UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of August 2024
Commission File Number 001-36903
KORNIT DIGITAL LTD.
(Translation of Registrant’s name into English)
12 Ha’Amal Street
Park Afek
Rosh Ha’Ayin 4824096 Israel
(Address of Principal Executive Office)
Indicate by check mark whether the registrant
files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒
Form 40-F ☐
CONTENTS
Results of Operations and Financial Condition— Quarter
and Six Months Ended June 30, 2024
On August 7, 2024, Kornit
Digital Ltd. (“Kornit”) issued a press release entitled “Kornit Digital Reports Second Quarter 2024 Results,”
in which Kornit reported its results of operations for the quarter and six months ended June 30, 2024. A copy of that press release is
furnished as Exhibit 99.1 hereto.
Kornit is holding a conference
call on August 7, 2024 to discuss its quarterly and six-months results for the quarter and six months ended June 30, 2024 and, in connection
with that call, is making available to its investors a slide presentation to provide additional information regarding its business and
its financial results. That slide presentation is attached as Exhibit 99.2 to this Report of Foreign Private Issuer on Form 6-K
(this “Form 6-K”) and is incorporated herein by reference.
Exhibits
Incorporation by Reference
The U.S. GAAP financial
information contained in the (i) consolidated balance sheets, (ii) consolidated statements of operations and (iii) consolidated statements
of cash flows included in the press release attached as Exhibit 99.1 to this Report of Foreign Private Issuer on Form 6-K is hereby incorporated
by reference into Kornit’s Registration Statements on Form S-8 (File No.’s 333-203970, 333-214015, 333-217039, 333-223794,
333-230567, 333-237346, 333-254749, and 333-263975).
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| |
KORNIT DIGITAL LTD. |
| |
|
|
| Date: August 7, 2024 |
By: |
/s/ Lauri Hanover |
| |
Name: |
Lauri Hanover |
| |
Title: |
Chief Financial Officer |
2
Exhibit 99.1
Investor
Contact:
Jared
Maymon
Global
Head of Investor Relations & Strategic Finance
Jared.Maymon@Kornit.com
Kornit
Digital Reports Second Quarter 2024 Results
| ● | Second
quarter revenues of $48.6 million, in line with previous guidance |
| ● | Second
quarter GAAP net loss of $4.9 million; non-GAAP net income of $1.1 million |
| ● | Generated
positive cash flow from operations for the second quarter of 2024 |
| | |
| ● | Both
impressions and consumables grew year-over-year during the second quarter |
| ● | Interest
in our pilot of the all-inclusive click (“AIC”) program and our Apollo system
remains strong, with multiple orders added to our backlog in second quarter |
Rosh-Ha’Ayin,
Israel – August 7, 2024 – Kornit Digital Ltd. (“Kornit” or the “Company”) (Nasdaq: KRNT), a worldwide
market leader in sustainable, on-demand, digital fashionX and textile production technologies, today reported results for
the second quarter ended June 30, 2024.
“We
are witnessing a pivotal shift to on-demand production in the fashion industry, where consumers are demanding both increased variety
and faster delivery.” said Ronen Samuel, Kornit’s Chief Executive Officer. He added, “While the positive impact of
these trends on our systems sales remains muted, we again saw growth in impressions and consumables. This supports our view that our
customers continue to digest available capacity.”
Mr.
Samuel continued, “In the second quarter, we also received several additional Apollo orders, including four on our AIC model. Given
the strong initial feedback and traction we have seen with our AIC model, we made the decision to begin piloting the model on the Atlas
MAX system for screen replacement customers.” He concluded, “We look forward to updating the investor community on our long-term
business plans and capital allocation strategy at our investor event planned on September 10th.”
Second
Quarter 2024 Results of Operations
| ● | Total
revenue for the second quarter of 2024 was $48.6 million compared with $56.2 million in the
prior year period, due primarily to lower systems revenues. |
| ● | GAAP
gross profit margin for the second quarter of 2024 was 45.8% compared with 33.3% in the prior
year period. On a non-GAAP basis, gross profit margin was 48.6% compared with 36.1% in the
prior year period. |
| ● | GAAP
operating expenses for the second quarter of 2024 were $33.0 million compared with $39.6
million in the prior year period. On a non-GAAP basis, operating expenses decreased by 17.9%
to $28.0 million compared with the prior year period. |
| ● | GAAP
net loss for the second quarter of 2024 was $4.9 million, or ($0.10) per basic share, compared
with net loss of $14.3 million, or ($0.29) per basic share, for the second quarter of 2023. |
| ● | Non-GAAP
net income for the second quarter of 2024 was $1.1 million, or $0.02 per diluted share, compared
with non-GAAP net loss of $7.4 million, or ($0.15) per basic share, for the second quarter
of 2023. |
| ● | Adjusted
EBITDA loss for the second quarter of 2024 was $1.6 million compared with adjusted EBITDA
loss of $10.7 million for the second quarter of 2023. Adjusted EBITDA margin for the second
quarter of 2024 was -3.4% compared with -19.1% for the second quarter of 2023. |
Third
Quarter 2024 Guidance
For
the third quarter of 2024, the Company expects revenues to be in the range of $48 million to $52 million and adjusted EBITDA margin between
1% to 6%.
Second
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 1-800-717-1738
or 1-646-307-1865. The toll-free Israeli number is 972 3 384 8161. The conference confirmation code is 71703.
To
listen to a replay of the conference call, dial toll-free 1-844-512-2921 or 1-412-317-6671 (international) and enter confirmation
code 1171703. The telephonic replay will be available approximately three hours after the completion of the live call until 11:59 pm
ET on August 21, 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 fashionx and textile production technologies.
The Company is writing the operating system for fashion with end-to-end solutions including digital printing systems, inks, consumables,
and an entire global ecosystem that manages workflows and fulfillment. 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.
KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(U.S. dollars in thousands)
| | |
June 30, | | |
December 31, | |
| | |
2024 | | |
2023 | |
| | |
(Unaudited) | | |
(Audited) | |
| ASSETS | |
| | |
| |
| CURRENT ASSETS: | |
| | |
| |
| Cash and cash equivalents | |
$ | 22,522 | | |
$ | 39,605 | |
| Short-term bank deposit | |
| 243,396 | | |
| 235,600 | |
| Marketable securities | |
| 160,121 | | |
| 57,292 | |
| Trade receivables, net | |
| 79,461 | | |
| 93,632 | |
| Inventory | |
| 70,595 | | |
| 67,712 | |
| Other accounts receivable and prepaid expenses | |
| 27,062 | | |
| 28,546 | |
| Total current assets | |
| 603,157 | | |
| 522,387 | |
| | |
| | | |
| | |
| LONG-TERM ASSETS: | |
| | | |
| | |
| Marketable securities | |
| 128,396 | | |
| 223,203 | |
| Deposits and other long-term assets | |
| 10,727 | | |
| 8,209 | |
| Severance pay fund | |
| 286 | | |
| 283 | |
| Property, plant and equipment, net | |
| 47,710 | | |
| 50,905 | |
| Operating lease right-of-use assets | |
| 19,697 | | |
| 23,782 | |
| Intangible assets, net | |
| 6,623 | | |
| 7,647 | |
| Goodwill | |
| 29,164 | | |
| 29,164 | |
| Total long-term assets | |
| 242,603 | | |
| 343,193 | |
| | |
| | | |
| | |
| Total assets | |
| 845,760 | | |
| 865,580 | |
| | |
| | | |
| | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |
| | | |
| | |
| CURRENT LIABILITIES: | |
| | | |
| | |
| Trade payables | |
| 4,794 | | |
| 6,936 | |
| Employees and payroll accruals | |
| 11,865 | | |
| 12,121 | |
| Deferred revenues and advances from customers | |
| 1,486 | | |
| 2,158 | |
| Operating lease liabilities | |
| 3,270 | | |
| 5,073 | |
| Other payables and accrued expenses | |
| 22,152 | | |
| 23,814 | |
| Total current liabilities | |
| 43,567 | | |
| 50,102 | |
| | |
| | | |
| | |
| LONG-TERM LIABILITIES: | |
| | | |
| | |
| Accrued severance pay | |
| 1,021 | | |
| 1,080 | |
| Operating lease liabilities | |
| 15,676 | | |
| 18,533 | |
| Other long-term liabilities | |
| 138 | | |
| 198 | |
| Total long-term liabilities | |
| 16,835 | | |
| 19,811 | |
| | |
| | | |
| | |
| SHAREHOLDERS’ EQUITY | |
| 785,358 | | |
| 795,667 | |
| | |
| | | |
| | |
| Total liabilities and shareholders’ equity | |
$ | 845,760 | | |
$ | 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 | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| | |
| | |
| | |
| | |
| |
| Revenues | |
| | |
| | |
| | |
| |
| Products | |
$ | 34,366 | | |
$ | 40,083 | | |
$ | 63,379 | | |
$ | 71,986 | |
| Services | |
| 14,255 | | |
| 16,116 | | |
| 29,018 | | |
| 31,991 | |
| Total revenues | |
| 48,621 | | |
| 56,199 | | |
| 92,397 | | |
| 103,977 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cost of revenues | |
| | | |
| | | |
| | | |
| | |
| Products | |
| 13,271 | | |
| 22,620 | | |
| 28,962 | | |
| 42,999 | |
| Services | |
| 13,066 | | |
| 14,886 | | |
| 27,012 | | |
| 29,213 | |
| Total cost of revenues | |
| 26,337 | | |
| 37,506 | | |
| 55,974 | | |
| 72,212 | |
| | |
| | | |
| | | |
| | | |
| | |
| Gross profit | |
| 22,284 | | |
| 18,693 | | |
| 36,423 | | |
| 31,765 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating expenses: | |
| | | |
| | | |
| | | |
| | |
| Research and development, net | |
| 10,472 | | |
| 12,907 | | |
| 21,824 | | |
| 25,989 | |
| Sales and marketing | |
| 14,976 | | |
| 18,158 | | |
| 28,772 | | |
| 33,341 | |
| General and administrative | |
| 7,532 | | |
| 8,541 | | |
| 14,809 | | |
| 17,489 | |
| Total operating expenses | |
| 32,980 | | |
| 39,606 | | |
| 65,405 | | |
| 76,819 | |
| | |
| | | |
| | | |
| | | |
| | |
| Operating loss | |
| (10,696 | ) | |
| (20,913 | ) | |
| (28,982 | ) | |
| (45,054 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Financial income, net | |
| 6,435 | | |
| 7,018 | | |
| 11,781 | | |
| 12,422 | |
| Loss before taxes on income | |
| (4,261 | ) | |
| (13,895 | ) | |
| (17,201 | ) | |
| (32,632 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Taxes on income | |
| 648 | | |
| 430 | | |
| 907 | | |
| 624 | |
| Net loss | |
$ | (4,909 | ) | |
$ | (14,325 | ) | |
$ | (18,108 | ) | |
$ | (33,256 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Basic loss per share | |
$ | (0.10 | ) | |
$ | (0.29 | ) | |
$ | (0.38 | ) | |
$ | (0.67 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares used in computing basic net loss per share | |
| 47,535,212 | | |
| 49,554,383 | | |
| 47,573,334 | | |
| 49,720,453 | |
| | |
| | | |
| | | |
| | | |
| | |
| Diluted loss per share | |
$ | (0.10 | ) | |
$ | (0.29 | ) | |
$ | (0.38 | ) | |
$ | (0.67 | ) |
| |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares used in computing diluted net loss per
share | |
| 47,535,212 | | |
| 49,554,383 | | |
| 47,573,334 | | |
| 49,720,453 | |
KORNIT
DIGITAL LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)
| | |
Three
Months Ended | | |
Six
Months Ended | |
| | |
June
30, | | |
June
30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| | |
| | |
| | |
| | |
| |
| Revenues | |
$ | 48,621 | | |
$ | 56,199 | | |
$ | 92,397 | | |
$ | 103,977 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP cost of revenues | |
$ | 26,337 | | |
$ | 37,506 | | |
$ | 55,974 | | |
$ | 72,212 | |
| Cost of product recorded
for share-based compensation (1) | |
| (490 | ) | |
| (672 | ) | |
| (992 | ) | |
| (1,179 | ) |
| Cost of service recorded
for share-based compensation (1) | |
| (453 | ) | |
| (493 | ) | |
| (872 | ) | |
| (844 | ) |
| Intangible assets amortization
on cost of product (2) | |
| (264 | ) | |
| (263 | ) | |
| (529 | ) | |
| (526 | ) |
| Intangible assets amortization
on cost of service (2) | |
| (160 | ) | |
| (160 | ) | |
| (320 | ) | |
| (320 | ) |
| Restructuring expenses (3) | |
| - | | |
| - | | |
| (914 | ) | |
| (89 | ) |
| Non-GAAP cost of revenues | |
$ | 24,970 | | |
$ | 35,918 | | |
$ | 52,347 | | |
$ | 69,254 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP gross profit | |
$ | 22,284 | | |
$ | 18,693 | | |
$ | 36,423 | | |
$ | 31,765 | |
| Gross profit adjustments | |
| 1,367 | | |
| 1,588 | | |
| 3,627 | | |
| 2,958 | |
| Non-GAAP gross profit | |
$ | 23,651 | | |
$ | 20,281 | | |
$ | 40,050 | | |
$ | 34,723 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP operating expenses | |
$ | 32,980 | | |
$ | 39,606 | | |
$ | 65,405 | | |
$ | 76,819 | |
| Share-based compensation
(1) | |
| (4,926 | ) | |
| (5,385 | ) | |
| (9,453 | ) | |
| (9,772 | ) |
| Intangible assets amortization
(2) | |
| (87 | ) | |
| (152 | ) | |
| (175 | ) | |
| (340 | ) |
| Restructuring expenses (3) | |
| - | | |
| - | | |
| (757 | ) | |
| (206 | ) |
| Non-GAAP operating expenses | |
$ | 27,967 | | |
$ | 34,069 | | |
$ | 55,020 | | |
$ | 66,501 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP Financial income, net | |
$ | 6,435 | | |
$ | 7,018 | | |
$ | 11,781 | | |
$ | 12,422 | |
| Foreign exchange losses associated
with ASC 842 | |
| (269 | ) | |
| (121 | ) | |
| 116 | | |
| (497 | ) |
| Non-GAAP Financial income,
net | |
$ | 6,166 | | |
$ | 6,897 | | |
$ | 11,897 | | |
$ | 11,925 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP Taxes on income | |
$ | 648 | | |
$ | 430 | | |
$ | 907 | | |
$ | 624 | |
| Non-cash deferred tax income | |
| 86 | | |
$ | 102 | | |
| 173 | | |
$ | 323 | |
| Non-GAAP Taxes on income | |
$ | 734 | | |
$ | 532 | | |
$ | 1,080 | | |
$ | 947 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP net loss | |
$ | (4,909 | ) | |
$ | (14,325 | ) | |
$ | (18,108 | ) | |
$ | (33,256 | ) |
| Share-based compensation
(1) | |
| 5,869 | | |
| 6,550 | | |
| 11,317 | | |
| 11,795 | |
| Intangible assets amortization
(2) | |
| 511 | | |
| 575 | | |
| 1,024 | | |
| 1,186 | |
| Restructuring expenses (3) | |
| - | | |
| - | | |
| 1,671 | | |
| 295 | |
| Foreign exchange losses associated
with ASC 842 | |
| (269 | ) | |
| (121 | ) | |
| 116 | | |
| (497 | ) |
| Non-cash deferred tax income | |
| (86 | ) | |
| (102 | ) | |
| (173 | ) | |
| (323 | ) |
| Non-GAAP net income (loss) | |
$ | 1,116 | | |
$ | (7,423 | ) | |
$ | (4,153 | ) | |
$ | (20,800 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP diluted loss per share | |
$ | (0.10 | ) | |
$ | (0.29 | ) | |
$ | (0.38 | ) | |
$ | (0.67 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Non-GAAP diluted income (loss)
per share | |
$ | 0.02 | | |
$ | (0.15 | ) | |
$ | (0.09 | ) | |
$ | (0.42 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Weighted average number of shares | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Shares used in computing
GAAP diluted net loss per share | |
| 47,535,212 | | |
| 49,554,383 | | |
| 47,573,334 | | |
| 49,720,453 | |
| | |
| | | |
| | | |
| | | |
| | |
| Shares used in computing
Non-GAAP diluted net loss per share | |
| 49,898,775 | | |
| 49,554,383 | | |
| 47,573,334 | | |
| 49,720,453 | |
| | |
| | | |
| | | |
| | | |
| | |
| (1) Share-based compensation | |
| | |
| | |
| | |
| |
| Cost
of product revenues | |
$ | 490 | | |
$ | 672 | | |
$ | 992 | | |
$ | 1,179 | |
| Cost
of service revenues | |
| 453 | | |
| 493 | | |
| 872 | | |
| 844 | |
| Research
and development | |
| 1,376 | | |
| 1,601 | | |
| 2,671 | | |
| 2,952 | |
| Sales
and marketing | |
| 1,784 | | |
| 1,944 | | |
| 3,366 | | |
| 3,307 | |
| General
and administrative | |
| 1,766 | | |
| 1,840 | | |
| 3,416 | | |
| 3,513 | |
| | |
$ | 5,869 | | |
$ | 6,550 | | |
$ | 11,317 | | |
$ | 11,795 | |
| (2) Intangible assets amortization | |
| | | |
| | | |
| | | |
| | |
| Cost
of product revenues | |
$ | 264 | | |
$ | 263 | | |
$ | 529 | | |
$ | 526 | |
| Cost
of service revenues | |
| 160 | | |
| 160 | | |
| 320 | | |
| 320 | |
| Sales
and marketing | |
| 87 | | |
| 152 | | |
| 175 | | |
| 340 | |
| | |
$ | 511 | | |
$ | 575 | | |
$ | 1,024 | | |
$ | 1,186 | |
| | |
| | | |
| | | |
| | | |
| | |
| (3) Restructuring expenses | |
| | | |
| | | |
| | | |
| | |
| Cost
of product revenues | |
$ | - | | |
$ | - | | |
$ | 865 | | |
$ | 89 | |
| Cost
of service revenues | |
| - | | |
| - | | |
| 49 | | |
| - | |
| Research
and development | |
| - | | |
| - | | |
| 235 | | |
| 20 | |
| Sales
and marketing | |
| - | | |
| - | | |
| 190 | | |
| 186 | |
| General
and administrative | |
| - | | |
| - | | |
| 332 | | |
| - | |
| | |
$ | - | | |
$ | - | | |
$ | 1,671 | | |
$ | 295 | |
KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| Cash flows from operating activities: | |
| | |
| | |
| | |
| |
| | |
| | |
| | |
| | |
| |
| Net loss | |
$ | (4,909 | ) | |
$ | (14,325 | ) | |
$ | (18,108 | ) | |
$ | (33,256 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities: | |
| | | |
| | | |
| | | |
| | |
| Depreciation and amortization | |
| 3,191 | | |
| 3,654 | | |
| 6,515 | | |
| 7,527 | |
| Fair value of warrants deducted from revenues | |
| (313 | ) | |
| 3,332 | | |
| 3,273 | | |
| 5,676 | |
| Share-based compensation | |
| 5,869 | | |
| 6,550 | | |
| 11,317 | | |
| 11,795 | |
| Amortization of premium and accretion of discount on marketable securities, net | |
| 16 | | |
| 202 | | |
| 9 | | |
| 525 | |
| Realized loss on sale and redemption of marketable securities | |
| - | | |
| (43 | ) | |
| - | | |
| (3 | ) |
| Change in operating assets and liabilities: | |
| | | |
| | | |
| | | |
| | |
| Trade receivables, net | |
| 1,266 | | |
| (11,248 | ) | |
| 14,171 | | |
| (16,856 | ) |
| Other accounts receivables and prepaid expenses | |
| 970 | | |
| (1,682 | ) | |
| 1,484 | | |
| (766 | ) |
| Inventory | |
| (3,868 | ) | |
| 4,963 | | |
| (3,964 | ) | |
| 1,940 | |
| Operating leases right-of-use assets and liabilities, net | |
| (488 | ) | |
| (555 | ) | |
| (575 | ) | |
| (1,012 | ) |
| Deposits and other long term assets | |
| (511 | ) | |
| (851 | ) | |
| (1,219 | ) | |
| (1,878 | ) |
| Trade payables | |
| 1,832 | | |
| (225 | ) | |
| (1,933 | ) | |
| (1,702 | ) |
| Employees and payroll accruals | |
| 1,674 | | |
| 1,752 | | |
| 522 | | |
| 2,489 | |
| Deferred revenues and advances from customers | |
| (364 | ) | |
| (2,199 | ) | |
| (672 | ) | |
| (3,237 | ) |
| Other payables and accrued expenses | |
| 123 | | |
| (4,378 | ) | |
| (2,190 | ) | |
| (38 | ) |
| Accrued severance pay, net | |
| (30 | ) | |
| (161 | ) | |
| (62 | ) | |
| (62 | ) |
| Other long - term liabilities | |
| 26 | | |
| (330 | ) | |
| (60 | ) | |
| (690 | ) |
| Net cash provided by (used in) operating activities | |
$ | 4,484 | | |
$ | (15,544 | ) | |
$ | 8,508 | | |
$ | (29,548 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Cash flows from investing activities: | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Purchase of property, plant and equipment | |
$ | (1,439 | ) | |
$ | (1,791 | ) | |
$ | (2,723 | ) | |
$ | (5,069 | ) |
| Proceeds from (investment in) short-term bank deposits, net | |
| 16,601 | | |
| (219,997 | ) | |
| (7,796 | ) | |
| 54,935 | |
| Proceeds from sales and redemption of marketable securities | |
| - | | |
| 1,250 | | |
| 3,494 | | |
| 5,250 | |
| Proceeds from maturities of marketable securities | |
| 24,581 | | |
| 7,680 | | |
| 35,879 | | |
| 11,252 | |
| Investment in marketable securities | |
| (26,602 | ) | |
| (8,911 | ) | |
| (44,619 | ) | |
| (18,935 | ) |
| Net cash provided by (used in) investing activities | |
$ | 13,141 | | |
$ | (221,769 | ) | |
$ | (15,765 | ) | |
$ | 47,433 | |
| | |
| | | |
| | | |
| | | |
| | |
| Cash flows from financing activities: | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Exercise of employee stock options | |
$ | 7 | | |
$ | 53 | | |
$ | 7 | | |
$ | 95 | |
| Payments related to shares withheld for taxes | |
| (184 | ) | |
| (302 | ) | |
| (778 | ) | |
| (437 | ) |
| Repurchase of ordinary shares | |
| (1,427 | ) | |
| (14,066 | ) | |
| (9,055 | ) | |
| (20,818 | ) |
| Net cash used in financing activities | |
$ | (1,604 | ) | |
$ | (14,315 | ) | |
$ | (9,826 | ) | |
$ | (21,160 | ) |
| | |
| | | |
| | | |
| | | |
| | |
| Increase (decrease) in cash and cash equivalents | |
$ | 16,021 | | |
$ | (251,628 | ) | |
$ | (17,083 | ) | |
$ | (3,275 | ) |
| Cash and cash equivalents at the beginning of the period | |
| 6,501 | | |
| 352,950 | | |
| 39,605 | | |
| 104,597 | |
| Cash and cash equivalents at the end of the period | |
$ | 22,522 | | |
$ | 101,322 | | |
$ | 22,522 | | |
$ | 101,322 | |
| | |
| | | |
| | | |
| | | |
| | |
| Non-cash investing and financing activities: | |
| | | |
| | | |
| | | |
| | |
| | |
| | | |
| | | |
| | | |
| | |
| Purchase of property and equipment on credit | |
| 105 | | |
| 219 | | |
| 105 | | |
| 219 | |
| Inventory transferred to be used as property and
equipment and long term assets | |
| 455 | | |
| - | | |
| 1,401 | | |
| - | |
| Property, plant and equipment transferred to be used as inventory | |
| 166 | | |
| - | | |
| 320 | | |
| 734 | |
| Lease liabilities arising from obtaining right-of-use assets | |
| 338 | | |
| (550 | ) | |
| (1,408 | ) | |
| 5,487 | |
KORNIT
DIGITAL LTD.
AND ITS SUBSIDIARIES
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA
(U.S. dollars in thousands, except share and per share data)
| | |
Three Months Ended | | |
Six Months Ended | |
| | |
June 30, | | |
June 30, | |
| | |
2024 | | |
2023 | | |
2024 | | |
2023 | |
| | |
(Unaudited) | | |
(Unaudited) | |
| | |
| | |
| | |
| | |
| |
| GAAP Revenues | |
$ | 48,621 | | |
$ | 56,199 | | |
$ | 92,397 | | |
$ | 103,977 | |
| | |
| | | |
| | | |
| | | |
| | |
| GAAP Net Loss | |
| (4,909 | ) | |
| (14,325 | ) | |
| (18,108 | ) | |
| (33,256 | ) |
| Taxes on income | |
| 648 | | |
| 430 | | |
| 907 | | |
| 624 | |
| Financial income | |
| (6,435 | ) | |
| (7,018 | ) | |
| (11,781 | ) | |
| (12,422 | ) |
| Share-based compensation | |
| 5,869 | | |
| 6,550 | | |
| 11,317 | | |
| 11,795 | |
| Intangible assets amortization | |
| 511 | | |
| 575 | | |
| 1,024 | | |
| 1,186 | |
| Restructuring expenses | |
| - | | |
| - | | |
| 1,671 | | |
| 295 | |
| Non-GAAP Operating Loss | |
| (4,316 | ) | |
| (13,788 | ) | |
| (14,970 | ) | |
| (31,778 | ) |
| Depreciation | |
| 2,680 | | |
| 3,079 | | |
| 5,491 | | |
| 6,341 | |
| Adjusted EBITDA | |
$ | (1,636 | ) | |
$ | (10,709 | ) | |
$ | (9,479 | ) | |
$ | (25,437 | ) |
8
Exhibit
99.2
Kornit Digital. All Rights Reserved. Kornit Digital. All Rights Reserved. Kornit Digital (NASDAQ: KRNT) Second Quarter 2024 Earnings Conference Call Supporting Slides August 7, 2024 Kornit Digital. All Rights Reserved.
Kornit Digital. All Rights Reserved. On Today’s Call Ronen Samuel CEO Lauri Hanover CFO Jared Maymon Investor Relations
Kornit Digital. All Rights Reserved. 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,” “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 . In addition to U . S . GAAP financials, this presentation includes certain non - GAAP financial measures . These non - GAAP financial measures are in addition to, and not a substitute for or superior to, measures of financial performance prepared in accordance with U . S . GAAP . Please see the reconciliation table that appears among the financial tables in our earnings release being issued today, which earnings release is attached as Exhibit 99 . 1 to our report of foreign private issuer on Form 6 - K being furnished to the SEC today, which reconciliation table is incorporated by reference in this presentation . This presentation contains statistical data that we obtained from industry publications and reports generated by third parties . Although we believe that the publications and reports are reliable, we have not independently verified this statistical data . Kornit, Kornit Digital, the K logo, and NeoPigment are trademarks of Kornit Digital Ltd . All other trademarks are the property of their respective owners and are used for reference purposes only . Such use should not be construed as an endorsement of our products or services .
Kornit Digital. All Rights Reserved. Business Highlights
Kornit Digital. All Rights Reserved. ― Revenues of $48.6 million and adjusted EBITDA margin of negative 3.4% ― Within the guidance range provided in May ― Generated positive cash from operations for Q2 2024 ― Continued improvements year - over - year to impressions and consumables sales ― Macroeconomic environment continues to delay investments in systems Second Quarter 2024 Recap
Kornit Digital. All Rights Reserved. ― The system is driving significant improvements to productivity and TCO ― Regarded as the best solution for replacing screen printing for mid - sized runs ― Received several additional orders in Q2, with four on the AIC model ― Pipeline for 2024 remains filled with a mixture of AIC and CapEx deals ― Continuing to build 2025 pipeline with new and existing customers Apollo Update
Kornit Digital. All Rights Reserved. ― AIC removes barriers to entry by eliminating large capital investments and providing predictable unit economics ― AIC provides better visibility for Kornit on revenue, profitability, and cash flow ― Expanded the program from Apollo to the Atlas family of systems ― Gaining momentum with new and existing customers for AIC on Atlas MAX All - inclusive Click (AIC) Pilot Program Update
Kornit Digital. All Rights Reserved. ― Continues to drive revenue diversification ― Gaining traction in key textile - producing regions ― Viewing India, China, Peru, Portugal, and others as growth drivers for our future in DTF ― Making progress in footwear applications ― Working to have a production - ready footwear solution in coming quarters Direct - to - Fabric Update
Kornit Digital. All Rights Reserved. ― Continuing to see signs of improvement ― Anticipating a stronger second half than first half ― Sales to increase by 20 - 25% in the second half ― Growth to be primarily driven by consumables sales ― Expecting positive EBITDA on a full - year basis and positive operating cash flow throughout 2024 Current View on the Second Half of 2024
Kornit Digital. All Rights Reserved. ― Hosting an Investor Event on September 10 th in Las Vegas ― Event to be held in conjunction with participation in Printing United trade show ― Investor Event will feature presentations from members of executive mgmt. ― Event will also feature panels with key customers and demand generators ― Planning to provide insights into its recent business activities, GTM strategy, and capital allocation plans Announcement of Investor Event
Kornit Digital. All Rights Reserved. ― We achieved significant year - over - year improvements to profitability and cash flow ― Despite a challenging backdrop, we continue to see improvements in impressions, consumables, and utilization ― Adding to our pipeline of orders on AIC for both Apollo and Atlas systems ― Stabilizing our business and improving our P&L in H2 2024 Concluding Remarks
Kornit Digital. All Rights Reserved. Financial Highlights
Kornit Digital. All Rights Reserved. ― Q2 2024 revenues were $48.6 million ― Within the guidance range of $47 - $52 million ― Consumables contributed to year - over - year growth for Q2 2024 ― Systems and services sales declined year - over - year, as expected Revenues $56.2 $48.6 Q2 Revenues ($M) 2023 2024 66% 24% 10% Revenues By Region Americas EMEA Asia Pacific
Kornit Digital. All Rights Reserved. ― Q2 2024 non - GAAP gross margin of 48.6% compared to 36.1% in Q2 2023 ― Improvement again attributable to better mix between comparatively higher - margin consumables and systems, as well as reduced fixed costs due to restructuring efforts ― Q2 2024 margin also benefitted from lack of warrant expense, as first tranche of our warrant agreement with our largest global strategic account concluded Gross Margins 36.1% 48.6 % Q2 Non - GAAP Gross Margin 2023 2024
Kornit Digital. All Rights Reserved. ― Q2 2024 Non - GAAP Operating Expenses: $28.0 million, down from $34.1 million in Q2 2023 ― Reduction reflects cost - savings and restructuring initiatives ― Including workforce reductions, consolidation of facilities, and phasing - out legacy platforms ― OPEX includes ~$1.5 million allowance for doubtful debts related to a customer that filed Ch. 11 ― We continue to target FY24 non - GAAP OPEX to be ~$20 million lower versus FY23 Operating Expenses Non - GAAP Operating Expenses ($ in millions) Q2 2024 Q2 2023 $9.1 $11.3 Research & Development $13.1 $16.1 Sales & Marketing $5.8 $6.7 General & Administrative $28.0 $34.1 Total Operating Expenses (1) (1) Figures may not sum due to rounding
Kornit Digital. All Rights Reserved. P&L KPI’s Q 2 2024 Q2 2023 ($4.3) ($13.8) Non - GAAP Operating Loss ($1.6) ($10.7) Adjusted EBITDA Loss $1.1 ($7.4) Non - GAAP Net Income (Loss) $0.02 ($0.15) Non - GAAP Diluted income (loss) per share ($4.9) ($14.3) GAAP Net Loss ($0.10) ($0.29) GAAP Diluted loss per share $ in millions, except per share amounts
Kornit Digital. All Rights Reserved. ― At quarter end, cash, including bank deposits and marketable securities, was ~$554 million ― Q2 2024 cash generated from operating activities: ~$4.5 million ― Accounts receivable decreased ~$1.2 million from Q1 2024 ― Inventories increased ~$3.6 million from Q1 2024 ― Trade payables increased ~$1.9 million from Q1 2024 Balance Sheet & Cash Flow Q2 2024 Q1 2024 Q2 2023 $554.4 $551.4 $591.7 Cash, Deposits & Marketable Securities $79.5 $80.7 $84.2 Accounts r eceivable, net $70.6 $67.0 $88.2 Inventory $4.8 $2.9 $11.6 Trade p ayables $ in millions
Kornit Digital. All Rights Reserved. ― Interest in our pilot of the AIC offering remains strong ― In Q2 we signed four new Apollo AIC units for delivery towards the end of this year ― Overall, expect to deliver 15 Apollo systems this year, with 10 of those expected on AIC model ― Also began a pilot AIC program for the Atlas family of systems this quarter ― Plan to provide an update on our progress at our Investor Event in September ― Under our AIC model revenue is generated from impressions a customer produces over time rather than upfront at the time of a system sale ― As such P&L benefits of systems shipped on the AIC model will begin to ramp toward the end of this year and into 2025 AIC Pilot Program Update
Kornit Digital. All Rights Reserved. ― We were subject to a blackout period under our existing trading plan ― Unable to repurchase shares for most of Q2 ― Repurchase activity was limited to ~83,000 shares for Q2 ― Average price paid per share net of fees was $14.32 ― Existing authorization for our share repurchase program expired in July ― The Israeli approval process regarding share repurchases recently changed as well ― We are currently navigating this new process ― We look forward to updating the investor community on our capital allocation strategy at upcoming Investor Event planned for September 10 th Share Repurchase Program
Kornit Digital. All Rights Reserved. ― Q3 2024 Revenues: ― Expected to be in the range of $48 million to $52 million ― Q3 2024 Adjusted EBITDA margin: ― Expected to be in the range of 1% to 6% of revenue Third Quarter 2024 Guidance
Kornit Digital. All Rights Reserved. 2024 2023 2024 2023 GAAP Revenues 48,621$ 56,199$ 92,397$ 103,977$ GAAP Net Loss (4,909) (14,325) (18,108) (33,256) Taxes on income 648 430 907 624 Financial income (6,435) (7,018) (11,781) (12,422) Share-based compensation 5,869 6,550 11,317 11,795 Intangible assets amortization 511 575 1,024 1,186 Restructuring expenses - - 1,671 295 Non-GAAP Operating Loss (4,316) (13,788) (14,970) (31,778) Depreciation 2,680 3,079 5,491 6,341 Adjusted EBITDA (1,636)$ (10,709)$ (9,479)$ (25,437)$ KORNIT DIGITAL LTD. RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA AND ITS SUBSIDIARIES (U.S. dollars in thousands, except share and per share data) Six Months Ended June 30, June 30, (Unaudited) (Unaudited) Three Months Ended
Kornit Digital. All Rights Reserved. Thank You!
Kornit Digital (NASDAQ:KRNT)
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From Sep 2024 to Oct 2024
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