- Third quarter revenues of
$59.2 million , in line with previous guidance - Third quarter GAAP net loss of
$8.2 million ; non-GAAP net loss of$3.4 million - Impressions and consumables revenues both continued to grow year-over-year
- System sales increased quarter-over-quarter on continued conversion of ITMA orders
- Company operations have not been materially impacted by the security situation in
Israel
“We delivered third quarter revenues within our guidance range, despite a challenging macroeconomic environment. Our consumables sales grew year-over-year, while system sales improved sequentially as we continued to convert orders from ITMA,” said
"During the quarter, we successfully installed our initial Apollo beta systems, which have received highly encouraging feedback and demonstrated solid uptime, yield, and unit economics. We continue to target general availability for Apollo in the first quarter of 2024 and are building a strong pipeline of both existing and new customers,”
Third Quarter 2023 Results of Operations
- Total revenue for the third quarter of 2023 was
$59.2 million compared with$66.8 million in the prior year period, due primarily to lower systems revenues. - GAAP gross profit margin for the third quarter of 2023 was 34.8% compared with 32.1% in the prior year period. On a non-GAAP basis, gross profit margin was 37.4% compared with 35.5% in the prior year period.
- GAAP operating expenses for the third quarter of 2023 decreased by 17.6% to
$35.3 million compared with the prior year period. On a non-GAAP basis, operating expenses decreased by 15.3% to$31.1 million compared with the prior year period. - GAAP net loss for the third quarter of 2023 was
$8.2 million , or ($0.17 ) per basic share, compared with net loss of$19.0 million , or ($0.38 ) per basic share, for the third quarter of 2022. - Non-GAAP net loss for the third quarter of 2023 was
$3.4 million , or ($0.07 ) per basic share, compared with non-GAAP net loss of$10.7 million , or ($0.21 ) per basic share, for the third quarter of 2022. - Adjusted EBITDA loss for the third quarter of 2023 was
$5.6 million compared with adjusted EBITDA loss of$10.5 million for the third quarter of 2022. Adjusted EBITDA margin for the third quarter of 2023 was -9.5% compared with -15.7% for the third quarter of 2022.
Fourth Quarter 2023 Guidance
For the fourth quarter of 2023, the Company expects revenues to be in the range of
Third Quarter Earnings Conference Call Information
The Company will host a conference call today at
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 13741274.
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 13741274. The telephonic replay will be available approximately three hours after the completion of the live call until
About
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
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:
Global Head of Investor Relations
jared.maymon@kornit.com
AND ITS SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
( | ||||||||
2023 | 2022 | |||||||
(Unaudited) | (Audited) | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 76,288 | $ | 104,597 | ||||
Short-term bank deposit | 220,095 | 275,033 | ||||||
Marketable securities | 49,974 | 20,380 | ||||||
Trade receivables, net | 93,137 | 67,360 | ||||||
Inventory | 83,111 | 89,415 | ||||||
Other accounts receivable and prepaid expenses | 23,506 | 22,054 | ||||||
Total current assets | 546,111 | 578,839 | ||||||
LONG-TERM ASSETS: | ||||||||
Marketable securities | 222,285 | 245,970 | ||||||
Deposits and other long-term assets | 8,106 | 5,927 | ||||||
Severance pay fund | 262 | 274 | ||||||
Property, plant and equipment, net | 55,026 | 60,463 | ||||||
Operating lease right-of-use assets | 28,988 | 27,139 | ||||||
Intangible assets, net | 8,165 | 9,890 | ||||||
29,164 | 29,164 | |||||||
Total long-term assets | 351,996 | 378,827 | ||||||
Total assets | 898,107 | 957,666 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES: | ||||||||
Trade payables | 9,626 | 14,833 | ||||||
Employees and payroll accruals | 15,023 | 14,255 | ||||||
Deferred revenues and advances from customers | 2,050 | 5,701 | ||||||
Operating lease liabilities | 4,543 | 4,989 | ||||||
Other payables and accrued expenses | 23,216 | 25,592 | ||||||
Total current liabilities | 54,458 | 65,370 | ||||||
LONG-TERM LIABILITIES: | ||||||||
Accrued severance pay | 1,073 | 1,223 | ||||||
Operating lease liabilities | 21,607 | 21,035 | ||||||
Other long-term liabilities | 272 | 1,216 | ||||||
Total long-term liabilities | 22,952 | 23,474 | ||||||
SHAREHOLDERS' EQUITY | 820,697 | 868,822 | ||||||
Total liabilities and shareholders' equity | $ | 898,107 | $ | 957,666 |
AND ITS SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
( | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Revenues | ||||||||||||||||
Products | $ | 45,486 | $ | 52,627 | $ | 117,472 | $ | 172,707 | ||||||||
Services | 13,738 | 14,164 | 45,729 | 35,513 | ||||||||||||
Total revenues | 59,224 | 66,791 | 163,201 | 208,220 | ||||||||||||
Cost of revenues | ||||||||||||||||
Products | 25,392 | 31,789 | 68,391 | 96,909 | ||||||||||||
Services | 13,212 | 13,569 | 42,425 | 36,160 | ||||||||||||
Total cost of revenues | 38,604 | 45,358 | 110,816 | 133,069 | ||||||||||||
Gross profit | 20,620 | 21,433 | 52,385 | 75,151 | ||||||||||||
Operating expenses: | ||||||||||||||||
Research and development, net | 12,038 | 14,684 | 38,027 | 42,775 | ||||||||||||
Sales and marketing | 15,586 | 17,502 | 48,927 | 54,917 | ||||||||||||
General and administrative | 7,654 | 10,616 | 25,143 | 30,632 | ||||||||||||
Total operating expenses | 35,278 | 42,802 | 112,097 | 128,324 | ||||||||||||
Operating loss | (14,658 | ) | (21,369 | ) | (59,712 | ) | (53,173 | ) | ||||||||
Financial income, net | 6,304 | 2,207 | 18,726 | 8,330 | ||||||||||||
Loss before taxes on income | (8,354 | ) | (19,162 | ) | (40,986 | ) | (44,843 | ) | ||||||||
Taxes on income (tax benefit) | (193 | ) | (130 | ) | 431 | (1,138 | ) | |||||||||
Net loss | $ | (8,161 | ) | $ | (19,032 | ) | $ | (41,417 | ) | $ | (43,705 | ) | ||||
Basic loss per share | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.84 | ) | $ | (0.88 | ) | ||||
Weighted average number of shares used in computing basic net loss per share | 48,968,244 | 49,834,417 | 49,469,717 | 49,750,458 | ||||||||||||
Diluted net loss per share | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.84 | ) | $ | (0.88 | ) | ||||
Weighted average number of shares used in computing diluted net loss per share | 48,968,244 | 49,834,417 | 49,469,717 | 49,750,458 |
AND ITS SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF GAAP TO NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
( | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Revenues | $ | 59,224 | $ | 66,791 | $ | 163,201 | $ | 208,220 | ||||||||
GAAP cost of revenues | $ | 38,604 | $ | 45,358 | $ | 110,816 | $ | 133,069 | ||||||||
Cost of product recorded for share-based compensation (1) | (632 | ) | (587 | ) | (1,811 | ) | (1,642 | ) | ||||||||
Cost of service recorded for share-based compensation (1) | (467 | ) | (422 | ) | (1,311 | ) | (1,268 | ) | ||||||||
Intangible assets amortization on cost of product (3) | (267 | ) | (744 | ) | (793 | ) | (1,799 | ) | ||||||||
Intangible assets amortization on cost of service (3) | (160 | ) | (160 | ) | (480 | ) | (480 | ) | ||||||||
Restructuring expenses (4) | - | (396 | ) | (89 | ) | (396 | ) | |||||||||
Non-GAAP cost of revenues | $ | 37,078 | $ | 43,049 | $ | 106,332 | $ | 127,484 | ||||||||
GAAP gross profit | $ | 20,620 | $ | 21,433 | $ | 52,385 | $ | 75,151 | ||||||||
Gross profit adjustments | 1,526 | 2,309 | 4,484 | 5,585 | ||||||||||||
Non-GAAP gross profit | $ | 22,146 | $ | 23,742 | $ | 56,869 | $ | 80,736 | ||||||||
GAAP operating expenses | $ | 35,278 | $ | 42,802 | $ | 112,097 | $ | 128,324 | ||||||||
Share-based compensation (1) | (4,050 | ) | (5,646 | ) | (13,822 | ) | (14,524 | ) | ||||||||
Acquisition related expenses (2) | - | - | - | (512 | ) | |||||||||||
Intangible assets amortization (3) | (117 | ) | (160 | ) | (457 | ) | (363 | ) | ||||||||
Restructuring expenses (4) | - | (281 | ) | (206 | ) | (281 | ) | |||||||||
Non-GAAP operating expenses | $ | 31,111 | $ | 36,715 | $ | 97,612 | $ | 112,644 | ||||||||
GAAP Financial income, net | $ | 6,304 | $ | 2,207 | $ | 18,726 | $ | 8,330 | ||||||||
Foreign exchange losses associated with ASC 842 | (704 | ) | (279 | ) | (1,201 | ) | (3,408 | ) | ||||||||
Non-GAAP Financial income , net | $ | 5,600 | $ | 1,928 | $ | 17,525 | $ | 4,922 | ||||||||
GAAP Taxes on income (tax benefit) | $ | (193 | ) | $ | (130 | ) | $ | 431 | $ | (1,138 | ) | |||||
Non-cash deferred tax income | $ | 255 | $ | (247 | ) | $ | 578 | $ | 220 | |||||||
Non-GAAP Taxes on income (tax benefit) | $ | 62 | $ | (377 | ) | $ | 1,009 | $ | (918 | ) | ||||||
GAAP net loss | $ | (8,161 | ) | $ | (19,032 | ) | $ | (41,417 | ) | $ | (43,705 | ) | ||||
Share-based compensation (1) | 5,149 | 6,655 | 16,944 | 17,434 | ||||||||||||
Acquisition related expenses (2) | - | - | - | 512 | ||||||||||||
Intangible assets amortization (3) | 544 | 1,064 | 1,730 | 2,642 | ||||||||||||
Restructuring expenses (4) | - | 677 | 295 | 677 | ||||||||||||
Foreign exchange losses associated with ASC 842 | (704 | ) | (279 | ) | (1,201 | ) | (3,408 | ) | ||||||||
Non-cash deferred tax income | (255 | ) | 247 | (578 | ) | (220 | ) | |||||||||
Non-GAAP net loss | $ | (3,427 | ) | $ | (10,668 | ) | $ | (24,227 | ) | $ | (26,068 | ) | ||||
GAAP diluted loss per share | $ | (0.17 | ) | $ | (0.38 | ) | $ | (0.84 | ) | $ | (0.88 | ) | ||||
Non-GAAP diluted loss per share | $ | (0.07 | ) | $ | (0.21 | ) | $ | (0.49 | ) | $ | (0.52 | ) | ||||
Weighted average number of shares | ||||||||||||||||
Shares used in computing GAAP diluted net loss per share | 48,968,244 | 49,834,417 | 49,469,717 | 49,750,458 | ||||||||||||
Shares used in computing Non-GAAP diluted net loss per share | 48,968,244 | 49,834,417 | 49,469,717 | 49,750,458 | ||||||||||||
(1) Share-based compensation | ||||||||||||||||
Cost of product revenues | $ | 632 | $ | 587 | $ | 1,811 | $ | 1,642 | ||||||||
Cost of service revenues | $ | 467 | 422 | 1,311 | 1,268 | |||||||||||
Research and development | $ | 1,478 | 1,515 | 4,430 | 3,972 | |||||||||||
Sales and marketing | $ | 1,747 | 2,368 | 5,054 | 5,668 | |||||||||||
General and administrative | $ | 825 | 1,763 | 4,338 | 4,884 | |||||||||||
$ | 5,149 | $ | 6,655 | $ | 16,944 | $ | 17,434 | |||||||||
(2) Acquisition related expenses | ||||||||||||||||
General and administrative | $ | - | $ | - | $ | - | $ | 512 | ||||||||
$ | - | $ | - | $ | - | $ | 512 | |||||||||
(3) Intangible assets amortization | ||||||||||||||||
Cost of product revenues | $ | 267 | $ | 744 | $ | 793 | $ | 1,799 | ||||||||
Cost of service revenues | $ | 160 | 160 | 480 | 480 | |||||||||||
Sales and marketing | $ | 117 | 160 | 457 | 363 | |||||||||||
$ | 544 | $ | 1,064 | $ | 1,730 | $ | 2,642 | |||||||||
(4) Restructuring expenses | ||||||||||||||||
Cost of product revenues | $ | - | $ | 384 | $ | 89 | $ | 384 | ||||||||
Cost of service revenues | $ | - | $ | 12 | $ | - | $ | 12 | ||||||||
Research and development | $ | - | 64 | 20 | 64 | |||||||||||
Sales and marketing | $ | - | 188 | 186 | 188 | |||||||||||
General and administrative | $ | - | 29 | - | 29 | |||||||||||
$ | - | $ | 677 | $ | 295 | $ | 677 |
AND ITS SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||
( | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net loss | $ | (8,161 | ) | $ | (19,032 | ) | $ | (41,417 | ) | $ | (43,705 | ) | ||||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||||
Depreciation and amortization | 3,886 | 3,264 | 11,413 | 9,166 | ||||||||||||
Fair value of warrants deducted from revenues | 3,325 | 5,640 | 9,001 | 18,161 | ||||||||||||
Share-based compensation | 5,149 | 6,655 | 16,944 | 17,434 | ||||||||||||
Amortization of premium and accretion of discount on marketable securities, net | 148 | 435 | 673 | 1,447 | ||||||||||||
Realized gain on sale and redemption of marketable securities | 44 | - | 41 | 10 | ||||||||||||
Change in operating assets and liabilities: | ||||||||||||||||
Trade receivables, net | (8,921 | ) | (3,214 | ) | (25,777 | ) | (12,218 | ) | ||||||||
Other accounts receivables and prepaid expenses | (686 | ) | (4,343 | ) | (1,452 | ) | (6,134 | ) | ||||||||
Inventory | 4,567 | (2,715 | ) | 6,507 | (26,567 | ) | ||||||||||
Operating leases right-of-use assets and liabilities, net | (711 | ) | (290 | ) | (1,723 | ) | (3,147 | ) | ||||||||
Deferred taxes | - | (577 | ) | - | (2,993 | ) | ||||||||||
Deposits and other long term assets | (301 | ) | (1,071 | ) | (2,179 | ) | (2,392 | ) | ||||||||
Trade payables | (1,887 | ) | (5,960 | ) | (3,589 | ) | (17,880 | ) | ||||||||
Employees and payroll accruals | (1,284 | ) | 1,382 | 1,205 | (5,452 | ) | ||||||||||
Deferred revenues and advances from customers | (414 | ) | 2,581 | (3,651 | ) | (1,533 | ) | |||||||||
Other payables and accrued expenses | (2,152 | ) | 12,623 | (2,190 | ) | 16,063 | ||||||||||
Accrued severance pay, net | (76 | ) | 12 | (138 | ) | (280 | ) | |||||||||
Other long - term liabilities | (254 | ) | (1,046 | ) | (944 | ) | (317 | ) | ||||||||
Loss from sale and disposal of property, plant and equipment | - | 526 | - | 567 | ||||||||||||
Net cash used in operating activities | $ | (7,728 | ) | $ | (5,130 | ) | $ | (37,276 | ) | $ | (59,770 | ) | ||||
Cash flows from investing activities: | ||||||||||||||||
Purchase of property, plant and equipment | $ | (1,003 | ) | $ | (2,819 | ) | $ | (6,072 | ) | $ | (12,266 | ) | ||||
Investment in equity securities | - | (273 | ) | - | (627 | ) | ||||||||||
Acquisition of intangible assets | - | (102 | ) | - | (235 | ) | ||||||||||
Proceeds from sale of property, plant and equipment | - | 16 | - | 71 | ||||||||||||
Cash paid in connection with acquisition, net of cash acquired | - | - | - | (14,654 | ) | |||||||||||
Proceeds from (investment in) short-term bank deposits, net | 3 | (100,059 | ) | 54,938 | (350,954 | ) | ||||||||||
Proceeds from sales and redemption of marketable securities | 1,990 | - | 7,240 | 1,945 | ||||||||||||
Proceeds from maturities of marketable securities | 2,970 | 3,976 | 14,222 | 21,398 | ||||||||||||
Investment in marketable securities | (5,516 | ) | (25,468 | ) | (24,451 | ) | (129,365 | ) | ||||||||
Net cash provided by (used in) investing activities | $ | (1,556 | ) | $ | (124,729 | ) | $ | 45,877 | $ | (484,687 | ) | |||||
Cash flows from financing activities: | ||||||||||||||||
Exercise of employee stock options | $ | 198 | $ | 120 | $ | 293 | $ | 460 | ||||||||
Payments related to shares withheld for taxes | - | (179 | ) | (437 | ) | (861 | ) | |||||||||
Repurchase of ordinary shares | (15,948 | ) | - | (36,766 | ) | - | ||||||||||
Net cash used in financing activities | $ | (15,750 | ) | $ | (59 | ) | $ | (36,910 | ) | $ | (401 | ) | ||||
Decrease in cash and cash equivalents | $ | (25,034 | ) | $ | (129,918 | ) | $ | (28,309 | ) | $ | (544,858 | ) | ||||
Cash and cash equivalents at the beginning of the period | 101,322 | 196,611 | 104,597 | 611,551 | ||||||||||||
Cash and cash equivalents at the end of the period | $ | 76,288 | $ | 66,693 | $ | 76,288 | $ | 66,693 | ||||||||
Non-cash investing and financing activities: | ||||||||||||||||
Purchase of property and equipment on credit | 74 | 1,033 | 74 | 1,033 | ||||||||||||
Inventory transferred to be used as property and equipment | 531 | 255 | 531 | 1,544 | ||||||||||||
Property, plant and equipment transferred to be used as inventory | - | 183 | 734 | 192 | ||||||||||||
Lease liabilities arising from obtaining right-of-use assets | 322 | 790 | 5,809 | 7,177 |
AND ITS SUBSIDIARIES | ||||||||||||||||
RECONCILIATION OF GAAP NET INCOME TO ADJUSTED EBITDA | ||||||||||||||||
( | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||||
GAAP Revenues | $ | 59,224 | $ | 66,791 | $ | 163,201 | $ | 208,220 | ||||||||
GAAP Net Loss | (8,161 | ) | (19,032 | ) | (41,417 | ) | (43,705 | ) | ||||||||
Taxes on income | (193 | ) | (130 | ) | 431 | (1,138 | ) | |||||||||
Financial income | (6,304 | ) | (2,207 | ) | (18,726 | ) | (8,330 | ) | ||||||||
Share-based compensation | 5,149 | 6,655 | 16,944 | 17,434 | ||||||||||||
Intangible assets amortization | 544 | 770 | 1,730 | 1,979 | ||||||||||||
Acquisition related expenses | - | - | - | 512 | ||||||||||||
Excess cost of product on acquired inventory | - | 294 | - | 663 | ||||||||||||
Restructuring expenses | - | 677 | 295 | 677 | ||||||||||||
Non-GAAP Operating Loss | (8,965 | ) | (12,973 | ) | (40,743 | ) | (31,908 | ) | ||||||||
Depreciation | 3,342 | 2,494 | 9,683 | 7,187 | ||||||||||||
Adjusted EBITDA | $ | (5,623 | ) | $ | (10,479 | ) | $ | (31,060 | ) | $ | (24,721 | ) |
Source:
2023 GlobeNewswire, Inc., source