Kornit Digital Ltd. (NASDAQ:KRNT) Q3 2025 Earnings Call Transcript

Kornit Digital Ltd. (NASDAQ:KRNT) Q3 2025 Earnings Call Transcript November 5, 2025

Kornit Digital Ltd. beats earnings expectations. Reported EPS is $0.09, expectations were $0.04.

Operator: Greetings, and welcome to the Kornit 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 Maymon, Investor Relations for Kornit Digital. Mr. Maymon, you may begin.

Jared Maymon: Thank you, operator. Good day, everyone, and welcome to Kornit Digital’s Third Quarter 2025 Earnings Conference Call. Joining me today are our Chief Executive Officer, Ronen Samuel; and Lauri Hanover, Kornit’s Chief Financial Officer. For today’s call, Ronen will provide comments on the third quarter of 2025 and provide an update on our progress. Lauri 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 20-F filed with the SEC on March 28, 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?

Ronen Samuel: Good morning, everyone, and thank you for joining our third quarter 2025 earnings call. This quarter, we delivered results above the midpoint of our guidance range 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 upfront, which builds recurring revenue over time even though it shifts part of the recognition to a later periods. Our EBITDA margin came in at approximately 2%, reflecting continued progress towards full year profitability as we maintain disciplined cost control.

I’m particularly pleased that we have achieved this growth while continuing to generate positive cash flow from operations for the eighth 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 bulk 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, Kornit is uniquely positioned to lead the 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 customers expand their 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 impression 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 Kornit’s technology and the expanding opportunity ahead. Another area of progress is the continued expansion of our All-Inclusive Click 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 continue 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 delivered 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 produced 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 installed 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, Mad Engine Global, one of the world’s largest manufacturer of licensed and branded apparel added another Apollo under the AIC model on top of 2 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 6 months 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, Webling in South Korea became the first customer to adopt AIC, operating 2 Atlas MAX PLUS systems as part of a full digital transformation that replaced legacy screen capacity while improving time to market and production efficiency. This example 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 athleisure markets. After 2 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 Kornit 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 about 2 billion print impressions and Kornit is well positioned to capture a meaningful share of this opportunity. Our solution directly addresses the footwear industry 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 Kornit 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. Kornit is transitioning from onetime 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 low-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 position Kornit for sustainable, profitable growth and long-term value creation. In summary, we are executing with discipline, capturing a multibillion-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 Lauri to further discuss our third quarter results and our guidance for the fourth quarter.

Lauri?

Lauri Hanover: Thank you, Ronen, and good day to everyone. Third quarter revenues were $53.1 million, within our guidance range of $49 million to $55 million provided in August. Year-over-year, we saw growth in product revenues, primarily attributable to an increase in consumable sales and continued growth of revenue from the AIC model. Service revenue also increased year-over-year due primarily to greater upgrade activity. Moving to margins. Third quarter non-GAAP gross margin was 45.8% compared with 50.3% in the same period last year. The year-over-year decline was primarily the result of inventory-related adjustments, U.S. tariff costs and lower service gross margin as expected. We have communicated targeted price increases that are expected to offset part of the tariff impact in the coming quarters.

Looking at operating expenses; total third quarter non-GAAP operating expenses were $25.8 million, a decrease of $1 million or about 3.7% from $26.8 million in the same period last year. A large portion of our operating expenses are Israeli shekel denominated. The shekel appreciated more than 9% in the third quarter year-over-year. Had the U.S. dollar shekel exchange rate remained at the prior year level, operating expenses would have been $25 million or 7% below Q3 2024. Managing our operating expenses closely is within our control even in an uncertain environment, and we are expecting to realize more meaningful operating leverage over time as we continue to align our expenses with our base of revenue and near-term needs. For the third quarter, adjusted EBITDA was $1.1 million compared with $1.5 million in the same period last year.

Had exchange rates in Q3 ’25 remained at the level of the year earlier period, adjusted EBITDA would have reached $1.8 million. Adjusted EBITDA margin for the third quarter of 2025 was 2%, above the midpoint of the guidance range we provided in August. We still anticipate delivering adjusted EBITDA profitability on a full year basis in 2025. As we move into 2026, we plan to continue shifting a greater share of system volume from the traditional CapEx model to AIC. As Ronen said earlier, ARR from systems shipped under the AIC model reached $21.5 million at the end of Q3. As a reminder, this figure does not represent recognized revenue, but rather the annualized recurring revenue we expect to generate based on systems shipped to date. We are focused on moving a greater portion of our system shipments to the AIC model with the goal of expanding this base of recurring revenue.

This effort will strengthen our ability to project the coming quarters and year and is expected to drive an improvement in our gross margin over time. Moving to our balance sheet. Our balance sheet remains robust with our quarter end cash balance, including bank deposits and marketable securities, standing at $490 million. Operating cash flow was $4.3 million compared with $13.6 million in the same period last year. Cash flow less capital expenditures, including investment in equipment on lease for AIC in Q3 was $800,000 compared with $3.1 million in the same period last year. Ending with our fourth quarter guidance. We currently expect fourth quarter revenues to be between $56 million and $60 million and adjusted EBITDA margin to be in the 7% to 10% range.

I’ll now turn it back over to Ronen to open the call for Q&A.

Ronen Samuel: Thank you, Lauri. Operator, we are ready for the session of the Q&A.

Q&A Session

Operator: [Operator Instructions] And our first question comes from the line of Greg Palm with Craig-Hallum.

Danny Eggerichs: This is Danny Eggerichs on for Greg today. Maybe just one kind of on the broader demand environment and maybe if you could break out systems and consumables and how — what played out this quarter was maybe different or better or worse than you were expecting from what you saw a few months ago? Where are we at in kind of inventory levels, on the consumable side? And how have customers’ kind of activity changed around capital sales and AIC for Apollo.

Ronen Samuel: Yes. Thank you, Danny. So regarding this quarter, the way we look at it, product, as you can see, grew year-over-year the same way the service. Service grew mainly due to upgrades that we delivered this quarter. Within the product, we see expansion both on the ink side, but also, of course, on the AIC that’s starting to contribute to our revenue. Overall, we are shipping more and more systems. You don’t see the systems, of course, that we are shipping on the AIC model, but they’re going to contribute moving forward into Q4 and 2026. This is a major focus for us for growth. Hopefully, I answer your question.

Danny Eggerichs: Yes. No, that’s helpful. Maybe just one on gross margin, maybe a little step down and a little below expectations. I know you kind of mentioned that inventory-related adjustment and some tariff stuff. Is there any way to kind of break out into a little more depth some of those impacts that you saw and how we should think about maybe the price increase offsetting those tariff impacts going forward?

Ronen Samuel: Yes, I will leave this question to Lauri for beginning.

Lauri Hanover: Okay. So as you mentioned, we faced some headwinds resulting from inventory adjustments in addition to a greater impact from the effects of U.S. tariffs, which, of course, we didn’t have last year. Both of these affected the product gross margin as well as the service gross margin this quarter. And as we said, we have communicated targeted price increases that we expect to offset a part of the tariff impact in the coming quarters.

Ronen Samuel: Yes. What I can add as well that, you should expect to see expansion in gross margin, of course, in Q4. Q4 is traditionally stronger on — is the most — is the strongest quarter in terms of gross margin. And we are planning, of course, to continue to see expansion year-over-year into 2023 on gross margin.

Danny Eggerichs: Okay. Great. Maybe just one last one for me. I appreciate you kind of giving that early 2026 outlook. I guess, what kind of visibility do you have at this point? I’m assuming a little bit more visibility transitioning to more recurring revenue. And what kind of gives you that confidence in your ability to grow next year?

Ronen Samuel: Yes. So we are starting to have more and more visibility because of our recurring revenue and reaccruing revenue. Of course, we have the ink revenue, which is the reaccruing. We have the service revenue that is reaccruing, and we are building more and more the ARR from the AIC model that is the recurring revenue. And while taking relative conservative view on the systems that we will deliver next year on CapEx, we still believe that we can deliver growth next year, as I mentioned, low-single digit growth. But you will see a much stronger expansion on the EBITDA and of course, accelerated growth on the ARR during the year.

Operator: And our next question comes from the line of Brian Drab with William Blair.

Brian Drab: I would like to talk first just about the low-single digit outlook for 2026. Ronen, can you just talk about the thinking that goes into that, the components of that growth? And I guess, I would have thought that with the ARR that you’re entering 2026 with that you would have expected to grow a little bit faster than low-single digits?

Ronen Samuel: Yes. Thank you, Brian. And you’re right. From one hand, we’re entering with a nice ARR into 2026. We’re also having better visibility on our pipeline. We have stronger pipeline than we had before. But when we are looking at our growth rate, it reflects a deliberate and strategic transition towards building a more predictable, sustainable, profitable business. We are not only expanding our addressable market, we are really getting into the bulk apparel, footwear and additional categories, but also transforming, and this is the main impact, our model from onetime equipment sales to recurring usage-based revenue under the All-Inclusive Click model. This shift naturally moves part of the revenue recognition that we are planning for next year from the short term into future periods, but it creates a much stronger foundation of long-term growth, profitability and visibility.

While we expect 2026 to deliver low-single revenue growth, we see meaningful expansion in EBITDA as we maintain a disciplined cost structure and continue to scaling our recurring revenue base. The ability to grow ARR significantly while expanding profitability is a major milestone for us and a strong indicator of the durable growth engine we are building over the years ahead. So I hope I answered your question, Brian.

Brian Drab: Yes, Ronen, that’s helpful. My follow-up to that is just, are you leaning more away from outright equipment sales in ’26? Like has your strategy changed a little bit in the last few months regarding — trying to just move customers to AIC rather than equipment?

Ronen Samuel: The answer is yes, because we see the AIC model is the right — the preferred model for our customers, reducing barriers of investing in capital in advance, aligning cost structure to revenues and providing predictability to our customers. We see also that customers on this program are using the systems, the utilization is higher. The number of impression is higher on systems that are on AIC model. For us, it creates much better visibility, much stronger recurring revenue and better profitability and customer value that we are generating out of each of those systems. So we deliberate decided to move more and more into the recurring business, the AIC. And therefore, we anticipate a reduction next year on the CapEx deal but increasing the number of systems overall.

And we see the number of systems even this year is growing quite significantly versus last year, and we expect even more next year. But many of them or most of them will be on the AIC, and we will not see the revenue recognition at the same quarter. We’ll see it over time and will create much stronger business moving forward for the years to come.

Brian Drab: Okay. So just to put a final note on this, I guess it seems like CapEx sales will be much lower. AIC revenue will probably increase significantly next year and maybe even more than double. But really, you’re positioning the company kind of for 2027 and beyond is my impression right now, in terms of revenue drop.

Ronen Samuel: Yes, as we mentioned, AIC revenue is becoming significant. And most likely, by the end of Q1, we’ll start reporting separately on the AIC revenue as it becomes even more significant. So next year, you will see more revenue — significantly more revenue coming from the AIC. Some of it is offsetting the reduction of the CapEx revenue. Overall, we still expect a growth for the full year.

Operator: And our next question comes from the line of Chris Moore with CJS Securities.

Unknown Analyst: This is [ Will ] on for Chris. Do you think the geographic mix of your revenue will look much different 2 to 3 years from now? And if so, what are the drivers?

Ronen Samuel: Geographically — thanks, Chris. So for us, North America today represents something like 65%. In 3 years from now, will continue to be the largest region. And we definitely would like to see EMEA catching up and a massive opportunity in Asia. We see specifically in Asia, the opportunity around the footwear. We’ve been there last week at ITMA, and we got fantastic feedback, and we have many new prospects for this segment. But we see the penetration also into the screen market in Asia. And as I mentioned in my prepared remarks, we closed 2 deals, the first deal is in Asia, both in the screen market, but also in the AIC. We only now introduced the AIC model in Asia. So we expect Asia to contribute more moving forward.

But as we see today, North America is the largest opportunity, both from the screen market, from the fashion perspective. From the installed base, we have very large installed base, and we expect North America to continue to contribute and grow.

Unknown Analyst: And can you remind us or add some color to what your thoughts are on free cash flow in 2026 and 2027?

Ronen Samuel: Lauri?

Lauri Hanover: As we presented earlier, as we drive our penetration with the AIC approach, we would expect our free cash flow to be negative, whereas our objective is to keep operating cash flow positive. Does that answer the question?

Unknown Analyst: Yes.

Operator: And our next question comes from the line of Erik Woodring with Morgan Stanley.

Unknown Analyst: This is [ Maya ] on for Eric. Last quarter you told us that second half revenue would grow kind of in the low-single digit range year-over-year. Your guidance for 4Q implies flat to slight declines. Over the past 3 months, what has really changed? And what supporting evidence can you provide to give us the confidence that you’ll achieve at least the midpoint of 4Q results?

Ronen Samuel: Yes. So first of all, Q3 we grew 5% year-over-year. Q4, we expect sequentially growth versus Q3. However, year-over-year, you’re right, it’s a decline based on our guidance. And the main driver is the move from CapEx deals to all-inclusive. So we do expect to see meaningful growth on the ink sides service probably will be flat or a bit lower than last year. But the main impact versus last year will be the move from CapEx deals that we delivered last year to all-inclusive deals that become ARR.

Unknown Analyst: Got it. And then you kind of touched on this for 4Q, but it was good to see services return to year-over-year growth this quarter. I understand maybe in 4Q, we’re thinking flat to slightly down. I guess how sustainable is upgrade activity as we look to 2026?

Ronen Samuel: So in 2024, we have quite significant amount of upgrades, which contributed to the service revenue. So if we are taking the — from the service revenue, the upgrade at all, service revenue continued to grow year-over-year. Once we are putting the inside the upgrade, it depends on the upgrades or the deals that we are closing, the availability of the upgrades that we have, that we are offering. Most of the upgrades that we’ve done in 2024 were around the Atlas to Atlas MAX upgrades, but we completed most of it. Some of it we continue to do this year, and we saw it in Q3. We do expect in 2024, at least from the midpoint of 2024 to have some new upgrades, which will contribute for more capability to our systems. I cannot get into detail right now. We didn’t disclose it yet, but we do plan on additional upgrades that will come in 2026 on top of our biggest customers that potentially can continue and upgrade their fleet into MAX technology.

Operator: And our next question comes from the line of Chris Reimer with Barclays.

Chris Reimer: Two quick ones on demand in the footwear and in textile. I mean, the footwear, I know you’ve been talking about this for a while. What’s changed and how do you see customer adoption as a growth driver over the next 2 years? And then on the textile, you mentioned some of the new customers in the branded printing, but how do you see traction with textile customers?

Ronen Samuel: Yes. So let’s start with the footwear. You all remember that we started it about 2 years ago, and we mentioned that we are looking into these segments with initial customers in China and then it grew to additional customers. And over time, they took more systems. We work very closely with those customers and with major brands, and we have reached a point that we felt that we have the right solution. As of today, those customers deliver more than 1 million pairs of footwear upper into the market. We learned a lot about this market. We didn’t know anything about this market 2 years ago, and we met many customers, new potential customers when we learned about the market. The market is a big market. When we’re looking at the decorated footwear market, we are talking about 1 billion pairs of shoes that are being decorated and printed on an annual level.

If you translate it, it’s about 2 billion impression. And this is our addressable market that we are going after it. We are only in the beginning. And what we are doing here is actually a replacement move of changing the current technology and moving a very complex way of production that takes months into much more agile and in one-step process, meeting the durability standard that this industry requires. And right now, there is tons of innovation that we are bringing to the market around this technology. We are very proud because we are unique. We are the only digital solution out there in the market. There was tons of excitement at ITMA from footwear manufacturers that came and saw this — look at it as a magic. And what we are delivering there is really solving the main pain of this industry, which is a slow development is taking months to develop a footwear and you can move it now to days.

Design freedom, no limitation anymore on design and produce exactly what you need without waste and without overproduction. We have early success in China with 2 major manufacturers that’s working with most of the leading brands of the world. One of them at ITMA order another 2 systems on top of the system that is they already have. And we’re now entering into Vietnam and Germany with additional orders that we got already. As I mentioned, lots of interest, and we need to understand it’s just the beginning. So while we see a big opportunity there, it will take time to capture it, but it’s going to become a significant contributor to our growth in the next 3 years. This is on the footwear. On the fashion, on the fashion market, we are looking more the technical aspects of the fashion.

I mentioned on the previous call that we signed a very strategic agreement with one of the leading brands of the world, sports brand of the world. The project is running. In a few months, we are reaching a point of decision, and this can open for us another very, very lucrative and interesting market with a big order that will follow up once the pilot will finalize. There is a lot of interest in the technical area in Germany, Central Europe, in Asia, specifically around the sports market, but we continue to deliver systems also to the fashion market. One of our biggest customers actually in the customized design market is adopted a Presto a few months back and now is using the Presto for all over print to print on hoodies and create hoodies and create T-shirts and delivering to the market with on demand, with customization.

Very innovative direction, and we see it as an opportunity for them to grow rapidly with additional systems and for others to follow up as well.

Operator: And our next question comes from the line of Kieran McCabe with Cantor Fitzgerald.

Kieran McCabe: I was wondering maybe if you could maybe touch on the improvement in OpEx year-over-year, kind of quarter-over-quarter, kind of what were the drivers and how they kind of met your plan? And really kind of what do you see as opportunities going forward to continue to optimize OpEx with your revenue line?

Lauri Hanover: So we have been focused on allocating resources to drive our growth. So resources that were not part of driving growth were reduced. That is in addition to constant efficiencies that we are looking to achieve. As I mentioned, this quarter, you can see even with the unfavorable exchange impact that we were successful in reducing our operating expenses. We will continue to look to drive our operating expenses to match our level of revenue growth so that we achieve our profitability targets. And we’ll do our best to manage that through what we expect will be a more significant impact next year because of exchange rates. Is that helpful?

Kieran McCabe: Yes, it does. And I guess, maybe I had a kind of — for demand for 2026, kind of the AIC model. But generally, what’s your kind of impression of the overall demand or business environment in 2026, a sense of more optimism, more of an uptick? Or is it more of a sense overall that it’s kind of pretty much the same as this year? Just kind of your general sense of the — outside of company’s change from a CapEx model to the AIC, but just a general overall business environment expected in 2026.

Ronen Samuel: So it was very difficult to understand the line was breaking. Can you repeat the question, please?

Kieran McCabe: I was just wondering what your sense of the business environment or you’re kind of visibility in 2026 is versus this year? Do you see kind of overall more optimistic view of the year or kind of more of the same given geopolitical tariffs and the like?

Ronen Samuel: In terms of the pipeline, we feel that we are in a better place. We have better visibility on our pipeline, both for the deals that are on AIC models, but also on CapEx deals. Specifically, we have a very strong pipeline on screen replacement market. As I mentioned, we have a nice pipeline for the footwear market, as well. So we have visibility there. We have very good visibility, of course, on the ink and the services and what are the upgrades that we are planning to do next year. So overall, we feel that we have a good plan, and we feel confident about what we described as a year of growth — of modest growth on top line of low-single digits and more significant growth on the EBITDA on the bottom line.

Operator: And with that, there are no further questions at this time. I’d like to turn the floor back to Mr. Samuel, who will provide some closing remarks.

Ronen Samuel: Yes. So first of all, thank you, everyone, for joining us on this call. As you can see, Kornit is going through a major transformation, both in terms of the markets, the addressable market that we are going after. It is the screen market, which is totally new to us, which is a massive opportunity and the main opportunity we are going after on top of the customized design market. And now also footwear and some other adjacencies that we are going after. On top of that, we are changing our business model into the recurring ARR AIC model, which is only now starting to gain momentum and penetrating new regions like Asia Pacific. And we see acceleration and adoption of Apollo with multiple systems being delivered to many of our customers.

Our pipeline is getting stronger. We have better visibility both through Q4 and for 2026. And we believe that we are executing with passion and clarity to our strategy. So I would like to thank you again and hope to meet you soon in different events. Thank you very much.

Operator: Thank you, and with that, this does conclude today’s teleconference. We thank you for your participation, and you may disconnect your lines at this time, and have a wonderful day.