Cognex 2Q First Take: Guidance Raised, Conviction Intact: The Profitable Growth Playbook Works

Research evidence excerpt

J P M O R G A N

North America Equity Research

05 August 2026

Cognex

2Q First Take: Guidance Raised, Conviction Intact: The

Profitable Growth Playbook Works

Cognex delivered a mixed 2Q26, with revenue of $291M (+17% YoY, +16%

constant-currency) a touch under consensus $293M while adjusted EPS of $0.45

(+80% YoY) exceeded consensus $0.43. Sales growth was driven by broad-based

demand across most major end markets. Importantly, Cognex saw continued

structural margin expansion with adjusted EBITDA margin of 32.2% representing

the eighth consecutive quarter of margin expansion. Management issued Q3 and

full-year 2026 guidance calling for strong double-digit revenue growth and

significant profitability expansion, with the FY26 adjusted EPS range of $1.64$1.68 is well above consensus $1.49. We expect a positive share price reaction

given the stronger profitability, the strong outlook, and continued execution

against the operating model transformation, and reiterate our Overweight rating.

EBITDA Margin Expansion is the Story: Cognex's 2Q26 revenue of $291M

(vs. consensus $293M) and adjusted EPS of $0.45 (vs. $0.43) rose 17% and

80% YoY. Adjusted gross margin expanded ~350bps YoY to 71.5% on

favorable mix/volume, with tariff refunds immaterial. Adjusted EBITDA

margin expanded ~1,150bps YoY to 32.2% (above consensus 30.1%), aided by

opex of $119M down 3% YoY (-5% constant-currency). Growth was broadbased across most major end markets with management’s 2026 outlook

improving across many: Logistics revenue now seen +HSD% from +M/HSD

% prior, Packaging now seen +DD% from +HSD% prior, Consumer

Electronics now seen DD% from +HSD/DD% prior and Semiconductor now

seen +DD% from +HSD/DD% while Automotive reiterated at Flat to +LSD%.

Strong Cash Generation, Net Cash Position, and Shareholder Returns:

Cognex generated operating cash flow of $69M in 2Q26, +60% YoY, and free

cash flow of $68M, +70% from $40M, representing ~23% of sales. FCF

conversion was 89% of adjusted net income in the quarter. The balance sheet

remains strong with $755M in cash and investments and no debt. Cognex

returned $14M to shareholders via dividends in the quarter.

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