Kornit Digital Ltd. · NASDAQ:KRNT
Kornit Digital — Q1 2020 Earnings Presentation
21 slides from Kornit Digital's earnings presentation, 2020
Slide 1: Kornit Digital Q1 2020 Earnings Call – Supporting Slides
KORNIT DIGITAL (NASDAQ: KRNT) Q1 2020 Earnings Call – Supporting Slides 1 | © All rights reserved Kornit Digital 2018
Slide 2: Safe Harbor
SAFE HARBOR This presentation contains forward-looking statements within the meaning of U.S. securities laws. All statements other than statements of historical fact contained in this presentation are forward-looking statements. In some cases, you can identify forward-looking statements by terminolo
Slide 3: Speakers on Today's Call
SPEAKERS ON TODAY’S CALL Ronen Samuel Guy Avidan CEO CFO 3 © 2020 Kornit Digital. All rights reserved.
Slide 4: Our Vision
OUR VISION CREATE A BETTER WORLD WHERE EVERYBODY CAN BOND, DESIGN AND EXPRESS THEIR IDENTITIES, ONE IMPRESSION AT A TIME
Slide 5: Business Highlights
BUSINESS HIGHLIGHTS RONEN SAMUEL CEO 5 | © All rights reserved Kornit Digital 2018
Slide 6: Q1 2020 & Current Update
Q1 2020 & CURRENT UPDATE • Enthusiastic to see global progress on lockdown exit strategies and pick-up in business activity • Acted decisively to ensure safety of our staff, while maintaining business continuity Manufacturing and R&D operated throughout the period (staggered shifts) Service cont
Slide 7: Industry in an Inflection Point
INDUSTRY IN AN INFLECTION POINT • Crisis fundamentally changing behaviors in textile industry, both on demand and supply side • We believe this is an inflection point in the continued adoption of digital production of textile • E-commerce has gone from a growing channel to the only channel of operat
Slide 8: Activity & Business Momentum
ACTIVITY & BUSINESS MOMENTUM • Customer sites are reopening and strategic accounts with big projects have reengaged • Some major orders expected in Q1 2020 have already been received in Q2 2020 • Partners in the online customized design segment, as well as brands/retailers with solid ecommerce on-de
Slide 9: Activity & Business Momentum
ACTIVITY & BUSINESS MOMENTUM • Pleased with early reception of Vulcan Plus, largest system addressing high volumes of short to mid-run production orders Regional account addressing proximity production needs adding second system, as part of a larger investment • Interest in Presto continues to be
Slide 10: Well Positioned
WELL POSITIONED • Pipeline is getting stronger • Leadership position has only strengthened • Irresponsible to provide guidance for second quarter, considering high macro volatility levels: At this point, we expect to do significantly better than consensus revenues estimates, with at least 30% sequ
Slide 11: Q1 2020 Financial Overview
Q1 2020 FINANCIAL OVERVIEW GUY AVIDAN CFO 11| © All rights reserved Kornit Digital 2018
Slide 12: Quarterly Warrants Impact
QUARTERLY WARRANTS IMPACT Q1 20 Q4 19 Q1 19 Net of Warrants Net of Warrants Net of Warrants Warrants Impact Warrant Impact Warrants Impact Impact K$/BPS/EPS s Impact K$/BPS/EPS Impact K$/BPS/EPS Revenues $26,212 $564 $26,776 $48,650 $1,131 $49,781 $38,590 $560 $39,150 Gross Profit $8,661 $9,225 $24,
Slide 13: Q1 2020 Financial Results
Q1 2020 FINANCIAL RESULTS GAAP Non-GAAP YoY YoY Q1 2020 Q1 2019 Q1 2020 Q1 2019 Change Change Total Revenue $26.2 $38.6 ($12.4) $26.2 $38.6 ($12.4) Gross Profit $8.0 $15.7 ($7.7) $8.7 $17.6 ($8.9) Operating Income (Loss) ($13.0) ($1.1) ($11.9) ($10.5) $2.0 ($12.5) Net Income (Loss) ($10.1) ($1.2) ($
Slide 14: Quarterly Revenues
QUARTERLY REVENUES • Revenues of $26.2 million vs. $38.6 million in prior year, decrease of 32.1% YoY and 46.1% QoQ • A global customer accounted for 8.5% of revenues compared to 7.7% in prior year • 10 largest accounts represented 49.0% of revenues compared to 52.9% in prior year Geographic Revenue
Slide 15: Quarterly Gross Margin and Opex
QUARTERLY GROSS MARGIN AND OPEX • Non-GAAP gross margin of 33.0% decreased from 45.5% in Q1 2019 attributed to decline in top line and less favorable product mix • Non-GAAP operating expenses of $19.2 million increased 23.5% year over year Q1 2020 Q1 2019 Research & Development 23.4% 13.5% Sales & M
Slide 16: Quarterly P&L KPI
QUARTERLY P&L KPI Q1 2020 Q1 2019 Non-GAAP Operating Income (Loss) ($10.5) $2.0 Non-GAAP Net Income (Loss) ($8.9) $1.6 Non-GAAP Diluted EPS ($0.22) $0.04 GAAP Net Income (Loss) ($10.1) ($1.2) GAAP Diluted EPS ($0.25) ($0.03) Adjusted EBITDA ($9.2) $3.5 $ In millions except per share amounts 16 © 202
Slide 17: Quarterly Balance Sheet and Cash Flow
QUARTERLY BALANCE SHEET AND CASH FLOW Balance Sheet Cash From Operating Activities 0.4 Q1 2020 Q4 2019 Q1 2019 Cash, Bank Deposits and MK Securities $247.5 $263.7 $124.3 (3.7) Trade Recievables $32.8 $40.5 $26.0 Inventory $46.6 $37.5 $34.9 Trade Payables $23.0 $23.4 $19.3 Net Working Capital $209.0
Slide 18: Warrants Impact and Vesting
WARRANTS IMPACT AND VESTING Warrants Impact * 20.00 18.00 16.00 14.60 15.16 13.46 14.00 12.00 11.04 9.50 10.06 10.00 8.12 8.00 6.46 6.00 4.38 4.53 4.93 4.97 2.03 2.97 4.00 2.03 2.43 1.41 1.49 1.66 1.39 1.13 2.00 0.94 0.39 0.56 0.97 0.56 0.15 0.04 - Warrants $M Accumulative $M Warrants Vesting ** 1.8
Slide 19: Amazon Warrants Agreement
AMAZON WARRANTS AGREEMENT • 2,932,176 warrants to purchase ordinary shares of the Company at an exercise price of $13.04 were issued to Amazon as a customer incentive. The warrants are subject to vesting as a function of payments for purchased products and services of up to $150 million beginning on
Slide 20: Our Vision
OUR VISION CREATE A BETTER WORLD WHERE EVERYBODY CAN BOND, DESIGN AND EXPRESS THEIR IDENTITIES, ONE IMPRESSION AT A TIME 20| © All rights reserved Kornit Digital 2018
Slide 21: Warrants Impact Change in ASU 2019-08
WARRANTS IMPACT CHANGE IN ASU 2019-08 Q1 2019 Q2 2019 Q3 2019 Q4 2019 2019 GAAP prior to adoptation of ASU 2019-08 38,161 43,890 44,581 48,649 175,281 Warrants impact prior to adoptation of ASU 2019-08 989 2,416 5,143 1,130 9,678 Warrants impact % 2.5% 5.2% 10.3% 2.3% 5.2% Warrants impact after adop