COGNEX CORP Q1 FY2026 earnings call

• Go-to-market and sales force transformation is paying off. - Focus on both top and bottom line, with growth initiatives and cost reduction. - AI is a huge opportunity, used to drive productivity internally and transform product strategy. - In logistics, vision technology is gaining traction with good ROI. - In semiconductor, strong relationships with OEMs and sustained growth. - In Europe, flexible go-to-market model helps mitigate softness in some verticals. - In China, strength due to localizing efforts. - In automotive, underlying growth drivers like need for automation to drive quality and efficiency.

Gross margin stayed above 67%. Factory automation market helped gross margin. Portfolio optimization contributes. Memory cost has 50 basis points headwind in third quarter. Electronics, semi, and packaging contributed to revenue growth. Logistics is largest market with double-digit growth. Semiconductor business has sustained growth with relationships with leading equipment manufacturers.

• Relatively early in the year, visibility is limited. Will be better prepared on next earnings call to provide clearer view on full year. - Initial financial framework with visibility into 18 months, pleased with achieving greater than 20% number ahead of schedule. - Need visibility into second half of the year before putting out new margin numbers.

• Memory cost headwind with 50 basis points expected in third quarter. - General inflationary pressures, including energy prices and potential second and third degree impacts on supply chain. - Uncertainties in geopolitics, energy prices, supply chain price increases, and interest rates. - Timing effects of memory costs and inflation on gross margins.

Q: About updated 2026 view and concerns on demand slowing, A: It's about visibility, early in the year, short cycle business, lot of uncertainty ahead.

Q: About margins, A: Initial financial framework with 18-month visibility, pleased with achieving greater than 20% number ahead, need visibility into second half.

Q: About regionally, A: Europe has growth trends with flexible go-to-market, China has strength due to localizing, Asia has various nuances.

Q: About automotive market, A: Comps help, but underlying growth drivers like need for automation.

Q: About logistics, A: Large and base accounts both interested in vision for process improvement.

Q: About supply chain, A: Well set up to manage, monitoring lead times.

Q: About pricing and demand, A: Pricing progress made, offsetting some headwinds, not seeing negative demand signals currently