Cognex Corp Q3 2024 10-Q Filing

TL;DR

**Cognex Q3 2024 10-Q filed. Financials and operations detailed.**

AI Summary

Cognex Corporation filed its 10-Q for the period ending September 29, 2024. The filing details financial performance and operational updates for the third quarter of fiscal year 2024. Key financial figures and business segments are presented, reflecting the company's ongoing activities in industrial automation and machine vision technology.

Why It Matters

This filing provides investors with the latest financial results and operational details for Cognex, a key player in machine vision technology, impacting their investment decisions.

Risk Assessment

Risk Level: low — This is a routine quarterly financial filing (10-Q) and does not contain any immediately apparent high-risk disclosures.

Key Players & Entities

• Cognex Corp (company) — Filer of the 10-Q
• September 29, 2024 (date) — End of the reporting period
• 20240929 (date) — Conformed period of report
• 0000851205 (company) — Central Index Key for Cognex Corp

FAQ

Filing Documents

• cgnx-20240929.htm (10-Q) — 1319KB
• a9292024-10qxexhibit311.htm (EX-31.1) — 11KB
• a9292024-10qxexhibit312.htm (EX-31.2) — 11KB
• a9292024-10qxexhibit321.htm (EX-32.1) — 8KB
• a9292024-10qxexhibit322.htm (EX-32.2) — 7KB
• 0000851205-24-000079.txt ( ) — 8114KB
• cgnx-20240929.xsd (EX-101.SCH) — 53KB
• cgnx-20240929_cal.xml (EX-101.CAL) — 85KB
• cgnx-20240929_def.xml (EX-101.DEF) — 239KB
• cgnx-20240929_lab.xml (EX-101.LAB) — 733KB
• cgnx-20240929_pre.xml (EX-101.PRE) — 510KB
• cgnx-20240929_htm.xml (XML) — 1247KB

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 and nine-month periods ended September 29, 2024 and October 1, 2023 3 Consolidated Statements of Comprehensive Income (Loss) for the three-month and nine-month periods ended September 29, 2024 and October 1, 2023 4 Consolidated Balance Sheets as of September 29, 2024 and December 31, 2023 5 Consolidated Statements of Cash Flows for the nine-month periods ended September 29, 2024 and October 1, 2023 6 Consolidated Statements of Shareholders' Equity for the three-month and nine-month periods ended September 29, 2024 and October 1, 2023 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9 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 25 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 30 Item 4.

Controls and Procedures

Controls and Procedures 31 PART II OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 32 Item 1A.

Risk Factors

Risk Factors 32 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 32 Item 3. Defaults Upon Senior Securities 32 Item 4. Mine Safety Disclosures 32 Item 5. Other Information 32 Item 6. Exhibits 33

: 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 Nine-months Ended September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023 (unaudited) (unaudited) Revenue $ 234,742 $ 197,241 $ 684,831 $ 640,877 Cost of revenue 75,343 54,467 216,896 174,680 Gross margin 159,399 142,774 467,935 466,197 Research, development, and engineering expenses 35,210 32,580 107,277 104,707 Selling, general, and administrative expenses 92,625 82,307 276,433 248,767 Loss (recovery) from fire (Note 17) — ( 2,750 ) — ( 5,250 ) Operating income 31,564 30,637 84,225 117,973 Foreign currency gain (loss) 1,221 ( 8,699 ) 1,086 ( 9,910 ) Investment income 3,561 4,891 9,797 12,573 Other income (expense) 209 173 581 358 Income before income tax expense 36,555 27,002 95,689 120,994 Income tax expense 6,964 8,086 17,864 18,989 Net income $ 29,591 $ 18,916 $ 77,825 $ 102,005 Net income per weighted-average common and common-equivalent share: Basic $ 0.17 $ 0.11 $ 0.45 $ 0.59 Diluted $ 0.17 $ 0.11 $ 0.45 $ 0.59 Weighted-average common and common-equivalent shares outstanding: Basic 171,519 172,169 171,588 172,408 Diluted 172,753 173,354 172,733 173,659 Cash dividends per common share $ 0.075 $ 0.070 $ 0.225 $ 0.210 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 Nine-months Ended September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023 (unaudited) (unaudited) Net income $ 29,591 $ 18,916 $ 77,825 $ 102,005 Other comprehensive income (loss), net of tax: Available-for-sale investments: Net unrealized gain (loss), net of tax of $ 2,040 and $ 707 in the three-month periods, and net of tax of $ 2,493 and $ 1,981 in the nine-month periods, respectively 6,252 738 7,631 4,458 Reclassification of net

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, adjustments related to losses and recoveries from the fire at the Company's primary contract manufacturer (Note 17), and financial statement reclassifications necessary to present fairly the Company's financial position as of September 29, 2024, and the results of its operations for the three-month and nine-month periods ended September 29, 2024 and October 1, 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 and nine-month periods ended September 29, 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, di

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 September 29, 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 $ 662 $ — $ — Corporate bonds — 349,198 — Treasury notes — 46,372 — Certificate of deposit — 13,811 — Asset-backed securities — 13,529 — Treasury bills — 7,122 — Sovereign bonds — 991 — Economic hedge forward contracts — 234 — Liabilities: Economic hedge forward contracts — 152 — 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 gene

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): September 29, 2024 December 31, 2023 Cash $ 175,480 $ 183,242 Certificate of deposit 13,811 — Treasury bills 7,122 — Money market instruments 662 19,413 Cash and cash equivalents 197,075 202,655 Corporate bonds 84,503 124,851 Asset-backed securities 3,821 3,551 Treasury notes 2,479 — Sovereign bonds — 990 Current investments 90,803 129,392 Corporate bonds 264,695 183,965 Treasury notes 43,893 43,523 Asset-backed securities 9,708 15,763 Sovereign bonds 991 979 Non-current investments 319,287 244,230 $ 607,165 $ 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; treasury notes consist of debt securities issued by the U.S. government; and sovereign bonds consist of direct debt issued by foreign governments. All of the Company's securities as of September 29, 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 $ 4,749,000 and $ 3,169,000 as of September 29, 2024 and December 31, 2023, respectively. The following table summarizes the Company's available-for-sale investments as of September 29, 2024 (in thousands): Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value Current: Corporate bonds $ 85,309 $ 10 $ ( 816 ) $ 84,503 Asset-backed securities 3,848 — ( 27 ) 3,821 Treasury notes 2,501 — ( 22 ) 2,479 Non-current: Corporate bonds 263,582 2,978 ( 1,865 ) 264,695 Treasury notes 43,465 428 — 43,893 Asset-backed securities 10,202 11 ( 505 ) 9,708 Sovereign bonds 1,019 — ( 28 ) 991 $ 409,926 $ 3,427 $ ( 3,263 ) $ 4

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 September 29, 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 $ 30,018 $ ( 80 ) $ 127,990 $ ( 2,601 ) $ 158,008 $ ( 2,681 ) Asset-backed securities — — 10,019 ( 532 ) 10,019 ( 532 ) Treasury notes — — 2,479 ( 22 ) 2,479 ( 22 ) Sovereign bonds — — 991 ( 28 ) 991 ( 28 ) $ 30,018 $ ( 80 ) $ 141,479 $ ( 3,183 ) $ 171,497 $ ( 3,263 ) 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 ) Management monitors debt secur

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 and nine-month periods ended September 29, 2024 and October 1, 2023 (in thousands): Three-months Ended Nine-months Ended September 29, 2024 October 1, 2023 September 29, 2024 October 1, 2023 Gross realized gains $ — $ 109 $ 8 $ 109 Gross realized losses — ( 733 ) ( 16 ) ( 733 ) Net realized gains (losses) $ — $ ( 624 ) $ ( 8 ) $ ( 624 ) 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 September 29, 2024 (in thousands): <1 year 1-2 Years 2-3 Years 3-4 Years 4-5 Years 5-8 Years Total Corporate bonds $ 84,503 $ 63,389 $ 72,754 $ 68,795 $ 59,757 $ — $ 349,198 Treasury notes 2,479 1,967 23,982 17,944 — — 46,372 Asset-backed securities 3,821 3,974 — — 2,104 3,630 13,529 Sovereign bonds — 991 — — — — 991 $ 90,803 $ 70,321 $ 96,736 $ 86,739 $ 61,861 $ 3,630 $ 410,090 NOTE 5: Inventories Inventories consisted of the following (in thousands): September 29, 2024 December 31, 2023 Raw materials $ 89,141 $ 93,201 Work-in-process 4,568 5,747 Finished goods 61,569 63,337 $ 155,278 $ 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 September 29, 2024, there were no options to terminate and twenty options to extend that were accounted for in the de

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) The total operating lease expense for the three-month and nine-month periods ended October 1, 2023 was $ 5,512,000 and $ 8,151,000 , respectively. The total operating lease cash payments for the three-month and nine-month periods ended October 1, 2023 were $ 5,168,000 and $ 7,532,000 , respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and nine-month periods ended October 1, 2023 was $ 132,000 and $ 292,000 , respectively. Future operating lease cash payments are as follows (in thousands): Year Ended December 31, Amount Remainder of fiscal 2024 $ 3,657 2025 13,148 2026 11,064 2027 9,966 2028 9,389 2029 8,786 Thereafter 46,700 $ 102,710 The discounted present value of the future lease cash payments resulted in a total lease liability of $ 77,181,000 and $ 78,601,000 as of September 29,

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