Good morning, ladies and gentlemen, and welcome to the Kornit Digital Second Quarter 2024 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. 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 of 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 would like to remind you that forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other U.S. 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 28th, 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 on the company's earnings release, published today, which is also posted on the company's investor relations website. At this time, I would now 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 -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 consumables, 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. 2 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-size runs. In Q2, we received several additional orders for Apollos, with 4 specifically orders 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%-25%, driven primarily by sequential growth in consumables. We also expect positive Adjusted EBITDA on a full year basis and a positive operating cash flow for the entirety of 2024. I'm excited to announce that we will hold an investor event on September 10 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 continue to see improvement in impressions, consumables, and utilization. These enhancements, combined with a backlog of Apollo orders and the growing interest in 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-$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 once again 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 a 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 U.S. 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. 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 -10% to 0% we provided in May. Again, continuing to reflect 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 4 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 a 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 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. 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 tenth. 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%-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're ready to take questions from the audience. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Our first question comes from the line of Mr. Greg Palm from Craig-Hallum Capital Group. Please go ahead. Greg, 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, you know, what gives you confidence that moving this to Atlas is, is the right decision? And does this mean you're now maybe broadening out this program with, you know, certain potential customers, you know, 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. And the initial feedback that we are receiving from customers are very encouraging. As of today, we, as Lauri mentioned, we have signed on multiple Apollos. We are planning to deliver about 15 systems this year. Out of these 15 systems, 10 Apollos will be on the All-Inclusive Click. What we hear from our customer is that they see massive benefit for this program. First of all, it removes the barrier for entry. They don't need to invest the large amount for capital investment in the beginning. They can allocate this investment to other stuff, aligning their expenses with revenues and provide them predictable unit economics. Also, there's a massive benefit for Kornit. It clears their view for revenues, for profitability and cash flow. We expect that each unit that will be on AIC actually will produce more impression and more ink and more revenue. We assume that it will produce about 30% more in terms of impression versus the CapEx program. Think about it. The 10 Apollos that we are going to install this year, each one of them is going to generate, on an annual basis, a $1 million of revenues. This is need to be taken into account into the P&L, starting in Q4, and maybe it will be very meaningful for next year. So, the feedback that we're receiving is very, very positive, and therefore we have decided to open it also for the Atlas MAXes. The reason why we have decided to open it for the Atlas MAXes, because we are meeting many customers that cannot commit to a minimum volume that addressed with the Apollo. Apollo is going after a massive volume, and the minimum commitment in some customer is too high. Those customers that they don't have high enough minimum commitment, the Atlas MAX is the right solution. So right now we have a portfolio of solution to address different volume and different type 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 impression and consumable 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 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 customers, they are growing very, very nicely. We see the growth in impression, we see the growth in, of course, supplies, consumption of supplies. To remind everyone, they increased their fleet in 2023, and now we see the results of these growing fleets and the impression. 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, and the first tranche was about existing, product, and it was, up to $250 million. And the second tranche is about new products, and it's up to $150 million. So if our global strategic account will go and buy new products, i.e., Apollos or Prestos, then they will be able to utilize the second tranche, but they continue to go with the current product as well. Okay, but to be clear, sounds like the relationship is still really solid and obviously growing based on what you said for Q2. A-absolutely. Absolutely. Yep. Okay. I'll leave it there. Thanks. Thank you, Mr. Greg. Now, your next question comes from the line of Mr. Jim 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, when, you know, upon systems recovering, to see any difference in the pace or cadence of recovery between direct-to-garment, direct-to-fabric, if there's any difference there? Yeah, it's totally. There's a massive difference between the direct-to-garment to direct-to-fabric. Totally different markets and different type 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, and this will be also a theme of the event, the investor event that we are going to have. What we hear from brands, retailers, demand generators, is that on-time delivery and speed to market is crucial. Variety of SKUs today is crucial. The lifespan of every product is getting shorter and shorter, and consumer would like to have more SKUs. So all of it is driving shorter runs. And we also can 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 actually 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 is growing, and it's very manual, and quite analog in the way that it's being produced. We have the potential to disrupt this market. We are working with few major producers both in terms of brands and fulfillers or in this market, and there's a lot of excitement. We are in the process to finalize our solution to prove that it's meeting 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 of them is the technical vertical, another one is home decor, and we are going to deep dive into them during our investor event in September. Of course, we continue to see the growth also in the fashion. And there we are focusing specific territories like India, like China, like Peru, 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 much more sustainable way, on time, in much faster speed to the market, in much larger SKUs, both in terms of fabrics and design, and going into a relative shorter run versus the analog that needs to print only longer runs. Great. Thank you very much. You had reiterated your expectation for revenues in the second half to be up 20-25%. So my estimate at 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. Yeah. So, what we have mentioned, we gave guidance, of course, for Q3, and we gave indication for the H2. In terms of indication for H2, we mentioned very clearly that we see right now a growth in revenue of about 20%-25% versus H1. We also said very clearly that we are planning for the full year to be EBITDA positive and to continue to deliver cash flow positive for the coming quarters. So this is in terms of the financials. In terms of the growth that we're expecting, major part of it will come from the growth of the ink. As usual, the seasonality of our business, that H2 is much stronger than H1, and Q4 is much stronger in terms of ink than any other quarter. You would will continue to see the impact of the growth of the supplies both in Q3 and Q4. You should expect to see improvement in gross margin, both in Q3 and in Q4. On top of that, we have a good line of sight for systems that we are going to deliver in Q3, and some of them in Q4. We have an important event in front of us in September, which is the Printing United, which we are planning to collect as well, orders for Q4, for the end of Q3 and Q4. The impact of the All-Inclusive Click of those units that we are installing right now and planning to install during Q3 and Q4, you will start seeing the impact of it in Q4, but the meaningful impact of those units will come 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 just wanted to put maybe just a slightly finer point on that last discussion and last question around the sales guidance. So, my understanding, and you've given us enough, you know, numbers here to do some math, but if the second half sales are up 20%-25% from the first half, then we'd have, you know, that in dollars, that's a range of $111 million to a little over $115 million for the second half, and you gave us guidance for the third quarter. So, you know, we're looking at a fourth quarter that ranges from $59 million-$68 million, and I just wanna make sure that, you know, that math is right, and you're looking at, you know, significant step up in sales from the fourth quarter to third quarter, I guess, Ronen, for the reasons that you just spoke about it. Am I doing that math in line with how you're doing it? Yeah, 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 of course, recognizing over time on the impression, on the clicks are being generated. Okay. Okay, thanks. And then, as you go into 2025, you know, you'll of course have this building revenue base from the AIC units that you're putting into the market now, and, you know, more, and then you'll have further orders. I'm just wondering, you know, can you make any comment on how you're feeling about you know, as we move into 2025 and that typical seasonal downtick that we see in the first quarter, or do you feel like you might, you know, this year it might be a different dynamic because you have that momentum? So 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 in high level, and we were 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, 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, which we are going to share the direction of the business moving forward. Okay. And then can you just comment on, because I think this is so important, you know, how are you seeing the business develop across, you know, for the Apollo and with the AIC across historically, you know, companies that only do screen printing and, you know, only use analog screen printers historically? And are you getting their attention more, and can you maybe give us an example or a couple examples of, you know, that where that's working? Yeah. So first of all, the answer is absolutely. We already closed with few traditional screen printers, some of them with no digital experience. And we have a very strong pipe by moving forward with screen printers, which are first being introduced to digital. They heard about it, but they thought 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, meeting the needs of quality, first of all, of the market, actually surprising in terms of quality versus the analog, the screen, in many, many fabrics and many design, like photographic designs, we're doing much, much better job than screen. And on top of that, the productivity is reaching to totally different limit, and the run lengths are getting shorter. And with this machine, you need only one operator, is starting to make a lot of sense to those screen printers. And we see really good reaction and interest, and 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 also with customers, so some of them 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 reduce the last barrier. And, the intention, as you know, we mentioned on previous call, that this year we are going to deliver 15 systems. Next year, we are planning to double the number of system of the Apollo into the market. We're already collecting orders for 2025, and it looks very, very good. So the issue that I see right now is not the demand. We need to ramp up. We need to make sure that the product deliver what is promised to deliver. At this stage, it looks fantastic. I just want to also just close with my questions by just saying congrats on... And you're sensitive to using the name of the global strategic, but it's mentioned 100 times in these warrant agreements, but some people may have lost track of this, but congrats on hitting $400 million in cumulative sales to Amazon. As Greg, I think, alluded to it, you know, I get questions often on regarding how your business with the global strategic customer is, and that's a real milestone. So congrats on hitting $400 million. Thank you very much. Thank you very much, Mr. Brian. Your next question comes from the line of Mr. Erik Woodring from Morgan Stanley. Please go ahead. Great, thank you very much for taking my questions. I just have two. Maybe to touch on, you know, a number of the questions that are focused on 4Q 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, you know, 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, 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, you know, 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. The way I will approach it is as follows: Look, we went through a very tough 2.5 years, a big change in our market that we were addressing. We were addressing mainly the customized design. This was most of the business of Kornit. Kornit business today, on top of the customized design, that finally the utilization getting to a different level. We are addressing totally new market, if it's the fashion, if it's the screen replacement, if it's the sports, home decor, et cetera. But, you know what? Let's talk a bit about the this year, the past, versus talking about the future, and maybe it will be confident. So what did we say in the beginning of the year? In the beginning of this year, we said that we are going to deliver 15 Apollos this year. We are standing now, and we have full confidence that we are going to deliver it. It's a breakthrough product, and we're already focusing on collecting order for 2025. This is the most disruptive product that ever been in this market. What else we said? We started talking about AIC model in the beginning of the year. I remember there was a lot of confusion. And we said in the beginning that maybe seven out of the fifteen system of Apollo will be on all-inclusive. Now, we can say that probably ten or more of the Apollos that we are delivering this year will be on all-inclusive. It's so successful, and we're entering to new market and incremental volume that we are opening to the Atlas. We said very clearly in the beginning of the year that we continue to cut costs, and our OpEx is going to be the range of $107 million for the year. We are tracking it, although we had one-time negative impact this quarter, we are still committing to that this year will be $20 million lower OpEx versus last year, and we are cutting costs also relating to the COGS, and you can see it in the gross margin. We said also in the beginning of the year that this year will be a positive cash flow for the entire year, and we are delivering on that. And we said that we are going to improve gross margin quarter by quarter, and this quarter we deliver 48%, and you will see an improvement in Q3 and Q4. And EBITDA, we said that we are going to improve our EBITDA, and for the full year, we are going to be positive. You can see the improvement. If you take the $1.5 billion impact of the one-time that we had this quarter, it's a breakeven for this quarter. We said that we believe that the market will improve, and we will see it by the utilization of our customer, of the system, the amount of impression and the amount of ink, and we clearly see it quarter by quarter. Customer utilization is becoming better, even though we are upgrading the system with more utilization to the Atlas MAX PLUS, or to, first of all, to the Atlas MAX and the Atlas MAX PLUS, are providing them additional capacity. We have said that we are going to release the, the MAX PLUS technology, which is going to bring the Atlas MAX even further to another between 15%-20% of utilization for our customers, and we are, we deliver it. And this quarter, substantial amount of units we upgraded, and we are planning to continue to upgrade in Q3 and Q4. So I think that the track record that you see from the team here, that we're executing it to what we are saying. In the last few quarter, we met our, guidance that we gave to the market. I'm hopefully and confident that we will continue to deliver what we said... we, what we are saying to the market. Thank you, Ron, and that, that was an honest answer. And again, my feedback is, you're right, a lot of what you said you would deliver, you are delivering on. And so I just wanna make sure that, that the expectations have not been set too high to, to maybe mask all of the progress that you have made this year. That was some of the point of my, of my question. Maybe just on a follow-up, just in terms of the buyback, I realize you'll save most of the details for on capital allocation for the Investor Day on, on the tenth of September, which I think we're all looking forward to. Can you maybe just help us understand, maybe mechanically, just the timeline that, you know, it will now take to go back to the Israeli courts, get some form of approval? You know, I'm not asking necessarily for, for how much you would increase your authorization by or, or how your capital allocation plans will change, but simply the, the process of getting that authorization, if there's a timeline that we can think about, at least initially, so we can all maybe make estimates, that maybe will get updated, on, on September tenth. And that's it for me. Thanks. Hi, Erik. Let me take that question. So first of all, our existing repurchase authorization expired during the second quarter, as I mentioned, and with the new regulations, there is no longer a need for court approval. All other elements of the regulation remain. We still have a notification, a 30-day notification period, et cetera, et cetera. So we are now navigating this process, and as you noted, we will be looking forward to share with you a more comprehensive capital allocation 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. Hey, guys. Thanks for taking a couple questions. So maybe get back to AIC for a moment. So $1 million in annual revenue on the Apollo. Can you kind of give a reasonable gross margin range for that, that $1 million minimum? So the intention, first of all, 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, during the investor event. Got it. That, 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 kind of the customer profile, you walk through that with the Apollo AIC. Is the typical customer that you're approaching on the, on the Max AIC, is that much different from the Apollo? Is that more, you know, even more, you know, as interest rates come down, is, is that gonna be less of an issue since the cost is, is not what the Apollo is? Just trying to understand who you're talking to there. Yes, it's different. Of course, we are with Apollo. We are addressing, focusing on big screen printers and big retailers, that they have massive volume, that they need to move from analog to digital because they're getting shorter and shorter runs, and they need to deliver them in speed to the market. We are talking about hundreds of potential customers for the Apollo. With the Atlas MAXes, we are targeting smaller screen printers, that they might have two or three carousels only, and they would like to move some of the volume or the entire volume into digital, again, to meet time to market, speed, quality, and better ROI and with much less manpower. There, we are talking about thousands of potential customers. This is the differentiators, and we will again provide much more details on the event in a month from now. Got it. And I'm guessing this last one falls into that category as well, but just it, obviously, the model is changing to more and more recurring revenue, which is a great thing, obviously, with the AIC. Is there a target, you know, kind of range in terms of recurring revenue or percentage of overall revenue a couple years out? We will share more details on the event. I cannot share it right now. Of course, we have targets internally, and we have the 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. Well, 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, and to give the attention to the announcement we just released this morning and on this earnings call relating to the investor event in September tenth 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 panel with key customers, with demand generators. We're going to talk about future technologies. So please, if you can join us in person, please join. If not, be on the call. It will be an important day. Looking forward to see you all. Thank you for your questions. Thank you, Mr. Ronen Samuel. Ladies and gentlemen, this concludes your 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.