Kornit Digital Ltd (KRNT) 2023 Q4 法說會逐字稿

Ladies and gentlemen, good morning, and welcome to the Kornit Digital fourth quarter 2023 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded.

女士們、先生們，早安，歡迎參加康麗數碼 2023 年第四季財報電話會議。（操作員指示）謹此提醒，本次會議正在錄製中。

It is now my pleasure to introduce your host, Mr. Jared Maymon, Investor Relations for Kornit Digital. Please go ahead sir.

現在我很高興向您介紹主持人，康麗數位投資者關係部門的賈里德·梅蒙 (Jared Maymon) 先生。請先生繼續。

Thank you, operator. Good day, everyone, and welcome to Kornit Digital's fourth quarter and full year 2023 earnings conference call. Joining me today are Chief Executive Officer, Ronen Samuel; and Lauri Hanover, Kornit's Chief Financial Officer. For today's call, Ronen will recap the full year 2023 provide comments on the fourth quarter and then discuss our view on 2024. Lauri will then review the fourth quarter and full year numbers and provide our first quarter outlook before we open it up for Q&A.

謝謝你，接線生。大家好，歡迎參加 Kornit Digital 的第四季和 2023 年全年財報電話會議。今天與我一起出席的是執行長羅南·塞繆爾 (Ronen Samuel)；康麗集團財務長勞裡‧漢諾威 (Lauri Hanover)。在今天的電話會議中，Ronen 將回顧 2023 年全年，提供第四季度的評論，然後討論我們對 2024 年的看法。然後，勞裡將回顧第四季度和全年的數據，並在我們開始問答之前提供我們第一季的展望。

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 US 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.

在我們開始之前，我想提醒您，本次電話會議將做出 1995 年《私人證券訴訟改革法案》和其他美國證券法含義內的前瞻性陳述。這些前瞻性陳述包括但不限於與公司計畫、策略、預期營運績效或財務狀況有關的陳述，以及涉及公司預計未來將發生的發展的所有陳述。

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 20-F filed with the SEC on March 30, 2023, which identifies specific risk factors that could cause actual results to differ materially.

前瞻性陳述受到已知和未知的風險和不確定性的影響，這些風險和不確定性可能導致結果與前瞻性陳述所暗示的結果有重大差異。我鼓勵您查看該公司向美國證券交易委員會提交的文件，包括該公司於2023 年3 月30 日向美國證券交易委員會提交的20-F 表格年度報告，該報告指出了可能導致實際結果出現重大差異的具體風險因素。

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.

任何前瞻性陳述均為目前做出，本公司不承擔公開更新任何前瞻性陳述的義務，除非法律要求。此外，該公司將在此次電話會議上參考某些非公認會計準則財務指標。這些非公認會計原則衡量標準與最直接可比較的公認會計原則衡量標準的調節可以在公司今天發布的收益報告中找到，該報告也發佈在公司的投資者關係網站上。

At this time, I would now like to turn the call over to Ronen. Ronen?

此時，我想將電話轉給羅南。羅南？

Thanks, Jared, and thanks to everyone for joining us on today's call. Before we dive into fourth quarter results, let's take a moment to reflect on the transformative journey of 2023. A year that three shape, not only our industry, but also core needs standing in the market. In 2023 as the cost of capital rose and consumer preferences continue to shift, the industry continue to recognize the need to reduce inventory, improve time to market, limit dependency on broken offshore supply chains and produce sustainably.

謝謝賈里德，也謝謝大家參加今天的電話會議。在深入研究第四季業績之前，讓我們花點時間回顧一下 2023 年的變革之旅。一年三定，不僅是我們的產業，更是立足市場的核心需求。到 2023 年，隨著資本成本上升和消費者偏好持續轉變，該行業繼續認識到需要減少庫存、縮短上市時間、限制對破碎的離岸供應鏈的依賴以及可持續生產。

The traditional practice of overstocking does not make sense in a market characterized by adverse changing consumer preferences. As a result, many retailers spent 2023 working through excess inventories that had piled up since the pandemic while shifting the focus towards fixing the operating models and supply chains.

在消費者偏好發生不利變化的市場中，傳統的庫存過剩做法沒有意義。因此，許多零售商在 2023 年處理了疫情以來堆積的過剩庫存，同時將重點轉向修復營運模式和供應鏈。

The ideal supply chain that these retailers are seeking utilizes lean inventory management and is backed by fast and constant in-season replenishments. Entering 2023, knowing that we were heading into a challenging macro environment, we defined a few key business objective that would ensure Kornit was best prepared for its next phase of long-term profitable growth.

這些零售商尋求的理想供應鏈採用精益庫存管理，並以快速、持續的當季補貨為後盾。進入 2023 年，我們知道我們將面臨充滿挑戰的宏觀環境，因此制定了一些關鍵業務目標，以確保康麗為下一階段的長期獲利成長做好充分準備。

These objectives included strengthening our product portfolio, broadening the application we serve, diversifying our customer base, successfully launching our Apollo platform, expanding our direct to fabric business and optimizing our operating model. A key pillar in our strategy of transitioning the market from analog to digital production has been to offer a portfolio of innovative digital solutions that deliver a retail quality and efficiency.

這些目標包括加強我們的產品組合、擴大我們服務的應用、使我們的客戶群多元化、成功推出我們的 Apollo 平台、擴大我們的直接面料業務以及優化我們的營運模式。我們將市場從類比生產轉變為數位生產的策略的關鍵支柱是提供一系列創新的數位解決方案，以提高零售品質和效率。

After a few years of major R&D investments, we arrive to ITMA 2023 with a remarkably wide portfolio of solutions for on-demand sustainable production. We cemented our leading position with the max technology as the new industry standard for quality introduced the Apollo platform for bulk production, enhance our DTF offering for unprecedented capabilities, expanded the application reach of our poly offering, Integrated Smart Curing Technology into our mass production solutions made major software enhancement to the KornitX platform and both added value ancillaries like our RSS smart pallet adjustment technology.

經過幾年的重大研發投資，我們帶著非常廣泛的按需永續生產解決方案組合來到 ITMA 2023。隨著新的行業品質標準引入了用於批量生產的Apollo 平台，我們以max 技術鞏固了我們的領先地位，增強了我們的DTF 產品以實現前所未有的功能，擴大了我們的多晶矽產品的應用範圍，將智慧固化技術整合到我們的大量生產解決方案中對 KornitX 平台和增值輔助設備（如我們的 RSS 智慧托盤調整技術）進行了重大軟體增強。

With our revolutionary solutions, we managed to penetrate new market segments such as bulk apparel, athleisure, fashion, home décor, technical and footwear and new geographies such as India, Latin America and other key textile production hubs across the globe. Our diversification efforts extend beyond market segments and geographies. We are also now engage with new types of customers such as Tier 1 manufacturers, value added suppliers and directly with major brands, digital platforms and retailers.

憑藉我們革命性的解決方案，我們成功打入了大宗服裝、運動休閒、時尚、家居裝飾、技術和鞋類等新市場領域，以及印度、拉丁美洲和全球其他主要紡織品生產中心等新地區。我們的多元化努力超越了細分市場和地理位置。我們現在也與一級製造商、增值供應商等新型客戶合作，並直接與主要品牌、數位平台和零售商合作。

Turning to the Apollo, as you may have seen, after successfully installing all three Apollo beta assistance for the peak season in Q4, we delivered on our plan of bringing digital apparel production to the mainstream with the launch of the Apollo in January. The feedback from the industry leaders on the Apollo has been outstanding.

轉向 Apollo，正如您可能已經看到的，在第四季度旺季成功安裝所有三個 Apollo beta 輔助之後，我們透過 1 月推出 Apollo 實現了將數位服裝生產帶入主流的計劃。產業領導者對 Apollo 的回饋非常出色。

Customers refer to the release of the Apollo to the start of a new era in direct to government, pushing the boundaries of speed quality and sustainability further than ever before. The Apollo represents a quantum leap in direct to government printing technology, ensuring businesses can meet the evolving demands of the fashion and textile industries.

客戶直接向政府表示 Apollo 的發布標誌著新時代的開始，比以往任何時候都進一步突破了速度、品質和永續性的界限。阿波羅代表了直接向政府印刷技術的巨大飛躍，確保企業能夠滿足時尚和紡織業不斷變化的需求。

Simultaneously with the launch, we hosted customers and prospects at one of our better sites with North American retailers to demonstrate the system at an industrial scale. The event was very successful and I'm also pleased to report that one of our beta customers has already disclosed the plan to add several more Apollos to their facilities throughout 2024.

在發布的同時，我們在北美零售商的更好地點之一接待了客戶和潛在客戶，以工業規模演示該系統。這次活動非常成功，我還很高興地報告，我們的一位測試客戶已經透露了計劃在 2024 年期間向其設施添加更多 Apollo。

In 2023, we also made significant strides in the direct to fabric market. Our new ink solution unveiled at ITMA, combined with our MAX technology, has created a best-in-class solution in the growing digital pigment market. This market is going through a massive transition into just-in-time sustainable production, and Kornit is leading the market.

2023年，我們在布料直銷市場也取得了重大進展。我們在 ITMA 上推出的新型墨水解決方案與我們的 MAX 技術相結合，在不斷增長的數位顏料市場中創造了一流的解決方案。該市場正在經歷向及時可持續生產的巨大轉變，而康麗正在引領市場。

We continue to believe that the direct to fabric market represents a significant long term growth opportunity, especially with global brands and retailers, we have committed to move to sustainable production and offer maximum flexibility.

我們仍然相信，直接布料市場代表著一個重要的長期成長機會，特別是對於全球品牌和零售商來說，我們致力於轉向永續生產並提供最大的靈活性。

Turning to our operations. In 2023, we work diligently to achieve our goal of returning to breakeven profitability on an adjusted EBITDA basis and despite a more challenging environment than we anticipated in the second half, we achieved this goal in the fourth quarter. A key factor to this return to profitability was consistently strong growth in consumables through 2023.

轉向我們的營運。2023年，我們努力實現在調整後的 EBITDA 基礎上恢復盈虧平衡盈利能力的目標，儘管下半年的環境比我們預期的更具挑戰性，但我們在第四季度實現了這一目標。獲利能力恢復的關鍵因素是到 2023 年消耗品的持續強勁成長。

This year over year improvement in both impressions and consumables indicates continued digestion of capacity within our installed base, which we view as a positive leading indicator for future systems demand. Additionally, we have and continue to realign our operating expenses with the current market environment. In 2023, this realignment included cost reduction and efficiency initiatives across our operations.

印象和消耗品的同比改善表明我們的安裝基礎中容量的持續消化，我們認為這是未來系統需求的積極領先指標。此外，我們已經並將繼續根據當前的市場環境調整我們的營運費用。2023 年，這項調整包括我們整個營運的成本削減和效率措施。

In the first quarter of 2024, we extended this effort through a restructuring and realignment effort designed to prepare Kornit for its next phase of growth. This restructuring, including a meaningful reduction in force adjustment to our go to market strategy, a reorganization of certain business segments, changes to our leadership team and improve operating efficiencies in our supply chain.

2024 年第一季度，我們透過重組和調整工作擴大了這項努力，旨在為康麗下一階段的成長做好準備。此次重組包括對我們的市場策略進行有意義的調整、重組某些業務部門、改變我們的領導團隊以及提高供應鏈的營運效率。

We expect this proactive measures to contribute to our return to consistent profitability and allow us to protect our robust balance sheet. Lauri will expand on the implications of this cost saving measures in our prepared remarks.

我們預計這些積極措施將有助於我們恢復穩定的獲利能力，並保護我們穩健的資產負債表。勞裡將在我們準備好的發言中詳細闡述這項成本節約措施的影響。

Turning now to the fourth quarter. Today, we reported fourth quarter revenues of $56.6 million within the range of the guidance we provided in November, an adjusted EBITDA margin of 0.3%, which was above the high end of our guidance range. As a reminder, this includes the impact of the fair value of the issues warrants.

現在轉向第四季。今天，我們報告第四季度營收為 5,660 萬美元，在我們 11 月份提供的指導範圍內，調整後 EBITDA 利潤率為 0.3%，高於我們指導範圍的上限。提醒一下，這包括發行認股權證公允價值的影響。

Despite the persistent macroeconomic headwinds fourth quarter results were driven by good peak seasons, where we saw double digit year-over-year growth in impressions and in our consumable revenues. This marks our fourth consecutive quarter of year-over-year impressions growth. Releasing the Apollo is also giving us the opportunity to introduce a creative recurring based revenue model. We shift CapEx to OpEx for some customer with this system.

儘管宏觀經濟持續不利，第四季業績仍受到旺季良好的推動，我們的印象數和消費品收入較去年同期實現兩位數成長。這標誌著我們的展示次數連續第四個季度同比增長。Apollo 的發布也讓我們有機會引入創造性的經常性收入模式。對於使用該系統的某些客戶，我們將資本支出轉向營運支出。

This offering sets minimum level of production, reduced barrier to entry provides more predictability and visibility for our customer and for us shortens the sales cycle and improves our opportunity to address screen printers. We expect this revenue model to generate around $1 million in revenue per system per year.

該產品設定了最低生產水平，降低了進入壁壘，為我們的客戶和我們提供了更多的可預測性和可見性，縮短了銷售週期，並提高了我們解決網版印刷商問題的機會。我們預計這種收入模式每年將為每個系統帶來約 100 萬美元的收入。

With that said, in 2024, we continue to expect modest revenue growth and adjusted EBITDA profitability. Our outlook assumes that the challenging macroeconomics backdrop we experienced in 2023 continues into 2024. Based on the actions we have taken today to improve our operating efficiency and our working capital position we now anticipate generating positive cash flow from operations for the full year.

話雖如此，我們仍預期 2024 年營收將溫和成長，調整後的 EBITDA 獲利能力將出現適度成長。我們的展望假設，我們在 2023 年經歷的充滿挑戰的宏觀經濟背景將持續到 2024 年。根據我們今天為提高營運效率和營運資金狀況而採取的行動，我們現在預計全年營運將產生正現金流。

So in conclusion, we ended the year on a solid footing. During the fourth quarter. We experienced a good peak season with nice growth from some of our key customers and work diligently to bring the business back to breakeven results. Entering 2024, we are focused on our key long-term growth drivers, which include further movement into mainstream bulk production, expansion of our direct to fabric business, engagement with key demand generators and further penetration of new segments in key textile production regions. We plan to focus on these areas while returning to profitability and cash flow generation on a full year basis.

總而言之，我們以堅實的基礎結束了這一年。第四季期間。我們經歷了一個良好的旺季，一些主要客戶實現了良好的成長，並努力工作，使業務恢復盈虧平衡。進入2024年，我們將重點關注關鍵的長期成長動力，其中包括進一步進入主流批量生產、擴大我們的直接面料業務、與關鍵需求產生者的合作以及進一步滲透主要紡織品生產地區的新細分市場。我們計劃重點關注這些領域，同時恢復全年的獲利能力和現金流產生。

Before I pass the call over to Lauri, as you all know is well faced and a horrific barbaric attack in the second half of 2023. While some of our people were impacted, we were resilient and continue to fully support our customers throughout their most important time of the year. We continue to prioritize the safety of our people in Israel and remain confident that our contingency plan secure our business continuity.

在我把電話轉給勞里之前，你們都知道，2023 年下半年將發生一場可怕的野蠻攻擊。雖然我們的一些員工受到了影響，但我們保持彈性，並在客戶一年中最重要的時刻繼續全力支持他們。我們繼續優先考慮以色列人民的安全，並對我們的應急計劃確保業務連續性充滿信心。

I want to thank our tremendously dedicated people for their resilience in this difficult time and to thank many of you for your continued support. Now let me turn the call over to Lauri for a closure look at our fourth quarter and full year 2023 financials and first quarter guidance. Lauri?

我要感謝我們極其敬業的員工在這個困難時期表現出的韌性，並感謝你們中的許多人的持續支持。現在，讓我將電話轉給勞裡，以結束我們第四季度和 2023 年全年的財務狀況以及第一季的指導。勞裡？

Thank you, Ron, and good day to everyone. Fourth quarter revenues were $56.6 million within the guidance range we provided in November. This quarter, we experienced double digit year-over-year growth in consumable sales, which was more than offset by a decline in systems and services sales as expected. For the full year 2023, revenues were $219.8 million compared with $271.5 million in 2022, despite consumables and services demonstrating healthy growth for the full year, the year-over-year decline was primarily attributable to significantly lower system sales in 2023.

謝謝你，羅恩，祝大家有美好的一天。第四季營收為 5,660 萬美元，處於我們 11 月份提供的指導範圍內。本季度，我們的消耗品銷售額較去年同期實現了兩位數成長，但係統和服務銷售額的下降（如預期）抵消了這一成長。2023 年全年營收為 2.198 億美元，而 2022 年為 2.715 億美元，儘管全年耗材和服務呈現健康成長，但同比下降的主要原因是 2023 年系統銷售額大幅下降。

Moving to margins. Fourth quarter non-GAAP gross margin was 48.6% compared with 36.4% in the same period last year. The year over year improvement can be attributed to high-margin consumables comprising the lion's share of total revenues. For the full year 2023, the non-GAAP gross margin of 38.4% increased slightly from 38.2% in 2022, driven by higher volumes and ASPs in consumables and solid profitable growth in services. This was offset by the sizable decline in system sales volumes, reflecting the challenging environment we faced throughout 2023 and particularly in the last quarter.

轉向邊緣。第四季非公認會計原則毛利率為48.6%，去年同期為36.4%。年成長可歸因於高利潤消耗品佔總收入的最大份額。2023 年全年，由於消耗品銷量和平均售價增加以及服務業務盈利穩健增長，非 GAAP 毛利率為 38.4%，較 2022 年的 38.2% 略有上升。這被系統銷售的大幅下降所抵消，反映出我們在 2023 年全年（尤其是上個季度）面臨的充滿挑戰的環境。

Looking at expenses, total fourth quarter non-GAAP operating expenses were $30.1 million, a decrease of about 9% from $32.9 million in the same period last year. For the full year 2023, non-GAAP operating expenses decreased about 12% to $127.7 million compared to 2022. The continued reduction in expenses reflects the savings achieved by our ongoing cost savings initiatives. In the fourth quarter, we took decisive actions to advance these cost savings initiatives, which resulted in a $19.1 million restructuring charge.

從費用來看，第四季非 GAAP 營運費用總額為 3,010 萬美元，比去年同期的 3,290 萬美元減少約 9%。2023 年全年，非 GAAP 營運費用較 2022 年下降約 12%，至 1.277 億美元。費用的持續減少反映了我們持續的成本節約措施所實現的節省。第四季度，我們採取了果斷行動來推進這些成本節約舉措，最終產生了 1,910 萬美元的重組費用。

This charge supports our strategy to align our cost structure with our revenue expectations and to enable operating leverage as we return to growth. Included in this restructuring is a meaningful workforce reduction, a consolidation of facilities and a phasing out of our legacy platforms.

這項費用支持我們的策略，使我們的成本結構與我們的收入預期保持一致，並在我們恢復成長時實現營運槓桿。此次重組包括大幅裁員、整合設施以及逐步淘汰我們的遺留平台。

We expect this restructuring plan to save approximately $20 million in operating expenses during 2024 versus the full year 2023. Adjusting for these restructuring charges, our adjusted EBITDA was positive in the fourth quarter, marking a significant improvement over the adjusted EBITDA loss of $6.1 million in the same period last year.

我們預計，與 2023 年全年相比，這項重組計畫將在 2024 年節省約 2,000 萬美元的營運費用。在調整這些重組費用後，我們在第四季度調整後的 EBITDA 為正，這比去年同期 610 萬美元的調整後 EBITDA 損失有了顯著改善。

And the adjusted EBITDA loss of $5.6 million last quarter. Adjusted EBITDA margin for the fourth quarter of 2023 was 0.3% at the top end of the guidance range we provided in November, again, reflecting an improvement year over year and sequentially. For the full year 2023, the adjusted EBITDA loss of $30.9 million was essentially consistent with that of 2022.

上季調整後 EBITDA 虧損 560 萬美元。2023 年第四季調整後 EBITDA 利潤率為 0.3%，處於我們 11 月提供的指導範圍的上限，再次反映出同比和環比的改善。2023年全年，調整後的EBITDA虧損為3,090萬美元，與2022年基本一致。

However, the adjusted EBITDA margin for 2023 decreased to minus 14% compared with minus 11.3% for 2022, primarily due to significantly lower revenues year over year. Our cash balance, including bank deposits and marketable securities at quarter end was approximately $556 million through cost saving measures and healthy collections, resulting in improvements to working capital we generated positive cash flow from operations of $2.6 million during the fourth quarter. We remain committed to improving working capital to drive cash conversion.

然而，2023 年調整後 EBITDA 利潤率下降至-14%，而 2022 年為-11.3%，主要是由於營收年比大幅下降。透過成本節約措施和健康的收款，我們的現金餘額（包括銀行存款和有價證券）在季度末約為5.56 億美元，從而改善了營運資金，我們在第四季度從營運中產生了260 萬美元的正現金流。我們仍致力於改善營運資金以推動現金轉換。

Moving on to our share repurchase program. For the full year 2023, we repurchased approximately 2.7 million shares spending an aggregate amount of $55.8 million. The average price paid per share net of fees was $21.03. On January 17, our second quarter approved share repurchase authorization expired. Subsequently, we applied for and obtained Israeli court approval for a new six month period extending through July, allowing us to use the balance of our previously authorized share repurchase program.

繼續我們的股票回購計劃。2023 年全年，我們回購了約 270 萬股股票，總金額為 5,580 萬美元。扣除費用後每股支付的平均價格為 21.03 美元。 1月17日，我們第二季核准的股票回購授權到期。隨後，我們申請並獲得了以色列法院的批准，將新的六個月期限延長至 7 月，允許我們使用先前授權的股票回購計畫的餘額。

This unused balance currently amounts to approximately $19 million. Given our current enterprise value, we plan to continue repurchasing shares in the first quarter. Next, I'd like to take a moment to discuss the operating environment. As we discussed on our last earnings call, the consumer environment remains uncertain, which with regard to system sales impacts our customer's purchasing appetite and thus our visibility.

目前未使用的餘額約為 1900 萬美元。鑑於我們目前的企業價值，我們計劃在第一季繼續回購股票。接下來我想花點時間討論一下運行環境。正如我們在上次財報電話會議上討論的那樣，消費者環境仍然不確定，這在系統銷售方面影響了客戶的購買興趣，從而影響了我們的知名度。

Additionally, we continue to expect to face a challenging macro environment in 2024, similar to what we faced in 2023. While we will work proactively with our customers, invest in our product portfolio and improve our operating model. We acknowledge that these macroeconomic headwinds will weigh on our ability to convert leads and planned confidently.

此外，我們仍預期 2024 年將面臨充滿挑戰的宏觀環境，與 2023 年類似。我們將積極與客戶合作，投資我們的產品組合併改善我們的營運模式。我們承認，這些宏觀經濟逆風將影響我們自信地轉換潛在客戶和計畫的能力。

With that said, we continue to expect modest growth and modest profitability in 2024 on a full year basis. We are also expecting to deliver positive cash from operations in 2024 on a full year basis.

儘管如此，我們仍然預計 2024 年全年將溫和成長和適度獲利。我們也預計 2024 年全年營運將產生正現金。

Turning to first quarter guidance. We currently expect revenues for the first quarter of 2024 to be between $43 million and $48 million. And adjusted EBITDA margin to be in the negative 16% to negative 26% range. As a reminder, the guidance for revenue and adjusted EBITDA margin includes the impact of the noncash expense associated with the fair value of the company's warrants to our largest global strategic account.

轉向第一季指引。我們目前預計 2024 年第一季的營收將在 4,300 萬美元至 4,800 萬美元之間。調整後的 EBITDA 利潤率在負 16% 至負 26% 範圍內。提醒一下，收入和調整後 EBITDA 利潤率的指導包括與公司對我們最大的全球策略帳戶的認股權證公允價值相關的非現金費用的影響。

That concludes our prepared remarks. And with that, I will now turn it back over to Ronen to open up the call for Q&A. Ronen?

我們準備好的演講到此結束。現在，我將把它轉回給 Ronen，以開啟問答環節。羅南？

Thank you, Lauri. Operator, we are now ready for the Q&A session.

謝謝你，勞裡。接線員，我們現在準備好進行問答環節了。

Thank you. Ladies and gentlemen, we will now be conducting a question-and-answer session. (Operator Instructions)

謝謝。女士們、先生們，我們現在將進行問答環節。（操作員說明）

Greg Palm, Craig-Hallum Capital Group.

帕爾姆（Greg Palm），克雷格-哈勒姆資本集團。

Hey, everyone. Thanks for taking the questions. I guess just kind of looking back at Q4 specifically, I'm wondering if you can maybe characterize the peak season, it sounded like it was maybe a little bit better than planned, but offset by really weak system sales. But just in terms of overall activity, can you comment on capacity the industry relative to 2022, whether it was maybe a little bit tighter than the previous year? Any other color would be helpful. Thanks.

嘿大家。感謝您提出問題。我想具體回顧一下第四季度，我想知道您是否可以描述旺季的特點，聽起來可能比計劃好一點，但被非常疲軟的系統銷售所抵消。但就整體活動而言，您能否評論一下該行業相對於 2022 年的產能，是否比前一年稍微緊張一些？任何其他顏色都會有幫助。謝謝。

Yeah, thank you, Greg. So Q4, on the positive side, we can see that the supplies we saw very nice supplies growth, actually double digit growth on revenue on orders of inks. And also we saw very nice goals on the impression which gave us confidence that customers is starting to improve the utilization and capacity utilization of the systems and will be ready to starting, adding orders of additional systems in 2024 and definitely into 2025.

是的，謝謝你，格雷格。因此，第四季度，從積極的一面來看，我們可以看到我們看到的供應量成長非常好，實際上墨水訂單收入的兩位數成長。此外，我們還看到了非常好的目標，這讓我們相信客戶正在開始提高系統的利用率和容量利用率，並將做好準備，在 2024 年甚至到 2025 年增加額外系統的訂單。

So we see that our customers growing the number of impressions per systems and the overall number of impression and it's very, very clear trend on and others a good (inaudible) service revenue, which grew as well and continue to be strong and we expect that we will continue to be strong as well next year. For the overall 2023 and specifically Q4, our system revenue and system sale was weak.

因此，我們看到我們的客戶每個系統的印象數和總印象數都在增長，這是非常非常明顯的趨勢，其他服務收入也很好（聽不清楚），該收入也在增長並繼續強勁，我們預計明年我們也將繼續保持強勁。對於 2023 年整體情況，特別是第四季度，我們的系統收入和系統銷售疲軟。

And this is mainly contributed to the macro environment. Interest rate is still high and many of our customers, some of them after the ITMA event are still waiting and standing in defense. So sitting on the fence to take decision and many of them are telling us that their customers, meaning brands and retailers are still sitting on a pile of inventory that they're trying to get rid of.

而這主要是宏觀環境促成的。利率仍然很高，我們的許多客戶（其中一些在 ITMA 活動之後）仍在等待並處於防禦狀態。因此，在做出決定時，他們中的許多人告訴我們，他們的客戶，這意味著品牌和零售商仍然坐在一堆他們試圖擺脫的庫存上。

On the positive side they are of all with those of you who are talking to are saying that into 2024, they believe that those inventory will be behind the brands and they will move back to production if it's on the DTF or the DTG market.

從積極的一面來看，他們與你們交談的人都表示，到 2024 年，他們相信這些庫存將落後於品牌，如果是在 DTF 或 DTG 市場上，他們將恢復生產。

So overall, this is the main trends that we see looking at our key customers and our global strategic customer that are very strong quarters in terms of impressions and in goals. So overall, we are happy to see this momentum continue and this is the fourth quarter that we see growth on the ink side. But in Q4, we saw double digit, which is the peak season and to see in the pictures in double digits is a very strong indication.

總的來說，這是我們在關鍵客戶和全球策略客戶方面看到的主要趨勢，這些客戶在印象和目標方面都非常強勁。因此，總的來說，我們很高興看到這種勢頭持續下去，這是我們看到墨水方面增長的第四季度。但在第四季度，我們看到了兩位數，這是旺季，在圖片中看到兩位數是一個非常強烈的跡象。

Yeah, I understand. Okay thanks. And then my second question is related to the Apollo, maybe a two-parter. Can you confirm that the beta units, will be or has been recognized as revenue in Q1, and I'm guessing that is the assumption in the guide. And then just your overall outlook for that in terms of contribution for this year? And then a little bit more color on maybe this new recurring base revenue model that you alluded to, which sounds pretty interesting. That's all -- I'll leave it there. Thanks.

是的，我明白。好的謝謝。然後我的第二個問題與阿波羅有關，可能是由兩個部分組成的。您能否確認貝塔單位將或已經被確認為第一季的收入，我猜這是指南中的假設。那麼您對今年的貢獻有何整體展望？然後對您提到的這個新的經常性基本收入模型進行更多的描述，這聽起來很有趣。就這些了——我就把它留在那裡。謝謝。

Yes. So on the Apollo we are very excited. So first of all, Apollo represent for us totally new incremental market, but we didn't report before this is the bulk (inaudible) this is large quantities large volume much, much bigger than the customized design market that we were approaching till now. We are talking with many big, big customer, some of the fulfillers, brands, retailers.

是的。所以在阿波羅號上我們非常興奮。首先，阿波羅為我們代表了全新的增量市場，但我們之前沒有報告過，這是大量的（聽不清楚），這是大批量的大容量，比我們目前正在接近的客製化設計市場大得多。我們正在與許多大客戶、一些履行者、品牌、零售商進行交談。

But looking into the Apollo. After 4.5 years of development, we installed three systems in North America with key customers and different type of customers. One of them is retailers, big retailers. One of them is more focused on three in longer run and one of them is about mainly customized design, one of each one of them work on the system around the clock in the peak season.

但看看阿波羅號。經過4.5年的發展，我們在北美安裝了三個系統，主要客戶和不同類型的客戶。其中之一是零售商，大型零售商。其中一者更注重三者的長遠發展，一者以客製化設計為主，每者一者在旺季全天候在系統上工作。

And the feedback is outstanding from all three beta customers that were shopping based, but the quality, the productivity of can run up to 400, governments and our the automation that all this with one operator and the breakthrough TCO, total cost of ownership. This system is a breakthrough for the direct to government, and we believe that we are going to really create an impact and replace mainstream screen jobs into digital.

來自所有三個基於購物的測試版客戶的反饋都很出色，但品質、生產力可高達400、政府和我們的自動化，所有這一切都只需一名操作員以及突破性的TCO（總體擁有成本） 。該系統是直接面向政府的突破，我們相信我們將真正產生影響並將主流螢幕工作替換為數位化。

We also had a very strong, a pipeline into 2024 and beyond on the Apollo, one of our beta customers already indicated that they are going to add several more system in 2024, and we are already working on it or we expect the other two betas as well towards more systems. And we are already engaged with other customers on really finalizing the contract for additional systems.

我們在Apollo 上還有一個非常強大的、到2024 年及以後的管道，我們的一位測試版客戶已經表示他們將在2024 年添加更多系統，我們已經在努力，或者我們預計其他兩個測試版以及更多的系統。我們已經與其他客戶接洽，真正敲定附加系統的合約。

We need to understand that 2024 we're still a ramp-up period for this product, and we are limited the number of products we're expecting for 2024 while we are going to accelerate in 2025. Still, it will be meaningful in 2024. We also introducing and actually piloting a new business model, a business model that enabling customers, which is very creative to move from CapEx to OpEx and the customers that are going to build that and actually committing on minimum level of production that they need to print on the machine.

我們需要明白，2024 年我們仍然是該產品的加速期，我們預計 2024 年的產品數量有限，但我們將在 2025 年加速。儘管如此，到 2024 年這仍然有意義。我們還引入並實際試點了一種新的業務模式，這種業務模式使客戶​​能夠從資本支出轉向營運支出，這是非常有創意的，並且客戶將要建立這種模式，並實際承諾他們需要列印的最低生產水準在機器上。

And this reduce the barriers of entry mainly into the screen printer that's very, very keen in this model when we are talking to them about it. This will pay I create more predictability and visibility both for us and for our customers that using it, it will create a shorter sales cycle and improve our opportunity to address screen as a whole. This business model going to generate around $1 million per unit per year and this is kind of the minimum, we expect it even to do more than this $1 million. The machine is capable to print much more than that.

這主要降低了進入網版印刷機的門檻，當我們與他們討論時，網版印刷機對此模型非常非常熱衷。這將為我們和使用它的客戶創造更多的可預測性和可見性，這將縮短銷售週期並提高我們解決整個螢幕問題的機會。這種商業模式每年每單位將產生約 100 萬美元的收入，這是最低限度，我們預計它甚至會超過這 100 萬美元。這台機器能夠列印的內容遠不止於此。

As you ask about the three systems, one of those systems is on this pilot on OpEx versus a CapEx. So in terms of revenue recognition, you will not see the full amount in recognized in Q1, but you will see it's split into the years with the -- with this model, this specific customer is playing to win much more than the minimum commitment that we have on this plan. And of course, the rest are going to be recognized in the coming quarters. We this pilot we are going to limited at this stage, mainly for the Apollo platform. And in only few cases, we are going to land a lot from me and we are planning to report back to all of you the success and how we are going to take it forward.

當您詢問這三個系統時，其中一個系統在營運支出與資本支出的試點中。因此，就收入確認而言，您不會看到第一季確認的全部金額，但您會看到它被分成數年——透過這種模式，這個特定的客戶正在贏得比最低承諾更多的東西。我們有這個計劃。當然，其餘的將在未來幾季得到認可。我們現階段將限制這個試點，主要針對 Apollo 平台。在極少數情況下，我們會從我這裡獲得很多成果，我們計劃向大家報告成功的情況以及我們將如何推進它。

Okay, great. Thanks for all the color. Best of luck.

好的，太好了。感謝所有的顏色。祝你好運。

Thank you.

謝謝。

Thank you.

謝謝。

Chris Moore, CJS Securities.

克里斯摩爾，CJS 證券。

Hey, good morning, guys. Thanks for taking a few. Maybe just stay with the Apollo for a moment. So obviously, it's fair to assume that from a recurring revenue standpoint, it's going to be significantly helpful for someone like Amazon's purchase of the Apollo. Do you expect it to have any impact on -- there are other system purchases?

嘿，早上好，夥計們。謝謝你拿了幾張。也許只是在阿波羅號上待一會兒。顯然，從經常性收入的角度來看，這對像亞馬遜購買阿波羅這樣的人來說將會有很大幫助，這是公平的假設。您預計這會對其他系統採購產生任何影響嗎？

So I didn't refer specifically to our global key customers or any specific names we currently targeting, as I mentioned, with the Apollo a new market, a new type of customers this is a as many screens fulfillers that running longer runs working with mainly brands and retailers and also major retailers that would like to change the supply chain.

因此，我沒有具體提及我們的全球主要客戶或我們目前針對的任何特定名稱，正如我所提到的，阿波羅是一個新市場，一種新型客戶，這是一個運行時間較長的屏幕履行者，主要是與他們合作品牌和零售商以及希望改變供應鏈的主要零售商。

So this is our first priority to go after incremental market. As I mentioned, one of our beta customers is actually more on the customized design and doing one-offs, and they found the products very suitable for them and they're planning to continue to grow leveraging the Apollo for this product. We assume that in the future, some of our customized design customers, including some of our strategic customer will continue to grow leveraging this platform as well, but not only this platform.

所以這是我們追求增量市場的首要任務。正如我所提到的，我們的一位測試版客戶實際上更注重客製化設計和一次性產品，他們發現這些產品非常適合他們，並且他們計劃繼續利用 Apollo 來發展該產品。我們假設未來我們的一些客製化設計客戶，包括我們的一些策略客戶也將利用這個平台繼續成長，但不僅僅是這個平台。

Got it, that's very helpful. Sounds like lots and lots of new customers there. Any sense for the kind of timeframe on the payback for the OpEx model versus the CapEx, obviously, you're not getting the upfront dollars on the Apollo, but you're getting much more recurring, how long do you think it should take before you breakeven and then profitable there?

明白了，很有幫助。聽起來那裡有很多很多新客戶。對於營運支出模型與資本支出的回報時間框架有什麼意義，顯然，你沒有在阿波羅上獲得預付款，但你會得到更多的重複性，你認為需要多長時間才能完成你盈虧平衡然後盈利嗎？

So it's not about -- it's more than -- doesn't work like this and you actually being profitable from the first impression that the customers printing. And the model that the contract is for five years with a minimum commitment of impressions that the customer needs to print per year. The customer know exactly how much the need to print (inaudible) impression.

所以這不是——它不僅僅是——不是這樣工作的，你實際上可以從客戶打印的第一印像中獲利。該模型的合約期限為五年，並承諾客戶每年需要列印的最低印刷數。客戶確切地知道需要列印多少（聽不清楚）印象。

And if they print more than the minimum -- of course, they need to pay more than that. It gives them visibility and it gives them understanding exactly for the cost. It's aligned the interest of the customer and the Kornit together. And we believe that this model is very profitable for Kornit and moving us a bit more to the recurring. So give us more predictability, but also a very strong stickiness to our customers working hand-in-hand with our customers and helping them to grow.

如果他們列印的數量超過最低限度——當然，他們需要支付更多的費用。它為他們提供了可見性，並讓他們準確地了解成本。它將客戶和康麗的利益結合在一起。我們相信，這種模式對康麗來說非常有利可圖，並讓我們更加關注經常性業務。因此，為我們帶來更多的可預測性，同時也讓我們對客戶有很強的黏性，與客戶攜手合作，幫助他們成長。

Got it. Very helpful. Maybe just one more there. So I understand a little bit better. So, what would be the reason why a customer wouldn't employ this model?

知道了。很有幫助。也許那裡還只有一個。所以我稍微明白一點了。那麼，客戶不採用這種模式的原因是什麼呢？

It's a very good question. This model is not the cheapest one, actually (inaudible) that knows how to run the systems with better off buying the systems paying for the separately for the service contracts and buying separately the ink. However, they need to know how to run the machine efficiently and the cost per type of jobs will be different on the amount of ink that they are consuming.

這是一個非常好的問題。這種模型並不是最便宜的模型，實際上（聽不清楚）它知道如何運行系統，最好購買單獨支付服務合約費用的系統並單獨購買墨水。然而，他們需要知道如何有效地運行機器，並且每種類型的作業的成本將根據他們消耗的墨水量而有所不同。

The model of the creative model of moving to OpEx gives predictability to the customers this predictability, of course, has a cost and the customer will pay a bit more. And therefore, it's a good also for Kornit in terms of margin. And so it's a range of customers that can afford buying a systems and then the cash to buy the systems and the know how to run it would be better off to be owned CapEx versus OpEx.

轉向營運支出的創意模型為客戶提供了可預測性，這種可預測性當然是有成本的，客戶會支付更多的費用。因此，就利潤率而言，這對康麗來說也有好處。因此，一系列客戶有能力購買系統，然後有足夠的現金購買系統，並且知道如何運作系統，擁有資本支出比擁有營運支出更好。

Got it. That's helpful. I will leave it there. Thanks, Ronen.

知道了。這很有幫助。我會把它留在那裡。謝謝，羅南。

Thank you.

謝謝。

Thank you.

謝謝。

Brian Drab, William Blair.

布萊恩德拉布、威廉布萊爾。

Hi, thanks for taking my questions. Firstly, I just wanted to ask about the restructuring to be sure that I understood. Did you say that the incremental cost takeout would be $20 million related to actions that were taken since the end of the year. And that's $20 million in cost takeout in 2024 relative to '23?

您好，感謝您回答我的問題。首先，我只是想問一下重組的情況，以確保我理解。您是否說過與年底以來採取的行動相關的增量成本支出將為 2000 萬美元？與 23 年相比，2024 年的成本支出為 2,000 萬美元？

Hi Brian. Yes, we did say that we recorded the charge in the fourth quarter. The benefit of the restructuring efforts will be in 2024. And when you look at OpEx on a year over year basis, we expect it to be approximately $20 million lower in 2024 than it was in 2023.

嗨布萊恩。是的，我們確實說過我們在第四季度記錄了這筆費用。重組工作將於 2024 年見效。當您逐年查看營運支出時，我們預計 2024 年的營運支出將比 2023 年減少約 2,000 萬美元。

Okay. And it's all coming out of OpEx, not COG?

好的。而這一切都來自營運支出，而不是 COG？

There is a portion that is in COGS, but the lion's share is in OpEx.

其中一部分是銷貨成本，但大部分是營運支出。

Okay. Got it. And then just one other question for now. What is the update and outlook related to upgrades for the Atlas machines. Can you give us a sense, what percentage of the installed bases upgraded and what's the prospect for the balance to be upgraded to MAX? Thanks.

好的。知道了。現在還有一個問題。與 Atlas 機器升級相關的更新和展望是什麼？能否為我們介紹一下，已升級的安裝量百分比是多少？餘額升級到 MAX 的前景如何？謝謝。

Yeah. So first of all, as I mentioned on my script, MAX technology, much quality is the new standard of the industry. We have -- we are hearing it from the market from our competitors, but we're also hearing it from our customers that upgrading to the MAX technology. They are super pleased about the quality and also the productivity of the MAX.

是的。首先，正如我在劇本中提到的，MAX技術、多元品質是業界的新標準。我們從競爭對手那裡聽到了市場的聲音，但我們也從客戶那裡聽到了升級到 MAX 技術的消息。他們對 MAX 的品質和生產力非常滿意。

I would say in 2023, we had a very strong view on the MAX upgrade. We are starting this year with a few major orders (inaudible) you already received from customers to upgrade their fleet into the MAX. So you will see in H1 a nice uptake or nice revenue coming from those upgrade as well. I would say in terms of number of customers, the majority of our customers already did the upgrade and we are only a few customers, some of them or one of them is very big that is in the process of deciding if they are going to upgrade, yes or not.

我想說，在 2023 年，我們對 MAX 升級有非常強烈的看法。我們從今年開始，您已經從客戶那裡收到了一些主要訂單（聽不清楚），將他們的機隊升級為 MAX。因此，您將在上半年看到這些升級帶來的良好吸收或良好收入。我想說，就客戶數量而言，我們的大多數客戶已經完成了升級，我們只是少數客戶，其中一些或其中一個非常大，正在決定是否要升級， 是否。

And hopefully this year there will be some upgrades also within these customers. I would say also that are doing this year in 2024. We are taking the MAX technology in the Atlas MAX to the next level, we are going to introduce the Atlas MAX plus. We've shown it ITMA at FESPA in March in Amsterdam, we are going to show the Atlas MAX plus with additional capabilities.

希望今年這些客戶也能進行一些升級。我還想說，今年 2024 年也會這樣做。我們將 Atlas MAX 中的 MAX 技術提升到一個新的水平，我們將推出 Atlas MAX plus。我們已於 3 月在阿姆斯特丹的 FESPA 上展示了 ITMA，我們將展示具有附加功能的 Atlas MAX plus。

These additional capabilities will open for customers, new markets, new applications and new capabilities, and it will be substantial and it will go into create a major [buzz]. I'm not going to get specific enough both of the application, what are the capabilities? We're keeping it to FESPA. I can say open your eyes and look for FESPA because there will be big news there.

這些額外的功能將為客戶、新市場、新應用程式和新功能開放，這將是巨大的，並將創建一個主要的[嗡嗡聲]。我不會對這兩個應用程式進行足夠具體的說明，它們的功能是什麼？我們將其保留給 FESPA。我可以說睜大眼睛尋找 FESPA，因為那裡會有重大新聞。

Okay. Thank you very much.

好的。非常感謝。

Thank you.

謝謝。

Erik Woodring, Morgan Stanley.

艾瑞克‧伍德林，摩根士丹利。

Eric your line is unmuted. You can please ask your question.

埃里克（Eric）你的線路已取消靜音。您可以提出您的問題。

Sorry about that, and good afternoon, everyone. This is Maya on for Erik. Thank you for taking my questions today. Maybe just to start kind of as you speak to customers. What is the catalyst that they're looking for that would unlock that spend? I understand the recurring revenue model helps with that.

抱歉，大家下午好。這是 Maya 為 Erik 所做的。感謝您今天回答我的問題。也許只是在與客戶交談時開始。他們正在尋找什麼催化劑來釋放這筆支出？我知道經常性收入模式對此有所幫助。

But just in general, unlocking that spend, I'm just trying to understand what changes the spent and are going on in the spending dynamic because you're launching new compelling products, you're seeing growth in impressions and consumables demand. So what unlocks that next step.

但總的來說，釋放支出，我只是想了解支出的變化以及支出動態中正在發生的事情，因為您正在推出新的引人注目的產品，您會看到印象和消耗品需求的增長。那麼下一步是什麼解鎖呢？

Thank you, Maya, So excellent question. Look, we are by far the best technology, the best products portfolio in the market and as you mentioned, are their elements that we need to go in order to accelerate the growth of our system sales and it's different from market to market.

謝謝你，瑪雅，非常好的問題。看，我們是迄今為止市場上最好的技術、最好的產品組合，正如您所提到的，我們需要採用這些元素來加速我們系統銷售的成長，而且每個市場都不同。

Let me start with the market with a direct to fabric market, okay, the fashion market and that totally different dynamic from the direct to government that in the fashion market when we are talking today to customers and in the last few months, I travel all over the world to visit those customer, both in India, in Latin America and Eastern Europe to visit our key customers and key prospects.

讓我從直接面向布料市場的市場開始，好吧，時裝市場，與直接面向政府的動態完全不同，在時裝市場中，當我們今天與客戶交談時，在過去的幾個月裡，我到處旅行在世界各地拜訪這些客戶，無論是在印度、拉丁美洲或東歐，拜訪我們的主要客戶和主要潛在客戶。

And they're all telling me the same story, the whole is telling me that they have to change the technology from reactive and acid inks to technologies enable them flexibility to print on different material, different fabrics without changing the ink or technology enable them on a just-in-time production and sustainable without consuming water without pollution.

他們都在告訴我同一個故事，整個故事告訴我，他們必須將技術從活性和酸性墨水改變為使他們能夠靈活地在不同材料、不同織物上打印的技術，而無需改變墨水或技術使他們能夠準時生產且可持續，不消耗水，無污染。

They've been forced to do that by the brands and they see the legislation, regulations coming over and capturing them. They have to change to pigment. Pigment is the only solution and Kornit is by far the best pigment in the market, the best solution in the market, not only in terms of the pigment, but in terms of the capability of being able to print on that fabric with Whiting with XDI, we are the only player in the market that doing it.

他們是被品牌強迫這樣做的，他們看到立法、法規的到來並捕獲了它們。他們必須換成顏料。顏料是唯一的解決方案，康麗是迄今為止市場上最好的顏料，市場上最好的解決方案，不僅在顏料方面，而且在能夠使用 XDI 在織物上進行白色印花的能力方面，我們是市場上唯一這樣做的參與者。

All the big players all the big fulfillers that I was talking are super interested in our technology. Some of them already adopted it like the one customers that I visited one of the customer I visited in India, which is a massive is like a city and the massive potential of acquisition of many systems and is just starting now with one of our System, One Presto MAX. So the market has to move there, what they're telling us that's currently a bill, their customers, the brands and retailer still struggling to get rid of the inventory that pile up from the corona time.

我所說的所有大玩家、所有大實現者都對我們的技術非常感興趣。他們中的一些人已經採用了它，就像我拜訪的一位客戶一樣，我在印度拜訪了一位客戶，印度是一個巨大的城市，擁有收購許多系統的巨大潛力，現在剛開始使用我們的一個系統，一台 Presto MAX。因此，市場必須轉移到那裡，他們告訴我們，目前這是一項法案，他們的客戶、品牌和零售商仍在努力擺脫新冠時期累積的庫存。

And they all believe in talking with those brands are doing 2024, it will be behind them and they will go back into full production. We believe that this will open the gate. This will open the gate for our technology for moving to pigment. Now that they are also bringing the (inaudible) with a better hand, feel and better a black -- this will accelerate the growth in the market.

他們都相信，到 2024 年，這些品牌正在做的事情將會過去，他們將恢復全面生產。我們相信這將打開大門。這將為我們的技術轉向顏料打開大門。現在他們也帶來了（聽不清楚）手感更好、手感更好的黑色——這將加速市場的成長。

The mentioned I believe this market is a major growth engine moving forward of two corners. So this is on the direct to fabric is really about brands and retail, moving back to production on the direct to government. Again, let's break it to two different market. One is the traditional market the Kornit was working on these customized designs. And what we can see on our key customers and customized design. We have hundreds of them and we see the same phenomena.

提到的我相信這個市場是兩個角落向前發展的主要成長引擎。因此，這對布料的直接影響實際上是關於品牌和零售，然後回到對政府的直接生產。再次，讓我們將其分為兩個不同的市場。一是康麗致力於這些客製化設計的傳統市場。以及我們在主要客戶和客製化設計上可以看到的內容。我們有數百個這樣的人，我們看到了同樣的現象。

Finally, we start to see that they are back and increasing their utilization versus 2021. So many of them not only printing more than they were printing in 2021 in the peak, but actually utilizing better the systems and we believe that some of them will get into the cycle of adding capacity in 2024 and definitely after the Pyxis or 2024 into 2025.

最後，我們開始看到它們回來了，與 2021 年相比，利用率有所提高。他們中的許多人不僅列印量超過了2021 年高峰期的列印量，而且實際上更好地利用了系統，我們相信其中一些人將在2024 年進入增加產能的周期，並且肯定是在Pyxis 或2024年到2025 年之後。

So this is customized design a very good indication. On the bulk apparel, the bulk apparel is replacing screen and there we are going very strong with the Apollo what is limiting us in 2024 in the Apollo is not the demand in the market. Actually, most of the systems that we are planning to shift and to recognize in 2024, we are already in a very advanced stage of contract with customers, and the list is almost full for 2024. And now we are working on 2025.

所以這是客製化設計一個非常好的跡象。在大宗服裝方面，大宗服裝正在取代螢幕，我們與 Apollo 的合作非常強勁，在 2024 年限制我們的 Apollo 並不是市場的需求。事實上，我們計劃在 2024 年轉移和認可的大多數系統，我們已經處於與客戶簽訂合約的非常高級的階段，並且 2024 年的清單幾乎已滿。現在我們正在努力爭取 2025 年。

As for the MAX technology, I believe that events like FESPA in March that we have and another event in May that we have as well in Europe will be catalyst to generate more sales into those customers, some of them are still struggling in terms of cash flow in terms of financing there, we need to be a bit more creative this model of recurring revenue moving OpEx from CapEx to OpEx will help some of them to jump and move ahead into digital or increase the fleet of digital that they're using.

至於 MAX 技術，我相信我們 3 月份舉辦的 FESPA 等活動以及 5 月份我們在歐洲舉辦的另一場活動將成為催化劑，為這些客戶帶來更多銷售，其中一些客戶仍在現金方面陷入困境在融資方面，我們需要更具創造性，這種將營運支出從資本支出轉移到營運支出的經常性收入模式將幫助其中一些人跳入數位化領域，或增加他們正在使用的數位化艦隊。

Great. Thank you. And then kind of related to that, you mentioned further diversifying your customer base, where and what products are you seeing kind of the most net new interest and in your customer conversations what's driving those competitive lens?

偉大的。謝謝。與此相關的是，您提到進一步多元化您的客戶群，您在哪裡以及哪些產品看到了最淨的新興趣，以及在您的客戶對話中是什麼推動了這些競爭鏡頭？

Yeah so if we talk about diversification, let's understand that Kornit was based in the last years mainly on one segment, which is customized design is one of customization. Most of our business was in the North America and most of our business was based on few big customers that together with us grew this segment of customized design that was not exist before.

是的，所以如果我們談論多元化，讓我們了解康麗在過去幾年主要基於一個細分市場，即客製化設計是客製化之一。我們的大部分業務都在北美，而且我們的大部分業務都基於少數幾個大客戶，這些客戶與我們一起發展了以前不存在的客製化設計領域。

Now the first steps that we take did in diversification is getting into new market segments like the bulk apparel like the athleisure that are growing very nicely for us with the poly technology like the fashion, the home décor, we are getting into footwear, we're getting to technical. So all of those are incremental and diversifying our type of customer.

現在，我們在多元化方面採取的第一步是進入新的細分市場，例如運動休閒等大宗服裝，這些服裝透過時尚、家居裝飾等聚酯技術對我們來說成長得非常好，我們正在進入鞋類領域，我們正進入技術層面。因此，所有這些都是增量的，並且使我們的客戶類型多樣化。

So you can imagine that when we are going to this type of segments like footwear or technical those are totally new type of customers that we didn't have before. Some of them are major, major one and I will repeat again, the customer that have visited in India is a massive potential for growth for direct to fabric So I see a really big potential, of course, in the future for Kornit in the direct to fabric both expanding geography to places like India, Turkey, Morocco, but Latin America, is very strong as well.

所以你可以想像，當我們進入鞋類或技術等此類細分市場時，這些都是我們以前沒有的全新類型的客戶。其中一些是主要的，主要的，我會再說一遍，在印度訪問過的客戶對於直接面料有著巨大的增長潛力，所以我看到了康麗未來在直接面料方面的巨大潛力。向印度、土耳其、摩洛哥和拉丁美洲等地擴張的地理空間也非常強大。

But you see production moving also nearshore and onshore to Mexico and even to North America and of course the e-mail. So this is a one part and another part but we put a lot of focus in the last, I would say two years is really growing the business with retailers and brands, major part of our business today is already coming with those retailers, some of the mid-sized retailers in the US, but having 500, 600 shops all around the US and changing the business model from outsourcing production to screen printing moving production in house into the warehouse in order to do just in time for a production (inaudible) advance and shipping and replenishment directly to the shelf of their brick and mortars.

但你會看到生產也轉移到近岸和陸上墨西哥，甚至北美，當然還有電子郵件。所以這是一個又一個部分，但我們在最後投入了很多重點，我想說兩年確實在與零售商和品牌的業務增長，我們今天業務的主要部分已經與這些零售商合作，其中一些美國的中型零售商，但在美國各地擁有500、600 家商店，並將業務模式從外包生產改為絲網印刷，將內部生產轉移到倉庫，以便及時生產（聽不清楚）預付款、運輸和補貨直接到他們的實體貨架上。

Also, we see it very clearly, and we have a long list of customers already using our technology. Some of them already scaled up and we have one of them that already have the Apollo. So this is totally new, another new type of diversification that we didn't have before, and it's a growing and we are putting more focus.

此外，我們看得很清楚，我們有一長串已經在使用我們技術的客戶。其中一些已經擴大規模，我們其中一個已經擁有阿波羅。所以這是全新的，是我們以前沒有過的另一種新型多元化，而且它正在不斷增長，我們正在更加關注。

We actually with the new operating model, we are building a team that are just going after the retailers and the brands and the demand generation. We are getting into a pilot, a new pilot with a big digital platform, leveraging KornitX and leveraging our installed base those, of course, never been a customer before with a huge potential as well.

實際上，透過新的營運模式，我們正在建立一個團隊，專門關注零售商、品牌和需求的產生。我們正在進行一個試點，一個擁有大型數位平台的新試點，利用 KornitX 並利用我們的客戶群，當然，這些客戶以前從未成為過具有巨大潛力的客戶。

So they stores of diversification, new customers, new geographies, new products, new segments and are very pleased that we managed to do it in the last two years. And I really hope. But soon we will see that result in the growth of system sales as well.

因此，他們的商店具有多元化、新客戶、新地域、新產品、新細分市場，我們很高興我們在過去兩年中成功地做到了這一點。我真的希望。但很快我們就會看到這也會導致系統銷售的成長。

Great, thank you.

太好了謝謝。

Thank you.

謝謝。

Tavy Rosner, Barclays.

泰維·羅斯納，巴克萊銀行。

Hi, thank you for taking my questions. Most of them have been asked. So I just wanted to ask about the cash. You mentioned about $550 million net cash. I'm wondering are you looking into M&A. Are you looking to potentially buying back more shares? How should we think of the balance going forward?

你好，謝謝你回答我的問題。大多數人都被問過。所以我只是想問一下現金的事。您提到了大約 5.5 億美元的淨現金。我想知道您是否正在考慮併購。您是否打算回購更多股票？我們該如何看待未來的平衡？

I'll start and maybe Lauri will add on top of that, as we mentioned, we continue with the buyback of the shares. We got approval from the authorities in Israel to continue. We have about $90 million but we are planning to execute during Q1.

我將開始，也許勞裡會補充說，正如我們所提到的，我們將繼續回購股票。我們得到了以色列當局的批准繼續進行。我們有大約 9000 萬美元，但我們計劃在第一季執行。

And as we mentioned before, we are always looking for opportunities of organic and inorganic activities to leverage our cash position. An example of organic leverage of the cash position is this move from CapEx to OpEx model. We will see the impact. And we believe that there will be a great justification to use our balance sheet for this direction. And of course, we are looking for inorganic in specific areas of growth in the companies once we will have something to report, we will share it with you.

正如我們之前提到的，我們一直在尋找有機和無機活動的機會來利用我們的現金狀況。現金部位有機槓桿的例子是從資本支出模式轉向營運支出模式。我們將會看到其影響。我們相信，利用我們的資產負債表朝這個方向發展是有充分理由的。當然，我們正在尋找公司特定成長領域的無機物，一旦我們有東西要報告，我們會與您分享。

Thank you, (inaudible)

謝謝你，（聽不清楚）

Okay. Any additional question, Tavy?

好的。還有其他問題嗎，泰維？

Yes, just about the model, I guess, should we expect a similar seasonality in 2024?

是的，就模型而言，我想我們是否應該期待 2024 年會出現類似的季節性？

Yes, (inaudible) correctly, you're asking if we expect to see revenue from the more than 2024.

是的，（聽不清楚）正確，您是在問我們是否預計在 2024 年以上看到收入。

Yeah, (technical difficulty) EUR similar to what we put in 2023?

是的，（技術難度）歐元與我們在 2023 年的投入相似嗎？

It was difficult to hear you. Can you repeat the question, please? Is it for the models that we have a whole model of specifically --

很難聽到你的聲音。請您重複一下這個問題好嗎？是不是對於模型我們有專門的整體模型--

Yeah just to revenue growth, we should expect a similar seasonality (technical difficulty)

是的，就收入成長而言，我們應該預期類似的季節性（技術難度）

Yes, yes. So in terms of 2024, you will see very similar seasonality across the quarter. Q1 is the lowest quarter in terms of supplies and system sales. You will see stronger Q2 and the H2 will be much stronger than H1, both from an ink perspective and a system perspective. And the same way, you will see an improvement on EBITDA and profitability across the quarter, while we gave a guidance of negative EBITDA in Q1 we expecting Q2 to be closer to breakeven in H2 to be profitable on EBITDA.

是的是的。因此，就 2024 年而言，您將看到整個季度的季節性非常相似。第一季是供應和系統銷售額最低的季度。無論是從墨水角度還是從系統角度來看，您都會看到 Q2 更強，而 H2 也會比 H1 強得多。同樣，您將看到整個季度 EBITDA 和盈利能力的改善，雖然我們在第一季度給出了負 EBITDA 的指導，但我們預計第二季度將更接近下半年的盈虧平衡，從而實現 EBITDA 盈利。

Great. Thank you. That's all for me. I appreciate it.

偉大的。謝謝。這就是我的全部。我很感激。

Thank you.(Operator Instructions)

謝謝。（操作說明）

[Jim Ricchiuti, Needham and Company].

[Jim Ricchiuti，尼達姆公司]。

Hi, thank you, hi Lauri I want to make sure I heard you correctly. You're saying that you're expecting modest growth for the year in 2024?

嗨，謝謝你，嗨勞裡，我想確保我沒有聽錯。您是說您預計 2024 年將出現溫和成長？

Yes, (inaudible)

是的，（聽不清楚）

Got it. And so maybe it would be helpful to understand what may go into that outlook. So for instance, should we -- what are the expectations, for instance, with your large global customer in terms of new equipment purchases or upgrades? And again, I understand you can't be specific, but it would be helpful in terms of how to think about that the contribution from Apollo, sounds like you're expecting some meaningful revenues, although Is it fair to say that comes in more in back half of the year?

知道了。因此，也許了解這種前景可能會有所幫助。例如，我們是否應該—例如，您的全球大客戶在購買或升級新設備方面的期望是什麼？再說一次，我知道你不能具體說明，但就如何思考阿波羅的貢獻而言，這會很有幫助，聽起來你期待一些有意義的收入，儘管公平地說，這會帶來更多收入下半年？

Okay. So first of all let me refer to the modest revenue growth and let me explain from where is it coming and so when we say more modest revenue growth. We have three major parts in our P&L on the revenue. One is ink services and systems.

好的。因此，首先讓我提到適度的收入成長，並讓我解釋一下它來自哪裡，以及當我們說更溫和的收入成長時。我們的損益表中包含收入的三個主要部分。一是墨水服務和系統。

Being consistent we have relative very high visibility and predictability. So we expect ink to continue to grow year over year. We had a very strong year in 2023, and we expect it to continue to grow also in 2024. We have a very good visibility and we see how Q1 tracking as well. On service, we have also a very good visibility because major part of the sales service is recurring revenue and some other parts are orders for upgrades like the MAX upgrades as we discussed before, we have a good visibility and service.

保持一致，我們具有相對非常高的可見性和可預測性。因此，我們預計墨水將繼續逐年增長。2023 年是我們非常強勁的一年，我們預計 2024 年也將持續成長。我們有非常好的可見性，我們也看到第一季的追蹤情況。在服務方面，我們也有很好的可見性，因為銷售服務的主要部分是經常性收入，其他部分是升級訂單，例如我們之前討論的 MAX 升級，我們有很好的可見性和服務。

We believe that will continue to grow as well in 2024. Well we have a relative lower visibility is on system sales. Now some parts of system sales with good visibility like the Apollo with I mentioned, already know who will be the customer for 2024. We are working with them so that Apollo is one part of it. We have better view also on the direct to fabric, some on that athleisure.

我們相信，到 2024 年，這一數字還將繼續增長。嗯，我們對系統銷售的了解相對較低。現在，一些具有良好可見性的系統銷售部分（例如我提到的 Apollo）已經知道誰將成為 2024 年的客戶。我們正在與他們合作，讓阿波羅成為其中的一員。我們對直接布料也有更好的看法，其中一些是運動休閒。

But still we have a pipeline, we need to build it and some of it we are planning to build doing the fed by event and the May event that we have. So at this stage here, still a lot of work to do to build the pipeline on the systems. But overall, we believe that we are going to see a modest scores on overall revenue for 2024. As for our global strategic customers of course, we cannot get into their purchasing plans for 2024.

但我們仍然有一個管道，我們需要建造它，我們計劃建造其中的一些管道，以進行我們的聯邦事件和五月事件。因此，在現階段，在系統上建立管道仍然有很多工作要做。但總體而言，我們相信 2024 年的整體收入將會適度成長。至於我們的全球策略客戶，我們當然無法了解他們2024年的採購計畫。

What I can tell you is that we are working very closely with them. We have very good visibility where they are heading and mentioned that the peak season was strong for them without getting into too much details. And overall, 2023 is strong, and I believe that they will continue to go in 2024, there are the plans as for the upgrades that I mentioned on previous calls, we still didn't get the TO or decision if they're going ahead in 2024 of upgrading the fleet to the MAX and if yes, how many of them, we still under discussion and we will see once we will have more information material information, we will share with you. There was another part on any add -- you had another --

我可以告訴你的是，我們正在與他們密切合作。我們非常清楚他們的發展方向，並提到旺季對他們來說很強勁，但沒有透露太多細節。總的來說，2023 年是強勁的，我相信他們將在 2024 年繼續進行，有我在之前的電話中提到的升級計劃，我們仍然沒有得到 TO 或決定是否繼續進行2024年將機隊升級到MAX，如果是的話，有多少，我們仍在討論中，我們將看到一旦我們有更多的信息材料信息，我們將與您分享。任何添加都有另一部分——你還有另一部分--

(multiple speakers) just as it relates to Apollo and I do have another follow-up. Apollo is should we assume that the scale up on the revenue on Apollo is more skewed more towards the second half of the year? Or do you see Apollo being a contributor throughout the year? I know you have some revenue in Q1, obviously.

（多個發言者）就像與阿波羅有關一樣，我還有另一個後續行動。阿波羅我們是否應該假設阿波羅收入的成長更傾向於下半年？或者您認為 Apollo 是全年的貢獻者嗎？顯然，我知道您在第一季有一些收入。

Yeah, yeah. So you will see some may, of course, you will see revenue in Q1 and Q2, but it's say, correct to assume that more revenue was from the Apollo you will see in H2 of this year.

是啊是啊。所以你會看到一些，當然，你會在第一季和第二季看到收入，但可以說，正確的假設是，更多的收入來自阿波羅，你將在今年下半年看到。

Got it. And the follow-up just is with respect to this recurring revenue, base model, this revenue model is there's a -- it's a five year contract minimum impressions per year, presumably that scales up each year. Is that fair to say?

知道了。後續只是關於這種經常性收入，基本模型，這種收入模型有一個 - 這是每年的五年合約最低印像數，大概每年都會擴大。這麼說公平嗎？

It's a minimum volume per year that the customer needs to achieve and it doesn't change from year to year (multiple speakers) minimum, but we expect the customer will buy additional systems and go between the years.

這是客戶每年需要達到的最低數量，並且每年（多個揚聲器）最低數量不會發生變化，但我們預計客戶將購買額外的系統並在不同年份之間使用。

And it's mainly geared around it to the Apollo, you would seem like this would also lend itself this model to other products, I guess in including the director fabric business is just potentially a template for you looking out a couple of years?

它主要針對阿波羅，你看起來這也會將這種模式應用到其他產品中，我想包括總監面料業務可能只是你未來幾年的潛在模板？

So right now, as I mentioned, we are starting with the Apollo and is a pilot. We will learn a lot from it. And of course, we are looking to leverage it if it will be successful to other products and other segments. It can be very successful. It can be very profitable it can open new markets for us, which is a very strong stickiness to work with our customers.

所以現在，正如我所提到的，我們從阿波羅號開始，並且是一名飛行員。我們將從中學到很多。當然，如果它能在其他產品和其他細分市場中取得成功，我們希望利用它。它可以非常成功。它可以帶來非常豐厚的利潤，可以為我們打開新的市場，這是與我們的客戶合作非常強大的黏性。

Those customers that we are speaking with about it are very excited. Some of them in the end decided to go on CapEx, not OpEx were once they see the full cost of the OpEx, but for the other is very, very attractive. So it depends on the customer. And this is part of the innovations that Kornit is bringing monitoring innovation, not on only the technology, a lot of innovation, marketing, but also innovation on the business model, but we are taking it step by step.

與我們交談的那些客戶都非常興奮。他們中的一些人最終決定繼續資本支出，而不是營運支出，因為他們看到了營運支出的全部成本，但對其他人來說非常非常有吸引力。所以這取決於客戶。這是康麗帶來的監控創新的一部分，不僅是技術上的創新、行銷上的許多創新，還有商業模式上的創新，但我們正在一步一步地進行。

And we are starting only with these products and limited number of customers we will learn from it. And then we will roll it out or we'll decide how to roll it out to other corporate products.

我們僅從這些產品和有限數量的客戶開始，我們將從中學習。然後我們將推出它，或者我們將決定如何將其推廣到其他公司產品。

Can you say how many customers?

能說一下有多少客戶嗎？

Right now we have one customers that running in this model and we expect to have a few more in the next few months.

目前，我們有一個客戶正在使用此模型，預計在接下來的幾個月內還會有更多客戶。

Okay. Thank you. Appreciate it.

好的。謝謝。欣賞它。

Thank you.

謝謝。

Thank you. As there are no further questions, I will now hand the conference over to Jared Maymon for closing comments.

謝謝。由於沒有其他問題，我現在將會議交給賈里德·梅蒙（Jared Maymon）進行總結評論。

Thank you all very much for your time today. As always, should you have any questions, please feel free to reach out directly and operator, you can close the call.

非常感謝大家今天抽出時間。一如既往，如果您有任何疑問，請隨時直接聯繫接線員，您可以結束通話。

Thank you. The conference of Kornit Digital has now concluded. Thank you for your participation. You may now disconnect your lines.

謝謝。康麗數位的會議現已結束。感謝您的參與。現在您可以斷開線路。