Q2 2026 Camtek Ltd Earnings Call

August 10, 2026

Speaker #1: Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtech's Result Zoom webinar. My name is Kenny Green, and I'm part of the Investor Relations team at Camtech.

Speaker #1: All participants other than the presenters are currently muted. Following the formal presentation, I will provide some instructions for participating in the live question-and-answer session.

Speaker #1: 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 Camtech's website from tomorrow.

Speaker #1: You should have all received by now the company's press release. If not, please view it on the company's website. With me today on the call we have Mr. Rafi Amit, CEO; Mr. Moshe Eisenberg, CFO; and Mr. Rami Langa, COO.

Speaker #1: Before we begin, I'd like to remind you that the statements made by management on this call will contain forward-looking statements within the meaning of the Federal Securities Laws.

Speaker #1: Those statements are subject to a range of changes, risks, and uncertainties that can cause actual results to vary materially. For more information regarding the risk factors that may impact Camtech's results, please review Camtech's earnings release and SEC filings, and specifically the forward-looking statements and risk factors identified in the results press release, issued earlier today, and such other factors discussed in Camtech's most recent annual report on SEC Form 20F.

Speaker #1: Camtech does not undertake the obligation to update these forward-looking statements in light of new information or future events. Today's discussion of the financial results will be presented on an ungapped financial basis, unless otherwise specified, as a reminder a detailed reconciliation between gap and non-gap financial results can be found in today's earnings release.

Speaker #2: And now I'd like to hand the call over to Mr. Rafi Amit, Camtech CEO. Rafi, please go ahead.

Speaker #3: Hello everyone. I'm delighted with our second quarter result, and even more excited about the exceptional momentum we are seeing across our business. More importantly, the expectation we share with you on our previous call regarding the second half of 2026 and our leadership position in the advanced packaging market are now becoming a reality.

Speaker #3: As you will hear, through today's call. But first thing first, let's begin with our second quarter financial result. Second quarter revenue reached a record of 133 million dollars exceeding our guidelines.

Speaker #3: Gross margin was 51.4%, and operating income totaled 36 million dollars. Approximately 75% of our revenue was generated from the advanced packaging segment. With the majority supporting AI-related applications.

Speaker #3: The remaining revenue was generated across a diverse range of 2D inspection applications, including photonic and various 2D inspection applications. Now let me return to the point I made at the beginning of the call.

Speaker #3: Earlier this year, we communicated that we expected the second half of 2026 to be significantly stronger than the first half. That expectation has materialized.

Speaker #3: Since the beginning of the year, we have experienced a significant acceleration in order intake. Bringing total orders received year to date to more than 600 million dollars with deliveries scheduled through the remainder of 2026 and into 2027.

Speaker #3: This exceptional level of order intake has significantly improved our business visibility for the remainder of 2026 and well into 2027. Giving us increased confidence in our outlook.

Speaker #3: Our leading position in the advanced packaging market is expected to drive approximately 45% growth in our advanced packaging business in the second half of 2026, compared with the first half.

Speaker #3: Looking at the year from another perspective, we expect our advanced packaging revenue in the fourth quarter to be approximately 70% higher than the first quarter, reflecting the strong acceleration in demand.

Speaker #3: In the second quarter, approximately 50% of our systems revenue was generated by the new generation platform, the Eagle G5, and the Oak. We expect the contribution from these products to continue increasing over the coming quarters, as customer adoption accelerated.

Speaker #3: Let me provide some additional color on the more than 600 million dollar orders we have received since the beginning of the year. Approximately 80% of these orders are advanced packaging applications.

Speaker #3: The industry transition to HBM4, together with continued capacity expansion, has resulted in significant order from multiple leading HBM manufacturers. In parallel, the ongoing expansion of 2.5D and 3D IC packaging capacity is creating a substantial growth opportunity for Camtech as reflected by the large multi-system orders we have already received from leading foundries, IDMs, and OSATs.

Speaker #3: Notably, OSATs accounted for more than 50% of our total order intake. Another existing market emerging as a meaningful growth opportunity for Camtech is photonics including silicon photonics and compound semiconductor.

Speaker #3: We have already received multi-system orders from several customers in this market, and we expect photonics to become an incredibly important contributor to our growth in the coming years.

Speaker #3: This brings me to our outlook. We expect third quarter revenue to be in the range of 158 million to 160 million dollars, representing an exceptional 20% sequential increase over the second quarter.

Speaker #3: Giving our strong order momentum and record backlog, we expect to deliver more than 30% growth in H2 2026 versus H1 2026, followed by continued growth into 2027.

Speaker #3: It is also important to highlight that we are continuing to expand our core product portfolio with new platform configuration and applications specific module that will enable us to address additional applications and markets where we have not previously competed.

Speaker #3: Example including a high-resolution backside inspection module and fluorescence illumination technology for detecting organic residue. In the metrology space, we are also launching a new platform, Nanoprof, which will significantly expand our metrology capabilities and enable us to address with existing and emerging process step.

Speaker #3: The Hawk, combined with its enhanced optical capabilities, and our breakthrough AI technology, is further strengthening our competitive position and enabling us to penetrate additional process steps, including hybrid bonding as well as other fast-growing emerging applications.

Speaker #3: We look forward to discuss these development in greater detail at our investor breakfast in October at Semicon West. I am also pleased to report that we are successfully managing the operational challenges created by this unprecedented level of demand.

Speaker #3: We prepare well in advance by expanding our production capacity and strengthening our supply chain enabling us to meet customer delivery schedule while supporting our continued growth.

Speaker #3: At the same time, we are preparing the organization for the next stage of growth by further expanding our manufacturing capacity system integration capabilities self-organization and customer support infrastructure to support substantially higher annual revenue level.

Rafi Amit: Detail at our investor breakfast in October at SEMICON West. I am also pleased to report that we are successfully managing the operational challenges created by this unprecedented level of demand. We prepare well in advance by expanding our production capacity and strengthening our supply chain, enabling us to meet customer delivery schedule while supporting our continued growth. At the same time, we are preparing the organization for the next stage of growth by further expanding our manufacturing capacity, system integration capabilities, sales organization, and customer support infrastructure to support substantially higher annual revenue levels. Let me conclude by summarizing our key messages. The AI revolution is driving unprecedented demand for data center, compute capacity, and power infrastructure. With AI adoption still in its early stage, we believe demand for AI compute infrastructure will continue to grow significantly, supporting sustained investment in AI data center and advanced semiconductor manufacturing.

Speaker #3: Let me conclude by summarizing our key messages. The AI revolution is driving unprecedented demand for data center, compute capacity, and power infrastructure, with AI adoption still in its early stage we believe demand for AI compute infrastructure will continue to grow significantly supporting sustained investment in AI data center and advanced semiconductor manufacturing.

Speaker #1: Still, at our investor breakfast in October at Semicon West, I'm also pleased to report that we are successfully managing the operational challenges created by this unprecedented level of demand.

Speaker #1: We prepare well in advance by expanding our production capacity and strengthening our supply chains, enabling us to meet customer delivery schedules while supporting our continued growth.

Speaker #3: Camtech is exceptionally well positioned to benefit from the expected growth over the coming years. We have hundreds of system install at the world's leading customer and we work closely with them to develop inspection and metrology solutions tailored to their evolving technology requirements.

Speaker #1: At the same time, we are preparing the organization for the next stage of growth by further expanding our manufacturing capacity system integration capabilities self-organization and customer support infrastructure to support substantially higher annual revenue level.

Speaker #3: Our product development roadmap is closely aligned with the technology roadmaps of this industry leaders. This strong customer engagement combined with our expanding products portfolio and proven execution giving us great confidence in our ability to deliver sustained growth in the year ahead.

Speaker #1: Let me conclude by summarizing our key messages. The AI revolution is driving unprecedented demand for data center compute capacity and power infrastructure, with AI adoption still in its early stage we believe demand for AI compute infrastructure will continue to grow significantly supporting sustained investment in AI data center and advanced semiconductor manufacturing.

Speaker #3: And now Moshe will review the financial result. Moshe, thanks Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis.

Speaker #1: Camtek is exceptionally well positioned to benefit from the expected growth over the coming years, we have hundreds of systems installed at the world's leading customer and we work closely with them to develop inspection and metrology solutions tailored to their evolving technology requirements.

Rafi Amit: Camtek is exceptionally well-positioned to benefit from the expected growth over the coming years. We have hundreds of systems installed at the world's leading customer, and we work closely with them to develop inspection and metrology solutions tailored to their evolving technology requirements. Our product development roadmap is closely aligned with the technology roadmaps of these industry leaders. This strong customer engagement, combined with our expanding product portfolio and proven execution, giving us great confidence in our ability to deliver sustained growth in the year ahead. Moshe will review the financial result. Moshe?

Speaker #3: The reconciliation between the GAAP results and the non-GAAP results appear in the table at the end of the press release issued earlier today. Second quarter revenues came in at a record level of 133.2 million dollars.

Speaker #3: An 8% increase year on year and 10% compared with the first quarter of 2026. The geographic revenue split for the quarter was as follows.

Speaker #1: Our product development roadmap is closely aligned with the technology roadmaps of this industry leaders. This strong customer engagement combined with our expanding products portfolio and proven execution giving us great confidence in our ability to deliver sustained growth in the year ahead.

Speaker #3: Asia accounted for 92% and the rest of the world 8%. Gross profit for the quarter was 68.5 million dollars. The gross margin for the quarter was 51.4% similar to the previous quarter.

Speaker #3: Operating expenses in the quarter were 32.5 million dollars compared to 30.9 million dollars in the previous quarter. The main area which has increased is R&D.

Speaker #1: And now Moshe will review the financial result. Moshe, thanks.

Moshe Eisenberg: Thanks, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appear in the table at the end of the press release issued earlier today. Q2 revenues came in at a record level of $133.2 million, an 8% increase year-on-year, and 10% compared with Q1 2026. The geographic revenue split for the quarter was as follows: Asia accounted for 92% and the rest of the world 8%. Gross profit for the quarter was $68.5 million. The gross margin for the quarter was 51.4%, similar to the previous quarter. Operating expenses in the quarter were $32.5 million, compared to $30.9 million in the previous quarter. The main area which has increased is R&D.

Speaker #2: Rafi, in my financial summary ahead I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appear in the table at the end of the press release issued earlier today.

Speaker #3: This is around the investment in new technologies and additional resources from the visual layer acquisition in order to strengthen our AI offering. Operating profit in the quarter was 36 million dollars compared to 31.1 million dollars in the first quarter.

Speaker #2: Second quarter revenues came in at a record level of $133.2 million, an 8% increase year on year and 10% compared with the first quarter of 2026.

Speaker #3: Operating margin was 27% compared to 25.5%. In line with our forecast for a strong second half, the leverage we have in the model together with the improved product mix towards the Eagle Gen 5 and the Hawk is expected to result in a gradual improvement across all profitability metrics in the next few quarters.

Speaker #2: The geographic revenue split for the quarter was as follows: Asia accounted for 92% and the rest of the world 8%. Gross profit for the quarter was $68.5 million.

Speaker #2: The gross margin for the quarter was 51.4%, similar to the previous quarter. Operating expenses in the quarter were $32.5 million, compared to $30.9 million in the previous quarter. The main area which has increased is R&D; this is around the investment in new technologies and additional resources from the Visual Layer acquisition, in order to strengthen our AI offering.

Speaker #3: Financial income for the quarter was 7 million dollars compared to 8.1 million dollars in the previous quarter. The main reason was devaluation of certain balance sheet items due to the weakness of the US dollars versus the Israeli shekel.

Moshe Eisenberg: This is around the investment in new technologies and additional resources from the Visual Layer acquisition in order to strengthen our AI offering. Operating profit in the quarter was $36 million, compared to $31.1 million in Q1. Operating margin was 27% compared to 25.5%. In line with our forecast for a strong H2, the leverage we have in the model, together with the improved product mix towards the Eagle G5 and the Hawk, is expected to result in a gradual improvement across all profitability metrics in the next few quarters. Financial income for the quarter was $7 million, compared to $8.1 million in the previous quarter. The main reason was devaluation of certain balance sheet items due to the weakness of the US dollars versus the Israeli shekel. Net income for Q2 2026 was $39.4 million, or $0.78 per diluted share.

Speaker #3: Income for the second quarter of 2026 was 39.4 million dollars. Over 78 cents per diluted share. This is compared to a net income of 35.5 million dollars or 70 cents per share in the previous quarter.

Speaker #2: Operating profit in the quarter was $36 million compared to $31.1 million in the first quarter. Operating margin was $27% compared to $25.5%. In line with our forecast for a strong second half the leverage we have in the model together with the improved product mix towards the Eagle Gen 5 and the Hawk is expected to result in a gradual improvement across all profitability metrics in the next few quarters.

Speaker #3: Total diluted number of shares as of the end of the second quarter was 51.5 million. Turning to some high-level balance sheet and cash flow metrics.

Speaker #3: Cash and cash equivalents including short and long-term deposits and marketable securities as of June 30, 2026 were 815.8 million dollars which generated 12.2 million dollars in cash from operations in the quarter.

Speaker #2: Financial income for the quarter was $7 million compared to $8.1 million in the first in the previous quarter the main reason was devaluation of certain balance sheet items due to the weakness of the US dollars versus the Israeli shekel.

Speaker #3: As a result of the increased business volume, accounts receivables increased to 153.9 million dollars compared to 131.7 million dollars in the previous quarter. DSO increased to 105 days.

Speaker #2: Net income for the second quarter of 2026 was $39.4 million or $78 cents per diluted share this is compared to a net income of $35.5 million or $70 cents per share in the previous quarter.

Speaker #3: No change to the inventory level this quarter however we do expect it to grow in the coming quarters to support the forecasted strong growth in revenues.

Moshe Eisenberg: This is compared to a net income of $35.5 million or $0.70 per share in the previous quarter. Total diluted number of shares as of the end of Q2 was 51.5 million. Turning to some high-level balance sheet and cash flow metrics. Cash and cash equivalents, including short and long-term deposits and marketable securities, as of 30 June 2026, were $815.8 million. We generated $12.2 million in cash from operations in the quarter. As a result of the increased business volume, accounts receivables increased to $153.9 million compared to $131.7 million in the previous quarter. DSO increased to 105 days. No change to the inventory level this quarter. However, we do expect it to grow in the coming quarters to support the forecasted strong growth in revenues.

Speaker #3: As Rafi said before we expect revenues of 158 to 160 million dollars in the third quarter with sequential double-digit growth in Q4 and further growth into 2027.

Speaker #2: Total diluted number of shares as of the end of the second quarter was 51.5 million. Turning to some high level balance sheet and cash flow metrics cash and cash equivalents including short and long-term deposits and marketable securities as of June 30, 2026 were $815.8 million we generated $12.2 million in cash from operations in the quarter.

Speaker #3: This represents over 30% second half 2026 growth versus the first half. Before we open the call for questions I would like to announce that Camtech will be hosting an investors and analyst breakfast presentation at Semicon West.

Speaker #3: It will take place on Wednesday October 14, 2026 at 7:00 a.m. Camtech's management will present our market outlook strategy and technology roadmap. A formal invitation with additional details will follow and we look forward to seeing you many of you there.

Speaker #2: As a result of the increased business volume accounts receivables increased to $153.9 million compared to $131.7 million in the previous quarter DSO increased to $105 days.

Speaker #2: There was no change to the inventory level this quarter; however, we do expect it to grow in the coming quarters to support the forecasted strong growth in revenues.

Speaker #2: As Rafi said before we expect revenues of $158 to $160 million in the third quarter with sequential double digit growth in Q4 and further growth into 2027.

Moshe Eisenberg: As Rafi said before, we expect revenues of $158 million to $160 million in Q3, with sequential double-digit growth in Q4 and further growth into 2027. This represents over 30% H2 2026 growth versus H1. Before we open the call for questions, I would like to announce that Camtek will be hosting an investors and analysts breakfast presentation at SEMICON West. It will take place on Wednesday, 14 October 2026 at 7:00 AM. Camtek's management will present our market outlook strategy and technology roadmap. A formal invitation with additional details will follow, and we look forward to seeing many of you there. Rafi, Ramy, and I will be open to take your questions. Kenny?

Speaker #2: This represents over 30% second half 2026 growth versus the first half. Before we open the call for questions I would like to announce that Camtek will be hosting an investors and analyst breakfast presentation at Semicon West.

Speaker #2: It will take place on Wednesday, October 14, 2026, at 7:00 a.m. Camtek's management will present our market outlook, strategy, and technology roadmap. A formal invitation with additional details will follow, and we look forward to seeing many of you there.

Speaker #2: And with that Rafi Rami and I will be open to take your questions. Kenny.

Speaker #3: At this time, we'll begin the analyst question and answer session. If you have a question, please raise your hand using the Zoom platform. I will introduce you and ask you to unmute.

Kenny Green: At this time, we will begin the analyst question and answer session. If you have a question, please raise your hand via the Zoom platform. I will introduce you and ask you to unmute, after which you may ask your question. Our first question will be from Brian Chin of Stifel. Brian, please go ahead.

Speaker #3: After which you may ask your question. Our first question will be from Brian Shin of Stifel. Brian please go ahead.

Speaker #4: Hi there good afternoon can you can you hear me okay.

Brian Chin: Hi there. Good afternoon. Can you hear me okay?

Speaker #3: Yeah we can.

Kenny Green: Yeah, we can.

Speaker #4: Great. Congratulations on the good results in Outlook and thanks for letting us ask a few questions. Maybe first just to clarify some statements you made I think you said that and also in the release that 70 you'll see 70% you expect 70% growth in AP advanced packaging over Q4 this year over Q1 this year.

Brian Chin: Great. Congratulations on the good results and outlook, and thanks for letting us ask a few questions. Maybe first, just to clarify some statements you made. I think you said that, and also in the release, that you expect 70% growth in advanced packaging over Q4 this year over Q1 this year. If I run that math, do you expect advanced packaging could be, again, 75% of total revenue in Q4, similar to how it was in Q2? Can I use that to imply what your Q4 revenue will be?

Speaker #4: And so, if I kind of run that math, do you expect AP, or advanced packaging, could be again kind of 75% of total revenue in Q4, similar to how it was in Q2? And then, can I use that to sort of imply what your forecast revenue will be?

Speaker #2: So let me try and clarify the question. First of all, yes, we do see a gradual increase in our advanced packaging business compared to other businesses that we have.

Ramy Langer: Let me try and clarify the question. First of all, yes, we do see gradual increase of our advanced packaging business compared to other businesses that we have. We expect that at the end of this year, probably 80% of our revenues will go towards advanced packaging. Yes, you are correct.

Speaker #2: So we expect that at the end of this year, probably 80% of our revenues will go towards advanced packaging. And yes, you are correct—when we look at revenues, the advanced packaging revenues in the first quarter compared to the fourth quarter, we expect growth of 70%.

Brian Chin: Okay.

Ramy Langer: When we look at revenues, the advanced packaging revenues in Q1 compared to Q4, we expect growth of 70%.

Speaker #4: Okay that's that's helpful I think I can place the math. Based on that and then just kind of more broadly obviously you know 70% very steep ramp going through the year so from a supply chain and manufacturing standpoint can you maybe break down what's enabling the company to to match and keep pace with this strong demand growth.

Brian Chin: Okay. That's helpful. I think I can place the math based on that. Then just more broadly, obviously, 70%, very steep ramp going through the year. From a supply chain and manufacturing standpoint, can you maybe break down what's enabling the company to match and keep pace with the strong demand growth? Are you tapping into some of that manufacturing capacity that you've spoken about in Europe? Also lastly, do you think any customers, even though all the bookings from here on out sound like they might be more 2027 versus 2026, do you think any customers will want delivery sooner than 2027? Do you think you could fulfill any of that upside?

Speaker #4: Are you tapping into some of that manufacturing capacity that you've spoken about in Europe? And also, lastly, do you think any customers, even though all the bookings from here on out sound like they might be more '27 versus '26?

Speaker #4: Do you think any customers will want delivery sooner than '27, and do you think you could fulfill any of that upside?

Speaker #2: So, first of all, let's talk about our capacity. We've done a lot of work, and Rafi discussed it in the opening statements. We are well ready to ramp the business.

Ramy Langer: First of all, let's talk about our capacity. We've done a lot of work, and Rafi discussed it in the opening statements, and we are well ready to ramp the business. We have all the subcontractors and supply chain in place, and we're very confident about our ability to ship the machines on time, and we don't see any issues or obstacles when we discuss capacity. Regarding the ordering flows, it's really customer dependent. We're still seeing some orders from 2026, yes, but they are very few. Most of the orders that we are getting today and will be getting in the H2 of the year will be for 2027.

Speaker #2: We have all the subcontractors and supply chain in place, and we are very confident about our ability to ship the machines on time. We don't see any issues or obstacles when we discuss capacity.

Speaker #2: Regarding the order inflows, it's really customer dependent. We are still seeing some orders from '26, yes, but they are very few. Most of the orders that we are getting today, and will be getting in the second half of the year, will be for '27.

Speaker #4: Great.

Brian Chin: Great.

Speaker #2: And I think, you know, Brian, maybe one point from my end: it's important to mention that, with respect to 2027, we are building a nice backlog already, and obviously, the visibility has significantly improved in the last few months.

Moshe Eisenberg: I think, Brian, maybe one point from my end. It's important to mention that, with respect to 2027, we are building a nice backlog already. Obviously, the visibility has significantly improved in the last few months.

Speaker #4: Great. Maybe just one last piggyback, and then I'll hop off. But you alluded to—and again reiterated—that Hawk, and probably Eagle Gen 5, both will be significantly higher in the mix.

Brian Chin: Great. Maybe just one last piggyback off and I'll hop off. But you alluded again, reiterated that Hawk and probably Eagle G5 both will be significantly higher in the mix, at least 50% of revenue now into the H2. In terms of that 30% plus H2 sequential, how would you break that down in terms of ASP? Because Hawk obviously has a much higher ASP versus volume.

Speaker #4: At least 50% of revenue now into the second half. In terms of that 30%-plus second half sequential, you know, how would you break that down in terms of ASP? Because Hawk obviously has a much higher ASP versus volume.

Speaker #2: You know, it's very hard. We didn't do the math before the meeting, so it's hard to give you, you know, an accurate answer, but definitely there is going to be an improvement in ASPs as we go along.

Ramy Langer: It is very hard. We did not do the math before the meeting, so it is hard to give you an accurate answer. But definitely, there is going to be an improvement in ASPs as we go along.

Speaker #4: Okay thank you.

Brian Chin: Okay. Thank you.

Speaker #2: Thank you.

Ramy Langer: Thank you.

Speaker #3: Thanks, Brian. Our next question will be from Matt Prisco of Canter. Matt, you can go ahead and ask your question.

Kenny Green: Thanks, Brian. Our next question will be from Matt Prisco of Cantor. Matt, you can go ahead and ask your question.

Speaker #5: Yes, thanks for taking the questions. I guess to start looking into 2027—you’re talking about this increasing visibility, obviously very strong orders.

Matt Prisco: Yes. Thanks for taking the questions. I guess to start, looking into 2027, you are talking about this increasing visibility, obviously very strong orders. How do we think about that visibility today? Where can we actually see into, and how do you think about growth into 2027? I think you are going to exit the year at a quarterly +35%, 40% year-over-year growth. Is something like that sustainable into and through next year?

Speaker #5: So how do we think about that visibility today? Where can you actually see into and how do you think about growth into 2027? I think I think you're going to exit the year at a quarterly you know plus 35 40% year over year growth.

Speaker #5: So, if something like that is sustainable into and through next year.

Speaker #2: Well first of all I think it's a very good sign that at this stage of the year you know in the really in the beginning of the second quarter we already have visibility into 2027.

Ramy Langer: Well, first of all, I think it is a very good sign that at this stage of the year, really in the beginning of Q2, we already have visibility into 2027. All in all, we are talking to customers. Our customers are planning increased capacity in 2027. They are very optimistic about 2027. It is too early in the game to say today what will be the forecast, what do we expect in 2027. But definitely, we are into a good start. The fact that we see increased growth into 2027, that is definitely a good sign at the time that we are talking about it.

Speaker #2: All in all, we're talking to customers. Our customers are planning increased capacity in 2027. They are very optimistic about 2027. It's too early in the game to say today what will be the forecast, what do we expect in 2027.

Speaker #2: But definitely we're off to a good start. The fact that we see increased growth into 2027, that's definitely a good sign at the time that we are talking about it.

Speaker #5: That's helpful. And then and then maybe an updated thoughts on on China dynamics and how do I think about revenue trajectory there you know growth potential through this year maybe set up into next year and and thoughts on the competitive environment.

Matt Prisco: That is helpful. Then maybe an updated thoughts on China dynamics and how to think about revenue trajectory there, growth potential through this year, maybe to set up into next year, and thoughts on the competitive environment. Thank you.

Speaker #5: Thank you.

Speaker #2: Look, our China business has been, I would say, stable over the last few years. And in general, China is continuing to invest in semiconductors. We expect the business there to continue to be strong.

Ramy Langer: Look, our China business has been, I would say, stable over the last couple of years. In general, China is continuing to invest in semiconductors. We expect the business there to continue to be strong. Definitely, there are good opportunities there. I think this is more or less what I can comment at this stage.

Speaker #2: Definitely, there are good opportunities there. And I think this is more or less what I can comment at this stage.

Matt Prisco: Appreciate it. Thanks, guys.

Speaker #5: Appreciate it. Thanks guys.

Speaker #3: Thanks, Matt. Our next question is from Jim Schneider of Goldman Sachs. Jim, please go ahead.

Kenny Green: Thanks, Matt. Our next question is from James Schneider of Goldman Sachs. Jim, please go ahead. Jim?

Speaker #6: Good morning. Thanks for taking my question—sorry about that. I was wondering if you could maybe comment on, you know, the DRAM and HBM exposure you see specifically heading into the back half of this year and into 2027.

James Schneider: Good morning. Thanks for taking my question. Sorry for that. I was wondering if you could maybe comment on the DRAM and HBM exposure you see specifically heading into the back half of this year and into 2027. As you mentioned, there are many of your customers who are expanding capacity. Could you maybe talk about the profile of that relative to the rest of your advanced packaging business? Specifically comment on your exposure to some of the China-based players in the market such as ChangXin Memory Technologies. Thank you.

Jim Schneider: Good morning. Thanks for taking my question. Sorry for that. I was wondering if you could maybe comment on the DRAM and HBM exposure you see specifically heading into the back half of this year and into 2027. As you mentioned, there are many of your customers who are expanding capacity. Could you maybe talk about the profile of that relative to the rest of your advanced packaging business? Specifically comment on your exposure to some of the China-based players in the market such as ChangXin Memory Technologies. Thank you.

Speaker #6: As you mentioned, there are many of your customers who are expanding capacity. Maybe talk about the profile of that relative to the rest of your advanced packaging business.

Speaker #6: And specifically, could you comment on your exposure to some of the China-based players in the market, such as CXMT? Thank you.

Speaker #2: So, all in all, you know we spoke about $600 million in orders. Let me try to add some color there, and then we can talk about the HBM business.

Ramy Langer: All in all, we spoke about $600 million in order. Let me try to draw some color there, and then we can talk about the HBM business. We said 80% for advanced packaging. I think this indicates the strength of our business in the advanced packaging space. With that, OSAT is a very strong business. Over 50% of the business goes through OSAT. A lot of them are doing advanced packaging. As we talk about the HBM, we spoke about the strength of our business already in the previous call when we discussed the $260 million of bills and forecast that we had. Out of the $600 million, over 20% is from HBM players, and we do have additional strong forecast into 2027 in this segment. Of course, we cannot talk about named customers. This is something that we are not allowed to speak about.

Speaker #2: So we said 80% for advanced packaging. I think this indicates the strength of our business in the advanced packaging space, and with that, offset is a very strong business.

Speaker #2: Over 50% of the business goes to offsets. A lot of them are doing advanced packaging. As we talk about the HBM, we spoke about the strength of our business already in the previous call when we discussed the $260 million of POs and forecast that we had.

Speaker #2: Out of the $600 million, over 20% is from HBM players, and we do have additional strong forecasts into 2027 in this segment. Now, of course, we cannot talk about main customers; this is something that we're not allowed to speak about.

Speaker #6: Thank you. That's helpful. And then, could you maybe talk a little bit about the OPEX trend you expect over the coming quarters? You clearly had the Visual Layer acquisition impacting things.

James Schneider: Thank you. That is helpful. Could you maybe talk a little bit about the OpEx trend you expect over the coming quarters? You clearly had the Visual Layer acquisition impacting things. So maybe talk about, if you see, for example, strong sales growth into 2027 at X percent, what fraction of that sales growth would fall through to the bottom line, or what increase in OpEx you would expect? Thank you.

Jim Schneider: Thank you. That is helpful. Could you maybe talk a little bit about the OpEx trend you expect over the coming quarters? You clearly had the Visual Layer acquisition impacting things. So maybe talk about, if you see, for example, strong sales growth into 2027 at X percent, what fraction of that sales growth would fall through to the bottom line, or what increase in OpEx you would expect? Thank you.

Speaker #6: So maybe talk about you know given you know if you see for example strong sales growth into 2027 at X percent you know what fraction of that sales growth would fall through to the bottom line or what fraction or what increase in OPEX you would expect.

Speaker #6: Thank you.

Speaker #2: Okay, hi Jim. This is Moshe. We definitely plan to see some increase in our OPEX level, but not to the extent that will exceed the revenue growth.

Moshe Eisenberg: Okay. Hi, Jim. This is Moshe. We definitely plan to see some increase in our OpEx level, but not to the extent that will exceed the revenue growth. The leverage that we have in the model will play a major role in the improved profitability in the next few quarters ahead, and we definitely plan to improve both the gross margin, but even more, the operating margin level.

Speaker #2: So, the leverage that we have in the model will play a major role in the improved profitability in the next few quarters ahead. And we definitely plan to improve both the gross margin, but even more, the operating margin level.

Speaker #2: Now, maybe just to give you some color, most of the growth that you are going to see in the OPEX will be at the R&D level.

Moshe Eisenberg: Thank you.

Moshe Eisenberg: Maybe just to give you some color, most of the growth that you are going to see in the OpEx will be on the R&D level, with the acquisition of Visual Layer. This adds a few hundreds of thousands of USD to the R&D. We plan to continue to invest in R&D, that is for sure.

Speaker #2: With the acquisition of Visual Layer, this adds a few hundred thousand dollars to the R&D. And we plan to continue to invest in R&D.

Speaker #2: That's for sure.

Speaker #6: Thank you very much.

James Schneider: Thank you very much.

Jim Schneider: Thank you very much.

Speaker #3: Thanks, Jim. Our next question will be from Fatih Shrotra from Evercore. Fatih, please go ahead.

Kenny Green: Thanks, Jim. Our next question will be from Vedvati Shrotre from Evercore. Vedvati, please go ahead.

Speaker #4: Yeah, thanks for taking my question. The first one I have is on the silicon photonics business and opportunity. Could you talk about how big of a revenue opportunity this could be, and what kind of applications you are getting involved in with silicon photonics?

Vedvati Shrotre: Yeah. Thanks for taking my question. The first one I have is on the silicon photonics business and opportunity. Could you talk about how big of a revenue opportunity this could be, and what kind of applications are you getting involved in with silicon photonics? Thank you.

Speaker #4: Thank you.

Speaker #2: Hi, this is Fatih. So, if you look at the $600 million orders that we talked about, 5% is photonics. So, it's a nice number to start, and you know, this is really a market that's just taking off now.

Ramy Langer: Hi, Vedvati. If you look at the USD 600 million orders that we talked about, 5% is photonics. So it is a nice number to start, and this is really a market that is just taking off now. So definitely, there is a potential there. I think we will get more orders to this specific market as we go on this year. I think 2027 will be more than the 5% I just mentioned. When we talk about the application, there are basically two, and Rafi spoke about it. There are basically two, I would say, main segments when you talk about photonics. Obviously, there is silicon photonics, and this is an area that we already sold quite a few machines into, and we are selling, and this is part of the 5% we discussed.

Speaker #2: So, definitely there is potential there, and I think we will get more orders from this specific market as we go on this year.

Speaker #2: So I think 27 will be more than the 5% I just mentioned. When we talk about the applications—so basically there are two, and Rafi spoke about it—there are basically two, I would say, main segments when you talk about photonics.

Speaker #2: Obviously, the silicon photonics—and this is, I would say, an area that we already sold quite a few machines into and we're selling. And this is part of the 5% we discussed.

Speaker #2: And then there is the compound semi. When we talked actually about the diodes, you know there are all kinds of diodes that are being used for the transfer, transceivers, and receivers.

Ramy Langer: And then there is the compound semiconductor, when we talked actually about the diodes. There are all kinds of diodes that are being used for the transceivers and receivers. That is a different segment. Different, I would say, the characterization of these applications are different, but that is I would say the main two segments that we are seeing today in this specific market.

Speaker #2: That's a different segment. I would say the characterization of these applications is different, but those are the main two segments that we're seeing today in this specific market.

Speaker #4: Understood. Thank you. And and of the for my second question of the 600 million orders could you provide any color on how this splits 27 versus 26 and and what what I'm really trying to ask is do you do you see revenues accelerate in in second half from sorry the first half 27 versus second half 26.

Vedvati Shrotre: Understood. Thank you. Also, for my second question, of the 600 million orders, could you provide any color on how this splits, 2027 versus 2026? What I am really trying to ask is, do you see revenues accelerate in H2, sorry, the H1 2027 versus H2 2026?

Speaker #2: What we can see today, and you know it is really early in the game, we definitely see growth in the business continuing to grow into 2027. But really, this is really initial—we will need more time as we continue the year.

Ramy Langer: What we can see today, and it is really early in the game, we definitely see growth into business continuing to grow into 2027, but really, this is really initial. We will need more time as we continue the year. It is definitely a strong start for 2027. As I said, for one of my previous questions, we are talking to customers. They are all talking about increasing capacity in 2027. So, the signal is very positive from the market. We still need time to really digest this information and really build it into a full picture. This will take at least one more quarter to two quarters until we will have the full picture of 2027.

Speaker #2: It's definitely a strong start for '27. And as I said for one of my previous questions, we are talking to customers; we are all talking about increasing capacity in 2027.

Speaker #2: So you know the signal is very positive from the market. We still need time to to really digest this information and really build it into a full picture.

Speaker #2: This will take at least one more quarter to two quarters until we'll have the full picture of 27.

Vedvati Shrotre: Okay. Thank you very much.

Speaker #4: Okay. Thank you very much.

Speaker #2: Thank you.

Ramy Langer: Thank you.

Speaker #3: Thanks, Fatih. Our next question is from Dennis Piaccini from Needham. Dennis, please go ahead.

Kenny Green: Thanks, Utati. Our next question is from Denis Pyatchanin from Needham. Dennis, please go ahead.

Denis Pyatchanin: Thank you for the opportunity. Maybe we can start on your non-advanced packaging business. Could you give us an update on what you are seeing into the end of 2026 or into early 2027?

Speaker #5: Thank you for the opportunity. Maybe we can start on your non-advanced packaging business. Could you give us an update on what you're seeing into the end of 2026 and maybe into early 2027.

Ramy Langer: On what?

Speaker #2: On what, non-advanced? On the non-advanced.

Denis Pyatchanin: Non-AP.

Ramy Langer: On the non-AP?

Speaker #5: Yes non-advanced.

Denis Pyatchanin: Yes. Non-AP.

Speaker #2: So so the non-advanced I think first of all I think the photonics is a good signal of a new market that we're seeing. I would see the business is stable.

Ramy Langer: The non-AP, I think first of all, I think the photonics is a good signal of a new market that we're seeing. I would say the business is stable. I would say even I can say with certain, I would say small growth. But definitely, there are opportunities there. We'll need to. We'll see as things go by. We have some orders for CMOS image sensors that are significant. There are some signs there of some recovery, I would say, in the stable business, the consumer business that is not really very strong today. You're seeing there, I would say it is stable, but there are good signs for 2027 that we'll see some growth on specific areas.

Speaker #2: I would say, even, I can say with certainty, I would say small growth. But definitely, there are opportunities there, and we'll need to—we'll see as things go by.

Speaker #2: We have some orders for CMOS image sensors that are significant. There are some signs there of some recovery, I would say, in the stable business.

Speaker #2: The consumer business is not really very strong today, as you mentioned there. I would say it is stable, but there are good signs for 2027 that we'll see some growth in specific areas.

Speaker #5: Thank you. Then, for my follow-up, maybe we can talk about the profitability metrics you discussed. I think you said that they would be improving in the next few quarters. How will these be achieved, and perhaps could you quantify them if possible?

Denis Pyatchanin: Thank you. For my follow-up, maybe we can talk about the profitability metrics you discussed. I think you said that they would be improving in the next few quarters. Could you provide some more details on how these will be achieved and perhaps quantify them if possible?

Speaker #2: So, with respect to the gross margin, we are exiting Q2 with 51.4%. We certainly hope that we will get anywhere between 52.5% to 53% exiting the year.

Ramy Langer: With respect to the gross margin, we are exiting Q2 with 51.4%. We certainly hope that we will get anywhere between 52.5% to 53% exiting the year. With respect to the operating margin, we are looking into an operating margin of between 30% to 32% at the end of this year.

Speaker #2: And with respect to the operating margin, we are looking into an operating margin of between 30% to 32% at the end of this year.

Speaker #5: Great. That's very helpful. Thank you.

Denis Pyatchanin: Great. That's very helpful. Thank you.

Speaker #3: Thanks, Dennis. Our next question will be from Michael Manny of Bank of America. Michael, please go ahead. Michael?

Kenny Green: Thanks, Denis. Our next question will be from Michael Mani of Bank of America. Michael, please go ahead. Michael?

Speaker #6: Oh, hello. Can you hear me?

Michael Mani: Oh.

Speaker #3: Yeah, go ahead. Yeah, yeah, we can hear you.

Kenny Green: Yeah.

Michael Mani: Well, can you hear me?

Kenny Green: Go ahead. Yeah, we can hear you.

Michael Mani: Oh, yeah. Sorry. I wanted to start on the OSAT business. If you look at the overall CapEx trends for the back-end market, I think they are growing something like 45% to 50% this year. Some of your customers in that segment are expanding CapEx even faster. First, how should we compare your growth in the OSAT opportunity this year and even potentially the next year relative to those very strong CapEx trends we are seeing? Second, related to OSAT, it seems like a lot of your competitors have been more vocal about some of the progress that they are making there this year, especially as that market moves to more sophisticated architectures and capabilities. Could you talk about the competitive landscape and how you see that evolving as competition intensifies? Thank you.

Speaker #6: Oh yeah, sorry. Yeah, I wanted to start on the OSAT business. If you look at the overall CapEx trends for the back-end market, I think they're growing something like 45% to 50% this year.

Speaker #6: Some of your customers in that segment are expanding capex even faster. So first, how should we compare your growth in the OSAT opportunity this year and even potentially next year, relative to those very strong capex trends we're seeing?

Speaker #6: And second, related to OSATs, it seems like a lot of your competitors have been more vocal about, you know, some of the progress that they're making there.

Speaker #6: This year especially, as that market moves to more, you know, sophisticated architectures and capabilities. Could you talk about the competitive landscape and how you see that evolving, you know, as competition intensifies?

Speaker #6: Thank you.

Ramy Langer: Hi, Michael. First of all, obviously, we are hearing what our competitors are saying. We are aware of where they are in the applications that they are doing. Let me start from the basics. We have a dominant position in the OSAT market, something that we have had for quite a few years, very good relationship. This relates when we talk about OSAT. This is the growth of the 2.5D IC and 3D IC manufacturing and all the other applications that we have been discussing. Definitely, this provides us with a very good opportunity for further growth. 50% of our business goes to the OSAT business. This is also reflected in the 600 million orders that we have received so far. So we feel very, very comfortable that with the increase of CapEx by the OSAT, we will have very good, very strong intake of orders.

Speaker #2: Hi, Michael. So, first of all, obviously, we are hearing what our competitors are saying. We are aware of where they are and the applications that they are pursuing.

Speaker #2: Let me start from the basics. We have a dominant position in the OSATs market, something that we've had for quite a few years. We have a very good relationship.

Speaker #2: And this relates, when we talk about OSAT, to the growth of 2.5D IC and 3D IC manufacturing and all the other applications that we have been discussing. Definitely, this provides us with a very good opportunity for further growth.

Speaker #2: 50% of our business goes to the OSATs business. This is also reflected in the 600 million orders that we have received so far, so we feel very, very comfortable that with the increase of capex by the OSATs, we will have very good, very strong intake of orders we accept, and we're actually in discussions with some of our customers for additional orders for 2027.

Ramy Langer: We accept, and we are actually in discussions with some of our customers for additional orders for 2027. Definitely our position is strong. We are very competitive there, and we feel very comfortable about the business and our market position there.

Speaker #2: So definitely our position is strong. We are very competitive there, and I don't think we are going. We feel very comfortable about the business and our market position there.

Michael Mani: Thank you. Just for my follow-up, I wanted to ask on the progress you're seeing in some of your newer systems. It seems like relative to maybe a couple of quarters ago, a higher mix of the business is going towards Hawk. Some of these other newer systems, this year, it seems like they're doing better than expected. Could you break down where that incremental traction is coming from? From an applications perspective or customers or end markets, versus the beginning of the year. Where are you seeing more progress with these new tools than you expected? Thank you.

Speaker #3: Thank you.

Speaker #6: And just for my follow-up follow-up, I wanted to ask about the progress you're seeing in some of your newer systems. So, it seems like, relative to maybe a couple of quarters ago, a higher mix of the business is going towards Hawk and some of these other newer systems this year.

Speaker #6: It seems like they're doing better than expected. So, could you break down where that incremental traction is coming from—from, like, an applications perspective, or customers, or end markets? Versus, like, the beginning of the year, where are you seeing more progress with these new tools than you expected?

Speaker #6: Thank you.

Speaker #2: Okay, so first of all, yes, we have spent a lot of R&D on our new products, the Hawk and the Eagle G5.

Ramy Langer: Okay. First of all, yes, we have spent a lot of R&D in our new products, the Hawk and the Eagle G5, and definitely their performance is superior. We are very confident that we can continue and take market share and go to new process steps with this equipment. When we look at the target application, let me start with the Hawk. The Hawk definitely is for high volume applications, and I think the HBM is a very good example where we are selling more and more Hawks. It is really targeted there. It can go to the high-end applications. It will go to the applications that will be required in 1 or 2 years. So definitely this is the right machine at the right place.

Speaker #2: And definitely, their performance is superior, and we are very, very confident that we can continue to take market share and move to new process steps with this equipment.

Speaker #2: When we look at the target application—and let me start with the Hawk—the Hawk definitely is for high-volume applications. And I think the HBM is a very good example, where we are selling more and more Hawks.

Speaker #2: It is really targeted there. It can go to the high-end applications; it will go to the applications that will be required in one or two years, so definitely, this is the right machine.

Speaker #2: At the right place. When we talk about the Eagle G5, I think not only is it more profitable, but the performance of the machine—in terms of resolution and optics, the throughput, or I would say, the cost of ownership—is better. And definitely, we’re seeing a lot of our customers who have been buying Eagles and want to stay with the Eagle, switching over to the Gen 5. That provides them with better cost of ownership, but also the ability to address applications down the road.

Ramy Langer: When we talk about the Eagle G5, I think there it's not only better profitability, but the performance of the machine from the resolution and optical point of view, the throughput, or I would say the cost of ownership is better. Definitely we're seeing a lot of our customers that have been buying Eagles and want to stay with the Eagle, switching over to the Gen5 that provide them better cost of ownership, but also being able to address applications down the road. So we are very confident with both of these products.

Speaker #2: So, we are very confident with both of these products.

Speaker #3: Great.

Michael Mani: Great. Thank you.

Speaker #6: Thank you.

Speaker #3: Thanks, Michael. Our next question will be from Shane Brett of Morgan Stanley. Shane, please go ahead.

Kenny Green: Thanks, Michael. Our next question will be from Shane Brett of Morgan Stanley. Shane, please go ahead.

Shane Brett: Thank you for letting me ask a question. If I assume HPC was 55% of your revenue in Q2, I think your guidance implies advanced packaging revenue grows 30% this year and HPC closer to 40%. Just within HPC, is there one end market that has been growing higher than the 40%? Do you have any early expectations on HBM versus other end markets next year? Thank you.

Speaker #6: Thank you for allowing me to ask a question. So, if I assume HPC was 55% of your revenue in Q2, I think your guidance implies advanced packaging revenue grows 30% this year and HPC closer to 40%.

Speaker #6: Just within HPC, is there one end market that has been growing higher than 40%? And do you have any early expectations on HBM versus other end markets next year?

Speaker #6: Thank you.

Speaker #2: So actually, let me try and understand. I didn't fully get what you want to understand, but let me try and give you some insights on what you discussed.

Ramy Langer: So hi, Shane. Let me try and understand. I did not fully understand what you want to understand, but let me try and give you some insights on what you discussed. First of all, from the business, yes, 50% of our business, over 50%, 55% plus, goes to the, I would say, the HPC or AI-related products, and another 20% goes to the what we call conventional advanced packaging. The advanced packaging will grow by 70% this year, and will actually reach also the growth will go, the HPC area will probably grow faster and will reach probably closer to 60% by the end of the year. Did I answer your question?

Speaker #2: So first of all, from the business, yes, 50% of our business—over 50%, 55% plus—goes to the, I would say, the HPC or AI-related products. And another 20%, like 20%, goes to what we call conventional advanced packaging.

Speaker #2: The advanced packaging will grow by 70% this year and will actually reach also the growth will go the the HPC area will probably grow faster and will reach probably closer to 60% by the end of the year.

Speaker #2: Did I answer your question?

Speaker #6: Yes, so I guess just to clarify that—for the full year, total advanced packaging revenue should grow, give or take, 30%, of which HPC should be growing 40% for calendar 2026.

Shane Brett: Yes. So I guess just to clarify that, for the full year, total advanced packaging revenue should grow give or take 30%, of which HPC should be growing 40% for calendar 2026.

Speaker #2: So, are you now referring to '25 or '26?

Ramy Langer: So are you now referring, 25% to 26%?

Speaker #6: Correct. Correct.

Shane Brett: Correct.

Speaker #2: Okay, so we are talking anywhere between 35% to 45% between the advanced packaging, and within the advanced packaging, the AI-related business.

Ramy Langer: Okay. So we are talking anywhere between 35% to 45% between the advanced packaging and within the advanced packaging, the AI-related business. That is correct.

Speaker #2: That's correct.

Speaker #6: Got it.

Shane Brett: Got it.

Speaker #2: Bearing in mind bearing in mind that last year was a a record year for Camtek. So we are starting off from a high bar.

Ramy Langer: Bear in mind that last year was a record year for Camtek, so we are starting off from a high bar.

Speaker #6: Got it. And my question was, kind of just within that HPC portion, is it HBM or sort of 2.5D logic that's driving the growth?

Shane Brett: Got it. My question was kind of just within that HPC portion, is it HBM or 2.5D logic that's driving the growth?

Speaker #2: Yes, of course, there are two aspects to it. On one side, there is HBM; on the other side, what we call COAS, and COAS-like applications. These are the two main segments for what we call AI-related products or HPC.

Ramy Langer: Yes, of course. There are two aspects for it. One side is the HBM, on the other side, what we call CoWoS and CoWoS-like applications. These are the two main segments, or what we call AI-related products or HPC.

Speaker #6: Got it. And is there any color as to which one is growing faster this year?

Shane Brett: Got it. Is there any color as to which one is growing faster this year?

Speaker #2: No, I think both. Look, eventually it's the same thing. I think they're growing at a similar pace. It really depends also on which customer is adding capacity and which is not.

Ramy Langer: No, I think both. Eventually it's the same thing. I think they're growing at similar pace. It really depends also which customer is adding capacity and which is not. So it is really hard to judge. Both are expanding very fast.

Speaker #2: So it is really hard to, you know, to judge. Both are expanding very fast.

Speaker #6: Got it. Understood. And just for my follow-up, there have been a few questions on China, but China was 49% of your revenue for last year.

Shane Brett: Got it. Understood. Just for my follow-up, there has been a few questions on China, but China was 49% of revenue for you last year. Could you help us ballpark where it could be this year? Thank you.

Speaker #6: Could you help us ballpark where it could be this year? Thank you.

Speaker #2: I would say that we expect the level of revenue from China to be anywhere between 45, you know, 45-ish this year, given the fact that we see nice growth also from other areas.

Ramy Langer: I would say that we expect the level of revenue from China to be anywhere between 45-ish this year, given the fact that we see nice growth also from other areas. I just want to go back to the question about the advanced packaging, just to mention that, again, the reason that we are looking into the comparison between Q4 and Q1 is to emphasize the point that Rafi mentioned earlier this call, about the fact that it took couple of quarters of lagging until the growth came to our market. Now we see the growth coming to the full degree, and in Q4, we are going to see 80% of our business coming from advanced packaging.

Speaker #2: And I just want to go back to the question about advanced packaging. Just to mention that again, the reason we are looking into the comparison between Q4 and Q1 is to emphasize the point that Rafi mentioned earlier today.

Speaker #2: Earlier the the you know this call. About the fact that it took couple of quarters of lagging between until the growth came to our market and now we see the growth coming in a full to the full degree and and in the fourth quarter we are going to see 80% of our business coming from advanced packaging.

Speaker #6: Got it. That's very encouraging. Thank you very much.

Shane Brett: Got it. That is very encouraging. Thank you very much.

Speaker #2: Thank you. Thank you.

Ramy Langer: Thank you.

Speaker #3: Thanks, Shane. Our next question will be from Ed Yang of Oppenheimer. Ed, please go ahead.

Kenny Green: Thanks, Shane. Our next question will be from Ed Yang of Oppenheimer. Edward, please go ahead.

Speaker #6: All right. Well, thank you for your time. The 45% half-on-half growth in advanced packaging—can you just qualitatively characterize whether that's market growth, share gain, or just higher process control intensity?

Edward Yang: All right. Well, thank you for your time. The 45% H2-on-H2 growth in advanced packaging, can you just qualitatively characterize whether that is market growth, share gain, or just higher process control intensity?

Ed Yang: All right. Well, thank you for your time. The 45% H2-on-H2 growth in advanced packaging, can you just qualitatively characterize whether that is market growth, share gain, or just higher process control intensity?

Speaker #2: Hi Edward. So so I think it's the bottom line I think it's both. I think we're gaining share at certain areas and definitely there is a lot of capacity being added to the market.

Ramy Langer: Hi, Edward. The bottom line, I think it is both. I think we are gaining share at certain areas, and definitely there is a lot of capacity being added to the market. When you look at the growth, it is coming from all the different applications. There is a lot of growth that has been discussed on the HBM side and on the CoWoS and CoWoS-like applications. Definitely, we see also the Fan-Out and Fan-In. There is a lot of capacity out there that is being added. So the market overall for the advanced packaging is very strong and continues to be strong.

Speaker #2: And when you look at the growth, each coming from all the different applications, there is a lot of growth that has been discussed on the HBM side and on the CoAS and CoAS-like applications. And definitely, we see also the fan-out and fan-in; there is a lot of capacity out there that is being added. So, the market overall for the advanced packaging is very strong and continues to be strong.

Edward Yang: Thanks for that color, Rami. Also, just going back to this question on the outlook for 2027, and understand that you are still fine-tuning your forecast. Rough cuts, do you think Camtek's growth should track overall WFE, or do you think that your advanced packaging and share gain should allow you to outgrow WFE?

Ed Yang: Thanks for that color, Rami. Also, just going back to this question on the outlook for 2027, and understand that you are still fine-tuning your forecast. Rough cuts, do you think Camtek's growth should track overall WFE, or do you think that your advanced packaging and share gain should allow you to outgrow WFE?

Speaker #6: Thanks for that color, Rami. And also, just going back to this question on the outlook for 2027—I understand that you're still fine-tuning your forecast, but, you know, rough cuts: do you think Camtek's growth should track overall WFE, or do you think that your advanced packaging and share gain should allow you to outgrow WFE?

Speaker #2: So you know, if you look historically, we were always better than the WFE. What is happening this year—and we've seen it before, already, at the beginning of the cycle or the end of the cycle—is our business lags.

Ramy Langer: If you look historically, we are always better than the WFE. What is happening this year, and we have seen it before already, at this beginning of the cycle or the end of the cycle, it is our business lags. As a result, it is very difficult to say this year how the WFE versus what we will do. But if you look at, I would say, a little bit longer time, we will take let's say from Q2 of this year to Q2 of next year, I believe that we will be doing similar or better than the WFE.

Speaker #2: And as a result, it is very, very difficult to say this year how the WFE versus what we will do. But if you look at, I would say, a little bit longer time—let's say from the second quarter of this year to the second quarter of next year—I believe that we will be doing similar or better than the WFE.

Speaker #6: That's great to hear. Thank you so much.

Edward Yang: That is great to hear. Thank you so much.

Ed Yang: That is great to hear. Thank you so much.

Speaker #3: Thanks, Ed. Our next question will be from Gus Rashad of Northland Gas. Please go ahead. Gus, you can go ahead and ask your question.

Kenny Green: Thanks, Ed. Our next question will be from Gus Richard of Northland. Gus, please go ahead. Gus, you can go ahead and ask your question.

Speaker #7: You hear me?

Gus Richard: Can you hear me?

Speaker #3: We can't hear you clearly.

Kenny Green: We can't hear you clearly.

Speaker #7: All right. I'll speak. Sorry.

Gus Richard: All right. I'll speak up. Sorry.

Kenny Green: Now we can hear you. You can go ahead and ask.

Speaker #3: Now, now we can hear you. No, no, you can go ahead and ask.

Speaker #7: Yeah, sorry. Just real quick, your book-to-bill in the first half is quite strong, and I'm just wondering if you could give a little bit of color on the shape of that booking. So, did that happen mostly in Q2, and is that momentum carrying into Q3?

Gus Richard: Yeah, sorry. Just real quick, your book-to-bill in the H1 is quite strong, and I'm just wondering if you could give a little bit of color on the shape of that booking. So did that happen in Q2 mostly, and is that momentum carrying into Q3?

Speaker #2: I think this order flow started in the first quarter, and it's been steady ever since. You know, it sometimes shifts by a couple of weeks, but all in all, it has been growing steadily.

Ramy Langer: I think this order flow started in Q1, and it has been steady ever since. It sometimes shifts by a couple of weeks, but all in all, it has been growing steadily.

Speaker #7: Got it. And then just on the product side, you talked about the NanoProof. Could you talk about what that product is for, and just give some description of what metrology steps it might cover?

Gus Richard: Got it. Just on the product side, you talked about the MicroProf. Could you talk about what that product is for and just some description of what metrology steps it might cover?

Speaker #2: So, the NanoProof is a very important product, because this is a product where we believe, through this product, we'll be able to significantly increase our footprint in the metrology area.

Ramy Langer: The MicroProf is a very important product because this is a product where we believe through this product, we will be able to significantly increase our footprint in the metrology area. If you recall, three years ago, we bought a company in Germany called FRT. We have been working with this company, developing new application, and one of the key highlights was to take their old product and come out with a brand-new product that is based also on technologies developed in Camtek, much more stable, much faster, with new capabilities we did not have before. We finally completed this product. We started to install it in Q1 of this year at selected customers, and we believe that based on this new platform, we will be able to significantly increase the revenues, win new application and process steps.

Speaker #2: If you recall, three years ago we bought a company in Germany called FRT. We have been working with this company, developing new applications, and one of the key highlights was to take their old product and come out with a brand-new product that is also based on technologies developed in Camtek—much more stable, much faster, with new capabilities it didn't have before.

Speaker #2: We finally completed this product. We started to install it in the first quarter of this year at selected customers, and we believe that, based on this new platform, we will be able to significantly increase revenues, win new application and process steps, and definitely, that's a market that—when you're looking at advanced packaging and some of the applications that will be required in the future—it's definitely going to help us to increase our footprint in advanced packaging.

Ramy Langer: Definitely that is a market that when you are looking at advanced packaging and some of the applications that will be required in the future, it is definitely going to help us to increase our footprint in the advanced packaging.

Gus Richard: And as I recall, it is for wafer bow and that sort of thing. Is that correct?

Speaker #7: Ed, and as I recall, it's for wafer shape, bow, and that sort of thing. Is that correct?

Ramy Langer: That is one of the, I would say, the older applications, warp, and there is a lot of wafer topography. There is a lot of applications that are related to there, and there are a few new applications that it is still not time to discuss.

Speaker #2: That's one of the, I would say, older applications—warp—and there is a lot of wafer topography. There are a lot of applications that are related to that.

Speaker #2: And there are a few new applications that, you know, it's still not the time to discuss.

Speaker #7: Got it. All right. Thanks so much.

Gus Richard: Got it. All right. Thanks so much.

Speaker #2: Thank you Gus.

Ramy Langer: Thank you, Gus.

Speaker #3: Thanks, Gus. Our next question is from Tom O'Malley of Barclays. Tom, please go ahead. Tom, you're still muted. Tom, are you there? Tom, are you able to—Tom, we don't hear you.

Kenny Green: Thanks, Gus. Our next question is from Tom O'Malley of Barclays. Tom, please go ahead. Tom, you are still muted. Tom, you there? Tom, are you able to Tom, we do not hear you. Okay, I think that actually brings us to the end of our Q&A. Rafi, if you have any closing statements, please go ahead.

Speaker #3: Okay, so I think that actually brings us to the end of our Q&A. So, Rafi, if you have any closing statements, please go ahead.

Speaker #8: Okay. I want to express my gratitude to all of you for your ongoing interest in our business. Special thanks go to our employees and management team for their outstanding performance.

Rafi Amit: Okay. I want to express my gratitude to all of you for your ongoing interest in our business. A special thanks goes to our employees and the management team for their outstanding performance. To our investor, I appreciate your long-term support. I look forward to seeing you in October at the SEMICON show in San Francisco. Thank you and goodbye.

Speaker #8: To our investors, I appreciate your long-term support. I look forward to seeing you in October at the Semicon show in San Francisco.

Q2 2026 Camtek Ltd Earnings Call

Request DemoDemo

Camtek

Earnings