Cognex (CGNX) risk factors, FY2025 10-K

Cognex's FY2025 10-K, filed Feb 12, 2026, lists 28 risk factors in 4 groups. Against the prior year's 24: 4 new, 9 substantially reworded.

Open CGNX in Gloom →
Cognex's chart, financials and news, free in your browser.Open CGNX in Gloom →
Risk factors listed
284 groups
New this year
4vs 24 last year
Dropped
0since the prior 10-K
Substantially reworded
9of those kept
Section length
7k wordsItem 1A

What the changes say

  • Cognex added new risks regarding inventory management, scaling its salesforce, operating model transformations, and AI regulations.
  • The company updated disclosures on competitive threats from open-source AI, activist shareholders, and in-house manufacturing risks in China and Vietnam.
  • Investment portfolio figures and debt securities balances were updated for the end of fiscal 2025.

What changed since the prior 10-K

New

  • NewRisks Related to Execution of our Business Strategy

    primary distribution centers may result in higher costs and increased risk of excess or obsolete inventory associated with maintaining the appropriate level and mix of products in multiple inventory locations, resulting in lower gross margins

    Managing multiple distribution centers could increase costs and inventory obsolescence, lowering gross margins.

  • NewRisks Related to Execution of our Business Strategy

    If we are unable to effectively scale our operations and salesforce to support a significantly expanded customer base, our growth strategy and customer experience may be adversely affected

    Failing to scale the salesforce and operations for a broader customer base could harm growth and customer experience.

  • NewRisks Related to Execution of our Business Strategy

    The failure to effectively transform our operating model, manage our expenses, and achieve expected cost reductions could adversely affect our business and financial results

    Unsuccessful operating model transformations or failure to achieve expected cost reductions could hurt financial results.

  • NewRisks Related to Information Technology and Intellectual Property

    Changes in laws or regulations relating to artificial intelligence, data usage, or automated technologies, or any actual or perceived failure to develop, deploy, or govern such technologies responsibly, could harm our business

    New laws governing artificial intelligence and data usage, such as the EU AI Act, could increase compliance costs and delay product development.

Reworded

  • 59% rewrittenRisks Related to Execution of our Business Strategy

    Increased competition may result in decreased demand or prices for our products and services and may harm our operating results

    Removed specific mentions of low-cost Chinese providers and lowered mention of AI barriers to entry to a future risk of market fragmentation.

  • 55% rewrittenRisks Related to Financial Performance

    Expectations relating to environmental, social, and governance considerations expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on our business

    Removed governments and employees from the list of stakeholders focused on environmental, social, and governance disclosures.

  • 53% rewrittenRisks Related to Financial Performance

    Our Company may be subject to time-consuming and costly litigation or activist shareholder activities

    Added a new threat from activist investors seeking to influence business strategy, capital allocation, governance, or leadership.

  • 51% rewrittenRisks Related to Information Technology and Intellectual Property

    Changes in laws or regulations relating to data privacy, data protection, or product security, or any actual or perceived failure by us to comply with such laws and regulations, could harm our business

    Was: Changes in laws or regulations relating to data privacy or data protection, or any actual or perceived failure by us to comply with such laws and regulations, could harm our business

  • 40% rewrittenRisks Related to Execution of our Business Strategy

    Our failure to properly manage the distribution of our products and services could result in the loss of revenues and profits

    Expanded distribution partners to include original equipment manufacturers and added international operating structure changes for faster delivery and local currency sales.

  • 27% rewrittenRisks Related to Financial Performance

    We are at risk for impairment charges with respect to our investments or acquired intangible assets, which could have a material adverse effect on our operating results

    Updated debt securities portfolio figures to approximately $379 million with a net unrealized gain of $2,787,000 as of December 31, 2025.

  • 26% rewrittenRisks Related to Execution of our Business Strategy

    If we fail to attract and retain key talent, effectively plan for and execute management succession, and maintain our unique corporate culture, our business and operating results could suffer

    Removed transformer-based models from the description of technical personnel skills in high demand.

    Was: If we fail to attract and retain key talent, effectively plan for succession, and maintain our unique corporate culture, our business and operating results could suffer

  • 26% rewrittenRisks Related to our Supply Chain

    The failure to manufacture and deliver products in a timely manner could negatively affect customer satisfaction and our operating results

    Added specific operational risks for in-house manufacturing in China and Vietnam regarding employee health, hazardous materials, and environmental laws.

  • 24% rewrittenRisks Related to Execution of our Business Strategy

    Any of these factors could have a material adverse effect on our business, operating results, or financial condition

All 28 risk factors

Headings as the filing states them, in filing order.

Risks Related to Execution of our Business Strategy

  1. 01Our failure to introduce new products in a successful and timely manner could result in the loss of our market share and a decrease in our revenues and profits
  2. 02Increased competition may result in decreased demand or prices for our products and services and may harm our operating results59% rewritten
  3. 03If we fail to attract and retain key talent, effectively plan for and execute management succession, and maintain our unique corporate culture, our business and operating results could suffer26% rewritten
  4. 04Our failure to properly manage the distribution of our products and services could result in the loss of revenues and profits40% rewritten
  5. 05primary distribution centers may result in higher costs and increased risk of excess or obsolete inventory associated with maintaining the appropriate level and mix of products in multiple inventory locations, resulting in lower gross marginsNew
  6. 06Economic, political, and other risks associated with international sales and operations could adversely affect our business and operating results
  7. 07Any of these factors could have a material adverse effect on our business, operating results, or financial condition24% rewritten
  8. 08Implementation of our acquisition strategy may not be successful, which could affect our ability to increase our revenue or profitability and may otherwise adversely affect our business
  9. 09Our future capital needs are uncertain and may be influenced by various factors, including strategic initiatives, which could impact our financial condition and operating results
  10. 10If we are unable to effectively scale our operations and salesforce to support a significantly expanded customer base, our growth strategy and customer experience may be adversely affectedNew
  11. 11The failure to effectively transform our operating model, manage our expenses, and achieve expected cost reductions could adversely affect our business and financial resultsNew

Risks Related to Information Technology and Intellectual Property

  1. 12Information security breaches may adversely affect our business
  2. 13Changes in laws or regulations relating to data privacy, data protection, or product security, or any actual or perceived failure by us to comply with such laws and regulations, could harm our business51% rewritten
  3. 14Changes in laws or regulations relating to artificial intelligence, data usage, or automated technologies, or any actual or perceived failure to develop, deploy, or govern such technologies responsibly, could harm our businessNew
  4. 15If we fail to successfully protect our intellectual property, our competitive position and operating results could suffer

Risks Related to our Supply Chain

  1. 16The failure to manufacture and deliver products in a timely manner could negatively affect customer satisfaction and our operating results26% rewritten
  2. 17Our inability to obtain components for our products could adversely affect our operating results
  3. 18Our products may contain design or manufacturing defects, which could result in reduced demand, significant delays, substantial costs, or customer dissatisfaction and/or loss of sales

Risks Related to Financial Performance

  1. 19The loss of, or significant curtailment of purchases by, large customers could have an adverse effect on our business
  2. 20Our financial performance varies quarterly due to seasonal and cyclical purchasing patterns and the timing of large customer orders, which can lead to challenges in accurately forecasting our financial results
  3. 21We are at risk for impairment charges with respect to our investments or acquired intangible assets, which could have a material adverse effect on our operating results27% rewritten
  4. 22We may have additional tax liabilities and our effective tax rate may increase or fluctuate, which could adversely affect our operating results and financial condition
  5. 23Fluctuations in foreign currency exchange rates and the use of derivative instruments to hedge these exposures could adversely affect our reported results, liquidity, and competitive position
  6. 24Unfavorable global economic conditions may negatively impact our operating results
  7. 25Natural disasters, widespread public health crises, and man-made disasters could result in business disruptions that may adversely affect our business and operating results
  8. 26Expectations relating to environmental, social, and governance considerations expose the Company to potential liabilities, increased costs, reputational harm, and other adverse effects on our business55% rewritten
  9. 27The price of the Company’s stock is subject to volatility
  10. 28Our Company may be subject to time-consuming and costly litigation or activist shareholder activities53% rewritten

Other Cognex 10-Ks

  • FY2024 10-K risk factors
    24 risks

    Cognex relies heavily on international sales, particularly in China and Asia, exposing it to tariffs, currency swings, and geopolitical friction. Supply chain concentration in Indonesia and Malaysia, plus a heavy reliance on a few large customers, creates revenue vulnerability. The company faces intense competition in machine vision and AI talent acquisition, alongside integration risks from its largest acquisition, Moritex.

    Filed Feb 13, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.