Core Insights - Cognex (CGNX) reported fourth-quarter 2025 non-GAAP earnings of 27 cents per share, exceeding the Zacks Consensus Estimate by 23.85%, with a year-over-year increase of 35% [1] - Revenues reached $252.3 million, surpassing the Zacks Consensus Estimate by 7.17%, reflecting a 10% year-over-year growth on a reported basis and 9% on a constant-currency basis [1] Financial Performance - The gross margin on a non-GAAP basis was 71.6%, an increase of 220 basis points year over year [3] - Non-GAAP operating margin improved to 20.9%, up 470 basis points year over year [4] - Selling, general & administrative (SG&A) expenses rose by 0.1% year over year to $94.6 million, while research & development (R&D) expenses increased by 10.8% year over year to $36.1 million [3] Cash Flow and Balance Sheet - As of December 31, 2025, Cognex had cash and cash equivalents of $262.9 million, up from $245.9 million as of September 28 [5] - The company generated $74.9 million in cash from operating activities in the fourth quarter, compared to $87.5 million in the previous quarter [5] - Free cash flow for the reported quarter was $72.3 million [5] Dividend and Guidance - Cognex declared a quarterly cash dividend of $0.085 per share, payable on March 12, 2026, to shareholders of record as of February 26, 2026 [6] - For the first quarter of 2026, Cognex expects non-GAAP revenues between $235 million and $255 million, with adjusted EBITDA margins ranging from 19% to 22% [7] Stock Performance - Cognex shares increased by 23.45% in pre-market trading and have risen 26.9% over the trailing 12 months, outperforming the Zacks Computer & Technology sector's appreciation of 21.6% [2]

Financial Data and Key Metrics Changes - In 2025, Cognex achieved a return to profitable growth with constant currency revenue growth of 8% year-over-year and adjusted EPS growth of 38% [6][24] - The adjusted EBITDA margin reached 20.7%, exceeding the 20% milestone a year ahead of plan, driven by strong cost discipline [15][17] - For the fourth quarter, adjusted EBITDA margin was 22.7%, marking a 420 basis point increase year-over-year [19] Business Line Data and Key Metrics Changes - Logistics continued to show steady growth, contributing to the overall revenue increase, with double-digit growth driven by large e-commerce customers [26] - The packaging segment delivered high single-digit revenue growth, indicating a strong market position [27] - Consumer electronics revenue grew double digits, supported by supply chain shifts and new device form factors [26] Market Data and Key Metrics Changes - Revenue from the Americas expanded by 11%, driven by strong demand in packaging and logistics [20] - Europe saw a 13% revenue growth, primarily due to strength in packaging [20] - Greater China revenue increased by 7%, supported by growth in consumer electronics and semiconductors [20] Company Strategy and Development Direction - Cognex is focused on leading in AI for industrial machine vision, with significant investments in new AI-enabled products [6][9] - The company aims to double its customer base within five years, having acquired approximately 9,000 new customer accounts in 2025 [10] - A comprehensive portfolio review has led to exiting low-margin product lines, with an expected annualized cost reduction of $35 million to $40 million by year-end 2026 [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation of the operating model and disciplined cost management as key drivers for future growth [31] - The company anticipates moderate growth in logistics for 2026, following two years of outsized growth [26] - Management remains cautious about the macroeconomic environment but is optimistic about the company's strategic positioning and customer acquisition momentum [31] Other Important Information - Cognex generated $237 million in free cash flow in 2025, the highest since 2021, with a trailing twelve-month free cash flow conversion rate of 138% [24][25] - The company returned $206 million to shareholders in 2025, including $151 million in share repurchases [25] Q&A Session Summary Question: Timing and impact of the $22 million revenue divestments - The majority of the revenue exiting is related to a Japan-focused trading business, expected to close by the end of the year or within the second quarter, impacting the packaging and logistics verticals [36][37] Question: Determining core versus non-core products - The company defines core products based on core IP, market size, growth potential, and profitability, focusing on areas where they have a competitive advantage [40][41] Question: Cost reduction program for 2026 - The largest lever for EBITDA margin expansion is OpEx efficiency, with expected offsets primarily on the mix side [46][47] Question: Customer growth initiatives and market outgrowth - The sales force transformation has significantly improved customer acquisition, with flexibility to redirect sales activities based on market conditions [50][51] Question: Organic top-line assumptions for 2026 - The company is not providing full-year guidance but expects mid to high single-digit growth based on current data [58] Question: Update on capital allocation priorities - Capital allocation priorities remain unchanged, focusing on strong cash flow generation and maintaining a cash conversion cycle of 150 to 155 days [72][73]

Financial Data and Key Metrics Changes - In 2025, the company achieved constant currency revenue growth of 8% year-over-year and adjusted EPS growth of 38% [5] - Adjusted EBITDA margin reached 20.7%, exceeding the 20% milestone a year ahead of plan, driven by strong cost discipline [14][16] - For the fourth quarter, adjusted EBITDA margin was 22.7%, a 420 basis point increase year-over-year, and adjusted EPS increased 35% year-over-year [18][20] Business Line Data and Key Metrics Changes - The logistics segment continued to deliver steady growth, with double-digit revenue growth driven by large e-commerce customers [25] - Packaging experienced high single-digit revenue growth, while consumer electronics saw double-digit growth as the market emerged from a down cycle [26][27] - Automotive revenue declined by high single digits, with expectations for flat to low single-digit growth in 2026 [27] Market Data and Key Metrics Changes - Americas revenue expanded by 11%, Europe grew by 13%, and Greater China revenue increased by 7% on a constant currency basis [19] - Other Asia revenue was flat, with growth from consumer electronics offset by declines in semiconductors [19] Company Strategy and Development Direction - The company is focused on leading in AI for industrial machine vision, with significant investments in new AI-enabled products and customer experience enhancements [5][8] - A comprehensive portfolio review is underway, with plans to exit low-margin product lines generating approximately $22 million in revenue [10] - The company aims to double its customer base within five years, having acquired approximately 9,000 new customer accounts in 2025 [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving a 25% adjusted EBITDA margin by the end of 2026, supported by ongoing cost reductions and operational efficiencies [16][30] - The company remains cautious about macroeconomic conditions but is optimistic about growth in logistics and consumer electronics [25][30] Other Important Information - The company generated $237 million in free cash flow in 2025, the highest since 2021, with a trailing twelve-month free cash flow conversion rate of 138% [23][24] - A $500 million increase in the share repurchase authorization was approved, reflecting the company's commitment to returning capital to shareholders [24] Q&A Session Questions and Answers Question: Can you provide details on the $22 million revenue divestments? - The majority of the revenue being exited is related to a Japan-focused trading business, expected to close by the end of the year or within the second quarter, impacting the packaging and logistics verticals [35][36] Question: How does the company determine core versus non-core products? - The company evaluates core products based on core IP, market size, growth potential, and profitability, focusing on areas where it has a competitive advantage [39][40] Question: What are the offsets for the cost reduction program in 2026? - The primary offset is on the mix side, with favorable one-time effects in 2025 not expected to recur, while operational efficiency remains the largest lever for margin expansion [46] Question: What has changed in customer growth initiatives over the past year? - Significant improvements in salesforce transformation, including better organization, processes, and collaboration with partners, have driven customer acquisition and flexibility in targeting high-growth areas [48][49] Question: What is the outlook for organic top-line growth in 2026? - The company expects mid to high single-digit organic growth, with ongoing monitoring of macroeconomic indicators to adjust expectations as necessary [56][58] Question: Can you elaborate on the demand trends in consumer electronics and logistics? - Consumer electronics demand is driven by new AI features and supply chain shifts, while logistics continues to see strong growth, although moderation is expected after a period of outsized growth [68][69]

Cognex (NasdaqGS:CGNX) Q4 2025 Earnings call February 12, 2026 08:30 AM ET Speaker8Greetings, and welcome to the Cognex Fourth Quarter 2025 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question and answer session will follow the formal presentation. If anyone requires operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Greer Aviv, He ...

Cognex Q4 2025 Earnings February 11, 2026 © 2026 Cognex Corporation 1 Forward-Looking Statements Certain statements made in this presentation, as well as oral statements made by the Company from time to time, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act. Readers can identify these forward-looking statements by our use of the words "expects," "anticipates," "estimates," "potential," "believes," "projects ...

Revenue and Income - Revenue for 2025 was $994,359,000, representing a 9% increase from $914,515,000 in 2024, primarily driven by higher revenue from logistics and consumer electronics industries [158]. - Operating income increased to 16% of revenue in 2025 compared to 13% in 2024, attributed to revenue growth and lower operating expenses [156]. - Net income remained flat at 12% of revenue in 2025, with earnings per share increasing to $0.68 from $0.62 in 2024 [156]. - Income before income tax expense rose by $51,313,000, or 39%, totaling $182,802,000 for the year ended December 31, 2025 [176]. Expenses - Gross margin decreased to 67% in 2025 from 68% in 2024, mainly due to a $13 million charge for excess and obsolete inventory [162]. - Research, development, and engineering expenses decreased by 1% to $138,970,000 in 2025, representing 14% of total revenue [167]. - Selling, general, and administrative expenses decreased by 2% to $363,857,000 in 2025, accounting for 37% of total revenue [169]. - The company expects to achieve an additional $35 to $40 million in annualized operating expense reductions by the end of 2026 [170]. Revenue by Region - Revenue from the Americas increased by 16% to $407,288,000, while revenue from Europe rose by 15% to $251,638,000 [160]. - Revenue from Greater China decreased by 3% to $158,456,000, and revenue from Other Asia also decreased by 3% to $176,977,000 [160]. Cash Flow and Investments - Net cash provided by operating activities totaled $245,514,000 in 2025, an increase from $149,081,000 in 2024 [181]. - The Company had an accumulated cash and investment balance of $642,301,000 as of December 31, 2025 [180]. - Investment income increased by $2,979,000, or 21%, primarily due to higher yields on the Company's portfolio of debt securities [173]. - Total non-operating income increased by $3,812,000, or 23%, from the prior year, reaching $20,236,000 [176]. Capital Expenditures and Shareholder Returns - Capital expenditures decreased to $8,743,000 in 2025 from $15,043,000 in 2024, primarily due to timing of planned business systems projects [183]. - The Company repurchased 4,234,000 shares at a cost of $151,233,000 in 2025, leaving a remaining balance of $115,020,000 for future repurchases [186]. - The Board declared cash dividends totaling $54,627,000 in 2025, with dividends of $0.080 per share in the first three quarters and $0.085 per share in the fourth quarter [187]. Financial Instruments and Currency Exposure - The Company entered into a forward contract for the Singapore Dollar with a notional value of S$34 million (USD equivalent of $27 million) in January 2026 [203]. - Approximately 50% of the Company's sales in 2025 were invoiced in currencies other than the U.S. Dollar, with expectations for continued significant foreign currency sales [205]. - Changes in foreign currency exchange rates could materially impact the fair value of contracts, but management believes it would not materially affect operations or cash flows [204]. - The Company may experience unanticipated foreign currency gains or losses due to inaccurate forecasts of transaction activity in various currencies [204]. Debt Securities and Interest Rate Risk - As of December 31, 2025, the fair value of the Company's portfolio of debt securities amounted to $379,376,000, with an amortized cost of $376,589,000 and a yield to maturity of 4.19% [206]. - 72% of the investment portfolio had effective maturity dates of less than three years as of December 31, 2025 [207]. - The Company does not expect a sharp rise in interest rates to materially affect the fair value of its debt securities due to their relatively short maturities [208]. - The hypothetical change in the fair value of the Company's portfolio of debt securities shows a valuation of $386,113,000 with a 100 basis point decrease in interest rates [210]. - The valuation of corporate bonds would decrease to $339,218,000 with a 100 basis point increase in interest rates [210]. - The Company does not currently hedge its interest rate exposures due to the short maturities and investment-grade quality of its portfolio [208].

Core Viewpoint - Cognex Corp. shares experienced a significant increase of 24.31% in after-hours trading, reaching $53.49 following the release of its fourth-quarter 2025 earnings results [1]. Financial Performance - Cognex reported a revenue increase of $22.65 million compared to the same period last year [2]. - Management provided guidance for the first quarter of 2026, projecting earnings between $0.22 and $0.26 per share [2]. Trading Metrics and Technical Analysis - The company has a market capitalization of $7.21 billion, with a 52-week high of $49.76 and a low of $22.67 [3]. - The stock has shown an 8.61% increase over the past 12 months and is currently trading approximately 75.2% above its 52-week low [3]. - The Relative Strength Index (RSI) for Cognex is reported at 62.95, indicating a positive price trend [3][4].

分组1 - Cognex Corporation reported quarterly earnings of $0.27 per share, exceeding the Zacks Consensus Estimate of $0.22 per share, and showing an increase from $0.20 per share a year ago, resulting in an earnings surprise of +23.85% [1] - The company achieved revenues of $252.34 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 7.17%, and up from $229.68 million in the same quarter last year [2] - Cognex has consistently outperformed consensus EPS and revenue estimates over the last four quarters, indicating strong financial performance [2] 分组2 - The stock has gained approximately 21.1% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.4% [3] - The current consensus EPS estimate for the upcoming quarter is $0.21 on revenues of $235.24 million, and for the current fiscal year, it is $1.13 on revenues of $1.04 billion [7] - The Electronics - Testing Equipment industry, to which Cognex belongs, is currently ranked in the top 36% of over 250 Zacks industries, suggesting a favorable outlook for the sector [8]

Revenue Growth - Fourth-quarter revenue increased by 10% year over year to $252 million, with a constant-currency growth of 9%[4] - Full-year revenue grew by 9% to $994 million, with a 7% increase when excluding the one-time benefit from the Commercial Partnership[6] - First-quarter 2026 revenue guidance is set between $235 million and $255 million, representing a year-over-year increase of approximately 13%[10] - Revenue for Q4 2025 was $252.3 million, an increase of 9.1% from $229.7 million in Q4 2024[20] Profitability Metrics - Adjusted EBITDA margin for the fourth quarter expanded by 420 basis points year over year to 22.7%, marking the sixth consecutive quarter of expansion[4] - Full-year adjusted EBITDA increased by 37% to $214 million, with an adjusted EBITDA margin of 21.5%, up 440 basis points year over year[6] - Net income per diluted share for the fourth quarter was $0.19, an increase of 18% year over year, while adjusted diluted EPS rose by 35% to $0.27[5] - Operating income for Q4 2025 was $35.3 million, representing 14.0% of revenue, compared to 13.4% in Q4 2024[20] - The company reported a net income of $32.7 million for Q4 2025, compared to $28.3 million in Q4 2024, with adjusted net income of $46.4 million[26] Shareholder Returns - The company returned $206 million to shareholders in 2025, including $151 million in share buybacks[4] - Cognex's Board of Directors declared a quarterly cash dividend of $0.085 per share, payable on March 12, 2026[8] - The company declared cash dividends of $0.085 per share in Q4 2025, compared to $0.080 in Q4 2024[20] Cash Flow and Assets - The company generated $246 million in cash from operating activities in 2025, a 65% increase compared to 2024[12] - Free cash flow for the twelve months ended December 31, 2025, was $236.8 million, significantly higher than $134.0 million in the previous year[27] - Cash provided by operating activities increased to $74.9 million in Q4 2025 from $51.4 million in Q4 2024[27] - Total assets increased to $2.02 billion in 2025 from $1.99 billion in 2024[18] - Cash and cash equivalents rose to $262.9 million in 2025, up from $186.1 million in 2024[18] - Total liabilities increased to $524.7 million in 2025 from $475.3 million in 2024[18] Research and Development - Research and development expenses for Q4 2025 were $36.1 million, representing 14.3% of revenue, slightly up from 14.2% in Q4 2024[20] - The company continues to focus on AI technology to enhance the capabilities of its vision sensors and systems, improving efficiency in manufacturing and distribution[36] Strategic Initiatives - Cognex expects to achieve an additional $35 to $40 million in annualized cost reductions by the end of 2026 through ongoing operating model optimization[4] - Cognex acquired Moritex Corporation in Q4 2023, which has contributed to ongoing integration costs and amortization of intangible assets[29][30] Inventory and Tax - The company incurred $13.1 million in excess and obsolete inventory charges in Q4 2025, reflecting a strategic product portfolio review[26] - Cognex's effective tax rate for Q4 2025 was 25.9%, compared to 20.8% in Q4 2024[27] Gross Profit Metrics - Gross profit margin for Q4 2025 was 65.7%, down from 68.7% in Q4 2024[20] - Q4 2025 GAAP gross profit reached $165.9 million, up from $157.9 million in Q4 2024, with an adjusted gross profit of $180.7 million[26] - The adjusted gross margin improved to 71.6% in Q4 2025 compared to 69.4% in Q4 2024[26]

Core Viewpoint - Cognex Corporation reported a return to profitable growth in 2025, with significant increases in revenue and adjusted earnings per share, driven by strategic portfolio optimization and cost management initiatives [1][2]. Financial and Operating Highlights - The company expects to achieve an additional $35 to $40 million in annualized cost reductions by the end of 2026 through continued optimization of its operating model [1]. - Cognex completed a strategic portfolio review, exiting approximately $22 million of non-core, no-growth, or low-margin revenue [1]. - A total of $206 million was returned to shareholders in 2025, including $151 million in share buybacks [1]. - Full-year net income per diluted share was $0.68, with adjusted diluted earnings per share increasing by 38% year over year to $1.02 [1][2]. - The full-year operating margin was 16.3%, with an adjusted EBITDA margin of 21.5%, reflecting a year-over-year increase of 440 basis points [1][2]. Fourth Quarter Performance - Fourth-quarter revenue grew by 10% year over year to $252 million, with an operating income of $35 million, representing a 14% increase [1][2]. - The fourth-quarter adjusted EBITDA margin was 22.7%, up 420 basis points year over year, marking the sixth consecutive quarter of expansion [1][2]. - Net income per diluted share for the fourth quarter was $0.19, an increase of 18% from the previous year [1][2]. Yearly Financial Performance - For the full year, revenue reached $994 million, a 9% increase compared to 2024, with a 7% growth rate when excluding the one-time benefit from a commercial partnership [2]. - Adjusted EBITDA for the year was $214 million, a 37% increase from 2024, with an adjusted EBITDA margin of 21.5% [2]. - Operating income for the year was $163 million, reflecting a 41% increase year over year [2]. Balance Sheet and Cash Flow - As of December 31, 2025, Cognex had $642 million in cash and investments, with no debt [2]. - The company generated free cash flow of $237 million in 2025, a 77% increase from the previous year [2]. - During the fourth quarter, free cash flow was $72 million, up 47% year over year [2]. Dividend and Share Repurchase - The Board of Directors declared a quarterly cash dividend of $0.085 per share, payable on March 12, 2026 [2]. - Cognex repurchased $25 million of its common stock in the fourth quarter and $151 million throughout 2025 [2]. First-Quarter 2026 Guidance - For Q1 2026, Cognex expects revenue between $235 million and $255 million, with an adjusted EBITDA margin of 19% to 22% [2]. - Adjusted earnings per share for Q1 2026 is projected to be between $0.22 and $0.26, representing a 50% increase year over year [2].