Camtek Ltd. (CAMT) | The Buildout — AI Infrastructure
The Verdict
Camtek builds inspection and metrology equipment used to check wafers during advanced semiconductor packaging. Its systems measure features and catch defects in steps such as HBM stack formation, chiplet assembly, and hybrid bonding. Camtek does not make the chips or packages; it supplies the process-control tools that fabs, IDMs, and OSATs need to run those steps at high volume.
| Market Cap | — |
| Revenue (TTM) | $499M |
| Revenue Growth | +10.7% |
| EBITDA Margin (TTM) | 24.6% |
| Net Cash | $182M |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Year-to-date order intake exceeded $600M as of Q2 2026, with about 80% from Advanced Packaging and deliveries extending into 2027.
- Two HBM manufacturers placed a >$260M order and forecast for 2026–2027 covering 3D metrology and 2D inspection steps.
- Eagle G5 and Hawk, the new platforms, were about 50% of Q2 systems revenue after being about 30% of 2025 revenue.
- Advanced Packaging is expected to rise from about 75% of Q2 revenue to about 80% exiting 2026.
- Management estimates the addressable market steps up to over $2B in 2027 from roughly $1.5–1.7B.
What We’re Watching
- Q3 2026 revenue of $158M–$160M is the first direct test of the raised second-half ramp.
- DSO reached 105 days and Q2 operating cash flow was only $12.2M, so order-to-cash conversion deserves watching.
- The market is contested: Onto disclosed a >$240M HBM volume purchase agreement and Nova says its Sentronics acquisition positions it in direct competition with Camtek.
- Most new orders are now for 2027, and management says a full 2027 picture is one to two quarters away.
The thesis is strengthening on disclosed order evidence, but not yet proven on conversion. Management moved from a qualitative 'unprecedented start' in Q1 to a hard >$600M year-to-date order figure, a record Q2, and raised H2 growth guidance in Q2. The open question is whether the company can ship those orders on time, hold gross and operating margin targets, and defend share against Onto, Nova, and KLA as the H2 ramp lands.
Earnings Beat
Camtek reported record Q2 2026 revenue of $133.2M, up 10% sequentially and 8% year over year. Non-GAAP gross margin was 51.4% and non-GAAP operating margin was 27%. Management said year-to-date order intake exceeded $600M.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $122M | $128M | $119M | +2.6% |
| Gross margin | 50.1% | 50.0% | 51.0% | -90bps |
| EBITDA | $27M | $32M | $33M | −16.5% |
| EPS | $0.61 | $0.72 | $0.70 | −11.8% |
| Advanced Packaging share of revenue | ~75% | ~70% | n/a | — |
Since the beginning of the year, we have experienced a significant acceleration in order intake, bringing total orders received year-to-date to more than $600 million with deliveries scheduled through the remainder of 2026 and into 2027.— Rafi Amit, Chief Executive Officer, August 10, 2026
Management tone: Management's tone shifted from confident but qualitative in Q1 to explicitly numeric in Q2. The Q2 call converted the 'unprecedented start' language into a hard year-to-date order disclosure, a record quarter, a raised H2 growth threshold, and specific gross and operating margin exit targets.
Management Guidance
For Q3 2026, management guided revenue of $158M–$160M, calling it a ~20% sequential increase. H2 2026 revenue versus H1 was raised to more than 30%, from over 25% in Q1, with Q4 guided to sequential double-digit growth. Management set gross margin exit targets of 52.5%–53% and operating margin exit targets of 30%–32% for 2026.
Trajectory
Revenue moved from a record $128.1M in Q4 2025 to $121.7M in Q1 2026, a 5% sequential dip, before Q2 set a new record of $133.2M. The early-2026 pattern was modest, but the company's order book and guidance now point to a steep second half; management guides Q4 Advanced Packaging revenue about 70% above Q1 and H2 Advanced Packaging growth of about 45% versus H1. Margins were 51.4% gross and 27% operating in Q2, with management expecting mix to Eagle G5 and Hawk and operating leverage to lift both to 52.5–53% and 30–32% by year-end.
The Model
The model projects FY+1 revenue of $579M with EBITDA of $156M, an EBITDA margin of 26.9%, and FY+2 revenue of $760M with EBITDA of $227M, an EBITDA margin of 29.9%. The FY+1 anchor is the second-half Advanced Packaging ramp and year-to-date order book; FY+2 assumes the 2027 order backlog converts and the mix continues shifting toward Eagle G5 and Hawk.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $496M | $579M | $760M |
| YoY Growth | — | +16.7% | +31.3% |
| EBITDA | $128M | $156M | $227M |
| EBITDA Margin | 25.8% | 26.9% | 29.9% |
Projections are the median of 5 independent model runs. The model’s revenue sits 8.9% above analyst consensus.
For Q3 2026, management guided revenue of $158M–$160M, calling it a ~20% sequential increase. H2 2026 revenue versus H1 was raised to more than 30%, from over 25% in Q1, with Q4 guided to sequential double-digit growth. Management set gross margin exit targets of 52.5%–53% and operating margin exit targets of 30%–32% for 2026.
What Could Go Right — and Wrong
- Q3 revenue lands at or above $158M–$160M and Q4 posts the guided double-digit sequential growth.
- Advanced Packaging reaches ~80% of revenue exiting 2026 with AI/HPC-related revenue closer to 60%.
- Management converts a fuller 2027 picture into a formal growth framework in the next one to two quarters.
- Photonics grows beyond 5% of orders in 2027 as management expects.
- AI software from the Visual Layer installed base begins contributing in H2 2026.
- A HBM or OSAT customer pause or pushout delays the concentrated advanced-packaging order book.
- Onto, Nova, or KLA wins high-volume 2D or 3D steps at key customers, eroding Camtek's share.
- Sole-source or limited-source component shortages, or geopolitical disruption in Israel, interrupt shipments.
- China, expected to be ~45% of 2026 revenue, absorbs a trade or customer-spending shock.
Looking Ahead
The next 12 months turn on the second-half 2026 ramp and the start of 2027 order conversion. Management has raised the H2 growth target, guided Q3 and Q4 sequentially higher, and set year-end margin targets; the main external disclosure is the Q3 earnings report. A full 2027 picture is expected in one to two quarters.
- Q3 2026 earningsQ3 revenue guidance test — Tests the Q3 revenue guide and ~20% sequential step for H2 ramp.
- H2 2026Advanced Packaging revenue ramp — H2 AP revenue expected ~45% above H1.
- Exit 2026Margin and mix targets — AP ~80% of revenue; GM 52.5–53%; OM 30–32%.
- December 1, 20262026 convertible notes mature — Remaining principal was $32.9M at year-end 2025.
- 1–2 quarters from August 2026Full 2027 picture — Management expects to provide fuller 2027 visibility.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $429M | $496M | $499M | +15.6% |
| Gross Margin | 48.8% | 50.5% | 50.2% | +162bps |
| EBITDA | $112M | $128M | $573M | +14.5% |
| EBITDA Margin | 26.1% | 25.8% | 24.6% | 25bps |
| Net Income | $118M | $51M | $48M | -57.2% |
| Free Cash Flow | $0M | $0M | $98M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)50.2%
- EBITDA Margin (TTM)24.6%
- Net Margin (TTM)9.6%
- ROIC19.4%
- SBC / Revenue3.3%
The Company
Camtek designs and builds high-end inspection and metrology equipment for semiconductor wafers. Its systems inspect integrated circuits and measure IC features across back-end-of-line, mid-end, and the beginning of assembly. The equipment is used in advanced packaging applications such as HBM, chiplets, hybrid bonding, and 2.5D/3D packaging, where fabs, foundries, and OSATs add capacity for AI-related chips.
Manufacturing is in Migdal Ha'Emek, Israel, and Bergisch Gladbach, Germany, with Germany expansion ongoing. The company is overwhelmingly a product business: FY2025 product sales were $468.5M of $496.1M total revenue, while service fees were $27.6M. Camtek relies on single- and limited-source suppliers for essential components and subsystems.
Business Segments
Competitive Landscape
The market is contested. Camtek said OSATs accounted for more than 50% of year-to-date order intake. Competitors are converting the same advanced-packaging demand: Onto Innovation disclosed a >$240M HBM volume purchase agreement, and Nova says its Sentronics acquisition positions it in direct competition with Camtek.
- Onto InnovationNamed by Onto as a principal competitor in advanced packaging inspection; disclosed a >$240M HBM volume purchase agreement.
- NovaNova says its Sentronics acquisition positions it in direct competition with Camtek.
- KLADocumented as a principal competitor for advanced packaging inspection per Onto.
- Named in intel-file wiring as a competitor designation; not discussed in provided calls.
- Named in intel-file wiring as a competitor designation; not discussed in provided calls.
Supply Chain
Camtek sits between component suppliers and advanced-packaging equipment buyers. Customer names are not disclosed; supplier and customer relationships in the wiring are inferred or estimated rather than call-confirmed.
More on CAMT: Earnings recap