KRNT - Earnings call transcript Q4 2020

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Operator

Greetings. Welcome to Kornit Digital's fourth quarter 2020 earnings conference call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions]. is conference this note, being recorded. Please now your host, would like Blueshirt to to over conference the Allise turn Group. I Furlani The with Thank you.

begin. may You

Allise Furlani

Digital's year Thank quarter operator. Good and to you afternoon and earnings XXXX Kornit full conference call. welcome fourth

are relating company's to other in projected would projects, that expects, within of that the future. will limited the this made and our objectives, to U.S. developments not of Securities plans, Securities intends, occur begin, Private that statements Act Reform call. preliminary results financial meaning you believes statements strategies, on like or laws we or forward-looking address all remind These include or or company statements statements activities, anticipates events Before of of the Litigation will operations the I statements the XXXX may but forward-looking to condition and or be

risks statements by otherwise, no of required cause X-K, law. as at those potentially made information, forward-looking cause Forward-looking whether The may differ result events by from Form results and subject actual and statements, identifies could and quarterly Any Securities the are that expected Exchange or November unknown known as call the could filings the actual that uncertainties obligation for many new assumptions filed implied factors forward-looking or forward-looking based statements on differ to publicly results any encourage revise results specific from or events report to as the differ XX, company's inaccurate those with and XXXX, of are risk materially which materially to to this and are to review the hereof materially. company including update company's company's Commission, and you undertakes or future a reasons statements. except I anticipated on

directly will to these be can comparable making measures is to the will measures company's in most posted of on over the will release the Chief Ronen? reconciliation the reference and call the Investor which like the At Ronen to I non-GAAP this be call time, to earnings call. Alon Relations Kornit's website. I over found Executive today, company's turn Samuel, certain The now financial Officer this Additionally, GAAP Rozner, now Kornit's Financial Chief non-GAAP company turn published Officer. to on measures Ronen.

Ronen Samuel

an Thank all this you Thank for exceeding evening I joining to call. guidance significantly a record quarter, profitability, Allise. year on half off growth Kornit. earning topline Kornit's you XXXX report for transformative This on capping us outstanding for am second pleased history. proved our fourth to and in be

of than will supply inefficiency ever the transformation In it that XXXX second Kornit leading. our be traditional remembered management ability exposed year XXXX. are textile in is this goal ahead in more to of hit this of in e-commerce an tailwinds year of leap out business achieve revenue the our the in journey, chains million confident also and completion is Upon end which pandemic, the inflection $XXX rate goal global run strong creates become a point. While XXXX, the at the massive The for we we plan. to laid the textile to industry the digital

activities. related net for full margin operating net revenue We gross record the account. in from our finished XX% growing with very while a warrants to record a year Turning $XX.X note million on goal generating we to significantly to of total cash QX strategic possibility of $X.X results. global We million, exceeded million strong operating year-over-year XXXX and $XX.X our delivered

and and effect brands the apparel including home to athleisure, merch, licensing, retail core of While online the continue e-com sports from fashion verticals customized pandemic, marketplaces boom decor. traditional is recovering across

multiple to AVHDs with adding months the are that As XX to And system on a ago systems. see existing entry-level fleets. their Vulcans Kornit started and regional we XX purchase result, for customers and accounts moving Atlases, multiple key to high-throughput rapidly

We highs, higher is regional accounts growth year-over-year DTFs quarter. throughput basis, is book experienced an net continued order grow. a business and America across tremendous for with new from a in new we of The continue also quarter, On continue changer and fashion set Germany particularly versus brands Presto the consumable existing of geographies. good see system. movement the the engagement in adoption gaining our our record absolutely fourth the of recurring volume fashion EMEA mix in for delivered to level top U.K. The and with very manufacturers healthy industry game to to

consumable leadership Services announced new to profitability. outperform continues to to our proud have and the we Gateway. an customer is business. expectation new capitalize I recovery We we our strategic the pandemic making expect very on recurring XXXX. growth see on staggering with a customers of Asia-Pacific to am the with enable required struggle line, strategic successful opportunity leveraging execution strong our the in massive to team. Custom challenges, season our And year-over-year in reflected and peak alignments of our QX, In continue growth business While terribly our of success foundation

automate customers a for software from exciting XXXX Kornit for our are for services. there of opportunity We well huge to is application added global from workflow is phenomenal business and the demonstrating software an at and pipeline demand interest build we the orders accelerating a as optimize our team. and execution experiencing continues received production value and on-demand a pandemic execution looking environment, have across continued an huge grow. business unprecedented adopt an models regions to brands cloud-based year net was believe incremental platform recurring throughout we flows. the multiple and We new as scale products the of Our to Kornit fulfillers model and broad and unique

Turning to XXXX.

the backlog supported ever than industry highest pipeline. with with an strong, strategic XXXX robust the account history. that in by and projects is significant level year year be of very strategic We stronger an confidence filled and accelerating impressive of global the year expansion extremely initiatives. the tailwinds, are in will Our outlook process visibility fulfilling with for we of an started our exciting

We new heart further penetration the into fashion, products drive decor will will which apparel the launch powerful home of industry. and

We a are automation going that launch technology consistency and increases breakthrough usability proprietary to of throughput, operation. substantially

application Kornit's significantly market. will addressable the creation, traditional embroidery market new We high-density disrupt introducing first will to XD products kind the embroidery, enable a and heat proprietary printing transfer groundbreaking entirely vinyl effects. textile of the that This will be unique application expand market and bring

software our We new business workflow will line. scale

as it global our on as market strategic We footprint Kornit been massive long-term sustainability XXXX our key our especially with we continuing will note segments, And are strategic level. in execute taking with while which vertical accounts. the to mega to new also expansion the as comes focus customer area brands the a since will in activities ESG textile program industry. to in drive success. our we will penetrate beginning, next has that ESG well expand driving I will mark year grow

designers in demanding fashion planned our fashion is the Aviv insight many industry rapidly. be the Kornit the showcase Our of building be working customers, we announced compromising commitment More a is we in international our second quality. to event couldn't Last year, unusual designers hundreds with in our it be be and of prioritize to innovation with to deliver professional is of of of best execution published for will part the even all event sustainable to footprint year. partners participating dedicated a a is event prouder Fashion report that will first Israel this the technology demonstrates investors most fashion it expand sustainable The our give and and many Week and of fashion kind how future without the more Last half the in will Tel problem. widely host most impact of the into business create event. to technology solving initiatives XX the world team and meet to fashion our ways first hoping week, leading around recognized empowers than that the this industry's expressive will international you the world showcase excitement sustainable, pressing in this famous and We observers ESG were and at industry.

While industry restrictions extraordinary predict remain remain we global event during travel of XXXX. these to half optimistic challenging currently, and hold to second the aim

profitable essential Alon strategy. to continue beyond more XXXX. more role growth than capabilities than So believe the massive in over and Rozner will XX disrupt than achieve enabling will for Alon ability success execute to our on Kornit. Kornit's been I will stay our as management the Kornit we his further confident experience call is Moreover, ever we CFO brings years on and as earning to of of to execute stronger his profitability and be to Kornit's ahead first the well financial call the greater while we leadership industry fueling opportunities a XXXX ever tuned. In exceptional initiatives the growth our even customer of moment, us. enter turn

Alon? pass to call I the Alon. Now, over will

Alon Rozner

the across Thank my operations familiar professional and of ahead journey get immerse have continue am to I us everyone. as we and December, and profitably. in excited as you the industry Kornit the I well with Kornit. scale the in and to Ronen with had evening business good textile opportunity teams joining myself as Since closely transform colleagues

to following forma issued our in include basis financial today pro measures the a I GAAP Before non-GAAP available overview, beginning to on the is would financial on earnings A section the our full release and GAAP Investors website. that discussion press the as you reconciliation will as of non-GAAP of earlier well results results. remind like

into dive financials. let's Now the

financial bottom quarter were very including which fourth are our quarter across Fourth pleased our strong results top for Kornit and significantly revenue, line. record-high We expectations with parameters key increased compared cash on an exceeded from to the quarter flow year-over-year Fourth revenue and and increase to XX% previous impact of of warrants $XX.X $X.X quarter. profitability net XX% non-cash million, million operations. results

industrial compared were year-over-year million, for revenue, demand in to our for quarter. Our system XX% America in accounting high North driven fourth for during non-cash quarter of quarter an consumables peak an $XXX,XXX fourth growth Europe warrants the Services results increase production and of strong impact, $XX.X mostly net revenue XX% very previous mass season. and and XX% was the of the increase of and total by

and Gateway As a cost reminder, mostly of in included are revenue goods services. Custom

our growing revenue improve which to continue We contract is stream. attach service rate, our recurring

As quarter XX% of one only had Americas region. customer in EMEA from from of with total In XX% than from XX% Ronen quarter, contributed X% it that and the revenue we revenue. region, a Asia-Pacific coming mentioned, that fourth was strong the total more

revenue. total Our of top accounted XX customers for XX.X%

margin warrants gross Non-GAAP profitability. the in basis to year-over-year of previous quarter. and points XXX quarter, an XXX XX.X%, reached from improvement Moving of points net impact, basis

XXX Our quarter GAAP gross an previous and of XXX basis of quarter. XX.X%, improvement margin the was year-over-year an points basis basis points in from the improvement

is service revenue Our high margin for strong our high-end and a continuous of demand profitable gross the systems, ink, efficiency. result for demand operational

I to items a basis. Moving discuss non-GAAP on these items. our OpEx will

We continue growth of to opportunities the ahead invest in us. business to support accelerated the

to compared were During related or and XXXX. going to $X.X the quarter innovative of Adjusted R&D in XX.X% of expenses million fourth or the of applications million result and fourth development quarter, any we XXXX. or forward. quarter of compared increase in to costs expect and a $X.X investment The and in do XX.X% didn't is in revenue, the revenue, million accelerated of R&D revenue for and XX.X% expenses of marketing research the and we have not any expenses attributed fourth or Sales $X.X additions of adjustments COVID-XX new use or to $XX.X were the XX.X% materials. products quarter in headcount revenue million of

facing capabilities customer continue to activities. our in go-to-market invest We expanding and in

increase XXXX. $X.X X.X% in additional travel to events limitations revenue, continued related $X.X revenue lower due headcount, to professional with quarter G&A in insurance organically was X.X% employees, increase were XXX new line employees quarter. and us a fourth The million this from an services compared General expenses XX D&O Gateway. and in and increase XX organically in and and our or million plans, The the the with is increase growth mainly cost. compared of However, of We employees administrative quarter cost year-over-year in joining to with in in some both increase or the areas. travel ended fourth year-over-year of of quarter employees of XXX Custom previous the to expenses were quarter

sales support fourth share deferred and the of compared level to XXXX quarter the or of payments $XX.X We share the for $X.XX million from fourth revenue XXXX. a and or increase XXXX, backlog, million, million net share quarter per was $X.X R&D activity quarter was income by fourth advances. or to share Looking invest forward GAAP quarter of of and for the for a mainly mainly fully to was enter XXXX million Fourth fourth to for with of in or the from to on XXXX. adjusted quarter the and operating fourth will $XX.X to $X.XX in organization $XX this marketing. Adjusted $X.X fully basis, increased million Non-GAAP was we diluted up million quarter per our in $XX.X $X.XX up customers. the profit of The million a customer was per continue in business, quarter growing $X.X activities basis, diluted the strong compared $X.XX cash XXXX. $X.X net million profit fourth quarter advance of per Net on XXXX. provided EBITDA of $XX.X including million EBITDA of from due net

December offering September cash XXXX the of now by million, the deposit and in expect $XXX in convert I $XXX year XXXX, third The was largely operating in securities, at balance, We driven to increase bank to as of revenues mostly deferred quarter. $XXX successful our in second marketable balance Cash quarter-end the recap million results. full profit. briefly including and to revenue were and million XX, compared will our XXXX.

year-over-year. impacted share per in the basis Full net full were $X.X X.X% XXXX. in net $X.X year. uncertainty resulted of year net of was by diluted half XXXX. in Full on or an record non-cash a results Full experienced of compared in adjusted million close XXXX, year year quarter. per EBITDA we or $X.XX share strong business of to was Then in was COVID the to $XX.X $XX.X the million $XXX.X growth in of million, second to revenue, loss income GAAP $XX warrants first compared million a increase the year Our impact, EBITDA fully million $X.XX adjusted million which

tailwinds, XXXX. first of We view our the with backlog a large great the to expansion Turning of XXXX on quarter and momentum industry in enter projects business. strong

the $XX X% XX% to income to million $XX be the in expect of revenue. range For non-GAAP range we first million of quarter of to the of and XXXX, revenue to operating of revenue be in

we us. to in while I and of to million gross turn $XXX profitability. ever position margin Kornit we As is back impact of issued has are the our ability assume of ahead term strategy confident and on on our to will practice goal as more past, our call and in plan, very the continue the run execute been results numbers achieve a strong in Ronen now ahead in rate our In these our opportunity warrants no of proud very the summary, of than capitalize long fair expanding QX quarter. are we value

Ronen Samuel

call that, Alon. ready to open are we questions. the for With you Thank

Operator

[Operator Instructions].

Suva Research. Please Our is Jim Investment from with proceed. first question Citigroup

Jim Suva

thus for the Thank evening. and congratulations much and the you And And very you far. good good all thank results on outlook. details

Your of flying ability for one you outlook, can It to two lot quarter? seems you supply a bit do how like chain? the constraints we have airplanes looking a us supply about your world, is around? about think On enough potential the there less to chain, around or So components? specifically shortages components should forward, little talk quarter the

Ronen Samuel

Good question. constraints supply Jim. on don't see any Thank We you chain.

working manufacturer, with put Flextronics. contract a use both systems As in and we closely you very Sanmina Israel of know,

a capacity will above to plant to well move next new we in has what ink about which We are need XX just years. the the

logistics know don't only cost shipping we So everywhere up. we is of side constraints that business and negative well cost The our up see on any as on see you supply going chain. supply as is of in chain, going the it

Jim Suva

of last any there shaking they trials, such my that world as meetings could are the are question be better getting customers, some meetings hands, in-person and opening parts with sooner Israel than, results then Or on a now vaccine just up are with And your those things that it are challenged? demand? visibility still say, little North pretty are even wondering to little a if America? where Because more is am really strong. from bit of getting I kind starting you for sit is, a

Ronen Samuel

Yes.

we we existing customers is that again, So net between new great questions. to when looking mix actually QX, the at customers healthy. very Bottomline, are have

So we in to customers, meeting And so Zoom actually going through sites. cases, visit gaining momentum, new are them, see many our customers veteran meetings, business. with this net many we other joining

live including material and with our experience our in center in doing us customers advance. sending the very Israel. very, efficient. from world, are the are demonstration all We around They Live

are all We testing. doing the

sending them material back it printed. after and are We the produced was

So from can it's efficient I three, day very even working productivity, of and key quite sometimes calls having very, one with well. my Zoom four I on find Actually, beneficial. in myself end, customers tell terms you and it's for

Jim Suva

so you and for much congratulations. the Thank details

Ronen Samuel

Thank you.

Alon Rozner

you. Thank

Operator

Rosner question next Barclays. proceed. is Our with Tavy Please from

Peter Zdebski

Hello. on you some was quarter. color This the in is Congratulations all the the I have What have but or system skewed am you also, the the more year. any on XX% you sort of And bit give if mention a year quarter. customers the Peter did fourth rest of than you the Alon. then if at quarter I quarter? typically pace sorry consumables in it, to Zdebski, am accelerated given wondering I than welcome the the if on you, wondering towards sales greater missed would us changed of I that's seeing? been for wondering I mix consumables am mix And could Tavy. for is,

Alon Rozner

This Alon. Hi. is

higher we mean consumables. supported it We very And for I the in which very have demand strong was QX, and yes, well. typically even stronger. for the our business same demand this consumables quarter had So

Ronen Samuel

in QX, add in terms of that growth. the growth, supply quarter the strong can this record supply really, I really we broke

see and the but well not We what expected into it's we the are XXXX. we numbers sharing moving above momentum

terms more In customers question has of about your than XX%. that second

We global than this it was quarter our that a XX%. strategic It account. great And not one global only more customer strategic account. have wasn't had

Peter Zdebski

That's much. Thanks so helpful. great. Very

Operator

is question next proceed. William Drab Our with from Please Brian Blair.

Brian Drab

am when wondering my it about the that? a across can solution Congratulations. much Is up I more portfolio? Is more we hear might on share Thanks applicable today your questions. and that? talk could How machines Hi. for if to you little automation about process? taking the else speed bit you anything does there it

Ronen Samuel

you Brain, Yes. much the thank very question. for

it's the one-of-a-kind. automation, this So solution. It's market. the is a There breakthrough in nothing like

portfolio systems, a have We the of And option will the really operators in that top of the solution. And new systems. on new that depends of release the we it half are solution planning it year. that to the strong This going portfolio, including are terms is we and to Atlases portfolio release the the the have. the in on an of productivity, mid so in the we IP year. service the efficiency the are It second running on the

per can XXX constantly of hour. run for today, is XXX at the actually the the on operator. example, or Atlas per the impressions But hour limitation running above So impression Atlases above

they it much are do his down the maybe constant tired way, they and to The a do and second the the quality and in they enables in hour will constant operators to taking easy end. one can are job the operator in more go XX. hour but automation in Sometimes breaks

It the the the improve and use will of productivity. will it improve So quality. ease

around the be will XX% by average. We expect on that productivity increased

Brian Drab

really Thanks. That's helpful.

need clear, an solution, be makes remove efficient. that operator a the it's doesn't an so just operator, to it but much more And for completely

Ronen Samuel

to Correct. system unload see the cases, with It operator In two doesn't this the It the a can running one automation. with operator. way. load consistent we remove systems system from the helps and operator in some

Brian Drab

Got it.

the addressable application Okay. that how embroidery Thanks. help little alluded press talk expands you market, your to in as this And can XD release? envision And also better? then you me much bit a about

Ronen Samuel

Yes.

So too much we share information not to are this ready stage. at

to June. are We share will that show There of market enable And other information be in going we digital market. new it those more no are application. the breakthrough in solution Again, is much releasing to April. It portfolio to that going can solution. the it's we to the part course, of a are

application were never of exist those Some before.

on could what garment, So the XD it will to of enable images. could blended, on be do system is the type any polyester, new actually system, it be to garment, cotton print

we images go surface and of to can micron to XD build up can XXX actually, all which above kinds the So application. emulate

is embroidery. getting the One application feel of excellent result excellent embroidery. are and And we of

and also market. Another example, is for market. application athleisure is much is very transfer, for which also high density the the very, vinyl for very which heat sports relevant And important, for sports

terms have So the we by market we XX% this of addressable believe, it to market, at XX% from addressable what in about Kornit's point, today. that will increase

that, So it been that to top it's increase never of And a on our new that application before. produce huge able were we create TAM. will for believe

Brian Drab

That's that it part just a or embroiders the clarification. Is great. embroidery simulates one And it solution? as of system

Ronen Samuel

a April a additional we bit bit are But information It's looks will it printing it. more keep with share later embroidery. about embroidery many, a simulates many we in going advantages, it feels like okay. but and to It

Brian Drab

you Thank Right. much. very

Operator

is from question with your Stifel. with proceed Patrick next Please Our Ho question.

Patrick Ho

year contracts those for are renewals little customers? a these are of some get and attach services strong attach Ronen, close much to you some Can of you posted on if nice us very very in rates. off, and which have multiyear you the the with Thank first your the rates about you prepared still agreements? now service color type year. you talked quote increasing of to congrats kind they numbers remarks to give Or quarter and bit

Ronen Samuel

a for way the a year. with coming Every is ago So we multiple to machine we business. not are machine and contract. us one selling full to we we revenue a year-and-half very from see And contract. already contract. a from year services nice about recurring It's that other we for no moved it's buy selling, are There are

Patrick Ho

operating And Great. terms Alon, model. helpful. in the That's maybe of as follow-up, a

You very posted gross guys that. to had margins. products contributed Obviously, mix strong

are you grow the business. you in items help you released? about talked of talk look some One, Are they do new with R&D? product As are until, at to be Or add say, for for yet others embroidery and sales XXXX that's going of OpEx front focus they And to can to need XXXX, much the that more about increasing the terms and the marketing beyond? how in you seen to be these initiatives? to support

Alon Rozner

Okay.

we invest to So the continue in as said, we organization.

As the the go-to-market. across regard invest focus you R&D, In marketing, to R&D mentioned, is actually we sales and and board. the

enhancing are workflow. in the projects, software, capabilities in R&D, in in occupations We core in our new

invest all investment we R&D. sales will it is continue we a salespeople And same coverage massive yes, So increase regions. XXXX and will same. I did with QX And and across our continue the the in in We there XXXX. professional We in marketing. in to mean goes with

Ronen Samuel

Let me point. add one more

and operating and profit. our on are to on As the bring of said mission mentioned, we also we the we $XXX committing line for rate goal, the run bottom expand million leverage to gross our margin

you leverage will XXXX on profit. during So see operating

feet can a maintaining street, as maximum. would the to while the cow in it more to we like commitment the we small would can because R&D parts market much milk invest to profit. on But of our We to and in the more and We see because on in the we to invest as the grab not leverage businesses we will like want the opportunity and maximize as and the this we marketplace is bring to to market. other don't time to invest as massive much operating

Patrick Ho

Thank very much. you

Operator

question with is & next proceed. Our from Needham Jim Please Ricchiuti Company.

Jim Ricchiuti

you. a did seeing And begun evening. is high have question the strength that had you wonder like this? is to like bit quarter Ronen, out utilization what A in Is are customers there? little talk Presto. Hi. clearly call strong certain supplies. at And I sounds Thank you It it you pretty deploy about it very a about, more, just [indiscernible] a could really if for sounds Good you level. or

Ronen Samuel

Yes.

So success we Presto. tremendous have on the

Now going onshore textile on success, is it is or let's Asia as see from on see fashion on market production and on have the these market. in Actually, in the the We can across coming. are Europe, it discussed. points can to inflection ask decor home really if the where we the We nearshore onshore markets to textile, also production. moving it on U.S. the or move

ready have from the And solutions the system right on tell market one we nothing of momentum. you with to the places The going gaining it have designing They are is unheard that we in the decor entire the have the world, that This in can see and and address coming preparing this onshore We what here immediately see sew. can the which we we huge Presto. our kind believe without into is quality just and onshore any the any we the Presto, Israel amazed week and facility the Aviv full floor posttreatment. of actually are many which one out without enabling the many, a pretreatment, way is in production designers are can like their market. for only see textile other is on hand-feel press Kornit a sustainable on-demand moving to they the this fashion Tel out in is you, cut market, in and and ideas Fashion the are the and of ability, they They market. show. entire can the market home production I

Jim Ricchiuti

Gateway. have And for many at progress XXXX, you. Kornit solution than how half Ronen, Custom the pleased out you you Thank your Can that looking the second bring existing been appears half at only year. It less guess Custom business have a of had the to the you with customers Gateway are say, portfolio? the you of I into able

Ronen Samuel

for very, be the are from of But able to from bit also of players to future we solution. brands. more see be joining huge this more enable on to excitement, We there on at really you, What huge So, the I the increase customers we numbers it's to We not we can increase can to both We marketplaces the will from enable share from business. nice directly brands, are Gateway connect in production to that performance. middle major that our line coming of from expect customer efficient marketplaces, from a to and the Custom case flow. and numbers impressions online from of coming stage business brands our our Jim, and customers from the our a impression ready system. that's retail, we share very this this volume tell target is also year, And see coming of customers.

So potential move. growth a are big this this coming from revenue and business see moving and forward margin of we very we about optimistic

Jim Ricchiuti

And ones question, excited I you. last may, you the are new with that just if the products, respect Thank to most by.

second year, skewed we For you see anticipating the more QX? a they these Will the in the this products to for that half? most part, are contribution contribution are

Ronen Samuel

from the the from Yes. automation will new also also QX, the products, application. see and we Absolutely. In contribution form

in So we HX. it will see already

Jim Ricchiuti

you. Thank

Operator

Hall proceed. Rod Please next Our is from with question Sachs. Goldman

Rod Hall

the guidance I wanted question. the ahead pushed surprised there a I way range in of end the have that for and printed maybe you for ways of things one lot revenue guidance guidance, with then start And QX that the and two you of really for to guidance QX? QX. you off follow-up. a Thanks above Yes. your strong the or Could the your in highlight high long that

Ronen Samuel

things. So a few

on discussed the we already all, of First supplies. growth the on

quarter was very the systems strong. QX. service It supplies it very while very, the also a So for growth strong strong was our was very also a quarter,

more cases and of even purchasing getting we of and names few to XX more When dramatically without customers systems. XX, orders multiple say very more than and of combination XX never a what relative those have year we three joined a the on And see capacity businesses. things it's system just Kornit all of system, that systems see I multiple is customers about ago, volume that. have before. So see than even than we increasing We new seen

surprisingly, multiple the to surprised is ordering of systems. what customers me vast so seeing magnitude multiple, are many So many

Rod Hall

:Like, critical of this of math that out you are these that's Is a done that that like feel things do Ronen, all recognition with there be thing, what kind acceleration sudden? just of them do and you a just, think? driven could point

Ronen Samuel

is point strategic acceleration account. that the really in inflection can existing growth It's are two from The about into onshore. see The move booming. online talking were marketplaces We the the move The the we the account coming ago. e-commerce. into quarter and about

customers. which peak Presto, growing the see very, know, growth revenue for We was very new very new systems, And Kornit. for the customer a recurring is business the strong the AVHD, Our is it the is you existing the the The Kornit, relative new The in product to fantastically. between strong. segment Atlases, Vulcans, mix can very, season.

So it's all a of those together. combination

Alon Rozner

the the I think very their the was for season the infrastructure quarter. got also our kept last demand and peak until it peak they but season that not strong during of preparing day investing we only customers

peak So I absolutely Ronen this to we not term point related as mentioned, just inflection season. see, the the short and mean again, is

Rod Hall

going then last things give little Thanks you that. And question on my a was just maybe Pro. there? Okay. update on how for are Could Poly us

Ronen Samuel

Yes.

Pro, are Poly very a on So demand. we nice getting

are good bringing terms terms middle starting of in in is of Part introductions of the the product the the it level are in year we of portfolio the the Poly expanding quality, additional of that taking current solution, Pro traction the efficiency. Pro to new the terms the productivity, in of very the and next Poly to the solution. of We see NPI,

quality, the market. It really next open the see market. the will to going athleisure new bringing about for us to that market. that see amazing and durability from product the will this are an sports the will growth And we year very out Poly of we are coming You we optimistic

Rod Hall

you different? thing as are And is XD same thing here? about that's Okay. totally the the thought thing? is Or but were printing different talking it same I it the they

Ronen Samuel

No. different. It's

Rod Hall

Okay. you. Thank

Operator

Greg And Capital proceed. with our Craig-Hallum next question Group. from is Palm Please

Greg Palm

the congrats in to you the but usually give on history, versus revenue QX kind full the the tends a Yes. taking here. of in looking the year know don't of and point for always low the step-up I back a and see second Thanks you be half. year questions results usually at first half guidance

that well? expect just same Or seasonality this anything year should curious, of to year? is the you So unusual we as hold this I would sort there expect am trend

Ronen Samuel

Greg, you are absolutely right.

You should expect the same seasonality.

Greg Palm

Great. I alluded Okay. what new of curious I this to from about customers in customers think that your incremental it as outside of that's of customers kind specifically, if is business? that that the of area? core largest for have are And we maybe is? what am contribution us new maybe Is expansions and if capacity that help well? Or mean then existing expectations and core out sort bucket you the product sort drivers

Ronen Samuel

Yes.

we peak it our demand year see then they they December, season customers them. during peak is already the can see and they as They existing adding continue it that capacity. a adding are QX peak what coming. They from they are growth more expect to the capacity for of and even this see peak timeframe, So the customers, season. and are because constant was constant the actually on the into say April, peak May And volume XXXX and

key sites our adding our accounts example, moving U.S., strategic it's capacity, and additional for accounts So them Asia. the of across are more into even it's if many Europe the and across continent, if to opening

moving the additional site expansion more of of of they to within capacity expansion and systems. see also higher And sites systems. we are additional So capacity

them are from Avalanche moving the of the Atlases. growth see the into many So into Vulcans. We also

are the are coming customers. they as opportunity also from that Presto very, see they very and I customers we area they and And momentum Digital market gaining mentioned, new in starting are one see totally growth is this fast. net the this entering, the So is all. the on are relative side. new. momentum big, Poly is well now exist the The And as not for Poly we again, on of ago was DTF big growth top that, one-and-half-years new And which engine. gaining at us, is relative business another

Greg Palm

Okay. one clarification. And if I could just in sneak

your what previous think upside. QX sort the and to drove question I a answer about of

mentioned Or you did the surpassed mishear consumables the I growth I that the think almost like or the answer rate rate Was least business right? something? of the growth in at growth that systems. implied

Ronen Samuel

No.

in think I I was And in we fronts. in in the we nice growth that had high in business growth that systems, types was have. consumables all growth of in growth very But we all the service. different consumables as mean and had we highlighted.

Greg Palm

luck Okay. forward. Great. Best all of the Thanks color. for going

Ronen Samuel

you. Thank

Alon Rozner

you. Thank

Operator

over would conference turn to for to closing does I conclude And our management remarks. like the question-and-answer that back session.

Ronen Samuel

Great.

their I our call. So joining like very opportunity their thank us good afternoon for all hope and Tel our thank in would partnership. be us. you you and ever in an through from would thank the like will XXXX we I and also to of good to for face-to-face, execute We of night everyone Aviv. you We health confident more all trust customers. to than of opportunity wish much. want to for would the Thank ability Zoom our community a our to not wish to are to on this like massive Kornit dedication you on I ahead soon see to and passion for exciting XXXX. this take investor employees and year

Operator

does This conclude you. today's conference. Thank

and your disconnect your time you for at thank You may this lines participation.

Kornit Digital (KRNT) 17 Feb 212020 Q4 Earnings call transcript