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KRNT Kornit Digital Ltd

32.28
-0.32 (-0.98%)
Last Updated: 14:57:15
Delayed by 15 minutes
Share Name Share Symbol Market Type
Kornit Digital Ltd NASDAQ:KRNT NASDAQ Common Stock
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.32 -0.98% 32.28 32.28 32.43 32.96 32.1427 32.27 16,782 14:57:15

Kornit Digital Reports Third Quarter 2024 Results

06/11/2024 12:29pm

GlobeNewswire Inc.


Kornit Digital (NASDAQ:KRNT)
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From Oct 2024 to Dec 2024

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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 FinanceJared.Maymon@Kornit.com

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 
        

    
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 Nine Months Ended
  September 30, September 30,
   2024   2023   2024   2023 
  (Unaudited) (Unaudited)
         
Revenues$50,732  $59,224  $143,129  $163,201 
         
         
GAAP cost of revenues$26,522  $38,604  $82,496  $110,816 
Cost of product recorded for share-based compensation (1) (502)  (632)  (1,494)  (1,811)
Cost of service recorded for share-based compensation (1) (422)  (467)  (1,294)  (1,311)
Intangible assets amortization on cost of product (2) (231)  (267)  (760)  (793)
Intangible assets amortization on cost of service (2) (160)  (160)  (480)  (480)
Restructuring expenses (3) -   -   (914)  (89)
Non-GAAP cost of revenues$25,207  $37,078  $77,554  $106,332 
         
         
GAAP gross profit$24,210  $20,620  $60,633  $52,385 
Gross profit adjustments 1,315   1,526   4,942   4,484 
Non-GAAP gross profit$25,525  $22,146  $65,575  $56,869 
         
         
GAAP operating expenses$31,333  $35,278  $96,738  $112,097 
Share-based compensation (1) (4,431)  (4,050)  (13,884)  (13,822)
Intangible assets amortization (2) (87)  (117)  (262)  (457)
Restructuring expenses (3) -   -   (757)  (206)
Non-GAAP operating expenses$26,815  $31,111  $81,835  $97,612 
         
         
GAAP Financial income, net$6,720  $6,304  $18,501  $18,726 
Foreign exchange losses associated with ASC 842 441   (704)  557   (1,201)
Non-GAAP Financial income , net$7,161  $5,600  $19,058  $17,525 
         
         
GAAP Taxes on income$505  $(193) $1,412  $431 
Non-cash deferred tax income (173)  255   -   578 
Non-GAAP Taxes on income$332  $62  $1,412  $1,009 
         
         
GAAP net loss$(908) $(8,161) $(19,016) $(41,417)
Share-based compensation (1) 5,355   5,149   16,672   16,944 
Intangible assets amortization (2) 478   544   1,502   1,730 
Restructuring expenses (3) -   -   1,671   295 
Foreign exchange losses associated with ASC 842 441   (704)  557   (1,201)
Non-cash deferred tax income 173   (255)  -   (578)
Non-GAAP net income (loss)$5,539  $(3,427) $1,386  $(24,227)
         
GAAP diluted loss per share$(0.02) $(0.17) $(0.40) $(0.84)
         
Non-GAAP diluted income (loss) per share$0.11  $(0.07) $0.03  $(0.49)
         
Weighted average number of shares       
         
Shares used in computing GAAP diluted net loss per share 47,604,224   48,968,244   47,583,631   49,469,717 
         
Shares used in computing Non-GAAP diluted net loss per share 49,988,803   48,968,244   49,166,345   49,469,717 
         
         
(1) Share-based compensation       
 Cost of product revenues$502  $632  $1,494  $1,811 
 Cost of service revenues 422   467   1,294   1,311 
 Research and development 1,384   1,478   4,055   4,430 
 Sales and marketing 1,650   1,747   5,016   5,054 
 General and administrative 1,397   825   4,813   4,338 
  $5,355  $5,149  $16,672  $16,944 
(2) Intangible assets amortization       
 Cost of product revenues$231  $267  $760  $793 
 Cost of service revenues 160   160   480   480 
 Sales and marketing 87   117   262   457 
  $478  $544  $1,502  $1,730 
         
(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 Nine Months Ended
 September 30, September 30,
  2024   2023   2024   2023 
 (Unaudited) (Unaudited)
Cash flows from operating activities:       
        
Net loss$(908) $(8,161) $(19,016) $(41,417)
Adjustments to reconcile net loss to net cash used in operating activities:       
Depreciation and amortization 3,219   3,886   9,734   11,413 
Fair value of warrants deducted from revenues -   3,325   3,273   9,001 
Share-based compensation 5,355   5,149   16,672   16,944 
Amortization of premium and accretion of discount on marketable securities, net (287)  148   (278)  673 
Realized loss on sale and redemption of marketable securities -   44   -   41 
Change in operating assets and liabilities:       
Trade receivables, net 5,329   (8,921)  19,500   (25,777)
Other accounts receivables and prepaid expenses (447)  (686)  1,037   (1,452)
Inventory 4,094   4,567   130   6,507 
Operating leases right-of-use assets and liabilities, net 339   (711)  (236)  (1,723)
Deposits and other long term assets (440)  (301)  (1,659)  (2,179)
Trade payables 227   (1,887)  (1,706)  (3,589)
Employees and payroll accruals 914   (1,284)  1,436   1,205 
Deferred revenues and advances from customers 55   (414)  (617)  (3,651)
Other payables and accrued expenses (3,880)  (2,152)  (6,070)  (2,190)
Accrued severance pay, net 4   (76)  (58)  (138)
Other long - term liabilities (20)  (254)  (80)  (944)
Net cash provided by (used in) operating activities 13,554   (7,728)  22,062   (37,276)
        
Cash flows from investing activities:       
        
Purchase of property, plant and equipment (774)  (1,003)  (3,497)  (6,072)
Investing in long term assets (9,723)  -   (9,723)  - 
Proceeds from short-term bank deposits, net 73,995   3   66,199   54,938 
Proceeds from sales and redemption of marketable securities 7,000   1,990   10,494   7,240 
Proceeds from maturities of marketable securities 8,750   2,970   44,629   14,222 
Investment in marketable securities (1,282)  (5,516)  (45,901)  (24,451)
Net cash provided by (used in) investing activities 77,966   (1,556)  62,201   45,877 
        
        
Cash flows from financing activities:       
        
Exercise of employee stock options 115   198   122   293 
Payments related to shares withheld for taxes (296)  -   (1,074)  (437)
Repurchase of ordinary shares -   (15,948)  (9,055)  (36,766)
Net cash used in financing activities (181)  (15,750)  (10,007)  (36,910)
        
        
        
Increase (decrease) in cash and cash equivalents 91,339   (25,034)  74,256   (28,309)
Cash and cash equivalents at the beginning of the period 22,522   101,322   39,605   104,597 
Cash and cash equivalents at the end of the period$113,861  $76,288  $113,861  $76,288 
        
        
        
Non-cash investing and financing activities:       
        
Purchase of property and equipment on credit 145   74   145   74 
Inventory transferred to be used as property and equipment and long term assets 175   531   1,576   531 
Property, plant and equipment transferred to be used as inventory -   -   320   734 
Lease liabilities arising from obtaining right-of-use assets 337   322   (1,071)  5,809 
        

    
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 Nine Months Ended
  September 30, September 30,
   2024   2023   2024   2023 
  (Unaudited) (Unaudited)
         
GAAP Revenues $50,732  $59,224  $143,129  $163,201 
         
GAAP Net Loss  (908)  (8,161)  (19,016)  (41,417)
Taxes on income  505   (193)  1,412   431 
Financial income  (6,720)  (6,304)  (18,501)  (18,726)
Share-based compensation  5,355   5,149   16,672   16,944 
Intangible assets amortization  478   544   1,502   1,730 
Restructuring expenses  -   -   1,671   295 
Non-GAAP Operating Loss  (1,290)  (8,965)  (16,260)  (40,743)
Depreciation  2,741   3,342   8,232   9,683 
Adjusted EBITDA $1,451  $(5,623) $(8,028) $(31,060)
         

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