[Management View]
Camtek reported record non-GAAP revenue of $123.3 million for Q2 2025, reflecting over 20% YoY growth. The company maintained a gross margin of 51.9% and achieved an operating profit of $37.4 million. High-performance computing (HPC) applications contributed 45-50% of total revenue, with advanced packaging accounting for 20%. New product lines, Hawk and Eagle 5 systems, are expected to drive significant revenue growth in 2026.

[Outlook]
Management guided Q3 2025 revenue to approximately $125 million, with a healthy order flow and pipeline into Q4. The advanced packaging market, driven by AI applications, is expected to grow rapidly, supported by new technologies like hybrid bonding and micro copper bumps. Camtek anticipates continued strong demand for its Hawk and Eagle 5 systems.

[Financial Performance]
- Revenue: $123.3 million (20% YoY growth)
- Gross Margin: 51.9% (improved YoY)
- Operating Profit: $37.4 million (up from $30.8 million YoY)
- Net Income: $38.8 million, or $0.79 per diluted share (up from $32.6 million, or $0.66 per share YoY)
- Cash and Equivalents: $544 million (up from $523 million in the prior quarter)

[Q&A Highlights]
Question 1: What is the expected composition of HPC revenue for the second half of the year and the contribution from China?
Answer: HPC revenue is expected to remain at 45-50% for the second half. China’s contribution is anticipated to be slightly higher than the 30% seen last year.

Question 2: How does Camtek plan to compete with KLA in the hybrid bonding market?
Answer: Camtek sees hybrid bonding as a significant opportunity and believes its inspection and metrology capabilities are well-suited to address this market. The company has demonstrated competitiveness against KLA and expects its Hawk and Eagle 5 systems to strengthen its position.

Question 3: Where is Camtek seeing the greatest traction for the Eagle G5 and Hawk products?
Answer: The Hawk provides high throughput and addresses challenging applications like microbumps and hybrid bonding. The Eagle G5 offers faster detection capabilities. Both products have seen strong customer reception, contributing to 30% of revenue this year.

Question 4: What are Camtek’s growth prospects for 2026?
Answer: Camtek expects the high-performance computing market to grow rapidly, driven by technological advancements like fine pitch micro bumps and hybrid bonding. Assuming a positive market environment, Camtek anticipates another growth year in 2026.

Question 5: What is the impact of HBM4 on Camtek’s business?
Answer: HBM4 is expected to drive increased capacity and wafer scanning. Camtek’s equipment is already qualified for HBM4, and the company is in discussions with customers about future forecasts.

Question 6: How does Camtek view the potential entry of a third major memory supplier in the HBM market?
Answer: Camtek is well-positioned to benefit regardless of whether there are two or three major suppliers. The company works closely with all potential customers and expects to gain from additional qualifications.

Question 7: Have high shipping costs due to the Iran conflict normalized?
Answer: Yes, the exceptionally high shipping costs have returned to normal rates, and no similar expenses are expected in Q3 if the situation remains stable.

Question 8: What are the growth drivers for Camtek in the next eighteen months?
Answer: High-performance computing, 3D metrology, and new software capabilities like EDC and ADC are expected to drive growth. The company also sees opportunities in conventional advanced packaging and front-end applications.

[Sentiment Analysis]
Analysts and management maintained a positive tone, emphasizing strong demand, strategic product launches, and robust financial performance. Management expressed confidence in future growth driven by technological advancements and market opportunities.

[Quarterly Comparison]
| Metric | Q2 2025 | Q2 2024 | QoQ Change |
|-------------------------|---------------|---------------|-------------|
| Revenue | $123.3 million| $102.8 million| +20% |
| Gross Margin | 51.9% | 50.5% | +1.4% |
| Operating Profit | $37.4 million | $30.8 million | +21.4% |
| Net Income | $38.8 million | $32.6 million | +19% |
| Cash and Equivalents | $544 million | $523 million | +4% |

[Risks and Concerns]
- Elevated operating expenses due to geopolitical conflicts.
- Potential market and customer visibility dynamics affecting future guidance.
- Dependence on high-performance computing and advanced packaging markets.

[Final Takeaway]
Camtek delivered record Q2 2025 results, driven by strong demand for high-performance computing and advanced packaging applications. The company’s strategic investments in new product lines, Hawk and Eagle 5 systems, are expected to drive significant revenue growth in 2026. Despite temporary shipping cost spikes, Camtek maintained robust financial performance and a positive outlook for the second half of the year. Investors should monitor the company’s ability to capitalize on emerging market opportunities and manage potential risks related to geopolitical tensions and market dynamics.