Q2 2025 Camtek Ltd Earnings Call
This meeting is being recorded.
Ladies and gentlemen, thank you for standing by.
I would like to welcome all of you to kamtex results Zoom webinar. My name is Kenny Green and I'm part of the investor relations team at Camp test.
All participants other than presenters are currently muted following the formal presentation, I will provide some instructions for participating in the Live question and answer session.
I would like to remind everyone that this conference call is being recorded and the recording will be available from the link in the earnings press release. And on campus website from tomorrow,
you should have all received by now, the company's press release. If not, please review it on the company's website.
With me today on the call, we have Mr. Rafi, Amit kex CEO.
Mr. Moshe Eisenberg campeo and Mr. Ramey langa campex CEO Bradley will open by providing an overview of canex results and discuss recent market trends. Moshe will then summarize the financial results of the quarter.
Following that wrapping will share and Ramy will be available to take your questions.
Before we begin, I'd like to remind everyone that the statements made by Management on this. Call will contain 4 looking statements. Within the meaning of the Federal Security laws, those statements are subject to a range of of changes risks and uncertainties. That think that may cause actual results to differ and Vary materially for more information. Regarding the risk factors that may impact campus results. Please review canex earnings release NCC filings and specifically, the forward-looking statements and risk factors identified in the results. Press release issued earlier today, and other risk factors are discussed in context. Most recent annual report on SEC form, 20 year.
Camptech does not undertake the obligations to update. These forward-looking statements in light of new information or future events.
Today's discussion or the financial results will be presented on an on get financial basis. Unless otherwise specified. As a reminder, a detailed reconciliation between gaap and non-gaap results can be found in today's earnings release.
And now, I'd like to hand the call over to Mr. Ray, I mean rafy's, uh, campex CEO Raffi. Please go ahead.
Thanks Kenny.
Hello everyone.
The second quarter with a record performance.
Tier 2 revenues reach 123.3 million reflecting over. 20% growth year-over-year.
We also maintained our gross margin at around 52% contributing a record operating income of over 37 million.
Revenue distribution remained in the last in line with our expectations and closely match last quarter results.
High performance Computing, applications contributed approximately 45 to 50% of total revenue while other Advanced packaging applications accounted for about 20%.
The balance came from simos image, sensor Compound, Semiconductor front, end applications and other General applications.
We continue to observe a shift in quarks, like production, thoughts, or thought.
A trend that plays to our advantages given context strong Market positions in this segment.
We continue to see strong momentum heading into the third quarter.
Based on the current orders our sales Pipeline and ongoing customer engagement. We expect Q3 2025 Revenue to be approximately 1 125 million dollars.
Representing an analyze run rate of half billion dollars a significant milestone for the company.
in addition, we have
Healthy orders flow and pipeline into the force water.
The advanced packaging segment is rapidly evolving with technological changes to support the fast pace. Evolution of high performance computers for AI applications based on analyst research on the semiconductor industry. The advanced packaging Market that support AI related application is expected to grow at an exceptionally rapid rate over the next few years.
This growth is being driven by adoption of new packaging Technologies such as hybrid bonding micro copper bumps with densities below 10 microns RDL with line width of 2 Micron and below and more.
This advancement requires state-of-the-art inspection and Metrology capabilities combined with AI based algorithms to detect defects.
Filter out, non-critical issues and classify defects. Hence, ensure that only high quality components enter the HPC module assembly line.
By integrating Advanced inspection and Metrology tools. Manufacturers can significantly increase yield and gain valuable insight into defect types. Empowering continuous process, refinement, and production optimization.
Contact anticipated, the upcoming technological shift. Several years in advance and made significant strategic Investments to develop Innovative solution addressing this emerging opportunities.
We have invested heavily. Heavily in developing Cutting Edge platform. That combine exceptional, mechanical, Precision with state-of-the-art Optical technology.
This efforts have culminated in the launch of the Oak and Eagle 5 systems.
Delivering breakthrough performance and significantly higher throughput compared to our existing system.
In parallel, we have been developing software solution such as enhance, defect, detection, EDC, and automatic disassociation ABC technologies, that will strengthen our Competitive Edge in the market.
T5 have been exceptionally well received by our customers, and are expected to generate approximately 30% of total revenue this year with an even larger contribution, projected for the next year,
In addition, our micro approved Metrology system. Originated from the frt acquisition has been successfully adapted and accepted by a tier 1. Customer for multiple Metrology applications.
Over 30 systems have already been installed and are now operating seamlessly in full scale production, environments.
In summary.
Camptech has solidify itself position for a market leader in its domain.
We believe the packaging Technologies highlighted today. Represent significant growth opportunities for us in the coming years.
And now, Moshe will review the financial result. Moshe
Thanks roughy, uh Revenue. Uh, for the second quarter came in at a record 123.3 million and increase of 20% compared with the second quarter of 2024.
The geographic Revenue split for the quarter was similar to last quarter as follows Asia 90% and the rest of the world. Accounted for 10%
Gross profit for the quarter was 64 million, the gross margin for the quarter was 51.9%, similar to the previous quarter and an improvement from the second quarter of last year.
Operating expenses in the quarter were 26.6 million compared to 21.6 million dollars. In the second quarter of last year and 24.4 million dollars in the previous quarter.
Operating profit in the quarter was 37.4 million compared to the 30.8% in the second quarter of last year and 37.3 million in the first quarter.
This record with us results, results were achieved, despite an increase in the operating expenses which were mainly due to the exceptionally High shipping expenses related to the conflict with Iran.
Operating margin was 30.3% compared to 30% and 31.5% respectively.
Financial income for the quarter was 4.9 million. Similar to the 5 million dollars reported last year and a decrease from the 5.4 million in the previous quarter. The decrease, from the previous quarter was mainly an impact of the weakness of the US Dollars on re-evaluation of certain balance sheet items.
Net income for the second quarter of 2025 was 38.8 million or 79 cents per diluted share. This is compared to a net income of 32.6 million or 666 cents per share in the second quarter of last year. Total diluted number of shares. As of the end of the second quarter was 49.3 Million.
Standing now to some high-level balance sheet and and cash flow metrics.
Uh, so Cash, Cash equivalents, including short and long-term, deposits and marketable securities.
as of June 30th 2025 where 544 million this compared with 523 million at the end of the first quarter,
We generated over 23 million dollars in cash for operations in the quarter.
Accounts receivable increased 212 million from 100 million in the previous quarter, mainly due to timing of collections.
Inventory levels increased to $1,149 million from $142 million. The increase over the quarter is primarily to support the anticipated sales growth of our new Eagle, Gen 5, and Hawk products in the coming quarters.
As raphe said before, we expect Revenue revenues of around 125 million in the third quarter.
And with that roughly running and I will be open to take your questions. Kenny, thank you Moshe at this time, we'll begin the question and answer session. If you have a question please raise your hand by the zoom platform.
you may ask your question, so we'll give a few moments for everyone to, uh,
For themselves in the cube.
Our first question will be from Charles XI from Nem Charles. You may go ahead and ask your question.
Thanks for taking my uh, question. Uh, maybe the first question, uh, want to gather a little bit of the updated, uh, thoughts about the composition of the business. Uh, maybe for the second half of the year or, or maybe for the full year. We we share the um, a time for you, you guys prefer to discuss. Um, so want to ask, uh, HPC, uh, what's the expectation for the second half of the year? Maybe from a mixed perspective? Clearly first half, it has been around that 45 to 50% level, is it uh, similar level into second half or for the full year and uh On a related question, do want to ask uh, what's the current expectation for China? Uh, contribution to the total revenue for the year last time. I think you guys, uh, were more looking at the 35 to 40% of the total revenue. Has any of that? Those numbers changed. Thank you.
so, thank you, Charles
Um, so let's talk a little bit. We'll start with your first question. We see a positive momentum in the second half.
And as we discussed in the pre, in the, in the, in the roughly discussion, we have a healthy order flow and pipeline.
Um, we provided
a positive guidance for Q3 and will provide the guidance for Q3 Q4 in the next earthquake.
Regarding the HP.
So we expect the HPC contribution to our revenues in the second half.
To be not much different than the first half.
And regarding China, uh, Charles High regarding, uh, the the China contribution to the business. All together, China is obviously significant to contact, uh, has been so for many years,
Last year, the number at the contribution was around 30%. We expect the this year, the contribution will be uh a little bit higher than than that. Still early to say how much will be the contribution for the second half, but we expect it to be uh, a little bit higher.
Thanks. Um, okay, uh, uh, uh, specifically on China? No, no. Uh, additional quantitative, uh, uh View for the year. Uh, maybe a second question, a little bit more, uh, at a higher level and, uh, maybe this is more about product and Technology. Um, KOA, uh, has been making, uh, good amount of inroads in 2.5d. I especially at the leading Foundry and, uh, uh, looks like they are looking at at the HPM opportunity as well, but, uh, so far looks like, uh, it's more around hybrid bonding related to hbm opportunity. Maybe a little bit by concentrated, uh, at 1 customer that, uh, is focusing on hybrid bonding want to get your general thoughts, um, kamtex position versus potential entry of KOA in your existing HPC markets. And uh uh what what, what's management
Uh, thought, um, how to compete. Effectively, uh, versus KOA. Um, and uh, um, yeah, let's go from there.
So, let me start with the hybrid bonding. We see the hybrid bonding as a great opportunity for us.
This field is still in the early stages and we are running our tools today at strategic customers and we believe that we have the necessary capabilities and inspection and Metrology to address the hybrid bonding opportunities.
Now, you know, we discussed the KLA penetration and, and trying to get in some of the into this Market. I think we discussed it also in the last call.
And and we've already been engaged in competition with KLA on multiple occasions.
Different customers I would say for the last couple of years and we demonstrated that our equipment is highly competitive.
Move looking into the future. We offer a very competitive market.
Now, in general, the advanced packaging is our Market. We are well known. We have excellent relationships with our customers, and we understand exactly their requirements. Moving into the future,
but I I and therefore, I think, if I would like to summarize, I think the unique combination
of our technology scale, which is important here and flexibility.
Are key reasons why many customers choose to work with us over larger competitors?
Who often are slower to respond?
Thank you. That's all from me.
Thank you. Thank you. Thanks. Charles
Our next question is from, Matt Frisco of cancer, Matt. You may go ahead and ask
Hey guys, thanks for taking the question. So I guess first for your product ramps, can you go over where you're seeing the greatest traction today? For both the eagle G5 and the hawk in terms of applications and kind of what are the primary drivers beyond the behind the strong customer reception here.
so,
So I think it's a few, a few things to drive the new products. So let me start with the Hulk.
I think the Hulk provides 2 very important capabilities that are first of all, very high throughput, that is very important where people are very sensitive to their footprint, in the Fabs and on the other side, it provide the path.
To very, very, I would say, difficult applications.
That people will need now or into the future and I think people that are looking into these changing Market.
That the products are changing and people are not sure what they will need in a year to the help provides the path to address those challenges with the capabilities it has today. And this obviously relates to the microbes, you know, with the pitches coming very small
Very high number of bands, hybrid bonding.
A lot of challenges in the inspection Market all of these challenges. The hawk provides a very very good solution moving forward.
On the G5. I I think compared to the eagle. It's much faster.
And I think it addressed to the game from the Optics, point of view, the ability to detect, um, I would say defects that we couldn't previously.
ER, address with the current products.
Um, and other capabilities. So, for the, I would say for the price tag,
Of million plus no doubts. Today, the Eagle provides the best-in-class solution in the marketing. So I would say it's two different reasons; it's two different product lines. Um, and I think what I've discussed, these are the reasons for the very high traction by our customers. And I think, as we said in our prepared notes, we were able to achieve 30% of our revenues this year.
With with 2 product lines which is exceptionally well. And I expect that um we will see more next year and maybe a few words about the applications. So as I said and I will, I said it maybe not clear enough, I just want to make sure that it's well understood. So first of all the applications are, I would say large number of thumbs. That's very important. Very small defects,
The hook will address defects down to 150 nanometers. And this is very this is challenging and this is very important for hybrid bonding and other to the inspection requirements.
And, of course the throughput and similarly the eagle G5.
On a on a different, I would say not to the extent of the capabilities of the hook, but definitely a very good solution in the price range. That is being offered.
if I answered your question,
How you're thinking about kamtex growth prospects, overall, for the company, it's a 2026. Thank you.
2526 266 26, so look regarding 26. I think our market and specifically the high performance Computing are expected to grow rapidly in the coming years.
This Market also technologically changes and the HPC is undergoing. A lot of changes that we believe will create a lot of opportunities for us.
For example, and I think Rafi mentioned it in his, in his prepared notes.
Find Peach micro bumps hybrid bonding hbm and and many others.
so, if I look at these opportunities at our Market position, assuming a positive Market environment in 2026 with no doubt support another growth year for content,
Thank you guys.
Thanks man.
Our next question will be from Ezra weina of Jeffrey's. Ezra, please, go ahead and ask your question.
Hi. Yeah, thanks for taking my question. Uh I guess it's a 2-part uh first. Can you talk a little bit about the content uplift from HPM 3/3 to HPM 4 for you guys? Uh, I know there's a couple different paths, people are going with it. So what you're seeing there and then second part of that question would be, from a, uh, capex perspective, what you're seeing at your customers, and, uh, what you're seeing for HPM specifically is we wait for potential qualification,
Thank you.
So so, obviously the HBA Market from capacity point of view continues to grow and and we're seeing customers adding capacity.
now, in general, the app Lyft and the
You know, it's it goes in a few ways. First of all, there are more hbms but a product we see the the density is growing, not the drastically. I think the the the major jump
In density from the hbm will come probably late, 26 early 27, but definitely on the, on the 4, it's moving to more layers. And eventually this means that we will scan more Wafers and there is some change in the, in the number of uh of bumps, some Peach differences. But all in all, um, we've already been qualified.
Okay, some customers for the HBM 4. So all in all, it's a very positive path. We're getting very good, I would say, input from our customers. So expect that definitely HBM 4 will be a positive opportunity for us.
got it then if you could just talk a little bit about what you're seeing in terms of uh, timing for customers spending and kind of the shape of that spend
um,
In terms of, hmm, for specifically in in, hmm, for specifically. Um, I would say that customers are talking to us. Hmm. For we are starting to see initial forecasts, uh, to support the athlete of the hbm 4.
I think more than that, I will not be able to um, to discuss during this call.
Understood, thank you very much.
Thanks, Ezra.
Our next question will be from Craig Ellis of the Riley. Craig you may go ahead and ask a question.
Yeah, thanks for taking the question. I wanted to follow up a little bit on hbm, for to start. So it sounds like it. It's very immaterial part of revenues today. And and the visibility may not, uh, be clear on when you'd get the crossover from hbm3 to hbm for related revenues. But if you have some idea of that sounding like 2026, it would be helpful. The question is more this. Um, what? When you look at the specific feature enhancements, in either G5 or Hawk, what are they that are uh, very advantageous for hbm 4. And what does that mean for the trajectory of gross margin as we move through the hbm for ramp up period?
Okay, so thank you. Greg for the question.
Now.
The equipment that we saw the most of was the equipment that we sold to HBM3.
Will be used for hbm Force as well.
So it's not that the you know what we sold in 25 or 24. This is in material for the additional growth. So this
Some of these equipment has already been qualified to address the hb4.
So specific this is in in January. However, the reason at least this is going to be an increase in capacity for the hbm 4.
And what I indicated in my previous answer is that we are already in the process of talking to customers about the forecast for hbm 4, definitely. This will start to happen early in 26 where in this we will ship
Equipment to support the HP and 4 more than that. I will not be able to give you any details now, going to the Hulk versus the Eagles.
The advantage of the whole, as I discussed in one of the previous questions, are two things. First of all, it's the throughput, which means immediately.
Much better footprint in the Fab.
It's the ability to address a large number of bumps, and the HBM is going in this direction.
Its inspection capabilities. Today already down to 159, nanometers already were demonstrating it at customers.
This capability will be able to support. Also the hbm, the, the hybrid, the hybrid bonding requirements. So definitely all in all when a customer is looking today, whether he wants, you know, an eagle versus he wants a hog those that are thinking about the future and want to ensure that they will be able
To support their products in 2 or 3 years. Some of them lean towards making a higher investment today and buying the hog.
From gross margin in general, the Hulk is more expensive and it will have a positive contribution to our gross margins.
It answer your question, Greg.
Yes, it does Ramey, thank you very much. And the next question is uh, a somewhat intermediate to long-term question. And I'll start with congratulating the team on on being just inches from um, driving the business to its 500 million run rate target. So so good for you for getting so close to that Target. Um, but the question is this, if we look at the list of incremental growth drivers, we spent a lot of time on hbm 4 and it sounds like that would be at the top of the list. But as we think about growth through 2026, what are the next couple of applications that we should be focused on as your bigger incremental growth drivers over the next 18 months. Thank you team.
So I think, first of all, no doubt, the high performance Computing is going to be a main driver for our business.
This goes to Metrology in general 3D Metrology. It's also in the Metrology and roughly in its prepared. Remarks talk about the I would say phenomenal success. We have seen at the Tier 1 customer with our Metrology line and that's a line that's also going to contribute. I think it's a very good growth engine Metrology. In general, for our business.
And so I would say that the high performance Computing and getting into more and more applications. We are gaining more and more traction on the inspection part. And definitely, that's a big Market with our capabilities on the G5.
And on the hog specifically ability to go and detect very small defects.
In the range of 150 nanometers, we will definitely try a lot more applications outside, as well as in high-performance computing.
That are going to push us much, I would say, would game to give us.
A lot of strength on the inspection side.
But all in all no doubt we are in the market, it's going to grow at the ran run rate with what I hear from all the different analysts over 25% growth in the next few years. So definitely, I think this is the main driver of
of course, our task is to gain more and more applications.
In this market. Now we haven't forgotten the other markets. The I would say the conventional Advanced packaging fan out and other applications.
Still have a very nice momentum.
And last but not least today. Um, I think still, we see a lot of opportunities in the front end.
Compound semi is comparatively depressed in the last couple of years but definitely this is an opportunity looking into the future.
And, and don't forget, we have...
I think about 350 customers 200 active every year. A lot of ones and tools, that all of them will definitely provide additional opportunities in the foreseeable future.
Thank you, Romy.
Thanks, Craig. Our next question is going to be from Gus Rashad of Northland. Gus, please go ahead.
Yes, thanks for taking the question. Um, just in terms of the oats, um, can you talk a little bit about uh what you're seeing in terms of applications how that compares to you know the traditional foundries that do um Advanced packaging for HPC?
I guess a
it's it's it's a very interesting you know process that we are seeing because I think we started to talk about it a year ago that we expected the oats to start to take a I would say a position in the high performance Computing and this is definitely what we are seeing. They used to do, they started to go into the heterogeneous integration a couple of years ago, started with these applications, we are seeing major all sets today. Some of the just do the kovaz and I think that the tsmc made some uh, remarks about it about specific names, but definitely, we are seeing all the major osas going into cos or what we call kovaz. Like it's something similar. It's becoming a significant, uh, business.
and then we're definitely, you know, it's it's significant number of orders that we are seeing for these applications from the major also sells
Yeah. Can you hear me? Yeah, we can hear you. Did you hear my answer?
No. But, um, I can follow up later. Um, okay. All right, so we'll have a follow-up later. Thank you, guys.
Yeah.
Uh, follow-up is how um, how do you see the opportunities um, for like chiplets and advanced Packaging?
Well, look at the chiplets. We look at the chiplets in general. The spark of high-performance computing, you know, eventually it's a chiplet which is either the GPU or CPU, depending on the context.
Actually, I would say the design of the high-performance computer, and with it, you know it's surrounded by the high-bandwidth memory. So from that point of view, when we talk about ATPC, we specifically talk about chiplets, the high-end chiplets.
But in general, no doubt this market is picking up as part of all the changes in the market.
and,
I think from all the numbers that I'm seeing, it will continue to grow very in a very healthy way in the foreseeable future.
Got it. Thanks. Thanks guys.
Our next question is from Amali of Berkeley. You may go ahead and ask your question.
Hey guys, thanks for taking my question. And apologies. If this got asked already I just topped on from another 1 but uh I think you guys gave Advanced packaging is about 20% of the the revenue mix in the quarter. Can you talk about how much of that is hvm today? Versus a year ago, has the percentage within Advanced packaging grown pretty materially and maybe give us an update of how much of that is hbm today.
Correct. So
70% of our business goes to what we call the Advanced package.
High Performance Computing, or HPC, as it's referred to, is part of our advanced packaging. Out of these, 70%...
50% goes to HPC and 20% goes to what we call conventional Advanced packaging such as spell out.
In the HPC and because of the, we we do not specify what goes to chiplets and what goes to the high bandwidth memory. And the reason for it that there is changes and it depends when the orders are coming and it's too complicated and therefore we've been just talking about high performance Computing and for the last few quarters, we've been at a run rate where 50%
Of our total revenues, a portion went to high-performance computing, which includes HBM and chiplets.
Gotcha, thank you for that. I, uh, wanted to ask a little bit of a strange one, so bear with me. In a world right now where you have two major memory suppliers that are qualified on HPM for the largest guy in the world, and there's a third that's attempting to do that pretty aggressively, which world suits you the best into next year? A world in which it is still two guys that are qualified that need to...
Add more capacity or a world in which there are 3 qualified guys, all who are serving the market if you could walk through that, that'd be super helpful. Thank you.
So, you know,
we don't have any preference, whether it will be 2 or 3. All of the players today are very good customers to us,
And if 1 of the there is not qualified will be qualified, we will enjoy it with the additional.
Application and steps. And we're working very closely with all of them. So we're fine with 2 and we will be very fine. Also with 3
Tell me, you're on mute.
I'm all good with those 2. Thank you guys. Thank you Tom.
Our next question will be from Edward Yang of Oppenheimer. As you may, go ahead and ask.
Hi, uh, thanks for the time. Uh, Moshe mentioned the high shipping costs that may have elevated your Opex. Is that moderated now?
Yes, this this has been, uh, a kind of an exceptionally, uh, high level of shipping expenses due to the, uh, uh, conflict with Iran. Now, that the conflict is muted to some to some degree. Uh, the shipping expenses, went back to normal rates, uh, and, uh, we don't expect anything like that.
I think the third quarter, if the situation remains as
Is, and can you quantify, what the impact was in the second quarter?
It, it was over half a million dollar.
Yes, got it. And um, just clarify on the positive momentum that uh, Ramey was talking about and you're seeing in the second second half of the year. Are there any seasonal puts and takes that could, um, impact fourth quarter? Or should we also expect that to grow, uh, Revenue sequentially and for the, the 2026 expected growth, um, you know, the street is mod modeling about 7% total revenue growth, but that's, that's slower than what's typical for you. So, um, maybe you could help us reconcile. Um, you know, any Divergence there or any reason why we shouldn't see another year of double digit growth for camptech in 2026. Thank you. So,
You know, I I it's too early definitely to talk about Q4 and we will uh, discuss it in the, in the next earning code. But as I said before,
There is positive momentum in the second half, and this is based on orders on hand.
On orders that are in the pipeline. And as we said, we did provide a guidance for Q3 that is positive. And and therefore, I think the overall second half is, is definitely as, as, as we said, we we are it's a positive momentum. Now I'm going back to 26 and you know, there are lots of discussion today. How 26 will look like
So, uh, through with everything that we do. But, as I said, the high-performance computing.
is growing rapidly and will continue to grow in the foreseeable future.
And with the technical changes and everything that is happening in the market.
It's we
Assuming.
A positive environment in 26, definitely will lead to another growth year for context.
What will be the percentage? It's really too early. Unfortunately, it is too early today.
But we'll talk about it in future calls.
Fair enough. Thank you very much. You're welcome. Thank you. Thanks.
Our next question will be from Dennis patchin of SEO. Dennis please go ahead and ask your question.
Okay, thank you. This is Dennis on for Brian at staple. So for my first question, um, maybe you could discuss that for hbm, phora. What is the expected ratio of hawk versus eagle shipments? Would you expect to be roughly even or do you think for hbm for that, customers would require more of the newer system?
Um, so first of all, this is very customer dependent and so and we we don't really give these numbers of eagle versus the whole application.
Um as I said um the the Hulk has specific advantages in term of capabilities in throughput accuracy and and other aspects.
That for certain applications and specifically. For those that want very high volumes in the HP and 4 may take some of the capacity will move into Hawks, but then again, this is very customer specific. And as we said, both products are very successful in the market and definitely there is. And don't forget, it's not just HPM, a lot of the business goes to the conventional Advanced packaging. And there are many other applications where the eagle line I think, is the best product for the price. It is offered today on the marketplace.
But then again we'll probably as time goes by we'll be able to give you a much more. I would say clearer estimation and discuss this a little bit more accurately but that's more or less what we see today.
Great. Thank you. Yes. Can you hear me? Yeah, yeah, okay. Great. And then for my follow-up, maybe you can tell us a little bit more about the oats. So, do the oats continue to exhibit more signs of strengthening? And maybe you can tell us, you know, what's driving this? Is it just purely calls or something else? And you know, do you have any view on your oat logic expansion plans for the second half of 2025 and into 2026?
Well, definitely 2026 is is is too early to discuss the the oats and don't forget, a lot of these players are still planning 26 and are still not in a position to release orders to give us the the actual forecast.
But I think for all sets today um where we see a lot of the growth is coming, first of all, from the HPC, as we discussed before, the major offers are starting to produce the KOA and KOA slice applications, and this is definitely a very high growth area. And I think this trend started a year ago, we see it undergoing today and will continue into the foreseeable future.
But don't forget, there is a lot of uh, regular Advanced packaging and spin out and other applications. We see a lot of this business, still strong in the oats, and we're shipping.
Equipment to address those applications, as we speak, in each of the quarters, that some of the applications are all sorts of buying equipment from us. So I would say from the OETS, the major, I would say, two applications are the ones I discussed.
Wonderful. That's it for me. Thank you, thank you. Thank you, thanks. Dennis.
Our next question will be from the vet area from Bank of America. Please go ahead.
Changes to, you know, the investment plans that any, your trip with customers. Um, and to, what extent, you know, could this already be reflected in your backlog. Um, and you know,
Could we see this demand be made up by some of your other customers over time as well?
Well.
You know, these are there are discussions about you know and and the 4 customers may move by by quarter here and there. And and and this happens, you know, on a regular basis that people move around, you know, their their focus
We have not seen anything significant in terms of changes in the focus to our shipment. Um, so I.
Can't comment on anything more than that. I've just said.
Got it understood. Thank you. And just um uh on your newer products. Uh you said that 30% of sales this year would come from Hawkins G5. Um, so could you give us an idea of how much of that is weighted in the second half? And then I, I guess my main question kind of the spirit of, like, of other questions that people have asked, um, earlier in the call. Uh, I mean, how much incremental growth are these new tools driving for you? Would you say that they're mainly replacing? Uh, for now mainly replacing demand that you would normally see for your older systems and is it possible that we won't see the incremental growth from new applications new customers, really, until
We get to something close to hm4 just how would you frame the incremental growth opportunity over the near term from these new tools?
So, let me answer your first question. First of all, the G5.
Was actually introduced in the market a little earlier than the Hawk. So we started to ship it in larger quantities already at the beginning of the year. Actually, if I recall correctly, the first shipments were done in Q4 of 2024, and then we gradually increased it. So it was really loaded very nicely already in the first half, and we continue to see growth into the second half as well.
And the shipment actually started a little later, and it's more, I would say, the load.
Well, maybe I would say we started more in the second quarter and and we'll probably most of the shipments will be divided on on 3 quarters and obviously, we will see more shipments and the I would say the percentage will definitely be higher in 26.
Now, going into applications.
Definitely, we are seeing.
More applications but I will put it in a different way.
I think that our product lines today when we talk about the G5 is more competitive than the eagle.
And it's definitely more competitive today compared with our competition. So I think this will potentially mean for us to take market share.
As we move into the future and gain some applications, these applications require, I would say, more performance. It's always about throughput, and it's always about better detection. So this is, in general, when we talk about the Hulk, definitely.
These are capabilities that we didn't have before. So definitely, this will open a lot of opportunities for us as we move along.
and,
But still, it's too early to quantify it.
Great. Thanks so much.
You're welcome. Thanks Rebecca.
That will end our question and answer session.
Before I hand it back to Raffi for his closing statements, I'd like to mention that in the coming hours, this call will be available from the Investor Relations section of the Hex website at sc.com.
And with that, I'd like to thank all of you for joining this call. Raffi, please go ahead and make your closing statements.
Rafi.
Okay, what's the mute? Sorry.
I would like to sincerely thank all of you for your continued interest in this subject.
A special note of appreciation, goes to our dedicated employees and exceptional management team for the outstanding performance and commitment.
Grateful for your trust and long-term support. I look forward to updating you in our continued progress in the next quarter.
Thank you.