Slide 1: Third Quarter 2022 Earnings Conference Call Supporting Slides
KORNIT DIGITAL (NASDAQ: KRNT) Third Quarter 2022 Earnings Conference Call Supporting Slides November 9, 2022 1 © 2022 Kornit Digital. All rights reserved.
Slide 2: On Today's Call
ON TODAY’S CALL Ronen Samuel Lauri Hanover Amir Shaked Mandel Andrew Backman © 2022 Kornit Digital. All rights reserved. CEO Incoming CFO EVP Corp Dev Global Head of IR
Slide 3: 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 4: Business Highlights
BUSINESS HIGHLIGHTS RONEN SAMUEL Chief Executive Officer 4 © 2022 Kornit Digital. All rights reserved.
Slide 5: Third Quarter Results
Third Quarter Results • Total revenues $66.8 million, net of $5.6 million of non-cash warrants impact • Exceeded revenue guidance range provided in August, which assumed zero impact from the fair value of issued warrants • Consumables revenues grew nicely from the second quarter and year-over-year;
Slide 6: Current Operating Environment
Current Operating Environment • Macro-related headwinds (inflation, general consumer sentiment, rising interest rates) continue to impact customers and prospects; • Impacting their projected pace of growth in coming quarters • Longer sale cycle • Increased demand for robust financing options • Overa
Slide 7: Long-term Opportunities Remain Firmly Intact
Long-term Opportunities Remain Firmly Intact • Continue to engage with large fashion brands, retailers, major manufacturers, e-commerce and digital platforms • Focused on improving their operations, lowering inventory levels, and transforming supply chains • Continue to hear need for shorter runs •
Slide 8: Long-term Opportunities Remain Firmly Intact
Long-term Opportunities Remain Firmly Intact • Continue to see interest in recent new product introductions • Pipeline of potential business with existing and new accounts globally • However: • Expect systems revenues to remain challenging in next several quarters • Balanced by healthy and growing c
Slide 9: Adjusting to Current Market Environment
Adjusting to Current Market Environment • Over past several years, built business and cost structure to be profitable at materially higher revenue run rate • In July, took decisive actions in operations, including a reduction in workforce • Taking additional steps to reduce company’s cost structure
Slide 10: © 2022 Kornit Digital. All rights reserved.
© 2022 Kornit Digital. All rights reserved.
Slide 11: Financial Highlights
FINANCIAL HIGHLIGHTS LAURI HANOVER Incoming Chief Financial Officer 11 © 2022 Kornit Digital. All rights reserved.
Slide 12: Third Quarter Revenues
Third Quarter Revenues • $66.8 million, net of $5.6 million of non-cash warrant impact related to a global strategic account • Consumables: Solid demand from key strategic accounts as they head into the peak season • Services: Grew sequentially and year-over-year due in part to a large north-America
Slide 13: Third Quarter Gross Margins
Third Quarter Gross Margins • Non-GAAP Gross Margins, net of a 5-point warrants impact, was 35.5% (compared to 47.8% in Q3’21) • Gross margins were negatively impacted year-over-year due to: • Significantly lower systems revenues on a fixed cost infrastructure • Inventory write-offs for older genera
Slide 14: Third Quarter Operating Expenses
Third Quarter Operating Expenses • Non-GAAP operating expenses were $36.7 million, down ~10% from $40.7 million in Q2’22 • Sequential decline driven by reduced marketing activities and some benefit from cost reduction and other initiatives • Expect Q4’22 operating expenses to be lower as we further
Slide 15: Quarterly P&L KPI
Quarterly P&L KPI Q3 2022 Q3 2021 Non-GAAP Operating Income (Loss) ($13.0) $8.6 Non-GAAP Net Income (Loss) ($10.7) $11.5 Non-GAAP Diluted EPS ($0.21) $0.24 GAAP Net Income (Loss) ($19.0) $3.9 GAAP Diluted (Basic) EPS ($0.38) $0.08 $ in millions, except per share amounts 15 © 2022 Kornit Digital. All
Slide 16: Balance Sheet and Cash Flow
Balance Sheet and Cash Flow • Q3 cash used in operating activities were approximately $5.1 million • Receivables increased approximately $3.2 million from the second quarter • Inventories increased approximately $2.7 million from the second quarter • Trade payables decreased approximately $6.0 milli
Slide 17: $75 Million Share Repurchase Authorization
$75 Million Share Repurchase Authorization • In August, the Board of Directors approved the repurchase of up to $75 million of the Company’s ordinary shares • Share repurchase program is subject to certain requirements under the Israeli Companies Law and the receipt of Israeli court approval • We ha
Slide 18: Q4 2022 Guidance
Q4 2022 Guidance Revenues • Expect fourth quarter revenues to be in the range of $66 million to $70 million • Consistent with outlook previously provided on third quarter earnings call in August • Expect higher proportion of consumables in the sales mix for the fourth quarter Operating Margins • Exp
Slide 19: Q3 2022 Warrants Impact Summary
Q3 2022 Warrants Impact Summary 19 © 2022 Kornit Digital. All rights reserved.
Slide 20: Thank You
THANK YOU 20 © 2022Kornit ©2022 KornitDigital. Digital. All Allrights rightsreserved. reserved.