Kornit Digital Ltd. · NASDAQ:KRNT
Kornit Digital — Q3 2023 Earnings Presentation
20 slides from Kornit Digital's earnings presentation, Nov 8, 2023
Slide 1: Kornit Digital Third Quarter 2023 Earnings Conference Call Supporting Slides
KORNIT DIGITAL (NASDAQ: KRNT) Third Quarter 2023 Earnings Conference Call Supporting Slides November 8, 2023 ©2023 Kornit Digital. All rights reserved.
Slide 2: On Today's Call
ON TODAY’S CALL Ronen Samuel Lauri Hanover Amir Shaked Mandel Jared Maymon 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: Update on Situation in Israel
UPDATE ON SITUATION IN ISRAEL • Committed to the safety, security, and wellbeing of our teams in Israel • Emphasized to customers our commitment to continuity and to expect no disruption in interactions with us • As of today, the situation in Israel has not materially impacted our business • Strateg
Slide 6: Third Quarter - Recap
THIRD QUARTER - RECAP • Total third quarter revenues of $59.2 million, within guidance range provided in August • As a reminder, revenues include the impact from the fair value of issued warrants • We continued to see consumables sales growth • Impressions also increased year-over-year, marking our
Slide 7: Business Dynamics & Trends
BUSINESS DYNAMICS & TRENDS • Continued to focus on: • Diversifying customer base • Selling to new customers in key growth regions, including LATAM & APAC • Accelerating growth into market segments like screen replacement and retail • Encouraged to see new key customers leverage our technology in eme
Slide 8: Apollo Update
APOLLO UPDATE • Our initial beta systems were installed and operational • Feedback we have received from customers is highly encouraging • We have seen strong indications on the system’s uptime, yield, and unit economics • As of today, we have 3 systems installed in North America • Expect these syst
Slide 9: Continued Progress Towards Approaching Breakeven
CONTINUED PROGRESS TOWARDS APPROACHING BREAKEVEN • In Q3, we saw a continuation of macroeconomic headwinds, despite this we were able to: • Further diversify our customer base • Expand into key textile producing regions • Pursue growth opportunities in new applications • Continue to take proactive m
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS Lauri Hanover Chief Financial Officer 10 ©2023 Kornit Digital. All rights reserved.
Slide 11: Revenues
REVENUES • Q3 2023 revenues of $59.2 million in line with the guidance range of $58 million to $62 million provided in August • Consumables revenues grew both year-over-year and sequentially • Services revenue declined slightly year-over-year • System sales drove the year-over-year decline in total
Slide 12: Regional Overview
REGIONAL OVERVIEW • Americas: • Growth was driven by strong system sales in Latin America following ITMA • EMEA: • Consumables revenue grew as utilization rose, and upgrades to MAX continued • Asia Pacific: • Revenues were flat compared to the same period last year • Continue to develop a meaningful
Slide 13: Gross Margin
GROSS MARGIN • Q3 2023 Non-GAAP gross margin of 37.4% compared with 35.5% in Q3 2022 and 36.1% in Q2 2023 • Improvement due primarily to higher-margin consumables representing a greater portion of total revenues • Expect improvement in the fourth quarter as consumables comprise the highest percentag
Slide 14: Operating Expenses
OPERATING EXPENSES • Q3 2023 Non-GAAP Operating Expenses: $31.1 million, down from $36.7 million in Q3 2022 • The year-over-year decrease of ~15% primarily reflects: • Savings realized from our previously completed workforce reductions • Reduced marketing spend Non-GAAP Operating Expenses $ in milli
Slide 15: P&L KPI's
P&L KPI’S Q3 2023 Q3 2022 Non-GAAP Operating Loss ($9.0) ($13.0) Adjusted EBITDA Loss ($5.6) ($10.5) Non-GAAP Net Loss ($3.4) ($10.7) Non-GAAP EPS ($0.07) ($0.21) GAAP Net Loss ($8.2) ($19.0) GAAP EPS ($0.17) ($0.38) $ in millions, except per share amounts 15 ©2023 Kornit Digital. All rights reserve
Slide 16: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW • Cash balances, including bank deposits and marketable securities, ~$569 million at quarter end • Q3 2023 cash used in operating activities: ~$7.7 million • Receivables increased ~$8.9 million from Q2 2023 • Inventories decreased ~$5.1 million from Q2 2023 • Trade payabl
Slide 17: Share Repurchase Program Update
SHARE REPURCHASE PROGRAM UPDATE • Repurchased a total of ~1.6 million shares for ~$36.8 million since the beginning of 2023 • Average price of ~$22.97 per share • Unused balance of our previously announced share repurchase program is ~$38 million • Plan to be more aggressive in repurchasing efforts
Slide 18: Fourth Quarter 2023 Guidance
FOURTH QUARTER 2023 GUIDANCE • Revenues: • Expect fourth quarter revenues to be in range of $55 million to $60 million, net of warrants impact • Adjusted EBITDA Margins: • Expect fourth quarter adjusted EBITDA margin in range of negative 6% to 0% of revenue, net of warrants impact 18 ©2023 Kornit Di
Slide 19: 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 Nine Months Ended September 30, September 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) GAAP Revenues $ 59,224 $ 66,791 $ 16
Slide 20: TNX
TNX ©2023 Kornit Digital. All rights reserved.