Kornit Digital Ltd.

and welcome to Cornet Digital's fourth quarter and full year 2022 earnings conference call. As a reminder, this call is being recorded. I would now like to turn the conference over to your host, Andrew Backman, Global Head of Investor Relations for Cornet Digital. Mr. Backman, you may begin.

Thank you, Operator. Good day, everyone, and welcome to Cornet Digital's fourth quarter and full year 2022 earnings conference call. Joining me today are Chief Executive Officer Ronan Samuel, Laurie Hanover, Cornete's Chief Financial Officer, and Amir Shakad-Mendel, EVP of Corporate Development. For today's call, Ronan will provide comments on our fourth quarter, recap the full year 2022 highlights, and discuss key focus areas for 2023. Laurie will then review fourth quarter and full year numbers and provide our first quarter outlook before we open it up for Q&A. Before we begin, I would like to remind you that forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other U.S. securities laws will be made on this call. These forward-looking statements include but are not limited to statements relating to the company's plans, strategies, projected results of operations or financial condition, and all statements that address developments that the company expects will occur in the future. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause results to differ materially from those implied by forward-looking statements. I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's annual report on foreign 20F filed in March 2022, which identifies specific risk factors that could cause actual results to differ materially. Any forward-looking statements are made currently, and the company undertakes no obligation to publicly update any forward-looking statement except as required by law. Additionally, the company will be making reference to certain non-GAAP financial measurements on this call. The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's earnings press release published today. which is also posted on the company's investor relations website. At this time, I would like to turn the call over to Ronan. Ronan?

Thank you, Andy, and good day, everyone. Thank you for joining us. Before we begin, I wanted to extend from all of us here at Cornete our thoughts and prayers to those who have been impacted by the recent devastation caused by the earthquakes. Turning to our results, as reported this morning, fourth quarter revenues were 63.3 million, net of approximately 4.3 million of non-cash warrants, impact related to a global strategic account, and in line with the revenue guidance range provided in November, which as a reminder assumes zero impact from the fair value of the issues warrants. For the fourth quarter, consumable and services revenues were were again up sequentially year over year and on a full year basis as compared to 2021. We saw a mixed peak season across regions and customers, with some of our largest strategic accounts, mainly in Americas, experiencing a very good peak season. Others, especially in Europe, were generally flat to slightly up or down in terms of impressions and consumables. As expected, systems revenues were down meaningfully in the quarter, given the ongoing macroeconomics backdrop. Some customers and prospects continue to take a wait-and-see approach on making meaningful investments, including adding production capacity to their existing fleets. As such, we continue to expect system sales to remain challenging in 2023 and expect to see growth for consumables and services. Like the broader global technology environment, 2022 was a tough year for all of us. We started 2022 with a strong momentum and growth, fueled by the introduction of groundbreaking new products that set the stage for sustainable long-term top-line growth. We closed the acquisition of Tesoma, opened our new ink plant, and cemented the position of our MAX technology as the new industry standard for quality, with several strategic customers looking to upgrade to Atlas MAX, given its retail quality and superior TCO. Despite the macro backdrop, we experienced good demand and encouraging results for our DTF solutions, especially in Latin America and in important European fashion production countries such as Italy, Portugal, and Turkey. Results in Japan are trending well. and new meaningful opportunities are beginning to develop in India as well as in China, where the economy is slowly reopening. Our long-term partnership with our largest global strategic customer remains very strong. Relative to the market, they continue to grow nicely, contributing to the increase in our consumables and services revenues this quarter. Looking at 2023, we expect this customer to have new sites operational with added capacity driven by the systems we sold in 2022. While global uncertainties and what I call the big waves of the overall market environment are outside of our control, we are focused on what we can control. We view 2023 as an important year for Kurnit. a year of transition and execution. And the year we will focus on three key areas vital to our long-term profitable growth. First, returning to profitability. Over the past several quarters, we implemented decisive actions to reduce operating expenses, improve margins, and adjust our operations to the current market conditions. These actions include combined with improvements in system utilization in some of our install base, plus the rebuilding and scaling our system cells, should help us turn the corner during the second half of this year and approach breakeven and later on move to profitability. Second, we are laser focused on successfully launching Apollo, for which we expect to gain meaningful traction with retail brands and fulfillers and to help transform the retail industry supply chain. Better trials for the Apollo are set to begin over the next several months, with a formal unveiling in June at ITMA Global Trade Show in Milan, Italy. In addition to showcasing Apollo at ITMA, we will demonstrate how Cornit is leading the retail transformation with our strong portfolio of DTG, DTF, and CornitX solutions. We will show global brands and retailers how they can fundamentally change their business models with the highest quality, flexible, on-demand, sustainable digital production capabilities, all while unleashing unmatched creativity and being aligned with the new rules of supplies and demand. We hope many of you will join us for what will be an amazing conference. So stay tuned for more details. And third, we are focused on scaling CornetX by pursuing demand generators and further building our global fulfillment network of on-demand digital fulfillers. We have added several key customers and partners most recently with a number of global brands and marketplaces. Over the past two years, we have learned a great deal and reprioritized efforts to improve the customer experience for demand generators and further develop and scale the GFM. We continue to believe Kornit X will be a meaningful contributor to Kornit in the years to come. Okay, a couple of final comments before I turn it over to Lori. First, our long-term growth drivers remain firmly intact, the penetration of digital production remains low, and we fully expect demand for DTG systems to resume growth as capacity utilization and market conditions improve. We also see meaningful new market opportunities with Apollo, Atlas Max Poly, DTF, and scaling Conit X. We see meaningful system upgrades and replacement opportunities across our customer base. Further, we expect a higher mix of revenues from consumables to drive additional operating leverage on our adjusted cost structure over time. While current market dynamics have impacted the timing of reaching our 2026 financial objectives, we firmly believe we can achieve our long-term financial goals in the years to come as we continue to lead the retail and supply chain transformation in the industry. It is clear to me that our vision to transform the fashion industry is happening. While we expect customized design, which represents the vast majority of our current business, to resume growth and continue to be a meaningful part of our business, we see very meaningful growth opportunities in several new markets that we expect to really drive and accelerate long-term growth. For example, we see mid-sized retailers all over the world shifting their business models and transforming their supply chains with vertical on-demand digital production, or by using ConitX, as they test and change product SKUs daily in order to chase trends. In addition, we see massive opportunities within surging creator economies, influencers, and their communities, large digital, social, and content-generating platforms, all of whom can benefit from productizing and monetizing their individual brands and platforms using Cognizant's on-demand digital solutions to support their production needs. Finally, As we have seen over the last several years, supply chains in the broader apparel industry, including for the large traditional brands, are broken and are reliant on antiquated production cycles. We believe Kornit is best positioned to lead the retail transformation to a more efficient, profitable, and sustainable business model for years to come. As I've said before, we are a resilient company with a strong balance sheet, and we remain fully committed to long-term profitable growth. With that, let me turn the call over to Lori for a closer look at the fourth quarter and full year 2022 numbers and guidance. Lori.