Kornit Digital Ltd.

Greetings and welcome to the Corneet Digital's third quarter 2025 earnings conference call. As a reminder, this call is being recorded. I would now like to turn the conference over to our host, Mr. Jared Maiman, Investor Relations for Corneet Digital. Mr. Maiman, you may begin.

Thank you, Operator. Good day, everyone, and welcome to Corneet Digital's third quarter 2025 earnings conference call. Joining me today are Chief Executive Officer Ronan Samuel and Lori Hanover, Courtney's Chief Financial Officer. For today's call, Ronan will provide comments on the third quarter of 2025 and provide an update on our progress. Lori will then review the third quarter results and provide our fourth 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 the 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 Form 20F, filed with the SEC on March 28th of 2025, 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 statements except as required by law. Additionally, the company will be making reference to certain non-GAAP financial measures 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 release published today, which is also posted on the company's investor relations website. At this time, I would now like to turn the call over to Ronen. Ronen?

Good morning, everyone, and thank you for joining our third quarter 2025 earning call. This quarter, we delivered results above the midpoint of our guidance range and with revenues of 53.1 million, representing 5% growth year-over-year. When including deals under our all-inclusive click AIC model, which are recognized over time, underlining business activity was even stronger this quarter. Under this model, revenue is recognized as customer print and consumer impressions rather than app form, which builds recurring revenue over time, even though it shifts parts of the recognition to later periods. Our EBITDA margin came in at approximately 2%, reflecting continued progress towards full-year profitability as we maintain disciplined cost control. I am particularly pleased that we have achieved this growth while continuing to generate positive cash flow from operations for the 8th consecutive quarter. This performance reflects not only strong operational execution, but also continued progress in transforming Kornit into a business driven by recurring revenues, expanding the addressable market while driving sustainable profitability. Beyond the financials, I would like to provide an update on our key focus areas. Screen market penetration, Apollo adoptions, and the expansion of our all-inclusive click model. The global screen printing market for Bark Apparel represents around 14 billion annual impressions, and more than 40% of those production runs are under 1,000 units, representing an addressable market of roughly 6 billion impressions. As production continues shifting towards shorter runs and faster delivery, Conit is uniquely positioned to lead a transition from screen printing to agile, high-volume digital production powered by our advanced technology portfolio and the AIC model that lowers barriers to entry. Our goal remains to capture approximately 5% of this addressable market by 2030. In just 18 months, Since the first Apollo installation, adoption continues to accelerate as customer expander fleets increase utilization and push production to new levels. Across our early Apollo users, Production has scaled rapidly, with systems now averaging more than 1 million impressions annually and now over 40% of those impressions produced for bulk apparel. About 25% of these bulk jobs are above 500 copies, proving that digital is moving beyond short runs and increasingly replacing traditional screen printing in high-volume production. With a growing number of customers installing multiple Apollo systems, the shift towards digital as the preferred production method is clearly gaining momentum. Importantly, approximately 40% of all Apollo and Atlas Max systems sold this year were to new customers, reflecting the growing confidence in Kornitz technology and the expanding opportunity ahead. Another area of progress is the continued expansion of our all-inclusive Qlik model. Today, about 80% of Apollo systems operate under the AIC model, which removes barriers for customers and drives a growing stream of recurring revenue. AIC is strengthening Kornit's leadership in digital production serving as a clear differentiator that attracts new customers and generates strong momentum across the industry. At the end of the third quarter, annual recurring revenue from AIC reached $21.5 million, up $2.6 million sequentially. Several deals that shifted into early Q4 have since closed. bringing ARR to 23.1 million today. And we expect further expansion by year end as the program continues to scale. This milestone is especially meaningful given that the AIC is still in its early stages of global rollout and was only recently introduced in Asia, where we deliver our first Atlas Max Plus systems and early in Q4 closed our first Apollo deal under the program. Asia is the largest textile producing region in the world, and early success there is another encouraging validation of our technology and business model. Over the past 12 months, Kornit customers produce approximately 232 million impressions, reflecting 5% growth on a trailing 12-month basis. We expect a solid increase in the growth rate of impressions on a trailing 12-month basis as we move through the fourth quarter, driven by continued ramp-up of Apollo systems and higher utilization across our install base. Our progress can also be seen clearly in the success of our customers who are expanding capacity, scaling production, and increasing utilization across their operations. In the third quarter, MedEngine Global, one of the world's largest manufacturers of licensed and branded apparel, added another Apollo under the AIC model on top of two existing Apollos and a large fleet of Atlas Max Plus systems. This expansion allows them to replace screen jobs, shorten production time, and reduce waste and energy use. Hybrid Digital, a fast-growing wholesaler, added a second Apollo under AIC to better support peak season POD demand, move more of its bulk apparel production into digital, and meet faster delivery requirements. Basic Thinking, a European manufacturer, installed a second Apollo within six months after to meet growing demand from leading fashion brands and strengthen its position as a digital first producer. HFT71, part of the TBI group, integrated Apollo with its existing Atlas Max Plus fleet to meet surging bulk demand and set a new production standard in Central Europe. And in Asia, Weblink in South Korea became the first customer to adopt AIC operating two Atlas Max Plus systems as part of a full digital transformation that replaced legacy screen capacity while improving time to market and production efficiency. These examples show that Kornit's technology and business model are delivering tangible results and accelerating the industry transition from screen to digital. I also want to touch on our expansion beyond our traditional apparel market segments. Last week at ITMA Asia in Singapore, we showcased our portfolio and announced the commercial launch of Kornit's digital footwear solution for the sports and leisure markets. After two years of pilot programs, With leading global brands, the solution is now commercially available and has already crossed the milestone of more than 1 million pairs of shoes produced using Corny technology under well-known international brands. This achievement marks an important step forward in applying our digital platform to adjacent categories and demonstrate that our focused innovation engine continues to create new growth opportunities. We view footwear as a significant pillar of our long-term growth plan. The total addressable market is approximately 1 billion pairs annually, equal to to about 2 billion print impressions, and Cornit is well positioned to capture a meaningful share of this opportunity. Our solution directly addresses the footwear industry's biggest challenges, such as slow development cycles, design limitations, and overproduction by replacing complex analog decoration with a single step digital process that delivers unlimited design freedom, durability, and efficiency. Customers are excited because the design to production cycle, which once took months, can now be done in days, enabling faster response to trends, lower waste, and local on-demand production at scale. Following successful deployments of our new solution in China, we are expanding into Vietnam and Germany, establishing a new global standard for digital footwear production. These efforts are further supported by additional orders from existing customers secured during ITMA Singapore. Ten days ago, we also participated in Printing United in Orlando, where we engaged with many new potential customers and partners. The feedback was consistent. The industry's needs for agile, high-quality, and sustainable digital production continues to grow, and Cornit remains the most advanced and trusted partner to enable that transformation. Before I close, I want to take a step back and reflect on the broader transition we are executing. Cornit is transitioning from one-time equipment sales to a recurring usage-based model through AIC and ARR. While this naturally shifts the timing of revenue recognition, it is a deliberate move. It strengthens long-term profitability, predictability, and customer lifetime value. We are already seeing the benefits through stronger customer retention, higher engagement, and increasing system utilization. Our plan for 2025 was to deliver profitability, generate cash from operations, and drive growth both in revenue and even more importantly in recurring revenue from the AIC model. We are on track to deliver on this plan. Looking ahead to the fourth quarter, we expect sequential growth in revenue, gross margin, and EBITDA, while continuing to expand our recurring revenue base through the AIC program. As we look ahead into 2026, we expect modest top-line growth in the lowest single digits, as we continue to deliberately transition more customers to AIC while driving strong growth in annual recurring revenue. At the same time, we expect continued EBITDA expansion driven by higher utilization, scaling recurring revenues, and disciplined cost management. This evolution positions Cornete for sustainable, profitable growth and long-term value creation. In summary, We are executing with discipline, capturing a multi-billion dollar market opportunity as we transform how apparel is produced. Our recurring business model is scaling. Our technology is driving real impact and we continue to look ahead with innovation into new segments like footwear and other adjacencies. The progress so far is just the beginning and there is much more to come. I will now turn the call over to Lori to further discuss our third quarter results and our guidance for the fourth quarter. Lori.