Kornit Digital Reports First Quarter 2023 Results

• In line with previous guidance, first quarter revenues were $47.8 millions.
• First quarter GAAP loss of 18.9 million dollars; non GAAP loss of 13.4 million dollars
• MAX upgrades drive strong quarter for Services
• Double-digit growth in impressions from strategic customers
• Atlas MAX Poly customers and Direct-to Fabric customers added to the key textile regions
• The ITMA Tradeshow in Milan will feature new solutions and breakthroughs.

ROSH-HA`AYIN, Israel — Kornit Digital Ltd. (“Kornit” or “the Company”), a worldwide market leader in sustainable, on-demand, digital fashionX and textile production technologies, reported today its results for the first quarter ended March 31, 2023.

“Promising indicators emerged during the first quarter in certain parts of our business, despite the persistent macroeconomic pressures,” said Ronen Samuel, Kornit’s Chief Executive Officer. “These indicators included the double-digit year-over-year impressions growth from several of our larger direct-to-garment (DTG) strategic accounts in the customized design market, and the continued adoption of our MAX technology. While capacity utilization is still not optimal, we see immense opportunities unfolding with major demand generating platforms and expect this market to resume growth as overall macro conditions improve.”

Mr. Samuel continued, “With our MAX technology as the cornerstone, we’ve been steadily gaining momentum on our strategy in targeting brands, retailers, and their global fulfillers, all of whom will greatly benefit from Kornit’s sustainable on-demand digital solutions, instead of existing analog production. Atlas MAX Poly had a great quarter, and we continued to consolidate our leading position in direct-to fabric (DTF) production with Presto MAX. The progress made in the first quarter offers additional proof points that our MAX technology is becoming the industry standard and an excellent solution that offers top retail quality output, increased productivity, better cost efficiencies, and new product capabilities and offerings.”

Mr. Samuel concluded, “We are excited to attend the upcoming ITMA tradeshow in Milan, where we will demonstrate how digital production goes mainstream with sustainable on-demand manufacturing at scale. We will demonstrate a variety of cutting-edge DTF/DTG solutions, as well as our highly anticipated Apollo that will revolutionize the markets traditionally served by analogue. These new systems and solutions significantly extend the breadth of print applications and offer levels of automation never before seen in any of the markets we serve.”

First Quarter Results 2023

The total revenue for the first three months of 2023 is $47.8 millions, down from $83.3 millions in the previous period. This was mainly due to lower system revenues.

GAAP gross profits margins for the first quarter 2023 were 27.4%, compared to 40.1% during the same period in the prior-year. On a non GAAP basis, the gross profit margin was 30,2% compared to 41.5% for the prior-year period.

GAAP operating costs for the first quarter 2023 were down 7.7% on $37.2 million, compared to last year’s period. Non-GAAP operating expenses decreased by 8.0%, to $32.4 Million compared with prior year period.

GAAP net losses for the quarter ended March 2023 were $18.9 millions, or (0.38) per basic shares, compared to $5.2 million or (0.10) per basic shares for the quarter ended March 2022.

Non-GAAP loss of $13.4 million for the first three months of 2023, or ($0.27) for each basic share. This compares to a non-GAAP income of $0.00 for each diluted share for the first three months of 2022.

The adjusted EBITDA loss in the first quarter 2023 was $14.7 Million compared to $1.5 million in the first quarter 2022. Adjusted EBITDA Margin for the First Quarter of 2023 is -30.8% as compared to 1.8% for first quarter of 2012.
Second Quarter 2023 Guidance

The Company anticipates that revenues will be between $54 million and $59 million for the second quarter 2023. Adjusted EBITDA margin is expected to range from -19% to 27% of revenue. The guidance for revenue and adjusted EBITDA margin includes the impact of the non-cash expense associated with the fair value of the Company’s warrants.

First Quarter Earnings conference Call Information

The Company will be hosting a conference phone today at 8:45 a.m. The results will be discussed at 3:30 pm ET or 8:30 am Israel time. There will then be a Q&A session with investors.

The live webcast can be accessed via ir.kornit.com. Participants can dial 1-888-886 7786 or 1-416-764 8658 to access the call. Toll-free Israeli numbers are 1 809 468 221 and 1 809 468 228. The confirmation code for the conference is 79530398.

Call 1-844-512-21 (toll free) or 1-412-317-66671 for international to listen to the replay. Enter confirmation code: 79530398. The replay will be available three hours after the conclusion of the live conference call, until 11:59pm ET on May 24, 2023. The call will also be available for replay via the webcast link on Kornit’s Investor Relations website.

To find out more about the bold way Kornit Digital transforms fashion and textiles in the world, visit www.kornit.com.