Financial Data and Key Metrics Changes - The company reported revenues of $53.1 million for Q3 2025, reflecting a 5% year-over-year growth [4] - EBITDA margin was approximately 2%, indicating progress towards full-year profitability [4] - Annual recurring revenue (ARR) from the all-inclusive click (AIC) model reached $21.5 million, up $2.6 million sequentially [8][18] - Non-GAAP gross margin for Q3 was 45.8%, down from 50.3% year-over-year, primarily due to inventory-related adjustments and U.S. tariff costs [16] Business Line Data and Key Metrics Changes - Product revenues grew year-over-year, driven by increased consumable sales and growth from the AIC model [15] - Service revenue also increased year-over-year, mainly due to greater upgrade activity [15] - Approximately 80% of Apollo systems now operate under the AIC model, enhancing recurring revenue streams [8] Market Data and Key Metrics Changes - The global screen printing market for blank apparel represents around 14 billion annual impressions, with Kornit targeting to capture approximately 5% of this market by 2030 [5] - In Asia, Kornit customers produced approximately 232 million impressions over the past 12 months, reflecting a 5% growth [9] - The company showcased its digital footwear solution at ITMA Asia, marking a significant step in expanding into adjacent markets [11] Company Strategy and Development Direction - Kornit is transitioning from one-time equipment sales to a recurring usage-based model through the AIC, which is expected to strengthen long-term profitability and customer lifetime value [13][14] - The company aims to expand its addressable market by focusing on footwear and other adjacent categories, with a total addressable market of approximately 1 billion pairs annually in footwear [12] - The strategy includes a deliberate shift towards building a more predictable and sustainable business model, with a focus on recurring revenue [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving sequential growth in revenue, gross margin, and EBITDA in Q4 2025 [14] - For 2026, the company anticipates modest top-line growth in the low single digits, with significant expansion in EBITDA driven by higher utilization and scaling recurring revenues [14][26] - The management highlighted a strong pipeline for both AIC and CapEx deals, indicating better visibility for future growth [44] Other Important Information - The company is focused on managing operating expenses closely, with total non-GAAP operating expenses decreasing by 3.7% year-over-year [16][42] - Kornit is experiencing strong customer adoption of its Apollo systems, with over 40% of impressions produced for Barker Peril [6] - The company is expanding its operations in Asia, having recently introduced the AIC model in the region [9][30] Q&A Session Summary Question: Broader demand environment and inventory levels - Management noted that product and service revenues grew year-over-year, with a focus on expanding the AIC model for future growth [21][22] Question: Gross margin impacts - Management acknowledged headwinds from inventory adjustments and tariffs, with plans for price increases to offset these impacts [23] Question: 2026 growth outlook - Management indicated a conservative view on CapEx but expects low single-digit growth with stronger expansion in EBITDA [24][26] Question: Geographic revenue mix - North America is expected to remain the largest region, but Asia is anticipated to contribute more significantly moving forward [30] Question: Overall business environment in 2026 - Management expressed optimism about the pipeline and visibility for growth, expecting modest top-line growth and significant EBITDA expansion [44]

Kornit Digital (NASDAQ: KRNT) Third Quarter 2025 Earnings Conference Call Supporting Slides November 5, 2025 Kornit Digital. All Rights Reserved. Kornit Digital. All Rights Reserved. On Today's Call Ronen Samuel CEO Lauri Hanover CFO Jared Maymon Investor Relations This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and other U.S. securities laws. Forward-looking statements are characterized by the use of forward-looking terminol ...

Financial Performance - Q2 2025 revenues reached $49.8 million, driven by systems sales and AIC, but below the midpoint of guidance due to consumables and service headwinds[10, 21] - The adjusted EBITDA margin was -2.3%[10] - Non-GAAP gross margin decreased to 46.3% in Q2 2025, compared to 48.6% in Q2 2024, primarily due to a lower portion of consumables revenue in the sales mix[24, 25] - Non-GAAP operating expenses decreased to $26.7 million in Q2 2025 from $28 million in Q2 2024[27] - Cash, deposits, and marketable securities were approximately $489 million at the end of Q2 2025[31] Market Dynamics - Impressions grew 4.7% year-over-year to 222.7 million, with strong double-digit growth from top customers in DTG and R2R[11, 37] - Annual recurring revenue from AIC grew to $18.9 million[10, 39] Future Outlook - The company expects low single-digit growth in H2[15] - Q3 2025 revenues are expected to be in the range of $49 million to $55 million, with an adjusted EBITDA margin between -3% and 3%[33]

Financial Performance - First quarter 2025 revenues reached $46.5 million[12,39] - Adjusted EBITDA margin was -8.4%[12] - The company generated positive cash from operations during the quarter[12] - Non-GAAP gross margin improved to 45.3% in Q1 2025, compared to 37.5% in Q1 2024[44] - The company completed a $75 million accelerated share repurchase program, buying back approximately 2.5 million shares[50] Business Highlights - Annual recurring revenue (ARR) from All-Inclusive Click (AIC) contracts reached $14.5 million[22] - Approximately 80% of Kornit's revenue is now recurring or highly predictable, combining AIC with re-occurring consumables and service revenue[22] - Trailing twelve-month impressions reached a record 222 million, a 10% increase year-over-year[24,25] Future Outlook - The company expects full-year revenue growth, adjusted EBITDA profitability, and positive operating cash flow[32] - Second quarter 2025 revenue is expected to be in the range of $49 million to $55 million[51] - Second quarter 2025 Adjusted EBITDA margin is expected to be in the range of -4% to 4%[52]

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].