Kornit Digital’s Earnings Call: Mixed Outlook with Growth Potential

Kornit Digital Ltd. ((KRNT)) has held its Q1 earnings call. Read on for the main highlights of the call.

Kornit Digital’s recent earnings call presented a mixed yet optimistic outlook, highlighting growth in certain areas while acknowledging challenges. The company reported positive cash flow and a rise in impressions, although it faced delays in system purchases and a decline in service revenue. Kornit’s strategic positioning and expansion of recurring revenue streams are promising, but macroeconomic factors continue to pose challenges.

Revenue and EBITDA Within Expectations

Kornit Digital reported Q1 2025 revenue of $46.5 million and an adjusted EBITDA margin of minus 8.4%, both aligning with the company’s guidance range. This demonstrates Kornit’s ability to meet its financial expectations despite challenging market conditions.

Positive Cash Flow

The company achieved positive cash flow from operations, totaling $5.8 million in Q1 2025, an increase from $4 million in the same period last year. This improvement underscores Kornit’s effective financial management and operational efficiency.

Growth in Impressions

Kornit reached a record 222 million impressions on a trailing 12-month basis, marking a 10% increase compared to the previous period. This growth reflects stronger system utilization and increased digital adoption, highlighting the company’s expanding market presence.

Expansion of AIC Program

The Annual Recurring Revenue from Kornit’s All-Inclusive Click (AIC) contracts reached $14.5 million, indicating a growing base of recurring revenue. This expansion is a positive sign of the company’s strategic focus on building sustainable revenue streams.

Strategic Partnerships

Kornit announced new partnerships with MAS ACME and Gooten, enhancing its global fulfillment network and on-demand production capabilities. These partnerships are expected to bolster Kornit’s market position and drive future growth.

System Purchase Delays

Planned system purchases were delayed in Q1 due to macroeconomic conditions, impacting immediate growth expectations. This highlights the challenges Kornit faces in navigating the current economic landscape.

Service Revenue Decline

Service revenue declined year-over-year due to fewer upgrades of the Atlas MAX, although this was partially offset by upgrades to MAX Plus. This decline points to potential areas for improvement in Kornit’s service offerings.

Forward-Looking Guidance

For the second quarter, Kornit expects revenues between $49 million and $55 million and an adjusted EBITDA margin from -4% to 4%. The company remains optimistic about its strategic initiatives, including the Apollo system’s adoption, and anticipates stronger growth in the second half of 2025. Kornit’s focus on recurring revenue and digital adoption is expected to drive future performance.

In summary, Kornit Digital’s earnings call reflects a balanced outlook with both positive developments and challenges. The company’s strategic initiatives and expansion of recurring revenue streams are promising, although macroeconomic factors and service revenue declines present hurdles. Kornit’s forward-looking guidance suggests cautious optimism for future growth.