Core Insights - Camtek's share price has declined nearly 15% week to date due to disappointing quarterly results [1] - The company reported an all-time high revenue of over $123 million for the second quarter, a 20% increase year-over-year, with adjusted net income rising 19% to almost $39 million or $0.79 per share [2] - The semiconductor industry is experiencing significant investor interest driven by the growth of AI functionalities, but Camtek's performance only met average analyst estimates for adjusted profitability [4] Financial Performance - Camtek achieved a revenue of just over $123 million in the second quarter, marking a 20% year-over-year increase [2] - The adjusted net income for the same period was nearly $39 million, reflecting a 19% increase [2] - The company expects third-quarter revenue of $125 million, which would represent an 11% year-over-year growth, but is lower than the second quarter's performance [6] Market Position and Strategy - Camtek is focusing on AI, particularly in its advanced packaging segment, to meet the increasing demand for inspection and measuring tools driven by AI's computing power requirements [5] - The semiconductor industry is currently under scrutiny as investors expected stronger performance from companies like Camtek amid the AI boom [4]

Financial Data and Key Metrics Changes - The company reported record revenues of $123.3 million for Q2, reflecting over 20% growth year over year [5][11] - Gross margin was maintained at around 51.9%, similar to the previous quarter, contributing to an operating income of over $37 million [12] - Net income for Q2 was $38.8 million, or $0.79 per diluted share, compared to $32.6 million, or $0.66 per share in the same quarter last year [13] - Cash and cash equivalents increased to $544 million from $523 million at the end of the previous quarter [14] Business Line Data and Key Metrics Changes - High-performance computing (HPC) applications contributed approximately 45-50% of total revenue, while advanced packaging applications accounted for about 20% [6][11] - The advanced packaging segment is rapidly evolving, driven by technological changes to support AI applications [8] Market Data and Key Metrics Changes - Geographic revenue split for the quarter was 90% from Asia and 10% from the rest of the world [11] - The company expects Q3 revenue to be approximately $125 million, indicating a strong sales pipeline and healthy order flow into Q4 [8][15] Company Strategy and Development Direction - The company has made significant strategic investments in developing innovative solutions to address emerging opportunities in advanced packaging and HPC [9][10] - The launch of the AUK and Eagle 5 systems is expected to generate approximately 30% of total revenue this year, with larger contributions projected for the next year [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong momentum heading into the third quarter, supported by a healthy order flow and pipeline [7][8] - The advanced packaging market supporting AI applications is expected to grow rapidly over the next few years, driven by new packaging technologies [8][9] Other Important Information - Operating expenses increased to $26.6 million due to exceptionally high shipping expenses related to geopolitical conflicts [12][13] - The company has successfully adopted its micro proof metrology system by a tier-one customer, with over 30 systems installed in production environments [10] Q&A Session Summary Question: What is the expectation for HPC contribution in the second half of the year? - Management expects HPC contribution to remain similar to the first half, around 45-50% [17][18] Question: What is the current expectation for China’s contribution to total revenue? - The contribution from China is expected to be slightly higher than the previous year's 30% [19] Question: How does Camtek view competition from KLA in the hybrid bonding market? - Management believes they are well-positioned to compete effectively against KLA, citing strong customer relationships and competitive technology [24][25] Question: What traction is being seen for the Eagle 5 and Hawk products? - The Hawk is noted for high throughput and addressing difficult applications, while the Eagle 5 is faster and offers better defect detection capabilities [28][30] Question: What are the growth prospects for 2026? - Management anticipates rapid growth in the HPC market, driven by technological changes and new applications [33][34] Question: What is the expected ratio of Hawk versus Eagle shipments for HBM4? - The ratio is customer-dependent, with both products being successful in the market [84] Question: Are OSATs showing signs of strengthening? - OSATs are increasingly involved in high-performance computing applications, with significant orders being seen [58][89]

Financial Data and Key Metrics Changes - Camtek reported record revenues of $123.3 million for Q2, reflecting over 20% growth year over year [6][12] - Gross margin was maintained at approximately 52%, contributing to a record operating income of over $37 million [6][12] - Operating profit for the quarter was $37.4 million, compared to $30.8 million in the same quarter last year [13] - Net income for Q2 was $38.8 million, or $0.79 per diluted share, compared to $32.6 million, or $0.66 per share in the prior year [14] Business Line Data and Key Metrics Changes - High-performance computing (HPC) applications contributed approximately 45-50% of total revenue, while advanced packaging applications accounted for about 20% [7] - The advanced packaging segment is rapidly evolving, driven by technological changes to support high-performance computing for AI applications [8] Market Data and Key Metrics Changes - Geographic revenue split for the quarter was 90% from Asia and 10% from the rest of the world [12] - The advanced packaging market supporting AI-related applications is expected to grow rapidly over the next few years [8] Company Strategy and Development Direction - Camtek has made significant strategic investments to develop innovative solutions addressing emerging opportunities in advanced packaging and inspection technologies [10] - The company anticipates that its new systems, AUK and Eagle 5, will generate approximately 30% of total revenue this year, with larger contributions expected next year [11] Management's Comments on Operating Environment and Future Outlook - Management expressed positive momentum heading into the third quarter, with expectations of approximately $125 million in revenue for Q3 [8][16] - The company expects continued growth in the high-performance computing market, driven by advancements in packaging technologies [36][54] Other Important Information - Operating expenses increased to $26.6 million due to exceptionally high shipping costs related to geopolitical conflicts, but these costs are expected to normalize [13][75] - Cash and cash equivalents as of June 30, 2025, were $544 million, up from $523 million at the end of the previous quarter [15] Q&A Session Summary Question: Update on business composition for the second half of the year - Management expects HPC contribution to remain similar to the first half, with a slight increase in China's contribution to total revenue [20][21] Question: Camtek's position against KLA in HPC markets - Management believes they are well-positioned to compete with KLA, citing strong customer relationships and competitive technology [25][26] Question: Traction for Eagle G5 and Hawk products - The Hawk provides high throughput and addresses challenging applications, while the Eagle G5 is faster and offers better defect detection capabilities [30][32] Question: Growth prospects for 2026 - Management anticipates rapid growth in the high-performance computing market, with expectations for another growth year in 2026 [36][54] Question: Impact of HBM4 on shipments - The ratio of Hawk versus Eagle shipments for HBM4 is customer-dependent, with both products being successful in the market [85] Question: OSATs and their strengthening - OSATs are increasingly involved in high-performance computing applications, with significant orders being received for these applications [58][89]

Company Performance - Camtek reported quarterly earnings of $0.79 per share, matching the Zacks Consensus Estimate, and an increase from $0.66 per share a year ago [1] - The company posted revenues of $123.32 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 1.40% and up from $102.59 million year-over-year [2] - Over the last four quarters, Camtek has surpassed consensus EPS estimates three times and topped revenue estimates three times as well [2] Stock Movement and Outlook - Camtek shares have increased approximately 19.8% since the beginning of the year, outperforming the S&P 500's gain of 7.6% [3] - The company's earnings outlook is crucial for assessing future stock performance, with current consensus EPS estimates at $0.81 for the coming quarter and $3.19 for the current fiscal year [4][7] - The estimate revisions trend for Camtek was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Electronics - Measuring Instruments industry, to which Camtek belongs, is currently ranked in the top 13% of over 250 Zacks industries, suggesting a favorable environment for stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Record revenues of $123.3 million for Q2 2025, a 20% year-over-year increase compared to $102.6 million in Q2 2024[11] - GAAP net income of $33.7 million, or $0.69 per diluted share, reflecting a 20% increase compared to $28.0 million, or $0.57 per diluted share, in Q2 2024[10][14] - Revenues for the six months ended June 30, 2025, increased to $241,955 thousand, up 21.2% from $199,601 thousand in the same period of 2024[26] - Net income for the six months ended June 30, 2025, reached $68,006 thousand, a 29.0% increase from $52,763 thousand in the same period of 2024[27] - Non-GAAP net income for the six months ended June 30, 2025, was $77,509 thousand, up 21.3% from $63,906 thousand in the same period of 2024[27] - Basic net earnings per share for the six months ended June 30, 2025, were $1.49, compared to $1.17 for the same period in 2024, reflecting a 27.4% increase[26] Profitability Metrics - GAAP gross margin of 50.8% and non-GAAP gross margin of 51.9%, with gross profit totaling $62.2 million and $64.0 million respectively[10][12] - GAAP operating income of $32.0 million, up 24% year-over-year, representing an operating margin of 25.9%[10][13] - Gross profit for the six months ended June 30, 2025, was $123,175 thousand, representing a gross margin of 50.9%, compared to 48.1% in the same period of 2024[27] - Operating income for the six months ended June 30, 2025, was $64,674 thousand, a 37.1% increase from $47,123 thousand in the same period of 2024[27] - Non-GAAP gross margin for the six months ended June 30, 2025, improved to 52.0%, compared to 50.9% in the same period of 2024[27] Future Outlook - Anticipated revenue of approximately $125 million for Q3 2025, indicating a run rate of half a billion dollars annually[8][11] - Strong order flow and pipeline expected to continue into Q4 2025, supporting growth initiatives[11] - The Advanced Packaging segment is projected to drive significant growth opportunities due to evolving market demands for AI[9] Assets and Cash Position - Cash and cash equivalents, along with marketable securities, totaled $543.9 million as of June 30, 2025, up from $522.6 million at the end of Q1 2025[15] - Total assets increased to $974.7 million as of June 30, 2025, compared to $892.0 million at the end of 2024[24] Operating Expenses - Total operating expenses for the six months ended June 30, 2025, were $58,501 thousand, an increase of 19.8% from $48,840 thousand in the same period of 2024[26] - The company recorded acquisition-related expenses of $1,300 thousand during the six months ended June 30, 2025[27] Product Development - New product introductions, including the Eagle G5 and Hawk systems, are well-received and aligned with technological advancements in AI applications[9] Shareholder Information - The weighted average number of diluted shares outstanding for the six months ended June 30, 2025, was 49,306 thousand, slightly up from 49,283 thousand in the same period of 2024[26]

Core Viewpoint - Camtek Ltd. anticipates continued growth in Q3 2025, projecting revenues of approximately $125 million, which translates to an annualized run rate of half a billion dollars [3][4]. Financial Highlights - Revenues for Q2 2025 were reported at $123.3 million, marking a 20% increase from $102.6 million in Q2 2024 [5][8]. - Gross profit on a GAAP basis for Q2 2025 was $62.2 million, representing 50.8% of revenues, up 22% from $51.1 million (49.9% of revenues) in Q2 2024 [5][8]. - Non-GAAP gross profit for the same period was $64.0 million (51.9% of revenues), also a 22% increase compared to $52.4 million (51.0% of revenues) in Q2 2024 [6][8]. - Operating income on a GAAP basis reached $32.0 million (25.9% of revenues), a 24% increase from $25.9 million (25.2% of revenues) in Q2 2024 [6][8]. - Non-GAAP operating income was $37.4 million (30.3% of revenues), up 21% from $30.8 million (30.0% of revenues) in Q2 2024 [7][8]. - Net income on a GAAP basis was $33.7 million, or $0.69 per diluted share, a 21% increase from $28.0 million ($0.57 per diluted share) in Q2 2024 [7][8]. - Non-GAAP net income totaled $38.8 million ($0.79 per diluted share), a 19% increase from $32.6 million ($0.66 per diluted share) in Q2 2024 [9][8]. Management Insights - CEO Rafi Amit highlighted that the company is experiencing record performance in 2025, driven by high-performance computing applications for AI, with a year-over-year revenue growth of 20% and strong gross margins around 52% [4][8]. - The Advanced Packaging segment is evolving rapidly, with expectations of an industry-wide upgrade cycle due to new technological requirements in AI [4][8]. - The company introduced new systems, Eagle G5 and Hawk, which have been well received in the market, aligning with the technological advancements needed for AI [4][8]. - Camtek aims to achieve its long-term revenue goal of half a billion dollars and maintains a healthy order flow into Q4 2025 [4][8]. Cash Position - As of June 30, 2025, the company reported cash and cash equivalents, short-term and long-term deposits, and marketable securities totaling $543.9 million, an increase from $522.6 million as of March 31, 2025 [9].

Company Overview - Camtek Ltd. is a developer and manufacturer of high-end inspection and metrology equipment for the semiconductor industry, focusing on inspecting integrated circuits (IC) and measuring IC features on wafers throughout the production process [4] - The company serves demanding semiconductor market segments, including Advanced Interconnect Packaging, Heterogeneous Integration, Memory and HBM, CMOS Image Sensors, Compound Semiconductors, MEMS, and RF, catering to leading global IDMs, OSATs, and foundries [4] Financial Results Announcement - Camtek Ltd. will release its financial results for the second quarter of 2025 on August 5, 2025 [1] - A video conference call will be hosted on the same day at 9:00 am ET, featuring Rafi Amit (CEO), Moshe Eisenberg (CFO), and Ramy Langer (COO) [2] Participation and Replay Information - Participants can register for the Zoom call via a provided link, and a replay will be available shortly after the call concludes [2][3]

Company Overview - Camtek is a market leader in metrology and inspection for advanced packaging with an installed base of over 3,000 tools[9, 16] - The company's systems ensure Known-Good-Die by providing inspection & metrology of 100% of the dice on the wafer[17] - As of March 31, 2025, Camtek had $522.6 million in cash[9] Market and Growth - Target markets are experiencing double-digit growth, including HBM & Chiplets (25-35% through 2030), Automotive SiC (22% through 2030), and HPC/AI (>12%)[20] - Approximately 45-50% of Camtek's revenues are derived from these segments[20] - The CoWoS market is projected to have a 51% CAGR from 2025-2029[39] Financial Performance - Camtek's revenue has grown significantly, reaching $429 million in 2024[10] - Operating income also increased to $130 million in 2024[12] - Q1 2025 revenue was $118.6 million, a 22% year-over-year increase, with a gross margin of 52.1% and operating income of $37.3 million, a 29% year-over-year increase[51] Future Outlook - Q2 2025 guidance projects revenue between $120-123 million, representing a 17%-20% increase year-over-year[57] - The company aims to reach a $500 million revenue target, with a gross margin of 51-53% and an operating margin of 30-33%[59]

Company Performance - Camtek (CAMT) closed at $84.10, reflecting a +2.45% increase from the previous day, outperforming the S&P 500's gain of 0.8% [1] - Over the past month, Camtek's shares have appreciated by 25.75%, significantly exceeding the Computer and Technology sector's gain of 8.5% and the S&P 500's gain of 5.12% [1] Upcoming Financial Results - Camtek is expected to report an EPS of $0.79, representing a 19.7% increase compared to the same quarter last year [2] - The consensus estimate projects revenue of $121.65 million, reflecting an 18.58% rise from the equivalent quarter last year [2] Full Year Projections - For the full year, earnings are projected at $3.2 per share and revenue at $488.2 million, indicating changes of +13.07% and +13.74% respectively from the prior year [3] - Recent adjustments to analyst estimates for Camtek suggest positive sentiment regarding the company's business and profitability [3] Valuation Metrics - Camtek currently has a Forward P/E ratio of 25.67, which is a discount compared to its industry's Forward P/E of 31.13 [5] - The PEG ratio for Camtek is 2.03, while the Electronics - Measuring Instruments industry has an average PEG ratio of 1.99 [6] Industry Context - The Electronics - Measuring Instruments industry is part of the Computer and Technology sector and holds a Zacks Industry Rank of 175, placing it in the bottom 29% of over 250 industries [6][7] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Core Insights - The article highlights the importance of lesser-known companies in the AI ecosystem, which are crucial for the foundational growth of AI technology [1][2][18] - These companies, often referred to as "hidden gems," provide essential infrastructure and services that support the AI revolution, contrasting with the more visible chip designers and software giants [1][2][18] Company Summaries Camtek - Camtek specializes in inspection and metrology equipment essential for semiconductor manufacturing, ensuring AI chips function correctly [5][7] - The company reported a 22% year-over-year revenue increase to $118.6 million and a 38% rise in net income to $34.3 million for Q1 2025 [6] - Management projects Q2 revenue between $120 million and $123 million, indicating a growth rate of 17% to 20% [6] - Camtek's market cap is $3.8 billion, and it is recognized as a key player in the advanced packaging market for AI applications [8] FormFactor - FormFactor addresses the challenge of testing AI chips with thousands of connections at high speeds, using advanced wafer probe cards [9][12] - The company reported Q1 2025 revenue of $171.4 million, with Q2 guidance set at $190 million, despite facing export restrictions [10] - FormFactor's acquisition of FICT Limited enhances its capabilities in advanced probe card components, and a $75 million share buyback reflects management's confidence [11] - The company is well-positioned to meet the increasing demands for sophisticated testing as AI chip complexity rises [12] Vertiv Holdings - Vertiv focuses on cooling solutions for AI data centers, which are critical for managing the heat generated by large-scale AI computations [13][16] - The company achieved Q1 2025 net sales of $2 billion, a 24% increase year-over-year, with a backlog 25% higher than the previous year [14] - Vertiv's collaboration with Nvidia and iGenius to deploy a large AI supercomputer in Italy showcases its role in AI infrastructure [15] - Full-year 2025 sales guidance has been raised to between $9.3 billion and $9.6 billion, reflecting the growing demand for thermal management solutions in AI [16] Industry Overview - The article emphasizes the interconnected roles of Camtek, FormFactor, and Vertiv in the AI ecosystem, where each company plays a vital part in the manufacturing, testing, and operational phases of AI chip deployment [17] - As AI adoption accelerates, the demand for inspection equipment, testing technology, and cooling infrastructure is expected to intensify, highlighting the critical nature of these "pick-and-shovel" companies [18]