Cognex’s third quarter was marked by a robust increase in demand across several end markets, but the market response was decidedly negative following the results. Management attributed the strong performance to ongoing momentum in logistics and consumer electronics, as well as the initial rollout of new AI-enabled vision products, which helped land new customers in underpenetrated verticals. CEO Matt Moschner noted that the company’s “highest adjusted EBITDA margin since Q2 of 2023” was achieved by combining strong sales execution with disciplined cost management. However, management acknowledged persistent softness in automotive and recognized that some of the quarter’s growth was driven by a one-time commercial partnership, suggesting caution regarding the sustainability of these gains.
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Cognex (CGNX) Q3 CY2025 Highlights:
- Revenue: $276.9 million vs analyst estimates of $263.1 million (18% year-on-year growth, 5.2% beat)
- Adjusted EPS: $0.33 vs analyst estimates of $0.29 (13.5% beat)
- Adjusted EBITDA: $68.83 million vs analyst estimates of $58.24 million (24.9% margin, 18.2% beat)
- Revenue Guidance for Q4 CY2025 is $237.5 million at the midpoint, roughly in line with what analysts were expecting
- Management lowered its full-year Adjusted EPS guidance to $0.22 at the midpoint, a 18.9% decrease
- Operating Margin: 20.9%, up from 13.4% in the same quarter last year
- Market Capitalization: $6.70 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Cognex’s Q3 Earnings Call
- Damian Karas (UBS) asked about the sustainability of consumer electronics growth and supply chain shifts; CEO Matt Moschner described broad-based demand and diversification across Asia as key factors, noting new device form factors and increasing AI adoption.
- Andrew Buscaglia (BNP Paribas) inquired about the runway for logistics automation; Moschner explained that most growth is from productivity gains in existing facilities, with the SLX product enabling new vision applications in warehouses.
- Jacob Levinson (Melius Research) questioned whether AI-enabled products would reduce the cost to serve logistics customers; Moschner confirmed that new solutions are designed for low-touch deployment, which should improve gross margins and reduce service resource requirements.
- Guy Hardwick (Barclays) sought insight into automotive sector recovery; Moschner indicated that while the Americas show more activity than Europe, the market’s recovery is uneven and further clarity will depend on OEM investments and model cycles.
- Kenneth Newman (KeyBanc Capital Markets) probed the company’s outlook for 2026; CFO Dennis Fehr reiterated that macro indicators suggest similar growth dynamics as the current year and confirmed no formal guidance beyond next quarter.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will monitor (1) the commercial launch and customer adoption of the OneVision platform, (2) ongoing penetration of AI-enabled products in logistics and packaging, and (3) stabilization or improvement in automotive and semiconductor markets. Additional focus will be on the pace of cost efficiency initiatives and the impact of ongoing macroeconomic and geopolitical developments on end market demand.
Cognex currently trades at $39.80, down from $47.44 just before the earnings. Is there an opportunity in the stock?See for yourself in our full research report (it’s free for active Edge members).
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