 million, compared to $40.7 million in the prior year period
• Net income of $0.9 million, or $0.05 per share compared to net loss of $7.3 million, or $(0.38) per share in the prior year period
• Non-GAAP net income of $6.4 million, or $0.33 per share compared to non-GAAP net income of $1.7 million, or $0.09 per share in the prior year period
• Adjusted EBITDA of $12.5 million, or 15.0% of total sales compared to $5.6 million, or 6.6% of total sales in the prior year period
• Cash, cash equivalents & short-term investments of $102.6 million compared to $98.7 million as of December 31, 2024

Outlook for the Second Quarter 2025

For the second quarter ending June 30, 2025, FARO currently expects:

• Revenue in the range of $79 to $87 million
• Gross margin in the range of 56.5% to 58.0%. Non-GAAP gross margin in the range of 57.0% to 58.5%
• Operating expenses in the range of $45.0 to $47.0 million. Non-GAAP operating expenses in the range of $38.5 to $40.5 million
• Net (loss) income per share in the range of ($0.20) to $0.00. Non-GAAP net income per share in the range of $0.20 to $0.40.

The Company will host a conference call to discuss these results on Thursday, April 24, 2025, at 8:00 a.m. ET. Interested parties can access the conference call by dialing (800) 245-3047 (U.S.) or +1 (203) 518-9765 (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 over 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 profit, non-GAAP gross margin, non-GAAP operating expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss) and non-GAAP net income (loss) per share, exclude the impact of purchase accounting intangible amortization expense, stock-based compensation, restructuring and other charges, and other tax adjustments, and are provided to enhance investors' overall understanding of our historical operations and financial performance.

In addition, we present EBITDA, which is calculated as net income (loss) before interest (income) expense, net, income tax benefit (expense) and depreciation and amortization, and Adjusted EBITDA, which is calculated as EBITDA, excluding other (income) expense, net, stock-based compensation, and restructuring and other charges, as measures of our operating profitability. The most directly comparable GAAP measure to EBITDA and Adjusted EBITDA is net income (loss). We also present Adjusted EBITDA margin, which is calculated as Adjusted EBITDA as a percent of total sales.

We have included non-GAAP total sales on a constant currency basis. The most directly comparable GAAP measure to total sales on a constant currency basis is total sales. We believe constant currency information is useful in analyzing underlying trends in our business and the commercial performance of our products by eliminating the impact of highly volatile fluctuations in foreign currency markets and allows for period-to-period comparisons of our performance. For simplicity, we may elect to omit this information in future periods if we determine a lack of material impact. To present this information, current period performance for entities reporting in currencies other than U.S. dollars are converted to U.S. dollars at the exchange rate in effect during the last day of the prior comparable period.

Management believes that these non-GAAP financial measures provide investors with relevant period-to-period comparisons of our core operations using the same methodology that management employs in its review of the Company's operating results. These financial measures are not recognized terms under GAAP and should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP.

These non-GAAP financial measures have limitations that should be considered before using these measures to evaluate a company's financial performance. These non-GAAP financial measures, as presented, may not be comparable to similarly titled measures of other companies due to varying methods of calculation. The financial statement tables that accompany this press release include a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties, such as statements about the outlook for the second quarter of 2025, demand for and customer acceptance of FARO's products, FARO's product development and product launches, FARO's growth, strategic and restructuring plans and initiatives, including but not limited to the additional restructuring charges expected to be incurred in connection with our restructuring and integration plans and the timing and amount of cost savings and other benefits expected to be realized from the restructuring and integration plans and other strategic initiatives, and FARO's growth potential and profitability. Statements that are not historical facts or that describe the Company's plans, objectives, projections, expectations, assumptions, strategies, or goals are forward-looking statements. In addition, words such as "is,” "will” and similar expressions or discussions of FARO's plans or other intentions identify forward-looking statements. Forward-looking statements are not guarantees of future performance and are subject to various known and unknown risks, uncertainties, and other factors that may cause actual results, performances, or achievements to differ materially from future results, performances, or achievements expressed or implied by such forward-looking statements. Consequently, undue reliance should not be placed on these forward-looking statements.

Factors that could cause actual results to differ materially from what is expressed or forecasted in such forward-looking statements include, but are not limited to:

• the Company's ability to realize the intended benefits of its undertaking to transition to a company that is reorganized around functions to improve the efficiency of its sales organization and to improve operational effectiveness;
• the Company's inability to successfully execute its strategic plan and our 2024 Restructuring Plan, including but not limited to additional impairment charges including existing leasehold improvements and/or higher than expected severance costs and exit costs, and its inability to realize the expected benefits of such plans;
• the effect of any changes in our executive management team and the loss of any of our executive officers or other key personnel, which may be impacted by factors such as our inability to competitively address inflationary pressures on employee compensation and flexibility in employee work arrangements, including the impact of our 2025 "return to office" policy;
• the outcome of any litigation to which the Company is or may become a party;
• loss of future government sales;
• potential impacts on customer and supplier relationships and the Company's reputation;
• development by others of new or improved products, processes or technologies that make the Company's products less competitive or obsolete;
• the Company's inability to maintain its technological advantage by developing new products and enhancing its existing products;
• declines or other adverse changes, or lack of improvement, in industries that the Company serves or the domestic and international economies in the regions of the world where the Company operates and other general economic, business, and financial conditions;
• the effect of general economic and financial market conditions, including in response to public health concerns;
• assumptions regarding the Company's financial condition or future financial performance may be incorrect;
• the impact of fluctuations in foreign exchange rates and inflation rates; and
• other risks and uncertainties discussed in Part I, Item 1A. Risk Factors in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the Securities and Exchange Commission on February 24, 2025, as supplemented by the Company's Quarterly Reports on Form 10-Q, and in other SEC filings.

Investor Contacts

FARO Technologies, Inc.

Matthew Horwath, Chief Financial Officer

+1 407-562-5005

IR@faro.com

Sapphire Investor Relations, LLC

Michael Funari or Erica Mannion

+1 617-542-6180

IR@faro.com