Cognex (CGNX) 3 Aug 222022 Q2 Earnings call transcript

Company Profile

Participants

Susan Conway	Senior Director of Investor Relations
Rob Willett	President and Chief Executive Officer
Paul Todgham	Chief Financial Officer
Joshua Pokrzywinski	Morgan Stanley
Joe Ritchie	Goldman Sachs
Rob Mason	Baird
Joe Giordano	Cowen
Jacob Levinson	Melius Research
Jim Ricchiuti	Needham & Co.
Andrew Buscaglia	Berenberg
Matt Summerville	D.A. Davidson

Call transcript

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Cognex' Second Quarter 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Ms. of Director Senior Conway, Investor Relations. Susan ma'am. you, Thank

You may begin.

Susan Conway

Todgham, to you. With earnings quarter evening, to website release quarterly at and our us contain like Officer. Welcome Good information Form everyone. our www.cognex.com/investor. report Investor Relations financial earnings in our Paul CEO, about are conference Both available and Rob Cognex' second the Chief Willett, that Financial results. I'd Thank section remind are on President our you call for and XX-Q of our detailed XXXX.

During measure better the we is investors non-GAAP or call, we them may if our understand use useful if a financial trends. think or help business it we will results it believe to

Exhibit made we X statements be during the Any of a forward-looking the may that based release. in upon of can information believe from certain You see in reconciliation earnings we release of call are make we today. to non-GAAP or earnings this any as items GAAP true to

However, things projected results materially can differ actual anticipated. or change, and from those may

For list of including second refer filings, the SEC Form tonight detailed most filed you factors, recent XX-Q our and our to XX-K quarter. should for our risk Form a

turn over Rob. I'll to Now call the

Rob Willett

on occurred One thank right and contract in big Thanks, business Sue. primary you us. fire have months The challenges that three our our for Hello, everyone, going a in now. last particularly To two June. you want at begin update I manufacturer to joining active. since on been call earnings concerns our tonight's call,

our largest The end other market. in relates to overcapacity

specific the products manufactured. on equipment was Also, was there unaffected. June primary our where Thankfully, no Cognex contract floor most was largely manufacturing area Cognex First, On are let's talk at Indonesia, fire our production a the at fire in about and X, one the injured. facility the manufacturer.

inventory However, a our portion destroyed. of significant was component

this products. can situation, is because our of a components touch you many serious imagine, As these

cars customer up from otherwise consoles, unavailability in sourced. seen hold past it's the in all until the over to As of a video one delivery year, everything can we've an assembly chip game completed

support next-generation Cognex the been Our around to We're are source moving that with to delivery they redesigning component and transitioning easier chips are products communicating hard suppliers, We're are grateful I'm Cognoids our containing to technology directly major customers customers I'm replace. procure. that older world at fast actively top CEOs schedules. components. for addressing are priorities to are alternative with of and noids currently Cognex sales their source communicating have chips prioritizing also our and customers with to shipments. many products supply.

ingenuity of I a section customer reputation customers. is the stepped supply team put strong in to implications at and quarter. a new the our third We commitments the finding in business believe Our effort, technology deeply the disruption will pays talk The culture fire more flexibility the and from about on brunt and excellent helping balance this has time in us will especially and and be I work Cognex's It to an taking all time, shined hard meet the leadership required assignments in sheet up, the of a guidance leader us in before tonight's growing how with that the call. of lot fire position. us get solutions a help this. our has extra time. have suppliers as Cognoids during like considering difficult appreciate they had to on

new that in could quarters in now shopping setback in postponing challenge. years our temporary customer major After fulfillment second spend online investments surge are during on e-commerce other driver that automation Cognex centers been this our two in to logistics to of now growth and in heavy out. view new strong and on capacity logistics We play in largest e-commerce has growth machine waning. leaders take vision, a for move the Let's a our technology fulfillment multiple the as business. is profile pandemic Spending our logistics

in productivity these about and integrated our being because sourcing to over for machine from lower are term, headwind and We volume. medium near gain term. expect current improvements share. is we more longer situation that It is in is are revenue logistics but vision the excited as which delayed, parts. business partners will that customers, The us, logistics difficulty The customers notwithstanding, are expect the and in growth come emerging at taking large, for having implement where and further long we as to market good opportunity a fast-growing process are projects ever

We to continue to a tasks vision believe beyond at introducing point are a our quickly rapid that market new see dimensioning, easily that and detection such the be products Retailers perform machine will last barcode item Cognex as to implement open for driver a of U.S. will machine A significant products growth the us. – be customers vision. logistics. adopting and outside rate, Cognex implement more and and will to reading on growth technology are significant we we

recently tonight's you As we long-term of growth share here guidance for our the We'll stop in that I'll now. logistics. quarter. Paul, of anticipating, microphone details for you call. with as the updated that section in are our many goal is yours, last of call, in the indicated and we is for

Paul Todgham

to the of million QX the included That middle represents QX plus range. Thanks, was included discussed. for a Both orders XXXX. change, Rob, Revenue the Also, everyone. logistics in hello, of substantially in prior of higher QX in catch-up backlog. a on and revenue Rob of minus, low quarter single-digit reasons $XXX and level our guidance and revenue from or periods compared prior XXXX

the did large already revenue timing at on electronics Thankfully, in centers time. Cognex have the QX. the in owned the distribution Given shipped not consumer material were a of incident in fire, deployments impact either or

of X a by Greater XX% from than end a Stronger our reduction Americas Asia, products. from decreased consumer a lower delivery China currency electronics our by orders consumer to due increased in XXXX. higher revenue and year-on-year conditions chain of despite of country. supply expected markets lockdowns region automotive, market the tentative large growth increased logistics. exchange XX revenue market by rolling automotive, QX semi, electronics, change rates. electronics geographic XX% year-on-year from XX% to more consumer from in at offset was point a the from excluding logistics broad revenue Asia, the currency percentage-point Despite our growth Revenue due revenue than came including broader from and and XX%, challenges, by Looking grew from for which QX range Within In was reduction Europe, from logistics by best-performing rates. percentage and in the exchange perspective,

XX%, we to margin supply Rob struggle was As due in year's experiencing the margin QX brokers. level through fewer shortages. percentage in discussed, to almost expected. lower electronic as are gross is components Greenfield and investments we entirely significant reported with activity are quarter, the points X second Gross is This and customers procure integrators as last paying overall below premiums

and will non-cash covered on QX the point see QX for this Regarding expenses such, value both the future we believe be lost contract our in our million, by I want we in And $XX.X claims inventory don't are and primarily operating included the charge charge may a to insurance. QX. manufacturer. our net of that of books insurance being to adjustments that out as processed Cognex possibly for fire,

slightly by and XX% digits QX that XXXX, was operating QX to and low a increased the the by charge, been the combined single in and due of on was sequential of in X% engineering RD&E including Excluding guidance. our incremental total favorable in fire we've basis loss. margin making Operating Comparing investments year-on-year, SG&A declined to sales headcount. expenses

Reported QX operating in the effective XX% long-term compared rate charge, that made was decline and in future was Excluding additions and in the line year The supply the tax the over On items The near XX% quarter. $X.XX non-GAAP in earnings past for and with loss respectively, year-on-year excluding prior in compared prior $X.XX share, just were growth. $X.XX and fire to discrete elevated QX was prior $X.XX we to XX% period mentioned. and of the margin and as share, headcount per per were $X.XX excluding tax $X.XX with term with earnings quarter, due target a costs of XX%, drive XXXX per and our XXXX basis, in XXXX. expected. of in QX discrete QX items share QX tax

in be an no million Turning sheet. advantage position continues We investments, and a strong to for debt. quarter ended cash $XXX us. the the and to cash with balance Having

orders shipped the of without Following healthy. we increased in quickly having XXXX represent receivable QX and were Large very securing concerns. Accounts to by begin the cash the components remains increase. from able end of fire, XX% most late flow

approximately lost of off component our million Regarding in wrote inventory reserves. $XX of we mostly the net balance, fire inventory

wrote of We million off in also us for fire. the our about they representing held assets, made bought were inventories payments we primarily and that component contract lost to manufacturer $X for prepaid

to turn back I'll call Now the Rob.

Rob Willett

were Thanks, Paul. results summary, our In QX good. for

QX believe be we will However, more difficult.

$XX would by have million. million meet. for million. than sized be quarters. lost is we QX million Of the million, revenue have $XXX revenue are discontinued expectations as challenges created will to we expected about we expect to in few requirements QX expect we is and The going gap two The have $XXX $XX realize follows: a products about what have range a First, in ago. our We the remaining delivery lower that, that fire able months not believe reduced revenue we we for later business This $XXX on between and $XX from million

our the year-on-year. by for and be and slowdown Separately, QX point strong Second, project in this We from logistics QX the electronics in will about year. QX will revenue we grow expectations consumer for expect $XX believe revenue be million. reduced logistics deferrals low recent

higher. We revenue from We to grow lower year-on-year, to year. up scarce QX brokers we'll also XX% expected estimate from We by due be electronics premiums. believe digits that for premium prior our paying moderately revenue will gross double will about from prices be in of into pressure components margin next and the believe consumer believe annual broker

tax combined due items. compensation. and We XX% a tax excluding The to RD&E SG&A incentive sequential be to variable expect single by discrete total digits lower effective in of rate basis expected decline is the will on QX low

by about goal to revenue to goal Lastly, sharing we logistics think grow you we over an is our long-term. new the how you compounded annually help This understand with for logistics. internal are XX%, is

remind years year-on-year it's prudent compounded rate We in by in guidance. are and after adjust logistics line million and annual many be the experienced revenue XXXX our five-year situation. recent to growth we we our a We annual for grew I'd target. revenue approximately believe target that XX% to growth come was the to like and approximately driver to get dramatic base. near-term through from in believe you not providing XX% continue $XXX growth will We the with sizable previous given years our rate logistics

Now we questions. open call for will please the go Operator, ahead.

Operator

question a first time, Joshua line we question-and-answer this [Operator Stanley. comes will At with Our from Instructions] Morgan the session. be conducting Pokrzywinski of

You question. may with your proceed

Joshua Pokrzywinski

all. Hi. Good evening

Rob Willett

Hi, Josh.

Joshua Pokrzywinski

So, something buildup next is as revenue in XQ that Rob, pretty that's than your maybe $XX happening to for well it rate an you a run going under call kind logistics in the as quarter. more revenues at million to pertains of a there be gave Is commentary how of low? we here it, bit question suggest that the rate That built the seems expected on should keep or mind we're a that Or while? out artificial logistics more quarter acute to there. lower sort is of a small, much run of

Rob Willett

was to are looking business, in there's quarter you we're both year. low. reasons as first we companies at flat the a in know. go both half, expect still currently give QX the the some things QX, implementing context that, up a we X think for in our prior on sequentially, I the To We're in, expecting on systems explained, quarter, difficult of and next lot QX orders we don't and And in artificially very logistics slightly which we deferred quarter challenges, then but stronger ours other much I into. supply chain a would

forward I rate to this certainly logistics that think quarter to now. expecting to down we're going in be going in we're we're but not year-on-year, business our So the see certainly that down

Joshua Pokrzywinski

quarters? or Like something thoughts number deferrals take? it. about maybe that helpful. side, the eight remembering in quarters, terms conversations Got early $XX And anticipate which over the of Is million how caught you just two that's Thanks. That's that gets then up the the customers with on long if right. your time to I'm deferred do

Rob Willett

to question difficult answer. a That's

in now. it wouldn't I deliveries for beyond QX. time have would order where of that's a quarters. I us. kind much significant the portion line extend or rescheduling it are mean of those happen two would expect normal to we We I expect QX

Joshua Pokrzywinski

Exactly what luck. Good was color. for the it. Thanks Got I hoping for.

Rob Willett

Thank you.

Operator

Our Ritchie Joe next the with question comes Goldman of from line Sachs.

proceed with question. may your You

Joe Ritchie

pursue the going arrive some $XX Yes, thank to And thinking of you the externally decisions the Good portion million? the $XX now. afternoon that of the us dealing in deferrals, the versus to some how about everybody. like made clearly versus at discontinued bit how products right like kind about you. with maybe million obviously, not curious that's fire, portion – just lot you did a – Look, little forward? I'm talk decided what on you you to like of did try a

Paul Todgham

and our Joe, the situation getting in. that point obviously from million. $XX to sales the discontinued, information It's at and chime And best is using we're teams one from products can We're Sure. on we information we two say for I'll this This a would But Paul we customers while broadly important have large instance, factors Rob both and time. new project. start. speaking, can are in the regularly. dynamic

we was we're do going to were last it. instance, project longer line particular the For and fire with the able given a it fulfill product no damage, to

strength smaller logistics cycle near it where a completely life And we regard what time had So of really sort to lead project period much short really to buys that's that of customer make time the of series million sort where end is visibility cycle over they businesses, have relatively that's – it our those customer their percentage we're of there's something and the were for included allows can go is the lost how there's that product trust that $XX tend pieces, needs good that. one then into were projects we that sense some fulfill But, the with we last have again, other of relationships, our to with a do overall then estimate. maybe very That's products a for we thankful and figure to when that really do pretty also a small that off. time market and meet quickly and that that. back short business a us needs. customer time go the doesn't out that's items, our product of And or of the to built can't in need

Joe Ritchie

bit why, Got deferrals you maybe that, us just to are in in be about color willing to just up $XX go you little deliver future with following a booking maybe in on customers, can can't must And confidence conversations relatively in quarters, future tough their us what your why on actually to That's I has like, been. bit that that helpful. guess your from wait little they Why your maybe potentially expect the like million competitors? and quarters. market of tell it. one a there on response give they

Paul Todgham

right. a Yes, time technology of OEMs they outperform a Joe. really our think does there is and I lot our factors a competitors, spend lot One our of customers is number it are here, qualifying of and

in switching do. how is thing there very to certainly we're So We're not supply. easy being an thoughtful prioritizing

our in further and customers less to more cases And are in keeping of we're take our near product So some agreeing they supplied. quarters out.

are right. a to against which happening nothing if delayed, where also it's with projects do getting backdrop think Cognex, has I

product, They improve so that the they their upgrade also often are able to now. therefore might our receive are have even and starting are that delay And to technology to but product they have technology. have more newer to the up we it readily available. moving to to we soon, a as then like wanted product projects opportunity with that's holding from And not that though the another more not customers one earlier, in have. they So us do that they are customer they are an we do also seeing might we may

are kind the that those seeing. we're factors of So

Joe Ritchie

more your in you confidence Got would I deferrals able maybe bit just similar to you're that market the that of one term flip of million. up a is and it. little How I today. get in the That's that line to longer gives will helpful. more could what And versus on the base love in questioning, of rate? guess, that weakness target it actual $XX weakness be grow I project If demand growth of logistics, that seeing we a don't the the about then much lower just rate, Rob, XX% you confidence at number hear back

Robert Willett

Sure.

the seeing relates a business So really phenomenon. million deferred to I in a the market it's slowdown $XX think in we're and that logistics,

I think about it. we've all been reading

that think, In about players you it we of And out quarter and the talking think Greenfield clearer were that, was build the were there earnings in the at of deferring us spoke last has on some at slowing last I just but fact, centers. been large to shedding employees sites. even we when logistics I unclear call where to as are and it's emerging sort distribution down really gone fewer implications about

coverage where we leaders one slowdown are often in they related point similar a a to spend a space can of capacity. having reporting quite lot to hiatus over see think in or from I technology news this although we customer of see ecommerce thinks other companies dynamics. in similar have a in large kind leaders technology where the there among about, really other And, So ecommerce, we that fulfillment

then in projects will that we backlog have happening. I $XX expect kick the That's QX a in expecting stronger we're we move as substantial much million that think we we do that's And QX. into phenomenon really and see. So other

next growth So the have years this market five then ten application that of confidence logistics. expect a other or in are grown have we question drive XX% the five the over to to five is there to about get And vision we of to they the your include we last lot a years. last to well growth very And in they years. levers as in rate, understand to have the

a when our but place as there know, is to it you many new where in is the or are really package new very most it been look a size, there we for high sales customers, but these our full traction really things profile lot of that applications As or customers, vision, today we barcode label types really a full with many at include the or are applications see or funnel business is how with of of on that should be package, these of is us. not, gaining the damaged, right reading,

confidence the much expect us gives outside than that grow that the growth U.S. United in our a to sales do our faster continue. And driving sales we is States, to continue that's dynamic on which Another basis of percentage

great some have adopting are machine Cognex that markets those We customers vision. really in

I by lot a market products of have to perhaps a of powerful market space. lot grow the much new bring deploy And We think then that we easier to in should itself coming have and that right. going is started to saying, to quickly, market are vision

starting there we're later growing. But market, how lot not think the in, they we addressing and in the year to, segments of a white markets how number about this address. is that will which quickly we in you we'll think share we're big I how about are or space a with today we're are

bigger. also, the our quickly serve the is see see to in others it it And we're as very we And expect and as market. we so then making market grow market

years. about have that's So very the see from growth to over view but we last we've logistics, we in five why been obviously deliver XX% able down positive a the the

Joe Ritchie

helpful. Super Thank you.

Operator

of Baird. Mason Our from line comes next question with Rob

other You may proceed questions.

Rob Mason

and automation taking Rob, ask the about I question. guess The just the slower year-over-year the talked I that to press Yes, release wanted slower factory about. in quarter-to-quarter. broader thanks spending for referenced, you trends,

had. So the think logistics that's I, you excludes framing I that

the Just you're to there, went your anything whether factory you includes seeing as automation? broader you through what saw color there what outlook quarter some along and the adjustment and third the quarter

Rob Willett

Yes, Rob. hi,

and was we the what did think America I automation. see quarter rates growth as Europe, slowing progressed factory in

to in some good I very think in certainly were but growth slowing recent areas. can those as in the quarters seen rates two automotive growth we point regions, in automotive, those rate we've

in on I chain Europe, two in reading I think we're sort to about still can we've in that's to hybrid of really would all growth on. we markets the and think yet. is And problems what's majority going the in combustion America engine dynamic aware of, really cars those automotive going point Europe. of around and point can Asia still, say concerns, Factors particularly macroeconomic of we and Europe kind seen the and I hasn't reached in very spend particularly cars exciting also are supply automotive

coming see EV we growth do signs there. it to applications it we expect be and talking driver I'm Although of a about

we automotive the some certainly the some the of in in Europe of we for reported smartphone see Asia, I of but projects was are you've it those of particularly an and that some challenges the as in was new had of And saw some we So, that in whether playing then rest are there's some rest or America. great seen, another getting think and more also with seeing, players platforms in results some Asia. rest broadly which phenomenon dynamics they around the out, deferred, China, in really Asia, it's challenges implementation, electronics also the there that of whether

through second in moved think that I overall saw as of the quarter that's So, automation. slowing kind factory softening of momentum down we or the we

Rob Mason

that how… funnel way revenue I’m of perhaps outlook, to fourth quarter I result a order that or your the to not doesn't that quarter, – trying Is though, as fair impact the understand would your guess say but necessarily that did built it impact just third

Paul Todgham

Certainly This biggest that, are I'll two include consumer might by beyond guidance outlined. two well. that And better factors the slowdown but also for then for in activity of first which is there in Paul. far sort of in QX as FA secondary Rob. Rob modest factory electronics smaller in a automation, are business the our slightly factors the part, some

two think factors. course factory offset sort those So, impacted we fire the automation of of and we business And get the is main the that as roughly to supply us outlined. dynamic dynamic by the

Rob Mason

Sure.

Just real of is just function are that inventory? quarter reflective your getting of or your last off question quick, guidance, third manufacturer that currently, you goods contract out of finished a production working is preexisting this more

Paul Todgham

both. It's

Rob Mason

both. A mixture of

Okay. Thank you.

Operator

Our Cowen. Giordano next comes question of to Joe line with

You may question. proceed your with

Joe Giordano

guys. Hi

Rob Willett

Joe. Hi,

Joe Giordano

from So a couple me.

You expect logistics down year. this

largest you been as the Do down year that is be doing spending similar they business logistics this they largest ex Your cuts about, and well? customer a And has magnitude? your are the there. it are customer pretty that expect clear to

Rob Willett

large kind Well, and But of one Tier customers, about of logistics, exclude in part the or logistics, this business, customer they that many down. that's when be up X customers, when large we perhaps we we are many, year. the largest many, the how two we expect rest customers have think we be going type other that to take

they Cognex, that and the big and We online, of take spending and see like home improvement. out less heavily, the a years. who two and over starts the customers few as customers it those but of the So on less also invested others a the a their kind store, quite customers few seeing who that is one, to money of are COVID, lot going everybody buying we They see, last heavily. are now time who the out on substantial very phenomenon starts invested invested seeing largest we're hitting shopping experiences comes online phenomenon

many we in spend of we types were all growth in States, in they And do see growth ways, to good more And period the many up outside they're hundreds, Europe we United of invest broadly see slower also The which and customers other Asia. growth going from rates and eCommerce. customers the in next catching them. have think I to

Joe Giordano

like of terms, In X that is million? large how that of piece rough non can terms in scale you logistics $XXX Tier percentage

Rob Willett

than Yes. I certainly it's would less say half.

Joe Giordano

Sure.

Okay.

growth the about that largest that when customer at included previously eCommerce line with the in XX% becoming you five-year rate new world's so a Now think target your CAGR customer logistics, company. the said I was like for your prior largest XX%

when like, like is large significantly dilutive is. from future, was how XX like just significant Now, up what bottom that my that to maybe the mean? one this how in a to does seems the ramp mind, of than that that and that in bogie customer up if harder even you growth That built the because customer customer hit

Rob Willett

investing period, plans, think names positions wouldn't out to growth, that their with. Well, with positions be have I we expansion, also on and customer work are a growing I think, substantial international as I time for of some is, that their grower who their expect good they globally famous of have for potential be over companies to Cognex. count heavily them But there e-commerce are in many them terms we the that other we potential

products had introducing large for to spoken in don't we postal segments see expect products, applications because about But think, haven't parcel today and we potential eCommerce to none with where have really [indiscernible] do I I've So certainly that dynamic, particularly areas still but I and as also substantially be would other we Vision us where we think grow. the play be is there. we

the And huge we a So expect We add to to our market. growth large of more we still market. to it's we is think getting relatively small. We fair think going them. think think be share dollars than our it's of share

our compound XX% annual. a draw hard us bottoms us for has at up picture it's So not where build growing to

Joe Giordano

Sure.

how couple simplistically, color. that appreciate simplify very peak kind machine back Okay the maturity say, I kind I the what happened. And comp right? years well, consumer XXXX, ramp than relative to And at world's could just penetrated peak, you've a the had just of vision very more significantly ramp near the ago? ago? maybe world's years largest and versus was was electronics like, it least e-commerce company of do quickly. where more you of easy largest quickly then one is judge I company in mean, and it that five How term up Is it then up way

Rob Willett

particularly Well, ways think Mach itself is I think it think the the I technology vision advancing think, number to new I of very is machine the way at of quickly and one some that look defines really served around grow we are one market, learning significantly. involved, where and And And a are go big learning maturity we'll of you think make no edge we're still deep as the manufacturing. of deep applying lights-out that – market areas have to technologies if to strides, if the potential the where and big particularly vision field humans type strides as full of really long over as human which then in make I learning, we right. inspection making big replicates and result on manufacturing, machine the progress, will capabilities maturity, way a

amazing, eCommerce. kind applied had of point with to electronics So technical way I one look one machine success think customers to, maybe who you yes, I overall. some to in think vision have very we've applications, in it and great one sophisticated that's at some then And certain

of growth expect they we've to customers machine with the more I see through would partner been leaders of their that make bringing in companies new and vision, we're fully and expect large discrete choice we'll large for contraction like going with And technology products. new and markets. entrepreneurial, go we when to expect years the partner entering new of and I be years sophisticated we're technology think expect see partner less growth going choice most or of to them. emerge Right. we would capabilities also manufacturing and to cycles And see are those bringing to them. just

yet out us machine and I in what universe their excellent scene big of manufacturing growth automation optimism it's there quite So, think need gives appear a that that kind on vision great of that's And vision we to for the has logistics. potential going and realize about to aspirations. factory the kind to machine is see

Joe Giordano

queue. back answer. Thanks. jump in I'll Fair

Operator

[Operator of comes question Instructions] the Melius Our next Levinson with from Research. Jacob line

questions. your with proceed may You

Jacob Levinson

evening, Good everyone.

Rob Willett

Good evening.

Jacob Levinson

about question redundancy strategy the guess supply events in unfortunate the and catalyzed is, your maybe I chain review your happened of creating has to base. thinking just returning there, a what manufacturing around Just Indonesia. more broader

Rob Willett

on thank had This And we is the further question. wish all the have our happened. you, think we been I of some years of before we wish road inflection our diversifying working manufacturing I something down you for incident inventory. been and for this footprint component warehousing

right I diversify in have ways manage that of this track. down alternatives do weren't just more We we we carefully. enough risk and along can the the right happened. some, considerably terms and think when were we that around our track But far on this alternatives far

lot think robust diversification. we've I a we and from make happened about what's quite supply improvements with our chain more learned in terms how can

as were were wish and experience we from learning painful something it as is. this that we on, we're it's certainly So further along something

Jacob Levinson

– Okay. seen when quickly respective European way That's or a their that this helpful. any currencies? curious peers And just in we've but this your since dollar for on if disadvantage puts have gears a with sometimes they're Asian appreciated if that a you're obviously if obviously bit follow-up the you switching currency, a been just at at of of competing that discount, against – you some speed,

Rob Willett

in markets We currencies markets do. we in. and most local all in price we're large the Well, some

compress about of Paul it that? very does on revenue So street want in the like of competing anything and reduce and for But to margins business about you no, terms we're that. say course savvy

Paul Todgham

a No, Yes. mean, growth. on I revenue it's year-to-date X% about our impact had

had us. many and is quite our then think in as with [indiscernible]. of we're customers. think in on also said, geographies, currency view, local and it's priced the for from we're impact pricing point working very again a modest nimble then our a between we both Rob It's gross I that biggest And I margin; impact

Rob Willett

it's And those I think worth noting pleased by perhaps number the market. increases implemented here, have over execution gone. we well been price a with how the We've of received the been that has months last XX have of

Jacob Levinson

pass Good on. Got it. guys. Thank you. it luck I'll

Operator

Jim of & line Our Needham next to with Co. Ricchiuti comes the question

with may You proceed your question.

Jim Ricchiuti

the some that or you'll Thanks. in terms into if just makeup market will sense next revenues? point verticals? that to in be million there a flow Does think into of QX revenue you of $XX that of back QX? the I seem your in suggesting think $XX one revenue the to over low than about that there the realize you vertical – normal to Just I it's the go be million more mean, way any logistics go able be to of wanted logistics. couple so quarters. to is of that remaining Is to from in of get trying that a your skewed more makeup

Rob Willett

we're to Jim a question. situation, our time do changing the a all that for dynamic Thanks with need for work the has periods we supply those to to lot what as with able going time Yes. through be and them. it's customers product over It's and

that to really will sense would consumer false them, want recognize don't precision, revenue shipped I of be is on I are acquirer and but a and QX normally for electronics say going QX you to We've I right. and this, impacted. think give So less

give I I we're logistics large then based the execute out any get of about integrators also was can big I timing timing think we of more implementation I with ability able and And the there the very of confused the think and before backlog there's as integrators probably that's think the as much the customers so of – a that I on think in automotive plans and and the market think what think I happened fire clarity. I to will on have middle, the sort significantly door, impacted itself to colors be would have. because

Jim Ricchiuti

Yes.

Rob Willett

business lower software where default consumer lens just in is by I might embedded of take more the we geographic Europe Asia by more by fire. slightly then of virtue just more slightly more which higher in impact in electronics you see and Asia, the and mean, – an products impacted Americas there. if and And pure a have we

Jim Ricchiuti

Okay.

Operator

Andrew Our Berenberg. to Buscaglia next line comes of the question with

your with proceed may question. You

Andrew Buscaglia

a modeling lower of bit period for gross out, are here if a Hey logistics is margin or the less a on presumably think that's because side, mix. subdued favorable guys, that mix just little sales looking question a time. How you do

tailwind not a of in margin helping increases? component little these bit next we bit would little year gross a of a some So offset see

Rob Willett

to fire possible. our broker chosen discussed. had scarce market impacting drag not more longer. to biggest buy Yes. mean, And in making that now purchases of right back We're going factor it's seen down the broker needs. we've by for dramatic unfortunately to now I and to the do decrease, we components the wind get that supply decrease, the to we the lost is back that revenue customer but or to supply and have minimize fulfill Andrew revenue starting and quickly starting on secure as and to gross far margin is meet and deferred our the

I really the biggest far think factor. that's So by

it our on if margins only say overall logistics Specifically on from revenue down, Cognex. came is get leverage would caution higher logistics, overall do revenue we costs fixed is our slightly but still the to dilutive I at level a

the again, So those to component is are cost offsetting sort of factors factor. well both But negative overall, any pricing with Off note, our we are mix counteract a might get. broker year-to-date. that increases would inflation also that, of but that factor, benefit secondary we buy

actions par cost designed not have inflation, are those really roughly – pricing our the on the buy. component at been two So factors broker core and around

Andrew Buscaglia

then just you as I long-term why the get outside Where more exactly do the because see into competition overseas? growth interesting you would growth growth U.S. there on think comment you? is at more run rate made Okay. that logistics And that you XX%, and for you

Rob Willett

ability the we kind other home that proven Yes. broadly United terms this packages our machine in – vision production And of technology tasks. the market, Well, in read our have and in its inspect and we've and it. very is in perhaps, my is considered where perform best to slower we've of be think tends And where applying become industrial markets I in generally in it's been Europe. out successful to again, a then products and of we're new roll sort adopted slower to at been experience Europe of in States

are two and We logistics customer relationships legacy would they that larger are we local into players displacing a Europeans. get And this we I both the further. in in also that as players that of have say market, lot that have entrenched market

one penetrated progress but less still then far, Europe. lot automation and we're of growth a rates high we thus percentage So could the mature. a say say good, making relatively in of logistics Asia and certainly And see in lot under would less of successful is we're I

willingness wage a of players still the then and you'll COVID to those like them But is in able markets eCommerce that, there's in see and automation riding larger And players growth process. of goods, markets or I starting the company in that we're and perhaps they as what the spend invest that parts the XX change them inflation, we they with into also are envision, think to are want obviously less starting automation growth Asia, retail have overseas. in with our to large put wage into most years thanks those work think to of to but then to Asia, are starting to I people handling with do those helping. and inflation is being here of And experience those footprint our and that's, market in eCommerce I expanding here customers on in to change. factory and some the successful incremental of been rates support think less to confidence to travel is And start So the leverage markets. U.S., markets. types from willingness if business the those of change. big many obviously Sure, you you of more – if still technology lot physical to large we've

So, expect to yes, kind rates of in logistics. for we outside growth we're U.S. optimistic see the the very would market about the

Andrew Buscaglia

you. Okay. Thank

Operator

Matt line comes of question Summerville the next to Davidson. Our D.A. with

question. You may with proceed your

Matt Summerville

put great. next to the size may if organization, many you logistics. and is levels it get severity Don't of a than I'm you the business the kind need whether duration guess you you're something, to do at excuse XX, I on read on for a And you overall Rob, get business me, over thought point and sort a is for final looking XX% XX% quarters. or sized XX? the temporary want to seeing this just to into just of higher down I gauge Thanks. be in put resize an of sized cycle properly that have that is properly wrong, any end, trying me or organization your to however have is the not to

Rob Willett

think I your answer Well question. first

Greenfield what it's the and I large in that quarters, I just where think have it's few how to and it in the some not – unclear form, spend of comes the right. in develops don't we it’s next see when few think back. develops next but

that's would the of look So I I at say when point. a business say careful we would the our three last – headcount with over years. we been – I we've think sizing own pretty

that we a pretty exited had we that to had we million As exited we XXXX, sales. XXXX, about similar headcount of but more we that $XXX

managed we've through think think our pretty I I how headcount period. So we've prudent been about this

the to tend we So – company and where our for run long-term.

about thinking we are opportunities growth significant. the we they So and see, are

we we as about of see However, And We're is down. we second we this of we year, now exceptional the the in pride we a employees, factory of our and growth next for of a expect with that the – quarters, be slowing and ourselves automation, spoke we half see stopping slowing some with earlier hiring. company an over some on opportunity I not it, but people. down logistics challenges look where dynamics the it forward us rates is slow to do it quality the doing into few Cognex to pretty think

market know going difficult situation all market, see I and we're it going bringing very So board recruit people a of this been when out think and as we it's regardless into. we short-term exceptional be to the on to talent,

from have So give XX% and perhaps look But how doesn't leaner to right think we rate are heartburn of sized we growth in expected as really headcount capacity been forward. XX% would've running us to. so going we we than I terms

Matt Summerville

been has number, moving applications products from have? that you logistics much is logistics that then vision? Thank of for how the that versus barcode your a that's sticking the of XXXX into just up, generated the a is some much more $XXX higher aside, customers revenue as follow million? of logistics revenue And Is it. end today logistics, maybe I but with your And of Got assume higher end hesitance how what you.

Rob Willett

Yes.

their even and And primarily. So we number think tremendous – focused if into million and that the distribution the out that it's ability barcode, day, think where late a ship don't that about read X% be more might large process, to or XX,XXX it's a And that's value that I value the reliably to day to and of they've much a think I quickly packages competitors, so the to is have a reading, that. there's of driven still rung as the if very a show goes center technology the been to processes out amount of customers. the million And up. is been absorb companies up revenue growing And be they've processed our barcode XXXX vast we but market scale packages reading we've of then as $XXX of been be looking reported. a majority to there's can it through it's barcode that's that

managed are Is want customers of things place We around lot be a think than with for to to or there's in in package right still – today causing through chain. They positioned correctly the hazardous all There's of but again, like, of and damaged, expensive. less humans box? the their to sorts the the to challenges kinds sophisticated at technology that is I is goods vision a a other supply more of more cost all with want be lot the still causing right how of value things huge to and suppliers look right things. there's logistic lot right value the good be So barcodes, with, package things run of out chains. with supply more do

type large capabilities based engineers kind we of the thinking and of has that then years engineering these companies So and eCommerce a have at massively. and look we they've a also of, we also of investment it the their And would've we robotics the they lot say number own potential, of spaces. on and at I'm see the in in just retailers of based caliber just see five increased that internal done on areas. some acquisitions When logistics now worked these the caliber ago, engineering

we're more to going we're some that barcoding think already that. and from applications pivot beyond seeing engineering of capability to I see or So vision

Matt Summerville

Thank you, Rob.

Operator

of next Cowen. comes Joe the with Our line question to Giordano

question. pursue may You your you’re

Joe Giordano

Hey, thanks me follow letting up. for

stock think like bespoke a in and is a you you terms I'm camera just up then quick and can for get lot where the Cognex; use and it you're you general? have into like just of ones here, real just Thanks. of auto to expectation seeing computer Obviously like in program. Just standpoint new interesting year bigger to to applications that's something pop you'd potentially for how M&A then in in curious today world do as more the on growth from an one that vision for Rob, future type of fit that involved? in

Rob Willett

Yes.

market the to a and said segments specific too. right we past we machine that our expect the you of brand, So serve we've investing have but So leading higher we're long maps. draw market, market guidance, kind the by of vision, in And would are it digits-right? I we grow guidance world's we've we draw – vision low-double we expect give so future – I In then really faster our grow attention at and rate, you shown will been don't think that your than to market. your

to way it. one about be would think that So

Our through rate year. still of and automotive rest strong, year the our is this to up highly overall, expect we'd significantly growth it accretive the to is be

We've think of perhaps acquisition the seen more terms interesting in opportunities, realistic. but And kind have of that will for to do acquisitions terms think in market so. the in prices. at I continue glad And to, those then course, getting that's very little perhaps didn't some this space. specific of is are and of acquisitions to forward point in So many, market a high don't know, even at anything been they've going the toolkit of our our we're how of think but going as levels, we that you now do I – that I acquisitions part becoming that more evaluations be in light looks. I to there participate opportunities cultivate more do in And, we are many past

Joe Giordano

Thank you.

Rob Willett

Thank you.

Operator

My the next question Joshua of comes to with Stanley. Pokrzywinski line Morgan

Your may pursue bigger the question.

Joshua Pokrzywinski

the Hey, follow up. thanks for

this this, off? same Just you would here down big point. tell one quarter, make of I base clear pedantic, you long-term to numbers like, between Can new thing have want logistics XX% materially we'll that's like it know just what seems is the I be us kind next these but to CAGR. the on XX%, start

Rob Willett

there's and a of at take. whole year in we to based on on Well, what what Yes. uncertain can customers from how but bunch will where that, I think point, variables strongly want we're which what end comes the QX this – – share

So all expect on it's to to a that. thinking some out that, XX-year, your think think So I I sorry, years dodge our years kind CAGR want to lower page years of really But but where we for uncertain, would some other same is than be here. have great three the and us but I long-term think view, if than right? higher we're don't I at question, our XX% little a least

probably up slightly start where we we be and end to we're this think would I from want year, it going okay. to said that

Joshua Pokrzywinski

you. helpful. Thank Thanks Yes.

Rob Willett

Okay.

Operator

Mr. end call Ladies gentlemen, and Willett question-and-answer reached today's this to turn I over we like of session. have for closing remarks. to back the would Rob

Rob Willett

with call. forward speaking Thank for joining on you. Well, We tonight. you to again quarter's you next thank us Thank look you.

Operator

This concludes today's conference.

your You may you time. this disconnect your lines for at participating. Thank

We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.