Release Date: August 01, 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 $102.6 million, representing a 40% growth compared to Q2 2023.
- The company achieved a gross margin of 51% and an operating margin of about 30%, indicating improved profitability.
- Camtek Ltd (CAMT) received a significant order of over $31 million from a global Tier 1 customer for HPC-related products, showcasing strong demand in this segment.
- The company expects continued revenue growth in the third and fourth quarters of 2024, with guidance between $107 million to $110 million for Q3.
- Camtek Ltd (CAMT) is well-positioned in the semiconductor market, particularly in HPC modules for generative AI, which is a key growth driver.
Negative Points
- A significant portion of Camtek Ltd (CAMT)'s business is concentrated in Asia, particularly Korea and Taiwan, which poses risks related to geopolitical and economic conditions.
- Operating expenses increased to $21.6 million, up from $17.1 million in the same quarter last year, due to planned expansion to support growth.
- The company's financial income decreased slightly due to a lower cash balance following a $60 million dividend payout.
- Inventory levels increased by $7 million to $109 million, which could indicate potential challenges in managing supply chain and demand fluctuations.
- The company's reliance on the HPC segment, which accounts for 50% to 60% of revenue, may pose risks if demand in this segment fluctuates.
Q & A Highlights
Q: What is the current estimate from management on the overall contribution of HPC modules for the full year?
A: Ramy Langer, Camtek's CEO, stated that they expect the overall contribution from HPC, including both HBM and chiplets modules, to account for anywhere between 50% to 60% for the entire year.
Q: Do you see any changes in the HBM versus chiplet mix going into the second half of the year?
A: Ramy Langer mentioned that the ratios will vary from one quarter to another, but overall, both markets are stable. The entire contribution from HPC is expected to remain between 50% to 60%.
Q: What is the expectation for gross margin in the next two quarters?
A: Moshe Eisenberg, Camtek's CFO, indicated that the gross margin has improved due to ongoing efforts to improve cost structure and product mix. They expect the gross margin to remain within the range of 50% to 51.5%, depending on the product mix.
Q: Are you seeing more diversification across the main HBM players, or is it more concentrated?
A: Ramy Langer noted that they have not observed a pause in business and that the business is stable. They see the HPC business continuing into 2025, indicating diversification across players.
Q: How is the FRT acquisition trending, and is it contributing to the upsides in Advanced Packaging?
A: Ramy Langer stated that they are happy with the FRT acquisition, which is still a relatively small business. They expect significant business opportunities as they continue to integrate FRT, but the current upsides in Advanced Packaging are not attributed to FRT.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
