Kornit Digital Ltd. Q4 FY2024 earnings call

• 2024 was a turning point with return to profitability, successful execution of strategy. Introduced innovations like Apollo, Atlas MAX Plus, Vivido Ink. - Upgraded installed base from Atlas to Atlas MAX and began upgrading to Atlas MAX Plus. - All-inclusive click model driving adoption, expanding into new markets like bulk apparel, footwear, home decor. - Shifted go-to-market approach focusing on customer success, account management, recurring revenue growth. - Strengthened team with top talent across functions.

In Q4 2024, revenues were $60.7 million. For the full year 2024, revenues were $203.8 million. Non-GAAP gross margin in Q4 2024 was 55.1%, up from 48.6% in the same period last year. For the full year 2024, non-GAAP gross margin was 48.6% compared to 38.4% in 2023. Adjusted EBITDA in Q4 2024 was $8.4 million, with an adjusted EBITDA margin of 13.8%. For the full year 2024, adjusted EBITDA was $0.3 million. Operating cash flow in Q4 2024 was $26.7 million, and for the full year 2024, it was $48.7 million.

• Q1 2025 revenues expected between $45.5 million and $49.5 million, adjusted EBITDA margin in negative 4% to negative 9% range. - 2025 focus on execution for profitable growth, aiming to deliver 30 Apollo systems, build ARR from AIC model, penetrate screen market, drive impression growth, improve roll-to-roll market performance.

• Macro economic uncertainties including potential tariffs on Mexico affecting nearshore manufacturing. - Inflationary pressures stemming from policies impacting consumer purchasing power.

Q: Greg Palm asked about 2025 goals and top line growth potential.

A: Ronen Samuel responded on 2025 focus on execution, profitable growth, Apollo system delivery target of 30, building ARR from AIC model, penetrating screen market, impression growth.

Q: Brian Drab asked about roll-to-roll opportunity and Apollo performance.

A: Ronen Samuel talked about new roll-to-roll products, market shift, impression growth on existing customers, footwear and home decor penetration.

Q: James Ricchiuti asked about equipment upgrades and gross margins.

A: Ronen Samuel mentioned Printful upgrade, Lauri Hanover talked about Q1 gross margin seasonality and cost base reduction.

Q: Troy Jensen asked about financial income and gross margins.

A: Lauri Hanover stated they don't provide guidance on other P&L elements.

Q: Maiah Woodring asked about gross margins and Apollo capacity.

A: Lauri Hanover talked about gross margin drivers, Ronen Samuel mentioned moderate gross margin improvement in 2025.

Q: Chris Moore asked about Apollo customers and AIC for Atlas.

A: Ronen Samuel discussed mix of existing and new customers for Apollo, AIC use on Atlas family.

Q: Tavy Rosner asked about new systems not under AIC.

A: Ronen Samuel explained mix of CapEx and AIC deals, with AIC preferred by new to digital customers and CapEx by existing customers.