CFO Dennis Fehr highlighted that factory automation, which accounts for about 75% of Cognex’s business, showed growth only in late 2025 with strong year-end Q4 demand. He noted improved customer sentiment, a tick-up in U.S. PMI and a better-than-expected semiconductor start to 2026, but remains cautiously optimistic pending more consistent data and seasonal factors.

Fehr explained that 2025 revenue of $994 million included a one-time commercial partnership, and after adjusting out roughly $17 million from portfolio optimization, Cognex’s starting baseline is about $965 million. He provided an illustrative 5%–7% growth range yielding $1.015 billion to $1.035 billion in 2026 revenue and reiterated a through-cycle growth framework of 10%–11%, comprising 4% market growth and 6%–7% penetration.

Cognex exited 2025 at a 20.7% adjusted EBITDA margin and is aiming for 25% by end-2026, assuming mid-single-digit revenue growth, $35 million to $40 million of run-rate cost reductions and continued portfolio optimization. Management has put in place defined workstreams, KPIs and ownership to drive efficiency and pricing improvements after COGS productivity shortfalls.

The OneVision Physical AI approach retrains edge models in the cloud and redeploys them on devices to meet manufacturing demands for high accuracy and low latency. Fehr sees AI-driven penetration as a key driver of high-single-digit packaging growth and a defense against low-cost, cloud-dependent competitors, while noting semiconductor penetration remains high but timing of cycle acceleration is uncertain.