Financial Data and Key Metrics Changes - First quarter revenues were $46,500,000, within the guidance range of $45,500,000 to $49,500,000 [23][24] - Non-GAAP gross margin reached 45.2%, up from 37.5% year-over-year, attributed to operating efficiencies and a one-time materials recovery effort [25] - Adjusted EBITDA was negative $3,900,000, an improvement from negative $7,800,000 in the same period last year, with an adjusted EBITDA margin of negative 8.4% [26] - Operating cash flow was $5,800,000 compared to $4,000,000 in the same period last year [26] - Cash balance at quarter-end was $513,000,000 [26] Business Line Data and Key Metrics Changes - Product revenues grew year-over-year, primarily due to the expansion of the AIC program [24] - Service revenue declined year-over-year due to fewer upgrades of the Atlas Max, partially offset by upgrades to Max Plus [24] - Annual recurring revenue (ARR) from AIC contracts reached $14,500,000, representing a stable and growing base of recurring revenue [15][16] Market Data and Key Metrics Changes - The apparel industry is experiencing significant disruption, with brands and retailers rethinking supply chains due to trade policy changes and consumer demands for faster delivery and sustainability [7][8] - Kornit reported a record 222 million impressions, up 10% year-over-year, driven by stronger system utilization [17] Company Strategy and Development Direction - Kornit is focusing on the successful adoption and scale-up of the Apollo system to penetrate the mass production market [12] - The company is accelerating the adoption of its all-inclusive click AIC model, which is gaining traction in the market [15] - Kornit aims to capture the mass production space for print runs under 1,000 units, estimated at $4,500,000,000 globally [22] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic conditions have delayed some planned system purchases but emphasized a growing conviction among brands to transition to on-demand mass production [11] - 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 [21] Other Important Information - Kornit completed a $75,000,000 accelerated share repurchase program, repurchasing approximately 2,500,000 shares [27] - The company is actively pursuing partnerships to enhance its global fulfillment network, including collaborations with MAS Acme and Guten [19][20] Q&A Session Summary Question: Discussion on the transition to screen and recent changes in tariffs and trade supply chains - Management highlighted that the fashion and textile market is undergoing significant disruption, with brands moving towards local manufacturing to reduce inventory and markdowns [36] Question: Apollo placement numbers for the year - Management expects to deliver approximately 30 Apollo systems this year, with a strong pipeline despite some delays [43][44] Question: Clarification on ARR and its growth potential - Management confirmed that the ARR reflects the minimum commitment from customers, with expectations for continued growth throughout the year [51][52] Question: Opportunities for profitability while waiting for revenue growth - Management is focused on operational efficiencies and connecting customers with demand generators to drive impression growth, which is crucial for recurring revenue [95][96] Question: Update on the roll-to-roll market opportunity - Management noted growth in the roll-to-roll segment, particularly in footwear and technical markets, with increasing traction and customer interest [88][89]

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]