Kornit Digital Reports 2Q 2022 Results

Kornit Digital Ltd. reported results for the second quarter ended June 30, 2022.

Total revenue for the second quarter of 2022 was $58.1 million, net of $4.5 million attributed to the non-cash impact of warrants, compared to $81.7 million, net of $6.6 million attributed to the non-cash impact of warrants in the prior year period.

GAAP net loss for the second quarter of 2022 was $19.5 million, or ($0.39) per basic share, compared to net income of $5.6 million, or $0.12 per diluted share, for the second quarter of 2021.

“While the overall operating environment remains challenging, we believe the industry will continue its long-term secular growth, fueled by the mega-trends we’ve discussed in the past,” said Ronen Samuel, Kornit Digital’s CEO. “We are navigating the current market dynamics by working closely with global brands, retailers and fulfillers to shift production volumes to on-demand, executing on new product introductions and adoption of these innovative technologies, and focusing on returning to profitability.

“Our vision remains unchanged and we remain extremely confident in the fundamentals of the business,” added Samuel. “With our solid financial foundation and dedicated global team of professionals, we continue to be laser focused on leading the industry’s transformation from analog manufacturing to sustainable on-demand digital production.”

“We continue to strategically look at all aspects of our business and are adjusting our cost structure as needed, including a recent focused reduction-in-force, while reallocating resources to key growth initiatives and investments in long-term programs that support our customers’ needs,” said Alon Rozner, Kornit Digital’s CFO. “Our extremely strong balance sheet provides us with a great foundation to navigate the current market conditions and volatility, while focusing on longer-term opportunities to drive profitable growth.”

For the third quarter of 2022, the company expects revenue to be in the range of $66 million to $70 million; non-GAAP operating margins to be in the range of -15% to -11% of revenue; EBITDA margins to be in the range of -12% to -8%. Consistent with past practice, this guidance excludes the impact of the fair value of issued warrants in the quarter.

The company announced that Rozner will leave the company for personal reasons. Kornit has appointed Lauri Hanover as the company’s new CFO. To ensure an orderly transition, Rozner will continue as CFO until his expected departure in November.

Since March 2015, Hanover has served as a member of the Company’s Board of Directors. Hanover has more than 25 years of CFO experience and financial expertise in the software, hardware, consumer goods, and industrials sectors.

Hanover will continue as a member of the company’s Board of Directors, but will step down as the company’s Audit Committee chair and as member of the Compensation Committee effective immediately. Current Board members Dov Ofer will assume the role of Audit chairperson and Gabi Seligsohn will join the Audit Committee, while Stephen Nigro will join the Compensation Committee. Each of the foregoing individuals heading or joining those committees of the Board is an independent director and possesses the requisite credentials for the relevant role under the Nasdaq Listing Rules.

“Alon has been an integral member of our executive management team and an immensely valued colleague to everyone here at Kornit,” said Samuel. “His exceptional leadership and vital contributions further strengthened and expanded the financial foundation of the firm, especially through the global pandemic. We wish him only the best in the future.”

“It has been a pleasure to serve as Kornit’s CFO and to work with such an amazing team across the world,” said Rozner. “I have the utmost confidence in the company, its strategy, and its leadership team, and have no doubt the company will successfully transform the fashion and textile industry. I look forward to working with Lauri on a successful transition and wish everyone at Kornit tremendous success.”

“I am truly honored to undertake this role with Kornit in a new capacity as CFO and look forward to working with Alon on the transition, and with the entire management team to execute on our long-term strategy and drive value creation,” Hanover said.