CAMT - Earnings call 3 2023

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Operator

Hello, everyone, and good morning. Hosting today's call is Rafa Amit, Camtek's Chief Executive Officer; Ramy 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 terminologies 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.

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

release, For the in please and posted the of which the a Investor results, Relations press website. non-GAAP is GAAP between section also table reconciliation see Camtek's today's attached in

So Amit, today, ahead. now over Rafi may Rafi, Moshe CEO; I Eisenberg, to you and to turn with CFO, would we COO.And call the Amit. like Langer, us have Rafi Ramy go

Rafi Amit

semiconductors interconnect XX% Okay. came power revenues applications. of earlier compound margin portion was XX%. Thanks, revenue Gross as devices, over Over indicated or million. quarters, which control Camtek Operating everyone. year. came which packaging $XX.X of quarter afternoon, margin from CIS process with the from previous and for our good is third at chiplet a closed continued between with XX% XX%, divided we advanced HBM applications, and coming is significant a improvement modules.The remaining Kenny. this in Good morning

The workforce absence. employees active situation. for compensate in managed to has About of the managed in explain our remaining Israel, duty. to war how this like on would are reserve Israel have Regarding XX% I their we

to in supply material have far affected, facility delivery different shortage. have border, interruption X has which experienced from locations. done is some any not or redundancy not Our is and we any minimized.Our Thus, we in customers of been our operations, risk quite and is the

So or of has XX, not affected FRT the and all operations the war process FRT of in acquiring X begun our October factor, On integration completed Camtek. have into business. from all, the we we

We of organization. make of straightforward. sales products functions FRT, this integration synergy global The into support the in our our are process and final process customer

] orders [ ordering for to is expected our several spot the chiplets years XX% next X grow a the is to us. for pipeline HBM growth sales for in a XXXX.No bright high-performance Based customer, Most for doubt XX%. year and number of healthy the have we during XXXX. then, on integration the that in at This into Camtek, to we add different words workflow We about order beginning environment. organizations support the business And other systems. third potential for also would we to from quarter, since I received the the yesterday The was into additional of orders about growth last for facility XXX implement orders started of few expand we of at are surveys, in heterogeneous point and functions CAGR to Camtek, and expect and a the we reported computing Since order plan XX received FRT.Now of tools in record about the the Camtek X CAGR have Tier a installation of HBM systems. like of the have applications. integration reported backlog and and year XX

expand this by strong FRT steps expect metrology market, market so to and our additional winning a together have products. in position we We with share inspection

demand and serving also for that territories, see some from by enjoying other are phones, multiple we to OSAT mobile are not fueled demand in healthy In other high-performance computer, addition, automotive the related applications but server, segments.We applications.

same the to number encouraged the be by our for modules aware by time, soon HBM chiplet adopted we greatly are received and the technological XXXX. of customers. orders are by installed we be to changes At We of in

start with customers. $XX guidance and $XX prepared FRT, and solutions creative contribution processes million.And qualification our Moshe? organic innovative will at And the the growth. to are With is with of we now million respect We review revenue financial totally will Moshe expect to continued results. QX,

Moshe Eisenberg

non-GAAP provide you, tables Thank summary press release in earlier between ahead, I today. financial results my In Rafi. non-GAAP and the results reconciliation of GAAP end the the basis. at will on a the The appear issued the results

gross of of to from initial was in The year. in XXXX expect and from end net a for per the X% have This $XX.X similar as for reported the was previous the with the operations an and than quarter cash quarter income previous second was Inventory shares.Turning generated We subject decreased quarter quarter our quarter quarter. compared million last the with metrics. It we XX, to number also third margin. in short, The increased the $X.XX sales to the FRT million. to the of split and in Total quarter XX%, $XX.X taking much quarter improve by $XX.X level including The will quarter $XX.X compared line was reported level I been at million higher at with September million the significantly gross million million.Financial sheet which XX.X% XX%. equivalents, $X.XX and know million per collections. million and the the million. increase XX.X interest the share. XXXX. higher million, is QX a anticipated $XX.X in third million up approximately $X.X quarter for revenue similar cash Operating rates of of million for growth mix. last $XXX.X coming in year. million profit XX margin an to timing long-term accounts was quarter as year. to to XX%; of third quarter improvement previous went for income third year the in our or the compared interest seen for quarter. was at measures Net accounted by Cash to relates continued the quarter Operating the income. the mentioned geographic $X we've were or in to $X.X profit Third Europe over that quarter, was of X% cash receivables quarter end balance increase quarter share flow to $XXX.X Operating gradual we as million, from the the quarters, quarter the balance. $XX revenue revenue to a $XX.X Asia, of income affect of to due the of XX%.As million, for year $XX.X quarters, compared of the in impact, was last increased coming the in expenses last was to $XX.X quarters.The diluted balance of follows: X sales was the primarily the deposits and similar some the shares XXXX, of million. second to quarter increasing cash third from closing and and compared very in October, and see which million, were margin came XXXX, $XXX the year of last U.S. high-level the the year, improvement the securities $XX.X second and to In in third the decline of the and last an million quarter this before, quarter. support of cash the $X.X Gross diluted marketable the rest of million has last the This on

As fourth year. the Rafi forward that quarter, of quarter in to of XXXX. increase last we between And mentioned we million which $XX look the of fourth about a expect is $XX over X% before, to revenue year million growth in

with quarter will our more your Rafi, be and we after will take We I results.And open color provide to Kenny? Ramy that, questions. announced next QX

Operator

now call Q&A. will Instructions]. open We the for [Operation

is from question Brian Chin Stifel. first Our be to going from

Brian Chin

is XX% system of was this to to of since right least I will Rafi, way that think X:X also, relates of And XX% the the in probably your at to that bookings next start, to XXX about year. beginning maybe Maybe occur XQ. as think XQ, shipments the book-to-bill

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

Rafi Amit

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

Moshe Eisenberg

but percentage, for deliveries. to X. the orders, the most so XXXX. for of in machines is book-to-bill don't I received it most much obviously, are was the have Indeed, With that QX, have than exact higher Yes. we deliveries in the of respect book-to-bill, XXXX far XXX

middle the quarter. in fourth still are of We the

So pipeline me will expectation book-to-bill it's indeed, so greater that plus orders far, still quarter But to on early say whether we have that, my that in for will based we this be received X. than be X. orders have the the greater it than

Brian Chin

do the platforms? revenue certainly into provide â€˜XX, and to does the impact from this company. technology to of For an us how margins adds represent a stated record for existing the should also, you And also expenses FRT? synergies? this. year idea give and the model, FRT calendar you plan integrate acquisition gross customer favorable to that the new Can And you

Rafi Amit

there think FRT, mean start any Camtek, to now about backlog. is they the from Camtek plan operation way, our its with This priority. when acquisition of and few don't the years. XXXX, backlog come I in the We in to have in in to last to customer. By the we own what have sales that new has regarding integrate in for some Effort to mainly discuss integrate and also we right to did enough models not tools. here

and put Camtek. R&D believe we let's to and we work on call in the of X is going the not integration, of the terms together FRT companies aspects to are operation it, focus, too XXXX as regarding more much administration, but This that other one. So

Moshe Eisenberg

Just the financial the asked about to model. to contribution add, you

So the year. plan next around following. for And say million that they I FRT deal we number. would announced that when said we we is the this $XX good contribution feel a a We still of --

pretty profitability be rate. contribution run For much to metrics overall, quite profitable, expected in the similar to is their of this is it's very And quarter, with this and line business Camtek. fourth the

Brian Chin

you line just rate? had Moshe, clarify, in XQ, months. XQ the then you run million to that guess, XQ? $XX it only And is said I Because with X for Or

Moshe Eisenberg

run fourth correct. So X the included months is quarter, the months the It's rate. only the out X of within X in

Operator

from O'Malley Barclays. be Tom will question from next Our

Thomas O'Malley

wanted bit So here. to I just QX through little a just run

you morning, XX for QX. this So on to in had you slide the web like had the XX

So are through you I you're million, the the seeing assume guiding to here? FRT. imply that that, of revenue. just organic was a what in $XX couple contribution exact walk so contributions $X.X And million numbers then Can that just a different QX because I'm would from

Moshe Eisenberg

number $XX this be I'm it typo. where to not comes million, sure the from, but million what $XX may a

As pretty of much the million FRT plus some I $XX that from year. next million from level million said, $XX in run includes growth rate $XX Camtek is contribution to a the we our expect organic that

So contribution. XX to with the correct XX the million is guidance combined FRT

Thomas O'Malley

rate, X makes X going the or you're that to So run $XX sense. for adjust That quarters. million

what the business? out of 'XX? for you're still that into from acceleration an FRT $XX are the business year, you million with sticking Or the expecting acquired for contribution is that Going

Rafi Amit

are Well, said, million with that this staying and we 'XX, $XX will assessment 'XX. be what it we for

we course, will the learn the business, but expectation that's â€™XX. it, Of we we as into go learn as

Thomas O'Malley

you that have year-over-year you orders get business record backed on guys to revenue revenue? that record a bookings the given fully lastly, I that that when When book, a are a for turns that record is is expecting With then you in of better. at you year revenue above you would revenue guys year? your some that already amount lot visibility 'XX, look And orders imagine have, guys just traditionally, Or the you the today? existing is orders say record

Rafi Amit

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

Operator

B. of Next question will be Ellis Craig from Riley.

Craig Ellis

And on and for the war I in very just and unusual pass operating also wanted a best to impacted to the wishes wishes team. environment best

which emerge have the of areas has. year you orders the the of the then to is what of think and versus that that the of orders the second company on seemed to next more to of been die And areas have been things and AI and and heterogeneous muted some of heterogeneous and of have this of one is, yet the come there part strength So as question could plus really in systems ask some other for more the whether year, question I hand you some AI-related attention pretty business first CIS is I lot the extent that of the degree that to is potential understand in, around applications the are that other areas a this muted exposure wanted XXX the orders to do that both or some end year? it's industry had have areas.So some front for wanted better there's parts

Rafi Amit

So a time, but to. for Greg. manage first you the thank it's challenging all, best wishes, of we'll indeed Yes,

we look we're when in in what all all, the the the $XXX at at is forward looking So, business, at look backlog. I million

a indeed, volume So next different No ABMs will from itself much by level of we business. this are would record it. is really us this is view, as, dairy of for --give and this above about No say, was new year. doubt, business smaller.So had a this we to the is And still our as the call an packaging. the advanced emerging for and why business. doubt what We chiplet but that point the area business, I makes is take expectation in it the this half XX% contribution of us a is relatively

Now when at the we other look areas.

the dominant integration the in So, on heterogeneous is becoming more definitely and more business.

a are dominant is the there fan-out we from of in packaging.And the still the portion also this OSATs packaging, being seeing growing IDMs. in are that lot another We business. also and is business from advanced advanced in seeing That's

really So I our today think that business. make advanced packaging areas these X

of there. rest the Now the businesses are

RF. we spoke CMOS that's OSATs think packaging, from advanced about and healthy some of sensor, backlog I applications, lots image

carbide, of front they're next are forward for So when above there. the they and our The silicon we year, business. would I look end, say XX%

What exact healthy. going be really It's these silicon think that look to the of expense the interesting is they that's are continue I carbide you the business. FRT at these do, So what hard see businesses the to areas advanced when FRT definitely, in the in areas very but we'll is give of and to business, business packaging.

to strengthened really new be us this the as on more past. for there there and position will to the processes So that our in because we a exposed same going in were do are steps company, opportunities

Craig Ellis

it's customer admittedly, The can and more significant capture is you an has shipment company's the can to how But hit order potential. given surge the times orders you XXXX. second of tool end that time the time Rafi, tool given regarding point, operational in just maybe windows shipment lead confidence your how question, and dramatically about order been and and question, talk of to activity shipment for recent lead vastly this

Rafi Amit

Greg, So really time that today orders I are we issues our get see do not chain. the And us for getting very we XXXX, these that think enough any prepared. give with to supply It's solid. fact

have place. in the inventory We

that business and in We that and have at the the in forecast to we we the liking are the forecasting. place surge meet manpower are

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

Craig Ellis

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

Rafi Amit

continue and off preferable perfect potential. that a the for to table we searching the it's system, are not synergy, not a I well potential. when something same is the market FRT, one we this we of But M&A to understand consideration for there is the that doing same No, okay? as integrate our not call issue what probably, company for maybe look would what And exact, environment, that same if this but we definitely not do say, totally easy very are it's different copy the that's or

definitely and considering continue we we're M&A. more So

Operator

is of going question Richard Gus be next to Our from Northland.

Auguste Richard

do capacity as to maybe Or you a question demand the constraints? any have you grows? capacity you focus As to need to better do you sure ask where ramp, make foresee way is

Rafi Amit

are here to Gus? about You capacity talking the manufacture,

Auguste Richard

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

Rafi Amit

first we calls. in previous all, discussed I So of think

have capacity. And roughly We today, our capacity enough in year. increased $X.X have annually. we capacity We've last for today sales billion

clean the longest and is the also training we time the have manpower room, So is which there enough.

next rest the I said, planning. for backlog really understand what already because is or next And year. So to we we more is less year, have going happen as

what we're to and customers, So we ship. need talking understand we to we have, will

for have for enough what from view, We inventory we material point months. of have few next already hand orders on put the in need a we

XXXX. to of do in reason we So the all not ship not foresee machines any

Auguste Richard

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

Rafi Amit

no. No,

that we in other that HBMs, opportunities opportunities are remarks, see our said there there is what to I think chiplets and well. not related as for business we here

more for range we Our the HBM business rest come and the from serve. other the the in say, the will let's that XX% will segments than be of, chiplets,

is computing. think the the is I and This focused high-performance market today, HBM. on So chiplet

think this I what is call to people going AI applications.

is think think time doubt, the X X, But that Definitely, get to the is standard today no we'll computing will in in the main I industry. until I application. there become in years, this point. this

Auguste Richard

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

Moshe Eisenberg

this that really remarks you application going is to. in market And So no dependent, Rafi, we the I mentioned but doubt. understand where prepared the think is

So we've smaller. denser increasing number this obviously, becoming talked becoming And will they And about are new that are the pumps of numbers. the and fact more the require capabilities.

new of to that have capabilities with already those qualify we customers. are Some capabilities customers. are we There installed going

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

Operator

The Vedvati Shrotre next Jefferies. question from is from

Vedvati Shrotre

had system first later â€˜XX half? more it how XXX us Could would second on orders you half revenues be half? second first half, you for Is have I Any versus helpful. one versus these that understand converted the there is The first maybe help color packaging.

Moshe Eisenberg

for orders 'XX. Vedvati see the obviously, that we

but somewhere less we obviously, more But QX, but in we quick third PO. have speak comes place that a most we the QX the of they deliveries. quarter for us look even certain where they year, the to the customers. with an to we And or next naturally. where people some into pipeline at and issued quarter, need machines slot, went second lean not This the oldest understanding half, have So from the when XXX some have fourth said certain is needed the in first yet half, asked the backlog,

So definitely, from a moving converting what to orders, of be next is will the this pipeline we couple doing the pipeline months. in it or

Vedvati Shrotre

into zooming that a bit. And maybe little

XXXX. manufacturers So most HBM talked chiplet have about their manufacturers and the by doubling capacity

may all So have do of what order these any they sense but tools achieve And need target? they kind that here? color volumes, is Like here? visibility limited, know be I think you to with your the the

Moshe Eisenberg

Well, tools. that need. see, if a what you understand getting they that can tools that additional and are they there you be tell And that we they I will need the I know we what will they and think feel will short

We machines. in more have enough to capacity and place enough inventory manufacture

bottleneck So we're from think have I if they not least will at for needed, think first this be we our what 'XX, I least at will the least enough seeing the understanding be at us. half, to

Vedvati Shrotre

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

Rafi Amit

that will something and will what definitely is I that's think happen. our market this enlarge -- So

not are starting use architecture, same the adding but I to HBM. think the people

what happen. will think this I

would say the the structure one but the don't become I volume. for would ATMs, of And I will is architecture the become then not say, the cost I what but questions definitely, HBMs, will applications it with today, they the said one the computers. need. most that personally get and actually as of standard, And of they gaming the, of Some require cost will run many which of the down it I preferred forth in I but is go structure, the HBM that before, so say, the will believe this limiting do factors,

this end will that's the most high And happen becomes as in So in case I something, cases, the standard and think well. over this time.

Operator

Vivek Arya Securities. America from be next question Our [Operator Bank is from going to of Instructions]

Vivek Arya

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

Moshe Eisenberg

year. we steps beginning certain took said of yes, in basically So that the we the

margin. We is the quarter seeing improved quarter the of row to second are the starting This or in third gross gross fruits our actually it affect a of margin.

We expect improvement gradually. target mark. only reach is is continued give take that mix. all The it to subject sales here The to XX% is and

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

Vivek Arya

of you been could AP, trends encouraging. then outside semis, phones and Esan the have of visibility about some also order talk mobile And maybe automotive compound in your

outlook about curious your I'm there. So

Rafi Amit

general, say, what silicon say, the They XX%. I have a would the up it's front are that integration can mobile we for others, is carbide to say, been and in I next HBM XX% XX%. would packaging, anywhere -- includes to to lately So CMOS come we sensors them then is together. our, so down. And call end. the image Then XX% few to reason which genus the low and phones come have We combine business would chiplets, advanced the about would I This sizable forth.

This then this of are the So between business can front is more a be next is will opportunity. I sizable X% the to businesses a the mobile couple little the doubt next I definitely, be then HBMs, is the but no look would a lot XXX%. may annually, But -- bit this now, or overall better. of there packaging driver is the that slower with growth phones. to today range strongest CAGR account year, carbide XX% this smaller in for a silicon the if the definitely business which XX%.And be and going the will on a doubt at the say, driver, at with end, a the that's dominant anywhere no names, assume advanced chiplets years is market market to less they of RF definitely, be And least. part, that of we that and is this and couple

Operator

question is Funds. next Pruski Optimus Our from of Ella

Ella Pruski

One revenue this about for quarter, geographic question the please? split

Moshe Eisenberg

XX%. ADR And Europe was U.S. XX%, X-X. So was and around

Operator

Our next Shahar from question is of Cohen Capital. Lucid

Shahar Cohen

back Vedvati about question some desktop to of or the going publication. laptop And the

is but in what to adopted applicable would be spoke these to adopted meant that you as try maybe [Indiscernible], about You understand packaging the HBM meant true be techniques you HBA, I'm HBM will not advanced of and laptop flip-top advanced TPUs your the given you leapfrog Wouldn't in GPUs you advanced applications. year, giving let's next major to, packaging say, CPU, those a packaging expect on another magnitude compared

Rafi Amit

and are before the starting that questions, notebooks general, The see first let you with in and There one. me the the came today start X question that is PCs to adapt chiplet architecture.

also add down are not. HBM. road, will they they the Now Currently,

of PC the HBM is know I using arena, only that some gaming the the that's I chiplets in application applications. think and

use will But and as structure use is road. down the well that's structure as also the still to starting chiplets, power. more from which this the HBM probably start eventually the to need So of they more

segment And it significantly year, this of than is year more and doubt no grow second this bigger is therefore, the But dramatically is to more X definitely, other an Now is how fast how mean clear. question and HBMs this there your than business. other as I it XX% applications will we still a will go will opportunity. said, question, regarding was or than not be ago. AI, fast this our than

for to further fast for growth, big very last definitely part that's what us. of of than is it's it's potential one the contact area grow over reasons an will a and an say. to increase growth it of So today, area few the still definitely, this that hard the that's the going going years, But is how definitely,

Operator

it session. That looks ends like the Q&A

that back your to recording please just of And a Zoom know and of Rafi, from the be next available this everybody the go call to Camtek's couple So Rafi, website before turn ahead closing hours. I same will call make on let statements. in the link

Rafi Amit

you to to and thank business. for my for I their you, you our to with look in tremendous thank management your like talking you investors, for I all Okay. continued and thank goodbye. the want would forward team our especially support. employees performance. I long-term Thank quarter. your next I To again interest

Operator

Thank you.

Camtek (CAMT) 14 Nov 232023 Q3 Earnings call transcript