Kornit Digital Ltd. (KRNT) Q1 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call summary indicates strong product development and business updates, particularly with the AIC model's growth and new market opportunities. Despite the lack of specific revenue guidance for MATRIX and Presto MAX PLUS, the Q&A reveals positive analyst sentiment and a strong order pipeline. The company's reduced OpEx and continued cash generation are favorable, alongside a $100M share buyback plan. While guidance for Q1 2026 shows a negative EBITDA margin, overall optimism and strategic initiatives suggest a positive stock reaction.
Key Financial Performance
Total Revenues $48.5 million, a year-over-year growth of 4% for products and 7% for services. This growth was supported by growing customer activity and expansion across the installed base.
AIC Revenue Increased approximately 103% year-over-year compared to the first quarter last year. This growth reflects strong customer adoption and expansion.
ARR (Annual Recurring Revenue) Approximately $27 million, with an addition of $2.1 million in Q1. This growth is attributed to a strong backlog, advanced pipeline, and customer commitments to AIC.
Impressions Grew by approximately 12% year-over-year on a trailing 12-month basis. This growth was driven by continued utilization across the installed base and the ongoing shift from screen to digital production.
Non-GAAP Gross Margins 41%, compared to 45.2% in Q1 2025. The decline was due to a higher mix of systems and services relative to consumables, FX movement related to the shekel strengthening, and certain tariff-related costs.
Non-GAAP Operating Expenses $25.5 million, down 7% year-over-year. This reduction reflects disciplined cost management despite an unfavorable FX impact of approximately $2 million related to shekel strengthening.
Adjusted EBITDA Loss $2.8 million, compared to a loss of $3.9 million in the same period last year. This represents an improvement of approximately 260 basis points year-over-year.
Operating Cash Flow $6.3 million, marking the 10th consecutive quarter of positive operating cash flow. This reflects continued focus on working capital efficiency and disciplined financial management.
Cash Balance Approximately $462.2 million, including bank deposits and marketable securities. This strong balance sheet supports organic growth initiatives and strategic investments.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
ATLAS MATRIX platform: Beta testing with customers, enabling high-quality digital production on polyester fabrics, addressing industry challenges like dye migration, and expanding into sportswear and performance apparel markets.
Apollo: Demonstrated in live production environments, showcasing automation and consistency for bulk and mid-run production, opening new market opportunities.
Presto MAX Plus: Introduced for roll-to-roll digital textile manufacturing, targeting footwear, technical apparel, and home decor markets with enhanced durability and print performance.
Market Expansion: Promos Ink and Printis expanded their fleets with Kornit systems, with Printis planning U.S. market entry. New product platforms like ATLAS MATRIX and Presto MAX Plus are opening new market opportunities.
Revenue Growth: Q1 revenue reached $48.5 million, with ARR growing to $27 million, supported by a 12% year-over-year increase in impressions.
Operational Efficiency: Achieved 10 consecutive quarters of positive operating cash flow, with $6.3 million in Q1.
Acquisition of PrintFactory: Strengthened software workflow and production automation capabilities, aligning with the strategy to build a connected digital infrastructure for the textile and apparel industry.
Shift to Digital Manufacturing: Continued transition from analog to digital production, with 40% of Q1 system sales from new customers and 65% targeting traditional screen printing customers.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Gross Margin Pressure: Gross margins decreased to 41% from 45.2% in Q1 2025 due to a higher mix of systems and services relative to consumables, FX movements related to the strengthening of the shekel, and certain tariff-related costs.
Foreign Exchange Impact: The strengthening of the shekel created unfavorable FX impacts, reducing gross margins by approximately 190 basis points year-over-year and increasing operating expenses by $2 million.
Tariff-Related Costs: Certain tariff-related costs during the quarter negatively impacted gross margins.
Class Action Lawsuit Costs: Approximately $2 million in legal costs were incurred related to a prior class action lawsuit, though largely covered by insurance.
Seasonality in Consumables Demand: The business typically experiences lower consumables demand and utilization levels in the first half of the year, impacting gross margins.
Strategic Investments and Costs: Continued investments in strategic initiatives, including Konnections 2026 and other growth initiatives, are contributing to ongoing profitability challenges.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Revenue Guidance for Q2 2026: The company expects revenue between $51 million and $55 million for the second quarter of 2026.
Adjusted EBITDA Margin Guidance for Q2 2026: The company anticipates an adjusted EBITDA margin between negative 5% and breakeven for Q2 2026.
Annual Recurring Revenue (ARR) Growth: ARR ended Q1 at approximately $27 million, with expectations for a meaningful step-up in Q2 and continued acceleration throughout the second half of the year.
Gross Margin Outlook: Gross margins are expected to improve in Q2 2026, with more meaningful improvements in the second half of the year driven by higher utilization, recurring revenues, and improved operating leverage.
Market Expansion and Product Launches: The company is expanding into new markets and applications with products like Atlas MATRIX and Presto MAX Plus, which are expected to drive growth in high-growth segments such as polyester, sportswear, and performance apparel.
Strategic Acquisition Impact: The acquisition of PrintFactory is expected to strengthen software workflow and production automation capabilities, supporting the company's long-term strategy to build connected digital infrastructure for the textile and apparel industry.
Operational and Financial Discipline: The company remains focused on cost management and expects continued revenue growth, improving profitability, and ongoing positive operating cash flow generation through 2026.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
Share Repurchase Program: During the first quarter, the company repurchased just over $30 million under its share repurchase program. Since the launch of the initial repurchase program in 2023 and through the end of the first quarter of 2026, the company has repurchased approximately 9.1 million shares for a total gross amount of approximately $200 million.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:What is the momentum in the second quarter and the setup for the rest of the year?
A:The industry is moving towards on-demand production, with strong sentiment from brands, retailers, and fulfillers. Kornit has shifted its strategy to target the mainstream market, including high production in the screen market and new segments like footwear. Q1 results showed revenue growth in products and services, with a 12% growth in impressions over the trailing 12 months. 40% of systems delivered in Q1 were from new customers, and 65% of deals came from the screen market. The AIC model is growing at around 100% year-over-year, and Kornit has reduced OpEx by 7% despite currency headwinds. The company continues to generate cash and has a strong product portfolio, including the MATRIX and Presto MAX PLUS, which are opening new markets. Kornit expects growing backlog and confidence for the full year.
Q:What revenue is expected from MATRIX and Presto MAX PLUS upgrades or new system sales in 2026 and 2027?
A:Ronen Samuel did not provide specific numbers but mentioned that the MATRIX platform will generate revenue from upgrades of the installed base and new system sales. The MATRIX allows customers to print on polyester and blended fabrics, leading to incremental impressions and higher revenue per impression. The Presto MAX PLUS opens new markets like footwear, camouflage, and home decor, with strong interest from new customers and existing ones upgrading their systems.
Q:What feedback and order bookings were received from the Konnections event?
A:The Konnections event aimed to build an ecosystem for on-demand manufacturing. It had close to 600 participants, including over 300 customers and prospective customers. The event showcased solutions like the MATRIX and Apollo, with live demos and orders placed on the spot. Kornit received a strong pipeline of orders, including from new customers, with some orders already booked for Q2 and others expected to convert in H2 and the next year.
Q:When will revenue from the MATRIX be recognized, and what is the bigger opportunity: upgrades or new system sales?
A:Revenue from the MATRIX will start in Q2 2026, with both new shipments and upgrades contributing. Most upgrades are expected in Q3 and early Q4, continuing into the next year. Both upgrades and new system sales present significant opportunities, with a strong backlog of orders already in place.
Q:What percentage of new customers are entering through the AIC model versus the traditional CapEx method?
A:In the screen market, over 90% of new customers are adopting the AIC model. In the customized design market, existing customers often prefer the CapEx model, while new customers show a tendency towards AIC. Kornit is pushing more deals into the AIC model for better predictability of recurring revenue and gross margins. Customers on AIC generally print more impressions than those on CapEx.
Q:What is the outlook for buybacks for the rest of the year?
A:Kornit plans to buy back up to $100 million worth of shares but does not have a consistent quarterly run rate. The buyback strategy depends on the company's priorities, including organic growth, M&A activities, and shareholder value.
Q:What is the average selling cycle for new customers, and how does it vary by market?
A:The sales cycle is becoming shorter as the market matures and customers adopt digital solutions. The AIC model shortens the cycle further, with some deals closing in 1-2 months. In the screen market, the cycle is longer, while in customized design, it is shorter. Existing customers have a quicker cycle compared to new ones.
Q:What is the opportunity for driving multiple machines at customer locations?
A:New customers often start with one or two systems and expand within six months, adding more capacity. In the screen market, initial sales are complex, but successful implementations lead to additional system purchases. Kornit sees many customers scaling up quickly after initial adoption.
Q:What is the activity with Kornit's large global strategic customer?
A:Kornit has a confidentiality agreement with its large global strategic customer. The customer continues to upgrade its fleet to the MAX platform, and Kornit is in discussions about new technologies like the MATRIX and Apollo.
Q:What is the opportunity in new markets like home decor, camouflage, and footwear?
A:The camouflage market is massive, with billions of impressions. Kornit is identifying its specific addressable market. The footwear market has a SAM of 2 billion impressions, with strong interest from brands and customers. Home decor is another large market, with more developments expected later this year. Kornit is also exploring opportunities in performance wear and compression with major brands.
Q:Review of Unclear Management Responses
A:Management avoided providing specific revenue numbers for the MATRIX and Presto MAX PLUS in 2026 and 2027, instead offering directional insights. Additionally, details about the large global strategic customer were limited due to confidentiality agreements.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
AIC
ARR
ATLAS MAX
Apollo
Chief
Konnection
Kornit
MATRIX platform
MAX fleet
MAX system
apparel
application production
backlog
capability
consistency
demand manufacturing
durability
environment PrintFactory
expansion market
fabric
fleet ATLAS
fulfillment
industry demand
level automation
manufacturing environment
momentum
platform expansion
polyester
printing
production control
production environment
screen
shift
technology platform
visibility confidence
vision
workflow
KRNT Transcript
Kornit Digital Ltd. (KRNT) Q1 2026 Earnings Call Transcript
Positive5-13
The earnings call summary indicates strong product development and business updates, particularly with the AIC model's growth and new market opportunities. Despite the lack of specific revenue guidance for MATRIX and Presto MAX PLUS, the Q&A reveals positive analyst sentiment and a strong order pipeline. The company's reduced OpEx and continued cash generation are favorable, alongside a $100M share buyback plan. While guidance for Q1 2026 shows a negative EBITDA margin, overall optimism and strategic initiatives suggest a positive stock reaction.
First Capital Real Estate Investment Trust (FCR.UN:CA) Q4 2025 Earnings Call Transcript
Unknown2-11
The earnings call summary presents a mixed outlook. Financial performance shows modest revenue growth and improved liquidity, but there are concerns with rising G&A expenses and lack of specific profit guidance. The Q&A reveals management's avoidance of some direct answers, which might raise investor uncertainty. However, optimistic guidance for EBITDA growth and strategic asset sales provide balance. Without market cap data, it's challenging to gauge the impact, but the overall sentiment appears neutral due to balanced positive and negative indicators.
Kornit Digital Ltd. (KRNT) Q4 2025 Earnings Call Transcript
Positive2-11
The earnings call reflects a positive sentiment overall. Despite a slight decline in gross margins, the company has shown strong growth in recurring revenue and EBITDA. The Apollo system's success, high customer satisfaction, and expansion into new markets like digital footwear are promising. The strategic focus on ARR and AIC models, along with disciplined expense management, suggests a positive outlook. While some details were withheld, the overall market strategy and innovation plans support a positive stock price movement prediction.
Kornit Digital Ltd. (KRNT) Q3 2025 Earnings Call Transcript
Unknown11-5
The earnings call presents a mixed sentiment. While there are positive aspects like disciplined cost control, ARR growth, and strategic shifts to a recurring revenue model, there are concerns about declining gross margins, flat Q4 guidance, and negative free cash flow projections. The Q&A session highlights uncertainties, such as management's lack of specific details on future upgrades and geopolitical impacts. These mixed signals suggest a neutral stock price movement in the short term, as positive long-term strategies are offset by immediate financial challenges.
KRNT Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
