Camtek NASDAQ: CAMT reported first-quarter revenue of $121.7 million, slightly ahead of its guidance, as management pointed to strong demand tied to artificial intelligence, high-bandwidth memory and advanced packaging applications.
Chief Executive Officer Rafi Amit said approximately 50% of quarterly revenue came from AI-related products, with another 20% from other advanced packaging applications. The remainder came from a broad range of applications with a mix similar to prior quarters.
Amit said the company had an “unprecedented start to the year” in incoming orders, which he said strengthened Camtek’s confidence in its outlook for 2026 and 2027. The company has received orders and forecasts from two HBM manufacturers for 3D metrology and 2D inspection steps, representing expected revenue of more than $260 million across 2026 and 2027, he said.
Revenue Guidance Points to Second-Half Acceleration
Camtek guided second-quarter revenue to a range of $129 million to $131 million. Amit said that, based on backlog and pipeline, the company expects a surge in revenue in the second half of 2026, with revenue more than 25% higher than in the first half. He added that there could be additional upside depending on the timing of orders and deliveries between the fourth quarter of 2026 and early 2027.
Management described demand as broadening beyond AI alone. In response to an analyst question, Chief Operating Officer Ramy Langer said AI is “the engine” fueling the industry and Camtek’s business, but that growth is also visible across OSATs and other applications. He said the company is seeing positive momentum across different regions rather than in a single geography.
On China, Langer said the business remains healthy and in a positive trend, though the largest contribution to growth is expected to come from outside China. Asked about competition in China, he said Camtek faces both international and domestic rivals, including local players that may pressure lower-end applications. However, he said the company’s large installed base and position with OSAT customers support its outlook in the market.
Margins Pressured by Spending, Expected to Improve
Chief Financial Officer Moshe Eisenberg said Camtek’s first-quarter non-GAAP gross profit was $62 million, with gross margin at 51%, similar to the prior quarter. Operating expenses rose to $30.9 million, compared with $24.4 million in the year-earlier quarter and $28.7 million in the previous quarter.
Eisenberg attributed the higher expenses mainly to increased research and development and sales and marketing spending to support expected business growth, as well as the weaker U.S. dollar against the shekel. Operating profit was $31.1 million, down from $37.3 million in the first quarter of last year and $36.7 million in the fourth quarter. Operating margin was 25.5%, compared with 31.5% a year earlier and 28.6% in the prior quarter.
The company expects operating margin to return to around 30% in the second half of the year. Eisenberg also said gross margin is expected to improve in the second half, in line with the stronger revenue forecast and the expected contribution from the Hawk and Eagle G5 systems.
First-quarter non-GAAP net income was $35.3 million, or $0.70 per diluted share, compared with $38.7 million, or $0.79 per share, in the prior-year period. Financial income was $8.1 million, compared with $5.4 million a year earlier and $8.2 million in the previous quarter.
Balance Sheet Remains Strong as Inventory Plans Rise
Camtek ended the quarter with $850 million in cash and cash equivalents, including short- and long-term deposits and marketable securities, roughly level with year-end. Inventory was $116.7 million after recent optimization efforts, but Eisenberg said the company expects inventory to increase in coming quarters as it prepares for a stronger growth period.
Accounts receivable rose to $131.7 million from $90.8 million in the previous quarter due to the timing of collections, which reduced cash generation in the quarter.
Hawk, Eagle G5 and AI Capabilities Drive Product Focus
Amit said Camtek aims to maintain its leadership in 3D bump metrology while gaining share in 2D inspection. He highlighted the Eagle G5 and Hawk systems, introduced last year, as key platforms designed for tighter industry requirements, including sub-6-micron bump height metrology and inspection capability down to 100 nanometers.
The two systems accounted for 30% of Camtek’s revenue last year, and Amit said the company expects revenue from the platforms to double in 2026. He said Camtek’s investments in platform innovation, AI-based algorithms and software capabilities are intended to improve throughput, detection sensitivity, false-alarm rates and measurement accuracy.
Camtek recently closed its acquisition of Visual Layer, an AI technology company with which it had collaborated for more than a year. Langer said Visual Layer developed technology for annotation, acquisition and classification that Camtek had already begun implementing in its products. He said the acquisition adds technology, researchers and full ownership of Visual Layer’s capabilities.
Amit said Camtek plans to integrate new AI features into its systems over the coming months. He also said the company sees the potential to develop a dedicated AI-based software product line. In the question-and-answer session, Amit said Camtek could sell software packages to customers already using its installed base, adding AI capabilities to improve system performance.
Management Cites OSAT Opportunity and Manufacturing Stability
Amit said Camtek sees a significant opportunity in the OSAT market, which he said is undergoing a wave of investment in advanced packaging, particularly for AI-related capacity expansion. He said the company expects to benefit as a provider of both 2D inspection and 3D metrology in that domain.
Asked about the company’s total addressable market, Langer said Camtek sees an opportunity to expand its serviceable available market to above $2 billion in 2027, up by roughly $500 million from current levels. He pointed to inspection applications across back-end front-end lines, compound semiconductors, CMOS image sensors and RF as areas for expansion.
On manufacturing, Langer said Camtek’s facilities in Israel are operating as usual despite the difficult situation in the Middle East. He said the company has not missed a shipment and continues to operate in manufacturing and R&D. He also said Camtek is adding capacity in Germany.
Management also said lead times are around three months for Eagle systems and between three and six months for Hawk systems, with Langer saying the company has enough supply-chain flexibility and inventory planning to respond to additional customer requirements.
About Camtek NASDAQ: CAMT
Camtek Ltd. NASDAQ: CAMT is a provider of automated inspection and metrology solutions for the semiconductor and printed circuit board (PCB) industries. The company develops, manufactures and markets a suite of inline and stand-alone systems that perform high‐resolution 2D and 3D measurements, defect review and process control. Its products are used by integrated device manufacturers, foundries, OSAT (outsourced semiconductor assembly and test) providers, and PCB fabricators to optimize yield, improve product quality and reduce production costs.
Camtek's core offerings include wafer inspection systems that detect and classify defects on patterned wafers, patterned wafer metrology tools for overlay and critical dimension measurements, and advanced packaging inspection platforms for 3D ICs and fan-out wafer-level packaging.
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