Kornit Digital Ltd. (KRNT) Earnings Call Transcript & Summary

Hi, everyone. I'm Tavy Rosner from Barclays, and I'm pleased to host today, Kornit Digital, represented by CEO, Ronen Samuel; CFO, Alon Rozner; and Head of Business Development, Amir Shaked. Thanks for being here, guys today. Much appreciate it.

Thank you very much. It's a pleasure to be here.

Great. Before I start, I want to remind investors that they can feel free to send me questions for management by e-mail or through Bloomberg at ID Tavy Rosner. And yes, I'll make sure to pass on the question. So Ronen before we start for investors, who are not familiar with the story. Do you mind taking, I would say, 3 minutes to describe the big picture, what is it that you guys do? And perhaps maybe go over the addressable market that you guys operate in?

Yes. So thank you, Tavy, and thanks, everyone, for joining, and good afternoon. So with me today is Tavy Rosner mentioned Alon, our CFO; and Amir EVP of Corporate Development. And it's an exciting time for Kornit because actually, yesterday, we had a very big and important investor event where we shared our strategy for the next 5 years. For those of you who missed it, I recommend you to go to the Kornit website to the Investors section, it's all recorded and look at it because there's a lot of details. There were many questions and a lot of exciting news. I'm not sure we'll be able to cover everything today. But for your opening question, Kornit is founded in 2002, we are working in a huge market in a textile market. And what we are developing, we are a technology company, developing solutions which are mainly systems, printing systems, ink software and services to provide -- to sell it. We are selling it to fulfillers, to brands, to marketplaces, but printing on garment. So the best example I can show you here, I'm wearing a T-shirt, you ask yourself how come a CEO wear a T-shirt. So I'm very proud way T-shirts that is being printed with our technology, and it's the latest technology, the MAX technology, and actually, I'm going to touch on it later on. We have about 1,000 customers all around the world using our technology within the very big companies like Amazon, like Fanatics and many other -- Adidas as a brand and many other big companies, many of them using hundreds of our systems. So you can imagine that a system, average selling price is about $0.5 million and there is a ink recurring revenue coming from selling the ink and the consumable at least twice in the next 5 years of selling a system. It depends on the system, but there's other systems that even 5x more recurring revenue coming from the ink and the services. So this is in a nutshell. We just finished also Q1. We published our results the company is growing very, very fast on CAGR for the last few years, we are growing around 24%, we are profitable on the bottom line, we are around 10%. We have a strong gross margin of around 50%, close to 50% gross margin and our recurring revenue today is about 50% of our revenue is recurring. As I mentioned, yesterday, we shared our business plan for the next 5 years. Until yesterday, we was mentioning we had a target to become a $500 million run rate business by end of 2023. Yesterday, we shared that we are going to bring it earlier than expected, a $500 million run rate, and we put the target to become a $1 billion company revenue in 2026.

Thanks for the intro. I think you touched on many of my upcoming questions, but that's great. So let's dig in. I mean, the first one is about the trends and COVID and those 2 themes are related. If we take a step back, remember that 2020 was really unusual with very strong starts, then some orders being pushed and then you had a significant V-shaped recovery driven by e-commerce and on-demand production and the other megatrends. And I guess, can you talk a little bit about the megatrends that you are seeing? And especially the fact that COVID has been such an accelerator for many of them.

Yes. So when you're looking at different industry, most of the industry around us already went from analog to digital. So we saw a transformation in the -- in every industry, in music industry, in communication industry, in car industry. But in the textile industry, the industry didn't go through any transformation yet. The industry is very analog is actually the second most polluted industry in the world. There is something like 93 million tons of waste being generated on a yearly basis from this industry. 30% of the items that are being produced never being sold, and there is a huge amount of water being wasted in this process. Not only is polluting rivers all around the world, but there's a lot of water being consume in this process. For example, to prepare this T-shirt, you're actually going to consume about 20,000 liter of water from growing the cotton to the entire process of dying the material and then printing it. So it's a very bad industry in terms of the pollution to the environment. And what happened in the last -- the way that this industry is working is that brands usually, the Nike of the world, the HUGO BOSS of the world, they are planning what they would like to sell to the consumer in a period of 18 months. So usually, they will place big orders being produced in China or in Bangladesh of tons of materials, shipping in 12,000 miles into warehouse in the U.S. and then pushing it to the consumer and publishing it, of course, what they would like to sell. And as I mentioned, about 30% of what they have in the stock in the world would never be sold and create a lot of pollution. So in today's world, it just doesn't make any sense because what we see today is that the consumer behaviors totally have changed from the self-expression that people would like to wear things that are unique. Social media is the main vehicle to communicate. When you go on social media, you see something you want to buy, and you want to get it immediately. Normal people don't want to wait 1 week or 2 weeks to get the item. They would like to get it really immediately, so immediate gratification is very, very important, together with self-expression. And we saw very clearly what happened in the beginning of the COVID in the use of the e-commerce. So actually, the e-commerce in the first 3 months of the e-commerce grew in the same pace of the last 10 years. Today, something like 1/3 of all of purchases are being done through the e-commerce and the focus in 2024, it will be double. So e-commerce is the main vehicle. Now if the e-commerce is people buying in the e-commerce and it's virtual, you would like to allow people to order any product that they would like to have. The problem here, if you are stuck with this supply chain of 18 months or even making closer to 1 year, it's just impossible to connect between the e-commerce to the supply chain. So you need to build a different supply chain, which is much more agile and what we call on-demand manufacturing is actually manufacturing into order versus manufacturing into a forecast or should I call it hope cast that you are trying to sell. And this is what Kornit was doing for many, many years, not only with systems and inks, but also now we will talk about Kornit inks that actually enable the brands and marketplaces to connect virtually and connect to a network of fulfiller using our technology. So the idea is that if you are a brand, you have your e-commerce, you can have endless amount of products you can visualize on the e-commerce, and you actually don't carry anything of that in your inventory. Once the consumer plays an order and if the order is being placed in China, only then you start to produce it. And you produce it in China next to the consumer. So you can meet the immediate gratification without shipping the product from the U.S. or vice versa. And this is what we call Kornit inks that really enabling the on-demand manufacturing, leveraging our digital technology, not only the physical digital technology that can print on garment and garment is not only T-shirt but also any fashion and also for home decor, but also the network, the workflow that connecting this network.

And you touched on pollution and waste. So that was one of my questions. So we understand the difference between the analog and the benefit of using Kornit from the environment. What I was wondering is, if that's a concern among retailers on one hand and consumer on the other hand. And if that's the case, you have do you have a way to brand, Kornit, we think something like this shirt was produced using Kornit technology, which doesn't generate any water waste or anything because it's definitely an asset. The question is, how do you monetize the fact that you really -- your solution are really beneficial for the environment?

Yes. So absolutely, great question. So first of all, everyone is talking about becoming green. And which are more sustainable. But usually, people are being -- starting to react to it when it's cost them money, right? So the main issue for the brands and for the retail today is how do they manage their inventory. They're losing money because they're getting such a use inventory that they need to slow or to wait. And they cannot manage the business because the business is moving online and they need to have a variety of products. So they have no choice. But eliminating the waste moving on-demand manufacturing, to actually eliminating huge amount of pollution that this industry is creating. Another factor is actually the printing process. So the analog process not only creates a huge pollution because to take, for example, to print on fabric, you actually, after there is a pretreatment process, there is the printing process, then there is a washing, a huge washing cycle and there's a steaming. And in this process, not only takes time, but it creates a lot of pollution, and you cannot do it for 10 meters. You need to print really long runs on fabrics, and then you need to produce a lot of dresses. With digital, with our solution, actually, you can print on any fabric without any pretreatment without any posttreatment, our ink is pigment is fully green and there is no pollution. And you can print oneoff. And the best example is what happened last month here in Israel where we did the Kornit fashion week together with many designers. They were standing back next to the machine and were amazed because for the first time that they could think about a product, design a product, see it printing live, just cut and sew it and immediately have a collection within 2 weeks, they had a full collection and within 1 day, they had the dress ready. It's impossible to do it in the old way. The old way, they used to wait at least 1 year to get a fabric that was designed by them, but they had to order hundreds of meters in order that it will be economical makes sense. And then to create a collection only with this same fabric. Here, they can change any different fabric, every dress can be different. So the motivation of a change in terms of the environmental is really coming from saving the cost, being able to express and change your -- the design as frequent as you want. And of course, there is a lot of new legislation. Government now are coming with new legislation, making sure that you are not using reactive ink and acid ink L.A. it's impossible. You won't be able to buy analog machine. You only will be able to buy digital pigment ink in L.A., for example. Yes. And in Germany, they are putting kind of the green circle on fabrics that was produce in a sustainable way. There are today brands that are expert in sustainability and promoting themselves as a sustainable product is a fresh and sustainable product. So we see it as a trend. We see a major trend within the consumer. The young generation are really aware of all this trend aware that the fashion industry, the textile industry is really harmful, and they are looking for textile that is being produced in a green environment, leveraging digital technology and specifically Kornit technology.

That's great to hear. So let's just jump to the outlook. When I was preparing my questions, I was going to ask you about your $500 million revenue run rate. And I think that analysts have been asking you for a few years now if it's not time to adjust it. But you beat me to it [indiscernible] that are listed before '23 and introduced the $1 billion guidance, $1 billion revenue run rate by '26. So can we go over the components of that top line growth and the pillars behind the growth strategy? You mentioned Kornit X. Can you just run through the pillars and the revenue contribution from a different element?

Yes, I will touch on it, and then I will ask also Alon to provide a bit more financial overview in more detail. So our business in general, today is being based on system, the system that we are selling, which is -- could be the atlas or the presto, which can print on garment on rolls of fabrics is about 40% of our business -- 40% to 50% of our business. Another 10% is the services, another 40% is the ink and the consumable. Okay. So this is the kind of the split of the revenue. Kornit X is the workflow, which we introduced about 8 months back. Once we acquired Custom Gateway and also develop new solutions like the Kornit, and we are coming with much more solution. And yesterday, we shared that Kornit X is going to be a $100 million by 2026, is a workflow we are going to charge based on transaction. We see great adoption. And really, the market, as I mentioned, needs it. So the split on the revenue and is a very, very strong gross margin contribution. So we expect it to really drive the gross margin even higher than what we have today, which we are today, around 50%. We said that we are going to be at 2026 above 50 -- between 50% to 54%. This is the estimation. We also mentioned that on the bottom line, we are going to be in 2026 on the operating profit, more than 20% profitability. So the drivers are coming, continue selling the system and the system growth is very, very strong right now, which is great because it's fueling later on the ink consumption. We see a very, very strong also growth on the ink. We expect it to continue to be a strong driver moving forward. Services, which used to be a lost business for us in the past become profitable and growing very, very fast as well. And now the Kornit X is on top of that. We'll ask Alon to share a bit more information on what we have shared yesterday and the thing that I missed.

Okay. Hi, everyone. So a few reference points, taking us from today or actually from the end of last year, 2020, where we have our official results all the way to 2026. So as we discussed earlier, 2020 started very slow. We had the COVID shock like the rest of the world, and very soon after, we had a very nice recovery in H2 of 2020. With a significant increase in revenues, and we ended up H2 with more than 35% compared to the previous year, with about $130 million only for H2 in 2020. Then we see this momentum continues in 2021. We had strong results, as Ronen mentioned, for Q1, and we gave strong guidance for the second quarter and also some reference points of -- we don't give guidance for the full year, but how the year going to look like with having second half of the year stronger than the first half. And all of these take us to a CAGR of 30% from now from 2020 all the way to 2026 with 3 main financial permits, as Ronen mentioned, $1 million of revenues, 50% to 54% of gross margin and more than 20% of operating income. We see all of the revenue streams. I mean, systems, consumables, software and service are going to grow significantly in the next 5 years. What we do expect is that to see the consumables and the new business, the Kornit X growing faster than the systems. Again, we are growing our installed base, and then we'll continue to serve a much larger installed base, which will contribute a lot to our revenues and with higher profitability than the average. And this help us to increase our gross margin over time.

As a follow-up, in the past when investor would ask you about the $500 million run rate, you put it in the context of the number of prints in the market. When you think of the $1 billion guidance by '26, what does that represent in terms of market share, in terms of the evolution of print and so on, that would be helpful.

So I'll start and maybe Alon also will add on top of that. So think about it on the DTG, yes, the DTG printing on T-shirt. There's about 20 billion decorated T-shirts printing today, 20 billion. Actually, it's 21 billion impression, but it's about 20 billion decorated item, which mainly T-shirt. Out of those 20 billion today in our current business that is mainly based on DTG, our customers printing 200 million. Which means less than 1%. When we calculated the $1 billion in '20 -- when we sit, we're looking at the market 2026. The focus is this market, the DTG will be a 31 billion impression or close to 30 billion items, okay, decorated items. Out of those, we need to capture 3%. The 3% will bring us to $400 million on supplies, which is 40% of the total pie of revenue of $1 billion. Okay? This is how we calculated it. So we are not talking about capturing 10%, 20%, only 3%. This is only the DTG. Actually, much larger market is the DTF. Yes, the DTF is a huge market. In terms of impression, we are talking about 4 trillion in pressure. So today, we are not even not 0.0001 of percent in terms of the market. And if you can capture only 1% of this, we are talking about a company, Kornit Company to become much more than $1 billion in revenue the $1 billion revenue that we put as a target for 2026, it's just the beginning of the revolution of the textile industry. And as we see a blue ocean, this company can become much, much larger than that. Anything you want to add?

Yes. Just to continue what Ronen mentioned about the $1 billion and connected to our financial model, so in our long-term financial model, we assume about 40% of the revenues to come from the consumables, which is equal to $400 million. Now on average, the revenue per impression is about $0.40 to $0.50 for us. That means that if we translate the $400 million of revenues to impressions, it takes us to about 1 billion impressions. And this is actually the 1 billion impression that Ronen is talking about. And this 1 billion is out of the 31 billion of the total term of DTG. And again, we have the DTF products, which are give us huge, huge, huge opportunities. So this is one of the main building blocks in our model.

And Tavy, probably many people asking why we are so optimistic and why we are so successful. So we discussed a lot about the market trends and the market trends are very clear. The market moving to on-demand manufacturer. There is no other way. The market is moving to digital, onshore production, initial production versus offshore production in China and hope cast of 12 months or 18 months. This is for sure, but it's also about the technology. Kornit is a leader today, both in the DTG and the DTF. The reason we are market leader. We have very strong patterns around our technology. We are the only one that develop the wet-on-wet technology using pigmenting can print on any fabric without pretreatment without posttreatment, fully sustainable in the highest print quality. There's nothing you can get in such high print quality on top of that, the durability, you can take this T-shirt, you can wash it 20 times, 60 degrees looks like new. So having technologies, such a strong technology, having such a strong installed base of customers like Adidas, like Amazon, so many big customers that choose and they look at every other technology possible there. Give us the advantage of leading this market and being bold on putting those statements. Now yesterday, it was nice to hear one of our analysts that thought that maybe we are conservative about our goal with -- he knows our value very well. He knows that what is the technology and what are the market trends and things that we can even be bring even more than that earlier than what we were focusing.

No, it's actually -- that was my next -- the next comment is -- I realize that both of $500 million and the $1 billion is really relying on the DTG and the DTF [indiscernible]. And I'm wondering why is that so like? Is it a market that's harder to penetrate? Or what are the different dynamics between DTF and DTG? And how do you get to 1% market share in DTF?

So I would say Kornit for the from the founding in 2002 and 2003, we came with the first solution to the market. We're focusing on the DTG. We can say today that from a product and market perspective, we closed the CASM on the DTG. And we actually enter into the tornado now. We feel it, everyone there is a huge demand to our DTG technology. We bought it to the level of quality that much better than any conventional technology, we are really replacing and we are enabling new markets. So in the enablement is very, very strong because today, people are going online and buying products that were never been exist before. And this is enablement. You couldn't do on demand one-off. You couldn't print 10-off. It always was for long run, same product on the shelf. So the DTG market is already in the tornado and is already in the enablement process that only digital can serve this market. In the DTF, where it's not the same. Our technology in terms of life cycle is really now causing the CASM. Because we met all the demand that this market needs in terms of quality, in terms of productivity, in terms of durability, hand feel, which is very important. But the market is still not in the enablement stage. We can see now many customers are buying from us, they understand that also in the DTF, in the home decor core market, you can go online. So going to IKEA instead of working in IKEA for 3 hours and being hungry and eating a hotdog on the way, you can actually go online and see 10,000 different design on the same sofa and choose your own design. It's just coming right now. And to do that, of course, you need also a printing engine that is digital that can do that. So the market as a whole is still didn't cause the CASM is on the way to cause the CASM. And we see it's coming. We see it coming very fast. Actually, the fastest growth engine for Kornit today is DTF but we are starting from a much smaller installed base. Therefore, although it's growing faster, the DTG, that's growing as well, very fast, still in 2026, would be the majority of our business.

Okay. That's very clear. And I wanted to touch on a point, which is your customer base, you mentioned having the 1,000 customer globally. When you look at your top 10 customers, it's over 50% of revenues. And I guess, investors often ask us, what's the risk and so on. And I think our answer is that a lot of these are, I mean, there's obviously Amazon that you commented from time to time. But most of the others are fulfillers. And by definition, fulfillers themselves have thousands of clients and so on. I guess, can you comment on the role of fulfillers and on qualitatively how your top 10 customers have evolved over time, have they become bigger and so on. Any color would be helpful.

Yes. So let's think about who are we selling our solution to who are our customers. So on one hand, you have the marketplaces. Customers like Amazon, that actually, what they did Amazon, they took the business of books. You all know remember Amazon the beginning of Amazon was from selling books, digital books, they didn't have it on the shelf. You order book, they printed it live and send it to your home. They saw that another huge market, much bigger market. It's the textile market. Let's go to the textile, build Amazon Fashion, and matched by Amazon and they created a business that actually you can order any type of T-shirt, any design of T-shirt. And you order it online. It does not exist in just virtually. Once you order it, they print it and ship it to you within 24 hours or if you buy now even less than that. This type of customer, Amazon started to grow very fast. By building additional sites closer to the consumer to be able to deliver to them as fast as possible. Moving from North America also to EMEA and to Asia and continue to expand and expand. We are very proud of the relationship with Amazon and the growth but we see the same phenomenon with other customers. I'll give you an example of another customer which is called Printful, another -- 1 of our biggest customers. 5 years ago, this company was a startup they bought the smallest machine of Kornit because they didn't have a cash. 3 months back, we announced about 50 new system, Atlas system, that they bought it on top of many new on top of many other machines that they have already. They have more than 100 systems on their facility and actually few facility and the spread, not only in they started in Latvia, they spread into the U.S. Now that are in Canada, in Mexico, in Barcelona and also in Asia. This is another example, they created a marketplace, the marketplace that they created they actually enables small businesses, medium-sized businesses, the open shop, if its own Printful or if it's on Shopify or eBay, wherever you want or even on Amazon, and they fulfill it for them and shipping it to the consumer. So we have many of those customers, like Spreadshirt, like BTG to go, like TSC, like -- and many, many others that are doing their marketplaces. And we are aiming to go after other marketplaces. You think about eBay, you think about Alibaba, all those are potential customers for Kornit. Some of them will buy directly machine from us, some of them will work with our customers to fulfill for them, other cuts. This is the 1 type of customer. Another type of customers that we are working are the brands and private labels. Brands is, for example, the did as of the world. That didn't understand that they need to go DTC, direct-to-consumer, and they would like to react fast to new trends. And also, they would like to target young legs and the young legs all the time changing T-shirt and changing names on the back of the T-shirt, and they need something to print very fast. And of course, it just started to buying our technology and printing it directly. So young leg can order whatever color they want, whatever name they want on the back, and they can get the product the next day. So this is an example of one brand, but we are focusing on working with many other brands, big brands, midsized brands and small-sized brands. Some of them will buy directly machine from us and producing vertically. Some of them will just route the jobs to other fulfiller that will print for them using the -- using Kornit technology and shipping it to customers, to the consumer. The other parts or type of customers are just traditional printers, those that used to run cover cells, screen cover cells of printing that used to have long runs, many of them working in the merchandise business, with a company like Disney and other merchandise. What happened today is they are getting jobs that are much shorter right, and they need to react to all the changes in the market. And therefore, they are adding capacity of digital machine and digital starting to replace their old technology. In general, those are the 3 types of customers. Now you're asking about concentration about this 50% plus but we have from our top 10 customers, and this is true. From one hand, we are very proud to have customers like Adidas, like Amazon, like Printful, continue to grow with very aggressive plans. We are working very, very closely with them. We have 3 years plans ahead, and we know what the capacity that they will need. From another hand, we are putting a lot of effort to develop new customers. So today, majority of our machines that we are selling in terms of deals out to new customers, okay? Some of them will stay small with 1 or 2 machine. But from those new customers, some of them, we become very big, and we saw it another example last year with Stakes, the started very small with few machines become a huge customer in 1 year immediately after the COVID Day understood that something there was a big shift in the market and they enter with a big investment, and they are very, very successful. So you will start seeing new comers becoming much bigger, much more influenced, both from the brands, from marketplaces, new marketplaces and also traditional fulfillers.

Right. And then touching on capital allocation. I mean, you have a net cash position on your book and in the past, you mentioned M&A looking into technology companies and you actually made acquisition in the field of software. I guess when you look at your portfolio today, do you still feel that you're missing key components that could be solved through M&A.

Sure. We always strive for more. We have amazing software solution-based on the custom data. We're getting great feedback but we are looking to expand it. We are looking to add more capabilities, but I will let Amir to share with you a bit more on the M&A activities that we are going through. It's a major a focus area for us and Amir is managing it. So Amir?

Yes. So as yes, as Ronen mentioned, Kornit, answer your question, Tavy, the Custom Gateway platform is a very robust platform. That's why we focused on them when we did the acquisition last year. So right now, we have the platform that covers end-to-end. We are looking, and we will be doing follow-on technology acquisitions into the Kornit X platform in some areas, we want to deepen the capabilities. In some segments of the market, there are specific requirements that are specialized requirements that we're looking we're looking into. So that's definitely an area of focus. Another area of focus, which we've been discussing in as Ronen presented yesterday, the production layer, the digitizing production layer as part of the operating systems. Obviously, there's ancillary equipment, whether it's hardware and software that goes alongside the production process in that area, you should expect to see some technology acquisitions as well.

Okay. Understood.

Yes. To add to this, Tavy. I mean, we are investing a lot in growth. So yes, I mean, we have a great focus now to look for new technologies by M&A, but we are also investing a lot organically. In increasing our internal research and development capabilities. We are currently in the last stages of building new ink plant, new ink factory that will take us many, many years, really state-of-the-art of technology and production. So we are investing a lot in growth.

And I guess my last one is really more about the competitive landscape. When guys come with differentiated technology, and especially explained to the market the value proposition, like you've done the hard work. It's always tempting for other guys to come and piggyback on their success. And do you feel that anyone is entering your market? Do you feel that there is nascent signs of competition or nothing in your item?

Great questions. There is a book of saying that you have to be paranoid. So I don't think that we need to put paranoid, but I think we need to look all the time around us if to see what competition is doing. And of course, we are looking very carefully on that. The nice thing is that the market is such a huge market and mostly is being done today analog. So it's not about another technology or digital competition. I'm not worried about that. I'm worried about how do we scale our business faster all the time. How do we scale to capture more from the analog to the digital. Now specifically on the digital side, first of all, if we are talking about the DTG, and we're talking about the industrial space, the space that we are focusing on. We don't see today any competitive, that we can say that it's any threat on us. And this is to say, is mainly due to the moat that we managed to build around our technology. We really have a unique technologies that no one has it. Which provide, as I explained before, a huge differentiator, and we're all the time developing it. So yesterday, we announced about the new technology of the MAX technology that not only take the print quality to the next level. That you couldn't see it before. But also, you can actually replace even embroidery broader. So we print in 3D on the image. You can replace heat transfer, not only for polyester, but also for cotton. And raise printing, all kinds of applications that it was impossible to do it before on digital. Now you can do it in digital in much cheaper than the analog and much, much faster. Sometimes a 20x faster than the regular process of the analog and much more automated. So we also release -- we announced the releasing of an automation systems. As of today, you're actually manually loading T-shirt by T-shirt on the DTG everywhere. And we are coming the first time with automation systems at making the loading very, very simple, very consistent and improving the productivity by 20%. We have a strong patent on that. And so again, the model we are building is with more patent with more technology, taking the technology all the time once day. On top of that, today, we establish ourselves with the biggest brands, with the biggest market leaders but using our technology, and they're not using it with 1 system, they build the entire operation based on Kornit. We are well integrated into their system. So it would be very difficult to bring new technology in. In the DTF. This is a new area. We are just starting. We announced about the press or about 2 years back. Today, within 2 years, we can announce that we are already market leader. And the market leadership is because, again, the technology. We are the only 1 that can take a fabric, any type of fabric could be polyester could be cotton, blended and print on it directly without pretreatment with our posttreatment with all the benefits that I mentioned before, the hand feel is great, the durability, the designers love it. And we see companies like [ Cation ] Digitally that's working with all the mega brands like Gucci and Versace, their main issues at the Versace missed the Versace coming in the morning and telling him, I need this fabric in the afternoon with this design and they cannot do it today with analog, and they need digital, and we have now the solution. So it's really an revolution for this industry.

Great. Listen, our time is up. So maybe I'll grant you 1 more minute. Any final message, anything we didn't touch on.

So I think the message I would like to leave all of you. We -- on top of all of that, we have a great team. A team full of passion, full of belief, we have a clear vision. And again, inviting all for you to listen to the investor call that we had yesterday, it really shape the entire region and the entire strategy of the company. What I can say is that this $1 billion of target in 2026 is just the beginning. I know it's 5 years from now, but we have a very, very clear plan how to reach there. And once we are reaching there, it means that the market is fully open. And it's a huge market that Kornit is leading this transformation, this revolution in the textile and fashion industry.

Excellent. Thank you, guys, Ronen, Alon, Amir. Thanks for taking the time.

Thank you very much. A pleasure. Thank you.

Thank you, thank you very much.

Bye-bye.