Is the acceleration of analog-to-digital adoption primarily driven by traditional screen printers or by Kornit's existing customer base?

Ronen stated that the shift is mainly driven by new customers in the screen market, though existing customers are also leveraging technology for bulk apparel. He attributed the shift to market changes (agility, flexibility, faster turnaround, shorter runs, onshore production), labor shortages, and Kornit's technology (MAX, Apollo, workflow with PrintFactory) and the AIC model reducing upfront investment. “So it's being driven mainly from new customers that we are penetrating in the screen market although we see also growth within our installed base.”

What will primarily drive the 15% half-on-half revenue growth in H2 FY26, specifically regarding upgrades, system sales, or consumables?

Ronen explained that H2 is seasonally stronger. Growth will come from new systems sold on the AIC model, leading to significant expansion in AIC revenue. CapEx system sales are also expected to contribute, with a strong pipeline. The main growth driver in H2 will be consumables (ink), which also leads to significant expansion in gross margin and profitability. “So AIC revenue is a major growth engine in H2 versus H1. Also in terms of the system sales that we are seeing and of course the main growth in H2 is the consumables, is the ink.”

What constitutes the 20% of revenue that is not recurring, and how have outright system sales influenced results?

Ronen clarified that the 20% non-recurring revenue primarily consists of CapEx system sales and non-recurring services upgrades. He noted that unit sales on CapEx were higher than expected in Q2, with approximately 50% of system deliveries in Q2 being CapEx sales and 50% on the AIC model, though this split can vary by quarter. “So in the 20%, there are 2 main components. One is system sales, CapEx system sales and another thing is spare parts, services upgrades -- sorry, not spare parts, upgrades on services that are not recurring.”

KRNT

Kornit Digital (KRNT) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 12, 2026

Source: earnings call transcript

Executive summary

Kornit Digital Q2 FY26 — Strong Recurring Revenue Growth and Digital Transformation Momentum

Kornit Digital delivered a strong Q2 FY26, exceeding revenue and adjusted EBITDA guidance, driven by significant growth in its All-Inclusive Click (AIC) model and annual recurring revenue (ARR). The company is successfully executing its strategy to transition from analog to digital production, particularly within the traditional screen printing market, and is evolving into a resilient manufacturing platform with a highly recurring revenue base. Management expressed confidence in continued profitable growth and cash generation for the second half of the year.

Highlights

Revenue of $55.3 million, above the high end of guidance.
Generated positive adjusted EBITDA of $0.3 million, also above the high end of guidance.
Annual recurring revenue (ARR) increased by $7 million, reaching $33.8 million, representing 79% YoY growth.
All-Inclusive Click (AIC) revenue increased by 112% compared with the prior year period.
Operating cash flow was approximately $8.5 million, marking the 11th consecutive quarter of positive operating cash flow.

Concerns

Foreign exchange headwinds impacted operating expenses by approximately $1.9 million.
Overall apparel market is not doing great, with long-tail customers declining.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$55 million and $60 million high materiality	Q3 · FY26	High
Adjusted EBITDA Margin	between breakeven and 3% medium materiality	Q3 · FY26	High
Revenue Growth	approximately 15% higher than the first half of the year high materiality	H2 FY26	High
Revenue Growth	high single-digit revenue growth high materiality	Full-year FY26	High
Profitability	continuing to improve profitability medium materiality	Full-year FY26	High
Operating Cash Flow	generate positive operating cash flow medium materiality	Full-year FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Services Benefiting from higher customer activity and continued expansion in the utilization of installed systems.	—	34.7%	—	—
Product Benefiting from higher customer activity and continued expansion in the utilization of installed systems.	—	4.3%	—	—

Product announcements

Product	Type	Timeline	Details
Presto MAX PLUS	launch	Recently released
Additional roll-to-roll technology	roadmap	by the end of the year

Deals & partnerships

Print Factory Strengthens platform strategy with software capabilities.

Acquisition closed in Q2 FY26.

Jerry Leigh Investment in 2 Apollo systems and 2 Atlas MAX platforms.

One of the leading screen printers in the U.S. and a new Kornit customer.

Printful Added 2 Apollo systems to their existing large fleet of Atlas MAX systems.

One of Kornit's largest and most strategic global customers.

Shirt Monkey Expanded from Atlas MAX to both Apollo and Atlas MATRIX through the All-Inclusive Click model.

One of the U.K.'s leading print-on-demand providers.

SNQS Expanded from Atlas MAX to Apollo within 1 year to support higher volume screen replacement.

A leading screen printer in India.

Risks & headwinds

Foreign exchange headwinds Q2 FY26

$1.9 million impact on operating expenses

Mitigation:Not explicitly stated, but managed within financial discipline.

Labor shortages Current

very difficult today to retain and to find, but it's also expensive

Mitigation:Automation offered by Kornit's technology.

Inventory risk Current

continue to pressure traditional manufacturing models

Mitigation:Digital manufacturing offers reduced inventory risk.

Overall apparel market softness Current

not doing great, long-tail customers declining

Mitigation:Kornit's focus on digital transformation and gaining market share within the shifting market.

What to watch in Q3 FY26

H2 FY26 Revenue Growth

H2 FY26

Current H1 FY26 revenue

Target approximately 15% higher than the first half of the year

Why it matters

This is a key guidance metric for the second half of the fiscal year, indicating the company's growth trajectory.

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 a high single-digit revenue growth for the full year while continuing to improve profitability and generate positive operating cash flow.

Find out whether KRNT delivers this. Inve re-checks your case every morning.

Q&A highlights

What has driven the recent acceleration in performance, and what is fundamentally different about Kornit today compared to a few years ago?

Ronen highlighted the success of strategies implemented 2-2.5 years ago, leading to revenue growth and significant ARR expansion. He emphasized the shift to a recurring business model (80% of revenue), new technology (Apollo, MATRIX, PrintFactory, AI), financial discipline (11 consecutive quarters of positive operating cash flow), and expansion into the screen printing market (60% of system sales to this market).

“Overall, we are totally different company as of today and we are very happy with the changes that we have done.”

asked by Greg Palm · answered by Ronen Samuel

2 min read 7 chapters

Detailed narrative

Transformation and Strategic Progress

Kornit Digital is undergoing a significant transformation, with its strategy implemented 2-2.5 years ago now delivering results. The company is shifting towards a more resilient, recurring business model, with 80% of revenue now recurring or highly recurring. This provides stronger visibility and predictability, supported by 11 consecutive quarters of positive operating cash flow.

Shift to Digital Manufacturing

The industry is experiencing a structural shift from analog to digital production, driven by demand for greater flexibility, shorter production runs, faster response times, and nearshore manufacturing. Traditional screen printers are increasingly adopting digital solutions, with approximately 60% of system sales in Q2 and H1 FY26 going to this market, indicating a significant market penetration.

All-Inclusive Click (AIC) Model Success

The AIC model is a key driver of growth, increasing long-term customer commitments, typically 5-year agreements. It lowers upfront investment for customers and aligns Kornit's economics with customer success, leading to higher system utilization and deeper platform adoption. The model has contributed to a total contract value of approximately $142 million, providing strong future revenue visibility.

Technology and Platform Evolution

Kornit has invested in industrial production systems like Apollo, Atlas MATRIX, and Presto MAX PLUS, expanding into software, AI, and automation, including the recent PrintFactory acquisition. The company now positions itself as a manufacturing platform, offering integrated solutions rather than just printing systems, enabling customers to build smarter, more profitable businesses.

Global Screen Printer Adoption

The adoption of Kornit's digital technology by traditional screen printers is a global phenomenon, observed in the U.S., Europe, India (e.g., SNQS), Sri Lanka, and Japan. This widespread adoption is driven by market pressures such as labor shortages, the need for automation, and the competitive total cost of ownership offered by digital solutions for longer runs.

Roll-to-Roll Business Momentum

After a slow 2025, the roll-to-roll business is gaining momentum with a focus on unique applications like footwear, home decor, and technical markets. The recent release of Presto MAX PLUS and upcoming additional technology announcements are expected to drive contributions to total revenue in H2 FY26 and build a strong pipeline for 2027.

Capital Allocation and Financial Discipline

Kornit maintains a disciplined capital allocation strategy, balancing investments in the AIC program, inventory, product innovation, and targeted acquisitions with returning capital to shareholders. The company repurchased $5.4 million in shares during Q2, with $60 million remaining under the current authorization, while maintaining a strong cash balance of $451 million.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.