Kornit Digital Ltd. · NASDAQ:KRNT
Kornit Digital — Q1 2023 Earnings Presentation
22 slides from Kornit Digital's earnings presentation, May 10, 2023
Slide 1: Kornit Digital First Quarter 2023 Earnings Conference Call
KORNIT DIGITAL (NASDAQ: KRNT) First Quarter 2023 Earnings Conference Call Supporting Slides May 10, 2023 ©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 CEO CFO EVP Corp Dev Global Head of IR 2 ©2023 Kornit Digital. All rights reserved.
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 Digital. All rights reserved.
Slide 5: First Quarter - Recap
FIRST QUARTER - RECAP • Total first quarter revenues of $47.8 million, in line with guidance provided in February • As a reminder, revenues include the impact from the fair value of issued warrants • Promising indicators emerged in certain parts of our business, despite macro pressures in operating
Slide 6: Immense Opportunities in Customized Design
IMMENSE OPPORTUNITIES IN CUSTOMIZED DESIGN • Capacity utilization in customized design market still not optimal • Immense opportunities unfolding with large social, digital, entertainment and content online platforms • Platforms seeking to embrace and monetize the power of on-demand digital producti
Slide 7: Targeting Brands and Retailers
TARGETING BRANDS AND RETAILERS • Steady progress on strategy targeting brands, retailers, and their global fulfillment partners looking to restructure supply chains to address: • New product speed to market • Margin expansion • Excess inventory liability • Regulatory enforcement of sustainable texti
Slide 8: Atlas MAX Poly
ATLAS MAX POLY • Opens up massive new global fashion, athleisure, and entertainment apparel markets for Kornit customers • Enables them to offer retail quality sportswear and fanwear • Strong first quarter for Atlas MAX Poly; Mostly with some of our larger strategic customers in North America, EMEA,
Slide 9: Direct-to-Fabric (DTF)
DIRECT-TO-FABRIC (DTF) • Starting to contribute more meaningfully to our business • Penetrating new markets and building a very good funnel in key textile regions of Latin America, Europe, and Asia Pacific • Added several new customers during first quarter • Successfully closed several Presto-to-Pre
Slide 10: Gearing Up for ITMA June 8-14, Milan, Italy
GEARING UP FOR ITMA JUNE 8 – 14 – MILAN, ITALY • Will demonstrate “How Digital Production Goes Mainstream, and showcase, Sustainable On-Demand Manufacturing at Scale” • Officially unveil Apollo, our break-through platform suitable for longer-run production cycles • Expect Apollo to be a game-changer
Slide 11: 2023 - Laser Focused on Three Key Areas
2023 - LASER FOCUSED ON THREE KEY AREAS > Returning to Profitability > Successfully Launching Apollo > Scaling KornitX • Approach breakeven second half • Formal unveiling in June at ITMA • Making good progress with of this year on Adjusted EBITDA • Beta trials expected to begin several demand genera
Slide 12: Financial Highlights
FINANCIAL HIGHLIGHTS Lauri Hanover Chief Financial Officer 12 ©2023 Kornit Digital. All rights reserved.
Slide 13: Revenues
REVENUES • Q1 revenues of $47.8 million in line with the guidance range of $47 million to $52 million provided in February • Systems revenues drove meaningful year-over-year decline, as expected, primarily in Customized Design Market • Consumables revenues were essentially in line with the prior yea
Slide 14: Regional Overview
REGIONAL OVERVIEW • Americas: • Very solid quarter of services growth • Overall systems sales remained challenging due to the macro environment • Expect healthy cadence of customer upgrades throughout the year, which will drive services revenues • Expect positive trends in consumables; Seeing some s
Slide 15: Gross Margins
GROSS MARGINS • Q1’23 Non-GAAP gross margin 30.2% as compared with 41.5% in Q1’22 • Negative year-over-year impact was primarily due to lower systems volumes and mix • Expect gross margin improvement: • Throughout the balance of 2023 given consumables as a percent of sales progressively higher headi
Slide 16: Operating Expenses
OPERATING EXPENSES • Q1 Non-GAAP Operating Expenses: $32.4 million, down from $35.2 million in Q1’22 • The year-over-year decrease of ~8% reflects: • Impact of our previously completed workforce reductions • Cost structure improvements across the board, including prioritizing R&D and Sales and Marke
Slide 17: P&L KPI's
P&L KPI’S Q1 2022 Q1 2023 Non-GAAP Operating Income (Loss) ($0.7) ($18.0) Adjusted EBITDA (Loss) $1.5 ($14.7) Non-GAAP Net Income (Loss) $0.2 ($13.4) Non-GAAP Diluted EPS $0.00 ($0.27) GAAP Net Income (Loss) ($5.2) ($18.9) GAAP Diluted EPS ($0.10) ($0.38) $ in millions, except per share amounts 17 ©
Slide 18: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW • Q1 cash used in operating activities: ~$14.0 million • Receivables increased ~$5.6 million from the fourth quarter • Inventories increased ~$3.3 million from the fourth quarter • Trade payables decreased ~$3.0 million from the fourth quarter • Cash balances, including b
Slide 19: Share Repurchase Program
SHARE REPURCHASE PROGRAM • In December 2022 Kornit received Israeli court approval for a share repurchase program of up to ~$75 million • The court approved share repurchase program covers an initial period of six months • During Q1 ~338 thousand shares were repurchased for ~$6.8 million; Average pr
Slide 20: Q2 2023 Guidance
Q2 2023 GUIDANCE • Revenues: • Expect second quarter revenues to be in range of $54 million to $59 million, net of warrants impact • Adjusted EBITDA Margins: • Expect second quarter Adjusted EBITDA margins in range of -19% to -27% of revenue, net of warrants impact • Expect to turn the corner during
Slide 21: Reconciliation of GAAP Net Income to Adjusted EBITDA
KORNIT DIGITAL LTD. AND ITS SUBSIDIARIES RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA (U.S. dollars in thousands, except share and per share data) Three Months Ended March 31, 2023 2022 (Unaudited) GAAP Revenues $ 47,778 $ 83,293 GAAP Net Loss (18,931) (5,197) Taxes on income 194 91 Financia
Slide 22: TNX
TNX ©2023 Kornit Digital. All rights reserved.