Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Camtek Ltd (NASDAQ:CAMT) reported record Q4 revenue of $117 million, a 32% increase year over year.
• Operating income for Q4 was $36.3 million, marking a 42% improvement year over year.
• The company expects strong business momentum in 2025, with revenue guidance for Q1 between $118 to $120 million, a 25% increase over Q1 last year.
• Camtek Ltd (NASDAQ:CAMT) has introduced two new models, the Eagle G5 and the Hawk, which are expected to enhance their market position.
• The demand for high-performance computing (HPC) products remains robust, with recent orders totaling over $10 million, reinforcing growth expectations in this segment.

Negative Points

• The geographic revenue split shows a heavy reliance on Asia, with 92% of Q4 revenue coming from this region, indicating potential regional risk.
• Operating expenses increased to $23.1 million in Q4, up from $18.2 million in the same quarter last year.
• Inventory levels rose to $123.1 million, which could indicate potential overstocking if anticipated sales growth does not materialize.
• Accounts receivables increased significantly to $99.6 million, raising concerns about cash flow management.
• The company faces challenges in the hybrid bonding market, with high complexity and low yield issues potentially delaying widespread adoption.

Q & A Highlights

• Warning! GuruFocus has detected 1 Warning Sign with CAMT.

Q: Can you provide more details on the HPC contribution in the first half of 2025 and the mix between HBM and chiplet demand? A: (Rami, COO) We have a strong position with major manufacturers, which makes us less sensitive to specific customers. OSATs are starting to open up, reflected in our forecast. We continue to see demand for HBM with significant orders for the first half of 2025.

Q: What is the expected impact of hybrid bonding on your business, and when do you anticipate it becoming significant? A: (Rami, COO) Hybrid bonding is in initial production stages, with machines installed at several sites. We expect high-volume production to start around 2027-2028. Hybrid bonding presents additional opportunities in our market space.

Q: How is the China revenue contribution expected to change in 2025 compared to 2024? A: (Moshe, CFO) In 2024, China contributed around 30% of our revenue, down from 47% in 2023. We expect China to contribute between 30% and 35% in 2025.

Q: Can you discuss the traction and market opportunities for the Eagle G5 and Hawk products? A: (Rami, COO) The Eagle G5 is more competitive with faster and more accurate capabilities, expected to increase market share. The Hawk opens new markets beyond the Eagle's capabilities, such as high micro bump applications, potentially increasing our total available market by at least $200 million.

Q: How do you see the market for HBM and AI packaging evolving in 2025? A: (Rami, COO) We expect the market to grow significantly, with TSMC doubling capacity and more OSATs entering the space. The demand for HBM and AI packaging is expected to increase, driven by the complexity of applications and the need for higher quality control.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.