Camtek Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 14, 2023

There are 11 speakers on the call.

Operator

Hello, everyone, and good morning. Hosting today's call is Rafi Amit, Camtek's Chief Officer Rami Langer, Chief Operating Officer and Moshe Eisenberg, Chief Financial Officer. Before we start, I would like to note that certain statements made on this call constitute forward looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended and the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may use terminology such as believes, expects, will, may, should, anticipates, plans or similar expressions to identify forward looking statements. Such statements reflect only current beliefs, expectations and assumptions of Camtek.

Operator

However, actual results, performance or the achievements of Camtek may differ materially as they are subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, those that are described in Camtek's most recent annual report on Form 20 F and as may be supplemented from time to time in Camtek's other filings with the SEC, including today's earlier filing of the earnings PR, all of which are expressly incorporated herein by reference. Camtek undertakes no obligation to update any such forward looking statements unless required by law. Camtek's public filings are available on the Securities and Exchange Commission's website at www.sec.gov and may also be obtained from Camtek's website at www.camtek.com. Also on today's call, we will include certain non GAAP numbers.

Operator

For a reconciliation between the GAAP and non GAAP results, please see table attached in today's press release, which is also posted in the Investor Relations section of Camtek's website. So So with us today, we have Moshe Eisenberg, CFO Rafi Amit, CEO and Ramit Langa, COO. And I would now like to turn the call over to Rafi Amit. Rafi, you may go ahead.

Speaker 1

Okay. Thanks, Kenny. Good morning or good afternoon, everyone. Camtek closed the 3rd quarter with revenue of $80,500,000 Gross margin came In at 49%, which is a continued improvement over previous quarters as we indicated earlier this year. Operating margin was 28%.

Speaker 1

Over 60% of our revenues came from advanced interconnect packaging Communications, which with a significant portion coming from HBM and chip led modules. The remaining 40% is divided between compound semiconductors for power devices, CIS and Process Control Applications. Regarding the war in Israel, I would like to explain how we have managed this situation. About 10% of our employees in Israel are on active reserve duty. The remaining workforce has managed to compensate for their absence.

Speaker 1

Our facility is quite far from the border And we have some redundancy in our operations, which is done in 3 different locations. Thus, Any risk of interruption is minimized. Our delivery to customer has not been affected And we have not experienced any material or supply shortage. So all in all, The war has not affected our operations or business. On October 31, we completed the process of acquiring FRT from 4 factor and we have begun the integration of FRT into Camtek.

Speaker 1

We are in the final integration process of FRT sales and customer support functions into our global organization. The synergy of our products make this process straightforward. We have also started the integration of the other different organizations functions into Camtek and we plan to expand the facility in order to support potential growth and implement the Camtek's workflow into FRT. Now I would like to add a few words about the business environment. Since the beginning of Q3, we have reported orders received of about 150 systems Today was for 28 tools from Tier 1 customer for HBM and heterogeneous integration applications.

Speaker 1

Most of the orders are for installation during 2024. This healthy backlog and ordering pipeline point to a year of growth for Camtek and we expect a record year in sales in 2024. No doubt that our high performance computing is the bright spot for us. Based on several survey, the number of chiplets is expected to grow at 35% We have strong position in this market, so we expect to expand our market share by winning additional Executive. In addition, in some territories, We see demand for other applications that are not related to the high performance computer, but fueled by mobile phones, server, automotive and other segments.

Speaker 1

We are also enjoying healthy demand from OSAT serving multiple applications. We are greatly encouraged by the number of orders We received for HBM and by chiplet modules to be installed in 2024. At the same time, we are aware Of the technological changes soon to be adopted by our customers, we are totally prepared with Innovative and creative solutions and will start qualification processes at customer Officer. With respect to Q4, we expect continued organic growth and with the contribution of FRT, Our revenue guidance is $87,000,000 to $89,000,000 And now Moshe will review the financial result.

Speaker 2

Thank you, Rafi. In my financial summary ahead, I will provide the results on a non GAAP basis. The reconciliation between GAAP results and the non GAAP results appear in the tables at the end of the press release issued earlier today. 3rd quarter revenue came in at $80,500,000 a decline of 2% compared with the Q3 of 2022, an increase of 9% for the Q2 of 2023. The geographic revenue split

Speaker 3

For the quarter was as follows:

Speaker 2

Asia 81% and U. S. And Europe accounted for the rest 19%. Gross profit for the quarter was $39,400,000 The gross margin for the quarter was 49%, Similar to the Q3 of last year and an improvement from the Q2 of this year, which was 48%. As mentioned before, we've been taking measures to improve the gross margin.

Speaker 2

In the last two quarters, we have seen the initial impact and we expect to see continued gradual improvement in the coming quarters subject to sales mix. Operating expenses in the quarter were $17,200,000 very similar to the Q3 of last year and to the previous quarter. Operating profit in the quarter was $22,200,000 compared to the $23,200,000 reported in the Q3 of last Officer. Operating margin was 27.6% compared to 28.3 Financial income for the quarter was $5,700,000 at a similar level to the previous quarter and much higher than the $2,000,000 reported last year. The increase from last year relates to the significantly higher interest rates on an increased cash balance.

Speaker 2

Net income for the Q3 of 2023 was $25,200,000 or $0.52 per diluted share. This is compared to a net income of $23,300,000 or $0.48 per share in the Q3 of last year. Total diluted number of shares as of the end of Q3 was 49,000,000 shares. 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 September 30, 2023 were $517,100,000 This compared with $506,300,000 at the end of the second quarter.

Speaker 2

I know that in line with the FOT closing in October, our cash balance has decreased by approximately $100,000,000 Which will also affect our interest income. We generated $12,400,000 in cash from operations in the quarter. Inventory level was $72,700,000 It went up by $4,400,000 over the quarter to support the The anticipated sales growth in the coming quarters. Accounts receivables increased to $91,400,000 from $79,000,000 in the previous quarter, primarily due to the increasing revenue and the timing of collections. As Rafi mentioned before, we expect revenue of between $87,000,000 to $89,000,000 in the Q4, which is about 7% increase over the Q4 of last year.

Speaker 2

And that we look forward to a year of growth in 2024. We will provide more color Next quarter after we announce our Q4 results. And with that, Rafi, Rami and I will be open to take your questions. Kenny.

Operator

Thank you, Moshe. We will now open the call for Q and A. So if you have a question, please raise your hand on the platform and we will call for a few minutes to see for a few seconds to see who wishes to ask. So our first question is going to be from Brian Chin from Stifel. Brian, you may go ahead and ask your questions.

Speaker 4

Hi, there. Firstly, best wishes, and I hope that you are all well. And thank you for letting us ask a few questions. Maybe to start, Rafi, of the 240 system bookings since the beginning of 3Q, is the right way to think about this as maybe 80% to 90% of that relates to shipments that will occur next year. And also, I think your book to bill was probably at least 2 times, 2 to 1 in 3Q.

Speaker 4

So maybe it won't be quite that high, but do you expect the book to bill will still be well above 1 in 4Q?

Speaker 1

Look, as we mentioned in all the announcement, most of the order we receive are for 2024, Okay. And on top of that, I think we don't really discuss any specific We don't answer to specific question about the backlog or about the book to bill and other type of the but maybe Moshe can elaborate a little bit about that. Moshe, could you add something?

Speaker 2

Yes. Indeed, most of the orders, the 2 40 machines that we have received so far are for Teams that we have received so far are for deliveries in 2024. I don't have the exact percentage, but most of it is for 2024 deliveries. With respect to book to bill, obviously, in Q3, the book to bill was much higher than 1. We are still in the middle of the 4th quarter, So it's still early for me to say whether the book to bill this quarter will be greater than 1.

Speaker 2

But my expectation based on orders that we have received so far Plus orders that we have in the pipeline that indeed it will be greater than 1.

Speaker 4

Great, thanks. For a follow-up, for calendar 24, you stated that this should represent a record revenue year for the company. FRT certainly adds to this. Can you give us an idea of the impact to the model, gross margins and expenses from FRT? And also, How do you plan to integrate the technology into new and existing platforms?

Speaker 4

And does the acquisition also provide favorable customer synergies?

Speaker 1

By the way, regarding the acquisition of FRT, I think that in 2024, When we discuss about to integrate to Camtek, we mainly mean in the operation, in sales and customer. We are not we don't have any plan right now to start to integrate the model from here to there And to come with some new tool, this is not in our priority. FRT has its own backlog for what they did In the last few years, Camtek also have enough backlog. So we believe that 2024 in term of R and D integration, let's call it, we We are not going to put too much focus, but more on the administration, operation and other aspects of the 2 company to work together as one. This is regarding the FRT and Camtek.

Speaker 2

Just to add, you asked About the contribution to the financial model. So I would say the following. We said when we announced the deal We plan a contribution of around $30,000,000 for FRT next year and we feel that this is still Good number. For the Q4, their contribution is expected to be pretty much in line with this run rate. And overall, this business is quite profitable and it's very similar to the profitability metrics Officer of Canvtek.

Speaker 4

Okay, great. Thank you. And then just to clarify Moshe, You said 4Q in line with the $30,000,000 run rate or is that 1Q? Because I guess 4Q, you only have it for 2 out of 3 months.

Speaker 2

So the 2 out of the 3 months is within the run rate, yes. It's only 2 months within the Q4, correct.

Speaker 4

Okay. Thank you.

Operator

Thanks, Brian. Our next question will be from Tom O'Malley from Barclays. Tom, you may go ahead.

Speaker 5

Hey. So just a little confusion on Q4 there, and I want to kind of

Operator

sorry. Tom, you there? We lost you, Prasad.

Speaker 5

Yes. Can you hear me? Yes. Hey, so just wanted to just run through Q4 a little bit here. So in the slide deck you had on the web this morning, you had 82 to 83 So I assume that that was the organic revenue and then you're guiding to $88,000,000 So that would imply a $5,500,000 contribution from FRT.

Speaker 5

Can you just walk through what the exact contributions are in Q4 just because I'm seeing a couple of different numbers here?

Speaker 2

I'm not sure what The $82,000,000 to $83,000,000 where this number comes from, but it may be a typo. As I said, our $87,000,000 to $89,000,000 includes some organic growth from Camtek plus contribution from FRT in a level that is pretty much the run rate of the $30,000,000 that we expect next year. So the correct guidance is $87,000,000 to $89,000,000 combined with the FRT contribution.

Speaker 5

Okay. So, I guess, what is then okay. So, dollars 30,000,000 run rate, You're going to adjust that for the 2 or 3 quarters. That makes sense. Going into the out year, are you expecting an acceleration of that FRT business?

Speaker 5

Or is that 30,000,000 Still what you're sticking with for the contribution from the acquired business for 2024?

Speaker 3

For 2024, what we said and we are staying with this Investment. It will be €30,000,000 for 24,000,000. Of course, as we learn the business, we will be more we will earn it, but that's the expectation as we go into expectation as we go into 2024.

Speaker 5

Okay. And then lastly, when you guys look at bookings year traditionally, I would imagine that just given the amount of orders that you guys have, your visibility is a lot better. When you guys say record revenue for 2024, Is that record revenue fully backed on existing orders today, a. K. A.

Speaker 5

With the orders that you have in the book, is that already a record revenue year? Are you expecting Some turns business year over year to get you above that record revenue. Thank you.

Speaker 3

So first of all, the record revenue today, it's an expectation. The backlog today that we have in hand still does not support record revenues, but understanding what we have with the pipeline, talking to customers, Our expectation is to be for a record year very similar to what we said a quarter ago.

Operator

Thank you. Thank you, Tom. Thank you, Tom. Next question will be from Craig Ellis of B. Riley.

Operator

Craig, you may go ahead and ask your questions.

Speaker 6

Yes. Thanks for taking the questions. And I also wanted to Just the best wishes for operating in a very unusual and more So the first question I wanted to ask is around Some of the orders that are in hand and some that could come in, there's a lot of attention on Both AI related orders and heterogeneous die, and yet there have been parts of The business for industry that have seemed pretty muted this year, whether it's CIS So we're front end and some other areas. So one of the things I wanted to better understand is the degree to which The orders for the 2 40 systems that you have is really more heterogeneous plus AI versus some of the other And areas of exposure that the company has. And then the second part of the question is, to what extent do you think some of the areas that have been more muted Executive.

Speaker 3

So first of all, thank you for the best wishes, It's Greg. Yes, it's indeed a challenging time, but we'll manage through it. So when we look at the business, All in all, I look at the $240,000,000 or looking forward at what is in the backlog. We are above 60% of our business is for what we call advanced packaging. No doubt the triplets and the HBMs by itself is about half of it.

Speaker 3

No doubt and this is emerging as I would say as a relatively new business. We had this business, but From the volume point of view, it was much smaller. So indeed, this is an area that will take us to A different level in the business and this is why really this contribution makes us feel give us the expectation for a record there next year. Now when we look at the other areas, so on the the Progenius integration is definitely becoming more And more dominant in the business. We're seeing a lot of business there from OSATs and also from IDMs.

Speaker 3

That's another portion that is growing in the advanced packaging. And in the advanced Packaging, we're also seeing the fan out is still being dominant in this business. So I think that these three areas Really make today our advanced packaging business. Now the rest of the businesses are there. I think we spoke about healthy backlog from OSATs and that's lots of applications advanced packaging, CMOS image sensors, some RF, so they are there.

Speaker 3

The silicon carbide and I would say the front end When we look forward for next year, they're above 20% of our business. So I think these businesses Are going to be healthy. It's very hard to give the exact extent of what they do, but definitely that's in areas that will continue to see business. What is interesting when you look at the FRT business, the FRT business is really in these areas The silicon carbide and the advanced packaging. So this really strengthened our position there because we are going to do as a company more steps on the same processes and will be exposed to new opportunities that were in there for us in the past.

Speaker 6

That's really helpful color, Rami. Thank you. The second question, maybe more of an operational question, and it's regarding To a lead times, given how significant the recent order activity has been and admittedly To your point, Rafi, this is vastly for shipment in 2024. But can you just talk about To a lead time shipment times and the company's confidence given how dramatically orders have surged That you can hit end customer shipment windows and capture all of the order potential.

Speaker 3

So I think from that, Greg, the fact that these orders we are getting today for 2024 Give us enough time to really get prepared. And we do not See any issues with our supply chain. It's very solid. We have the inventory in place. We have the manpower in place and to meet the forecast that we are looking at and the surge in the business that we are forecasting.

Speaker 3

So from that point of view, we are ready. And I think we have enough, I would say, Head on time or we are seeing the things in early enough in the game to make sure that we will have all the material and We'll be prepared to deliver all the machines on time.

Speaker 6

That's really helpful. And then lastly for me before I drop back in the queue. Rafi, you and I have talked on numerous calls in the past about the company's M and A aspirations and NFRT looks like a really nicely synergistic fit and it looks very EPS accretive intermediate and long term. With that deal now closed and working nicely through integration, does that mean M and A is something that will be off the table for a while? Or how do you think about M and A from here with FRT now in the pool?

Speaker 1

No, it's not off table. We continue Searching for potential, but the same as FRT, this is what we call a perfect synergy. Okay. And this is definitely one of our preferable M and A consideration To look for a company that it's easy to integrate, that they are probably I would say The same environment, the same system, not copy exec, but not something totally different for what we are doing or if maybe

Operator

Our next question is going to be from Gus Richard of Northland. Gus, you may go ahead and ask your questions.

Speaker 7

Yes. Thanks for letting me ask a question. Just in terms of as you ramp, Do you foresee any capacity constraints or maybe a better way to ask the question is, Where do you need to focus to make sure you have capacity as demand grows?

Speaker 3

You are talking about the capacity here to manufacture guns?

Speaker 7

Correct, yes. Is it lead times on optics? Is it manpower, floor space? Just sort of where Would you first run into a capacity constraint?

Speaker 3

So first of all, I think we discussed in previous calls, we have today capacity. We've increased our capacity last year and today we have enough capacity for roughly $500,000,000 in sales annually. So the clean room which is the longest time is there and also the manpower training we have enough. So the rest is really planning. And as I said, Because we understand more or less what is going to happen next year, we have backlog already for next year.

Speaker 3

So we have we're talking to customers. We understand what we will need to And what we will need to ship, we have already put in orders for what we need from material point of view. We have enough inventory on hand for the next few months. So we do not foresee any reason not to shift all of the machines in 2024.

Speaker 7

Got it. Thank you. And then I think in your prepared remarks. I think you're starting to see, chiplets expand into auto and I think you said mobile as well. And I'm just wondering if you could talk a little bit more about those opportunities and when you might start to see those impact Your backlog or your shipments.

Speaker 3

No, no. I think here in our remarks what we said that there are other opportunities For non business that is not related to chiplets and HBMs, we see opportunities there as well. Our business We'll be in the range of, let's say, more than 30% for the HBM and the triplets. The rest will come from the other segments that we serve. So I think today the market is focused on the triplet and HBM.

Speaker 3

This is high performance computing. I think this is going to what people call AI applications. I think this is today The main application definitely this in 2, 3 years no doubt will become the standard in computing in the industry. But I think there is time until we'll get to that point.

Speaker 7

Got it. And then the last question for me in terms of Demand obviously is going up because of unit volume, but I also wonder if you could comment a little bit about inspection times And increasing bump density and then what's happening for how long it takes to inspect a wafer.

Speaker 3

So you know this is really application dependent, but no doubt. And I think Rafi mentioned in the prepared remarks that we understand where the market is going to. So we've talked about the fact that The number of pumps are becoming more, the increasing numbers and obviously they are becoming denser and smaller And this is this will require new capabilities. Some of those capabilities we already have installed at customers. There are new capabilities that we are going to qualified customers.

Speaker 3

So those capabilities, First of all, we'll improve the throughput on one hand to address the increase in the numbers of bumps or the density. But definitely all in all, some of these applications, they slow the inspection and metrology time In certain applications, obviously, I mean, this is the physics of the business And customers are required to purchase more machines. But we are doing on our hands our best from the to supply the best ROI in the industry in improving the throughput, the accuracies and everything on our machines.

Speaker 7

Got it. Thanks so much.

Operator

Thanks, Gus. Next question is from Vittwati Shwatri from Jefferies. Svetbana. Please go ahead. Please unmute as well.

Speaker 8

Hi, thanks for taking my question. The first one I had is on the 2 40 system orders that you have for packaging. Could you help us understand How maybe these convert to revenues first half 'twenty four versus second half? Is it more first half weighted versus second half? Any color there would be helpful.

Speaker 3

So obviously, Vadwati, obviously, the orders that we see for 2024, so we said most of the 240, Somewhere went to Q3 and Q4, some needed quick deliveries. But when we look at next year, obviously, the orders lean more The first half naturally and on the second half, we have less backlog, But we have an understanding from customers. This is where the pipeline comes into place where people speak with us that they need certain machines in the 3rd quarter or the Q4, some even asked for a certain slot, but they have not issued yet the PO. So the moving the pipeline or converting it from a pipeline to orders, Definitely, this is what we will be doing in the next couple of months.

Speaker 8

Got it. And maybe zooming into that a little bit. So Most HBM manufacturers and the chiplet manufacturers have talked about doubling their capacity by 2024. So with these kind of order volumes, do you think they have all the tools they need to achieve that target? Like what is your sense here?

Speaker 8

And I know the visibility may be limited, but any color here?

Speaker 3

Well, you know what I understand and what we see, we think that they are getting the tools that they need. I can tell you that if there will be a shortage and they will feel that they will need additional tools, we have enough capacity and enough inventory in place to manufacture more machines. So I think we will not be the bottleneck This will be needed at least from our understanding what we're seeing at least for the I would say for 2024, At least the first half, I think they have enough tools.

Speaker 8

Okay. Got it. And then Another question I had was, there are some notebook desktop chips that are starting to use chiplet architectures, which will start ramping soon. Can you help me understand what this opportunity means for you? Do you think it becomes an opportunity as big as HPM that you're seeing right now?

Speaker 3

So that's definitely something that will I would say will enlarge our market. And this is what I think will happen. I think people are starting to use the same architecture, but not adding the HBM's. I think this is what will happen. Some of the applications of gaming and so forth actually require the HBMs, but many do not need.

Speaker 3

And this is what I said in one of the questions before. I personally believe that as they ramp the HPMs, They will get the cost structure, which is today I would say one of the limiting factors, but the HPM cost structure will go down with the volume. And then I don't want to say that it will become standard, but definitely it will become the, I would say, the preferred architecture for most of the computers. So that's something. And in most cases, the high end becomes the standard all the time.

Speaker 3

And I think this will happen in this case as well.

Operator

Attie. Just as a reminder to everybody, you can raise your hands on the platform if you want to ask. Our next question is going to be from Vivek REA from Bank of America Securities.

Speaker 9

This is Doug San on behalf of Vivek. A question on gross margins. I'm curious about your outlook into 'twenty four. Not looking for a guide, obviously, but What are some of the puts and takes and drivers of margins next year? Could it return to your target 50 plus levels?

Speaker 2

So yes, we said basically that we took certain steps in the beginning of the year. We are seeing the The fruits of it starting to affect our gross margin. This is the Q2 or the Q3 actually in a row of improved Gross margin. We expect continued improvement gradually. The target is To reach 50%, Mark, the only give and take here is that this is all subject to sales mix.

Speaker 2

So in some cases, on some quarters, we have more favorable product mix. And in other quarters, this is Less favorable. So, this has it also have an impact on the margin. But overall, our target for next year is to be at At least 50%.

Speaker 9

Got it. And then could you talk about Your order trends outside of AP, maybe some of the visibility in compound semis. You said mobile phones and automotives have also been encouraging. So I'm curious about your outlook there. Thank you.

Speaker 3

So In general, our, I would say, advanced packaging, which includes the chiplets, HBM, heterogeneous integration and so forth, this is, I would say, it's above 60% can come up to 65%. Then I would say the next sizable business is what we call the silicon carbide and the front end. We combine them together. They would come to anywhere 20% to 25%. And then we have a few others.

Speaker 3

CMOS image sensors have been low lately for the reason that mobile phones are down. So This is more or less couple this business with mobile phones. I assume that next year they will be better. This business can be anywhere between 5% to 10%. And then there are RF names.

Speaker 3

A lot of smaller businesses That will account to the 100%. But if we look at the I I would say the strongest driver no doubt today is on the advanced packaging part, which is the chiplets and the HVMs. And that's no doubt a growth driver that is going to be dominant for the next couple of years at least. And then the silicon carbide and the front end, definitely this market may be a little bit slower now, But definitely this is overall the CAGR is in the range of 20% annually, definitely a market with a sizable opportunity.

Operator

Our next question is from Ella Prileutsky CEO of Optimus Funds. Ella, please go ahead and ask your question.

Speaker 8

Hi, hello. One question about the Geographical revenue split for this quarter, please.

Speaker 2

Yeah. So Asia was around 80%, eight-zero and U. S. And Europe

Operator

Executive. Our next question is from ataul. Shahar, you may go ahead and ask your question.

Speaker 10

Hi, guys. Thank you for asking the question. And going back to the Viverte question about the some of the laptop or desktop application, you spoke about HBM, but I'm not sure HBM is applicable to these. Maybe Trying to understand, in your answer, you meant that HBM will be adopted in the laptop and desktop, or you meant the advanced packaging A major leapfrog on your advanced packaging next year, giving you another ramp up of

Speaker 3

So, Shahar, let's say there are 2 questions and let me start with the first one. The question that came before is that you see today notebooks and in general the PCs starting to adapt The Chipet architecture. Now down the road, they will add also HBMs. Currently, they are not I think The only application that I know of in the PC arena that's using the chiplets and HBM is some gaming applications. So, but from the structure, they're starting to use the structure of the chiplets, which will eventually will probably start to use also HBMs as well as they need more and more power, but this is still down the road.

Speaker 3

Now regarding your second question, no doubt There is an opportunity. But the question is how fast it will grow and how fast HBMs will go to other applications Other than AI, this is still not clear. And therefore, definitely as we said, This segment will be more than 30% of our business. I mean, this is significantly more than this year And dramatically bigger than it was a year or 2 ago. So definitely, this has This is part of the growth one of the reasons for the growth of Camtek over the last few years.

Speaker 3

Definitely, that's an area that's going to increase And definitely an area that is has a very big potential for us. But how fast it will grow Further than what is going today, it's still hard to say.

Speaker 10

Okay, thanks.

Operator

Okay. Thank you, Shaha. That looks like it ends the Q and A session. So before I turn the call back to Rafi, Just to let everybody know that a recording of this call will be available from the same Zoom link on Camtek's website in the next couple of hours. And Rafi, please go ahead and make your closing statements.

Speaker 1

Okay. I would like to thank you all Thank you for their tremendous performance. To our investor, I thank you for your long term support. I look forward to talking with you again next quarter. Thank you and goodbye.

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Key Takeaways

  • Camtek closed Q3 with $80.5 million in revenue, a 49% gross margin (up from 48% in Q2), 28% operating margin, and non-GAAP net income of $25.2 million ($0.52 per share).
  • Q4 revenue is guided to $87 million–$89 million (including FRT), and the company expects a record year in sales for 2024 driven by a healthy backlog.
  • Advanced interconnect packaging—led by HBM and chiplet modules—accounted for over 60% of Q3 revenues, and Camtek has booked about 240 systems since the start of Q3, mostly for 2024 installations.
  • On October 31 Camtek completed the acquisition of FRT, with integration of sales, customer support and operations underway, and a target of ~$30 million in FRT revenue contribution for 2024 at profitability metrics similar to Camtek’s.
  • Despite the conflict in Israel, operations remain uninterrupted thanks to workforce redundancy, diversified facilities, and secure supply chains, with no material shortages or delivery delays.
AI Generated. May Contain Errors.
Earnings Conference Call
Camtek Q3 2023
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