What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-07-31 · 130 added, 107 removed, 543 unchanged (30% of the section changed)

3 unchanged sentences

(In thousands, except per share amounts)

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

(unaudited) (unaudited)

22 unchanged sentences

(In thousands)

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

(unaudited) (unaudited)

2 unchanged sentences

Available-for-sale investments:

Net unrealized gain (loss), net of tax of $ 1,435 and $ 336 in the three-month periods, respectively, and net of tax of $ 2,310 and $ 453 in the six-month periods, respectively

Net unrealized gain (loss), net of tax of $ 232 and $ 2,040 in the three-month periods, respectively, and net of tax of $ 1,667 and $ 2,493 in the nine-month periods, respectively

805 6,252 5,258 7,631

10 unchanged sentences

(In thousands, except share amounts)

June 29, 2025 December 31, 2024

September 28, 2025 December 31, 2024

Current assets:

48 unchanged sentences

(In thousands)

Six-months Ended

June 29, 2025 June 30, 2024

Nine-months Ended

September 28, 2025 September 29, 2024

Cash flows from operating activities:

30 unchanged sentences

Repurchase of common stock ( 126,233 ) ( 23,841 )

Payment of excise tax on prior year common stock repurchases ( 388 ) —

Payment of dividends ( 40,424 ) ( 38,619 )

13 unchanged sentences

Shares Par Value

Balance as of March 30, 2025 167,865 $ 336 $ 1,097,989 $ 405,949 $ ( 58,646 ) $ 1,445,628

Balance as of June 29, 2025

167,899 $ 336 $ 1,110,458 $ 433,040 $ ( 37,777 ) $ 1,506,057

Net issuance of common stock under stock plans 197 — 260 — — 260

Repurchase of common stock ( 547 ) ( 1 ) — ( 23,999 ) — ( 24,000 )

Excise tax on repurchase of common stock — — — ( 915 ) — ( 915 )

7 unchanged sentences

Foreign currency translation adjustment — — — — ( 9,112 ) ( 9,112 )

Balance as of June 29, 2025 (unaudited)

Balance as of September 28, 2025 (unaudited)

167,549 $ 335 $ 1,123,134 $ 412,347 $ ( 46,180 ) $ 1,489,636

4 unchanged sentences

Shares Par Value

Balance as of March 31, 2024 171,662 $ 343 $ 1,047,643 $ 502,338 $ ( 61,135 ) $ 1,489,189

Balance as of June 30, 2024

171,501 $ 343 $ 1,061,597 $ 515,142 $ ( 70,352 ) $ 1,506,730

Net issuance of common stock under stock plans 96 1 1,665 — — 1,666

6 unchanged sentences

— — — — 6,252 6,252

Reclassification of net realized (gain) loss on the sale of available-for-sale investments — — — — 10 10

Foreign currency translation adjustment — — — — 26,511 26,511

Balance as of June 30, 2024 (unaudited)

Balance as of September 29, 2024 (unaudited)

171,515 $ 343 $ 1,076,363 $ 527,909 $ ( 37,589 ) $ 1,567,026

21 unchanged sentences

Foreign currency translation adjustment — — — — 21,489 21,489

Balance as of June 29, 2025 (unaudited)

Balance as of September 28, 2025 (unaudited)

167,549 $ 335 $ 1,123,134 $ 412,347 $ ( 46,180 ) $ 1,489,636

16 unchanged sentences

Foreign currency translation adjustment — — — — 108 108

Balance as of June 30, 2024 (unaudited)

Balance as of September 29, 2024 (unaudited)

171,515 $ 343 $ 1,076,363 $ 527,909 $ ( 37,589 ) $ 1,567,026

5 unchanged sentences

Reference should be made to the consolidated financial statements and related notes included in Cognex Corporation's ("Cognex" or the "Company") Annual Report on Form 10-K for the year ended December 31, 2024 for a full description of other significant accounting policies.

In the opinion of the management of the Company, the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments and financial statement reclassifications necessary to present fairly the Company’s financial position as of June 29, 2025, and the results of its operations for the three-month and six-month periods ended June 29, 2025 and June 30, 2024, and changes in shareholders’ equity, comprehensive income, and cash flows for the periods presented.

The results disclosed in the Consolidated Statements of Operations for the three-month and six-month periods ended June 29, 2025 are not necessarily indicative of the results to be expected for the full year.

In the opinion of the management of the Company, the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments and financial statement reclassifications necessary to present fairly the Company’s financial position as of September 28, 2025 , and the results of its operations for the three-month and nine-month periods ended September 28, 2025 and September 29, 2024, and changes in shareholders’ equity, comprehensive income, and cash flows for the periods presented.

The results disclosed in the Consolidated Statements of Operations for the three-month and nine-month periods ended September 28, 2025 are not necessarily indicative of the results to be expected for the full year.

New Pronouncements

13 unchanged sentences

The adoption will result in disclosure changes only.

Accounting Standards Update (ASU) 2025-05 - Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets

This ASU provides a practical expedient to simplify the measurement of credit losses for certain receivables and contract assets.

The amendments allow entities to assume that current conditions at the balance sheet date will persist over the life of these assets, eliminating the need to develop forward-looking forecasts required under the current expected credit loss ("CECL") model.

For public business entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

Early adoption is permitted in any interim or annual period in which financial statements have not yet been issued or made available for issuance.

Management does not expect ASU 2025-05 to have a material impact on the Company's financial statements and disclosures.

Accounting Standards Update (ASU) 2025-06 - Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software

The amendments in this ASU updates the accounting and disclosure guidance for internal-use software to better reflect modern, iterative development practices.

The amendments replace the former “development stage” model with a judgment-based framework and require entities to evaluate whether significant development uncertainty exists before capitalizing costs.

The ASU also incorporates website development guidance into Subtopic 350-40

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

and aligns disclosures for capitalized software with those for property, plant, and equipment.

For public business entities, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted.

Management is currently evaluating the impact that adopting ASU 2025-06 would have on the Company's financial statements and disclosures.

Financial Instruments

Cash, Cash Equivalents, and Investments

The following table summarizes the Company’s cash, cash equivalents, and investments as of June 29, 2025 (in thousands):

The following table summarizes the Company’s cash, cash equivalents, and investments as of September 28, 2025 (in thousands):

Fair Value Level Amortized

3 unchanged sentences

Certificates of deposit Level 2 36,422 — — 36,422 36,422 — —

Treasury bills Level 2 2,000 — — 2,000 2,000 — —

Corporate bonds Level 2 315,660 2,697 ( 592 ) 317,765 — 51,879 265,886

1 unchanged sentence

Asset-backed securities Level 2 4,822 — ( 340 ) 4,482 — — 4,482

Treasury bills Level 2 1,489 — — 1,489 — 1,489 —

Sovereign bonds Level 2 1,000 — — 1,000 — 1,000 —

15 unchanged sentences

They use this information to structure yield curves for various types of debt securities and arrive at the daily valuations.

Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $ 3,926,000 and $ 4,144,000 as of June 29, 2025 and December 31, 2024, respectively.

Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $ 3,268,000 and $ 4,144,000 as of September 28, 2025 and December 31, 2024, respectively.

COGNEX CORPORATION

1 unchanged sentence

Realized Gains (Losses) on Debt Securities

The following table summarizes the Company's gross realized gains and losses on the sale of debt securities for the three-month and six-month periods ended June 29, 2025 and June 30, 2024 (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

The following table summarizes the Company's gross realized gains and losses on the sale of debt securities for the three-month and nine-month periods ended September 28, 2025 and September 29, 2024 (in thousands):

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Gross realized gains $ 116 $ — $ 173 $ 8

4 unchanged sentences

Unrealized Losses on Debt Securities

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of June 29, 2025 (in thousands):

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of September 28, 2025 (in thousands):

Unrealized Loss Position For:

21 unchanged sentences

When developing an estimate of expected credit losses, management considers all relevant information including historical experience, current conditions, and reasonable forecasts of expected future cash flows.

Based on this evaluation, no allowance for credit losses on debt securities was recorded as of June 29, 2025 or December 31, 2024.

Based on this evaluation, no allowance for credit losses on debt securities was recorded as of September 28, 2025 or December 31, 2024.

Management currently intends to hold these securities to full value recovery at maturity.

2 unchanged sentences

Debt Securities Maturities

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of June 29, 2025 (in thousands):

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of September 28, 2025 (in thousands):

<1 year 1-2 Years 2-3 Years 3-4 Years 4-5 Years 5-8 Years Total

2 unchanged sentences

Asset-backed securities — — — 1,713 — 2,769 4,482

Treasury bills 1,489 — — — — — 1,489

Sovereign bonds 1,000 — — — — — 1,000

6 unchanged sentences

The Company had the following outstanding forward contracts (in thousands):

June 29, 2025 December 31, 2024

September 28, 2025 December 31, 2024

Currency Notional

5 unchanged sentences

Hungarian Forint 2,500,000 7,466 2,360,000 5,951

Indian Rupee 500,000 5,844 — —

British Pound 4,000 5,362 3,200 4,008

Korean Won 7,000,000 5,155 — —

Japanese Yen 200,000 1,341 2,000,000 12,789

7 unchanged sentences

Fair Value Fair Value

Balance Sheet Location Fair Value Level June 29, 2025 December 31, 2024 Balance Sheet Location Fair Value Level June 29, 2025 December 31, 2024

Balance Sheet Location Fair Value Level September 28, 2025 December 31, 2024 Balance Sheet Location Fair Value Level September 28, 2025 December 31, 2024

Derivatives Not Designated as Hedging Instruments:

7 unchanged sentences

Information regarding the effect of derivative instruments on the Consolidated Statements of Operations was as follows (in thousands):

Statement of Operations Location Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Statement of Operations Location Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Derivatives Not Designated as Hedging Instruments:

2 unchanged sentences

Inventories consisted of the following (in thousands):

June 29, 2025 December 31, 2024

September 28, 2025 December 31, 2024

Raw materials $ 79,683 $ 86,917

7 unchanged sentences

Certain leases may contain options to extend or terminate the lease at the Company's sole discretion.

As of June 29, 2025, there were no options to terminate and twenty options to extend that were accounted for in the determination of the applicable lease term for the Company's outstanding leases.

As of September 28, 2025 , there were no options to terminate and nineteen options to extend that were accounted for in the determination of the applicable lease term for the Company's outstanding leases.

Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index.

There were no restrictions or covenants for outstanding leases as of June 29, 2025.

The Company did not have any leases that had not yet commenced but that created significant rights and/or obligations as of June 29, 2025.

There were no restrictions or covenants for outstanding leases as of September 28, 2025 .

The Company did not have any leases that had not yet commenced but that created significant rights and/or obligations as of September 28, 2025 .

The components of lease expense were as follows (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Operating lease expense $ 3,637 $ 3,610 $ 10,629 $ 10,647

3 unchanged sentences

Supplemental balance sheet information related to leases was as follows:

June 29, 2025 December 31, 2024

Weighted average remaining lease term 9.3 years

September 28, 2025 December 31, 2024

Weighted average remaining lease term 9.2 years 9.9 years

Weighted average discount rate 6.3 % 5.9 %

Supplemental cash flow information related to leases was as follows (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Cash paid for amounts included in the measurement of operating lease liabilities $ 3,594 $ 3,516 $ 10,428 $ 10,130

Maturities of lease liabilities as of June 29, 2025 were as follows (in thousands):

Maturities of lease liabilities as of September 28, 2025 were as follows (in thousands):

Remainder of fiscal 2025 $ 4,044

8 unchanged sentences

an 88,000 square-foot premises that had a commencement date in June of 2023 and a second 27,000 square-foot premises that does not commence until the fourth quarter of 2025.

Accordingly, the second component of the lease has not yet been recorded on the Consolidated Balance Sheets, nor has it created any significant rights and obligations as of June 29, 2025.

This second lease component has an original term of eight years and the Company has the right and option to extend this term by an additional five years , commencing upon the expiration of the original term.

Undiscounted lease payment obligations associated with this lease component total $ 14,084,000 , $ 172,000 of which is payable in the remainder of 2025 and which reflects the estimated extension period of five years .

Accordingly, the second component of the lease has not yet been recorded on the Consolidated Balance Sheets, nor has it created any significant rights and obligations as of September 28, 2025 .

This second lease component has an original term of eight years .

Undiscounted lease payment obligations associated with this lease component total $ 8,420,000 , $ 169,000 of which is payable in the remainder of 2025.

Undiscounted lease payment obligations related to this lease component are not included in the lease liability maturity table above as the lease component has not yet commenced.

The Company has entered into a lease for a 6,500 square-foot building in Aachen, Germany for a term of ten years .

The lease had a commencement date in June of 2025, and therefore, was recorded on the Consolidated Balance Sheet as of June 29, 2025.

The lease was recorded on the Consolidated Balance Sheet upon commencement in June of 2025.

The Company has the right and option to extend the term of this lease for an additional period of five years , commencing upon the expiration of the original term.

4 unchanged sentences

Foreign exchange rate changes 7,147

Balance as of June 29, 2025 $ 397,389

Amortized intangible assets as of June 29, 2025 consisted of the following (in thousands):

Balance as of September 28, 2025 $ 392,084

Amortized intangible assets as of September 28, 2025 consisted of the following (in thousands):

Value Accumulated

4 unchanged sentences

Non-compete agreements 340 ( 330 ) 10

Balance as of June 29, 2025 $ 135,020 $ ( 42,885 ) $ 92,135

Balance as of September 28, 2025 $ 131,764 $ ( 45,013 ) $ 86,751

Amortized intangible assets as of December 31, 2024 consisted of the following (in thousands):

8 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Future amortization expense related to intangible assets as of June 29, 2025 is as follows (in thousands):

Future amortization expense related to intangible assets as of September 28, 2025 is as follows (in thousands):

Remainder of fiscal 2025 $ 2,596

11 unchanged sentences

Foreign exchange rate changes 10

Balance as of June 29, 2025 $ 5,918

Balance as of September 28, 2025 $ 5,464

Commitments and Contingencies

As of June 29, 2025, the Company had outstanding purchase orders totaling $ 50,682,000 to procure inventory from various vendors.

As of September 28, 2025 , the Company had outstanding purchase orders totaling $ 42,597,000 to procure inventory from various vendors.

Certain of these purchase orders may be canceled by the Company, subject to cancellation penalties.

These purchase commitments relate primarily to expected sales in the next twelve months.

A significant portion of the Company's outstanding inventory purchase orders as of June 29, 2025, as well as additional preauthorized commitments to procure strategic components based on the Company's expected customer demand, are placed with the Company's primary contract manufacturer for the Company's assembled products.

A significant portion of the Company's outstanding inventory purchase orders as of September 28, 2025 , as well as additional preauthorized commitments to procure strategic components based on the Company's expected customer demand, are placed with the Company's primary contract manufacturer for the Company's assembled products.

The Company has the obligation to purchase any non-cancelable and non-returnable components that have been purchased by the contract manufacturer with the Company's preauthorization, when these components have not been consumed within the period defined in the terms of the Company's agreement with this contract manufacturer.

8 unchanged sentences

In March 2022, the Company's Board of Directors (the "Board") authorized a program providing for the repurchase of $ 500,000,000 of the Company's common stock (the "Program").

Under the Program, in addition to repurchases made in other periods, the Company repurchased 473,000 shares at a total cost of $ 19,879,000 during the six-month period ended June 30, 2024 and 3,047,000 shares at a total cost of $ 102,233,000 during the six-month period ended June 29, 2025, leaving a remaining balance of $ 164,020,000 as of June 29, 2025.

Under the Program, in addition to repurchases made in other periods, the Company repurchased 555,000 shares at a total cost of $ 23,841,000 during the nine-month period ended September 29, 2024 and 3,594,000 shares at a total cost of $ 126,233,000 during the nine-month period ended September 28, 2025 , leaving a remaining balance of $ 140,020,000 as of September 28, 2025 .

The Company may repurchase shares under the Program in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements.

2 unchanged sentences

The Company’s stock-based awards that result in compensation expense consist of stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs").

The following table summarizes the number of stock-based awards granted by the Company and the weighted-average grant-date fair value per unit for the three-month and six-month periods ended June 29, 2025 and June 30, 2024:

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

The following table summarizes the number of stock-based awards granted by the Company and the weighted-average grant-date fair value per unit for the three-month and nine-month periods ended September 28, 2025 and September 29, 2024:

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Stock-Based Awards Granted

15 unchanged sentences

Compensation expense for these PRSUs is recognized based on the probable outcome of the performance condition with a cumulative catch-up adjustment for prior periods in the period that the probable outcome changes.

During the three-month and six-month periods ended June 29, 2025, the Company recorded $ 344,000 and $ 496,000 in compensation expense based on the probable three-year financial target outcome for the PRSUs granted during the first quarter of 2025.

During the three-month and nine-month periods ended September 28, 2025 , the Company recorded $ 345,000 and $ 841,000 in compensation expense based on the probable three-year financial target outcome for the PRSUs granted during the first quarter of 2025.

The Company stratifies its employee population into two groups:

3 unchanged sentences

Credits of $ 4,789,000 and $ 1,832,000 were recorded in 2025 and 2024, respectively, to true up previously recorded compensation expense for this forfeiture rate revision.

As of June 29, 2025, total unrecognized compensation expense, net of estimated forfeitures, related to non-vested equity awards, including stock options, RSUs, and PRSUs, was $ 69,681,000 , which is expected to be recognized over a weighted-average period of 1.9 years.

As of September 28, 2025 , total unrecognized compensation expense, net of estimated forfeitures, related to non-vested equity awards, including stock options, RSUs, and PRSUs, was $ 59,613,000 , which is expected to be recognized over a weighted-average period of 1.7 years.

COGNEX CORPORATION

1 unchanged sentence

The following table presents the stock-based compensation expense by caption for each period presented on the Consolidated Statements of Operations (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Cost of revenue $ 489 $ 442 $ 1,694 $ 1,460

2 unchanged sentences

Total stock-based compensation expense $ 12,416 $ 13,101 $ 34,649 $ 39,367

No compensation expense was capitalized as of June 29, 2025 or December 31, 2024.

No compensation expense was capitalized as of September 28, 2025 or December 31, 2024.

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Revenue Recognition

The following table summarizes disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Americas $ 104,513 $ 82,293 $ 296,499 $ 250,590

4 unchanged sentences

The following table summarizes disaggregated revenue information by revenue type (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Standard products and services (1)

232,619 203,182 653,164 591,670

Application-specific customer solutions 44,273 31,560 88,857 93,161

276,892 234,742 742,021 684,831

(1) In July 2025, the Company entered into a commercial partnership with a strategic channel partner (the “Partner”) to better serve Original Equipment Manufacturer (OEM) customers in the specialized field of medical lab automation.

Through 2030, the Partner has exclusive rights to sell machine vision hardware into these applications in combination with licensed Company software, in exchange for annual minimum license fees paid to the Company.

The contract includes a substantive termination penalty if the contract is cancelled by the Partner.

As such, the Company recognized the minimum license fees as revenue in the third quarter of 2025, at the point in time when the Partner received access to the software.

Although the license revenue was recognized upfront, payments are expected to be received over the duration of the partnership, resulting in unbilled revenue.

Also in the third quarter of 2025, the Company transferred related inventories at cost to the Partner.

As a result of the upfront recognition of the license revenue and transfer of inventories, the Company recognized one-time revenue of approximately $ 13 million in the third quarter of 2025, which is included in the "Standard products and services" amount in the table above for the three-month and nine-month periods ended September 28, 2025.

Costs to Fulfill a Contract

Costs to fulfill a contract are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $ 14,133,000 and $ 10,705,000 as of June 29, 2025 and December 31, 2024, respectively.

Costs to fulfill a contract are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $ 11,467,000 and $ 10,705,000 as of September 28, 2025 and December 31, 2024, respectively.

Accounts Receivable, Contract Assets, and Contract Liabilities

3 unchanged sentences

Contract liabilities consist of deferred revenue and customer deposits which arise when amounts are billed to or collected from customers in advance of revenue recognition.

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the allowance for credit losses activity for the six-month period ended June 29, 2025 (in thousands):

The following table summarizes the allowance for credit losses activity for the nine-month period ended September 28, 2025 (in thousands):

Balance as of December 31, 2024 $ 827

2 unchanged sentences

Foreign exchange rate changes ( 19 )

Balance as of June 29, 2025 $ 620

The following table summarizes the deferred revenue and customer deposits activity for the six-month period ended June 29, 2025 (in thousands):

Balance as of September 28, 2025 $ 732

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the deferred revenue and customer deposits activity for the nine-month period ended September 28, 2025 (in thousands):

Balance as of December 31, 2024 $ 25,035

2 unchanged sentences

Foreign exchange rate changes 585

Balance as of June 29, 2025 $ 53,077

Balance as of September 28, 2025 $ 23,767

As a practical expedient, the Company has elected not to disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations for our contracts that have an original expected duration of less than one year.

The remaining unsatisfied performance obligations for our contracts that have an original expected duration of more than one year, primarily related to extended warranties, are not material.

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company's effective tax rate was 16 % and 15 % for the three-month and six-month periods ended June 29, 2025, respectively, and 13 % and 18 % for the three-month and six-month periods ended June 30, 2024, respectively.

The Company's effective tax rate was 72 % and 41 % for the three-month and nine-month periods ended September 28, 2025 , respectively, and 19 % for the three-month and nine-month periods ended September 29, 2024, respectively.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, Japan, and Korea, and within the United States, Massachusetts.

1 unchanged sentence

federal statutory corporate tax rate of 21 %.

These foreign tax rate differences resulted in a favorable impact to the effective tax rate for both the three-month and six-month periods ended June 29, 2025 and June 30, 2024.

The Company recorded a net discrete tax benefit totaling $ 211,000 and $ 518,000 for the three-month and six-month periods ended June 29, 2025, respectively, and a net discrete tax benefit totaling $ 463,000 and a net discrete tax expense totaling $ 2,622,000 for the three-month and six-month periods ended June 30, 2024, respectively.

Discrete tax items for the six-month period ended June 29, 2025 included (1) an increase in tax expense of $ 2,668,000 related to stock-based compensation;

These foreign tax rate differences resulted in a favorable impact to the effective tax rate for both the three-month and nine-month periods ended September 28, 2025 and September 29, 2024.

The Company recorded a net discrete tax expense totaling $ 33,650,000 and $ 33,132,000 for the three-month and nine-month periods ended September 28, 2025 , respectively, and a net discrete tax expense totaling $ 889,000 and $ 3,511,000 for the three-month and nine-month periods ended September 29, 2024, respectively.

Discrete tax items for the nine-month period ended September 28, 2025 included (1) an increase in tax expense accrual of $ 33,265,000 related to changes in the accrual of the Company's deferred tax position upon a change in tax rates from the newly enacted One Big Beautiful Bill Act ("OBBBA");

(2) an increase in tax expense of $ 2,955,000 related to stock-based compensation;

(3) an increase in tax expense of $ 1,286,000 for interest expense related to tax reserves;

3 unchanged sentences

and (7) a net decrease in tax expense of $ 282,000 related to return-to-provision adjustments.

Discrete tax items for the six-month period ended June 30, 2024 included (1) an increase in tax expense of $ 1,371,000 related to stock-based compensation;

Discrete tax items for the nine-month period ended September 29, 2024 included (1) an increase in tax expense of $ 1,645,000 related to stock-based compensation;

(2) an increase in tax expense of $ 320,000 related to state tax matters;

2 unchanged sentences

and (5) an increase in tax expense of $ 1,130,000 for other tax matters.

The Company’s reserve for income taxes, including gross interest and penalties, was $ 28,109,000 as of June 29, 2025, of which $ 25,742,000 was classified as a non-current liability and $ 2,367,000 was classified as an offset to deferred tax assets.

The Company’s reserve for income taxes, including gross interest and penalties, was $ 28,478,000 as of September 28, 2025 , of which $ 26,359,000 was classified as a non-current liability and $ 2,119,000 was classified as an offset to deferred tax assets.

If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period.

1 unchanged sentence

The tax years 2013 through 2024 remain open to examination by various international taxing authorities in other jurisdictions in which the Company operates.

On July 4, 2025, tax legislation known as the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States.

OBBBA modifies certain international tax provisions such as the tax on Global Intangible Low Taxed Income ("GILTI") and renames GILTI as Net CFC Tested Income ("NCTI").

The Company records NCTI taxes on a deferred basis.

The Company is in the early stages of evaluating the impact of U.S.

tax law changes introduced by OBBBA on our consolidated financial statements and disclosures.

As of the date of this filing, we expect OBBBA to materially increase our deferred tax liability and income tax expense in the third quarter of 2025, while also providing a cash tax benefit estimated between $ 12 million and $ 15 million for the full year.

A full quantitative estimate of all specific financial impacts cannot be reasonably determined at this time due to the complexity of the changes in OBBBA and the need for further analysis.

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On July 4, 2025, tax legislation known as the One Big Beautiful Bill Act ("OBBBA") was enacted in the United States.

OBBBA modifies certain international tax provisions such as the tax on Global Intangible Low Taxed Income ("GILTI") and renames GILTI as Net CFC Tested Income ("NCTI").

The Company records NCTI taxes on a deferred basis, and as a result of OBBBA's enactment, accrued a discrete tax expense of approximately $ 33,265,000 to increase its deferred tax liability during the third quarter of 2025.

The legislation is expected to result in a full-year cash tax benefit estimated between $ 12 million and $ 15 million, primarily driven by the Company's ability to immediately expense research and development costs.

However, this benefit does not directly impact the Company's effective tax rate.

Earnings per Share

The following table shows the computation of basic and diluted earnings per share for the three-month and six-month periods ended June 29, 2025 and June 30, 2024 (in thousands, except per share amounts):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

The following table shows the computation of basic and diluted earnings per share for the three-month and nine-month periods ended September 28, 2025 and September 29, 2024 (in thousands, except per share amounts):

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Net income 17,664 29,591 $ 81,778 $ 77,825

5 unchanged sentences

Diluted 0.10 0.17 0.48 0.45

The computation of diluted weighted-average common shares outstanding excludes the following weighted average anti-dilutive stock-based awards outstanding for the three-month and six-month periods ended June 29, 2025 and June 30, 2024 (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

The computation of diluted weighted-average common shares outstanding excludes the following weighted average anti-dilutive stock-based awards outstanding for the three-month and nine-month periods ended September 28, 2025 and September 29, 2024 (in thousands):

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 September 29, 2024

Stock options 9,352 8,640 10,206 8,490

12 unchanged sentences

The following table summarizes significant segment expenses, which represents the difference between segment revenue and segment net income (in thousands):

Three-months Ended Six-months Ended

June 29, 2025 June 30, 2024 June 29, 2025 June 30, 2024

Three-months Ended Nine-months Ended

September 28, 2025 September 29, 2024 September 28, 2025 0 September 29, 2024

Revenue $ 276,892 $ 234,742 $ 742,021 $ 684,831

Cost of revenue (1)

89,602 75,343 242,532 216,896

Gross profit 187,290 159,399 499,489 467,935

2 unchanged sentences

Incentive compensation (2)

3,350 1,492 6,789 4,277

Stock-based compensation 3,794 3,707 11,933 11,636

1 unchanged sentence

Other segment expenses (3)

8,404 9,394 25,332 29,075

Total research, development, and engineering expenses 35,081 35,210 102,910 107,277

2 unchanged sentences

Incentive compensation (2)

15,747 11,994 40,487 35,060

Stock-based compensation 8,133 8,952 21,022 26,271

1 unchanged sentence

Other segment expenses (3)

23,103 22,260 65,405 67,533

Total selling, general, and administrative expenses 94,444 92,625 269,289 276,433

6 unchanged sentences

Net income $ 17,664 $ 29,591 $ 81,778 $ 77,825

(1) Cost of revenue includes depreciation and amortization expense (including amortization of acquired technologies) of $ 3,144,000 and $ 6,162,000 for the three-month and six-month periods ended June 29, 2025, respectively, and $ 2,988,000 and $ 6,138,000 for the three-month and six-month periods ended June 30, 2024, respectively.

(1) Cost of revenue includes depreciation and amortization expense (including amortization of acquired technologies) of $ 3,105,000 and $ 9,267,000 for the three-month and nine-month periods ended September 28, 2025 , respectively, and $ 3,374,000 and $ 9,512,000 for the three-month and nine-month periods ended September 29, 2024, respectively.

(2) Incentive compensation includes company bonus and sales commissions.

(3) Other segment expenses include outside services, prototyping materials, sales demonstration equipment, travel and entertainment, marketing programs, and rent, among other less significant expenses.

Segment assets amounted to $ 2,003,541 and $ 1,992,850 as of June 29, 2025 and December 31, 2024, respectively.

Segment assets amounted to $ 2,002,750 and $ 1,992,850 as of September 28, 2025 and December 31, 2024, respectively.

COGNEX CORPORATION

1 unchanged sentence

Subsequent Events

On July 30, 2025, the Board declared a cash dividend of $ 0.08 per share.

The dividend is payable on August 28, 2025 to all shareholders of record as of the close of business on August 14, 2025.

In July 2025, the Company entered into a commercial partnership with a strategic channel partner (the “Partner”) to better serve Original Equipment Manufacturer (OEM) customers in the specialized field of medical lab automation.

The Company expects to recognize the minimum license fees as revenue in the third quarter of 2025, at the point in time when the Partner receives access to the software.

Although the license revenue will be recognized upfront, payments are expected to be received over the duration of the partnership, resulting in unbilled revenue.

Also in the third quarter of 2025, the Company will transfer related inventories at cost to the Partner.

As a result of the upfront recognition of the license revenue and transfer of inventories, the Company expects a one-time benefit ranging from $ 8 million to $ 14 million of revenue in the third quarter of 2025.

On October 29, 2025, the Board declared a cash dividend of $ 0.085 per share.

The dividend is payable on November 28, 2025 to all shareholders of record as of the close of business on November 13, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements