Cognex Sales Lag as Recent Acquisition Broadens Customer Base
NATICK, Mass., Nov. 2, 2023 — Cognex continues to feel the effects of soft demand for capital equipment, the machine vision industry leader said this week, as the company released financial results for its 2023 third quarter. The company pointed to slow economic recovery in China as a force behind its revenue report, which saw a 6% year-over-year quarterly decrease, and which totaled $197 million for the quarter and $641 million for the nine-month period starting Jan. 1.
Cognex said that strategic product releases during the quarter, which ended Sept. 30, and its recent acquisition of machine vision optics manufacturer Moritex, paint a picture for growth over the long term, as well as greater market capitalization.
“The operating environment remains similar to what we saw last quarter across each of our end markets,” said Cognex CEO Robert Willett. Consumer electronics, he said, saw the steepest decline among the company’s sectors, which was driven in part by decreased demand from China. The company predicts that the market will remain challenging in the near to medium future.
Cognex’s In-Sight SnAPP vision sensor represents a step into a new market for the company: vision sensors. The product is intended to function as a gateway into the In-Sight programming environment and a way to broaden its customer base. Courtesy of Cognex.
The company also took a loss on foreign currency, including $8.5 million on the settlement of a foreign currency forward contract that hedged Cognex’s $270 million obligation to buy Moritex Corp.
Despite an overall difficult environment, the third quarter saw Cognex’s foray into two adjacent markets: the vision sensor and the optical components markets. “These two markets expand our served market by $1.5 billion, adding to our served market previously sized at $6.5 billion,” Willett said.
The company launched its In-Sight SnAPP vision sensor in September, which Willett called Cognex’s “easiest-to-sell and easiest-to-use” product released to date. Vision sensors, he added, will allow the company to reach a new and broader customer base.
The high-end optical components market, Willet said, will be served through the recent acquisition of Japanese provider Moritex. Cognex also acquired lighting technology producer SAC last year, which enabled the company to market computational lighting solutions, though Willett said the Moritex addition represents a larger step. He added that Cognex has traditionally focused the majority of its R&D undertakings on algorithm development. Often, he said, customers used optics from third-party providers, as well as lights for image acquisition.
“[Moritex’s] products capture high-resolution detailed images for their customers who are some of the most sophisticated manufacturers of semiconductor, automotive, and electronics capital equipment,” Willett said. “Moritex also gives us a more substantial presence in Japan, an important machine vision market where we have lower share.”
Still, said Cognex CFO Paul Todgham, Moritex faces similar operating conditions as the parent company. As a result, the immediate contribution to Cognex’s business remains less than what it anticipates in the mid to long term, Todgham said.
Cognex is expecting revenues between $175 million and $195 million next quarter, including $5 million to $7 million from Moritex.
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