Slide 1: Fourth Quarter & Full Year 2022 Earnings Conference Call Supporting Slides
KORNIT DIGITAL (NASDAQ: KRNT) Fourth Quarter & Full Year 2022 Earnings Conference Call Supporting Slides February 15, 2023 1 ©2023 Kornit Digital. All rights reserved.
Slide 2: On Today's Call
ON TODAY’S CALL Ronen Samuel Lauri Hanover Amir Shaked Mandel Andrew Backman ©2023 Kornit Digital. All rights reserved. CEO CFO EVP Corp Dev Global Head of IR
Slide 3: Safe Harbor
SAFE HARBOR 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 terminology such as “will,” “expects,” “anticipate
Slide 4: Business Highlights
BUSINESS HIGHLIGHTS RONEN SAMUEL Chief Executive Officer 4 ©2023 Kornit ©2023 KornitDigital. Digital.AllAll rights rights reserved. reserved.
Slide 5: Fourth Quarter – Recap
Fourth Quarter – Recap • Total revenues $63.3 million, net of $4.3 million of non-cash warrants impact • In line with revenue guidance range provided in November, which assumed zero impact from the fair value of issued warrants • Consumables and Services revenues up from the third quarter, year-over
Slide 6: Full Year 2022 – Snapshot
Full Year 2022 – Snapshot • Like the broader global technology environment 2022 was a tough year for all of us • Started the year with strong momentum and growth: • Introduced groundbreaking new products • Closed acquisition of Tesoma • Opened new ink plant • Cemented position of MAX technology as n
Slide 7: 2023 – A Year of Transition and Execution
2023 – A Year of Transition and Execution • Focusing on three key areas to support long-term growth: 1) Returning to Profitability: • Implemented decisive actions to reduce OPEX, improve margins, adjust operations to current market conditions • Should turn corner during 2H’23 and approach breakeven,
Slide 8: Long-Term Growth Drivers Remain Firmly Intact
Long-Term Growth Drivers Remain Firmly Intact • Digital production penetration remains low • Expect demand for DTG systems to resume growth as capacity utilization and market conditions improve • New market opportunities with Apollo, Atlas MAX Poly, DTF, and scaling KornitX • Meaningful system upgra
Slide 9: Vision to Transform Fashion Industry Is Happening
Vision to Transform Fashion Industry Is Happening • Customized design to resume growth and remain a meaningful part of our business • Expect very meaningful growth opportunities in several new markets to really drive and accelerate long-term growth • Mid-size retailers all over the world shifting bu
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS LAURI HANOVER Chief Financial Officer 10 ©2023 Kornit ©2023 KornitDigital. Digital.AllAll rights rights reserved. reserved.
Slide 11: Revenues
Revenues • Q4 revenues of $63.3 million, net of $4.3 million non-cash warrant impact related to a global strategic account • FY22 revenues of $271.5 million, net of $22.5 million non-cash warrant impact related to a global strategic account • Consumables and Services revenues each rose year-over-yea
Slide 12: Regional Overview (4Q22)
Regional Overview (4Q22) • Americas: • Solid Consumables and Services revenue growth; Some customers experienced strong peak season; Others work through excess capacity • Overall System sales remain challenging; Continue to gain traction for DTF solutions in Latin America with another encouraging qu
Slide 13: Gross Margins
Gross Margins • Q4 Non-GAAP Gross Margins, net of 4.1 margin-point warrants impact: 36.4% (as compared with 49.6% in Q4’21) • 2022 Non-GAAP Gross Margins, net of 4.7 margin-point warrants impact: 38.2% (as compared with 48.2% in 2021) • Gross margins negatively impacted year-over-year due to: • Redu
Slide 14: Operating Expenses
Operating Expenses • Q4 Non-GAAP Operating Expenses: $32.9 million, down from $36.7 million in Q3’22, and $38.4 million in Q4’21 • The sequential decrease ~10%; Year-over-year decrease ~14% due to: • Cost structure improvements across the board, including prioritizing R&D and Sales and Marketing ini
Slide 15: P&L KPIs
P&L KPIs Q4 2022 Q4 2021 FY 2022 FY 2021 Non-GAAP Operating Income (Loss) ($9.9) $5.1 ($41.8) $30.3 Adjusted EBITDA (Loss) ($6.1) $6.8 ($30.8) $36.0 Non-GAAP Net Income (Loss) ($6.6) $6.4 ($32.6) $36.1 Non-GAAP Diluted (Basic) EPS ($0.13) $0.13 ($0.65) $0.74 GAAP Net Income (Loss) ($35.4) $1.0 ($79.
Slide 16: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • Q4 cash used in operating activities: ~$39.6 million • Receivables increased ~$3.7 million from the third quarter • Inventories decreased ~$2.8 million from the third quarter • Trade payables decreased ~$9.2 million from the third quarter • Cash balances, including bank
Slide 17: Share Repurchase Program – Update
Share Repurchase Program – Update • August: Board of Directors approved the repurchase of up to $75 million of the Company’s ordinary shares • December: Israeli court approved the Company’s request to authorize a share repurchase program • Believe opportunistically repurchasing shares is in best int
Slide 18: Changes to Guidance Going Forward
Changes to Guidance Going Forward Guidance provided for Revenues and Profitability will be net of warrants impact, starting with the first quarter of 2023 • Historical Guidance Practice: • Provided range for Revenues and Non-GAAP operating margins • Guidance assumed no impact of the fair value of is
Slide 19: Q1 2023 Guidance
Q1 2023 Guidance Revenues: • Expect first quarter revenues to be in range of $47 million to $52 million, net of warrants impact • Reflects typical seasonality in our business • First quarter lowest quarter for higher-margin consumable sales Adjusted EBITDA Margins: • Expect first quarter Adjusted EB
Slide 20: Warrants Impact – 4Q22
Warrants Impact – 4Q22 20 ©2023 Kornit ©2023 KornitDigital. Digital.AllAll rights rights reserved. reserved.
Slide 21: Warrants Impact – FY22
Warrants Impact – FY22 21 ©2023 Kornit ©2023 KornitDigital. Digital.AllAll rights rights reserved. reserved.
Slide 22: Thank You
THANK YOU 22 ©2023 Kornit ©2023 KornitDigital. Digital.AllAll rights rights reserved. reserved.