Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 7 of last 7 quarters
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Cognex's strong quarter and raised guidance underscore the accelerating adoption of AI-enabled machine vision across manufacturing, particularly in semiconductor and electronics, which are directly tied to AI infrastructure investment. The company's growing data center supply chain business, though still small, is a direct beneficiary of the AI buildout, with potential for significant expansion as AI infrastructure manufacturing scales. Cognex's ability to inspect complex server components and racks positions it as a key enabler of quality and throughput in AI infrastructure production.
Cognex delivered record quarterly revenue of $291.3M, up 17% YoY, with adjusted EBITDA margin expanding 1,150 bps to 32.2% and adjusted EPS up 80% to $0.45. Growth was led by semiconductor, electronics, and packaging, with logistics marking its 10th consecutive quarter of double-digit growth. The company added ~4,500 new customers year-to-date, and data center revenue grew over 30% YoY, though still low single-digit as a percentage of total. Free cash flow was $68M in the quarter, with trailing 12-month conversion at 114%.
Management raised full-year 2026 guidance, now expecting revenue of $1.13B-$1.15B (15% growth at midpoint, 16% ex-commercial partnership), adjusted EBITDA margin of 29%-31% (850 bps expansion at midpoint), and adjusted EPS of $1.64-$1.68 (63% growth at midpoint). They raised end-market outlooks for logistics (high single-digit), packaging (double-digit), electronics (double-digit), and semiconductor (double-digit), while maintaining automotive at flat to low single-digit. Q3 guidance implies revenue of $300M-$320M (12% growth at midpoint, 17% ex-partnership), adjusted EBITDA margin of 32%-35%, and adjusted EPS of $0.50-$0.54. Management emphasized strong demand visibility into H2, but noted memory market conditions as a risk and a shift from cost reduction to productivity optimization, with ~$35M annualized net cost reductions expected by end of 2026.
“Q2 was another strong quarter for Cognex and further evidence that our strategy is driving results. We delivered record quarterly revenue, significant adjusted EBITDA margin expansion and strong double-digit adjusted EPS growth.”
on Q2 performance
“We are sizing it today as low single digits of revenue with a growth path right now of 30%. And so you can kind of extrapolate that, whether that accelerates or decelerates, we're not prepared to say full potential.”
on Data center opportunity
“We now expect approximately $35 million of annualized net cost reductions by the end of 2026. This is closer to the lower end of our originally $35 million to $40 million range, reflecting a balanced approach of disciplined cost management in times of strong growth.”
on Cost reduction
Can you expand on the data center opportunity? What's creating the opportunity for you now?
Matt explained that Cognex has served data centers for years, but the aggressive build-out of AI-oriented facilities is driving demand across three areas: component manufacturing, assembly into racks, and deployment/maintenance. Currently, most revenue comes from quality inspection of components like connectors, PCBs, and metal enclosures. He noted the technology, especially OneVision, is now capable of solving these complex inspections, and the market is still nascent with potential for multi-year growth.
At the Automate show, you noted a sense of urgency about automation. What demos generated the strongest customer reactions and how is that translating into pipeline and deal ASP?
Matt said the show's energy reflected manufacturers' realization that automation is now table stakes. The strongest reactions were to complex PCBA inspections using the In-Sight 3900 and a demo on the 6900 that detected nuanced defects on variable art with no incremental training. These AI-driven 2D inspection demos are where Cognex's AI advantage is most pronounced, and they are seeing strong demand and pricing commensurate with ROI.
You're halfway toward the 9,000 customers added in 2025. What KPIs can you share on win rates or conversion speed? And where are you on hiring additional sales folks?
Matt said they are happy with new customer adds, especially in packaging, and are shifting focus to land-and-expand within existing accounts. He noted they are investing in data to identify high-potential accounts and are revitalizing channel partners to drive productivity rather than continuing to grow the direct sales force. Dennis added that 2026 is about growing with existing resources to deliver strong leverage.