Kornit Digital (KRNT) Q1 2026 Earnings Call Summary

1Key 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.

2Strategic 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.

3Forward 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.

4Bad 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.

5Notable 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.