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Kornit Digital Reports First Quarter 2023 Results

May 10, 2023
  • First quarter revenues of $47.8 million, in line with prior guidance
  • First quarter GAAP net loss of $18.9 million; non-GAAP net loss of $13.4 million
  • MAX upgrades drive strong quarter for Services
  • Double-digit year-over-year impressions growth from several strategic customers
  • New Atlas MAX Poly and Direct-to-Fabric customers added in key textile regions
  • Set to showcase new break-through solutions at June ITMA tradeshow in Milan, Italy

ROSH-HA`AYIN, Israel, May 10, 2023 (GLOBE NEWSWIRE) -- Kornit Digital Ltd. (“Kornit” or “the Company”) (Nasdaq: KRNT), a worldwide market leader in sustainable, on-demand, digital fashionX and textile production technologies, reported today its results for the first quarter ended March 31, 2023.

“Promising indicators emerged during the first quarter in certain parts of our business, despite the persistent macroeconomic pressures,” said Ronen Samuel, Kornit’s Chief Executive Officer. “These indicators included the double-digit year-over-year impressions growth from several of our larger direct-to-garment (DTG) strategic accounts in the customized design market, and the continued adoption of our MAX technology. While capacity utilization is still not optimal, we see immense opportunities unfolding with major demand generating platforms and expect this market to resume growth as overall macro conditions improve.”

Mr. Samuel continued, “With our MAX technology as the cornerstone, we’ve been steadily gaining momentum on our strategy in targeting brands, retailers, and their global fulfillers, all of whom will greatly benefit from Kornit’s sustainable on-demand digital solutions, instead of existing analog production. We had a strong quarter for Atlas MAX Poly, and continued to strengthen our market-leading position in direct-to-fabric (DTF) with Presto MAX. The progress made in the first quarter offers additional proof points that our MAX technology is becoming the industry standard and an excellent solution that offers top retail quality output, increased productivity, better cost efficiencies, and new product capabilities and offerings.”

Mr. Samuel concluded, “We are excited to attend the upcoming ITMA tradeshow in Milan, where we will demonstrate how digital production goes mainstream with sustainable on-demand manufacturing at scale. We will showcase a diverse range of new cutting-edge DTF and DTG solutions, including unveiling our highly anticipated Apollo, which will revolutionize markets traditionally served by analog. These new systems and solutions significantly extend the breadth of print applications and offer levels of automation never before seen in any of the markets we serve.”

First Quarter 2023 Results of Operations

  • Total revenue for the first quarter of 2023 was $47.8 million compared with $83.3 million in the prior year period, primarily due to expected lower systems revenues.

  • GAAP gross profit margin for the first quarter of 2023 was 27.4% compared with 40.1% in the prior year period. On a non-GAAP basis, gross profit margin was 30.2% compared with 41.5% in the prior year period.

  • GAAP operating expenses for the first quarter of 2023 decreased by 7.7% to $37.2 million compared with the prior year period. On a non-GAAP basis, operating expenses also decreased by 8.0% to $32.4 million compared with the prior year period.

  • GAAP net loss for the first quarter of 2023 was $18.9 million, or ($0.38) per basic share, compared with net loss of $5.2 million, or ($0.10) per basic share, for the first quarter of 2022.

  • Non-GAAP net loss for the first quarter of 2023 was $13.4 million, or ($0.27) per basic share, compared with non-GAAP net income of $0.2 million, or $0.00 per diluted share, for the first quarter of 2022.

  • Adjusted EBITDA loss for the first quarter of 2023 was $14.7 million compared with adjusted EBITDA of $1.5 million for the first quarter of 2022. Adjusted EBITDA margin for the first quarter of 2023 was -30.8% compared with 1.8% for the first quarter of 2022.

Second Quarter 2023 Guidance

For the second quarter of 2023, the Company expects revenues to be in the range of $54 million to $59 million and adjusted EBITDA margin between -19% to -27% of revenue. The guidance for revenue and adjusted EBITDA margin includes the impact of the non-cash expense associated with the fair value of the Company’s warrants.

First 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 To access the call, participants may dial toll-free at 1-888-886-7786 or 1-416-764-8658. The toll-free Israeli number is 1 809 468 221. The conference confirmation code is 79530398.

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 79530398. The telephonic replay will be available approximately three hours after the completion of the live call until 11:59 pm ET on Wednesday, May 24, 2023. The call will also be available for replay via the webcast link on Kornit’s Investor Relations website.

About Kornit Digital

Kornit Digital Ltd. (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 serves customers in more than one hundred countries and states worldwide. To learn more about how Kornit Digital is boldly transforming the world of fashion and textiles, visit

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 current adverse macro-economic headwinds being caused by supply-chain delays, inflationary pressures, and rising interest rates, which have been impacting, 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; 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; 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, 2022, filed with the SEC on March 30, 2023. 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; acquisition related expenses; 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:
Andrew G. Backman
Global Head of Investor Relations 

(U.S. dollars in thousands) 
  March 31, December 31, 
  2023 2022 
  (Unaudited) (Audited) 
Cash and cash equivalents $352,950 $104,597 
Short-term bank deposit  101  275,033 
Marketable securities  25,948  20,380 
Trade receivables, net  72,968  67,360 
Inventory  92,727  89,415 
Other accounts receivable and prepaid expenses  21,138  22,054 
Total current assets  565,832  578,839 
Marketable securities  244,946  245,970 
Deposits and other long-term assets  6,954  5,927 
Severance pay fund  301  274 
Property, plant and equipment, net  58,717  60,463 
Operating lease right-of-use assets  31,910  27,139 
Intangible assets, net  9,233  9,890 
Goodwill  29,164  29,164 
Total long-term assets  381,225  378,827 
Total assets  947,057  957,666 
Trade payables  11,837  14,833 
Employees and payroll accruals  14,857  14,255 
Deferred revenues and advances from customers  4,663  5,701 
Operating lease liabilities  4,975  4,989 
Other payables and accrued expenses  30,127  25,592 
Total current liabilities  66,459  65,370 
Accrued severance pay  1,349  1,223 
Operating lease liabilities  25,363  21,035 
Other long-term liabilities  856  1,216 
Total long-term liabilities  27,568  23,474 
SHAREHOLDERS' EQUITY  853,030  868,822 
Total liabilities and shareholders' equity $947,057 $957,666 

(U.S. dollars in thousands, except share and per share data)
 Three Months Ended
 March 31,
  2023   2022 
     Products$31,903  $72,514 
     Services 15,875   10,779 
Total revenues 47,778   83,293 
Cost of revenues   
      Products 20,379   39,237 
      Services 14,327   10,654 
Total cost of revenues 34,706   49,891 
Gross profit 13,072   33,402 
Operating expenses:   
Research and development, net 13,082   14,010 
Sales and marketing 15,183   16,531 
General and administrative 8,948   9,766 
Total operating expenses 37,213   40,307 
Operating loss (24,141)  (6,905)
Financial income, net 5,404   1,799 
Loss before taxes on income (18,737)  (5,106)
Taxes on income 194   91 
Net loss$(18,931) $(5,197)
Basic loss per share$(0.38) $(0.10)
Weighted average number of shares   
used in computing basic net loss per share 49,887,982   49,658,028 
Diluted net loss per share$(0.38) $(0.10)
Weighted average number of shares   
used in computing diluted net loss per share 49,887,982   49,658,028 

 (U.S. dollars in thousands, except share and per share data)
   Three Months Ended
   March 31,
    2023   2022 
 Revenues$47,778  $83,293 
 GAAP cost of revenues$34,706  $49,891 
 Cost of product recorded for share-based compensation (1) (507)  (449)
 Cost of service recorded for share-based compensation (1) (351)  (385)
 Intangible assets amortization on cost of product (3) (263)  (173)
 Intangible assets amortization on cost of service (3) (160)  (160)
 Restructuring expenses (4) (89)  - 
 Non-GAAP cost of revenues$33,336  $48,724 
 GAAP gross profit$13,072  $33,402 
 Gross profit adjustments 1,370   1,167 
 Non-GAAP gross profit$14,442  $34,569 
 GAAP operating expenses$37,213  $40,307 
 Share-based compensation (1) (4,387)  (4,464)
 Acquisition related expenses (2) -   (512)
 Intangible assets amortization (3) (188)  (86)
 Restructuring expenses (4)  (206)  - 
 Non-GAAP operating expenses$32,432  $35,245 
 GAAP Financial income, net$5,404  $1,799 
 Foreign exchange differences associated with ASC 842 (376)  (649)
 Non-GAAP Financial income , net$5,028  $1,150 
 GAAP Taxes on income$194  $91 
 Non-cash deferred tax income 221   217 
 Non-GAAP Taxes on income$415  $308 
 GAAP net loss$(18,931) $(5,197)
 Share-based compensation (1) 5,245   5,298 
 Acquisition related expenses (2) -   512 
 Intangible assets amortization (3) 611   419 
 Restructuring expenses (4) 295   - 
 Foreign exchange differences associated with ASC 842 (376)  (649)
 Non-cash deferred tax income (221)  (217)
 Non-GAAP net income (Loss)$(13,377) $166 
 GAAP diluted loss per share$(0.38) $(0.10)
 Non-GAAP diluted earnings (loss) per share$(0.27) $0.00 
 Weighted average number of shares   
 Shares used in computing GAAP diluted net loss per share 49,887,982   49,658,028 
 Shares used in computing Non-GAAP diluted net earnings (loss) per share 49,887,982   50,955,776 
 (1) Share-based compensation   
  Cost of product revenues$507  $449 
  Cost of service revenues 351   385 
  Research and development 1,351   1,189 
  Sales and marketing 1,363   1,809 
  General and administrative 1,673   1,466 
   $5,245  $5,298 
 (2) Acquisition related expenses   
  General and administrative$-  $512 
   $-  $512 
 (3) Intangible assets amortization   
  Cost of product revenues$263  $173 
  Cost of service revenues 160   160 
  Sales and marketing 188   86 
   $611  $419 
 (4) Restructuring expenses   
  Cost of product revenues$89  $- 
  Research and development 20   - 
  Sales and marketing 186   - 
   $295  $- 

 (U.S. dollars in thousands)
  Three Months Ended
  March 31,
   2023   2022 
 Cash flows from operating activities:   
 Net loss$(18,931) $(5,197)
 Adjustments to reconcile net loss to net cash used in operating activities:   
 Depreciation and amortization 3,873   2,580 
 Fair value of warrants deducted from revenues 2,344   8,005 
 Share-based compensation 5,245   5,298 
 Amortization of premium and accretion of discount on marketable securities, net 323   528 
 Realized loss on sale and redemption of marketable securities 40   3 
 Change in operating assets and liabilities:   
 Trade receivables, net (5,608)  (31,193)
 Other accounts receivables and prepaid expenses 916   (2,464)
 Inventory (3,023)  (9,036)
 Operating leases right-of-use assets and liabilities, net (457)  (408)
 Deferred taxes -   (305)
 Deposits and other long term assets (1,027)  6 
 Trade payables (1,477)  (7,444)
 Employees and payroll accruals 737   (6,470)
 Deferred revenues and advances from customers (1,038)  (1,471)
 Other payables and accrued expenses 4,340   359 
 Accrued severance pay, net 99   (189)
 Other long-term liabilities (360)  316 
 Net cash used in operating activities$(14,004) $(47,082)
 Cash flows from investing activities:   
 Purchase of property, plant and equipment$(3,278) $(7,462)
 Proceeds from (investment in) short-term bank deposits, net 274,932   (410,985)
 Proceeds from sales and redemption of marketable securities 4,000   445 
 Proceeds from maturities of marketable securities 3,572   11,922 
 Investment in marketable securities (10,024)  (80,894)
 Net cash provided by (used in) investing activities$269,202  $(486,974)
 Cash flows from financing activities:   
 Exercise of employee stock options$42  $299 
 Payments related to shares withheld for taxes (135)  (510)
 Repurchase of ordinary shares (6,752)  - 
 Net cash used in financing activities$(6,845) $(211)
 Increase (decrease) in cash and cash equivalents$248,353  $(534,267)
 Cash and cash equivalents at the beginning of the period 104,597   611,551 
 Cash and cash equivalents at the end of the period$352,950  $77,284 
 Non-cash investing and financing activities:   
 Purchase of property and equipment on credit 173   1,292 
 Inventory transferred to be used as property and equipment 365   697 
 Property, plant and equipment transferred to be used as inventory 653   4 
 Receipt on account of shares -   63 
 Lease liabilities arising from obtaining right-of-use assets 6,037   5,746 

(U.S. dollars in thousands, except share and per share data)
  Three Months Ended
  March 31,
   2023   2022 
GAAP Revenues $47,778  $83,293 
GAAP Net Loss  (18,931)  (5,197)
     Taxes on income  194   91 
     Financial income  (5,404)  (1,799)
     Share-based compensation  5,245   5,298 
     Intangible assets amortization  611   419 
     Acquisition related expenses  -   512 
     Restructuring expenses  295   - 
Non-GAAP Operating Loss  (17,990)  (676)
     Depreciation  3,262   2,161 
Adjusted EBITDA $(14,728) $1,485 

Contact Investor Relations

Jared Maymon

Global Head of Investor Relations