Kornit Digital Stock

Kornit Digital Ltd. (Kornit) develops, designs, and markets digital printing solutions for the global printed textile industry.

The company’s intention is to become the operating system for fashionX and textile production offering end-to-end solutions, including digital printing systems, inks, consumables, and an entire global ecosystem that manages workflows and fulfillment. The company’s product and services offerings serve fulfillers and demand generators, such as brands, creators, and licensors, thereby connecting demand and supply, with a major focus on the fashion, apparel and home decor segments of the industry.

On April 5, 2022, the company completed the acquisition of Lichtenau, Germany-based Tesoma GmbH, or Tesoma. Tesoma is globally recognized for the high-quality engineering and performance of its cutting-edge textile curing solutions.

The company strives to connect demand generators like fashion brands, e-commerce platforms, marketplaces, designers, and licensors to the most advanced production capabilities by becoming the operating system for on-demand, sustainable fashionX and textile production. (self-expression through textiles - anyone, anywhere, anytime).

The company focuses on the rapidly growing high throughput, direct-to-garment, or DTG, and Direct-to-Fabric, or DTF, segments of the printed and decorated textile industry. The company’s solutions include proprietary digital printing systems, ink, and other consumables, associated software and value-added services that allow for large-scale printing of short runs of complex images and designs directly on finished garments and fabrics. The company’s solutions address the growing production gaps reflected in the need to shift to shorter runs, proximity production, proximity decoration, partial or full on-demand production, and EcoFactory models by enabling the company’s customers to print and decorate high quality products in a time efficient, cost-effective, and environmentally friendly manner. This allows textile manufacturers to transition from their traditional business and operating models of supply based on demand predictions, to partial or full on-demand or made-to-order models, by which decoration of fabric and production of finished goods only takes place once a customer order has been issued.

The company’s DTG solutions utilize its patented wet-on-wet printing methodology that eliminates the common practice of separately coating and drying textiles prior to printing. This methodology also enables printing on a wide range of untreated natural, synthetic and man-made fabrics, including cotton, wool, polyester and lycra, and with throughputs ranging from 40 to 235 garments per hour. The company’s entry-level, industrial and mass production DTG solutions are suited to the needs of a variety of customers, from smaller industrial operators with limited budgets to mass producers with complex manufacturing requirements. The company’s patented NeoPigment ink and other consumables have been specially formulated to be compatible with the company’s systems and overcome the quality-related challenges that pigment-based inks have traditionally faced when used in digital printing. The company’s software solutions simplify order to production workflows in the printing process, by offering a complete solution from web and traditional order intake through graphic job preparation and execution. The company also offers customers maintenance and support services, as well as value-added services and application consulting, aimed at optimizing the number of impressions printed by the company’s systems.

In April 2019, the company supplemented its original DTG printing technology with the company’s Kornit NeoPoly Technology, which is the company’s industry’s first digital, industrial process for high-quality printing on polyester, thereby opening the large sport and athleisure market to the company’s digital printing solutions. The Kornit NeoPoly Technology addresses existing challenges with a new process and ink set implemented in the Kornit NeoPigmentT process. The company’s process handles polyester applications without having to compromise on design, run size, substrate, or labor costs. The breakthrough technological innovation has been achieved by an innovative ink set and a physical and chemical process specifically developed for low-temperature curing, and polyester-enhancing functionalities developed to maintain fabric characteristics and provide superior fastness. This unique process overcomes dye migration on polyester. The inks are Eco-Passport certified and do not contain PVCs or any other toxic ingredients. The first system equipped with the company’s Kornit NeoPigment Technology is the Kornit Avalanche Poly Pro, a member of the company’s industrial platform, which became commercially available in April 2019.

In April 2021, the company supplemented its original DTG printing technology with the company’s new Kornit MAX technology, which enables never-seen-before print quality and durability standards, together with enhanced production speed.

With the company’s MAX technology, the company also introduced new consumables enabling another groundbreaking innovation – Kornit’s XDi technology. Kornit XDi brings a new dimension to digital printing by enabling to print multiple layers to create unlimited 3D-effects. XDi’s unique premium applications open new markets for the company’s customers and offer boundless creative freedom powered by a simple, single-step, digital and sustainable process. The company’s customers are able to do much more with their printing equipment and enter into higher margin premium markets.

In July 2022, the company introduced the Atlas MAX Poly, which extends its technological capabilities in high quality printing on polyester even further by leveraging the Kornit MAX technology and incorporating it as part of the company’s proprietary polyester printing process which is based on the Neo Olympia ink set. The Atlas MAX Poly harnesses an innovative low temperature curing ink set alongside a new process and consumables to deliver highest quality digital printing on polyester as well, as delivering improved productivity rates. These new capabilities expand the company’s opportunity within the sports and athleisure spaces. This new platform is also equipped with Neon applications and a proprietary consumable called ProGuard, which acts as a barrier between the fabric and print and promotes the inhibition of dye migration.

In addition to offering solutions that target DTG applications, the company markets an industrial digital printing solution, the Kornit Presto, which targets the on-demand DTF market. While the DTG market generally involves printing on finished garments, the DTF market is focused on printing on fabrics that are subsequently converted into finished garments, home or office decor, and other items. The Kornit Presto, like the company’s predecessor Kornit Allegro, utilizes the company’s proprietary wet-on-wet printing methodology and houses an integrated curing system. Following the Allegro, the Presto offers the sole single-step, eco-friendly, stand-alone industrial DTF digital textile printing solution available on the market. The company primarily markets the Kornit Presto to businesses seeking horizontal or vertical expansions into fabric decoration, such as innovative web-based businesses operating on-demand models that require a high degree of variety and limited order quantities, as well as to fabric converters, which source large quantities of fabric and convert untreated fabrics into finished materials to be sold to garment and home decor manufacturers, and to sustainable fashion producers seeking a competitive edge in today’s changing supply chains. With the Presto, the company is well positioned to take advantage of the growing trend towards customized fashion, home decor and on-demand fabric printing, where there is an increased focus on sustainable production. The company began selling the Presto commercially in the second quarter of 2019, four years after having introduced the company’s initial DTF digital textile printing solution, the Kornit Allegro in the second quarter of 2015.

In October 2021, the company introduced the Presto MAX. The Presto MAX is the first digital print system to offer white printing on colored fabrics, enhancing decoration capabilities for dark colored fabrics more broadly. In addition, the Presto MAX is the only single-step solution- and the most sustainable solution available- for direct-to-fabric printing, delivering quality, soft feel, with whites and brighter neon colors. As mentioned above, the MAX technology enables the company’s new Presto MAX to utilize the innovative XDi technology, enabling the company’s customers to cater to new market verticals and to offer completely differentiated, high-value applications.

Kornit Presto MAX is compatible with natural, synthetic, man-made and blended fabrics, and includes advanced algorithms infrastructure for smart automatic calibration, to deliver high-quality results with short cycle times and minimal manual interruptions or defects. The system was designed for compatibility with the KornitX global fulfillment ecosystem to enable anywhere, anytime production, supporting a true distributed on-demand sustainable production model with fulfillment closer to the end consumer, eliminating time and logistical waste, while empowering brands to ensure quality and consistency across all systems and production sites.

Kornit Presto MAX provides the cornerstone of a smart, efficient, sustainable EcoFactory that empowers producers to cover and integrate more parts of the process, from design to finished product, to decrease their carbon footprint, water consumption, and energy, and to utilize automation to increase productivity and generate less waste. This means eliminating excess time, labor, and shipping throughout the value chain, enabling proximity on-demand production to meet the accelerated demands of a web-driven global marketplace-revealing new sales channels and clever business models to grow the business long-term.

KornitX

Building on the company’s acquisition of Custom Gateway and the expanding installed base of Kornit systems, in May 2021, the company announced the establishment of KornitX. KornitX is a key building block in the company’s execution plan to become the operating system for on-demand sustainable fashion. KornitX provides an end-to-end solution, connecting demand generators and e-commerce channels to sustainable on-demand fulfillment across the globe, utilizing its digital software platform and a global fulfilment network of on-demand manufacturers and fulfillers.

Strategy

The company is connecting consumers and demand generators like fashion brands, marketplaces, designers, merchandisers and creators to the most advanced digital production floors around the world by becoming the operating system for on-demand, sustainable fashion (fashion includes apparel, home decor, and other textile-based forms of self-expression). The operating system has a few key elements:

The first key element focuses on the production floor. The company is digitizing the production floor by growing its tech leadership and solution offering. The company is strategically focused on investments in its research and development, product management, solutions and applications development areas to continue driving innovation and automation within the industry, thereby allowing the company’s customers and prospects to grow their businesses by enabling them to expand their product offering with additional applications, designs, and fabric types.

Another key element of the operating system is establishing KornitX as the virtual layer of the on-demand production workflow, connecting the front-end with the back end. KornitX is the engine and the brain behind the operating system, managing every aspect of the end-to-end process. The KornitX solution connects the virtual demand with the physical supply by capturing impressions generated in the front-end and using its smart routing engine - assigning them to the best suitable production location. This enables a true on-demand, sustainable manufacturing process that supports consumers’ immediate gratification. KornitX is the enabler of the massive opportunities for the end-to-end on-demand workflow, in both B2C and B2B environments across different verticals, including fashion, sports, music, entertainment, influencers, gaming and broader creator and merchandiser communities. The company is focused on four execution areas of this key element: scaling the global fulfillment network to offer a close-to-the-consumer endless-supply model for demand generators; investing in tech layers of the KornitX platform, such as automation, and data-driven decisioning; enriching its front-end offering, with content creation, content management, visualization, and smart connectivity APIs; and forming additional strategic alliances with mega-platforms and marketplaces.

The additional elements of the company’s growth strategy and catalysts that will drive the company’s business expansion: expanding in key markets; maximizing impressions; expanding its GTM; and extending its leadership position through acquisitions and strategic partnerships.

Products

Direct-to-Garment (DTG) Systems

In 2019, the company started consolidation of its core DTG products portfolio to rely on the company’s HD technology. The HD technology enabled the company’s customers to produce retail-quality prints with competitive cost per print. This represented a clear focus in the company’s product offering, supporting the company’s strategy to penetrate the market segment of brands and private labels. The combination of the company’s HD technology, together with the Eco-Rapid ink-set, introduced in January 2019, enabled the company’s customers to produce retail-quality prints with competitive cost per print, allowing them to replace screen printed jobs, including those targeted for the retail market. Leveling up the company’s product portfolio to the superior performance of the company’s HD technology allowed the company to execute its screen-replacement strategy across different market segments and a variety of customer types and sizes. The underlying strategy behind this system lineup was to accommodate a variety of customer types with the highest digital printing capabilities at a variety of productivity levels and price points, enabling them to produce the same retail-quality at the same CPP on all the company’s HD systems. The differentiation across the company’s line of HD systems was mainly based on system productivity and total cost of ownership, with a clear benefit to the company’s higher productivity systems.

In the beginning of 2019, the company launched a new industrial DTG platform - the Kornit Atlas. The Atlas represented the company’s next generation direct-to-garment printing platform, equipped with the company’s next generation HD technology and designed mainly for high-volume garment decoration businesses and mid-to-large size screen printers. With its retail-grade print quality, high productivity and attractive total cost of ownership, the Atlas allows the company’s customers to serve additional market needs and open new opportunities.

In January 2020, the company introduced the Storm HD6 Lite Refurbished, which effectively replaced the Kornit Storm II, enabling DTG printing for smaller print operations, such as commercial printers moving to the industrial market and analog printers broadening their production capabilities. It has a production capacity of up to 60,000 impressions annually and provides on-demand DTG printing that meets high-level, retail quality and sustainability standards.

In January 2020, the company also launched the Vulcan Plus, which is its highest productivity HD system, with the best total cost of ownership for large production facilities with high volumes of mass customization print jobs. The Vulcan Plus is based on the Vulcan platform, that was introduced in 2016, and was designed based on the company’s customers feedback and field experience with the platform.

Building on the new product introductions of 2019 and 2020, the company was able to create an extensive HD product portfolio, ranging all the company’s main product platforms and a multitude of product configurations - starting from the Storm, through the Avalanche, and all the way to the Atlas and the Vulcan. In alignment with the company’s products upgrade strategy, different upgrade paths are available to the HD systems, enabling the company’s customers to equip themselves with new and superior capabilities and improve cost of ownership on their existing systems, expanding their business opportunities and allowing the company to earn additional revenues from its existing installed base.

Specialty DTG: In 2019, the company established another line of products as a part of its DTG offering - specialty solutions. This new line of products introduces a diversification in the company’s offering, representing the company’s product strategy of solutions. The underlying strategy behind this new line of products is to identify specific market needs and application challenges representing major market opportunities and address them with unique and specific solutions. In 2019, the company introduced a new and innovative process for printing on dyed polyester, addressing the cross-industry challenge of dye-migration, when decorating dyed polyester. This new solution was introduced to the market during 2019 on a new system from the Avalanche platform - the Avalanche Poly Pro.

Based on the company’s NeoPoly technology, the Avalanche Poly Pro can print on dyed polyester, using the company’s new and innovative low temperature curing process, thus reducing the challenge of dye-migration that exists in all other polyester decoration techniques.

The Avalanche Poly Pro enables the production of on-demand customized polyester products, without minimum order quantity, providing all the advantages of digital printing on polyester. The system can print on a variety of polyester fabrics, including poly blends (e.g., poly-lycra and poly-cotton), a variety of fabric builds and textures, including woven and knitted fabrics, as well as on recycled polyester.

In 2021, the company launched a new industrial DTG platform - the Kornit Atlas MAX. The Atlas MAX represents its next generation direct-to-garment printing platform, equipped with the company’s next generation MAX technology. The MAX technology introduces new consumables that help produce superb print quality, durability and print speed while allowing optimal ease of use, minimal application tweaking, wider working window, and a significantly larger media variety. In addition, the Atlas MAX introduces the Kornit XDi technology that enables the printing of multiple layers to create unlimited innovative 3D effects and premium applications like mimicking embroidery, heat transfer and vinyl for example. With the capabilities of Atlas Max and the Kornit Xdi technology, the company’s customers are now able to do much more with their printing equipment and enter new premium markets.

In 2022, the company released an upgrade kit for its Atlas printer that enables existing customers to upgrade to the Atlas Max. With the new upgrade kit, Atlas users can benefit from the latest technological advancements in digital textile printing, including the exclusive XDi technology. XDi technology allows for printing of high-quality images with greater detail and color depth, making it ideal for embroidery-like printing. The Atlas Max also features advanced software, additional chemistry (Qfix and Intensifier). Overall, the upgrade kit provides Atlas users with superior quality, throughput, and flexibility, enabling them to enhance their production capabilities without having to purchase an entirely new printer.

In July 2022, the company introduced the Atlas MAX Poly, which extends its technological capabilities in high quality printing on polyester even further by leveraging the Kornit MAX technology and incorporating it as part of the company’s proprietary polyester printing process which is based on the Neo Olympia ink set. The Atlas MAX Poly harnesses the innovative low temperature curing ink set alongside a new process and consumables to deliver high quality digital printing on polyester as well as delivering improved productivity rates. These new capabilities expand the company’s opportunity within the sports and athleisure spaces. This new platform is also equipped with Neon applications and a proprietary consumable named ProGuard, which acts as a barrier between fabric and print and promotes the inhibition of dye migration.

Direct-to-Fabric (DTF) Systems

Presto: The Presto combines a printing system and a drying and curing module so that a full end-to-end manufacturing process is enabled, allows one-step DTF printing. Unlike the Presto, most DTF printers require additional steps. The Presto takes advantage of the company’s patented wet-on-wet methodology to allow for in-line printing on various fabrics, without requiring a separate pre-treatment process, thereby avoiding the need to use textiles that are specifically pre-treated for digital printing. The Presto is designed to achieve high throughput and does not require water or steam for any part of the printing process, making the system environmentally friendly. By using the company’s proprietary pigment-based ink, Presto can print on a variety of natural and synthetic fabrics providing customers with a significant level of flexibility. Most other dye-based systems are specifically designed to print on specific fabric types and cannot be used with other types of fabric as the processes and consumables used vary considerably from one to the other.

Presto MAX: The Presto MAX is the first digital print system to offer white printing on colored fabrics, enhancing decoration capabilities for dark-colored fabrics more broadly. The Presto Max is also the only single-step solution-and the most sustainable solution available for direct-to-fabric printing, delivering quality, soft- feel, with whiter whites and brighter neon colors. The system was designed to incorporate future iterations and evolutions of Xdi technology-3D decorative applications to produce threadless embroidery, high-density, vinyl, screen transfer, and other innovative effects.

Kornit Presto MAX is compatible with natural fabrics, synthetics, and blends, and includes advanced algorithms infrastructure for smart automatic calibration, to deliver high-quality results with short cycle times and minimal manual interruptions or defects. The system was devised for compatibility with the KornitX global fulfillment ecosystem to enable anywhere, anytime production, supporting a true distributed production model that fulfills nearer the end-consumer, eliminating time and logistical waste from the experience while empowering brands to ensure quality and consistency across all systems and production sites.

Ink and Other Consumables

Kornit NeoPigment inks are water based, non-toxic, phthalate free and free of heavy metals and follow the highest international sustainability standards, such as Eco-Passport, GOTS and per specific customer requirements. The company’s ink and consumables consist of the company’s patented NeoPigment ink, proprietary binding agent, priming fluid, wiping fluid and flushing fluid. The company categorizes its line of inks into two category groups: Direct-to-Garment and Direct-to-Fabric.

The company has a series of ink sets for its DTG systems, including NeoPigment, NeoPigment Rapid, NeoPigment Eco-Rapid and NeoPigment Olympia. The first two ink sets are designed for Kornit legacy products, while the Eco-Rapid is the most advanced ink set designed for retail quality. These three ink sets are available in seven colors (W+CMYKRG) and a complementary binding agent. NeoPigment Olympia is designed for the company’s polyester printing system, the Avalanche Poly Pro and the Atlas MAX Poly; and is available in five colors (W+CMYK), with an enhancer for the Avalanche Poly Pro and 7 colors (W+CMYKNyNp) on the Atlas MAX Poly. The printing process is unique and innovative, specially designed for polyester printing to overcome challenges by implementing four crucial steps. The first step, a fixation agent specially designed and formulated for polyester fabrics. The second step, a white layer with special properties resulting in a high-quality white color, high opacity and elastic properties for high performance. The third step, CMYK printing, allows for an increased color gamut and spot color matching and finishing with a poly-enhancer, designed for high quality finishing with improved durability and refined hand-feel.

For the company’s Direct-to Fabric systems, the company has two ink sets: NeoPigment Intenso and NeoPigment Robusto. The inks are designed for the company’s roll-to-roll systems and consist of six colors (CMYKRG), with the Intenso holding additional fluorescent colors and a light-K color. The company’s Direct-to-Fabric customer bases only uses NeoPigment Robusto as the company no longer sell the NeoPigment Intenso. With the company’s Direct-to-Fabrics ink, the company has developed and patented a fixation on the fly (FOF) process. This unique consumable allows to print in a single step solution, avoiding the need of fabric pre-treatment and enabling minimal environmental impact. In March 2020, Kornit announced the release of a new NeoPigment Robusto Softener. This solution eliminates a key barrier with pigment-based printing, which enables a softer hand-feel, and is mostly required by brands. In October 2021, the company introduced the Presto Max with NeoPigment Duosoft that is replacing the FOF and the NeoPigment Robusto Softener. The Duosoft has two actions in one- enabling softer hand feel and performing fixation on the fly (FOF).

All the company’s inks are formulated for optimal use exclusively in the company’s systems. The company’s patented wet-on-wet printing methodology involves spraying a wetting solution on the fabric before applying the company’s proprietary pigment-based inks. This unique capability enables the company’s systems to reach high throughput levels while still producing high quality images and designs. The wetting solution prevents the ink from bleeding into the textile and fixes the ink drops, which enables digital printing with high color-intensity and image sharpness. This printing methodology combines the use of pigments rather than dyes in conjunction with the company’s proprietary binding agent and allows the company to print on a wide range of fabrics without the need for a separate pre-treatment process or system reconfiguration, resulting in minimal setup times for each run and high throughput levels. Given the proprietary nature of the company’s printing methodology, its ink and consumables attachment rate is close to 100%. The company also continuously invests in the development of new ink formulas for the company’s systems in order to expand the range of applications the company can print, further increase the quality of the company’s high-resolution images and designs and improve color fastness.

The company has developed two patented methods for printing on dark or colored fabrics. The first method involves printing a layer of specially formulated white ink as a base upon which to print colored images and designs. Printing on top of this foundation enhances color intensity and creates contrast against dark or colored fabric. In addition, the company has developed a patented discharge ink for printing on dark or colored fabrics. The discharge ink bleaches the fabric dye and applies colored ink in the locations where the discharge ink removed the fabric dye. This method, which is primarily used by brand owners and contract printers, allows the printing of high-resolution images and designs without compromising the texture or feel of the garment.

Software Solutions

The company’s DTG systems arrive with its QuickP Production software embedded. The software manages the system operation and prepares image files for print. QuickP Production is a simple to use solution that allows users to control key operating parameters, such as print resolution, perform maintenance and calibration procedures and import image files and prepare them for print.

Some of the company’s customers also purchase its QuickP Designer software. QuickP Designer is a software package that combines the company’s own internally developed Raster Image Processing, or RIP, software with other print job management capabilities and includes an advanced ink consumption estimation tool. A single QuickP Designer license can be used to support multiple Kornit systems.

In 2018, the company introduced to the market a new professional RIP software offering in collaboration with ColorGate. This offering allows customers to enhance the company’s systems’ performance in the areas of print quality and color management, allowing them to achieve superior results and manage high-end color demanding applications. The combination of this new product offering, together with the company’s HD technology, also serves its screen-printing replacement strategy, allowing the company’s customers to achieve color accuracy and matching to screen prints.

In June 2019, the company introduced Kornit Konnect, its cloud-based, software analytics connectivity platform that enables businesses to maximize productivity of their digital printing solutions. In its first phase, Kornit Konnect enables businesses to monitor production, analyze insights and manage their fleet, in order to eliminate blind spots. It includes a fleet management dashboard, data driven benchmarks, actual production costs, and cost structures per job, making it easy for businesses to learn more, react faster and perform better.

In August 2020, the company acquired Custom Gateway, a leading global provider of cloud-based software workflow solutions for both B2B and B2C business models. Custom Gateway’s solution enables Kornit to offer customers an end-to-end solution for on-demand production.

KornitX’s technology, which is based on the company’s acquisition of Custom Gateway, connects front end, web-based demand generators, such as on-line stores and on-line brands, as well as licensors with a digitized fulfillment process, enabling a digitized on-demand manufacturing process. With the KornitX production floor solution, orders are routed and managed to facilitate efficient on-demand production on a mass scale. The technology enables customers to realize the full efficiency, scalability and profitability benefits of digitization by seamlessly connecting the front end whether online or storefront, to the most suitable back-end element.

KornitX’s solution also enables the company to facilitate smart connectivity, for operational and business transactions between multiple stakeholders in the on-demand manufacturing ecosystem, such as brands, licensors, retailers, blank providers and digital printers.

Services

The company’s services offering consist of maintenance and support, consulting and professional services. The company continues to expand its services capabilities and intend to increase the number of customers that rely on the company’s service for their systems. As of December 31, 2022, the company had service contracts in place with approximately 44% of the company’s industrial and mass production installed base. The company’s services ultimately help its customers increase system utilization and the number of impressions printed.

Maintenance and Support

In 2019, the company began to provide a warranty, typically for a six-month period, covering parts, labor, and remote support. At the time of sale, the company’s customers usually purchase support for an additional year of coverage. After this period, customers can renew their support contract by purchasing a support package that includes remote support, on-site support, software updates, and annual on-site maintenance. Alternatively, customers can choose support on a time-and-materials basis. In the United States, the company provides direct service to all of its customers. In the EMEA region, the company provides direct service to more than half of its installed base, while the other half receives support through its independent distributors. In the Asia Pacific region, service is provided by the company’s independent distributors, while the company provides a second line of support if needed.

Professional Services

Even though the company’s systems are designed for customers to operate them without the assistance of the company’s company or the company’s independent distributors, the company provides a Customer Empowerment Program to ensure an efficient knowledge-transfer process and to help the company’s customers become proficient and independent at operating their systems in a short period of time.

The Customer Empowerment Program is composed of four touchpoints:

Digital Touchpoint: Available prior to system installation at the customer site, with access to a variety of online tutorials and documentation.

Basic Technical and Application Training: A five-day course in the company’s training center that includes an overview of the system and allows the customer to practice performing typical maintenance, application, and operating procedures.

Installation Training: Consists of a three-day on-site training during the installation of the system to ensure the machine is up-and-running as expected.

Ramp-up Training: Includes three-to-five days of professional services, which consist of customized consulting aimed at optimizing the use of the company’s systems. These professional services are provided at the company’s regional offices or at customer sites.

The company has furthermore established three training centers at the company’s regional offices in the U.S., Germany, and Hong Kong, respectively. The company continuously seeks to expand the number and content of the company’s training programs.

Customers

The company’s diverse global customer base consisted of approximately 1,300 active customers as of December 31, 2022. The company’s growing installed base serves a variety of business models, in particular, those that have developed to respond to quickly changing consumer trends and to the growing online retail market.

The ecosystem of on-demand businesses that the company serves fulfill for e-commerce and for high street and other brands and includes:

Self-Fulfillment: Companies manufacturing and selling their own designs advertised on their own websites and other marketing means.

Hybrid Printers: Companies that manufacture both in-house and outsource to third party fulfillment providers, who are often also the company’s customers.

Third Party Fulfillment Centers: Companies serving as third party fulfillment for other businesses. Third party fulfillment providers include a number of the company’s customers.

With the acquisition of Custom Gateway, the company expanded its customer base, which is a part of the company’s KornitX customer base, to include digitally native and traditional creators, licensors, retailers, e-tailers, and brands selling textile and hard good products and fulfilling them using on-demand business models, by leveraging the Custom Gateway network of fulfillers and suppliers.

The KornitX customer base includes:

Demand Generators: Driven by online presence but may also include brick-and-mortar presence, notably creators, licensors, retailers, e-tailers, merchandisers, and brands benefiting from KornitX ability to diversify their online and physical offering, enable virtual product display, personalized and customized offerings with rapid fulfilment capabilities.

Fulfillers and Suppliers. Utilizing KornitX platform to publish their own virtual product offerings, as well as fulfill and manufacture on-demand for demand generators. These customers include both textile and hard-good fulfillers.

Government Regulation

The company is subject to various local, state, federal and international laws, regulations, and agencies that affect businesses generally, and the company’s business in particular. These include Israeli environmental, health and safety regulations, including conditions set by the Israeli Ministry of Environmental Protection for the operation of the company’s manufacturing and development facilities, which use chemicals and produce waste materials; the U.S. Foreign Corrupt Practices Act; Anti-Money Laundering Act of 2020 59 laws pertaining to the hiring, treatment, safety and discharge of employees; import/ export control regulations related to chemicals and hazardous substances; Israeli tax regulations; and CE regulations for the European market.

Additionally, the company is required to comply with certain laws, regulations and directives, such as the United States Toxic Substances Control Act, or TSCA; and the Registration, Evaluation, Authorization and Restriction of Chemical Substances, or REACH.

The company is subject to the provisions of the Israeli Companies Law, 5759-1999.

History

Kornit Digital Ltd. was founded in 2002. The company was incorporated under the laws of the state of Israel in 2002.