Cognex Corporation

Greetings, and welcome to the Cognite's first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Nathan McCurran, Head of Investor Relations. You may begin.

Thank you, Shamali. Good morning, everyone. Thank you for joining us. With me on today's call are Rob Willett, Cognex's president and CEO, and Paul Podgham, our CFO. Our results were released earlier today. The press release and quarterly report on Form 10-Q are available on the investor relations section of our website. Both the press release and our call today will reference non-GAAP measures. You can see a reconciliation of certain items from GAAP to non-GAAP in Exhibit 2 of the press release. Any forward-looking statements we made in the press release or anything we may make during this call are based upon information that we believe to be true as of today. Our actual results may differ materially from our projections due to the risks and uncertainties that are described in our SEC filings, including our most recent Form 10-K and on our Form 10-Q filed this morning for Q1. With that, I'll turn the call over to Rob.

Thanks, Nathan. Good morning, everyone, and thank you for joining us. As anticipated, we had a challenging first quarter of 2023. Revenue from our largest e-commerce customers remained low, and we continued to see cautious investment by customers across many of our end markets. More projects in our sales funnel are being delayed by spending cuts and additional levels of executive approval at our customers amid concerns about near-term demand. You can see this in macro leading indicators that remain muted. Since our last call, new orders and manufacturing PMI have decreased slightly in our largest regions, partially offset by an improvement in China compared to the January lows. We've seen slow periods like this before, and we've come out of them delivering meaningful growth. Our business is short a cycle and not as backlog-driven as many of our peers, so it tends to inflect more quickly. Additionally, we are comparing to an exceptionally strong Q1 of 2022, highlighted by large logistics projects and backlog catch-up as the supply environment improved. Gross margin of 71% in Q1 was in line with our expectations, yet still below our mid-70% long-term target, due to the elevated prices we paid to buy scarce components and replenish inventory through brokers. We believe that pressure is behind us going forward. Before I go into further commentary on the business and outlook for Q2, I'd like to turn the call over to Paul to walk through more of the results.