Cognex Raises 2026 Outlook as Q3 Revenue Hits Record

Cognex Corporation (NASDAQ: CGNX) reported record third-quarter 2026 revenue and sharply higher profitability, while lifting its full-year outlook as stronger logistics demand supplemented broad-based growth across factory automation markets.

Revenue rose 13% year over year to $313 million, marking the machine-vision company’s ninth consecutive quarter of annual growth. Excluding a commercial-partnership benefit recorded in the prior-year period, revenue increased 19%.

Adjusted EBITDA climbed 61% to $111 million, and the adjusted EBITDA margin expanded 1,060 basis points to 35.5%. Excluding the prior-year commercial-partnership benefit, the margin increased 1,340 basis points. Cognex attributed the improvement to higher revenue, stronger adjusted gross margin and disciplined cost management.

Adjusted diluted earnings per share rose 61% to a record $0.53 from $0.33. Compared with the prior-year result excluding the commercial-partnership benefit, adjusted EPS increased 89% from $0.28. GAAP diluted EPS was $0.50, up from $0.10, while GAAP net income increased to $84.8 million from $17.7 million.

Margin gains and cash generation

Adjusted gross profit increased 19% to $224 million, with adjusted gross margin rising 290 basis points to 71.3%. Excluding the prior-year partnership benefit, adjusted gross margin expanded 360 basis points. The company said favorable product mix, higher volume and faster-than-expected pricing execution more than offset anticipated pressure from memory costs.

Adjusted operating expenses declined 7% to $116 million. Free cash flow, defined as operating cash flow less capital expenditures, increased 21% to $104 million. Trailing 12-month free cash flow conversion was 106%, representing the eighth consecutive quarter above 100%.

Logistics and factory automation support growth

Cognex recorded double-digit third-quarter growth in logistics, packaging, consumer electronics and semiconductor revenue, excluding currency effects and the divestiture of its Japan-focused trading business. Automotive revenue grew at a mid-single-digit rate.

Logistics posted its 11th consecutive quarter of double-digit annual growth. Factory automation growth was broad-based, led by semiconductor, packaging and electronics applications.

The company now expects double-digit logistics growth for 2026, compared with its previous high-single-digit view. It continues to anticipate double-digit growth in packaging, consumer electronics and semiconductor markets. Its automotive outlook remains between flat and low-single-digit growth.

Cognex also launched the In-Sight 1750, an AI-powered reader designed for wafer and panel identification in semiconductor manufacturing. The system uses edge-AI optical character recognition and automated tuning to read faint or low-contrast markings across multiple substrate types. It is backward-compatible with the In-Sight 1740 series.

Full-year outlook increased

Cognex raised its 2026 revenue forecast to between $1.143 billion and $1.163 billion, from $1.13 billion to $1.15 billion previously. At the new range’s midpoint, revenue would rise 16% from reported 2025 results and 17% excluding the prior-year commercial-partnership benefit.

The company now expects a full-year adjusted EBITDA margin of 31% to 32%, compared with its previous 29% to 31% range. Adjusted diluted EPS is forecast at $1.68 to $1.72, up from the prior outlook of $1.64 to $1.68.

Management attributed the higher revenue outlook to stronger logistics growth than previously expected. The margin forecast reflects the company’s expectation that it can support the additional growth while remaining on track for about $35 million in annualized net cost reductions. Higher revenue and margins are expected to support adjusted EPS, partly offset by lower investment income.

For the fourth quarter, Cognex forecast revenue of $270 million to $290 million, an adjusted EBITDA margin of 29% to 32%, and adjusted diluted EPS of $0.37 to $0.41. At the midpoints, those figures represent year-over-year increases of 11%, 780 basis points and 44%, respectively. The outlook excludes the pending acquisition of RealSense.

Cognex said the RealSense transaction, expected to close in the fourth quarter, would expand its vision capabilities into robotic perception. Proceeds from investment sales, together with existing cash, are intended to fund the acquisition.

The outlook remains subject to risks including tariffs and trade disputes, currency movements, memory-chip and other supply-chain constraints, cyclical customer demand, competition, product-development execution and the company’s ability to achieve planned cost reductions. Cognex also identified closing and integrating RealSense, and realizing the expected benefits of the acquisition, as areas of uncertainty.