Cognex Widens Margins as Revenue Hits Record
Second-quarter revenue reached $291 million as Cognex issued full-year guidance.
Cognex Corporation (CGNX), the machine-vision technology maker, widened its adjusted operating margin by 12 percentage points as earnings growth outpaced sales in the second quarter.
The results extended Cognex’s margin expansion to an eighth consecutive quarter while marking a shift in its sales trajectory. Revenue growth slowed from 24% in the first quarter, though the 17% increase represented a sharp acceleration from 4% in the year-earlier period.
Revenue rose 17% from a year earlier and 8.6% sequentially. Net income increased 78% to $73 million, while diluted earnings rose 79% to $0.43 a share. Adjusted earnings climbed 80% to $0.45 a share, up about 32% from the first quarter.
Favorable mix and higher volume helped lift adjusted gross margin to 71.5% from 68% a year earlier, though it eased from 71.8% in the first quarter. Adjusted operating expenses fell 3% after rising 9% in the previous quarter, contributing to an adjusted operating margin of 30.7%.
Cognex also moved its OneVision AI-vision platform into general availability, a year after its product launch. Hundreds of customers are using the platform.
Adjusted EBITDA increased 81% to $94 million, and the margin reached 32.2%, compared with 20.7% a year earlier. Operating cash flow rose 60% to $69 million, while free cash flow increased 70% to $68 million and equaled 93% of net income.
Cognex expects third-quarter revenue of $300 million to $320 million, an adjusted EBITDA margin of 32% to 35% and adjusted earnings of $0.50 to $0.54 a share. Its new full-year outlook calls for revenue of $1.13 billion to $1.15 billion and adjusted earnings of $1.64 to $1.68 a share.
The quarter included $1.3 million in reorganization charges, primarily for severance and consulting fees. Cognex also recorded a $1.5 million pretax divestiture loss in the first half after exiting its Japan-focused trading business, leaving the third-quarter outlook to test whether its sales growth can sustain the latest margin gains.