KRNT - Earnings call transcript Q2 2021

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Operator

Hello. Welcome to the Kornit Digital Second Quarter 2021 Earnings Conference Call. Please note this conference is being recorded. I will now turn the conference over to our host, Mr. Andrew Backman, Global Head of Investor Relations for Kornit Digital.

begin. may You

Andrew Backman

Amir And second operator. Samuel, everyone. to Officer, Welcome Executive Corporate President Thank Development. XXXX good With Digital's and Financial Chief quarter Alon Ronen Executive me Kornit Vice Officer; and you, Rozner, morning, Shaked, today Chief are

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

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

GAAP measures the financial certain company's on comparable release can the this today, site. earnings posted of reconciliation in the Investor will measures Additionally, non-GAAP to to the reference found making most Relations measures company's these company non-GAAP on published be is directly The call. which be

Now, call the turn I to would now Ronen. like Ronen? to over

Ronen Samuel

for you, our And us joining you Thank call. thank Andy. earnings all on

jump I are to Andy recently have Global as Relations. say our pleased want of to joined into the Before the Head we of quarter, very the first Andy that welcome. I company review new Investor

So for Kornit the board, let's truly significantly quarter quarter expectations. turn a where to was what amazing another beat we across

growth systems customers very delivered of stronger. very ended basis. posted XX% So end to growth and posted an growth in year-over-year strong never as strong account, the and sequential extremely tremendous a pipeline and quarter million saw total our key on reflecting year-over-year XX% the but only again strategic revenue businesses, quarter, our been with We in We in of our for net bottom We significantly as and well with very exceeding $XX.X the top organization, and customer, line strong strong also which global with over saw our growth growths. a XXX% in high warrants net consumable new has growth margins a of not and service a related pipeline. gross million guidance backlog $X.X

quarter, began of testing completed we shipping Atlas systems. second the beta During and Max

the will year, another those for industry. of the in on available unique strong durability, upgrades and installed upgrades expect we revenue contribution next also Atlas very next quarter in on truly first only seeing be significant the the level from is and are feedback increase on the excellent the Max We base year. but have unparallel not XDi order customer quality capabilities, print for Max and and backlog received productivity which

of global brands sustainable experience market on-demand of solutions, the advantages adoption the to our as to to DTS comes micro-factory production. strong tailwinds continue proximity leading We embrace as it continue

their the micro-factory example, full the direct to advanced includes single which a printing, fashion For acquired brands. the step emerging Presto, Presto, is with most recently and now design, able they This the sew many fabric solution on-demand, for Arizona of in addition offer of cut to based service Kornit sustainable perfect and solution. example designers services Kornit customers, print, to DTS are

of a the partnerships deepening display customer these engagement massive outbreak our comprehensive participating Turning Fashion customer of successes, Week, addition New Dusseldorf projects the growth we as of growth opportunities Jersey. engagements, Building Amsterdam. the of November. have to formation we in orders DTG to the was new Week be the events, in by as of projects capabilities, our committed person and to our received anticipated VIP on success, the well LA in extremely we result the customers, strategic of the great come. the and we United Fashion contribution at to a pipelines. clients. in since both pandemic New Orlando, very customer for to we than the month, at experience meaningful pandemic We the was event in a customers. this feedback customers York expect our Customer our Fespa, a we first it we newly US execute of provided start of business to Kornit fall are customer in in as those in expansion execution number Last our more much are in Printing And In hosted see most the event globally. first customer upon XXX glad event already parallel, with COVID-XX. long Center to also strong evidenced huge as continue After massive global and quarters positive a event DTF the in hosted pause, And these in of the renovated the since as event September

of further a several next contribute the So to that pipeline. for activities we XXXX growing have planned months our ton will

details. for additional So stay tuned

on-line content providers momentum great as world. partnership Canva, the KornitX, evidenced for design by the announced and see recently to continue studio our in We largest with

begun already effort Canva. have We with implementation

addition discussion We marketplaces projects accelerate with partnership we our which c currently as the execution In were of fashion VoxelX, to online strategy of announce production. textile to on-demand very will multiple brands. XX over to strategic to this excited for in us help backlog leading KornitX, acquisition X.X well sustainable implementation have the morning, as digitize and

strong some Hush functional and So textile we business Wolverine proven want opportunities completely team has to In a disrupt footwear including of of to XD footwear applications, and Kornit which advanced the will I great VoxelX and quarter part empowering technology, by the first been new while tested Worldwide, had which VoxelX the never-before-seen decorative leading a brands, the together. of is fashion concepts things fashion, exploring family lucrative world's to and Puppies, welcome in functional we the year. creative half look and the forward new and of apparel many second very summary, markets. achieving

We XXXX. year. then are ever We way we by in for operating outlook of believe company to our remainder X on than becoming and sustainable are the the our into billion more confident well system next fashion, and revenue on-demand this year for

for numbers call and Now turn the a to guidance. at look Alon Alon? the over I the closer will

Alon Rozner

everyone. Thanks good and morning, Ronen,

cash Revenue $XX and are we of results. well which very increased to warrant said, net of Revenue sequentially year-over-year our million impact to quarter XXX% ahead XX% strong the of also warrants. Ronen impact. pleased very our second million $XX million of As $XX.X was with guidance million, non $X.X excluded

part continue due second XX% Our for was This in and consumables an year. million, were significant again and orders of of with cash addition accounts, into results was total services. in revenue, non half $X.X driven second increase strong sequentially. increased growth net XX% Services quarter to momentum which strategic revenue the for year-over-year, of warrant for to the to expect of by second systems, DTG the demand we million, for XX% accounting the of $X.X impact quarter continued

XX% accounted doubled total XX% and Americas customers Top XX% Geographically, prior more quarter up both year of their than for regions revenue. total Our all XX were sequentially. The and year-over-year of respectively. accounted revenue EMEA regions approximately and revenue and for

from related experience total manage we've business. and travel accounted been continues to to XX% of year for Pacific able in revenue. under quarter last Asia Revenue While increased second just limitations, the Asia X% Pacific COVID successfully of

profitability; basis, XXX gross GAAP net XX.X%, impact of the of the the improvement warrant margin On of in year-over-year. basis gross non-GAAP an was was quarter a to of points margin year-over-year. for XX.X%, over the over Moving improvement quarter XXX basis an points

as Second from to margin expansion production sales, increased business. as our quarter consumables, well due continued profitability strong mass gross system the services was

expansion. mix Going and ongoing software along forward, drive of the our shift mass continued gross growth to revenue systems of expect to margin services acceleration continue we higher with to production

to business last to on we mentioned OpEx; Moving invest the growth. quarter, to I continue in as accelerate

million, or revenue, $X.X were marketing internal and second marketing For revenue million, X.X% in was of XX.X% of but the XX.X% $XX.X previous programs expenses compared as expenses increase of the and and expansion or million than compared targets, of to revenue million, the and the as quarter Sales to mainly or administrative and with to quarter. the revenue of were in second go-to- awareness the $X.X hiring, due customer Development timing due market later revenue the for revenue or higher second in quarter in million, XX.X% were was our to brand quarter, second expenses quarter, or facing of XXXX. XX.X% of capabilities, last which compared $X.X activities. Research The of or our the $X.X quarter OpEx quarter of $X.X General million occurred year. XXXX. second $XX.X of XX.X% quarter, quarter million, in the in the second below

year of ended of higher increase X.X% the XX.X% employees, quarter. quarter This XX quarter. operating ago combined XXX margin employees increase by XXX versus first the employees year-over-year Our I leverage increase gross discussed warrant compared in the non-GAAP in and We was margin operating earlier net negative quarter. of impact to with the as an was driven with increased the the

and in to of or Non-GAAP for million, the $X.XX a of in per net quarter XXXX, we basic share $XX.X in the per to For $X.X the the profit quarter continue and growing $X.XX diluted was on million, compared loss the marketing. will a support balance second to XXXX. mainly business, second or basis, organization invest of fully share R&D sales

or the million, very this basis, diluted Adjusted share strong to million net $X.X year. $X.XX the second GAAP million to million, $X.X $X.X of compared a $X.X of again net and million quarter XXXX. in second to Net basic in was million share on quarter the profit the million adjusted $XX of revenue $X.XX year quarter, cash quarter compared ago per fully a a activities EBITDA operating EBITDA We customer backlog, cash or negative operating provided was for activities the per advances. loss last was as second quarter Second in by of $XX.X quarter. compared deferred including quarter $X.X ended of used for with

remainder of acquisitions. quarter. and of per million our is continue cash assumed deferred contribution $XXX.X be was We next securities XXXX. revenue an with technology we impact immaterial, balance for line million. at to expect this balance and OpEx revenue impact year respect VoxelX, to which to with long-term our potential we previously in end to deposits including expect $X bank This With finally, to financial the revenues year convert discussed, quarter model marketable And acquisition the approximately the the of in

we very of Based quarter to in of be the non-GAAP Turning pipeline, the to on and our XX% strong range the of to including XX% revenue. our $XX visibility range backlog revenue be the third and million, $XX to guidance. in business, in to income million expect current operating for

call I the XXXX as of now and And in second first the and our it the proud is consistent further value a past, team assumes practice very a with strong warrants our the quarter. this no with In performance, work strategy, all we and of Ronen. issued back turn of are reminder, validates As will in dedication impact summary, the that, hard result our fair guidance entire of half of very Kornit. quarter of

Ronen Samuel

Thank ready the questions audience. from Alon. And take you, now to we're

Operator

question Our first Instructions] Rod Sachs. Goldman Hall [Operator is from with

RodHall

evening, Yes, for question. good the thank morning, and to I guys. the guess Good you opportunity ask

comment. exciting. seems a revenue guess I look here to, us strong. wanted I The KornitX to the numbers very mean, very backlog I So

implementation XX And backlog. of a we the in that be huge driver projects talking business You're future. the could know about in

take follow it see curious is, do timeline And those to numbers? the those does Just And what those? when impacting long on up I question. then how have implement we a

RonenSamuel

production is the driver of Thanks, to for Great. proximity that way than top that, storm of with industry. long production the list join KornitX, for implement changing the We the to we digitizing Rod XX both also was about this to dirty really a huge orders KornitX environment. big, the Yes, industry on-demand network marketplaces that right in and this course, fulfiller production, in projects perfect believe questions. have with of of is see the a time retail On sustainable flow. to is now, would Hall interest brands for more from industry. this both the first of We with all, like change

So the driving, are marketplace. the very, visions adoption in very change the we of are driving and pleased we with are that we the KornitX

we I'm like we will major XX be implementation, the that we tremendous to projects, sure that would meantime, XX we the to expect there There days customers. longer. say Some term some within it projects some nine to six we able are them to will of I the that Canva, those few about a projects most of In are months driving volume in of gain our will, implement a of drive take are projects. of projects will pipeline. project meaning are more short months; the amount

RodHall

below think a up those Okay, projects, I of curious give also this margin little And cetera? wondered guide. that? EBIT because then decline the us a the of et all the could delivery, on Thanks. is EBIT is guidance, you expecting. you're just if color margin on drove And year-over-year my margins I thanks, that, we implementation it's decline. that Ronen. Is follow just were that guidance the sequential And in doing in what I speed what

AlonRozner

to firstly our the QX, the consider add We working OpEx again, back we operating and the to results. you of business, saw, activities QX, QX, we leverage, level QX, and with gross and In according operational alone we mix the continuous additional So invest additional takes a resources mean, had however, in as great margin the improvement different of margin. mix investments to drivers to in is seek key the and increased for operating and long-term expect, that that investment margin, the OpEx bit as the in all in we plans, organization, expect are which accelerate to the then level go I and know, more OpEx to in continue our had together organization. we great the the the we as

RodHall

growth? a there we you're are lockdown there? of the guys So, you you driver keep lot is some to think with assuming hiring impacts just should what the or is of up Or main it

AlonRozner

drivers again, please? what, Main for

RodHall

QX margin of and margin for the guide end the the difference in guide The the actuals. between QX

if delta lock the -- there adding the to is that there to drives kind try what growth, be? -- that would curious hiring thing what it, is we due in all out assumption that drives Just keep up to of you're so that with just think the personnel costs main or you're is or increase of lockdown about some --

AlonRozner

the so, mix, different Yes, mix QX. very don't of terms expect we in in

on that side also in impact invest margin in the supporting activities and COG the immaterial; be the also in the customers So, related gross building will from system. service we

and this So, in in going main And is overall, then in to higher the QX expected the be driver, gross QX, different. margin very is yes. to is OpEx than not investment the be

RonenSamuel

and to because to confident the we gross operating to OpEx as on of see profit, just heading compare in to see we are investing [Tech both we why But to of OpEx, growth see year, massive intending even from we margin, revenue, accelerating XXXX you expansion operating the QX, revenue, continue in last with order comments the margin an expansion QX, we it. gross you XX% to are operating investor, XX% Difficulty] margin, QX perspective, reason QX XX% feel on about our versus guided of continue we margin into Rod, margin, about if we operating accelerate there. promised and my growth definitely and opportunity on versus it both will

Operator

Suva Jim from Citi. is with question next Our

JimSuva

great parts like it that of getting stable? Or I'd and for worse? is better? for need you products? Is And up lead to add procuring a lead all, times you. First it about Or is projects equipment you. your follow Can you times? the little bit talk I Thank also Thank results. question. And then getting a it all have

RonenSamuel

items. Yes, pressure some the see lead will I time very, weeks, lead started a to Alon we next on lead of for have months excellent we sometimes time visibility long year. and of for definitely that, we year year. top took for wait have maybe if very visibility getting products much of add it us for Luckily, And year, some their even longer good on this

this on not we limitation any on not For not see part, don't on system delivery year, ink. on

year, time for suppliers we issue next long our with much us already we In We control For also see chain from some Not anything any for year. your next suppliers. items in supply on we see some Alon, feel a price also don't impacting we place the a see big so parallel, all are order price increase the increase. side? too from way. we but on our lead

AlonRozner

here the able great production No, the ahead. visibility were main that for because is quarters well main to I the we think as of lead slot secure point times as

any So material of do But do on some we impact we business. supply our now We cost. to at don't it's some -- as not see on all. see impact

JimSuva

about those lead standpoint, the come lead or as times example, customers the times looking as times now how XXXX? the like want the to are think at from Atlas lead opposed order then in dates my And customer perspective? Great. to should Or XXXX, if follow year as assume something from question, to probably starting we're in stabilize? delivery their and we up I And an customer that

RonenSamuel

good it's so Yes, very a question.

we with of we We, [Indiscernible] net on of time. we ahead planning with new have of them some most are are is course, even customers one key a So are of our working than very clear that, some and visibility, strategic coming. longer customers

planning have are them levels, any we're We we getting supply ahead inventory if surprise to time orders. enough inventories and of

manufacturer, two we already can a we -- big are odor, we to one and Sanmina contract increasing about and Israel, Flex deliver increase three usually, manufacturer month see So Israel, can the In year, we capacity production. within system months contract of outside an be that we in local site we Israel the in next to of the open are another And to another manufacturer. business. and have growth

Operator

Our next question from with William is Blair. Brian Drab

BrianDrab

that going calculations proprietary VoxelX, print heads are about you And those next-gen seems it print machines? talk long they a market? your And like On like proprietary can there? expands to how any might around just bit you they acquiring little much take? have what consumables, have I you're guess you acquisition? into a looks have incorporate how done addressable your that that And head

RonenSamuel

and something metallic silicone let's features of compression reflective, to breathing yes, first decoration a decoration, we we can in technology, waterproofing. for attitude, such talk here look, from I print culture, proprietary it seen of therapeutics, a take our of people. [Indiscernible] course. knowledgeable, reflective great high directions, and say and this fit terms say never can capabilities, practical of density, impact a be terms be and all, before then that great I'll are of materials we resistance would enhanced about Super and able of feel will also But, With many enhance breathing, sports, capabilities; we like versatility yes, technology. acquiring to we we group great technology, sportswear in cushioning offer is apparel, will as to Well, there a able

opportunity it as the of markets to get more production Presto, embed that both are always market to step are is serving stage, are so open can to the that in the being planning So technology in we their that trace rollout us point huge after. our will at of it's in that us ourselves not a opportunity you're case a sharing you tell for are later on and us see fully planning Kornit, see that this to itself huge our new for capabilities. the -- in website, the we the market market application focusing the to is the also VoxelX market process to And in if potential a will the technology that I out opportunities, the top case we front now see. it's were market new footwear we share today, by by future markets. and digitized we and for when major they this application new go in is you single enabling Atlas, we all to what of it's also start of and on can time, of first we market solution enter not At will the looking if sharing customers go

an and we as is with immediate to metallic integrate bring opportunity to and it it and how like reflective marketers have the are a to clear plan possible. market We mentioned, as have soon I now we as serving that

BrianDrab

the that revenue question? you can any Thank you. asked visibility we Right. you compared given with on XQ little time have a versus last XQ comment And more make

RonenSamuel

we visibility QX. are us. orders. -- XXXX for are so QX, feel taking We can we're going say then we XXXX, only already very we have sorry are a We're QX, starting taking right be Yes, that already very And not foot. guiding a the full guiding on more to quarter, order comfortable; we importantly year it's one I for for strong

in buy so to in of opportunities. Poly Atlas Presto customers us Presto, as of long new we have Max bringing exciting and the are a that well have automation customers Atlas to asking Atlas as an quarter are we Max, upgrades and Max We front a are Atlas of of for list asking their terms the growth

Operator

with Company. from is question Ricchiuti Our Jim and next Needham

JimRicchiuti

thank Hi, you.

based you'll opportunity anticipate now be the anticipate upgrade you would have that interest QX. like beginning from you upgrades? When sounds question for for those on would that Max, just a you Atlas Would in go XXXX? of it base? through existing a those upgrades part installed large the on level When Just the completing

RonenSamuel

Jim audience value Atlas the But to just Max. thanks of understands for the that make the question. the sure

from So customers. say proud product what finally of one feedback and was very that mature, ended amazing the I'm we to that the Kornit our just company. better a box a of we out bringing got feedbacks is that like mature is

in of about are in So this proud quality we different quality, all to the that, very position. On standards is be levels. top that placing of that the talking them is are qualities bring different the

XDi course, in and XD Of the the new and application new totally terms to market. of dimension opening

key the of productivities also excited. course, to and were Of the automation our they're very customers' many and customers exposed

it's quarter have know the installed a that as are for take installed customers this Max. Atlas start upgrading our as base most of the we Atlas take than big already guess the market. fleet upgrade our for to QX, Max, accounts XXXX QX will materials benefit we expect with and going you it system to the in one installed base, of the to it more some recognition So we entire will mentioned, to they the to Atlas I upgrade upgrade to huge large a really And base expect to we revenue

JimRicchiuti

fulfillers, as how way projects, just it, just Got us project -- those are the you that bulk you on senses sense fulfillers, the give then break get a ADM And with for those implementation wondering out pipeline or looks. marketplace. talk respect I'm any It's the to of KornitX, to thank brands, there's pipeline to that. might that just some how about between to when if

RonenSamuel

that part stage those place. have orders share more in retailers some marketplaces, can detail they're the cannot question, have that XXs. are on split are I of those the fleet XXs providing those we we projects. the that amount fulfiller So tell At XXs the names big of you a world, we good the implementation joining are but also not we of on large brands, the across but

Operator

Our with Berenberg. next question is from Mizrahi David

DavidMizrahi

and Hey you on about potentially earlier guys, know some are comment questions. one can order the Atlas systems to your the talked I quarter. just go congrats to backlog just KornitX. back you and But other so I far? the the of on Max book-to-bill, for the And what wanted projects XX of legacy more maybe

RonenSamuel

Yes, both our mix the type I mentioned network. David, so too of say on and cannot projects, very as installed of those fulfiller, I to would XX that much. much base join thank customers with you KornitX the like

Some marketplaces, XXs like join Canva. to with are the would are of those XX on those retails network that brands, the and those customers main like projects. big And

DavidMizrahi

And just [Indiscernible] to performing it. what of acceleration the based sounds got is more for particular, be that through going stronger feel biggest also Okay, are there drivers to to areas broad or then wanted the I clarify, acceleration it better, like I are to the but want certain in kind a just have

RonenSamuel

is storm we Yes, I Yes, ready perfect as new seen year. so all the products QX, are mentioned, very of in see On coming becoming to They online perfect Sustainability main demand strong own many have brand. of is direction, the in all, continued important. the our focusing trends manufacturing we've we're XXXX. one really variety. every discussion with on market, super to wants storm, from market first booming. is Consumer

year brand So size the within a the so few going business, would growth done use and see, current joining see events many but we've our market fulfiller we ask absolutely perfect major moving in also a these Atlas see regions, Max both from this as both the a do for accounts, new next sustainable funnel concept for customers say, I board, with that ago up see fashion traditional that and perspective weeks explosion, value driver are can if customers see a we another Bringing the across more sites, that to the we opportunity a growth, the our micro-factory really growth of story DTF we opening fulfiller massive and And the we great momentum, how new a joining. way. decor, the gaining net are strategic growth is the the VoxelX we definitely changing that that created into trend, storm well. using forward, another from you it's from home And all and bring major system supplies world expanding, the that this multiple in is on-demand and in clock. expansion actually around of but is us and new year. industry the

think the United Week, We us about Week; about in Fespa. have Kornit Fashion events think New Printed York Fashion massive front of the LA

face this face meeting And this very have going very, those momentum. technologies demonstrate strong already we And top shows. with create will that our have. all on is customers we're really a into pipeline Finally, of to that to we

As quarter our if versus year-over-year XX% QX more year. last QX is than calculated year, a you was last very for for growth strong And you guidance, saw us.

So the of growth year the the And and yes, we this momentum. we about business feel are very proud and year. comfortable very of next

Operator

question Palm next Our Capital is Group. from with Craig-Hallum Greg

DannyEggerichs

those Yes, with guess partnerships progress you you're are the questions. Eggerichs Thanks Greg the big maybe working and maybe on I thanks. taking is how could for just with for to Danny that materialize. on if This today. starting touch brands

RonenSamuel

with as getting multiple about can There's many you or in we really micro-factory our brands, with disclose changing the with into don't within have and this share news the to the announced both you interaction we stage. share I on-demand, the into of some the Adidas. Atlas of many, I of KornitX, UK, both But supply with So, them relationship much at than announced stage, working the of Presto, don't this we buying some equipment, chain to number are with at I have today, endless other brand. about that on both the news the

DannyEggerichs

morning on helpful. guess, congrats that's it, the And then Got I VoxlateX. acquisition this of

In looking I M&A terms looking guess, of the you pipeline forward, that? at how are guys

RonenSamuel

Yes, so very we are excited.

wet, on will was together CTO on the opening looking think much market. are were new it report few defining the with decor, the for technology to for different us evaluating the us we at bring CTO on what We DTF. to in DTG home the application and group application technology our I that technology, involved new will and what VoxlateX the to looking technology for for textile to very wet both print this we help organization, the months; garment suitable found and

So a we technology. huge potential coming see growth this from for

the benefit pleased team this are based I Boston, also engagement team there with very it's As a huge and the we in having us. mentioned, for

So talent more team. to attract to our

So coming overall, start will seeing very we acquisition. in I it's of think quarters. the a this fruit acquisition the And strategic

AlonRozner

support a business the are If and organically I of talking add, term execution we that of will acquisition about will our technologies great long support this model. can is enormously financial and our that accelerated example

according exactly to So this plan plan long to our is $X of to billion. us the take term

Operator

Our with from Barclays. next Tavy is question Rosner

TavyRosner

have questions. VoxelX, taking maintenance you if I going for any you Thanks it afternoon. them is my don't of I on Most touched good stream that on maintaining Hi, be been But just there guess, asked, will ongoing already. forward? revenue

RonenSamuel

on drive And revenues. not company areas to today. as impact to to it top we Tavy, profit $X some it line they any thank in so material are Yes, OpEx technology well. account a we revenue, we operating will question. expenses top see into million was revenue But of don't the on We don't as basis. material quarterly you our on our from of a OpEx is the are the for where something impact like different in add Kornit see taking mentioned the as terms some models, -- a generating t bit the going

TavyRosner

this the look when coming general, that conversely at new How coming in growth we the your looking customer? is momentum customer say you just or think of at at growth quarter, it look existing you from to then When from comes should majority the for at split? would incremental And sales you look quarter. the Great. you

RonenSamuel

It's really a mix.

As some is something them really explosion that for more and of are even three we I on systems expand them continue mentioned and customers when with see the years and with go unique. buy There and to strategic services long-term ink length. we with talking plans, that key

very So optimistic we are there.

other hand, new see joining. the we many On customers net

a segment many see for DTG for us. there, both are we is we them relative new, of DTF, going see coming us in net product it the new the are net also new so but net most net On very but new America And also North of course Europe, like Central new of up line this see quarter, in EMEA, in quarter very but has see market going Europe, strong. both with UK, mature across good Eastern we our we EMEA Spain, course EMEA, in it and we in growth Asia the Germany, Turkey,

Latin joining see America; in mostly in customers Latin big America. net also potential We are new

ground our very growth we of are with on us this the not but So are potential net the top the customers, news strategic fast. scratching at joining of of stage expanding

Operator

Patrick question next Ho from with is Stifel. Our

PatrickHo

time? off, much, Max you of very Can bit product? have are they past are you have introduced be with quarter. strategic congrats existing in a long first of you recent little about first over of; two color Where a new seeing and the will of are the or the on that of in plans the Or that in upgrades traction that nice upgrades? the say been Ronen, Thank for greatest you Max give quarter XXXX. customers year they the you're terms bought terms the talking the

RonenSamuel

upgrade for first in having but Atlas two already and accounts, will So you strategic all, beta we those as them Many them one We lab Atlas of with in installed testing Atlas believe were most mentioned, experience the both Max, the the engaged of the Max. product to that will they it within the strategic Atlas base. to in talking base that account and are them Atlas. of the our and customers that our the seeing center only of for also of many installed the

with will you But the and with buy the system When calculate believe clear the ROI two there really upgrade. are can also the And installed the there upgrade we calculate So fast. we new they and small quality during you the you to of upgrade. the question we'll the XX% that a you relative and Max, can our is for XXXX. Max Atlas that clear, when also one to a do no variety production, customer the it print application is Atlas all is so base print material, of expect most

PatrickHo

my of Can as like of again? for through about what supply you to and some changing how you're the chain that's and mentioned get trying it situation, the going recent follow being what COVID situation about managing Alon, of maybe seeing costs that related freight there question talk And it's kind costs? I'm changes the part is any up of sounds you And with Great, well. managed you pretty about the is you're Are up? logistics the that mentioning in some costs? and pricing costs of outbreaks, helpful

AlonRozner

in by general, so the say whole development Yes, of the the the our and ecommerce we if to situation acceleration can impact, business. see of good I

is in for is supply So that the our the logistics. this chain for business, momentum general, positive specifically very and

than the and with are I So, yes, talking it enforced we saving on are deal costs. more some that and we air rather by together by costs. But pressure logistic with comes think able shipments doing and that more see moving operational to sea leverage increase it we this

for can we secure so quantities better larger have We logistics. and prices slot better

profitability all-in-all, margin. results, impact minor. So we as the some really impact, or can And in I doesn't see it gross our we mean, really it's see but

AlonRozner

doing an when that pleased place. is to I control cost, the it compared And believe also we are benchmark, increase that. we would in our team on just job good increase with logistic while very the working monitoring I we are seriously to very suppliers and we a I believe tremendous see are a that our of costs in in say costs

with gross with new As saw expansion see quarter, will mentioned, of in we that products will to and margin. you you the we the be continue will additional this we gross see And are to the year. expansion on you a rest on margin committed XXXX enter

Operator

Chris Our Moore question from Securities. with CJS is next

ChrisMoore

taking Hey, Atlas back for upgrade for to the thanks to question. a maybe second. Max just Yes, my the

that I'm of number of there you Is get upgrade kind of the upgrade way be in of XXXX. So just that numbers to Even sense you in revenue terms either from of a of mean upgraded? around XXX% opportunity. kind potentially choose could out could just there rough sense Or of what could they're number kind put any perspective. trying can Atlases the scale the any

have in sense perspective. might Just what no of from that a terms mean revenue

RonenSamuel

XXXX you have know, the upgrade ago Atlases of expect in a we to we large we course, have of of providing we we crossed field, as we're of it. we the coming material to So, out the Atlas than field, that already Atlases mentioned number we the in the it, in expect XXX a Atlases Max. the portion we year field, in And although have them exact revenue much more not mentioned XXX

ChrisMoore

I'll challenges? Can And process just kind leave infrastructure? there. it, CTG? significant for about a more DTF much challenge, me, part it sales one becomes sales Got any the last incremental create DTF little Does talk one new that one as require a of for mix. bit DTF you of important more Does

RonenSamuel

and Yes, teams. it's selling going selling, that support is all, application team also dedicated the so a question; of and we DTS, having after first the are supporting great not only

have DTF. the for We business manager

of and with that type approaching the proposition. totally specifically also product with we solution this it DTF different -- different around line and totally customers it's and So the are is value Presto the

that ink and doesn't meter fabric or enablement, polyester -- one and step not top a then here -- and without pretreatment with to pigment on hundreds on enablement of ink you of on-demand treatment. fabric you of do of cotton of steaming you print take this and looking you acid which using with meters traditional of washing lot in process. in a order lots solution was available the hundreds pollution matter manufacturing, for tons is if XXX technology post any with it natural ink printing cannot really build for directly long run a Difficulty] of it, technology. the blended, Really pigment it requires without are We water pretreatment of it which then couldn't of [Tech process

this seeing home variety print one of that technology. one the designers excitement You and for dress, of the you off cotton see the can home into a now moving industry can into in is We fashion. revolutionary coloration print is the at

and You more time really really in Kornit they the Fashion express using now be They the LA the excitement those buy with Week in designer can the and Fashion, see themselves LA will needs. York important Week, their first and of designs New all technology for consumer. Fashion can for unique

major the expecting So industry. a change we in are

change major we And a DTF driving coming are the the in from growth long-term We expect industry. business.

Operator

We have with one Drab more from Brian William Blair. question

BrianDrab

reporting And make had I'll your I be say I I numbers, data just have reported that was and so to this for headline year honest aggregators the been they and that to half, confused the how want sure the -- relative this fact by I And miss and consensus Hi, think a $X.XX. But make even you're last did XX, for numbers apples-to-apples guidance to for right. saying okay, to Adjusting adjusting $X.XX I sure quarter was correct. for warrants? XX with versus the And XX. are revenue your these you fact that just And correct. want right.

RonenSamuel

you Thank Brian. Yes. for clarifying,

XX without to guiding of more we we impact if take the than we So the are guided XX. deliver we apple-to-apple, warrant, XX,

QX. So what into so it's see market well can growth far expected. about above well we And you the what guided the

BrianDrab

was been And operating $X.XX was margin And relative consensus. have to Yes, I EPS adjusted your gross XX. guess, margin, XX%. and your would

RonenSamuel

the operating margin, should Apple-to-apples XX%, to XX% say you profit versus operating Right. the on guidance.

guided well it's So quarter above profit. last what operating we on

AlonRozner

yes. share, cents And per $X.XX

BrianDrab

mean, correctly. I were they correct. it assumed yes. because the And was reporting quarters, for six least at just right, got Understood, I last just confused, I it

since I couple if want there that am people clarify a just assume least have So might I to at other I confused, that are been.

RonenSamuel

help you. it So of all might you,

TR, impact there help of warrant. will to table look and with clarify It a this. might the it without the you So impact the show the the comparison warrant of at that the all you is of

BrianDrab

models there's revenue can you business tell update then can you if And to how what And quick the just the to monetize us thinking regarding Exactly. give evolution is a Right. that that way your Thanks. about best any model? maybe KornitX?

RonenSamuel

if as the revenue impression and brands, is on both these the based or on from So transaction the it's in the transaction a past, mentioned fees, generator, than more also marketplace fulfiller. mainly we is days

from it. business ideas will into By of very the and together with We strong We just president already COO are guy model. the model. recruited COO business exploring joined way us [Indiscernible] see perspective. amazing is COO his this business the the into coming the define And is, different looking the future company, we and

early I be business We say the will there huge the there will audiences. model it business set. too their So opportunity model business in believe potential future on great already to around be monetizing also more please There so different stay generating, is this at like the tuned, back closing systems in you these more of would Ronen remarks. models that are the questions future. datas provide turn These time. Samuel is different some no to see data. the call I'd we for to to able information be to And

Ronen Samuel

on us So I to morning joining thank this call. everyone for this want

this is US. afternoon is the for morning Israel, this Although, in

I to momentum. like would Kornit, going again we'd amazing Kornit. for all, to our to team an welcome like family of the family amazing to for the of of quarter First an VoxelX thank

are new with products all of ahead the very many with But sharing results, how the York in production about and overall, results. results, with excited about Fashion opportunity HX first and look Show, growth forward Kornit New We second Fashion LA look progress we the half about quarter the quarter we're even like we Show. our going for to all after you pleased XXXX of fantastic us more

on share also have KornitX months. with we So tons the you coming in of excitement, to

thank Thank meantime, and soon. you. forward to again, So face-to-face meet in you looking the all

Operator

This conference. concludes today's

a may you very lines great much at Have for time. participation. disconnect your You day. your this Thank

Andrew Backman	Global Head of Investor Relations
Ronen Samuel	Chief Executive Officer
Alon Rozner	Chief Financial Officer
Rod Hall	Goldman Sachs
Jim Suva	Citigroup
Brian Drab	William Blair and Company
Jim Ricchiuti	Needham and Company
David Mizrahi	Berenberg
Danny Eggerichs	Craig Hallum Capital
Tavy Rosner	Barclays
Patrick Ho	Stifel Financial Corp
Chris Moore	CJS Securities

Kornit Digital (KRNT) 10 Aug 212021 Q2 Earnings call transcript