CGNX
Financial Performance
Cognex reported Q3 2024 revenue of $235 million, a 19% increase year-on-year, with a 7% growth excluding the Moritex acquisition. Adjusted gross margin was 68.7%, down from 72.7% a year ago, primarily due to Moritex's impact and competitive pricing pressures. Adjusted EBITDA margin stood at 17.6%, slightly up from 17.4% in the previous year. Diluted EPS increased to $0.17 from $0.11 year-on-year, while adjusted diluted EPS rose 19% to $0.20. The company generated $52 million in free cash flow, the highest since Q4 2022, and returned $17 million to shareholders through stock buybacks and dividends. A quarterly cash dividend of $0.08 per share was declared, payable on March 13, 2025.
Management Guidance
For Q4 2024, Cognex expects revenue between $210 million and $230 million, reflecting a challenging market backdrop. The company anticipates continued growth in logistics and semiconductor sectors, with adjusted gross margins projected in the high 60% range. Management emphasized the importance of their emerging customer initiative, which aims to broaden their customer base and enhance sales coverage. Analysts focused on the performance of the emerging customer initiative and its potential impact on future revenue, with management expressing optimism about its long-term growth prospects.
Challenges and Opportunities
Cognex faces challenges in the automotive sector, which has seen a decline due to over-investment in electric vehicles and macroeconomic uncertainties. The company noted a mixed performance across end markets, with logistics showing strong growth while factory automation remains weak. However, opportunities exist in logistics, driven by increased automation and e-commerce investments. The emerging customer initiative is expected to expand Cognex's reach into small and medium-sized businesses, potentially leading to significant revenue growth. Additionally, advancements in AI technology are anticipated to enhance product accessibility and drive future market growth.
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