10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549 

FORM 10-Q 

(Mark One)

☒ Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended July 2, 2023 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)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.002 per share	CGNX	The NASDAQ Stock Market LLC

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Yes ☒ No ☐

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

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Yes ☐ No ☒

As of July 2, 2023, there were 172,293,115 shares of Common Stock, $.002 par value per share, of the registrant outstanding.

INDEX

PART I	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (interim periods unaudited)	3
	Consolidated Statements of Operations for the three-month and six-month periods ended July 2, 2023 and July 3, 2022	3
	Consolidated Statements of Comprehensive Income for the three-month and six-month periods ended July 2, 2023 and July 3, 2022	4
	Consolidated Balance Sheets as of July 2, 2023 and December 31, 2022	5
	Consolidated Statements of Cash Flows for the six-month periods ended July 2, 2023 and July 3, 2022	6
	Consolidated Statements of Shareholders’ Equity for the three-month and six-month periods ended July 2, 2023 and July 3, 2022	7
	Notes to Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	31
PART II	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosures	32
Item 5.	Other Information	32
Item 6.	Exhibits	33
	Signatures	34

2

PART I: FINANCIAL INFORMATION

ITEM 1: FINANCIAL STATEMENTS

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
	(unaudited)				(unaudited)
Revenue	$	242,512	$	274,628	$	443,636	$	557,035
Cost of revenue	62,829		78,143		120,213		156,933
Gross margin	179,683		196,485		323,423		400,102
Research, development, and engineering expenses	33,585		33,991		72,127		70,045
Selling, general, and administrative expenses	83,423		79,950		166,460		160,785
Loss (recovery) from fire (Note 17)	(2,500)		17,403		(2,500)		17,403
Operating income	65,175		65,141		87,336		151,869
Foreign currency gain (loss)	(1,605)		(2,043)		(1,211)		(2,487)
Investment income	4,095		1,505		7,682		2,973
Other income (expense)	112		(188)		185		(236)
Income before income tax expense	67,777		64,415		93,992		152,119
Income tax expense	10,303		5,514		10,903		25,885
Net income	$	57,474	$	58,901	$	83,089	$	126,234
Net income per weighted-average common and common-equivalent share:
Basic	$	0.33	$	0.34	$	0.48	$	0.73
Diluted	$	0.33	$	0.34	$	0.48	$	0.72
Weighted-average common and common-equivalent shares outstanding:
Basic	172,429		173,507		172,527		173,830
Diluted	173,622		174,993		173,791		175,874
Cash dividends per common share	$	0.070	$	0.065	$	0.140	$	0.130

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				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
	(unaudited)				(unaudited)
Net income	$	57,474	$	58,901	$	83,089	$	126,234
Other comprehensive income (loss), net of tax:
Available-for-sale investments:
Net unrealized gain (loss), net of tax of $(584) and $(698) in the three-month periods, and net of tax of $1,274 and $(4,734) in the six-month periods, respectively	(1,706)		(2,322)		3,720		(15,870)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments into current operations	—		(12)		—		24
Net change related to available-for-sale investments	(1,706)		(2,334)		3,720		(15,846)
Foreign currency translation adjustments:
Foreign currency translation adjustments	(2,866)		(3,962)		(3,225)		(6,073)
Net change related to foreign currency translation adjustments	(2,866)		(3,962)		(3,225)		(6,073)
Other comprehensive income (loss), net of tax	(4,572)		(6,296)		495		(21,919)
Total comprehensive income	$	52,902	$	52,605	$	83,584	$	104,315

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

4

COGNEX CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands)

	July 2, 2023		December 31, 2022
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	177,485	$	181,374
Current investments, amortized cost of $195,690 and $223,545 in 2023 and 2022, respectively, allowance for credit losses of $0 in 2023 and 2022	191,474		218,759
Accounts receivable, allowance for credit losses of $602 and $730 in 2023 and 2022, respectively	147,864		125,417
Unbilled revenue	2,243		2,179
Inventories	126,226		122,480
Prepaid expenses and other current assets	73,090		67,490
Total current assets	718,382		717,699
Non-current investments, amortized cost of $481,101 and $476,148 in 2023 and 2022, respectively, allowance for credit losses of $0 in 2023 and 2022	463,494		454,117
Property, plant, and equipment, net	81,638		79,714
Operating lease assets	68,594		37,682
Goodwill	241,582		242,630
Intangible assets, net	10,729		12,414
Deferred income taxes	407,257		407,241
Other assets	6,438		6,643
Total assets	$	1,998,114	$	1,958,140
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	26,109	$	27,103
Accrued expenses	83,605		93,235
Accrued income taxes	19,121		18,129
Deferred revenue and customer deposits	43,439		40,787
Operating lease liabilities	8,188		8,454
Total current liabilities	180,462		187,708
Non-current operating lease liabilities	61,852		31,298
Deferred income taxes	237,357		249,961
Reserve for income taxes	19,239		15,866
Non-current accrued income taxes	18,338		33,008
Other liabilities	403		1,905
Total liabilities	517,651		519,746
Commitments and contingencies (Note 10)
Shareholders’ equity:
Preferred stock, $.01 par value – Authorized: 400 shares in 2023 and 2022, respectively; no shares issued and outstanding	—		—
Common stock, $.002 par value – Authorized: 300,000 shares in 2023 and 2022, respectively; issued and outstanding: 172,293 and 172,631 shares in 2023 and 2022, respectively	345		345
Additional paid-in capital	1,010,973		979,167
Retained earnings	537,947		528,179
Accumulated other comprehensive loss, net of tax	(68,802)		(69,297)
Total shareholders’ equity	1,480,463		1,438,394
Total liabilities and shareholders' equity	$	1,998,114	$	1,958,140

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

5

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	Six-months Ended
	July 2, 2023		July 3, 2022
	(unaudited)
Cash flows from operating activities:
Net income	$	83,089	$	126,234
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	29,153		28,053
Depreciation of property, plant, and equipment	8,177		8,114
(Gain) loss on disposal of property, plant, and equipment	(8)		12
Amortization of intangible assets	1,685		1,662
Excess and obsolete inventory charges	1,443		741
Non-cash impact of write-offs related to fire (Note 17)	—		44,903
Amortization of discounts or premiums on investments	1,200		2,714
Realized loss (gain) on sale of investments	—		24
Change in deferred income taxes	(14,158)		(10,809)
Change in operating assets and liabilities:
Accounts receivable	(24,420)		(44,118)
Unbilled revenue	(104)		1,704
Inventories	(4,981)		(20,122)
Prepaid expenses and other current assets	(5,289)		(45,752)
Accounts payable	(989)		(23,525)
Accrued expenses	(9,219)		(20,024)
Accrued income taxes	(13,684)		(372)
Deferred revenue and customer deposits	3,160		41,535
Other	2,347		2,655
Net cash provided by (used in) operating activities	57,402		93,629
Cash flows from investing activities:
Purchases of investments	(94,060)		(77,760)
Maturities and sales of investments	115,761		164,610
Purchases of property, plant, and equipment	(10,207)		(11,253)
Net cash provided by (used in) investing activities	11,494		75,597
Cash flows from financing activities:
Net payments from issuance of common stock under stock plans	2,655		4,414
Repurchase of common stock	(49,163)		(154,317)
Payment of dividends	(24,160)		(22,573)
Net cash provided by (used in) financing activities	(70,668)		(172,476)
Effect of foreign exchange rate changes on cash and cash equivalents	(2,117)		(5,865)
Net change in cash and cash equivalents	(3,889)		(9,115)
Cash and cash equivalents at beginning of period	181,374		186,161
Cash and cash equivalents at end of period	$	177,485	$	177,046

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

6

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Par Value
Balance as of April 2, 2023	172,601	$	345	$	992,690	$	517,526	$	(64,230)	$	1,446,331
Net issuance of common stock under stock plans	179	1		5,709		—		—		5,710
Repurchase of common stock	(487)	(1)		—		(24,984)		—		(24,985)
Stock-based compensation expense	—	—		12,574		—		—		12,574
Payment of dividends ($0.070 per common share)	—	—		—		(12,069)		—		(12,069)
Net income	—	—		—		57,474		—		57,474
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(584)	—	—		—		—		(1,706)		(1,706)
Foreign currency translation adjustment	—	—		—		—		(2,866)		(2,866)
Balance as of July 2, 2023 (unaudited)	172,293	$	345	$	1,010,973	$	537,947	$	(68,802)	$	1,480,463

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Par Value
Balance as of April 3, 2022	173,738	$	347	$	933,452	$	488,511	$	(63,565)	$	1,358,745
Net issuance of common stock under stock plans	47	—		820		—		—		820
Repurchase of common stock	(388)	—		—		(23,912)		—		(23,912)
Stock-based compensation expense	—	—		12,997		—		—		12,997
Payment of dividends ($0.065 per common share)	—	—		—		(11,270)		—		(11,270)
Net income	—	—		—		58,901		—		58,901
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(698)	—	—		—		—		(2,322)		(2,322)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments	—	—		—		—		(12)		(12)
Foreign currency translation adjustment	—	—		—		—		(3,962)		(3,962)
Balance as of July 3, 2022 (unaudited)	173,397	$	347	$	947,269	$	512,230	$	(69,861)	$	1,389,985

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

7

COGNEX CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Par Value
Balance as of December 31, 2022	172,631	$	345	$	979,167	$	528,179	$	(69,297)	$	1,438,394
Net issuance of common stock under stock plans	628	2		2,653		—		—		2,655
Repurchase of common stock	(966)	(2)		—		(49,161)		—		(49,163)
Stock-based compensation expense	—	—		29,153		—		—		29,153
Payment of dividends ($0.140 per common share)	—	—		—		(24,160)		—		(24,160)
Net income	—	—		—		83,089		—		83,089
Net unrealized gain (loss) on available-for-sale investments, net of tax of $1,274	—	—		—		—		3,720		3,720
Foreign currency translation adjustment	—	—		—		—		(3,225)		(3,225)
Balance as of July 2, 2023 (unaudited)	172,293	$	345	$	1,010,973	$	537,947	$	(68,802)	$	1,480,463

	Common Stock			Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Total Shareholders’ Equity
	Shares	Par Value
Balance as of December 31, 2021	175,481	$	351	$	914,802	$	562,882	$	(47,942)	$	1,430,093
Net issuance of common stock under stock plans	183	—		4,414		—		—		4,414
Repurchase of common stock	(2,267)	(4)		—		(154,313)		—		(154,317)
Stock-based compensation expense	—	—		28,053		—		—		28,053
Payment of dividends ($0.130 per common share)	—	—		—		(22,573)		—		(22,573)
Net income	—	—		—		126,234		—		126,234
Net unrealized gain (loss) on available-for-sale investments, net of tax of $(4,734)	—	—		—		—		(15,870)		(15,870)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments	—	—		—		—		24		24
Foreign currency translation adjustment	—	—		—		—		(6,073)		(6,073)
Balance as of July 3, 2022 (unaudited)	173,397	$	347	$	947,269	$	512,230	$	(69,861)	$	1,389,985

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

8

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, 2022 for a full description of other significant accounting policies.

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, adjustments related to losses and recoveries from the fire (Note 17), and financial statement reclassifications necessary to present fairly the Company’s financial position as of July 2, 2023, and the results of its operations for the three-month and six-month periods ended July 2, 2023 and July 3, 2022, 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 and six-month periods ended July 2, 2023 are not necessarily indicative of the results to be expected for the full year.

NOTE 2: New Pronouncements

Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", (ASU) 2021-01, "Reference Rate Reform (Topic 848): Scope", and Accounting Standards Update (ASU) 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848"

The amendments in these ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Together, the ASUs provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024 that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in these ASUs are effective for all entities as of March 12, 2020 through December 31, 2024. Management adopted Topic 848 on January 1, 2023, and now uses the Secured Overnight Financing Rate (SOFR). The adoption did not have a material impact on the Company's financial statements and disclosures.

9

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 July 2, 2023 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Money market instruments	$	30,492	$	—	$	—
Corporate bonds	—		527,352		—
Treasury bills	—		72,709		—
Asset-backed securities	—		52,340		—
Sovereign bonds	—		1,932		—
Municipal bonds	—		635		—
Economic hedge forward contracts	—		118		—
Liabilities:
Economic hedge forward contracts	—		31		—

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 on 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.

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

Non-financial assets, such as property, plant and equipment, operating lease assets, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record impairment charges related to non-financial assets during the three-month or six-month periods ended July 2, 2023 or July 3, 2022.

10

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 4: Cash, Cash Equivalents, and Investments

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

	July 2, 2023		December 31, 2022
Cash	$	146,993	$	180,959
Money market instruments	30,492		415
Cash and cash equivalents	177,485		181,374
Corporate bonds	165,539		164,055
Asset-backed securities	15,339		26,890
Treasury bills	9,961		11,332
Municipal bonds	635		624
Agency bonds	—		15,858
Current investments	191,474		218,759
Corporate bonds	361,813		374,440
Treasury bills	62,748		44,214
Asset-backed securities	37,001		33,539
Sovereign bonds	1,932		1,924
Non-current investments	463,494		454,117
	$	832,453	$	854,250

Corporate bonds consist of debt securities issued by both domestic and foreign companies; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; treasury bills consist of debt securities issued by the U.S. government; 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 sovereign bonds consist of direct debt issued by foreign governments. All of the Company's securities as of July 2, 2023 and December 31, 2022 were denominated in U.S. Dollars.

Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $4,265,000 and $3,620,000 as of July 2, 2023 and December 31, 2022, respectively.

The following table summarizes the Company’s available-for-sale investments as of July 2, 2023 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Current:
Corporate bonds	$	169,464	$	—	$	(3,925)	$	165,539
Asset-backed securities	15,492		—		(153)		15,339
Treasury bills	10,099		—		(138)		9,961
Municipal bonds	635		—		—		635
Non-current:
Corporate bonds	376,629		329		(15,145)		361,813
Treasury bills	63,664		2		(918)		62,748
Asset-backed securities	38,737		—		(1,736)		37,001
Sovereign bonds	2,071		—		(139)		1,932
	$	676,791	$	331	$	(22,154)	$	654,968

11

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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 July 2, 2023 (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	$	127,474	$	(1,767)	$	350,232	$	(17,303)	$	477,706	$	(19,070)
Treasury bills	59,832		(838)		11,884		(218)		71,716		(1,056)
Asset-backed securities	15,850		(199)		36,490		(1,690)		52,340		(1,889)
Sovereign bonds	—		—		1,932		(139)		1,932		(139)
Municipal bonds	—		—		—		—		—		—
	$	203,156	$	(2,804)	$	400,538	$	(19,350)	$	603,694	$	(22,154)

Management monitors debt securities that are in an unrealized loss position to determine whether a loss exists related to the credit quality of the issuer. When developing an estimate of expected credit losses, management considers all relevant information including historical experience, current conditions, and reasonable forecasts of expected future cash flows. Based on this evaluation, no allowance for credit losses on debt securities was recorded as of July 2, 2023 or December 31, 2022. There was no activity recorded in the allowance for credit losses during the three-month or six-month periods ended July 2, 2023 or July 3, 2022. Management currently intends to hold debt securities that are in an unrealized loss position to full value recovery at maturity.

The Company recorded no gross realized gains or losses on the sale of debt securities during the three-month and six-month periods ended July 2, 2023. The Company recorded gross realized gains on the sale of debt securities totaling $15,000 and $133,000 during the three-month and six-month periods ended July 3, 2022, respectively, and gross realized losses on the sale of debt securities totaling $3,000 and $157,000 during the three-month and six-month periods ended July 3, 2022, respectively. Realized gains and losses are included in "Investment income" on the Consolidated Statements of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, were recorded in shareholders’ equity as accumulated other comprehensive income (loss).

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of July 2, 2023 (in thousands):

	<1 year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-8 Years		Total
Corporate bonds	$	165,539	$	129,096	$	95,060	$	56,128	$	81,073	$	456	$	527,352
Treasury bills	9,961		3,362		16,263		20,408		22,715		—		72,709
Asset-backed securities	15,339		11,622		11,093		7,227		—		7,059		52,340
Sovereign bonds	—		974		958		—		—		—		1,932
Municipal bonds	635		—		—		—		—		—		635
	$	191,474	$	145,054	$	123,374	$	83,763	$	103,788	$	7,515	$	654,968

NOTE 5: Inventories

Inventories consisted of the following (in thousands):

	July 2, 2023		December 31, 2022
Raw materials	$	72,327	$	71,720
Work-in-process	1,339		906
Finished goods	52,560		49,854
	$	126,226	$	122,480

12

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 6: Leases

The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion.

As of July 2, 2023, there were no options to terminate and twenty options to extend that were accounted for in the determination of the lease term for outstanding leases. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for outstanding leases as of July 2, 2023.

The total operating lease expense for the three-month and six-month periods ended July 2, 2023 was $2,639,000 and $5,031,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 2, 2023 were $2,364,000 and $4,768,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 2, 2023 was $136,000 and $160,000, respectively.

The total operating lease expense for the three-month and six-month periods ended July 3, 2022 was $2,215,000 and $4,444,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 3, 2022 were $2,227,000 and $4,306,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 3, 2022 was $37,000 and $75,000, respectively.

Future operating lease cash payments are as follows (in thousands):

Year Ended December 31,	Amount
Remainder of fiscal 2023	$	4,863
2024	11,026
2025	9,237
2026	7,722
2027	7,144
2028	6,922
Thereafter	56,108
	$	103,022

The discounted present value of the future lease cash payments resulted in a total lease liability of $70,040,000 and $39,752,000 as of July 2, 2023 and December 31, 2022, respectively. The Company did not have any leases that had not yet commenced but that created significant rights and obligations as of July 2, 2023.

In June 2023, the Company entered into a lease for a 115,000 square-foot building in Singapore to serve as a new distribution center for customers in Asia. The lease contains two components, including a 88,000 square-foot premises with a term of ten years, six months. The Company has the right and option to extend the term of this lease component for an additional period of five years, commencing upon the expiration of the original term. This lease component commenced during the second quarter of 2023, and therefore the Company recorded approximately $29,684,000, which reflects an estimated extension period of five years, within "Operating lease assets" and "Operating lease liabilities" on the Consolidated Balance Sheets on the commencement date. The second component of this Singapore lease is for a 27,000 square-foot premises with a term of eight years. The commencement date for this lease component is in the fourth quarter of 2025, and therefore it was not yet recorded on the Consolidated Balance Sheets, nor did it create any significant rights and obligations as of July 2, 2023. The Company has the right and option to extend the term of this lease component for an additional period of five years, commencing upon the expiration of the original term. Future payment obligations associated with this lease component total $13,231,000, none of which is payable in 2023 and which reflects an estimated extension period of five years. Future payment obligations related to this lease component are not included in the future operating lease cash payments table above.

13

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

In December 2021, the Company entered into a lease for a 65,000 square-foot building in Southborough, Massachusetts for a term of ten years to serve as a new distribution center for customers in the Americas. The Company has the right and option to extend the term of this lease for an additional period of five years, commencing upon the expiration of the original ten-year term. This lease commenced during the first quarter of 2022, and therefore the Company recorded approximately $9,271,000, which does not reflect an estimated extension period, within "Operating lease assets" and "Operating lease liabilities" on the Consolidated Balance Sheets on the commencement date.

The weighted-average discount rate was 5.3% and 3.3% for the leases outstanding as of July 2, 2023 and December 31, 2022, respectively. The weighted-average remaining lease term was 11.0 and 7.8 years for the leases outstanding as of July 2, 2023 and December 31, 2022, respectively.

NOTE 7: Goodwill

The changes in the carrying value of goodwill were as follows (in thousands):

Balance as of December 31, 2022	$	242,630
Foreign exchange rate changes	(1,048)
Balance as of July 2, 2023	$	241,582

NOTE 8: Intangible Assets

Amortized intangible assets consisted of the following (in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Completed technologies	$	28,017	$	(19,041)	$	8,976
Customer relationships	5,838		(4,220)		1,618
Non-compete agreements	340		(205)		135
Balance as of July 2, 2023	$	34,195	$	(23,466)	$	10,729
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Completed technologies	$	28,017	$	(17,744)	$	10,273
Customer relationships	5,838		(3,860)		1,978
Non-compete agreements	340		(177)		163
Balance as of December 31, 2022	$	34,195	$	(21,781)	$	12,414

As of July 2, 2023, estimated future amortization expense related to intangible assets was as follows (in thousands):

Year Ended December 31,	Amount
Remainder of fiscal 2023	$	1,452
2024	2,623
2025	2,300
2026	1,995
2027	1,273
2028	543
Thereafter	543
	$	10,729

14

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 9: 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 changes in 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 obligation were as follows (in thousands):

Balance as of December 31, 2022	$	4,375
Provisions for warranties issued during the period	1,163
Fulfillment of warranty obligations	(1,537)
Balance as of July 2, 2023	$	4,001

NOTE 10: Commitments and Contingencies

As of July 2, 2023, the Company had outstanding purchase orders totaling $40,388,000 to procure inventory from various vendors. Certain of these purchase orders may be canceled by the Company, subject to cancellation penalties. These purchase commitments relate primarily to expected sales in the next twelve months.

A significant portion of the Company's outstanding inventory purchase orders as of July 2, 2023, as well as additional preauthorized commitments to procure strategic components based on the Company's expected customer demand, are placed with the Company's primary contract manufacturer for the Company's assembled products. The Company has the obligation to purchase any non-cancelable and non-returnable components that have been purchased by the contract manufacturer with the Company's preauthorization, when these components have not been consumed within the period defined in the terms of the Company's agreement with this contract manufacturer. While the Company typically expects such purchased components to be used in future production of Cognex finished goods, these components are considered in the Company's reserve estimate for excess and obsolete inventory. Furthermore, the Company accrues for losses on commitments for the future purchase of non-cancelable and non-returnable components from this contract manufacturer at the time that circumstances, such as changes in demand, indicate that the value of the components may not be recoverable, the loss is probable, and management has the ability to reasonably estimate the amount of the loss.

Various 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 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 11: 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. The Company enters into economic hedges utilizing foreign currency forward contracts with maturities that do not exceed approximately three months 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.

15

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

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

	July 2, 2023			December 31, 2022
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Not Designated as Hedging Instruments:
Euro	32,500	$	35,371	60,000	$	64,174
Chinese Renminbi	70,000	9,665		55,000	7,619
Mexican Peso	120,000	6,979		185,000	9,480
Hungarian Forint	1,950,000	5,671		1,590,000	4,238
British Pound	3,540	4,467		3,445	4,161
Japanese Yen	600,000	4,159		700,000	5,281
Canadian Dollar	1,750	1,321		1,730	1,278
Swiss Franc	—	—		1,120	1,218

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	July 2, 2023		December 31, 2022		Sheet Location	July 2, 2023		December 31, 2022
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	118	$	27	Accrued expenses	$	31	$	479

The following table presents 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
	July 2, 2023		December 31, 2022			July 2, 2023		December 31, 2022
Gross amounts of recognized assets	$	118	$	27	Gross amounts of recognized liabilities	$	31	$	479
Gross amounts offset	—		—		Gross amounts offset	—		—
Net amount of assets presented	$	118	$	27	Net amount of liabilities presented	$	31	$	479

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

	Location in Financial Statements	Three-months Ended				Six-months Ended
		July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	859	$	6,191	$	(612)	$	7,930

16

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 12: Revenue Recognition

The following table summarizes disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands):

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Americas	$	82,297	$	91,551	$	162,911	$	218,210
Europe	56,860		61,840		116,702		124,631
Greater China	72,351		78,616		105,351		127,021
Other Asia	31,004		42,621		58,672		87,173
	$	242,512	$	274,628	$	443,636	$	557,035

The following table summarizes disaggregated revenue information by revenue type (in thousands):

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Standard products and services	$	194,944	$	221,474	$	385,727	$	479,354
Application-specific customer solutions	47,568		53,154		57,909		77,681
	$	242,512	$	274,628	$	443,636	$	557,035

Costs to Fulfill a Contract

Costs to fulfill a contract are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $18,951,000 and $14,578,000 as of July 2, 2023 and December 31, 2022, respectively.

Accounts Receivable, Contract Assets, and Contract Liabilities

Accounts receivable represent amounts billed and currently due from customers which are reported at their net estimated realizable value. The Company maintains an allowance against its accounts receivable for credit losses. Contract assets consist of unbilled revenue which arises when revenue is recognized in advance of billing for certain application-specific customer solutions contracts. Contract liabilities consist of deferred revenue and customer deposits which arise when amounts are billed to or collected from customers in advance of revenue recognition.

The following table summarizes the allowance for credit losses activity for the six-month period ended July 2, 2023 (in thousands):

Balance as of December 31, 2022	$	730
Increases to the allowance for credit losses	350
Write-offs, net of recoveries	(477)
Foreign exchange rate changes	(1)
Balance as of July 2, 2023	$	602

17

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The following table summarizes the deferred revenue and customer deposits activity for the six-month period ended July 2, 2023 (in thousands):

Balance as of December 31, 2022	$	40,787
Deferral of revenue billed in the current period, net of recognition	26,719
Recognition of revenue deferred in prior period	(14,154)
Returned customer deposit	(9,205)
Foreign exchange rate changes	(708)
Balance as of July 2, 2023	$	43,439

As a practical expedient, the Company has elected not to disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations, as our contracts have an original expected duration of less than one year.

NOTE 13: Stock-Based Compensation Expense

Stock Plans

The Company’s stock-based awards that result in compensation expense consist of stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs"). In May 2023, the shareholders of the Company approved the Cognex Corporation 2023 Stock Option and Incentive Plan (the “2023 Plan”). The 2023 Plan permits awards of stock options (both incentive and non-qualified options), stock appreciation rights, RSUs, and PRSUs. Up to 8,100,000 shares of common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the 2023 Plan. In connection with the approval of the 2023 Plan, no further awards will be made under the Cognex Corporation 2001 General Stock Option Plan, as amended and restated (the “2001 Plan”), and the Cognex Corporation 2007 Stock Option and Incentive Plan, as amended and restated (the “2007 Plan”). With the approval of the 2023 Plan, the 10,610,800 shares of common stock subject to awards granted under the 2001 Plan and the 2007 Plan that were outstanding as of May 3, 2023 may become eligible for issuance under the 2023 Plan if such awards are forfeited, cancelled or otherwise terminated (other than by exercise) (the “Carryover Shares”). As of July 2, 2023, forfeits, cancellations, and other terminations from the 2001 Plan and the 2007 Plan have resulted in 147,585 Carryover Shares, raising the authorized total shares that may be issued under the 2023 Plan to 8,247,585.

As of July 2, 2023, the Company had 8,183,000 shares available for grant under its stock plans. Stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date and generally vest over four or five years based upon continuous service and expire ten years from the grant date. RSUs generally vest upon three or four years of continuous employment or incrementally over such three or four-year periods. PRSUs generally vest upon three years of continuous employment and achievement of performance criteria established by the Compensation Committee of our Board of Directors on or prior to the grant date. Participants are not entitled to dividends on stock options, RSUs, or PRSUs.

18

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Stock Options

The following table summarizes the Company’s stock option activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	8,467	$	51.56
Granted	1,266	47.28
Exercised	(299)	33.87
Forfeited or expired	(515)	58.22
Outstanding as of July 2, 2023	8,919	$	51.16	6.31	$	70,411
Exercisable as of July 2, 2023	5,213	$	47.62	4.90	$	52,631
Options vested or expected to vest as of July 2, 2023 (1)	8,416	$	50.95	6.17	$	67,670

 (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				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Risk-free rate	3.5	%	1.9	%	3.9	%	1.9	%
Expected dividend yield	0.56	%	0.53	%	0.59	%	0.40	%
Expected volatility	39	%	37	%	39	%	37	%
Expected term (in years)	5.9		6.1		4.9		5.2

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. 

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 weighted-average grant-date fair values of stock options granted during the three-month and six-month periods ended July 2, 2023 were $20.09 and $17.86, respectively, and during the three-month and six-month periods ended July 3, 2022 were $18.21 and $22.33, respectively.

The total intrinsic values of stock options exercised for the three-month and six-month periods ended July 2, 2023 were $2,123,000 and $5,562,000, respectively, and for the three-month and six-month periods ended July 3, 2022 were $934,000 and $3,099,000, respectively. The total fair values of stock options vested for the three-month and

19

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

six-month periods ended July 2, 2023 were $892,000 and $32,073,000, respectively, and for the three-month and six-month periods ended July 3, 2022 were $1,188,000 and $26,723,000, respectively.

Restricted Stock Units (RSUs)

The following table summarizes the Company's RSUs activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2022	1,269	$	61.74
Granted	663	46.86
Vested	(482)	59.40
Forfeited or expired	(65)	61.52
Nonvested as of July 2, 2023	1,385	$	55.44

The fair value of RSUs is determined based on the observable market price of the Company's stock on the grant date less the present value of expected future dividends. The weighted-average grant-date fair values of RSUs granted during the three-month and six-month periods ended July 2, 2023 were $52.53 and $46.86, respectively, and during the three-month and six-month periods ended July 3, 2022 were $45.25 and $63.37, respectively. There were 29,000 and 482,000 RSUs that vested during the three-month and six-month periods ended July 2, 2023, respectively, and 20,000 and 74,000 that vested during the three-month and six-month periods ended July 3, 2022, respectively.

Performance Restricted Stock Units (PRSUs)

The following table summarizes the Company's PRSUs activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2022	33	$	62.49
Granted	46	44.86
Vested	—	—
Forfeited or expired	—	—
Nonvested as of July 2, 2023	79	$	52.23

The fair value of PRSUs is calculated using the Monte Carlo simulation model to estimate the probability of satisfying the service and market conditions stipulated in the award grant. There were 0 and 46,000 PRSUs granted during the three-month and six-month periods ended July 2, 2023, respectively, and 0 and 33,000 PRSUs granted during the three-month and six-month periods ended July 3, 2022, respectively. No PRSUs vested during the three-month and six-month periods ended July 2, 2023 and July 3, 2022.

Stock-Based Compensation Expense

The Company stratifies its employee population into three groups: one consisting of the CEO, one consisting of senior management, and another consisting of all other employees. The Company currently applies an estimated annual forfeiture rate of 0% to all stock-based awards for the CEO, 8% to all stock-based awards for senior management, and a rate of 13% for all other employees. Each year during the first quarter, the Company revises its forfeiture rate based on updated estimates of employee turnover. This resulted in a decrease to compensation expense of $234,000 in 2023 and an increase to compensation expense of $1,536,000 in 2022.

As of July 2, 2023, total unrecognized compensation expense, net of estimated forfeitures, related to non-vested equity awards, including stock options, RSUs, and PRSUs, was $76,162,000, which is expected to be recognized over a weighted-average period of 2.2 years.

20

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended July 2, 2023 were $12,574,000 and $1,892,000, respectively, and for the six-month period ended July 2, 2023 were $29,153,000 and $4,200,000, respectively. The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended July 3, 2022 were $12,997,000 and $2,044,000, respectively, and for the six-month period ended July 3, 2022 were $28,053,000 and $4,363,000, respectively. No compensation expense was capitalized as of July 2, 2023 or December 31, 2022.

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

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Cost of revenue	$	441	$	482	$	1,062	$	1,045
Research, development, and engineering	3,308		3,851		9,198		8,299
Selling, general, and administrative	8,825		8,664		18,893		18,709
	$	12,574	$	12,997	$	29,153	$	28,053

NOTE 14: Stock Repurchase Program

On March 12, 2020, the Company's Board of Directors authorized the repurchase of $200,000,000 of the Company's common stock. Under this March 2020 program, in addition to repurchases made in prior years, the Company repurchased 1,677,000 shares at a cost of $117,000,000 during the six-month period ended July 3, 2022, which completed purchases under this program. On March 3, 2022, the Company's Board of Directors authorized the repurchase of an additional $500,000,000 of the Company's common stock. Under this March 2022 program, the Company repurchased 590,000 shares at a cost of $37,317,000 during the six-month period ended July 3, 2022. Under this same March 2022 program, in addition to repurchases made in the prior year, the Company repurchased 966,000 shares at a total cost of $49,163,000 during the six-month period ended July 2, 2023 leaving a remaining balance of $363,523,000 as of July 2, 2023. The Company may repurchase shares under this program in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements. The Company is authorized to make repurchases of its common stock through open market purchases, pursuant to Rule 10b5-1 trading plans, or in privately negotiated transactions.

21

COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 15: Income Taxes

The Company's effective tax rate was 15% and 12% for the three-month and six-month periods ended July 2, 2023, respectively, and 9% and 17% for the three-month and six-month periods ended July 3, 2022, respectively.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Korea, and within the United States, Massachusetts. The statutory tax rate is 12.5% in Ireland, 25% in China, and 22% in Korea compared to the U.S. federal statutory corporate tax rate of 21%. These foreign tax rate differences resulted in a net decrease to the effective tax rate for both the three-month and six-month periods ended July 2, 2023 and July 3, 2022.

The Company recorded a net discrete tax expense totaling $399,000 and a net discrete tax benefit totaling $3,195,000 for the three-month and six-month periods ended July 2, 2023, and a net discrete tax benefit totaling $2,352,000 and a net discrete tax expense totaling $3,986,000 for the same periods in 2022.

Discrete tax items for the six-month period ended July 2, 2023 included (1) an increase in tax expense of $1,766,000 related to stock-based compensation; (2) a net decrease in tax expense of $3,051,000 due primarily to the release of tax reserves on state tax credits and foreign audit settlements; (3) a decrease in tax expense of $2,198,000 for adjustments to certain deferred tax assets; and (4) a net increase in tax expense of $288,000 for return-to-provision adjustments.

Discrete tax items for the six-month period ended July 3, 2022 included (1) an increase in tax expense of $176,000 related to stock-based compensation; (2) a decrease in tax expense of $1,577,000 arising from audit settlements; (3) an increase in tax expense of $2,316,000 to establish a reserve against certain deferred tax assets; and (4) an increase in tax expense of $3,071,000 consisting primarily of transfer pricing and return-to-provision adjustments.

The Company’s reserve for income taxes, including gross interest and penalties, was $19,239,000 as of July 2, 2023, which was classified as a non-current liability. 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.

Within the United States, the tax years 2019 through 2021 remain open to examination by the IRS, and 2018 through 2021 remain open to examination by various state tax authorities. The tax years 2017 through 2022 remain open to examination by various international taxing authorities in other jurisdictions in which the Company operates.

NOTE 16: Weighted-Average Shares

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

	Three-months Ended		Six-months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Basic weighted-average common shares outstanding	172,429	173,507	172,527	173,830
Effect of dilutive equity awards	1,193	1,486	1,264	2,044
Weighted-average common and common-equivalent shares outstanding	173,622	174,993	173,791	175,874

Stock options to purchase 6,890,000 and 6,713,000 shares of common stock, on a weighted-average basis, were outstanding during the three-month and six-month periods ended July 2, 2023, respectively, and 4,048,000 and 1,818,000 for the same periods in 2022, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive. Restricted stock units totaling 3,000 and 1,000 shares of common stock, on a weighted-average basis, were outstanding during the three-month and six-month periods ended July 2, 2023, respectively, and 480,000 and 21,000 for the same periods in 2022, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive. No PRSUs were excluded in the calculation of dilutive net income per share for the three-month and six-month periods ended July 2, 2023, as PRSUs were not anti-dilutive on a weighted-average basis. PRSUs totaling 33,000 and 0 shares of common stock, on a weighted-average basis, were outstanding during the three-month and six-month periods ended July 3, 2022, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive.

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COGNEX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 17: Loss (Recovery) from Fire

On June 7, 2022, the Company’s primary contract manufacturer experienced a fire at its plant in Indonesia. The fire destroyed a significant amount of Cognex-owned consigned inventories, as well as component inventories owned by the contract manufacturer that were designated for Cognex products. There was no significant damage to the Company's production equipment. Since the date of the fire, the Company has worked with the contract manufacturer to resume production, maintain standards of product quality, and replenish inventories destroyed by the fire. The Company has also been working to ramp up an additional contract manufacturer to further mitigate risk, diversify the supply chain, and expand production capacity.

During the three-month period ended July 3, 2022, the Company recorded a net loss related to the fire of $17,403,000, consisting primarily of losses from inventories and other assets of $44,903,000, partially offset by an estimated insurance recovery of $27,500,000. The net loss is presented in the caption “Loss (recovery) from fire” on the Consolidated Statements of Operations. The Company received insurance proceeds of $27,560,000 from the Company's insurance carrier in the fourth quarter of 2022, and gross losses recorded during 2022 related to the fire were further reduced by the proceeds received in excess of the original estimated insurance recovery.

During the three-month period ended July 2, 2023, the Company recorded a recovery related to the fire of $2,500,000 for proceeds received from the Company's insurance carrier in relation to a business interruption claim. This recovery amount is presented in the caption “Loss (recovery) from fire” on the Consolidated Statements of Operations.

As of July 2, 2023 and through the date of financial statement issuance, management cannot yet estimate additional recoveries that could be available from the contract manufacturer. Any future, additional recoveries in excess of recognized losses will be treated as gain contingencies and will be recognized when the gain is realized or realizable. There can be no assurance, however, that the insurance coverage and/or recoveries from the contract manufacturer will be available to cover the losses from the fire.

NOTE 18: Restructuring Charges

On December 7, 2022, the Company acquired all of the outstanding shares of SAC Sirius Advanced Cybernetics GmbH ("SAC"), a leader in computational lighting technology based in Germany. Following its acquisition of SAC, the Company performed restructuring activities to align the cost and operating structure of the acquired business with the Company's business strategy. As of December 31, 2022, the majority of these restructuring actions were completed. No additional charges were recorded during the three-month and six-month periods ended July 2, 2023, or are expected to be incurred in future periods in relation to this restructuring plan.

The following table summarizes the activity in the Company’s restructuring reserve related to these restructuring activities, which is included in “Accrued expenses” on the Consolidated Balance Sheets (in thousands):

	One-time Termination Benefits		Contract Termination Costs		Total
Balance as of December 31, 2022	$	964	$	75	$	1,039
Cash payments	(703)		(48)		(751)
Foreign exchange rate changes	9		1		10
Balance as of July 2, 2023	$	270	$	28	$	298

NOTE 19: Subsequent Events

On August 3, 2023, the Company’s Board of Directors declared a cash dividend of $0.07 per share. The dividend is payable on September 1, 2023 to all shareholders of record as of the close of business on August 18, 2023.

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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,” “potential,” “believes,” “projects,” “intends,” “plans,” “will,” “may,” “shall,” “could,” “should,” and similar words and other statements of a similar sense. These statements are based on 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 and financial targets, the expected impact of the fire at our primary contract manufacturer's plant on our assets, business, and results of operations and related recoveries, customer demand and order rates and timing of related revenue, managing supply shortages, delivery lead times, future product mix, research and development activities, sales and marketing activities, new product offerings and product development activities, cost management, capital expenditures, investments, liquidity, dividends and stock repurchases, strategic and growth plans and opportunities (including our "Emerging Customer" sales initiative, and estimated tax benefits and expenses and other tax matters, 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 reliance on key suppliers, such as our primary contract manufacturer, to manufacture and deliver products; (2) delays in the delivery of our products, the failure to meet delivery schedules, and resulting customer dissatisfaction or loss of sales; (3) the inability to obtain, or the delay in obtaining, components for our products at reasonable prices; (4) the failure to effectively manage product transitions or accurately forecast customer demand; (5) the inability to manage disruptions to our distribution centers or to our key suppliers; (6) the expected impact of the fire at our primary contract manufacturer's plant and related recoveries; (7) the inability to design and manufacture high-quality products; (8) the loss of, or curtailment of purchases by, large customers in the logistics, consumer electronics, or automotive industries; (9) information security breaches; (10) the failure to comply with laws or regulations relating to data privacy or data protection; (11) the inability to protect our proprietary technology and intellectual property; (12) the inability to attract and retain skilled employees and maintain our unique corporate culture; (13) the technological obsolescence of current products and the inability to develop new products; (14) the failure to properly manage the distribution of products and services, including the management of lead times and delivery dates; (15) the impact of competitive pressures; (16) the challenges in integrating and achieving expected results from acquired businesses; (17) potential disruptions in our business systems; (18) potential impairment charges with respect to our investments or acquired intangible assets; (19) exposure to additional tax liabilities, increases and fluctuations in our effective tax rate, and other tax matters; (20) fluctuations in foreign currency exchange rates and the use of derivative instruments; (21) unfavorable global economic conditions, including increases in interest rates and high inflation rates; (22) business disruptions from natural or man-made disasters, such as fire, or public health issues; (23) economic, political, and other risks associated with international sales and operations, including the impact of trade disputes with China and the war in Ukraine; (24) exposure to potential liabilities, increased costs, reputational harm, and other adverse effects associated with expectations relating to environmental, social, and governance considerations; (25) stock price volatility; and (26) our involvement in time-consuming and costly litigation or activist shareholder activities. 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, 2022, as updated by Part II - Item 1A of this Quarterly Report on Form 10-Q. 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 (the “Company”) invents and commercializes technologies that address some of the most critical manufacturing and distribution challenges. We are a leading global provider of machine vision products and solutions that improve efficiency and quality in high-growth potential businesses across attractive industrial end markets. In addition to product revenue derived from the sale of machine vision products, the Company also generates revenue by providing maintenance and support, consulting, and training services to its customers; however, service revenue accounted for less than 10% of total revenue for all periods presented.

Machine vision is used in a variety of industries where technology is widely recognized as an important component of automated production, distribution, and quality assurance. Virtually every manufacturer or distributor can achieve

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better quality and efficiency by using machine vision; thus, our applications have a broad base of customers across a variety of industries, including automotive, logistics, consumer electronics, medical-related, semiconductor, consumer products, and food and beverage.

Revenue for the second quarter of 2023 totaled $242,512,000, representing a decrease of 12% from the second quarter of 2022. The decrease was driven by three main factors: (i) lower revenue from the logistics industry primarily as a result of the continued pause in investments by a few large e-commerce customers; (ii) slower spending trends across our broader factory automation business, most notably in the consumer electronics and semiconductor industries; and (iii) the unfavorable impact of foreign currency exchange rate changes on revenue. Gross margin as a percentage of revenue was 74% for the second quarter of 2023 as compared to 72% for the second quarter of 2022. The increase in gross margin as a percent of revenue was due to lower inventory costs resulting from a reduction in premiums paid to brokers for the purchase of components in response to global supply chain constraints.

Operating expenses for the second quarter of 2023 totaled $114,508,000, representing a decrease of 13% from the second quarter of 2022. On June 7, 2022, our primary contract manufacturer suffered a fire at its Indonesian plant destroying a large portion of the Company's component inventories (refer to Note 17 of the consolidated financial statements). In the second quarter of 2022, the Company recorded a net loss related to the fire of $17,403,000, consisting primarily of losses from inventories and other assets of $44,903,000, partially offset by an estimated insurance recovery of $27,500,000. In the second quarter of 2023, the Company recorded a recovery related to the fire of $2,500,000 for proceeds received from the Company's insurance carrier in relation to a business interruption claim. Excluding the impact of losses and recoveries related to the fire, operating expenses for the second quarter of 2023 increased 3% from the second quarter of 2022, primarily due to headcount to support our "Emerging Customer" sales initiative, annual merit increases provided to employees, and increased travel expenses. These higher expenses were partially offset by lower incentive compensation and the favorable impact of foreign currency exchange rate changes on expenses.

Operating income increased to 27% of revenue for the second quarter of 2023 as compared to 24% of revenue for the second quarter of 2022. Excluding the impact of losses and recoveries related to the fire, operating income decreased to 26% of revenue for the second quarter of 2023 as compared to 30% of revenue for the second quarter of 2022 primarily as a result of the lower revenue levels. Tax expense increased from the second quarter of 2022 primarily due to less favorable discrete tax adjustments. Net income as percentage of revenue was 24%, or $0.33 per diluted share, for the second quarter of 2023 and 21% of revenue, or $0.34 per diluted share, for the second quarter of 2022.

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 decreased by $32,116,000, or 12%, for the three-month period and decreased by $113,399,000, or 20%, for the six-month period as compared to the same periods in 2022. Changes in foreign currency exchange rates resulted in a lower level of reported revenue for both the three-month and six-month periods in 2023 as compared to the same periods in 2022. Excluding the impact of foreign currency exchange rate changes, revenue decreased by 10% for the three-month period and decreased by 18% for the six-month period as compared to the same periods in 2022.

The largest factor contributing to the decreases in total revenue for both the three-month and six-month periods was a decline in logistics revenue primarily as a result of the continued pause in investments by a few large e-commerce customers. Slower spending trends across our broader factory automation business further contributed to the decrease in revenue.

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The following table sets forth our disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands) for the three-month and six-month periods ended July 2, 2023 and July 3, 2022 with the dollar and percentage changes between the corresponding periods, and the line item as a percentage of total revenue.

	Three-months Ended										Six-months Ended
	July 2, 2023			July 3, 2022			$ Change		% Change		July 2, 2023			July 3, 2022			$ Change		% Change
	(unaudited)										(unaudited)
Americas	$	82,297		$	91,551		$	(9,254)	(10)	%	$	162,911		$	218,210		$	(55,299)	(25)	%
Percentage of total revenue	34		%	33		%					37		%	39		%
Europe	$	56,860		$	61,840		$	(4,980)	(8)	%	$	116,702		$	124,631		$	(7,929)	(6)	%
Percentage of total revenue	23		%	23		%					26		%	22		%
Greater China	$	72,351		$	78,616		$	(6,265)	(8)	%	$	105,351		$	127,021		$	(21,670)	(17)	%
Percentage of total revenue	30		%	29		%					24		%	23		%
Other Asia	$	31,004		$	42,621		$	(11,617)	(27)	%	$	58,672		$	87,173		$	(28,501)	(33)	%
Percentage of total revenue	13		%	16		%					13		%	16		%
Total revenue	$	242,512		$	274,628		$	(32,116)	(12)	%	$	443,636		$	557,035		$	(113,399)	(20)	%

Changes in revenue from a geographic perspective were as follows:

•Revenue from customers based in the Americas decreased by 10% for the three-month period and decreased by 25% for the six-month period as compared to the same periods in 2022. The decreases were primarily driven by lower revenue from customers in the logistics industry.

•Revenue from customers based in Europe decreased by 8% for the three-month period and decreased by 6% for the six-month period as compared to the same periods in 2022. Excluding the impact of foreign currency exchange rate changes, revenue from customers based in Europe decreased by 9% for the three-month period and decreased by 5% for the six-month period as compared to the same periods in 2022. On both a U.S. GAAP and constant-currency basis, the decreases were primarily driven by lower revenue from customers in the logistics and consumer electronics industries.

•Revenue from customers based in Greater China decreased by 8% for the three-month period and decreased by 17% for the six-month period as compared to the same periods in 2022. Excluding the impact of foreign currency exchange rate changes, revenue from customers based in Greater China decreased by 4% for the three-month period and decreased by 12% for the six-month period as compared to the same periods in 2022. On both a U.S. GAAP and constant-currency basis, the decreases resulted from broad-based declines in revenue from customers across multiple industries, partially offset by increases in revenue from large projects in the consumer products industry.

•Revenue from customers based in other countries in Asia decreased by 27% for the three-month period and decreased by 33% for the six-month period as compared to the same periods in 2022. Excluding the impact of foreign currency exchange rate changes, revenue from customers based in other countries in Asia decreased by 23% for the three-month period and 28% for the six-month period as compared to the same periods in 2022. On both a U.S. GAAP and constant-currency basis, the decreases resulted from broad-based declines in revenue from customers across multiple industries, most notably the semiconductor industry.

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Gross Margin

The following table sets forth our gross margin (in thousands) for the three-month and six-month periods ended July 2, 2023 and July 3, 2022 with the dollar and percentage changes between the corresponding periods, and the line item as a percentage of total revenue.

	Three-months Ended										Six-months Ended
	July 2, 2023			July 3, 2022			$ Change		% Change		July 2, 2023			July 3, 2022			$ Change		% Change
	(unaudited)										(unaudited)
Gross margin	$	179,683		$	196,485		$	(16,802)	(9)	%	$	323,423		$	400,102		$	(76,679)	(19)	%
Percentage of total revenue	74		%	72		%					73		%	72		%

Gross margin as a percentage of revenue was 74% and 73% for the three-month and six-month periods in 2023, respectively, as compared to 72% and 72% for the same periods in 2022, respectively. The increases in gross margin as a percent of revenue were primarily due to lower inventory costs resulting from a reduction in premiums paid to brokers for the purchase of components in response to global supply chain constraints. These increases were partially offset by the unfavorable impact of foreign currency exchange rates on revenue, and reduced cost efficiencies from the lower sales volume.

Operating Expenses

The following table sets forth our operating expenses (in thousands) for the three-month and six-month periods ended July 2, 2023 and July 3, 2022 with the dollar and percentage changes between the corresponding periods, and the line item as a percentage of total revenue.

	Three-months Ended										Six-months Ended
	July 2, 2023			July 3, 2022			$ Change		% Change		July 2, 2023			July 3, 2022			$ Change		% Change
	(unaudited)										(unaudited)
Research, development, and engineering expenses	$	33,585		$	33,991		$	(406)	(1)	%	$	72,127		$	70,045		$	2,082	3	%
Percentage of total revenue	14		%	12		%					16		%	13		%
Selling, general, and administrative expenses	$	83,423		$	79,950		$	3,473	4	%	$	166,460		$	160,785		$	5,675	4	%
Percentage of total revenue	34		%	29		%					38		%	29		%
Loss (recovery) from fire	$	(2,500)		$	17,403		$	(19,903)	(114)	%	$	(2,500)		$	17,403		$	(19,903)	(114)	%
Percentage of total revenue	(1)		%	6		%					(1)		%	3		%
Total operating expenses	$	114,508		$	131,344		$	(16,836)	(13)	%	$	236,087		$	248,233		$	(12,146)	(5)	%
Percentage of total revenue	47		%	48		%					53		%	45		%

Research, Development, and Engineering Expenses

Research, development, and engineering (RD&E) expenses decreased by $406,000, or 1%, for the three-month period and increased by $2,082,000, or 3%, for the six-month period as compared to the same periods in 2022. For both the three-month and six-month periods, personnel-related costs increased as a result of headcount additions to support new product initiatives and compensation increases provided to employees as part of our annual merit process. Incentive compensation expenses for both the three-month and six-month periods in 2023 were lower than the prior year comparable periods in 2022 based on the Company's expected performance against relevant full-year goals. Foreign currency exchange rate changes further offset the increases to personnel-related costs, as costs denominated in foreign currencies were translated into U.S. Dollars at a lower rate. For the three-month period in 2023, increases in personnel-related costs did not offset the decreases in incentive compensation and foreign currency exchange rate changes which drove the slight overall decrease to total RD&E expenses.

RD&E expenses as a percentage of revenue were 14% and 16% for the three-month and six-month periods in 2023, respectively, as compared to 12% and 13% for the same periods in 2022, respectively. We believe that a continued commitment to RD&E activities is essential in order to maintain product leadership with our existing products and to provide innovative new product offerings, as well as to provide engineering support for large customers. In addition, we consider our ability to accelerate the time to market for new products to be critical to our revenue growth and competitive position. These percentages are impacted by revenue levels and investing cycles.

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Selling, General, and Administrative Expenses

Selling, general, and administrative (SG&A) expenses increased by $3,473,000, or 4%, for the three-month period and increased by $5,675,000, or 4%, for the six-month period as compared to the same periods in 2022. SG&A expenses increased due to costs related to our “Emerging Customer” sales initiative, including primarily compensation for additional headcount, travel expenses, and sales demonstration equipment. We launched this initiative towards the end of 2022 to broaden the reach of our sales force to customers who are relatively new to factory automation and have not fully realized the advantages of machine vision.

Unrelated to our "Emerging Customer" sales initiative, for both the three-month and six-month periods in 2023, we also had higher personnel-related costs resulting primarily from compensation increases provided to employees as part of our annual merit process. Travel expenses also increased due primarily to a higher level of travel activity now that restrictions related to the COVID-19 pandemic have eased or been eliminated.

These increases to total SG&A expenses were partially offset by lower incentive compensation expenses than the prior year, which included sales commissions and incentive bonuses, due to lower revenue levels and based on the Company's expected performance against relevant full-year goals. Foreign currency exchange rate changes further offset increases to total SG&A expenses, as costs denominated in foreign currencies were translated into U.S. Dollars at a lower rate.

Loss (Recovery) from Fire

On June 7, 2022, the Company’s primary contract manufacturer experienced a fire at its plant in Indonesia. The fire destroyed a significant amount of Cognex-owned consigned inventories, as well as component inventories owned by the contract manufacturer that were designated for Cognex products. There was no significant damage to the Company's production equipment. Since the date of the fire, the Company has worked with the contract manufacturer to resume production, maintain standards of product quality, and replenish inventories destroyed by the fire. The Company has also been working to ramp up an additional contract manufacturer to further mitigate risk, diversify the supply chain, and expand production capacity.

In the second quarter of 2022, the Company recorded a net loss related to the fire of $17,403,000, consisting primarily of losses from inventories and other assets of $44,903,000, partially offset by an estimated insurance recovery of $27,500,000. In the second quarter of 2023, the Company recorded a recovery related to the fire of $2,500,000 for proceeds received from the Company's insurance carrier in relation to a business interruption claim.

As of July 2, 2023 and through the date of financial statement issuance, management cannot yet estimate additional recoveries that could be available from the contract manufacturer. Any future, additional recoveries in excess of recognized losses will be treated as gain contingencies and will be recognized when the gain is realized or realizable. There can be no assurance, however, that additional insurance coverage and/or recoveries from the contract manufacturer will be available to cover the net loss from the fire.

Non-operating Income (Expense)

The following table sets forth our non-operating income (expense) (in thousands) for the three-month and six-month periods ended July 2, 2023 and July 3, 2022 with the dollar and percentage changes between the corresponding periods.

	Three-months Ended								Six-months Ended
	July 2, 2023		July 3, 2022		$ Change		% Change		July 2, 2023		July 3, 2022		$ Change		% Change
	(unaudited)								(unaudited)
Foreign currency gain (loss)	$	(1,605)	$	(2,043)	$	438	(21)	%	$	(1,211)	$	(2,487)	$	1,276	(51)	%
Investment income	$	4,095	$	1,505	$	2,590	172	%	$	7,682	$	2,973	$	4,709	158	%
Other income (expense)	$	112	$	(188)	$	300	(160)	%	$	185	$	(236)	$	421	(178)	%
Total non-operating income (expense)	$	2,602	$	(726)	$	3,328	(458)	%	$	6,656	$	250	$	6,406	2,562	%

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The Company recorded foreign currency losses of $1,605,000 and $1,211,000 for the three-month and six-month periods in 2023, respectively, and $2,043,000 and $2,487,000 for the three-month and six-month periods in 2022, respectively. Foreign currency gains and losses result primarily from the revaluation and settlement of assets and liabilities that are denominated in currencies other than the functional currency of the Company, which is the U.S. Dollar, or its subsidiaries.

Investment income for the three-month and six-month periods in 2023 was $4,095,000 and $7,682,000, respectively, representing increases of $2,590,000 and $4,709,000, respectively, from the prior comparable periods in 2022. The increases were primarily due to higher yields on the Company's portfolio of debt securities, and to a lesser extent, higher investment balances.

The Company recorded other income of $112,000 and $185,000 for the three-month and six-month periods in 2023, respectively, compared to other expense of $188,000 and $236,000 for the three-month and six-month periods in 2022, respectively.

Income Tax Expense

The following table sets forth our effective income tax rate reconciliation (in thousands) for the three-month and six-month periods ended July 2, 2023 and July 3, 2022 with the dollar and percentage changes between the corresponding periods.

	Three-months Ended										Six-months Ended
	July 2, 2023			July 3, 2022			$ Change		% Change		July 2, 2023			July 3, 2022			$ Change		% Change
	(unaudited)										(unaudited)
Income before income tax expense	$	67,777		$	64,415		$	3,362	5	%	$	93,992		$	152,119		$	(58,127)	(38)	%
Income tax expense	$	10,303		$	5,514		$	4,789	87	%	$	10,903		$	25,885		$	(14,982)	(58)	%
Effective income tax rate	15		%	9		%					12		%	17		%

The Company’s effective tax rate was 15% and 12% for the three-month and six-month periods ended July 2, 2023, respectively, and 9% and 17% for the same periods in 2022, respectively.

The increase in the effective tax rate from 9% to 15% for the three-month period primarily resulted from the impact of discrete tax items. Compared to a net discrete tax expense recorded for the three-month period in 2023, the Company recorded a net discrete tax benefit for the three-month period in 2022 primarily driven by audit settlements which decreased income tax expense.

The decrease in the effective tax rate from 17% to 12% for the six-month period primarily resulted from the impact of discrete tax items. The Company recorded a net discrete tax benefit for the six-month period in 2023 due primarily to the release of tax reserves on state tax credits, foreign audit settlements, and adjustments to certain deferred tax assets. The Company recorded a net discrete tax expense for the six-month period in 2022 primarily driven by an increase in valuation allowance as well as transfer pricing and return-to-provision adjustments which were partially offset by a decrease in tax expense from audit settlements.

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 and investment balance of $832,453,000 as of July 2, 2023. The Company has established guidelines relative to credit ratings, diversification, and maturities of its investments to maintain the liquidity and safety of the investment portfolio.

As of July 2, 2023, the Company's portfolio of debt securities was in a net unrealized loss position of $21,823,000. The Company currently does not intend to sell debt securities in an unrealized loss position to meet current liquidity needs as it has the ability and intention to hold these investments until full value recovery at maturity. However, if the Company is required to sell these debt securities to meet future liquidity needs, for example, to acquire new businesses or technologies, it is prepared to sell these investments at a loss.

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	Six-months Ended
	July 2, 2023		July 3, 2022		$ Change		% Change
	(unaudited)
Net cash provided by (used in) operating activities	$	57,402	$	93,629	$	(36,227)	(39)	%
Net cash provided by (used in) investing activities	$	11,494	$	75,597	$	(64,103)	(85)	%
Net cash provided by (used in) financing activities	$	(70,668)	$	(172,476)	$	101,808	(59)	%

Operating activities

Net cash provided by operating activities decreased by $36,227,000 during the six-month period ended 2023 as compared to the same period in 2022. This decrease was driven by a decline in net income of $43,145,000 resulting primarily from lower revenue year-over-year. Cash outlays from operating activities in both the six-month periods ended July 2, 2023 and July 3, 2022 consisted of incentive compensation payments that were earned and accrued in 2022 and 2021, respectively.

Investing activities

Net cash provided by investing activities decreased by $64,103,000 during the six-month period ended 2023 as compared to the same period in 2022. This decrease was driven by a $48,849,000 decline in cash provided by the maturities and sales of investments and a $16,300,000 increase in cash used in the purchases of investments. Capital expenditures for the six-month period in 2023 totaled $10,207,000 and consisted primarily of continued investments in business systems related to the Company's sales process, manufacturing test equipment related to new product introductions, and leasehold improvements related to one of the Company's offices in Shanghai, China.

Financing activities

Net cash used in financing activities decreased by $101,808,000 during the six-month period ended 2023 as compared to the same period in 2022. This decrease was driven by a $105,154,000 decline in cash used to repurchase common stock.

On March 12, 2020, the Company's Board of Directors authorized the repurchase of $200,000,000 of the Company's common stock. Under this March 2020 program, in addition to repurchases made in prior years, the Company repurchased 1,677,000 shares at a cost of $117,000,000 during the six-month period ended July 3, 2022, which completed purchases under this program. On March 3, 2022, the Company's Board of Directors authorized the repurchase of an additional $500,000,000 of the Company's common stock. Under this March 2022 program, the Company repurchased 590,000 shares at a cost of $37,317,000 during the six-month period ended July 3, 2022. Under this same March 2022 program, in addition to repurchases made in the prior year, the Company repurchased 966,000 shares at a total cost of $49,163,000 during the six-month period ended July 2, 2023 leaving a remaining balance of $363,523,000 as of July 2, 2023. The Company may repurchase shares under this program in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements. The Company is authorized to make repurchases of its common stock through open market purchases, pursuant to Rule 10b5-1 trading plans, or in privately negotiated transactions.

The Company’s Board of Directors declared and paid cash dividends of $0.070 per share for the first and second quarters of 2023, totaling $24,160,000. Future dividends will be declared at the discretion of the Company's Board of Directors and will depend on such factors as the Board deems relevant, including, among other things, the Company's ability to generate positive cash flow from operations.

Future Cash Requirements

The Company's future material cash requirements include contractual obligations related to inventory purchase commitments and leases. As of July 2, 2023, the Company had inventory purchase commitments of $40,388,000, with the majority payable during 2023, and lease payment obligations of $116,253,000, with $4,863,000 payable during 2023. During 2023, we also expect significant cash outlays related to the Company's "Emerging Customer" sales initiative as we continue to grow our sales force in order to reach customers who may not be utilizing machine vision to its full potential.

We believe that the Company's existing cash 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. In addition, the Company has no long-term debt. We believe that our balance sheet condition has put us in a strong position with respect to anticipated longer-term liquidity needs.

30

New Pronouncements

Refer to Part I - Note 2 within this Form 10-Q, for a full description of recently issued accounting pronouncements including the expected dates of adoption and the expected impact on the financial position and results of operations of the Company.

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, 2022.

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 July 2, 2023 that materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

31

PART II: OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Various 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 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 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, 2022.

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 three-month period ended July 2, 2023:

	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 (1)
April 3, 2023 - April 30, 2023	158,000	$	48.51	158,000	$	380,851,000
May 1, 2023 - May 28, 2023	161,000	50.06		161,000	372,792,000
May 29, 2023 - July 2, 2023	168,000	55.13		168,000	363,523,000
Total	487,000	$	51.31	487,000	$	363,523,000

(1) On March 3, 2022, the Company's Board of Directors authorized the repurchase of an additional $500,000,000 of the Company's common stock. Purchases under this program commenced in March 2022. The Company may repurchase shares under this program in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements. The Company is authorized to make repurchases of its common stock through open market purchases, pursuant to Rule 10b5-1 trading plans, or in privately negotiated transactions.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

During the three-month period ended July 2, 2023, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

32

 ITEM 6. EXHIBITS

Exhibit Number
10.1	Cognex Corporation 2023 Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 4, 2023)
10.2	Form of Non-Qualified Stock Option Agreement under the Cognex Corporation 2023 Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 4, 2023)
10.3	Form of Restricted Stock Unit Award Agreement under the Cognex Corporation 2023 Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 4, 2023)
10.4	Form of Performance Restricted Stock Unit Award Agreement under the Cognex Corporation 2023 Stock Option and Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on May 4, 2023)
31.1	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934*
31.2	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934*
32.1	Certification of Principal 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 Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002**
101.SCH	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document*
104	Cover Page Interactive Data File (formatted as Inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*)
*	Filed herewith
**	Furnished herewith

33

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:	August 3, 2023	COGNEX CORPORATION
		By:	/s/ Robert J. Willett
			Robert J. Willett
			President and Chief Executive Officer
			(Principal Executive Officer)
		By:	/s/ Paul D. Todgham
			Paul D. Todgham
			Senior Vice President of Finance and Chief Financial Officer
			(Principal Financial Officer)

34

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:	August 3, 2023	By:	/s/ Robert J. Willett
			Robert J. Willett
			President and Chief Executive Officer
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Paul D. Todgham, 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:	August 3, 2023	By:	/s/ Paul D. Todgham
			Paul D. Todgham
			Senior Vice President of Finance and Chief Financial Officer
			(Principal 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 July 2, 2023 (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:	August 3, 2023	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 July 2, 2023 (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:	August 3, 2023	By:	/s/ Paul D. Todgham
			Paul D. Todgham
			Senior Vice President of Finance 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.

XML

Cover Page	6 Months Ended
	Jul. 02, 2023 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	001-34218
Entity Registrant Name	COGNEX CORP
Entity Incorporation, State or Country Code	MA
Entity Tax Identification Number	04-2713778
Entity Address, Address Line One	One Vision Drive
Entity Address, City or Town	Natick
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	01760
City Area Code	508
Local Phone Number	650-3000
Title of 12(b) Security	Common Stock, par value $.002 per share
Trading Symbol	CGNX
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	172,293,115
Document Period End Date	Jul. 02, 2023
Entity Central Index Key	0000851205
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Income Statement [Abstract]
Revenue	$ 242,512	$ 274,628	$ 443,636	$ 557,035
Cost of revenue	62,829	78,143	120,213	156,933
Gross margin	179,683	196,485	323,423	400,102
Research, development, and engineering expenses	33,585	33,991	72,127	70,045
Selling, general, and administrative expenses	83,423	79,950	166,460	160,785
Loss (recovery) from fire (Note 17)	(2,500)	17,403	(2,500)	17,403
Operating income	65,175	65,141	87,336	151,869
Foreign currency gain (loss)	(1,605)	(2,043)	(1,211)	(2,487)
Investment income	4,095	1,505	7,682	2,973
Other income (expense)	112	(188)	185	(236)
Income before income tax expense	67,777	64,415	93,992	152,119
Income tax expense	10,303	5,514	10,903	25,885
Net income	$ 57,474	$ 58,901	$ 83,089	$ 126,234
Net income per weighted-average common and common-equivalent share:
Basic (usd per share)	$ 0.33	$ 0.34	$ 0.48	$ 0.73
Diluted (usd per share)	$ 0.33	$ 0.34	$ 0.48	$ 0.72
Weighted-average common and common-equivalent shares outstanding:
Basic (shares)	172,429	173,507	172,527	173,830
Diluted (shares)	173,622	174,993	173,791	175,874
Cash dividends per common share (usd per share)	$ 0.070	$ 0.065	$ 0.140	$ 0.130

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Statement of Comprehensive Income [Abstract]
Net income	$ 57,474	$ 58,901	$ 83,089	$ 126,234
Available-for-sale investments:
Net unrealized gain (loss) on available-for-sale investments, net of tax	(1,706)	(2,322)	3,720	(15,870)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments into current operations	0	(12)	0	24
Net change related to available-for-sale investments	(1,706)	(2,334)	3,720	(15,846)
Foreign currency translation adjustments:
Foreign currency translation adjustments	(2,866)	(3,962)	(3,225)	(6,073)
Net change related to foreign currency translation adjustments	(2,866)	(3,962)	(3,225)	(6,073)
Other comprehensive income (loss), net of tax	(4,572)	(6,296)	495	(21,919)
Total comprehensive income	$ 52,902	$ 52,605	$ 83,584	$ 104,315

XML

Consolidated Statements of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Statement of Comprehensive Income [Abstract]
Tax effect of unrealized gain (loss) on available-for-sale investments	$ (584)	$ (698)	$ 1,274	$ (4,734)

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 177,485	$ 181,374
Current investments, amortized cost of $195,690 and $223,545 in 2023 and 2022, respectively, allowance for credit losses of $0 in 2023 and 2022	191,474	218,759
Accounts receivable, allowance for credit losses of $602 and $730 in 2023 and 2022, respectively	147,864	125,417
Unbilled revenue	2,243	2,179
Inventories	126,226	122,480
Prepaid expenses and other current assets	73,090	67,490
Total current assets	718,382	717,699
Non-current investments, amortized cost of $481,101 and $476,148 in 2023 and 2022, respectively, allowance for credit losses of $0 in 2023 and 2022	463,494	454,117
Property, plant, and equipment, net	81,638	79,714
Operating lease assets	68,594	37,682
Goodwill	241,582	242,630
Intangible assets, net	10,729	12,414
Deferred income taxes	407,257	407,241
Other assets	6,438	6,643
Total assets	1,998,114	1,958,140
Current liabilities:
Accounts payable	26,109	27,103
Accrued expenses	83,605	93,235
Accrued income taxes	19,121	18,129
Deferred revenue and customer deposits	43,439	40,787
Operating lease liabilities	8,188	8,454
Total current liabilities	180,462	187,708
Non-current operating lease liabilities	61,852	31,298
Deferred income taxes	237,357	249,961
Reserve for income taxes	19,239	15,866
Non-current accrued income taxes	18,338	33,008
Other liabilities	403	1,905
Total liabilities	517,651	519,746
Commitments and Contingencies
Shareholders’ equity:
Preferred stock, $.01 par value – Authorized: 400 shares in 2023 and 2022, respectively; no shares issued and outstanding	0	0
Common stock, $.002 par value – Authorized: 300,000 shares in 2023 and 2022, respectively; issued and outstanding: 172,293 and 172,631 shares in 2023 and 2022, respectively	345	345
Additional paid-in capital	1,010,973	979,167
Retained earnings	537,947	528,179
Accumulated other comprehensive loss, net of tax	(68,802)	(69,297)
Total shareholders’ equity	1,480,463	1,438,394
Total liabilities and shareholders' equity	$ 1,998,114	$ 1,958,140

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Amortized cost of current investments	$ 195,690	$ 223,545
Allowance for credit losses	0	0
Allowance for credit losses, current	602	730
Amortized cost of non-current investments	481,101	476,148
Allowance for credit losses, non-current	$ 0	$ 0
Preferred stock par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock shares authorized (in shares)	400,000	400,000
Preferred stock shares issued (in shares)	0	0
Preferred stock shares outstanding (in shares)	0	0
Common stock par value (in dollars per share)	$ 0.002	$ 0.002
Common stock shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	172,293,000	172,631,000
Common stock, shares outstanding (in shares)	172,293,000	172,631,000

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022
Cash flows from operating activities:
Net income	$ 83,089	$ 126,234
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation expense	29,153	28,053
Depreciation of property, plant, and equipment	8,177	8,114
(Gain) loss on disposal of property, plant, and equipment	(8)	12
Amortization of intangible assets	1,685	1,662
Excess and obsolete inventory charges	1,443	741
Non-cash impact of write-offs related to fire (Note 17)	0	44,903
Amortization of discounts or premiums on investments	1,200	2,714
Realized loss (gain) on sale of investments	0	24
Change in deferred income taxes	(14,158)	(10,809)
Accounts receivable	(24,420)	(44,118)
Unbilled revenue	(104)	1,704
Inventories	(4,981)	(20,122)
Prepaid expenses and other current assets	(5,289)	(45,752)
Accounts payable	(989)	(23,525)
Accrued expenses	(9,219)	(20,024)
Accrued income taxes	(13,684)	(372)
Deferred revenue and customer deposits	3,160	41,535
Other	2,347	2,655
Net cash provided by (used in) operating activities	57,402	93,629
Cash flows from investing activities:
Purchases of investments	(94,060)	(77,760)
Maturities and sales of investments	115,761	164,610
Purchases of property, plant, and equipment	(10,207)	(11,253)
Net cash provided by (used in) investing activities	11,494	75,597
Cash flows from financing activities:
Net payments from issuance of common stock under stock plans	2,655	4,414
Repurchase of common stock	(49,163)	(154,317)
Payment of dividends	(24,160)	(22,573)
Net cash provided by (used in) financing activities	(70,668)	(172,476)
Effect of foreign exchange rate changes on cash and cash equivalents	(2,117)	(5,865)
Net change in cash and cash equivalents	(3,889)	(9,115)
Cash and cash equivalents at beginning of period	181,374	186,161
Cash and cash equivalents at end of period	$ 177,485	$ 177,046

XML

Consolidated Statement of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss
Beginning Balance (in shares) at Dec. 31, 2021		175,481
Beginning Balance at Dec. 31, 2021	$ 1,430,093	$ 351	$ 914,802	$ 562,882	$ (47,942)
Increase (Decrease) in Stockholders' Equity
Net issuance of common stock under stock plans (in shares)		183
Net issuance of common stock under stock plans	4,414		4,414
Repurchase of common stock (in shares)		(2,267)
Repurchase of common stock	(154,317)	$ (4)		(154,313)
Stock-based compensation expense	28,053		28,053
Payment of dividends	(22,573)			(22,573)
Net income	126,234			126,234
Net unrealized gain (loss) on available-for-sale investments, net of tax	(15,870)				(15,870)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments	24				24
Foreign currency translation adjustment	(6,073)				(6,073)
Ending Balance (in shares) at Jul. 03, 2022		173,397
Ending Balance at Jul. 03, 2022	1,389,985	$ 347	947,269	512,230	(69,861)
Beginning Balance (in shares) at Apr. 03, 2022		173,738
Beginning Balance at Apr. 03, 2022	1,358,745	$ 347	933,452	488,511	(63,565)
Increase (Decrease) in Stockholders' Equity
Net issuance of common stock under stock plans (in shares)		47
Net issuance of common stock under stock plans	820		820
Repurchase of common stock (in shares)		(388)
Repurchase of common stock	(23,912)			(23,912)
Stock-based compensation expense	12,997		12,997
Payment of dividends	(11,270)			(11,270)
Net income	58,901			58,901
Net unrealized gain (loss) on available-for-sale investments, net of tax	(2,322)				(2,322)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments	(12)				(12)
Foreign currency translation adjustment	(3,962)				(3,962)
Ending Balance (in shares) at Jul. 03, 2022		173,397
Ending Balance at Jul. 03, 2022	$ 1,389,985	$ 347	947,269	512,230	(69,861)
Beginning Balance (in shares) at Dec. 31, 2022	172,631	172,631
Beginning Balance at Dec. 31, 2022	$ 1,438,394	$ 345	979,167	528,179	(69,297)
Increase (Decrease) in Stockholders' Equity
Net issuance of common stock under stock plans (in shares)		628
Net issuance of common stock under stock plans	2,655	$ 2	2,653
Repurchase of common stock (in shares)		(966)
Repurchase of common stock	(49,163)	$ (2)		(49,161)
Stock-based compensation expense	29,153		29,153
Payment of dividends	(24,160)			(24,160)
Net income	83,089			83,089
Net unrealized gain (loss) on available-for-sale investments, net of tax	3,720				3,720
Reclassification of net realized (gain) loss on the sale of available-for-sale investments	0
Foreign currency translation adjustment	$ (3,225)				(3,225)
Ending Balance (in shares) at Jul. 02, 2023	172,293	172,293
Ending Balance at Jul. 02, 2023	$ 1,480,463	$ 345	1,010,973	537,947	(68,802)
Beginning Balance (in shares) at Apr. 02, 2023		172,601
Beginning Balance at Apr. 02, 2023	1,446,331	$ 345	992,690	517,526	(64,230)
Increase (Decrease) in Stockholders' Equity
Net issuance of common stock under stock plans (in shares)		179
Net issuance of common stock under stock plans	5,710	$ 1	5,709
Repurchase of common stock (in shares)		(487)
Repurchase of common stock	(24,985)	$ (1)		(24,984)
Stock-based compensation expense	12,574		12,574
Payment of dividends	(12,069)			(12,069)
Net income	57,474			57,474
Net unrealized gain (loss) on available-for-sale investments, net of tax	(1,706)				(1,706)
Reclassification of net realized (gain) loss on the sale of available-for-sale investments	0
Foreign currency translation adjustment	$ (2,866)				(2,866)
Ending Balance (in shares) at Jul. 02, 2023	172,293	172,293
Ending Balance at Jul. 02, 2023	$ 1,480,463	$ 345	$ 1,010,973	$ 537,947	$ (68,802)

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Consolidated Statement of Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Statement of Stockholders' Equity [Abstract]
Cash dividends per common share (usd per share)	$ 0.070	$ 0.065	$ 0.140	$ 0.130
Tax effect of unrealized gain (loss) on available-for-sale investments	$ (584)	$ (698)	$ 1,274	$ (4,734)

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Summary of Significant Accounting Policies

6 Months Ended

Jul. 02, 2023

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, 2022 for a full description of other significant accounting policies.

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, adjustments related to losses and recoveries from the fire (Note 17), and financial statement reclassifications necessary to present fairly the Company’s financial position as of July 2, 2023, and the results of its operations for the three-month and six-month periods ended July 2, 2023 and July 3, 2022, 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 and six-month periods ended July 2, 2023 are not necessarily indicative of the results to be expected for the full year.

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New Pronouncements

6 Months Ended

Jul. 02, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

New Pronouncements

New Pronouncements

Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", (ASU) 2021-01, "Reference Rate Reform (Topic 848): Scope", and Accounting Standards Update (ASU) 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848"

The amendments in these ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Together, the ASUs provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024 that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in these ASUs are effective for all entities as of March 12, 2020 through December 31, 2024. Management adopted Topic 848 on January 1, 2023, and now uses the Secured Overnight Financing Rate (SOFR). The adoption did not have a material impact on the Company's financial statements and disclosures.

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Fair Value Measurements

6 Months Ended

Jul. 02, 2023

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 July 2, 2023 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Money market instruments	$	30,492	$	—	$	—
Corporate bonds	—		527,352		—
Treasury bills	—		72,709		—
Asset-backed securities	—		52,340		—
Sovereign bonds	—		1,932		—
Municipal bonds	—		635		—
Economic hedge forward contracts	—		118		—
Liabilities:
Economic hedge forward contracts	—		31		—

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 on 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.

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

Non-financial assets, such as property, plant and equipment, operating lease assets, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record impairment charges related to non-financial assets during the three-month or six-month periods ended July 2, 2023 or July 3, 2022.

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Cash, Cash Equivalents, and Investments

6 Months Ended

Jul. 02, 2023

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):

	July 2, 2023		December 31, 2022
Cash	$	146,993	$	180,959
Money market instruments	30,492		415
Cash and cash equivalents	177,485		181,374
Corporate bonds	165,539		164,055
Asset-backed securities	15,339		26,890
Treasury bills	9,961		11,332
Municipal bonds	635		624
Agency bonds	—		15,858
Current investments	191,474		218,759
Corporate bonds	361,813		374,440
Treasury bills	62,748		44,214
Asset-backed securities	37,001		33,539
Sovereign bonds	1,932		1,924
Non-current investments	463,494		454,117
	$	832,453	$	854,250

Corporate bonds consist of debt securities issued by both domestic and foreign companies; asset-backed securities consist of debt securities collateralized by pools of receivables or loans with credit enhancement; treasury bills consist of debt securities issued by the U.S. government; 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 sovereign bonds consist of direct debt issued by foreign governments. All of the Company's securities as of July 2, 2023 and December 31, 2022 were denominated in U.S. Dollars.

Accrued interest receivable is recorded in "Prepaid expenses and other current assets" on the Consolidated Balance Sheets and amounted to $4,265,000 and $3,620,000 as of July 2, 2023 and December 31, 2022, respectively.

The following table summarizes the Company’s available-for-sale investments as of July 2, 2023 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Current:
Corporate bonds	$	169,464	$	—	$	(3,925)	$	165,539
Asset-backed securities	15,492		—		(153)		15,339
Treasury bills	10,099		—		(138)		9,961
Municipal bonds	635		—		—		635
Non-current:
Corporate bonds	376,629		329		(15,145)		361,813
Treasury bills	63,664		2		(918)		62,748
Asset-backed securities	38,737		—		(1,736)		37,001
Sovereign bonds	2,071		—		(139)		1,932
	$	676,791	$	331	$	(22,154)	$	654,968

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 July 2, 2023 (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	$	127,474	$	(1,767)	$	350,232	$	(17,303)	$	477,706	$	(19,070)
Treasury bills	59,832		(838)		11,884		(218)		71,716		(1,056)
Asset-backed securities	15,850		(199)		36,490		(1,690)		52,340		(1,889)
Sovereign bonds	—		—		1,932		(139)		1,932		(139)
Municipal bonds	—		—		—		—		—		—
	$	203,156	$	(2,804)	$	400,538	$	(19,350)	$	603,694	$	(22,154)

Management monitors debt securities that are in an unrealized loss position to determine whether a loss exists related to the credit quality of the issuer. When developing an estimate of expected credit losses, management considers all relevant information including historical experience, current conditions, and reasonable forecasts of expected future cash flows. Based on this evaluation, no allowance for credit losses on debt securities was recorded as of July 2, 2023 or December 31, 2022. There was no activity recorded in the allowance for credit losses during the three-month or six-month periods ended July 2, 2023 or July 3, 2022. Management currently intends to hold debt securities that are in an unrealized loss position to full value recovery at maturity.

The Company recorded no gross realized gains or losses on the sale of debt securities during the three-month and six-month periods ended July 2, 2023. The Company recorded gross realized gains on the sale of debt securities totaling $15,000 and $133,000 during the three-month and six-month periods ended July 3, 2022, respectively, and gross realized losses on the sale of debt securities totaling $3,000 and $157,000 during the three-month and six-month periods ended July 3, 2022, respectively. Realized gains and losses are included in "Investment income" on the Consolidated Statements of Operations. Prior to the sale of these securities, unrealized gains and losses for these debt securities, net of tax, were recorded in shareholders’ equity as accumulated other comprehensive income (loss).

The following table presents the effective maturity dates of the Company’s available-for-sale investments as of July 2, 2023 (in thousands):

	<1 year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-8 Years		Total
Corporate bonds	$	165,539	$	129,096	$	95,060	$	56,128	$	81,073	$	456	$	527,352
Treasury bills	9,961		3,362		16,263		20,408		22,715		—		72,709
Asset-backed securities	15,339		11,622		11,093		7,227		—		7,059		52,340
Sovereign bonds	—		974		958		—		—		—		1,932
Municipal bonds	635		—		—		—		—		—		635
	$	191,474	$	145,054	$	123,374	$	83,763	$	103,788	$	7,515	$	654,968

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Inventories

6 Months Ended

Jul. 02, 2023

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in thousands):

	July 2, 2023		December 31, 2022
Raw materials	$	72,327	$	71,720
Work-in-process	1,339		906
Finished goods	52,560		49,854
	$	126,226	$	122,480

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Leases

6 Months Ended

Jul. 02, 2023

Leases [Abstract]

Leases

Leases

The Company's leases are primarily leased properties across different worldwide locations where the Company conducts its operations. All of these leases are classified as operating leases. Certain leases may contain options to extend or terminate the lease at the Company's sole discretion.

As of July 2, 2023, there were no options to terminate and twenty options to extend that were accounted for in the determination of the lease term for outstanding leases. Certain leases contain leasehold improvement incentives, retirement obligations, escalating clauses, rent holidays, and variable payments tied to a consumer price index. There were no restrictions or covenants for outstanding leases as of July 2, 2023.

The total operating lease expense for the three-month and six-month periods ended July 2, 2023 was $2,639,000 and $5,031,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 2, 2023 were $2,364,000 and $4,768,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 2, 2023 was $136,000 and $160,000, respectively.

The total operating lease expense for the three-month and six-month periods ended July 3, 2022 was $2,215,000 and $4,444,000, respectively. The total operating lease cash payments for the three-month and six-month periods ended July 3, 2022 were $2,227,000 and $4,306,000, respectively. The total lease expense for leases with a term of twelve months or less for which the Company elected not to recognize a lease asset or lease liability for the three-month and six-month periods ended July 3, 2022 was $37,000 and $75,000, respectively.

Future operating lease cash payments are as follows (in thousands):

Year Ended December 31,	Amount
Remainder of fiscal 2023	$	4,863
2024	11,026
2025	9,237
2026	7,722
2027	7,144
2028	6,922
Thereafter	56,108
	$	103,022

The discounted present value of the future lease cash payments resulted in a total lease liability of $70,040,000 and $39,752,000 as of July 2, 2023 and December 31, 2022, respectively. The Company did not have any leases that had not yet commenced but that created significant rights and obligations as of July 2, 2023.

In June 2023, the Company entered into a lease for a 115,000 square-foot building in Singapore to serve as a new distribution center for customers in Asia. The lease contains two components, including a 88,000 square-foot premises with a term of ten years, six months. The Company has the right and option to extend the term of this lease component for an additional period of five years, commencing upon the expiration of the original term. This lease component commenced during the second quarter of 2023, and therefore the Company recorded approximately $29,684,000, which reflects an estimated extension period of five years, within "Operating lease assets" and "Operating lease liabilities" on the Consolidated Balance Sheets on the commencement date. The second component of this Singapore lease is for a 27,000 square-foot premises with a term of eight years. The commencement date for this lease component is in the fourth quarter of 2025, and therefore it was not yet recorded on the Consolidated Balance Sheets, nor did it create any significant rights and obligations as of July 2, 2023. The Company has the right and option to extend the term of this lease component for an additional period of five years, commencing upon the expiration of the original term. Future payment obligations associated with this lease component total $13,231,000, none of which is payable in 2023 and which reflects an estimated extension period of five years. Future payment obligations related to this lease component are not included in the future operating lease cash payments table above.

In December 2021, the Company entered into a lease for a 65,000 square-foot building in Southborough, Massachusetts for a term of ten years to serve as a new distribution center for customers in the Americas. The Company has the right and option to extend the term of this lease for an additional period of five years, commencing upon the expiration of the original ten-year term. This lease commenced during the first quarter of 2022, and therefore the Company recorded approximately $9,271,000, which does not reflect an estimated extension period, within "Operating lease assets" and "Operating lease liabilities" on the Consolidated Balance Sheets on the commencement date.The weighted-average discount rate was 5.3% and 3.3% for the leases outstanding as of July 2, 2023 and December 31, 2022, respectively. The weighted-average remaining lease term was 11.0 and 7.8 years for the leases outstanding as of July 2, 2023 and December 31, 2022, respectively.

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Goodwill

6 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Goodwill

The changes in the carrying value of goodwill were as follows (in thousands):

Balance as of December 31, 2022	$	242,630
Foreign exchange rate changes	(1,048)
Balance as of July 2, 2023	$	241,582

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Intangible Assets

6 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

Amortized intangible assets consisted of the following (in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Completed technologies	$	28,017	$	(19,041)	$	8,976
Customer relationships	5,838		(4,220)		1,618
Non-compete agreements	340		(205)		135
Balance as of July 2, 2023	$	34,195	$	(23,466)	$	10,729
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Completed technologies	$	28,017	$	(17,744)	$	10,273
Customer relationships	5,838		(3,860)		1,978
Non-compete agreements	340		(177)		163
Balance as of December 31, 2022	$	34,195	$	(21,781)	$	12,414

As of July 2, 2023, estimated future amortization expense related to intangible assets was as follows (in thousands):

Year Ended December 31,	Amount
Remainder of fiscal 2023	$	1,452
2024	2,623
2025	2,300
2026	1,995
2027	1,273
2028	543
Thereafter	543
	$	10,729

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Warranty Obligations

6 Months Ended

Jul. 02, 2023

Product Warranties Disclosures [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 changes in 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 obligation were as follows (in thousands):

Balance as of December 31, 2022	$	4,375
Provisions for warranties issued during the period	1,163
Fulfillment of warranty obligations	(1,537)
Balance as of July 2, 2023	$	4,001

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Commitment and Contingencies

6 Months Ended

Jul. 02, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

As of July 2, 2023, the Company had outstanding purchase orders totaling $40,388,000 to procure inventory from various vendors. Certain of these purchase orders may be canceled by the Company, subject to cancellation penalties. These purchase commitments relate primarily to expected sales in the next twelve months.

A significant portion of the Company's outstanding inventory purchase orders as of July 2, 2023, as well as additional preauthorized commitments to procure strategic components based on the Company's expected customer demand, are placed with the Company's primary contract manufacturer for the Company's assembled products. The Company has the obligation to purchase any non-cancelable and non-returnable components that have been purchased by the contract manufacturer with the Company's preauthorization, when these components have not been consumed within the period defined in the terms of the Company's agreement with this contract manufacturer. While the Company typically expects such purchased components to be used in future production of Cognex finished goods, these components are considered in the Company's reserve estimate for excess and obsolete inventory. Furthermore, the Company accrues for losses on commitments for the future purchase of non-cancelable and non-returnable components from this contract manufacturer at the time that circumstances, such as changes in demand, indicate that the value of the components may not be recoverable, the loss is probable, and management has the ability to reasonably estimate the amount of the loss.

Various 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 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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Derivative Instruments

6 Months Ended

Jul. 02, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative InstrumentsThe 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. The Company enters into economic hedges utilizing foreign currency forward contracts with maturities that do not exceed approximately three months 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 Company had the following outstanding forward contracts (in thousands):

	July 2, 2023			December 31, 2022
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Not Designated as Hedging Instruments:
Euro	32,500	$	35,371	60,000	$	64,174
Chinese Renminbi	70,000	9,665		55,000	7,619
Mexican Peso	120,000	6,979		185,000	9,480
Hungarian Forint	1,950,000	5,671		1,590,000	4,238
British Pound	3,540	4,467		3,445	4,161
Japanese Yen	600,000	4,159		700,000	5,281
Canadian Dollar	1,750	1,321		1,730	1,278
Swiss Franc	—	—		1,120	1,218

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	July 2, 2023		December 31, 2022		Sheet Location	July 2, 2023		December 31, 2022
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	118	$	27	Accrued expenses	$	31	$	479

The following table presents 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
	July 2, 2023		December 31, 2022			July 2, 2023		December 31, 2022
Gross amounts of recognized assets	$	118	$	27	Gross amounts of recognized liabilities	$	31	$	479
Gross amounts offset	—		—		Gross amounts offset	—		—
Net amount of assets presented	$	118	$	27	Net amount of liabilities presented	$	31	$	479

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

	Location in Financial Statements	Three-months Ended				Six-months Ended
		July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	859	$	6,191	$	(612)	$	7,930

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Revenue Recognition

6 Months Ended

Jul. 02, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The following table summarizes disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands):

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Americas	$	82,297	$	91,551	$	162,911	$	218,210
Europe	56,860		61,840		116,702		124,631
Greater China	72,351		78,616		105,351		127,021
Other Asia	31,004		42,621		58,672		87,173
	$	242,512	$	274,628	$	443,636	$	557,035

The following table summarizes disaggregated revenue information by revenue type (in thousands):

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Standard products and services	$	194,944	$	221,474	$	385,727	$	479,354
Application-specific customer solutions	47,568		53,154		57,909		77,681
	$	242,512	$	274,628	$	443,636	$	557,035

Costs to Fulfill a Contract

Costs to fulfill a contract are included in "Prepaid expenses and other current assets" on the Consolidated Balance Sheet and amounted to $18,951,000 and $14,578,000 as of July 2, 2023 and December 31, 2022, respectively.

Accounts Receivable, Contract Assets, and Contract Liabilities

Accounts receivable represent amounts billed and currently due from customers which are reported at their net estimated realizable value. The Company maintains an allowance against its accounts receivable for credit losses. Contract assets consist of unbilled revenue which arises when revenue is recognized in advance of billing for certain application-specific customer solutions contracts. Contract liabilities consist of deferred revenue and customer deposits which arise when amounts are billed to or collected from customers in advance of revenue recognition.

The following table summarizes the allowance for credit losses activity for the six-month period ended July 2, 2023 (in thousands):

Balance as of December 31, 2022	$	730
Increases to the allowance for credit losses	350
Write-offs, net of recoveries	(477)
Foreign exchange rate changes	(1)
Balance as of July 2, 2023	$	602

The following table summarizes the deferred revenue and customer deposits activity for the six-month period ended July 2, 2023 (in thousands):

Balance as of December 31, 2022	$	40,787
Deferral of revenue billed in the current period, net of recognition	26,719
Recognition of revenue deferred in prior period	(14,154)
Returned customer deposit	(9,205)
Foreign exchange rate changes	(708)
Balance as of July 2, 2023	$	43,439

As a practical expedient, the Company has elected not to disclose the aggregate amount of the transaction price allocated to unsatisfied performance obligations, as our contracts have an original expected duration of less than one year.

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Stock-Based Compensation Expense

6 Months Ended

Jul. 02, 2023

Share-Based Payment Arrangement [Abstract]

Stock-Based Compensation Expense

Stock-Based Compensation Expense

Stock Plans

The Company’s stock-based awards that result in compensation expense consist of stock options, restricted stock units ("RSUs"), and performance restricted stock units ("PRSUs"). In May 2023, the shareholders of the Company approved the Cognex Corporation 2023 Stock Option and Incentive Plan (the “2023 Plan”). The 2023 Plan permits awards of stock options (both incentive and non-qualified options), stock appreciation rights, RSUs, and PRSUs. Up to 8,100,000 shares of common stock (subject to adjustment in the event of stock splits and other similar events) may be issued pursuant to awards granted under the 2023 Plan. In connection with the approval of the 2023 Plan, no further awards will be made under the Cognex Corporation 2001 General Stock Option Plan, as amended and restated (the “2001 Plan”), and the Cognex Corporation 2007 Stock Option and Incentive Plan, as amended and restated (the “2007 Plan”). With the approval of the 2023 Plan, the 10,610,800 shares of common stock subject to awards granted under the 2001 Plan and the 2007 Plan that were outstanding as of May 3, 2023 may become eligible for issuance under the 2023 Plan if such awards are forfeited, cancelled or otherwise terminated (other than by exercise) (the “Carryover Shares”). As of July 2, 2023, forfeits, cancellations, and other terminations from the 2001 Plan and the 2007 Plan have resulted in 147,585 Carryover Shares, raising the authorized total shares that may be issued under the 2023 Plan to 8,247,585.

As of July 2, 2023, the Company had 8,183,000 shares available for grant under its stock plans. Stock options are granted with an exercise price equal to the market value of the Company’s common stock at the grant date and generally vest over four or five years based upon continuous service and expire ten years from the grant date. RSUs generally vest upon three or four years of continuous employment or incrementally over such three or four-year periods. PRSUs generally vest upon three years of continuous employment and achievement of performance criteria established by the Compensation Committee of our Board of Directors on or prior to the grant date. Participants are not entitled to dividends on stock options, RSUs, or PRSUs.

Stock Options

The following table summarizes the Company’s stock option activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	8,467	$	51.56
Granted	1,266	47.28
Exercised	(299)	33.87
Forfeited or expired	(515)	58.22
Outstanding as of July 2, 2023	8,919	$	51.16	6.31	$	70,411
Exercisable as of July 2, 2023	5,213	$	47.62	4.90	$	52,631
Options vested or expected to vest as of July 2, 2023 (1)	8,416	$	50.95	6.17	$	67,670

 (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				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Risk-free rate	3.5	%	1.9	%	3.9	%	1.9	%
Expected dividend yield	0.56	%	0.53	%	0.59	%	0.40	%
Expected volatility	39	%	37	%	39	%	37	%
Expected term (in years)	5.9		6.1		4.9		5.2

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. 

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 weighted-average grant-date fair values of stock options granted during the three-month and six-month periods ended July 2, 2023 were $20.09 and $17.86, respectively, and during the three-month and six-month periods ended July 3, 2022 were $18.21 and $22.33, respectively.

The total intrinsic values of stock options exercised for the three-month and six-month periods ended July 2, 2023 were $2,123,000 and $5,562,000, respectively, and for the three-month and six-month periods ended July 3, 2022 were $934,000 and $3,099,000, respectively. The total fair values of stock options vested for the three-month and

six-month periods ended July 2, 2023 were $892,000 and $32,073,000, respectively, and for the three-month and six-month periods ended July 3, 2022 were $1,188,000 and $26,723,000, respectively.

Restricted Stock Units (RSUs)

The following table summarizes the Company's RSUs activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2022	1,269	$	61.74
Granted	663	46.86
Vested	(482)	59.40
Forfeited or expired	(65)	61.52
Nonvested as of July 2, 2023	1,385	$	55.44

The fair value of RSUs is determined based on the observable market price of the Company's stock on the grant date less the present value of expected future dividends. The weighted-average grant-date fair values of RSUs granted during the three-month and six-month periods ended July 2, 2023 were $52.53 and $46.86, respectively, and during the three-month and six-month periods ended July 3, 2022 were $45.25 and $63.37, respectively. There were 29,000 and 482,000 RSUs that vested during the three-month and six-month periods ended July 2, 2023, respectively, and 20,000 and 74,000 that vested during the three-month and six-month periods ended July 3, 2022, respectively.

Performance Restricted Stock Units (PRSUs)

The following table summarizes the Company's PRSUs activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2022	33	$	62.49
Granted	46	44.86
Vested	—	—
Forfeited or expired	—	—
Nonvested as of July 2, 2023	79	$	52.23

The fair value of PRSUs is calculated using the Monte Carlo simulation model to estimate the probability of satisfying the service and market conditions stipulated in the award grant. There were 0 and 46,000 PRSUs granted during the three-month and six-month periods ended July 2, 2023, respectively, and 0 and 33,000 PRSUs granted during the three-month and six-month periods ended July 3, 2022, respectively. No PRSUs vested during the three-month and six-month periods ended July 2, 2023 and July 3, 2022.

Stock-Based Compensation Expense

The Company stratifies its employee population into three groups: one consisting of the CEO, one consisting of senior management, and another consisting of all other employees. The Company currently applies an estimated annual forfeiture rate of 0% to all stock-based awards for the CEO, 8% to all stock-based awards for senior management, and a rate of 13% for all other employees. Each year during the first quarter, the Company revises its forfeiture rate based on updated estimates of employee turnover. This resulted in a decrease to compensation expense of $234,000 in 2023 and an increase to compensation expense of $1,536,000 in 2022.

As of July 2, 2023, total unrecognized compensation expense, net of estimated forfeitures, related to non-vested equity awards, including stock options, RSUs, and PRSUs, was $76,162,000, which is expected to be recognized over a weighted-average period of 2.2 years.

The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended July 2, 2023 were $12,574,000 and $1,892,000, respectively, and for the six-month period ended July 2, 2023 were $29,153,000 and $4,200,000, respectively. The total stock-based compensation expense and the related income tax benefit recognized for the three-month period ended July 3, 2022 were $12,997,000 and $2,044,000, respectively, and for the six-month period ended July 3, 2022 were $28,053,000 and $4,363,000, respectively. No compensation expense was capitalized as of July 2, 2023 or December 31, 2022.

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

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Cost of revenue	$	441	$	482	$	1,062	$	1,045
Research, development, and engineering	3,308		3,851		9,198		8,299
Selling, general, and administrative	8,825		8,664		18,893		18,709
	$	12,574	$	12,997	$	29,153	$	28,053

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Stock Repurchase Program	6 Months Ended
	Jul. 02, 2023
Equity [Abstract]
Stock Repurchase Program	Stock Repurchase ProgramOn March 12, 2020, the Company's Board of Directors authorized the repurchase of $200,000,000 of the Company's common stock. Under this March 2020 program, in addition to repurchases made in prior years, the Company repurchased 1,677,000 shares at a cost of $117,000,000 during the six-month period ended July 3, 2022, which completed purchases under this program. On March 3, 2022, the Company's Board of Directors authorized the repurchase of an additional $500,000,000 of the Company's common stock. Under this March 2022 program, the Company repurchased 590,000 shares at a cost of $37,317,000 during the six-month period ended July 3, 2022. Under this same March 2022 program, in addition to repurchases made in the prior year, the Company repurchased 966,000 shares at a total cost of $49,163,000 during the six-month period ended July 2, 2023 leaving a remaining balance of $363,523,000 as of July 2, 2023. The Company may repurchase shares under this program in future periods depending on a variety of factors, including, among other things, the impact of dilution from employee stock awards, stock price, share availability, and cash requirements. The Company is authorized to make repurchases of its common stock through open market purchases, pursuant to Rule 10b5-1 trading plans, or in privately negotiated transactions.

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Income Taxes

6 Months Ended

Jul. 02, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The Company's effective tax rate was 15% and 12% for the three-month and six-month periods ended July 2, 2023, respectively, and 9% and 17% for the three-month and six-month periods ended July 3, 2022, respectively.

The Company has defined its major tax jurisdictions as the United States, Ireland, China, and Korea, and within the United States, Massachusetts. The statutory tax rate is 12.5% in Ireland, 25% in China, and 22% in Korea compared to the U.S. federal statutory corporate tax rate of 21%. These foreign tax rate differences resulted in a net decrease to the effective tax rate for both the three-month and six-month periods ended July 2, 2023 and July 3, 2022.

The Company recorded a net discrete tax expense totaling $399,000 and a net discrete tax benefit totaling $3,195,000 for the three-month and six-month periods ended July 2, 2023, and a net discrete tax benefit totaling $2,352,000 and a net discrete tax expense totaling $3,986,000 for the same periods in 2022.

Discrete tax items for the six-month period ended July 2, 2023 included (1) an increase in tax expense of $1,766,000 related to stock-based compensation; (2) a net decrease in tax expense of $3,051,000 due primarily to the release of tax reserves on state tax credits and foreign audit settlements; (3) a decrease in tax expense of $2,198,000 for adjustments to certain deferred tax assets; and (4) a net increase in tax expense of $288,000 for return-to-provision adjustments.

Discrete tax items for the six-month period ended July 3, 2022 included (1) an increase in tax expense of $176,000 related to stock-based compensation; (2) a decrease in tax expense of $1,577,000 arising from audit settlements; (3) an increase in tax expense of $2,316,000 to establish a reserve against certain deferred tax assets; and (4) an increase in tax expense of $3,071,000 consisting primarily of transfer pricing and return-to-provision adjustments.

The Company’s reserve for income taxes, including gross interest and penalties, was $19,239,000 as of July 2, 2023, which was classified as a non-current liability. 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.

Within the United States, the tax years 2019 through 2021 remain open to examination by the IRS, and 2018 through 2021 remain open to examination by various state tax authorities. The tax years 2017 through 2022 remain open to examination by various international taxing authorities in other jurisdictions in which the Company operates.

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Weighted-Average Shares

6 Months Ended

Jul. 02, 2023

Earnings Per Share [Abstract]

Weighted-Average Shares

Weighted-Average Shares

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

	Three-months Ended		Six-months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Basic weighted-average common shares outstanding	172,429	173,507	172,527	173,830
Effect of dilutive equity awards	1,193	1,486	1,264	2,044
Weighted-average common and common-equivalent shares outstanding	173,622	174,993	173,791	175,874

Stock options to purchase 6,890,000 and 6,713,000 shares of common stock, on a weighted-average basis, were outstanding during the three-month and six-month periods ended July 2, 2023, respectively, and 4,048,000 and 1,818,000 for the same periods in 2022, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive. Restricted stock units totaling 3,000 and 1,000 shares of common stock, on a weighted-average basis, were outstanding during the three-month and six-month periods ended July 2, 2023, respectively, and 480,000 and 21,000 for the same periods in 2022, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive. No PRSUs were excluded in the calculation of dilutive net income per share for the three-month and six-month periods ended July 2, 2023, as PRSUs were not anti-dilutive on a weighted-average basis. PRSUs totaling 33,000 and 0 shares of common stock, on a weighted-average basis, were outstanding during the three-month and six-month periods ended July 3, 2022, respectively, but were not included in the calculation of dilutive net income per share because they were anti-dilutive

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Loss (Recovery) from Fire

6 Months Ended

Jul. 02, 2023

Insurance [Abstract]

Loss (Recovery) from Fire

Loss (Recovery) from Fire

On June 7, 2022, the Company’s primary contract manufacturer experienced a fire at its plant in Indonesia. The fire destroyed a significant amount of Cognex-owned consigned inventories, as well as component inventories owned by the contract manufacturer that were designated for Cognex products. There was no significant damage to the Company's production equipment. Since the date of the fire, the Company has worked with the contract manufacturer to resume production, maintain standards of product quality, and replenish inventories destroyed by the fire. The Company has also been working to ramp up an additional contract manufacturer to further mitigate risk, diversify the supply chain, and expand production capacity.

During the three-month period ended July 3, 2022, the Company recorded a net loss related to the fire of $17,403,000, consisting primarily of losses from inventories and other assets of $44,903,000, partially offset by an estimated insurance recovery of $27,500,000. The net loss is presented in the caption “Loss (recovery) from fire” on the Consolidated Statements of Operations. The Company received insurance proceeds of $27,560,000 from the Company's insurance carrier in the fourth quarter of 2022, and gross losses recorded during 2022 related to the fire were further reduced by the proceeds received in excess of the original estimated insurance recovery.

During the three-month period ended July 2, 2023, the Company recorded a recovery related to the fire of $2,500,000 for proceeds received from the Company's insurance carrier in relation to a business interruption claim. This recovery amount is presented in the caption “Loss (recovery) from fire” on the Consolidated Statements of Operations.

As of July 2, 2023 and through the date of financial statement issuance, management cannot yet estimate additional recoveries that could be available from the contract manufacturer. Any future, additional recoveries in excess of recognized losses will be treated as gain contingencies and will be recognized when the gain is realized or realizable. There can be no assurance, however, that the insurance coverage and/or recoveries from the contract manufacturer will be available to cover the losses from the fire.

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Restructuring Charges

6 Months Ended

Jul. 02, 2023

Restructuring and Related Activities [Abstract]

Restructuring Charges

Restructuring Charges

On December 7, 2022, the Company acquired all of the outstanding shares of SAC Sirius Advanced Cybernetics GmbH ("SAC"), a leader in computational lighting technology based in Germany. Following its acquisition of SAC, the Company performed restructuring activities to align the cost and operating structure of the acquired business with the Company's business strategy. As of December 31, 2022, the majority of these restructuring actions were completed. No additional charges were recorded during the three-month and six-month periods ended July 2, 2023, or are expected to be incurred in future periods in relation to this restructuring plan.

The following table summarizes the activity in the Company’s restructuring reserve related to these restructuring activities, which is included in “Accrued expenses” on the Consolidated Balance Sheets (in thousands):

	One-time Termination Benefits		Contract Termination Costs		Total
Balance as of December 31, 2022	$	964	$	75	$	1,039
Cash payments	(703)		(48)		(751)
Foreign exchange rate changes	9		1		10
Balance as of July 2, 2023	$	270	$	28	$	298

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Subsequent Events	6 Months Ended
	Jul. 02, 2023
Subsequent Events [Abstract]
Subsequent Events	Subsequent EventsOn August 3, 2023, the Company’s Board of Directors declared a cash dividend of $0.07 per share. The dividend is payable on September 1, 2023 to all shareholders of record as of the close of business on August 18, 2023.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Pay vs Performance Disclosure
Net income	$ 57,474	$ 58,901	$ 83,089	$ 126,234

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Insider Trading Arrangements	3 Months Ended
	Jul. 02, 2023
Trading Arrangements, by Individual
Non-Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jul. 02, 2023

Accounting Policies [Abstract]

New Pronouncements

New Pronouncements

Accounting Standards Update (ASU) 2020-04, "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting", (ASU) 2021-01, "Reference Rate Reform (Topic 848): Scope", and Accounting Standards Update (ASU) 2022-06, "Reference Rate Reform (Topic 848): Deferral of the Sunset Date of Topic 848"

The amendments in these ASUs apply to all entities that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. Together, the ASUs provide optional expedients and exceptions for applying generally accepted accounting principles (GAAP) to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships entered into or evaluated after December 31, 2024, except for hedging relationships existing as of December 31, 2024 that an entity has elected certain optional expedients for and that are retained through the end of the hedging relationship. The amendments in these ASUs are effective for all entities as of March 12, 2020 through December 31, 2024. Management adopted Topic 848 on January 1, 2023, and now uses the Secured Overnight Financing Rate (SOFR). The adoption did not have a material impact on the Company's financial statements and disclosures.

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Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2023

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 July 2, 2023 (in thousands):

	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Unobservable Inputs (Level 3)
Assets:
Money market instruments	$	30,492	$	—	$	—
Corporate bonds	—		527,352		—
Treasury bills	—		72,709		—
Asset-backed securities	—		52,340		—
Sovereign bonds	—		1,932		—
Municipal bonds	—		635		—
Economic hedge forward contracts	—		118		—
Liabilities:
Economic hedge forward contracts	—		31		—

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Cash, Cash Equivalents, and Investments (Tables)

6 Months Ended

Jul. 02, 2023

Cash and Cash Equivalents [Abstract]

Components of Cash, Cash Equivalents, and Investments

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

	July 2, 2023		December 31, 2022
Cash	$	146,993	$	180,959
Money market instruments	30,492		415
Cash and cash equivalents	177,485		181,374
Corporate bonds	165,539		164,055
Asset-backed securities	15,339		26,890
Treasury bills	9,961		11,332
Municipal bonds	635		624
Agency bonds	—		15,858
Current investments	191,474		218,759
Corporate bonds	361,813		374,440
Treasury bills	62,748		44,214
Asset-backed securities	37,001		33,539
Sovereign bonds	1,932		1,924
Non-current investments	463,494		454,117
	$	832,453	$	854,250

Summary of Available-for-Sale Investments

The following table summarizes the Company’s available-for-sale investments as of July 2, 2023 (in thousands):

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
Current:
Corporate bonds	$	169,464	$	—	$	(3,925)	$	165,539
Asset-backed securities	15,492		—		(153)		15,339
Treasury bills	10,099		—		(138)		9,961
Municipal bonds	635		—		—		635
Non-current:
Corporate bonds	376,629		329		(15,145)		361,813
Treasury bills	63,664		2		(918)		62,748
Asset-backed securities	38,737		—		(1,736)		37,001
Sovereign bonds	2,071		—		(139)		1,932
	$	676,791	$	331	$	(22,154)	$	654,968

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 July 2, 2023 (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	$	127,474	$	(1,767)	$	350,232	$	(17,303)	$	477,706	$	(19,070)
Treasury bills	59,832		(838)		11,884		(218)		71,716		(1,056)
Asset-backed securities	15,850		(199)		36,490		(1,690)		52,340		(1,889)
Sovereign bonds	—		—		1,932		(139)		1,932		(139)
Municipal bonds	—		—		—		—		—		—
	$	203,156	$	(2,804)	$	400,538	$	(19,350)	$	603,694	$	(22,154)

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 July 2, 2023 (in thousands):

	<1 year		1-2 Years		2-3 Years		3-4 Years		4-5 Years		5-8 Years		Total
Corporate bonds	$	165,539	$	129,096	$	95,060	$	56,128	$	81,073	$	456	$	527,352
Treasury bills	9,961		3,362		16,263		20,408		22,715		—		72,709
Asset-backed securities	15,339		11,622		11,093		7,227		—		7,059		52,340
Sovereign bonds	—		974		958		—		—		—		1,932
Municipal bonds	635		—		—		—		—		—		635
	$	191,474	$	145,054	$	123,374	$	83,763	$	103,788	$	7,515	$	654,968

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Inventories (Tables)

6 Months Ended

Jul. 02, 2023

Inventory Disclosure [Abstract]

Schedule of Inventories

Inventories consisted of the following (in thousands):

	July 2, 2023		December 31, 2022
Raw materials	$	72,327	$	71,720
Work-in-process	1,339		906
Finished goods	52,560		49,854
	$	126,226	$	122,480

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Leases (Tables)

6 Months Ended

Jul. 02, 2023

Leases [Abstract]

Lessee, Operating Lease, Liability, Maturity

Future operating lease cash payments are as follows (in thousands):

Year Ended December 31,	Amount
Remainder of fiscal 2023	$	4,863
2024	11,026
2025	9,237
2026	7,722
2027	7,144
2028	6,922
Thereafter	56,108
	$	103,022

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Goodwill (Tables)

6 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The changes in the carrying value of goodwill were as follows (in thousands):

Balance as of December 31, 2022	$	242,630
Foreign exchange rate changes	(1,048)
Balance as of July 2, 2023	$	241,582

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Intangible Assets (Tables)

6 Months Ended

Jul. 02, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Amortized intangible assets consisted of the following (in thousands):

	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Completed technologies	$	28,017	$	(19,041)	$	8,976
Customer relationships	5,838		(4,220)		1,618
Non-compete agreements	340		(205)		135
Balance as of July 2, 2023	$	34,195	$	(23,466)	$	10,729
	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
Completed technologies	$	28,017	$	(17,744)	$	10,273
Customer relationships	5,838		(3,860)		1,978
Non-compete agreements	340		(177)		163
Balance as of December 31, 2022	$	34,195	$	(21,781)	$	12,414

Schedule of Intangible Assets, Future Amortization Expense

As of July 2, 2023, estimated future amortization expense related to intangible assets was as follows (in thousands):

Year Ended December 31,	Amount
Remainder of fiscal 2023	$	1,452
2024	2,623
2025	2,300
2026	1,995
2027	1,273
2028	543
Thereafter	543
	$	10,729

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Warranty Obligations (Tables)

6 Months Ended

Jul. 02, 2023

Product Warranties Disclosures [Abstract]

Changes in Warranty Obligations

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

Balance as of December 31, 2022	$	4,375
Provisions for warranties issued during the period	1,163
Fulfillment of warranty obligations	(1,537)
Balance as of July 2, 2023	$	4,001

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Derivative Instruments (Tables)

6 Months Ended

Jul. 02, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Outstanding Forward Contracts Table

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

	July 2, 2023			December 31, 2022
Currency	Notional Value	USD Equivalent		Notional Value	USD Equivalent
Derivatives Not Designated as Hedging Instruments:
Euro	32,500	$	35,371	60,000	$	64,174
Chinese Renminbi	70,000	9,665		55,000	7,619
Mexican Peso	120,000	6,979		185,000	9,480
Hungarian Forint	1,950,000	5,671		1,590,000	4,238
British Pound	3,540	4,467		3,445	4,161
Japanese Yen	600,000	4,159		700,000	5,281
Canadian Dollar	1,750	1,321		1,730	1,278
Swiss Franc	—	—		1,120	1,218

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	July 2, 2023		December 31, 2022		Sheet Location	July 2, 2023		December 31, 2022
Derivatives Not Designated as Hedging Instruments:
Economic hedge forward contracts	Prepaid expenses and other current assets	$	118	$	27	Accrued expenses	$	31	$	479

Offsetting Assets

The following table presents 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
	July 2, 2023		December 31, 2022			July 2, 2023		December 31, 2022
Gross amounts of recognized assets	$	118	$	27	Gross amounts of recognized liabilities	$	31	$	479
Gross amounts offset	—		—		Gross amounts offset	—		—
Net amount of assets presented	$	118	$	27	Net amount of liabilities presented	$	31	$	479

Derivative Instruments, Gain (Loss)

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

	Location in Financial Statements	Three-months Ended				Six-months Ended
		July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Derivatives Not Designated as Hedging Instruments:
Gains (losses) recognized in current operations	Foreign currency gain (loss)	$	859	$	6,191	$	(612)	$	7,930

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Revenue Recognition (Tables)

6 Months Ended

Jul. 02, 2023

Revenue from Contract with Customer [Abstract]

Revenue from External Customers by Geographic Areas

The following table summarizes disaggregated revenue information by geographic area based upon the customer's country of domicile (in thousands):

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Americas	$	82,297	$	91,551	$	162,911	$	218,210
Europe	56,860		61,840		116,702		124,631
Greater China	72,351		78,616		105,351		127,021
Other Asia	31,004		42,621		58,672		87,173
	$	242,512	$	274,628	$	443,636	$	557,035

Revenue from External Customers by Products and Services

The following table summarizes disaggregated revenue information by revenue type (in thousands):

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Standard products and services	$	194,944	$	221,474	$	385,727	$	479,354
Application-specific customer solutions	47,568		53,154		57,909		77,681
	$	242,512	$	274,628	$	443,636	$	557,035

Schedule of Allowance for Credit Loss Activity

The following table summarizes the allowance for credit losses activity for the six-month period ended July 2, 2023 (in thousands):

Balance as of December 31, 2022	$	730
Increases to the allowance for credit losses	350
Write-offs, net of recoveries	(477)
Foreign exchange rate changes	(1)
Balance as of July 2, 2023	$	602

Deferred Revenue, by Arrangement, Disclosure

The following table summarizes the deferred revenue and customer deposits activity for the six-month period ended July 2, 2023 (in thousands):

Balance as of December 31, 2022	$	40,787
Deferral of revenue billed in the current period, net of recognition	26,719
Recognition of revenue deferred in prior period	(14,154)
Returned customer deposit	(9,205)
Foreign exchange rate changes	(708)
Balance as of July 2, 2023	$	43,439

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Stock-Based Compensation Expense (Tables)

6 Months Ended

Jul. 02, 2023

Share-Based Payment Arrangement [Abstract]

Summary of Stock Option Activity

The following table summarizes the Company’s stock option activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (in years)	Aggregate Intrinsic Value (in thousands)
Outstanding as of December 31, 2022	8,467	$	51.56
Granted	1,266	47.28
Exercised	(299)	33.87
Forfeited or expired	(515)	58.22
Outstanding as of July 2, 2023	8,919	$	51.16	6.31	$	70,411
Exercisable as of July 2, 2023	5,213	$	47.62	4.90	$	52,631
Options vested or expected to vest as of July 2, 2023 (1)	8,416	$	50.95	6.17	$	67,670

 (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				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Risk-free rate	3.5	%	1.9	%	3.9	%	1.9	%
Expected dividend yield	0.56	%	0.53	%	0.59	%	0.40	%
Expected volatility	39	%	37	%	39	%	37	%
Expected term (in years)	5.9		6.1		4.9		5.2

Schedule of Nonvested Restricted Stock Units Activity

The following table summarizes the Company's RSUs activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2022	1,269	$	61.74
Granted	663	46.86
Vested	(482)	59.40
Forfeited or expired	(65)	61.52
Nonvested as of July 2, 2023	1,385	$	55.44

Schedule of Nonvested Performance-based Units Activity

The following table summarizes the Company's PRSUs activity for the six-month period ended July 2, 2023:

	Shares (in thousands)	Weighted-Average Grant Date Fair Value
Nonvested as of December 31, 2022	33	$	62.49
Granted	46	44.86
Vested	—	—
Forfeited or expired	—	—
Nonvested as of July 2, 2023	79	$	52.23

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

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

	Three-months Ended				Six-months Ended
	July 2, 2023		July 3, 2022		July 2, 2023		July 3, 2022
Cost of revenue	$	441	$	482	$	1,062	$	1,045
Research, development, and engineering	3,308		3,851		9,198		8,299
Selling, general, and administrative	8,825		8,664		18,893		18,709
	$	12,574	$	12,997	$	29,153	$	28,053

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Weighted-Average Shares (Tables)

6 Months Ended

Jul. 02, 2023

Earnings Per Share [Abstract]

Calculation of Weighted-Average Shares

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

	Three-months Ended		Six-months Ended
	July 2, 2023	July 3, 2022	July 2, 2023	July 3, 2022
Basic weighted-average common shares outstanding	172,429	173,507	172,527	173,830
Effect of dilutive equity awards	1,193	1,486	1,264	2,044
Weighted-average common and common-equivalent shares outstanding	173,622	174,993	173,791	175,874

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Restructuring Charges (Tables)

6 Months Ended

Jul. 02, 2023

Restructuring and Related Activities [Abstract]

Schedule of Activity in Restructuring Reserve

The following table summarizes the activity in the Company’s restructuring reserve related to these restructuring activities, which is included in “Accrued expenses” on the Consolidated Balance Sheets (in thousands):

	One-time Termination Benefits		Contract Termination Costs		Total
Balance as of December 31, 2022	$	964	$	75	$	1,039
Cash payments	(703)		(48)		(751)
Foreign exchange rate changes	9		1		10
Balance as of July 2, 2023	$	270	$	28	$	298

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Assets:
Money market instruments	$ 30,492	$ 415
Financial assets at fair value	654,968
Corporate bonds
Assets:
Financial assets at fair value	527,352
Treasury bills
Assets:
Financial assets at fair value	72,709
Asset-backed securities
Assets:
Financial assets at fair value	52,340
Sovereign bonds
Assets:
Financial assets at fair value	1,932
Municipal bonds
Assets:
Financial assets at fair value	635
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring
Assets:
Money market instruments	30,492
Economic hedge forward contracts	0
Liabilities:
Economic hedge forward contracts	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | Corporate bonds
Assets:
Financial assets at fair value	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | Treasury bills
Assets:
Financial assets at fair value	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | Asset-backed securities
Assets:
Financial assets at fair value	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | Sovereign bonds
Assets:
Financial assets at fair value	0
Quoted Prices in Active Markets for Identical Assets (Level 1) | Recurring | Municipal bonds
Assets:
Financial assets at fair value	0
Significant Other Observable Inputs (Level 2) | Recurring
Assets:
Money market instruments	0
Economic hedge forward contracts	118
Liabilities:
Economic hedge forward contracts	31
Significant Other Observable Inputs (Level 2) | Recurring | Corporate bonds
Assets:
Financial assets at fair value	527,352
Significant Other Observable Inputs (Level 2) | Recurring | Treasury bills
Assets:
Financial assets at fair value	72,709
Significant Other Observable Inputs (Level 2) | Recurring | Asset-backed securities
Assets:
Financial assets at fair value	52,340
Significant Other Observable Inputs (Level 2) | Recurring | Sovereign bonds
Assets:
Financial assets at fair value	1,932
Significant Other Observable Inputs (Level 2) | Recurring | Municipal bonds
Assets:
Financial assets at fair value	635
Unobservable Inputs (Level 3) | Recurring
Assets:
Money market instruments	0
Economic hedge forward contracts	0
Liabilities:
Economic hedge forward contracts	0
Unobservable Inputs (Level 3) | Recurring | Corporate bonds
Assets:
Financial assets at fair value	0
Unobservable Inputs (Level 3) | Recurring | Treasury bills
Assets:
Financial assets at fair value	0
Unobservable Inputs (Level 3) | Recurring | Asset-backed securities
Assets:
Financial assets at fair value	0
Unobservable Inputs (Level 3) | Recurring | Sovereign bonds
Assets:
Financial assets at fair value	0
Unobservable Inputs (Level 3) | Recurring | Municipal bonds
Assets:
Financial assets at fair value	$ 0

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Cash, Cash Equivalents, and Investments - Components of Cash, Cash Equivalents, and Investments (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Debt Securities, Available-for-sale
Cash	$ 146,993	$ 180,959
Money market instruments	30,492	415
Cash and cash equivalents	177,485	181,374
Current investments	191,474	218,759
Non-current investments	463,494	454,117
Total	832,453	854,250
Corporate bonds
Debt Securities, Available-for-sale
Current investments	165,539	164,055
Long-term investments	361,813	374,440
Asset-backed securities
Debt Securities, Available-for-sale
Current investments	15,339	26,890
Long-term investments	37,001	33,539
Treasury bills
Debt Securities, Available-for-sale
Current investments	9,961	11,332
Long-term investments	62,748	44,214
Municipal bonds
Debt Securities, Available-for-sale
Current investments	635	624
Agency bonds
Debt Securities, Available-for-sale
Current investments	0	15,858
Sovereign bonds
Debt Securities, Available-for-sale
Long-term investments	$ 1,932	$ 1,924

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Cash, Cash Equivalents, and Investments - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022	Dec. 31, 2022
Cash and Cash Equivalents [Line Items]
Debt securities, available-for-sale, allowance for credit loss	$ 0		$ 0		$ 0
Credit loss on investments	0	$ 0	0	$ 0
Gross realized gains on sale of investments	0	15	0	133
Gross realized losses on sale of investments	0	$ 3	0	$ 157
Other current assets
Cash and Cash Equivalents [Line Items]
Accrued interest receivable	$ 4,265		$ 4,265		$ 3,620

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Cash, Cash Equivalents, and Investments - Summary of Available-for-Sale Investments (Details) $ in Thousands	Jul. 02, 2023 USD ($)
Debt Securities, Available-for-sale
Amortized Cost	$ 676,791
Gross Unrealized Gains	331
Gross Unrealized Losses	(22,154)
Fair Value	654,968
Corporate bonds
Debt Securities, Available-for-sale
Fair Value	527,352
Corporate bonds | Current assets
Debt Securities, Available-for-sale
Amortized Cost	169,464
Gross Unrealized Gains	0
Gross Unrealized Losses	(3,925)
Fair Value	165,539
Corporate bonds | Non-current assets
Debt Securities, Available-for-sale
Amortized Cost	376,629
Gross Unrealized Gains	329
Gross Unrealized Losses	(15,145)
Fair Value	361,813
Asset-backed securities
Debt Securities, Available-for-sale
Fair Value	52,340
Asset-backed securities | Current assets
Debt Securities, Available-for-sale
Amortized Cost	15,492
Gross Unrealized Gains	0
Gross Unrealized Losses	(153)
Fair Value	15,339
Asset-backed securities | Non-current assets
Debt Securities, Available-for-sale
Amortized Cost	38,737
Gross Unrealized Gains	0
Gross Unrealized Losses	(1,736)
Fair Value	37,001
Treasury bills
Debt Securities, Available-for-sale
Fair Value	72,709
Treasury bills | Current assets
Debt Securities, Available-for-sale
Amortized Cost	10,099
Gross Unrealized Gains	0
Gross Unrealized Losses	(138)
Fair Value	9,961
Treasury bills | Non-current assets
Debt Securities, Available-for-sale
Amortized Cost	63,664
Gross Unrealized Gains	2
Gross Unrealized Losses	(918)
Fair Value	62,748
Municipal bonds
Debt Securities, Available-for-sale
Fair Value	635
Municipal bonds | Current assets
Debt Securities, Available-for-sale
Amortized Cost	635
Gross Unrealized Gains	0
Gross Unrealized Losses	0
Fair Value	635
Sovereign bonds
Debt Securities, Available-for-sale
Fair Value	1,932
Sovereign bonds | Non-current assets
Debt Securities, Available-for-sale
Amortized Cost	2,071
Gross Unrealized Gains	0
Gross Unrealized Losses	(139)
Fair Value	$ 1,932

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Cash, Cash Equivalents, and Investments - Gross Unrealized Losses and Fair Values for Available-for-Sale Investments (Details) $ in Thousands	Jul. 02, 2023 USD ($)
Debt Securities, Available-for-sale
Fair value, less than 12 months	$ 203,156
Unrealized losses, less than 12 months	(2,804)
Fair value, 12 months or greater	400,538
Unrealized losses, 12 months or greater	(19,350)
Total fair value	603,694
Total unrealized Losses	(22,154)
Corporate bonds
Debt Securities, Available-for-sale
Fair value, less than 12 months	127,474
Unrealized losses, less than 12 months	(1,767)
Fair value, 12 months or greater	350,232
Unrealized losses, 12 months or greater	(17,303)
Total fair value	477,706
Total unrealized Losses	(19,070)
Treasury bills
Debt Securities, Available-for-sale
Fair value, less than 12 months	59,832
Unrealized losses, less than 12 months	(838)
Fair value, 12 months or greater	11,884
Unrealized losses, 12 months or greater	(218)
Total fair value	71,716
Total unrealized Losses	(1,056)
Asset-backed securities
Debt Securities, Available-for-sale
Fair value, less than 12 months	15,850
Unrealized losses, less than 12 months	(199)
Fair value, 12 months or greater	36,490
Unrealized losses, 12 months or greater	(1,690)
Total fair value	52,340
Total unrealized Losses	(1,889)
Sovereign bonds
Debt Securities, Available-for-sale
Fair value, less than 12 months	0
Unrealized losses, less than 12 months	0
Fair value, 12 months or greater	1,932
Unrealized losses, 12 months or greater	(139)
Total fair value	1,932
Total unrealized Losses	(139)
Municipal bonds
Debt Securities, Available-for-sale
Fair value, less than 12 months	0
Unrealized losses, less than 12 months	0
Fair value, 12 months or greater	0
Unrealized losses, 12 months or greater	0
Total fair value	0
Total unrealized Losses	$ 0

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Cash, Cash Equivalents, and Investments - Effective Maturity Dates of Available-for-Sale Investments (Details) $ in Thousands	Jul. 02, 2023 USD ($)
Debt Securities, Available-for-sale
less than 1 year	$ 191,474
1-2 Years	145,054
2-3 Years	123,374
3-4 Years	83,763
4-5 Years	103,788
5-8 Years	7,515
Total	654,968
Corporate bonds
Debt Securities, Available-for-sale
less than 1 year	165,539
1-2 Years	129,096
2-3 Years	95,060
3-4 Years	56,128
4-5 Years	81,073
5-8 Years	456
Total	527,352
Treasury bills
Debt Securities, Available-for-sale
less than 1 year	9,961
1-2 Years	3,362
2-3 Years	16,263
3-4 Years	20,408
4-5 Years	22,715
5-8 Years	0
Total	72,709
Asset-backed securities
Debt Securities, Available-for-sale
less than 1 year	15,339
1-2 Years	11,622
2-3 Years	11,093
3-4 Years	7,227
4-5 Years	0
5-8 Years	7,059
Total	52,340
Sovereign bonds
Debt Securities, Available-for-sale
less than 1 year	0
1-2 Years	974
2-3 Years	958
3-4 Years	0
4-5 Years	0
5-8 Years	0
Total	1,932
Municipal bonds
Debt Securities, Available-for-sale
less than 1 year	635
1-2 Years	0
2-3 Years	0
3-4 Years	0
4-5 Years	0
5-8 Years	0
Total	$ 635

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Inventories (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Inventory Disclosure [Abstract]
Raw materials	$ 72,327	$ 71,720
Work-in-process	1,339	906
Finished goods	52,560	49,854
Inventories	$ 126,226	$ 122,480

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Leases - Narrative (Details) ft² in Thousands, $ in Thousands	1 Months Ended		3 Months Ended		6 Months Ended
	Jun. 30, 2023 ft² lease_component	Dec. 31, 2021 ft²	Jul. 02, 2023 USD ($)	Jul. 03, 2022 USD ($)	Jul. 02, 2023 USD ($)	Jul. 03, 2022 USD ($)	Dec. 31, 2022 USD ($)
Lessee, Lease, Description [Line Items]
Operating lease, cost			$ 2,639	$ 2,215	$ 5,031	$ 4,444
Operating lease, payments			2,364	2,227	4,768	4,306
Lease, cost			136	37	160	75
Operating lease liability			70,040		70,040		$ 39,752
Operating lease assets			68,594		68,594		$ 37,682
Future lease payments			103,022		103,022
Remainder of fiscal 2023			$ 4,863		$ 4,863
Weighted average discount rate			5.30%		5.30%		3.30%
Weighted average remaining lease term			11 years		11 years		7 years 9 months 18 days
Singapore
Lessee, Lease, Description [Line Items]
Rentable area | ft²	115
Lease components | lease_component	2
Singapore | 88,000 square-foot premises
Lessee, Lease, Description [Line Items]
Operating lease liability			$ 29,684		$ 29,684
Rentable area | ft²	88
Term of contract	10 years 6 months
Option to renew, term of contract	5 years
Operating lease assets			29,684		29,684
Singapore | 27,000 square-foot premises
Lessee, Lease, Description [Line Items]
Rentable area | ft²	27
Term of contract	8 years
Option to renew, term of contract	5 years
Future lease payments			13,231		13,231
Remainder of fiscal 2023			$ 0		$ 0
Southborough, Massachusetts
Lessee, Lease, Description [Line Items]
Operating lease liability				9,271		9,271
Rentable area | ft²		65
Term of contract		10 years
Option to renew, term of contract		5 years
Operating lease assets				$ 9,271		$ 9,271

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Leases - Future Minimum Lease Payment Obligations Under Operating Leases (Details) $ in Thousands	Jul. 02, 2023 USD ($)
Leases [Abstract]
Remainder of fiscal 2023	$ 4,863
2024	11,026
2025	9,237
2026	7,722
2027	7,144
2028	6,922
Thereafter	56,108
Total	$ 103,022

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Goodwill (Details) $ in Thousands	6 Months Ended
	Jul. 02, 2023 USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2022	$ 242,630
Foreign exchange rate changes	(1,048)
Balance as of July 2, 2023	$ 241,582

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Intangible Assets (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Distribution Rights, Developed Technology Rights, Customer Contracts And Relationships, Other Intangible Assets, And Trademarks
Gross Carrying Value	$ 34,195	$ 34,195
Accumulated Amortization	(23,466)	(21,781)
Net Carrying Value	10,729	12,414
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Net Carrying Value	10,729	12,414
Indefinite-lived intangible asset excluding in-process technologies
Distribution Rights, Developed Technology Rights, Customer Contracts And Relationships, Other Intangible Assets, And Trademarks
Net Carrying Value	10,729
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Remainder of fiscal 2023	1,452
2024	2,623
2025	2,300
2026	1,995
2027	1,273
2028	543
Thereafter	543
Net Carrying Value	10,729
Completed technologies
Distribution Rights, Developed Technology Rights, Customer Contracts And Relationships, Other Intangible Assets, And Trademarks
Gross Carrying Value	28,017	28,017
Accumulated Amortization	(19,041)	(17,744)
Net Carrying Value	8,976	10,273
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Net Carrying Value	8,976	10,273
Customer relationships
Distribution Rights, Developed Technology Rights, Customer Contracts And Relationships, Other Intangible Assets, And Trademarks
Gross Carrying Value	5,838	5,838
Accumulated Amortization	(4,220)	(3,860)
Net Carrying Value	1,618	1,978
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Net Carrying Value	1,618	1,978
Non-compete agreements
Distribution Rights, Developed Technology Rights, Customer Contracts And Relationships, Other Intangible Assets, And Trademarks
Gross Carrying Value	340	340
Accumulated Amortization	(205)	(177)
Net Carrying Value	135	163
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Net Carrying Value	$ 135	$ 163

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Warranty Obligations (Detail) $ in Thousands	6 Months Ended
	Jul. 02, 2023 USD ($)
Movement in Standard Product Warranty Accrual [Roll Forward]
Beginning balance	$ 4,375
Provisions for warranties issued during the period	1,163
Fulfillment of warranty obligations	(1,537)
Ending balance	$ 4,001

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Commitment and Contingencies (Details) $ in Thousands	Jul. 02, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Outstanding purchase orders	$ 40,388

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Derivative Instruments - Narrative (Details)	6 Months Ended
	Jul. 02, 2023
Not Designated as Hedging Instrument
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Remaining maturity of foreign currency derivatives (up to)	3 months

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Derivative Instruments - Outstanding Forward Contracts Table (Details) - Not Designated as Hedging Instrument € in Thousands, ¥ in Thousands, ¥ in Thousands, £ in Thousands, SFr in Thousands, Ft in Thousands, $ in Thousands, $ in Thousands, $ in Thousands	Jul. 02, 2023 EUR (€)	Jul. 02, 2023 USD ($)	Jul. 02, 2023 CNY (¥)	Jul. 02, 2023 MXN ($)	Jul. 02, 2023 HUF (Ft)	Jul. 02, 2023 GBP (£)	Jul. 02, 2023 JPY (¥)	Jul. 02, 2023 CAD ($)	Jul. 02, 2023 CHF (SFr)	Dec. 31, 2022 EUR (€)	Dec. 31, 2022 USD ($)	Dec. 31, 2022 CNY (¥)	Dec. 31, 2022 MXN ($)	Dec. 31, 2022 HUF (Ft)	Dec. 31, 2022 GBP (£)	Dec. 31, 2022 JPY (¥)	Dec. 31, 2022 CAD ($)	Dec. 31, 2022 CHF (SFr)
Euro
Derivative [Line Items]
Outstanding forward contracts	€ 32,500	$ 35,371								€ 60,000	$ 64,174
Chinese Renminbi
Derivative [Line Items]
Outstanding forward contracts		9,665	¥ 70,000								7,619	¥ 55,000
Mexican Peso
Derivative [Line Items]
Outstanding forward contracts		6,979		$ 120,000							9,480		$ 185,000
Hungarian Forint
Derivative [Line Items]
Outstanding forward contracts		5,671			Ft 1,950,000						4,238			Ft 1,590,000
British Pound
Derivative [Line Items]
Outstanding forward contracts		4,467				£ 3,540					4,161				£ 3,445
Japanese Yen
Derivative [Line Items]
Outstanding forward contracts		4,159					¥ 600,000				5,281					¥ 700,000
Canadian Dollar
Derivative [Line Items]
Outstanding forward contracts		1,321						$ 1,750			1,278						$ 1,730
Swiss Franc
Derivative [Line Items]
Outstanding forward contracts		$ 0							SFr 0		$ 1,218							SFr 1,120

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Derivative Instruments - Schedule of Derivative Instruments in Statement of Financial Position, Fair Value (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Derivatives, Fair Value [Line Items]
Derivative asset	$ 118	$ 27
Derivative liability	31	479
Not Designated as Hedging Instrument
Derivatives, Fair Value [Line Items]
Derivative asset	118	27
Derivative liability	$ 31	$ 479

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Derivative Instruments - Offsetting Assets (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross amounts of recognized assets	$ 118	$ 27
Gross amounts offset	0	0
Net amount of assets presented	118	27
Gross amounts of recognized liabilities	31	479
Gross amounts offset	0	0
Net amount of liabilities presented	$ 31	$ 479

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Derivative Instruments - Derivative Instruments, Gain (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Not Designated as Hedging Instrument
Derivative Instruments, Gain (Loss) [Line Items]
Gains (losses) recognized in current operations	$ 859	$ 6,191	$ (612)	$ 7,930

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Revenue Recognition - Revenue Disaggregated by Geography (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 242,512	$ 274,628	$ 443,636	$ 557,035
Americas
Disaggregation of Revenue [Line Items]
Revenue	82,297	91,551	162,911	218,210
Europe
Disaggregation of Revenue [Line Items]
Revenue	56,860	61,840	116,702	124,631
Greater China
Disaggregation of Revenue [Line Items]
Revenue	72,351	78,616	105,351	127,021
Other Asia
Disaggregation of Revenue [Line Items]
Revenue	$ 31,004	$ 42,621	$ 58,672	$ 87,173

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Revenue Recognition - Revenue Disaggregated by Products and Services (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Revenue from External Customer [Line Items]
Revenue	$ 242,512	$ 274,628	$ 443,636	$ 557,035
Standard products and services
Revenue from External Customer [Line Items]
Revenue	194,944	221,474	385,727	479,354
Application-specific customer solutions
Revenue from External Customer [Line Items]
Revenue	$ 47,568	$ 53,154	$ 57,909	$ 77,681

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Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands	Jul. 02, 2023	Dec. 31, 2022
Revenue from Contract with Customer [Abstract]
Costs to fulfill contract	$ 18,951	$ 14,578

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Revenue Recognition - Schedule of Allowance for Credit Loss (Details) $ in Thousands	6 Months Ended
	Jul. 02, 2023 USD ($)
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Balance as of December 31, 2022	$ 730
Increases to the allowance for credit losses	350
Write-offs, net of recoveries	(477)
Foreign exchange rate changes	(1)
Balance as of July 2, 2023	$ 602

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Revenue Recognition - Deferred Revenue Activity (Details) $ in Thousands	6 Months Ended
	Jul. 02, 2023 USD ($)
Movement in Deferred Revenue [Roll Forward]
Balance as of December 31, 2022	$ 40,787
Deferral of revenue billed in the current period, net of recognition	26,719
Recognition of revenue deferred in prior period	(14,154)
Returned customer deposit	9,205
Foreign exchange rate changes	(708)
Balance as of July 2, 2023	$ 43,439

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Stock-Based Compensation Expense - Narrative (Details)	2 Months Ended	3 Months Ended		6 Months Ended
	Jul. 02, 2023 USD ($) group shares	Jul. 02, 2023 USD ($) group $ / shares shares	Jul. 03, 2022 USD ($) $ / shares shares	Jul. 02, 2023 USD ($) group $ / shares shares	Jul. 03, 2022 USD ($) $ / shares shares	May 03, 2023 shares	Dec. 31, 2022 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted-average grant-date fair values (in dollars per share) | $ / shares		$ 20.09	$ 18.21	$ 17.86	$ 22.33
Total intrinsic value | $		$ 2,123,000	$ 934,000	$ 5,562,000	$ 3,099,000
Total fair values of stock options vest | $		$ 892,000	1,188,000	$ 32,073,000	26,723,000
Groups within the employee population | group	3	3		3
Estimated forfeiture rate for unvested options for CEO	0	0		0
Estimated annual forfeiture rate for unvested options for senior management	8.00%	8.00%		8.00%
Estimated annual forfeiture rate for unvested options for all other employees	13.00%	13.00%		13.00%
Decrease in compensation expense due to revised estimated forfeiture rates | $				$ 234,000
Increase in compensation expense due to revised estimated forfeiture rates | $					1,536,000
Unrecognized compensation expense | $	$ 76,162,000	$ 76,162,000		$ 76,162,000
Weighted average period to be recognized				2 years 2 months 12 days
Stock-based compensation expense | $		12,574,000	12,997,000	$ 29,153,000	28,053,000
Tax benefit from compensation expense | $		1,892,000	$ 2,044,000	4,200,000	$ 4,363,000
Recognized period costs capitalized | $	$ 0	$ 0		$ 0			$ 0
2001 Plan and 2007 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant under stock option plans (in shares) | shares						10,610,800
2023 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares auhtorised for grant under stock option plans (in shares) | shares	8,247,585	8,247,585		8,247,585		8,100,000
Additional shares available for grant under stock option plans (in shares) | shares	147,585
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares available for grant under stock option plans (in shares) | shares	8,183,000	8,183,000		8,183,000
Expiration period from grant day				10 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Granted (in dollars per share) | $ / shares		$ 52.53	$ 45.25	$ 46.86	$ 63.37
Vested (in shares) | shares		29,000	20,000	482,000	74,000
Granted (in shares) | shares				663,000
Performance Shares (PRSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans				3 years
Granted (in dollars per share) | $ / shares				$ 44.86
Vested (in shares) | shares		0	0	0	0
Granted (in shares) | shares		0	0	46,000	33,000
Minimum | General Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans				4 years
Minimum | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans				3 years
Maximum | General Stock Option Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans				5 years
Maximum | Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period for stock option plans				4 years

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Stock-Based Compensation Expense - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jul. 02, 2023 USD ($) $ / shares shares
Shares (in thousands)
Outstanding (in shares) | shares	8,467
Granted (in shares) | shares	1,266
Exercised (in shares) | shares	(299)
Forfeited or expired (in shares) | shares	(515)
Outstanding (in shares) | shares	8,919
Exercisable as of reporting date (in shares) | shares	5,213
Options vested or expected to vest as of reporting date (in shares) | shares	8,416
Weighted- Average Exercise Price
Outstanding (in dollars per shares) | $ / shares	$ 51.56
Granted (in dollars per shares) | $ / shares	47.28
Exercised (in dollars per shares) | $ / shares	33.87
Forfeited or expired (in dollars per shares) | $ / shares	58.22
Outstanding (in dollars per shares) | $ / shares	51.16
Exercisable as of reporting date (in dollars per shares) | $ / shares	47.62
Vested and expected to vest (in dollars per shares) | $ / shares	$ 50.95
Weighted- Average Remaining Contractual Term (in years)
Outstanding (in years)	6 years 3 months 21 days
Exercisable (in years)	4 years 10 months 24 days
Options vested or expected to vest (in years)	6 years 2 months 1 day
Aggregate Intrinsic Value (in thousands)
Outstanding | $	$ 70,411
Exercisable | $	52,631
Options vested or expected to vest | $	$ 67,670

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Stock-Based Compensation Expense - Weighted-Average Assumptions Used in Estimating Fair Values of Stock Options Granted (Details)	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Share-Based Payment Arrangement [Abstract]
Risk-free rate	3.50%	1.90%	3.90%	1.90%
Expected dividend yield	0.56%	0.53%	0.59%	0.40%
Expected volatility	39.00%	37.00%	39.00%	37.00%
Expected term (in years)	5 years 10 months 24 days	6 years 1 month 6 days	4 years 10 months 24 days	5 years 2 months 12 days

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Stock-Based Compensation Expense - Schedule of Restricted Stock Units (Details) - Restricted Stock Units (RSUs) - $ / shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Shares (in thousands)
Nonvested as of beginning of period (in shares)			1,269
Granted (in shares)			663
Vested (in shares)	29	20	482	74
Forfeited or expired (in shares)			(65)
Nonvested as of end of period (in shares)	1,385		1,385
Weighted-Average Grant Date Fair Value
Nonvested as of beginning of period (in dollars per share)			$ 61.74
Granted (in dollars per share)	$ 52.53	$ 45.25	46.86	$ 63.37
Vested (in dollars per share)			59.40
Forfeited or expired (in dollars per share)			61.52
Nonvested as of end of period (in dollars per share)	$ 55.44		$ 55.44

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Stock-Based Compensation Expense - Schedule of Performance Restricted Stock Units (Details) - Performance Shares (PRSUs) - $ / shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Shares (in thousands)
Nonvested as of beginning of period (in shares)			33
Granted (in shares)	0	0	46	33
Vested (in shares)	0	0	0	0
Forfeited or expired (in shares)			0
Nonvested as of end of period (in shares)	79		79
Weighted-Average Grant Date Fair Value
Nonvested as of beginning of period (in dollars per share)			$ 62.49
Granted (in dollars per share)			44.86
Vested (in dollars per share)			0
Forfeited or expired (in dollars per share)			0
Nonvested as of end of period (in dollars per share)	$ 52.23		$ 52.23

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Stock-Based Compensation Expense - Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 12,574	$ 12,997	$ 29,153	$ 28,053
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	441	482	1,062	1,045
Research, development, and engineering
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	3,308	3,851	9,198	8,299
Selling, general, and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 8,825	$ 8,664	$ 18,893	$ 18,709

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Stock Repurchase Program (Details) - USD ($) shares in Thousands	6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Mar. 03, 2022	Mar. 12, 2020
Repurchase Program March 2020
Equity, Class of Treasury Stock [Line Items]
Authorized common stock to be repurchased				$ 200,000,000
Shares repurchased at cost (in shares)		1,677
Shares repurchased at cost		$ 117,000,000
Repurchase Program March 2022
Equity, Class of Treasury Stock [Line Items]
Authorized common stock to be repurchased			$ 500,000,000
Shares repurchased at cost (in shares)	966	590
Shares repurchased at cost	$ 49,163,000	$ 37,317,000
Remaining authorized repurchase amount	$ 363,523,000

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Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Income Tax Contingency [Line Items]
Effective tax rate	15.00%	9.00%	12.00%	17.00%
Discrete tax expense (benefit)	$ 399	$ (2,352)	$ (3,195)	$ 3,986
Increase in tax expense related to stock-based compensation			1,766	176
Decrease in tax expense arising from tax settlement			3,051	1,577
Change in tax expense related to valuation allowance			2,198	2,316
Increase in tax expense related to transfer pricing and return-to-provision adjustments			288	$ 3,071
Liability for uncertain tax positions	$ 19,239		$ 19,239
Tax years open to examination by Internal Revenue Service			2019 through 2021
Tax years open to examination by various taxing authorities for other entities			2017 through 2022
Foreign Tax Authority | Ireland
Income Tax Contingency [Line Items]
Statutory tax rate			12.50%
Foreign Tax Authority | China
Income Tax Contingency [Line Items]
Statutory tax rate			25.00%
Foreign Tax Authority | Korea
Income Tax Contingency [Line Items]
Statutory tax rate			22.00%
Domestic Tax Authority
Income Tax Contingency [Line Items]
Statutory tax rate			21.00%

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Weighted-Average Shares - Calculation of Weighted-Average Shares (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Earnings Per Share [Abstract]
Basic weighted-average common shares outstanding (in shares)	172,429	173,507	172,527	173,830
Effect of dilutive equity awards (in shares)	1,193	1,486	1,264	2,044
Weighted-average common and common-equivalent shares outstanding (in shares)	173,622	174,993	173,791	175,874

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Weighted-Average Shares - Narrative (Details) - shares	3 Months Ended		6 Months Ended
	Jul. 02, 2023	Jul. 03, 2022	Jul. 02, 2023	Jul. 03, 2022
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anti-dilutive securities excluded from computation of earnings per share (shares)	6,890,000	4,048,000	6,713,000	1,818,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anti-dilutive securities excluded from computation of earnings per share (shares)	3,000	480,000	1,000	21,000
Performance Shares (PRSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Anti-dilutive securities excluded from computation of earnings per share (shares)	0	33,000	0	0

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Loss (Recovery) from Fire (Details) - USD ($) $ in Thousands	3 Months Ended
	Jul. 02, 2023	Dec. 31, 2022	Jul. 03, 2022
Insurance [Abstract]
Loss from fire			$ 17,403
Gross loss from fire			$ 44,903
Estimated insurance recoveries	$ 27,500
Insurance recoveries		$ 27,560
Recovery from fire	$ 2,500

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Restructuring Charges (Details) - Accrued expenses - December 2022 $ in Thousands	6 Months Ended
	Jul. 02, 2023 USD ($)
Restructuring Reserve [Roll Forward]
Balance at beginning of period	$ 1,039
Cash payments	(751)
Foreign exchange rate changes	(10)
Balance at end of period	298
One-time Termination Benefits
Restructuring Reserve [Roll Forward]
Balance at beginning of period	964
Cash payments	(703)
Foreign exchange rate changes	(9)
Balance at end of period	270
Contract Termination Costs
Restructuring Reserve [Roll Forward]
Balance at beginning of period	75
Cash payments	(48)
Foreign exchange rate changes	(1)
Balance at end of period	$ 28

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Subsequent Events (Details)	Aug. 01, 2023 $ / shares
Subsequent Event
Subsequent Event [Line Items]
Dividends (in dollars per share)	$ 0.07