- Second quarter revenues of $56.2 million, in line with previous guidance
- Second quarter GAAP net loss of $14.3 million; non-GAAP net loss of $7.4 million
- Double-digit year-over-year impressions and consumables growth across all regions
- Successful ITMA tradeshow in Milan, Italy, securing high-quality leads and providing a healthy pipeline for 2024 and beyond
- Company issues third-annual Impact Report highlighting progress on its long-term impact strategy and reaffirming commitment to a more sustainable fashion and textiles industry
ROSH-HA`AYIN, Israel, Aug. 09, 2023 (GLOBE NEWSWIRE) -- Kornit Digital Ltd. (“Kornit” or “the Company”) ( KRNT), a worldwide market leader in sustainable, on-demand, digital fashionX and textile production technologies, reported today its results for the second quarter ended June 30, 2023.
“During the quarter, impressions grew at a double-digit pace year-over-year for the second consecutive quarter, driving a steady improvement in capacity utilization and strong double-digit consumables revenue growth across our customer segments and throughout all our operating regions,” said Ronen Samuel, Kornit’s Chief Executive Officer. “Services revenues again demonstrated exceptional growth, as it has during the past year, with customers upgrading to our new MAX technology. While system sales volumes are expected to remain modest in the near-term due to continued softness in capital equipment spending and lengthening sales cycles, we have taken actions through various initiatives to diversify our customer base, increase operating efficiencies, and build a healthy pipeline for 2024 and beyond.”
Mr. Samuel concluded, “We were pleased with our successful participation in the recent ITMA trade show in Milan, where exceptional customer interest in our innovative solutions generated numerous high-quality leads and sales orders. We remain confident that our strategy, product roadmap, and solid balance sheet position us well to generate meaningful, long-term, profitable growth and continue to expect to approach break-even on an adjusted EBITDA basis for the fourth quarter of this year, and aim to deliver profitable growth for the full year 2024.”
Second Quarter 2023 Results of Operations
- Total revenue for the second quarter of 2023 was $56.2 million compared with $58.1 million in the prior year period, due primarily to lower systems revenues.
- GAAP gross profit margin for the second quarter of 2023 was 33.3% compared with 35.3% in the prior year period. On a non-GAAP basis, gross profit margin was 36.1% compared with 38.6% in the prior year period.
- GAAP operating expenses for the second quarter of 2023 decreased by 12.8% to $39.6 million compared with the prior year period. On a non-GAAP basis, operating expenses decreased by 16.3% to $34.1 million compared with the prior year period.
- GAAP net loss for the second quarter of 2023 was $14.3 million, or ($0.29) per basic share, compared with net loss of $19.5 million, or ($0.39) per basic share, for the second quarter of 2022.
- Non-GAAP net loss for the second quarter of 2023 was $7.4 million, or ($0.15) per basic share, compared with non-GAAP net loss of $15.6 million, or ($0.31) per basic share, for the second quarter of 2022.
- Adjusted EBITDA loss for the second quarter of 2023 was $10.7 million compared with adjusted EBITDA loss of $15.7 million for the second quarter of 2022. Adjusted EBITDA margin for the second quarter of 2023 was -19.1% compared with -27.1% for the second quarter of 2022.
Third Quarter 2023 Guidance
For the third quarter of 2023, the Company expects revenues to be in the range of $58 million to $62 million and adjusted EBITDA margin between -6% to -13% 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.
Second Quarter Earnings Conference Call Information
The Company will host a conference call today at 8:30 a.m. ET, or 3:30 p.m. Israel time, to discuss the results, followed by a question-and-answer session with the investor community.
A live webcast of the call can be accessed at ir.kornit.com. To access the call, participants may dial toll-free at 1-877-407-0792 or 1-201-689-8263. The toll-free Israeli number is 1 809 406 247. The conference confirmation code is 13739895.
To listen to a replay of the conference call, dial toll-free 1-844-512-2921 or 1-412-317-6671 (international) and enter confirmation code 13739895. The telephonic replay will be available approximately three hours after the completion of the live call until 11:59 pm ET on August 23, 2023. The call will also be available for replay via the webcast link on Kornit’s Investor Relations website.
About Kornit Digital
Kornit Digital Ltd. ( KRNT) is a worldwide market leader in sustainable, on-demand, digital fashionx and textile production technologies. The Company is writing the operating system for fashion with end-to-end solutions including digital printing systems, inks, consumables, and an entire global ecosystem that manages workflows and fulfillment. Headquartered in Israel with offices in the USA, Europe, and Asia Pacific, Kornit serves customers in more than one hundred countries and states worldwide. To learn more about how Kornit Digital is boldly transforming the world of fashion and textiles, visit www.kornit.com.
Forward Looking Statements
Certain statements in this press release are “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 terminology such as “will,” “expects,” “anticipates,” “continue,” “believes,” “should,” “intended,” “guidance,” “preliminary,” “future,” “planned,” or other words. These forward-looking statements include, but are not limited to, statements relating to the Company’s objectives, plans and strategies, statements of preliminary or projected results of operations or of financial condition and all statements that address activities, events, or developments that the Company intends, expects, projects, believes or anticipates will or may occur in the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. The Company has based these forward-looking statements on assumptions and assessments made by its management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things: the duration and severity of current adverse macro-economic headwinds being caused by inflationary pressures, rising interest rates, and supply-chain delays, which have been impacting, and may continue to impact, in an adverse manner, the Company’s operations, financial position and cash flows, in part due to the adverse impact on the Company’s customers and suppliers; the Company’s degree of success in developing, introducing and selling new or improved products and product enhancements including specifically the Company’s Poly Pro and Presto products; the extent of the Company’s ability to consummate sales to large accounts with multi-system delivery plans; the degree of the Company’s ability to fill orders for its systems; the extent of the Company’s ability to increase sales of its systems, ink and consumables; the extent of the Company’s ability to leverage its global infrastructure build-out; the development of the market for digital textile printing; the availability of alternative ink; competition; sales concentration; changes to the Company’s relationships with suppliers; the extent of the Company’s success in marketing; and those additional factors referred to under “Risk Factors” in Item 3.D of the Company’s Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on March 30, 2023. Any forward-looking statements in this press release are made as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Discussion Disclosure
The Company presents certain non-GAAP financial measures, in this press release and in the accompanying conference call to discuss the Company’s quarterly results. These non-GAAP financial measures reflect adjustments to corresponding GAAP financial measures in order to exclude the impact of the following: share-based compensation expenses; amortization of intangible assets; acquisition related expenses; restructuring expenses; foreign exchange differences associated with ASC 842; and non-cash deferred tax income.
The Company defines “Adjusted EBITDA” as non-GAAP operating income (loss), which reflects the adjustments described in the preceding paragraph, as further adjusted to exclude depreciation expense.
The purpose of the foregoing non-GAAP financial measures is to convey the Company’s performance exclusive of non-cash charges and other items that are considered by management to be outside of the Company’s core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage, and evaluate the Company’s business and make operating decisions, and the Company believes that they are useful to investors as a consistent and comparable measure of the ongoing performance of the Company’s business. The Company’s non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
The reconciliation tables included below present a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measures.
Investor Contact:
Andrew G. Backman
Global Head of Investor Relations
[email protected]
| KORNIT DIGITAL LTD. | ||||||||
| AND ITS SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (U.S. dollars in thousands) | ||||||||
| June 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 101,322 | $ | 104,597 | ||||
| Short-term bank deposit | 220,098 | 275,033 | ||||||
| Marketable securities | 42,463 | 20,380 | ||||||
| Trade receivables, net | 84,216 | 67,360 | ||||||
| Inventory | 88,209 | 89,415 | ||||||
| Other accounts receivable and prepaid expenses | 22,820 | 22,054 | ||||||
| Total current assets | 559,128 | 578,839 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Marketable securities | 227,798 | 245,970 | ||||||
| Deposits and other long-term assets | 7,805 | 5,927 | ||||||
| Severance pay fund | 279 | 274 | ||||||
| Property, plant and equipment, net | 56,981 | 60,463 | ||||||
| Operating lease right-of-use assets | 29,921 | 27,139 | ||||||
| Intangible assets, net | 8,707 | 9,890 | ||||||
| Goodwill | 29,164 | 29,164 | ||||||
| Total long-term assets | 360,655 | 378,827 | ||||||
| Total assets | 919,783 | 957,666 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | 11,550 | 14,833 | ||||||
| Employees and payroll accruals | 16,307 | 14,255 | ||||||
| Deferred revenues and advances from customers | 2,464 | 5,701 | ||||||
| Operating lease liabilities | 4,753 | 4,989 | ||||||
| Other payables and accrued expenses | 26,570 | 25,592 | ||||||
| Total current liabilities | 61,644 | 65,370 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Accrued severance pay | 1,166 | 1,223 | ||||||
| Operating lease liabilities | 23,041 | 21,035 | ||||||
| Other long-term liabilities | 526 | 1,216 | ||||||
| Total long-term liabilities | 24,733 | 23,474 | ||||||
| SHAREHOLDERS' EQUITY | 833,406 | 868,822 | ||||||
| Total liabilities and shareholders' equity | $ | 919,783 | $ | 957,666 | ||||
| KORNIT DIGITAL LTD. | |||||||||||||||
| AND ITS SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (U.S. dollars in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Revenues | |||||||||||||||
| Products | $ | 40,083 | $ | 47,566 | $ | 71,986 | $ | 120,080 | |||||||
| Services | 16,116 | 10,570 | 31,991 | 21,349 | |||||||||||
| Total revenues | 56,199 | 58,136 | 103,977 | 141,429 | |||||||||||
| Cost of revenues | |||||||||||||||
| Products | 22,620 | 25,667 | 42,999 | 64,904 | |||||||||||
| Services | 14,886 | 11,937 | 29,213 | 22,591 | |||||||||||
| Total cost of revenues | 37,506 | 37,604 | 72,212 | 87,495 | |||||||||||
| Gross profit | 18,693 | 20,532 | 31,765 | 53,934 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development, net | 12,907 | 14,081 | 25,989 | 28,091 | |||||||||||
| Sales and marketing | 18,158 | 21,100 | 33,341 | 37,631 | |||||||||||
| General and administrative | 8,541 | 10,250 | 17,489 | 20,016 | |||||||||||
| Total operating expenses | 39,606 | 45,431 | 76,819 | 85,738 | |||||||||||
| Operating loss | (20,913 | ) | (24,899 | ) | (45,054 | ) | (31,804 | ) | |||||||
| Financial income, net | 7,018 | ||||||||||||||
