CGNX - Cognex Corporation (CGNX) Q4 2023 Earnings Call Transcript

2024-02-15 14:27:10 ET

Cognex Corporation (CGNX)

Q4 2023 Earnings Conference Call

February 15, 2024, 08:30 AM ET

Company Participants

Nathan McCurren - Head-IR

Rob Willett - President and CEO

Paul Todgham - CFO

Conference Call Participants

Andrew Buscaglia - BNP Paribas

Jim Ricchiuti - Needham & Company

Jacob Levinson - Melius Research

Joseph Donahue - Baird

Joe Ritchie - Goldman Sachs

Piyush Avasthy - Citi

Jairam Nathan - Daiwa

Katie Fleischer - KeyBanc Capital Markets

Presentation

Operator

Greetings, and welcome to the Cognex Fourth Quarter 2023 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Nathan McCurren, Head of Investor Relations. Thank you. Please go ahead.

Nathan McCurren

Thank you, Donna. Good morning, everyone. Thank you for joining us. With me on today's call are Rob Willett, Cognex' President and CEO; and Paul Todgham, our CFO. Our results were released earlier today.

The press release, annual report on Form 10-K and a newly introduced quarterly earnings presentation are available on the Investor Relations section of our website. Today's earnings materials and statements we will make during this call contain forward-looking statements and are based upon information we believe to be true as of today. All forward-looking statements are subject to risks and uncertainties that are described in our SEC filings, including our most recent Form 10-K filed this morning for 2023.

Before I hand it over to Rob and Paul to discuss the results and outlook, I want to spend a minute explaining changes to our reporting metrics that you will notice. As we previewed with you on last quarter, after the acquisition of Moritex in the fourth quarter, we now have a more material level of acquisition costs and amortization of intangible assets. As our financial results have begun to be more impacted by these nonrecurring and purchase accounting charges, we've made changes to our non-GAAP measures to exclude those charges from the reporting of our adjusted earnings figures. This change in methodology applies to our calculation of non-GAAP operating expense, operating income and net income per share.

We have also introduced and we expect to be reporting on and speaking to more frequently adjusted gross margin, adjusted EBITDA and free cash flow. These changes and the new non-GAAP measures referenced on our call today are clearly defined with a historical look back to prior period impacts in the earnings presentation posted to our website this morning. You can also see a reconciliation of certain items from GAAP to non-GAAP in our earnings press release. We want to emphasize that our previously communicated long-term financial targets of 15% revenue growth, mid-70% gross margin and over 30% operating margin are unchanged and should be evaluated on an adjusted basis, excluding these nonrecurring and purchase accounting charges.

Next, Rob will discuss our fourth quarter and 2023 results, Paul with then provide additional detail on the financials and Rob will conclude with our outlook and a discussion on how our execution of strategic initiatives in 2023 sets us up for the future growth....

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