Cognex(US:CGNX)2026-02-12 11:14Revenue 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].