Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Camtek Ltd (CAMT, Financial) reported a record quarterly revenue of $112 million, representing a 40% growth compared to Q3 2023.
- The company achieved a gross margin of 51% and an operating margin slightly over 30%, indicating strong profitability.
- Camtek Ltd (CAMT) expects continued demand for its HPC-related products into 2025, driven by the semiconductor market's growth.
- The introduction of the Eagle G5 system has already resulted in over $20 million in orders, with deliveries starting in Q4 2024.
- Camtek Ltd (CAMT) anticipates 2024 to be a record year with revenue around $427 million, representing a 35% growth year over year.
Negative Points
- The company's revenue from China is expected to decrease to 30-35% this year, down from over 40% in previous years.
- There are concerns about potential bottlenecks in the production capacity of 2.5D substrates, which could impact future growth.
- Operating expenses increased to $22.9 million in Q3 2024, up from $18.6 million in the same quarter last year.
- The company faces challenges in maintaining its gross margin due to product mix variations.
- There is uncertainty regarding the qualification process for some customers' latest HBM products, which could impact future demand.
Q & A Highlights
Q: Can you provide more insight into the HPC market and the potential overcapacity concerns, particularly regarding chiplets and HBM?
A: Ramy Langer, COO, explained that HPC includes both chiplets and HBM, which grow together. While order percentages may vary quarterly, the expectation is for similar growth patterns in 2025 as seen this year. The bottleneck is currently due to 2.5D substrate capacity, expected to be resolved in 2025.
Q: What is the current and future revenue contribution from China, given its past significance?
A: Ramy Langer noted that China's contribution is expected to be around 30-35% this year, down from over 40% previously. However, the business environment in China remains solid, and similar or slightly increased contributions are anticipated for 2025.
Q: Could you elaborate on the constraints in advanced packaging substrates and their impact on revenue outlook?
A: Ramy Langer stated that the constraints are primarily in 2.5D substrates, but the company has a strong backlog and pipeline, ensuring confidence in Q4 2024 and Q1 2025 revenue growth. The positive trend in HPC is expected to continue into 2025.
Q: Can you provide details on the new product introduced and its market potential?
A: The new product, set to launch officially in early 2025, targets high-end applications with superior inspection capabilities. It is expected to contribute tens of millions in revenue in 2025, with a gradual ramp-up throughout the year.
Q: How do you see the demand for silicon carbide and other specialty materials evolving?
A: Ramy Langer indicated that interest in silicon carbide is picking up after a slow period, with growth expected in CMOS image sensors and fan-out applications. These areas are anticipated to contribute more significantly to the business in the coming year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
