Kornit Digital Ltd.

Greetings and welcome to Cornet Digital's second quarter 2026 earnings conference call. As a reminder, this call is being recorded. I would now like to turn the conference over to Andy Backman, Chief Capital Markets Officer to Cornet Digital. Mr. Backman, please go ahead.

Thank you, Operator. Good day, everyone, and welcome to Cornet Digital's second quarter 2026 earnings conference call. With me today are Ronen Samuel, Kornit's Chief Executive Officer, and Assaf Zipori, our Chief Financial Officer. For today's call, Ronen will share his overall commentary on the second quarter, followed by Assaf, who will review our results and provide guidance for our third quarter before we open up the call for Q&A. Before we begin, I would like to remind you that forward-looking statements within the meaning of the U.S. securities laws will be made on this call. These statements involve known and unknown risks and uncertainties. Ronen Samuel, Tomer Artzi, Ayelet Oryan Godard, Assaf Zipori

Thank you for joining us today. The second quarter marked another important step in Kornit's transformation. We delivered revenue of $55.3 million above the high end of our guidance, generated positive adjusted EBITDA also above the high end of our guidance range, and positive operating cash flow for the 11th consecutive quarter. We also increased annual recurring revenue by $7 million bringing total ARR to 33.8 million, representing 79% year-over-year growth, while revenue from all-inclusive click model increased by 112% compared with the peer-to-peer period. In addition, trailing 12-month impression grew 15%, reflecting higher production volume across our install base. Thank you very much. Approximately 60% of system sales in both Q2 and the first half of 2026 were to traditional screen printers, providing clear evidence of the momentum we are seeing in the transition from analog to digital production. These results reinforce the progress we are making against our strategy. We are delivering revenue growth while significantly expanding annual recurring revenue, improving the quality of our growth and giving us greater visibility into the future. A key driver of this progress is our all-inclusive click model, which is increasing the share of the business built around long-term customer commitments. Every new all-inclusive click agreement creates a long-term partnership, typically built around a five-year commitment. For our customers, AIC lowers up from investment and provides the flexibility to scale production as their business grows. As a result, we are seeing higher system utilization, stronger customer engagement, and deeper adoption of the Kornit platform. For Kornit, AIC strengthens customer relationships and aligns our economics directly with our customers' success. As our customers grow, we grow with them. What gives us confidence today is not simply the financial performance we delivered this quarter. It is what we are hearing from customers around the world. And one thing is becoming increasingly clear. The economics of manufacturing are changing. Brands, retailers, and traditional screen printers are looking for greater flexibility, shorter production runs, faster response time, and manufacturing closer to the point of demand, while inventory risk and labor shortages continue to pressure traditional manufacturing models. We are seeing this transition particularly clearly among traditional screen printers, where digital is increasingly replacing screen production across a growing range of applications. These are not shortened trends. They represent a structural shift in how our industry will manufacture over the coming decade. Having spent more than three decades in this industry, I believe We are witnessing one of the most significant manufacturing transition of my career. Customers are no longer asking whether digital production has a role. They are asking how quickly they can shift from analog to digital. That's exactly what we have been preparing for. For years, we have invested in industrial production systems like Apollo, Atlas Metrics and Presto Max Plus while expanding into software, AI and automation. As the industry moves towards digital manufacturing, Kornit is positioned as a manufacturing platform, bringing together industrial production systems, software, AI and automation Thank you very much. Thank you. Let me share a few examples. Jerry Lee, one of the leading screen printers in the US, and a new customer to Kornit, recently invested in two Apollo systems and two Atlas Max platforms, illustrating how traditional screen printers are transitioning production from analog to digital. Another great example is Printful. Shirt Monkey One of the UK leading print-on-demand providers expanded from Atlas Max to both Apollo and Atlas Metrics through our all-inclusive click model, demonstrating how AIC can accelerate digital adoption with lower upfront investment. Finally, SMQS, A leading screen printer in India expanded from Atlas Max to Apollo within just one year to support higher volume screen replacement, demonstrating how mainstream screen printers are increasingly scaling digital production as they transition more of their core production from analog to digital. While these customers operate in different markets and applications, they all point to the same conclusion. Manufacturers are increasingly choosing digital production because it delivers a smarter, more flexible and more profitable manufacturing model. As we look ahead, we enter the second half of the year with stronger backlog visibility, a healthy pipeline and continued momentum across both new customer acquisition and expansion within our stall base. Based on what we see today, we expect revenue in the second half of 2026 to be approximately 15% higher than the first half of the year, positioning us to deliver high single digit revenue growth for the full year while continuing to improve profitability and generate positive operating cash flow. Before I conclude, I'd like to leave you with one final perspective. Many people still think of Kornit primarily as a capital equipment company. The reality today is quite different. Approximately 80% of our revenue is recurring or highly recurring in nature generated through annual recurring revenue in services and software. This fundamentally changes our business model. Thank you very much. Assaf Zipori