KRNT · Kornit Digital Ltd.

Kornit Digital's Q1 2026 results demonstrate execution on its strategy to expand digital textile production and shift toward recurring revenues via the All-Inclusive Click (AIC) model. Revenues hit $48.5 million, the top of guidance, driven by product sales of $35.1 million and services of $13.5 million, reflecting higher utilization across the installed base and a 12% year-over-year increase in trailing twelve-month impressions from the screen-to-digital transition. AIC revenues surged approximately 103% to ~$4.9 million, with annualized recurring revenue (ARR) climbing to $26.8 million from $14.5 million a year ago, underscoring growing customer adoption. GAAP gross margin contracted to 37.9% from 42.6%, and non-GAAP to 41.0% from 45.2%, due to a higher mix of systems and services, FX impacts, and tariff costs. Operating expenses held steady at $31.9 million on a GAAP basis but declined 7% to $25.5 million non-GAAP, despite $2.0 million FX headwind from shekel strengthening and one-time items like $2.0 million class action legal fees and $0.2 million M&A costs. This led to a GAAP net loss of $8.2 million ($0.19 per share) versus $5.1 million ($0.11 per share) last year, but non-GAAP loss narrowed to $0.4 million ($0.01 per share), with Adjusted EBITDA loss improving to $2.8 million from $3.9 million. Positive operating cash flow of $6.3 million marked the tenth straight quarter, supported by working capital efficiency. The company repurchased $30.5 million in shares under its $100 million program. Management highlights strong momentum from Atlas MATRIX backlog, Presto MAX PLUS introduction, and PrintFactory integration, providing improved visibility into H2 2026. Q2 guidance of $51-55 million in revenues and Adjusted EBITDA margin of -5% to breakeven signals confidence amid seasonality and investments.