Camtek Q2 2026 Earnings Call Transcript

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Provided by Quartr
August 10, 2026

Key Takeaways

  • Positive Sentiment: Record Q2 revenue reached $133.2 million, up 10% sequentially, with a 51.4% gross margin, 27% operating margin, and $0.78 non-GAAP diluted EPS.
  • Positive Sentiment: Camtek reported more than $600 million in year-to-date orders, approximately 80% tied to advanced packaging and more than 50% from OSATs, improving visibility through 2026 and into 2027.
  • Positive Sentiment: Management expects Q3 revenue of $158 million-$160 million, a 20% sequential increase, and more than 30% growth in second-half 2026 revenue versus the first half; advanced packaging revenue is expected to grow about 45% in the second half.
  • Positive Sentiment: Demand is being driven by HBM4, 2.5D/3D packaging, and AI-related applications, while photonics is emerging as an additional growth market; newer Hawk and Eagle G5 systems represented about 50% of Q2 systems revenue.
  • Negative Sentiment: Accounts receivable rose to $153.9 million and DSO increased to 105 days, while management expects inventory to grow in coming quarters to support the rapid revenue ramp; operating expenses are also expected to increase, primarily from continued R&D investment.
AI Generated. May Contain Errors.
Earnings Conference Call
Camtek Q2 2026
00:00 / 00:00

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Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtek's Result Zoom Webinar. My name is Kenny Green, and I am part of the investor relations team at Camtek. All participants other than the presenters are currently muted. Following the formal presentation, I will provide some instructions for participating in the live question-and-answer session. I would like to remind everyone that this conference call is being recorded, and the recording will be available from the link in the earnings press release and on Camtek's website from tomorrow. You should have all received by now the company's press release. If not, please view it on the company's website. With me today on the call, we have Mr. Rafi Amit, CEO, Mr. Moshe Eisenberg, CFO, and Mr. Ramy Langer, COO.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Before we begin, I would like to remind you that the statements made by management on this call will contain forward-looking statements within the meaning of the Federal Securities laws. Those statements are subject to a range of changes, risks, and uncertainties that can cause actual results to vary materially. For more information regarding the risk factors that may impact Camtek's results, please review Camtek's earnings release and SEC filings, and specifically the forward-looking statements and risk factors identified in the results press release issued earlier today, and such other factors discussed in Camtek's most recent annual report on SEC Form 20-F. Camtek does not undertake the obligation to update these forward-looking statements in light of new information or future events. Today's discussion of the financial results will be presented on a non-GAAP financial basis, unless otherwise specified.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

As a reminder, a detailed reconciliation between GAAP and non-GAAP financial results can be found in today's earnings release. Now I would like to hand the call over to Mr. Rafi Amit, Camtek's CEO. Rafi, please go ahead.

Rafi Amit
Rafi Amit
CEO at Camtek

Hello, everyone. I am delighted with our second quarter result and even more excited about the exceptional momentum we are seeing across our business. More importantly, the expectation we share with you on our previous call regarding the second half of 2026 and our leadership position in the advanced packaging market are now becoming a reality, as you will hear through today call. But first things first. Let's begin with our second quarter financial results. Second quarter revenue reached a record of $133 million, exceeding our guidance. Gross margin was 51.4%, and operating income totaled at $36 million. Approximately 75% of our revenue was generated from the advanced packaging segment, with the majority supporting AI-related applications. The remaining revenue was generated across a diverse range of 2D inspection application, including silicon photonics and various 2D inspection applications.

Rafi Amit
Rafi Amit
CEO at Camtek

Now, let me return to the point I made at the beginning of the call. Earlier this year, we communicated that we expected the second half of 2026 to be significantly stronger than the first half. That expectation has materialized. Since the beginning of the year, we have experienced a significant acceleration in order intake, bringing total orders received year to date to more than $600 million, with deliveries scheduled through the remainder of 2026 and into 2027. This exceptional level of order intake has significantly improved our business visibility for the remainder of 2026 and well into 2027, giving us increased confidence in our outlook. Our leading position in the advanced packaging market is expected to drive approximately 45% growth in our advanced packaging business in the second half of 2026 compared with the first half.

Rafi Amit
Rafi Amit
CEO at Camtek

Looking at the year from another perspective, we expect our advanced packaging revenue in the fourth quarter to be approximately 70% higher than the first quarter, reflecting the strong acceleration in demand. In the second quarter, approximately 50% of our systems revenue were generated by the new generation platform, the Eagle G5 and the Hawk. We expect the contribution from these products to continue increasing over the coming quarters as customer adoption accelerated. Let me provide some additional color on the more than $600 million orders we have received since the beginning of the year. Approximately 80% of these orders are advanced packaging applications.

Rafi Amit
Rafi Amit
CEO at Camtek

The industry transition to HBM4, together with continued capacity expansion, has resulted in significant order from multiple leading HBM manufacturers. In parallel, the ongoing expansion of 2.5D and 3D IC packaging capacity is creating a substantial growth opportunity for Camtek, as reflected by the large multi-system orders we have already received from leading foundries, IDMs, and OSATs. Notably, OSATs accounted for more than 50% of our total order intake. Another existing market emerging as a meaningful growth opportunity for Camtek is photonics, including silicon photonics and compound semiconductor. We have already received multi-system orders from several customers in this market, and we expect photonics to become an incredibly important contributor to our growth in the coming years. This brings me to our outlook. We expect third quarter revenue to be in the range of $158 million-$160 million, representing an exceptional 20% sequential increase over the second quarter.

Rafi Amit
Rafi Amit
CEO at Camtek

Given our strong order momentum and record backlog, we expect to deliver more than 30% growth in H2 2026 versus H1 2026, followed by continued growth into 2027. It is also important to highlight that we are continuing to expand our core product portfolio with new platform configuration and application-specific module that will enable us to address additional applications and markets where we have not previously competed. Examples including a high-resolution backside inspection module and fluorescence illumination technology for detecting organic residue. In the metrology space, we are also launching a new platform, MicroProf, which will significantly expand our metrology capabilities and enable us to address with existing and emerging process step. The Hawk, combined with its enhanced optical capabilities and our breakthrough AI technology, is further strengthening our competitive position and enabling us to penetrate additional process steps, including hybrid bonding, as well as other fast-growing emerging applications.

Rafi Amit
Rafi Amit
CEO at Camtek

We look forward to discuss this development in greater detail at our investor breakfast in October at SEMICON West. I am also pleased to report that we are successfully managing the operational challenges created by this unprecedented level of demand. We prepare well in advance by expanding our production capacity and strengthening our supply chain, enabling us to meet customer delivery schedule while supporting our continued growth. At the same time, we are preparing the organization for the next stage of growth by further expanding our manufacturing capacity, system integration capabilities, sales organization, and customer support infrastructure to support substantially higher annual revenue level. Let me conclude by summarizing our key messages. The AI revolution is driving unprecedented demand for data center, compute capacity, and power infrastructure.

Rafi Amit
Rafi Amit
CEO at Camtek

With AI adoption still in its early stage, we believe demand for AI compute infrastructure will continue to grow significantly, supporting sustained investment in AI data center and advanced semiconductor manufacturing. Camtek is exceptionally well-positioned to benefit from the expected growth over the coming years. We have hundreds of system installed at the world's leading customer. We work closely with them to develop inspection and metrology solutions tailored to their evolving technology requirements. Our product development roadmap is closely aligned with the technology roadmaps of these industry leaders. This strong customer engagement, combined with our expanding products portfolio and proven execution, giving us great confidence in our ability to deliver sustained growth in the year ahead. Moshe will review the financial result. Moshe?

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Thanks, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appear in the table at the end of the press release issued earlier today. Second quarter revenues came in at a record level of $133.2 million, an 8% increase year-on-year, and 10% compared with the first quarter of 2026. The geographic revenue split for the quarter was as follows: Asia accounted for 92%, and the rest of the world, 8%. Gross profit for the quarter was $68.5 million. The gross margin for the quarter was 51.4%, similar to the previous quarter. Operating expenses in the quarter were $32.5 million, compared to $30.9 million in the previous quarter. The main area which has increased is R&D.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

This is around the investment in new technologies and additional resources from the Visual Layer acquisition in order to strengthen our AI offering. Operating profit in the quarter was $36 million, compared to $31.1 million in the first quarter. Operating margin was 27% compared to 25.5%. In line with our forecast for a strong second half, the leverage we have in the model, together with the improved product mix towards the Eagle G5 and the Hawk, is expected to result in a gradual improvement across all profitability metrics in the next few quarters. Financial income for the quarter was $7 million, compared to $8.1 million in the previous quarter. The main reason was devaluation of certain balance sheet items due to the weakness of the US dollars versus the Israeli shekel. Net income for the second quarter of 2026 was $39.4 million, or $0.78 per diluted share.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

This is compared to a net income of $35.5 million or $0.70 per share in the previous quarter. Total diluted number of shares as of the end of the second quarter was 51.5 million. 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 June 30th, 2026, were $815.8 million. We generated $12.2 million in cash from operations in the quarter. As a result of the increased business volume, accounts receivables increased to $153.9 million, compared to $131.7 million in the previous quarter. DSO increased to 105 days. No change to the inventory level this quarter. However, we do expect it to grow in the coming quarters to support the forecasted strong growth in revenues.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

As Rafi said before, we expect revenues of $158 million-$160 million in the third quarter, with sequential double-digit growth in Q4 and further growth into 2027. This represents over 30% second half 2026 growth versus the first half. Before we open the call for questions, I would like to announce that Camtek will be hosting an investors and analysts breakfast presentation at SEMICON West. It will take place on Wednesday, October 14th, 2026, at 7:00 A.M. Camtek's management will present our market outlook strategy and technology roadmap. A formal invitation with additional details will follow, and we look forward to seeing many of you there. With that, Rafi, Ramy, and I will be open to take your questions. Kenny?

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

At this time, we will begin the analyst question-and-answer session. If you have a question, please raise your hand via the Zoom platform. I will introduce you and ask you to unmute, after which you may ask your question. Our first question will be from Brian Chin of Stifel. Brian, please go ahead.

Brian Chin
Brian Chin
Director at Stifel

Hi there. Good afternoon. Congratulations on the good results and outlook, and thanks for letting us ask a few questions. Maybe first, just to clarify some statements you made. I think you said that, and also in the release, that you expect 70% growth in AP, advanced packaging, over Q4 this year over Q1 this year. If I run that math, do you expect AP or advanced packaging could be, again, 75% of total revenue in Q4, similar to how it was in Q2? Can I use that to imply what your Q4 revenue will be?

Ramy Langer
Ramy Langer
COO at Camtek

Let me try and clarify the question. First of all, yes, we do see gradual increase of our advanced packaging business compared to other businesses that we have. We expect that at the end of this year, probably 80% of our revenues will go towards advanced packaging. Yes, you are correct. When you look at the revenues, the advanced packaging revenues in the first quarter compared to the fourth quarter, we expect growth of 70%.

Brian Chin
Brian Chin
Director at Stifel

Okay. That's helpful. I think I can place the math based on that. Then just kind of more broadly, obviously, 70% very steep ramp going through the year. So from a supply chain and manufacturing standpoint, can you maybe break down what's enabling the company to match and keep pace with the strong demand growth? Are you tapping into some of that manufacturing capacity that you've spoken about, in Europe? Also kind of lastly, do you think any customers, even though all the bookings from here on out sound like they might be more 2027 versus 2026, you think any customers will want delivery sooner than 2027? Do you think you could fulfill any of that upside?

Ramy Langer
Ramy Langer
COO at Camtek

So first of all, let's talk about our capacity. We've done a lot of work, and I roughly discussed it in the opening statements, and we are well ready to ramp the business. We have all the subcontractors and supply chain in place, and we're very confident about our ability to ship the machines on time, and we don't see any issues or obstacles when we discuss capacity. Regarding the order inflows, then it's really customer dependent. We're still seeing some orders from 2026, yes, but there are very few. Most of the orders that we are getting today and will be getting in the second half of the year will be for 2027.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

I think, Brian, maybe one point from my end, it's important to mention that, with respect to 2027, we are building nice backlog already. Obviously the visibility has significantly improved in the last few months.

Brian Chin
Brian Chin
Director at Stifel

Great. Maybe just one last kind of piggyback off, and I'll hop off. But you alluded again, reiterated that Hawk and probably Eagle G5 both will be significantly higher in the mix, at least 50% of revenue now into the second half. In terms of that 30% plus second half sequential, how would you break that down in terms of ASP? Because Hawk obviously has a much higher ASP versus volume.

Ramy Langer
Ramy Langer
COO at Camtek

It's very hard. We didn't do the math before the meeting, so it's hard to give you an accurate answer. But definitely there is going to be an improvement in ASPs as we go along.

Brian Chin
Brian Chin
Director at Stifel

Okay. Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

Thank you.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Brian. Our next question will be from Matt Prisco of Cantor. Matt, you can go ahead and ask your question.

Matt Prisco
Matt Prisco
Analyst at Cantor

Yes. Thanks for taking the questions. I guess to start, looking into 2027, you are talking about this increasing visibility, obviously very strong orders. How do we think about that visibility today? Where can you actually see into and how do you think about growth into 2027? I think you are going to exit the year at a quarterly +35%, 40% year-over-year growth. Is something like that sustainable into and through next year?

Ramy Langer
Ramy Langer
COO at Camtek

Well, first of all, I think it is a very good sign that at this stage of the year, really in the beginning of the second quarter, we already have visibility into 2027. All in all, we are talking to customers. Our customers are planning increased capacity in 2027. They are very optimistic about 2027. It is too early in the game to say today what will be the forecast or what do we expect in 2027. But definitely we are into a good start. The fact that we see increased growth into 2027, that is definitely a good sign at the time that we are talking about it.

Matt Prisco
Matt Prisco
Analyst at Cantor

That is helpful. Then maybe an updated thoughts on China dynamics, and how to think about revenue trajectory there, growth potential through this year, maybe to set up into next year, and thoughts on the competitive environment? Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

Look, our China business has been, I would say, stable over the last couple of years. In general, China is continuing to invest in semiconductors. We expect the business there to continue to be strong. Definitely it is good opportunities there, and I think this is more or less what I can comment at this stage.

Matt Prisco
Matt Prisco
Analyst at Cantor

Appreciate it. Thanks, guys.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Matt. Our next question is from James Schneider of Goldman Sachs. Jim, please go ahead.

James Schneider
James Schneider
Analyst at Goldman Sachs

Good morning. Thanks for taking my question. Sorry for that. I was wondering if you could maybe comment on the DRAM and HBM exposure you see specifically heading into the back half of this year and into 2027. As you mentioned, there are many of your customers who are expanding capacity. Can you maybe talk about the profile of that relative to the rest of your advanced packaging business? Specifically comment on your exposure to some of the China-based players in the market, such as CXMT. Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

All in all, we spoke about $600 million in order. Let me try to draw some color there, and then we can talk about the HBM business. We said 80% for advanced packaging. I think this indicates the strength of our business in the advanced packaging space. With that, OSAT is a very strong business. Over 50% of the business goes to OSATs. A lot of them are doing advanced packaging. As we talk about the HBM, we spoke about the strength of our business already in the previous call when we discussed the $260 million of POs and forecast that we had. Out of the $600 million, over 20% is from HBM players, and we do have additional strong forecast into 2027 in this segment. Of course, we cannot talk about named customers. This is something that we are not allowed to speak about.

James Schneider
James Schneider
Analyst at Goldman Sachs

Thank you. That is helpful. Could you maybe talk a little bit about the OpEx trend you expect over the coming quarters? You clearly had the Visual Layer acquisition impacting things. Maybe talk about, given if you see, for example, strong sales growth into 2027 at X%, what fraction of that sales growth would fall through to the bottom line, or what fracture or what increase in OpEx you would expect? Thank you.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Okay. Hi, Jim. This is Moshe. We definitely plan to see some increase in our OpEx level, but not to the extent that will exceed the revenue growth. The leverage that we have in the model will play a major role in the improved profitability in the next few quarters ahead. We definitely plan to improve both the gross margin, but even more the operating margin levels. Maybe just to give you some color, most of the growth that you are going to see in the OpEx will be on the R&D level. With the acquisition of Visual Layer, this adds a few hundreds of thousands of USD to the R&D, and we plan to continue to invest in R&D, that is for sure.

James Schneider
James Schneider
Analyst at Goldman Sachs

Thank you very much.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Jim. Our next question will be from Vedvati Shrotre from Evercore. Vedvati, please go ahead.

Vedvati Shrotre
Vedvati Shrotre
Analyst at Evercore

Yeah. Thanks for taking my question. The first one I have is on the silicon photonics business and opportunity. Could you talk about how big of a revenue opportunity this could be, and what kind of applications are you getting involved in with silicon photonics? Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

Hi, Vedvati. If you look at the $600 million orders that we talked about, 5% is photonics. It is a nice number to start, and this is really a market that is just taking off now, so definitely there is a potential there. I think we will get more orders to this specific market as we go on this year. I think 2027 will be more than the 5% I just mentioned. When we talk about the applications, basically there are two, and Rafi spoke about it. There are basically two, I would say, main segments when you talk about photonics. Obviously, there is silicon photonics, and this is an area that we already sold quite a few machines into, and we are selling, and this is part of the 5% we discussed. Then there is the compound semi.

Ramy Langer
Ramy Langer
COO at Camtek

When we talked actually about the diodes, there are all kind of diodes that are being used for the transceivers and receivers. That's a different segment. Different, I would say, the characterization of these applications are different, but that's, I would say, the main two segments that we're seeing today in this specific market.

Vedvati Shrotre
Vedvati Shrotre
Analyst at Evercore

Understood. Thank you. For my second question, of the $600 million orders, could you provide any color on how this splits 2027 versus 2026? What I'm really trying to ask is, do you see revenues accelerate in the first half 2027 versus second half 2026?

Ramy Langer
Ramy Langer
COO at Camtek

What we can see today, and it is really early in the game. We definitely see growth into business continuing to grow into 2027, but really, this is really initial. We will need more time as we continue the year. It's definitely a strong start for 2027. As I said, for one of the previous questions, we are talking to customers, they are all talking about increasing capacity in 2027. So, the signal is very positive from the market. We still need time to really digest this information and really build it into a full picture. This will take at least one more quarter to two quarters until we'll have the full picture of 2027.

Vedvati Shrotre
Vedvati Shrotre
Analyst at Evercore

Understood. Thank you very much.

Ramy Langer
Ramy Langer
COO at Camtek

Thank you.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Vedvati. Our next question is from Denis Pyatchanin from Needham. Denis, please go ahead.

Denis Pyatchanin
Denis Pyatchanin
Analyst at Needham

Great. Thank you for the opportunity. Maybe we can start on your non-advanced packaging business. Could you give us an update on what you're seeing into the end of 2026 and maybe into early 2027?

Ramy Langer
Ramy Langer
COO at Camtek

On what?

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Non-AP.

Ramy Langer
Ramy Langer
COO at Camtek

On the non-AP.

Denis Pyatchanin
Denis Pyatchanin
Analyst at Needham

Yes, non-AP.

Ramy Langer
Ramy Langer
COO at Camtek

The non-AP, I think, first of all, I think the photonics is a good signal of a new market that we're seeing. I would say the business is stable. I would say even I can say with certain, I would say small growth, but definitely there are opportunities there, and we'll see as things go by. We have some orders for CMOS image sensors that are significant. There are some signs there of some recovery, I would say, in the stable business, the consumer business that is not really very strong today. What you're seeing there, I would say it is stable, but there are good signs for 2027 that we'll see some growth on specific areas.

Denis Pyatchanin
Denis Pyatchanin
Analyst at Needham

Thank you. Then for my follow-up, maybe we can talk about the profitability metrics you discussed. I think you said that they would be improving in the next few quarters. Could you provide some more details on how these will be achieved and perhaps quantify them if possible?

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

With respect to the gross margin, we are exiting Q2 with 51.4%. We certainly hope that we will get anywhere between 53%-55% exiting the year. And with respect to the operating margin, we are looking into an operating margin of between 30%-32% at the end of this year.

Denis Pyatchanin
Denis Pyatchanin
Analyst at Needham

Great. That's very helpful. Thank you.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Denis. Our next question will be from Michael Mani of Bank of America. Michael, please go ahead.

Michael Mani
Michael Mani
Analyst at Bank of America

Hi, thanks. I wanted to start on the OSAT business. If you look at the overall CapEx trends for the back-end market, I think they're growing something like 45%-50% this year. Some of your customers in that segment are expanding CapEx even faster. First, how should we compare your growth in the OSAT opportunity this year and even potentially the next year relative to those very strong CapEx trends we're seeing? Second, related to OSAT, it seems like a lot of your competitors have been more vocal about some of the progress that they're making there this year, especially as that market moves to more sophisticated architectures and capabilities. Could you talk about the competitive landscape and how you see that evolving as competition intensifies? Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

Hi, Michael. First of all, obviously, we are hearing what our competitors are saying. We are aware of where they are in the applications that they are doing. Let me start from the basics. We have a dominant position in the OSAT market, something that we've had for quite a few years, very good relationship, and this relates when we talk about OSAT, this is the growth of the 2.5D IC and 3D IC manufacturing, and all the other application that we have been discussing. Definitely, this provides us with a very good opportunity for further growth. 50% of our business goes to the OSAT business. This is also reflected in the $600 million orders that we have received so far.

Ramy Langer
Ramy Langer
COO at Camtek

We feel very, very comfortable that with the increase of CapEx by the OSAT, we will have very good, very strong intake of orders we accept, and we are actually in discussions with some of our customers for additional orders for 2027. Definitely our position is strong. We are very competitive there, and we feel very comfortable about the business and our market position there.

Michael Mani
Michael Mani
Analyst at Bank of America

Thank you. Just for my follow-up, I wanted to ask on the progress you are seeing in some of your newer systems. It seems like relative to maybe a couple of quarters ago, a higher mix of the business is going towards Hawk, and some of these other newer systems this year, it seems like they are doing better than expected. Could you break down where that incremental traction is coming from an applications perspective or customers or end markets versus the beginning of the year. Where are you seeing more progress with these new tools than you expected? Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

Okay. First of all, yes, we have spent a lot of R&D in our new products, the Hawk and the Eagle G5, and definitely, their performance is superior, and we are very, very confident that we can continue and take market share and go to new process steps with this equipment. When we look at the target application, let me start with the Hawk. The Hawk definitely is for high volume applications, and I think the HBM is a very good example where we are selling more and more Hawks. It is really targeted there. It can go to the high-end applications. It will go to the applications that will be required in one or two years. Definitely this is the right machine at the right place.

Ramy Langer
Ramy Langer
COO at Camtek

When we talk about the Eagle G5, I think there it is not only better profitability, but the performance of the machine from the resolution and optical point of view, the throughput, or I would say the cost of ownership is better. Definitely, we are seeing a lot of our customers that have been buying Eagles and want to stay with the Eagle, switching over to the Eagle G5 that provide them better cost of ownership, but also being able to address applications down the road. So we are very confident with both of these products.

Michael Mani
Michael Mani
Analyst at Bank of America

Great. Thank you.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Michael. Our next question will be from Shane Brett of Morgan Stanley. Shane, please go ahead.

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Great. Thank you for letting me ask a question. If I assume HPC was 55% of your revenue in Q2, I think your guidance implies advanced packaging revenue grows 30% this year, and HPC closer to 40%. Just within HPC, is there one end market that has been growing higher than the 40%, and do you have any early expectations on HBM versus other end markets next year? Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

So hi, Shane, let me try and understand. I didn't fully what you want to understand, but let me try and give you some insights on what you discussed. First of all, from the business, yes, 50% of our business, over 50%, 55%+, goes to the, I would say, the HPC or AI-related products. Another 20% goes to the what we call conventional advanced packaging. The advanced packaging will grow by 70% this year, and will actually reach, also the growth will go, the HPC area will probably grow faster and will reach probably closer to 60% by the end of the year. Did I answer your question?

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Yes. To clarify that, for the full year, total advanced packaging revenue should grow give or take 30%, of which HPC should be growing 40% for calendar 2026?

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Are you now referring 2025 to 2026?

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Correct.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Okay. We are talking anywhere between 35% to 45% between the advanced packaging, and within the advanced packaging, the AI-related business. That is correct.

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Got it.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Bear in mind that last year was a record year for Camtek, so we are starting off from a high bar.

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Got it. My question was kind of just within that HPC portion, is it HBM or 2.5D logic that is driving the growth?

Ramy Langer
Ramy Langer
COO at Camtek

Yes, of course. There are two aspects for it. One side is the HBM, on the other side, what we call CoWoS and CoWoS-like applications. These are the two main segments for what we call AI-related products, or HPC.

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Got it. Is there any color as to which one is growing faster this year?

Ramy Langer
Ramy Langer
COO at Camtek

No, I think both. Look, eventually it's the same thing. I think they're growing at similar pace. It really depends also which customer is adding capacity and which is not. So it is really hard to judge. Both are expanding very fast.

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Got it. Understood. Just for my follow-up, there's been a few questions on China, but China was 49% of revenue for your last year. Could you help us ballpark where it could be this year? Thank you.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

I would say that we expect the level of revenue from China to be anywhere between 45-ish kind of this year, given the fact that we see nice growth also from other areas. I just want to go back to the question about the advanced packaging, just to mention that, again, the reason that we are looking into the comparison between Q4 and Q1 is to emphasize the point that Rafi mentioned earlier this call about the fact that it took couple of quarters of lagging until the growth came to our market. Now we see the growth coming to the full degree, and in the fourth quarter, we are going to see 80% of our business coming from advanced packaging.

Shane Brett
Shane Brett
Analyst at Morgan Stanley

Got it. That's very encouraging. Thank you very much.

Moshe Eisenberg
Moshe Eisenberg
CFO at Camtek

Thank you.

Ramy Langer
Ramy Langer
COO at Camtek

Thank you.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Shane. Our next question will be from Ed Yang of Oppenheimer. Edward, please go ahead.

Ed Yang
Ed Yang
Analyst at Oppenheimer

All right. Well, thank you for your time. The 45% half-on-half growth in advanced packaging, can you just qualitatively characterize whether that is market growth, share gain, or just higher process control intensity?

Ramy Langer
Ramy Langer
COO at Camtek

Hi, Edward. I think the bottom line, I think it is both. I think we are gaining share at certain areas, and definitely there is a lot of capacity being added to the market. When you look at the growth, it is coming from all the different applications. There is a lot of growth that has been discussed on the HBM side, and on the CoWoS and CoWoS-like applications. Definitely we see also the fan-out and fan-in, there is a lot of capacity out there that is being added. The market overall for the advanced packaging is very strong and continues to be strong.

Ed Yang
Ed Yang
Analyst at Oppenheimer

Thanks for that color, Ramy. Also, just going back to this question on the outlook for 2027, I understand that you're still fine-tuning your forecast, but rough cuts, do you think Camtek's growth should track overall WFE, or do you think that your advanced packaging and share gain should allow you to outgrow WFE?

Ramy Langer
Ramy Langer
COO at Camtek

If you look historically, we're always better than the WFE. What is happening this year, and we've seen it before already, at the beginning of the cycle or the end of the cycle, it's our business lags. As a result, it is very difficult to say this year how the WFE versus what we will do. But if you look at, I would say, a little bit longer time, we'll take, let's say, from the second quarter of this year to the second quarter of next year, I believe that we will be doing similar or better than the WFE.

Ed Yang
Ed Yang
Analyst at Oppenheimer

That's great to hear. Thank you so much.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Ed. Our next question will be from Gus Richard of Northland. Gus, please go ahead.

Gus Richard
Gus Richard
Analyst at Northland

Just real quick, your book-to-bill in the first half is quite strong. I am just wondering if you could give a little bit of color on the shape of that booking. Did that happen in Q2 mostly, and is that momentum carrying into Q3?

Ramy Langer
Ramy Langer
COO at Camtek

I think this order flow started in the first quarter, and it has been steady ever since. It sometimes shifts by a couple of weeks, but all in all, it has been growing steadily.

Gus Richard
Gus Richard
Analyst at Northland

Got it. Then just on the product side, you talked about the MicroProf. Could you talk about what that product is for and just some description of what metrology steps it might cover?

Ramy Langer
Ramy Langer
COO at Camtek

The MicroProf is a very important product because this is a product where we believe through this product, we will be able to significantly increase our footprint in the metrology area. If you recall, three years ago, we bought a company in Germany called FRT. We have been working with this company, developing new application. One of the key highlights was to take their old product and come out with a brand-new product that is based also on technologies developed in Camtek, much more stable, much faster, with new capabilities it did not have before. We finally completed this product. We started to install it in the first quarter of this year at selected customers, and we believe that based on this new platform, we will be able to significantly increase the revenues, win new application and process steps.

Ramy Langer
Ramy Langer
COO at Camtek

Definitely that's a market that when you are looking at advanced packaging and some of the applications that will be required in the future, it's definitely going to help us to increase our footprint in the advanced packaging.

Gus Richard
Gus Richard
Analyst at Northland

As I recall, it's for wafer shape, bow, that sort of thing. Is that correct?

Ramy Langer
Ramy Langer
COO at Camtek

That's one of the, I would say the older applications, warp, there is a lot of wafer topography. There is a lot of applications that are related to there are a few new application that it's still not time to discuss.

Gus Richard
Gus Richard
Analyst at Northland

Got it. All right. Thanks so much.

Ramy Langer
Ramy Langer
COO at Camtek

Thank you, Gus.

Kenny Green
Kenny Green
Investor Relations Representative at Camtek

Thanks, Gus. I think that actually brings us to the end of our Q&A. Rafi, if you have any closing statements, please go ahead.

Rafi Amit
Rafi Amit
CEO at Camtek

Okay. I want to express my gratitude to all of you for your ongoing interest in our business. A special thanks goes to our employees and the management team for their outstanding performance. To our investor, I appreciate your long-term support. I look forward to seeing you in SEMICON show in San Francisco. Thank you and goodbye.

Executives
    • Kenny Green
      Kenny Green
      Investor Relations Representative
    • Rafi Amit
      Rafi Amit
      CEO
    • Moshe Eisenberg
      Moshe Eisenberg
      CFO
    • Ramy Langer
      Ramy Langer
      COO
Analysts
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