• Fourth Quarter Revenue: $230 million, increased 17% year on year.
• Excluding Moritex Revenue Growth: 12% year on year.
• Adjusted Gross Margin: 69.4%, down 130 basis points from the previous year.
• Adjusted Operating Expenses: Increased 3% year on year.
• Adjusted EBITDA Margin: 18.5%, up from 12.6% a year ago.
• GAAP Diluted EPS: $0.16, up from $0.07 in Q4 2023.
• Adjusted Diluted EPS: $0.20, up from $0.11 year on year.
• Free Cash Flow: $49 million, compared to $7 million in Q4 2023.
• Full Year 2024 Revenue: $915 million, grew 9% year on year.
• Adjusted Gross Margin for 2024: 69.3%, down 3.2 percentage points.
• Adjusted EBITDA Margin for 2024: 17.1%, declined 140 basis points.
• Adjusted Diluted EPS for 2024: $0.74, up from $0.73 in 2023.
• Total Free Cash Flow for 2024: $134 million.
• Cash and Investments at Year-End: $587 million, with no debt.
• First Quarter 2025 Revenue Outlook: Between $200 million and $220 million.
• Expected Adjusted Gross Margin for Q1 2025: High 60% range.
• Expected Adjusted EBITDA Margin for Q1 2025: Between 12% and 15%.

• Warning! GuruFocus has detected 5 Warning Signs with CGNX.

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cognex Corp (NASDAQ:CGNX) successfully integrated its largest acquisition, Moritex, which contributed positively to the bottom line and was accretive to adjusted EPS in 2024.
• The company launched innovative AI-powered products, including the industry's first AI-enabled 3D smart camera and the VisionPro Deep Learning 4.0, enhancing its machine vision capabilities.
• Cognex Corp (NASDAQ:CGNX) achieved significant growth in its logistics segment, with a 20% revenue increase driven by global e-commerce leaders and regional logistics providers.
• The sales transformation initiative led to the acquisition of over 3,000 new customers in 2024, expanding the company's market reach.
• Cognex Corp (NASDAQ:CGNX) maintained strong financial discipline, with adjusted EBITDA margin improving to 18.5% in Q4, driven by revenue growth and cost management.

Negative Points

• The automotive segment experienced a 14% revenue decline due to reduced EV battery investment and tentativeness in large capital projects.
• Consumer electronics revenue decreased by 5% year on year, impacted by limited smartphone design changes and conservative CapEx spending.
• The company's core factory automation markets remained soft, with only slight stabilization despite improvements in macro indicators.
• Pricing pressures, particularly in China, negatively impacted gross margins, alongside unfavorable mix effects from higher logistics revenue.
• Cognex Corp (NASDAQ:CGNX) faces ongoing uncertainty in the automotive market, with expectations of continued weakness in 2025.

Q & A Highlights

Q: How do you view the automotive market's performance in 2024, and what are your expectations for 2025? A: Robert Willett, President and CEO, noted that 2024 was a challenging year for the automotive sector, with a 14% decline due to reduced EV battery investments. While 2025 is expected to remain weak, the decline is not anticipated to be as severe. There is optimism for a potential recovery in 2026 as investments might return, particularly in EV battery manufacturing.

Q: Can you provide insights into the consumer electronics market and expectations for 2025? A: Robert Willett mentioned that consumer electronics revenue fell by 5% in 2024, but there was growth in the latter half of the year. The market is expected to have long-term growth potential, driven by innovations in smartphones and wearable devices. However, it's too early to predict 2025 performance, with more clarity expected by the next earnings call.

Q: What is the current state of the logistics market, and how do you see it evolving? A: Robert Willett highlighted that the logistics market grew by 20% in 2024, with broad strength across geographies and customer tiers. The market is returning to growth after a period of capacity absorption post-pandemic. There is ongoing investment in technology, and Cognex is optimistic about continued growth, particularly in e-commerce and parcel sectors.

Q: How is Cognex managing operating expenses, and what is the outlook for 2025? A: Dennis Feh, CFO, emphasized tight cost management, with operating expenses growing by 6% in 2024, below the 9% revenue growth. For 2025, the company aims to keep operating expense growth below revenue growth, focusing on efficiency and leveraging investments in sales transformation.

Q: What are Cognex's plans for mergers and acquisitions (M&A) in 2025? A: Dennis Feh stated that M&A remains a high priority, following the successful integration of Moritex. Cognex is looking for quality deals and will be thoughtful in decision-making. More details on potential markets and balance sheet strategies will be discussed at the upcoming Investor Day.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.