Kornit Digital reports fourth quarter and full year 2023 results

• Fourth quarter revenues of $56.6 million, in line with previous guidance
• Fourth quarter GAAP net loss of $22.9 million; non-GAAP net income of $3.8 millio
• Achieved breakeven adjusted EBITDA and generated positive operating cash flow for the fourth quarter
• Successfully launched the Apollo platform for general commercial use in early 2024
• Expecting modest revenue growth, adjusted EBITDA profitability, and positive operating cash flow for the full year 2024

“We experienced a healthy peak season, with year-over-year growth in impressions and double-digit growth in high-margin consumable sales.” said Ronen Samuel, Kornit’s Chief Executive Officer. Mr. Samuel continued, “This growth, combined with improvements to our operating efficiency and working capital position, drove us to positive adjusted EBITDA and cash from operations in the fourth quarter.”

Mr. Samuel concluded, “Despite a challenging operating environment in 2023, we made progress in further diversifying our customer base, established our MAX technology as the new industry standard, and completed a successful beta program for the Apollo. As we enter 2024, while we continue to anticipate macroeconomics headwinds to weigh on our sales cycle, we are focused on leveraging our key drivers to achieve modest revenue growth for the full year. In the first quarter we have taken further actions to restructure and realign our operating expenses with the current market environment. This puts us on solid footing to generate adjusted EBITDA profitability and positive operating cash flow for the full year.”

Fourth Quarter 2023 Results of Operations

Total revenue for the fourth quarter of 2023 was $56.6 million compared with $63.3 million in the prior year period, due primarily to lower systems revenues.

GAAP gross profit margin for the fourth quarter of 2023 was 25.8% compared with 33.7% in the prior year period. On a non-GAAP basis, gross profit margin was 48.6% compared with 36.4% in the prior year period.

GAAP operating expenses for the fourth quarter of 2023 were $42.4 million compared with $38.1 million in the prior year period. On a non-GAAP basis, operating expenses decreased by 8.7% to $30.1 million compared with the prior year period.

GAAP net loss for the fourth quarter of 2023 was $22.9 million, or ($0.48) per basic share, compared with net loss of $35.4 million, or ($0.71) per basic share, for the fourth quarter of 2022.

Non-GAAP net income for the fourth quarter of 2023 was $3.8 million, or $0.08 per diluted share, compared with non-GAAP net loss of $6.6 million, or ($0.13) per basic share, for the fourth quarter of 2022.

Adjusted EBITDA for the fourth quarter of 2023 was $0.2 million compared with adjusted EBITDA loss of $6.1 million for the fourth quarter of 2022. Adjusted EBITDA margin for the fourth quarter of 2023 was 0.3% compared with -9.6% for the fourth quarter of 2022.

Full Year 2023 Results of Operations

Total revenue for the full year 2023 was $219.8 million compared with $271.5 million in the prior year, due primarily to lower systems revenues.

GAAP gross profit margin for the full year 2023 was 30.5% compared with 35.5% in the prior year. On a non-GAAP basis, gross profit margin was 38.4% compared with 38.2% in the prior year.

GAAP operating expenses for the full year 2023 were $154.5 million compared with $166.4 million in the prior year. On a non-GAAP basis, operating expenses decreased by 12.3% to $127.7 million compared with the prior year.

GAAP net loss for the full year 2023 was $64.4 million, or ($1.31) per basic share, compared with net loss of $79.1 million, or ($1.59) per basic share, for the full year 2022.

Non-GAAP net loss for the full year 2023 was $20.4 million, or ($0.42) per basic share, compared with non-GAAP net loss of $32.6 million, or ($0.66) per basic share, for the full year 2022.

Adjusted EBITDA loss for the full year 2023 was $30.9 million compared with adjusted EBITDA loss of $30.8 million for the full year 2022. Adjusted EBITDA margin for the full year 2023 was -14.0% compared with -11.3% for the full year 2022.

First Quarter 2024 Guidance

For the first quarter of 2024, the Company expects revenues to be in the range of $43 million to $48 million and adjusted EBITDA margin between –16% to –26% 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.