Why Did Cognex Soar 7.08%? Strong Q2 Earnings Beat

Cognex's stock surged 7.08% in pre-market trading on July 31, 2025, driven by strong second-quarter financial results that exceeded Wall Street's expectations.

Cognex reported a 4.1% year-over-year increase in revenue, reaching $249 million, which surpassed analyst estimates of $246.11 million. The company's adjusted EBITDA margin expanded to 20.7%, marking the first time it exceeded 20% since the second quarter of 2023. This improvement was driven by a 12% increase in adjusted EPS to $0.25 and a 3% reduction in operating expenses.

Cognex's strong financial performance was also highlighted by its robust cash generation, with operating cash flow up 54% and free cash flow increasing 74% to $40 million. The company's balance sheet remains strong, with $553 million in cash and no debt, providing financial flexibility for strategic investments or shareholder returns.

Looking ahead, Cognex expects revenue between $245-265 million for the third quarter of 2025 and adjusted EPS of $0.24-0.29. The company also announced a quarterly dividend of $0.08 per share and entered a strategic partnership in medical lab automation expected to generate additional revenue of $8-14 million in the third quarter of 2025.