Slide 1: Fourth Quarter & Full Year 2023 Earnings Conference Call
Kornit Digital (NASDAQ: KRNT) Fourth Quarter& Full Year 2023 Earnings ConferenceCall Supporting Slides February 14, 2024 Kornit Digital. All Rights Reserved.
Slide 2: On Today's Call
On Today’s Call Jared Maymon Ronen Samuel Lauri Hanover Global Head of CEO CFO Kornit Digital. All Rights Reserved. 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 Kornit Digital. All Rights Reserved.
Slide 5: 2023 Recap – A transformational year
2023 Recap – A transformational year Significant Changes in Our Industry ― Rising cost of capital and shifting consumer preferences ― Industry-wide bloat in inventory and need to improve time to market ― Increased need for sustainable production methods ― Industry shifting focus towards fixing opera
Slide 6: 2023 Recap – A Transformational Year
2023 Recap – ATransformational Year Our 2023 Focus Areas which Prepared us for the Next Phase of Long-term Growth ―Strengthening product portfolio ―Broadening applications we serve ―Diversifying our customer base ―Successfully launching Apollo platform ―Expanding direct-to-fabric business ―Optimizin
Slide 7: 2023 Recap – A Transformational Year
2023 Recap – A Transformational Year ― We brought a wide range of leading solutions at ITMA 2023 after years of major R&D ― Cemented our MAX technology as the new industry standard for quality ― Introduced the Apollo platform for bulk production ― Enhancements to direct-to-fabric products with unpre
Slide 8: 2023 Recap – A Transformational Year
2023 Recap – A Transformational Year ― Product portfolio providing opportunity to penetrate new market segments ― Examples include bulk apparel, athleisure, fashion, home décor, technical, and footwear ― Diversifying in terms of new geographies, such as India, Latin America, and other key textile pr
Slide 9: 2023 Recap – Apollo Printer
2023 Recap – A Transformational Year Kornit APOLLO Printer ― Successfully installed three Apollo beta systems for the peak season ― Delivered on bringing digital production to mainstream with Apollo launch in January ― Feedback from industry leaders on the Apollo has been outstanding ― Apollo pushin
Slide 10: 2023 Recap – A Transformational Year
2023 Recap – A Transformational Year ― New inks unveiled at ITMA and MAX technology creates best-in- class solution ― This market is going through transition to just-in-time sustainable production ― Direct-to-fabric market represents a significant long-term growth opportunity ― Especially as global
Slide 11: 2023 Recap – A Transformational Year
2023 Recap – A Transformational Year ― Achieved breakeven on adjusted EBITDA despite a more challenging macro environment ― Key factor was consistently strong growth in consumables throughout 2023 ― Improvement in impressions and consumables indicates continued digestion of capacity ― We have, and c
Slide 12: Fourth Quarter 2023 Recap
Fourth Quarter 2023 Recap ― Fourth quarter revenues of $56.6 million, within the guidance range provided in November ― Fourth quarter adjusted EBITDA margin of 0.3%, at high-end of the guidance range ― As a reminder, this includes the impact of the fair value of issued warrants ― Despite persistent
Slide 13: Recurring-based Revenue Model for the Apollo
Recurring-based Revenue Model for theApollo ― Releasing Apollo gives us an opportunity to pilot new models for some customers ― Introducing recurring-based revenue model; shifts capex to opex for some customers ― Sets minimum levels of production and reduces barriers to entry ― Provides more predict
Slide 14: Concluding Remarks
Concluding Remarks ― Further penetration of mainstream bulk production ― Expansion of our direct-to-fabric business ― Engagement with key demand generators, including brands and digital platforms ― Widening range of addressable applications ― Growing opportunities in key textile producing regions ―
Slide 15: Kornit Strong – Concluding Remarks (continued)
Concluding Remarks(continued) KORNIT STRONG ― As you all know, Israel faced a horrific barbaric attack in the second half of 2023 ― While some of our people were impacted, we have been resilient ― We continued to fully support our customers throughout their most important time of year ― Continue to
Slide 16: Financial Highlights
Financial Highlights Kornit Digital. All Rights Reserved.
Slide 17: Revenues
Revenues • Q4 2023 revenues of $56.6 million within the guidance range of $55-$60 million • Experienced double-digit growth in consumables sales in Q4 2023 • More than offset by year-over-year declines in systems and services sales, as expected • FY23 revenues declined to $219.8 million due to signi
Slide 18: Gross Margins
Gross Margins • Q4 2023 non-GAAP gross margin of 48.6% compared to 36.4% in Q4 2022 • Improvement attributed to high-margin consumables comprising lion’s share of revenues • FY23 non-GAAP gross margin of 38.4% increased slightly from 38.2% in 2022 • Driven by higher volumes and ASPs from consumables
Slide 19: Operating Expenses
Operating Expenses • Q4 2023 Non-GAAP Operating Expenses: $30.1 million, down from $32.9 million in Q4 2022 • FY23 Non-GAAP Operating Expenses: $127.7 million, down from $145.6 million in FY22 • Continued year-over-year reduction in expenses reflects ongoing cost-savings initiatives Non-GAAP Operati
Slide 20: Advancing Our Cost Savings Initiatives
Advancing Our Cost Savings Initiatives • Took decisive actions to advance cost-savings initiatives • Resulted in $19.1 million restructuring charge in Q4 2023 • Supports strategy to align cost structure with our revenue expectations • Enable operating leverage as we return to growth • Included reduc
Slide 21: P&L KPI's
P&L KPI’s Q4 2023 Q4 2022 FY 2023 FY 2022 Non-GAAP Operating Loss ($2.6) ($9.9) ($43.3) ($41.8) Adjusted EBITDA (Loss) $0.2 ($6.1) ($30.9) ($30.8) Non-GAAP Net Income (Loss) $3.8 ($6.6) ($20.4) ($32.6) Non-GAAP Basic/Diluted EPS $0.08 ($0.13) ($0.42) ($0.66) GAAP Net Loss ($22.9) ($35.4) ($64.4) ($7
Slide 22: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow • At quarter end, cash, including bank deposits and marketable securities, was ~$556 million • Q4 2023 cash generated from operating activities: ~$2.6 million • Accounts receivable increased ~$0.5 million from Q3 2023 • Inventories decreased ~$15.4 million from Q3 2023 • Tr
Slide 23: Share Repurchase Program
Share Repurchase Program • Repurchased ~2.7 million shares for a total of $55.8 million during FY23 • Average price paid per share net of fees was $21.03 • On January 17 our second court approved share repurchase authorization expired • Obtained Israeli court approval for a new six-month period exte
Slide 24: Operating Environment
Operating Environment • Consumer environment remains uncertain • Impacts our customer's purchasing appetite and thus our visibility for systems sales • Continue to face challenging macroeconomic environment in 2024, similar to 2023 • We will work proactively with our customers and prospects • Contin
Slide 25: First Quarter 2024 Guidance
First Quarter 2024Guidance • Q1 2024 Revenues: • Expected to be in the range of $43 million to $48 million • Q1 2024 Adjusted EBITDA margin: • Expected to be in the range of negative 16% to negative 26% of revenue • Guidance for revenues and adjusted EBITDA margin is net of the warrants impact Korni
Slide 26: Kornit Digital. All Rights Reserved.
Kornit Digital. All Rights Reserved.
Slide 27: Thank You!
Thank You! Kornit Digital. All Rights Reserved.