Camtek Ltd. Q2 FY2025 earnings call

Camtek concluded Q2 2025 with a record performance. They observed a shift in CoWoS-like production towards OSATs, which aligns with their strong market position. They launched the Hawk and Eagle 5 systems with breakthrough performance and higher throughput. The MicroProf metrology system from FRT acquisition has been successfully adopted by a Tier 1 customer with over 30 systems installed. The advanced packaging market for AI-related applications is expected to grow rapidly, driven by new technologies, and Camtek has invested in innovative solutions to address these opportunities.

Camtek's Q2 2025 revenues reached $123.3 million, reflecting over 20% year-over-year growth. High-performance computing applications contributed approximately 45% to 50% of total revenue, while other advanced packaging applications accounted for about 20%. The geographic revenue split was Asia at 90% and the rest of the world at 10%. Gross profit for the quarter was $64 million, with a gross margin of 51.9%. Operating income was over $37 million, and net income for the second quarter of 2025 was $38.8 million or $0.79 per diluted share. Cash, cash equivalents, including short- and long-term deposits and marketable securities as of June 30, 2025, were $544 million.

Camtek expects Q3 2025 revenue to be approximately $125 million, representing an annualized run rate of $0.5 billion. They anticipate the HPC contribution in the second half to be similar to the first half. China contribution to total revenue is expected to be slightly higher than last year's 30%, though exact figures for the second half are not specified yet. Guidance for Q4 2025 will be provided in the next earnings call.

Exceptionally high shipping expenses due to the conflict with Iran impacted operating expenses in Q2 2025. Forward-looking statements are subject to a range of changes, risks, and uncertainties that may cause actual results to differ materially, including market conditions, technological advancements, and geopolitical factors.

Q: Update on HPC mix in second half and China revenue contribution A: Ramy Langer mentioned positive momentum in the second half with healthy order flow and pipeline, and HPC contribution in the second half is expected to be not much different than the first half. Moshe Eisenberg stated China contribution is expected to be slightly higher than last year's 30% but exact figures for the second half are not specified yet.

Q: Camtek's position vs KLA in HPC markets A: Ramy Langer stated Camtek has competitive equipment, is well-positioned with unique technology scale and flexibility, and has been engaged in competition with KLA, demonstrating competitive equipment in addressing HPC market requirements.

Q: Traction of Eagle G5 and Hawk products A: Ramy Langer explained the Hawk provides high throughput and addresses difficult applications, while the Eagle G5 is faster with better defect detection, both driving strong customer traction with 30% of revenues this year from these products.

Q: HBM 4 impact and customer spending A: Ramy Langer said HBM 4 is a positive opportunity, customers are talking about it, but specific timing and details on customer spending for HBM 4 were not fully disclosed during the call.

Q: OSATs and applications A: Ramy Langer discussed OSATs taking a position in high-performance computing, seeing major OSATs entering CoWoS-like applications, which is driving significant orders for Camtek.