ROSH-HA`AYIN, Israel, June 03, 2024 (GLOBE NEWSWIRE) -- Kornit Digital Ltd. ("Kornit" or the "Company") (Nasdaq: KRNT), a worldwide market leader in sustainable, on-demand, digital fashionX and textile production technologies, announced today that Ronen Samuel, Kornit's Chief Executive Officer, and Jared Maymon, the Company's Global Head of Investor Relations & Strategic Finance, will participate in a presentation and conduct one-on-one meetings at the William Blair 44th Annual Growth Stock Conference. Date ...

Investor Contact: Jared Maymon Global Head of Investor Relations & Strategic Finance Jared.Maymon@Kornit.com Kornit Digital Reports First Quarter 2024 Results Rosh-Ha'Ayin, Israel – May 8, 2024 – Kornit Digital Ltd. ("Kornit" or the "Company") (Nasdaq: KRNT), a worldwide market leader in sustainable, on-demand, digital fashion and textile production technologies, reported today its results for the first quarter ended March 31, 2024. "Despite enduring macroeconomic challenges, we saw success with the strateg ...

ROSH-HA`AYIN, Israel, April 17, 2024 (GLOBE NEWSWIRE) -- Kornit Digital Ltd. ("Kornit" or the "Company") (NASDAQ:KRNT), a worldwide market leader in sustainable, on-demand, digital fashionX and textile production technologies, announced today that it will release its financial results for the first quarter ended March 31, 2024, on Wednesday, May 8, 2024, prior to the market open. The Company will host an earnings conference call and webcast reviewing these results and its operations on Wednesday, May 8th at ...

PART I This part details the company's risks, business operations, financial performance, governance, shareholding, legal matters, and market risk exposures [ITEM 3. Key Information](index=8&type=section&id=ITEM%203.%20Key%20Information) This section outlines significant risks related to the company's business, intellectual property, stock, and Israeli operations, including market adoption, customer concentration, and geopolitical instability [D. Risk Factors](index=8&type=section&id=D.%20Risk%20Factors) - The company's success highly depends on the broader market adoption of digital textile printing over traditional analog methods, where a slower shift could negatively impact revenue growth[40](index=40&type=chunk) - A significant portion of revenue is concentrated among a few key customers, with the top ten accounting for **49% of revenues** in 2023 and Amazon alone representing **20%**, posing a material risk[45](index=45&type=chunk) - Adverse macroeconomic conditions, including inflation and high interest rates, have negatively impacted demand for systems, delayed sales cycles, and reduced overall profitability[46](index=46&type=chunk) - The company relies on single or limited-source suppliers for critical components like print heads from FujiFilm Dimatix, Inc. (FDMX), where disruption could significantly delay manufacturing and harm the business[55](index=55&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Operations are heavily concentrated in Israel, exposing the company to risks from political, economic, and military instability, with the ongoing conflict leading to about **13% of the Israeli workforce** called up for military reserve duty, potentially disrupting operations[121](index=121&type=chunk)[122](index=122&type=chunk) - Research and development grants from the Israeli government impose restrictions on transferring manufacturing or technology outside of Israel, limiting strategic flexibility[127](index=127&type=chunk)[128](index=128&type=chunk) [ITEM 4. Information on the Company](index=32&type=section&id=ITEM%204.%20Information%20on%20the%20Company) This section provides an overview of Kornit Digital, a leading provider of digital textile printing solutions, detailing its history, business model, strategic pillars, and global operations [A. History and Development of the Company](index=32&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) - Kornit Digital Ltd. was incorporated in Israel in **2002** and completed its IPO on the Nasdaq Global Select Market in **April 2015** under the symbol "KRNT"[136](index=136&type=chunk) Recent Capital Expenditures | Year | Capital Expenditures (USD Million) | | :--- | :--- | | 2021 | $14.5 | | 2022 | $18.0 | | 2023 | $7.0 | - Key recent acquisitions include Voxel8 in August 2021 for **$15.0 million** to enhance additive manufacturing, and Tesoma GmbH in April 2022 for **€15.4 million** to acquire textile curing solutions[141](index=141&type=chunk)[142](index=142&type=chunk) [B. Business Overview](index=33&type=section&id=B.%20Business%20Overview) - Kornit provides digital printing solutions for the textile industry, focusing on high-throughput Direct-to-Garment (DTG) and Direct-to-Fabric (DTF) segments, including proprietary systems, inks, consumables, and software[144](index=144&type=chunk) - The company's patented wet-on-wet printing methodology and NeoPigment inks eliminate the need for pre-treatment, allowing printing on a wide variety of fabrics in a streamlined and environmentally friendly manner[145](index=145&type=chunk)[148](index=148&type=chunk) - Key products include the Atlas MAX series for DTG, the Apollo mass production platform capable of printing up to **400 shirts per hour**, and the Presto MAX for the DTF market, along with Smart Curing solutions and workflow software like KornitX[172](index=172&type=chunk)[175](index=175&type=chunk)[176](index=176&type=chunk) - The company's growth strategy focuses on three pillars: expanding in growth markets, maximizing impressions from existing customers through new applications and services, and extending leadership through strategic acquisitions and partnerships[189](index=189&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) [C. Organizational Structure](index=43&type=section&id=C.%20Organizational%20Structure) - Kornit Digital Ltd. is the Israeli parent company with six wholly-owned subsidiaries located in Israel, North America (Delaware), Germany, Hong Kong, the United Kingdom, and Japan[198](index=198&type=chunk) [D. Property, Plant and Equipment](index=43&type=section&id=D.%20Property,%20Plant%20and%20Equipment) - The company's corporate headquarters are located in Rosh Ha'Ayin, Israel, in a leased facility of approximately **172,492 square feet**[200](index=200&type=chunk) - A modern ink manufacturing and storage facility was opened in Kiryat Gat, Israel, in January 2022, with a total cost for the land and facility of approximately **$22 million**[201](index=201&type=chunk) - U.S. headquarters are located in Englewood, New Jersey, with additional sales, support, and marketing offices in Germany, Hong Kong, the UK, and Japan[202](index=202&type=chunk) [ITEM 5. Operating and Financial Review and Prospects](index=44&type=section&id=ITEM%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) This section analyzes the company's financial performance, liquidity, and critical accounting policies, highlighting a **19.1%** revenue decline and a net loss in 2023, alongside a strong cash position [A. Operating Results](index=45&type=section&id=A.%20Operating%20Results) Financial Performance Summary (2023 vs. 2022) | Metric | 2023 (USD Million) | 2022 (USD Million) | Change (%) | | :--- | :--- | :--- | :--- | | **Total Revenues** | **$219.8** | **$271.5** | **-19.1%** | | - Products | $161.0 | $222.5 | -27.6% | | - Services | $58.7 | $49.0 | +19.8% | | **Gross Profit** | **$67.0** | **$96.5** | **-30.6%** | | Gross Margin | 30.5% | 35.5% | -5.0 p.p. | | **Operating Loss** | **($87.5)** | **($69.9)** | **+25.2%** | | **Net Loss** | **($64.4)** | **($79.1)** | **-18.6%** | - The **19.1% decrease** in total revenues for 2023 was primarily driven by a **59% decline** in systems revenues, partially offset by an **8% increase** in ink/consumables revenue and a **20% increase** in service revenue[241](index=241&type=chunk) - Gross margin fell to **30.5%** in 2023 from **35.5%** in 2022, reflecting lower systems revenues against a fixed cost structure and higher inventory write-offs[242](index=242&type=chunk) - Total operating expenses decreased by **7.1%** to **$154.5 million** in 2023, driven by workforce reductions and lower spending on materials and marketing activities[243](index=243&type=chunk) [B. Liquidity and Capital Resources](index=56&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) - As of December 31, 2023, the company had a strong liquidity position with **$555.7 million** in cash, cash equivalents, short-term deposits, and marketable securities[274](index=274&type=chunk) Consolidated Statement of Cash Flows Summary | Cash Flow Activity | 2023 (USD Million) | 2022 (USD Million) | | :--- | :--- | :--- | | Net cash used in operating activities | ($34.7) | ($99.3) | | Net cash provided by (used in) investing activities | $26.2 | ($407.3) | | Net cash used in financing activities | ($56.5) | ($0.3) | - Net cash used in operating activities was **$34.7 million** in 2023, an improvement from **$99.3 million** used in 2022, reflecting the net loss adjusted for non-cash items and working capital changes[281](index=281&type=chunk)[282](index=282&type=chunk) - Net cash used in financing activities was **$56.5 million** in 2023, primarily due to **$55.8 million** used for the repurchase of ordinary shares[290](index=290&type=chunk) [E. Critical Accounting Estimates](index=58&type=section&id=E.%20Critical%20Accounting%20Estimates) - Key accounting policies requiring significant management judgment and estimates include revenue recognition, inventory valuation, share-based compensation, and income taxes[294](index=294&type=chunk)[295](index=295&type=chunk) - For revenue recognition, the company allocates the transaction price to multiple performance obligations based on their relative stand-alone selling price (SSP)[299](index=299&type=chunk) - Inventories are valued at the lower of cost or net realizable value, with the company recording inventory write-offs of **$22.0 million** in 2023, up from **$11.4 million** in 2022, due to obsolescence and excess stock[303](index=303&type=chunk)[304](index=304&type=chunk) [ITEM 6. Directors, Senior Management and Employees](index=61&type=section&id=ITEM%206.%20Directors,%20Senior%20Management%20and%20Employees) This section details the company's leadership, compensation, board structure, and global employee base, including executive team members, aggregate compensation, and governance practices as a foreign private issuer [A. Directors and Senior Management](index=61&type=section&id=A.%20Directors%20and%20Senior%20Management) - The executive leadership team includes Ronen Samuel (CEO), Lauri Hanover (CFO), Daniel Gazit (CPO), and Kobi Mann (CTO)[316](index=316&type=chunk) - The Board of Directors is chaired by Yuval Cohen and consists of **nine members**[316](index=316&type=chunk)[323](index=323&type=chunk) [B. Compensation](index=65&type=section&id=B.%20Compensation) - Aggregate compensation for directors and executive officers for the year ended December 31, 2023, was **$4.8 million**, including **$0.4 million** for pension and severance benefits[334](index=334&type=chunk) 2023 Compensation for Top 5 Covered Executives | Name and Principal Position | Base Salary ($) | Benefits & Perquisites ($) | Variable Comp. ($) | Equity-Based Comp. ($) | Total ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Ronen Samuel, CEO | 393,000 | 103,000 | - | 1,254,000 | 1,750,000 | | Kobi Mann, CTO | 227,000 | 69,000 | - | 662,000 | 958,000 | | Chris Govier, President EMEA | 240,000 | 16,000 | 11,000 | 609,000 | 876,000 | | Ilan Elad, President KDAM | 290,000 | 52,000 | 39,000 | 442,000 | 823,000 | | Amir Shaked-Mandel, EVP Corp. Dev. | 210,000 | 55,000 | 17,000 | 478,000 | 760,000 | - The company maintains a 2015 Incentive Compensation Plan for granting equity awards, with **631,675 shares** and **1,674,902 unvested RSUs** outstanding as of December 31, 2023[344](index=344&type=chunk)[345](index=345&type=chunk) [C. Board Practices](index=70&type=section&id=C.%20Board%20Practices) - The Board of Directors consists of **nine members** divided into three staggered classes, each serving a three-year term[359](index=359&type=chunk) - The company has elected an exemption under Israeli Companies Law, allowing it to not appoint external directors, provided it complies with Nasdaq listing rules for board and committee independence[361](index=361&type=chunk) - The Audit Committee consists of three independent directors, with Naama Halevi Davidov as Chairperson, and the Compensation Committee also consists of three independent directors, chaired by Yehoshua (Shuki) Nir[370](index=370&type=chunk)[380](index=380&type=chunk) [D. Employees](index=80&type=section&id=D.%20Employees) Employee Headcount by Area of Activity | Area of Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Service | 151 | 160 | 165 | | Sales and marketing | 208 | 205 | 225 | | Manufacturing and operations | 151 | 179 | 126 | | Research and development | 223 | 239 | 223 | | General and administrative | 140 | 151 | 143 | | **Total** | **873** | **934** | **882** | - As of December 31, 2023, the company had **873 employees**, a decrease from **934** in the prior year, with **486** in Israel, **124** in the U.S., **214** in Europe, and **49** in the Asia Pacific region[411](index=411&type=chunk) [ITEM 7. Major Shareholders and Related Party Transactions](index=81&type=section&id=ITEM%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) This section identifies major shareholders and outlines key related party transactions, including executive compensation and indemnification agreements [A. Major Shareholders](index=81&type=section&id=A.%20Major%20Shareholders) 5% or Greater Shareholders (as of Feb 14, 2024) | Shareholder | Ownership (%) | | :--- | :--- | | Senvest Management, LLC | 9.2% | | Artisan Partners Limited Partnership | 7.8% | | Morgan Stanley | 6.6% | [B. Related Party Transactions](index=83&type=section&id=B.%20Related%20Party%20Transactions) - The company has entered into written employment agreements with all executive officers, which include provisions for notice periods, non-competition, and confidentiality[425](index=425&type=chunk) - Indemnification agreements are in place with all directors and executive officers, providing protection to the fullest extent permitted by Israeli law[427](index=427&type=chunk) - The CEO's compensation package includes a base salary of **NIS 1.46 million**, a target annual bonus of **100% of base salary**, and an annual long-term equity incentive target value of **$2,500,000**, split among TSR-based PSUs, RSUs, and stock options[428](index=428&type=chunk)[430](index=430&type=chunk)[434](index=434&type=chunk) [ITEM 8. Financial Information](index=86&type=section&id=ITEM%208.%20Financial%20Information) This section addresses ongoing securities class action lawsuits and the company's consistent policy of not paying cash dividends, prioritizing reinvestment for growth [A. Legal Proceedings](index=86&type=section&id=A.%20Legal%20Proceedings) - The company is defending against consolidated securities class action lawsuits filed in February 2023, alleging misrepresentations and omissions in public disclosures between February 2021 and July 2022, asserting claims under the Exchange Act and Securities Act[441](index=441&type=chunk)[442](index=442&type=chunk)[443](index=443&type=chunk) - The company believes the lawsuits are without merit and is defending against them vigorously, with no estimate of potential loss available as of the report date[444](index=444&type=chunk) [B. Dividend Distribution Policy](index=87&type=section&id=B.%20Dividend%20Distribution%20Policy) - The company has never declared or paid cash dividends on its ordinary shares and does not anticipate paying any in the foreseeable future[445](index=445&type=chunk) - Kornit intends to retain future earnings to finance operations and expand the business, though it may consider share repurchases depending on market conditions[445](index=445&type=chunk) [ITEM 9. The Offer and Listing](index=88&type=section&id=ITEM%209.%20The%20Offer%20and%20Listing) This section details the listing of Kornit Digital's ordinary shares on the Nasdaq Global Select Market under the ticker symbol "KRNT" since April 2015 - The company's ordinary shares are traded on the Nasdaq Global Select Market under the symbol "KRNT" since **April 2, 2015**[448](index=448&type=chunk) [ITEM 10. Additional Information](index=88&type=section&id=ITEM%2010.%20Additional%20Information) This section outlines material contracts, notably with Amazon, and provides a summary of Israeli and U.S. tax considerations for shareholders [C. Material Contracts](index=88&type=section&id=C.%20Material%20Contracts) - The company has a Master Purchase Agreement with Amazon for the supply of digital printers, ink, and consumables at prices subject to volume[457](index=457&type=chunk) - A warrant was issued to an Amazon affiliate to acquire up to **3,401,028 ordinary shares** at **$59.26 per share**, vesting over a five-year period based on Amazon's payments up to an aggregate of **$400 million**[459](index=459&type=chunk)[460](index=460&type=chunk) - As of December 31, 2023, a total of **1,787,953 shares** under the new Amazon warrant had vested and were issuable[467](index=467&type=chunk) [E. Taxation](index=91&type=section&id=E.%20Taxation) - Non-Israeli resident shareholders are generally exempt from Israeli capital gains tax on the sale of shares, provided certain conditions are met and the sale is not exempt under a tax treaty[473](index=473&type=chunk) - Dividends paid to non-Israeli residents are generally subject to Israeli withholding tax at a rate of **25%** (or **30%** for a Substantial Shareholder), which may be reduced by an applicable tax treaty[477](index=477&type=chunk) - The company believes it was not a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes for the 2023 taxable year, but its status is subject to annual determination[117](index=117&type=chunk)[496](index=496&type=chunk) [ITEM 11. Quantitative and Qualitative Disclosures About Market Risks](index=99&type=section&id=ITEM%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risks) This section details the company's exposure to market risks, primarily foreign currency exchange risk between USD and NIS, and its hedging strategies - The company faces significant foreign currency risk, with approximately **81% of 2023 revenues** in USD and a majority of operating costs in NIS, where exchange rate fluctuations can materially affect results[517](index=517&type=chunk) - A sensitivity analysis for 2023 indicates that a **10% increase** in NIS value against USD would have decreased net income by approximately **$8.5 million**, while a **10% decrease** would have increased it by **$7.0 million**[519](index=519&type=chunk) - To manage currency risk, the company has a foreign currency cash flow hedging program using derivative instruments like forward and option contracts to hedge a portion of its anticipated NIS-denominated expenses[521](index=521&type=chunk)[522](index=522&type=chunk) PART II This part outlines the company's internal controls, disclosure procedures, share repurchase activities, and corporate governance practices, including cybersecurity risk management [ITEM 15. Controls and Procedures](index=101&type=section&id=ITEM%2015.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and internal control over financial reporting as of December 31, 2023, as assessed by management and attested by auditors - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[530](index=530&type=chunk) - Management assessed the internal control over financial reporting and concluded it was effective as of December 31, 2023, based on the COSO 2013 framework[532](index=532&type=chunk) - The independent registered public accounting firm, Kost Forer Gabbay & Kasierer (a member of EY Global), issued an unqualified opinion on the effectiveness of the company's internal control over financial reporting[533](index=533&type=chunk)[577](index=577&type=chunk) [ITEM 16. Corporate Governance and Other Disclosures](index=102&type=section&id=ITEM%2016.%20Corporate%20Governance%20and%20Other%20Disclosures) This section covers corporate governance, including a **$75 million** share repurchase program, adherence to Israeli governance practices as a foreign private issuer, and cybersecurity risk management [16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers](index=103&type=section&id=16E.%20Purchases%20of%20Equity%20Securities%20by%20the%20Issuer%20and%20Affiliated%20Purchasers) - The company has a **$75 million** share repurchase program, which was approved by an Israeli court in December 2022 and subsequently extended[543](index=543&type=chunk) - In 2023, the company repurchased **2,652,051 ordinary shares** for approximately **$55.8 million** (excluding commissions) at an average price of **$22.95 per share**[544](index=544&type=chunk)[547](index=547&type=chunk) - As of December 31, 2023, **$19.2 million** remained available for repurchases under the current board authorization[544](index=544&type=chunk) [16G. Corporate Governance](index=104&type=section&id=16G.%20Corporate%20Governance) - As a foreign private issuer, the company follows certain Israeli corporate governance practices in lieu of Nasdaq rules, including a lower quorum requirement for shareholder meetings (**25% vs. 33.3%**) and allowing director nominations by the board itself[549](index=549&type=chunk)[554](index=554&type=chunk) [16K. Cybersecurity](index=104&type=section&id=16K.%20Cybersecurity) - The company's cybersecurity risk management is integrated into its overall risk management system, with oversight provided by the Audit Committee of the Board of Directors[555](index=555&type=chunk)[560](index=560&type=chunk) - A Chief Information Security Officer (CISO) oversees the implementation of the information security program, supported by a management-level information security committee and a cybersecurity incident team[561](index=561&type=chunk) - The company states that while it has experienced cybersecurity incidents, it is not aware of any material cybersecurity incident during 2023[558](index=558&type=chunk) PART III This part presents the company's audited consolidated financial statements and a comprehensive list of all filed exhibits [ITEM 18. Financial Statements](index=107&type=section&id=ITEM%2018.%20Financial%20Statements) This section presents the company's audited consolidated financial statements for fiscal year 2023, prepared under U.S. GAAP, including key financial statements and notes - The full audited consolidated financial statements for the years ended December 31, 2023, 2022, and 2021, and the related notes, are included in the report starting on page F-1[564](index=564&type=chunk)[573](index=573&type=chunk)[574](index=574&type=chunk) [ITEM 19. Exhibits](index=107&type=section&id=ITEM%2019.%20Exhibits) This section lists all exhibits filed with the annual report, including governance documents, material contracts, and required certifications - A list of all exhibits filed with the annual report is provided, including governance documents, material contracts, and required certifications[565](index=565&type=chunk)

Financial Data and Key Metrics - Q4 2023 revenue was $56 6 million within the guidance range with double-digit year-over-year growth in consumable sales offset by a decline in systems and services sales [43] - Full-year 2023 revenue was $219 8 million compared to $271 5 million in 2022 primarily due to lower system sales [76] - Q4 2023 non-GAAP gross margin improved to 48 6% from 36 4% in the same period last year driven by higher-margin consumables [70] - Full-year 2023 non-GAAP gross margin was 38 4% slightly up from 38 2% in 2022 due to higher consumables volumes and ASPs and growth in services [44] - Q4 2023 adjusted EBITDA margin was 0 3% at the high end of guidance marking an improvement year-over-year and sequentially [59] - Full-year 2023 adjusted EBITDA loss was $30 9 million with a margin of -14% compared to -11 3% in 2022 due to lower revenues [59] - Q1 2024 revenue guidance is $43-48 million with adjusted EBITDA margin expected to be -16% to -26% [3] - The company expects modest revenue growth and adjusted EBITDA profitability for full-year 2024 [75] Business Line Data and Key Metrics - Consumables sales showed double-digit year-over-year growth in Q4 2023 indicating improved system utilization [66] - System sales were weak in Q4 2023 mainly due to the macro environment [38] - Service revenue grew strongly in 2023 and is expected to continue growing in 2024 [38] - The Apollo platform represents a new incremental market in bulk apparel production with strong customer interest and a robust pipeline for 2024 and beyond [78][79] - The company is piloting a new recurring revenue model for the Apollo platform shifting from CapEx to OpEx which is expected to generate around $1 million per system per year [41][15] Market Data and Key Metrics - The direct-to-fabric market represents a significant long-term growth opportunity especially with global brands and retailers moving to sustainable production [20] - The company has expanded into new geographies such as India Latin America and other key textile production hubs [19] - The MAX technology has become the industry standard for quality with strong customer adoption and upgrades [39] - The company is seeing growth in new market segments such as bulk apparel athleisure fashion home decor technical and footwear [19] Company Strategy and Industry Competition - The company is focused on transitioning the market from analog to digital production with innovative solutions like the Apollo platform and MAX technology [57] - Key objectives include strengthening the product portfolio broadening applications diversifying the customer base and optimizing the operating model [63] - The company is leveraging its cash position for organic and inorganic growth opportunities including share repurchases and potential M&A [26] - The recurring revenue model for the Apollo platform is expected to create more predictability and visibility for both the company and its customers [15] Management Commentary on Operating Environment and Future Outlook - The consumer environment remains uncertain impacting customer purchasing appetite and visibility [2] - The company expects a challenging macro environment in 2024 similar to 2023 [2] - Despite macroeconomic headwinds the company is focused on returning to profitability and cash flow generation in 2024 [69] - The company sees strong potential for growth in the direct-to-fabric market and is investing in new technologies and business models to capture this opportunity [20][41] Other Important Information - The company took a $19 1 million restructuring charge in Q4 2023 to align its cost structure with revenue expectations and enable operating leverage [45] - The restructuring plan is expected to save approximately $20 million in operating expenses in 2024 [16] - The company repurchased 2 7 million shares in 2023 spending $55 8 million and plans to continue repurchasing shares in Q1 2024 [46] - The company has a strong cash position with $556 million in cash and marketable securities at the end of Q4 2023 [65] Q&A Session Summary Question: Can you confirm if the beta units for Apollo will be recognized as revenue in Q1? [5] - Answer: Revenue recognition for the Apollo beta units will be split over the years with the recurring revenue model and some revenue will be recognized in Q1 [85] Question: What is the outlook for Apollo's contribution in 2024? [5] - Answer: Apollo is expected to contribute meaningfully in 2024 with more revenue skewed towards the second half of the year [29][103] Question: What is the update on Atlas MAX upgrades? [7] - Answer: The company had a strong year for MAX upgrades in 2023 and expects continued upgrades in 2024 with the introduction of the Atlas MAX plus [7][8] Question: What is the catalyst for unlocking customer spending? [94] - Answer: The recurring revenue model and the need for sustainable production are key catalysts for unlocking customer spending [94][95] Question: What is the outlook for 2024 revenue growth? [97] - Answer: The company expects modest revenue growth in 2024 driven by ink services and systems with higher visibility on ink and services [113] Question: What is the potential for the recurring revenue model in other products? [114] - Answer: The company is starting with the Apollo platform and will consider leveraging the model to other products and segments if successful [114]

Investor Contact: Jared Maymon Global Head of Investor Relations Jared.Maymon@Kornit.com Kornit Digital Reports Fourth Quarter and Full Year 2023 Results Rosh-Ha'Ayin, Israel – February 14, 2024 – Kornit Digital Ltd. ("Kornit" or the "Company") (Nasdaq: KRNT), a worldwide market leader in sustainable, on-demand, digital fashion and textile production technologies, reported today its results for the fourth quarter and full year ended December 31, 2023. "We experienced a healthy peak season, with year-over-ye ...

Earnings Conference Call Supporting Slides November 8, 2023 CEO 2 ©2023 Kornit Digital. All rights reserved. UPDATE ON SITUATION IN ISRAEL 6 • Selling to new customers in key growth regions, including LATAM & APAC ©2023 Kornit Digital. All rights reserved. 5 • System sales improved sequentially as we continued to convert orders from ITMA • Continued to focus on: • Building a good pipeline of existing and new customers ©2023 Kornit Digital. All rights reserved. CONTINUED PROGRESS TOWARDS APPROACHING BREAKEVE ...

Investor Contact: Jared Maymon Global Head of Investor Relations jared.maymon@kornit.com Kornit Digital Reports Third Quarter 2023 Results Rosh-Ha`Ayin, Israel – November 8, 2023 – Kornit Digital Ltd. ("Kornit" or the "Company") (Nasdaq: KRNT), a worldwide market leader in sustainable, on-demand, digital fashion and textile production technologies, reported today its results for the third quarter ended September 30, 2023. "We delivered third quarter revenues within our guidance range, despite a challenging ...

Kornit Digital Ltd. (NASDAQ:KRNT) Q3 2023 Earnings Conference Call November 8, 2023 8:30 AM ET Company Participants Jared Maymon – Global Head-Investor Relations Ronen Samuel – Chief Executive Officer Lauri Hanover – Chief Financial Officer Amir Shaked-Mandel – Executive Vice President-Corporate Development Conference Call Participants Greg Palm – Craig-Hallum Capital Group Brian Drab – William Blair Tavy Rosner – Barclays Erik Woodring – Morgan Stanley Chris Moore – CJS Securities Chris Grenga – Needham O ...

Financial Data and Key Metrics Changes - The company reported second quarter revenues of $56.2 million, aligning with the guidance provided in May, despite lower system sales volumes leading to a decline in gross margin to 36.1% from 38.6% year-over-year [4][8][63] - Adjusted EBITDA loss for Q2 2023 was $10.7 million, an improvement from a loss of $15.7 million in the same period last year, with an adjusted EBITDA margin of negative 19% [64] - The company expects revenues for Q3 2023 to be between $58 million and $62 million, with adjusted EBITDA margins projected to be in the negative 6% to negative 13% range [65] Business Line Data and Key Metrics Changes - Consumable revenue grew at a strong double-digit rate across customer segments, contributing to overall revenue growth despite lower system sales [4][63] - The services business demonstrated exceptional revenue growth during Q2, driven by customer upgrades to MAX technology [44][63] Market Data and Key Metrics Changes - In the Americas, year-over-year growth was attributed to a double-digit increase in consumables across strategic accounts, while EMEA faced a decline in system sales due to financing challenges [63] - The APAC region experienced healthy growth in consumables and services compared to the same period last year, particularly in key textile producing countries like India and China [47] Company Strategy and Development Direction - The company is focusing on diversifying its customer base and entering new markets, with a strong emphasis on launching the Apollo platform and capitalizing on growth opportunities in direct-to-fabric business [5][6] - Kornit aims to achieve breakeven on an adjusted EBITDA basis in Q4 2023 and deliver profitable growth for the full year 2024 [5][64] Management's Comments on Operating Environment and Future Outlook - Management noted that while system sales volumes remain soft due to capital equipment spending challenges, there is a positive trend in consumables and services revenue growth [44][63] - The company anticipates a strong Q3 and Q4 driven by increased engagement with brands and retailers, particularly in the sports and athleisure markets [22][27] Other Important Information - Kornit successfully introduced new technologies at the ITMA trade show, receiving positive feedback and securing a significant number of leads and sales orders [6][61] - The company has repurchased approximately 938,000 shares for an aggregate amount of $21.8 million, reflecting confidence in its financial position [48] Q&A Session Summary Question: Can you discuss the upgrade timing for larger customers going into 2024? - Management indicated that upgrades are expected to continue in Q3, with a strong focus on completing upgrades before Q4, as customers are busy during that period [54][72] Question: How is the relationship with Amaze progressing? - The company is optimistic about the growth potential with Amaze, noting that they are testing the Apollo system and exploring additional opportunities [56][74] Question: What is the outlook for revenue recognition for new products? - Management stated that many deals signed at ITMA will be implemented in early 2024, with a strong pipeline for direct-to-fabric systems [84][86] Question: Can you provide insight into financing alternatives for customers? - The company is exploring third-party financing options to support qualified buyers, which could drive conversions moving forward [63][76]