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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549 
FORM 10-Q 
(Mark One)
☒
Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended June 30, 2024 or
☐Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________

Commission File Number 001-34218
COGNEX CORPORATION
(Exact name of registrant as specified in its charter)
Massachusetts 04-2713778
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer
Identification No.)

One Vision Drive
Natick, Massachusetts 01760-2059
(508) 650-3000
(Address, including zip code, and telephone number, including area code, of principal executive offices)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, par value $.002 per shareCGNXThe NASDAQ Stock Market LLC


Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  
 Yes☒   No☐  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
 Yes☒   No☐  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):
Large accelerated filer☒  Accelerated filer☐
Non-accelerated filer☐  Smaller reporting company☐
Emerging growth company☐


If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    
 Yes☐   No☒  
As of June 30, 2024, there were 171,500,835 shares of Common Stock, $.002 par value per share, of the registrant outstanding.


INDEX
 
PART IFINANCIAL INFORMATION
Consolidated Statements of Operations for the three-month and six-month periods ended June 30, 2024 and July 2, 2023
Consolidated Statements of Comprehensive Income (Loss) for the three-month and six-month periods ended June 30, 2024 and July 2, 2023
Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023
Consolidated Statements of Cash Flows for the six-month periods ended June 30, 2024 and July 2, 2023
Consolidated Statements of Shareholders’ Equity for the three-month and six-month periods ended June 30, 2024 and July 2, 2023

2

PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS

COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
 
 Three-months EndedSix-months Ended
June 30, 2024July 2, 2023June 30, 2024July 2, 2023
 (unaudited)(unaudited)
Revenue$239,292 $242,512 $450,089 $443,636 
Cost of revenue72,693 62,829 141,553 120,213 
Gross margin166,599 179,683 308,536 323,423 
Research, development, and engineering expenses34,962 33,585 72,067 72,127 
Selling, general, and administrative expenses93,180 83,423 183,808 166,460 
Loss (recovery) from fire (Note 17)— (2,500)— (2,500)
Operating income38,457 65,175 52,661 87,336 
Foreign currency gain (loss)(181)(1,605)(135)(1,211)
Investment income3,116 4,095 6,236 7,682 
Other income (expense)176 112 372 185 
Income before income tax expense41,568 67,777 59,134 93,992 
Income tax expense5,356 10,303 10,900 10,903 
Net income$36,212 $57,474 $48,234 $83,089 
Net income per weighted-average common and common-equivalent share:
Basic$0.21 $0.33 $0.28 $0.48 
Diluted$0.21 $0.33 $0.28 $0.48 
Weighted-average common and common-equivalent shares outstanding:
Basic171,568 172,429 171,630 172,527 
Diluted172,733 173,622 172,699 173,791 
Cash dividends per common share$0.075 $0.070 $0.150 $0.140 













 
The accompanying notes are an integral part of these consolidated financial statements.
3

COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In thousands)
 
 Three-months EndedSix-months Ended
June 30, 2024July 2, 2023June 30, 2024July 2, 2023
 (unaudited)(unaudited)
Net income$36,212 $57,474 $48,234 $83,089 
Other comprehensive income (loss), net of tax:
Available-for-sale investments:
Net unrealized gain (loss), net of tax of $336 and $(584) in the three-month periods, and net of tax of $453 and $1,274 in the six-month periods, respectively
1,020 (1,706)1,379 3,720 
Reclassification of net realized (gain) loss on the sale of available-for-sale investments into current operations10 — 8 — 
Net change related to available-for-sale investments1,030 (1,706)1,387 3,720 
Foreign currency translation adjustments:
Foreign currency translation adjustments(10,247)(2,866)(26,403)(3,225)
Net change related to foreign currency translation adjustments(10,247)(2,866)(26,403)(3,225)
Other comprehensive income (loss), net of tax(9,217)(4,572)(25,016)495 
Total comprehensive income (loss)$26,995 $52,902 $23,218 $83,584 



















The accompanying notes are an integral part of these consolidated financial statements.
4

COGNEX CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
 
June 30, 2024December 31, 2023
 (unaudited) 
ASSETS
Current assets:
Cash and cash equivalents$176,626 $202,655 
Current investments, amortized cost of $114,177 and $132,799 in 2024 and 2023, respectively, allowance for credit losses of $0 in 2024 and 2023
112,449 129,392 
Accounts receivable, allowance for credit losses of $665 and $583 in 2024 and 2023, respectively
159,305 114,164 
Unbilled revenue1,858 2,402 
Inventories157,255 162,285 
Prepaid expenses and other current assets73,524 68,099 
Total current assets681,017 678,997 
Non-current investments, amortized cost of $272,613 and $250,790 in 2024 and 2023, respectively, allowance for credit losses of $0 in 2024 and 2023
266,214 244,230 
Property, plant, and equipment, net102,997 105,849 
Operating lease assets71,283 75,115 
Goodwill381,042 393,181 
Intangible assets, net98,548 112,952 
Deferred income taxes396,723 400,400 
Other assets6,260 7,088 
Total assets$2,004,084 $2,017,812 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable$22,617 $21,454 
Accrued expenses75,405 72,374 
Accrued income taxes20,827 16,907 
Deferred revenue and customer deposits40,529 31,525 
Operating lease liabilities9,405 9,624 
Total current liabilities168,783 151,884 
Non-current operating lease liabilities64,778 68,977 
Deferred income taxes233,798 246,877 
Reserve for income taxes28,826 26,685 
Non-current accrued income taxes— 18,338 
Other liabilities1,169 299 
Total liabilities497,354 513,060 
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, $.01 par value – Authorized: 400 shares in 2024 and 2023, respectively; no shares issued and outstanding
— — 
Common stock, $.002 par value – Authorized: 300,000 shares in 2024 and 2023, respectively; issued and outstanding: 171,501 and 171,599 shares in 2024 and 2023, respectively
343 343 
Additional paid-in capital1,061,597 1,037,202 
Retained earnings515,142 512,543 
Accumulated other comprehensive loss, net of tax(70,352)(45,336)
Total shareholders’ equity1,506,730 1,504,752 
Total liabilities and shareholders' equity$2,004,084 $2,017,812 

The accompanying notes are an integral part of these consolidated financial statements.
5

COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
 Six-months Ended
June 30, 2024July 2, 2023
 (unaudited)
Cash flows from operating activities:
Net income$48,234 $83,089 
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense26,266 29,153 
Depreciation of property, plant, and equipment10,472 8,177 
(Gain) loss on disposal of property, plant, and equipment— (8)
Amortization of intangible assets5,540 1,685 
Excess and obsolete inventory charges1,343 1,443 
Fair value adjustment on acquired inventories (Note 18)1,224 — 
Amortization of discounts or premiums on investments562 1,200 
Realized (gain) loss on sale of investments8 — 
Change in deferred income taxes(7,538)(14,158)
Change in operating assets and liabilities:
Accounts receivable(47,784)(24,420)
Unbilled revenue527 (104)
Inventories1,145 (4,981)
Prepaid expenses and other current assets(6,590)(5,289)
Accounts payable2,786 (989)
Accrued expenses6,234 (9,219)
Accrued income taxes(14,305)(13,684)
Deferred revenue and customer deposits9,374 3,160 
Other3,908 2,347 
Net cash provided by (used in) operating activities41,406 57,402 
Cash flows from investing activities:
Purchases of investments(269,860)(94,060)
Maturities and sales of investments266,090 115,761 
Purchases of property, plant, and equipment(8,571)(10,207)
Net payments related to business acquisitions (Note 18)(1,444)— 
Net cash provided by (used in) investing activities(13,785)11,494 
Cash flows from financing activities:
Net payments from issuance of common stock under stock plans(1,871)2,655 
Repurchase of common stock(19,879)(49,163)
Payment of dividends(25,756)(24,160)
Net cash provided by (used in) financing activities(47,506)(70,668)
Effect of foreign exchange rate changes on cash and cash equivalents(6,144)(2,117)
Net change in cash and cash equivalents(26,029)(3,889)
Cash and cash equivalents at beginning of period202,655 181,374 
Cash and cash equivalents at end of period$176,626 $177,485 









The accompanying notes are an integral part of these consolidated financial statements.
6

COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
 Common StockAdditional
Paid-in Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Total
Shareholders’
Equity
 SharesPar Value
Balance as of March 31, 2024171,662 $343 $1,047,643 $502,338 $(61,135)$1,489,189 
Net issuance of common stock under stock plans81 — 990 — — 990 
Repurchase of common stock(242)— — (10,540)— (10,540)
Stock-based compensation expense— — 12,964 — — 12,964 
Payment of dividends ($0.075 per common share)
— — — (12,868)— (12,868)
Net income— — — 36,212 — 36,212 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $336
— — — — 1,020 1,020 
Reclassification of net realized (gain) loss on the sale of available-for-sale investments— — — — 10 10 
Foreign currency translation adjustment— — — — (10,247)(10,247)
Balance as of June 30, 2024 (unaudited)
171,501 $343 $1,061,597 $515,142 $(70,352)$1,506,730 

 Common StockAdditional
Paid-in Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Total
Shareholders’
Equity
 SharesPar Value
Balance as of April 2, 2023172,601 $345 $992,690 $517,526 $(64,230)$1,446,331 
Net issuance of common stock under stock plans179 1 5,709 — — 5,710 
Repurchase of common stock(487)(1)— (24,984)— (24,985)
Stock-based compensation expense— — 12,574 — — 12,574 
Payment of dividends ($0.070 per common share)
— — — (12,069)— (12,069)
Net income— — — 57,474 — 57,474 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(584)
— — — — (1,706)(1,706)
Foreign currency translation adjustment— — — — (2,866)(2,866)
Balance as of July 2, 2023 (unaudited)
172,293 $345 $1,010,973 $537,947 $(68,802)$1,480,463 








The accompanying notes are an integral part of these consolidated financial statements.
7


COGNEX CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands)
 Common StockAdditional
Paid-in Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Total
Shareholders’
Equity
 SharesPar Value
Balance as of December 31, 2023
171,599 $343 $1,037,202 $512,543 $(45,336)$1,504,752 
Net issuance of common stock under stock plans375 — (1,871)— — (1,871)
Repurchase of common stock(473)— — (19,879)— (19,879)
Stock-based compensation expense— — 26,266 — — 26,266 
Payment of dividends ($0.150 per common share)
— — — (25,756)— (25,756)
Net income— — — 48,234 — 48,234 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $453
— — — — 1,379 1,379 
Reclassification of net realized (gain) loss on the sale of available-for-sale investments— — — — 8 8 
Foreign currency translation adjustment— — — — (26,403)(26,403)
Balance as of June 30, 2024 (unaudited)
171,501 $343 $1,061,597 $515,142 $(70,352)$1,506,730 

 Common StockAdditional
Paid-in Capital		Retained EarningsAccumulated
Other
Comprehensive
Loss		Total
Shareholders’
Equity
 SharesPar Value
Balance as of December 31, 2022
172,631 $345 $979,167 $528,179 $(69,297)$1,438,394 
Net issuance of common stock under stock plans628 2 2,653 — — 2,655 
Repurchase of common stock(966)(2)— (49,161)— (49,163)
Stock-based compensation expense— — 29,153 — — 29,153 
Payment of dividends ($0.140 per common share)
— — — (24,160)— (24,160)
Net income— — — 83,089 — 83,089 
Net unrealized gain (loss) on available-for-sale investments, net of tax of $1,274
— — — — 3,720 3,720 
Foreign currency translation adjustment— — — — (3,225)(3,225)
Balance as of July 2, 2023 (unaudited)
172,293 $345 $1,010,973 $537,947 $(68,802)$1,480,463 











The accompanying notes are an integral part of these consolidated financial statements.
8

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1: Summary of Significant Accounting Policies
As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles (GAAP). Reference should be made to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 for a full description of other significant accounting policies.
In the opinion of the management of Cognex Corporation (the "Company"), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments, adjustments related to losses and recoveries from the fire at the Company's primary contract manufacturer (Note 17), and financial statement reclassifications necessary to present fairly the Company’s financial position as of June 30, 2024, and the results of its operations for the three-month and six-month periods ended June 30, 2024 and July 2, 2023, and changes in shareholders’ equity, comprehensive income, and cash flows for the periods presented.
The results disclosed in the Consolidated Statements of Operations for the three-month and six-month periods ended June 30, 2024 are not necessarily indicative of the results to be expected for the full year.
NOTE 2: New Pronouncements
Accounting Standards Update (ASU) 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures"
The amendments in this ASU apply to all entities that are subject to Topic 740, Income Taxes. The amendments require public business entities to disclose specific categories in their rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. They also require all entities to disclose income taxes paid, net of refunds received, disaggregated by federal, state, and foreign taxes and by individual jurisdictions in which income taxes paid, net of refunds received, are equal to or greater than five percent of total income taxes paid. For public business entities, the amendments in this ASU are effective for annual periods beginning after December 15, 2024. The amendments in this ASU should be applied on a prospective basis. Management does not expect ASU 2023-09 to have a material impact on the Company's financial statements and disclosures.
Accounting Standards Update (ASU) 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures"
The amendments in this ASU apply to all public entities, including public entities with a single reportable segment, that are required to report segment information in accordance with Topic 280, Segment Reporting. The amendments require public business entities to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance. Additionally, the amendments require disclosure of significant segment expenses and other segment items, as well as incremental qualitative disclosures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The amendments in the ASU should be applied on a retrospective basis. We did not early adopt ASU 2023-07. Management does not expect ASU 2023-07 to have a material impact on the Company's financial statements and disclosures.

9

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 3: Fair Value Measurements
Financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
The following table summarizes the financial assets and liabilities required to be measured at fair value on a recurring basis as of June 30, 2024 (in thousands):
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)		Significant Other
Observable
Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Money market instruments$583 $— $— 
Corporate bonds— 316,342 — 
Treasury notes— 45,042 — 
Treasury bills— 26,394 — 
Asset-backed securities— 15,304 — 
Certificate of deposit— 7,601 — 
Sovereign bonds— 1,975 — 
Economic hedge forward contracts— 57 — 
Liabilities:
Economic hedge forward contracts— 152 — 
The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1.
The Company’s debt securities and forward contracts are reported at fair value based on model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset or liability, and are therefore classified as Level 2. Management is responsible for estimating the fair value of these financial assets and liabilities, and in doing so, considers valuations provided by a large, third-party pricing service. For debt securities, this service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the daily valuations. The Company's forward contracts are typically traded or executed in over-the-counter markets with a high degree of pricing transparency. The market participants are generally large commercial banks.
Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis
Non-financial assets, such as property, plant and equipment, operating lease assets, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record impairment charges related to non-financial assets during the three-month or six-month periods ended June 30, 2024 or July 2, 2023.
10

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 4: Cash, Cash Equivalents, and Investments
Cash, cash equivalents, and investments consisted of the following (in thousands):
June 30, 2024December 31, 2023
Cash$141,508 $183,242 
Treasury bills26,934 — 
Certificate of deposit7,601 — 
Money market instruments583 19,413 
Cash and cash equivalents176,626 202,655 
Corporate bonds103,654 124,851 
Asset-backed securities5,346 3,551 
Treasury notes2,449 — 
Sovereign bonds1,000 990 
Current investments112,449 129,392 
Corporate bonds212,688 183,965 
Treasury notes42,593 43,523 
Asset-backed securities9,958 15,763 
Sovereign bonds975 979 
Non-current investments266,214 244,230 
$555,289 $576,277 
Corporate bonds consist of debt securities issued by both domestic and foreign companies; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; treasury notes consist of debt securities issued by the U.S. government; and sovereign bonds consist of direct debt issued by foreign governments. All of the Company's securities as of June 30, 2024 and December 31, 2023 were denominated in U.S. Dollars.
Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $4,383,000 and $3,169,000 as of June 30, 2024 and December 31, 2023, respectively.
The following table summarizes the Company’s available-for-sale investments as of June 30, 2024 (in thousands):
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Current:
Corporate bonds$105,250 $— $(1,596)$103,654 
Asset-backed securities5,426 — (80)5,346 
Treasury notes2,500 (51)2,449 
Sovereign bonds1,001 — (1)1,000 
Non-current:
Corporate bonds217,537 73 (4,922)212,688 
Treasury notes43,362 — (769)42,593 
Asset-backed securities10,689 — (731)9,958 
Sovereign bonds1,025 — (50)975 
$386,790 $73 $(8,200)$378,663 
11

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the Company’s available-for-sale investments as of December 31, 2023 (in thousands):
Amortized
Cost		Gross
Unrealized
Gains		Gross
Unrealized
Losses		Fair Value
Current:
Corporate bonds$128,150 $— $(3,299)$124,851 
Asset-backed securities3,637 — (86)3,551 
Sovereign bonds1,012 — (22)990 
Non-current:
Corporate bonds189,326 506 (5,867)183,965 
Treasury notes43,654 82 (213)43,523 
Asset-backed securities16,773 — (1,010)15,763 
Sovereign bonds1,037 — (58)979 
$383,589 $588 $(10,555)$373,622 
The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of June 30, 2024 (in thousands):
 Unrealized Loss Position For: 
 Less than 12 Months12 Months or GreaterTotal
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
Corporate bonds$93,328 $(962)$203,251 $(5,556)$296,579 $(6,518)
Treasury notes22,107 (284)22,936 (536)45,043 (820)
Asset-backed securities9,599 (716)5,705 (95)15,304 (811)
Sovereign bonds— — 1,974 (51)1,974 (51)
$125,034 $(1,962)$233,866 $(6,238)$358,900 $(8,200)
The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of December 31, 2023 (in thousands):
 Unrealized Loss Position For: 
 Less than 12 Months12 Months or GreaterTotal
 Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses		Fair ValueUnrealized
Losses
Corporate bonds$30,770 $(359)$226,643 $(8,807)$257,413 $(9,166)
Treasury notes20,725 (153)2,441 (60)23,166 (213)
Asset-backed securities17,062 (1,049)2,252 (47)19,314 (1,096)
Sovereign bonds— — 1,968 (80)1,968 (80)
$68,557 $(1,561)$233,304 $(8,994)$301,861 $(10,555)
Management monitors debt securities that are in an unrealized loss position to determine whether a loss exists related to the credit quality of the issuer. When developing an estimate of expected credit losses, management considers all relevant information including historical experience, current conditions, and reasonable forecasts of expected future cash flows. Based on this evaluation, no allowance for credit losses on debt securities was recorded as of June 30, 2024 or December 31, 2023. Management currently intends to hold these securities to full value recovery at maturity.
12

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the Company's gross realized gains and losses on the sale of debt securities for the three-month periods ended June 30, 2024 and July 2, 2023 (in thousands):
Three-months EndedSix-months Ended
June 30, 2024July 2, 2023June 30, 2024July 2, 2023
Gross realized gains$6 $— $8 $— 
Gross realized losses(16)— (16)— 
Net realized gains (losses)$(10)$— $(8)$— 
Realized gains and losses are included in "Investment income" on the Consolidated Statements of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, were recorded in shareholders’ equity as accumulated other comprehensive income (loss).
The following table presents the effective maturity dates of the Company’s available-for-sale investments as of June 30, 2024 (in thousands):
<1 year1-2 Years2-3 Years3-4 Years4-5 Years5-8 YearsTotal
Corporate bonds$103,654 $59,638 $57,273 $61,410 $34,367 $— $316,342 
Treasury notes2,449 987 18,909 22,697 — 45,042 
Asset-backed securities5,346 4,060 — — 2,162 3,736 15,304 
Sovereign bonds1,000 975 — — — — 1,975 
$112,449 $65,660 $76,182 $84,107 $36,529 $3,736 $378,663 

NOTE 5: Inventories
Inventories consisted of the following (in thousands):
June 30, 2024December 31, 2023
Raw materials$97,031 $93,201 
Work-in-process4,344 5,747 
Finished goods55,880 63,337 
$157,255 $162,285 
NOTE 6: Leases
The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion. As of June 30, 2024, there were no options to terminate and twenty options to extend that were accounted for in the determination of the lease term for the Company's outstanding leases. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for outstanding leases as of June 30, 2024.
The total operating lease expense for the three-month and six-month periods ended June 30, 2024 was $3,474,000 and $7,037,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended June 30, 2024 were $3,406,000 and $6,614,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended June 30, 2024 was $57,000 and $139,000, respectively.
13

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The total operating lease expense for the three-month and six-month periods ended July 2, 2023 was $2,639,000 and $5,031,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 2, 2023 were $2,364,000 and $4,768,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 2, 2023 was $136,000 and $160,000, respectively.
Future operating lease cash payments are as follows (in thousands):
Year Ended December 31,Amount
Remainder of fiscal 2024$6,876 
202512,011 
20269,944 
20279,107 
20288,659 
20298,078 
Thereafter44,328 
$99,003 
The discounted present value of the future lease cash payments resulted in a total lease liability of $74,183,000 and $78,601,000 as of June 30, 2024 and December 31, 2023, respectively. The Company did not have any leases that had not yet commenced but that created significant rights and obligations as of June 30, 2024.
The Company leases a building in Singapore that serves as a distribution center for customers in Asia. The lease contains two components: an 88,000 square-foot premises that had a commencement date in June of 2023 and a second 27,000 square-foot premises that does not commence until the fourth quarter of 2025. Accordingly, the second component of the lease has not yet been recorded on the Consolidated Balance Sheets, nor has it created any significant rights and obligations as of June 30, 2024. This second lease component has an original term of eight years and the Company has the right and option to extend this term by an additional five years, commencing upon the expiration of the original term. Future payment obligations associated with this lease component total $13,231,000, none of which is payable in 2024 and which reflects the estimated extension period of five years. Future payment obligations related to this lease component are not included in the future operating lease cash payments table above.
The weighted-average discount rate was 5.7% for the leases outstanding as of both June 30, 2024 and December 31, 2023. The weighted-average remaining lease term was 10.2 and 10.5 years for the leases outstanding as of June 30, 2024 and December 31, 2023, respectively.
NOTE 7: Goodwill
The changes in the carrying value of goodwill were as follows (in thousands):
Balance as of December 31, 2023$393,181 
  Foreign exchange rate changes(12,139)
Balance as of June 30, 2024$381,042 
14

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 8: Intangible Assets
Amortized intangible assets consisted of the following (in thousands):
Gross
Carrying
Value		Accumulated
Amortization		Net
Carrying
Value
Customer relationships$70,394 $(7,753)$62,641 
Completed technologies58,612 (23,401)35,211 
Trademarks792 (176)616 
Non-compete agreements340 (260)80 
Balance as of June 30, 2024$130,138 $(31,590)$98,548 
 Gross
Carrying
Value		Accumulated
Amortization		Net
Carrying
Value
Customer relationships$75,965 $(5,352)$70,613 
Completed technologies62,123 (20,745)41,378 
Trademarks903 (50)853 
Non-compete agreements340 (232)108 
Balance as of December 31, 2023$139,331 $(26,379)$112,952 
As of June 30, 2024, estimated future amortization expense related to intangible assets was as follows (in thousands):
Year Ended December 31,Amount
Remainder of fiscal 2024$5,247 
202510,267 
20269,918 
20278,976 
20288,246 
20298,246 
Thereafter47,648 
$98,548 
NOTE 9: Warranty Obligations
The Company records the estimated cost of fulfilling product warranties at the time of sale based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or changes in circumstances impacting product quality become known that would not have been taken into account using historical data. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers and third-party contract manufacturers, the Company’s warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. An adverse change in any of these factors may result in the need for additional warranty provisions. Warranty obligations are included in “Accrued expenses” on the Consolidated Balance Sheets.
The changes in the warranty obligation were as follows (in thousands):
Balance as of December 31, 2023$4,244 
Provisions for warranties issued during the period2,120 
Fulfillment of warranty obligations(1,990)
Foreign exchange rate changes(20)
Balance as of June 30, 2024$4,354 
15

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 10: Commitments and Contingencies
As of June 30, 2024, the Company had outstanding purchase orders totaling $43,078,000 to procure inventory from various vendors. Certain of these purchase orders may be canceled by the Company, subject to cancellation penalties. These purchase commitments relate primarily to expected sales in the next twelve months.
A significant portion of the Company's outstanding inventory purchase orders as of June 30, 2024, as well as additional preauthorized commitments to procure strategic components based on the Company's expected customer demand, are placed with the Company's primary contract manufacturer for the Company's assembled products. The Company has the obligation to purchase any non-cancelable and non-returnable components that have been purchased by the contract manufacturer with the Company's preauthorization, when these components have not been consumed within the period defined in the terms of the Company's agreement with this contract manufacturer. While the Company typically expects such purchased components to be used in future production of Cognex finished goods, these components are considered in the Company's reserve estimate for excess and obsolete inventory. Furthermore, the Company accrues for losses on commitments for the future purchase of non-cancelable and non-returnable components from this contract manufacturer at the time that circumstances, such as changes in demand, indicate that the value of the components may not be recoverable, the loss is probable, and management has the ability to reasonably estimate the amount of the loss.
Various claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations.
NOTE 11: Derivative Instruments
The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. The Company enters into economic hedges utilizing foreign currency forward contracts with maturities that do not exceed approximately three months to manage the exposure to fluctuations in foreign currency exchange rates arising primarily from foreign-denominated receivables and payables. The gains and losses on these derivatives are intended to be offset by the changes in the fair value of the assets and liabilities being hedged. These economic hedges are not designated as hedging instruments for hedge accounting treatment.
The Company had the following outstanding forward contracts (in thousands):
June 30, 2024December 31, 2023
CurrencyNotional
Value		USD
Equivalent		Notional
Value		USD
Equivalent
Derivatives Not Designated as Hedging Instruments:
Singapore Dollar40,700 $30,041 39,700 $30,136 
Euro22,000 23,577 40,000 44,302 
Chinese Renminbi100,000 13,711 50,000 7,025 
Mexican Peso215,000 11,663 145,000 8,505 
Hungarian Forint2,180,000 5,883 2,240,000 6,466 
British Pound3,245 4,112 3,345 4,258 
Japanese Yen600,000 3,750 600,000 4,255 
Swiss Franc1,675 1,875 — — 
Canadian Dollar1,660 1,212 1,470 1,112 

16

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):
 Asset DerivativesLiability Derivatives
 BalanceFair ValueBalanceFair Value
 Sheet
Location		June 30, 2024December 31, 2023Sheet
Location		June 30, 2024December 31, 2023
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contractsPrepaid expenses and other current assets$57 $151 Accrued expenses$152 $106 

The following table presents the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with each counterparty (in thousands):
Asset DerivativesLiability Derivatives
June 30, 2024December 31, 2023June 30, 2024December 31, 2023
Gross amounts of recognized assets$57 $151 Gross amounts of recognized liabilities$152 $106 
Gross amounts offset— — Gross amounts offset— — 
Net amount of assets presented$57 $151 Net amount of liabilities presented$152 $106 

Information regarding the effect of derivative instruments on the consolidated financial statements was as follows (in thousands):
 Location in Financial StatementsThree-months Ended
Six-months Ended
 June 30, 2024July 2, 2023June 30, 2024July 2, 2023
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operationsForeign currency gain (loss)$876 $859 $631 $(612)
17

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 12: Revenue Recognition
The following table summarizes disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands):
Three-months EndedSix-months Ended
June 30, 2024July 2, 2023June 30, 2024July 2, 2023
Americas$85,162 $82,297 $168,297 $162,911 
Europe57,151 56,860 109,505 116,702 
Greater China54,410 72,351 84,459 105,351 
Other Asia42,569 31,004 87,828 58,672 
$239,292 $242,512 $450,089 $443,636 

The following table summarizes disaggregated revenue information by revenue type (in thousands):
Three-months EndedSix-months Ended
June 30, 2024July 2, 2023June 30, 2024July 2, 2023
Standard products and services$200,856 $194,944 $388,488 $385,727 
Application-specific customer solutions38,436 47,568 61,601 57,909 
$239,292 $242,512 $450,089 $443,636 
Costs to Fulfill a Contract
Costs to fulfill a contract are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $11,310,000 and $13,265,000 as of June 30, 2024 and December 31, 2023, respectively.
Accounts Receivable, Contract Assets, and Contract Liabilities
Accounts receivable represent amounts billed and currently due from customers which are reported at their net estimated realizable value. The Company maintains an allowance against its accounts receivable for credit losses. Contract assets consist of unbilled revenue which arises when revenue is recognized in advance of billing for certain application-specific customer solutions contracts. Contract liabilities consist of deferred revenue and customer deposits which arise when amounts are billed to or collected from customers in advance of revenue recognition.
The following table summarizes the allowance for credit losses activity for the six-month period ended June 30, 2024 (in thousands):
Balance as of December 31, 2023$583 
Increases to the allowance for credit losses100 
Write-offs, net of recoveries(19)
Foreign exchange rate changes1 
Balance as of June 30, 2024$665 
18

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following table summarizes the deferred revenue and customer deposits activity for the six-month period ended June 30, 2024 (in thousands):
Balance as of December 31, 2023$31,525 
Deferral of revenue billed in the current period, net of recognition30,777 
Recognition of revenue deferred in prior period(21,271)
Foreign exchange rate changes(502)
Balance as of June 30, 2024$40,529 
As a practical expedient, the Company has elected not to disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations for our contracts that have an original expected duration of less than one year. The remaining unsatisfied performance obligations for our contracts that have an original expected duration of more than one year, primarily related to extended warranties, are not material.
NOTE 13: Stock-Based Compensation Expense
Stock Plans
The Company’s stock-based awards that result in compensation expense consist of stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs"). In May 2023, the shareholders of the Company approved the Cognex Corporation 2023 Stock Option and Incentive Plan (the “2023 Plan”). The 2023 Plan permits awards of stock options (both incentive and non-qualified options), stock appreciation rights, RSUs, and PRSUs. Up to 8,100,000 shares of common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the 2023 Plan. In connection with the approval of the 2023 Plan, no further awards will be made under the Cognex Corporation 2001 General Stock Option Plan, as amended and restated (the “2001 Plan”), and the Cognex Corporation 2007 Stock Option and Incentive Plan, as amended and restated (the “2007 Plan”). With the approval of the 2023 Plan, the 10,610,800 shares of common stock subject to awards granted under the 2001 Plan and the 2007 Plan that were outstanding as of May 3, 2023 may become eligible for issuance under the 2023 Plan if such awards are forfeited, cancelled or otherwise terminated (other than by exercise) (the “Carryover Shares”). As of June 30, 2024, forfeitures, cancellations, and other terminations from the 2001 Plan and the 2007 Plan have resulted in 777,455 Carryover Shares, raising the authorized total shares that may be issued under the 2023 Plan to 8,877,455.
As of June 30, 2024, the Company had 5,958,000 shares available for grant under its stock plans. Stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date and generally vest over four or five years based upon continuous service and expire ten years from the grant date. RSUs generally vest upon three or four years of continuous employment or incrementally over such three or four-year periods. PRSUs generally vest upon three years of continuous employment and achievement of performance criteria established by the Compensation Committee of our Board of Directors on or prior to the grant date. Participants are not entitled to dividends on stock options, RSUs, or PRSUs.
19

COGNEX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Stock Options
The following table summarizes the Company’s stock option activity for the six-month period ended June 30, 2024:
Shares
(in thousands)		Weighted-
Average
Exercise
Price		Weighted-
Average
Remaining
Contractual
Term (in years)		Aggregate
Intrinsic
Value
(in thousands)
Outstanding as of December 31, 2023
9,008 $50.87 
Granted1,620 39.74 
Exercised(112)23.52 
Forfeited or expired(397)56.39 
Outstanding as of June 30, 2024
10,119