COGNEX CORPCGNX
COGNEX CORP Revenue Disclosure
Revenue Recognition
The following table summarizes disaggregated revenue information by geographic area based on the customer's country of domicile (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
| Americas | $ | 407,288 | $ | 350,155 | $ | 330,415 | ||||||||||||||
| Europe | 251,638 | 217,880 | 220,665 | |||||||||||||||||
| Greater China | 158,456 | 164,147 | 164,115 | |||||||||||||||||
| Other Asia | 176,977 | 182,333 | 122,352 | |||||||||||||||||
| $ | 994,359 | $ | 914,515 | $ | 837,547 | |||||||||||||||
The following table summarizes disaggregated revenue information by revenue type (in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | 2023 | ||||||||||||||||||
Standard products and services (1) | $ | 880,015 | $ | 795,319 | $ | 734,140 | ||||||||||||||
| Application-specific customer solutions | 114,344 | 119,196 | 103,407 | |||||||||||||||||
| $ | 994,359 | $ | 914,515 | $ | 837,547 | |||||||||||||||
(1) In 2025, the Company entered into a commercial partnership with a strategic channel partner (the “Partner”) to better serve Original Equipment Manufacturer (OEM) customers in the specialized field of medical lab automation. Through 2030, the Partner has exclusive rights to sell machine vision hardware in combination with licensed Company software, in exchange for annual minimum license fees paid to the Company. The contract includes a substantive termination penalty if the contract is cancelled by the Partner. As such, the Company recognized the minimum license fees as revenue in 2025, at the point in time when the Partner received access to the software. Also in 2025, the Company transferred related inventories at cost to the Partner. As a result of the upfront recognition of the license revenue and transfer of inventories, the Company recognized one-time revenue of approximately $13 million in 2025, which is included in the "Standard products and services" amount in the table above. | ||||||||||||||||||||
Costs to Fulfill a Contract
Costs to fulfill customer contracts are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $10,592,000, $10,705,000, and $13,265,000 as of December 31, 2025, 2024, and 2023, respectively. Costs to fulfill customer contracts are amortized when the Company transfers the promised goods and services to the customer. The amount of amortization during 2025 related to costs deferred as of December 31, 2024 amounted to $9,831,000, and the amount of amortization during 2024 related to costs deferred as of December 31, 2023 amounted to $12,512,000.
Accounts Receivable
Accounts receivable represent amounts billed and currently due from customers which are reported at their net estimated realizable value. The Company maintains an allowance against its accounts receivable for credit losses.
The following table summarizes changes in the allowance for credit losses (in thousands):
| Amount | |||||
| Balance as of December 31, 2023 | $ | 583 | |||
| Increases to the allowance for credit losses | 459 | ||||
| Write-offs, net of recoveries | (222) | ||||
| Foreign exchange rate changes | 7 | ||||
| Balance as of December 31, 2024 | 827 | ||||
| Increases to the allowance for credit losses | 477 | ||||
| Write-offs, net of recoveries | (555) | ||||
| Foreign exchange rate changes | (21) | ||||
| Balance as of December 31, 2025 | $ | 728 | |||
Contract Assets
The following table summarizes the contract assets (in thousands):
| Year Ended December 31, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| Unbilled revenue | $ | 16,980 | $ | 3,055 | $ | 2,402 | |||||||||||
Contract assets consist of unbilled revenue which arises when revenue is recognized in advance of billing primarily for certain application-specific customer solutions contracts, as well as for upfront license revenue recognized in connection with the strategic channel partnership mentioned above. Our rights to consideration are generally unconditional at the time our performance obligations are satisfied. The increase in unbilled revenue as of December 31, 2025 was primarily due to $10,365,000 of upfront license revenue recognized in 2025 in connection with the strategic channel partnership. Although the license revenue was recognized upfront, payments are expected to be received over the duration of the partnership, resulting in unbilled revenue.
Contract Liabilities
Contract liabilities consist of deferred revenue and customer deposits which arise when amounts are billed to or collected from customers in advance of revenue recognition.
The following table summarizes the deferred revenue and customer deposits activity (in thousands):
| Amount | |||||
| Balance as of December 31, 2023 | $ | 31,525 | |||
| Deferral of revenue billed in the current period, net of recognition | 21,998 | ||||
| Recognition of revenue deferred in prior period | (28,108) | ||||
| Foreign exchange rate changes | (380) | ||||
| Balance as of December 31, 2024 | 25,035 | ||||
| Deferral of revenue billed in the current period, net of recognition | 18,100 | ||||
| Recognition of revenue deferred in prior period | (22,728) | ||||
| Foreign exchange rate changes | 687 | ||||
| Balance as of December 31, 2025 | $ | 21,094 | |||
As a practical expedient, the Company has elected not to disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations for contracts that have an original expected duration of less than one year. The remaining unsatisfied performance obligations for contracts that have an original expected duration of more than one year, primarily related to extended hardware warranties, are not material.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.