Cognex Corp at Cantor Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Awesome. If you guys could actually keep that up, a couple of my questions are actually addressed in some of your presentations. So I'd love to start with that, the $8 million (sic - "$8 billion") market served, if you want to go back to that slide. All right. So 2024 was a good year for Cognex despite the market conditions. You guys grew 9% year-over-year, about 1% organically if you exclude Moritex. 70% gross margins, 17% adjusted EBITDA margins. So I'd just love to hear your thoughts about the market growth rates for machine learning and how penetrated this market. And conveniently, you got that all displayed right here for us.

Question: Troy Jensen - Cantor Fitzgerald - Analyst : So Dennis, I think of you guys as the market leader in this space, right? And the fact that you guys are only kind of like 15% to 20% share, can you just talk about competition? Who are the other big players that you see the most?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Okay. All right. So -- and you hit on this a little bit, too, but 70% gross margin selling cameras, barcode readers implies to me that you have a ton of software in your products. As you said, you're a software company, but you're launching all these AI-based products. So can you just talk -- what's the difference between AI-based products, software versus kind of legacy products with all the software?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : So do the AI-based products have better gross margins? So if that becomes a larger percentage of your sales, would you expect to see some gross margin expansion?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Okay. Just to stay competitive and kind of lead the competition, too. Yeah. All right. So maybe go to the new sales initiative. To me, that was pretty important for you guys. I think you had 80,000 customer visits last year, 3,000 new customers. I think the OpEx grew by $23 million in '24 because of that. Can you just talk about the sales efforts here to accelerate growth?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Okay. Perfect. Just a competitive question. RFID, right, another company that follows Impinj, and they've had a lot of success recently with logistic customers like FedEx and UPS. Were they previously using barcode scanners? Do you view RFID as a competitive risk to some of your barcode scanning?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Okay. If you could go back to that $8 billion market share to you, I guess I want to kind of go through the verticals a little bit. So start out with how about automotive, right? I mean that was a struggle for you guys and now we are in the tariffs. And can you talk about your expectations for the automotive vertical?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : All right. How about the more exciting markets, logistics, and I'm assuming that includes e-commerce. And in semiconductors, you think the growth you've seen there is sustainable?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Let me just pause and see if there's any questions from the audience, Matt? Unidentified Participant Can you talk about what exactly you're doing at size of logistics was last year and what your run rate growth flows in the fourth quarter? And then can you speak specifically to what extent you're doing inspection and to what extent you're doing 3D? And talking about the whole 3D taking REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MARCH 12, 2025 / 2:00PM, CGNX.OQ - Cognex Corp at Cantor Global Technology Conference place in (inaudible) and even last week, they closed, and I don't even know how big [Photoneo] is and Intel shutting down the 3D camera business, it apparently was a market leader. What's happening -- (inaudible) and what's happening in it?

Question: Troy Jensen - Cantor Fitzgerald - Analyst : Any other questions from the audience? Unidentified Participant (inaudible)

Question: Troy Jensen - Cantor Fitzgerald - Analyst : And with that, we do need to pause. We're at the end of our time. So Dennis, thank you so much, and good luck with everything.