FARO revenue down, CEO departing

It’s been a tough couple of weeks for reality computing companies, as first Stratasys announced a marked slowdown in demand for its MakerBot prosumer offerings, then 3D Systems CEO Avi Reichenthal left under what sound like contentious circumstances — and, now FARO announces weak Q3 results and the departure of its CEO.

Very briefly, FARO’s Q3 revenue was $72.5 million, down 12% year/year as reported and sown 4% on constant currencies. In prepared remarks, CEO Jay Freeland said that FARO saw “slow-down of capital spending around the world, particularly in China and Japan, and macro-economic turmoil in Brazil. A number of our vertical markets experienced a slow-down late in the third quarter, especially the Architecture, Engineering and Construction [AEC] vertical challenging our closure rate of Focus Laser Scanner sales. In response to weaker customer capital spending, we are re-aligning our cost structure immediately by reducing our global work force by approximately 8% and implementing further cost reduction initiatives, without inhibiting our long-term growth strategy.” Along with Q3 results, FARO announced that Mr. Freeland, who has served as CEO for 11 years, will be moving on to other opportunities once a successor is found.

FARO makes laser scanners and measurement devices for industrial quality control, as well as developing software for accident reconstruction and other functions based on scan results. Scanner features and capabilities are evolving so quickly, buyers expect prices to fall as rapidly as we’re seeing in other trendy hardware systems and, to some extent, this technology is still searching for its perfect market fit. But this is a group of technologies that is only going to grow, even if the trajectory isn’t perfect. Here at the Bentley Year in Infrastructure, point clouds and laser scanning come up often; it’s technology that enables safer and more accurate data gathering about existing assets — critical as operators need to be more efficient and extend their assets’ productive life.