What are the updated thoughts on China revenue growth for the year, considering previous comments about strong dollars but not repeating last year's double-digit growth, with overall business growth driven by non-China markets?

China continues to be a positive and healthy market for Camtek, but the major contribution to overall growth will indeed come from outside China, confirming the analyst's assessment. “China continues to be in a positive trend and our business from there is healthy. But as you mentioned, the overall, the major contribution will come out of China and this is the situation. So I think your comment is correct.”

What are the current lead times for Eagle and Hawk products, and does Camtek have the flexibility and capacity to drive incremental growth in the current year, or will some demand shift to next year?

Camtek is comfortable with its supply chain capabilities and has enough inventory to respond to demand. Eagle lead times are around 3 months, and Hawk lead times are between 3 to 6 months. The company has flexibility to meet additional orders and does not foresee demand shifting to next year due to capacity constraints. “All in all, Brian, we have all the capabilities. And as we mentioned in the prepared notes, we have enough inventory and we are ramping the inventory in such a way that we will be able to respond to any number that comes.”

What are the primary drivers behind the incremental 25% half-on-half growth expected in H2 FY26, specifically regarding HBM, chiplets, and product mix (Eagle/Hawk), and how has visibility changed?

The advanced packaging segment, where Camtek operates, tends to lag the front-end by 1-2 quarters. AI is the primary engine fueling the industry and Camtek's business. While AI is central, other applications and the OSAT business are also growing in parallel across different regions. The market is clearly ramping up, and this growth is expected to continue into 2027. “the segment of the advanced packaging, our segment tend to lag behind the front end by, I would say, 1 or 2 quarters. This you see to our experience both at the beginning of the cycle, at the end of the cycle. And I think what we are seeing today, we are seeing our market in general. Of course, the AI is the engine, is the fuel, what's fueling the entire industry and our business as well.”

CAMT

Camtek (CAMT) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Industrials· May 12, 2026

Source: earnings call transcript

Executive summary

Camtek Q1 FY26 — Strong Order Intake and AI-Driven Growth Outlook

Camtek reported Q1 FY26 results slightly above guidance, driven by strong demand for AI-related and advanced packaging products. The company experienced unprecedented order intake, particularly from HBM manufacturers, reinforcing a confident outlook for significant revenue growth in the second half of 2026 and into 2027. Strategic investments in AI technology, including the acquisition of Visual Layer, are expected to expand market share and total addressable market, positioning Camtek for sustained growth.

Highlights

Q1 revenue reached $121.7 million, slightly ahead of guidance.
Unprecedented order intake, including over $260 million in expected revenue from 2 HBM manufacturers for 2026 and 2027.
AI-related products drove approximately 50% of Q1 revenue, with an additional 20% from other advanced packaging.
Revenue from new Eagle G5 and Hawk platforms is expected to double in 2026, after accounting for 30% of revenue last year.
Acquisition of Visual Layer closed, integrating AI technology and expanding total addressable market to over $2 billion in 2027.

Concerns

Operating expenses increased to $30.9 million in Q1 FY26, up from $24.4 million in Q1 FY25 and $28.7 million in Q4 FY25.
Operating margin decreased to 25.5% in Q1 FY26, down from 31.5% in Q1 FY25 and 28.6% in Q4 FY25.
Accounts receivables increased to $131.7 million from $90.8 million QoQ, resulting in lower cash generation this quarter.

Guidance & targets

Category	Target	Timeline	Confidence
Revenue	$129 million to $131 million high materiality	Q2 · FY26	High
Revenue	over 25% higher revenues compared with the first half high materiality	H2 FY26	High
Operating margin	around 30% level medium materiality	H2 FY26	Medium
Gross margin	improve medium materiality	H2 FY26	Medium
Total Addressable Market (TAM)	over $2 billion high materiality	FY27	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Revenue Mix by Application Revenue mix for Q1 FY26, with AI-related products being the largest contributor. AI-related products: 50% of revenueOther advanced packaging applications: 20% of revenueBroad range of applications: 30% of revenue	$121.7M	—	—	—

Orderbook & backlog

HBM orders and forecast exceeding $260 million Q1 FY26

unprecedented start to the year in terms of incoming orders

expected revenue for 2026 and 2027 from 2 HBM manufacturers for 3D metrology and 2D inspection steps

Product announcements

Product	Type	Timeline	Details
AI features integration into systems	update	coming months
Dedicated AI-based software product line	roadmap	second phase, after completing package for Camtek system users

Deals & partnerships

Visual Layer Acquisition of an AI technology company to integrate its technology, AI research capabilities, and engineering team into Camtek's AI initiatives.

Camtek collaborated with Visual Layer on an AI-focused project for over a year before acquiring the company. The acquisition was closed a couple of weeks prior to the call.

Risks & headwinds

Increased Operating Expenses Q1 FY26

Operating expenses increased to $30.9 million in Q1 FY26 from $24.4 million in Q1 FY25 and $28.7 million in Q4 FY25.

Mitigation:Increase is mainly to support expected strong growth in business volume and is expected to normalize with operating margin returning to 30% in H2 FY26.

Lower Cash Generation Q1 FY26

Accounts receivables went up to $131.7 million compared with $90.8 million in the previous quarter, resulting in lower cash generation this quarter.

Mitigation:Attributed to timing of collections, implying a temporary issue rather than a structural problem.

Competitive Pressure in China foreseeable future

Local and international players are trying to compete, with main pressure from local players.

Mitigation:Camtek has a very strong position due to its large installed base, success in the OSAT market, flexibility, and strong customer support organization. Expects positive trend to continue.

Component Pricing Increases / Supply Chain Pressure current

DRAM prices going up and general component pricing increases.

Mitigation:Company continues to implement cost reduction in its machines, expecting gross margin to improve in H2 FY26.

Middle East Geopolitical Situation ongoing

Difficult situation in the Middle East.

Mitigation:Camtek's facility in Israel is working as usual, with no missed shipments and 100% performance in manufacturing and R&D. The team is committed and able to execute. Adding capacity in Germany is ongoing.

What to watch in Q2 FY26

H2 FY26 Revenue Surge

H2 FY26

Current Q1 FY26 revenue of $121.7 million

Target over 25% higher revenues compared with H1 FY26

Why it matters

This surge is a key indicator of the company's ability to capitalize on unprecedented order intake and strong demand in AI and advanced packaging.

we can already say that we expect a surge in revenue in the second half of 2026 with over 25% higher revenues compared with the first half with a potential to see additional upside based on timing of orders and deliveries between Q4 2026 and early 2027.

Find out whether CAMT delivers this. Inve re-checks your case every morning.

Q&A highlights

Why acquire Visual Layer now, what unique capabilities does it bring, and what are the plans for AI-based software products, including stand-alone offerings and revenue generation?

Visual Layer brings unique annotation and classification technology, complementing Camtek's in-house AI algorithm development. The acquisition provides full ownership of their technology and team, enhancing capabilities. AI features will be integrated into existing products in the coming months, contributing revenue in H2 FY26. Future plans include selling software packages to existing Camtek installed base and developing dedicated AI-based software for the broader semiconductor industry.

“We are going to introduce -- in the very next few months, we are going to introduce to our customers our AI capabilities in inspection and metrology. And as Rafi mentioned earlier, the capabilities of this technology is breakthrough...”

asked by Yu Shi · answered by Ramy Langer

2 min read 6 chapters

Detailed narrative

Q1 Financial Highlights and Outlook

Camtek reported Q1 FY26 revenue of $121.7 million, slightly exceeding guidance. Non-GAAP gross margin was 51%, and operating income totaled $31 million. The company anticipates a significant surge in revenue in the second half of 2026, with expectations of over 25% higher revenues compared to the first half, and continued growth into 2027.

Operating margin is projected to return to around 30% in H2 FY26, with gross margin also expected to improve.

Unprecedented Order Intake and HBM Opportunity

The company experienced an unprecedented start to the year with incoming orders, significantly strengthening its outlook for 2026 and 2027. Specifically, Camtek received orders and forecasts from two HBM manufacturers for 3D metrology and 2D inspection steps, representing expected revenue exceeding $260 million for 2026 and 2027. This demand is further reinforced by incremental business from these customers and other HPC players.

Visual Layer Acquisition and AI Strategy

Camtek successfully closed the acquisition of Visual Layer, integrating its technology, AI research capabilities, and engineering team. This acquisition, following a year-long collaboration, is central to Camtek's AI initiatives, enabling the development of cutting-edge capabilities in detection, metrology, and classification.

The company plans to introduce these AI features into its systems in the coming months, with expected revenue contribution in the second half of the year, and potentially offer dedicated AI-based software as a stand-alone product line in the future.

Product Innovation and Market Expansion

New systems, Eagle G5 and Hawk, introduced last year, accounted for 30% of revenue and are expected to double their revenue contribution in 2026. These products support evolving industry roadmaps, including sub-6 micro bump height metrology and 100-nanometer inspection. The company's continued investment in platform innovation and AI-based algorithms is expected to expand its 2D market share and win additional process steps, increasing its total addressable market to over $2 billion by 2027.

China Market and Competitive Landscape

The China business continues to show a positive trend and remains healthy, though major growth contributions are expected from non-China markets. Camtek acknowledges international and local competition in China but maintains a strong position due to its large installed base and dominance in the OSAT market.

The company expects to see a positive trend in China in the foreseeable future, leveraging its flexibility and strong customer support.

Operational Resilience and Competitive Differentiation

Despite the situation in the Middle East, Camtek's facility in Israel is operating as usual, with no missed shipments and 100% performance in manufacturing and R&D. The company's competitive advantage stems from its state-of-the-art mechanical capabilities, precise platforms, optical hardware, and breakthrough AI capabilities. Additionally, flexibility in customization, quick deliveries, and a strong customer support organization contribute to its leadership, particularly with OSAT customers.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.