FARO Technologies Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, showing a mixed performance compared to the previous fiscal period. Total sales for the third quarter were $82.6 million, a decrease from $86.8 million in the same period of 2023. This decline was primarily driven by an 8.1% drop in product sales, which fell to $61.5 million, largely due to weakened demand in the Asia-Pacific region, particularly in China. However, service sales increased to $21.1 million, up from $19.9 million in the prior year.
Despite the decrease in sales, the company achieved a gross profit of $46.0 million for the third quarter, an increase of 10.3% from $41.7 million in 2023. This improvement was reflected in a gross margin rise to 55.7%, up from 48.0% in the previous year. Operating expenses also decreased significantly, with selling, general, and administrative expenses dropping to $34.0 million from $38.0 million, contributing to a notable turnaround in operational income, which reached $2.2 million compared to a loss of $6.9 million in the prior year.
For the nine months ended September 30, 2024, total sales were $248.9 million, down from $260.0 million in 2023. Product sales decreased by 6.7% to $186.3 million, while service sales increased by 3.9% to $62.6 million. The overall gross profit for this period was $134.1 million, a 16.9% increase from $114.7 million in 2023, with gross margins improving to 53.9% from 44.1%.
The company reported a net loss of $0.3 million for the third quarter, a significant improvement from a net loss of $8.8 million in the same quarter of 2023. For the nine-month period, the net loss was $8.1 million, compared to a substantial loss of $58.2 million in the previous year. This reduction in losses was attributed to lower operating expenses and improved gross profit margins.
FARO's cash and cash equivalents increased to $88.9 million as of September 30, 2024, up from $76.8 million at the end of 2023. The company generated $13.4 million in cash from operating activities during the nine months, a turnaround from cash used in operations of $17.6 million in the same period of 2023.
Strategically, FARO has been focusing on restructuring efforts, with the 2024 Restructuring Plan approved on November 1, 2024, aimed at enhancing operational performance. The company anticipates pre-tax charges related to this plan to be between $6 million and $9 million, primarily in the fourth quarter of 2024 and the first quarter of 2025. Additionally, FARO launched the FARO Sphere XG, a cloud-based platform designed to enhance its software offerings and increase recurring revenue.