Good morning, ladies and gentlemen, and welcome to the Kornit Digital Second Quarter 2024 Earnings Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. This call is being recorded on Wednesday, August 7, 2024. I would now like to turn the conference over to Mr. Jared Maymon, Global Head of Investor Relations. Please go ahead.

Thank you, operator. Good day everyone, and welcome to Kornit Digital's second quarter 2024 earnings conference call. Joining me today are Chief Executive Officer, Ronen Samuel; and Lauri Hanover, Kornit's Chief Financial Officer. For today's call, Ronen will provide comments on the second quarter of 2024. Lauri will then review the second quarter numbers and provide our third quarter outlook before we open it up for Q&A. Before we begin, I’d like to remind you that forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other US securities laws will be made on this call. These forward-looking statements include, but are not limited to statements relating to the company's plans, strategies, projected results of operations or financial condition and all statements that address developments that the company expects will occur in the future. Forward-looking statements are subject to known and unknown risks and uncertainties that could cause results to differ materially from those implied by the forward-looking statements. I encourage you to review the company's filings with the Securities and Exchange Commission, including the company's Annual Report on Form 20-F filed with the SEC on March 28, 2024, which identifies specific risk factors that could cause actual results to differ materially. Any forward-looking statements are made currently and the company undertakes no obligation to publicly update any forward-looking statements, except as required by law. Additionally, the company will be making reference to certain non-GAAP financial measures on this call. The reconciliation of these non-GAAP measures to the most directly comparable GAAP measures can be found in the company's earnings release published today, which is also posted on the company's Investor Relations website. At this time, I’d like to turn the call over to Ronen. Ronen?

Thanks, Jared. Good morning, everyone, and welcome to our second quarter 2024 earnings conference call. Today, we reported revenue of $48.6 million and an adjusted EBITDA margin of negative 3%, which is within the guidance range we provided in May. I am pleased to announce that we generated positive cash from operations in the second quarter, marking our third consecutive quarter of positive cash flow. The year-over-year boost to our EBITDA and cash flow reflects improved efficiencies from the cost-saving measures we implemented over the last several quarters. During the second quarter, we again saw growth in impressions and consumable, supporting our view that our customers continue to utilize available capacity. This growth is driving our ability to improve our results and stabilize our business in the second half of this year. Despite the macroeconomic environment remaining unstable and delaying investments in capital equipment, we are witnessing a pivotal shift to on-demand production in the fashion industry. Speed, on-time delivery, and an increase in the variety of SKUs are becoming crucial. At Kornit, we are not just adapting; we are leading. Our innovative solutions are designed to help our customers succeed in these dynamic times. Two of these groundbreaking solutions are the AIC model and our recently released Apollo system. The Apollo continues to be well-received in the market, driving significant improvements in productivity and total cost of ownership. It is regarded as the best solution for replacing screen printing in mid-sized runs. In Q2, we received several additional orders for Apollo's with four specifically ordered through our AIC model. The pipeline for 2024 is robust with both AIC and CapEx deals, and we are actively working on our pipeline for 2025 with new and existing customers. We believe the AIC model is a game changer for our customers and for us. This program removes barriers to entry by eliminating large initial capital investment and providing customers with predictable unit economics, as they know exactly how much each impression will cost. Simultaneously, this model offers Kornit a clearer view of revenues, profitability, and cash flow, which is especially valuable given the market volatility we have experienced over the past several years. Given the strong initial feedback and the traction we have seen with our AIC model, we decided this quarter to begin piloting the model on the Atlas MAX system. Like the Apollo AIC model, the Atlas MAX AIC model is receiving strong and positive feedback from both existing and new customers, and our pipeline of potential orders is gaining momentum. Moving to direct-to-fabric, this quarter, we continue to see traction in key textile-production regions, particularly in Asia Pacific. Key regions such as India, China, Peru, and Portugal are viewed as significant growth drivers for our future in direct-to-fabric. Additionally, we are making progress in developing applications for the footwear industry, and we are working diligently to have a solution ready for production in the coming quarters. Given these trends, we continue to anticipate a stronger second half compared to the first, with sales expected to increase by 20% to 25%, driven primarily by sequential growth in consumables. We also expect positive adjusted EBITDA on a full-year basis and positive operating cash flow for the entirety of 2024. I'm excited to announce that we will hold an investor event on September 10th in Las Vegas in conjunction with our participation at the Printing United Trade Show. At this event, we plan to expand on many of the topics we have discussed in the recent quarters, including our direction for the all-inclusive program, our product roadmap, long-term go-to-market strategy, capital allocation strategy, and our outlook on the market over the next few years. This event will feature key customers and demand generators, who will share their experiences in the on-demand fashion market. It will be our first sizable investor event since our Investor Day in 2021. For those who are able to attend in person, we will also offer a tour of the show floor and a demo of the new Apollo system. Please keep an eye out for an official invitation and registration link. We hope to see you there. In conclusion, during the second quarter, we achieved significant year-over-year improvement in profitability and cash flow generation. Despite the challenging macroeconomic environment, we continued to see improvement in impressions, consumable, and utilization. These enhancements combined with the backlog of Apollo orders and the growing interest in the All-Inclusive Click model are enabling us to stabilize the business and improve our P&L in the second half of 2024 and beyond. Now let me turn the call over to Lauri for a closer look at our Q2 results and guidance for the third quarter. Lauri?

Thank you, Ronen, and good day to everyone. Second quarter revenues were $48.6 million, within the guidance range of $47 million to $52 million we provided in May. This quarter, consumables contributed to year-over-year growth, while systems and services sales declined as expected. Moving to margins, second quarter non-GAAP gross margin was 48.6% compared with 36.1% in the same period last year. The year-over-year improvement is primarily attributable to a better mix between comparatively higher margin consumables and systems, as well as reduced fixed costs due to our restructuring efforts. It is important to note that the second quarter margin also benefited from the conclusion of the first tranche of our warrant agreement which covered purchases of $250 million in existing products and services by our largest global strategic account. As such, this quarter did not include an impact from expenses related to those warrants. Per this existing agreement, any purchases of products and services categorized as new business up to $150 million would be eligible for warrants. Looking at operating expenses, total second quarter non-GAAP operating expenses were $28 million, a decrease of $6.1 million or 17.9% from $34.1 million in the same period last year. The reduction in expenses reflects our cost savings and restructuring initiatives, including a meaningful workforce reduction, consolidation of facilities, and the phasing out of our legacy platforms. Also, remember that the second quarter last year included significant marketing expenses associated with our participation at the ITMA trade show, which did not repeat this quarter. Lastly, this quarter's operating expense includes an allowance for doubtful debts of approximately $1.5 million related to a North American customer that filed voluntary petitions under Chapter 11 of the US Bankruptcy Code. Despite this event, we continue to target full year 2024 non-GAAP operating expenses to be approximately $20 million lower versus the full year 2023. Moving to profitability, the second quarter adjusted EBITDA loss was $1.6 million, which is significantly better than the adjusted EBITDA loss of $10.7 million in the same period last year. Adjusted EBITDA margin for the second quarter of 2024 was negative 3.4%, near the high end of the guidance range of negative 10% to 0% we provided in May, again reflecting a meaningful improvement year-over-year. Our balance sheet remains robust with our quarter-end cash balance, including bank deposits and marketable securities, increasing to approximately $554 million. During the second quarter, we generated positive cash flow from operations of $4.5 million. This achievement once again reflects the benefits of our cost savings and restructuring initiatives, coupled with a strong focus on collections. We remain focused on generating positive operating cash flow for the full year 2024. As Ronen highlighted, interest in our pilot of the all-inclusive click, AIC offering remains strong. In the second quarter, we signed four new Apollo AIC units for delivery towards the end of this year. Based on the favorable response and encouraging feedback we received from target customers of the program, we made the decision to begin piloting the AIC program for the ATLAS family of systems this quarter. Overall, this year, we expect to deliver 15 Apollo systems, and we are currently expecting 10 of those to be on the AIC model. For the ATLAS family of systems on AIC, we plan to provide an update on our progress at our investor event in September. I'd like to again emphasize that in the AIC model, revenue is generated from the impressions a customer produces over time rather than upfront at the time of the system sale. As such, the P&L benefits of these systems shipped on AIC model will begin to ramp towards the end of this year and into 2025. As a reminder, we expect each of these Apollo AIC agreements to generate approximately $1 million of revenue annually. Moving to our share repurchase program, we were subject to a blackout period under our existing 10b-18 trading plan, and we were unable to repurchase shares for most of the second quarter. As a result, our repurchase activity was limited to approximately 83,000 shares at an average price paid per share net of fees of $14.32. The existing authorization for our share purchase program expired in July; the Israeli approval process regarding share repurchases recently changed as well, and we are currently navigating this new process. As Ronen mentioned, we look forward to updating the investor community on our capital allocation strategy at our upcoming investor event planned for September 10. Turning to third quarter guidance, we currently expect revenues for the third quarter of 2024 to be between $48 million and $52 million, and adjusted EBITDA margin to be in the 1% to 6% range. That concludes our prepared remarks. With that, I will now turn it back over to Ronen to open up the call for Q&A. Ronen?

Thank you, Lauri. Operator, now we are ready to take questions from the audience.

Ladies and gentlemen, we will now begin the question-and-answer session. Our first question comes from the line of Mr. Greg Palm from Craig-Hallum Capital Group. Please go ahead.

Great. Thank you. Hey, everyone. Thanks for taking the questions here. Maybe starting with AIC model, if you could maybe just give us a little bit more of an update on progress you're seeing with Apollo, but more importantly, what gives you confidence that moving this to Atlas is the right decision? And does this mean you're now maybe broadening out this program with certain potential customers type of customer that you maybe weren't expecting to do this initially with?

Thank you, Greg. The AIC model is a game changer for this industry. To remind everyone, we were targeting with this program to penetrate new markets and bring incremental volume into Kornit. The initial feedback that we are receiving from customers is very encouraging. As of today, we have signed on multiple Apollos. We are planning to deliver about 15 systems this year out of which 10 Apollos will be on the all-inclusive click. What we hear from our customers is that they see massive benefits from this program. First of all, it removes the barrier for entry. They don't need to invest a large amount for capital investment in the beginning. They can allocate this investment to other areas, aligning their expenses with revenues and providing predictable unit economics. Also, there is a significant benefit for Kornit. It clears the view for revenues, profitability, and cash flow. We expect that each unit that will be on AIC will actually produce more impressions and more ink and more revenue. We assume that it will produce about 30% more in terms of impressions versus the CapEx program. Think about it, the tenfold that we are going to install this year, each one of them is going to generate on an annual basis, $1 million of revenue. This needs to be taken into account into the P&L starting in Q4 and will be very meaningful for next year. So the feedback that we are receiving is very, very positive, and therefore, we have decided to open it also for the Atlas MAX. The reason why we have decided to open it for the Atlas MAX is because we are meeting many customers that cannot commit to a minimum volume that is addressed with the Apollo. Apollo is going after a massive volume and the minimum commitment for some customers is too high. For those customers who do not have a high enough minimum commitment, the Atlas MAX is the right solution. So right now, we have a portfolio of solutions to address different volumes and different types of customers. And again, to remind everyone, we are approaching incremental volume and mainly going after the screen replacement market, which will accelerate the growth of impressions, consumables, and revenue for Kornit moving forward.

Got it. That's helpful. Appreciate all that. And then just on the warrant situation, just to be clear, you did generate revenue from your global strategic customer in the quarter, if you could confirm that. But going forward, are you saying you'll only receive or you only have a warrant impact if the purchases are on the new systems. Is that right? Did I understand that right?

Yes. So first of all regarding our global strategic customer, they are growing very, very nicely. We see the growth in impressions. We see the growth in, of course, supplies – consumption of supply. To remind everyone, they increased their fleet in 2023 and now we see the results of these growing fleets and impressions. And as I mentioned in the previous call, they also were looking for the MAX upgrade, and hopefully, we'll get it sooner than later. In terms of the warrant, the warrant agreement with our strategic customer – our global strategic customer completed the first tranche. The first tranche was about existing products and it was up to $250 million. The second tranche is about new products and it's up to $150 million. So if the global strategic account goes and buys new products i.e. Apollos or Prestos, then they will be able to utilize the second tranche. But they continue to grow with the current product as well.

Okay. But to be clear, it sounds like the relationship is still really solid and obviously growing based on what you said for Q2?

Absolutely. Absolutely.

Okay. I’ll leave it there.

Thank you, Mr. Greg. Your next question comes from the line of Mr. James from Needham. Please go ahead.

Hi. This is Chris Grenga on for Jim. You spoke about the Direct-to-Fabric. I'm just curious if you could elaborate a bit more about what you're seeing there and whether you expect upon systems recovering to see any difference in the pace or cadence of recovery between Direct-to-Garment and Direct-to-Fabric? If there's any difference there?

Yes. Certainly, there is a massive difference between the Direct-to-Garment and Direct-to-Fabric. They are totally different markets and different types of customers. Overall, what we see in the market is that the overall fashion market is moving to on-demand, and fashion is choosing on-demand. This will be the theme of the investor event that we are going to have. What we hear from brands, retailers, and demand generators is that on-time delivery and speed to market is crucial. The variety of SKUs today is crucial. The lifespan of every product is getting shorter and shorter and consumers would like to have more SKUs. So all of this is driving shorter runs. We can also see production moving from offshore to nearshore and to onshore. This of course reflects both in our DTG Direct-to-Garment business and also in the Direct-to-Fabric business. So on the Direct-to-Fabric, the excitement that we see is going after new value applications, which are unique, and we can bring huge value to the industry. One of them that we mentioned is footwear. This footwear industry is massive and it's growing and it's very manual and quite analog in the way that it is being produced. We have the potential to disrupt this market. We are working with a few major producers, both in terms of brands and fulfillers in this market, and there's a lot of excitement. We are in a process to finalize our solution to prove that this meets the standard of the industry, and we are planning to launch it and to scale it in the coming quarters. There are other exciting verticals that we are going after. One is a technical vertical, another is home decor. We are going to deep dive into them at our investor event in September. Of course, we continue to see growth also in fashion. And there, we are focusing on specific territories like India, China, Peru, and Portugal. Those are the producing countries, and we are focusing there. We can start seeing customers really utilizing our system for longer runs, replacing the reactive process, and being able to deliver products in a much more sustainable way, on time in much faster speed to the market in much larger SKUs, both in terms of fabrics and designs and going into a relatively shorter run versus the analog that needs to print only longer runs.

Great. Thank you very much. And you had reiterated your expectation for revenues in the second half to be up 20%, 25%. So my estimate, the midpoint shows that at least if I'm doing this right, Q4 will be a return to growth year-over-year. You had mentioned your expectation for consumables to continue to increase sequentially for the back half of the year. Just wondering if you could elaborate on the expectation for return to growth in Q4. Is that consumables driven? Does that also include the impact of all-in click? Just wondering if you could elaborate on what you see there. Thank you.

Yes, we provided guidance for Q3 and indicated that for the second half of the year, we expect revenue growth of about 20% to 25% compared to the first half. We clearly stated our plan to be EBITDA positive for the full year and to maintain positive cash flow in the upcoming quarters. Much of the expected growth will come from ink sales. Historically, our business is more robust in the second half, particularly in Q4, which tends to see stronger ink sales. Therefore, we anticipate growth in supplies during both Q3 and Q4, along with improvements in gross margin in those quarters. Additionally, we have visibility on systems we will deliver in Q3 and some in Q4. An important event in September, Printing United, is expected to allow us to collect orders for the end of Q3 and Q4. The All-Inclusive Click units we are installing now and plan to install during Q3 and Q4 will start to show positive effects in Q4, but the significant impact will be realized in 2025.

Great. Thank you very much. I'll leave it there.

Thank you, Mr. James. Your next question comes from the line of Mr. Brian Drab of William Blair. Please go ahead.

Hi, thanks for taking my questions. I wanted to clarify the discussion about the sales guidance. If the sales in the second half are projected to increase by 20% to 25% compared to the first half, that would translate to roughly $111 million to just over $115 million for the second half. With the guidance provided for the third quarter, the fourth quarter would be estimated to be between $59 million and $68 million. I want to confirm that this calculation is accurate and that you're anticipating a significant increase in sales from the third quarter to the fourth quarter for the reasons you mentioned. Am I calculating this correctly?

Yes, the math is correct. And again, I would like to repeat that most of the growth will come from the ink side and less from the system side. Although we will install systems, as I mentioned, quite a few of them will be on the all-inclusive which we cannot recognize the system when we're installing it. We're recognizing over time the impressions on the click being generated.

Thanks. As you approach 2025, you'll have a growing revenue base from the AIC units currently being introduced to the market and additional orders. I'm curious about your perspective on the typical seasonal decline we experience in the first quarter as we enter 2025. Do you think this year might present a different situation due to the existing momentum?

It's too early to discuss about 2025. Of course, we are going to share our longer-term view at the event. In a month from now, we are going to share with all of you how do we see our longer-term view at a high level, and we are going to get into the detail of the all-inclusive and how do we see it growing in the coming years. Of course, the intention is to move more into recurring and into a SaaS-based model, and you will start seeing the impact beginning of 2025. But let's leave it to our investor event, which is going to be an important one, where we are going to share the direction of the business moving forward.

Can you comment on how the business is developing with the Apollo and the AIC, particularly with companies that have traditionally only done screen printing using analog methods? Are you gaining more attention from them? Could you provide an example or two of where this is proving successful?

Yes. First of all, the answer is absolutely. We already closed with a few traditional screen printers, some of them with no digital experience. We have a very strong pipeline moving forward with screen printers, which are first being introduced to digital. They heard about it, but they didn't think that the quality is there, the productivity, and of course, the initial cost of the investment. Now that our technology, the Apollo, the MAX technology is meeting the needs of quality, first of all of the market actually surprising in terms of quality versus the analog. The screen printing in many fabrics and many designs, like photographic designs, we're doing a much, much better job than screen. On top of that, the productivity is reaching totally different limits. The run lengths are getting shorter, and with this machine, you need only one operator. It's starting to make a lot of sense to those screen printers. We see a really good reaction and interest. Almost every door that we are opening is a door that we have a potential to close. Many of them will come to the event, the investor event. We will have a panel with customers, so some of them are really moving volume from the analog to digital to Apollo. So Apollo is a game changer both in terms of manpower; it's only one operator to run the system; both in terms of TCO and productivity and quality. And now combining with the AIC model, we really reduced the last barrier. We mentioned on previous calls that this year, we are going to deliver 15 systems. Next year, we are planning to double the number of systems of the Apollo into the market. We're already collecting orders for 2025, and it looks very, very good. The issue that I see right now is not the demand; we need to ramp up. We need to make sure that the product delivers what it is promised to deliver. At this stage, it looks fantastic.

I just want to wrap up my questions by congratulating you on hitting $400 million in cumulative sales to Amazon. Some people may have lost track of this, but that's a real milestone. I often get questions about how your business is doing with the global strategic customer, and this achievement is noteworthy. So, congratulations on reaching $400 million.

Thanks very much.

Thank you very much. Your next question comes from the line of Mr. Erik Woodring from Morgan Stanley. Please go ahead.

Thank you very much for taking my question. I just have two, maybe to touch on a number of the questions that are focused on Q4 here, again, just to be even more specific. I think Ronen, what you're guiding to is perhaps roughly 14% year-over-year growth at the midpoint in the December quarter and an adjusted EBITDA margin of low double digits. Obviously, a significant improvement from recent performance, especially in the context of effectively since ITMA guiding below consensus. As we sit here today, I guess, why should all of us on the call, whether we're covering analysts or those that are following the company look at that guidance and say, we believe and we have confidence in that guidance? What can we take away from your comments that help us gain guidance in that commentary, and that 90 days from now, we won't be talking about further macro issues and an additional guide down? And then I have a follow-up. Thanks.

No, it's an excellent and direct question. Let me clarify. We have been through a challenging two and a half years due to significant changes in our market, primarily focused on customized design, which was the core of Kornit's business. Currently, we are expanding beyond just customized design. Our utilization levels are improving, and we are entering new markets such as fashion, screen replacement, sports, and home decor. Now, let's discuss this year in terms of past performance and future expectations. At the start of the year, we committed to delivering 15 Apollo units, and I am confident we will achieve this as we are actively working on it. The Apollo is a groundbreaking product, and we are already collecting orders for 2025. Additionally, we initially speculated that around 7 of the 15 Apollo systems would be all-inclusive, but we now believe that at least 10 will be, thanks to its success and new market opportunities that are contributing incremental volume to the Atlas. We have also consistently communicated our goal to cut costs, aiming for an OpEx of approximately $107 million for the year. Despite some one-time negative impacts this quarter, we are committed to achieving $20 million lower OpEx compared to last year, with visible cost reductions reflected in our gross margin. We also stated that we would generate positive cash flow for the year, and we are on track to do that. Our gross margins have improved quarter over quarter, with 48% this quarter, and further enhancements expected in Q3 and Q4. Regarding EBITDA, we aim for year-long improvements, and despite the $1.5 million one-time impact this quarter, we have effectively reached breakeven for this period. We anticipate market improvements indicated by increased customer utilization of our systems, which is evident in the volume of impressions and ink usage. Customer utilization is getting better each quarter, even as we upgrade systems to optimize capacity with Atlas MAX and Atlas MAX PLUS. We are set to introduce the MAX Plus technology, which will enhance the Atlas MAX by an additional 15% to 20% in utilization for our customers, and many units were upgraded this quarter, with plans for further upgrades in Q3 and Q4. The team's track record shows we are executing on our commitments, as we have met our guidance in recent quarters. I remain hopeful and confident that we will continue to deliver what we promise to the market.

Thank you for your response. I appreciate your honesty, and I agree with you. Much of what you promised is being delivered. I just want to ensure that expectations haven't been set too high, potentially overshadowing the progress you've made this year. That was the essence of my question. Regarding the buyback, I understand you'll share most details about capital allocation at the Investor Day on September 10, which we are all eager to attend. Could you clarify the timeline for returning to the Israeli courts to seek some level of approval? I'm not inquiring about how much you might increase your authorization or how your capital allocation plans will shift, but rather the process for obtaining that authorization, if there's a timeline we can consider. This way, we can all make preliminary estimates and perhaps get further updates on September 10. That's all from me. Thank you.

Okay. Hi, Erik. Let me take that question. First of all, our existing repurchase authorization expired during the second quarter, as I mentioned. With the new regulations, there is no longer a need for court approval. All other elements of the regulation remain. We still have a 30-day notification period, etc. So we are now navigating this process. As you noted, we will be looking forward to sharing with you a more comprehensive capital application strategy in September.

Okay. Fair enough. Thanks so much and good luck guys.

Thank you.

Thank you, Mr. Erik. Your next question comes from the line of Mr. Chris Moore from CJS Securities. Please go ahead.

Thank you for taking a couple of questions. Regarding AIC, there is $1 million in annual revenue from the Apollo. Can you provide a reasonable gross margin range for that $1 million minimum?

So, the intention, first of all, is to share more information on the all-inclusive in our event in September. What you can assume is that we built the model in such a way that our gross margin will be at least as good as the CapEx model, if not better. So you will see the results of it during the meeting at the investor event.

Got it. That's helpful. And in terms of the AIC with the ATLAS MAX, is there a minimum revenue number associated with that?

Yes, of course, and we will share it at the event. As we are starting the pilot right now, I prefer to keep it confidential at this stage. We will share it at the event in September.

Got it. And in terms of the customer profile you walked through that with the Apollo AIC. Is the typical customer that you're approaching on the MAX AIC much different from the Apollo? Is that going to be less of an issue since the cost is not what the Apollo is? Just trying to understand who you're talking to there?

Yes, it's different. With Apollo, we are targeting large screen printers and major retailers that have significant volumes transitioning from analog to digital. They are experiencing shorter production runs and require quick market delivery. We're looking at hundreds of potential customers for Apollo. For the ATLAS MAX, our focus is on smaller screen printers who might have only a few cover sales and wish to shift some or all of their production to digital. This allows them to improve time to market, speed, quality, and return on investment with less labor. Here, we are considering thousands of potential customers. These factors set us apart, and we will offer more details at the upcoming event next month.

Got it. I'm assuming this last one fits that description as well. The model is clearly shifting towards more recurring revenue, which is positive with the AIC. Is there a specific target for recurring revenue or its percentage of overall revenue a few years down the line?

We will share more details at the event. I cannot share it right now. Of course, we have targets internally and we have a model internally, and we will share a high level of the model with all of you.

Fair enough. All right. I appreciate it guys.

Thank you very much.

Thank you very much, Mr. Chris Moore. There are no further questions at this time. I'd now like to turn over the call back to Mr. Ronen Samuel, Chief Executive Officer for final closing comments.

Yeah. So first of all, thank you all for joining today's call. Before we disconnect, I would like to remind everyone again to pay attention to the announcement we just released this morning and on this earnings call relating to the investor event in September 10th in Vegas. We have a great day planned there with a lot of details. We're going to discuss the market situation, how do we see the market moving forward, our go-to-market strategy, capital allocation, AIC, and much, much more. We really hope to see you there. It will be beneficial. There will be many of our customers. There will be a panel with key customers and the main generators. We're going to talk about future technologies. So please if you can join us in person, please do. If not, be on the call. It will be an important day. Looking forward to seeing you all. Thank you for your questions.

Thank you, Mr. Ronen Samuel. Ladies and gentlemen, this concludes our conference call for today. We thank you for participating and ask that you please disconnect your lines. I hope you all have a great day ahead.