Camtek (NASDAQ: CAMT) reported Q2 2026 revenue of $133.2 million for the quarter ended June 30, up 8% from $123.3 million, while GAAP diluted EPS fell to $0.46 from $0.69. Record revenue was accompanied by lower GAAP operating and net income as operating expenses and tax expense increased, although non-GAAP net income edged up 2% and management projected faster growth in the second half.
Core financial results
The quarter showed a clear divergence between revenue and GAAP profitability. Gross profit increased, but gross margin narrowed, while operating expenses rose substantially faster than sales.
Non-GAAP results were more stable: adjusted net income increased slightly, although adjusted EPS declined by one cent as the diluted weighted-average share count increased.
| Metric | Q2 2026 | Q2 2025 | Year-over-year change |
|---|---|---|---|
| Revenue | $133.2 million | $123.3 million | +8% |
| GAAP gross profit and margin | $66.7 million; 50.1% | $62.6 million; 50.8% | About +7%; margin -0.7 pp |
| GAAP operating income and margin | $27.2 million; 20.4% | $32.0 million; 25.9% | -15%; margin -5.5 pp |
| Non-GAAP operating income and margin | $36.0 million; 27.0% | $37.4 million; 30.3% | -4%; margin -3.3 pp |
| GAAP net income | $23.3 million | $33.7 million | -31% |
| GAAP diluted EPS | $0.46 | $0.69 | About -33% |
| Non-GAAP net income | $39.4 million | $38.8 million | +2% |
| Non-GAAP diluted EPS | $0.78 | $0.79 | About -1% |
Camtek’s non-GAAP measures exclude share-based compensation, acquisition-related expenses and one-time tax expenses.
Higher operating costs and taxes outweighed revenue growth
GAAP operating expenses increased to $39.5 million from $30.6 million, or approximately 29%, compared with revenue growth of 8%. Research and development spending rose to $16.7 million from $11.5 million, while selling, general and administrative expenses increased to $22.8 million from $19.2 million. Together with the modest gross-margin contraction, this reduced the GAAP operating margin by 5.5 percentage points.
The decline became more pronounced at the bottom line. Income tax expense rose to $10.9 million from $3.2 million, including a $7.7 million one-time tax expense identified in the non-GAAP reconciliation. Higher net financial income of $7.0 million, versus $4.9 million a year earlier, provided only a partial offset.
The $16.1 million difference between GAAP and non-GAAP net income primarily reflected the one-time tax expense, $4.9 million of share-based compensation and $3.6 million of acquisition-related expenses. Meanwhile, the diluted weighted-average share count increased to 51.5 million from 49.3 million, helping explain why non-GAAP EPS declined slightly even as non-GAAP net income increased.
Cash flow and balance sheet
Operating cash flow was $12.2 million, equal to approximately 52% of GAAP net income. Camtek did not provide a year-ago quarterly operating cash flow comparison.
Cash, deposits and marketable securities totaled $815.8 million at June 30, down $33.9 million from $849.7 million at March 31. Compared with December 31, trade receivables increased to $153.9 million from $90.8 million, while inventory declined to $99.8 million from $112.2 million. The release did not explain the drivers of these working-capital movements.
Camtek also completed its acquisition of Visual Layer during the quarter. The company did not disclose the purchase price or separately quantify the acquisition’s contribution to quarterly revenue and cash flow in the release.
Outlook
Management guided Q3 revenue to $158 million to $160 million, representing approximately 19% to 20% sequential growth from Q2. It also expects second-half revenue to grow by more than 30% from the first half, with the AP business expected to grow 45% on the same basis.
The outlook is supported by approximately $600 million of orders received since the beginning of 2026 and what management described as a record backlog. However, those orders are scheduled for delivery across both 2026 and 2027, so the full amount should not be treated as near-term revenue.
| Metric | Latest outlook | Comparison basis |
|---|---|---|
| Q3 2026 revenue | $158 million-$160 million | About 19%-20% above Q2 2026 |
| H2 2026 revenue growth | More than 30% | Versus H1 2026 |
| AP business growth | 45% | H2 2026 versus H1 2026 |
Management also expects growth to continue into 2027 but did not provide a quantitative range. CEO Rafi Amit connected the order momentum and AP outlook to demand for AI data-center infrastructure and the alignment of Camtek’s product roadmap with customers’ technology plans.
Risks investors should monitor
- Operating expenses are growing faster than revenue. Continued R&D and SG&A growth at the Q2 pace could limit operating leverage even if sales accelerate.
- Backlog conversion depends on delivery timing. The roughly $600 million of orders includes deliveries scheduled for both 2026 and 2027, making execution and shipment timing important to the second-half outlook.
- Cash conversion was below reported profit. Quarterly operating cash flow was materially lower than GAAP net income, while receivables increased significantly from year-end.
- The growth outlook is tied closely to AP and AI infrastructure demand. Management’s second-half expectations depend partly on the projected 45% half-over-half growth in the AP business.
Summary
Camtek delivered record Q2 revenue and modest growth in non-GAAP net income, but higher operating expenses and a one-time tax charge pushed GAAP operating income, net income and EPS lower. The next test is whether expected Q3 and second-half acceleration can absorb the expanded cost base, stabilize margins and produce stronger cash conversion as the company works through its order backlog.
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