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Apr 02, 2023
Cognex Q1 2023 Earnings Report
Cognex experienced a decline in revenue and net income due to lower capacity expansion projects from e-commerce customers and macroeconomic softness.
Key Takeaways
Cognex reported a decrease in revenue by 29% and a decrease in net income by 62% compared to Q1 2022. The company's largest e-commerce customers continued to absorb excess capacity, and factory automation customers were cautious with capital investment. However, the company launched new products and made strides for long-term growth.
Revenue decreased by 29% year-over-year due to lower capacity expansion projects from e-commerce customers and macroeconomic softness.
Gross margin was 71%, slightly below the target due to high-priced inventory.
RD&E expenses increased by 7% due to personnel-related costs.
The effective tax rate was 2%, or 16% excluding discrete tax items.
Cognex
Cognex
Forward Guidance
Cognex expects Q2 2023 revenue to be between $225 million and $245 million, with gross margin in the mid-70% range and operating expenses increasing by low-single digits.
Positive Outlook
- Revenue is expected to increase sequentially due to the normal timing of annual revenue from consumer electronics.
- Revenue is expected to increase sequentially due to an expected pick-up in activity in China.
- Gross margin for Q2-23 is expected to be in the company’s mid-70% long-term target range, an increase from 71% in Q1-23.
- Move beyond the elevated costs from premium broker buys.
- Expect a more favorable revenue mix.
Challenges Ahead
- The decline year-on-year is due to the expected continuation of lower revenue from logistics.
- The decline year-on-year is due to cautiousness in capital spending by our customers.
- Operating expenses are expected to increase by low-single digits on a sequential basis.
- Investments in the company’s Emerging Customer initiative will be partially offset by lower stock-based compensation.
- The effective tax rate is expected to be 16%, excluding discrete tax items.