코르닛 디지털(KRNT) 2026년 2분기 실적 발표회: ARR 성장 및 연간 전망 상향

핵심 요약

• 2026년 2분기 매출은 전년 동기 대비 11.2% 증가한 5,530만 달러를 기록해 코르닛 디지털(Kornit Digital)의 가이던스 상단을 상회했습니다.
• 연간 반복 매출(ARR)은 전년 동기 대비 79%, 전분기 대비 26% 증가한 3,380만 달러를 기록했습니다. 올인클루시브 클릭(AIC) 매출은 전년 동기 대비 112%, 전분기 대비 32.7% 증가했습니다.
• 조정 EBITDA는 30만 달러를 기록해 2025년 2분기 120만 달러 손실에서 흑자 전환했습니다. 영업활동 현금흐름은 11분기 연속 흑자를 기록했습니다.
• 2026년 2분기 및 상반기에 판매된 시스템의 약 60%가 전통적인 스크린 인쇄업체에 공급되어, 아날로그에서 디지털로의 전환이 가속화되고 있다는 경영진의 견해를 뒷받침했습니다.
• 경영진은 2026년 하반기 매출이 상반기보다 약 15% 증가해 연간 한 자릿수 후반대 매출 성장을 뒷받침할 것으로 예상하고 있습니다.
• 2026년 3분기 가이던스로 매출 5,500만~6,000만 달러, 조정 EBITDA 마진율 손익분기점~3%를 제시했습니다.

핵심 재무 데이터

코르닛은 AIC 계약 기간이 일반적으로 5년이라고 밝혔습니다. 3,380만 달러의 ARR 수치는 향후 12개월 동안의 최소 약정액만을 반영한 것이며, 해당 계약의 총 계약 가치는 약 1억 4,200만 달러였습니다.

사업 및 경영 실적

반복 매출 구조로의 전환은 2026년 2분기 코르닛 실적 발표의 핵심 주제였습니다. 경영진은 ARR, 잉크, 서비스 및 소프트웨어를 포함해 현재 매출의 약 80%가 반복적이거나 높은 반복성을 띤다고 밝혔습니다. AIC 모델은 고객의 초기 투자 비용을 낮추고 일반적으로 5년 계약을 체결하여 코르닛의 매출을 생산량에 더욱 밀접하게 연결합니다.

시스템 인도를 통해 설치 기반이 지속적으로 확대되었습니다. 2분기 시스템 매출의 약 40%가 신규 고객에게서 발생했으며, 2분기와 상반기 모두 판매된 시스템의 약 60%가 전통적인 스크린 인쇄업체로 공급되었습니다. 경영진은 아폴로(Apollo), 아틀라스 매트릭스(Atlas MATRIX), 아틀라스 맥스(Atlas MAX)의 고객 도입을 스크린 인쇄 생산이 디지털 워크플로우로 전환되고 있다는 증거로 제시했습니다.

시스템 인도는 직접 CapEx 구매와 AIC 배치 간에 거의 균등하게 분할되었으나, 경영진은 분기별로 비중이 달라질 수 있다고 언급했습니다. CapEx 판매 대수는 연초 회사의 예상치를 상회하고 있으며, 경영진은 하반기 강력한 파이프라인을 보고했습니다.

북미 지역이 성장을 견인한 주요 지역으로 묘사되었습니다. 경영진은 또한 유럽, 인도, 스리랑카, 일본의 스크린 인쇄업체들 사이에서도 도입이 이루어지고 있다고 보고했습니다. 전략적 고객사들은 전반적으로 견조한 생산 성장을 나타낸 반면, 일부 롱테일 고객사들은 감소세를 나타냈습니다.

코르닛은 또한 롤투롤(roll-to-roll) 사업이 하반기 매출에 기여할 것으로 기대하고 있습니다. 회사는 최근 프레스토 맥스 플러스(Presto MAX PLUS)를 출시했으며 신발, 홈 데코, 기술용 직물 및 기능성 시장 등의 응용 분야를 공략하고 있습니다. 경영진은 연말까지 추가적인 롤투롤 기술이 발표될 것으로 예상된다고 밝혔습니다.

경영진 가이던스

2026년 3분기에 대해 경영진은 다음과 같은 가이던스를 제시했습니다:

• 매출 5,500만~6,000만 달러.
• 조정 EBITDA 마진율 손익분기점~3%.

2026년 하반기 매출은 상반기 대비 약 15% 증가할 것으로 예상됩니다. 이러한 전망은 연초에 예상했던 한 자릿수 초반대 성장에 비해 높은, 연간 한 자릿수 후반대 매출 성장을 뒷받침합니다.

경영진은 AIC 매출, 시스템 판매 및 소모품(특히 잉크)이 하반기 성장을 견인할 것으로 예상하고 있습니다. 또한 소모품의 매출 비중 기여도가 높아짐에 따라 매출총이익률과 수익성이 크게 개선될 것으로 기대합니다.

리스크 및 주시해야 할 사항

경영진은 전체 의류 시장이 지역 및 고객 유형에 따라 차이를 보이며 불균등한 상태를 유지하고 있다고 밝혔습니다. 전략적 고객은 전반적으로 성장하고 있으나, 일부 롱테일 고객은 감소세를 보이고 있습니다.

2분기 비GAAP 매출총이익률에는 200만 달러의 관세 환급금이 포함되어 약 83만 달러의 순 관세 관련 혜택을 가져왔습니다. 영업비용에는 약 190만 달러의 환율 관련 역풍도 포함되었습니다.

코르닛의 전망은 지속적인 고객 수요, 시스템 인도, AIC 도입 및 소모품 사용량 증가에 달려 있습니다. 또한 이 사업은 계절성을 유지하고 있으며, 고객들은 일반적으로 3분기 말과 4분기에 생산 성수기에 진입합니다.

애널리스트 Q&A 주요 내용

• 하반기 성장 동력: 경영진은 신규 시스템 배치에 힘입어 AIC 매출이 크게 확대될 것으로 예상하고 있습니다. CapEx 시스템 판매 및 잉크 소비 증가 역시 성장에 기여할 것입니다.
• 아날로그에서 디지털로의 전환: 코르닛은 이러한 전환의 요인으로 소량 생산 회차, SKU 증가, 더 빠른 처리 시간 요구, 근접국 또는 국내 생산, 인력 제약 및 자동화 수요 증가를 꼽았습니다.
• 시스템 판매 비중: 분기별 비중 변동은 있지만, 현재 시스템 인도량의 약 절반은 CapEx 구매이며 절반은 AIC 배치입니다.
• 인쇄건수 성장: 지난 12개월 누적 인쇄건수는 15% 증가했습니다. 경영진은 의류 생산이 소량 생산, 주문 제작, 현지화된 제조 방식으로 이동함에 따라 가속화가 이루어졌다고 설명하며, 코르닛이 시장 점유율을 확대하고 있다고 믿는다고 밝혔습니다.
• 전략적 고객: 주요 글로벌 전략 고객사의 설치 기기에 대한 업그레이드가 1분기에 시작되어 하반기에도 이어지고 있으며 2027년까지 지속될 것으로 예상됩니다. 경영진은 고객사별 구체적인 수요 수치는 제공하지 않았습니다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Greetings and welcome to Kornit Digital's Second Quarter 2026 Earnings Conference Call. As a reminder, this call is being recorded.

I would now like to turn the conference over to Andy Backman, Chief Capital Markets Officer to Kornit Digital. Mr. Backman, please go ahead.

Andrew Backman

Thank you, operator. Good day, everyone, and welcome to Kornit Digital's Second Quarter 2026 Earnings Conference Call. With me today are Ronen Samuel, Kornit's Chief Executive Officer; and Assaf Zipori, our Chief Financial Officer. For today's call, Ronen will share his overall commentary on the second quarter followed by Assaf, who will review our results and provide guidance for our third quarter before we open up the call for Q&A.

Before we begin, I would like to remind you that forward-looking statements within the meaning of the U.S. securities laws will be made on this call. These statements involve known and unknown risks and uncertainties. I encourage you to review the company's filings with the SEC, including our annual report on 20-F, which identifies specific risk factors that could cause actual results to differ materially. Additionally, we will reference certain non-GAAP financial measures. Reconciliations to the most comparable GAAP measures can be found in the earnings release published today and posted at ir.kornit.com.

At this time, I would like to turn the call over to Ronen. Ronen?

Ronen Samuel

Thanks, Andy, and good day, everyone. Thank you for joining us today. The second quarter marked another important steps in Kornit's transformation. We delivered revenue of $55.3 million, above the high end of our guidance; generated positive adjusted EBITDA, also above the high end of our guidance range; and positive operating cash flow for the 11th consecutive quarter. We also increased annual recurring revenue by $7 million bringing total ARR to $33.8 million representing 79% year-over-year growth while revenue from All-Inclusive Click increased by 112% compared with the prior year period.

In addition, trailing 12-month impressions grew 15% reflecting higher production volume across our installed base. We continue to see healthy growth in system deliveries, expanding our production footprint and customer base. Approximately 40% of our system sales during the quarter came from new customers demonstrating our continued ability to expand the market while growing alongside existing customers. Importantly, approximately 60% of system sales in both Q2 and the first half of 2026 were to traditional screen printers, providing clear evidence of the momentum we are seeing in the transition from analog to digital production.

These results reinforce the progress we are making against our strategy. We are delivering revenue growth while significantly expanding annual recurring revenue, improving the quality of our growth and giving us greater visibility into the future. A key driver of this progress is our All-Inclusive Click model, which is increasing the share of the business built around long-term customer commitments. Every new All-Inclusive Click agreement creates a long-term partnership, typically built around a 5-year commitment for our customers, AIC lower upfront investment and provides the flexibility to scale production as their business grows.

As a result, we are seeing higher system utilization, stronger customer engagement and deeper adoption of the Kornit platform. For Kornit, AIC strengthens customer relationship and aligns our economics directly with our customer success. As our customers grow, we grow with them. What gives us confidence today is not simply the financial performance we delivered this quarter. It is what we are hearing from customers around the world. And one thing is becoming increasingly clear, the economics of manufacturing are changing.

Brands, retailers and traditional screen printers are looking for greater flexibility, shorter production runs, faster response time and manufacturing closer to the point of demand while inventory risk and labor shortages continue to pressure traditional manufacturing models. We are seeing this transition particularly clearly among traditional screen printers where digital is increasingly replacing screen production across a growing range of applications. These are not short-term trends. They represent a structural shift in how our industry will manufacture over the coming decade.

Having spent more than 3 decades in this industry, I believe we are witnessing one of the most significant manufacturing transition of my career. Customers are no longer asking whether digital production has a role. They are asking how quickly they can shift from analog to digital. That's exactly what we have been preparing for. For years, we have invested in industrial production systems like Apollo, Atlas MATRIX and Presto MAX PLUS while expanding into software, AI and automation.

As the industry moves towards digital manufacturing, Kornit is positioned as a manufacturing platform; bringing together industrial production systems, software, AI and automation into one integrated solution. We are no longer simply helping customers buy better printing systems. We are helping them build smarter, more profitable manufacture businesses. Our ambition isn't simply to replace analog printing. It's to make on-demand digital manufacturing the new standard for apparel production. Our customers are the clearest proof that this transition is already underway.

Let me share a few examples. Jerry Leigh, one of the leading screen printers in the U.S. and a new customer to Kornit, recently invested in 2 Apollo systems and 2 Atlas MAX platforms illustrating how traditional screen printers are transitioning production from analog to digital. Another great example is Printful, one of our largest and most strategic global customers. Already operating a large fleet of Atlas MAX systems, they recently added 2 Apollo systems reflecting the value they are realizing from the Kornit platform and their continued confidence in Kornit.

Shirt Monkey, one of the U.K. leading print on-demand providers, expanded from Atlas MAX to both Apollo and Atlas MATRIX through our All-Inclusive Click model, demonstrating how AIC can accelerate digital adoption with lower upfront investment. Finally, SNQS, a leading screen printer in India, expanded from Atlas MAX to Apollo within just 1 year to support higher volume screen replacement, demonstrating how mainstream screen printers are increasingly scaling digital production as they transition more of their core production from analog to digital. While these customers operate in different markets and applications, they all point to the same conclusion.

Manufacturers are increasingly choosing digital production because it delivers a smarter, more flexible and more profitable manufacturing model. As we look ahead, we enter the second half of the year with stronger backlog visibility, a healthy pipeline and continued momentum across both new customer acquisition and expansion within our installed base. Based on what we see today, we expect revenue in the second half of 2026 to be approximately 15% higher than the first half of the year, positioning us to deliver a high single-digit revenue growth for the full year while continuing to improve profitability and generate positive operating cash flow.

Before I conclude, I'd like to leave you with one final perspective. Many people still think of Kornit primarily as a capital equipment company. The reality today is quite different. Approximately 80% of our revenue is recurring or highly recurring in nature generated through annual recurring revenue in services and software. This fundamentally changes our business model, making it more resilient and giving us greater visibility into the future revenues. At the same time, the industry accelerating shift from analog to digital manufacturing represent a significant structural growth opportunity for Kornit.

Combined with a highly recurring business model and market-leading technology, this gives us confidence in our ability to create sustainable long-term value for our customers and shareholders. I'd like to thank our customers for their continued trust, our partners for their collaboration, our employees for their relentless commitment and execution and our shareholders for their continued support.

With that, let me turn the call over to Assaf. Assaf?

Assaf Zipori

Thank you, Ronen, and good day, everyone. Let me walk you through our second quarter financial results and the continued progress we're making across the business. Second quarter revenue was $55.3 million growing 11.2% year-over-year and exceeding the upper end of our guidance range. Services revenue increased 34.7% while product revenue grew 4.3%, both benefiting from higher customer activity and continued expansion in the utilization of our installed systems. Annual recurring revenue reached $33.8 million representing 79% growth year-over-year and 26% sequentially reflecting continued momentum in the adoption of our All-Inclusive Click model.

Importantly, ARR represents only the next 12 months of minimum commitments under our AIC agreements. With these agreements typically spanning 5 years, they represent approximately $142 million in total contract value providing strong visibility into future revenues. AIC delivered another strong quarter with revenue increasing 112% year-over-year and 32.7% sequentially. The model continues to drive higher system utilization while closely aligning our economics with our customers' success. As Ronen mentioned, approximately 80% of our revenue today is recurring or highly recurring in nature generated through ARR, ink, services and software.

This provides greater resilience and the visibility while supporting sustainable, profitable growth. Now turning to margins. Second quarter non-GAAP gross margin was 47.4%, an improvement of 110 basis points compared with the prior year period. The quarter included a net tariff-related benefit of approximately $830,000 driven by a $2 million tariff refund during the quarter. Underlying gross margins performance continued to improve sequentially reflecting higher customer activity, increased platform utilization and the continued evolution of our revenue mix.

Turning to operating expenses. Second quarter non-GAAP operating expenses were $28.8 million, an increase of $2.1 million year-over-year. The increase primarily reflects expenses associated with our highly successful Konnections conference, which supported customer engagement and commercial momentum, together with approximately $1.9 million of foreign exchange headwinds. Adjusted EBITDA was $0.3 million compared with a loss of $1.2 million in the second quarter of 2025. Adjusted EBITDA margins improved 290 basis points year-over-year to 0.6%, exceeding the upper end of our guidance range.

Turning to cash and our balance sheet. We ended the quarter with approximately $451 million in cash, bank deposits and marketable securities. Operating cash flow was approximately $8.5 million, marking our 11th consecutive quarter of positive operating cash flow and reflecting continued working capital discipline. Our balance sheet remains a significant strategic asset.

It provides the flexibility to support continued investment in our AIC program, fund inventory to meet anticipated customer demand, invest in product innovation across our portfolio and pursue targeted acquisitions that strengthen our platform strategy with Print Factory, which closed in the second quarter, serving as the most recent example.

During the quarter, we also invested $5.4 million under our share repurchase program. Since the program began in 2023, we have repurchased approximately 9.5 million shares for about $205 million with approximately $60 million remaining under the current authorization. We remain committed to disciplined capital allocation strategy, balancing investment in long-term growth with returning capital to shareholders while maintaining strong financial flexibility.

Turning to guidance. For the third quarter of 2026, we expect revenue between $55 million and $60 million with adjusted EBITDA margin between breakeven and 3%. Looking beyond the quarter, we expect second half 2026 revenue to be approximately 15% higher than the first half supporting high single-digit revenue growth for the full year, an improvement from the low single-digit growth we anticipated entering the year. Our outlook reflects continued confidence in customer demand and the strength of our commercial pipeline.

As we continue to scale the business, our financial priorities remain clear: driving profitable revenue growth, improving margins, generating positive operating cash flow and investing with discipline to create sustainable long-term value to our shareholders.

With that, let me turn the call back to Ronen. Ronen?

Ronen Samuel

Thank you, Assaf. Operator, by that, we are ready to get questions from the audience.

Operator

[Operator Instructions] Our first question comes from the line of Greg Palm with Craig-Hallum.

질의응답

Greg Palm

Congrats on the results. It definitely seems like things are stepping up here. Ronen, just maybe talk to us a little bit about kind of what your view is and what's happened in the last few months year-to-date, this sort of acceleration and just kind of thinking about the company where it stands today versus a few years ago, what's fundamentally different?

Ronen Samuel

Yes. There is a lot of changes and what we clearly see is that the strategy that we implemented actually starting 2, 2.5 years ago are starting to deliver. We're delivering growth in revenue, in top line; but significantly expanding our ARR, which is providing us much stronger visibility into the future. Moving into recurring business model, as I mentioned, providing more predictability, but also resilience. We can see that as of today, we reached to $33.8 million of ARR and this represents 79% year-over-year growth. We ended this quarter Q2 with additional $7 million in the AIC revenue -- in ARR with AIC revenue growing by $6.5 million, which is a growth of 112%.

When we are looking at it, we need to understand that this ARR is multiple years, typically 5 years model, which brings us to a total contractual value of $142 million. We're changing totally the business model of the company. When we look at it today, actually about 80% of our revenue is recurring or re-occurring revenues, which again providing visibility and predictability and resilience to the company. So from a business model from the recurring, it's changing a lot the way we are looking at the future. But even more fundamentally, let's look at the technology what we've brought to the market in the last 2 years.

Starting with Apollo that is scaling up and really focusing on entering to the screen market and bringing huge volume to our customers and to Kornit. The MATRIX, we just introduced it in the beginning of Q2 and we see a massive adoption of the MATRIX getting into new markets, new applications like the Poly. We are starting to do upgrade for the installed base. We are bringing automation, AI, software with PrintFactory. Our wall-to-wall business is gaining momentum. So from a technology perspective, we are totally different company as of today and we're looking at ourselves as a manufacturing platform rather than just selling boxes.

Look at the financial discipline. This is the 11th quarter in terms of bringing positive operating cash flow. So there is a lot of discipline in the way we are executing and bringing back the company to profitability and to growth. And I think the most important thing is the addressable market. If you think about it as Kornit 3 years ago, Kornit was mainly focused on the customized design market, which is a very lucrative market, but it's a niche in at the overall apparel market. It's continued to grow and Kornit continued to lead this market.

But moving and entering to the screen market, the bulk apparel market, this is the biggest move that Kornit has done. And as we see today, 60% of the systems that we delivered in Q2 and also overall in H1 are going to screen market, screen replacement and we see those customers running not short run, really longer run jobs and we see them scaling very fast. Many of them leveraging the AIC model. So overall, we are totally different company as of today and we are very happy with the changes that we have done.

Greg Palm

Yes. I appreciate that color. And I know a lot of us have been waiting for some time for this acceleration from analog to digital and it seems like it's finally starting to happen. But if you could kind of help us understand is that being driven more by kind of that traditional screen printing industry or how much is actually driven by kind of your traditional customer base that is actually kind of helping accelerate that shift itself?

Ronen Samuel

Yes. So it's being driven mainly from new customers that we are penetrating in the screen market although we see also growth within our installed base. Some of our customers that were dealing in customized design see the opportunity now leveraging our technology to penetrate also the bulk apparel. And we see also some screen printers that leveraging digital technology to go after customized design. So it's a mixed bag. But we need to understand that a few things are happening in the screen market. First of all, is the market changing.

Even without talking about the business model and the technology from Kornit perspective, is the market is changing. I'm traveling a lot, meeting many brands, screen printers; they're all talking about the same thing. They need agility, they need flexibility, they need faster turnaround. The product in terms of run is becoming much, much shorter. They needed onshore or nearshore production and this is a massive change. Another big change in this market is labor. First of all, labor is very difficult today to retain and to find, but it's also expensive. So automation is very, very important.

So this is a major driver for screen printer and anyone that is dealing with bulk apparel that's looking for a new technology. Kornit for many years was working for developing technology that will meet the needs of the screen market. For the first time when we introduced the MAX technology and the Apollo, we finally got to the level that we can meet the quality, the flexibility, the total cost of ownership and the automation that bring with the Apollo. But think about it now that we are bringing the workflow together with PrintFactory, some AI capability as well into the production that's really helping those customers to switch much faster into digital.

Another thing that is very, very important and really accelerating the penetration of Kornit into the screen market is really the new model, the AIC model; which reduce the investment, the upfront capital investment from those screen printers that are not used to invest millions of dollars in equipment. But now they have predictability and they know exactly how much they need to pay per impression, per copy. And digital now is very, very competitive and going after longer run in terms of the total cost of ownership of per impression. Other things -- in the end what we need to know in the screen market is about the customer. I gave few examples.

The example of Jerry Leigh, SNQS in India. We see really main screen printers in places that you wouldn't expect like India, like Sri Lanka, like other places moving to digital and leveraging Kornit technology and I gave few examples. And the results to see 60% of our system sales going to this market speaks by itself. So we are very, very pleased. Another benefit that we see with our customers and many of them really when we are monitoring what they are printing, we see that they're starting to use our technology for much longer runs and they are scaling. Some of the new customers like SNQS, like Jerry Leigh scaling very, very fast, leveraging the All-Inclusive Click model.

Greg Palm

Okay. Thanks for all the thoughts and appreciate that new TCV disclosure. I think that will be really helpful.

Operator

Our next question comes from the line of Erik Woodring with Morgan Stanley.

Erik Woodring

Congrats on the results. Ronen, maybe starting just with 2 related questions. Just first, as we think about the 15% half-on-half growth into the second half, can you help us just better understand where exactly that growth will primarily come from; whether that's upgrades, system sales, consumables; and how that might be different from the first half? And then just a quick follow-up, please.

Ronen Samuel

Yes. First of all, as you know very well, Kornit has a seasonality in our business and always H2 is stronger than H1. Many of our customers has peak season during the end of Q3 and Q4. So traditionally, H2 is stronger than H1. Now in terms of visibility, we are entering H2 with much better visibility. As I mentioned, 80% of our revenue is recurring, re-occurring. So we have a very good visibility to more than 80% of our revenue already. We are entering with a very strong pipeline and some orders already in hand into Q3 and even in Q4 and all of it is coming from systems.

Some of the systems are CapEx systems. Some of the systems are into the AIC model. We have a very good line of sight on the AIC. So if we deliver in Q2, $6.5 million for Q2, you will see expansion of revenue quite significantly in H2 into the AIC revenue that we are collecting in Q2 and Q3. So AIC revenue is a major growth engine in H2 versus H1. Also in terms of the system sales that we are seeing and of course the main growth in H2 is the consumables, is the ink. So overall, not only we expect H2 to grow by 15% versus H1, but we expect a significant expansion in our gross margin and specifically in our profitability because of the consumables.

Erik Woodring

Okay. I'm just writing all that down. And then maybe just a follow-up. You've seen 4 quarters of accelerating trailing 12-month impressions growth. Can you maybe just provide a bit more detail to us about what you're hearing from your customers in terms of their end demand? What could be causing this acceleration? Is it an industry dynamic? Is it maybe somewhat unique to Kornit? Maybe just elaborate a bit on why we're seeing accelerations in impressions growth.

Ronen Samuel

So overall apparel market, and you can read the reports like anyone else, is not doing great. There's ups and downs in overall apparel market. But what we see within the apparel market is that a lot of the jobs are getting shorter. There's many more SKUs, time to market is very important. And this is why we start to see the shift from the growth of the overall market that is kind of a small growth to the growth of digital. So digital growing much, much faster because a lot of the move is moving to short runs, on-demand and onshore production. So we hear it. There is differences between the different regions. We see very strong growth in our Americas, our North America region.

So this is the leading region in terms of the growth. We see also differences between type of customers; between the screen printers to the customized design, between strategic customers to the long-tail customers. We see strong growth in most of our strategic customers. They are growing very, very nicely. On the long tail, we see customers declining. So it's all over the place. But overall, the main message that a lot of the apparel market is moving into short runs, on demand and by that overall digital enjoying Kornit and specifically Kornit, we believe we are gaining share.

Operator

Our next question comes from the line of Brian Drab with William Blair.

Brian Drab

Congratulations. First question is just on the 80% that's recurring now. Does that mean that -- what's in that 20%? Does that mean 20% is outright system sales? And how has outright system sales influenced the first half and second quarter results?

Ronen Samuel

Yes. So in the 20%, there are 2 main components. One is system sales, CapEx system sales and another thing is spare parts, services upgrades -- sorry, not spare parts, upgrades on services that are not recurring. So part of the revenue that you see in services is not part of the recurring revenue. Okay. What is in part of the recurring revenue within the services is our contract and spare parts that we know the tendency of selling them.

Brian Drab

Yes, it's clear. That's helpful. In my model based on the guidance and all these factors, I was kind of assuming there would not be significant outright CapEx system sales. I'm just wondering if those CapEx system sales are a little bit -- the units sold is a little bit higher than you expected or is it on track?

Ronen Samuel

The units sold is higher than what -- right now what we see is higher than what we expected in the beginning of the year. You see there is a split between unit sales that we are selling on CapEx to unit sales that we are selling on AIC. So as you can see that AIC is growing strongly. And the ARR for example in Q2 grew by $7 million, which means it's new systems that we sold to the market on the AIC model. In parallel, of course part of the product that you see the product revenue, which in the product revenue; you have consumable, you have AIC and you have system; there is a CapEx portion there. Actually we had a very good quarter in Q2 for the CapEx and we believe that we will continue also in H2 as we have a strong pipeline. Overall, in terms of system delivery, I would say it's something at this range that 50% of the systems are on CapEx delivery and 50% of the systems are on AIC. It changed between one quarter to another.

Brian Drab

Yes. Okay. And I don't mean to focus too much on that point. I think a lot of people have been thinking about the model. It's easier to forecast. Given you have such a high level of recurring revenue, we're focusing on AIC and it's growing so well. But just been thinking if there's really any system sales in the CapEx category, then that's upside to the results and I felt like that might be happening. And then can you just, Ronen, touch on when you talk about the success you're having with screen printer customers, the traditional screen printers, is that in the U.S. mainly and is that also being driven in part by just the need to change their supply chain dynamics or is that really global where you're seeing screen printer demand? I just want to understand that dynamic better.

Ronen Samuel

Yes. So the answer is very clear, absolutely global and we see a very strong adoption of screen in Europe. I mentioned for example India with SNQS, which is a manufacturing country. Even entered into Sri Lanka; but we see it in Japan and, as I mentioned, in Europe. U.S., yes, absolutely. U.S. is growing. U.S., we see a very nice penetration into traditional screen printers. I mentioned few in previous call and this call as well. So it's all over the globe. The same pressure that customers are seeing in the U.S., we see it also in Europe and in Asia.

Operator

And our final question comes from the line of Jim Ricchiuti with Needham & Company.

James Ricchiuti

Congrats. A couple of questions. I may have missed this information if you gave it. But did you say what percentage of your new customer adds are screen printers? Does this now represent the majority of the new customer adds that you alluded to for Q2?

Ronen Samuel

Yes. So what we mentioned in Q2 and overall in H1 that 60% of the systems that we have delivered, some of them on CapEx and some of them on AIC, went to screen printer. Many of them are net new customers.

James Ricchiuti

Okay. Many of them. Ronen, you also highlighted the roll-to-roll business gaining momentum. I was hoping to get a little bit more color on the progress in this area and what's driving the improvement in that direct-to-fabric part of the business.

Ronen Samuel

Yes. As you know, we spoke about it in the previous call as well. 2025 was a slow year for roll-to-roll. We are putting a lot of focus to gain again momentum because we believe that we have a unique technology and the market is moving more and more into digital, into sustainability, on-demand, pigment becoming a necessity in many different applications. So we just released a new product, which is called Presto MAX PLUS, with new capability to be able to print on unique applications. Digital has an advantage in specific markets like the footwear, like home decor, like technical market and performance market.

So those are the areas that we are focusing our pipeline and our funnel becoming stronger. I can hint that by the end of the year, we are going to announce about additional technology that we are bringing to the market, very exciting technology. I cannot share more than that, but there will be additional technology in this market. So overall, we are excited about the opportunity. Now it's the time to deliver. I believe that H2 will be the time that roll-to-roll will contribute to our total revenue and we are building a strong pipeline into 2027.

James Ricchiuti

Got it. Helpful. Last question from me. How would you characterize the demand that you're seeing from your global strategic customer, including upgrades? And how should we think about the contribution from that customer also as it relates to your second half guidance?

Ronen Samuel

Yes. So I cannot relate to demand and growth of our global strategic customer. This is their business and I would like they will share. I cannot share specific information. I can share what I shared in the past that we started this year upgrades for their installed -- for their systems. There's large amounts of systems going through upgrades started in Q1, continued in H2 and we believe that it will continue also in next year. There are multiple projects that we are working together with these strategic customers, global strategic customers. We have excellent relationship, but I cannot share more information specifically on this account.

Operator

Thank you. And Mr. Samuel, we have no further questions. I will turn it back over to you for final remarks.

Ronen Samuel

All right. So thank you, everyone, for joining us today. We are really pleased with the progress we delivered in Q2 and more importantly, encouraged by what we see ahead. Our strategy is translating into results. Our recurring revenue base continued to grow and we are seeing increasing momentum as traditional screen production move from analog to digital. We know there is still a lot of work ahead of us. Our focus remains on execution, customer success and continuing to build strong and more profitable Kornit.

We like to thank you. Thanks to our customers, our employees, our shareholders for your continued trust and support. We look forward to updating you again on the next quarter. Thank you and have a great day.

Andrew Backman

Great. Thank you, Ronen, and thank you, Assaf, and thank you all for joining us today. As always, please feel free to reach out to me directly should you have any follow-up questions. Shamal, if you could please give the replay instructions, I would appreciate it.

Operator

Thank you. And as far as the replay instructions, you may contact or visit viavid.com for the replay information. And with that, we do thank you for your participation. This concludes today's conference and you may disconnect your lines at this time. Thank you.