Kornit Digital (KRNT) Q3 2025 earnings summary

Executive summary

• Q3 2025 revenue reached $53.1 million, up 5% year-over-year and above the midpoint of guidance, reflecting strong operational execution and progress toward a recurring revenue model.

• The business is transitioning from one-time equipment sales to a recurring usage-based AIC model, driving sustainable profitability and expanding the addressable market.

• Apollo and Atlas MAX PLUS system adoption is accelerating, with over 40% of systems sold to new customers and 80% of Apollo systems under the AIC model.

• Annual recurring revenue from AIC reached $21.5 million at Q3 end and $23.1 million early Q4.

• Expansion into digital footwear solutions has begun, with over 1 million pairs produced and new orders from China, Vietnam, and Germany.

Financial highlights

• Q3 2025 revenue was $53.1 million, a 5% increase year-over-year, driven by growth in product and service revenues, especially consumables and AIC.

• Non-GAAP gross margin was 45.8%, down from 50.3% last year, mainly due to inventory adjustments and U.S. tariffs.

• Adjusted EBITDA was $1.1 million (2% margin), compared to $1.5 million last year.

• Q3 2025 non-GAAP net income was $4.2 million; GAAP net loss was $2.6 million ($0.06/share).

• Quarter-end cash, deposits, and securities stood at ~$490 million; cash and cash equivalents were $38.3 million.

Outlook and guidance

• Q4 2025 revenue expected between $56 million and $60 million, with adjusted EBITDA margin guidance of 7%-10%.

• 2025 full-year adjusted EBITDA profitability anticipated.

• 2026 revenue growth projected in the low single digits as the business shifts to AIC, with significant ARR and EBITDA expansion expected.

• Most new system shipments in 2026 will be under the AIC model, reducing CapEx sales but increasing recurring revenue.