Kornit Digital Ltd. (NASDAQ: KRNT) shares plummeted over 12% in pre-market trading on Wednesday, following the company's fourth quarter and full year 2024 earnings release.

The digital textile printing solutions provider reported fourth quarter revenue of $60.7 million, a 7.27% increase year-over-year, driven by growth in product revenue. However, for the full year 2024, revenue declined 7.2% to $203.8 million, primarily due to lower systems revenue.

While the company returned to profitability in the fourth quarter, with GAAP net income of $2.2 million or $0.05 per diluted share, it reported a full year 2024 GAAP net loss of $16.8 million or $0.35 per diluted share. Kornit Digital cited challenges such as inflationary pressures and higher interest rates impacting its customers and suppliers.

The company's outlook for the first quarter of 2025 was also weaker than expected, with revenue guidance in the range of $45.5 million to $49.5 million. This guidance likely disappointed investors, contributing to the stock's sharp decline.

Despite the challenges, Kornit Digital reported positive adjusted EBITDA and strong cash flow from operations in both the fourth quarter and full year 2024, indicating progress in its profitability initiatives. However, the full year loss and weak first quarter guidance appeared to outweigh these positive developments, leading to the significant selloff in the stock.