Camtek’s Earnings Call: Record Growth Amid Challenges

Camtek ((CAMT)) has held its Q3 earnings call. Read on for the main highlights of the call.

Camtek’s recent earnings call painted a picture of a company experiencing robust growth and technological advancements, albeit with some financial challenges. The sentiment was generally positive, highlighting record revenues and a strong financial position, but tempered by concerns over increased operating expenses and potential revenue growth delays in 2026.

Record-Breaking Revenue and Growth

Camtek reported record revenues of $126 million for Q3, marking over a 12% increase year-over-year. The company also achieved a record operating income of $37.6 million, with an impressive operating margin of 30%, showcasing its strong financial performance.

Strong Financial Position

The company boasts a robust cash position of approximately $800 million, significantly bolstered by a successful $500 million convertible notes offering in Q3. This financial strength positions Camtek well for future investments and growth opportunities.

Technological Advancements

Camtek’s new Eagle G5 and Hawk products have been well-received in the market, expected to contribute around 30% of the company’s revenue by 2025. The company has secured significant orders from major industry players, underscoring its technological leadership.

Leadership in HBM Market

Camtek continues to lead in the HBM market, with its tools serving as the reference for 3D metrology steps for HBM4 across all major players. This leadership position reinforces the company’s competitive edge in the industry.

Positive Outlook for 2026

The preliminary outlook for 2026 suggests sustained growth, with expectations for revenue to be more heavily weighted towards the second half of the year. This projection is driven by ongoing investments in wafer fab equipment and manufacturing capacity expansion.

Increased Operating Expenses

Operating expenses rose to $27.2 million from $22.9 million last year, primarily due to increased R&D expenses. This increase reflects Camtek’s commitment to innovation and maintaining its competitive edge.

One-Time GAAP Loss Due to Tax Asset

Camtek recorded a one-time GAAP loss of $89 million, attributed to the creation of a $12.3 million tax asset from convertible notes activities. This financial maneuvering highlights the complexities of the company’s fiscal strategies.

Potential Lag in Revenue Growth for 2026

The company anticipates a natural time lag between investment announcements and equipment purchases, leading to revenue growth being weighted towards the latter half of 2026. This expectation underscores the strategic planning required in the industry.

Uncertainty in Q1 2026 Revenue

The outlook for Q1 2026 suggests a slower start, with potential revenue declines compared to Q4 levels. This uncertainty reflects the challenges of forecasting in a rapidly evolving market.

Guidance

Looking ahead, Camtek anticipates Q4 2025 revenues around $125 million, leading to an annual revenue projection of $495 million, a 15% increase over 2024. The company is focused on enhancing its technological capabilities and expects growth in 2026 to be driven by investments in wafer fab equipment and AI-driven demand.

In summary, Camtek’s earnings call highlighted a strong quarter with record revenues and a solid financial footing. While there are challenges ahead, particularly concerning operating expenses and revenue growth timing, the company’s technological advancements and market leadership position it well for future success.