View:
Download DOC
Download PDF
Download XLS

 

 

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 2021

 

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 ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

 

 

 

 

 

CONTENTS

 

Results of Operations and Financial Condition - Second Quarter 2021

 

On August 10, 2021 Kornit Digital Ltd. (“Kornit”) issued a press release entitled “Kornit Digital Reports Second Quarter 2021 Results,” in which Kornit reported its financial results for the second quarter of 2021, ended June 30, 2021. A copy of that press release is furnished as Exhibit 99.1 hereto.

 

In conjunction with the conference call being held on August 10, 2021 to discuss Kornit’s results for the second quarter of 2021, ended June 30, 2021, Kornit also made 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.

 

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 Form 6-K is hereby incorporated by reference into Kornit’s Registration Statements on Form F-3 (File No. 333-248784) and Form S-8 (File No.’s 333-203970, 333-214015, 333-217039, 333-223794, 333-230567, 333-237346 and 333-254749).

 

1

 

 

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.

 

Date: August 10, 2021 KORNIT DIGITAL LTD.
   
  By: /s/ Alon Rozner
  Name:  Alon Rozner
  Title: Chief Financial Officer

 

2

 

 

Exhibit Index

 

Exhibit No.   Description
99.1   Press release, dated August 10, 2021, titled “Kornit Digital Reports Second Quarter 2021 Results”
     
99.2   Slide presentation for conference call of Kornit held on August 10, 2021

 

 

3

 

 

Exhibit 99.1

 

Investor Contact:

Andrew G. Backman

Global Head of Investor Relations

(201) 608-5882

andrew.backman@kornit.com

 

 

Kornit Digital Reports Second Quarter 2021 Results

Revenue Increases 118% Year-Over-Year

 

●Second quarter revenue increased 118% year-over-year to $81.7 million, net of $6.6 million attributed to the non-cash impact of warrants

 

●Second quarter GAAP operating profit of $6.1 million; Non-GAAP operating profit of $10.2 million, net of $6.6 million attributed to the non-cash impact of warrants

 

●All geographic regions posted significant year-over-year and sequential growth; Americas and EMEA regions revenue more than doubled year-over-year

 

●Successfully completed beta testing and began shipments of Atlas Max; Very strong order backlog and positive customer feedback on increased productivity, unique XDi capabilities, and unparalleled print quality and durability

 

●Visibility, pipeline and confidence for the remainder of year and into next year have never been stronger

 

●Announced acquisition of Voxel8 accelerates execution of Kornit’s 4.0 strategy to digitize on-demand textile production; Significantly expands Company’s reach into existing and new lucrative markets

 

Rosh-Ha’Ayin, Israel – August 10, 2021 – Kornit Digital Ltd. (NASDAQ: KRNT), a worldwide market leader in digital textile production technologies, reported results for the second quarter ended June 30, 2021.

 

“Our second quarter results capped off what was a remarkable first half of the year for Kornit,” said Ronen Samuel, Kornit Digital’s Chief Executive Officer. “The Company executed across the board, delivering on massive global expansion projects with top strategic customers and driving growth from new customers, both in the DTG and DTF product lines. We began shipping our Atlas Max mass production systems after very successful beta testing, and are seeing great momentum for KornitX, as evidenced by our recently announced partnership with Canva, the largest on-line design software and content provider in the world.”

 

1

 

 

Mr. Samuel continued, “We are also pleased to announce our acquisition of Voxel8, which will help us accelerate the execution of our 4.0 strategy to digitize on-demand sustainable textile production. Through Voxel8’s advanced and proven 3D technology, which has been tested by some of the world’s leading fashion and footwear brands including Hush Puppies, which is part of Wolverine Worldwide, we will disrupt the business of fashion, empowering completely new creative decorative concepts and never-before-seen functional textile applications, while exploring new lucrative opportunities in the functional apparel and footwear markets.”

 

Mr. Samuel concluded, “Our pipeline and visibility have never been stronger as the industry accelerates its digital transformation with Kornit leading the way. We are more confident than ever in our outlook for the remainder of this year and into next year, and believe we are well on our way to becoming the operating system for on demand sustainable fashion and a $1 billion revenue company in 2026.”

 

The following table compares the adverse, non-cash impact that the Company’s outstanding warrants had on the Company’s results of operations during the second quarter of 2021 and 2020, respectively:

 

Second Quarter Warrants Impact

 

   Three Months Ended 
   June 30, 
   2021   2020 
   Net of
Warrants
Impact		   Warrants
Impact		   Net of
Warrants
Impact		   Warrants
Impact		 
                 
Revenue  $81.7M   $6.6M   $37.4M   $0.8M 
Non-GAAP Gross Margin   48.2%   386bps    44.1%   123bps 
Non-GAAP Operating Margin   12.5%   652bps    (6.8)%   235bps 
Non-GAAP Net Margin   12.8%   649bps    (3.6)%   228bps 
Non-GAAP Diluted Earnings Per Share  $0.22   $0.13   $(0.03)  $0.02 

 

“We are very pleased with our exceptionally strong second quarter results,” said Alon Rozner, Kornit Digital’s Chief Financial Officer. “All revenue components including mass production systems, consumables and services increased, due in part to continued momentum with our global strategic accounts, while all regions posted year-over-year and sequential growth. Our gross margin expansion was again driven by a favorable product mix shift, as well as continued profitability from our services business, while overall profitability benefited from our scale and operating leverage. We are very proud of our strong second quarter performance as it further validates our strategy and is a result of all the hard work and dedication of the entire Kornit team.”

 

Second Quarter 2021 Results of Operations

 

●Total revenue for the second quarter of 2021 was $81.7 million, net of $6.6 million attributed to the non-cash impact of warrants, compared to $37.4 million, net of $0.8 million attributed to the non-cash impact of warrants in the prior year period.
●GAAP net income for the second quarter of 2021 was $5.6 million, or $0.12 per diluted share, compared to net loss of $4.6 million, or $0.11 per basic share, for the second quarter of 2020.
●Non-GAAP net income for the second quarter of 2021 was $10.5 million, or $0.22 per diluted share, net of $0.13 per diluted share attributed to the non-cash impact of warrants, compared to non-GAAP net loss of $1.3 million, or $0.03 per basic share, net of $0.02 per diluted share attributed to the non-cash impact of warrants, for the second quarter of 2020.

 

2

 

 

Third Quarter 2021 Guidance

 

The Company expects revenue for the third quarter to be in the range of $88 million to $92 million and non-GAAP operating income to be in the range of 12 % to 14 % of revenue. Consistent with past practice, this guidance excludes the impact of the fair value of issued warrants in the quarter.

 

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 investment 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 toll-free Israeli number is 1 809 406 247. The confirmation code is 13721628.

 

To listen to a telephonic replay of the conference call, dial toll-free 1-844-512-2921 or +1-412-317-6671 (international) and enter confirmation code 13721628. The telephonic replay will be available beginning at 11:30 a.m. ET on Tuesday, August 10, 2021, until 11:59 p.m. ET on Tuesday, August 24, 2021. The call will also be available for replay via the webcast link on Kornit’s Investor Relations website.

 

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 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 Kornit’s systems; the extent of the Company’s ability to continue to increase sales of Kornit’s systems, ink and consumables; the extent of the Company’s ability to leverage Kornit’s 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; the duration and severity of, and the degree of recovery from, the global COVID-19 pandemic, which could potentially impact once again, in a material adverse manner, the Company’s operations, financial position and cash flows, and those of the Company’s customers and suppliers; 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, 2020, filed with the U.S. Securities and Exchange Commission, or SEC, on March 25, 2021. 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.

 

3

 

 

Non-GAAP Discussion Disclosure

 

Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude the impact of share-based compensation expenses, acquisition related expenses, excess cost of acquired inventory, foreign exchange differences associated with ASC 842, amortization of acquired intangible assets, deferred tax impact and the one-time impact of COVID-19, and the tax effect of the foregoing. The purpose of such adjustments is to provide an indication of 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. However, 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.

 

About Kornit

 

Kornit Digital Ltd. (NASDAQ: KRNT) develops, manufactures and markets industrial digital printing technologies for the garment, apparel and textile industries. Kornit delivers complete solutions, including digital printing systems, inks, consumables, software and after-sales support. Leading the digital direct-to-garment printing market with its exclusive eco-friendly NeoPigment printing process, Kornit caters directly to the changing needs of the textile printing value chain. Kornit’s technology enables innovative business models based on web-to-print, on-demand and mass customization concepts. With its immense experience in the direct-to-garment market, Kornit also offers a revolutionary approach to the roll-to-roll textile printing industry: digitally printing with a single ink set onto multiple types of fabric with no additional finishing processes. Founded in 2002, Kornit Digital is a global company, headquartered in Israel with offices in the USA, Europe and Asia Pacific, and serves customers in more than 100 countries and states worldwide.

 

4

 

 

KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(U.S. dollars in thousands)

 

   June 30,   December 31, 
   2021   2020 
   (Unaudited)     
ASSETS        
CURRENT ASSETS:        
Cash and cash equivalents  $92,568   $125,777 
Short-term bank deposit   234,936    224,804 
Marketable securities   29,280    13,718 
Trade receivables, net   62,651    51,566 
Inventory   52,553    52,487 
Other accounts receivable and prepaid expenses   10,714    9,178 
Total current assets   482,702    477,530 
LONG-TERM ASSETS:          
Marketable securities   85,039    71,636 
Deposits and prepaid expenses   526    395 
Severance pay fund   335    337 
Deferred taxes   4,909    5,096 
Property, plant and equipment, net   34,818    29,255 
Operating lease right-of-use assets   20,383    21,053 
Intangible assets, net   6,399    7,221 
Goodwill   16,463    16,466 
Total long-term assets   168,872    151,459 
           
Total assets  $651,574   $628,989 
           
LIABILITIES AND SHAREHOLDERS’ EQUITY          
CURRENT LIABILITIES:          
Trade payables  $31,357   $32,016 
Employees and payroll accruals   15,980    15,022 
Deferred revenues and advances from customers   15,618    27,019 
Operating lease liabilities   3,853    3,957 
Other payables and accrued expenses   17,289    11,613 
Total current liabilities   84,097    89,627 
           
LONG-TERM LIABILITIES:          
Accrued severance pay   1,261    1,214 
Operating lease liabilities   17,603    18,688 
Other long-term liabilities   1,243    443 
Total long-term liabilities   20,107    20,345 
           
SHAREHOLDERS’ EQUITY   547,370    519,017 
           
Total liabilities and shareholders’ equity  $651,574   $628,989 

 

5

 

 

KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data) 

 

   Six Months Ended   Three Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
   (Unaudited)   (Unaudited) 
         
Revenues                
Products  $130,122   $54,246   $72,176   $31,859 
Services   17,667    9,402    9,490    5,577 
Total revenues   147,789    63,648    81,666    37,436 
                     
Cost of revenues                    
Products   62,429    27,086    34,254    14,930 
Services   16,368    12,736    8,830    6,708 
Total cost of revenues   78,797    39,822    43,084    21,638 
Gross profit   68,992    23,826    38,582    15,798 
                     
Operating expenses:                    
Research and development, net   19,243    13,524    9,799    7,041 
Sales and marketing   24,879    16,788    13,830    8,291 
General and administrative   15,689    11,864    8,881    5,794 
Total operating expenses   59,811    42,176    32,510    21,126 
Operating income (loss)   9,181    (18,350)   6,072    (5,328)
Financial income, net   2,416    2,797    351    592 
Income (loss) before taxes on income (tax benefit)   11,597    (15,553)   6,423    (4,736)
                     
Taxes on income (Tax benefit)   896    (927)   821    (164)
Net income (loss)   10,701    (14,626)   5,602    (4,572)
                     
Basic earnings (losses) per share  $0.23   $(0.36)  $0.12   $(0.11)
                     
Weighted average number of shares used in computing basic earnings (losses) per share   46,119,416    40,817,593    46,196,720    40,872,497 
                     
Diluted earnings (losses) per share  $0.22   $(0.36)  $0.12   $(0.11)
                     
Weighted average number of shares used in computing diluted earnings (losses) per share   47,709,429    40,817,593    47,849,783    40,872,497 

 

6

 

 

KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
RECONCILATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except share and per share data)

 

   Six Months Ended
June 30,		   Three Months Ended
June 30,		 
   2021   2020   2021   2020 
   (Unaudited)   (Unaudited) 
         
GAAP cost of revenues  $78,797   $39,822   $43,084   $21,638 
Cost of product recorded for share-based compensation (1)   (619)   (491)   (320)   (277)
Cost of service recorded for share-based compensation (1)   (499)   (360)   (266)   (210)
Intangible assets amortization on cost of product (2)   (50)   (50)   (25)   (25)
Intangible assets amortization on cost of service (2)   (320)   -    (160)   - 
COVID-19 one time impact (3)   -    (446)   -    (202)
Non-GAAP cost of revenues  $77,309   $38,475   $42,313   $20,924 
                     
GAAP gross profit  $68,992   $23,826   $38,582   $15,798 
Gross profit adjustments   1,488    1,347    771    714 
Non-GAAP gross profit  $70,480   $25,173   $39,353   $16,512 
                     
GAAP operating expenses  $59,811   $42,176   $32,510   $21,126 
Share-based compensation (1)   (5,781)   (3,779)   (3,241)   (2,035)
Intangible assets amortization (2)   (238)   (251)   (119)   (116)
COVID-19 one time impact (3)   -    69    -    80 
Non-GAAP operating expenses  $53,792   $38,215   $29,150   $19,055 
                     
GAAP Financial income, net  $2,416   $2,797   $351   $592 
Foreign exchange gain associated with ASC 842   (415)   (82)   387    528 
Non-GAAP Financial income, net  $2,001   $2,715   $738   $1,120 
                     
GAAP Taxes on income (Tax benefit)  $896   $(927)  $821   $(164)
Tax effect on to the above non-GAAP adjustments   165    (180)   (26)   (98)
Taxes on income (Tax benefit) (a)   (586)   1,015    (338)   169 
Non-GAAP Taxes on income  $475   $(92)  $457   $(93)
                     
GAAP net income (loss)  $10,701   $(14,626)  $5,602   $(4,572)
Share-based compensation (1)   6,899    4,630    3,827    2,522 
Intangible assets amortization (2)   608    301    304    141 
COVID-19 one time impact (3)   -    377    -    122 
Foreign exchange gain associated with ASC 842   (415)   (82)   387    528 
Tax effect on to the above non-GAAP adjustments   (165)   180    26    98 
Deferred taxes on income (Tax benefit) (a)   586    (1,015)   338    (169)
Non-GAAP net income (loss)  $18,214   $(10,235)  $10,484   $(1,330)
                     
GAAP diluted earnings (losses) per share  $0.22   $(0.36)  $0.12   $(0.11)
                     
Non-GAAP diluted earnings (losses) per share  $0.38   $(0.25)  $0.22   $(0.03)
                     
Weighted average number of shares                    
                     
Shares used in computing GAAP diluted net earnings (losses) per share   47,709,429    40,817,593    47,849,783    40,872,497 
                     
Shares used in computing Non-GAAP diluted net earnings (losses) per share   47,941,113    40,817,593    48,189,266    40,872,497 
                     
(1)      Share-based compensation                    
Cost of product revenues   619    491    320    277 
Cost of service revenues   499    360    266    210 
Research and development   1,071    780    569    436 
Selling and marketing   2,333    1,381    1,261    740 
General and administrative   2,377    1,618    1,411    859 
    6,899    4,630    3,827    2,522 
(2)      Intangible assets amortization                    
Cost of product revenues   50    50    25    25 
Cost of service revenues   320    -    160    - 
Selling and marketing   238    251    119    116 
    608    301    304    141 
(3)      COVID-19 one time impact                    
Cost of product revenues   -    453    -    209 
Cost of service revenues   -    (7)   -    (7)
Research and development   -    (57)   -    (57)
Selling and marketing   -    (1)   -    (12)
General and administrative   -    (11)   -    (11)
    -    377    -    122 

7

 

 

KORNIT DIGITAL LTD.
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(U.S. dollars in thousands)

 

   Six Months Ended   Three Months Ended 
   June 30,  June 30, 
   2021   2020   2021   2020 
   (Unaudited)   (Unaudited) 
Cash flows from operating activities:                
Net income (loss)  $10,701   $(14,626)  $5,602   $(4,572)
Adjustments to reconcile net income to net cash provided by operating activities:                    
Depreciation and amortization   3,035    2,196    1,543    1,095 
Fair value of warrants deducted from revenues   9,711    1,406    6,572    841 
Share-based compensation   6,899    4,630    3,827    2,522 
Amortization of premium and accretion of discount on marketable securities, net   (1,298)   165    (481)   76 
Realized gain on sale of marketable securities   -    (102)   -    - 
Change in operating assets and liabilities:                    
Trade receivables, net   (11,085)   616    (9,597)   (6,769)
Other accounts receivables and prepaid expenses   (1,513)   (844)   (3,063)   135 
Inventories   (526)   (5,205)   146    4,298 
Operating leases right-of-use assets   (104)   33    (48)   (30)
Deferred taxes   245    (1,384)   565    (278)
Deposits and long-term assets   (131)   (82)   (121)   (87)
Trade payables   (2,417)   (9,891)   3,639    (8,387)
Operating lease liabilities   (415)   (82)   385    527 
Employees and payroll accruals   2,104    335    (131)   688 
Deferred revenues and advances from customers   (11,401)   (107)   (8,029)   (12)
Other payables and accrued expenses   5,676    432    3,822    792 
Accrued severance pay, net   49    63    79    92 
Other long-term liabilities   800    (143)   501    (13)
Loss from sale and disposal of property and Equipment   -    75    -    - 
Foreign currency translation income (loss) on inter company balances with foreign subsidiaries   -    183    -    (127)
                     
Net cash provided by (used in) operating activities   10,330    (22,332)   5,211    (9,209)
                     
Cash flows from investing activities:                    
                     
Purchase of property, plant and equipment   (5,555)   (8,511)   (2,988)   (4,936)
Acquisition of intangible assets and capitalization of software development costs   -    (121)   -    (40)
Proceeds from sale of property, plant and equipment   -    4    -    - 
Investment in short-term bank deposits   (10,132)   15,196    8,723    1,346 
Proceeds from sale of marketable securities   2,050    20,802    2,050    - 
Proceeds from maturity of marketable securities   -    17,445    -    5,343 
Investment in marketable securities   (30,510)   (18,542)   (15,220)   (9,801)
                     
Net cash provided by (used in) investing activities   (44,147)   26,273    (7,435)   (8,088)
                     
Cash flows from financing activities:                    
                     
Exercise of employee stock options   1,754    2,804    1,079    1,236 
Payments related to shares withheld for taxes   (1,146)   (64)   (458)   (11)
                     
Net cash provided by (used in) financing activities   608    2,740    621    1,225 
                     
Foreign currency translation adjustments on cash and cash equivalents   -    24    -    43 
Increase (decrease) in cash and cash equivalents   (33,209)   6,705    (1,603)   (16,029)
Cash and cash equivalents at the beginning of the period   125,777    40,743    94,171    63,477 
Cash and cash equivalents at the end of the period   92,568    47,448    92,568    47,448 
                     
Non-cash investing and financing activities:                    
                     
Purchase of property and equipment on credit   2,678    384    2,678    384 
Inventory transferred to be used as property and equipment   463    511    51    214 
Property and equipment transferred to be used as inventory   3    51    -    - 
Receipt on account of shares   32    13    32    13 
Lease liabilities arising from obtaining right-of-use assets   1,296    2,187    1,033    267 

 

 

8

 

 

Exhibit 99.2

©2021 Kornit Di gital. All rights reserved. KORNIT DIGITAL (NASDAQ : KRNT) 1 Q2 2021 EARNINGS CALL SUPPORTING SLIDES

 

 

©2021 Kornit Digital. All rights reserved. SAFE HARBOR 2 This presentation contains forward - looking statements within the meaning of U . S . securities laws . All statements other than statements of historical fact contained in this presentation are forward - looking statements . In some cases, you can identify forward - looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology . These statements reflect our current views with respect to future events and are subject to known and unknown risks, uncertainties and other factors that may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward - looking statements . Although we believe that the expectations reflected in the forward - looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance or events or circumstances described in the presentation will occur or be achieved . You should read the Company’s most recent annual report on Form 20 - F, filed with the U . S . Securities and Exchange Commission, or SEC, on March 25 , 2021 , including the Risk Factors set forth therein, completely and with the understanding that our actual future results may be materially different from what we expect . Except as required by law, we undertake no obligation to update or revise any of the forward - looking statements, whether as a result of new information, future events or otherwise, after the date of this presentation . 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 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 .

 

 

©2021 Kor nit Digital. All rights reserved. 3 Ronen Samuel CEO Ronen Samuel C E O Alon Rozner CFO Alon Rozner CFO Amir Shaked Mandel EVP Corp Dev Amir Shaked Mandel EVP Corp Dev ON TODAY’S CALL Andrew Backman Global Head of IR Andrew Backman Global Head of IR

 

 

©2021 Kornit Di gital. All rights reserved. BUSINESS HIGHLIGHTS 4 RONEN SAMUEL Chief Executive Officer

 

 

©2021 Kornit Digital. All rights reserved. VERY STRONG Q2 AND FIRST HALF OF THE YEAR

 

 

©2021 Kornit Digital. All rights reserved. 6 EXCEEDED EXPECTATIONS • Tremendous top and bottom - line growth • YoY revenue increased 118% and 24% on sequential basis vs. Q121 • All geographic regions up year - over - year and sequentially • Americas and EMEA regions revenues more than doubled prior year quarter revenue • Very strong gross margins driven by increased mass production system sales, strong consumables, continued profitability in service business

 

 

©2021 Kornit Digital. All rights res e rv e d. 7 BUSINESS ACTIVITY r g • Continue to execute on massive global expansion projects with global strategic customers; Expect continued significant contribution in coming quarters • Strong growth with new customers • Pipeline and visibility never been stronger • Began shipping our Atlas Max systems after successful beta testing; Very strong orde backlog and positive customer feedback • Atlas Max upgrades available 1Q22; Expect significant revenue contribution beginnin 1Q22 • Strong tailwinds with market adoption of DTF - based micro - factory solutions

 

 

©2021 Kornit Digital. All rights reserved. BUSINESS ACTIVITY • Hosted multiple customer events; Met with >200 customers face to face globally; Additional events planned for 2H21 • Great momentum for KornitX as evidenced by Canva partnership ; Multiple strategic partnership discussions ongoing with leading online marketplaces and fashion brands ; ~ 80 implementation projects in backlog

 

 

©2021 Kornit Digital. All rights reserved. 9

 

 

©2021 Kornit Digital. All rights reserved. 1 0

 

 

©2021 Kornit Di gital. All rights reserved. FINANCIAL HIGHLIGHTS 1 1 ALON ROZNER Chief Financial Officer

 

 

12 ©2021 Kornit Digital. All rights reserved. QUARTERLY REVENUES • Revenue of $81.7 million vs. $37.4 million in prior year, an increase of 118% YoY and an increase of 23.5% QoQ • Service revenue of $9.5 million accounting for 12% of revenues compared to $5.6 in prior year • 10 largest accounts represented 64.1% of revenues compared to 59.3% in prior year Geographic Revenue Split 71 % 22 % 7 % Q2 2021 Geographic Segments % Americas E M E A Asia Pacific 68 % 24 % 8 % Q1 2021 Geographic Segments % Americas E M E A Asia Pacific

 

 

13 ©2021 Kornit Digital. All rights reserved. QUARTERLY GROSS MARGIN AND OPEX Non GAAP Operating Expenses (% of Revenue) Q2 2021 Q2 2020 Research & Development 11.3% 17.8% Sales & Marketing 15.2% 19.9% General & Administrative 9.1% 13.2% Total Operating Expenses 35.7% 50.9% • Non - GAAP gross margin of 48.2% increased from 44.1% in Q2 2020 • Non - GAAP operating expenses of $29.2 million compared to $19.1 in the previous year

 

 

14 ©2021 Kornit Digital. All rights reserved. QUARTERLY P&L KPI Q2 2021 Q2 2020 Non - GAAP Operating Income (Loss) $ 1 0 .2 - $2.5 Non - GAAP Net Income (Loss) $ 1 0 .5 - $1.3 Non - GAAP Diluted EPS $ 0 . 2 2 - $0.03 GAAP Net Income (Loss) $ 5 .6 - $4.6 GAAP Diluted EPS $ 0 . 1 2 - $0.11 Adjusted EBITDA $ 1 8 .0 - $0.9 $ in millions except per share amounts

 

 

15 ©2021 Kornit Digital. All rights reserved. QUARTERLY BALANCE SHEET AND CASH FLOW Cash from Operating Activities Balance Sheet $ in millions $ in millions Q2 2021 Q1 2021 Q2 2020 Cash, Deposits & Marketable Securities $441.8 $438.7 $237.4 Accounts Recievable $62.7 $53.1 $39.8 Inventory $52.6 $52.8 $42.1 Trade Payable $31.4 $26.5 $13.0 Net Working Capital $398.6 $393.2 $217.7 - 9 .2 5 .1 5 .2 Q 2 - 2 0 Q 1 - 2 1 Q 2 - 2 1

 

 

16 ©2021 Kornit Digital. All rights reserved. Q3 2021 GUIDANCE* *We assume zero impact of warrants on revenue and operating margin for the purposes of guidance • Revenue is expected to be between $88 . 0 million to $92.0 million • Non - GAAP operating income is expected to be between 12% to 14% of revenue

 

 

©2021 Kornit Digital. All rights reserved. T A TIME OUR VISION CREATE A BETTER WORLD WHERE EVERYBODY CAN BOND, DESIGN AND EXPRESS THEIR IDENTITIES, ONE IMPRESSION A THANK YOU