Kornit Digital Ltd. · NASDAQ:KRNT
Kornit Digital — Q2 2023 Earnings Presentation
21 slides from Kornit Digital's earnings presentation, Aug 9, 2023
Slide 1: Kornit Digital Second Quarter 2023 Earnings Conference Call
KORNIT DIGITAL (NASDAQ: KRNT) Second Quarter 2023 Earnings Conference Call Supporting Slides August 9, 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: Second Quarter - Recap
SECOND QUARTER - RECAP • Total second quarter revenues of $56.2 million, in line with guidance provided in May • As a reminder, revenues include the impact from the fair value of issued warrants • Impressions grew at a double-digit pace year-over-year for the second consecutive quarter; steady impro
Slide 6: Second Quarter - Recap (Cont)
SECOND QUARTER – RECAP (CONT) • Strong quarter of services growth due in-part to our MAX upgrades • Anticipate additional MAX upgrade orders in 2H23 and throughout 2024 • System sales volumes remained soft on continued challenges in capital equipment spending • Customized design customers continue t
Slide 7: Making Progress on Strategic Actions
MAKING PROGRESS ON STRATEGIC ACTIONS • Implemented strategic measures to attract new customers including brands, retailers, and digital platforms • Targeting new growth regions within key textile production hubs to establish a healthy pipeline for 2024 and beyond • Taken various actions to increase
Slide 8: Highly Successful ITMA - Milan, Italy
HIGHLY SUCCESSFUL ITMA – MILAN, ITALY • Very high customer engagements, with new customers from key textile regions such as India, China, Turkey, Morocco, and LATAM (Argentina, Brazil, and Mexico) • Met with hundreds of customers and prospects, very favorable feedback on our portfolio • Secured a hi
Slide 9: Apollo Debuts at ITMA
APOLLO DEBUTS AT ITMA • Successfully unveiled Apollo, with significantly positive feedback and receptivity for new high-throughput system • Secured several new orders; expect to recognize revenues 1Q24 • Focused on building substantial backlog for full year 2024 • Installed first Apollo beta system
Slide 10: First Half 2023 Progress
FIRST HALF 2023 PROGRESS • Built a solid foundation for future growth • Long-term growth drivers remain firmly intact; strategy and vision reinforced at ITMA • Successful introduction of new technologies and solutions • MAX platform well received by the market, becoming the new standard • Kornit's q
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS Lauri Hanover Chief Financial Officer 11 ©2023 Kornit Digital. All rights reserved.
Slide 12: Revenues
REVENUES • 2Q23 revenues of $56.2 million in line with the guidance range of $54 million to $59 million provided in May • Both consumables and services revenues grew strong double-digits year-over-year • Lower system sales drove the year-over-year decline in total revenues 12 ©2023 Kornit Digital. A
Slide 13: Regional Overview
REGIONAL OVERVIEW • Americas: • Growth attributable to a double-digit increase in consumables revenue across strategic accounts • Strong quarter of services growth contribution due mainly to MAX upgrades • EMEA: • Consumables revenue growth robust due to a larger installed base and increased usage •
Slide 14: Gross Margins
GROSS MARGINS • 2Q23 Non-GAAP gross margin 36.1% compared with 38.6% in 2Q22 and 30.2% in 1Q23 • Lower system sales volumes drove the year-over-year decline • Higher-margin consumables grew nicely • Profitability of services meaningfully improved • Expect gross margin improvement through the balance
Slide 15: Operating Expenses
OPERATING EXPENSES • 2Q23 Non-GAAP Operating Expenses: $34.1 million, down from $40.7 million in 2Q22 • The year-over-year decrease of ~16% reflects: • Impact of our previously completed workforce reductions • Lower marketing spend Non-GAAP Operating Expenses $ in millions Q2 2023 Q2 2022 Research &
Slide 16: P&L KPI's
P&L KPI’S Q2 2023 Q2 2022 Non-GAAP Operating Loss ($13.8) ($18.3) Adjusted EBITDA Loss ($10.7) ($15.7) Non-GAAP Net Loss ($7.4) ($15.6) Non-GAAP Diluted EPS ($0.15) ($0.31) GAAP Net Loss ($14.3) ($19.5) GAAP Diluted EPS ($0.29) ($0.39) $ in millions, except per share amounts 16 ©2023 Kornit Digital.
Slide 17: Balance Sheet and Cash Flow
BALANCE SHEET AND CASH FLOW • Cash balances, including bank deposits and marketable securities, ~$592 million at quarter end • 2Q23 cash used in operating activities: ~$15.5 million • Receivables increased ~$11.2 million from 1Q23 • Inventories decreased ~$4.5 million from 1Q23 • Trade payables decr
Slide 18: Share Repurchase Program Update
SHARE REPURCHASE PROGRAM UPDATE • Repurchased ~938 thousand shares for ~$21.8 million at an average price of ~$23.20 per share since the beginning of 2023 • Initial court approved period for share repurchases of up to $75 million expired June 15th • Applied for and received new approval from Israeli
Slide 19: Third Quarter 2023 Guidance
THIRD QUARTER 2023 GUIDANCE • Revenues: • Expect third quarter revenues to be in range of $58 million to $62 million, net of warrants impact • Adjusted EBITDA Margins: • Expect third quarter Adjusted EBITDA margins in range of -6% to -13% of revenue, net of warrants impact • Currently expect to appr
Slide 20: 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 Six Months Ended June 30, June 30, 2023 2022 2023 2022 (Unaudited) (Unaudited) GAAP Revenues $ 56,199 $ 58,136 $ 103,977 $ 141
Slide 21: Thank You
TNX ©2023 Kornit Digital. All rights reserved.