Cognex Reports Second Quarter 2025 Results

NATICK, Mass., July 30, 2025 /PRNewswire/ -- Cognex Corporation (NASDAQ:CGNX), the global technology leader in industrial machine vision, today reported financial results for the second quarter ended June 29, 2025.

Second-Quarter Financial and Operating Highlights

Revenue grew 4% year over year or 3% on a constant-currency basis.

Operating expenses declined 3% year over year, driven by disciplined cost management.

Operating margin of 17.4%; Adjusted EBITDA margin of 20.7%, up 80 basis points year over year and above 20% for the first time since the second quarter of 2023.

Net income per diluted share was $0.24; Adjusted diluted earnings per share were $0.25, an increase of 12% year over year, fourth consecutive quarter of growth.

Announced launch of OneVision, a breakthrough cloud platform for AI-powered Machine Vision.

"We're focused on executing on our strategic priorities and delivering on our long-term financial framework to drive shareholder value," said Matt Moschner, President and CEO. "The second quarter represents an early, but meaningful, step forward in this journey, marked by continued Adjusted EBITDA margin expansion and strong free cash flow generation, both of which we believe are important indicators of our financial discipline and long-term value creation."

Commenting further on the second-quarter performance, Mr. Moschner said, "We sustained our positive momentum from Q1 into Q2, with strength in Logistics and broader Factory Automation, especially in Consumer Electronics and Packaging. We believe that our salesforce transformation is delivering impactful results, helping us reach a broader cross-section of Packaging customers." 

Dennis Fehr, CFO, added, "We're pleased with our Q2 performance, which underscores our commitment to profitable growth and cash flow generation, the pillars of our through-cycle financial framework we shared at Investor Day. This focused execution drove our Adjusted EBITDA margin above 20% for the first time in two years and accelerated our cash flow generation."

Financial Performance Highlights for the Second Quarter(Dollars in millions, except per share amounts)

Three-months ended

June 29, 2025

June 30, 2024

Y/Y Change

Revenue

$249

$239

+4 %

Operating Income

$43

$38

+13 %

% of Revenue

17.4 %

16.1 %

+130 bps

Adjusted EBITDA*

$52

$48

+9 %

% of Revenue

20.7 %

19.9 %

+80 bps

Net Income per Diluted Share

$0.24

$0.21

+15 %

Adjusted EPS (Diluted)*

$0.25

$0.23

+12 %

*Adjusted EBITDA and Adjusted EPS (Diluted) include non-GAAP adjustments. A reconciliation from GAAP to non-GAAP metrics is provided in this news release.

Revenue was $249 million, compared with $239 million in the second quarter of 2024, an increase of 4%. Excluding the impact of foreign currency exchange (FX), revenue increased 3% compared to the prior year. The year-over-year increase in revenue was driven by growth in Logistics and strength in broader Factory Automation driven by Consumer Electronics and Packaging.

Gross margin was 67.4% compared to 69.6% in the second quarter of 2024. Adjusted gross margin was 68.0% compared to 70.3% in the second quarter of 2024, a decline of 230 basis points. The year-over-year decline was primarily due to less favorable industry mix, and, to a lesser extent, the impact from tariffs.

Operating expenses were $124 million compared to $128 million in the second quarter of 2024, a decrease of 3%. Adjusted operating expenses were $123 million compared to $126 million in the second quarter of 2024, a decrease of 2%, driven by disciplined cost management.

Operating margin was 17.4% compared to 16.1% in the second quarter of 2024, an increase of 130 basis points. Adjusted operating margin was 18.7% compared to 17.8% in the second quarter of 2024, an increase of 90 basis points.

Adjusted EBITDA was $52 million compared to $48 million in the second quarter of 2024, an increase of 9%. Adjusted EBITDA margin was 20.7% compared to 19.9% in the second quarter of 2024, an increase of 80 basis points, representing the first quarter above 20% since the second quarter of 2023. The year-over-year expansion was driven by revenue growth and lower operating expenses.

Net income of $41 million compared to $36 million in the second quarter of 2024, an increase of 12%. Adjusted net income of $43 million compared to $39 million in the second quarter of 2024, an increase of 9%.

Net income per diluted share was $0.24 compared to $0.21 in the second quarter of 2024, an increase of 15%. Adjusted diluted earnings per share were $0.25 compared to $0.23 in the second quarter of 2024, an increase of 12%.

Balance Sheet and Cash Flow Highlights

As of June 29, 2025, Cognex's financial position remained strong, with $553 million in cash and investments and no debt.

During the second quarter, Cognex generated $43 million of cash from operating activities compared to $28 million in the second quarter of 2024, an increase of 54%.

During the second quarter, Cognex generated Free Cash Flow (FCF) of $40 million compared to $23 million in the second quarter of 2024, an increase of 74%. Second quarter FCF conversion rate was 100% of net income and trailing twelve-month FCF conversion rate was 147% of net income. Second quarter FCF conversion rate was 95% of adjusted net income and trailing twelve-month FCF conversion rate was 130% of adjusted net income.

Cognex paid $13 million in dividends to shareholders in the second quarter.

Dividend

On July 30, 2025, Cognex's Board of Directors declared a quarterly cash dividend of $0.08 per share. The dividend is payable on August 28, 2025, to all shareholders of record at the close of business on August 14, 2025.

Guidance

Cognex issued third-quarter 2025 guidance; details are summarized in the table below.

As of the date of this release, Cognex continues to expect no material impact on Adjusted Earnings per Share or Adjusted EBITDA margin from tariffs, including recently announced trade agreements with China, Vietnam and Indonesia.

During the third quarter, Cognex entered into a commercial partnership with a strategic channel partner to better serve OEM customers in the specialized field of medical lab automation. This arrangement is expected to result in a one-time benefit to revenue and profit in the third quarter, which is excluded from guidance. Cognex currently expects the benefit to revenue to be between $8 and $14 million.

Cognex is in the early stages of evaluating the impact of U.S. tax law changes introduced by the One Big Beautiful Bill Act (OBBBA) and currently expects OBBBA to be neutral to Adjusted EPS in 2025; a cash tax benefit of $12 to $15 million is expected in 2025.

(Dollars in millions, except per share amounts)

Q3 2025 Guidance*

Q3 2024 Results

Y/Y Change**

Revenue

$245 - $265

$235

+9 %

Adjusted EBITDA Margin1

19.5% - 22.5%

17.6 %

+340 bps

Adjusted Earnings Per Share (diluted)1

$0.24 - $0.29

$0.20

+35 %

*Including the one-time benefit from the commercial partnership with a strategic channel partner, the Q3 guidance ranges would be: revenue $253 - $279 million, Adjusted EBITDA margin 20.5% - 25.0%, and Adjusted EPS (diluted) $0.26 - $0.34. Although this one-time benefit to revenue will be recognized in the third quarter, actual payments are expected to be received through 2030.

**At the midpoint of guidance.

1Cognex has provided the forward-looking non-GAAP measures of adjusted EBITDA margin, and adjusted earnings per share (diluted), but cannot, without unreasonable effort, forecast such items to present or provide a reconciliation to corresponding forecasted GAAP measures. These include special items such as reorganization charges, acquisition and integration charges, and amortization of acquisition-related intangible assets, all of which are subject to limitations in predictability of timing, ultimate outcome and numerous conditions outside of Cognex's control. Additionally, these items are outside of Cognex's normal business operations and not used by management to assess Cognex's operating results. Cognex believes these limitations would result in a range of projected values so broad as to not be meaningful to investors. For these reasons, Cognex believes that the probable significance of such information is low. Information with respect to special items for certain historical periods is included in the section entitled "Reconciliation of Selected Items from GAAP to Non-GAAP". For these reasons, Cognex believes that the probable significance of such information is low. Information with respect to special items for certain historical periods is included in the section entitled "Reconciliation of Selected Items from GAAP to Non-GAAP." In Q3 2024 the GAAP operating margin was 13.4% and GAAP earnings per share (diluted) were $0.17.

Analyst Conference Call and Simultaneous Webcast

Cognex will host a conference call on July 31, 2025 at 8:30 a.m. Eastern Daylight Time (EDT). The telephone number is (877) 704-4573 (or (201) 389-0911 if outside the United States).

A real-time audio broadcast of the conference call or an archived recording, together with a slide presentation, will be accessible on the Events & Presentations page of the Cognex Investor website: www.cognex.com/investor. 

Forward Looking Statements

Certain statements made in this report, as well as oral statements made by Cognex Corporation ("Cognex", "we", "us", "our", or 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 Securities Exchange Act of 1934, as amended (the "Exchange Act"). Readers can identify these forward-looking statements by our use of the words "expects," "anticipates," "estimates," "potential," "believes," "projects," "intends," "plans," "will," "may," "shall," "could," "should," "opportunity," "goal" and similar words and other statements of a similar sense. These statements are based on our current estimates and expectations as to prospective events and circumstances, which may or may not be in our control and as to which there can be no firm assurances given. These forward-looking statements, which include statements regarding business and market trends, future financial performance and financial targets, the impact of tariffs, customer demand and order rates and timing of related revenue, future product or revenue mix, research and development activities, sales and marketing activities, new product offerings, innovation and product development activities, customer acceptance of our products, commercial partnerships, capital expenditures, cost management activities, investments, liquidity, dividends and stock repurchases, strategic and growth plans and opportunities, acquisitions, and estimated tax benefits and expenses, changes in tax legislation, and other tax matters, involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: (1) the technological obsolescence of current products and the inability to develop new products; (2) the impact of competitive pressures; (3) the inability to attract and retain skilled employees, effectively plan for succession including managing the change of our Chief Executive Officer, all while maintaining our unique corporate culture; (4) the failure to properly manage the distribution of products and services; (5) economic, political, and other risks associated with international sales and operations, including the impact of trade disputes, the imposition of tariffs, the economic climate in China, and the wars involving Ukraine and Israel; (6) the challenges in integrating and achieving expected results from acquired businesses; (7) uncertainty surrounding our future capital needs; (8) information security breaches and other cybersecurity threats; (9) the failure to comply with laws or regulations relating to data privacy or data protection; (10) the inability to protect our proprietary technology and intellectual property; (11) the failure to manufacture and deliver products in a timely manner; (12) the inability to obtain, or the delay in obtaining, components for our products at reasonable prices; (13) the inability to design and manufacture high-quality products; (14) the loss of, or curtailment of purchases by, large customers in the logistics, consumer electronics, or automotive industries; (15) challenges in accurately forecasting our financial results due to seasonal and cyclical variations in customer purchasing patterns and economic and market volatility; (16) potential impairment charges with respect to our investments or acquired intangible assets; (17) exposure to additional tax liabilities, increases and fluctuations in our effective tax rate, and other tax matters; (18) fluctuations in foreign currency exchange rates and the use of derivative instruments; (19) unfavorable global economic conditions, including, without limitation, increases in interest rates, elevated inflation rates, and recession risks; (20) business disruptions from natural or man-made disasters, public health crises, or other events outside our control; (21) stock price volatility; and (22) our involvement in time-consuming and costly litigation or activist shareholder activities. The foregoing list should not be construed as exhaustive and we encourage readers to refer to the detailed discussion of risk factors included in Part I - Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, our Quarterly Reports on Form 10-Q, and other filings with the Securities and Exchange Commission. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation to subsequently revise forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such statements are made.

COGNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands)

June 29, 2025

December 31, 2024

(unaudited)

ASSETS

Current assets:

Cash and cash equivalents

$           179,311

$                   186,094

Current investments, allowance for credit losses of $0 in 2025 and 2024

48,892

59,956

Accounts receivable, allowance for credit losses of $620 and $827 in 2025 and 2024, respectively

183,946

143,359

Unbilled revenue

2,176