KRNT — Kornit Digital Ltd.

Kornit Digital (KRNT) Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Total Revenues: Approximately $48.5 million, at the high end of guidance.
• Adjusted EBITDA: Loss of $2.8 million, an improvement from a loss of $3.9 million in Q1 2025.
• Annual Recurring Revenue (ARR): Increased to $27 million, with an addition of $2.1 million in Q1.
• Operating Cash Flow: Positive cash flow of $6.3 million, marking the 10th consecutive quarter of positive cash flow.
• Non-GAAP Gross Margin: 41%, down from 45.2% in Q1 2025, impacted by a higher mix of systems and services relative to consumables and foreign exchange movements.

2. Strategic Updates and Business Highlights

• Kornit is experiencing a 12% year-over-year growth in impressions, indicating strong utilization of installed systems.
• 40% of system sales in Q1 came from new customers, with 65% targeting traditional screen printing customers.
• The company hosted Connection 2026, attracting nearly 600 participants, showcasing its leadership in on-demand production.
• Kornit introduced the Atlas MATRIX platform and the Presto Max Plus, which are expected to expand its addressable market significantly.
• The acquisition of Print Factory was announced, enhancing Kornit’s software workflow and production automation capabilities.

3. Forward Guidance and Outlook

• For Q2 2026, Kornit expects revenues between $51 million and $55 million and an adjusted EBITDA margin between negative 5% and breakeven.
• The company anticipates continued growth in ARR and AIC revenue throughout the year, supported by a strong backlog and pipeline.
• Kornit is optimistic about the second half of 2026, with improving visibility and confidence in its strategy.

4. Bad News, Challenges, or Points of Concern

• Gross Margin Pressure: The decline in gross margin was attributed to foreign exchange impacts and a higher mix of systems and services.
• Cost Management: While operating expenses decreased by 7%, the strengthening of the shekel poses a headwind to profitability.
• Market Competition: The shift to digital production is intensifying, requiring Kornit to maintain its competitive edge against other players in the market.

5. Notable Q&A Insights

• Sales Cycle: The sales cycle is shortening, especially for new customers moving to digital production, with some deals closing within 1-2 months.
• AIC Model Adoption: Over 90% of new customers in the screen market are adopting the AIC model, while existing customers show mixed preferences.
• Market Opportunities: Significant interest was noted in new markets such as footwear and camouflage, with potential revenue growth expected from both upgrades and new system sales.
• Customer Feedback: Positive reception of new products at Connection 2026, with immediate orders placed for the Atlas MATRIX and Presto Max Plus.

Overall, Kornit Digital is positioned well for growth with a strong product pipeline and increasing customer engagement, despite facing some challenges related to margins and currency fluctuations.