Financial Data and Key Metrics Changes - First quarter revenues were $46.5 million, within the guidance range of $45.5 million to $49.5 million, showing year-over-year growth in product revenues primarily due to the expansion of the AIC program [22][24] - Non-GAAP gross margin for Q1 reached 45.2%, up from 37.5% in the same period last year, attributed to operating efficiencies and a one-time benefit from a materials recovery effort [23][24] - Adjusted EBITDA for Q1 was negative $3.9 million, an improvement from negative $7.8 million in the same period last year, with an adjusted EBITDA margin of negative 8.4% [24] Business Line Data and Key Metrics Changes - The AIC program's annual recurring revenue (ARR) reached $14.5 million, representing a stable and growing base of recurring revenue [14][24] - Impressions reported on a trailing twelve-month basis reached a record 222 million, up 10% compared to the previous period, driven by stronger system utilization [15][26] Market Data and Key Metrics Changes - The apparel industry is experiencing significant disruption, with brands and retailers rethinking supply chains due to new trade policies and consumer demands for faster delivery and sustainability [6][7] - The mass production space for print runs under 1,000 units represents an estimated $4.5 billion globally, indicating a substantial market opportunity for Kornit [21] Company Strategy and Development Direction - Kornit is focusing on the successful adoption and scaling of the Apollo system to penetrate the mass production market, which has traditionally been dominated by analog methods [11][20] - The company is also accelerating the adoption of its all-inclusive AIC model, which is designed to lower barriers to entry for customers and align success with theirs [14][20] Management's Comments on Operating Environment and Future Outlook - Management noted that while macro conditions delayed some planned system purchases in Q1, there is growing conviction among brands and fulfillers to transition to on-demand mass production [10][20] - The company expects full-year revenue growth, adjusted EBITDA profitability, and positive operating cash flow, with stronger growth anticipated in the second half of 2025 [20][27] Other Important Information - Kornit completed a $75 million accelerated share repurchase program, repurchasing approximately 2.5 million shares at an average price of $30.4 per share [25] - The company is actively pursuing partnerships with major supply chain partners to enhance its market position and support high-volume, time-sensitive production [18][19] Q&A Session Summary Question: Discussion on the transition to screen and recent changes in tariffs - Management highlighted that the fashion and textile market is undergoing significant disruption, with brands seeking to connect to local manufacturing to reduce inventory and markdowns [30][34] Question: Apollo placement numbers and impact of macro conditions - Management confirmed the expectation to deliver approximately 30 Apollo systems this year, despite some delays, with a strong pipeline of new customers [40][41] Question: Clarification on ARR and growth expectations - Management indicated that the ARR reflects minimum commitments, with expectations for continued growth in AIC revenue throughout the year [48][50] Question: Opportunities for profitability and efficiency - Management emphasized ongoing efforts to find efficiencies and highlighted the importance of impression growth as a key driver of profitability [86][88] Question: Future capital allocation priorities - Management discussed the remaining share repurchase program and the balance between organic investments and strategic acquisitions [94][95]

Core Viewpoint - Kornit Digital Ltd. reported its first quarter results for 2025, highlighting its commitment to sustainable, on-demand digital fashion and textile production technologies amidst a challenging macro environment [2][3]. Financial Performance - First quarter revenues reached $46.5 million, an increase from $43.8 million in the same period last year [7]. - The GAAP gross profit margin improved to 42.6% from 32.3% year-over-year, while the non-GAAP gross profit margin rose to 45.2% from 37.5% [7]. - The company reported a GAAP net loss of $5.1 million, or $0.11 per basic share, compared to a net loss of $13.2 million, or $0.28 per basic share, in Q1 2024 [7][21]. - Non-GAAP net income for the first quarter was $0.6 million, or $0.01 per diluted share, compared to a non-GAAP net loss of $5.3 million, or $0.11 per basic share, in the prior year [7][21]. - Adjusted EBITDA loss was $3.9 million, an improvement from a loss of $7.8 million in Q1 2024, with an adjusted EBITDA margin of negative 8.4% compared to negative 17.9% [7][30]. Business Model and Market Opportunity - Kornit’s Apollo platform, combined with its AIC model, is driving significant growth in impressions and unlocking a mass production segment estimated at 4.5 billion impressions [2]. - The company reported annual recurring revenue from AIC contracts of $14.5 million, indicating strong initial adoption of this new business model [6]. Guidance - For the second quarter of 2025, Kornit expects revenues to be between $49 million and $55 million, with an adjusted EBITDA margin projected between negative 4% and 4% [4].

Core Insights - Kornit Digital has integrated with Gooten, enhancing global reach and production capabilities for brands using Gooten's platform [1][2][3] - The partnership allows brands to access Kornit's extensive Global Fulfillment Network, which includes over 250 production locations worldwide [1][6] - This collaboration aims to meet increasing consumer demands for choice, quality, and delivery speed while promoting sustainable production practices [5][6] Company Overview - Kornit Digital is a leader in sustainable, on-demand digital fashion and textile production technologies, providing end-to-end solutions including digital printing systems and fulfillment services [6][7] - Gooten specializes in print-on-demand fulfillment and order management software, enabling businesses to grow profitably through an on-demand manufacturing model [8] Benefits of the Partnership - Brands can achieve retail quality across a wide range of products through the combined expertise of Kornit and Gooten [6] - The integration allows for quick onboarding, enabling brands to activate on-demand operations without complex logistics [6] - The partnership supports sustainable growth by reducing waste and inventory risks while allowing brands to unlock new revenue streams [6][5]

Company Overview - Kornit Digital Ltd. is a global leader in sustainable, on-demand, digital fashion and textile production technologies [3] - The company provides end-to-end solutions including digital printing systems, inks, consumables, software, and fulfillment services [3] - Kornit Digital operates in over 100 countries and has a global fulfillment network [3] Financial Results Announcement - Kornit Digital will release its financial results for the first quarter ended March 31, 2025, on May 14, 2025, prior to market open [1] - An earnings conference call and webcast will be held on the same day at 8:30 am ET to review the results and operations [2] - The live call can be accessed through Kornit's website, and a replay will be available approximately three hours after the call until May 28, 2025 [2][3]

ROSH-HA`AYIN, Israel, March 28, 2025 (GLOBE NEWSWIRE) -- Kornit Digital LTD. (NASDAQ: KRNT) (“Kornit Digital” or the “Company”), a global pioneer in sustainable, on-demand digital fashion and textile production technologies, today announced that it has filed its annual report on Form 20-F for the fiscal year ended December 31, 2024, with the U.S. Securities and Exchange Commission (the "SEC"). The annual report, which contains Kornit Digital's audited financial statements, can be accessed at the SEC's websi ...

Currency and Economic Risks - The NIS depreciated relative to the U.S. dollar by 4.0%, 9.7%, and 0.4% in 2022, 2023, and 2024, respectively, while the annual inflation rate in Israel was 5.3%, 3.0%, and 3.2% for the same years [81]. - A significant portion of the company's leases are denominated in currencies other than the U.S. dollar, mainly in NIS, which may result in material foreign exchange gains or losses due to remeasurement of lease liabilities [81]. - The company has instituted a foreign currency cash flow hedging program to mitigate risks associated with NIS-denominated expenses, although it cannot guarantee the success of these hedging activities [81]. - The ongoing conflict in Israel has led to a downgrade in Israel's credit rating by Moody's and S&P Global, which may impact the company's operations [129]. - The company does not have commercial insurance covering losses from security situations in the Middle East, which could materially affect its business [131]. Personnel and Management Changes - The company has experienced changes in senior personnel, including the EVP of operations in December 2023 and the Chief Marketing Officer in March 2024, which could adversely affect performance [82]. - The ongoing war in Israel has reduced the available workforce for key personnel, impacting the company's ability to attract and retain qualified employees [83]. - The company competes to attract qualified personnel, facing challenges from competitors with greater resources and the impact of non-competition agreements [83]. Legal and Regulatory Risks - The company is currently subject to securities class action litigation, which may have a significant adverse effect on its financial condition or profitability [97]. - The company may face claims of intellectual property infringement, which could result in litigation and adversely affect its business and financial condition [105]. - The company follows Israeli corporate governance practices, which may provide less protection to investors compared to Nasdaq requirements [113]. - The company is exempt from U.S. proxy rules and certain Exchange Act reports, reducing the frequency and scope of information available to investors [114]. - The company is required to comply with the SEC's rules under the Sarbanes-Oxley Act, including management certification of financial information [120]. Financial Performance and Shareholder Matters - The market price of the company's ordinary shares has been volatile, influenced by various factors including financial performance and market conditions [109]. - The company has repurchased $75 million of the $100 million authorized under its new share repurchase program, totaling 2,467,206 ordinary shares [112]. - The company has never declared or paid cash dividends on its share capital and does not anticipate doing so in the foreseeable future [110]. - The market price of the company's ordinary shares could decline due to future sales or perceived sales of substantial numbers of shares [116]. - The company has a share repurchase program that may reduce the public float of shares available for trading, potentially causing volatility in share price [112]. Intellectual Property and Innovation - As of December 31, 2024, the company owned 54 issued patents in the United States and 27 provisional or pending U.S. patent applications, along with 41 pending non-U.S. patent applications [100]. - The company has 42 patents issued in non-U.S. jurisdictions, including China and the European Union [100]. - The company has implemented confidentiality agreements to protect its proprietary information, but unauthorized use or disclosure may still occur [102]. - The company may not be able to effectively enforce its issued patents or other intellectual property rights, which could harm its business prospects [99]. - The company’s ability to sell technology assets outside of Israel may be impaired due to restrictions imposed by the Innovation Law [137]. Tax and Compliance Issues - The company may face additional tax liabilities due to audits of its tax returns, having recently settled a tax audit with the Israeli Tax Authority for the years 2020 to 2021 [93]. - The statutory corporate tax rate for Israeli companies is 23% since January 1, 2018, which may increase costs if tax benefits are reduced or eliminated [134]. - The company must comply with the Innovation Law, which restricts the transfer of know-how and technology developed with government grants outside of Israel without prior approval [136]. - The company has received grants from the Israeli National Authority for Technological Innovation, reimbursing up to 55% of R&D expenses for projects, totaling approximately $1.1 million to date [135]. - The company has received commitments for non-royalty bearing grants from the Innovation Authority for 2021 to 2024, with amounts of NIS 2 million, NIS 3.6 million, NIS 2.6 million, and NIS 1.2 million respectively [135]. Operational Risks - The company has implemented contingency plans to mitigate risks of delivery interruptions due to political and military events, including increasing inventory levels in localized regions [133]. - The company faces potential delays in shipping and delivery of products due to external factors, which could materially impact revenues [133]. - As of the report date, the company's facilities have not been damaged, but prolonged conflict could disrupt operations and supply chains [130]. - The company may acquire other businesses, which could require significant management attention and disrupt operations if integration is unsuccessful [92]. - The company is subject to Israeli corporate law regulations that may impede mergers or acquisitions, requiring significant shareholder approval [139]. Shareholder Obligations - Shareholders may face additional obligations under Israeli law that differ from those typically imposed on U.S. shareholders, including duties of fairness and good faith [143]. - The company may lose its foreign private issuer status if a majority of its directors or executive officers are U.S. citizens or residents, leading to higher regulatory costs [115]. - The company believes it was not classified as a passive foreign investment company (PFIC) for the taxable year ended December 31, 2024, but future classification is uncertain [123].

Grunt Style significantly increases production speed and shortens reaction time for surging customer demand – powered by the automated Kornit Apollo direct-to-garment digital print solution.Addition of digital production to existing screen printing ensures no item is ever out of stock as demand grows for patriotic apparel ROSH-HA`AYIN, Israel, March 26, 2025 (GLOBE NEWSWIRE) -- Kornit Digital LTD. (NASDAQ:KRNT) ("Kornit" or the "Company"), a global pioneer in sustainable, on-demand digital fashion and texti ...

Grunt Style significantly increases production speed and shortens reaction time for surging customer demand – powered by the automated Kornit Apollo direct-to-garment digital print solution.Addition of digital production to existing screen printing ensures no item is ever out of stock as demand grows for patriotic apparel ROSH-HA`AYIN, Israel, March 26, 2025 (GLOBE NEWSWIRE) -- Kornit Digital LTD. (NASDAQ: KRNT) (“Kornit” or the “Company”), a global pioneer in sustainable, on-demand digital fashion and text ...

Group 1 - Kornit Digital LTD. announced that American Classics Apparel, Inc. is adopting the Kornit Apollo platform to enhance its production capabilities and meet increasing customer demand in the e-tailer marketplace [1][4][7] - American Classics Apparel has been a reputable name in licensed apparel for nearly three decades, offering products associated with iconic brands in music, movies, and television, sold through major retailers and online platforms [2][6] - The integration of Kornit Apollo, along with existing Kornit systems, will enable American Classics to deliver faster, more efficient, and high-quality products [3][5] Group 2 - The adoption of Kornit Apollo is seen as a strategic move to address labor shortages and the need for speed and flexibility in production, which is critical in the licensed apparel market [4][5][7] - Kornit Digital positions itself as a leader in sustainable, on-demand digital fashion and textile production technologies, serving customers in over 100 countries [6]

Core Insights - Kornit Digital LTD. has announced that American Classics Apparel, Inc. is adopting the Kornit Apollo platform to enhance its production capabilities and meet increasing customer demand [1][4][7] - The Kornit Apollo platform represents a shift from traditional screen printing to high-speed digital production, allowing American Classics to improve efficiency and quality [1][3][5] Company Overview - American Classics Apparel, Inc. is a well-established wholesaler of licensed apparel, known for its iconic designs from music, movies, and television, and has been in operation for nearly three decades [2] - The company sells its products through major retailers like Walmart and online platforms such as Amazon, establishing itself as a leader in fan gear [2] Technological Advancements - The integration of Kornit Apollo, along with existing Kornit systems, positions American Classics to deliver faster production times and maintain high-quality standards [3][4] - The Kornit Apollo platform is expected to address labor shortages and enhance production flexibility, which is crucial in the fast-paced licensed apparel market [4][5] Industry Impact - The adoption of Kornit Apollo by American Classics is seen as a significant advancement in the licensed apparel sector, setting a new standard for speed and quality in production [5][6] - Kornit Digital is recognized as a leader in sustainable, on-demand digital fashion and textile production technologies, serving customers globally [6]