Cognex Corp. Files 10-Q for Period Ending March 31, 2024

TL;DR

<b>Cognex Corporation filed its Q1 2024 10-Q report on May 2, 2024, detailing financial information for the period ending March 31, 2024.</b>

AI Summary

COGNEX CORP (CGNX) filed a Quarterly Report (10-Q) with the SEC on May 2, 2024. Cognex Corporation filed a 10-Q report for the period ending March 31, 2024. The filing covers the first quarter of fiscal year 2024. The company's principal business address is One Vision Drive, Natick, MA. The filing was made on May 2, 2024. Cognex Corp. is in the Industrial Instruments for Measurement, Display, and Control industry.

Why It Matters

For investors and stakeholders tracking COGNEX CORP, this filing contains several important signals. This 10-Q filing provides investors with the latest quarterly financial performance and operational updates for Cognex Corporation. Understanding the details within this report is crucial for assessing the company's current financial health, strategic direction, and potential risks.

Risk Assessment

Risk Level: low — COGNEX CORP shows low risk based on this filing. The filing is a standard quarterly report (10-Q) and does not contain immediate, significant new risks or disclosures beyond routine updates.

Analyst Insight

Review the detailed financial statements and management's discussion and analysis within the 10-Q to understand Cognex's performance drivers and outlook.

Key Numbers

• 2024-03-31 — Period End Date (CONFORMED PERIOD OF REPORT)
• 2024-05-02 — Filing Date (FILED AS OF DATE)
• 3823 — Standard Industrial Classification (SIC Code for Cognex Corp.)

Key Players & Entities

• COGNEX CORP (company) — FILER
• NATICK (company) — CITY
• MA (company) — STATE
• 0000851205-24-000051 (regulator) — ACCESSION NUMBER
• 2024-03-31 (date) — CONFORMED PERIOD OF REPORT
• 2024-05-02 (date) — FILED AS OF DATE

FAQ

Industry Context

Cognex Corporation operates in the industrial instruments sector, specifically focusing on machine vision technology for automation.

Regulatory Implications

The filing is a standard 10-Q, adhering to SEC regulations for quarterly financial reporting under the Securities Exchange Act of 1934.

What Investors Should Do

1. Analyze the financial statements (balance sheet, income statement, cash flow) for Q1 2024.
2. Review the 'Management's Discussion and Analysis of Financial Condition and Results of Operations' section for insights into performance drivers.
3. Identify any new or updated risk factors disclosed in the filing.

Key Dates

• 2024-03-31: Quarterly Period End — End of the reporting period for the 10-Q filing.
• 2024-05-02: Filing Date — Date the 10-Q report was officially submitted to the SEC.

Year-Over-Year Comparison

This is the first 10-Q filing for the fiscal year 2024, providing updated financial data compared to previous filings.

Filing Documents

• cgnx-20240331.htm (10-Q) — 1060KB
• exhibit101-ptagreement.htm (EX-10.1) — 26KB
• a3312024-10qxexhibit311.htm (EX-31.1) — 11KB
• a3312024-10qxexhibit312.htm (EX-31.2) — 11KB
• a3312024-10qxexhibit321.htm (EX-32.1) — 8KB
• a3312024-10qxexhibit322.htm (EX-32.2) — 7KB
• exhibit101-ptagreement001.jpg (GRAPHIC) — 168KB
• exhibit101-ptagreement002.jpg (GRAPHIC) — 232KB
• exhibit101-ptagreement003.jpg (GRAPHIC) — 283KB
• exhibit101-ptagreement004.jpg (GRAPHIC) — 248KB
• exhibit101-ptagreement005.jpg (GRAPHIC) — 304KB
• exhibit101-ptagreement006.jpg (GRAPHIC) — 281KB
• exhibit101-ptagreement007.jpg (GRAPHIC) — 223KB
• exhibit101-ptagreement008.jpg (GRAPHIC) — 78KB
• 0000851205-24-000051.txt (&nbsp;) — 9874KB
• cgnx-20240331.xsd (EX-101.SCH) — 52KB
• cgnx-20240331_cal.xml (EX-101.CAL) — 84KB
• cgnx-20240331_def.xml (EX-101.DEF) — 242KB
• cgnx-20240331_lab.xml (EX-101.LAB) — 715KB
• cgnx-20240331_pre.xml (EX-101.PRE) — 504KB
• cgnx-20240331_htm.xml (XML) — 1063KB

FINANCIAL INFORMATION 3

PART I FINANCIAL INFORMATION 3 Item 1.

Financial Statements (interim periods unaudited)

Financial Statements (interim periods unaudited) 3 Consolidated Statements of Operations for the three-month periods ended March 31, 2024 and April 2, 2023 3 Consolidated Statements of Comprehensive Income (Loss) for the three-month periods ended March 31, 2024 and April 2, 2023 4 Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023 5 Consolidated Statements of Cash Flows for the three-month periods ended March 31, 2024 and April 2, 2023 6 Consolidated Statements of Shareholders' Equity for the three-month periods ended March 31, 2024 and April 2, 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 24 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 29 Item 4.

Controls and Procedures

Controls and Procedures 29 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 30 Item 1A.

Risk Factors

Risk Factors 30 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 30 Item 3. Defaults Upon Senior Securities 30 Item 4. Mine Safety Disclosures 30 Item 5. Other Information 30 Item 6. Exhibits 31

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

: FINANCIAL STATEMENTS

ITEM 1: FINANCIAL STATEMENTS COGNEX CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Three-months Ended March 31, 2024 April 2, 2023 (unaudited) Revenue $ 210,797 $ 201,124 Cost of revenue 68,860 57,384 Gross margin 141,937 143,740 Research, development, and engineering expenses 37,105 38,542 Selling, general, and administrative expenses 90,628 83,037 Operating income 14,204 22,161 Foreign currency gain (loss) 46 394 Investment income 3,120 3,587 Other income (expense) 196 73 Income before income tax expense 17,566 26,215 Income tax expense 5,544 600 Net income $ 12,022 $ 25,615 Net income per weighted-average common and common-equivalent share: Basic $ 0.07 $ 0.15 Diluted $ 0.07 $ 0.15 Weighted-average common and common-equivalent shares outstanding: Basic 171,692 172,624 Diluted 172,594 173,903 Cash dividends per common share $ 0.075 $ 0.070 The accompanying notes are an integral part of these consolidated financial statements. 3 COGNEX CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Three-months Ended March 31, 2024 April 2, 2023 (unaudited) Net income $ 12,022 $ 25,615 Other comprehensive income (loss), net of tax: Available-for-sale investments: Net unrealized gain (loss), net of tax of $ 117 and $ 1,858 in the three-month periods, respectively 359 5,426 Reclassification of net realized (gain) loss on the sale of available-for-sale investments into current operations ( 2 ) — Net change related to available-for-sale investments 357 5,426 Foreign currency translation adjustments: Foreign currency translation adjustments ( 16,156 ) ( 359 ) Net change related to foreign currency translation adjustments ( 16,156 ) ( 359 ) Other comprehensive income (loss), net of tax ( 15,799 ) 5,067 Total comprehensive income (loss) $ ( 3,777 ) $ 30,682 The accompanying notes are an integral part of these consolidated financial statements. 4 COG

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1: Summary of Significant Accounting Policies As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles (GAAP). Reference should be made to the consolidated financial statements and related notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 for a full description of other significant accounting policies. In the opinion of the management of Cognex Corporation (the "Company"), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, and financial statement reclassifications necessary to present fairly the Company's financial position as of March 31, 2024, and the results of its operations for the three-month periods ended March 31, 2024 and April 2, 2023, and changes in shareholders' equity, comprehensive income, and cash flows for the periods presented. The results disclosed in the Consolidated Statements of Operations for the three-month periods ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year. NOTE 2: New Pronouncements Accounting Standards Update (ASU) 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" The amendments in this ASU apply to all entities that are subject to Topic 740, Income Taxes. The amendments require public business entities to disclose specific categories in their rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. They also require all entities to disclose income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and by individual jurisdictions in which income taxes paid, net of refunds received, is equal to or greater than

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 3: Fair Value Measurements Financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis The following table summarizes the financial assets and liabilities required to be measured at fair value on a recurring basis as of March 31, 2024 (in thousands): Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Unobservable Inputs (Level 3) Assets: Money market instruments $ 667 $ — $ — Corporate bonds — 353,745 — Treasury notes — 45,053 — Asset-backed securities — 16,995 — Certificate of deposit — 6,429 — Treasury bills — 3,499 — Sovereign bonds — 1,967 — Economic hedge forward contracts — 22 — Liabilities: Economic hedge forward contracts — 221 — The Company's money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1. The Company's debt securities and forward contracts are reported at fair value based on model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset or liability, and are therefore classified as Level 2. Management is responsible for estimating the fair value of these financial assets and liabilities, and in doing so, considers valuations provided by a large, third-party pricing service. For debt securities, this service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the daily valuations. The Company's forward contracts are typically traded or executed in over-the-counter markets with a high degree of pricing transparency. The market participants are generall

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 4: Cash, Cash Equivalents, and Investments Cash, cash equivalents, and investments consisted of the following (in thousands): March 31, 2024 December 31, 2023 Cash $ 128,264 $ 183,242 Certificate of deposit 6,429 — Treasury bills 3,499 — Money market instruments 667 19,413 Cash and cash equivalents 138,859 202,655 Corporate bonds 134,032 124,851 Asset-backed securities 4,309 3,551 Sovereign bonds 993 990 Current investments 139,334 129,392 Corporate bonds 219,713 183,965 Treasury notes 45,053 43,523 Asset-backed securities 12,686 15,763 Sovereign bonds 974 979 Non-current investments 278,426 244,230 $ 556,619 $ 576,277 Corporate bonds consist of debt securities issued by both domestic and foreign companies; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; sovereign bonds consist of direct debt issued by foreign governments; and treasury notes consist of debt securities issued by the U.S. government. All of the Company's securities as of March 31, 2024 and December 31, 2023 were denominated in U.S. Dollars. Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $ 4,119,000 and $ 3,169,000 as of March 31, 2024 and December 31, 2023, respectively. The following table summarizes the Company's available-for-sale investments as of March 31, 2024 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Current: Corporate bonds $ 136,479 $ — $ ( 2,447 ) $ 134,032 Asset-backed securities 4,391 — ( 82 ) 4,309 Sovereign bonds 1,006 — ( 13 ) 993 Non-current: Corporate bonds 225,074 175 ( 5,536 ) 219,713 Treasury notes 45,760 — ( 707 ) 45,053 Asset-backed securities 13,512 — ( 826 ) 12,686 Sovereign bonds 1,030 — ( 56 ) 974 $ 427,252 $ 175 $ ( 9,667 ) $ 417,760 10 COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table summarizes the Company's available-for-sale investments as of December 31, 2023 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Current: Corporate bonds $ 128,150 $ — $ ( 3,299 ) $ 124,851 Asset-backed securities 3,637 — ( 86 ) 3,551 Sovereign bonds 1,012 — ( 22 ) 990 Non-current: Corporate bonds 189,326 506 ( 5,867 ) 183,965 Treasury notes 43,654 82 ( 213 ) 43,523 Asset-backed securities 16,773 — ( 1,010 ) 15,763 Sovereign bonds 1,037 — ( 58 ) 979 $ 383,589 $ 588 $ ( 10,555 ) $ 373,622 The following table summarizes the Company's gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of March 31, 2024 (in thousands): Unrealized Loss Position For: Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds $ 95,052 $ ( 1,087 ) $ 222,979 $ ( 6,896 ) $ 318,031 $ ( 7,983 ) Treasury notes 42,612 ( 647 ) 2,441 ( 60 ) 45,053 ( 707 ) Asset-backed securities 14,742 ( 860 ) 2,252 ( 48 ) 16,994 ( 908 ) Sovereign bonds — — 1,968 ( 69 ) 1,968 ( 69 ) $ 152,406 $ ( 2,594 ) $ 229,640 $ ( 7,073 ) $ 382,046 $ ( 9,667 ) The following table summarizes the Company's gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of December 31, 2023 (in thousands): Unrealized Loss Position For: Less than 12 Months 12 Months or Greater Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses Corporate bonds $ 30,770 $ ( 359 ) $ 226,643 $ ( 8,807 ) $ 257,413 $ ( 9,166 ) Treasury notes 20,725 ( 153 ) 2,441 ( 60 ) 23,166 ( 213 ) Asset-backed securities 17,062 ( 1,049 ) 2,252 ( 47 ) 19,314 ( 1,096 ) Sovereign bonds — — 1,968 ( 80 ) 1,968 ( 80 ) $ 68,557 $ ( 1,561 ) $ 233,304 $ ( 8,994 ) $ 301,861 $ ( 10,555 )

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The following table summarizes the Company's gross realized gains and losses on the sale of debt securities for the three-month periods ended March 31, 2024 and April 2, 2023 (in thousands): Three-months Ended March 31, 2024 April 2, 2023 Gross realized gains $ 2 $ — Gross realized losses — — Net realized gains (losses) $ 2 $ — Realized gains and losses are included in "Investment income" on the Consolidated Statements of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, were recorded in shareholders' equity as accumulated other comprehensive income (loss). The following table presents the effective maturity dates of the Company's available-for-sale investments as of March 31, 2024 (in thousands): <1 year 1-2 Years 2-3 Years 3-4 Years 4-5 Years 5-8 Years Total Corporate bonds $ 134,032 $ 57,463 $ 59,120 $ 58,225 $ 44,905 $ — $ 353,745 Treasury notes — 3,429 14,097 22,829 4,698 — 45,053 Asset-backed securities 4,309 6,486 — — — 6,200 16,995 Sovereign bonds 993 974 — — — — 1,967 $ 139,334 $ 68,352 $ 73,217 $ 81,054 $ 49,603 $ 6,200 $ 417,760 NOTE 5: Inventories Inventories consisted of the following (in thousands): March 31, 2024 December 31, 2023 Raw materials $ 106,506 $ 93,201 Work-in-process 3,241 5,747 Finished goods 61,124 63,337 $ 170,871 $ 162,285 NOTE 6: Leases The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion. As of March 31, 2024, there were no options to terminate and twenty-eight options to extend that were accounted for in the determination of the lease term for the Company's outstanding leases. Certain leases contain leasehold improvement incentives, retirement obli

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Future operating lease cash payments are as follows (in thousands): Year Ended December 31, Amount Remainder of fiscal 2024 $ 10,392 2025 12,093 2026 10,031 2027 9,171 2028 8,721 2029 8,137 Thereafter 44,658 $ 103,203 The discounted present value of the future lease cash payments resulted in a total lease liability of $ 77,165,000 and $ 78,601,000 as of March 31, 2024 and December 31, 2023, respectively. The Company did not have any leases that had not yet commenced but that created significant rights and obligations as of March 31, 2024. The Company leases a building in Singapore that serves as a distribution center for customers in Asia. The lease contains two components: an 88,000 square-foot premises that had a commencement date in June of 2023 and a second 27,000 square-foot premises that does not commence until the fourth quarter of 2025. Accordingly, the second component of the lease has not yet been recorded on the Consolidated Balance Sheets, nor has it created any significant rights and obligations as of March 31, 2024. This second lease component has an original term of eight years and the Company has the right and option to extend this term by an additional five years , commencing upon the expiration of the original term. Future payment obligations associated with this lease component total $ 13,231,000 , none of which is payable in 2024 and which reflects the estimated extension period of five years . Future payment obligations related to this lease component are not included in the future operating lease cash payments table above. The weighted-average discount rate was 5.7 % for the leases outstanding as of both March 31, 2024 and December 31, 2023. The weighted-average remaining lease term was 10.3 and 10.5 years for the leases outstanding as of March 31, 2024 and December 31, 2023, respectively. NOTE 7: Goodwill The changes in the carrying value of goodwill were as follows (in

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 8: Intangible Assets Amortized intangible assets consisted of the following (in thousands): Gross Carrying Value Accumulated Amortization Net Carrying Value Customer relationships $ 72,775 $ ( 6,587 ) $ 66,188 Completed technologies 60,160 ( 22,112 ) 38,048 Trademarks 842 ( 117 ) 725 Non-compete agreements 340 ( 247 ) 93 Balance as of March 31, 2024 $ 134,117 $ ( 29,063 ) $ 105,054 Gross Carrying Value Accumulated Amortization Net Carrying Value Customer relationships $ 75,965 $ ( 5,352 ) $ 70,613 Completed technologies 62,123 ( 20,745 ) 41,378 Trademarks 903 ( 50 ) 853 Non-compete agreements 340 ( 232 ) 108 Balance as of December 31, 2023 $ 139,331 $ ( 26,379 ) $ 112,952 As of March 31, 2024, estimated future amortization expense related to intangible assets was as follows (in thousands): Year Ended December 31, Amount Remainder of fiscal 2024 $ 8,179 2025 10,615 2026 10,310 2027 9,587 2028 8,857 2029 8,857 Thereafter 48,649 $ 105,054 NOTE 9: Warranty Obligations The Company records the estimated cost of fulfilling product warranties at the time of sale based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or changes in circumstances impacting product quality become known that would not have been taken into account using historical data. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers and third-party contract manufacturers, the Company's warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. An adverse change in any of these factors may result in the need for additional warranty provisions. Warranty obligations are included in "Accrued expenses" on the Consolidated Balance Sheets. The changes in the wa

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