Key Highlights

  • KRNT reported second-quarter 2026 Revenue of $55.3 million, up 11.2 percent year over year and beating the $52.8 million estimate by 4.76 percent, above the high end of guidance.
  • Annual Recurring Revenue grew 79 percent year over year to $33.8 million, while all-inclusive click revenue increased 112 percent year over year.
  • The company achieved positive adjusted EBITDA of $0.3 million and generated its 11th consecutive quarter of positive operating cash flow.
  • Management raised full-year 2026 guidance to high single-digit revenue growth, up from low single-digit growth expected entering the year, with second-half revenue guided approximately 15 percent above the first half.

Screen Printer Conversion Becomes a Structural Growth Driver

Kornit Digital Ltd. (NASDAQ:KRNT), a Rosh Ha'ayin, Israel-based provider of digital textile and apparel production technology, said approximately 60 percent of its system sales in both the second quarter and first half of 2026 went to traditional screen printers transitioning to digital production, up from a smaller share historically. Management described this shift as one of the most significant Manufacturing transitions of its multi-decade career in the industry, driven by customer Demand for shorter production runs, faster turnaround, and reduced dependence on increasingly scarce and expensive labor.

Approximately 40 percent of system sales during the quarter came from entirely new customers, evidence that the company is expanding into the broader bulk apparel market beyond its traditional customized design niche. Because this transition depends heavily on continued adoption by an industry that has historically relied on analog screen production, the durability of this growth driver will hinge on whether digital Economics continue to compare favorably as production volumes scale.

All-Inclusive Click Model Builds Recurring Revenue Base

The company's all-inclusive click model, which typically involves five-year customer commitments with lower upfront Investment in exchange for per-impression payments, grew revenue 112 percent year over year and now represents a growing share of new system sales, roughly split evenly with traditional Capital equipment purchases. Total contract value under existing all-inclusive click agreements reached approximately $142 million, and management said approximately 80 percent of total company revenue is now recurring or highly recurring in nature, generated through annual recurring revenue, ink, services, and software.

Because all-inclusive click customers begin generating consumable revenue immediately upon system installation while capital equipment sales are recognized upfront, the mix between the two models can create variability in near-term revenue recognition even as the underlying Business becomes more predictable over the life of each contract.

Second-Half Guidance Reflects Seasonal Strength and Consumables Growth

Management guided third-quarter 2026 revenue to a range of $55 million to $60 million, with second-half revenue expected to be approximately 15 percent higher than the first half, consistent with the company's typical seasonal pattern tied to customer peak production periods in the fourth quarter. The company said growth in ink and consumable revenue tied to expanding annual recurring revenue is expected to be a significant driver of second-half profitability, supporting management's improved full-year gross Margin outlook.

Conclusion

Kornit's raised guidance reflects growing confidence that the structural shift from analog screen printing to digital production is translating into durable, recurring revenue growth rather than a temporary uptick in system sales. The pace at which new all-inclusive click agreements convert into growing consumable revenue, alongside continued penetration of the broader screen printing market, will likely determine whether the company can sustain high single-digit growth into 2027.