CAMT - Earnings call transcript Q3 2024

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Kenny Green

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtek's results' 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 Q&A session. remind the this on recording from to being call Camtek's like tomorrow. and recorded, will would everyone conference that is website I be available

If received overview have website. With will company's Camtek's on have company's by CEO; should we recent Mr. Rafi today view results quarter. now call, Rafi You press will summarize on all me providing release. Mr. an not, the the Eisenberg, market Mr. financial COO. please open it the Amit, discuss and Moshe Camtek's Camtek's of Ramy CFO; of results Langer, then and the trends. Camtek's by the Moshe

Following that, to available be and Rafi, Ramy will take your questions. Moshe,

statements Private use I reflect similar Before of the Camtek. XXXX. certain identify Securities to of beliefs, plans safe of or made as statements. Litigation expressions Act as within Securities would Act provisions assumptions and that expectations of forward-looking will, amended current and anticipates, as note harbor may, statements Such such of expects, Act the like forward-looking terminology Exchange we the the Securities XXXX should, meaning on start, Reform may only to the statements statements and amended XXXX constitute of Such believes, this call

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

GAAP the also and of table press section hand the see I Camtek's today's on to please is posted to release, Rafi, now website. And between non-GAAP ahead. call results, reconciliation IR go which included the Camtek's like Rafi, a For please over CEO. in would

Rafi Amit

trend sales packaging; the million, were XX% high-performance as 'XX. applications quarter the with Good for good compared Camtek everyone. Around Kenny. record ended in XX% Thanks, other a Okay. HPC with of of a products afternoon, mix or $XXX profitability this to and is for main morning driver our This HPC segments. were computing-related The gross representing overall, remained HPC, of this semiconductor of XX% business modules over AI year in HPC in around expect for margin parameters The our favorable resulted which a XX%. and operating key slightly in provider. we market segment the margin. The equipment be healthy. for split between rest in growth approximately growth in demand to of follows. third product this advanced QX to And quarter we for row; other the contribution be are or quarterly continues revenue generative the revenue quarter XX% distribution XX% of

XXXX. From customers, hand with order pipeline for in take we and continue HPC-related into products forecast discussion we have our a our from on positive into system expect to for demand future Our consideration trend. HPC

the our around year-over-year our increased demand in revenue systems QX sequential for other quarter with growth Based a of see for guidance is about million, XXXX. growth and order XX% wide applications. fourth for representing backlog flow, range also on $XXX current pipeline, We our

with Camtek XXXX expect we year for million, representing around revenue QX, for guidance growth the be record $XXX Given year-over-year. XX% to a

is expectation will be that growth. Our of year another XXXX

GX. advanced we inspection $XX early developing pitch generation million the the or will current of in products characterized first with and introduced micro that by solutions the several Taiwan Eagle this coupled market in future Eagle system bonding we the map. packaging system, and and metrology QX the system in fifth September, delivery already year. This as meeting new optical the are provide SEMICON customers' road demand last offers our new interconnects. with starting years in is order for the that and introduction, been we recent superior upcoming for bump Since hybrid over fine The technologies have received both improved announced During resolution, have we wafer throughput week,

In has our new officially been the and to generation also presented, several addition customers. introduced the of for to system advanced we Eagle key advanced packaging GX, next which

dollars the initial segment of beginning them to Some within already installed to of of for system estimates qualification, add placed for is orders will of the in This XXXX. comment forecast Korea be growth XXXX in others already SEMICON have the it. like the contribute millions of would expected HPC and new officially the a while tens launched confusing about in system XXXX. I have regarding new

of financial components slowdown understanding due be one in outlook lack the bottleneck XXXX that year clear of the We results. estimate manufacturing about indicated HBM to adding are review modules The meet Our bottleneck capacity. us demand. expected substrate Europe operations flow our HPC us excited the long-term In delivery into and cornerstones that is to expect to organize and modules now, see this a HPC due in be will capacity the and for high. to And reason demand all And backlog released efficiently missing allows I opinion, a production that business sum relatively we calls, the currently as And Moshe strong the XXXX. To is pack which to Moshe? components up, of it XXXX caution start is and capacity X.XD are some XXXX. The gives vision, in logic module. be that for order previous operating continues will our in will substrates. our new and to of in am another the a growth. X.XD

Moshe Eisenberg

Rafi. mix results provide the non-GAAP financial the sequential issued follows: to release improved mainly from earlier my ahead, was the in the The XX%; the record increased was Europe in compared of today. Revenue XX% and quarter and product a and as between for appear third quarter The due a XXXX. came revenue to quarter of for geographic prior U.S. of quarter was non-GAAP of the range the of will revenues for the quarter XX%. results second million. GAAP the Gross increase increase last XXXX accounted from quarter XXXX margin on the third for of and results The second in at the million, the changes was split quarter basis. our and Thanks, Asia press periods the This the In I XX% summary similar of from reconciliation gross for tables XX.X%, third quarter the is profit XX% within with in the XXXX. expected $XXX.X a $XX.X with end from an year. at quarter

last quarter by a in $XX.X expenses couple quarter. in the the to expansion We year to compared of in $XX.X The quarters. Operating new due expect development growth the increase to to similar previous Rafi. referred million in in continued levels of and were the quarter mostly support operations is million the investment $XX.X next and of million planned of the third products

million million is QX as OpEx in We quarter the similar in increase the the quarter. from million expect gross in previous and improvement margin reported Operating $XX.X million to and of the was XX.X% quarter respectively. Financial year of $X.XX positive well. Operating year in income differences. in to the $XX to of million the cash income $XX.X due third last $X XX.X%, rate the level share previous to million last million. XX.X impact year. due increased increase last exchange share. The for The revenue was in a in profit number to third reported balances of was diluted $XX.X of last in the quarter compared compared third of the This to was for mostly a increase $X.X compared per the third $XX.X profit and shares XXXX third in of compared year. the quarter income the the XX% Total million, of and per and the was $X.X or million, is as quarter of quarter end quarter net the mostly $X.XX the quarter. is diluted Net of the or

report of on and September including We quarter. second in balance the of and cash in Turning short- compared and increased were an end from to and $XXX profitability stand cash down level of $XX.X by $X XX, Cash XX revenue quarter the in the in marketable $XX pleased the and flow at securities metrics. back to million. outstanding sales This the operations Inventory with million coming the year. quarters. to increase just they slightly million at support million. is especially continue from the quarter previous our quarter. I'm that improve, receivables to The Accounts from growth million XXX increased days, now over and equivalents, long-term collection. deposits the XXXX, cash to and $XX.X sheet over million $XXX generated last $XXX days the days anticipated million the strong as to increased sales

expect revenue of around will with million your fourth Ramy, sequential that, QX I call to in and we As quarter take Rafi, of $XXX Rafi before, growth the with XXXX. And said the in questions. open

Kenny Green

be Our question from Needham. [Operator of will Instructions] Charles first Shi

Yu Shi

the about Camtek's with the respect Thanks overcapacity HPC understanding concerns. lot market going for the a noise about of on color pretty the to much HBM forward

you the not your management, if I like still HPC, sound of perspective, wonder of little that topic, year the but it side. little is are the the just to chiplet year. like the grow, next alone, HBM more for will other growing HPC does expecting bit chiplet I the side year, grow faster on next good do industry. this maybe I demand, the year But on maybe HBM this a sound a given bit hand, the seems if on does want it because chiplet ask So next the on still it want this understand be alone, the it like is much the a bottleneck the overall as stronger understanding HBM as it's case. to from not

Ramy Langer

hands. I think together. Hi, the by and growth they notes, includes prepared HPC the basically Charles, hands look, No, be will HBMs. Ramy. is his in hand and the the chiplets is hand And this go this Rafi, in And

the Now it's it what and entry. order on see, quarter-by-quarter, we depends do

this that year we expect from quarter-to-quarter. 'XX, HBM order differ not So may side They side. to growth as percentages. the as we both with we similar But see a same the into every it's and get on pattern exactly chiplet the go

Yu Shi

this On to the I want year Camtek last the of hand, up or revenue? go of XXXX, I China the And the China before. used as down? other expectation what's stay XX% or year be contributing where this think whether for and view that the for year will But go than a on year is any China ask contribution about percentage early to revenue more it

Ramy Langer

it this be So of be in XX% year, It will first about will range the to of XX%. lower. all,

China into seems business be solid, healthy. -- 'XX, in the seems to general Going seems to be

be larger to year. in little at a bit invest. all will or least it expect continues we But maybe similar China this all, than So

Kenny Green

question Stifel. is to from Our Brian going next of be Chin

Brian Chin

about explaining of maybe whether demand-related. kind more some around some around of packaging commentary the a AI is confusion advanced slowdown referenced that the suppliers or or supply- what have given pause Maybe

do think revenue You year? see impacting into constraints either your you do in talked you advanced QX I'm be next about of when outlook XQ that substrates. revenue And or constraints those relieved? will packaging curious XXXX, for trajectory

Ramy Langer

So what today we we said. see what see let's and

the a of first of and which X.XD the both substrates means HPC, to the we HBM. see all, So continue positive trend

Now we continue to pattern. the see

And on will we this are there is we to be visible into feel comfortable us. sequential something the of very and quarter very that said that business We is the a first based QX, and backlog regarding our 'XX. growth -- in our pipeline

it believe about will fourth main little definitely, obviously, HPC are But we numbers, that a a very next better and first early. quarter is the ahead, more year. To we to confident too quarter. go Looking contributor our the be bit into business or accurate

Brian Chin

of or introduced But the referencing the $XX new addressable contribution millions, year. maybe that's then sensitive And of share hasn't helpful. you across maybe of be since in in the have And first formally will in millions, you that being or size some then million, product, be You of it types until or product -- you have the Yes, new terms million, tens guess this like QX of that of QX slide, market? also that on formally, the can second applications for QX tens and more 'XX. and/or $XX details kind market? it referenced What's won't into the the think maybe you did it next something reference of half that could addressable half I or year? do maybe

Ramy Langer

all, of launch the first it production. course, gradually So of will start to we ramp up and

So much is XD I Eagle. it where machine what go remarks, think high-end to we -- be product much that see will we inspection, a the his currently at an We're we Rafi over by are also there ability and year will applications. in It a will this increased Eagle than side to discussed the go revenues machine. the And the currently new with with this the product. higher-end side we prepared because that looking obviously, about smaller faster inspect on talking call are here, capabilities defects is

is the to with hundreds want micron such down as address. Rafi, such packaging the kind the hybrid X anything? discussion, millions is are pitch add of wafer applications obviously, will the up you other applications application that of These this in of going to number of So bonding bumps bumps advanced going machine to as pitch. do and the per very fine this

Rafi Amit

they higher they want what current system And think with would all accuracy what you map better understand go from I small X micron, X pitch it expect of also cannot and you micron or in bumps, does to do XX it the much terms it does where very of mean more, it, summarized mean of or because No, customers customer, actually, amount if to the to go road well. X, the it of say, need you throughput. okay, I

platform of a this new that can type So meet this totally is demand.

Brian Chin

think of on Okay. that Is be terms Maybe and that of where maybe and clarification you increased quick this sort sort TSV is think of with an that as just example sensitivity would these in Do required? you that. one example more in HBMX do of ushered an interconnects? productivity, capabilities

Ramy Langer

It's wouldn't space capabilities our current than to I the achieve Well, market, are will available say far go the increase it From it. total for at as more superior the substantially a this hard to applications total market. us TSVs. But we this will to in in what our significantly now definitely, definitely, available inspection take it of stage increase number, specific on can general, machine but machines.

Kenny Green

Our question from from Tom Barclays. O'Malley be to is going next

Kyle Bleustein

So Bleustein this Tom. Kyle for on is

seems growth up investing earnings, of countries kind it The you have one is I first and drivers, in guys talked manufacturing domestic last question about of your of were geos like as your most sequentially.

some orders sequential So growth the like or country question that guys increasing of each versus initiatives either that you time? much how talked was last in those guys of about memory like my is, from domestic

Ramy Langer

fully sure understand that the question. we We're not

it If for repeat can you us. just

Kyle Bleustein

Sure.

like you semiconductor independent growth potential being So call, like guys manufacturing. assets their domestic the build invested driver a up last that earnings mentioned sovereign like to companies like on

those like Like U.S. or the customers split of So if versus with you is memory was from increase? large the from your pretty just the how better much geos manufacturing seeing like caused of kind their for of doing sequentially, your much initiatives are sizing domestic own like all that increasing what orders? some of in countries like curious sequential Korea I like there's

Ramy Langer

is I something time. we happened will think will not not this short diversity going ongoing, to think I So new this probably it's will definitely different geographic but something it's And facilities our discussion definitely contribute manufacturing, a of our I quarter. prediction, think see from that that some on in is up, geographies it take longer-term in But term. it but the business, longer-term

Kyle Bleustein

a quick sense. of then And on a makes that. lot That just Okay. follow-up

last about have you to Europe. building total have like able I it, like are revenue time greater your in guys that guys I that What is the than think million. it You capacity are $XXX support? you talked number And a was like know new able filling or -- that you do I might closer again? when would need be this question, to to an of it like you when to you expectation like increase capacity trail is get longer-term

Ramy Langer

stage, So at our this million. go facility, over in our current capacity current we in can $XXX

which happen are will We least adding location European in year. XX% this at next

million, to and can bring us be closer will grown capacity this $XXX further. that So

limitations So definitely, point foreseeable we the from future. grow a in don't capacity any view, have of to

Kenny Green

B. Our be from Riley. Craig next Ellis question will from

Craig Ellis

last a with HBM wanted we of And side for strength. the which bit or versus trending the for I as comment activity asking nice year degree Congratulations and comments guide quarter chiplet seen fourth nice can first accelerating what execution. on is, quarter in half on start little what to X first of is think by you a months customers around the question or the with implications discussions some the the you and over the you've just just pipeline contextual saw to XXXX? that the the on the about decelerating and

Ramy Langer

the It's grow our X.XD and lot and there the substrates. much -- discussions optimistic capacity. about From and capacity continue a will the add HBM you know players is discussions of to the are customers, obviously, how most very of with

this we is So less stage, something going see, slow or at that don't optimism.

it of goes I are then -- customer customer. the ongoing. by to think a lot a there discussions And is

slots. Some are ready to commit for and asking

the hesitant. bit But positive. I think atmosphere, overall, specifically HPC the Some is in general about are a little more

Craig Ellis

-- especially, in of either yet XX seeing high we're comments. things is customers press, Are intents still of you seeing or because and reported, time? helpful, engaged XX pipeline further Ramy, or HBMX Eastern those at stacks? out you it the pull That's high for level out it that or some clarifies to those Are seeing in

Ramy Langer

time. bit is little pulling don't a it's in think out there a stage. think this I I further at

Craig Ellis

things, looking or reiterate HBM, to it. is, business, contribute of from then potential, image the the the benefit things to year? going silicon Got on question a comment continuing side to attention like next CMOS the or in are the carbide chiplets all and other color growth after at can on whether growth recovery the And which specialty on sensor other degree to 'XX calendar things materials the potential it's you

Ramy Langer

interesting. that's So

Actually, -- the we're is customers. down. You're this years lot a of that market asking, over that pretty to it has yes, from And that a seeing sensors starting image to couple of last going business is. interest, CMOS lot it discussions this it of is contributed contribute lot a more seems was

there. is definitely, So there growth

on is more going think I the lately. fan-out, than activities be we saw to there

we in seeing are these definitely, actually shipping So interest to machines applications.

more are it's we traction. front-end not market silicon which and more seeing will shape, and the in I share. we I We more in progress to low XX really make good getting or up. last increase starting months our carbide, very And think are some a applications, market definitely, was think was And pick

Craig Ellis

point in regions, Got growth it. China in silicon is carbide is other that dovetails Ramy? And or year, point that the with a next

Ramy Langer

in China. I it's think also

Kenny Green

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

Auguste Richard

a strong application regular mobile little about old about is? more that the Congratulations Is what just coming bit PCs? from? I'm color you results. on phones? curious that's Is any demand it where increase Can talk in for you fan-out. it on Can provide the

Ramy Langer

This is OSATs. need the know you -- And is very careful they we coming here, about support we really sometimes letting of application. sort this They're the see don't application. coming in from and

about for have need fan-out. that. applications don't is information here. even do specific But I'm they what the requests the seeing I not Sometimes more

Kenny Green

going question from Vivek to of America. next Arya Our be Bank is from

Michael Mani

Vivek This is for on Michael Arya. Mani

the So one their to for start, that of seems like in well-reported products. customers latest be it your it's may some HBM been process issues encountering qualification

somewhere should year? be next to about think customer? any grow being think in might scenario up we another should potentially qualification, how about the this they your made at we impact in else unsuccessful to And demand So that ability

Ramy Langer

been always investments. This asked. I 'XX, I If all is a can look made question think the at players that we've

think are Moving may will forward, plans. any would market. obviously, in changes the probably But more serving major least did not this that stage, at change you But request this this year. make on our but then encounter customers' at change, this a we next I others see capacity don't

Michael Mani

just you are puts margin-accretive those And what see. potential profile? products we that they're a what the new next margins higher on gross I'm ramp release just for gross I and tailwinds and at these into and given Should about ASPs coming they heading into as margins, production? more takes is especially think assuming year,

Moshe Eisenberg

we factor In margin. the initiatives margin you Mike, the around the is years, made mix. Hey, took gross -- is Moshe. gross to last product we've said, this X.X certain is, main as improve But

could are operating currently a would XX%. between XX.X% say, at I XX.X%, We be even of, range to

the So product kind And to that's yes, be new will of but of early we the But be it's highly the contribution. impacted the majority. big the yes, that not be margin-accretive, in expect assess range. mention mix. picture, product to And the gross offering did of tens millions we by going still contribution. It may

can So positive much. slightly but impact, a it not have

Kenny Green

be from question Evercore. Shrotre next from going Vedvati is Our to

Vedvati Shrotre

about trying you was, to half to down I understand the to sort Is being XX% had year, one So that HPC XX%? now it's and the make I XX%. Just second talked the something pulled think change. in fully XX% for total quarter, it last sure there the I first that contribution of

Ramy Langer

this Hi, is Ramy. Vedvati,

for year we do the the of to finished what this eventually we had the quarter. lower and or year, our when estimates the that fourth than to XX% we the we with time, were year in going the revenues for for we'll XX% revenues So the beginning this said looked HPC. we year, assumed At finish discussion, at

the it's for HPC bad the do XX% So for close not the target. therefore, year whole a business bad of rather anticipated we will for And actually, there. the we news news from that the the news, to very really HPC, and is this the good numbers are we

We are target we on really the anticipated. that

Vedvati Shrotre

Noted.

question longer second was had more The term. I

transitioning end So on is Maybe 'XX, then 'XX. and are be? or more intensity you're metrology potentially how How inspection of HBMXE we into on impacting your this the you the to XD that's seeing shaping are seeing HBMX maybe color tools? up

Ramy Langer

the think the any are changes, looking No, In good wafer this to we really what yield change to scan to wafers. don't inspect going the going if die. From entire in make we sure we seeing, business. the in stacks, is for are and that therefore, intensity. good there obviously, is are see And that I are are dies still we more general, means known HBMs of are -- having known to a going more part even the the this we that the

to that's these as continue working XX for and this of We're least last in point that the involved in good news steps of stacks, at us So view. And hasn't into and don't view, and point 'XX. will the this think in trying our development from ongoing from add very with in of more yes, closely they something the I that business -- we change customers, generations. in XX year, metrology. inspection changed is And are

Vedvati Shrotre

Is doubled and the next Understood. it's year, the will be is on seems like has this you up? more something for a Korea seeing be strong? shaping side, of kind are suppliers and looking of within to capacities been continues process? there you Are year local HBM then strong? X now that's Korean their where competitors that hypothesis manufacturers come And the that sort tripled out help as the it -- Are that demand

Ramy Langer

don't know a major we've that out don't well. I we XX Korea, market. him here think this think But he's in been years, that don't for, in is known there. no, I competitor small contender I is, But There very know, he a

anything from view. this the don't the also most is think local I players. the the -- little a think Onto, and I are and us really at it's drastic KLA, I Korea this -- between I in -- we of there's changing of don't with contenders think point bit here in business they see main stage. And any but are from really it's

Kenny Green

Our next Curtis question Jefferies. is going of from Blayne to be

Blayne Curtis

to I that has questions. clean I this just X have covered there's wanted much lack the for of been outlook I mean room back go HPC. to space.

additions up CoWoS go If capacity, does every you look at it seem of the quarter. to incrementally

orders you it the I'm lumpy? are further when a growth 'XX? expecting And in say of in bit So to kind just little there, more you resume or curious, equipment March, it is is

Ramy Langer

quarters, or there. but the place a to and least and space, think competitors So clean of there I find of are has you players at to I are going correct all, managing room they room clean information that about have. capacity. there ongoing Taiwan find they are the that that's a and how yes, make discussion been first and in hold getting space are And there for many few This not past also too is the

point a are think they view, on capacity I So track. from of

of from are think visibility course, look seeing, very good we how I the we I X is that the have and months fourth And the forecast into seeing not quarter. today is, said guidance for next are it business further said, that earlier, understand we going, good forward. we we when as but we What we year. as our the visibility is gave

first or it. We really it about feel or be can I today will it. more a discuss we can we a definitely, -- less we will and details is what that this year. have 'XX in we it outlook sequential mean into have growth be quarter. see the to more growth And And that positive expect

plans. finish the But picture understanding will of year, always, into quarters make it's will And this next around think that the become ahead and things of clearer. we into get a have of more really closure get their I will beginning clear good as we the beginning year, people very obviously, go the X -- situation.

Blayne Curtis

question maybe second my then inverse for one. the I'll And

Just if you're in a sounds HBM, seeing not even like it huge pickup QX.

seeing So of in can I strength this the are to compound you're HBM semis. of you wait for else you you seeing particularly What you September the reaccelerate? quarter? talk mentioned September? kind HPC, while outside grew giving growth strength think that's you about Where

Ramy Langer

HBM let's all, business it. the on of first track into quarter. the is So and first healthy, clear is

first about As business and and smaller the a seeing to others, of the is up, are many picking HPC, lot pickup every applications see we said, and we includes of we in fan-out, customers some fourth have Xs quarter XX to machines other I said, is machines We're and -- Xs. -- as from which starting healthy. other we are to interest see close we're close image CMOS shipping the lot sensor chiplet a HBM, and Where to the every that quarter. so customers, definitely, both XX

So we a are of equipment and obviously, number of machines. starting other for that larger ones have players to smaller buy big take applications the for obviously lot HPC And kind few a a all applications. of that

So at if where picture, we is our positive look coming the from. entire outlook is this

Kenny Green

end that And will question-and-answer the session.

the hand Before closing at recording would know call back joining like section hours, the everybody to let camtek.com. I conference I will of that Camtek's to like I statements. upload we to hand to for back would his Investor website the Rafi, thank Rafi and coming this for call the Relations over you of all in to

Rafi Amit

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

Camtek (CAMT) 12 Nov 242024 Q3 Earnings call transcript