Fourth-Quarter and Full-Year Financial and Operating Highlights
Fourth-quarter revenue grew 10% year over year or 9% on a constant-currency basis.
Full-year revenue grew 9% year over year or 8% on a constant-currency basis; excluding the one-time benefit from the commercial partnership with a medical lab automation channel partner (the "Commercial Partnership" or "CP"), revenue grew 7% year over year.
Fourth-quarter operating margin of 14.0%; Adjusted EBITDA margin of 22.7%, up 420 basis points year over year, and the sixth consecutive quarter of expansion.
Full-year operating margin of 16.3%; Adjusted EBITDA margin of 21.5%, up 440 basis points year over year and up 360 basis points to 20.7% excluding the Commercial Partnership, surpassing 20% execution milestone ahead of plan.
Fourth-quarter net income per diluted share was $0.19; Adjusted diluted earnings per share were $0.27, an increase of 35% year over year, the sixth consecutive quarter of double-digit growth.
Full-year net income per diluted share was $0.68; Adjusted diluted earnings per share were $1.02, an increase of 38% year over year.
Returned $206 million to shareholders during the year, including $151 million in share buybacks.
Completed a comprehensive strategic portfolio review and began exiting approximately $22 million of non-core, no‑growth or low‑margin revenue, sharpening focus and improving mix.
Continued operating model optimization is expected to deliver an additional $35 to $40 million in annualized cost reductions by the end of 2026.
"2025 marked a return to profitable growth for Cognex, with constant‑currency revenue growth of 8% and adjusted EPS growth of 38%," said Matt Moschner, President and CEO. "We made significant progress against each of our strategic objectives, including advancing our technology leadership in AI-enabled industrial machine vision, raising the bar on our end-to-end customer experience, and making steady progress toward our customer growth objective."
Mr. Moschner continued, "We are also taking meaningful steps to optimize our portfolio, exiting approximately $22 million of non‑core, no‑growth or low‑margin revenue, and continuing to transform our operating model, which is expected to deliver an additional $35 to $40 million in annualized cost reductions by the end of 2026. We believe these changes, coupled with our ongoing salesforce transformation, will help maintain growth, expand margins, and allow for continued investment in new AI technologies and customer experience capabilities necessary to deepen our competitive advantage."
Dennis Fehr, CFO, added, "We believe our 2025 results again demonstrated our ability to drive profitable growth and the earnings power of our model. Adjusted EBITDA margin, excluding the one-time Commercial Partnership benefit, expanded 360 basis points year over year to 20.7%. We surpassed our first execution milestone of 20% a full year ahead of plan driven by focused execution and strong cost discipline. Building on the actions we've already completed, our next milestone is a 25% Adjusted EBITDA margin, targeted on a run‑rate basis by the end of 2026, as we focus on creating long‑term value for shareholders through sustainable margin expansion."
Financial Performance Highlights for the Fourth Quarter(Dollars in millions, except per share amounts)
Three-months ended
December 31, 2025
December 31, 2024
Y/Y Change
Revenue
$252
$230
+10 %
Operating Income
$35
$31
+14 %
% of Revenue
14.0 %
13.4 %
+60 bps
Adjusted EBITDA*
$57
$42
35 %
% of Revenue
22.7 %
18.5 %
+420 bps
Net Income per Diluted Share
$0.19
$0.16
+18 %
Adjusted EPS (Diluted)*
$0.27
$0.20
+35 %
*Adjusted EBITDA and Adjusted EPS (Diluted) include non-GAAP adjustments. A reconciliation from GAAP to non-GAAP metrics is provided in this news release.
Revenue was $252 million, compared with $230 million in the fourth quarter of 2024, an increase of 10%. Excluding the impact of foreign currency exchange (FX), revenue increased 9% compared to the prior year. The year-over-year increase in revenue was driven by increased year-end spending across many of our Factory Automation end markets, while Logistics continued to deliver steady growth.
Gross margin was 65.7% compared to 68.7% in the fourth quarter of 2024. Adjusted gross margin was 71.6% compared to 69.4% in the fourth quarter of 2024, an increase of 220 basis points. The year-over-year increase was driven by volume and favorable mix slightly offset by tariffs.
Operating expenses were $131 million compared to $127 million in the fourth quarter of 2024, an increase of 3%. Adjusted operating expenses were $128 million, compared to $122 million in the fourth quarter of 2024, an increase of 5%. On a constant-currency basis, Adjusted operating expenses increased 2% year over year, reflecting ongoing cost discipline offset by incentive compensation headwinds in the quarter.
Operating income was $35 million compared to $31 million in the fourth quarter of 2024, an increase of 14%. Operating margin was 14.0% compared to 13.4% in the fourth quarter of 2024, an increase of 60 basis points. Adjusted operating margin was 20.9% compared to 16.2% in the fourth quarter of 2024, an increase of 470 basis points.
Adjusted EBITDA was $57 million compared to $42 million in the fourth quarter of 2024, an increase of 35%. Adjusted EBITDA margin was 22.7% compared to 18.5% in the fourth quarter of 2024, an increase of 420 basis points year over year, the sixth consecutive quarter of year-over-year expansion. The expansion was driven by revenue growth and disciplined cost management.
Net income of $33 million compared to $28 million in the fourth quarter of 2024, an increase of 15%. Adjusted net income was $46 million compared to $35 million in the fourth quarter of 2024, an increase of 32%.
Net income per diluted share was $0.19 compared to $0.16 in the fourth quarter of 2024, an increase of 18%. Adjusted diluted earnings per share were $0.27 compared to $0.20 in the fourth quarter of 2024, an increase of 35%, the sixth consecutive quarter of double-digit year-over-year growth.
Financial Performance Highlights for the Year(Dollars in millions, except per share amounts)
Twelve-months ended
December 31, 2025
December 31, 2025
December 31, 2024
Y/Y Change
Y/Y Change
As Reported
Excluding CP
As Reported
As Reported
Excluding CP
Revenue
$994
$982
$915
+9 %
+7 %
Operating Income
$163
$152
$115
+41 %
+32 %
% of Revenue
16.3 %
15.5 %
12.6 %
+370 bps
+290 bps
Adjusted EBITDA*
$214
$204
$156
37 %
+31 %
% of Revenue
21.5 %
20.7 %
17.1 %
+440 bps
+360 bps
Net Income per Diluted Share
$0.68
$0.63
$0.62
+10 %
+2 %
Adjusted EPS (Diluted)*
$1.02
$0.97
$0.74
+38 %
+31 %
*Adjusted EBITDA and Adjusted EPS (Diluted) include non-GAAP adjustments. A reconciliation from GAAP to non-GAAP metrics is provided in this news release.
Revenue was $994 million, compared with $915 million in 2024, an increase of 9%. Excluding the impact of foreign currency exchange (FX), revenue increased 8% compared to the prior year. Excluding the one-time benefit from the Commercial Partnership, revenue grew 7% year over year.
Gross margin was 66.9% compared to 68.4% in 2024. Adjusted gross margin was 68.9% compared to 69.3% in 2024, a decline of 40 basis points. The year-over-year decline was primarily due to less favorable industry mix, and, to a lesser extent, the impact from tariffs, partially offset by the one-time benefit from the Commercial Partnership.
Operating expenses were $503 million compared to $511 million in 2024, a decrease of 2%. Adjusted operating expenses were $491 million, compared to $498 million in 2024, a decrease of 1%. On a constant-currency basis, Adjusted operating expenses declined 2% year over year, reflecting ongoing cost discipline offset by incentive compensation.
Operating income was $163 million compared to $115 million in 2024, an increase of 41%. Operating margin was 16.3% compared to 12.6% in 2024, an increase of 370 basis points. Adjusted operating margin was 19.6% compared to 14.9% in 2024, an increase of 470 basis points.
Adjusted EBITDA was $214 million compared to $156 million in 2024, an increase of 37%. Adjusted EBITDA margin was 21.5% compared to 17.1% in 2024, an increase of 440 basis points. Excluding the one-time benefit from the Commercial Partnership, Adjusted EBITDA of $204 million increased 31% year over year and Adjusted EBITDA margin of 20.7% increased 360 basis points year over year driven by revenue growth and disciplined cost management.
Net income of $114 million compared to $106 million in 2024, an increase of 8%. Adjusted net income of $172 million compared to $127 million in 2024, an increase of 35%.
Net income per diluted share was $0.68 compared to $0.62 in 2024, an increase of 10%. Adjusted diluted earnings per share were $1.02 compared to $0.74 in 2024, an increase of 38%. Excluding the one-time benefit from the Commercial Partnership, Adjusted diluted earnings per share of $0.97 increased 31% year over year.
Balance Sheet and Cash Flow Highlights
As of December 31, 2025, Cognex's financial position remained strong, with $642 million in cash and investments and no debt.
During the fourth quarter, Cognex generated $75 million of cash from operating activities compared to $51 million in the fourth quarter of 2024, an increase of 46%. During 2025, Cognex generated $246 million of cash from operating activities compared to $149 million in 2024, an increase of 65%.
During the fourth quarter, Cognex generated Free Cash Flow (FCF) of $72 million compared to $49 million in the fourth quarter of 2024, an increase of 47%. During 2025, Cognex generated FCF of $237 million compared to $134 million in 2024, an increase of 77%. Full-year FCF conversion rate was 207% of net income and 138% of Adjusted net income.
During the fourth quarter, Cognex repurchased $25 million of its common stock and paid $14 million in dividends to shareholders. During 2025, Cognex repurchased $151 million of its common stock and paid $55 million in dividends to shareholders.
As of December 31, 2025, Cognex had $115 million remaining on its $500 million share repurchase authorization. On February 11, 2026, Cognex's Board of Directors approved an increase of $500 million to the existing share repurchase authorization. Cognex expects to execute repurchases opportunistically, subject to market conditions and other uses of capital.
Dividend
On February 11, 2026, Cognex's Board of Directors declared a quarterly cash dividend of $0.085 per share. The dividend is payable on March 12, 2026, to all shareholders of record at the close of business on February 26, 2026.
First-Quarter 2026 GuidanceCognex issued first-quarter 2026 guidance; details are summarized in the table below.
(Dollars in millions, except per share amounts)
Q1 2026 Guidance
Q1 2025 Results
Y/Y Change*
Revenue
$235 - $255
$216
+13 %
Adjusted EBITDA Margin1
19.0% - 22.0%
16.8 %
+370 bps
Adjusted Earnings Per Share (diluted)1
$0.22 - $0.26
$0.16
+50 %
*At the midpoint of guidance.
1Cognex has provided the forward-looking non-GAAP measures of adjusted EBITDA margin, and adjusted earnings per share (diluted), but cannot, without unreasonable effort, forecast such items to present or provide a reconciliation to corresponding forecasted GAAP measures. These include special items such as reorganization charges, acquisition and integration charges, and amortization of acquisition-related intangible assets, all of which are subject to limitations in predictability of timing, ultimate outcome and numerous conditions outside of Cognex's control. Additionally, these items are outside of Cognex's normal business operations and not used by management to assess Cognex's operating results. Cognex believes these limitations would result in a range of projected values so broad as to not be meaningful to investors. For these reasons, Cognex believes that the probable significance of such information is low. Information with respect to special items for certain historical periods is included in the section entitled "Reconciliation of Selected Items from GAAP to Non-GAAP." In Q1 2025 the GAAP operating margin was 12.1% and GAAP earnings per share (diluted) were $0.14.
Analyst Conference Call and Simultaneous Webcast
Cognex will host a conference call on February 12, 2026, at 8:30 a.m. Eastern Daylight Time (EDT). The telephone number is (877) 704-4573 or (201) 389-0911 if outside the United States.
A real-time audio broadcast of the conference call or an archived recording, together with a slide presentation, will be accessible on the Events & Presentations page of the Cognex Investor website: www.cognex.com/investor.
