10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended April 5, 2015 or

[    ] Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from __________ to __________

Commission File Number 001-34218

COGNEX CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts	04-2713778
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

One Vision Drive

Natick, Massachusetts 01760-2059

(508) 650-3000

(Address, including zip code, and telephone number, including area code, of principal executive offices)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  

Yes X No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    

Yes X No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer	X	Accelerated filer
Non-accelerated filer		Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    

Yes No X

As of April 5, 2015, there were 87,128,037 shares of Common Stock, $.002 par value per share, of the registrant outstanding.

INDEX

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (interim periods unaudited)	3
	Consolidated Statements of Operations for the three-month periods ended April 5, 2015 and March 30, 2014	3
	Consolidated Statements of Comprehensive Income for the three-month periods ended April 5, 2015 and March 30, 2014	4
	Consolidated Balance Sheets as of April 5, 2015 and December 31, 2014	5
	Consolidated Statements of Cash Flows for the three-month periods ended April 5, 2015 and March 30, 2014	6
	Consolidated Statement of Shareholders’ Equity for the three-month period ended April 5, 2015	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
	Signatures	31

2

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three-months Ended
	April 5, 2015			March 30, 2014
	(unaudited)
Revenue
Product	$	105,775		$	83,569
Service	7,659			7,360
	113,434			90,929
Cost of revenue
Product	23,634			17,286
Service	4,320			3,798
	27,954			21,084
Gross margin
Product	82,141			66,283
Service	3,339			3,562
	85,480			69,845
Research, development, and engineering expenses	18,076			12,502
Selling, general, and administrative expenses	43,487			34,900
Operating income	23,917			22,443
Foreign currency gain (loss)	405			(110		)
Investment income	850			787
Other expense	(310		)	(273		)
Income before income tax expense	24,862			22,847
Income tax expense	4,360			4,341
Net income	$	20,502		$	18,506
Earnings per weighted-average common and common-equivalent share:
Basic	$	0.24		$	0.21
Diluted	$	0.23		$	0.21
Weighted-average common and common-equivalent shares outstanding:
Basic	86,764			86,879
Diluted	88,749			89,259

The accompanying notes are an integral part of these consolidated financial statements.

3

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

	Three-months Ended
	April 5, 2015			March 30, 2014
	(unaudited)
Net income	$	20,502		$	18,506
Other comprehensive income (loss), net of tax:
Cash flow hedges:
Net unrealized gain (loss), net of tax of ($73) and ($16) in 2015 and 2014, respectively	(520		)	(199		)
Reclassification of net realized (gain) loss into current operations	110			33
Net change related to cash flow hedges	(410		)	(166		)
Available-for-sale investments:
Net unrealized gain (loss), net of tax of $134 and $113 in 2015 and 2014, respectively	899			1,019
Reclassification of net realized (gain) loss into current operations	(29		)	(501		)
Net change related to available-for-sale investments	870			518
Foreign currency translation adjustments:
Foreign currency translation adjustments, net of tax of ($636) and $7 in 2015 and 2014, respectively	(10,690		)	445
Net change related to foreign currency translation adjustments	(10,690		)	445
Other comprehensive income (loss), net of tax	(10,230		)	797
Total comprehensive income	$	10,272		$	19,303

The accompanying notes are an integral part of these consolidated financial statements.

4

COGNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)

	April 5, 2015			December 31, 2014
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	36,047		$	55,694
Short-term investments	142,343			90,456
Accounts receivable, less reserves of $1,024 and $1,095 in 2015 and 2014, respectively	56,264			50,938
Inventories	48,458			35,536
Deferred income taxes	8,990			8,985
Prepaid expenses and other current assets	17,857			22,997
Total current assets	309,959			264,606
Long-term investments	370,433			400,845
Property, plant, and equipment, net	48,692			47,907
Deferred income taxes	16,349			14,452
Intangible assets, net	9,606			10,699
Goodwill	81,689			81,689
Other assets	1,617			1,536
	$	838,345		$	821,734
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	13,295		$	19,114
Accrued expenses	32,240			39,949
Accrued income taxes	928			1,048
Deferred revenue	20,447			20,563
Total current liabilities	66,910			80,674
Reserve for income taxes	4,372			4,623
Commitments and contingencies (Note 7)
Shareholders’ equity:
Common stock, $.002 par value – Authorized: 140,000 shares, issued and outstanding: 87,128 and 86,542 shares in 2015 and 2014, respectively	174			173
Additional paid-in capital	272,070			251,717
Retained earnings	544,448			523,946
Accumulated other comprehensive loss, net of tax	(49,629		)	(39,399		)
Total shareholders’ equity	767,063			736,437
	$	838,345		$	821,734

The accompanying notes are an integral part of these consolidated financial statements.

5

COGNEX CORPORATION

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

	Three-months Ended
	April 5, 2015			March 30, 2014
	(unaudited)
Cash flows from operating activities:
Net income	$	20,502		$	18,506
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	6,946			4,004
Depreciation of property, plant, and equipment	2,346			1,990
Amortization of intangible assets	1,093			916
Amortization of discounts or premiums on investments	203			896
Realized gain on sale of investments	(29		)	(501		)
Tax effect of stock option exercises	(3,694		)	(2,165		)
Change in deferred income taxes	(1,251		)	127
Change in operating assets and liabilities	(26,380		)	(6,312		)
Net cash provided by (used in) operating activities	(264		)	17,461
Cash flows from investing activities:
Purchases of investments	(157,083		)	(124,734		)
Maturities and sales of investments	130,476			117,753
Purchases of property, plant, and equipment	(4,264		)	(2,685		)
Net cash used in investing activities	(30,871		)	(9,666		)
Cash flows from financing activities:
Issuance of common stock under stock option plans	9,666			5,951
Repurchase of common stock	—			(14,287		)
Tax effect of stock option exercises	3,694			2,165
Net cash provided by (used in) financing activities	13,360			(6,171		)
Effect of foreign exchange rate changes on cash and cash equivalents	(1,872		)	195
Net change in cash and cash equivalents	(19,647		)	1,819
Cash and cash equivalents at beginning of period	55,694			40,644
Cash and cash equivalents at end of period	$	36,047		$	42,463

The accompanying notes are an integral part of these consolidated financial statements.

6

COGNEX CORPORATION

CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(In thousands)

	Common Stock			Additional Paid-in		Retained		Accumulated Other Comprehensive			Total Shareholders’
	Shares	Par Value		Capital		Earnings		Loss			Equity
Balance as of December 31, 2014	86,542	$	173	$	251,717	$	523,946	$	(39,399	)	$	736,437
Issuance of common stock under stock plans	586	1		9,665							9,666
Stock-based compensation expense				6,946							6,946
Excess tax benefit from stock option exercises				3,694							3,694
Tax benefit for research and development credits as a result of stock options				48							48
Net income						20,502					20,502
Net unrealized loss on cash flow hedges, net of tax of $73								(520		)	(520		)
Reclassification of net realized loss on cash flow hedges								110			110
Net unrealized gain on available-for-sale investments, net of tax of $134								899			899
Reclassification of net realized gain on the sale of available-for-sale investments								(29		)	(29		)
Foreign currency translation adjustment, net of tax of $636								(10,690		)	(10,690		)
Balance as of April 5, 2015 (unaudited)	87,128	$	174	$	272,070	$	544,448	$	(49,629	)	$	767,063

The accompanying notes are an integral part of these consolidated financial statements.

7

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1: Summary of Significant Accounting Policies

As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles (GAAP). Reference should be made to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

In the opinion of the management of Cognex Corporation (the “Company”), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments and financial statement reclassifications, necessary to present fairly the Company’s financial position as of April 5, 2015, and the results of its operations for the three-month periods ended April 5, 2015 and March 30, 2014, and changes in shareholders’ equity, comprehensive income, and cash flows for the periods presented.

The results disclosed in the Consolidated Statements of Operations for the three-month periods ended April 5, 2015 are not necessarily indicative of the results to be expected for the full year.

NOTE 2: New Pronouncements

Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers”

The amendments in ASU 2014-09 will supersede and replace all currently existing U.S. GAAP, including industry-specific revenue recognition guidance, with a single, principle-based revenue recognition framework. The concept guiding this new model is that revenue recognition will depict transfer of control to the customer in an amount that reflects consideration to which an entity expects to be entitled. The core principles supporting this framework include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue. This new framework will require entities to apply significantly more judgment. This increase in management judgment will require expanded disclosure on estimation methods, inputs, and assumptions for revenue recognition. The guidance in ASU 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016 and currently early adoption is not permitted. However, the Financial Accounting Standards Board is considering delaying the effective date of this standard by one year and also allowing early adoption. Management will continue to evaluate the impact of this standard as it evolves.

Accounting Standards Update (ASU) 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software"

ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, then the customer should account for the arrangement as a service contract. For public companies, the guidance in ASU 2015-05 is effective for annual periods beginning after December 15, 2015, and interim periods thereafter. Early adoption is permitted. Management does not expect ASU 2015-05 to have a material impact on the Company's financial statements and disclosures.

8

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 3: Fair Value Measurements

Financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets and liabilities required to be measured at fair value on a recurring basis as of April 5, 2015 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Money market instruments	$	1,240	$	—
Corporate bonds	—		241,634
Treasury bills	—		96,168
Asset-backed securities	—		77,840
Euro liquidity fund	—		62,045
Agency bonds	—		12,887
Sovereign bonds	—		11,645
Municipal bonds	—		6,699
Supranational bonds	—		1,902
Cash flow hedge forward contracts	—		327
Economic hedge forward contracts	—		7
Liabilities:
Cash flow hedge forward contracts	—		762
Economic hedge forward contracts	—		17

The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1.

The Company’s debt securities and forward contracts are reported at fair value based upon model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset or liability, and are therefore classified as Level 2. Management is responsible for estimating the fair value of these financial assets and liabilities, and in doing so, considers valuations provided by a large, third-party pricing service. For debt securities, this service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the daily valuations. The Company's forward contracts are typically traded or executed in over-the-counter markets with a high degree of pricing transparency. The market participants are generally large commercial banks.

The Company did not record an other-than-temporary impairment of these financial assets or liabilities during the three-month period ended April 5, 2015.

Financial Assets that are Measured at Fair Value on a Non-recurring Basis

The Company has an interest in a limited partnership, which is accounted for using the cost method and is required to be measured at fair value on a non-recurring basis. Management is responsible for estimating the fair value of this investment, and in doing so, considers valuations of the partnership’s investments as determined by the General Partner. Publicly-traded investments in active markets are reported at the market closing price less a discount, as appropriate, to reflect restricted marketability. Fair value for private investments for which observable market prices in active markets do not exist is based upon the best information available including the value of a recent financing, reference to observable valuation measures for comparable companies (such as revenue multiples), public or private transactions (such as the sale of a comparable company), and valuations for publicly-traded comparable companies. The valuations also incorporate the General Partner’s own judgment and close familiarity with the business activities of each portfolio company. Significant increases or decreases in any of these inputs in isolation may result in a significantly lower or higher fair value measurement. The portfolio consists of securities of public and private companies, and consequently, inputs used in the fair value calculation are classified as Level 3. The Company did not record an other-than-temporary impairment of this asset during the three-month period ended April 5, 2015.

9

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis

Non-financial assets such as goodwill, intangible assets, and property, plant, and equipment are required to be measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets during the three-month period ended April 5, 2015.

NOTE 4: Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following (in thousands):

	April 5, 2015		December 31, 2014
Cash	$	34,807	$	54,917
Money market instruments	1,240		777
Cash and cash equivalents	36,047		55,694
Euro liquidity fund	62,045		48,235
Corporate bonds	37,413		30,889
Treasury bills	31,644		—
Sovereign bonds	5,605		—
Supranational bonds	1,902		1,901
Municipal bonds	1,819		1,237
Agency bonds	1,523		6,883
Asset-backed securities	392		1,311
Short-term investments	142,343		90,456
Corporate bonds	204,221		216,294
Asset-backed securities	77,448		62,556
Treasury bills	64,524		90,412
Agency bonds	11,364		9,566
Sovereign bonds	6,040		13,461
Municipal bonds	4,880		6,600
Limited partnership interest	1,956		1,956
Long-term investments	370,433		400,845
	$	548,823	$	546,995

The Euro liquidity fund invests in a portfolio of investment-grade bonds; corporate bonds consist of debt securities issued by both domestic and foreign companies; treasury bills consist of debt securities issued by both the U.S. and foreign governments; sovereign bonds consist of direct debt issued by foreign governments; supranational bonds consist of direct debt issued by two or more foreign central governments; municipal bonds consist of debt securities issued by state and local government entities; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; and asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement. The Euro liquidity fund is denominated in Euros, and the remaining securities are denominated in U.S. Dollars.

10

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the Company’s available-for-sale investments as of April 5, 2015 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term:
Euro liquidity fund	$	61,866	$	179	$	—		$	62,045
Corporate bonds	37,356		58		(1		)	37,413
Treasury bills	31,652		—		(8		)	31,644
Sovereign bonds	5,594		11		—			5,605
Supranational bonds	1,900		2		—			1,902
Municipal bonds	1,814		5		—			1,819
Agency bonds	1,521		2		—			1,523
Asset-backed securities	392		—		—			392
Long-term:
Corporate bonds	203,712		618		(109		)	204,221
Asset-backed securities	77,417		43		(12		)	77,448
Treasury bills	64,468		57		(1		)	64,524
Agency bonds	11,344		20		—			11,364
Sovereign bonds	6,033		7		—			6,040
Municipal bonds	4,855		25		—			4,880
	$	509,924	$	1,027	$	(131	)	$	510,820

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of April 5, 2015 (in thousands):

	Unrealized Loss Position For:
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	48,070	$	(109	)	$	399	$	(1	)	$	48,469	$	(110	)
Treasury bills	33,143		(9		)	—		—			33,143		(9		)
Asset-backed securities	16,974		(7		)	2,597		(5		)	19,571		(12		)
	$	98,187	$	(125	)	$	2,996	$	(6	)	$	101,183	$	(131	)

As of April 5, 2015, the Company did not recognize an other-than-temporary impairment of these investments. In its evaluation, management considered the type of security, the credit rating of the security, the length of time the security has been in a loss position, the size of the loss position, our intent and ability to hold the security to expected recovery of value, and other meaningful information. The Company does not intend to sell, and is unlikely to be required to sell, any of these available-for-sale investments before its effective maturity or market price recovery.

The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $197,000 and $168,000, respectively, during the three-month period ended April 5, 2015 and $512,000 and $11,000, respectively, during the three-month period ended March 30, 2014. These gains and losses are included in "Investment income" on the Consolidated Statement of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, are recorded in shareholders’ equity as other comprehensive income (loss).

11

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of April 5, 2015 (in thousands):

	1 Year or Less		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-8 Years		Total
Corporate bonds	$	37,413	$	101,597	$	74,312	$	22,542	$	5,770	$	—	$	241,634
Treasury bills	31,644		64,524		—		—		—		—		96,168
Asset-backed securities	392		8,564		38,917		16,673		8,982		4,312		77,840
Euro liquidity fund	62,045		—		—		—		—		—		62,045
Agency bonds	1,523		6,360		5,004		—		—		—		12,887
Sovereign bonds	5,605		6,040		—		—		—		—		11,645
Municipal bonds	1,819		334		3,546		—		—		1,000		6,699
Supranational bonds	1,902		—		—		—		—		—		1,902
	$	142,343	$	187,419	$	121,779	$	39,215	$	14,752	$	5,312	$	510,820

The Company is a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with an expiration date of December 31, 2015. As of April 5, 2015, the Company contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock at any time before December 31, 2015. Distributions and contributions are at the discretion of Venrock’s management. No contributions were made and no distributions were received during the three-month period ended April 5, 2015.

NOTE 5: Inventories

Inventories consisted of the following (in thousands):

	April 5, 2015		December 31, 2014
Raw materials	$	29,621	$	23,498
Work-in-process	10,885		5,753
Finished goods	7,952		6,285
	$	48,458	$	35,536

NOTE 6: Warranty Obligations

The Company records the estimated cost of fulfilling product warranties at the time of sale based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or circumstances impacting product quality become known that would not have been taken into account using historical data. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers and third-party contract manufacturers, the Company’s warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. An adverse change in any of these factors may result in the need for additional warranty provisions. Warranty obligations are included in “Accrued expenses” on the Consolidated Balance Sheets.

The changes in the warranty obligations were as follows (in thousands):

Balance as of December 31, 2014	$	4,494
Provisions for warranties issued during the period	734
Fulfillment of warranty obligations	(608		)
Foreign exchange rate changes	(412		)
Balance as of April 5, 2015	$	4,208

NOTE 7: Contingencies

In March 2013, the Company filed a lawsuit against Microscan Systems, Inc. (“Microscan”) and Code Corporation in the United States District Court for the Southern District of New York alleging that Microscan’s Mobile Hawk handheld imager infringes U.S. Patent 7,874,487 owned by the Company (the “'487 patent”). The lawsuit sought to prohibit Code Corporation from manufacturing the product, and Microscan from selling and distributing the product. The Company also sought monetary damages resulting from the alleged infringement. Late in the day on April 30, 2014, the jury

12

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

found that Microscan willfully infringed the ‘487 patent and awarded Cognex $2,600,000 in damages. Following the verdict, Microscan filed motions requesting judgment as a matter of law on the issues of infringement, invalidity and willfulness, as well as a motion to dismiss for lack of standing. The Company filed motions seeking treble damages (based on the finding of willfulness), attorneys’ fees as an exceptional case, and a permanent injunction against future infringement of the ‘487 patent and the import, manufacture and/or sale of Microscan’s Mobile Hawk product within the U.S. In June 2014, the court issued an order denying all of Microscan’s motions and the Company’s motion for treble damages, while granting the Company’s motion for permanent injunction (limited to enjoining future infringement of the ‘487 patent and the import, manufacture and/or sale of infringing versions of Microscan’s Mobile Hawk product within the U.S.) and the Company’s motion for attorneys’ fees, in part, pending a determination thereof following submission of supplemental briefs by both parties. In July 2014, Microscan filed a Notice of Appeal with the Federal Circuit appealing all orders, findings, and/or conclusions of the District Court that were adverse to Microscan. In August 2014, the Company filed a Notice of Appeal with the Federal Circuit appealing the order granting summary judgment that claims 23, 28, and 29 of the ’487 patent are invalid. Also in August 2014, the Federal Circuit consolidated Microscan’s appeal and the Company’s appeal. In November 2014, the Company filed an unopposed motion to dismiss the Company's appeal, and in December 2014, the Court of Appeals granted the Company's motion to dismiss the Company's appeal. In January 2015, Microscan submitted their appeal brief asserting that the damage award should be vacated, the infringement judgment should be reversed, and that the remaining '487 claims are invalid. The Company filed its response to Microscan’s appeal brief, contesting all assertions therein, on March 16, 2015.

In August 2014, Microscan filed a lawsuit against the Company in the United States District Court for the Southern

District of New York alleging that the Company’s DataMan® 8500 handheld imager infringes U.S. Patent 6,352,204

(the “'204 patent”). The lawsuit sought to prohibit the Company from manufacturing, selling, and distributing the DataMan® 8500 product. Microscan also sought monetary damages resulting from the alleged infringement. In September 2014, the Company filed an Answer to the Complaint denying all allegations and asserting in a counterclaim that the ’204 patent is invalid. In October 2014, the Company filed an Amended Answer further explaining its counterclaim of invalidity. Also in October 2014, Microscan filed an Amended Complaint alleging that the Company’s DataMan® 7500 and DataMan® 8600 also infringe the ’204 patent. The Company subsequently responded in October 2014 with its Answer to the Amended Complaint. In December 2014, a Markman hearing regarding the legal construction of the relevant patent claim terms was held. In January 2015, the Court issued an order construing such patent claim terms. In early February 2015, the Company submitted summary judgment motions. On April 6, 2015 the Court issued its rulings on the summary judgment motions. The Court partially granted the Company’s summary judgment motion of non-infringement, dismissing Microscan’s contention that the accused products literally infringe, but denying summary judgment to the Company with respect to Microscan’s claim of infringement under other doctrines. The Court granted the Company’s motion for summary judgment dismissing Microscan’s contention that any infringement was willful. The Court denied the Company’s motion for summary judgment with respect to the invalidity of one claim and denied the Company’s motion on the claim of laches. The Court granted Microscan’s motion for summary judgment holding that the Company infringed a single claim. The trial took place from April 21, 2015 to April 29, 2015 in the Southern District of New York. On April 30, 2015, the jury reached a verdict awarding Microscan royalties of $4,411,000 related to sales of the Company’s products during the applicable period. Cognex intends to file an appeal, subject to the Court’s final assessment and decisions regarding the jury’s verdict.

The Company cannot predict the outcome of the above-referenced pending matter and an adverse resolution of this lawsuit could have a material adverse effect on the Company’s financial position, liquidity, results of operations, and/or indemnification obligations. In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these incidental matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations.

NOTE 8: Guarantees

In the ordinary course of business, the Company enters into guarantee contracts with certain customers, generally in the Company’s Surface Inspection Systems Division (SISD) business. These guarantees represent standby letters of credit (LOC) which can be grouped into three categories: (1) bank guarantees which may require the Company to return a customer’s initial payment if the Company cannot deliver the order; (2) warranty bonds which may require the Company to resolve warranty issues within a specified time period; and (3) performance bonds which include a combination of the above two options. The type of LOC is generally determined based upon customer request and the guarantee amount represents the maximum potential amount of future payments. All of the Company’s LOCs are with the same counterparty and they do not contain any recourse provisions or collateral obligations.

13

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table details the letters of credit outstanding as of April 5, 2015:

Type	Guarantee Amount (in thousands)		Guarantee Due Date
Bank guarantees	$	1,241	Various from May 2015 to January 2017
Warranty bonds	594		Various from May 2015 to December 2016
Performance bonds	568		Various from June 2015 to December 2017
	$	2,403

The Company evaluates losses for guarantees under accounting for contingencies. The Company considers such factors as the degree of probability that the Company would be required to satisfy the guarantee and the ability to make a reasonable estimate of the loss. To date, the Company has not incurred any losses as a result of these obligations, and therefore, has not recorded any liability related to such obligation in its financial statements. The fair value of the Company’s outstanding guarantees is immaterial for all periods presented.

NOTE 9: Indemnification Provisions

Except as limited by Massachusetts law, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which he or she is involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. The maximum potential amount of future payments the Company could be required to make under these provisions is unlimited. The Company has never incurred significant costs related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal.

In the ordinary course of business, the Company may accept standard limited indemnification provisions in connection with the sale of its products, whereby it indemnifies its customers for certain direct damages incurred in connection with third-party patent or other intellectual property infringement claims with respect to the use of the Company’s products. The term of these indemnification provisions generally coincides with the customer’s use of the Company’s products. The maximum potential amount of future payments the Company could be required to make under these provisions is generally subject to fixed monetary limits. The Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal.

In the ordinary course of business, the Company also accepts limited indemnification provisions from time to time, whereby it indemnifies customers for certain direct damages incurred in connection with bodily injury and property damage arising from the installation of the Company’s products. The term of these indemnification provisions generally coincides with the period of installation. The maximum potential amount of future payments the Company could be required to make under these provisions is generally limited and is likely recoverable under the Company’s insurance policies. As a result of this coverage, and the fact that the Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions, the Company believes the estimated fair value of these provisions is minimal.

NOTE 10: Derivative Instruments

The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. Currently, the Company enters into two types of hedges to manage this risk. The first are economic hedges which utilize foreign currency forward contracts with maturities of up to 45 days to manage the exposure to fluctuations in foreign currency exchange rates arising primarily from foreign-denominated receivables and payables. The gains and losses on these derivatives are intended to be offset by the changes in the fair value of the assets and liabilities being hedged. These economic hedges are not designated as hedging instruments for hedge accounting treatment. The second are cash flow hedges which utilize foreign currency forward contracts with maturities of up to 18 months to hedge specific forecasted transactions of the Company's foreign subsidiaries with the goal of protecting our budgeted revenues and expenses against foreign currency exchange rate changes compared to our budgeted rates. These cash flow hedges are designated as hedging instruments for hedge accounting treatment.

14

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The Company had the following outstanding forward contracts (in thousands):

	As of April 5, 2015			As of December 31, 2014
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Designated as Hedging Instruments:
Japanese Yen	1,266,500	$	9,836	1,225,000	$	10,211
Hungarian Forint	818,000	2,864		803,000	3,099
Singapore Dollar	3,274	2,214		3,515	2,564
Canadian Dollar	487	440		758	688
British Pound	304	408		491	732
Derivatives Not Designated as Hedging Instruments:
Japanese Yen	785,000	$	6,542	535,000	$	4,464
British Pound	1,650	2,432		1,400	2,183
Taiwanese Dollar	34,500	1,109		28,000	883
Korean Won	1,100,000	1,003		940,000	858
Singapore Dollar	1,250	918		1,225	922
Hungarian Forint	234,000	850		410,000	1,569

Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance	Fair Value				Balance	Fair Value
	Sheet Location	April 5, 2015		December 31, 2014		Sheet Location	April 5, 2015		December 31, 2014
Derivatives Designated as Hedging Instruments:
Cash flow hedge forward contracts	Prepaid expenses and other current assets	$	327	$	108	Accrued expenses	$	762	$	84
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	7	$	6	Accrued expenses	$	17	$	13

The table below details the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with each counterparty (in thousands):

Asset Derivatives							Liability Derivatives
	April 5, 2015			December 31, 2014				April 5, 2015			December 31, 2014
Gross amounts of recognized assets	$	335		$	188		Gross amounts of recognized liabilities	$	819		$	149
Gross amounts offset	(1		)	(74		)	Gross amounts offset	(40		)	(52		)
Net amount of assets presented	$	334		$	114		Net amount of liabilities presented	$	779		$	97

15

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Information regarding the effect of derivative instruments, net of the underlying exposure, on the consolidated financial statements was as follows (in thousands):

	Location in Financial Statements	Three-months Ended
		April 5, 2015			March 30, 2014
Derivatives Designated as Hedging Instruments:
Gains (losses) recorded in shareholders' equity (effective portion)	Accumulated other comprehensive income (loss), net of tax	$	(378	)	$	(62	)
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	Product revenue	$	(152	)	$	13
	Research, development, and engineering expenses	1			(30		)
	Selling, general, and administrative expenses	41			(16		)
	Total gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations	$	(110	)	$	(33	)
Gains (losses) recognized in current operations (ineffective portion and discontinued derivatives)	Foreign currency gain (loss)	$	—		$	—
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	78		$	(152	)

The following table provides the changes in accumulated other comprehensive income (loss), net of tax, related to derivative instruments (in thousands):

Balance as of December 31, 2014	$	32
Reclassification of net realized loss on cash flow hedges into current operations	110
Net unrealized loss on cash flow hedges	(520		)
Balance as of April 5, 2014	$	(378	)

Net losses expected to be reclassified from accumulated other comprehensive income (loss), net of tax, into current operations within the next twelve months are $401,000.

NOTE 11: Stock-Based Compensation Expense

The Company’s share-based payments that result in compensation expense consist of stock option grants and restricted stock awards. As of April 5, 2015, the Company had 7,823,929 shares available for grant. On April 17, 2015, the 2007 Stock Option and Incentive Plan received shareholder approval for an amendment and restatement of the plan, reserving an additional 2,000,000 shares of common stock, par value $0.002 per share, for issuance. Generally, stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date, vest over four years based upon continuous service, and expire ten years from the grant date. Restricted stock awards are granted with an exercise price equal to the market value of the Company's common stock at the time of grant. Conditions of the award may be based on continuing employment and or achievement of pre-established performance goals and objectives. Vesting for performance-based restricted stock awards and time-based restricted stock awards must be greater than one year and three years, respectively.

16

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the Company’s stock option activity for the three-month period ended April 5, 2015:

	Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014	6,812		$	23.26
Granted	1,399		41.26
Exercised	(586	)	16.49
Forfeited or expired	(24	)	9.20
Outstanding as of April 5, 2015	7,601		$	27.07	7.6	$	178,001
Exercisable as of April 5, 2015	3,137		$	16.59	5.8	$	106,335
Options vested or expected to vest as of   April 5, 2015 (1)	6,732		$	25.79	7.4	$	166,252

 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

The fair values of stock options granted in each period presented were estimated using the following weighted-average assumptions:

	Three-months Ended
	April 5, 2015		March 30, 2014
Risk-free rate	2.1	%	2.7	%
Expected dividend yield	1.25	%	—	%
Expected volatility	40	%	41	%
Expected term (in years)	5.4		5.4

Risk-free rate

The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option.

Expected dividend yield

Generally, the current dividend yield is calculated by annualizing the cash dividend declared by the Company’s Board of Directors and dividing that result by the closing stock price on the grant date. However, in the fourth quarter of 2012, the Company paid the full annual dividends for 2013 and 2014 in advance, and therefore, the dividend yield for those years has been adjusted to zero. A dividend yield of 1.25% was estimated for future periods from 2015 through the expected life of the option.

Expected volatility

The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock.

Expected term

The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time.

The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 74% of its stock options granted to senior management and 73% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated annual forfeiture rate of 10% to all unvested options for senior management and a rate of 11% for all other employees. The Company revised its estimated forfeiture rates in the first quarters of 2015 and 2014, resulting in an increase to compensation expense of $461,000 and $288,000, respectively.

The weighted-average grant-date fair values of stock options granted during the three-month periods ended April 5, 2015 and March 30, 2014 were $14.34 and $15.34, respectively.

17

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The total intrinsic values of stock options exercised for the three-month periods ended April 5, 2015 and March 30, 2014 were $16,740,000 and $8,933,000, respectively. The total fair values of stock options vested for the three-month periods ended April 5, 2015 and March 30, 2014 were $13,523,000 and $8,361,000, respectively.

As of April 5, 2015, total unrecognized compensation expense related to non-vested stock options was $30,963,000, which is expected to be recognized over a weighted-average period of 2.10 years.

The following table summarizes the Company's restricted stock award activity:

	Shares (in thousands)	Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Nonvested as of December 31, 2014	20	$	34.05
Granted	—	—
Vested	—	—
Forfeited or expired	—	—
Nonvested as of April 5, 2015	20	$	34.05	$	329

The fair values of restricted stock awards granted were determined based upon the market value of the Company's common stock at the time of grant. The initial cost is then amortized over the period of vesting until the restrictions lapse. These restricted shares will be fully vested in 2018. Participants are entitled to dividends on restricted stock awards, but only receive those amounts if the shares vest. The sale or transfer of these shares is restricted during the vesting period.

The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended April 5, 2015 were$6,946,000 and $2,337,000, respectively, and for the three-month period ended March 30, 2014 were $4,004,000 and $1,306,000, respectively. No compensation expense was capitalized as of April 5, 2015 or December 31, 2014.

The following table details the stock-based compensation expense by caption for each period presented on the Consolidated Statements of Operations (in thousands):

	Three-months Ended
	April 5, 2015		March 30, 2014
Product cost of revenue	$	420	$	285
Service cost of revenue	73		63
Research, development, and engineering	1,848		1,056
Selling, general, and administrative	4,605		2,600
	$	6,946	$	4,004

NOTE 12: Stock Repurchase Program

In November 2011, the Company’s Board of Directors authorized the repurchase of up to $80,000,000 of the Company’s common stock. Purchases under this 2011 program were completed in 2014. In April 2014, the Company's Board of Directors authorized the repurchase of an additional $50,000,000 of the Company's common stock. Purchases under this 2014 program began in 2014 upon completion of the 2011 program. The Company did not repurchase any shares in the three-month period ended April 5, 2015. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, the impact of dilution from employee stock options, stock price, share availability, and cash requirements.

18

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 13: Taxes

A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate, or income tax provision, was as follows:

	Three-months Ended
	April 5, 2015		March 30, 2014
Income tax provision at federal statutory rate	35	%	35	%
State income taxes, net of federal benefit	1	%	1	%
Foreign tax rate differential	(17	)%	(17	)%
Discrete tax events	(1	)%	—	%
Income tax provision	18	%	19	%

The effective tax rate for the three-month period ended April 5, 2015 included the impact of one discrete tax event, whereby the Company recorded a decrease in tax expense of $364,000 from the expiration of the statutes of limitations for certain reserves for income tax uncertainties. This discrete event decreased the effective tax rate from a provision of 19% to a provision of 18% for the three-month period ended April 5, 2015.

During the three-month period ended April 5, 2015, the Company recorded a $211,000 decrease in reserves for income taxes, net of deferred tax benefit, including a reduction to additional paid in capital of $48,000 and a reduction in income tax expense of $163,000. Included in this net decrease is the discrete event noted above. Estimated interest and penalties included in these amounts totaled $15,000 for the three-month period ended April 5, 2015.

In the first quarter of 2014, management adopted Accounting Standards Update (ASU) 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU requires companies to present an unrecognized tax benefit, or a portion thereof, as a reduction to a deferred tax asset for a net operating loss (NOL) carryforward or a similar tax loss or tax credit carryforward. In the first quarter of 2014, the Company reclassified a reserve for income taxes of $1,028,000 as a reduction to noncurrent deferred tax assets in compliance with this new guidance. Retroactive application was not required under this ASU, and therefore, prior periods were not restated.

The Company’s reserve for income taxes, including gross interest and penalties, was $5,400,000 as of April 5, 2015, which included $4,372,000 classified as a noncurrent liability and $1,028,000 recorded as a reduction to noncurrent deferred tax assets. The amount of gross interest and penalties included in these balances was $494,000. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period, less $616,000 that would be recorded through additional paid-in capital. As a result of the expiration of certain statutes of limitations and the conclusion of the IRS examination, there is a potential that a portion of these reserves could be released, which would decrease income tax expense by approximately $550,000 to $650,000 over the next twelve months.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Japan, and within the United States, Massachusetts and California. Within the United States, the tax years 2012 through 2014 remain open to examination by the Internal Revenue Service, while the tax years 2011 through 2014 remain open to various state taxing authorities, and the tax years 2010 through 2014 remain open to examination by various taxing authorities in other jurisdictions in which the Company operates.

NOTE 14: Weighted-Average Shares

Weighted-average shares were calculated as follows (in thousands):

	Three-months Ended
	April 5, 2015	March 30, 2014
Basic weighted-average common shares outstanding	86,764	86,879
Effect of dilutive stock options	1,985	2,380
Weighted-average common and common-equivalent shares outstanding	88,749	89,259

Stock options to purchase 2,263,787 and 585,208 shares of common stock, on a weighted-average basis, were outstanding during the three-month periods ended April 5, 2015 and March 30, 2014, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive.

19

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 15: Segment Information

The Company has two reportable segments: the Modular Vision Systems Division (MVSD) and the Surface Inspection Systems Division (SISD). MVSD develops, manufactures, and markets modular vision systems that are used to control the manufacture of discrete items by locating, identifying, inspecting, and measuring them during the manufacturing process. SISD develops, manufactures, and markets surface inspection vision systems that are used to inspect surfaces of materials processed in a continuous fashion, such as metals, paper, nonwoven, plastics, and glass, to ensure there are no flaws or defects on the surfaces. Segments are determined based upon the way that management organizes its business for making operating decisions and assessing performance. The Company evaluates segment performance based upon income or loss from operations, excluding stock-based compensation expense.

The following table summarizes information about the segments (in thousands):

Three-months Ended April 5, 2015	MVSD		SISD		Reconciling Items			Consolidated
Product revenue	$	97,494	$	8,281	$	—		$	105,775
Service revenue	3,879		3,780		—			7,659
Operating income	33,307		1,896		(11,286		)	23,917

Three-months Ended March 30, 2014	MVSD		SISD		Reconciling Items			Consolidated
Product revenue	$	77,618	$	5,951	$	—		$	83,569
Service revenue	3,698		3,662		—			7,360
Operating income	28,292		1,013		(6,862		)	22,443

Reconciling items consist of stock-based compensation expense and unallocated corporate expenses, which primarily include corporate headquarters costs, professional fees, and patent infringement litigation. Additional asset information by segment is not produced internally for use by the chief operating decision maker, and therefore, is not presented. Additional asset information is not provided because cash and investments are commingled and the segments share assets and resources in a number of locations around the world.

NOTE 16: Subsequent Events

On April 17, 2015, the 2007 Stock Option and Incentive Plan received shareholder approval for an amendment and restatement of the plan, reserving an additional 2,000,000 shares of common stock, par value $0.002 per share, for issuance.

In addition, on May 4, 2015, the Company’s Board of Directors declared a cash dividend of $0.07 per share. The dividend is payable on June 19, 2015 to all shareholders of record as of the close of business on June 5, 2015.

Finally, on April 30, 2015, the jury reached a verdict awarding Microscan royalties of $4,411,000 related to sales of the Company’s products during the applicable period. Cognex intends to file an appeal, subject to the Court’s final assessment and decisions regarding the jury’s verdict. Additional information regarding this litigation is included in Note 7 to the Consolidated Financial Statements.

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ITEM 2: MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

Certain statements made in this report, as well as oral statements made by the Company from time to time, constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Readers can identify these forward-looking statements by our use of the words “expects,” “anticipates,” “estimates,” “believes,” “projects,” “intends,” “plans,” “will,” “may,” “shall,” “could,” “should,” and similar words and other statements of a similar sense. These statements are based upon our current estimates and expectations as to prospective events and circumstances, which may or may not be in our control and as to which there can be no firm assurances given. These forward-looking statements, which include statements regarding business and market trends, future financial performance, customer order rates, expected areas of growth, emerging markets, future product mix, research and development activities, investments, and strategic plans, involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. Such risks and uncertainties include: (1) the loss of a large customer; (2) current and future conditions in the global economy; (3) the reliance on revenue from the consumer electronics or automotive industries; (4) the inability to penetrate new markets; (5) the cyclicality of the semiconductor and electronics industries; (6) the inability to achieve significant international revenue; (7) fluctuations in foreign currency exchange rates and the use of derivative instruments; (8) the inability to attract and retain skilled employees; (9) the reliance upon key suppliers to manufacture and deliver critical components for our products; (10) the failure to effectively manage product transitions or accurately forecast customer demand; (11) the inability to design and manufacture high-quality products; (12) the technological obsolescence of current products and the inability to develop new products; (13) the failure to properly manage the distribution of products and services; (14) the inability to protect our proprietary technology and intellectual property; (15) our involvement in time-consuming and costly litigation; (16) the impact of competitive pressures; (17) the challenges in integrating and achieving expected results from acquired businesses; (18) potential impairment charges with respect to our investments or for acquired intangible assets or goodwill; (19) exposure to additional tax liabilities; and (20) information security breaches or business system disruptions. The foregoing list should not be construed as exhaustive and we encourage readers to refer to the detailed discussion of risk factors included in Part I-Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014. The Company cautions readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date made. The Company disclaims any obligation to subsequently revise forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date such statements are made.

Executive Overview

Cognex Corporation is a leading worldwide provider of machine vision products that capture and analyze visual information in order to automate tasks, primarily in manufacturing processes, where vision is required. Our Modular Vision Systems Division (MVSD) specializes in machine vision systems and ID products that are used to automate the manufacture and tracking of discrete items, while our Surface Inspection Systems Division (SISD) specializes in machine vision systems that are used to inspect the surfaces of materials processed in a continuous fashion.

In addition to product revenue derived from the sale of machine vision systems, the Company also generates revenue by providing maintenance and support, training, consulting, and installation services to its customers. Our customers can be classified into three primary markets: factory automation, semiconductor and electronics capital equipment, and surface vision.

• Factory automation customers, who are included in the Company’s MVSD segment, purchase Cognex vision products and incorporate them into their manufacturing processes. Virtually every manufacturer can achieve better quality and manufacturing efficiency by using machine vision, and therefore, this market includes a broad base of customers across a variety of industries, including consumer electronics, automotive, consumer products, food and beverage, medical devices, and pharmaceuticals. The factory automation market also includes customers who purchase Cognex vision products for use outside of the assembly process, such as using ID products in logistics automation for package sorting and distribution. Sales to factory automation customers represented 84% of total revenue in the first quarter of 2015.

• Semiconductor and electronics capital equipment manufacturers, who are included in the Company’s MVSD segment, purchase Cognex vision products and integrate them into the automation equipment that they manufacture and then sell to their customers to either make semiconductor chips or assemble printed

21

circuit boards. Demand from these capital equipment manufacturers has historically been highly cyclical, with periods of investment followed by downturn. Sales to semiconductor and electronics capital equipment manufacturers represented 6% of total revenue in the first quarter of 2015.

• Surface vision customers, who comprise the Company’s SISD segment, are manufacturers of materials processed in a continuous fashion, such as metals, paper, nonwoven, plastics, and glass. These customers need sophisticated machine vision to detect, classify, and analyze defects on the surfaces of those materials as they are being processed at high speeds. Surface inspection sales represented 10% of total revenue in the first quarter of 2015.

Revenue for the first quarter of 2015 totaled $113,434,000, representing an increase of $22,505,000, or 25%, from the first quarter of 2014 driven by higher sales to factory automation customers. Gross margin was 75% of revenue in the first quarter of 2015 compared to 77% of revenue in the first quarter of 2014 due to volume pricing discounts on certain large orders and a shift in mix to relatively lower margin maintenance and support services. Operating expenses increased by $14,161,000, or 30%, from the first quarter of 2014 due primarily to higher personnel-related costs resulting from additional headcount. Management believes these personnel investments are important to the Company's efforts to maintain the record levels of business achieved by the Company in the prior year and generate further growth. Operating income increased by $1,474,000, or 7%, over the first quarter of 2014. Operating income was $23,917,000, or 21% of revenue, in the first quarter of 2015 compared to $22,443,000, or 25% of revenue, in the first quarter of 2014; net income was $20,502,000, or 18% of revenue, in the first quarter of 2015 compared to $18,506,000, or 20% of revenue, in the first quarter of 2014; and net income per diluted share was $0.23 in the first quarter of 2015 compared to $0.21 in the first quarter of 2014.

Results of Operations

As foreign currency exchange rates are a factor in understanding period-to-period comparisons, we believe the presentation of results on a constant-currency basis in addition to reported results helps improve investors’ ability to understand our operating results and evaluate our performance in comparison to prior periods. We also use results on a constant-currency basis as one measure to evaluate our performance.  Constant-currency information compares results between periods as if exchange rates had remained constant period-over-period. We generally refer to such amounts calculated on a constant-currency basis as excluding the impact of foreign currency exchange rate changes. Results on a constant-currency basis are not in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) and should be considered in addition to, and not as a substitute for, results prepared in accordance with U.S. GAAP.

Revenue

Revenue for the first quarter of 2015 increased by $22,505,000, or 25%, from the first quarter of 2014. Although the Company recorded higher sales in all three markets it serves, this increase was primarily attributable to the factory automation market.

Factory Automation Market

Sales to customers in the factory automation market represented 84% of total revenue in the first quarter of 2015, compared to 83% in the first quarter of 2014. Sales to these customers increased by $19,743,000, or 26%, from the first quarter of 2014. Excluding the impact of foreign currency exchange rate changes on revenue, sales to factory automation customers increased by $25,709,000, or 34%, compared to the first quarter of 2014, as sales denominated in foreign currencies, primarily the Euro, were translated to U.S. Dollars at a lower rate. This relatively high factory automation growth rate was driven by revenue from large orders in the consumer electronics industry recognized in the first quarter of 2015.

Sales to factory automation customers increased by $1,557,000, or 2%, from the fourth quarter of 2014. Excluding the impact of foreign currency exchange rates on revenue, sales to factory automation customers increased by $4,661,000, or 5%, compared to the fourth quarter of 2014. Management expects factory automation revenue to continue to grow in the second quarter as compared to the first quarter.

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Semiconductor and Electronics Capital Equipment Market

Sales to customers who make automation equipment for the semiconductor and electronics industries represented 6% and 7% of total revenue in the first quarters of 2015 and 2014, respectively. Sales to these customers increased by $315,000, or 5%, from the first quarter of 2014 and increased by $1,315,000, or 26%, from the fourth quarter of 2014. The impact of foreign currency exchange rate changes on revenue was not significant in either period. Despite the positive sequential momentum, the semiconductor and electronics capital equipment market has historically been highly cyclical and management has limited visibility regarding future order levels from these customers.

Surface Inspection Market

Sales to customers in the surface inspection market represented 10% of total revenue in both the first quarters of 2015 and 2014. Revenue from these customers increased by $2,448,000, or 25%, from the first quarter of 2014, as the first quarter of 2014 was adversely impacted by delays in revenue recognition related to a new software release. Sequentially, surface inspection revenue decreased by $6,621,000, or 35%, from the fourth quarter of 2014, which was a record revenue quarter for the Company in this market. The impact of foreign currency exchange rate changes on revenue was not significant in either period. Surface inspection revenue reported each quarter can vary significantly depending upon the timing of customer orders, system deliveries, and installations, as well as the impact of revenue deferrals.

Product Revenue

Product revenue increased by $22,206,000, or 27%, from the first quarter of 2014. A higher volume of systems sold to MVSD customers accounted for $19,876,000 of the increase. The remaining increase of $2,330,000 came from higher SISD product revenue.

Service Revenue

Service revenue, which is derived from the sale of maintenance and support, training, consulting, and installation services, increased by $299,000, or 4%, from the first quarter of 2014. Higher MVSD maintenance and support revenue was partially offset by lower revenue from MVSD consulting services. Service revenue as a percentage of total revenue was 7% in the first quarter of 2015 compared to 8% in the first quarter of 2014.

Gross Margin

Gross margin as a percentage of revenue was 75% in the first quarter of 2015 compared to 77% in the first quarter of 2014. This decrease was due to lower MVSD margins as described below.

MVSD Margin

MVSD gross margin as a percentage of revenue was 78% in the first quarter of 2015 compared to 80% in the first quarter of 2014 due to lower product and service margins. The lower product margin was due to volume pricing discounts on certain large orders, as well as higher new product introduction costs. These product margin decreases were partially offset by the favorable impact of material cost reductions and volume purchasing, as well as manufacturing efficiencies achieved from higher revenue levels as fixed manufacturing costs were spread over a larger revenue base. The lower service margin was due to a shift in mix to relatively lower-margin maintenance and support services.

SISD Margin

SISD gross margin as a percentage of revenue was 53% in the first quarter of 2015 compared to 52% in the first quarter of 2014. The increase was due to a higher product margin and a greater percentage of SISD revenue from the sale of products, which have higher margins than the sale of services, partially offset by lower service margins. The product margin increase was due to manufacturing efficiencies achieved from higher revenue levels, while the lower service margin was due to a shift in mix to relatively lower-margin installation services.

Product Margin

Product gross margin as a percentage of revenue was 78% in the first quarter of 2015 compared to 79% in the first quarter of 2014. This decrease was due to lower MVSD product margins as described above.

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Service Margin

Service gross margin as a percentage of revenue was 44% in the first quarter of 2015 compared to 48% in the first quarter of 2014. This decrease was due to lower MVSD service margins as described above.

Research, Development, and Engineering Expenses

Research, development, and engineering (RD&E) expenses for the first quarter of 2015 increased by $5,574,000, or 45%, compared to the same period in 2014. MVSD RD&E expenses increased by $5,418,000, or 47%, and SISD RD&E expenses increased by $156,000, or 15%.

The table below details the $5,418,000 net increase in MVSD RD&E in 2015 (in thousands):

MVSD RD&E expenses in 2014	$	11,479
Personnel-related costs	2,056
Outsourced engineering costs	1,323
Stock-based compensation expense	848
Engineering prototypes	659
Company bonus accruals	257
Foreign currency exchange rate changes	(619		)
Other	894
MVSD RD&E expenses in 2015	$	16,897

The increase in MVSD RD&E expenses was due to higher personnel-related costs, such as salaries and fringe benefits, resulting from headcount additions and modest salary increases granted early in 2015. Headcount was added to support the significantly higher level of business in 2014 and these investments are expected to continue in 2015. The Company also incurred higher spending on outsourced engineering costs and engineering prototypes. In addition, stock-based compensation expense increased due to a higher stock price valuation for options granted in the previous four years and company bonus expense increased due to the additional headcount. Offsetting these increases was the favorable impact of a weaker Euro, as expenses denominated in Euros were translated to U.S. Dollars at a lower rate.

The increase in SISD RD&E expenses was due to higher spending on engineering prototypes ($118,000).

RD&E expenses as a percentage of revenue was 16% in the first quarter of 2015 compared to 14% in the first quarter of 2014. We believe that a continued commitment to RD&E activities is essential in order to maintain or achieve product leadership with our existing products and to provide innovative new product offerings. In addition, we consider our ability to accelerate time to market for new products to be critical to our revenue growth. Therefore, we expect to continue to make significant RD&E investments in the future, and we target our RD&E spending to be between 10% and 15% of revenue. This percentage is impacted by revenue levels.

Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses for the first quarter of 2015 increased by $8,587,000, or 25%, compared to the same period in 2014. MVSD SG&A expenses increased by $5,611,000, or 20%, while SISD SG&A expenses increased by $305,000, or 9%. Corporate expenses that are not allocated to either division increased by $2,671,000, or 66%.

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The table below details the $5,611,000 net increase in MVSD SG&A in 2015 (in thousands):

MVSD SG&A expenses in 2014	$	27,571
Personnel-related costs	4,770
Stock-based compensation expense	987
Travel expenses	550
Outsourced professional services	439
Company bonus accruals	278
Foreign currency exchange rate changes	(2,378		)
Other	965
MVSD SG&A expenses in 2015	$	33,182

The increase in MVSD SG&A expenses was due to headcount additions, resulting in higher personnel-related costs, such as salaries, fringe benefits, sales commissions, and travel expenses, as well as modest salary increases granted early in 2015. Headcount was added to support the significantly higher level of business in 2014 and these investments are expected to continue in 2015. Stock-based compensation expense increased due to a higher stock price valuation for options granted in the previous four years and company bonus expense increased due to the additional headcount. Excluding the impact of increased headcount, travel expenses were also higher to support the higher levels of business. In addition, the Company incurred higher spending on outsourced professional services, primarily related to human resources and information systems. Offsetting these increases was the favorable impact of a weaker Euro and to a lesser extent a weaker Japanese Yen, as expenses denominated in these currencies were translated to U.S. Dollars at lower rates.

The increase in SISD SG&A expenses was primarily due to higher sales commissions ($194,000), personnel-related costs ($137,000), and travel costs ($100,000). Offsetting these increases was the favorable impact of foreign currency exchange rates, namely a weaker Japanese Yen and Euro, as expenses denominated in these currencies were translated to U.S. Dollars at lower rates ($215,000).

The increase in corporate expenses was due principally to higher stock-based compensation expense ($1,189,000) and higher legal fees related to the Company's patent-infringement actions against Microscan Systems, Inc., as described in the Notes to Consolidated Financial Statements ($1,167,000).

Nonoperating Income (Expense)

The Company recorded foreign currency gains of $405,000 in the first quarter of 2015 compared to foreign currency losses of $110,000 in the first quarter of 2014. The foreign currency gains and losses in each period resulted primarily from the revaluation and settlement of accounts receivable, accounts payable, and intercompany balances that are reported in one currency and collected in another.

Investment income increased by $63,000, or 8%, from the first quarter of 2014 due to increased funds available for investment, partially offset by declining yields, on average, on the Company's portfolio of debt securities.

The Company recorded other expense of $310,000 and $273,000 in the first quarters of 2015 and 2014, respectively. Other income (expense) includes rental income, net of associated expenses, from leasing buildings adjacent to the Company’s corporate headquarters.

Income Tax Expense

The Company’s effective tax rate was 18% and 19% for the first quarters of 2015 and 2014, respectively. The effective tax rate for the first quarter of 2015 included the impact of one discrete tax event, whereby the Company recorded a decrease in tax expense of $364,000 related to the expiration of statutes of limitations for certain reserves for income tax uncertainties. No discrete tax events were recorded in the first quarter of 2014.

Excluding the impact of this discrete event, the Company’s effective tax rate was 19% in both periods presented.

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Liquidity and Capital Resources

The Company has historically been able to generate positive cash flow from operations, which has funded its operating activities and other cash requirements and has resulted in an accumulated cash, cash equivalent, and investment balance of $548,823,000 as of April 5, 2015. The Company has established guidelines relative to credit ratings, diversification, and maturities of its investments that maintain liquidity.

The Company’s cash requirements during the three months ended April 5, 2015 were met with its existing cash balances, cash from investment maturities, and the proceeds from stock option exercises. Cash flows from operating activities, which included large cash outlays primarily related to the purchase of inventory, the payout of the annual Company bonus, the final payment related to the 2014 acquisition of a building in Cork, Ireland, and the payment of income taxes to various jurisdictions, were relatively flat in the first quarter of 2015. In addition to operating activities, cash requirements consisted of purchases of investments and capital expenditures. Capital expenditures for the three months ended April 5, 2015 totaled $4,264,000 and consisted primarily of expenditures for building improvements at the Company's headquarters and adjacent buildings in Natick, Massachusetts, as well as computer hardware and manufacturing test equipment related to new product introductions.

The Company is a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with the commitment period expiring on December 31, 2015. The Company does not have the right to withdraw from the partnership prior to this date. As of April 5, 2015, the Company had contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock in any period through December 31, 2015. Distributions and contributions are at the discretion of Venrock’s management. No contributions were made and no distributions were received during the three months ended April 5, 2015.

On May 4, 2015, the Company’s Board of Directors declared a cash dividend of $0.07 per share payable in the second quarter of 2015. Future dividends will be declared at the discretion of the Company’s Board of Directors and will depend upon such factors as the Board deems relevant including, among other things, the Company’s ability to generate positive cash flows from operations.

In November 2011, the Company’s Board of Directors authorized the repurchase of up to $80,000,000 of the Company’s common stock. Purchases under this 2011 program were completed in 2014. In April 2014, the Company's Board of Directors authorized the repurchase of an additional $50,000,000 of the Company's common stock. Purchases under this 2014 program began in 2014 upon completion of the 2011 program. The Company did not repurchase any shares during the three-months ended April 5, 2015. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, the impact of dilution from employee stock options, stock price, share availability, and cash requirements.

The Company believes that its existing cash, cash equivalent, and investment balances, together with cash flow from operations, will be sufficient to meet its operating, investing, and financing activities for the next twelve months. As of April 5, 2015, the Company had approximately $546,867,000 in cash, cash equivalents, and debt securities that could be converted into cash. In addition, the Company has no debt and does not anticipate needing debt financing in the near future. We believe that our strong cash position has put us in a relatively good position with respect to our longer-term liquidity needs.

New Pronouncements

Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers”

The amendments in ASU 2014-09 will supersede and replace all currently existing U.S. GAAP, including industry-specific revenue recognition guidance, with a single, principle-based revenue recognition framework. The concept guiding this new model is that revenue recognition will depict transfer of control to the customer in an amount that reflects consideration to which an entity expects to be entitled. The core principles supporting this framework include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue. This new framework will require entities to apply significantly more judgment. This increase in management judgment will require expanded disclosure on estimation methods, inputs, and assumptions for revenue recognition. The guidance in ASU 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016 and currently early adoption is not permitted. However, the Financial Accounting Standards Board is

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considering delaying the effective date of this standard by one year and also allowing early adoption. Management will continue to evaluate the impact of this standard as it evolves.

Accounting Standards Update (ASU) 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software"

ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, then the customer should account for the arrangement as a service contract. For public companies, the guidance in ASU 2015-05 is effective for annual periods beginning after December 15, 2015, and interim periods thereafter. Early adoption is permitted. Management does not expect ASU 2015-05 to have a material impact on the Company's financial statements and disclosures.

ITEM 3: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes to the Company’s exposures to market risk since December 31, 2014.

ITEM 4: CONTROLS AND PROCEDURES

As required by Rules 13a-15 and 15d-15 of the Securities Exchange Act of 1934, the Company has evaluated, with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, the effectiveness of its disclosure controls and procedures (as defined in such rules) as of the end of the period covered by this report. Based on such evaluation, the Chief Executive Officer and Chief Financial Officer concluded that such disclosure controls and procedures were effective as of that date. From time to time, the Company reviews its disclosure controls and procedures, and may from time to time make changes aimed at enhancing their effectiveness and to ensure that the Company’s systems evolve with its business. There was no change in the Company’s internal control over financial reporting that occurred during the quarter ended April 5, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

In March 2013, the Company filed a lawsuit against Microscan Systems, Inc. (“Microscan”) and Code Corporation in the United States District Court for the Southern District of New York alleging that Microscan’s Mobile Hawk handheld imager infringes U.S. Patent 7,874,487 owned by the Company (the “'487 patent”). The lawsuit sought to prohibit Code Corporation from manufacturing the product, and Microscan from selling and distributing the product. The Company also sought monetary damages resulting from the alleged infringement. Late in the day on April 30, 2014, the jury found that Microscan willfully infringed the ‘487 patent and awarded Cognex $2.6M in damages. Following the verdict, Microscan filed motions requesting judgment as a matter of law on the issues of infringement, invalidity and willfulness, as well as a motion to dismiss for lack of standing. The Company filed motions seeking treble damages (based on the finding of willfulness), attorneys’ fees as an exceptional case, and a permanent injunction against future infringement of the ‘487 patent and the import, manufacture and/or sale of Microscan’s Mobile Hawk product within the U.S. In June 2014, the court issued an order denying all of Microscan’s motions and the Company’s motion for treble damages, while granting the Company’s motion for permanent injunction (limited to enjoining future infringement of the ‘487 patent and the import, manufacture and/or sale of infringing versions of Microscan’s Mobile Hawk product within the U.S.) and the Company’s motion for attorneys’ fees, in part, pending a determination thereof following submission of supplemental briefs by both parties. In July 2014, Microscan filed a Notice of Appeal with the Federal Circuit appealing all orders, findings, and/or conclusions of the District Court that were adverse to Microscan. In August 2014, the Company filed a Notice of Appeal with the Federal Circuit appealing the order granting summary judgment that claims 23, 28, and 29 of the ’487 patent are invalid. Also in August 2014, the Federal Circuit consolidated Microscan’s appeal and the Company’s appeal. In November 2014, the Company filed an unopposed motion to dismiss the Company's appeal, and in December 2014, the Court of Appeals granted the Company's motion to dismiss the Company's appeal. In January 2015, Microscan submitted their appeal brief asserting that the damage award should be vacated, the infringement judgment should be reversed, and that the remaining '487 claims are invalid. The Company filed its response to Microscan’s appeal brief, contesting all assertions therein, on March 16, 2015.

In August 2014, Microscan filed a lawsuit against the Company in the United States District Court for the Southern

District of New York alleging that the Company’s DataMan® 8500 handheld imager infringes U.S. Patent 6,352,204

(the “'204 patent”). The lawsuit sought to prohibit the Company from manufacturing, selling, and distributing the DataMan® 8500 product. Microscan also sought monetary damages resulting from the alleged infringement. In September 2014, the Company filed an Answer to the Complaint denying all allegations and asserting in a counterclaim that the ’204 patent is invalid. In October 2014, the Company filed an Amended Answer further explaining its counterclaim of invalidity. Also in October 2014, Microscan filed an Amended Complaint alleging that the Company’s DataMan® 7500 and DataMan® 8600 also infringe the ’204 patent. The Company subsequently responded in October 2014 with its Answer to the Amended Complaint. In December 2014, a Markman hearing regarding the legal construction of the relevant patent claim terms was held. In January 2015, the Court issued an order construing such patent claim terms. In early February 2015, the Company submitted summary judgment motions. On April 6, 2015 the Court issued its rulings on the summary judgment motions. The Court partially granted the Company’s summary judgment motion of non-infringement, dismissing Microscan’s contention that the accused products literally infringe, but denying summary judgment to the Company with respect to Microscan’s claim of infringement under other doctrines. The Court granted the Company’s motion for summary judgment dismissing Microscan’s contention that any infringement was willful. The Court denied the Company’s motion for summary judgment with respect to the invalidity of one claim and denied the Company’s motion on the claim of laches. The Court granted Microscan’s motion for summary judgment holding that the Company infringed a single claim. The trial took place from April 21, 2015 to April 29, 2015 in the Southern District of New York. On April 30, 2015, the jury reached a verdict awarding Microscan royalties of $4,411,000 related to sales of the Company’s products during the applicable period. Cognex intends to file an appeal, subject to the Court’s final assessment and decisions regarding the jury’s verdict.

The Company cannot predict the outcome of the above-referenced pending matter and an adverse resolution of this lawsuit could have a material adverse effect on the Company’s financial position, liquidity, results of operations, and/or indemnification obligations. In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these incidental matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations.

ITEM 1A. RISK FACTORS

For a complete list of factors that could affect the Company’s business, results of operations, and financial condition, see the risk factors discussion provided in Part I—Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The following table sets forth information with respect to purchases by the Company of shares of its Common Stock during the periods indicated.

	Total Number of Shares Purchased	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
January 1—February 1, 2015	—	—	—	$	42,422,000
February 2 —March 1, 2015	—	—	—	$	42,422,000
March 2—April 5, 2015	—	—	—	$	42,422,000
Total	—	—	—	$	42,422,000

(1) In April 2014, the Company's Board of Directors authorized the repurchase of $50,000,000 of the Company's stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101	xBRL (Extensible Business Reporting Language)
	The following materials from Cognex Corporation’s Quarterly Report on Form 10-Q for the period ended April 5, 2015, formatted in xBRL: (i) Consolidated Statements of Operations for the three-month periods ended April 5, 2015 and March 30, 2014; (ii) Consolidated Statements of Comprehensive Income for the three-month periods ended April 5, 2015 and March 30, 2014; (iii) Consolidated Balance Sheets as of April 5, 2015 and December 31, 2014; (iv) Consolidated Statements of Cash Flows for the three-month periods ended April 5, 2015 and March 30, 2014; (v) Consolidated Statement of Shareholders’ Equity for the three-month period ended April 5, 2015; and (vi) Notes to Consolidated Financial Statements.
*	Filed herewith
**	Furnished herewith

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	May 4, 2015	COGNEX CORPORATION
		By:	/s/ Robert J. Willett
			Robert J. Willett
			President and Chief Executive Officer
			(principal executive officer)
		By:	/s/ Richard A. Morin
			Richard A. Morin
			Executive Vice President of Finance and Administration
			and Chief Financial Officer
			(principal financial and accounting officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert J. Willett, certify that:

1    I have reviewed this quarterly report on Form 10-Q of Cognex Corporation;

2    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2015	By:	/s/ Robert J. Willett
			Robert J. Willett
			President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Richard A. Morin, certify that:

1    I have reviewed this quarterly report on Form 10-Q of Cognex Corporation;

2    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3    Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4    The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5    The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	May 4, 2015	By:	/s/ Richard A. Morin
			Richard A. Morin
			Executive Vice President of Finance and Administration
			and Chief Financial Officer

EX-32.1

Exhibit 32.1*

CERTIFICATION PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of Cognex Corporation (the “Company”) hereby certifies to his knowledge that the Company’s quarterly report on Form 10-Q for the quarterly period ended April 5, 2015 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 4, 2015	By:	/s/ Robert J. Willett
			Robert J. Willett
			President and Chief Executive Officer
			(principal executive officer)

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

EX-32.2

Exhibit 32.2*

CERTIFICATION PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of Cognex Corporation (the “Company”) hereby certifies to his knowledge that the Company’s quarterly report on Form 10-Q for the quarterly period ended April 5, 2015 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	May 4, 2015	By:	/s/ Richard A. Morin
			Richard A. Morin
			Executive Vice President of Finance and Administration
			and Chief Financial Officer
			(principal financial officer)

* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

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Cash, Cash Equivalents, and Investments - Gross Unrealized Losses and Fair Values for Available-for-Sale Investments (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	$ 98,187
Unrealized Losses, Less than 12 Months	(125)
Fair Value, 12 Months or Greater	2,996
Unrealized Losses, 12 Months or Greater	(6)
Total Fair Value	101,183
Total Unrealized Losses	(131)
Treasury Bills
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	33,143
Unrealized Losses, Less than 12 Months	(9)
Fair Value, 12 Months or Greater	0
Unrealized Losses, 12 Months or Greater	0
Total Fair Value	33,143
Total Unrealized Losses	(9)
Corporate Bonds
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	48,070
Unrealized Losses, Less than 12 Months	(109)
Fair Value, 12 Months or Greater	399
Unrealized Losses, 12 Months or Greater	(1)
Total Fair Value	48,469
Total Unrealized Losses	(110)
Asset-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Fair Value, Less than 12 Months	16,974
Unrealized Losses, Less than 12 Months	(7)
Fair Value, 12 Months or Greater	2,597
Unrealized Losses, 12 Months or Greater	(5)
Total Fair Value	19,571
Total Unrealized Losses	$ (12)

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Stock-Based Compensation Expense - Summary of Stock Option Activity (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Apr. 05, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding, Shares	6,812
Granted, Shares	1,399
Exercised, Shares	(586)
Forfeited or expired, Shares	(24)
Outstanding, Shares	7,601
Exercisable as of April 5, 2015, Shares	3,137
Options vested or expected to vest as of April 5, 2015, Shares	6,732	[1]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Outstanding, Weighted-Average Exercise Price, in dollars per share	$ 23.26
Granted, Weighted-Average Exercise Price, in dollars per share	$ 41.26
Exercised, Weighted-Average Exercise Price, in dollars per share	$ 16.49
Forfeited or expired, Weighted-Average Exercise Price, in dollars per share	$ 9.20
Outstanding, Weighted-Average Exercise Price, in dollars per share	$ 27.07
Outstanding, Weighted Average Exercise Price	$ 27.07
Exercisable as of April 5, 2015, Weighted-Average Exercise Price, in dollars per share	$ 16.59
Options vested or expected to vest as of April 5, 2015, Weighted-Average Exercise Price, in dollars per share	$ 25.79	[1]
Outstanding, Weighted-Average Remaining Contractual Term	7 years 7 months 0 days
Exercisable, Weighted-Average Remaining Contractual Term	5 years 9 months 1 day
Options vested or expected to vest, Weighted-Average Remaining Contractual Term	7 years 5 months 1 day	[1]
Outstanding, Aggregate Intrinsic Value	$ 178,001
Exercisable, Aggregate Intrinsic Value	106,335
Options vested or expected to vest, Aggregate Intrinsic Value	$ 166,252	[1]

[1] In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

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Derivative Instruments - Outstanding Forward Contracts (Detail) In Thousands, unless otherwise specified	Apr. 05, 2015 Designated as Hedging Instrument Japanese Yen USD ($)	Apr. 05, 2015 Designated as Hedging Instrument Japanese Yen JPY (¥)	Dec. 31, 2014 Designated as Hedging Instrument Japanese Yen USD ($)	Dec. 31, 2014 Designated as Hedging Instrument Japanese Yen JPY (¥)	Apr. 05, 2015 Designated as Hedging Instrument Hungarian Forint USD ($)	Apr. 05, 2015 Designated as Hedging Instrument Hungarian Forint HUF	Dec. 31, 2014 Designated as Hedging Instrument Hungarian Forint USD ($)	Dec. 31, 2014 Designated as Hedging Instrument Hungarian Forint HUF	Apr. 05, 2015 Designated as Hedging Instrument Singapore Dollar USD ($)	Apr. 05, 2015 Designated as Hedging Instrument Singapore Dollar SGD	Dec. 31, 2014 Designated as Hedging Instrument Singapore Dollar USD ($)	Dec. 31, 2014 Designated as Hedging Instrument Singapore Dollar SGD	Apr. 05, 2015 Designated as Hedging Instrument British Pound USD ($)	Apr. 05, 2015 Designated as Hedging Instrument British Pound GBP (£)	Dec. 31, 2014 Designated as Hedging Instrument British Pound USD ($)	Dec. 31, 2014 Designated as Hedging Instrument British Pound GBP (£)	Apr. 05, 2015 Designated as Hedging Instrument Canadian Dollar USD ($)	Apr. 05, 2015 Designated as Hedging Instrument Canadian Dollar CAD	Dec. 31, 2014 Designated as Hedging Instrument Canadian Dollar USD ($)	Dec. 31, 2014 Designated as Hedging Instrument Canadian Dollar CAD	Apr. 05, 2015 Not Designated as Hedging Instrument Japanese Yen USD ($)	Apr. 05, 2015 Not Designated as Hedging Instrument Japanese Yen JPY (¥)	Dec. 31, 2014 Not Designated as Hedging Instrument Japanese Yen USD ($)	Dec. 31, 2014 Not Designated as Hedging Instrument Japanese Yen JPY (¥)	Apr. 05, 2015 Not Designated as Hedging Instrument Hungarian Forint USD ($)	Apr. 05, 2015 Not Designated as Hedging Instrument Hungarian Forint HUF	Dec. 31, 2014 Not Designated as Hedging Instrument Hungarian Forint USD ($)	Dec. 31, 2014 Not Designated as Hedging Instrument Hungarian Forint HUF	Apr. 05, 2015 Not Designated as Hedging Instrument Singapore Dollar USD ($)	Apr. 05, 2015 Not Designated as Hedging Instrument Singapore Dollar SGD	Dec. 31, 2014 Not Designated as Hedging Instrument Singapore Dollar USD ($)	Dec. 31, 2014 Not Designated as Hedging Instrument Singapore Dollar SGD	Apr. 05, 2015 Not Designated as Hedging Instrument British Pound USD ($)	Apr. 05, 2015 Not Designated as Hedging Instrument British Pound GBP (£)	Dec. 31, 2014 Not Designated as Hedging Instrument British Pound USD ($)	Dec. 31, 2014 Not Designated as Hedging Instrument British Pound GBP (£)	Apr. 05, 2015 Not Designated as Hedging Instrument Korean Won USD ($)	Apr. 05, 2015 Not Designated as Hedging Instrument Korean Won KRW	Dec. 31, 2014 Not Designated as Hedging Instrument Korean Won USD ($)	Dec. 31, 2014 Not Designated as Hedging Instrument Korean Won KRW	Apr. 05, 2015 Not Designated as Hedging Instrument Taiwanese Dollar USD ($)	Apr. 05, 2015 Not Designated as Hedging Instrument Taiwanese Dollar TWD	Dec. 31, 2014 Not Designated as Hedging Instrument Taiwanese Dollar USD ($)	Dec. 31, 2014 Not Designated as Hedging Instrument Taiwanese Dollar TWD
Derivative [Line Items]
Outstanding forward contracts	$ 9,836	¥ 1,266,500	$ 10,211	¥ 1,225,000	$ 2,864	818,000	$ 3,099	803,000	$ 2,214	3,274	$ 2,564	3,515	$ 408	£ 304	$ 732	£ 491	$ 440	487	$ 688	758	$ 6,542	¥ 785,000	$ 4,464	¥ 535,000	$ 850	234,000	$ 1,569	410,000	$ 918	1,250	$ 922	1,225	$ 2,432	£ 1,650	$ 2,183	£ 1,400	$ 1,003	1,100,000	$ 858	940,000	$ 1,109	34,500	$ 883	28,000

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Stock-Based Compensation Expense - Weighted-Average Assumptions Used in Estimating Fair Values of Stock Options Granted (Detail)	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Risk-free rate	2.10%	2.70%
Expected dividend yield	1.25%	0.00%
Expected volatility	40.00%	41.00%
Expected term (in years)	5 years 4 months 18 days	5 years 4 months 18 days

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Guarantees - Details of Letters of Credit Outstanding (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015
Guarantor Obligations [Line Items]
Guarantee Amount	$ 2,403
Bank Guarantees
Guarantor Obligations [Line Items]
Guarantee Amount	1,241
Guarantee due date	Various from May 2015 to January 2017
Warranty Bonds
Guarantor Obligations [Line Items]
Guarantee Amount	594
Guarantee due date	Various from May 2015 to December 2016
Performance Bonds
Guarantor Obligations [Line Items]
Guarantee Amount	$ 568
Guarantee due date	Various from June 2015 to December 2017

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Taxes (Tables)

3 Months Ended

Apr. 05, 2015

Income Tax Disclosure [Abstract]

Reconciliation of United States Federal Statutory Corporate Tax Rate to Company's Effective Tax Rate, or Income Tax Provision

A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate, or income tax provision, was as follows:

	Three-months Ended
	April 5, 2015		March 30, 2014
Income tax provision at federal statutory rate	35	%	35	%
State income taxes, net of federal benefit	1	%	1	%
Foreign tax rate differential	(17	)%	(17	)%
Discrete tax events	(1	)%	—	%
Income tax provision	18	%	19	%

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Stock-Based Compensation Expense - Stock-Based Compensation Expense (Detail) (USD $)	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014	Dec. 31, 2014
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 6,946,000	$ 4,004,000
Tax benefit from compensation expense	2,337,000	1,306,000
Recognized Period Costs Capitalized Amount	0		0
Product cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	420,000	285,000
Service cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	73,000	63,000
Research, development, and engineering
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	1,848,000	1,056,000
Selling, general, and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 4,605,000	$ 2,600,000

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Subsequent Events (Notes)

3 Months Ended

Apr. 05, 2015

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 17, 2015, the 2007 Stock Option and Incentive Plan received shareholder approval for an amendment and restatement of the plan, reserving an additional 2,000,000 shares of common stock, par value $0.002 per share, for issuance.

In addition, on May 4, 2015, the Company’s Board of Directors declared a cash dividend of $0.07 per share. The dividend is payable on June 19, 2015 to all shareholders of record as of the close of business on June 5, 2015.

Finally, on April 30, 2015, the jury reached a verdict awarding Microscan royalties of $4,411,000 related to sales of the Company’s products during the applicable period. Cognex intends to file an appeal, subject to the Court’s final assessment and decisions regarding the jury’s verdict. Additional information regarding this litigation is included in Note 7 to the Consolidated Financial Statements.

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Derivative Instruments - Assets and liabilities presented on a net basis due to the right of setoff (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross amounts of recognized assets	$ 335	$ 188
Gross amounts offset	(1)	(74)
Net amount of assets presented	334	114
Gross amounts of recognized liabilities	819	149
Gross amounts offset	(40)	(52)
Net amount of liabilities presented	$ 779	$ 97

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Inventories (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Inventory Disclosure [Abstract]
Raw materials	$ 29,621	$ 23,498
Work-in-process	10,885	5,753
Finished goods	7,952	6,285
Inventories	$ 48,458	$ 35,536

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Cash, Cash Equivalents, and Investments - Components of Cash, Cash Equivalents, and Investments (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014	Mar. 30, 2014	Dec. 31, 2013
Schedule of Available-for-sale Securities [Line Items]
Cash	$ 34,807	$ 54,917
Money market instruments	1,240	777
Cash and cash equivalents	36,047	55,694	42,463	40,644
Short-term investments	142,343	90,456
Limited partnership interest	1,956	1,956
Long-term investments	370,433	400,845
Total	548,823	546,995
Euro liquidity fund
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	62,045	48,235
Corporate Bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	37,413	30,889
Long-term investments	204,221	216,294
Treasury Bills
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	31,644	0
Long-term investments	64,524	90,412
Sovereign Bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	5,605	0
Long-term investments	6,040	13,461
Supranational bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	1,902	1,901
Municipal Bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	1,819	1,237
Long-term investments	4,880	6,600
Agency Bonds
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	1,523	6,883
Long-term investments	11,364	9,566
Asset-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Short-term investments	392	1,311
Long-term investments	$ 77,448	$ 62,556

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Derivative Instruments - Effect on Other Comprehensive Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	$ (39,399)
Ending balance	(49,629)
Losses expected to be reclassified from OCI into Net Income, net of tax, 12 months	401
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges
Accumulated Other Comprehensive Income [Roll Forward]
Beginning balance	32
Reclassification of net realized loss on cash flow hedges into current operations	110
Net unrealized loss on cash flow hedges	(520)
Ending balance	$ (378)

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Weighted-Average Shares - Calculation of Weighted-Average Shares (Detail) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Earnings Per Share [Abstract]
Basic weighted-average common shares outstanding	86,764	86,879
Effect of dilutive stock options	1,985	2,380
Weighted-average common and common-equivalent shares outstanding	88,749	89,259

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Derivative Instruments - Additional Information (Detail)	3 Months Ended
	Apr. 05, 2015
Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maximum Length of Time Hedged in Cash Flow Hedge	18 months
Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maximum Remaining Maturity of Foreign Currency Derivatives	45 days

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Consolidated Statement of Shareholders' Equity (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015
Statement of Stockholders' Equity [Abstract]
Tax effect on cash flow hedges	$ (73)
Tax effect of unrealized gain (loss) on available-for-sale investments	134
Foreign currency translation adjustment, tax	$ (636)

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Weighted-Average Shares - Additional Information (Detail)	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Earnings Per Share [Abstract]
Stock options to purchase anti-dilutive common stock	2,263,787	585,208

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Warranty Obligations - Changes in Warranty Obligations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015
Payables and Accruals [Abstract]
Beginning Balance	$ 4,494
Provisions for warranties issued during the period	734
Fulfillment of warranty obligations	(608)
Foreign exchange rate changes	(412)
Ending Balance	$ 4,208

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Warranty Obligations (Tables)

3 Months Ended

Apr. 05, 2015

Guarantees [Abstract]

Changes in Warranty Obligations

The changes in the warranty obligations were as follows (in thousands):

Balance as of December 31, 2014	$	4,494
Provisions for warranties issued during the period	734
Fulfillment of warranty obligations	(608		)
Foreign exchange rate changes	(412		)
Balance as of April 5, 2015	$	4,208

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Inventories (Tables)

3 Months Ended

Apr. 05, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	April 5, 2015		December 31, 2014
Raw materials	$	29,621	$	23,498
Work-in-process	10,885		5,753
Finished goods	7,952		6,285
	$	48,458	$	35,536

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Stock-Based Compensation Expense Stock-Based Compensation Expense- Summary of Restricted Stock Option Activity (Detail) (Details) (Restricted Stock [Member], USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Dec. 31, 2014
Restricted Stock [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Options, Shares Nonvested	20	20
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Weighted Average Grant Date Fair Value	$ 0.00
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeited in Period	0
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Forfeitures, Weighted Average Grant Date Fair Value	$ 0
Options, Non-Vested, Weighted-Average Exercise Price, in dollars per share	$ 34.05	$ 34.05
Nonvested as of April 5, 2015, Aggregate Intrinsic Value	$ 329

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Contingencies - Additional Information (Detail) (USD $)	0 Months Ended
	Apr. 30, 2014	Apr. 30, 2015
Loss Contingencies [Line Items]
Proceeds from Legal Settlements	$ 2,600,000
Subsequent Event [Member]
Loss Contingencies [Line Items]
Loss Contingency, Damages Awarded, Value		$ 4,411,000

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Guarantees (Tables)

3 Months Ended

Apr. 05, 2015

Guarantees [Abstract]

Details of Letters of Credit Outstanding

The following table details the letters of credit outstanding as of April 5, 2015:

Type	Guarantee Amount (in thousands)		Guarantee Due Date
Bank guarantees	$	1,241	Various from May 2015 to January 2017
Warranty bonds	594		Various from May 2015 to December 2016
Performance bonds	568		Various from June 2015 to December 2017
	$	2,403

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Derivative Instruments (Tables)

3 Months Ended

Apr. 05, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding Forward Contracts Table

The Company had the following outstanding forward contracts (in thousands):

	As of April 5, 2015			As of December 31, 2014
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Designated as Hedging Instruments:
Japanese Yen	1,266,500	$	9,836	1,225,000	$	10,211
Hungarian Forint	818,000	2,864		803,000	3,099
Singapore Dollar	3,274	2,214		3,515	2,564
Canadian Dollar	487	440		758	688
British Pound	304	408		491	732
Derivatives Not Designated as Hedging Instruments:
Japanese Yen	785,000	$	6,542	535,000	$	4,464
British Pound	1,650	2,432		1,400	2,183
Taiwanese Dollar	34,500	1,109		28,000	883
Korean Won	1,100,000	1,003		940,000	858
Singapore Dollar	1,250	918		1,225	922
Hungarian Forint	234,000	850		410,000	1,569

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance	Fair Value				Balance	Fair Value
	Sheet Location	April 5, 2015		December 31, 2014		Sheet Location	April 5, 2015		December 31, 2014
Derivatives Designated as Hedging Instruments:
Cash flow hedge forward contracts	Prepaid expenses and other current assets	$	327	$	108	Accrued expenses	$	762	$	84
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	7	$	6	Accrued expenses	$	17	$	13

Offsetting Assets

The table below details the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with each counterparty (in thousands):

Asset Derivatives							Liability Derivatives
	April 5, 2015			December 31, 2014				April 5, 2015			December 31, 2014
Gross amounts of recognized assets	$	335		$	188		Gross amounts of recognized liabilities	$	819		$	149
Gross amounts offset	(1		)	(74		)	Gross amounts offset	(40		)	(52		)
Net amount of assets presented	$	334		$	114		Net amount of liabilities presented	$	779		$	97

Derivative Instruments, Gain (Loss)

Information regarding the effect of derivative instruments, net of the underlying exposure, on the consolidated financial statements was as follows (in thousands):

	Location in Financial Statements	Three-months Ended
		April 5, 2015			March 30, 2014
Derivatives Designated as Hedging Instruments:
Gains (losses) recorded in shareholders' equity (effective portion)	Accumulated other comprehensive income (loss), net of tax	$	(378	)	$	(62	)
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	Product revenue	$	(152	)	$	13
	Research, development, and engineering expenses	1			(30		)
	Selling, general, and administrative expenses	41			(16		)
	Total gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations	$	(110	)	$	(33	)
Gains (losses) recognized in current operations (ineffective portion and discontinued derivatives)	Foreign currency gain (loss)	$	—		$	—
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	78		$	(152	)

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss)

The following table provides the changes in accumulated other comprehensive income (loss), net of tax, related to derivative instruments (in thousands):

Balance as of December 31, 2014	$	32
Reclassification of net realized loss on cash flow hedges into current operations	110
Net unrealized loss on cash flow hedges	(520		)
Balance as of April 5, 2014	$	(378	)

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Consolidated Statement of Shareholders' Equity (USD $) In Thousands, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning Balance at Dec. 31, 2014	$ 736,437	$ 173	$ 251,717	$ 523,946	$ (39,399)
Beginning Balance, Shares at Dec. 31, 2014	86,542	86,542
Increase (Decrease) in Stockholders' Equity
Issuance of common stock under stock option plans, shares		586
Issuance of common stock under stock option plans	9,666	1	9,665
Stock-based compensation expense	6,946		6,946
Excess tax benefit from stock option exercises	3,694		3,694
Tax benefit for research and development credits as a result of stock options	48		48
Net income	20,502			20,502
Net unrealized loss on cash flow hedges, net of tax of $73	(520)				(520)
Reclassification of net realized (gain) loss into current operations	110				110
Net unrealized gain on available-for-sale investments, net of tax of $134	899				899
Reclassification of net realized gain on the sale of available-for-sale investments	(29)				(29)
Foreign currency translation adjustment, net of tax of $636	(10,690)				(10,690)
Ending Balance at Apr. 05, 2015	$ 767,063	$ 174	$ 272,070	$ 544,448	$ (49,629)
Ending Balance, Shares at Apr. 05, 2015	87,128	87,128

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Stock-Based Compensation Expense (Tables)

3 Months Ended

Apr. 05, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity for the three-month period ended April 5, 2015:

	Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014	6,812		$	23.26
Granted	1,399		41.26
Exercised	(586	)	16.49
Forfeited or expired	(24	)	9.20
Outstanding as of April 5, 2015	7,601		$	27.07	7.6	$	178,001
Exercisable as of April 5, 2015	3,137		$	16.59	5.8	$	106,335
Options vested or expected to vest as of   April 5, 2015 (1)	6,732		$	25.79	7.4	$	166,252

 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

Weighted-Average Assumptions Used in Estimating Fair Values of Stock Options Granted

The fair values of stock options granted in each period presented were estimated using the following weighted-average assumptions:

	Three-months Ended
	April 5, 2015		March 30, 2014
Risk-free rate	2.1	%	2.7	%
Expected dividend yield	1.25	%	—	%
Expected volatility	40	%	41	%
Expected term (in years)	5.4		5.4

Nonvested Restricted Stock Shares Activity

The following table summarizes the Company's restricted stock award activity:

	Shares (in thousands)	Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Nonvested as of December 31, 2014	20	$	34.05
Granted	—	—
Vested	—	—
Forfeited or expired	—	—
Nonvested as of April 5, 2015	20	$	34.05	$	329

Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs

The following table details the stock-based compensation expense by caption for each period presented on the Consolidated Statements of Operations (in thousands):

	Three-months Ended
	April 5, 2015		March 30, 2014
Product cost of revenue	$	420	$	285
Service cost of revenue	73		63
Research, development, and engineering	1,848		1,056
Selling, general, and administrative	4,605		2,600
	$	6,946	$	4,004

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Cash, Cash Equivalents, and Investments - Effective Maturity Dates of Available-for-Sale Investments (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	$ 142,343
1-2 Years	187,419
2-3 Years	121,779
3-4 Years	39,215
4-5 Years	14,752
5-8 Years	5,312
Fair Value	510,820
Corporate Bonds
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	37,413
1-2 Years	101,597
2-3 Years	74,312
3-4 Years	22,542
4-5 Years	5,770
5-8 Years	0
Fair Value	241,634
Treasury Bills
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	31,644
1-2 Years	64,524
2-3 Years	0
3-4 Years	0
4-5 Years	0
5-8 Years	0
Fair Value	96,168
Asset-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	392
1-2 Years	8,564
2-3 Years	38,917
3-4 Years	16,673
4-5 Years	8,982
5-8 Years	4,312
Fair Value	77,840
Supranational bonds
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	1,902
1-2 Years	0
2-3 Years	0
3-4 Years	0
4-5 Years	0
5-8 Years	0
Fair Value	1,902
Euro liquidity fund
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	62,045
1-2 Years	0
2-3 Years	0
3-4 Years	0
4-5 Years	0
5-8 Years	0
Fair Value	62,045
Sovereign Bonds
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	5,605
1-2 Years	6,040
2-3 Years	0
3-4 Years	0
4-5 Years	0
5-8 Years	0
Fair Value	11,645
Municipal Bonds
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	1,819
1-2 Years	334
2-3 Years	3,546
3-4 Years	0
4-5 Years	0
5-8 Years	1,000
Fair Value	6,699
Agency Bonds
Schedule of Available-for-sale Securities [Line Items]
1 Year or Less	1,523
1-2 Years	6,360
2-3 Years	5,004
3-4 Years	0
4-5 Years	0
5-8 Years	0
Fair Value	$ 12,887

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Stock-Based Compensation Expense - Additional Information (Detail) (USD $)	3 Months Ended
	Apr. 05, 2015 group	Mar. 30, 2014	Dec. 31, 2014	Apr. 17, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Par or Stated Value Per Share	$ 0.002		$ 0.002
Expected dividend yield	1.25%	0.00%
Groups within the employee population	2
Percentage of stock options granted to senior management	74.00%
Percentage of stock options granted to all other employees	73.00%
Estimated annual forfeiture rate	10.00%
Estimated annual forfeiture rate for unvested options	11.00%
Increase (decrease) to compensation expense	$ 461,000	$ 288,000
Weighted-average grant-date fair values, in dollars per share	$ 14.34	$ 15.34
Total intrinsic value	16,740,000	8,933,000
Total fair values of stock options vest	13,523,000	8,361,000
Unrecognized compensation expense	30,963,000
weighted average period to be recognized	2 years 1 month 5 days
Recognized Period Costs Capitalized Amount	$ 0		$ 0
Stock Option And Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans	4 years
Expiration period from grant day	10 years
General Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans	4 years
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant under stock option plans	7,823,929
Expiration period from grant day	10 years
2015 Through Expected Life of Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected dividend yield	1.25%
Subsequent Event [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common Stock, Par or Stated Value Per Share				$ 0.002
Subsequent Event [Member] | Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
additional shares under Share-based Compensation Arrangement by Share-based Payment Award, Additional Number of Shares Available for Grant				2,000,000
Common Stock, Par or Stated Value Per Share				$ 0.002

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Consolidated Statements of Operations (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Revenue
Product	$ 105,775	$ 83,569
Service	7,659	7,360
Total revenue	113,434	90,929
Cost of revenue
Product	23,634	17,286
Service	4,320	3,798
Total cost of revenue	27,954	21,084
Gross margin
Product	82,141	66,283
Service	3,339	3,562
Total gross margin	85,480	69,845
Research, development, and engineering expenses	18,076	12,502
Selling, general, and administrative expenses	43,487	34,900
Operating income	23,917	22,443
Foreign currency gain (loss)	405	(110)
Investment income	850	787
Other expense	(310)	(273)
Income before income tax expense	24,862	22,847
Income tax expense	4,360	4,341
Net income	$ 20,502	$ 18,506
Earnings per weighted-average common and common-equivalent share:
Basic (in dollars per share)	$ 0.24	$ 0.21
Diluted (in dollars per share)	$ 0.23	$ 0.21
Weighted-average common and common-equivalent shares outstanding:
Basic (in shares)	86,764	86,879
Diluted (in shares)	88,749	89,259

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Guarantees - Additional Information (Detail)	3 Months Ended
	Apr. 05, 2015 Category
Guarantees [Abstract]
Number of categories of letters of credit	3

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Reserves for accounts receivable	$ 1,024	$ 1,095
Common stock, par value	$ 0.002	$ 0.002
Common stock, shares authorized	140,000,000	140,000,000
Common stock, shares issued	87,128,000	86,542,000

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Taxes - Reconciliation of United States Federal Statutory Corporate Tax Rate to Company's Effective Tax Rate, or Income Tax Provision (Detail)	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Income Tax Disclosure [Abstract]
Income tax provision at federal statutory rate	35.00%	35.00%
State income taxes, net of federal benefit	1.00%	1.00%
Foreign tax rate differential	(17.00%)	(17.00%)
Discrete tax events	(1.00%)	0.00%
Income tax provision	18.00%	19.00%

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Segment Information (Tables)

3 Months Ended

Apr. 05, 2015

Segment Reporting [Abstract]

Information About Segments

The following table summarizes information about the segments (in thousands):

Three-months Ended April 5, 2015	MVSD		SISD		Reconciling Items			Consolidated
Product revenue	$	97,494	$	8,281	$	—		$	105,775
Service revenue	3,879		3,780		—			7,659
Operating income	33,307		1,896		(11,286		)	23,917

Three-months Ended March 30, 2014	MVSD		SISD		Reconciling Items			Consolidated
Product revenue	$	77,618	$	5,951	$	—		$	83,569
Service revenue	3,698		3,662		—			7,360
Operating income	28,292		1,013		(6,862		)	22,443

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Subsequent Events (Details) (USD $)	0 Months Ended
	May 04, 2015	Apr. 30, 2015	Apr. 05, 2015	Dec. 31, 2014	Apr. 17, 2015
Subsequent Event [Line Items]
Common Stock, Par or Stated Value Per Share			$ 0.002	$ 0.002
Subsequent Event [Member]
Subsequent Event [Line Items]
Common Stock, Par or Stated Value Per Share					$ 0.002
Dividends	$ 0.07
Dividends Payable, Date Declared	Jun. 19, 2015
Dividends Payable, Date of Record	Jun. 05, 2015
Loss Contingency, Damages Awarded, Value		$ 4,411,000
Employee Stock Option | Subsequent Event [Member]
Subsequent Event [Line Items]
additional shares under Share-based Compensation Arrangement by Share-based Payment Award, Additional Number of Shares Available for Grant					2,000,000
Common Stock, Par or Stated Value Per Share					$ 0.002

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Taxes

3 Months Ended

Apr. 05, 2015

Income Tax Disclosure [Abstract]

Taxes

Taxes

A reconciliation of the United States federal statutory corporate tax rate to the Company’s effective tax rate, or income tax provision, was as follows:

	Three-months Ended
	April 5, 2015		March 30, 2014
Income tax provision at federal statutory rate	35	%	35	%
State income taxes, net of federal benefit	1	%	1	%
Foreign tax rate differential	(17	)%	(17	)%
Discrete tax events	(1	)%	—	%
Income tax provision	18	%	19	%

The effective tax rate for the three-month period ended April 5, 2015 included the impact of one discrete tax event, whereby the Company recorded a decrease in tax expense of $364,000 from the expiration of the statutes of limitations for certain reserves for income tax uncertainties. This discrete event decreased the effective tax rate from a provision of 19% to a provision of 18% for the three-month period ended April 5, 2015.

During the three-month period ended April 5, 2015, the Company recorded a $211,000 decrease in reserves for income taxes, net of deferred tax benefit, including a reduction to additional paid in capital of $48,000 and a reduction in income tax expense of $163,000. Included in this net decrease is the discrete event noted above. Estimated interest and penalties included in these amounts totaled $15,000 for the three-month period ended April 5, 2015.

In the first quarter of 2014, management adopted Accounting Standards Update (ASU) 2013-11, "Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists." This ASU requires companies to present an unrecognized tax benefit, or a portion thereof, as a reduction to a deferred tax asset for a net operating loss (NOL) carryforward or a similar tax loss or tax credit carryforward. In the first quarter of 2014, the Company reclassified a reserve for income taxes of $1,028,000 as a reduction to noncurrent deferred tax assets in compliance with this new guidance. Retroactive application was not required under this ASU, and therefore, prior periods were not restated.

The Company’s reserve for income taxes, including gross interest and penalties, was $5,400,000 as of April 5, 2015, which included $4,372,000 classified as a noncurrent liability and $1,028,000 recorded as a reduction to noncurrent deferred tax assets. The amount of gross interest and penalties included in these balances was $494,000. If the Company’s tax positions were sustained or the statutes of limitations related to certain positions expired, these reserves would be released and income tax expense would be reduced in a future period, less $616,000 that would be recorded through additional paid-in capital. As a result of the expiration of certain statutes of limitations and the conclusion of the IRS examination, there is a potential that a portion of these reserves could be released, which would decrease income tax expense by approximately $550,000 to $650,000 over the next twelve months.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Japan, and within the United States, Massachusetts and California. Within the United States, the tax years 2012 through 2014 remain open to examination by the Internal Revenue Service, while the tax years 2011 through 2014 remain open to various state taxing authorities, and the tax years 2010 through 2014 remain open to examination by various taxing authorities in other jurisdictions in which the Company operates.

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Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) (USD $)	3 Months Ended
	Apr. 05, 2015	Dec. 31, 2014
Assets:
Money market instruments	$ 1,240,000	$ 777,000
Financial assets at fair value	510,820,000
Corporate Bonds
Assets:
Financial assets at fair value	241,634,000
Treasury Bills
Assets:
Financial assets at fair value	96,168,000
Asset-Backed Securities
Assets:
Financial assets at fair value	77,840,000
Euro liquidity fund
Assets:
Financial assets at fair value	62,045,000
Agency Bonds
Assets:
Financial assets at fair value	12,887,000
Sovereign Bonds
Assets:
Financial assets at fair value	11,645,000
Municipal Bonds
Assets:
Financial assets at fair value	6,699,000
Supranational bonds
Assets:
Financial assets at fair value	1,902,000
Fair Value, Measurements, Nonrecurring
Liabilities:
Asset Impairment Charges	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Fair Value, Measurements, Recurring
Assets:
Money market instruments	1,240,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring
Assets:
Money market instruments	0
Assets, Cash flow hedge forward contracts	327,000
Assets, Economic hedge forward contracts	7,000
Liabilities:
Liabilities, Cash flow hedge forward contracts	762,000
Liabilities, Economic hedge forward contracts	17,000
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net	0
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Corporate Bonds
Assets:
Financial assets at fair value	241,634,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Treasury Bills
Assets:
Financial assets at fair value	96,168,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Asset-Backed Securities
Assets:
Financial assets at fair value	77,840,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Euro liquidity fund
Assets:
Financial assets at fair value	62,045,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Agency Bonds
Assets:
Financial assets at fair value	12,887,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Sovereign Bonds
Assets:
Financial assets at fair value	11,645,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Municipal Bonds
Assets:
Financial assets at fair value	6,699,000
Significant Other Observable Inputs (Level 2) | Fair Value, Measurements, Recurring | Supranational bonds
Assets:
Financial assets at fair value	1,902,000
Fair Value, Inputs, Level 3 | Fair Value, Measurements, Nonrecurring
Liabilities:
Other than Temporary Impairment Losses, Investments, Portion Recognized in Earnings, Net	$ 0

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Segment Information

3 Months Ended

Apr. 05, 2015

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company has two reportable segments: the Modular Vision Systems Division (MVSD) and the Surface Inspection Systems Division (SISD). MVSD develops, manufactures, and markets modular vision systems that are used to control the manufacture of discrete items by locating, identifying, inspecting, and measuring them during the manufacturing process. SISD develops, manufactures, and markets surface inspection vision systems that are used to inspect surfaces of materials processed in a continuous fashion, such as metals, paper, nonwoven, plastics, and glass, to ensure there are no flaws or defects on the surfaces. Segments are determined based upon the way that management organizes its business for making operating decisions and assessing performance. The Company evaluates segment performance based upon income or loss from operations, excluding stock-based compensation expense.

The following table summarizes information about the segments (in thousands):

Three-months Ended April 5, 2015	MVSD		SISD		Reconciling Items			Consolidated
Product revenue	$	97,494	$	8,281	$	—		$	105,775
Service revenue	3,879		3,780		—			7,659
Operating income	33,307		1,896		(11,286		)	23,917

Three-months Ended March 30, 2014	MVSD		SISD		Reconciling Items			Consolidated
Product revenue	$	77,618	$	5,951	$	—		$	83,569
Service revenue	3,698		3,662		—			7,360
Operating income	28,292		1,013		(6,862		)	22,443

Reconciling items consist of stock-based compensation expense and unallocated corporate expenses, which primarily include corporate headquarters costs, professional fees, and patent infringement litigation. Additional asset information by segment is not produced internally for use by the chief operating decision maker, and therefore, is not presented. Additional asset information is not provided because cash and investments are commingled and the segments share assets and resources in a number of locations around the world.

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Consolidated Condensed Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Cash flows from operating activities:
Net income	$ 20,502	$ 18,506
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Stock-based compensation expense	6,946	4,004
Depreciation of property, plant, and equipment	2,346	1,990
Amortization of intangible assets	1,093	916
Amortization of discounts or premiums on investments	203	896
Realized gain on sale of investments	(29)	(501)
Tax effect of stock option exercises	(3,694)	(2,165)
Change in deferred income taxes	(1,251)	127
Increase (Decrease) in Other Operating Assets and Liabilities, Net	(26,380)	(6,312)
Net cash provided by (used in) operating activities	(264)	17,461
Cash flows from investing activities:
Purchases of investments	(157,083)	(124,734)
Maturities and sales of investments	130,476	117,753
Purchases of property, plant, and equipment	(4,264)	(2,685)
Net cash used in investing activities	(30,871)	(9,666)
Cash flows from financing activities:
Issuance of common stock under stock option plans	9,666	5,951
Repurchase of common stock	0	(14,287)
Tax effect of stock option exercises	3,694	2,165
Net cash provided by (used in) financing activities	13,360	(6,171)
Effect of foreign exchange rate changes on cash and cash equivalents	(1,872)	195
Net change in cash and cash equivalents	(19,647)	1,819
Cash and cash equivalents at beginning of period	55,694	40,644
Cash and cash equivalents at end of period	$ 36,047	$ 42,463

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Statement of Comprehensive Income [Abstract]
Net income	$ 20,502	$ 18,506
Cash flows hedges [Abstract]
Net unrealized gain (loss), net of tax of ($73) and ($16) in 2015 and 2014, respectively	(520)	(199)
Reclassification of net realized (gain) loss into current operations	110	33
Net change related to cash flow hedges	(410)	(166)
Available-for-sale investments
Net unrealized gain (loss), net of tax of $134 and $113 in 2015 and 2014, respectively	899	1,019
Reclassification of net realized (gain) loss into current operations	(29)	(501)
Net change related to available-for-sale investments	870	518
Currency translation adjustments [Abstract]
Foreign currency translation adjustments, net of tax of ($636) and $7 in 2015 and 2014, respectively	(10,690)	445
Other comprehensive income (loss), net of tax	(10,230)	797
Total comprehensive income	$ 10,272	$ 19,303

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Guarantees

3 Months Ended

Apr. 05, 2015

Guarantees [Abstract]

Guarantees

Guarantees

In the ordinary course of business, the Company enters into guarantee contracts with certain customers, generally in the Company’s Surface Inspection Systems Division (SISD) business. These guarantees represent standby letters of credit (LOC) which can be grouped into three categories: (1) bank guarantees which may require the Company to return a customer’s initial payment if the Company cannot deliver the order; (2) warranty bonds which may require the Company to resolve warranty issues within a specified time period; and (3) performance bonds which include a combination of the above two options. The type of LOC is generally determined based upon customer request and the guarantee amount represents the maximum potential amount of future payments. All of the Company’s LOCs are with the same counterparty and they do not contain any recourse provisions or collateral obligations.

The following table details the letters of credit outstanding as of April 5, 2015:

Type	Guarantee Amount (in thousands)		Guarantee Due Date
Bank guarantees	$	1,241	Various from May 2015 to January 2017
Warranty bonds	594		Various from May 2015 to December 2016
Performance bonds	568		Various from June 2015 to December 2017
	$	2,403

The Company evaluates losses for guarantees under accounting for contingencies. The Company considers such factors as the degree of probability that the Company would be required to satisfy the guarantee and the ability to make a reasonable estimate of the loss. To date, the Company has not incurred any losses as a result of these obligations, and therefore, has not recorded any liability related to such obligation in its financial statements. The fair value of the Company’s outstanding guarantees is immaterial for all periods presented.

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Document and Entity Information	3 Months Ended
	Apr. 05, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	COGNEX CORP
Entity Central Index Key	0000851205
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Apr. 05, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding	87,128,037

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Indemnification Provisions

3 Months Ended

Apr. 05, 2015

Guarantees [Abstract]

Indemnification Provisions

Indemnification Provisions

Except as limited by Massachusetts law, the by-laws of the Company require it to indemnify certain current or former directors, officers, and employees of the Company against expenses incurred by them in connection with each proceeding in which he or she is involved as a result of serving or having served in certain capacities. Indemnification is not available with respect to a proceeding as to which it has been adjudicated that the person did not act in good faith in the reasonable belief that the action was in the best interests of the Company. The maximum potential amount of future payments the Company could be required to make under these provisions is unlimited. The Company has never incurred significant costs related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal.

In the ordinary course of business, the Company may accept standard limited indemnification provisions in connection with the sale of its products, whereby it indemnifies its customers for certain direct damages incurred in connection with third-party patent or other intellectual property infringement claims with respect to the use of the Company’s products. The term of these indemnification provisions generally coincides with the customer’s use of the Company’s products. The maximum potential amount of future payments the Company could be required to make under these provisions is generally subject to fixed monetary limits. The Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the Company believes the estimated fair value of these provisions is minimal.

In the ordinary course of business, the Company also accepts limited indemnification provisions from time to time, whereby it indemnifies customers for certain direct damages incurred in connection with bodily injury and property damage arising from the installation of the Company’s products. The term of these indemnification provisions generally coincides with the period of installation. The maximum potential amount of future payments the Company could be required to make under these provisions is generally limited and is likely recoverable under the Company’s insurance policies. As a result of this coverage, and the fact that the Company has never incurred significant costs to defend lawsuits or settle claims related to these indemnification provisions, the Company believes the estimated fair value of these provisions is minimal.

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Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Statement of Comprehensive Income [Abstract]
Tax effect on cash flow hedges	$ (73)	$ (16)
Tax effect of unrealized gain (loss) on available-for-sale investments	134	113
Tax effect of foreign currency translation adjustment	$ (636)	$ 7

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Fair Value Measurements

3 Months Ended

Apr. 05, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

Financial Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets and liabilities required to be measured at fair value on a recurring basis as of April 5, 2015 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Money market instruments	$	1,240	$	—
Corporate bonds	—		241,634
Treasury bills	—		96,168
Asset-backed securities	—		77,840
Euro liquidity fund	—		62,045
Agency bonds	—		12,887
Sovereign bonds	—		11,645
Municipal bonds	—		6,699
Supranational bonds	—		1,902
Cash flow hedge forward contracts	—		327
Economic hedge forward contracts	—		7
Liabilities:
Cash flow hedge forward contracts	—		762
Economic hedge forward contracts	—		17

The Company’s money market instruments are reported at fair value based upon the daily market price for identical assets in active markets, and are therefore classified as Level 1.

The Company’s debt securities and forward contracts are reported at fair value based upon model-driven valuations in which all significant inputs are observable or can be derived from or corroborated by observable market data for substantially the full term of the asset or liability, and are therefore classified as Level 2. Management is responsible for estimating the fair value of these financial assets and liabilities, and in doing so, considers valuations provided by a large, third-party pricing service. For debt securities, this service maintains regular contact with market makers, brokers, dealers, and analysts to gather information on market movement, direction, trends, and other specific data. They use this information to structure yield curves for various types of debt securities and arrive at the daily valuations. The Company's forward contracts are typically traded or executed in over-the-counter markets with a high degree of pricing transparency. The market participants are generally large commercial banks.

The Company did not record an other-than-temporary impairment of these financial assets or liabilities during the three-month period ended April 5, 2015.

Financial Assets that are Measured at Fair Value on a Non-recurring Basis

The Company has an interest in a limited partnership, which is accounted for using the cost method and is required to be measured at fair value on a non-recurring basis. Management is responsible for estimating the fair value of this investment, and in doing so, considers valuations of the partnership’s investments as determined by the General Partner. Publicly-traded investments in active markets are reported at the market closing price less a discount, as appropriate, to reflect restricted marketability. Fair value for private investments for which observable market prices in active markets do not exist is based upon the best information available including the value of a recent financing, reference to observable valuation measures for comparable companies (such as revenue multiples), public or private transactions (such as the sale of a comparable company), and valuations for publicly-traded comparable companies. The valuations also incorporate the General Partner’s own judgment and close familiarity with the business activities of each portfolio company. Significant increases or decreases in any of these inputs in isolation may result in a significantly lower or higher fair value measurement. The portfolio consists of securities of public and private companies, and consequently, inputs used in the fair value calculation are classified as Level 3. The Company did not record an other-than-temporary impairment of this asset during the three-month period ended April 5, 2015.

Non-financial Assets that are Measured at Fair Value on a Non-recurring Basis

Non-financial assets such as goodwill, intangible assets, and property, plant, and equipment are required to be measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets during the three-month period ended April 5, 2015.

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New Pronouncements

3 Months Ended

Apr. 05, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Pronouncements

New Pronouncements

Accounting Standards Update (ASU) 2014-09, “Revenue from Contracts with Customers”

The amendments in ASU 2014-09 will supersede and replace all currently existing U.S. GAAP, including industry-specific revenue recognition guidance, with a single, principle-based revenue recognition framework. The concept guiding this new model is that revenue recognition will depict transfer of control to the customer in an amount that reflects consideration to which an entity expects to be entitled. The core principles supporting this framework include (1) identifying the contract with a customer, (2) identifying separate performance obligations within the contract, (3) determining the transaction price, (4) allocating the transaction price to the performance obligations, and (5) recognizing revenue. This new framework will require entities to apply significantly more judgment. This increase in management judgment will require expanded disclosure on estimation methods, inputs, and assumptions for revenue recognition. The guidance in ASU 2014-09 is effective for public companies for annual reporting periods beginning after December 15, 2016 and currently early adoption is not permitted. However, the Financial Accounting Standards Board is considering delaying the effective date of this standard by one year and also allowing early adoption. Management will continue to evaluate the impact of this standard as it evolves.

Accounting Standards Update (ASU) 2015-05, "Intangibles—Goodwill and Other—Internal-Use Software"

ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, then the customer should account for the arrangement as a service contract. For public companies, the guidance in ASU 2015-05 is effective for annual periods beginning after December 15, 2015, and interim periods thereafter. Early adoption is permitted. Management does not expect ASU 2015-05 to have a material impact on the Company's financial statements and disclosures.

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Weighted-Average Shares

3 Months Ended

Apr. 05, 2015

Earnings Per Share [Abstract]

Weighted-Average Shares

Weighted-Average Shares

Weighted-average shares were calculated as follows (in thousands):

	Three-months Ended
	April 5, 2015	March 30, 2014
Basic weighted-average common shares outstanding	86,764	86,879
Effect of dilutive stock options	1,985	2,380
Weighted-average common and common-equivalent shares outstanding	88,749	89,259

Stock options to purchase 2,263,787 and 585,208 shares of common stock, on a weighted-average basis, were outstanding during the three-month periods ended April 5, 2015 and March 30, 2014, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive.

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Derivative Instruments

3 Months Ended

Apr. 05, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

The Company’s foreign currency risk management strategy is principally designed to mitigate the potential financial impact of changes in the value of transactions and balances denominated in foreign currencies resulting from changes in foreign currency exchange rates. Currently, the Company enters into two types of hedges to manage this risk. The first are economic hedges which utilize foreign currency forward contracts with maturities of up to 45 days to manage the exposure to fluctuations in foreign currency exchange rates arising primarily from foreign-denominated receivables and payables. The gains and losses on these derivatives are intended to be offset by the changes in the fair value of the assets and liabilities being hedged. These economic hedges are not designated as hedging instruments for hedge accounting treatment. The second are cash flow hedges which utilize foreign currency forward contracts with maturities of up to 18 months to hedge specific forecasted transactions of the Company's foreign subsidiaries with the goal of protecting our budgeted revenues and expenses against foreign currency exchange rate changes compared to our budgeted rates. These cash flow hedges are designated as hedging instruments for hedge accounting treatment.

The Company had the following outstanding forward contracts (in thousands):

	As of April 5, 2015			As of December 31, 2014
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Designated as Hedging Instruments:
Japanese Yen	1,266,500	$	9,836	1,225,000	$	10,211
Hungarian Forint	818,000	2,864		803,000	3,099
Singapore Dollar	3,274	2,214		3,515	2,564
Canadian Dollar	487	440		758	688
British Pound	304	408		491	732
Derivatives Not Designated as Hedging Instruments:
Japanese Yen	785,000	$	6,542	535,000	$	4,464
British Pound	1,650	2,432		1,400	2,183
Taiwanese Dollar	34,500	1,109		28,000	883
Korean Won	1,100,000	1,003		940,000	858
Singapore Dollar	1,250	918		1,225	922
Hungarian Forint	234,000	850		410,000	1,569

Information regarding the fair value of the outstanding forward contracts was as follows (in thousands):

	Asset Derivatives					Liability Derivatives
	Balance	Fair Value				Balance	Fair Value
	Sheet Location	April 5, 2015		December 31, 2014		Sheet Location	April 5, 2015		December 31, 2014
Derivatives Designated as Hedging Instruments:
Cash flow hedge forward contracts	Prepaid expenses and other current assets	$	327	$	108	Accrued expenses	$	762	$	84
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	7	$	6	Accrued expenses	$	17	$	13

The table below details the gross activity for all derivative assets and liabilities which were presented on a net basis on the Consolidated Balance Sheets due to the right of offset with each counterparty (in thousands):

Asset Derivatives							Liability Derivatives
	April 5, 2015			December 31, 2014				April 5, 2015			December 31, 2014
Gross amounts of recognized assets	$	335		$	188		Gross amounts of recognized liabilities	$	819		$	149
Gross amounts offset	(1		)	(74		)	Gross amounts offset	(40		)	(52		)
Net amount of assets presented	$	334		$	114		Net amount of liabilities presented	$	779		$	97

Information regarding the effect of derivative instruments, net of the underlying exposure, on the consolidated financial statements was as follows (in thousands):

	Location in Financial Statements	Three-months Ended
		April 5, 2015			March 30, 2014
Derivatives Designated as Hedging Instruments:
Gains (losses) recorded in shareholders' equity (effective portion)	Accumulated other comprehensive income (loss), net of tax	$	(378	)	$	(62	)
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	Product revenue	$	(152	)	$	13
	Research, development, and engineering expenses	1			(30		)
	Selling, general, and administrative expenses	41			(16		)
	Total gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations	$	(110	)	$	(33	)
Gains (losses) recognized in current operations (ineffective portion and discontinued derivatives)	Foreign currency gain (loss)	$	—		$	—
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	78		$	(152	)

The following table provides the changes in accumulated other comprehensive income (loss), net of tax, related to derivative instruments (in thousands):

Balance as of December 31, 2014	$	32
Reclassification of net realized loss on cash flow hedges into current operations	110
Net unrealized loss on cash flow hedges	(520		)
Balance as of April 5, 2014	$	(378	)

Net losses expected to be reclassified from accumulated other comprehensive income (loss), net of tax, into current operations within the next twelve months are $401,000.

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Warranty Obligations

3 Months Ended

Apr. 05, 2015

Guarantees [Abstract]

Warranty Obligations

Warranty Obligations

The Company records the estimated cost of fulfilling product warranties at the time of sale based upon historical costs to fulfill claims. Obligations may also be recorded subsequent to the time of sale whenever specific events or circumstances impacting product quality become known that would not have been taken into account using historical data. While we engage in extensive product quality programs and processes, including actively monitoring and evaluating the quality of our component suppliers and third-party contract manufacturers, the Company’s warranty obligation is affected by product failure rates, material usage, and service delivery costs incurred in correcting a product failure. An adverse change in any of these factors may result in the need for additional warranty provisions. Warranty obligations are included in “Accrued expenses” on the Consolidated Balance Sheets.

The changes in the warranty obligations were as follows (in thousands):

Balance as of December 31, 2014	$	4,494
Provisions for warranties issued during the period	734
Fulfillment of warranty obligations	(608		)
Foreign exchange rate changes	(412		)
Balance as of April 5, 2015	$	4,208

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Taxes - Additional Information (Detail) (USD $)	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014	Dec. 31, 2014
Tax Credit Carryforward [Line Items]
Unrecognized Tax Benefits, Increase/Decrease Resulting from Prior Period Tax Positions	$ 364,000
Effective Income Tax Rate Continuing Operations	19.00%
Provision for effective tax rate	18.00%	19.00%
Increase (decrease) in liabilities, net of deferred tax benefit, for uncertain tax positions	211,000
APIC portion of Decrease In Liability Net Of Deferred Tax Benefit For Uncertain Tax Positions	48,000
tax expense portion of Decrease in Liability Net of Deferred Tax Benefit for Uncertain Tax Positions	163,000
Increase (decrease) in interest and penalties	15,000
Unrecognized tax benefit shown as a reduction to noncurrent deferred tax assets			1,028,000
Liability For Uncertain Tax Positions	5,400,000
Reserve for income taxes, total	4,372,000		4,623,000
Interest and penalties, gross	494,000
Reserve for income taxes to be recorded in additional paid in capital	616,000
Minimum decrease in income tax expense due to release in reserves	550,000
Maximum decrease in income tax expense due to release in reserves	$ 650,000
Tax years open to examination by Internal Revenue Service	2012 through 2014
Tax years open to examination by various taxing authorities	2011 through 2014
Tax years open to examination by various taxing authorities for other entities	2010 through 2014

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Cash, Cash Equivalents, and Investments

3 Months Ended

Apr. 05, 2015

Cash and Cash Equivalents [Abstract]

Cash, Cash Equivalents, and Investments

Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following (in thousands):

	April 5, 2015		December 31, 2014
Cash	$	34,807	$	54,917
Money market instruments	1,240		777
Cash and cash equivalents	36,047		55,694
Euro liquidity fund	62,045		48,235
Corporate bonds	37,413		30,889
Treasury bills	31,644		—
Sovereign bonds	5,605		—
Supranational bonds	1,902		1,901
Municipal bonds	1,819		1,237
Agency bonds	1,523		6,883
Asset-backed securities	392		1,311
Short-term investments	142,343		90,456
Corporate bonds	204,221		216,294
Asset-backed securities	77,448		62,556
Treasury bills	64,524		90,412
Agency bonds	11,364		9,566
Sovereign bonds	6,040		13,461
Municipal bonds	4,880		6,600
Limited partnership interest	1,956		1,956
Long-term investments	370,433		400,845
	$	548,823	$	546,995

The Euro liquidity fund invests in a portfolio of investment-grade bonds; corporate bonds consist of debt securities issued by both domestic and foreign companies; treasury bills consist of debt securities issued by both the U.S. and foreign governments; sovereign bonds consist of direct debt issued by foreign governments; supranational bonds consist of direct debt issued by two or more foreign central governments; municipal bonds consist of debt securities issued by state and local government entities; agency bonds consist of domestic or foreign obligations of government agencies and government sponsored enterprises that have government backing; and asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement. The Euro liquidity fund is denominated in Euros, and the remaining securities are denominated in U.S. Dollars.

The following table summarizes the Company’s available-for-sale investments as of April 5, 2015 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term:
Euro liquidity fund	$	61,866	$	179	$	—		$	62,045
Corporate bonds	37,356		58		(1		)	37,413
Treasury bills	31,652		—		(8		)	31,644
Sovereign bonds	5,594		11		—			5,605
Supranational bonds	1,900		2		—			1,902
Municipal bonds	1,814		5		—			1,819
Agency bonds	1,521		2		—			1,523
Asset-backed securities	392		—		—			392
Long-term:
Corporate bonds	203,712		618		(109		)	204,221
Asset-backed securities	77,417		43		(12		)	77,448
Treasury bills	64,468		57		(1		)	64,524
Agency bonds	11,344		20		—			11,364
Sovereign bonds	6,033		7		—			6,040
Municipal bonds	4,855		25		—			4,880
	$	509,924	$	1,027	$	(131	)	$	510,820

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of April 5, 2015 (in thousands):

	Unrealized Loss Position For:
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	48,070	$	(109	)	$	399	$	(1	)	$	48,469	$	(110	)
Treasury bills	33,143		(9		)	—		—			33,143		(9		)
Asset-backed securities	16,974		(7		)	2,597		(5		)	19,571		(12		)
	$	98,187	$	(125	)	$	2,996	$	(6	)	$	101,183	$	(131	)

As of April 5, 2015, the Company did not recognize an other-than-temporary impairment of these investments. In its evaluation, management considered the type of security, the credit rating of the security, the length of time the security has been in a loss position, the size of the loss position, our intent and ability to hold the security to expected recovery of value, and other meaningful information. The Company does not intend to sell, and is unlikely to be required to sell, any of these available-for-sale investments before its effective maturity or market price recovery.

The Company recorded gross realized gains and gross realized losses on the sale of debt securities totaling $197,000 and $168,000, respectively, during the three-month period ended April 5, 2015 and $512,000 and $11,000, respectively, during the three-month period ended March 30, 2014. These gains and losses are included in "Investment income" on the Consolidated Statement of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, are recorded in shareholders’ equity as other comprehensive income (loss).

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of April 5, 2015 (in thousands):

	1 Year or Less		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-8 Years		Total
Corporate bonds	$	37,413	$	101,597	$	74,312	$	22,542	$	5,770	$	—	$	241,634
Treasury bills	31,644		64,524		—		—		—		—		96,168
Asset-backed securities	392		8,564		38,917		16,673		8,982		4,312		77,840
Euro liquidity fund	62,045		—		—		—		—		—		62,045
Agency bonds	1,523		6,360		5,004		—		—		—		12,887
Sovereign bonds	5,605		6,040		—		—		—		—		11,645
Municipal bonds	1,819		334		3,546		—		—		1,000		6,699
Supranational bonds	1,902		—		—		—		—		—		1,902
	$	142,343	$	187,419	$	121,779	$	39,215	$	14,752	$	5,312	$	510,820

The Company is a Limited Partner in Venrock Associates III, L.P. (Venrock), a venture capital fund. The Company has committed to a total investment in the limited partnership of up to $20,500,000, with an expiration date of December 31, 2015. As of April 5, 2015, the Company contributed $19,886,000 to the partnership. The remaining commitment of $614,000 can be called by Venrock at any time before December 31, 2015. Distributions and contributions are at the discretion of Venrock’s management. No contributions were made and no distributions were received during the three-month period ended April 5, 2015.

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Inventories

3 Months Ended

Apr. 05, 2015

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	April 5, 2015		December 31, 2014
Raw materials	$	29,621	$	23,498
Work-in-process	10,885		5,753
Finished goods	7,952		6,285
	$	48,458	$	35,536

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Contingencies

3 Months Ended

Apr. 05, 2015

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

In March 2013, the Company filed a lawsuit against Microscan Systems, Inc. (“Microscan”) and Code Corporation in the United States District Court for the Southern District of New York alleging that Microscan’s Mobile Hawk handheld imager infringes U.S. Patent 7,874,487 owned by the Company (the “'487 patent”). The lawsuit sought to prohibit Code Corporation from manufacturing the product, and Microscan from selling and distributing the product. The Company also sought monetary damages resulting from the alleged infringement. Late in the day on April 30, 2014, the jury found that Microscan willfully infringed the ‘487 patent and awarded Cognex $2,600,000 in damages. Following the verdict, Microscan filed motions requesting judgment as a matter of law on the issues of infringement, invalidity and willfulness, as well as a motion to dismiss for lack of standing. The Company filed motions seeking treble damages (based on the finding of willfulness), attorneys’ fees as an exceptional case, and a permanent injunction against future infringement of the ‘487 patent and the import, manufacture and/or sale of Microscan’s Mobile Hawk product within the U.S. In June 2014, the court issued an order denying all of Microscan’s motions and the Company’s motion for treble damages, while granting the Company’s motion for permanent injunction (limited to enjoining future infringement of the ‘487 patent and the import, manufacture and/or sale of infringing versions of Microscan’s Mobile Hawk product within the U.S.) and the Company’s motion for attorneys’ fees, in part, pending a determination thereof following submission of supplemental briefs by both parties. In July 2014, Microscan filed a Notice of Appeal with the Federal Circuit appealing all orders, findings, and/or conclusions of the District Court that were adverse to Microscan. In August 2014, the Company filed a Notice of Appeal with the Federal Circuit appealing the order granting summary judgment that claims 23, 28, and 29 of the ’487 patent are invalid. Also in August 2014, the Federal Circuit consolidated Microscan’s appeal and the Company’s appeal. In November 2014, the Company filed an unopposed motion to dismiss the Company's appeal, and in December 2014, the Court of Appeals granted the Company's motion to dismiss the Company's appeal. In January 2015, Microscan submitted their appeal brief asserting that the damage award should be vacated, the infringement judgment should be reversed, and that the remaining '487 claims are invalid. The Company filed its response to Microscan’s appeal brief, contesting all assertions therein, on March 16, 2015.

In August 2014, Microscan filed a lawsuit against the Company in the United States District Court for the Southern

District of New York alleging that the Company’s DataMan® 8500 handheld imager infringes U.S. Patent 6,352,204

(the “'204 patent”). The lawsuit sought to prohibit the Company from manufacturing, selling, and distributing the DataMan® 8500 product. Microscan also sought monetary damages resulting from the alleged infringement. In September 2014, the Company filed an Answer to the Complaint denying all allegations and asserting in a counterclaim that the ’204 patent is invalid. In October 2014, the Company filed an Amended Answer further explaining its counterclaim of invalidity. Also in October 2014, Microscan filed an Amended Complaint alleging that the Company’s DataMan® 7500 and DataMan® 8600 also infringe the ’204 patent. The Company subsequently responded in October 2014 with its Answer to the Amended Complaint. In December 2014, a Markman hearing regarding the legal construction of the relevant patent claim terms was held. In January 2015, the Court issued an order construing such patent claim terms. In early February 2015, the Company submitted summary judgment motions. On April 6, 2015 the Court issued its rulings on the summary judgment motions. The Court partially granted the Company’s summary judgment motion of non-infringement, dismissing Microscan’s contention that the accused products literally infringe, but denying summary judgment to the Company with respect to Microscan’s claim of infringement under other doctrines. The Court granted the Company’s motion for summary judgment dismissing Microscan’s contention that any infringement was willful. The Court denied the Company’s motion for summary judgment with respect to the invalidity of one claim and denied the Company’s motion on the claim of laches. The Court granted Microscan’s motion for summary judgment holding that the Company infringed a single claim. The trial took place from April 21, 2015 to April 29, 2015 in the Southern District of New York. On April 30, 2015, the jury reached a verdict awarding Microscan royalties of $4,411,000 related to sales of the Company’s products during the applicable period. Cognex intends to file an appeal, subject to the Court’s final assessment and decisions regarding the jury’s verdict.

The Company cannot predict the outcome of the above-referenced pending matter and an adverse resolution of this lawsuit could have a material adverse effect on the Company’s financial position, liquidity, results of operations, and/or indemnification obligations. In addition, various other claims and legal proceedings generally incidental to the normal course of business are pending or threatened on behalf of or against the Company. While we cannot predict the outcome of these incidental matters, we believe that any liability arising from them will not have a material adverse effect on our financial position, liquidity, or results of operations.

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Segment Information - Information About Segments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Segment Reporting Information [Line Items]
Product revenue	$ 105,775	$ 83,569
Service revenue	7,659	7,360
Operating income	23,917	22,443
Operating Segments | MVSD
Segment Reporting Information [Line Items]
Product revenue	97,494	77,618
Service revenue	3,879	3,698
Operating income	33,307	28,292
Operating Segments | SISD
Segment Reporting Information [Line Items]
Product revenue	8,281	5,951
Service revenue	3,780	3,662
Operating income	1,896	1,013
Reconciling Items
Segment Reporting Information [Line Items]
Operating income	$ (11,286)	$ (6,862)

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Segment Information - Additional Information (Detail)	3 Months Ended
	Apr. 05, 2015 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Weighted-Average Shares (Tables)

3 Months Ended

Apr. 05, 2015

Earnings Per Share [Abstract]

Calculation of Weighted-Average Shares

Weighted-average shares were calculated as follows (in thousands):

	Three-months Ended
	April 5, 2015	March 30, 2014
Basic weighted-average common shares outstanding	86,764	86,879
Effect of dilutive stock options	1,985	2,380
Weighted-average common and common-equivalent shares outstanding	88,749	89,259

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Derivative Instruments - Information Regarding Effect of Forward Contracts, Net of Underlying Exposure, on Consolidated Statements of Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Derivative Instruments, Gain (Loss) [Line Items]
Reclassification of net realized (gain) loss into current operations	$ (110)	$ (33)
Designated as Hedging Instrument | Accumulated other comprehensive income (loss), net of tax
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recorded in shareholders' equity (effective portion)	(378)	(62)
Designated as Hedging Instrument | Product revenue
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	(152)	13
Designated as Hedging Instrument | Research, development, and engineering expenses
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	1	(30)
Designated as Hedging Instrument | Selling, general, and administrative expenses
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) reclassified from accumulated other comprehensive income (loss) into current operations (effective portion)	41	(16)
Designated as Hedging Instrument | Foreign currency gain (loss)
Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations
Gains (losses) recognized in current operations (ineffective portion and discontinued derivatives)	0	0
Not Designated as Hedging Instrument | Foreign currency gain (loss)
Information regarding the effect of the forward contracts, net of the underlying exposure, on the Consolidated Statements of Operations
Gains (losses) recognized in current operations	$ 78	$ (152)

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Stock Repurchase Program

3 Months Ended

Apr. 05, 2015

Equity [Abstract]

Stock Repurchase Program

Stock Repurchase Program

In November 2011, the Company’s Board of Directors authorized the repurchase of up to $80,000,000 of the Company’s common stock. Purchases under this 2011 program were completed in 2014. In April 2014, the Company's Board of Directors authorized the repurchase of an additional $50,000,000 of the Company's common stock. Purchases under this 2014 program began in 2014 upon completion of the 2011 program. The Company did not repurchase any shares in the three-month period ended April 5, 2015. The Company may repurchase shares under this program in future periods depending upon a variety of factors, including, among other things, the impact of dilution from employee stock options, stock price, share availability, and cash requirements.

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Fair Value Measurements (Tables)

3 Months Ended

Apr. 05, 2015

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the financial assets and liabilities required to be measured at fair value on a recurring basis as of April 5, 2015 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)
Assets:
Money market instruments	$	1,240	$	—
Corporate bonds	—		241,634
Treasury bills	—		96,168
Asset-backed securities	—		77,840
Euro liquidity fund	—		62,045
Agency bonds	—		12,887
Sovereign bonds	—		11,645
Municipal bonds	—		6,699
Supranational bonds	—		1,902
Cash flow hedge forward contracts	—		327
Economic hedge forward contracts	—		7
Liabilities:
Cash flow hedge forward contracts	—		762
Economic hedge forward contracts	—		17

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Derivative Instruments - Information Regarding Fair Value of Forward Contracts Outstanding (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Derivatives, Fair Value [Line Items]
Derivative Asset	$ 334	$ 114
Derivative Liability	779	97
Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset	327	108
Designated as Hedging Instrument | Accrued Expenses
Derivatives, Fair Value [Line Items]
Derivative Liability	762	84
Not Designated as Hedging Instrument | Prepaid Expenses and Other Current Assets
Derivatives, Fair Value [Line Items]
Derivative Asset	7	6
Not Designated as Hedging Instrument | Accrued Expenses
Derivatives, Fair Value [Line Items]
Derivative Liability	$ 17	$ 13

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Cash, Cash Equivalents, and Investments - Additional Information (Detail) (USD $)	3 Months Ended
	Apr. 05, 2015	Mar. 30, 2014
Amortized Cost And Fair Value Debt Securities [Abstract]
Gross realized gains on sale of investments	$ 197,000	$ 512,000
Gross realized losses on sale of investments	168,000	11,000
Maximum amount committed to invest in limited partnership	20,500,000
Contribution to limited partnership	19,886,000
Remaining amount of commitment in limited partnership	614,000
Investment expiration date	Dec. 31, 2015
Number of contributions made during the period	0
Distributions From Partnership During Period	$ 0

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 36,047	$ 55,694
Short-term investments	142,343	90,456
Accounts receivable, less reserves of $1,024 and $1,095 in 2015 and 2014, respectively	56,264	50,938
Inventories	48,458	35,536
Deferred income taxes	8,990	8,985
Prepaid expenses and other current assets	17,857	22,997
Total current assets	309,959	264,606
Long-term investments	370,433	400,845
Property, plant, and equipment, net	48,692	47,907
Deferred income taxes	16,349	14,452
Intangible assets, net	9,606	10,699
Goodwill	81,689	81,689
Other assets	1,617	1,536
Total assets	838,345	821,734
Current liabilities:
Accounts payable	13,295	19,114
Accrued expenses	32,240	39,949
Accrued income taxes	928	1,048
Deferred revenue	20,447	20,563
Total current liabilities	66,910	80,674
Reserve for income taxes	4,372	4,623
Commitments and contingencies (Note 7)
Shareholders' equity:
Common stock, $.002 par value – Authorized: 140,000 shares, issued and outstanding: 87,128 and 86,542 shares in 2015 and 2014, respectively	174	173
Additional paid-in capital	272,070	251,717
Retained earnings	544,448	523,946
Accumulated other comprehensive loss, net of tax	(49,629)	(39,399)
Total shareholders’ equity	767,063	736,437
Total liabilities and shareholders' equity	$ 838,345	$ 821,734

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Summary of Significant Accounting Policies

3 Months Ended

Apr. 05, 2015

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

As permitted by the rules of the Securities and Exchange Commission applicable to Quarterly Reports on Form 10-Q, these notes are condensed and do not contain all disclosures required by generally accepted accounting principles (GAAP). Reference should be made to the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014.

In the opinion of the management of Cognex Corporation (the “Company”), the accompanying consolidated unaudited financial statements contain all adjustments, consisting of normal, recurring adjustments and financial statement reclassifications, necessary to present fairly the Company’s financial position as of April 5, 2015, and the results of its operations for the three-month periods ended April 5, 2015 and March 30, 2014, and changes in shareholders’ equity, comprehensive income, and cash flows for the periods presented.

The results disclosed in the Consolidated Statements of Operations for the three-month periods ended April 5, 2015 are not necessarily indicative of the results to be expected for the full year.

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Stock Repurchase Program - Additional Information (Detail) (Common Stock, USD $)	Nov. 30, 2008	Apr. 29, 2014
Repurchase Program 2011
Equity [Line Items]
Repurchase of authorized common stock	$ 80,000,000
Repurchase Program 2014
Equity [Line Items]
Repurchase of authorized common stock		$ 50,000,000

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Cash, Cash Equivalents, and Investments (Tables)

3 Months Ended

Apr. 05, 2015

Cash and Cash Equivalents [Abstract]

Components of Cash, Cash Equivalents, and Investments

Cash, cash equivalents, and investments consisted of the following (in thousands):

	April 5, 2015		December 31, 2014
Cash	$	34,807	$	54,917
Money market instruments	1,240		777
Cash and cash equivalents	36,047		55,694
Euro liquidity fund	62,045		48,235
Corporate bonds	37,413		30,889
Treasury bills	31,644		—
Sovereign bonds	5,605		—
Supranational bonds	1,902		1,901
Municipal bonds	1,819		1,237
Agency bonds	1,523		6,883
Asset-backed securities	392		1,311
Short-term investments	142,343		90,456
Corporate bonds	204,221		216,294
Asset-backed securities	77,448		62,556
Treasury bills	64,524		90,412
Agency bonds	11,364		9,566
Sovereign bonds	6,040		13,461
Municipal bonds	4,880		6,600
Limited partnership interest	1,956		1,956
Long-term investments	370,433		400,845
	$	548,823	$	546,995

Summary of Available-for-Sale Investments

The following table summarizes the Company’s available-for-sale investments as of April 5, 2015 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
Short-term:
Euro liquidity fund	$	61,866	$	179	$	—		$	62,045
Corporate bonds	37,356		58		(1		)	37,413
Treasury bills	31,652		—		(8		)	31,644
Sovereign bonds	5,594		11		—			5,605
Supranational bonds	1,900		2		—			1,902
Municipal bonds	1,814		5		—			1,819
Agency bonds	1,521		2		—			1,523
Asset-backed securities	392		—		—			392
Long-term:
Corporate bonds	203,712		618		(109		)	204,221
Asset-backed securities	77,417		43		(12		)	77,448
Treasury bills	64,468		57		(1		)	64,524
Agency bonds	11,344		20		—			11,364
Sovereign bonds	6,033		7		—			6,040
Municipal bonds	4,855		25		—			4,880
	$	509,924	$	1,027	$	(131	)	$	510,820

Gross Unrealized Losses and Fair Values for Available-for-Sale Investments

The following table summarizes the Company’s gross unrealized losses and fair values for available-for-sale investments in an unrealized loss position as of April 5, 2015 (in thousands):

	Unrealized Loss Position For:
	Less than 12 Months					12 Months or Greater					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
Corporate bonds	$	48,070	$	(109	)	$	399	$	(1	)	$	48,469	$	(110	)
Treasury bills	33,143		(9		)	—		—			33,143		(9		)
Asset-backed securities	16,974		(7		)	2,597		(5		)	19,571		(12		)
	$	98,187	$	(125	)	$	2,996	$	(6	)	$	101,183	$	(131	)

Effective Maturity Dates of Available-for-Sale Investments

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of April 5, 2015 (in thousands):

	1 Year or Less		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-8 Years		Total
Corporate bonds	$	37,413	$	101,597	$	74,312	$	22,542	$	5,770	$	—	$	241,634
Treasury bills	31,644		64,524		—		—		—		—		96,168
Asset-backed securities	392		8,564		38,917		16,673		8,982		4,312		77,840
Euro liquidity fund	62,045		—		—		—		—		—		62,045
Agency bonds	1,523		6,360		5,004		—		—		—		12,887
Sovereign bonds	5,605		6,040		—		—		—		—		11,645
Municipal bonds	1,819		334		3,546		—		—		1,000		6,699
Supranational bonds	1,902		—		—		—		—		—		1,902
	$	142,343	$	187,419	$	121,779	$	39,215	$	14,752	$	5,312	$	510,820

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Cash, Cash Equivalents, and Investments - Summary of Available-for-Sale Investments (Detail) (USD $) In Thousands, unless otherwise specified	Apr. 05, 2015
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	$ 509,924
Gross Unrealized Gains	1,027
Gross Unrealized Losses	(131)
Fair Value	510,820
Corporate Bonds
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Losses	(110)
Corporate Bonds | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	37,356
Gross Unrealized Gains	58
Gross Unrealized Losses	(1)
Fair Value	37,413
Corporate Bonds | Long-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	203,712
Gross Unrealized Gains	618
Gross Unrealized Losses	(109)
Fair Value	204,221
Supranational bonds | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,900
Gross Unrealized Gains	2
Gross Unrealized Losses	0
Fair Value	1,902
Euro liquidity fund | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	61,866
Gross Unrealized Gains	179
Gross Unrealized Losses	0
Fair Value	62,045
Municipal Bonds | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,814
Gross Unrealized Gains	5
Gross Unrealized Losses	0
Fair Value	1,819
Municipal Bonds | Long-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	4,855
Gross Unrealized Gains	25
Gross Unrealized Losses	0
Fair Value	4,880
Sovereign Bonds | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	5,594
Gross Unrealized Gains	11
Gross Unrealized Losses	0
Fair Value	5,605
Sovereign Bonds | Long-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	6,033
Gross Unrealized Gains	7
Gross Unrealized Losses	0
Fair Value	6,040
Asset-Backed Securities
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Losses	(12)
Asset-Backed Securities | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	392
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Value	392
Asset-Backed Securities | Long-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	77,417
Gross Unrealized Gains	43
Gross Unrealized Losses	(12)
Fair Value	77,448
Treasury Bills
Schedule of Available-for-sale Securities [Line Items]
Gross Unrealized Losses	(9)
Treasury Bills | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	31,652
Gross Unrealized Gains	0
Gross Unrealized Losses	(8)
Fair Value	31,644
Treasury Bills | Long-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	64,468
Gross Unrealized Gains	57
Gross Unrealized Losses	(1)
Fair Value	64,524
Agency Bonds | Short-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	1,521
Gross Unrealized Gains	2
Gross Unrealized Losses	0
Fair Value	1,523
Agency Bonds | Long-Term Investments
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	11,344
Gross Unrealized Gains	20
Gross Unrealized Losses	0
Fair Value	$ 11,364

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Stock-Based Compensation Expense

3 Months Ended

Apr. 05, 2015

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation Expense

Stock-Based Compensation Expense

The Company’s share-based payments that result in compensation expense consist of stock option grants and restricted stock awards. As of April 5, 2015, the Company had 7,823,929 shares available for grant. On April 17, 2015, the 2007 Stock Option and Incentive Plan received shareholder approval for an amendment and restatement of the plan, reserving an additional 2,000,000 shares of common stock, par value $0.002 per share, for issuance. Generally, stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date, vest over four years based upon continuous service, and expire ten years from the grant date. Restricted stock awards are granted with an exercise price equal to the market value of the Company's common stock at the time of grant. Conditions of the award may be based on continuing employment and or achievement of pre-established performance goals and objectives. Vesting for performance-based restricted stock awards and time-based restricted stock awards must be greater than one year and three years, respectively.

The following table summarizes the Company’s stock option activity for the three-month period ended April 5, 2015:

	Shares (in thousands)		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2014	6,812		$	23.26
Granted	1,399		41.26
Exercised	(586	)	16.49
Forfeited or expired	(24	)	9.20
Outstanding as of April 5, 2015	7,601		$	27.07	7.6	$	178,001
Exercisable as of April 5, 2015	3,137		$	16.59	5.8	$	106,335
Options vested or expected to vest as of   April 5, 2015 (1)	6,732		$	25.79	7.4	$	166,252

 (1) In addition to the vested options, the Company expects a portion of the unvested options to vest at some point in the future. Options expected to vest are calculated by applying an estimated forfeiture rate to the unvested options.

The fair values of stock options granted in each period presented were estimated using the following weighted-average assumptions:

	Three-months Ended
	April 5, 2015		March 30, 2014
Risk-free rate	2.1	%	2.7	%
Expected dividend yield	1.25	%	—	%
Expected volatility	40	%	41	%
Expected term (in years)	5.4		5.4

Risk-free rate

The risk-free rate was based upon a treasury instrument whose term was consistent with the contractual term of the option.

Expected dividend yield

Generally, the current dividend yield is calculated by annualizing the cash dividend declared by the Company’s Board of Directors and dividing that result by the closing stock price on the grant date. However, in the fourth quarter of 2012, the Company paid the full annual dividends for 2013 and 2014 in advance, and therefore, the dividend yield for those years has been adjusted to zero. A dividend yield of 1.25% was estimated for future periods from 2015 through the expected life of the option.

Expected volatility

The expected volatility was based upon a combination of historical volatility of the Company’s common stock over the contractual term of the option and implied volatility for traded options of the Company’s stock.

Expected term

The expected term was derived from the binomial lattice model from the impact of events that trigger exercises over time.

The Company stratifies its employee population into two groups: one consisting of senior management and another consisting of all other employees. The Company currently expects that approximately 74% of its stock options granted to senior management and 73% of its options granted to all other employees will actually vest. Therefore, the Company currently applies an estimated annual forfeiture rate of 10% to all unvested options for senior management and a rate of 11% for all other employees. The Company revised its estimated forfeiture rates in the first quarters of 2015 and 2014, resulting in an increase to compensation expense of $461,000 and $288,000, respectively.

The weighted-average grant-date fair values of stock options granted during the three-month periods ended April 5, 2015 and March 30, 2014 were $14.34 and $15.34, respectively.

The total intrinsic values of stock options exercised for the three-month periods ended April 5, 2015 and March 30, 2014 were $16,740,000 and $8,933,000, respectively. The total fair values of stock options vested for the three-month periods ended April 5, 2015 and March 30, 2014 were $13,523,000 and $8,361,000, respectively.

As of April 5, 2015, total unrecognized compensation expense related to non-vested stock options was $30,963,000, which is expected to be recognized over a weighted-average period of 2.10 years.

The following table summarizes the Company's restricted stock award activity:

	Shares (in thousands)	Weighted-Average Exercise Price		Aggregate Intrinsic Value (in thousands)
Nonvested as of December 31, 2014	20	$	34.05
Granted	—	—
Vested	—	—
Forfeited or expired	—	—
Nonvested as of April 5, 2015	20	$	34.05	$	329

The fair values of restricted stock awards granted were determined based upon the market value of the Company's common stock at the time of grant. The initial cost is then amortized over the period of vesting until the restrictions lapse. These restricted shares will be fully vested in 2018. Participants are entitled to dividends on restricted stock awards, but only receive those amounts if the shares vest. The sale or transfer of these shares is restricted during the vesting period.

The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended April 5, 2015 were$6,946,000 and $2,337,000, respectively, and for the three-month period ended March 30, 2014 were $4,004,000 and $1,306,000, respectively. No compensation expense was capitalized as of April 5, 2015 or December 31, 2014.

The following table details the stock-based compensation expense by caption for each period presented on the Consolidated Statements of Operations (in thousands):

	Three-months Ended
	April 5, 2015		March 30, 2014
Product cost of revenue	$	420	$	285
Service cost of revenue	73		63
Research, development, and engineering	1,848		1,056
Selling, general, and administrative	4,605		2,600
	$	6,946	$	4,004