Kornit Digital reports second-quarter 2020 results

Kornit Digital Ltd., a leading provider of digital printing solutions for the global textile industry, today reported second-quarter revenue of $37.4 million, with a loss of $5.3 million. In other news, the company announced the acquisition of Custom Gateway, a provider of cloud software workflow.

“We are very pleased to see strong momentum in the business as customers reopened sites in April and reengaged in big projects in response to significant demand, particularly in online channels. Looking ahead, we believe that we are at one of the most exciting times in our company’s history, as the megatrends in our industry have accelerated the transition to digital textile production where we are in a unique position to benefit,” said Ronen Samuel, Kornit Digital’s CEO. “For Kornit, we believe this inflection point will drive a V-shaped recovery in the business as we help brands and strategic partners quickly adopt agile, digital, and sustainable on-demand textile manufacturing.”

“We are also very excited to announce the acquisition of Custom Gateway, a leading provider of cloud software workflow solutions. This highly strategic acquisition accelerates our organic development effort and, when combined with Kornit’s technologies, will bring to the market a unique offering for end-to-end management of sustainable on-demand textile production. This combination further extends our market leadership.”

Custom Gateway offers a cloud platform is suitable for both B2B and B2C business models and handles all steps of efficient on-demand production, the company said. The platform enables content sourcing, creation, content management, and display at the front end. Orders created are captured by a robust order management system and are directed to the appropriate back-end production sites using sophisticated routing algorithms. Once orders proceed to the production floor, they are smartly routed and managed, to allow for efficient on-demand production on a mass scale. Custom Gateway has over 300 active customers globally, including brand names such as the U.K.’s largest fashion retailer Next, as well as other leading sports, fashion, and content brands.

	Second Quarter Warrants Impact
	Three Months Ended
	June 30,
	2020					2019
	Net of Warrants Impact		Warrants Impact			Net of Warrants Impact		Warrants Impact
Revenue	$37.4M		$0.8M			$45.3M		$1.0M
Non-GAAP Gross Margin	44.1%		123bps			47.7%		110bps
Non-GAAP Operating Margin	(6.8%)		235bps			9.2%		191bps
Non-GAAP Net Margin	(3.6%)		228bps			9.5%		190bps
Non-GAAP Diluted Earnings (Loss) Per Share	($0.03)		$0.02			$0.11		$0.03

“We are very excited by the huge opportunity we see in the market that has resulted in an unprecedented pipeline and very good visibility. The team is highly engaged with new customers as well as strategic partners’ system implementations that will not only drive system revenue over the coming quarters but will also create long-term demand for ink and services,” said Guy Avidan, Kornit Digital’s Chief Financial Officer. “As we head into the back of 2020, we are focused on a strong finish to the year and committed to profitability for fiscal 2020.”