Kornit Digital at 45th Annual William Blair Growth Stock Conference: Disrupting Fashion

On Tuesday, June 3, 2025, Kornit Digital (NASDAQ:KRNT) presented at the 45th Annual William Blair Growth Stock Conference. CEO Ronan Samuel outlined the company’s strategy amidst the transformation of the $3 trillion fashion industry. Highlighting both opportunities and challenges, Samuel detailed how Kornit’s on-demand manufacturing solutions are addressing shifts in consumer behavior and supply chain dynamics.

Key Takeaways

• Kornit emphasizes on-demand manufacturing to tackle $1 trillion in markdowns and waste.
• Partnerships with major brands like Nike and Lululemon validate Kornit’s market position.
• Kornit reported $14.5 million in Annual Recurring Revenue for Q1.
• The company is transitioning to a SaaS-based business model, focusing on recurring revenue.
• Kornit’s technology is expanding into new markets, including footwear and home decor.

Financial Results

• Kornit reported 222 million impressions in Q1, marking a 10% year-over-year increase.
• The company generated $14.5 million in Annual Recurring Revenue (ARR) from its All-Inclusive Cost model.
• Kornit anticipates significant AIC revenue growth in the second half of the year.
• The company expects Actual Consumption revenue to surpass ARR by Q1 2026.

Operational Updates

• Kornit’s Apollo technology is replacing traditional screen printing machines, offering greater agility.
• The MAX technology is facilitating entry into fashion and home decor markets.
• The Kornit X platform is being adopted by companies like Guten and Custom Inc for efficient job routing.

Future Outlook

• Kornit plans further innovations in automation, data, and AI to enhance its solutions.
• The company is transitioning its sales team towards a SaaS-based model.
• Kornit aims to connect demand generators with its customer base for on-demand manufacturing.
• The goal is to achieve 90% recurring revenue through a SaaS-based model over time.

Q&A Highlights

• CEO Ronan Samuel emphasized the industry’s shift towards on-demand manufacturing.
• He noted that 39% of surveyed CEOs are moving towards onshore manufacturing.
• 65% of surveyed companies are considering near-shore production strategies.

In conclusion, Kornit Digital’s presentation at the conference underscored its strategic focus on innovation and market expansion. For a deeper dive into the company’s plans and insights, readers are encouraged to refer to the full transcript below.

Full transcript - 45th Annual William Blair Growth Stock Conference:

Unidentified speaker, Analyst, William Blair: Just to get it out of the way, I have to tell you that you can find a full list of research disclosures on our website, WilliamBlair.com. Today, we’re happy to have with us Ronan Samuel, the CEO of Kornit. We also have Jared Mayman, head of investor relations. Jared, there’s plenty of seats if you wanna stand the whole time. I will be really brief with my comments because Ronan’s joking, half joking that his presentation’s gonna take forty minutes.

But I I think many of you know that Kornit is a leader, really the world leader in direct to garment digital printing, on textiles. And, you know, the the company has some revolutionary technology that they brought in the market over the last couple years in the Apollo machine.

Ronan Samuel, CEO, Kornit: Mhmm.

Unidentified speaker, Analyst, William Blair: I’m just gonna stop here because he’s gonna tell you all about this stuff, way better than I will. But, Ronan, thank you very much for being here today.

Ronan Samuel, CEO, Kornit: Yeah. Great. Thank you very much, and, good afternoon, almost. We’ll start, with a quick video clip, just taking us through the industry, the changes, the on demand, and then we’ll jump into the presentation.

Unidentified speaker, Voiceover: Advancements in technology are redefining consumer expectations and pushing the fashion industry to evolve. Remember when shopping for that new outfit required a trip to the mall? When consumers accepted limited choice, buying whatever the industry set out on the racks. Fashion supply chain relied on offshore mass production and eighteen month forecasts, stifling creativity and flooding the market with piles of identical items. Unsold inventory became waste that ended in landfills.

Designer wear and customization were expensive and a privilege of the few. That was yesterday. Today, everything has changed. Consumers live online and discover the latest trend from their algorithm, not fashion magazines, and they want to express their unique take on whatever their tribe is loving. They crave endless choices and demand overnight delivery for the thrill of instant gratification.

They embrace the influencer economy, following and buying whatever their favorite creators are selling directly online. Established brands and retailers are struggling to compete. They need speed, flexibility, and creativity. What they need most is more agility. And to be more sustainable, producing less waste with less water nearer to shore.

The fashion industry is choosing on demand to be relevant with unlimited creativity closer to demand so they can satisfy the consumer of today. Welcome to the future of digital on demand fashion where self expression needs immediate gratification sustainably for everyone.

Ronan Samuel, CEO, Kornit: Good. So fashion is choosing on demand, and the fashion industry is going through the biggest disruption. This is the second disruption in the five years. The first one was the COVID. The second one is now.

I’m going to talk about this disruption, and this this disruption is not only because of the tariff. It’s because of everything that’s going around the, this massive industry. This industry is one of the biggest industry in the world. It’s the $3,000,000,000,000 industry. While many industry went through the transition to digital, this industry is still behaving like it was ten one hundred days ago.

We will talk about the market. We will talk about the technology. We’ll talk about the new business models that we have today, but let’s start with the market. And as I mentioned, this market is going through the a big disruption. This market is lacking agility, and the agility is, is going to drive the innovation in this market and going to make this market more relevant.

We saw and we see lots of changes around us. Technology is changing every industry right now. But as I mentioned, fashion is stacked in the same way that it produced many, many years ago, and, the fashion is looking for agility to win. And as you can see, I have disruptions also here on my, shirt, and there’s a disruption going on in this industry. But before we go deeply into the disruption of the industry, just to remind us all around us, every industry around us is going through disruption.

If it’s the transformation industry with Uber that’s not, having even one taxi, with Airbnb, transitioning or transforming the hospitality with no one hotel, and Netflix and Amazon that, now two days delivery looks slow, and Spotify, though now it’s about fashion, and fashion require a big change. And AI is just one thing that will accelerate the move into on demand manufacturing. What you can see here that I’m wearing right now is actually, was designed by AI. This is why it looks very, unique. I actually uploaded my presentation, to MeetJourney and asked the presentation, and me journey to create a jacket for me.

It gave me few options, that you can see here on the slide. I chose one option, gave it to my team. They printed it for me. In a few days, I had this jacket, unique jacket that described this disruption. This is what it looks like disruption, including my T shirts, and this is the way that it was treated on our machine and later on will stop and stop.

This is part of this the disruption that this industry is going through, leveraging also AI, which is one of the driver of the disruption. It’s actually taking fashion into mass customization, mass personalization, democratizing fashion, democratizing, design, and bringing it into the fashion industry. Now let’s talk about this industry. One of the biggest disruption that’s happening today is by the consumer. The consumer today is different than the consumer that, we all grew with.

They’re looking for immediate immediate delivery of products. They’re living online. Six, seven hours of the day, they are online on looking into Instagram and TikToking and Zooming, and they’re being influenced by those social media. So TikTok is really influencing what people is going to wear. If in the past, brands were defining what consumer is going to wear today, TikTok and instant gum are the driver for what people would like to wear.

Immediate gratification, it’s a must. People are willing to pay a bit more to get the products today, latest tomorrow. They will switch website and ecommerce to another site if the product cannot be delivered within twenty four hours. It’s happening. And we can see that the number of SKUs of the products in the market is growing dramatically.

A good example is Sheen, which I’m going to touch in a minute, bringing about 8,000 new SKUs every day to the market. We can see Zara’s that are bringing also many, many SKUs to the market and changing the products, on a daily basis. Product life cycle becoming shorter, and the consumer today would like to choose their own tribe. They would like to be belongs to tribes, and everybody’s choosing their own fashion, which mean that there’s many more products. And all those products, the life cycle is shorter and shorter runs production.

So we are going through a revolution, and this revolution really require the agility, agility to bring new products to the market as fast as possible, to react fast to market trends, to reduce inventory, which is a massive, massive issues, and to be more sustainable. And, what is holding this industry is, in the way that this industry was, working for many, many years. This industry worked in a way that looked at the lowest cost, production area, actually producing large quantities in China, Bangladesh, Sri Lanka, and other places, and producing large quantities, trying to focus what the consumer would like to wear. Today, it’s impossible even to focus what the consumer would like to wear tomorrow. So everything is changing.

And the brands and retailer were stuck with massive inventory and massive write write down and markdown, which I’m going to touch in a minute, which created also a lot of waste and it’s unsustainable business model. And we can look at the p and l and the balance sheets of those brands, how they’re suffering from, those write down on every quarter. So this industry is lacking agility, and what we could see today is that, this industry starts starting to change. Sheen, which I touched before, everybody familiar, your kids familiar with Sheen for sure. They’re ordering online.

This is the biggest retailer in The US selling for the fashion for our kids, bringing about 8,000 new SKUs every day. And many, many brands and retailers are looking at them and trying to ask themselves how do we do it as well, how do we make supply chain more efficient. But we also see our customers, retailers like Life is Good, Zumiez, Tillyz, forty seven brands adopting digital technology into the warehouses, into the distribution centers, and producing for the shelf. Each one of them has 200, six hundred shops around The US, and they’re producing directly to the shelf, doing replenishment, bringing new products to the market. And we start to see it as a trends, with the retailers and definitely with any demand generation and demand generator.

Also, we we can see those big giant retailers like Macy’s, Nordstrom, that they have massive, massive, massive size in real estate. But in this industry, if you are too big and too slow, you are not relevant. So they are slow, and slow is the opposite of being relevant today. You need to be very fast and very agile. Actually, what we see from McKinsey, McKinsey is doing a survey every year with the CEO of the brands of the leading brands of the world and retailers, and they’re asking them what are the greatest trends.

39% of them this is a survey actually from 2023 that’s saying 39% need to move to onshore manufacturing and to on demand, and 30 65 saying near shore production, and 61 forming strategic relationship in order to produce to on demand. So those are massive changes in the market, and this is even before the disruption that we see today with the tariff. So tariff accelerating everything. And today, brands have to take action, have to move out from production in China, in Bangladesh, and moving production onshore once because the consumer demand it and the consumer would like changes. Second, their p and l and their balance sheet cannot absorb any more write downs, and the mark markdowns.

And third, tariffs making them, not relevant if anymore if they’re producing in China. So all of this, I think this is very important slide because it’s coming from, first of all, from BCG and explain the, the massive disconnect in this market. This market is one of the biggest market, $3,000,000,000,000 market. 1,000,000,000,000 of this market is markdown and a write off. Think about it.

Companies, Ralph Lauren, is trying to forecast what we are going to buy next year, producing large quantities, and then they are stuck with the inventory. And every year, they need to write it off and mark it down. That doesn’t make any sense, while other companies like Zara and like Shiin think about their working capital is a negative working capital. They’re actually producing what they need to sell next week or in the next two weeks and paying their suppliers in next three months. This is the model that investors are looking for.

This is also the model that consumers are looking for because then you are relevant in bringing new new products to the market. So it’s so crucial, to understand this slide. And now one thing that is driving their, business, is on this slide, and it’s also super, super important. Think about the products that, is being sold at $140 in the market. The the margin of these products is 12, dollar, about 88%, margin.

And they all what are they focused on? The brands and retailers focus on cost. How do we reduce cost? How do we produce large quantities in China and reduce the cost? But the cost part is the yellow, is actually represent only 15% of the total price of the of the of the products.

What represent close to 70% is actually all the markdown that they’re taking into account and the write off. So they have to work on the markdown and the write off. Until today, they were focusing just working on the cost of the production. And changing it is only by moving to on demand manufacturing and producing what consumer would like to have versus producing what the consumer might want or trying to focus, which is impossible to focus. So this is the major focus now in the market of really reducing the markdown and the write offs and moving to on demand manufacturing.

Another thing that we can see very, very clearly, companies that becoming more agile, every 5% of agility of, those brands and retailers, not only increasing the revenue, it’s reducing the decreasing the markdown, decreasing the inventory, and really increasing the profitability of those companies. And now on top of that, of course, we have the tariff. We can see the move. We’re already seeing the move outside of China. By the way, in China, in the last three months, there was no production.

All the facilities of, the production facility were closed. There was demonstration. It was done. That’s it. A company was telling, those manufacturer, even if you got the order and you produce it, throw it away.

You cannot bring it to to to The US. And we can see that the move into, onshore, if it’s in Europe, if it’s in in in the in The US is happening, as well moving to Latin America. Latin America becoming really, really strong because the tariff is relatively low, and the cost of employment is is relatively low as well. So what do we need to make in order to make the fashion better? Is really we need supply chain flexibility.

And this is when you’re talking today to brands and retailer in every boardroom, in every meeting, this is what they’re dealing right now. How do we change our supply chain? How do we move production from low cost countries like China to move it to The US or to Mexico in order to be relevant, in order to react fast to the market trends, in order to reduce the inventory, and to be much more agile in the production. And to do that, we call it postponement or in the name that you’re familiar with, on demand, moving really to on demand production closer to the consumer, and leveraging digital technology. Digital technology really can enable you to print and produce what you need rather than the forecast.

You can get an order today and delivering with, our customers. We’re doing it for many, many years, in the customized design market, customer like, Amazon and Printful and many, many others that using our technology and printing what needs and producing what needs and delivering within even the same day or two hours to, to houses. This is the model that now we are shifting it into the bulk apparel, which is a much, much bigger market, which I’m going to touch in a minute, by doing onshore. But it’s important to understand that there’s a big change in the technology, and the technology today that Kornit is bringing for the first time, enabling us to penetrate much bigger market. If till now, we were only in the one off market, the 222,000,000 impression that we, just, announced that our customers are doing, which is a 10% increase, is coming mainly from the one off.

The market of the that we are going now after a bulk apparel of of the screen market is 20 times bigger than what our customers are printing today is, about 4,500,000,000 impressions that we’re going after. This is being we can do that only because we released the max technology. Max technology actually is bringing the quality of digital to the level of screen or even better screen. I can tell you it’s better than screen in terms of quality, in terms of infill, and, for jobs below 1,000 copies, even cheaper. We see customers that using our technology even for 10,000 copies because they need to deliver the products fast to the market, or there are many colors or or photographic image, which it doesn’t make to do makes sense to do it on conventional.

We can see that, with our technology, we can enter to many different application and many different market. I’m going to touch on the Apollo. Apollo was released about one and a half years ago, really now is ramping up very quickly. We can see customers using the Apollo and replacing screen machine. We hear about customer yesterday.

I visited a customer, Grandstyle, actually, not far away here in Chicago. Grandstyle is, producing for military. They have their own brands. And, actually, they replaced 18 screen machine with Apollo and, Atlas Max. But we see customers that replacing three automated big screen machine with one Apollo, reducing number of employ headcount from, edge Apollo, reducing 15 headcounts.

So it’s really saving, money, but also more importantly is that you can really help your customer, be agile, bringing new products, to the market much, much faster with the highest quality. This is, the Apollo is a game changer. It’s a game changer for this industry. It’s a factory by itself running by one one person, and it’s really helping us to penetrate totally new market. As I mentioned, much, much bigger than before.

What you can see here is really the breakeven point, and you can see that Apollo can capture job of 1,000 and below and be more economical. But as I mentioned, we see customers that running much, much longer than 1,000. And as, you’re all familiar, Konitil now, most of the impression that we were doing is from one off. Our customer will print in one offs. This is the first time that we are going for the long runs market, then you can see customer using the Apollo, but also the Atlas Maxes for much, much longer RAM length and replacing screen.

The market is that we are penetrating now, is much, much bigger. If we are looking at the amount of T shirts that are being printed with with some T shirt with print on top of it. The market is 24,000,000,000, which going to 31,000,000,000. But below 1,000 copies, the market is 4.8 going to 7,000,000,000, impression, which is a massive opportunity that we can be, in every impression, be cheaper and, better quality and much more agile than, the alternative. And what we start to see that screen printer traditional screen printer that we used to have only analog starting to adopt digital digital, and the new business model of the all inclusive really accelerated and reducing the barrier of entry, to digital.

The same thing we see it also on the whole to whole. The whole to whole, the MAX technology enable us to enter into new market and getting into much better, in terms of much better in terms of productivity and quality. We’re getting into the fashion market like what I’m wearing right now, but also home decor is a new market that we are, penetrating footwear. We see a growth within China with few customers that are starting to use our technology to replace analog and to print for the footwear market and, of course, technical market as well. So this is another growth engine for for Kornit moving forward, and it’s a massive market to go after it.

And in terms of the overall capabilities, I want to touch in on another thing. Of course, Kornit is delivering systems in software services, a lot about data, but Kornit X is starting to gain momentum. We just, announced about few companies, that are starting to use Konnect X. Guten is one of them. Custom Inc, is another demand generator that’s starting to to to use Konnect X.

Konnect X is platform cloud based platform that’s routing jobs, into our customers, and enable them to move the demand generator to on demand manufacturing anywhere around the world in consistent quality. It’s starting to help the market to move to on demand, and we see more and more demand generators starting to use it. If we are looking to the future, Kinetics continue to innovate. We’re investing a lot in r and d. We are bringing more application, more automation, and more data and AI.

We are becoming more proactive in terms of maintaining maintaining the the our our machine, our customers, and and looking very much on bordering the our solution in terms of new market and new application. As for the go to market, massive change in the go to market. You heard about the new technology. You heard about the new markets that we’re entering, mainly the screen replacement market. We’ve done a a big change in terms of the our sales team because we are moving much more into a SASE model, leveraging the new business model of the AIC.

And on top of that, we are going after the demand generator. We have a team that going after demand generators and building really bring connecting demand generators to our customers. I want to touch on the AIC. The AIC model is a breakthrough model. We are the only one that bought it to this market.

We are enabling, new customers, screen printers, reducing the barrier of entry for the screen printers. It’s a very easy model. They understand exactly how much it will cost them. Let’s assume for Apollo, they need to commit for 700,000 impression per year. Let’s assume that they are paying for each impression $1, so they know how much they need to pay for a year.

They know that each impression impression is a shirt will cost them $1 no matter how much ink they need to put on the shirt, so they can do every shirt in the highest quality that they want. And then they compare it how much it cost them on screen. And if it’s cheaper than screen, they can move and from the first day being being save money. Yeah. And they have enough jobs to move, into digital so they can choose if they are doing it on the Apollo or doing it on the Atlas Max or Atlas Max Poly.

And this business starting to gain a lot of momentum, with many new customers and also existing customers. For Kornit, it’s providing us predictability. It’s five years predictability. For the first time, we announced about 14,500,000 ARR that we generated, in q one, for the last twelve months. And this is going to go very fast.

And in q one next year, we are going to report the AIC, the revenue, because the AIC is starting to be meaningful, and then h ’2 is going to be contribute quite a lot to our revenue. And in q one twenty twenty, ’6, you will start comparing the AAC revenue to the ARR. And, hopefully, the AAC, you will see that it’s, running faster because customers are printing more than the commitment. The ARR, what we are reporting, is on systems that we ship to the field, and the minimum commitment that the customer committed, multiplied by the cost per impression. As well, for us, it’s very good, to move to the SASE model.

First of all, we control the secondhand market. The machine belongs to us. So after five years, seven years, we can take the machine and install it back in even in a lower price into the market, penetrate further, is providing predictability. Kornit will move over time more and more into a SASE model today. 80% of our revenue is more recurring or reoccurring, and we you will see it growing.

You will see very soon that it will be 90%. And over time, our interest is to move to a more SaaSy and SaaSy model, of course, also from the investor perspective, we’ll get a different multiple in the market. So just a bit about where we stand today. So we reported the q one results. Just I want to touch base on the 222,000,000 impression.

This has come mainly from the installed base. They’re doing one off impression, but the nice thing to see that they are growing, growing 10% year over year, meaning that they are starting to get into the utilization, maximum utilization level of the system. And soon, we will start seeing customers also in the one off buying from us and not only the new customers that we are penetrating. We announced about MAS relationship. This is very, very important.

MAS is the largest manufacturer, to the biggest brands like, Nike, like Lululemon, like Victoria’s Secrets, Gap, and many, many other. When I’m saying manufacturer, they are actually producing the blanks. Nike is buying from them the blanks, and they are doing also the embellishment on the blanks. They took a decision that they understand that moving from production in Bangladesh, in Sri Lanka, they have to move onshore. They opened a facility in The US, leveraging our technology and starting to provide to the brands on demand manufacturing out of of The US.

This is a proof point that really the market is moving to on demand manufacturing with the biggest brands and the biggest fulfiller of the world. So now is the time. We have the the market is going through disruption. Everyone needs to move to on demand. We have the right technology.

We have the business model, to make it happen. AIC and Apollo is gaining momentum, in in the market, and we’re expanding into much bigger market with many, many opportunities to go to some new adjacent market like the footwear, home decor, and more. So thank you very much. You’re welcome to come to the breakout session and ask any question.

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