Cognex Corporation (NASDAQ:CGNX) Q3 2022 Earnings Conference Call November 3, 2022 5:00 PM ET Company Participants Susan Conway - Senior Director of Investor Relations Rob Willett - President & Chief Executive Officer Paul Todgham - Chief Financial Officer Conference Call Participants Joe Giordano - Cowen Joe Ritchie - Goldman Sachs Josh Pokrzwinski - Morgan Stanley Jake Levinson - Melius Research Jim Ricchiuti - Needham & Company Jairam Nathan - Daiwa Capital Markets Will Jellison - D.A. Davidson Damian Ka ...

Financial Data and Key Metrics Changes - Revenue for Q2 2022 was $275 million, representing a low single-digit change compared to Q2 2021 and Q1 2022 [15] - Gross margin in Q2 was 72%, down 3 percentage points from the previous year due to high premiums paid for electronic components [18] - Reported earnings were $0.34 per share in Q2 2022, compared to $0.43 in Q2 2021 and $0.38 in Q1 2022 [20] Business Line Data and Key Metrics Changes - Revenue from logistics decreased significantly due to reduced investments from major customers, impacting overall growth [11][15] - Consumer electronics revenue is expected to grow year-on-year in Q3, with double-digit annual growth anticipated [23] - Operating margin was 24% in Q2 2022, including a fire loss charge, but was 30% excluding that charge, aligning with long-term targets [19] Market Data and Key Metrics Changes - Asia was the best-performing region with a 20% increase in revenue year-on-year, driven by consumer electronics and semi-conductor markets [16] - Revenue in Europe increased by 13%, while the Americas saw a 16% decrease due to lower logistics revenue [17] - Greater China experienced over 30% growth despite lockdowns, attributed to large electronics orders [16] Company Strategy and Development Direction - The company aims to grow logistics revenue by 30% annually over the long term, adjusting from previous higher targets due to recent market conditions [25] - There is a focus on diversifying the manufacturing footprint and improving supply chain robustness following the fire incident [72] - The company is optimistic about growth opportunities in logistics and machine vision applications beyond barcode reading [12][45] Management's Comments on Operating Environment and Future Outlook - Management anticipates Q3 2022 will be challenging, with revenue expectations between $160 million and $180 million, significantly lower than previous estimates [23] - The slowdown in logistics is viewed as a temporary setback, with expectations for recovery in Q4 [11][39] - Management remains confident in the long-term growth potential of logistics and machine vision, citing ongoing demand and new applications [12][45] Other Important Information - A fire at the primary contract manufacturer in June resulted in significant inventory loss, impacting future revenue expectations [7][10] - The effective tax rate for Q2 was 16%, excluding discrete tax items, consistent with expectations [20] - The company ended Q2 with $788 million in cash and investments, maintaining a strong balance sheet [21] Q&A Session Summary Question: Logistics revenue expectations and deferrals - Management indicated that Q3 logistics revenue is expected to be artificially low due to deferred orders and supply chain challenges, with a stronger Q4 anticipated [28][30] Question: Impact of the fire on revenue estimates - The $20 million loss is attributed to discontinued products, while $60 million is expected to be realized in future quarters [32][34] Question: Confidence in long-term growth targets - Management expressed confidence in achieving a 30% growth rate in logistics, citing a strong understanding of the market and ongoing demand for machine vision applications [42][45] Question: Supply chain strategy review post-fire - The company is actively working on diversifying its manufacturing strategy to mitigate risks highlighted by the fire incident [72] Question: Currency impact on competitiveness - The strong dollar has had a 4% impact on revenue growth, but the company has implemented price increases that have been well received [75][76]

COGNEX CORPORATION Investor Overview | Q1 2022 1 © 2022 Cognex Corporation FORWARD-LOOKING STATEMENTS Certain statements made in this presentation and oral statements made by Cognex® that do not relate solely to historical matters are forward-looking statements. These statements can be identified by use of the words "expects," "anticipates," "estimates," "believes," "projects," "intends," "plans," "will," "may," "shall," "could," "should," and similar words and other statements of a similar sense. These sta ...

Cognex Corporation (NASDAQ:CGNX) Q1 2022 Results Conference Call May 5, 2022 5:00 PM ET Company Participants Susan Conway - Senior Director, IR Rob Willett - President, CEO Paul Todgham - CFO Conference Call Participants Andrew Buscaglia - Berenberg Jacob Levinson - Melius Research Jairam Nathan - Daiwa Jim Ricchiuti - Needham & Co. Joe Ritchie - Goldman Sachs Joe Giordano - Cowen Rob Mason - Baird Operator Greetings, and welcome to Cognex First Quarter 2022 Earnings Conference Call. [Operator Instructions] ...

Cognex Corporation (NASDAQ:CGNX) Q4 2021 Earnings Conference Call February 17, 2022 5:00 PM ET Company Participants Susan Conway - Senior Director, IR Rob Willett - President and CEO Paul Todgham - CFO Conference Call Participants Josh Pokrzywinski - Morgan Stanley Jacob Levinson - Melius Research Michael Anastasiou - Cowen and Company Matt Summerville - D.A. Davidson Jim Ricchiuti - Needham & Co. Andrew Buscaglia - Berenberg Capital Markets Markus Mittermaier - UBS Jairam Nathan - Daiwa Securities Bobby ...

Revenue and Market Presence - Cognex's machine vision products accounted for approximately 70% of total revenue in 2021, with logistics, automotive, and consumer electronics being the largest industries served [10]. - Sales to customers outside the United States represented approximately 62% of total revenue in 2021, with Europe contributing 24%, Greater China 19%, and other regions 19% [22]. - Cognex Corporation reported revenue of $1,037,098,000 for the year ended December 31, 2021, a 28% increase from $811,020,000 in 2020, driven by a 65% increase in logistics industry revenue [76]. - Revenue from the logistics industry was the largest market for Cognex in 2021, significantly contributing to overall revenue growth, particularly from e-commerce and omni-channel retailers [76]. - Revenue from customers in the Americas increased by 40% in 2021, primarily due to higher logistics industry revenue [78]. - Revenue from customers in Europe increased by 19% in 2021, with a 15% increase when excluding foreign currency exchange rate impacts [80]. - Revenue from Greater China increased by 19% in 2021, with a 12% increase when excluding foreign currency exchange rate impacts, driven by the automotive and semiconductor industries [81]. - A significant portion of the company's products is manufactured by a third-party contractor in Indonesia, which has led to potential delays in delivery schedules due to COVID-19 and other factors [32]. - The company has a large customer in the logistics industry that represented approximately 17% of total revenue in 2021, highlighting revenue concentration risks [39]. Financial Performance - The company has maintained historically high gross margin percentages in the mid-70% range, reflecting the value placed on its innovative products [13]. - Gross margin decreased to 73% in 2021 from 75% in 2020, primarily due to higher inventory purchase prices and a greater percentage of revenue from the logistics industry, which has lower gross margins [74]. - Operating income expanded to 30% of revenue in 2021 compared to 21% in 2020, resulting in net income of 27% of revenue in 2021 versus 22% in 2020, with net income per diluted share increasing to $1.56 from $1.00 [74]. - Cognex's net income increased to $279,881,000 for the year ended December 31, 2021, compared to $176,186,000 in 2020, representing a year-over-year increase of 58.7% [160]. - The company generated net cash provided by operating activities of $314,065,000 in 2021, up from $242,400,000 in 2020, indicating a growth of 29.6% [160]. - Total dividends paid by Cognex in 2021 amounted to $43,263,000, compared to $390,508,000 in 2020, which included a special cash dividend of $351,428,000 [66]. - Cognex's stock performance showed a cumulative total shareholder return of 262.48% from December 2016 to December 2021 [69]. Research and Development - Research and development expenses were 13% of revenue in 2021, down from 16% in both 2020 and 2019, indicating a focus on maintaining product leadership and innovation [20]. - Cognex plans to continue investing in core markets like automotive and consumer electronics while expanding into logistics, particularly in e-commerce and omni-channel retail [13]. - Research, development, and engineering expenses increased by $4,390,000, or 3%, in 2021, with RD&E expenses as a percentage of revenue decreasing to 13% from 16% in 2020 [89]. Operational Challenges - The company has experienced disruptions in the supply of key electronic components, resulting in higher purchase costs and manufacturing delays [33]. - The COVID-19 pandemic has created macroeconomic uncertainty, affecting customer orders and potentially leading to delayed revenue recognition [38]. - The company has faced labor shortages and operational challenges at its distribution centers due to COVID-19, which may impact shipping and customer satisfaction [36]. - The company may face challenges in managing product transitions and accurately forecasting customer demand, leading to excess or obsolete inventory [33]. Corporate Governance and Strategy - The company is selective in its acquisition strategy, aiming to enhance long-term growth and profitability through targeted business acquisitions [14]. - Cognex emphasizes a unique corporate culture that fosters innovation and employee engagement, which is critical for executing its strategic initiatives [25]. - Cognex's executive team includes Robert J. Willett as President and CEO, and Paul D. Todgham as CFO, with a focus on strategic growth and financial oversight [63]. Financial Position and Investments - As of December 31, 2021, the company had approximately $721 million in debt securities, with a net unrealized loss of $3,902,000 [50]. - The company had approximately $907 million in cash and investments as of December 31, 2021, and no long-term debt, positioning it well to weather economic downturns [55]. - The company has a diverse investment portfolio, including corporate bonds, treasury bills, and municipal bonds, which are reported at fair value [133]. - The company utilizes foreign currency forward contracts with maturities of up to 95 days to manage exposure to fluctuations in foreign currency exchange rates [130]. Stock and Shareholder Information - Cognex repurchased a total of 1,436,000 shares of its common stock in the fourth quarter of 2021 at an average price of $78.92 per share, completing its previous stock repurchase program [66]. - The company declared a cash dividend of $0.065 per share in the fourth quarter of 2021, an increase from $0.060 per share in the previous quarters [66]. - Cognex's common stock is traded on NASDAQ under the symbol CGNX, with approximately 650 shareholders of record as of January 30, 2022 [66]. Regulatory and Compliance Risks - The company is exposed to regulatory and compliance risks in international operations, which could adversely affect its business and operating results [56]. - The company may face impairment charges related to its investments or acquired intangible assets, which could materially impact operating results [50]. - The company is subject to foreign currency exchange rate fluctuations, with approximately 49% of sales in 2021 invoiced in currencies other than the U.S. Dollar, potentially impacting operating income [52].

Cognex Corporation (NASDAQ:CGNX) Q3 2021 Results Conference Call November 4, 2021 5:00 PM ET Company Participants Susan Conway - Senior Director-Investor Relations Rob Willett - President and Chief Executive Officer Paul Todgham - Chief Financial Officer Conference Call Participants Josh Pokrzywinski - Morgan Stanley Jacob Levinson - Melius Research Joe Ritchie - Goldman Sachs Joe Giordano - Cowen & Co Andrew Buscaglia - Berenberg Capital Markets Operator Greetings, and welcome to the Cognex Third Quarter 2 ...

Financial Data and Key Metrics Changes - Cognex reported record revenue of $269 million for Q2 2021, representing a 59% increase year-on-year and 35% above pre-COVID levels from Q2 2019 [19][20] - Gross margin was 75%, significantly improved year-on-year due to an $8 million excess inventory charge in Q2 2020, but declined sequentially due to revenue mix and supply chain cost increases [21][24] - Non-GAAP earnings per share were $0.43 in Q2 2021, compared to $0.18 in Q2 2020 and $0.36 in Q1 2021 [24] Business Line Data and Key Metrics Changes - Logistics remained the largest end market, achieving record revenue driven by strong e-commerce demand [8] - Consumer electronics contributed to growth but is expected to be modestly below last year's levels due to reduced investment in smartphone manufacturing [9] - Automotive set a new quarterly revenue record, recovering from previous lows, with significant contributions from various sectors including consumer products and food and beverage [10] Market Data and Key Metrics Changes - Revenue growth was broad-based across all regions, with Europe being the fastest-growing region, increasing by over 60% year-on-year [25] - The Americas saw more than 50% growth, primarily driven by logistics, automotive, and medical-related industries [26] - Asia also experienced over 50% growth, with significant contributions from consumer electronics and automotive sectors [26] Company Strategy and Development Direction - Cognex is focusing on new product development, including VisionPro 10 and SmartLine, to enhance its technology offerings and maintain competitive advantage [14][15] - The company is transitioning its logistics business from customized to standard solutions to improve scalability and gross margins [18] - Strategic investments are being made in high-potential customers, particularly in logistics, to drive future growth [32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging supply chain environment, which has led to longer lead times and increased backlog, estimating a potential 5% higher revenue without these issues [35] - For Q3 2021, revenue is expected to be between $275 million and $295 million, representing a year-on-year growth of about 14% [30] - Management anticipates some seasonal softness in consumer electronics and expects gross margins to be in the low to mid-70% range due to ongoing supply chain pressures [32] Other Important Information - Cognex maintains a strong cash position with $952 million in cash and investments and no debt, with plans for continued stock buybacks [27] - The company declared a quarterly cash dividend of $0.06 per share, payable on September 3 [27] Q&A Session Summary Question: Supply chain impact on sales - Management indicated that while sales are strong, they believe revenue could have been 5% higher without supply chain issues [35] Question: Margin normalization - Management noted that supply chain costs and a strategic investment in logistics are affecting margins, but they expect to maintain a long-term operating margin benchmark of around 75% [36] Question: Automation in pharmaceuticals - Management sees significant growth potential in the pharmaceutical distribution market, emphasizing the value of their technology in tracking and tracing products [38] Question: Deep learning advantages - Management highlighted that deep learning technology is opening up new inspection applications that were previously not cost-effective or reliable [44] Question: Sequential revenue drivers - The primary drivers for Q3 revenue growth are expected to be consumer electronics and logistics, with consumer electronics historically being the largest quarter [48] Question: Automotive growth context - Automotive was the fastest-growing market, with significant contributions from EV battery manufacturing and a shift in demand dynamics [53] Question: Semiconductor market demand - Management noted strong demand in the semiconductor sector, driven by capacity shortages and ongoing investments [74] Question: COVID impact on supply chain - Management expressed confidence in their Indonesian subcontractor's ability to manage COVID risks effectively, with no significant supply chain challenges reported [75]

COGNEX CORPORATION Investor Overview | Q1 2021 1 © 2021 Cognex Corporation FORWARD-LOOKING STATEMENTS Certain statements made in this presentation and oral statements made by Cognex® that do not relate solely to historical matters are forward-looking statements. These statements can be identified by use of the words "expects," "anticipates," "estimates," "believes," "projects," "intends," "plans," "will," "may," "shall," "could," "should," and similar words and other statements of a similar sense. These sta ...

Cognex Corporation (NASDAQ:CGNX) Q1 2021 Earnings Conference Call May 6, 2021 5:00 PM ET Company Participants Susan Conway - Director of Investor Relations Rob Willett - President and Chief Executive Officer Paul Todgham - Senior Vice President of Finance and Chief Financial Officer Conference Call Participants Richard Eastman - Robert W. Baird & Co Joe Giordano - Cowen & Company Matt Summerville - D.A. Davidson Andrew Buscaglia - Berenberg Jairam Nathan - Daiwa Capital Markets Operator Greetings, and welco ...