FARO Technologies Inc (FARO) 2024 Q2 法說會逐字稿

Good day, everyone, and welcome to the FARO Technologies second quarter 2024 earnings call. For opening remarks and introductions, I would now like to turn the call over to Michael Funari at Sapphire Investor Relations. Please go ahead.

大家好，歡迎參加 FARO Technologies 2024 年第二季財報電話會議。對於開場白和介紹，我現在想將電話轉給藍寶石投資者關係部的 Michael Funari。請繼續。

Thank you, and good afternoon. With me today from FARO are Peter Lau, President and Chief Executive Officer; and Matt Horwath, Chief Financial Officer.

謝謝你，下午好。今天與我一起出席 FARO 的有總裁兼執行長 Peter Lau；和首席財務官馬特·霍瓦斯。

Today, after market close, the company released its financial results for the second quarter of 2024. The related press release and Form 10-Q is available on FARO's website at www.faro.com.

今天收盤後，該公司發布了 2024 年第二季的財務業績。相關新聞稿和表格 10-Q 可在 FARO 網站 www.faro.com 上取得。

Please note certain statements in this conference call, which are not historical facts, may be considered forward-looking statements that involve risks and uncertainties, some of which are beyond our control and include statements regarding future business results, product and technology development, customer demand, inventory levels, our outlook and financial guidance, economic and industry projections or subsequent events.

請注意，本次電話會議中的某些陳述並非歷史事實，可能被視為涉及風險和不確定性的前瞻性陳述，其中一些風險和不確定性超出了我們的控制範圍，包括有關未來業務業績、產品和技術開發、客戶需求的陳述、庫存水準、我們的前景和財務指導、經濟和行業預測或後續事件。

Various factors could cause actual results to differ materially. For a more detailed description of these and other risks and uncertainties, please refer to today's press release and our annual and quarterly SEC filings. Forward-looking statements reflect our views only as of today, and except as required by law, we undertake no obligation to update or revise them.

各種因素可能導致實際結果有重大差異。有關這些以及其他風險和不確定性的更詳細描述，請參閱今天的新聞稿以及我們向 SEC 提交的年度和季度文件。前瞻性陳述僅反映我們截至目前為止的觀點，除非法律要求，否則我們不承擔更新或修改這些陳述的義務。

During today's conference call, management will discuss certain financial measures that are not presented in accordance with US generally accepted accounting principles, or non-GAAP financial issues. In the press release, you'll find additional disclosures regarding these non-GAAP measures, including reconciliations to comparable GAAP measures. While not recognized under GAAP, management believes these non-GAAP financial measures provide investors with relevant period-to-period comparisons of core operations. However, they should not be considered in isolation or as a substitute for a measure of financial performance prepared in accordance with GAAP.

在今天的電話會議上，管理階層將討論某些不符合美國公認會計原則或非公認會計準則財務問題的財務指標。在新聞稿中，您會發現有關這些非公認會計準則衡量標準的其他揭露，包括與可比較公認會計準則衡量標準的調節。雖然未根據公認會計原則予以認可，但管理層認為這些非公認會計原則財務指標為投資者提供了核心業務的相關期間比較。然而，它們不應被孤立地考慮或作為根據 GAAP 編制的財務業績衡量標準的替代品。

Now I'd like to turn the call over to Peter Lau.

現在我想把電話轉給劉彼得。

Thank you, Mike. Good afternoon, and welcome, everyone, to our call.

謝謝你，麥克。下午好，歡迎大家撥打我們的電話。

In the second quarter, we continued to make significant progress towards the strategic plan we outlined in March and are well ahead of where we expected to be at this time. We exceeded our targets on all items within our control. Non-GAAP gross margin was 55%, an increase of 300 basis points sequentially, and non-GAAP operating expenses were $40 million, down 9% over prior year and 2% sequentially. As a result, we generated $0.18 of non-GAAP EPS, which is above the high end of our guidance range, the fifth straight quarter of exceeding expectations.

第二季度，我們繼續在 3 月制定的策略計畫方面取得重大進展，遠遠超出了我們目前的預期。我們在我們控制範圍內的所有項目上都超出了目標。非 GAAP 毛利率為 55%，較上一季增加 300 個基點，非 GAAP 營運費用為 4,000 萬美元，較上年下降 9%，較上一季下降 2%。結果，我們實現了 0.18 美元的非 GAAP 每股收益，高於我們指導範圍的上限，連續第五個季度超出預期。

Adjusted EBITDA was $8.4 million or 10.3% of sales, bringing our first half adjusted EBITDA up to $14 million. That $14 million exceeds our full year 2023 adjusted EBITDA performance and represents an improvement of 1,100 basis points as a percent of revenue. Operating cash flow was positive in the quarter, our third straight quarter of operating cash flow generation, a first for our business since 2019.

調整後 EBITDA 為 840 萬美元，佔銷售額的 10.3%，使我們上半年調整後 EBITDA 達到 1,400 萬美元。這 1,400 萬美元超過了我們 2023 年全年調整後的 EBITDA 業績，佔營收的百分比提高了 1,100 個基點。本季營運現金流為正，這是我們連續第三個季度實現營運現金流生成，這是我們業務自 2019 年以來的首次。

As I reflect on the last year, we've made substantial progress in improving our operational efficiency. Our second quarter gross profit and EBITDA margins represent a step-up from our strong first quarter performance, and we believe this validates the targets we set out in March and demonstrates the significant operating leverage now built into our business as our organic growth initiatives take hold in the quarters and years ahead.

回顧去年，我們在提高營運效率方面取得了實質進展。我們第二季的毛利和EBITDA 利潤率比第一季的強勁業績有所提高，我們相信這驗證了我們在3 月份制定的目標，並表明隨著我們的有機增長計劃的實施，我們的業務現已建立了重要的營運槓桿在未來的幾個季度和幾年裡。

For reference, at our investor event in March, we laid out long-term targets of 600 basis points of improvement in gross margin with flat operating expenses, delivering an EBITDA margin of 9% to 11%, assuming no revenue growth. In Q2, we have already achieved these targets, and we expect to see additional long-term upside in the years ahead as we continue to optimize our operations through a number of initiatives.

作為參考，在 3 月的投資者活動中，我們制定了毛利率提高 600 個基點、營業費用持平的長期目標，假設收入沒有成長，則 EBITDA 利潤率為 9% 至 11%。在第二季度，我們已經實現了這些目標，隨著我們繼續透過一系列舉措優化我們的運營，我們預計未來幾年將看到更多的長期成長。

From a top line perspective, we delivered $82.1 million in revenue in the second quarter. Like many others, we saw a mix of demand levels across both the markets and geographies we serve. Within our various served markets, discretionary CapEx spending remains a focus as our customers evaluate the macroeconomic outlook and the potential implications it has for their business.

從營收角度來看，我們第二季實現了 8,210 萬美元的收入。與許多其他公司一樣，我們看到我們所服務的市場和地區的需求水準參差不齊。在我們服務的各個市場中，當我們的客戶評估宏觀經濟前景及其對其業務的潛在影響時，可自由支配的資本支出仍然是一個焦點。

As seen in our Q2 results, deals largely continue to move forward as planned. However, in certain subsectors, such as the construction market, there continues to be a degree of caution and budget spending beyond what we would normally see in a healthy macro environment.

正如我們第二季的業績所示，交易基本上繼續按計劃進行。然而，在某些子行業，例如建築市場，仍然存在一定程度的謹慎態度，預算支出超出了我們在健康的宏觀環境中通常會看到的水平。

With that said, while discretionary CapEx spend remains soft, we continue to see strong demand in our software and service offerings, and we continue to believe in our ability to grow faster than the markets we serve over time.

話雖如此，雖然可自由支配的資本支出仍然疲軟，但我們仍然看到對我們的軟體和服務產品的強勁需求，並且我們仍然相信我們有能力隨著時間的推移以比我們所服務的市場更快的速度成長。

Geographically, in the Americas and EMEA, demand remained stable, while in Asia, we again saw a decline in the overall region. As we discussed in May, while overall results were stable for Asia-Pac in the first quarter, it was a small number of deals that created the strength. Given the ongoing macroeconomic challenges in China, including a slower environment in 3D metrology, market demand proved softer than we had anticipated at the end of the first quarter.

從地理上看，在美洲和歐洲、中東和非洲，需求保持穩定，而在亞洲，我們再次看到整個地區的需求下降。正如我們在 5 月所討論的，雖然亞太地區第一季的整體業績穩定，但少數交易創造了實力。鑑於中國持續面臨的宏觀經濟挑戰，包括 3D 計量環境放緩，市場需求被證明比我們第一季末的預期疲軟。

Operationally, our gross margin came in ahead of expectations as our focus on variable cost productivity, mitigation of broker fees and supply chain localization efforts continue to progress. In addition, we continue to identify new opportunities to further identify -- optimize our operations.

在營運方面，我們的毛利率超出了預期，因為我們對可變成本生產力、降低經紀人費用和供應鏈本地化工作的關注不斷取得進展。此外，我們繼續尋找新的機會來進一步確定—優化我們的營運。

Using logistics as an example, over the last 6 months, we have enhanced the efficiency of the shipments from our manufacturing facilities, improved shipping methods and brought on new partners to leverage our global spend that we expect will save us a substantial amount of money in our run rate.

以物流為例，在過去 6 個月裡，我們提高了製造工廠的運輸效率，改進了運輸方法，並引入了新的合作夥伴來利用我們的全球支出，我們預計這將為我們節省大量資金我們的運行率。

Beyond that spend optimization in the second quarter, we also saw incremental contribution from the pricing actions we took at the start of the year. Taken together, our operating and pricing initiatives contributed meaningfully to our sequential gross margin improvement despite the nominal decrease in revenue.

除了第二季的支出優化之外，我們還看到了年初採取的定價行動的增量貢獻。總的來說，儘管收入名義上有所下降，但我們的營運和定價舉措對我們的毛利率連續改善做出了有意義的貢獻。

Related to operating expenses, we are focused on initiatives which help drive cost containment, while delivering our near and midterm objectives. As an example, we continue to evaluate ways in which we backfill resources and shift our spend to lowest cost regions to optimize productivity.

與營運費用相關，我們專注於有助於推動成本控制的舉措，同時實現我們的近期和中期目標。例如，我們繼續評估回填資源並將支出轉移到成本最低區域以優化生產力的方式。

Within R&D, we remain focused on dynamic resource allocation to ensure the investments we make are directly aligned with our focused product road map, including addressable market expansion opportunities and refreshing our key products, while protecting and enhancing our core competencies in developing our talent.

在研發方面，我們仍然專注於動態資源分配，以確保我們所做的投資直接與我們重點產品路線圖保持一致，包括可尋址的市場擴張機會和更新我們的關鍵產品，同時保護和增強我們在人才培育方面的核心能力。

As I mentioned earlier, the improved profit and our emphasis on working capital improvements resulted in our third straight quarter of positive operating cash flow. As the underlying financial foundation of our business continues to improve, we have a growing confidence in the ability for our business model to consistently generate earnings and cash flow. Based on this confidence, we took an action in the second quarter to repurchase $3 million of convertible debt at attractive terms.

正如我之前提到的，利潤的提高和我們對營運資本改善的重視導致我們連續第三個季度實現正營運現金流。隨著我們業務的基礎財務基礎不斷改善，我們對我們的業務模式持續產生收益和現金流的能力越來越有信心。基於這種信心，我們在第二季採取了行動，以有吸引力的條件回購了 300 萬美元的可轉換債券。

Going forward, we will continue to closely evaluate opportunities to redeploy our improving cash flow, either through our existing $18 million share repurchase program or debt repurchase to generate the highest return for our shareholders.

展望未來，我們將繼續密切評估重新部署不斷改善的現金流的機會，無論是透過現有的 1,800 萬美元股票回購計畫還是債務回購，為股東創造最高回報。

Looking ahead, we remain focused on improving productivity through both existing and new initiatives to fully realize the strategic targets we already have in place. With these actions well underway, we're placing a greater focus on the strategic investments and actions we can take around customers' experience, regional diversification and new products and technologies to improve our growth profile beyond the growth of the market itself.

展望未來，我們仍然致力於透過現有和新措施提高生產力，以充分實現我們已經制定的策略目標。隨著這些行動的順利進行，我們將更加關注圍繞客戶體驗、區域多元化以及新產品和技術可以採取的策略性投資和行動，以改善我們的成長狀況，超越市場本身的成長。

Related to our product road map, as we discussed in March, in addition to refreshing our existing product portfolio, we firmly believe there are opportunities to leverage FARO's technology and innovation beyond the markets we currently serve. As we look out over the next few quarters, our intention is to begin introducing these products to the market. As we do so, we look forward to discussing these impactful new solutions with you in greater detail, including the markets they target and opportunities they represent.

與我們的產品路線圖相關，正如我們在 3 月討論的那樣，除了更新我們現有的產品組合之外，我們堅信還有機會在我們目前服務的市場之外利用 FARO 的技術和創新。展望未來幾個季度，我們的目的是開始將這些產品推向市場。在此過程中，我們期待與您更詳細地討論這些有影響力的新解決方案，包括它們的目標市場和它們所代表的機會。

Within our existing portfolio, our Orbis Mobile Scanner continues to see great receptivity in the market, with revenue for our mobile scanning solutions, again, increasing double digits year-over-year. In Q2, we delivered a new Sphere XG workflow for mobile scanning, which has allowed us to capture more share of wallet with key customers through our full, differentiated workflow that merges two fully processed 3D scans in the cloud automatically without require manipulation in the desktop software. This workflow is providing productivity and insights to some of our most strategic customers.

在我們現有的產品組合中，我們的 Orbis 行動掃描儀繼續在市場上保持良好的接受度，我們的行動掃描解決方案的收入再次同比增長兩位數。In Q2, we delivered a new Sphere XG workflow for mobile scanning, which has allowed us to capture more share of wallet with key customers through our full, differentiated workflow that merges two fully processed 3D scans in the cloud automatically without require manipulation in the desktop軟體.此工作流程為我們的一些最具戰略意義的客戶提供生產力和見解。

In one case, an existing customer focused on commercial real estate measurement recently refreshed their fleet of FARO hardware. By upgrading to the Orbis platform and integrating Sphere XG into their workflows, they were able to significantly improved productivity through the ability to quickly scale and expedite project deliveries.

在一個案例中，一位專注於商業房地產測量的現有客戶最近更新了他們的 FARO 硬體系列。透過升級到 Orbis 平台並將 Sphere XG 整合到其工作流程中，他們能夠透過快速擴展和加快專案交付的能力顯著提高生產力。

In addition to Orbis' success, we continue to see further traction with our solution strategy, combining the power of our hardware offerings with Sphere XG software platform, to create greater value for our customers. This quarter, Ferguson, a leading distributor of HVAC products to a variety of markets, upgraded their FARO terrestrial and mobile scanners, emphasizing the growth and enhancement of the reality capture solutions.

除了 Orbis 的成功之外，我們繼續看到我們的解決方案策略的進一步吸引力，將我們的硬體產品的強大功能與 Sphere XG 軟體平台相結合，為我們的客戶創造更大的價值。本季度，向多個市場提供 HVAC 產品的領先經銷商 Ferguson 升級了其 FARO 地面和行動掃描儀，強調現實捕捉解決方案的成長和增強。

By using 360-degree photo documentation, model import and FARO scanners of Sphere XG, Ferguson now uses the FARO platform to remotely scope mechanical, electrical and plumbing project bids nationwide, monitor progress of projects and be more competitive against local contractors.

透過使用Sphere XG 的360 度照片文件、模型導入和FARO 掃描儀，Ferguson 現在使用FARO 平台遠端確定全國範圍內的機械、電氣和管道項目投標範圍，監控項目進度，並與當地承包商相比更具競爭力。

Specific to Sphere XG, we continue to make promising progress on delivering biweekly value feature releases, while upgrading legacy customers to our SaaS platform. Customers increasingly recognize the productivity and quality and utilizing our leading collaboration and reviewing platform.

具體到 Sphere XG，我們繼續在提供每兩週一次的價值功能發布方面取得可喜的進展，同時將舊客戶升級到我們的 SaaS 平台。客戶越來越認可我們領先的協作和審核平台的生產力和品質。

To help provide context for the pace of our progress, in the last month alone, we have migrated roughly 18 terabytes of customer data to the platform, with the expectation of reaching over 360 terabytes by the end of Q3. Finally, we've made a number of investments in our customer experience over the last year. Our NPS scores are up 10 points year-over-year.

為了幫助為我們的進展步伐提供背景信息，僅在上個月，我們就將大約 18 TB 的客戶數據遷移到該平台，預計到第三季度末將達到超過 360 TB。最後，去年我們在客戶體驗方面進行了大量投資。我們的 NPS 分數年增了 10 個百分點。

We also recently completed our latest brand loyalty survey, which reflected an 80% overall loyalty score, with 82% likely to continue buying from us. These metrics speak to our commitment of operating a customer-focused business, and customers are responding with their loyalty and satisfaction. This further reinforces our view that the FARO brand is a significant asset and is renowned through the markets we serve.

我們最近也完成了最新的品牌忠誠度調查，整體忠誠度得分為 80%，其中 82% 的人可能會繼續向我們購買。這些指標反映了我們經營以客戶為中心的業務的承諾，客戶的反應是他們的忠誠度和滿意度。這進一步強化了我們的觀點，即 FARO 品牌是一項重要資產，並且在我們所服務的市場中享有盛譽。

In summary, we are very excited about our progress to the plan that we set out over the last 12 months. We are not only executing to that plan, but are exceeding our own expectations ahead of schedule. We believe that FARO has great potential to outgrow both the markets we currently serve as well as those we look to target. By leveraging our strong brand name with our reputation for innovation and high-performance solution, we position ourselves well to deliver innovation that effectively addresses our customers' most pressing challenges.

總之，我們對過去 12 個月所製定的計畫所取得的進展感到非常興奮。我們不僅正在執行該計劃，而且還提前超出了我們自己的預期。我們相信 FARO 具有巨大的潛力，能夠超越我們目前服務的市場以及我們希望瞄準的市場。透過利用我們強大的品牌以及我們在創新和高效能解決方案方面的聲譽，我們能夠很好地提供創新，有效解決客戶最緊迫的挑戰。

Combined with both existing and new operational excellence initiatives to expand gross margins and profitability, we expect to be in a position to realize meaningful operating leverage as revenue grows. We are enthusiastic about our strategy in the years ahead and are confident in its capacity to drive substantial shareholder value.

結合現有和新的卓越營運措施來擴大毛利率和獲利能力，我們預計隨著收入的成長，我們將能夠實現有意義的營運槓桿。我們對未來幾年的策略充滿熱情，並對其推動股東價值的能力充滿信心。

With that, I'll now turn the call over to Matt to provide an in-depth overview of our second quarter financial results and third quarter outlook.

現在，我將把電話轉給馬特，深入概述我們第二季的財務表現和第三季的前景。

Thank you, Peter, and good afternoon, everyone. Second quarter revenue of $82.1 million was down 7% versus prior year. Geographically, Americas region demand improved sequentially in the second quarter versus a soft Q1, while in the Asia Pacific region, we experienced a $4.7 million decline or over 20% versus the second quarter of 2023. The Europe region remained stable with a 1% decline year-over-year in Q2 and up 2% year-to-date versus the first half of 2023.

謝謝你，彼得，大家下午好。第二季營收為 8,210 萬美元，比去年同期下降 7%。從地理上看，美洲地區的需求在第二季度比第一季的疲軟有所改善，而在亞太地區，與2023 年第二季相比，我們的需求下降了470 萬美元，即下降了20 % 以上。歐洲地區維持穩定，第二季年減 1%，年初至今較 2023 年上半年成長 2%。

Second quarter hardware revenue of $50.1 million was down 12% year-over-year, while software revenue of $11.3 million was up 4%, and service revenue of $20.8 million increased by 1%. Recurring revenue was $17.1 million and represented 21% of sales. GAAP gross margin was 54.6% and non-GAAP gross margin was 55% for the second quarter of 2024 compared to 37.8% in 2023.

第二季硬體營收為 5,010 萬美元，年減 12%，軟體營收為 1,130 萬美元，成長 4%，服務營收為 2,080 萬美元，成長 1%。經常性收入為 1,710 萬美元，佔銷售額的 21%。2024 年第二季 GAAP 毛利率為 54.6%，非 GAAP 毛利率為 55%，而 2023 年為 37.8%。

As Peter mentioned, in the second quarter, we executed on our variable cost productivity initiatives, including mitigating broker fees and incremental benefits from supply chain localization. Non-GAAP gross margin increased over 300 basis points sequentially versus Q1 and marks the highest quarterly level since 2021, as Peter mentioned.

正如彼得所提到的，在第二季度，我們執行了可變成本生產力計劃，包括降低經紀人費用和供應鏈本地化帶來的增量收益。正如 Peter 所提到的，非 GAAP 毛利率比第一季連續成長了 300 個基點，創下 2021 年以來的最高季度水準。

GAAP operating expenses were $43 million and included approximately $1.6 million in acquisition-related intangible amortization and stock compensation expenses, and $1.4 million in restructuring and other executive transition costs. Non-GAAP operating expense of $40 million was down $4.1 million from Q2 last year, as we realized the benefit of our restructuring efforts and continued productivity improvements.

GAAP 營運費用為 4,300 萬美元，其中包括約 160 萬美元的收購相關無形攤銷和股票補償費用，以及 140 萬美元的重組和其他高階主管過渡費用。非 GAAP 營運費用為 4,000 萬美元，比去年第二季減少了 410 萬美元，因為我們意識到重組工作和持續生產力提高的好處。

GAAP operating income was $1.8 million in the second quarter of 2024 compared with an operating loss of $25.4 million in the second quarter of 2023. Non-GAAP operating income was $5.1 million in the second quarter of 2024, compared to a loss of $9.9 million in the second quarter of 2023.

2024 年第二季的 GAAP 營業收入為 180 萬美元，而 2023 年第二季的營業虧損為 2,540 萬美元。2024 年第二季非 GAAP 營業收入為 510 萬美元，而 2023 年第二季虧損 990 萬美元。

Adjusted EBITDA was $8.4 million or approximately 10% of sales compared to an EBITDA loss of $7.2 million in the second quarter of 2023.

調整後 EBITDA 為 840 萬美元，約佔銷售額的 10%，而 2023 年第二季 EBITDA 虧損為 720 萬美元。

Our GAAP net loss was $500,000 or $0.03 per share. Our non-GAAP net income was $3.4 million or $0.18 per share for the second quarter of 2024, compared to a net loss of $10.8 million or $0.57 per share in Q2 2023.

我們的 GAAP 淨虧損為 500,000 美元，即每股 0.03 美元。2024 年第二季的非 GAAP 淨利潤為 340 萬美元，即每股 0.18 美元，而 2023 年第二季的淨虧損為 1,080 萬美元，即每股 0.57 美元。

Our cash and short-term investment balance at the end of the quarter was $97.9 million, up $1.6 million from Q4 and down $1.4 million sequentially. As Peter mentioned, we repurchased $3 million of our convertible debt principal in the second quarter. Excluding debt repurchases and the impact of foreign exchange, cash and short-term investments increased $2.3 million sequentially. Given our current working capital levels, expectations for revenue and our new expense base, we expect to be free cash flow positive throughout the second half of 2024.

截至本季末，我們的現金和短期投資餘額為 9,790 萬美元，比第四季增加 160 萬美元，比上一季減少 140 萬美元。正如 Peter 所提到的，我們在第二季回購了 300 萬美元的可轉換債務本金。排除債務回購以及外匯的影響，現金和短期投資季增230萬美元。鑑於我們目前的營運資本水準、收入預期和新的支出基礎，我們預期 2024 年下半年自由現金流將維持正值。

We are very pleased with our second quarter results, especially with adjusted EBITDA margin reaching over 10% and continued generation of positive cash flow from operations. The macro environment remains choppy, and we expect continued demand challenges in China and normal seasonality trends in the Europe region, driven by the summer holiday schedule in the third quarter.

我們對第二季的業績非常滿意，特別是調整後的 EBITDA 利潤率達到 10% 以上，並且營運業務持續產生正現金流。宏觀環境依然動盪，我們預計在第三季暑假計畫的推動下，中國的需求將持續面臨挑戰，而歐洲地區的季節性趨勢將保持正常。

Given these and the potential of a weakening macroeconomic environment, at present FX rates, we expect third quarter revenue of between $76 million and $84 million. At those revenue levels and given corresponding non-GAAP gross margin between 53.5% and 55%, and non-GAAP operating expenses of between $40 million and $42 million, we would expect non-GAAP earnings per share ranging from negative $0.01 per share to positive $0.19 per share for third quarter profitability.

考慮到這些因素以及宏觀經濟環境疲軟的可能性，按照目前的匯率，我們預計第三季營收將在 7,600 萬美元至 8,400 萬美元之間。在這些收入水準上，考慮到相應的非GAAP 毛利率在53.5% 到55% 之間，非GAAP 營運費用在4,000 萬美元到4,200 萬美元之間，我們預計非GAAP 每股盈餘範圍從負0.01 美元到正第三季獲利每股 0.19 美元。

This concludes our prepared remarks. And at this time, we'd be pleased to take your questions.

我們準備好的演講到此結束。此時，我們很樂意回答您的問題。

(Operator Instructions)

（操作員說明）

Greg Palm with Craig-Hallum Capital Group.

帕爾姆 (Greg Palm) 與克雷格·哈勒姆資本集團 (Craig-Hallum Capital Group)。

Congrats on the continued progress and on the gross margin and overall profitability front.

祝賀毛利率和整體獲利能力的持續進步。

I guess maybe just starting with a little bit around kind of the macro and kind of what you're seeing in terms of sales cycles, kind of cadence of activity. Would be really curious to kind of hear what you're seeing so far in July as it relates to kind of the guidance. And sort of what's baked in or what's assumed in the Q3 guidance versus what you just achieved in Q2?

我想也許只是從一些宏觀方面以及你在銷售週期、活動節奏方面看到的情況開始。我真的很想聽聽您在 7 月到目前為止所看到的情況，因為它與指導有關。第三季指南中的內容或假設與您在第二季剛實現的目標有何不同？

Greg, I think, look, the macro continues to remain very challenged as we've seen across a number of industries, especially those kind of looking at -- or exposed to discretionary CapEx. We feel that our Q3 guide certainly is achievable. And through July, we would have no indication at this point that it's not, although we'll continue to look at the market and make sure that we're adjusting as necessary and making the right decisions for the business to continue to deliver positive earnings, positive cash flow and the best revenue result we can.

格雷格，我認為，宏觀經濟仍然面臨很大的挑戰，正如我們在許多行業中看到的那樣，特別是那些關注或面臨可自由支配資本支出的行業。我們認為我們的第三季指南肯定是可以實現的。到 7 月份，我們目前還沒有跡象表明情況並非如此，儘管我們將繼續關注市場並確保我們進行必要的調整併為業務做出正確的決策以繼續實現正收益、正現金流和我們力所能及的最佳收入結果。

And just -- I know macro end market, it's outside of your control. But I think what -- in the release, it talks about kind of delivering on the next sort of growth plans. Part of that is probably new products, but give us some sense on how you're thinking about the next few years and your ability to at least outgrow the market?

只是 - 我知道宏觀終端市場，它超出了你的控制範圍。但我認為，在發布的版本中，它談到了實現下一種成長計畫。其中一部分可能是新產品，但請讓我們了解您對未來幾年的看法以及您至少有能力超越市場？

Yes, Greg, as we said, we're very confident in our strategy. And as we've been talking over the last 12 months, the first job in delivering that strategy was getting ourselves to a place where we could continually deliver consistent earnings and cash flow generation. And that has always been our focus for the last 12 months as we've come in, Matt and I, and really focused on getting ourselves in that position. And from there, the second phase was always going to be really looking at our ways to grow the business organically.

是的，格雷格，正如我們所說，我們對我們的策略非常有信心。正如我們在過去 12 個月中一直在談論的那樣，實施該策略的首要任務是讓我們能夠持續實現穩定的收益和現金流產生。在過去的 12 個月裡，這一直是我們的關注重點，馬特和我，並且真正專注於讓自己處於這個位置。從那時起，第二階段總是真正研究我們有機發展業務的方法。

And we have a very, very robust and very exciting plan that we've always said, our goal was to outgrow the markets that we serve. And we believe that through a combination of new products, a refresh of some of our products that are maybe a little longer in the tooth and partnerships to aid all of that stuff, we believe very firmly in our strategy that we'll be able to outgrow the market in the coming years.

我們有一個非常非常穩健和非常令人興奮的計劃，我們一直說，我們的目標是超越我們所服務的市場。我們相信，透過新產品的組合、對一些可能壽命較長的產品的更新以及為所有這些產品提供幫助的合作夥伴關係，我們非常堅定地相信我們的策略，我們將能夠未來幾年的成長將超過市場。

Can any of that benefit this year, Q4, for instance? Or should we be thinking about that as more of a '25 and beyond impact?

例如，今年第四季度，這些因素能帶來好處嗎？或者我們應該將其視為 25 世紀及以後的影響？

Yes, I think we would look to introduce more new products this year and certainly hope that they would contribute to 2024, but we certainly are very bullish about our prospects in the next several years, over the long term.

是的，我認為我們今年會推出更多新產品，當然希望它們能為 2024 年做出貢獻，但從長遠來看，我們對未來幾年的前景非常樂觀。

Yes. Okay. And then my last question is more of a capital allocation question. I appreciate the thoughts around buying back some of the debt. I feel like, Pete, since you've come on board, you've done a lot of things right for the P&L. And again, you're -- you can't control the macro but you've certainly done a great job of controlling what you can control, and you're seeing the benefits in gross margin and overall profitability.

是的。好的。我的最後一個問題更多的是資本配置問題。我很欣賞關於回購部分債務的想法。我覺得，皮特，自從你加入以來，你已經為損益表做了很多正確的事情。再說一遍，你無法控制宏觀，但你在控制你能控制的事情方面確實做得很好，而且你看到了毛利率和整體盈利能力的好處。

And if the stock is not performing well and it looks like it's down quite a bit here in the after hours, again, why not put a buyback in place? If you're buying back the debt, why not buy back the equity as well? Are you willing to at least comment on that?

如果股票表現不佳，而且看起來在盤後交易中下跌了很多，那麼為什麼不進行回購呢？如果你要回購債務，為什麼不也回購股權呢？您願意至少對此發表評論嗎？

Yes, let me start with that, Greg, and then I can turn it over to Matt. I did reference in our prepared remarks that we have an existing $18 million share buyback program. Certainly, at the levels that our stock is at, we would look at that as what we believe would be a fairly attractive investment. In the third -- in the second quarter, we saw the debt, we saw at attractive levels, and we decided to pull the trigger.

是的，讓我從這個開始，格雷格，然後我可以把它交給馬特。我在我們準備好的演講中提到，我們現有 1800 萬美元的股票回購計畫。當然，以我們的股票水平，我們認為這是一項相當有吸引力的投資。在第三季度——第二季度，我們看到了債務，看到了有吸引力的水平，我們決定扣動扳機。

But now that we've gotten ourselves to a place where we are really comfortable in our ability to generate cash flow and earnings, we'll continue to look to deploy that. We have the repurchase program in place already. We have $18 million left on it and we will continue to evaluate what the best return for our shareholders is going to be.

但現在我們已經達到了一個對產生現金流和收益的能力感到非常滿意的地步，我們將繼續尋求部署它。我們已經制定了回購計劃。我們還剩下 1800 萬美元，我們將繼續評估股東的最佳回報是什麼。

(Operator Instructions)

（操作員說明）

Jim Ricchiuti with Needham Capital.

吉姆·里奇烏蒂 (Jim Ricchiuti) 與尼德姆資本 (Needham Capital) 合作。

I wanted to ask you about the gross margins. It came in -- the gross margins came in better than expected. And you highlighted there are a few factors. I'm trying to understand a little more what drove the upside relative to your expectations going into the quarter? You talked about pricing and some mix but maybe you could just give us a better idea.

我想問一下毛利率。它進來了——毛利率好於預期。您強調了有幾個因素。我想更多地了解是什麼推動了本季相對於您的預期的上漲？您談到了定價和一些組合，但也許您可以給我們一個更好的主意。

Yes, Jim, this is Matt, and I appreciate the question. I think, versus the guide, let's just say kind of midpoint of guide on the gross margin line, on the non-GAAP side, was 52%. And if you kind of bridge that to the 55% actuals, I think most of the upside came from just acceleration of variable cost productivity. We've been talking a lot about the localization and the savings there as we move the supply chain to Southeast Asia, and there's a little bit of acceleration on that line. Plus, Pete, mentioned in his prepared remarks, even some incremental goodness on the logistics line as we kind of look to be as productive as we can.

是的，吉姆，我是馬特，我很欣賞這個問題。我認為，與指南相比，我們可以說，在非公認會計原則方面，毛利率線的指南中點是 52%。如果你將其與 55% 的實際值連結起來，我認為大部分的好處來自於變動成本生產力的加速。當我們將供應鏈轉移到東南亞時，我們一直在談論本地化和節省成本，而且這條線上有一點加速。另外，皮特在他準備好的演講中提到，甚至在物流線上也有一些增量的好處，因為我們希望盡可能地提高生產力。

And then I would say, at a smaller level, a little bit of mix at the hardware line. And then if you look at our overall revenue profile, had a little bit of mix shift to software, which had higher gross margins and then price kind of layered in, gives you that 3% kind of incremental versus the midpoint of the guide.

然後我想說，在較小的層面上，硬體產品線上有一點混合。然後，如果你看一下我們的整體收入狀況，你會發現有一點混合轉向軟體，它的毛利率更高，然後價格有點分層，與指南的中點相比，你會得到3% 的增量。

Got it. In terms of what has the bulk of those benefits that you cited early on, and your response has been realized? Or is there still some upside potentially could impact the coming quarter?

知道了。您早先提到的大部分好處是什麼？或者是否仍然存在一些可能影響下一季的上行空間？

Yes, - I think. Yes. Yes. No, I think as you think about the variable cost productivity and what we've been signaling for the last kind of 6 quarters is we think there's $12 million of kind of annualized cost savings on the localization of supply chain. And we think we're kind of in middle innings there, right? We think there's some to go. And that's not going to be linear, Jim. It kind of steps up as old contracts roll off and new contracts come online.

是的，-我想。是的。是的。不，我認為當你考慮變動成本生產力時，我們在過去 6 個季度中一直發出的訊號是，我們認為供應鏈在地化的年化成本節省了 1,200 萬美元。我們認為我們已經進入了中局，對吧？我們認為還有一些事情要做。這不會是線性的，吉姆。隨著舊合約的退出和新合約的上線，它會有所加強。

So we think there's a little bit of goodness over the longer term on that particular line item. And then mix can shift a little bit quarter-to-quarter. So I wouldn't get too hung up on mix. I think that may bounce around 50 bps, 80 bps from quarter-to-quarter. And then price, we still think there's some to go. We signaled that we never really expect to realize too much from price because historically, we really didn't show the ability to realize that but we saw some goodness in price in Q2, and we think there's a little bit of incremental upside there as well.

因此，我們認為從長遠來看，該特定訂單項目有一點好處。然後，混合可能會在每個季度發生一些變化。所以我不會太沉迷於混音。我認為季度與季度之間可能會反彈 50 個基點、80 個基點左右。然後是價格，我們仍然認為還有一些不足之處。我們表示，我們從未真正期望從價格中實現太多目標，因為從歷史上看，我們確實沒有表現出實現這一點的能力，但我們在第二季度看到了價格的一些好處，我們認為那裡也有一點增量上漲空間。

Got it. And a final question for me. Talking about the end markets, you called out construction as being one of the markets, I think, where you're seeing probably some slowing in terms of the decision-making. Where else are you -- have you seen changes in demand as it relates to folks maybe taking a little longer to give the PO?

知道了。最後還有一個問題想問我。談到終端市場，我認為您將建築業稱為市場之一，您可能會看到決策方面可能有所放緩。您在哪裡 - 您是否看到需求發生變化，因為這與人們可能需要更長的時間來提供採購訂單有關？

Yes. I think just in general, Jim, I would point to probably regionally. The biggest issue right here right now is in China. And that's something that we're focused on, but it's manufacturing in China. It is construction in China, and that's the bulk of what's driving the revenue or lack thereof revenue growth in our business.

是的。吉姆，我認為一般來說，我會指出可能是區域性的。目前最大的問題是在中國。這是我們關注的重點，但它是在中國製造。中國的建築業是推動我們業務收入成長或缺乏收入成長的主要因素。

And the outlook for China, again, I don't want to put words in your mouth, but in terms of -- as you look beyond this quarter, do you see any signs of that picking up?

至於中國的前景，我不想再說一遍，但是當您展望本季之後，您是否看到任何回升的跡象？

We don't, Jim, at this right here right now but I will point out that I think we're -- probably Q2 was the last of our really tough comps related to China. We really start to see the China business drop off in the second half of 2023. So while we don't see it materially getting better from here, it should start to ease a little bit in terms of kind of the year-over-year comps as we move forward into the second half of this year and then into 2025.

吉姆，我們現在不知道這一點，但我要指出的是，我認為我們——可能第二季是我們與中國相關的最後一個真正艱難的比賽。我們真正開始看到中國業務在 2023 年下半年開始下滑。因此，雖然我們沒有看到它從現在開始有實質性的改善，但隨著我們進入今年下半年，然後進入 2025 年，同比比較應該開始有所緩解。

Thank you. And we have no further questions in the queue at this time. I will turn the program back over to Peter Lau for any additional or closing remarks.

謝謝。目前我們隊列中沒有其他問題。我會將節目轉回給劉彼得，以供補充或結束語。

Okay. Thank you, operator. On behalf of all of our colleagues, I want to thank everyone for your interest in FARO.

好的。謝謝你，接線生。我謹代表我們所有同事感謝大家對 FARO 的關注。

Despite a really challenging market, we continue to exceed our targets in all areas we can control and are excited about our progress. Our second quarter performance demonstrates the operational leverage we've already built into our business with gross margin, operating expenses, overall profitability and cash flow generation, all tracking ahead of our plan.

儘管市場確實充滿挑戰，但我們在我們可以控制的所有領域繼續超越我們的目標，並對我們的進展感到興奮。我們第二季的業績證明了我們已經在業務中建立的營運槓桿，包括毛利率、營運費用、整體獲利能力和現金流生成，所有這些都超出了我們的計劃。

While we continue to focus on ways to further improve these results, our success thus far gives us confidence that as we execute on our organic growth initiatives in the quarters ahead, we believe we'll be in a position to unlock short- and long-term shareholder value. We look forward to sharing our progress and execution in the quarters ahead. This concludes our call today. Thank you very much for your interest.

雖然我們繼續專注於進一步改善這些結果的方法，但迄今為止的成功讓我們有信心，當我們在未來幾個季度執行有機增長計劃時，我們相信我們將能夠釋放短期和長期的潛力。詞。我們期待在未來幾季分享我們的進展和執行情況。我們今天的電話會議到此結束。非常感謝您的關注。

Once again, this does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful day.

今天的節目到此結束。感謝您的參與。您可以隨時斷開連接，祝您有美好的一天。