Good day, everyone, and welcome to the FARO Technologies fourth quarter and full year 2024 earnings call. At this time, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during our question-and-answer session. You may register to ask a question at any time by pressing star one on your telephone. Also, today's call is being recorded, and if you should need any operator assistance during the call today, please press star zero. Now, at this time, I'll turn things over to Mr. Mike Funari at Sapphire Investor Relations. Please go ahead, sir. Thank you. Good afternoon. With you today from FARO are Peter Lau, President and Chief Executive Officer, and Matt Horwath, Chief Financial Officer. Today, after market close, the company released its financial results for the fourth quarter and full year of 2024. The related press release, Form 10-K, is available on FARO's website at www.faro.com. 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. 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. During today's conference call, management will discuss certain financial measures that are not presented in accordance with U.S. GAAP or non-GAAP financial measures. 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. Now, I'd like to turn the call over to Peter Lau. Thank you, Mike. Good afternoon, and welcome, everyone, to our call. In the fourth quarter, we continued to make strides in optimizing our operations and again exceeded all of our targets. Revenue was $93.5 million above the midpoint of our guidance range. Non-GAAP gross margin was 57.4%, expanding over 600 basis points year-over-year and at the high end of our guidance range. Non-GAAP operating expenses were $39.9 million below the lower end of our targeted range of $40-$43 million per quarter. As a result, in the fourth quarter, we generated $0.50 of non-GAAP EPS, which was near the high end of our guidance range and represented the seventh straight quarter of exceeding our expectations. Adjusted EBITDA was $16.7 million, or 17.9% of sales, the highest single quarter in over a decade, with operating cash flow of $17.3 million, representing our fifth straight quarter of operating cash flow generation. It's also worth noting here that we delivered these results despite the FX headwinds we faced in the fourth quarter. Had exchange rates remained in line with the levels we saw during the third quarter, revenue would have been $2 million higher, with a corresponding positive impact to both gross margins and EPS. From a top-line perspective, in the fourth quarter, we again saw stable demand in certain sectors such as 3D metrology, while facing ongoing challenges in others, including commercial construction and specific regions like China and Germany. Within our served markets, discretionary CapEx remains a key area of focus for our customers. In the Americas, we continue to see stability in demand following the election, while the European region is becoming increasingly cautious, and Asia is remaining pretty soft. With the ongoing conversations we're having with our customers, as well as broader industry sentiment indicators like global PMI, we remain cautious on the market outlook beyond the next quarter. Looking back, 2024 was a record year for FARO, and we're extremely, extremely proud of the team's outstanding execution and focus towards optimizing our operations. Non-GAAP gross margins grew by 850 basis points year-over-year to 55.2%, while non-GAAP operating expenses as a percentage of revenue decreased by 200 basis points. As a result, 2024 marks the first time since 2018 that FARO has achieved double-digit EBITDA margins, and the first time in a decade we surpassed 11% EBITDA margins for the full year. As we discussed in our investor event last March, FARO is on an exciting multi-year journey, which can be categorized into three phases. The first phase is focused on operational excellence, instilling an 80/20 mindset throughout all aspects of our organization. This mindset has enabled us to execute on high return on investment items to enhance gross margins and optimize operating costs, resulting in a highly efficient organization and a financial base that gives us the ability to invest in key areas of growth. The outcomes of this first phase are consistent cash flow generation and improved gross margin and EBITDA, building significant operating leverage in the business. The second phase continues to utilize 80/20 as a key tool and will allow us to capitalize on this operating leverage with the introduction of three organic growth initiatives to ensure FARO grows faster than the market over the near to medium term. The third and final phase shifts our focus back to strategic investments such as M&A and organic programs further away from our core. Given the risk associated with these higher reward investments, though, we want to be disciplined and achieve our long-term aspirational goals first to ensure the organization has a solid foundation from which to build. Matt will talk about the updated aspirational goals in just a few minutes. In 2024, we executed on the commitments we made and saw significant progress in phase one of our strategy, remaining deeply focused on driving operational excellence across every aspect of our business. The results of this commitment enabled us to exceed the aspirational margin goals we set last March well ahead of schedule. Given this strong momentum, we're now updating these goals to reflect the continued improvements we anticipate, driven by the ongoing optimization of both our operations and financial performance. While we'll continue to identify opportunities for further optimization, as we enter 2025, our focus is transitioning to the next phase of our multi-year strategy: driving organic growth. Over the past several quarters, FARO has invested in three key strategic initiatives designed to accelerate our growth beyond the market. These actions include refreshing our core solutions, expanding our core addressable opportunity with new offerings, and forging strategic partnerships to enhance our scale and reach. With regards to our core product portfolio, as we discussed on our last call, in the fourth quarter, we refreshed two cornerstone product lines. First, with the FARO Arm Quantum X, building on our legacy of delivering the best accuracy available to the market. And second, the new Focus Premium Laser Scanner portfolio, including the versatile Premium Max with an improved range of 400 meters and the fastest scan mode utilizing our unique Flash technology. Building on that momentum, we launched our new Orbis Premium Mobile Scanner in November, a game changer in digital reality capture, with a new powerful 360-degree camera and improved data quality, making it a highly versatile solution, whether you're a building professional looking to manage your assets, a scanning service provider expanding its capabilities, or a public safety expert collecting information for pre-incident planning. On the software front, in the first quarter, we updated our CAM2 software for 3D metrology applications. Our updated version of CAM2 now offers different additions tailored to all customer needs. It includes options for scanning and probing devices and unifying data in the same software environment. CAM2 streamlines industrial metrology applications for dimensional controls, incoming parts and first article inspections, part-to-CAD comparisons, assemblies, repeat part measurements, and geometric dimensioning and tolerancing. Across the board, receptivity from our customers remains strong, and we look forward to seeing further traction in 2025. Turning to our initiatives to expand our addressable opportunities, I'm pleased to share that in January, we successfully launched the FARO Leap ST handheld scanner. This marks a significant milestone for FARO as we enter a new category of handheld scanning, approximately 35%-40% of the $800 million addressable opportunity expansion we're targeting. Leap ST further expands our product portfolio, making FARO a company that offers customers a complete range of portable 3D metrology devices and strengthens our presence across the manufacturing sector, where speed, accuracy, and throughput are essential. Fast time to data with high data quality is assured for a vast number of customer profiles, such as quality managers, product designers, product developers, and production managers. As a metrology-grade tool, it excels at measuring and verifying a variety of surfaces and parts. The design is compact, portable, and suitable for multiple industries and applications, making it extremely versatile. Leap ST adds another tool to the toolkit of our direct sales force and represents a significant share of wallet expansion opportunity within our existing and future customer base. As we've stated previously, our plan over the next several years is to increase our addressable opportunity by 40% through the introduction of solutions which are closely aligned with our core business and directly address the needs and the requests we've received from our customers. Our strategy here is really to build off the strength of our core business, where we have an extremely high brand loyalty, and deliver more solutions to our existing served market. As a result, we believe our revamped product roadmap that is geared towards where we play and have proven we can win has a much higher probability of being commercially successful than some of the other opportunities we had been considering. With a meaningful portion of this opportunity addressed with the launch of Leap, our plan is to roll out more products in the coming quarters and years to address the remaining 60%-65% to reach our target. Lastly, as it relates to our global partnership initiatives, I'm pleased to say in the first quarter, we signed two meaningful partnership agreements that are both global in nature. The first, a multi-year collaboration and distribution agreement with Topcon, a worldwide leader in the digital reality space, which was announced last week. Our collaboration with Topcon launches in the first half of 2025 and is an exciting step to make FARO's state-of-the-art laser scanning hardware and software solutions more widely accessible. Topcon has a significant worldwide distribution channel that has expertise in delivering solutions in key verticals such as construction, surveying, mapping, architecture, Building Information Modeling, and industrial plant and process applications. We expect this exciting relationship to continue to expand in the coming years. The second agreement that we signed in the first quarter was on the 3D metrology side of our business. This is a multi-year OEM partnership agreement that aligns us with a leading metrology company and enables our partner to white-label certain FARO products and deliver them to the market in a broad manner through our partner's extensive global marketing and supply chain network. This partnership is expected to be announced and launched to the market in the fourth quarter of 2025. We will plan to share more details closer to the launch event. To provide a sense, though, for the scale generated from these two partnerships, we expect to add over 200 new channel partners and 1,000-plus sellers of FARO's technology from these partnerships in 2025, which in essence triples the number of feet on the street than what we have today. Taking all three of these organic growth initiatives into account, we are thrilled about our momentum heading into 2025. While we recognize that it will take some time for these initiatives to ramp and meaningfully contribute to our top-line growth, we are very confident that they position us well for long-term success. The announcements we've made in the first quarter represent meaningful progress on the execution of these initiatives we committed to for phase two, but we will not rest on our laurels. We will continue to introduce more products and explore more partnerships as we move forward. These efforts are a clear testament to our commitment to our strategy and belief that FARO can continue to outpace market growth in the years ahead, even amid the ongoing uncertainty in the broader market. Coupled with our ongoing operational excellence initiatives designed to enhance profitability, we anticipate significant operating leverage as our revenue returns to growth. We are enthusiastic about our strategic direction in the coming years and are confident in our ability to drive substantial value for our shareholders. With that, I'll turn it over to Matt to provide an overview of our fourth quarter and full-year financial results, as well as an outlook for our first quarter. Thank you, Peter, and good afternoon, everyone. Fourth quarter revenue of $93.5 million was down 5% versus prior year. Geographically, the Americas and European regions were down 5% and 2%, respectively, while in the Asia-Pacific region, we experienced a decline of over 11% versus the fourth quarter of 2023, due primarily to continued weakness in China. Fourth quarter hardware revenue of $62.3 million was down 7% year-over-year, while software revenue of $11.6 million was down 5%, and service revenue of $19.7 million decreased by 2%. Recurring revenue was $17.1 million and represented 18% of sales, and declined by 2% year-over-year. GAAP gross margin was 56.7%, and Non-GAAP gross margin was 57.4% for the fourth quarter of 2024, compared to 51.3% in 2023. GAAP operating expenses were $48.4 million and included approximately $3.9 million in acquisition-related intangible amortization and stock compensation expenses, and $4.5 million in restructuring and other costs. Non-GAAP operating expense of $39.9 million was down $1.4 million from Q4 last year as we continued to realize productivity improvements. GAAP operating income was $4.7 million in the fourth quarter of 2024, compared with operating income of $1.4 million in the fourth quarter of 2023. Non-GAAP operating income was $13.8 million in the fourth quarter of 2024, compared to operating income of $9.4 million in the fourth quarter of 2023. Adjusted EBITDA was $16.8 million, or approximately 18% of sales, compared to $11.9 million in the fourth quarter of 2023. Our GAAP net loss was $986.05 per share. Our non-GAAP net income was $9.5 million, or $0.50 per share for the fourth quarter of 2024, compared to a net income of approximately $5.8 million, or $0.31 per share in Q4 2023. Our cash and short-term investment balance at the end of the quarter was $98.7 million, up $9.8 million sequentially with cash flow from operations of $17.3 million, representing our fifth consecutive positive quarter. As Peter mentioned in the fourth quarter, the U.S. dollar rapidly strengthened, which had an adverse effect on our business outside the U.S. To help provide some perspective on this impact, had FX rates stayed at similar levels to the third quarter of 2024, our revenue would have been $2 million higher, our gross margin would have been 50 basis points better, and our non-GAAP EPS would have been $0.06 greater. This is important to highlight for comparison purposes as it more clearly reflects the progress we made in the fourth quarter, including a year-over-year increase of approximately 650 basis points in non-GAAP gross margin and a $0.25 improvement in non-GAAP EPS. Moving to our annual results, we are very pleased with progress we've made in 2024. Despite a difficult macroeconomic environment throughout the year, on a year-over-year basis, we were able to deliver an 850 basis point improvement in gross margin to 55%, a $15 million reduction in non-GAAP operating expense to $160.7 million, a $1.49 improvement in non-GAAP EPS to $0.97, and a $29.6 million increase in cash flow from operations to $30.6 million. With this significant improvement in cash flow, we were able to repurchase $3 million of principal from our outstanding convert, $10 million of outstanding shares, and increase our cash and short-term investments on our balance sheet. As a result of our progress throughout the year, we updated our long-term aspirational goals versus the previously communicated goals during our investor event in March 2024, less than one year ago. At $400 million of revenue, we now expect gross margin of 59%, up 200 basis points from our prior goal, EBITDA margin of 20%, an improvement of 500 basis points, and an annual free cash flow of greater than $56 million, representing an increase of $16 million. Turning to our outlook, the macroeconomic environment remains choppy, and we expect the headwinds we experienced last quarter to continue, resulting in a similar level of year-over-year market contraction quarter in Q1. While we believe our growth initiatives will help offset industry softness as they gain momentum throughout the year, we remain mindful of broader challenges. With continued softness, tariff-related uncertainties, and potential government spending slowdowns, we want to remain thoughtful and measured in setting expectations for the first quarter of 2025. As a result, at present FX rates, we expect first quarter revenue of between $77 million and $85 million. At those revenue levels and given corresponding non-GAAP gross margin between 55% and 56.5%, and non-GAAP operating expenses of between $38.5 million and $40.5 million, we would expect non-GAAP earnings per share ranging from $0.10 per share to $0.30 per share for first quarter profitability. In addition, to help provide a more apples-to-apples comparison relative to last year, given the rapid change in exchange rates, assuming an FX rate in line with the third quarter of 2024, the midpoint of our first quarter guidance would increase by $1.7 million in revenue, 40 basis points in non-GAAP gross margin, and $0.02 in non-GAAP earnings per share. This concludes our prepared remarks, and at this time, we'd be pleased to take your questions. Thank you. Ladies and gentlemen, at this time, if you would like to ask a question, simply press star one. And if you find your question has been addressed, you may remove yourself from the queue by pressing star two. Once again, star one for questions. We'll go first this afternoon to Jim Ricchiuti of Needham & Company. Jim, please go ahead. Hi, thank you. I wanted to go to the two OEM distribution agreements, and maybe we could start with Topcon. Peter, FARO has had, at least going back a number of years ago, had an OEM distribution agreement. I believe it was with Trimble on the laser scanning product. Can you give us a sense because that agreement, I think, produced mixed results? Talk to us a little bit about why this agreement might be different with Topcon. Obviously, it's a different company, but just trying to get a sense as to how the agreements might be different and what it does for you in this part of the business. Yeah. Hey, Jim, thanks for the question. I think, I mean, look, they're a really good partner, someone we've been talking to for about eight months. As a part of our discussions and negotiations, we've been able to talk about how we really kind of take this partnership and deliver growth for both companies. And so we've talked about things like deal registration and certain geographies where one of us would take the lead versus the other. It's a very, very comprehensive plan, Jim, that we expect to deliver kind of into the eight figures for us and at its full ramp. And obviously, we expect it to expand as we get going. So full ramp, could that occur by the end of the year? Is that your expectation? You know, Jim, it's something that we want to be very cautious. I mean, the first thing we want to do is make sure that this is all about growth. And so as we sort of kind of look to the future, we'll take a very pragmatic approach to make sure that we're delivering growth for both companies. And so we'll just continue to watch and see how it grows. Got it. The second agreement, the digital metrology agreement, obviously, I guess we'll learn who this is down the road, but I just want to make sure I understand. So in other words, that we could see this agreement coming into play in late 2025? Is that correct? Yeah. I think that's what we're looking for. I mean, ultimately, the reason that we're not sharing all of the details right now is because our partner has not launched the product yet, and so we don't want to steal any thunder in that it's not available. But the target and the timeline, all indications point to the second half, fourth quarter of 2025. Is this relationship something that will help you geographically? Can you say, and maybe you can't, just what part of the digital metrology product line it covers? Any sense there? Yeah. I mean, ultimately, it's a company that we believe helps us scale to a lot of different parts of the world and a much larger customer base, obviously, with the addition of this partnership than the one that we have today. So it's global in nature. It serves every portion or part of the world. And we'll start with one of our metrology products and likely, over time, expand that into more than one. But we've got one in mind that, again, we don't want to betray any confidences here, but we'll start with one and look to see how that relationship goes and then look to expand it over the coming years. Thanks. I'll jump back in the queue. Thank you. Okay. Thanks, Jim. Thank you. And just a quick reminder, star one, please, for questions. We'll go next now to Greg Palm of Craig-Hallum. Yeah. Thanks. Congrats on the results, especially in light of that FX headwind that emerged in the quarter. Thanks, Greg. Good to hear you. Maybe just starting with, if you look back in the quarter and maybe even kind of year-to-date, what you're seeing in Q1, anything that surprises you, whether that was the cadence throughout the quarter, something geographically, and market mix, maybe just a little bit more sort of detail on what you're seeing out there in the market? Yeah. I think largely, Greg, what we're seeing in the market is about what we saw in Q4. Obviously, we launched our Leap ST, and we've got good hopes for these partnerships. And so as it ramps, we expect, obviously, for these initiatives to help us grow faster than the market. But Q1, kind of what we're seeing is about what we saw in Q4. No material or meaningful change. And how do you sort of rank order the various growth initiatives that you've highlighted from the Topcon, the unnamed white label announcement, new products, and the wallet share expansion opportunity? And from a timeline standpoint, do we think of that as being kind of more of a full run rate impact next year? What type of contribution would you expect this year as it ramps up, or is it too early to say? Yeah. Look, I think it's a couple of things here. I think it's a little too early to say. But obviously, look, on the product side of the house, having refreshed products is a strategy that's worked tried and true for us over the last two decades, right? So we're excited about that. Look, the new addressable opportunity expansion, this is a huge opportunity for us, right? It's been a long time since we introduced a new product versus an updated product, probably since 2010, right, since we've done that. And these are products that our customers are asking to buy from us, so we feel reasonably confident about the commercial viability of these projects. And then, again, the partnerships are companies that fit us well culturally. The negotiations or the discussions have been very, very good. They've been very two-way in nature. And look, we believe all of these are really, really great opportunities for us. In terms of kind of when we get to full run rate, hard to say, Greg, because we're not going to stop on the partnerships and we're not going to stop on the new products, right? So we're going to launch more products in 2025, and we're going to look at other partnerships. So to me, this strategy of these three initiatives is evergreen. And look, I think as with everything new, new products and new partnerships, we want to be disciplined. We want to be thoughtful and measured, as Matt said. We want to make sure that we're not getting out over our skis, but we are very, very excited about what we've been able to deliver in that phase two that we talked about and are really bullish about our future. As we think about the Leap ST specifically, knowing it's only been on the market for a month, but are you able to talk about maybe not necessarily order rates, but kind of feedback from the marketplace at all? Yeah. Look, I think all of the KPIs that we're tracking, and so think pipeline, think discussions, think demos, think orders, all of those KPIs, I would say, are ahead of what our initial expectations were. Okay. Great. And then just lastly, thinking about tariffs and trying to maybe figure out how you're either better or worse impacted versus some of the competition. So maybe remind us in terms of the manufacturing footprint and any color on maybe the competitive landscape and if there could be maybe a competitive advantage that emerges here depending on what happens over the coming months or year. Yeah. No, good question. It's something that we're obviously thinking about a lot. And I think right now, as a reminder, most of, and then all of our products by the end of the first quarter will be manufactured with our partner in Thailand. And so, obviously, not here in North America, over in Asia and in a country that likely has not been a huge target so far. But nonetheless, when we think about reciprocal tariffs, we do think that there's potentially an impact, but it's not a very sizable impact if you put it in absolute dollars. Look, I think we would probably in the beginning look to cover some of it with price. But we do retain with this partner the ability to potentially move our production around the world. They're obviously a contract manufacturer with locations around the world. We do have 13 service centers across the world that still have the ability. They service the parts today. They calibrate the products. They test the products. And so we do have the ability to really, really go local for local. And I think as more news comes out from a tariff standpoint, we'll be able to really kind of be in a better position to talk about what our strategy is. And again, we think that at least early returns say, "Hey, it's a relatively low absolute number. We could probably cover it with price," and then figure out kind of how it goes from there. In terms of the competitive environment, I would say just broadly, maybe some puts and takes from what we know, but the reality is we just don't know a whole lot about the competitors. And right now, Greg, we're just worried about ourselves and being able to deliver high-quality products that have high paybacks to our existing customer base. Yeah. Makes sense. All right. I will leave it there. Best of luck. Thanks. Thank you, Greg. Thank you. We'll take a follow-up question now from Jim at Needham. Just wanted to address the question on tariffs maybe a little differently. I'm just curious if as you're what you're hearing from your customer base, whether you're seeing any caution as they evaluate the tariff trade policy impacts on their own businesses. Yeah. Jim, it is a great question. I think Matt briefly touched on it when he was talking about kind of our view or outlook for the first quarter, and look, we've obviously unknown is not really productive for anybody, and so generally, when there's unknowns, we see customers kind of pinch their pennies a little bit, and look, we've been having those types of conversations. Obviously, you got some customers who are moving forward, some customers who are going to be a little more cautious, and I think we'll continue to monitor that. We took that into account when we provided a thoughtful and a measured guidance to Q1. Is the reaction that you're seeing, Pete, more pronounced in one vertical versus the other, whether it's automotive or aerospace or just say, I know you sell into a broad range? No, it's a good question. Actually, probably I speak to that more regionally and obviously, in places like Canada and Latin America, probably the second thoughts are more prevalent in those areas of the world as we sit here right now. Obviously, again, we'll continue to monitor that and do what we can to help those customers and do what we need to do to deliver a solid first quarter. Last question for me is just on pricing. You guys put through some price increases, I believe, in early January. I'm just curious how they've been received and whether you can give us a sense as to how broadly that covers the metrology product line and whether you're seeing any similar pricing actions from some of your competitors. Yeah. Jim, this is Matt. We did increase our list prices as of January 1st, 2025. So there was an initial kind of first time since COVID, we had increased our list prices back in January of 2024, and then we did so January 2025 as well. And I would say we did see some nice realization of that price increase in 2024. And I think early days in 2025, with a month and a half, almost two months under our belt, I don't think we're getting significant pushback there. We give some opportunity that if we are in a competitive deal that we would allow our team to discount. That's a great thing is we have increase in list prices, but we do have the ability to discount when needed in a competitive deal. And so I don't think we've seen anything significantly different from our competitors. They're increasing their prices. We're increasing ours. And we feel like we need to go get the value for our products that our products deserve. And that's kind of how our sales organization treats it. And that's kind of what we've seen early days in 2025. Thank you. And congrats on the results and the announcements. Thank you, Jim. Thank you. And gentlemen, it appears we have no further questions this afternoon. Mr. Lau, I'd like to turn things back to you, sir, for any closing comments. Good. Thank you, Operator. I'd just like to take a moment to really and sincerely thank all of our employees for their dedication and hard work in delivering an outstanding 2024. Despite facing a challenging market environment, we exceeded our targets in every area within our control, and we also made significant progress on several of our key strategic growth initiatives. In short, our team executed well on everything we said we were going to do. While we remain focused on identifying additional opportunities to further enhance these results, the success we've achieved so far gives us strong confidence moving forward. As we execute on our organic growth initiatives in the coming quarters, we are confident that we'll be well-positioned to outgrow the market and unlock significant value for our shareholders, both in the short and long term. We look forward to sharing our progress and execution in the quarters ahead. This concludes our call today. Thank you very much, everyone. Thank you, Mr. Lau. Again, ladies and gentlemen, that will conclude today's FARO Technologies fourth quarter earnings call. Again, thanks so much for joining us, and we wish you all a great day. Goodbye. Goodbye.