Camtek Ltd. Q3 FY2024 earnings call

• Camtek achieved a record quarterly revenue of $112 million, 40% growth Y/Y. • HPC-related products contributed around 50% of sales for the third quarter in a row, with demand remaining healthy and expected to be ~50% of business this year. • Introduced fifth generation Eagle system (Eagle G5) with superior wafer throughput and improved optical resolution, already received orders over $20 million with delivery starting Q4. • New advanced packaging system to be officially launched in SEMICON Korea early 2025, expected to contribute tens of millions in 2025. • Financial results: Q3 revenue $112.3M, +40% Y/Y; gross profit $57.1M, gross margin 50.8%; operating profit $34.2M, operating margin 30.4%; net income $37M, $0.75 per diluted share. • Cash and cash equivalents $489M as of 9/30/2024; generated $36M in cash from operations; inventory up $7M to $116M; accounts receivables slightly up, DSO at 57 days.

Camtek ended Q3 with a record quarterly revenue of $112 million, a 40% growth compared to Q3 '23. Revenue distribution: ~50% for HPC-related products, ~20% for other advanced packaging applications, rest split between other segments. Gross margin was 51% and operating margin slightly over 30%. Geographic revenue split: Asia accounted for 87%, U.S. and Europe 13%.

• Q4 revenue guidance ~$115M, 30% Y/Y growth with sequential growth in Q1 2025. • 2024 expected to be a record year with revenue ~$427M, 35% Y/Y growth. • 2025 expected to be another year of growth, with new products like Eagle G5 and the new advanced packaging system contributing to growth.

Q: Charles Shi asked about Camtek's understanding of HPC market, including HBM overcapacity concerns and China's revenue contribution.

A: Ramy Langer responded that HPC includes chiplets and HBMs growing together, China's revenue contribution this year expected to be 30%-35%, and in 2025 expected to be similar or higher.

Q: Brian Chin inquired about when constraints in advanced packaging substrates will be relieved and details on new product.

A: Ramy Langer said they are confident about Q4 and Q1 2025, new product is for high-end applications, addresses fine pitch and hybrid bonding interconnects, and will ramp up revenue over 2025.

Q: Kyle Bleustein asked about sovereign growth and Europe capacity.

A: Ramy Langer mentioned longer-term sovereign growth contributing to business, and Europe facility addition will bring capacity closer to $660M with no immediate limitations.

Q: Craig Ellis asked about pipeline discussions and other growth areas.

A: Ramy Langer said customer discussions are positive, CMOS Image Sensor and fan out are picking up, silicon carbide is starting to recover.

Q: Gus Richard asked about fan out application.

A: Ramy Langer stated fan out requests are from OSATs but specific applications not disclosed.

Q: Michael Mani asked about HBM qualification issues and gross margins.

A: Ramy Langer said no major changes expected next year, and gross margin impacted by product mix, new products may have slight positive impact.

Q: Vedvati Shrotre asked about HPC contribution and HBM transition.

A: Ramy Langer explained HPC contribution on target, HBM stack increase means more wafer scanning, no change in inspection intensity.

Q: Blayne Curtis asked about HPC equipment orders and growth outside HPC.

A: Ramy Langer said capacity issues are being managed, and growth outside HPC includes CMOS Image Sensor, fan out, and smaller applications with many customers buying equipment.