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COGNEX CORP (CGNX)·Q4 2024 Earnings Summary

Executive Summary

  • Revenue of $229.7M finished at the high end of guidance ($210–$230M); adjusted EBITDA margin of 18.5% exceeded the 14–17% guidance range, driven by Logistics and Semiconductor strength and tight OpEx control .
  • GAAP diluted EPS was $0.16 (up 153% y/y), and adjusted EPS was $0.20 (up 84% y/y); gross margin was 68.7% (flat y/y), while adjusted gross margin dipped to 69.4% on Moritex dilution and mix .
  • Free cash flow was $49.3M; the company repurchased $43M of stock and declared a $0.08 quarterly dividend (continued capital return) .
  • Q1 2025 outlook: revenue $200–$220M, adjusted EBITDA margin 12–15% (midpoint +150 bps y/y), adjusted gross margin high-60s, adjusted ETR 16%; sequential step-down reflects Q4 demand pull-forward and FX headwinds .

What Went Well and What Went Wrong

What Went Well

  • Demand strength in Logistics and Semiconductor drove revenue to the high end; CFO: “Adjusted EBITDA margin…above guidance…strong free cash flow generation of $49 million” .
  • AI product momentum: launched VisionPro Deep Learning 4.0 (Transformer-based “few sample” mode requiring as few as 10 images) and new AI-driven DataMan series to widen adoption and read rates across applications .
  • Sales transformation execution: first cohort booked ~$1M/week in Q3 and added >3,000 new customers in 2024; bookings hit highest in Q4; accretive gross margin business referring complex deals to experienced teams .

What Went Wrong

  • Automotive remained very weak; management expects continued pressure in 2025, though declines likely less severe than 2024 (EV battery project reductions drove step-down) .
  • Adjusted gross margin fell y/y to 69.4% (Q4) on Moritex dilution, negative mix (higher Logistics), and pricing headwinds most pronounced in China .
  • China remains a challenging and highly competitive pricing environment; Cognex is prioritizing maintaining share, which is a headwind to margins relative to volume/mix effects .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Millions)$196.7 $234.7 $229.7
GAAP Diluted EPS ($)$0.07 $0.17 $0.16
Adjusted EPS ($)$0.11 $0.20 $0.20
Gross Margin % (GAAP)68.7% 67.9% 68.7%
Adjusted Gross Margin %70.7% 68.7% 69.4%
Operating Margin % (GAAP)6.5% 13.4% 13.4%
Adjusted EBITDA Margin %12.6% 17.6% 18.5%
Free Cash Flow ($USD Millions)$7.5 $51.9 $49.3
Q4 Revenue vs GuidanceGuidance (Q4 2024)Actual (Q4 2024)Outcome
Revenue ($USD Millions)$210–$230 $229.7 At high end
Adjusted EBITDA Margin %14–17% 18.5% Beat
KPIsQ3 2024Q4 2024
Cash from Operations ($USD Millions)$56.3 $51.4
Free Cash Flow ($USD Millions)$51.9 $49.3
Cash & Investments ($USD Millions)$607 $587
Share Repurchases ($USD Millions)$4 $43
Dividend per Share ($)$0.075 $0.080
FY 2024 End-Market Performance (y/y)FY 2024
Logistics Revenue Growth (%)+20%
Automotive Revenue Growth (%)-14%
Consumer Electronics Revenue Growth (%)-5%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ1 2025n/a$200–$220MNew outlook; similar y/y at midpoint
Adjusted Gross Margin %Q1 2025n/aHigh-60sNew outlook
Adjusted EBITDA Margin %Q1 2025n/a12–15% (midpoint +150 bps y/y)New outlook; raised y/y at midpoint
Adjusted Effective Tax Rate %Q1 2025n/a16%New outlook
Quarterly DividendQ1 2025$0.075 (prior quarter) $0.080 declared (payable Mar 13, 2025)Increased in Oct; maintained Q1

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
AI/Technology InitiativesFocus on AI-driven innovation; non-GAAP/OpEx discipline amid soft environment AI-assisted labeling; near-zero setup OCR; emerging customer products broaden adoption Launched VisionPro DL 4.0 (Transformer, few-sample), new AI-driven DataMan series Accelerating productization; expanding ease-of-use
Supply Chain/MacroSoft FA markets; cost mgmt emphasized Weak PMIs globally; pricing pressure esp. China Mixed macro; Q4 demand acceleration; FX headwinds into Q1 Stable-to-mixed; FX a near-term headwind
Tariffs/Policy——No material direct COGS impact from announced tariffs; mid/long-term reshoring opportunity Monitoring; potential U.S. reshoring tailwind
Product Performance—DataMan 380 and modular vision tunnel success; share gains in logistics New DataMan series with embedded AI; industry-leading read rates Broadening barcode/vision portfolio
Regional Trends—All regions up y/y ex-Moritex; China up on CE timing Americas and Other Asia up ex-Moritex; China cautious; Europe slightly down on auto Diverse momentum; China remains challenging
R&D Execution—New AI models cut labeling by ~90% In-Sight L38 AI-enabled 3D smart camera; Transformer models reduce training images Sustained cadence of AI releases

Management Commentary

  • CEO: “Cognex delivered strong results in the fourth quarter, with revenue at the high end of our guidance…momentum in our Logistics and Semiconductor businesses” .
  • CEO on AI: “VisionPro Deep Learning 4.0…first product to utilize next-generation AI Transformer models…few sample mode…as few as 10 images” .
  • CFO: “Adjusted EBITDA margin…up nearly 6 percentage points from 12.6% a year ago…tight cost management” .
  • CEO on Automotive: “We think it's going to continue to be a bad year for automotive, but…not on the order of decline that we saw in 2024” .

Q&A Highlights

  • Automotive outlook: 2024 declines driven by EV battery project reductions; 2025 still weak but likely less severe; potential recovery in 2026 as utilization/investment returns .
  • Consumer Electronics: down 5% in 2024; back-half strength on timing; near-term visibility limited—update expected by early Q2 2025 .
  • Logistics breadth/durability: strong global momentum across e-commerce, parcel/post, base logistics; expanding into India/Indonesia; capacity expansion resuming .
  • OpEx discipline: OpEx growth below revenue growth in 2024; plan to keep OpEx growth below revenue growth in 2025 despite sales transformation investments .
  • AI competitive dynamics: Transformer/edge learning advantages; domain/application expertise key; broadening adoption with lower data/training needs .
  • Tariffs: No material direct COGS impact from announced measures; uncertainty near term; reshoring could be a medium-term demand catalyst .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q4 2024 and prior quarters were unavailable due to SPGI daily request limit exceeded; therefore, beat/miss vs Street cannot be quantified at this time. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

  • Q4 delivered revenue at the high end and a material margin beat vs guidance; adjusted EBITDA margin 18.5% underscores operating leverage despite gross margin mix dilution .
  • Mix shift toward Logistics and Semiconductor continues; Automotive remains a drag but management expects less severe declines in 2025 vs 2024, with potential recovery timing into 2026 .
  • AI-led product cycle is tangible (VisionPro DL 4.0, DataMan series, In-Sight L38 3D), lowering adoption friction and broadening TAM—supports medium-term growth and pricing power in higher-value applications .
  • Strong cash generation and capital returns ($49.3M FCF, $43M buybacks, $0.08 dividend) provide downside support and optionality for M&A and continued sales transformation investment .
  • Near-term caution: Q1 2025 revenue guide implies a sequential step-down (Q4 demand pull-forward and FX headwinds); watch mix (Logistics dilutive to GM%) and China pricing pressure .
  • Monitor Investor Day (June 9–10) for updated served market sizing, margin targets, and AI roadmap; could be a narrative catalyst .
  • Trading implications: Positive for margin momentum and AI narrative; near-term consolidation possible on sequential guide. Medium term favors a re-rating if Logistics/Semi strength persists and Automotive stabilizes, with incremental tailwinds from reshoring and new AI products .