Cognex (CGNX) 18 Feb 222021 Q4 Earnings call transcript

Greetings, and welcome to the Cognex Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded I would now like to turn this conference over to your host, Ms. Susan Conway, Senior Director of Investor Relations. ma'am. you, Thank

begin. You may

We'll about Good conference earnings our evening, contain President our are you. Financial Welcome CEO; then remarks, we'll open questions. the everyone. available With us earnings I'd our Investor the Officer. remind Chief call. our Cognex's Paul year-end with are prepared financial website report Both annual and our Relations and Thank Todgham, to start you to Rob and for and information on of at on detailed www.cognex.com/investor. call that section like release results. Form Willett, XX-K

During business the it we use trends. think understand will is it measure a non-GAAP better call, we believe if we may to help or investors, results useful them financial our

see that GAAP of in during two may can true forward-looking a exhibit in as release. any from of made today. this statements are we the upon we non-GAAP or we be items of release certain information to to earnings that the based believe make call earnings Any reconciliation You

from can materially results change, actual or projected may and differ things anticipated. However, those

Form For that risk list you recent should a we to SEC filings, our most detailed filed our tonight. factors, including refer of XX-K

the over turn Rob. I'll Now call to

annual And of Sue. revenue reported of the for tonight joining first Thanks, results everyone. thank billion us. the Hello, in Cognex a surpassed for for you I'm history. our $X proud XXXX. time We

all of for major categories we was largest industries. products accurate and time earnings Cognex to net for of vision a market XXXX. and products from many the quality implemented purchase. in most records range all per worldwide product first Demand the XXXX. from end Growth strong Logistics Manufacturers our annual new in wide ensure of income the set also regions, so and was continuing share We operations. for geographic delivery machine came

brick and in traditional Cognex's of throughput reductions. year and enable to retailers industry XX% automation higher XX% after sales. from XX% and on logistics leading the average. two grew and our XXXX. to grew of increased total revenue omnichannel sales, more faster XXXX, approximately compete struggling approximately in invested representing company represented After than for E-commerce year. revenue in online retailers products Now company revenue, declining of automotive cost by approximately investments consecutive mortar effectively years Also, Automotive

vision to reach XX% new with as accounts. serve work including strong we products. than at line concentration markets grow company year-on-year. year-on-year. customers manufacturing related One that consumer because making standing applications these XXXX, for lines, in XXXX competitor’s to was all incremental production large for in increased and regions being not both strength average or and electric consumer This about XX% in long to number battery market Automotive semi, in and all suddenly the notable across for Our total capacity region. did electronics. market. bring Revenue share total, technologies, and smartphone presence in in of company easy existing on Cognex investment focus more that roughly medical been we've seek to Otherwise, customers technologies represented increasing related new XXXX. rather with is collectively for of products big Together vehicles growth revenue win other the almost to we of the upgrading XXXX investing new demand encouraging third remote for grew in largest investments our the given Asia, making represented products. market meet modestly in after grew customers industries our increase industries XXXX one in it was Unlike smaller machine It decreased sales and

premiums two due were that XXXX, to delivery procure delivery XXXX, customers during expedited intense significant brokers, for substantially we've compared components financial through months by is One, prioritizing company that to of key resulted After in been had we're downward metric, in most we've good pleased The news global what end. added for keeping this on margin major in and gross of to our costs I'm first appreciate Turning XXXX. was value, paid with There year challenging improved very the XX% many them. in customer factors XX% time primary a chip report to our through engagement in products incremental doing that intention, pressure. freight. that conditions, to shortages times

slightly easier but to making from our in we to margin. of a be logistics, business machine market margin chose our high revenue supply overall long term. is believe have logistics cost was customers worthwhile to macro standardized percentage share, e-commerce to business labor for on transitioning we long have easy that also these dilutive to profits in winning stages last a to We're product We solutions the XXXX standard our second technology. vision and use partners running group quickly who at electronics it's DataMan margin our gross reading in for to greater some easily leadership more new a reasserts developments We're progress for makes are our effectively. we that XXXX able widespread us Overall, over in time of strategic higher industries. gross vision the of logistics to built customized on and lower developing launched in other as year. chain a in undertake is vision margins trends Delivering a Cognex of adopting commitment as gross logistics an good devices, operations. The performance value XD. XXXX, we and it sales solutions scale of enable the list comparatively impacted deploy logistics remarkable and XD-LXXXX factor $XXX medical engineering to the to handheld significant technology XD. product report of for see proposition deploy. true industry the a these Cognex focus tools that experienced manufacturing early and as automotive, and of such This integrity integrator us products some barcode will support, projects We logistics believe great customers We from in that keep a Cognex. The generation logistics still in million technology. of get the development, believe against and and underscore leading that provide effectively up In-Sight vision forefront Cognoids The us shortages, next competitors further as our the XD positions growth machine

a together in quickly The technology learning Cognex our powerful taking helps issues speed to shorter patented corrective software This significantly XXX aggregation, volume of actions. large many the mirror VisionPro customers a a barcodes pallet packaging is distances, expands and in pharmaceutical rules of of field reading large deep customers easily warehouse. of deployed such enables performance platform of across XX Edge software barcodes understand environment. on facilities, at as Cognex reading new steerable for high vision the DataMan more and across numbers of identifying such development in and Intelligence working high devices Our large invaluable based view, a use view barcode readers. fields

alone. manual Deep capabilities blemishes, measurement software time for expands VisionPro inspections. We also other for scratches, Learning further learning Cognex's the enable of Line the rules to Smart cracks deep of Cognex line combines Cognex vision defects. Smart introduced with accuracy XD Deep quickly that solve based flexibility the high challenging complex Tool vision of precision high applications to Technologies Learning X.X automation consuming and of detection

grew headcount Cognex leading the XXXX. hired manufacturers XXX by our approximately these employees to logistics customers and company-wide in are industry world. Many of on, Moving to Cognoids salesnoids, around sell products

understand further clarity help understanding salesforce.com our the path our of to implemented and We improve successfully billion platform revenue. customers. in productivity our scale our management new business we with greater us dollars annual to will customer sales on next Finally, believe relationship deepen and

details hand I'll call over Paul the Now, quarter. for of the to

everyone. ago, growth automotive, Electronics Rob. was new COVID our with QX over worth XXXX, year XX%. full Consumer products, in record. above and semi QX headwind of Gross declined to two in annual Revenue a quarter pleased revenue hello of range for quarter consistent above years a an supply for expected logistics, environment. compared strong top X% consumer was fourth million, ago, period food represents noting when for and of expected QX. the drivers XX% of growth a was of primarily XX% and Thanks, were a spend. as was to QX were $XXX the the a revenue the and year XXXX, timing margin beverage increase of deliver and for difficult We to And that which It's pre due

variable to year-on-year QX of more travel revenue a an in in to marketing with it's XXXX, in XX% of QX of activities, along expenses. XX% costs. incentive QX prior supply higher in than offset expenses The incremental more and and unfavorably made On compensation, of XXXX. chain margin favorable engineering over lower XXXX, is compares we margin than investments higher operating is year and higher headcount, due and the Operating sales increased increases decline a these costs. was supply Comparing line in near basis, gross quarter. adding this with decline revenue to operating quarter. and While improvement the prior was mix both incurring were higher XXXX, range. costs our and future with over expenses by drive we expenses, to growth. are QX due The year guidance by in XX% term X% the These due which on Operating X% increased is sequential situation, were sequentially, delaying and

comparisons of expense recorded of tax net periods the $XX,XXX, compared items million all In for make in $XX.X of XXXX. in items QX XXXX, QX combined tax a discrete we benefits of difficult. to and net million QX in Regarding XXXX, $X.X discrete provision, of that

basis, QX to rate our quarter items, $X.XX for QX share a $X.XX per and restructuring in a XX%. again QX versus QX, and the other XXXX, QX in discrete of XX% XXXX, to due compared with tax earnings per to QX of with reflect tax that QX sake. prior of XXXX revision $X.XX fourth XXXX. of in QX made XX% full removed in and comparison's compared XXXX excluding discrete in was That's Reported were On in Excluding estimate $X.XX charges were of and in tax of items in in The of in XX% effective earnings rate a share the $X.XX $X.XX XXXX. compared was we QX decrease tax non-GAAP XXXX we XXXX. of of year X% and

Asia from change largest the in contribution year-on-year delivered increased from QX to low increased low year-on-year. by among geographic and dollars other industries. in logistics the a Revenue to digits at Americas from revenue absolute perspective, also growth the revenue for Looking due by digits double double

semi rates. point a revenue Continued from offset industries products the in electronics. in by market consumer increased revenue automotive, two growth and In digits, Growth was reduction from logistics other a currency by offset exchange broad percentage broader market Europe, lower electronics. excluding from automation logistics, and in Europe's factory automotive, consumer revenue in decline mid-single consumer

Turning $XXX balance to million the debt. strong and in cash have with continues Cognex position sheet. to no cash a and investments

continue balance $XXX stock in QX which than end $XXX Cognex million. QX QX deployed We XXXX, have flexibility be XXXX the our stock, single a amount stock quarter. maintaining pace, million is While buy opportunistic buy We brought below buyback to That of for stock to in of in this more regular at a higher the while were repurchase to buyback because it the total activity. highest with opportunistic. more to we to to XXXX plan back we is is spent

the and resilience business. our costs has at global year. in over market Our in time increased share level win past And We're components we're so support higher to at of constraints. a inventory balance of supply to chain doing substantially customers bringing a elevated underwrite

Now, I'll turn Rob. to the over back call

Thank you, Paul.

be and reported to opportunities growth company we're for $XXX between next a low that the believe move $XXX we Cognex sequential represents about which Let's record our digit year XXXX. see for double a will And We million quarter excited the first guidance. basis. in on in XXXX. million, revenue

our reduce We from in particularly That substantial excellent suppliers, is in Cognoids seeing we're expect helping the improvement us to thanks higher delivery market. relationships somewhat logistics times. Also, the our backlog. our with revenue perseverance of

for QX. the We which in the margin expect in is line be low will gross gross XX% in reported margin with range, we QX

remains However, that XX% quarter you margin higher in want we range in target is year's and mid range. below the revenue the our chain reported to supply first due that mix. margin gross costs to last gross I remind

a on will in plans XXXX. flat during by approximately XXXX engineering our relevant incentive be be basis. compensation investments will and offset expenses of roughly sequential incremental made We operating goals performance we expect a for We reset headcount with believe the sales

will tax Lastly, excluding be the we expect discrete tax XX% rate effective items.

call Now, we Operator, will open please for ahead. the go questions.

first Pokrzywinski Our to with line Stanley. of Instructions] Morgan comes [Operator question Josh

You may proceed with question. your

Good evening, folks.

Josh. Hi,

logistic on me the question side. the For

So large a a you year, integrator grew XX% and think XX%. well last grew partner I results about probably

or So there that ability terms and of the same an given of were know Understand is things integration. clearly that and deliver. way intensive anyway, a flows gap of reliable kind of the that bottlenecks being do penetration since agree year you how had I what of sort kind last in guys you it's as about, to But would going and that forward? you good story, assessment handicap market are of guys in an other integration talking of about some can as a flat job Is 'XX ebbs outgrow that one to like the labor, thinking partner that's sort of you outgrowth that with the number market? sort

Right, think so our broadening, right. market is I logistics

our has of end customer And growth as and our to half our of lot new the a of see and broadening represented, business logistics overall, quickly so customers more outpacing different business have large but the well. we from that geographies about you'll business we're lot reading user growing customer. that So is our reach of a applications a disclosures, as rest

growth in Asia America we outpaced, market. In in saw Americas the the and growth our fact,

So, we marketplace. undercurrent a in very of feel growth this still strong potential

I we're would our I goal be think our to and for achieve although we expect don't stretch full stretch see cards, that the I the of us growth give think for as on the perhaps XX% we likely a However, last logistics. think we year, to achieve kind to do even in don't year. saw moderate we it guidance that don't growth

on is some integrate going of think other and something large where there's implementation by think going and is referenced marketplace, question your I chip of on supply getting things. because probably I shortages a chain delayed which challenges in you're referencing the the areas, that's

know lack And of some going we it down go labor of of being affect revenue growth seek over But think more overall slowing as the say, growth or of technology, know growth I and excellent So our also other part kind implement to on I being continue run, a which to think to has as you that but certainly our business. accretive there's I much and also, for more growth marketplace. to rates parts overall, vision all been applications reading, are on. long would players potential. logistics vectors are we expect we in the business strong and about barcode to so see were optimistic, of logistics whether we logistics be there our

please to your of feel my answer follow-up. So question, Josh, to kind that's overall

And unusual sort year. circumstances. I maybe mean, the I can down guess, an on appreciate side, all appreciate think of I the it. then consumer That's we electronics I helpful.

So content on growth model a a for sure. This here. one there's story hand, is

the electronics other hand, whole, think as consumer the On are sector looking I a in little inventories high. maybe a

folks So overhang still start sort I growth those this swing kind are for bias maybe weighing that we of pendulum cautious your to the flows on year? their an don't Or how investment? into customers’ back given inventory to memory? know Can of

can you us kind our indication year to of studied speaking, technologies and like many that for would of be swing think And new investment a know coming it and of Cognex the years models I view and earnings around in shaping electronics of good business the we early a those, in you market. how it's over give really give see up, to new too Generally better call, next right. tick-tock lines that year a little can we expect new who've there a that. to

We the in swings, we'll is talk, saw And we next as and as how continue of we very feel kind confident how when there'll challenges And sort to be -- this like long XXXX. see drivers strong more you of over know, of year next term. let sort up good years, I growth well looking

appreciate color. Really Understood. the Thanks.

question may Research, next question. Melius Our from with with Jacob Levinson you of your line comes proceed

Good everyone. evening,

Good evening.

that a on flowing over consumer space I Is into I over Sciences like expect having same just of doesn't wanted machine been seem an to to the as feel same content off that level potentially in for touch capital time market that second, of but Life your time, verticals? or matter. vision it's other a you of calls market business, a the like that electronics potential on up lot certainly in it's reached see and see or these some maybe a that comes your for logistics automotive you for of and

Yes, definitely thanks of good is the time, that Life on kind Sciences in some strong kind for a see longer and it's very a and a also had of thanks potential term. for been your we of a question. years, regulated market we've a number interest we've for industry. journey It's

So more arrives, the be into regulatory of sometimes to market a when a one seven slower, of approved then has product speed and can maybe revenue their that XX-year it's is part life. consistent penetration but

see value. then a those tubes in see test lot of over into things And really are the we've more in started barcode out that years, we type migrated journey, So kind the marketplace. medical where vision like of applications, we dynamics reading of and that the they're We and samples.

them then to help also that they're and interesting do where of a samples product we're recently, a happens where there. And and going they into sure is patients in a like vision usually test technicians and our we've from more reagent is actually or also patient can are data operating at at different have change, may things customers as what looking other And so for would And may then through looking that, them at XD in types then tube things. vision, Cognex learning include moving changed be color diagnosis. setting technology seeing and we position monitoring equipment moved to as technology positioning, One things to our move medical images where technology seeing that actually be also more in theatre more interest making be on what looking we radiology lot applications. area of the the do. may doing in with lab very deep customers an in around using with diagnostic out there we And is breathing, and the have and

correctly we're going them. seeing what's So on with

an It's great has kind had give even design you less may of in strong that in few XXXXs their a still sense it it's exciting Cognex wins specified revenue today. per a at market. machines but to dynamics, But of come last fully hundreds So or us key for metric consistent dollars customers deliver as forward of our millions years. that inside design vision for area growth of really us. a and new of X% look once they XX design really market we definitely year, they we to at OEMs And wins than win

So a really market like. it's we

That's very interesting.

Just bit you know quick on switching on follow-up balance I a the that. the a mentioned sheet. gears little

it we how anything should I internal history. it development. that unusually cash I spent year? about an obviously, guess, a and bit quite or or you maybe to how this to You've relative of on that, you're are thinking going amount on of even that with as think about M&A quite what do your bit But to your like cash relates a got suppose large buybacks, product past then hand,

is this more relatively organic this in we would sure, is it given aggressive buyback Yes, obviously, with stock before. cash priority I the level would objectives, say Jacob, noted, had slightly of top fourth still down in on generate cash this, were cash. balance as funded unchanged and opportunities, the from long-term include we've that's M&A, our our own after Certainly quarter, some we Paul. our philosophy QX was which we've And, market. we support excess our to given significant softness the which do is for growth

and then appreciate. dividend that Second from be modest would of through a relatively shareholders with success we many stock buybacks consistent sharing shareholders that but know our years some

might our those at being I to our remain M&A a and I more valuations is at So think priorities, have benefiting little you powder otherwise. dry for opportunistic today, think maybe size than

Perfect. it pass guys. I'll Thank you on.

the & proceed comes question next Giordano, question. may your Cowan from of with with Co. Joe Our you line

for is evening. Joe. This Good in Michael

about logistics program. ask potential a to something Do material? update is an wanted to to the you And Just more little turn this here? have for what

there else to potential Michael, investment are in something year specifically with logistics? asking referring last Or high you we about made you're a customer? is

It's the program. that's right. Yes, pilot

Yes.

So we business a in million now. roughly $XXX logistics have

is across. about. that and companies in create have order We up see customers other businesses. end a have buy off to adopt we we are go we've store. for all be this think where used large shelves common read And the we one to customer, lives, seen delivered it looking retailers, very And we pick to it's that advanced which automation But we the to and trend own or you've of online visit I much in e-commerce very now fulfillment think, who, brick-and-mortar kind our their would I back

automation So there's towards that. major of trend a the

their Really, year. making a who really customer think from not helping substantial helping we automated and with relevant being a them back I we've into capable Cognex with conveyor of and new different bring world, to engineering we And trend and of see with transition, that been that to is a was we're we leaning company one e-commerce into competitive of last with a should potential number really And say. team And in people customer a only more that a regions really So one with closely the do but are that shelves other in fully are think it's see be of stocking going them investment to customer, I leaning up be again and very who we're been investment. that and year, end world. that customers customers scale. we've already One year this very to the will best-in-class. that who see working last of company that, technology this to was kind

So that's companies that kind story of, of who And on I'd what's I a the to to there gone the many say, I follow expect similar path think are would around there. world on journey. who already

I view, this on from to it did drag QX the learning And We of service anticipate making this customer issue specifically that particularly both think which were in with a we with QX and component point and that investment a investment. a a strategic out we type it, do high don't call margin of QX was as was that margin, in year.

deep a So cost which and strategic factor in slightly But large other logistics have growth. that's in growth we obviously a learning still overall does dilutive other investment as on factors areas logistics for partially XXXX. don't revenue, the like rose and of offset. we anticipate remain side making And our logistics to the to

the deployment capital priorities. of touched we -- Great. on And terms in Thanks the for color.

In most you in terms of areas favorable what this M&A, do see environment?

Yes.

a we look and think number of time Last out years well-structured So an companies kind ongoing process our we market. own ago. which to of I service where is at we you, in run a reported

market. had approximately in share a we Now XX% our

very would and opportunities. then market players acquisition we the like kind we And we over look think only there. years our deep ViDi today look the And Sualab acquisitions so share, think or markets we doing they we opportunities, And at we companies good technology thirdly, capabilities that in learning, that significant use to playbook at They And where in adjacent not organizations technologies in who would at at that see their market. engineering as a and to we to and have enter Cognex, but also we're last then of our few I we have look really to small to make in they're could would think opportunities. you integration technology not we're that two we bought bring. what other bring see we enjoy I look markets have that

markets, we're that acquisitions. flow. evaluating ebb considering can just tend So to I and looking would technologies constantly at you've their say seen and

We one-year of we million years technology ago. Sualab, for our think a did approximately small acquired I six $XXX couple biggest size. acquisition acquisitions a of

of So see on also very being count very active, progresses. if we sort how -- we'll can that our But you selective.

for Thank color. Great. you the

comes Our with from D.A. of Matt line Summerville next question Davidson. the

proceed may question. your with You

Thanks. of A questions. couple

guidance? we And comment maybe like into been unfilled QX to I to saw your able to of relative it I'm if with upside chip little bit. respect contributor COVID it's wondering your And versus that backlog, a guess, kind that the that First, levels? maybe was a to in you of some versus can sounds pre how like now what looked it you've

expected, forecast Paul. favorable the Sure, to -- was more a little our we the quarter able Sure. in in guidance was had is than than certainly supply were the our conservatively part knowing Yes, environment we that and this The to of shortcomings QX, Matt. beat chain had in unanticipated guidance more out later orders the in some had supply we progressed. quarter as get we the

XXXX think did grow our we where do to we XXXX. ended I backlog quarters, most backlog has where in that's Overall, factor. grew. So our ended from a year-on-year -- And

healthy activity. sort there's a as the of been of seen So business of but we've has growth -- business, is element seasonality there an

those business delivery revenues. and fulfill and grows convert those to of that longer our to we logistics orders when does share -- come tend As with for longer time

it's supply magnified delivery both customer then execute you through being against well able think and of meet in now, a orders right would to and pretty the working QX So they I dynamics are expect times from with backlog what and today. expectations in quarter. certain it, our element we're But the new somewhat first and

battery being then side driven Got business? the of maybe the traditional How things. sort overtakes going shape side still how on EV product revenue? the much in proliferation, of going auto product about Thank around of out the I could you IC-driven by EV versus today you. see be or it. that And OEM when just if is much the the happening guess, you talk whether it And maybe crossover, automotive form, other itself is side, into some door where

our EV. throw you primarily driven we growth as in hybrid and off, being development, to over is business seen on EV growth really prepared is vehicle then to or by kick very new that EV give much in in I'll the a particularly data But we has it's a it we've our a lot investment driver technology And success manufacturing generally, companies whether and it certainly Cognex so Asia going offer vision to that I'll major this. and that lot we've are. of referenced of Paul remarks. more much capital automotive on in investment so there's And really growth where market. seen machine primarily And where significant see battery in

business growth. But and of a are part that I our or that big more certainly, becomes of it's part significant big tires or the we quantify difficult efficient not when like see hybrid EV your is for business people cars of our business it's blurred. a a how So EV EV driver and little little to Then not, it's bit our becoming certainly, more specially-designed a EV that. think becoming business because it and say as is more

engine if the do While legacy that the internal sort used is more we certainly growing business even much business, slowly, to of more growing all. at type combustion

I'd that. I add to just Yes. --

in manufacturing battery bright revenue was unable think I to XXXX EV both of for out, and that target our spot, was automotive And kind I today. sort of order in other a move areas, long-run EV -- business And automotive our revenue whereas areas EV a of XXXX driving in bit EV more seats bigger to the is tires it's attributed like profile hybrid we models second but think automotive was in a investment point to Rob specifically but grew just needle industry do of or attribute can vehicles, of harder of to XX% which where of and turning to specific overall. in growth, a as But coming growth stuff changes are got more Rob the by it. year, for engine. noted. than us, precipitated or excess then projects biggest launch XXXX, in far this effects kind XX% driving of in then our faster But declining driver under XXXX than and well automotive specifically that, areas car of overall the really and

for Understood. Thank color. the you guys

question next line Ricchiuti of & Co. Needham Our from Jim with comes the

a Hi, discussion follow-up the to thanks. just Maybe on automotive.

in growth a vertical. 'XX? You had just for But market you automotive line year year? in what in I good And do in by know clearly. your What's the opportunity of seeing, this of for general, how on don't terms based view sight 'XX, you guide the you're

I Yes. would we're outlook this year. automotive relatively for say the about positive

manufacturing that activities. battery-type scale continued investment grow. in see and we strong We I see consider to EV could think

Jim, where year and substantial part is has getting as more We start give again, phenomenon in you're short-term going But for what of would the Or kind right. of business little a on, There's of look forward? that difficult that chip automotive the the tail legacy and and stuff COVID but which there's area. shortages around good it's situation America call Europe, like more guess, year? does there. start it's we're don't of less clear really I established of plenty And the less going sort the I of slow full we're endemic, also a So our off seeing full business. activity, is just it is to a to outlook. businesses really on to think I it in say, something year? And a

about that? getting in markets wondering, in view new last the follow-up about year, to this part deep it. growth, of Got XXXX, the small then And as You, product. your a number And you strong relates are do traction just for of think, just think you general, you start I your how did doubling recall, you meet DXXX a very that business, which opportunity, we strong being question understand. I'm talked learning maybe mentioned products. I -- most anticipating I new a I as And as expectations? But it in? a a think were just

easily that DXXX what well a that saw are In-Sight our as think This that very and and camera of trained, tools, very launched we and excited smart deep customers learning we is learning-enabled was us. our call technology much bright definitely European used about edge very our particularly we're product. for version I updated powerful which business excited spot about an great adopted markets. in with American we more that are And

lot progress. say -- to The has partly and like, other some adopted. Asia technology in business of with than which large the other is type skill been would other that the we deep more hands-on in more more to manufacturers speed a runs of software difficult is business and sophisticated the it's But and much in a maybe that this vision more that's electronics environment. And provide in where sort restrictions because getting be would products. of requires and in And PC very support. tends learning of there, software little good sophisticated of programming we're been implementation making sophisticated part capability that a things I just of just slower And the the travel

camera pace sort of positive. be at the both doubt the opportunity, parts what like, but growth impact year. no very software So term, to over and part we'll have -- on play that, how the smart see question The will vision providing if have of And it both lot you is we this see see the a that's and those out long of is in time. wheels, I we it what of and

you that be to expectation learning. it's has of you XX% quite years? potential plus that, and talked and not products the this say your the that Would portfolio about of in maybe but year, that the couple is Is growth deep that logistics a XX% past, being business for the next

end, new I to rules-based we remarks. the think are the everywhere. we learning kind tools deep these becomes like slightly And I discussion in other interesting more that I think of the we're about give it's technology deep is, very and think EV Yes. but of But and more going guidance. to from you clearly move don't specific got see so we And and I vision, potential, I they're well. I so the that we excited you understand launched it's think said learning become that that we've and almost are really we're I -- technologies referenced technology, some Jim, kind do. in pervasive as prepared going see forward learning so new my powerful thing our technology more. self-programming deep trainable, growth And to be side think by don't we that And running certainly going separable side now. everything if like,

sense. makes you. Thank That

comes question the Buscaglia of with Berenberg. next Our from line Andrew

may You your proceed with question.

to wanted one electronics time. more touch I on consumer

see form areas VR how that you really for growth. Just comment past being in you know can that in the then handsets in like wearables on grow electronics big there really the you'll I on substantially? like order you factors see in talked and And where some some that things -- kind to sense are to of are secondly, dependent about AR, But and drive consumer kind volumes of enough segment? changes

Andrew. Yes. Thanks,

are I and is see always road of we standing kind who our And there technologies as you are season, we like, and closely about we if that those think of the work up the launching dynamics later models maps in large changes new in talked them of on customers a move we've through what the occasions. market in number And the normally very of year. many with.

year, XXXX, sometimes happens been right? that kicked if whether factors we at form -- Some form drive even in glass intensively what screens other other also can some and growth. that's them used, factors of have those impacts out years perhaps change since of where with and and seen more about So or the similarly technologies we've or technologies this and metal come for a things importantly, later and then material we've can it's can

growth generally, are a that to years, start form we you that's coming I in or other time, the can coming. So historically, thing. talked get to one mean, or tend market about be think It's I not substantial -- I watches smart and few factors. that we've think aspects. those seen tablets Then handset to be I new into be screens, think over you a reality back things of perhaps technologies would adopted -- number we look then other necessarily at and I things if see augmented It say.

move expect last market the wouldn't the radically needle to in few them haven't I the we seen So things in years. if those already

fairly small. they're and meaningful can to everything Collectively, certainly about be Individually, can very Yes. be they smartphone growth. meaningful

introduction of that changes excess requiring technology earnings would -- particularly we're of being know existing work that solve I still can meaningful in of that. and certain learning in growth don't the again, phases material is major years done to just is done show being the an a I new that And there's not our such well growth electronics, inspection, deep think better. lot consumer visual products. the hard staff but allow to opportunity thing or area for and with is whether technology good humans shared by other us of in the conversations an of XXXX, driver in in a view unlikely us problem of of we ahead. particularly necessarily where driver without I some believe that And in The I've not development as at that But call technology of -- a to be for grow to we market application

Yes.

do market there how know that strategy to it's big share pretty products. going think -- just with intend are of I'm established? got you you someone what player your a that market is such headway make Kind on to something really there. bit And like in compete there. wondering who's a along dominant if leader you guess, wondering, Yes, already how is I a call but up the new those just you I lines, the We XD question. introducing Interesting. well, is guys vision come has ended Okay. really how even

kind we different Yes. making significant product I No, in where question. we're And great a it's three of think XD have that headway. areas

use we we that XD that's with outstanding XD of all true camera product market existing -- our last really XD-LXXXX the launched see I optics. separate a to area displacement in than it's lot more -- kind the the the this which is of tend And leader a does that is particularly from first and head technologies easy The year, range. view new it's smart controller from very and version that require to, to the -- the separate you're product have space referring programming line a in a --

the XD-LXXXX. program our kind has is market. made use that programmed And as those, -- which product use can in the of it's one by would world's In-Sight, use In-Sight of is ease an key can you best-selling one really camera And of So Cognex. if easily you smart

that to use, easier applies vision, of, that smaller, becoming And that's time. to sophisticated less a over are in which theme, I more would a horsepower at markets So expensive, it's all think kind it's in to we I of integratable. general, There's XD. is easily will but lot And usability and we're trends that in move will bring those that think, certainly, into very say, technology, difficult space.

The product we're of a of is traction lot product, that our the seeing second where area scan XD-AXXXX.

it's structured be stationary moves best and those it's to as pattern it things really So product, a area. precise tool the of it and rather and And image light over very which that like picking. often very bin and fast having creates move of can acquisition applications, include than recognized for customers can projects the robot a large by types

not looking not where what It's we're It's know looking we're we for. samples. we what for. know random And So generally, random.

that Not a it's in watching project market technology a while, like area space, in that. also we're video area products house cost of where for game we what's speed, and where you for been you space. move and other all today but market logistics with the moving we're great kind a a around And that's products are size look the the logistics which objects traction, is -- traction customers then and to is effectively around, of your seeing moving. that lot our the familiar and that superior our product in think of we're has know of third platform, if seeing technology. with And position moving certainly to definitely the where XD-AXXXX you're pattern projects precision, a at in particularly So higher a might want

going at So of I hard think quite we're kind XD vision.

so away, there You're often advantage the and vision I vision opportunities things. are. of in vision where Cognex I in beyond can other don't see that tools faster-growing any the end, is, right, just think, share really, is chipping best to more that But best leader, automation specifically market is tools most a have that space. think we allow the do that they tools. big about having The and XD customers best final We're the in marketplace And kind certainly the at we certainly, thing and there's doubt the position. say to

generally, can't any of our with So they competitors.

for answers. great. the Thanks Okay,

Our UBS. the next of Markus with comes from line question Mittermaier

your You question. may with proceed

everyone. to the back, evening outperformance the Hi, wanted good I versus if could, I guide. come to

versus chain new availability peak you. maybe better is then normal or be supply primarily a to now to of that there later in Thank quantify is the band You where wondering that how would delivery sustainable just I'm Is qualified kind availability? was mentioned XXXX? way quarter. versus into having it times related That that times? delivery suppliers broker better And helpful. help stand us and

I'm sure. Yes.

we more available. and into year. got supply chain as we our look I robust period through as of we supply would think to sort inventory, through very that And think been end if you the over kind and can in and to to at the we the came challenges also suppliers really company particularly summer we senior certainly the we've engaged say, chain manage move started lot intensely chips inventory move that a I levels us our hard, on really very improve. back of the summer, of in in make traction lot of And of of I working to invested get we business we've So year, the saw kind as supply our really you short seeing see really the we built a as through

through very some ourselves aware we've our think I of coming what pretty win we're because least competitive see of challenging here. which products a now it's to use and measurably necessarily quarter. not And and shorter, going you lead getting the for for that It's that. supply think competitive chip again, situation us not most times And becoming appropriately while across are getting can broadly not on that is at help the that's fourth better, for I set. in little think we're is I advantage a in in the terms case to market we our us, major seeing share the I can much of think, positioned

I kind So we where of, see -- think, we things that's playing out.

logistics. Great. That's maybe helpful. And then one on

of you is exclusive. of You wonder between mentioned the were that partners these medium here you in to in direct do sort your extent here going what what indirect from integrated you think how standardized. term that And have to some and prepared between remarks mind direct and that that I indirect? goal sort about strategy of ultimate customized and

Yes.

logistics, customers of market. we're selling a fair and in to there's be So commissioned all of has I that engineering relationships on lines in start-up our of engineering technology think right? that and think them, and that's direct in But -- kind then application logistics, our kind required we of amount with model. having to ourselves of almost installed great

with very who some well do for extremely that have years sophisticated We integrators us. we've many worked with

may to doing cases, of integration the of take commissioning but some we're the and But some may and product do itself and the end they that and regular come we're will in we user -- sell bringing the stand in other some the the installers is up perform help important more in logistics directly. they So integrators or we in cases, customer what who lines of will servicing product. and

very doing our it to do customer to and partners the develop to relationships us for less to margins do to relationship well, directly and expect we these us, with important us. ourselves, as that we that invariably, scale be we and we're improve know we But able more. So that's we're understand as would and work generally, of having

for similar customer best. customer business for on potentially logistics. and a relationships as use take But that a we're a be bit And as the of allow the on the what of the And consumer distraction said, us. a it customer isn't with relationship. we our we to margin are focus and risk that's and we it partners ever, do losing we as Markus, isn't also dilutive of we it's for electronics, to -- Rob end And would what parts playbook focus where what best, do strong executing

luck. helpful. Thanks so good very That’s and much,

from question the next of comes Jairam Our line Securities. with Daiwa Nathan

with You your question. may proceed

taking Hi, thanks for my question.

term So long I two had one short questions, one and term.

first we Should the typically, XQ cadence, I'm to terms in see quarterly -- strong of given quarter weakest and that revenue be of you -- then backlog. the used delivering are people the So is guessing XQ. of a kind out quarter you and that

condition, Now expect given cadence XXXX? a you do in this different

are to we not we But it's your XXXX not just But we're good better would think would more early and I we're guidance, obviously mean, the and We'll to cadence. call grow I guide seeing, for a any, I the share sort bit supply about others love do as not seeing. this expecting that year fast do I Yes. challenges electronics. but you're certainly quarterly as as we XXXX, mean, is overall little giving at we environment, given Jairam, chain in to we're far. full certain work, expectations. And point, to starting than as that what so as right? know consumer of a think did

question or always think right, new And consumer helpful. companies with kind products. opportunity upgrade I their out terms you get -- customers and opportunity, to with products guys That's get I come Okay. the an automotive your in electronics, logistics, of when upgrade the other is, one of

grow think haven't logistics we I very sense? in we of be how that understand we that probably don't strong. think I should to

growth. loaded are you that, early how staying should an software a logistics of do sell of we stages upgrade beyond that as into But We -- in how think warehouse?

Yes.

distribution of as the the we equipment it are throughput down supply of think There and pretty chain and the within automation in similar technology the where general, further have of higher I center lots being products life. for demand or the a in upgrading play. --

that. So there's certainly

where and and I of more initial an to growing building an kind out world right think players starting more And is third-party of big capabilities. players are of it we're though, become kind as and interesting of, are I'd those quickly wave say, e-commerce also. logistics also now, still entering players there's in investment they're sort

it more And the a years, would many cadence so applications it be is. of see having sophisticated. then them the discussion a in replacement. And more and few will then as value-added doing time, wave, after expect more interesting be challenging becomes years be at industry of replacement same cadence for that that about the more get and we But into I we'll we'll how to a and

a will good factory probably that kind -- for probably might I So or but guide think how of automation is out. automotive play

Okay, you. Thank great.

comes the Chevy question Bobby line Chase next with of from Trust. Eubank Our

You may with proceed your question.

relative on kind of your you. consider my legacy of cheapest quarter. you growth off, to. If point you your stocks And maybe sheet? Couple kind about here. That's buyback? using look the forward some ever your electronics question. if at I first this valuation customer, But the market for How you're what the largest at continues to this with questions of of customer, is you've would consumer relative do Paul, Congrats balance of looked selling think that kind the

opportunity. going will just ratable to we our Yes. ever cash and that told I a there's doing after balance QX of earnings have surprise ongoing no a the we then I and But purchases to as quarter last are largest amount stock our are mean, stock regular we've our mix to do take as And well sheet. Sure, and soft good expect I have when that in relatively did a we continue call, happy of we market opportunistic just you plan on XXXX, into been mean buyback and through be feel so. a conservative think we had has Bobby. we hit was the activity. we

I offsetting stock activities. make to itself through presents buyback mean I are that do yes, So take dilution, change technology the equity our we dilution to have sure we're when programs We we'll trying as -- the our opportunity think price growth potential we company, so. a more from and or not to the fundamentally, of the than and want the get to ahead opportunity do to but that

have And been seeing there. -- track with record guys a you opportunistic have good

in of yet? what on supply and You back the would would logistics? going kind maybe protein comments legacy rapid like of just seeing of like and haven't the How think do want? competitive they you strategy been those back other able feel they Can to about in about talk I of guys industries that starting is get COVID, end areas chain that still just to some dollars kind can see then automation. that. large the on some forward, accelerate So are positioning, you the customer relationship of need the a flow things be holding accelerate? Or Are you of to some automate made? they've And parts

protein? you quickly think I heard, the didn't word ask just was you Or I what Can was I to clarify? it said?

Yes.

of of food beverage companies example, and challenges? some some the the America or an As and protein in

you the all Yes. being Got the applications in vision, leader at it. time. machine something as see being Well, Cognex and about new great just

as that many better the automation many, for technology capabilities to becomes get and as you've of traction some start them suddenly easier And use. and and seen to companies years our develop they

that's we're we're So really, understanding of of talked always where getting kind customers. And interesting, better systems. and always of those are the implementation with time those opportunities CRM and our we about some spending at

term. that see and customer, we've growth more substantial generally, customers opportunities generally we and customer, about the talk we long there's over overall. there largest certainly But perhaps with seen asked don't specifically about logistics -- certainly You our within more

and a world I automation sophisticated discrete partner think do players about great thing in most manufacturing. we in is Cognex the with the

technology see for rest the the going that potential the relationships the And so too. on industry, often, and bleed the we out we developed there and of into

Your East protein close comment of us on the dinner Coast all me reminds to and time. here on that it's awfully

I end. we're So think the coming to

reached Rob over hour. turn have like for call I Mr. remarks. closing top We the to back the of this would to Willett

you. on speaking night. for joining Thank you us you call. quarter's again forward tonight. Good look We Thank to next with

This concludes today's conference.

rest participation. day. the Enjoy your You at your may time. this your Thank lines for you of disconnect