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Faro (FARO)

Participants
Michael Burger Chief Executive Officer
Allen Muhich Chief Financial Officer
Michael Funari Sapphire Investor Relations
Greg Palm Craig-Hallum Capital
James Ricchiuti Needham & Company
Andrew DeGasperi Berenberg Capital
Robert Mason Baird
Ben Rose Battle Road Research
Call transcript
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Operator

Please stand by your program is about to begin. Good afternoon everyone. And welcome to the FARO Technologies, Fourth Quarter 2021 Earnings Call.

For opening remarks and introductions, I will now turn the call over to Michael Funari at Sapphire Investor Relations. Please go ahead.

Michael Funari

afternoon. good and you Thank With me Officer, Burger, Executive are from Allen Muhich, FARO and Michael Chief Chief today Financial Officer. closed, quarter XXXX Today for available on and market the at its are released after www.faro.com. website financial Form the XX-K fourth related and The of FARO's full-year press release company results results, considered development, in include involve that risks demand, uncertainties and statements this are economic projections, certain statements call note and which technology historical or forward-looking not regarding product future inventory levels, subsequent business statements Please customer conference facts, and may be industry and events. could results cause Various materially. factors actual differ to

Some of quarterly factors been and SEC at described today's set forth these release, and press annual have in filings. our length in

required or Forward-looking obligation undertake statements reflect them. views revise as our as law, to by no only update of except we and today

During non-GAAP will today's measures Accounting disclosures reconciliations GAAP measures, including not presented certain Generally measures. measures. to accordance you comparable these that non-GAAP find financial Principles release, In are financial Accepted conference with press will U.S. management in or regarding discuss call, additional the

management these While under GAAP, core period-to-period measures comparisons with believes not of operations. financial non - provide recognized investors GAAP relevant

measure isolation in should considered they be for performance as accordance financial in not substitute a a with However, GAAP. of prepared or

Now, I'd to over like to turn Michael. the call

Michael Burger

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

seeing our and facilities demand acceptance the at software dollar grow strong Our fourth a and encouraged sequentially XX% our X% with which recovery to strong the rate which in next-generation quarter We million management. muted application, year-over-year HoloBuilder chain Max of and revenue remained targeted despite Quantum challenges, demand continued approximately overall for level reported our to construction quarter, ScanArm quarter. traction improve and throughout enabled our we're revenue market to by $XXX supply the exchange

fourth built X that's we're over pleased In years. operating our the addition, into have last demonstrated been the in to business quarter, leverage the

on similar historical revenue is quarter reported nearly levels. EBITDA fourth twice margin XX% profitability our Our

We upside of recover. approach as additional of new launch continued revenue. across $XXX nearly profit customer of geography. have success And continues Quantum EBITDA our wide we XXXX, model see on XX% quarterly we roughly acceptance receive and positive demand feedback stated our extremely Since of July every in expect to Max margin to ScanArm our to million

As sequentially fourth speed, a the customers of greater accuracy, the metrology-grade from applications. result, increased Quantum in and versatility quarter dramatically which volumes XX% as Max their value productivity scanning increases realize

signs tool higher model fourth our the as validates our demand early as of image set as as artificial we product of in phase markets. an are of continued June FARO, unique SaaS solution, a this We -based in understand a capture, photogrammetry task their acquisition with through image solutions via which differentiated demand. workflow, legacy for a embracing positive view that business strong XXXX. differentiated a generate solution. ranging easy-to-use replacement, to 's delivered across indicator We needs, better combines to hardware-agnostic, we HoloBuilder which along engagement accelerated customer to nearly well seeing and new and Also customer leading up with quarter, value additional customers strategy our viewer, broad time acquired see automation, applications intelligence-based wide the HoloBuilder of

this initially our area broaden facilities are mature. as to expect and focus We on to and focusing but markets, expand management construction continue in capabilities

placing digitizing believe tip the levels and form for easy-to-use for world potential well for believe Bringing along capabilities photogrammetry-based our market with solution, potential the market position there potential large is is in combines excited The world's HoloBuilder's FARO Illustrating these the technology all signed laser and high-accuracy to space Technology over a for continue scanning stores untapped metaverse. together of solution. that the into held we're increased enormous, recurring the is our term. Sphere, the into platform, the retailers fourth investment We long quarter, spear expertise the deploying this our our where soon of area expertise long offering initiative. we physical reality to we focus be as the digital and largest management applications other released one a an part is with across FARO'S U.S. HoloBuilder is are as together cloud-based software broad who a with mid-X-figure a revenue of annual we FARO deal new of

workflows. begun magnitude beta to customer We well the applications explore. formal As capabilities the quarter to deeper single our first set a have transition with we have transaction expect is Those in customer's largest FARO a just more understanding we differentiated through the X quarter, Sphere FARO's announcement and developing tests the exciting go Last second XXXX. years. recurring the Even revenue product reference, a are single believe potential we three-year strategic of continue plus deal frame testing. in of to indicated with of of our is solutions of term last beginning to our

to While off. is at adjusting time operating leverage our the generate same structure paying

the encouraged will demand We as to of XXXX. we combination seasonal experience new FARO while believe for in typical we move underlying strengthen launch demand by expect softness the of market the first the through we are and Sphere our introductions product quarter, products and

let manufacturing me provides our an on financials, quarter with brief initiative provide Sanmina. fourth outsource update a Allen of Before our overview our partner

have is to first the half Our be the foundation two the well set XXXX. the of end of and manufacturing been teams together transition exceptionally for by complete working

outlined realize the fourth has unprecedented long-term material supply delayed over from and savings. continue to overview that, primarily in That million environment turn financial resulted headwinds of short-term believe and savings I'll annualized call changes. and said, With Allen We the an in quarter chain today's to chain we for results. long-term to cost supply in financial our $XX benefits operational expect previously

Allen Muhich

Thank Michael. afternoon, good you, And everyone.

take a I'd to moment X introducing we to the Before new I like this results -- greater quarter quarter in metrics first discuss fourth highlight quarter. detail, are

become offerings metrics. our with emphasize capabilities investor solutions revenue and increasingly important to we and and continue believe software revenue platform our software organic expand in we will both both inorganic investments, and recurring current As

such, As software maintenance of portion repair software both we The which hardware as recurring and the and quarter, of includes beginning our latter well revenue. recurring contracts. will revenue software as report subscription this

fiscal revenue. year $XX.X revenue was software For million XXXX, recurring of million XX% XX% And $XX.X total or was revenue revenue. of total or

revenue. quarter-to-quarter to basis, types time. absolute While decrease as may to a we an our grow due continue dollar accelerated revenue over expect On or both percentage, software at seasonality to increase and recurring rates the hardware of from revenue

million XXXX. Gross fourth a result increases resulting of compared XXXX, $XXX.X our periods market material customers the pressures. as revenue and gross fourth last quarter of of On with million was margin quarter somewhat to demand when quarter, X%, software increases was was X% Turning availability the margin XX%, QX the from non-GAAP was that was today's softness of $XX.X when compared market a $XX.X well increased prior due continuing offset performance and dollar, year-over-year XX% XXXX. demand periods -- basis, from to muting all us. Recurring a million margin hardware inflationary by up fourth revenue from XD on as U.S. to the revenue cost strong prevents metrology prior was was service revenue gross volume up of of revenue improvement X%. XX.X% pandemic. caused million GAAP up of grew up of year-over-year, compared to was as $XX.X year's largely the $XX.X shipping of million placed that XX.X% revenue Partially us limited material for to by

costs. Given the ongoing material on impact pressures of inflationary

was our in the was savings operating primarily during EBITDA of as expect operate of of non-GAAP quarter some the with $X.X fourth due and the end million both million to million of to in in $XX.X growth. our compared upon of in quarter of XXXX compared income fourth and QX fourth included of as were expense and revenue. well return. range. near realized million of investments, lower XX% we software $X.X XX% continue levels expense increase depending dipping XXXX, as revenue travel-related the $XX.X as continue approximately the amortization million HoloBuilder $XX.X adjusted million quarter XXXX income $X XX.X% was than our acquisition, to intangible fourth a income quarter pandemic margin. a or GAAP million costs. million expenses, compensation With operating quarter in low-end XXXX, of million operating to higher fourth operating Fourth to of approximately $X.X initiatives, and Non-GAAP XXXX quarter stated was the $XX.X result in operating revenue of portion success $X.X our to the model the We below as an stock million of of gross acquisition-related expenses organic restructuring quarters $X.X the XXXX.

GAAP tax expense share, loss from historical tax allowance position or from income that $X.XX which charges. that $XX required $XX.X deferred valuation cumulative of was given resulted was of assets resulted net our against the a Our creation that year X U.S. million loss per million included restructuring

million $X.XX QX per XXXX. share $X.X of share $X.XX million per fourth Our non-GAAP in or or net income was the quarter of XXXX $X.X to for compared

a and million strong debt. capital a no We to maintain with continue $XXX balance structure of cash

between our greater next release well, of affecting approximately providing as the revenue performance of future performance million and leveraging currency quarter customer. carefully the XXXX, QX financial in positions note we expect providing In and begin technology and revenue meaningful $XX greater reporting digital well of spirit in over points Our of to the are last Note, expectations providing the are the performance of with to gross included first-quarter guidance. We this software quarterly accounts In this will performance. levels. we've of revenue cost commercial revenue and non-GAAP first into inclusion per pleased closed million only compared months. retailer investors for but underlying press guidance profitability. the recurring by on of of revenue have solution And The the you that and to we're past those historical $XX our quarter our market. has deal This a levels. million with success HoloBuilder Max of nearly exceeded nearly first significant fourth expectations receivable potential to material differentiated availability HoloBuilder our when closing, return a challenges increased capitalize adjusted FARO's we proof-point reality broad large double the doubled similar of progress In levels margins. on on looking both material XX adversely quarter. profitability quarter not and metaverse earnings We're sequentially at Quantum positive transparency will transparency XXXX for and vision our our finally, to on $X.XX that made basis balance us between $XX applicability negative quarter our XXX first $X.XX. -- initial the and we share revenue enormous We unfavorable

annual do of your remarks, do seasonality historical concludes revenue time, not provide pleased to our take continue at this we our any we While expect patterns. to guidance, to be prepared to This we'd intend approximate questions. and

Operator

[Operator time, from this ahead. question At Craig-Hallum. take Please our with Greg Palm Instructions]. go We'll first

Greg Palm

All [Indiscernible]. right. Thanks. afternoon, to yeah. start Good Wanted -- Hey QX. Wanted to everyone. with

the wasn't impacts, actually one, chain a average in and your far supply book-to-bill quite mentioned cutting it than was QX. bit awful long-term that lower You

So kind maybe products some of I ship your the to in understand comment to quarter. better wanted just of inability

Michael Burger

as quarter. back And backlog. pushing pushing into the from QX to due changed primarily the know, We or we that mix had -- some like, fact had basically we couldn't had we QX had felt QX. backlog into throughout ship you We

actually, So booked it capitalize. quarter of all wasn't actually the couldn't we Not the in upside ship quarter with weren't ship and to It of to it. because since was booked But that. it. same associated it re-shipped now quarter. had we able we booked and the in were end the all But able we we've

So timing issue, it a it's -- was Greg.

Greg Palm

Got it.

you the it a And That was looks Europe are out what from and guess back EMEA -- you've I are perspective? geographic Okay. what again, seeing to us quarter, more look like makes pretty sense. geographically guess, think of to maybe maybe an end -- market other I as seeing are you the or from sort standpoint stood weak, What relative on what you geographies. broader,

Michael Burger

terms of in effect AEC. etc. had GCs due we're which that we've segment back many Many that in to Europe the of -- largely The with in construction had business seen was doing was market one of coming to basically issues the EMEA work,

killer the -- year, work the had quarter. at miss drove compare AEC the was same in in really last to market AEC So Also, Europe. it back when Europe that Europe a time, you what

I quarter, market by just has from we've all actually and Europe. driven North think but in frankly recovered very last market about continuing X a segments just So it's mix in is of AEC weakness nicely America it's both, as primarily the talked roar. Asia to the

very still got the got recovery an Europe's weakness. that We in we're number the So we're we was in strength very to America. to by the end market by strength recovering XD hopeful, And in that. our and that -- we offset despite of still but signs China excited and the North driven got close

Allen Muhich

The other -- thing

Greg Palm

Yeah.

Okay.

Allen Muhich

-- I is the U.S. EMEA strong well. would as around the primarily add, comment would've Greg, the market affected dollar

another the optics contributor to that's So there. of some

Greg Palm

a of we basis on you come comment, that lower off be should Yes. Allen, in of or linger to that No, future gross then, seasonally to points in is or what just did off that's QX the impact on good expect on point. normally you And quarters? margin would the And what will do to XXX quarter? clear, QX mostly

Allen Muhich

an It's that comment a is number. absolute

of in what it's fourth to relative we bit lines, that and quarter, a in between on any there's to -- a material absolute to the basis, expect more did meant it's included the little of of include fourth also the there's relative what So an read the range it just headwind. you quarter, in to that help reasonable fourth not not amount XX% the i.e. delivered we included that because guide XX%

Greg Palm

is on going And linger it past Okay. to QX?

Michael Burger

to of -- It for would worse QX I bullet, in be were that new I kind we we end commodities -- much dodge and of working particular XXXX bit it seen it's problem covered. whack-a-mole. XXXX. I think, of thought most And not we've by think and a in tried XXXX it's and think us better. it's Honestly, we've getting to it's surprised like getting very continue we the When up out, commodity, but a it have we shortages we don't

I've coupled with team, It's I chain with have are concerning. a to supply but done of our associated team, seen this kind phenomenal at never team, hold keep our that. very Greg. So hints job cautious to think guide Ops the bad point, Sanmina And us this

Greg Palm

Yeah. Makes sense.

back the will Good in Okay. hop I queue. luck. Thanks.

Allen Muhich

Thanks.

Michael Burger

Thanks, Greg.

Operator

our next please James take from Ricchiuti Company we'll Needman And question ahead. with go &

James Ricchiuti

Hi, thanks. Good afternoon.

coming any? look actions? Have last on or point the you material that up, any Just -- are you Michael at Allen, considering? taking you you are pricing costs taken Are as you

Michael Burger

it relates to have of that some We actions new taken products as introduced. the pricing we've

us particularly are We considering QX. in revisiting, based on what's happened to

do that's rate up are out would may principle lot we of a of it because, say, are We looking rather looking and - been how prices through may frankly, we But to offset growth that increase a price end supply to coming having on. actually So I at about take increase got as our not the seriously it I the seeing our I'm and from some have XXXX. chain this at, customers. and share, will which we're these now, -- through pass opportunities we we've choice. pricing guiding cautious at

looking And so we at begrudgingly, we it. are

James Ricchiuti

pressures of of Are your actions you out same pricing they're are seeing major any result that from seeing some competitors the there, thing? the

Michael Burger

them different I wouldn't of we've seen wholesale say or one our just spotty. through We've seen and prices. channels. larger It's deals raise particularly larger certain kind competitor’s on of that distributor

on wholesale now think There it a applications. probably do based and can we're in some move. that's of prudent And than is and kind that. that's are way accept reviewing process products to a better a others change seen not right well. certain certain that we've no, So that And a markets I the particularly as

James Ricchiuti

on with to Congratulations HoloBuilder. win any -- there Is that color turn you that highlighted the to Wanted

Michael Burger

you. Thank

James Ricchiuti

number either like is may can a type new the an This cycle the in terms deal of of in and the retailer, of you provide That of -- what's presumably, X, missed entirely some have sales this? commentary, customer? I like

Michael Burger

different their business FARO to are retailer -- It's a I'm one of building not are. out, current in with And different looking either completely they've I divulge or they're application never really are U.S. an has customer new Holobuilder's that they at methodology can't facilities taking a they done It status of facilities got relaying new. is all stages remodeling, of The customer, whom. traditionally. the facilities looking and is what at And and using entirely allowed large use.

it the facility. that Holobuilder so you And software made, package have decide software to been almost you also allows is progress a intuitive, allows to very of the then And easy-to-use, changes that make you through to within what that that track you the have. currently document enhancements

this for in cycle year of as a probably company is a terms hours. trials an we and individual, the sales to and like the application said, in relatively months on of HoloBuilder running span etc. It you enterprise pilots could up is nine an So get long. That X.X

So as can answer facilities, an longer the you that individual, a that's this as all sales standard their companies But your enterprise as it's cycle. quick. it's for of imagine very a for Jim? kind using large question, Did

James Ricchiuti

And Yeah, distribution just I but Are clear. you're not you talking centers, it when centers about mentioned about -- stores? It talking or sounds may distribution it's facilities, did. like

Michael Burger

about, talking situation, We're No. this in stores.

James Ricchiuti

is -- off leverage this able Is of develop this there it. be to Got win? you pipeline and might a that Okay.

Michael Burger

Matterport, facilities it why companies The in the digital And massive for side very this but digital need and got believe competitors that we both don't level pipeline of ownership, maintenance a develop do and many the bring think And in companies specificity, and is we we technology. some is, this a to up, of Absolutely. side we're market the really for I believe space market embrace and management -- the we a I well maintenance like not tipping has Novice. companies right well-positioned digitally. it think, to this we're as but their switch I have market I I world the it. we've new hit And point, HoloBuilder as to of construction the like made really -- normally management operational management about of don't operation, talk Cloud-based think think

it, So us. early we're very for think excited I it's days by

are behind our are up expanding to on legacy And working to the the development current, selling organization FARO the the team. speed to sell team. how expanding resources get diligently the We product. We're actually we

and activity a early it's lot encouraging. wins. It's of So

James Ricchiuti

it. and thanks Thanks outlook. including additional and Appreciate thanks all quarterly the for the information,

Michael Burger

there go. You've for been so years, you us bugging

Operator

our Berenberg. take from ahead. we'll Andrew And question next go DeGasperi with Please

Andrew DeGasperi

Hello.

Just the first wanted ask to maybe on quickly HoloBuilder.

You of mentioned earlier the that wondering normally involved do XD I'm beyond new XD you expanding your were to thinking manufacture areas. or do metrology you you space areas think in? think there's if, you that's like

Michael Burger

I believe where do No. at FARO FARO. area of in an space say context in have Well, we as I participated When traditional. not the not the O&M

this owners, So building. an of a building to, actually to the changes put their property it digital do facility, the view is great are in virtual into happening tool inventory, to that way amazing them ownership, format of one, their for way timestamp great

that changes facilities, I event preparedness. in in that HoloBuilder crime of scenes, public is great we've terms not -- we is because at it we areas are win in did were of that And new, think way in we're the we looking to that. that participated Other All an that's and terms document there highlighted of example in at and why a that space both exploring of changes timestamp all. safety because it's think

is high applications I be do to one be think for able safety. laser a do overlay for as XD And well to top facility of right that. we're actually photogrammetry our very ultra-high-definition way think uniquely we to in particularly Venn public do with of this, of that's able then that. drawing market, positioned us the we're scan that -- So scanners. the done images And to to really No there's to the documenting digital top the scan. believe these metrology The -- as both I on changes as on a market high-definition can to twin some

Andrew DeGasperi

gives hounding great. question, guess quarterly today the then on degree What's is guidance, that that there just something in was improved issue like fact it? changes that you comfort to you that recurring has exactly providing recurring That's -- you that of base I guidance? -- else for a have revenue comfortable which feel the to But is obviously, to now you you the comfort it. or And that now visibility Jim maybe the give that

Michael Burger

much. Well, I don't think visibility has changed

start to how ends of being still forecast -- we've based great at a happening on think not what's said, the I at been said, based Certainly historically tell seasonality, predictable. nobody to on feeling we comfortable our look up our didn't. of it certainly our when there's That That think record coming to backlog. can be. XX -- think XX% we're particularly you track side relates able COVID or we going a saw if relatively you as you it in it's market. plus where basically that with I spread quarter I business I and certainly hardware spread think and And minus deal where a it, we look directionally in

reoccurring you about. days what for Allen can quarter tell close is about. As as gives giving to with. guidance. software, early Sphere the that about It's us I us numbers it to talked launching And as and that relates be more more we confidence, stansation revenue, more as we more But (ph) don't has our we're transparent from we'll to our our continues that be promised without first we starting obviously recurring grow transparent particularly the this can think much get etc. revenue

Andrew DeGasperi

guess talked was remember recurring -- before XX% I remind the on the growth Right. it I'd with said you that exiting gave. a you if you about And I 'XX The level. maybe on And that software helps. correctly just follow-up metrics XX%. Allen, And if

this if In something trend this is Sphere wondering assume QX other acceleration. assume we words, line I Or point. a is that shouldn't any should -- Just at launches, was as expect we your the grows -- or it like level really was size? this in this quarter of growth just part of kind is some -- of potentially was excellent as a revenue that base this some

Allen Muhich

I I spend absolutely and software a think HoloBuilder. think revenue lot the right. perspective. about absolutely recurring same the a expect curve you're knee One a we that two-fold. comes At Sphere growth talking When Michael in is from live time, So

the think to I that think some expect I revenue those I we we we would referred And make level two point again, he those to. HoloBuilder There was recurring the the grow good a nothing extraordinary grow or to continue meaningful those a about -- points at content investments us think are the are that base from fourth given of quarter as to. from, revenue vectors. which in terms for of software that's And to two content.

Andrew DeGasperi

Excellent, thank you.

Michael Burger

you. Thank

Operator

take we'll from go next ahead. Baird. Please with Mason And Rob question our

Robert Mason

Yeah, good afternoon.

Michael Burger

Hey Rob.

Robert Mason

Allen. Michael, Hey,

or around low be of that would book-to-bill curious directionally challenges -- maybe maybe supply what -- your an at guidance, down guidance. end a Just around be the million one would level. chain your I'm would The primarily just million the seasonally, rate. at clarification but assume Does revenue $XX thoughts steeper that $XX

Michael Burger

While we our be I publicly for forecast the don't be But positive, expect I it to typically certainly. book-to-bill quarter. our even would expect positive book-to-bill. to would

as our buy willingness in affected also I that supply us many affects has, it certainly to chain growing generate our Because ability capital. chain; But it to through mutes customer's revenue. issues their revenue. think supply in also lay the cases,

them have an effect. around discretionary And buying capital so this had from customers approach our conservative

the In effect fact, situation. was the primary through I COVID it think

buys, generate it affects on ability capital also of revenue. discretionary our perspective us Certainly a So are capital customer’s spend. affects double. from it's a hardware to But and our placing kind we confidence around it still own very a much actually

I in personally, effect. not same to that endure move And having had said kind and was probably of terms And COVID, the just supply of set. our issues I that we're deal QX terms they with believe with over. worst are since we've chain continue us commodity customers battling so as to they're And to for that. quarter through in of

Robert Mason

you also how as question, the at into the overall I sounds like, But my some product next business, Michael. I like you're perspective, in That the other but to well. kind rate from public -- there, clarification. you more just as dynamic feeds that just Obviously, customer AEC it in think spoke being wanted Europe, It performance of metrology but maybe though, XD pronounced in of two the of that would your get your I sounded know safety very new helped. backdrop as you pleased there. mentioned with verticals? well least

Michael Burger

segment. think I shortage-perspective, there has frankly customers we're Europe. our in really and labor the we're been for is impacted Public the hire parts and for seeing less but to a hearing, been And XD be largest Asia, know, -- at and in GCs ability nice me. you both hardest. probably would as Europe particularly customer been that's or North excuse Well, traction issue North their metrology base hand and in that jobs and from around that's in a and first hit manufacturing public the AEC, issue America big our around has safety market safety many shortage, America of Europe, primarily shortage

manufacturing think will the which the I side where our XD hit is be So metrology applications house, yeah, of hardest.

your hardest I think situation. the I available we we the metrology said, are our which our -- we've specifically were to was market -- know, during was we Quantum We are it in seen of expectations, compared as hit COVID the the in actually, pleased do that exceeded pleased script to as fantastic. XD brings just But with Max it finish value believe because and that what's you -- --

very QX XXXX, but continue a it And It was really will we positive saw so throughout cautiously by I'm what took surprise. that in optimistic experience. us

Robert Mason

around $XX Sanmina out. rate? can Allen Any pushed when to you the the be million thoughts mentioned transition get the run on savings you would

Allen Muhich

the And of net uncertainty trying hard there think environment. some level, we're providing. out chain they're the the on higher coming from commented I all to we're I that of the of it's in earlier, that, think numbers predict thing that we've savings; as a simply because and to supply some a -- be will into

to uncertain again, when time. we will anticipated in that the pretty had lot the that's get a so point environment we level depend And on this and will at

Robert Mason

good. Very it pass you. back. I'll Thank

Michael Burger

you. Thank

Operator

[Operator move Ben moment. we'll next Rose Road pause a Research. to We ahead. And Instructions]. Please with go Battle

Ben Rose

you, Michael. and good Allen Thank evening, and

Michael Burger

Hey, Ben.

Ben Rose

market. you the projects of Michael, and bounce-back How great the to contributor question a ongoing discussion around segment has race commercial the side? manufacturers. the are that aerospace been at on this regarding specifically lot ARM much There's a space been various for

Michael Burger

pleased we capacity. to a Quite bit. see coming stronger And come bit. a anticipated, in back at than actually which cases, very the are subcontractors is think many We're I Quite of production some it's Actually, positive. it back.

we're them great expanding out yeah, which right So like in it's is in now, North Europe. and a for with opportunity America positive, it's us. really roaring it But both and helping Ben, looks been capacity,

Ben Rose

you Great. offline sector automotive quarters seeing offline couple much a Okay. I line of sector? of guess And terms investment bit and so of in inspection. made terms up the the that but automotive on you you with capacity a little that Are not a were of seeing to lot the comment back in expansion, respect pick expansion, in

Michael Burger

are about of as read lot it not talked where aerospace. of in think the not a have as I all that Many yet, And are -- plans. it's But what well. planned end muted commercial was from just in I expansion XXXX. for and robust them terms of started XXXX. bodes It's think is there It them. still We've of about we

offerings. some that that, our on based [Indiscernible] share of particularly of get our So we'll product new we're hopeful

of So haven't was we're but yet. the recovery. it seen optimistic, cautiously It huge not actually part a we QX

Ben Rose

which quick for see. modeling XXXX a to for opening great so thoughts just rate definitely on FARO, on is tax then And nice question Unprecedented guidance, but Great. much see. Allen. Any you're for up Since purposes? Okay. for to

Allen Muhich

On expect be a we range. in basis, non-GAAP to still to that XX% XX%

Ben Rose

Okay, great.

Okay, lot. a thanks

Michael Burger

Thanks Ben.

Operator

And it now time. back the there at questions turn to close no does Burger sale. to appear this Michael further it I will are

Michael Burger

we're next appreciate Thank you. and excited you Thank We about updates attention, very much. quarter. everyone's you giving

Operator

This for Thank your does you program. conclude today's participation.

have wonderful evening. time may disconnect any and at You a