Slide 1: Kornit Digital First Quarter 2022 Earnings Conference Call Supporting Slides
KORNIT DIGITAL (NASDAQ: KRNT) First Quarter 2022 Earnings Conference Call Supporting Slides May 11, 2022 1 ©2022 Kornit Digital. All rights reserved.
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: On Today's Call
ON TODAY’S CALL Ronen Samuel Alon Rozner Amir Shaked Mandel Andrew Backman CEO CFO EVP Corp Dev Global Head of IR 3 2022 Kornit ©2022 © Kornit Digital. Digital. All All rights rights reserved.
Slide 4: Business Highlights
BUSINESS HIGHLIGHTS RONEN SAMUEL Chief Executive Officer 4 2022 Kornit ©2022 © Kornit Digital. Digital. All All rights rights reserved.
Slide 5: A Good Start to the Year
A GOOD START TO THE YEAR • Total revenues grew by 26% year-over-year • $83.3 million, net of $8.0 million in warrants related to our global strategic account • Strong systems revenue growth; Very high contribution to overall revenue mix • Diversification across business within Top 10 customers 5 © 2
Slide 6: Our Business and Products
OUR BUSINESS AND • Record quarter in Asia Pacific PRODUCTS • Strong quarter for EMEA and Americas • Progress with major brands, including one of the largest retailers in the world • Excellent adoption and feedback for Atlas Max Initial stages of the Atlas-to-Atlas-MAX upgrades • Automation upgrades
Slide 7: Exceptional Quarter for Presto
EXCEPTIONAL QUARTER FOR PRESTO • Excitement and momentum around the Presto MAX • Presto MAX represents majority of DTF pipeline • Increasing backlog for Presto MAX upgrades 7 © 2022 Kornit Digital. All rights reserved.
Slide 8: KornitX
KORNITX • Very good progress with KornitX • Engagements with some of the largest digital platforms, marketplaces, and brands in the world • Launching new strategic partnership with Wix.com • Enables massive community to seamlessly add on- demand fulfillment services • Expect to go-live later this qu
Slide 9: Exciting Year of Ground-Breaking New Product Introductions
EXCITING YEAR OF GROUND-BREAKING APRIL NEW PRODUCT INTRODUCTIONS Kornit Apollo • Most comprehensive digital single-step system targeting screen-print mass production markets • Perfect solution for nearshore mid-runs mass production • Best-in-class MAX quality – lowest total cost of ownership Atlas M
Slide 10: Remarkable Position to Cater to Evolving Market Opportunities and Trends
REMARKABLE POSITION TO CATER TO EVOLVING MARKET OPPORTUNITIES AND TRENDS • Industry tailwinds driving accelerated adoption of on-demand production solutions • Brands and retailers shifting traditionally mass-produced offshore jobs to nearshore / onshore short-run production B2C ONSHORE (same country
Slide 11: Growing Tailwinds and Started the Year Strong; Not Immune to Macro Headwinds
GROWING TAILWINDS AND STARTED THE YEAR STRONG; NOT IMMUNE TO THE MACRO HEADWINDS • Started this year with a robust backlog and pipeline • As quarter progressed, began to see macro-economic volatility weigh on pace of consumables purchasing and capital allocation decisions of certain customers, impac
Slide 12: Remain Excited About 2022 Growth Plan
REMAIN EXCITED ABOUT 2022 GROWTH PLAN • Kornit is well positioned, with tremendous market opportunities and strong fundamentals; 2022 is a year of exciting new product introductions • We remain excited with our growth plan for the full year and continue to expect the second half of this year to be m
Slide 13: Will Demonstrate How Virtual and Physical Fashion Worlds Intersect
MAY WILL DEMONSTRATE HOW VIRTUAL AND PHYSICAL FASHION WORLDS INTERSECT 13 2022 Kornit ©2022 © Kornit Digital. Digital. All All rights rights reserved.
Slide 14: Remain Focused on Building the Operating System for On-Demand Fashion
REMAIN FOCUSED ON BUILDING THE OPERATING SYSTEM FOR ON-DEMAND FASHION • Laser focused on executing across the board to capture the massive opportunities we see • Expect to deliver $125M run-rate business we originally targeted for 4Q 2023 ahead of plan • Remain confident in our journey to become a $
Slide 15: Financial Highlights
FINANCIAL HIGHLIGHTS ALON ROZNER Chief Financial Officer 15 2022 Kornit ©2022 © Kornit Digital. Digital. All All rights rights reserved.
Slide 16: Quarterly Revenues
QUARTERLY REVENUES • Q1 revenues of $83.3 million, net of $8.0 million non-cash warrant impact; +26% YoY • Services revenues increased 32% YoY to $10.8 million and were 13% of total revenue • Top 10 largest accounts represented 53% of total revenues • Asia Pacific had another record quarter; EMEA de
Slide 17: Gross Margins
GROSS MARGINS • Q122 Non-GAAP Gross Margins, net of the impact of the warrants was 41.5% • Higher mix of systems sales, including sales to our largest global strategic account • Higher DTF sales in both EMEA and Asia Pacific • Lower consumables as a percentage of revenues • Moved to mass production
Slide 18: Macro-Economic Issues and Supply Chain
MACRO-ECONOMIC ISSUES AND SUPPLY CHAIN • We, like our customers, are not immune to overall macro-economic pressures and near- term volatility • Working hard to proactively address and mitigate impacts on our business where possible, including • Focused cost reduction projects • Continued supply chai
Slide 19: OPEX
OPEX • Continue to invest to capture meaningful opportunities in order to generate long-term acceleration in revenues • R&D increased due to continued investments in new product introductions and KornitX Non GAAP Operating Expenses (% of Revenues) • Sales and Marketing expenses increased due to the
Slide 20: Quarterly P&L KPI
QUARTERLY P&L KPI Q1 2022 Q1 2021 Non-GAAP Operating Income (Loss) ($0.7) $6.5 Non-GAAP Net Income (Loss) $0.2 $7.7 Non-GAAP Diluted EPS $0.00 $0.16 GAAP Net Income (Loss) ($5.2) $5.1 GAAP Diluted (Basic) EPS ($0.10) $0.11 Adjusted EBITDA $9.5 $10.8 $ in millions except per share amounts 20 © 2022 K
Slide 21: Balance Sheet
BALANCE SHEET • Receivables increase due to timing of sales later in the first quarter • No collection issues; Anticipate cash collections to improve over the next several quarters • Used balance sheet to secure supply chain; Advance payments for key go-to-market programs Q1 2022 Q4 2021 Q1 2021 Cas
Slide 22: Q2 2022 Guidance
Q2 2022 GUIDANCE Revenues • Expect second quarter revenues to be in the range of $85 million and $95 million • Expect revenues in 3Q22 and 4Q22 to be stronger than 2Q22 Operating Profitability • Expect Non-GAAP operating profitability in 2Q22 to be lower than 1Q22 due to continued investments in the
Slide 23: Q1 2022 Warrants Impact
Q1 2022 WARRANTS IMPACT Three Months Ended March 31, 2022 2021 Net of Net of Warrants Warrants Warrants Warrants Impact Impact Impact Impact Revenue $83.3M $8.0M $66.1M $3.1M Non-GAAP Gross 41.5% 5.1% 47.1% 2.4% Margin Non-GAAP Operating (0.8%) 8.8% 9.8% 4.1% Margin Non-GAAP Net Margin 0.2% 8.8% 11.
Slide 24: Thank You Q&A
THANK YOU Q&A 24 ©2022 Kornit ©2021 ©2022 Kornit Digital. Digital. All All rights rights reserved. reserved.