Cognex Corporation

Cognex develops machine-vision systems, sensors and software that help factories inspect products and warehouses identify and track goods. It reports one operating segment, machine vision technology, and trades on Nasdaq under CGNX.

Latest financial results

Free cash flow is operating cash flow less capital spending. Adjusted earnings exclude items such as acquisition-related intangible amortization, reorganization costs, acquisition costs and discrete tax items. The prior-year quarter included a $33.7 million discrete tax expense.

Trends and outlook

Quarterly revenue grew 13%. Excluding about $13 million of one-time revenue in the prior-year quarter from a medical-laboratory commercial partnership, Cognex reports 19% growth. That adjustment does not remove the effect of the Japan trading-business disposal.

Higher volume, favorable sales mix and faster price increases lifted gross margin, while operating expenses fell about 7% to $120.9 million. Reported operating margin rose to 32.2% from 20.9%. Adjusted EBITDA margin was 35.5%, above the previous Q3 forecast ceiling of 35%. Adjusted EBITDA adds back interest, taxes, depreciation, amortization and specified adjustments.

For full-year 2026, Cognex forecasts revenue of $1.143 billion to $1.163 billion, adjusted EBITDA margin of 31% to 32% and adjusted earnings of $1.68 to $1.72 a share. The prior ranges were $1.13 billion to $1.15 billion, 29% to 31% and $1.64 to $1.68, respectively. Q4 guidance is $270 million to $290 million of revenue, 29% to 32% adjusted EBITDA margin and $0.37 to $0.41 adjusted earnings per share.

Cash, investments and shareholder returns

At October 4, cash and cash equivalents were $694.7 million, with another $151.3 million in current and noncurrent investments. The combined balance was $846.0 million, and Cognex reported no debt. It sold approximately $330 million of investments late in Q3 to prepare to fund RealSense; those proceeds are already included in the cash balance.

Nine-month operating cash flow was $220.7 million, up from $170.6 million. Capital spending was $6.9 million, compared with $6.1 million. The quarterly dividend increased to $0.09 a share from $0.085, payable December 3 to holders of record November 19.

Completed disposal and pending acquisition

On April 1, Cognex completed the sale of the Japan-focused trading business acquired with Moritex in 2023. Gross proceeds were $12.0 million, or $11.5 million after direct transaction costs. The business represented about 2% of 2025 revenue.

The $500 million all-cash RealSense acquisition was agreed in September and remains pending, with closing expected in Q4 2026. The agreement requires RealSense's Facial Authentication product line to be spun out before closing. Cognex expects to fund the purchase from existing cash and investments.

Separate employee retention arrangements include a three-year cash program of $56.5 million at target, with a maximum of $69 million, and restricted stock units with an economic value of $45 million to $55 million. These are separate from the purchase price and depend on employment and, for part of the cash program, performance conditions.