Kornit Digital Reports Third Quarter 2024 Results
Third quarter revenues of $50.7 million, in line with previous guidance
Third quarter GAAP net loss of $0.9 million; non-GAAP net income of $5.5 million
Continued positive cash generation from operations
Significant year-over-year improvement in non-GAAP gross margin and return to adjusted EBITDA profitability
Industry-leading platforms, Apollo and Atlas MAX, continue to gain adoption among screen-replacement customers, driven by the new AIC model
ROSH-HA`AYIN, Israel, Nov. 06, 2024 (GLOBE NEWSWIRE) -- Kornit Digital Ltd. ("Kornit" or the "Company") (NASDAQ:KRNT), a global leader in sustainable, on-demand, digital fashion and textile production technologies, today reported results for the third quarter ended September 30, 2024.
"I am very pleased with the operational progress we achieved this quarter. We delivered gross margin expansion, returned to adjusted EBITDA profitability, and maintained positive cash generation as planned," said Ronen Samuel, Kornit's Chief Executive Officer.
He continued, "Our unsurpassed Apollo and MAX-powered products combined with our revamped go-to-market and our All-Inclusive-Click model are already expanding our serviceable market. This quarter we announced new customers such as Print Palace and Custom Ink that have chosen Kornit to shift their production from screen to digital-direct-to-garment. We are simultaneously seeing signs of a return to a growth-focused mindset from our core market with customers such as Monster Digital, Mad Engine Global and DO Apparel, all of whom have announced expansion of their on-demand digital production fleets with Kornit."
"We are entering 2025 with the right products and the right model, and we are laser-focused on executing the plan we laid out at our Investor Event in September," Mr. Samuel concluded.
Third Quarter 2024 Results of Operations
Total revenue for the third quarter of 2024 was $50.7 million compared with $59.2 million in the prior year period, due primarily to lower systems revenues.
GAAP gross profit margin for the third quarter of 2024 was 47.7% compared with 34.8% in the prior year period. On a non-GAAP basis, gross profit margin was 50.3% compared with 37.4% in the prior year period.
GAAP operating expenses for the third quarter of 2024 were $31.3 million compared with $35.3 million in the prior year period. On a non-GAAP basis, operating expenses decreased by 14% to $26.8 million compared with the prior year period.
GAAP net loss for the third quarter of 2024 was $0.9 million, or ($0.02) per basic share, compared with net loss of $8.2 million, or ($0.17) per basic share, for the third quarter of 2023.
Non-GAAP net income for the third quarter of 2024 was $5.5 million, or $0.11 per diluted share, compared with non-GAAP net loss of $3.4 million, or ($0.07) per basic share, for the third quarter of 2023.
Adjusted EBITDA for the third quarter of 2024 was $1.5 million compared with adjusted EBITDA loss of $5.6 million for the third quarter of 2023. Adjusted EBITDA margin for the third quarter of 2024 was 2.9% compared with -9.5% for the third quarter of 2023.
Fourth Quarter 2024 Guidance
For the fourth quarter of 2024, the Company expects revenues to be in the range of $58 million to $63 million and adjusted EBITDA margin between 12% to 16%.
Third Quarter Earnings Conference Call Information
The Company will host a conference call today at 8:30 a.m. ET, or 3:30 p.m. Israel time, to discuss the results, followed by a question-and-answer session with the investor community.
A live webcast of the call can be accessed at ir.kornit.com. To access the call, participants may dial toll-free at 1-877-407-0792 or 1-201-689-8263. The international number is 1 809 406 247.
To listen to a replay of the conference call, dial toll-free 1-844-512-2921 or 1-412-317-6671 and enter access ID 13746039. The telephonic replay will be available approximately three hours after the completion of the live call until 11:59 pm ET on November 20, 2024. The call will also be available for replay via the webcast link on Kornit's Investor Relations website.
About Kornit Digital
Kornit Digital (NASDAQ:KRNT) is a worldwide market leader in sustainable, on-demand, digital fashion, and textile production technologies. The company offers end-to-end solutions including digital printing systems, inks, consumables, software, and fulfillment services through its global fulfillment network. Headquartered in Israel with offices in the USA, Europe, and Asia Pacific, Kornit Digital serves customers in more than 100 countries and states worldwide. To learn more about how Kornit Digital is boldly transforming the world of fashion and textiles, visit www.kornit.com.
Forward Looking Statements
Certain statements in this press release are "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," "anticipates," "continue," "believes," "should," "intended," "guidance," "preliminary," "future," "planned," or other words. These forward-looking statements include, but are not limited to, statements relating to the Company's objectives, plans and strategies, statements of preliminary or projected results of operations or of financial condition and all statements that address activities, events, or developments that the Company intends, expects, projects, believes or anticipates will or may occur in the future. Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties. The Company has based these forward-looking statements on assumptions and assessments made by its management in light of their experience and their perception of historical trends, current conditions, expected future developments and other factors they believe to be appropriate. Important factors that could cause actual results, developments and business decisions to differ materially from those anticipated in these forward-looking statements include, among other things: the duration and severity of adverse macro-economic headwinds that were caused by inflationary pressures and higher interest rates, which have impacted, and may continue to impact, in an adverse manner, the Company's operations, financial position and cash flows, in part due to the adverse impact on the Company's customers and suppliers; the Company's degree of success in developing, introducing and selling new or improved products and product enhancements including specifically the Company's Poly Pro and Presto products, and the Company's Apollo direct-to-garment platform; the extent of the Company's ability to consummate sales to large accounts with multi-system delivery plans; the degree of the Company's ability to fill orders for its systems and consumables; the extent of the Company's ability to increase sales of its systems, ink and consumables; the extent of the Company's ability to leverage its global infrastructure build-out; the development of the market for digital textile printing; the availability of alternative ink; competition; sales concentration; changes to the Company's relationships with suppliers; the extent of the Company's success in marketing; and those additional factors referred to under "Risk Factors" in Item 3.D of the Company's Annual Report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 28, 2024. Any forward-looking statements in this press release are made as of the date hereof, whether as a result of new information, future events or otherwise, except as required by law.
Non-GAAP Discussion Disclosure
The Company presents certain non-GAAP financial measures, in this press release and in the accompanying conference call to discuss the Company's quarterly results. These non-GAAP financial measures reflect adjustments to corresponding GAAP financial measures in order to exclude the impact of the following: share-based compensation expenses; amortization of intangible assets; restructuring expenses; foreign exchange differences associated with ASC 842; and non-cash deferred tax income.
The Company defines "Adjusted EBITDA" as non-GAAP operating income (loss), which reflects the adjustments described in the preceding paragraph, as further adjusted to exclude depreciation expense.
The purpose of the foregoing non-GAAP financial measures is to convey the Company's performance exclusive of non-cash charges and other items that are considered by management to be outside of the Company's core operating results. These non-GAAP measures are among the primary factors management uses in planning for and forecasting future periods. Furthermore, the non-GAAP measures are regularly used internally to understand, manage, and evaluate the Company's business and make operating decisions, and the Company believes that they are useful to investors as a consistent and comparable measure of the ongoing performance of the Company's business. The Company's non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company's consolidated financial statements prepared in accordance with GAAP. Additionally, these non-GAAP financial measures may differ materially from the non-GAAP financial measures used by other companies.
The reconciliation tables included below present a reconciliation of our non-GAAP financial measures to the most directly comparable GAAP financial measures.
Investor Contact:Jared MaymonGlobal Head of Investor Relations & Strategic
KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)
September 30,
December 31,
2024
2023
(Unaudited)
(Audited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
113,861
$
39,605
Short-term bank deposit
169,401
235,600
Marketable securities
217,949
57,292
Trade receivables, net
74,132
93,632
Inventory
66,326
67,712
Other accounts receivable and prepaid expenses
27,509
28,546
Total current assets
669,178
522,387
LONG-TERM ASSETS:
Marketable securities
59,910
223,203
Deposits and other long-term assets
20,704
8,209
Severance pay fund
298
283
Property, plant and equipment, net
46,144
50,905
Operating lease right-of-use assets
19,248
23,782
Intangible assets, net
6,145
7,647
Goodwill
29,164
29,164
Total long-term assets
181,613
343,193
Total assets
850,791
865,580
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade payables
5,061
6,936
Employees and payroll accruals
12,483
12,121
Deferred revenues and advances from customers
1,541
2,158
Operating lease liabilities
3,251
5,073
Other payables and accrued expenses
18,210
23,814
Total current liabilities
40,546
50,102
LONG-TERM LIABILITIES:
Accrued severance pay
1,037
1,080
Operating lease liabilities
15,585
18,533
Other long-term liabilities
118
198
Total long-term liabilities
16,740
19,811
SHAREHOLDERS' EQUITY
793,505
795,667
Total liabilities and shareholders' equity
$
850,791
$
865,580
KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
2024
2023
2024
2023
(Unaudited)
(Unaudited)
Revenues
Products
$
36,996
$
45,486
$
100,375
$
117,472
Services
13,736
13,738
42,754
45,729
Total revenues
50,732
59,224
143,129
163,201
Cost of revenues
Products
14,647
25,392
43,609
68,391
Services
11,875
13,212
38,887
42,425
Total cost of revenues
26,522
38,604
82,496
110,816
Gross profit
24,210
20,620
60,633
52,385
Operating expenses:
Research and development, net
9,973
12,038
31,797
38,027
Sales and marketing
14,441
15,586
43,213
48,927
General and administrative
6,919
7,654
21,728
25,143
Total operating expenses
31,333
35,278
96,738
112,097
Operating loss
(7,123
)
(14,658
)
(36,105
)
(59,712
)
Financial income, net
6,720
6,304
18,501
18,726
Loss before taxes on income
(403
)
(8,354
)
(17,604
)
(40,986
)
Taxes on income (tax benefit)
505
(193
)
1,412
431
Net loss
$
(908
)
$
(8,161
)
$
(19,016
)
$
(41,417
)
Basic loss per share
$
(0.02
)
$
(0.17
)
$
(0.40
)
$
(0.84
)
Weighted average number of shares
used in computing basic net loss per share
47,604,224
48,968,244
47,583,631
49,469,717
Diluted loss per share
$
(0.02
)
$
(0.17
)
$
(0.40
)
$
(0.84
)
Weighted average number of shares
used in computing diluted net loss per share
47,604,224
48,968,244
47,583,631
49,469,717
