Kornit Digital Reports Fourth Quarter and Full Year 2023 Results
- Fourth quarter revenues of $56.6 million
- Achieved breakeven adjusted EBITDA and positive operating cash flow
- Successfully launched the Apollo platform for general commercial use
- Expecting modest revenue growth for 2024
- Improved operating efficiency and working capital position
- Diversified customer base and established MAX technology as industry standard
- Total revenue decrease in fourth quarter compared to prior year
- Lower gross profit margin in fourth quarter and full year 2023
- Decrease in systems revenues impacting total revenue
- Negative adjusted EBITDA margin for full year 2023
- Guidance for first quarter 2024 includes negative adjusted EBITDA margin
Insights
The reported fourth quarter revenues of $56.6 million, aligning with previous guidance, indicate a level of predictability in Kornit's financial performance. However, a year-over-year decrease from $63.3 million signals potential market challenges or operational issues. The GAAP net loss of $22.9 million juxtaposed with a non-GAAP net income of $3.8 million suggests significant adjustments, which may include stock-based compensation, amortization, or other non-cash expenses. These adjustments are common in earnings reports but warrant scrutiny to understand the company's true cash-generating ability.
The achievement of breakeven adjusted EBITDA and positive operating cash flow in the fourth quarter is a positive indicator of operational efficiency and financial health. This is particularly important for investors focused on cash flow as a measure of corporate sustainability. The launch of the Apollo platform is a strategic move that could catalyze future growth, but the expected 'modest revenue growth' for 2024 might reflect conservative estimates in light of ongoing macroeconomic challenges.
For stakeholders, the short-term implications include the need to monitor the company's ability to maintain profitability and cash flow positivity. In the long term, the successful adoption of the Apollo platform and the MAX technology could be pivotal in solidifying Kornit's market position. It is essential to analyze how the restructuring actions taken in Q1 2024 will affect operating expenses and whether these cuts will impact the company's growth trajectory.
From a market perspective, Kornit's focus on sustainable, on-demand digital fashion and textile production technologies positions the company in a niche but growing segment. The digital textile printing market is expected to grow, driven by trends towards sustainability and customization. Kornit's MAX technology being established as a new industry standard could indicate a competitive edge and potential for increased market share.
The report of double-digit growth in high-margin consumable sales is particularly noteworthy, as it suggests a recurring revenue stream that can provide stability against the more volatile systems sales. The diversification of Kornit's customer base is a strategic move to mitigate risks associated with customer concentration. However, the guidance for the first quarter of 2024, with expected revenues between $43 million to $48 million and an adjusted EBITDA margin between –16% to –26%, points to continued challenges and the possibility of a slow start to the year.
Investors should consider the broader industry trends, including the impact of macroeconomic factors on the sales cycle and the adoption rate of new technologies like Apollo. The company's performance relative to industry peers and the market's response to its restructuring efforts will be critical indicators of its future prospects.
- 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 million - 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
ROSH-HA`AYIN, Israel, Feb. 14, 2024 (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 fourth quarter and full year ended December 31, 2023.
“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 with33.7% in the prior year period. On a non-GAAP basis, gross profit margin was48.6% compared with36.4% 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 by8.7% 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 was0.3% 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 with35.5% in the prior year. On a non-GAAP basis, gross profit margin was38.4% compared with38.2% 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 by12.3% 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
Fourth Quarter and Full Year 2023 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 toll-free Israeli number is 1 809 406 247. The conference confirmation code is 13744080.
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 13744080. The telephonic replay will be available approximately three hours after the completion of the live call until 11:59 pm ET on February 28, 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 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 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; 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:
Jared Maymon
Global Head of Investor Relations
Jared.Maymon@Kornit.com
| KORNIT DIGITAL LTD. | ||||||||
| AND ITS SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||
| (U.S. dollars in thousands) | ||||||||
| December 31, | December 31, | |||||||
| 2023 | 2022 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 39,605 | $ | 104,597 | ||||
| Short-term bank deposit | 235,600 | 275,033 | ||||||
| Marketable securities | 57,292 | 20,380 | ||||||
| Trade receivables, net | 93,632 | 67,360 | ||||||
| Inventory | 67,712 | 89,415 | ||||||
| Other accounts receivable and prepaid expenses | 28,546 | 22,054 | ||||||
| Total current assets | 522,387 | 578,839 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Marketable securities | 223,203 | 245,970 | ||||||
| Deposits and other long-term assets | 8,209 | 5,927 | ||||||
| Severance pay fund | 283 | 274 | ||||||
| Property,plant and equipment, net | 50,905 | 60,463 | ||||||
| Operating lease right-of-use assets | 23,782 | 27,139 | ||||||
| Intangible assets, net | 7,647 | 9,890 | ||||||
| Goodwill | 29,164 | 29,164 | ||||||
| Total long-term assets | 343,193 | 378,827 | ||||||
| Total assets | 865,580 | 957,666 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Trade payables | 6,936 | 14,833 | ||||||
| Employees and payroll accruals | 12,121 | 14,255 | ||||||
| Deferred revenues and advances from customers | 2,158 | 5,701 | ||||||
| Operating lease liabilities | 4,345 | 4,989 | ||||||
| Other payables and accrued expenses | 23,814 | 25,592 | ||||||
| Total current liabilities | 49,374 | 65,370 | ||||||
| LONG-TERM LIABILITIES: | ||||||||
| Accrued severance pay | 1,080 | 1,223 | ||||||
| Operating lease liabilities | 19,261 | 21,035 | ||||||
| Other long-term liabilities | 198 | 1,216 | ||||||
| Total long-term liabilities | 20,539 | 23,474 | ||||||
| SHAREHOLDERS' EQUITY | 795,667 | 868,822 | ||||||
| Total liabilities and shareholders' equity | $ | 865,580 | $ | 957,666 | ||||
| KORNIT DIGITAL LTD. | |||||||||||||||
| AND ITS SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||||||||||
| (U.S. dollars in thousands, except share and per share data) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | Audited | |||||||||||||
| Revenues | |||||||||||||||
| Products | $ | 43,573 | $ | 49,795 | $ | 161,045 | $ | 222,502 | |||||||
| Services | 13,012 | 13,503 | 58,741 | 49,016 | |||||||||||
| Total revenues | 56,585 | 63,298 | 219,786 | 271,518 | |||||||||||
| Cost of revenues | |||||||||||||||
| Products | 23,125 | 29,026 | 91,516 | 125,935 | |||||||||||
| Services | 18,888 | 12,923 | 61,313 | 49,083 | |||||||||||
| Total cost of revenues | 42,013 | 41,949 | 152,829 | 175,018 | |||||||||||
| Gross profit | 14,572 | 21,349 | 66,957 | 96,500 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development, net | 12,033 | 13,251 | 50,060 | 56,026 | |||||||||||
| Sales and marketing | 17,909 | 16,150 | 66,836 | 71,067 | |||||||||||
| General and administrative | 12,449 | 8,657 | 37,592 | 39,289 | |||||||||||
| Total operating expenses | 42,391 | 38,058 | 154,488 | 166,382 | |||||||||||
| Operating loss | (27,819 | ) | (16,709 | ) | (87,531 | ) | (69,882 | ) | |||||||
| Financial income, net | 5,424 | 5,052 | 24,150 | 13,382 | |||||||||||
| Loss before taxes on income | (22,395 | ) | (11,657 | ) | (63,381 | ) | (56,500 | ) | |||||||
| Taxes on income | 539 | 23,703 | 970 | 22,565 | |||||||||||
| Net loss | $ | (22,934 | ) | $ | (35,360 | ) | $ | (64,351 | ) | $ | (79,065 | ) | |||
| Basic loss per share | $ | (0.48 | ) | $ | (0.71 | ) | $ | (1.31 | ) | $ | (1.59 | ) | |||
| Weighted average number of shares | |||||||||||||||
| used in computing basic net loss per share | 48,231,916 | 49,913,898 | 49,160,266 | 49,791,659 | |||||||||||
| Diluted net loss per share | $ | (0.48 | ) | $ | (0.71 | ) | $ | (1.31 | ) | $ | (1.59 | ) | |||
| Weighted average number of shares | |||||||||||||||
| used in computing diluted net loss per share | 48,231,916 | 49,913,898 | 49,160,266 | 49,791,659 | |||||||||||
| 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 | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||
| Revenues | $ | 56,585 | $ | 63,298 | $ | 219,786 | $ | 271,518 | |||||||
| GAAP cost of revenues | $ | 42,013 | $ | 41,949 | $ | 152,829 | $ | 175,018 | |||||||
| Cost of product recorded for share-based compensation (1) | (545 | ) | (543 | ) | (2,356 | ) | (2,185 | ) | |||||||
| Cost of service recorded for share-based compensation (1) | (447 | ) | (408 | ) | (1,758 | ) | (1,676 | ) | |||||||
| Intangible assets amortization on cost of product (3) | (260 | ) | (266 | ) | (1,053 | ) | (1,402 | ) | |||||||
| Intangible assets amortization on cost of service (3) | (160 | ) | (160 | ) | (640 | ) | (640 | ) | |||||||
| Excess cost of product on acquired inventory (2) | - | - | - | (663 | ) | ||||||||||
| Restructuring expenses (4) | (11,501 | ) | (305 | ) | (11,590 | ) | (701 | ) | |||||||
| Non-GAAP cost of revenues | $ | 29,100 | $ | 40,267 | $ | 135,432 | $ | 167,751 | |||||||
| GAAP gross profit | $ | 14,572 | $ | 21,349 | $ | 66,957 | $ | 96,500 | |||||||
| Gross profit adjustments | 12,913 | 1,682 | 17,397 | 7,267 | |||||||||||
| Non-GAAP gross profit | $ | 27,485 | $ | 23,031 | $ | 84,354 | $ | 103,767 | |||||||
| GAAP operating expenses | $ | 42,391 | $ | 38,058 | $ | 154,488 | $ | 166,382 | |||||||
| Share-based compensation (1) | (4,653 | ) | (4,264 | ) | (18,475 | ) | (18,788 | ) | |||||||
| Acquisition related expenses (2) | - | - | - | (512 | ) | ||||||||||
| Intangible assets amortization (3) | (93 | ) | (138 | ) | (550 | ) | (501 | ) | |||||||
| Restructuring expenses (4) | (7,579 | ) | (711 | ) | (7,785 | ) | (992 | ) | |||||||
| Non-GAAP operating expenses | $ | 30,066 | $ | 32,945 | $ | 127,678 | $ | 145,589 | |||||||
| GAAP Financial income, net | $ | 5,424 | $ | 5,052 | $ | 24,150 | $ | 13,382 | |||||||
| Foreign exchange losses associated with ASC 842 | 1,579 | 285 | 378 | (3,123 | ) | ||||||||||
| Non-GAAP Financial income , net | $ | 7,003 | $ | 5,337 | $ | 24,528 | $ | 10,259 | |||||||
| GAAP Taxes on income | $ | 539 | $ | 23,703 | $ | 970 | $ | 22,565 | |||||||
| Non-cash deferred tax income (expenses) | $ | 88 | $ | (10,234 | ) | $ | 666 | $ | (10,014 | ) | |||||
| Non-recurring tax payment (a) | $ | - | $ | (11,485 | ) | $ | - | $ | (11,485 | ) | |||||
| Non-GAAP Taxes on income | $ | 627 | $ | 1,984 | $ | 1,636 | $ | 1,066 | |||||||
| GAAP net loss | $ | (22,934 | ) | $ | (35,360 | ) | $ | (64,351 | ) | $ | (79,065 | ) | |||
| Share-based compensation (1) | 5,645 | 5,215 | 22,589 | 22,649 | |||||||||||
| Acquisition related expenses (2) | - | - | - | 512 | |||||||||||
| Intangible assets amortization (3) | 513 | 564 | 2,243 | 2,543 | |||||||||||
| Restructuring expenses (4) | 19,080 | 1,016 | 19,375 | 1,693 | |||||||||||
| Excess cost of product on acquired inventory (2) | - | - | - | 663 | |||||||||||
| Foreign exchange losses associated with ASC 842 | 1,579 | 285 | 378 | (3,123 | ) | ||||||||||
| Non-cash deferred tax expenses (income) | (88 | ) | 10,234 | (666 | ) | 10,014 | |||||||||
| Non-recurring tax payment (a) | - | 11,485 | - | 11,485 | |||||||||||
| Non-GAAP net income (loss) | $ | 3,795 | $ | (6,561 | ) | $ | (20,432 | ) | $ | (32,629 | ) | ||||
| GAAP diluted loss per share | $ | (0.48 | ) | $ | (0.71 | ) | $ | (1.31 | ) | $ | (1.59 | ) | |||
| Non-GAAP diluted income (loss) per share | $ | 0.08 | $ | (0.13 | ) | $ | (0.42 | ) | $ | (0.66 | ) | ||||
| Weighted average number of shares | |||||||||||||||
| Shares used in computing GAAP diluted net loss per share | 48,231,916 | 49,913,898 | 49,160,266 | 49,791,659 | |||||||||||
| Shares used in computing Non-GAAP diluted net income (loss) per share | 50,094,714 | 49,913,898 | 49,160,266 | 49,791,659 | |||||||||||
| (1) Share-based compensation | |||||||||||||||
| Cost of product revenues | $ | 545 | $ | 543 | $ | 2,356 | $ | 2,185 | |||||||
| Cost of service revenues | $ | 447 | 408 | 1,758 | 1,676 | ||||||||||
| Research and development | $ | 1,329 | 1,340 | 5,759 | 5,312 | ||||||||||
| Sales and marketing | $ | 1,635 | 1,693 | 6,689 | 7,361 | ||||||||||
| General and administrative | $ | 1,689 | 1,231 | 6,027 | 6,115 | ||||||||||
| $ | 5,645 | $ | 5,215 | $ | 22,589 | $ | 22,649 | ||||||||
| (2) Acquisition related expenses | |||||||||||||||
| Cost of product revenues | - | - | - | 663 | |||||||||||
| General and administrative | $ | - | $ | - | $ | - | $ | 512 | |||||||
| $ | - | $ | - | $ | - | $ | 1,175 | ||||||||
| (3) Intangible assets amortization | |||||||||||||||
| Cost of product revenues | $ | 260 | $ | 266 | $ | 1,053 | $ | 1,402 | |||||||
| Cost of service revenues | $ | 160 | 160 | 640 | 640 | ||||||||||
| Sales and marketing | $ | 93 | 138 | 550 | 501 | ||||||||||
| $ | 513 | $ | 564 | $ | 2,243 | $ | 2,543 | ||||||||
| (4) Restructuring expenses | |||||||||||||||
| Cost of product revenues | $ | 5,569 | $ | 305 | $ | 5,658 | $ | 689 | |||||||
| Cost of service revenues | $ | 5,932 | - | 5,932 | 12 | ||||||||||
| Research and development | $ | 860 | 137 | 880 | 201 | ||||||||||
| Sales and marketing | $ | 2,744 | 487 | 2,930 | 675 | ||||||||||
| General and administrative | $ | 3,975 | 87 | 3,975 | 116 | ||||||||||
| $ | 19,080 | $ | 1,016 | $ | 19,375 | $ | 1,693 | ||||||||
| (a) Attributed to tax settlement with the Israeli Tax Authority | |||||||||||||||
| KORNIT DIGITAL LTD. | |||||||||||||||
| AND ITS SUBSIDIARIES | |||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||||
| (U.S. dollars in thousands) | |||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||
| December 31, | December 31, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (Unaudited) | (Unaudited) | Audited | |||||||||||||
| Cash flows from operating activities: | |||||||||||||||
| Net loss | $ | (22,934 | ) | $ | (35,360 | ) | $ | (64,351 | ) | $ | (79,065 | ) | |||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||
| Depreciation and amortization | 3,287 | 4,399 | 14,700 | 13,565 | |||||||||||
| Restructuring and other charges | 19,080 | - | 19,080 | - | |||||||||||
| Fair value of warrants deducted from revenues | 4,841 | 4,339 | 13,842 | 22,500 | |||||||||||
| Share-based compensation | 5,645 | 5,215 | 22,589 | 22,649 | |||||||||||
| Amortization of premium and accretion of discount on marketable securities, net | 83 | 373 | 756 | 1,820 | |||||||||||
| Realized gain on sale and redemption of marketable securities | 93 | - | 134 | 10 | |||||||||||
| Change in operating assets and liabilities: | |||||||||||||||
| Trade receivables, net | 6,557 | (3,673 | ) | (19,220 | ) | (15,891 | ) | ||||||||
| Other accounts receivables and prepaid expenses | (5,040 | ) | (2,501 | ) | (6,492 | ) | (8,635 | ) | |||||||
| Inventory | 4,521 | (2,437 | ) | 11,028 | (29,004 | ) | |||||||||
| Operating leases right-of-use assets and liabilities, net | 1,544 | 229 | (179 | ) | (2,918 | ) | |||||||||
| Deferred taxes | - | 11,523 | - | 8,530 | |||||||||||
| Deposits and other long term assets | (103 | ) | (1,859 | ) | (2,282 | ) | (4,251 | ) | |||||||
| Trade payables | (2,902 | ) | (9,068 | ) | (6,491 | ) | (26,948 | ) | |||||||
| Employees and payroll accruals | (2,294 | ) | (2,222 | ) | (1,089 | ) | (7,674 | ) | |||||||
| Deferred revenues and advances from customers | (1,339 | ) | 107 | (4,990 | ) | (1,426 | ) | ||||||||
| Other payables and accrued expenses | (8,357 | ) | (8,873 | ) | (10,547 | ) | 7,190 | ||||||||
| Accrued severance pay, net | (14 | ) | 43 | (152 | ) | (237 | ) | ||||||||
| Other long - term liabilities | (74 | ) | 330 | (1,018 | ) | 13 | |||||||||
| Loss (gain) from sale and disposal of property, plant and equipment | - | (142 | ) | - | 425 | ||||||||||
| Net cash provided by (used in) operating activities | $ | 2,594 | $ | (39,577 | ) | $ | (34,682 | ) | $ | (99,347 | ) | ||||
| Cash flows from investing activities: | |||||||||||||||
| Purchase of property, plant and equipment | $ | (934 | ) | $ | (5,776 | ) | $ | (7,006 | ) | $ | (18,042 | ) | |||
| Investment in equity securities | - | (193 | ) | - | (820 | ) | |||||||||
| Acquisition of intangible assets | - | (73 | ) | - | (308 | ) | |||||||||
| Proceeds from sale of property, plant and equipment | - | - | - | 71 | |||||||||||
| Cash paid in connection with acquisition, net of cash acquired | - | - | - | (14,654 | ) | ||||||||||
| Proceeds from (investment in) short-term bank deposits, net | (15,505 | ) | 85,089 | 39,433 | (265,865 | ) | |||||||||
| Proceeds from sales and redemption of marketable securities | - | - | 7,240 | 1,945 | |||||||||||
| Proceeds from maturities of marketable securities | 6,300 | 6,500 | 20,522 | 27,898 | |||||||||||
| Investment in marketable securities | (9,526 | ) | (8,135 | ) | (33,977 | ) | (137,500 | ) | |||||||
| Net cash provided by (used in) investing activities | $ | (19,665 | ) | $ | 77,412 | $ | 26,212 | $ | (407,275 | ) | |||||
| Cash flows from financing activities: | |||||||||||||||
| Exercise of employee stock options | $ | - | $ | 159 | $ | 293 | $ | 619 | |||||||
| Payments related to shares withheld for taxes | (608 | ) | (90 | ) | (1,045 | ) | (951 | ) | |||||||
| Repurchase of ordinary shares | (19,004 | ) | - | (55,770 | ) | - | |||||||||
| Net cash used in financing activities | $ | (19,612 | ) | $ | 69 | $ | (56,522 | ) | $ | (332 | ) | ||||
| Increase (decrease) in cash and cash equivalents | $ | (36,683 | ) | $ | 37,904 | $ | (64,992 | ) | $ | (506,954 | ) | ||||
| Cash and cash equivalents at the beginning of the period | 76,288 | 66,693 | 104,597 | 611,551 | |||||||||||
| Cash and cash equivalents at the end of the period | $ | 39,605 | $ | 104,597 | $ | 39,605 | $ | 104,597 | |||||||
| Non-cash investing and financing activities: | |||||||||||||||
| Purchase of property and equipment on credit | 314 | 1,692 | 314 | 1,692 | |||||||||||
| Inventory transferred to be used as property and equipment | - | 5,248 | 531 | 6,792 | |||||||||||
| Property, plant and equipment transferred to be used as inventory | 131 | - | 865 | - | |||||||||||
| Lease liabilities arising from obtaining right-of-use assets | (3,250 | ) | 408 | 2,559 | 7,585 | ||||||||||
| 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 | Year Ended | ||||||||||||||||
| December 31, | December 31, | ||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||
| (Unaudited) | (Unaudited) | ||||||||||||||||
| GAAP Revenues | $ | 56,585 | $ | 63,298 | $ | 219,786 | $ | 271,518 | |||||||||
| GAAP Net Loss | (22,934 | ) | (35,360 | ) | (64,351 | ) | (79,065 | ) | |||||||||
| Taxes on income | 539 | 23,703 | 970 | 22,565 | |||||||||||||
| Financial income | (5,424 | ) | (5,052 | ) | (24,150 | ) | (13,382 | ) | |||||||||
| Share-based compensation | 5,645 | 5,215 | 22,589 | 22,649 | |||||||||||||
| Intangible assets amortization | 513 | 564 | 2,243 | 2,543 | |||||||||||||
| Acquisition related expenses | - | - | - | 512 | |||||||||||||
| Excess cost of product on acquired inventory | - | - | - | 663 | |||||||||||||
| Restructuring expenses | 19,080 | 1,016 | 19,375 | 1,693 | |||||||||||||
| Non-GAAP Operating Loss | (2,581 | ) | (9,914 | ) | (43,324 | ) | (41,822 | ) | |||||||||
| Depreciation | 2,774 | 3,835 | 12,457 | 11,022 | |||||||||||||
| Adjusted EBITDA | $ | 193 | $ | (6,079 | ) | $ | (30,867 | ) | $ | (30,800 | ) | ||||||
FAQ
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