Camtek Rises on AI Demand — But Growth Won’t Accelerate Until H2

Date of Call: Feb 18, 2026

Financials Results

• Revenue: Q4: $128.1M, up 9% YOY; Full Year: $496.9M, up 16% YOY
• EPS: Q4: $0.81 per diluted share, up from $0.77 YOY
• Gross Margin: Q4: 51.1%, similar to prior quarter, slightly better than 50.6% YOY; Full Year: 51.6%
• Operating Margin: Q4: 28.6%, down from 30.9% YOY; Full Year: 30%, similar to 2024

Guidance:

• Q1 2026 revenue expected to be around $120 million.
• Growth expected in Q2 and more significant growth in the second half of 2026.
• Expect 2026 to be a double-digit growth year.
• Gross margin expected to improve throughout the year, with Q1 between 50.5% to 51.5% and improvement expected in H2.
• Operating expenses expected to increase in H1 due to R&D investments.

Business Commentary:

Record Revenues and Year-Over-Year Growth:

• Camtek Ltd. reported record quarterly revenues of $128 million for Q4 2025, representing an increase of 9% year-over-year.
• Full-year revenues totaled $496 million, reflecting 16% year-over-year growth.
• The growth was driven by strong demand for AI-related products, with approximately 50% of full-year revenue coming from AI products, and additional contributions from advanced packaging applications, CMOS image sensors, compound semiconductors, and general 2D applications.

Growth Outlook and Market Confidence:

• Camtek provided revenue guidance for Q1 2026 around $120 million, expecting growth in Q2 and more significant growth in the second half of 2026.
• The company expressed confidence in achieving another double-digit growth year in 2026, supported by a strong order pipeline and backlog, as well as ongoing customer discussions and investments.

Product Demand and Market Share:

• Camtek's systems, particularly the Hawk and Eagle Gen 5, have been installed in dozens of locations over the past year.
• The company expects to increase its market share by introducing new capabilities and penetrating additional production steps, driven by the transition to HBM4 and strong customer validation of new system capabilities.

Geographic Revenue Distribution:

• For Q4 2025, 89% of Camtek's revenues were generated from Asia, with the remaining 11% from other regions.
• The geographic revenue distribution reflects strong demand in Asian markets, particularly from key customers expanding their manufacturing capacity to meet growing demand for AI applications.

Sentiment Analysis:

Overall Tone: Positive

• Management stated: 'Camtek concluded the fourth quarter and full year with record results' and 'We are excited with what we can achieve in 2026.' They expressed strong confidence in the second half growth, citing a 'significantly increased orders flow and pipeline' and 'completed the development of new capabilities' to increase market share.

Q&A:

• Question from Brian Chin (Stifel, Nicolaus & Company, Incorporated): Where is the accelerating demand more prevalent, HBM or chiplet logic, and is the step-up occurring in Q3 or Q4?
  Response: Demand is concentrated in AI-related products (HPC). The step-up is expected in the second half, but the exact quarter is customer-dependent.

• Question from Brian Chin (Stifel, Nicolaus & Company, Incorporated): Is the expectation still for over 50% of shipments to be new platforms (Hawk or Eagle Gen 5) in 2026, and are customers reusing existing systems?
  Response: Hawk and G5 accounted for about 30% of 2025 revenues; expectation is at least 50% in 2026. Transition to HBM4 is a major opportunity; industry will gradually move to HBM4, increasing demand for new systems.

• Question from Yu Shi (Needham & Company, LLC): Is the adoption of Hawk changing, and is it seeing more adoption including in memories?
  Response: Hawk is targeted for high-end applications with very high throughput and accuracy. Some memory customers will use Hawk for higher HBM (4/5) applications, but the G5 remains popular for OSATs. Future capacity in memory will tend towards Hawk.

• Question from Yu Shi (Needham & Company, LLC): What is the expectation for China this year?
  Response: Expectations for China are positive with stable revenues; no signs of weakness. Sales to China are primarily OSATs engaged in various applications, and the market is expected to remain stable.

• Question from James Schneider (Goldman Sachs Group, Inc.): How does Camtek's double-digit growth outlook compare to broader WFE forecasts, and is inspection expected to outgrow WFE?
  Response: Camtek has historically outgrown WFE by focusing on fastest-growing segments. Visibility has improved with new orders and customer discussions, providing high confidence in double-digit growth for 2026.

• Question from James Schneider (Goldman Sachs Group, Inc.): How should we expect gross margin trajectory throughout the year?
  Response: Gross margin is expected to improve throughout the year, particularly in the second half, due to measures taken to improve bill of materials and supply chain.

• Question from Shane Brett (Morgan Stanley): Has there been any change to competitive dynamics for HBM sockets, and what is Camtek's market share?
  Response: No market share lost to competitors; in fact, Camtek expects to increase market share in 2026 due to R&D efforts and new capabilities enabling penetration into more inspection and metrology steps.

• Question from Shane Brett (Morgan Stanley): How does the broadening of advanced packaging beyond leading foundries benefit Camtek?
  Response: The move of CoWoS-like technologies to OSATs benefits Camtek, as OSATs are a strong part of the business (~50%). Camtek also maintains a strong position with leading foundries and IDMs.

• Question from Craig Ellis (B. Riley Securities, Inc.): Should growth be characterized as strong across IDMs, OSATs, and foundry?
  Response: Yes, growth is expected across all three customer classes: strong IDM growth due to HBM exposure, good OSAT growth due to advanced packaging and CoWoS adoption, and foundry growth from 2.5D.

• Question from Craig Ellis (B. Riley Securities, Inc.): Does Camtek have capacity to meet potential upside demand, and what is the gross margin and OpEx outlook?
  Response: Operational capacity is ready for any demand level. Gross margin in Q1 expected between 50.5%-51.5%, with improvement in H2. OpEx will increase in H1 due to R&D investments for future opportunities.

• Question from Edward Yang (Oppenheimer & Co. Inc.): Are there specific catalysts or time frames for gaining market share?
  Response: Multiple customer steps are already confirmed or in validation; confident that market share will be maintained and increased in 2026 as these steps progress.

• Question from Edward Yang (Oppenheimer & Co. Inc.): Where does Camtek stand on WFE growth forecasts for 2026?
  Response: It is too early to quantify; Camtek will start the year and reassess quarterly as more information becomes available.

• Question from Auguste Richard (Northland Capital Markets): Why is Camtek's sequential decline in Q1 different from test and probe companies?
  Response: The slow start in 2026 is driven by customer order timing, with major capacity expansions planned for the second half.

• Question from Auguste Richard (Northland Capital Markets): Why is KLA's advanced packaging growth much higher than Camtek's?
  Response: Believes the comparison is not apples-to-apples, as Camtek focuses on different steps. Camtek expects to gain share and increase its total available market, confident in its technology, scale, and flexibility advantages.

• Question from Michael Mani (BofA Securities): How much of AI growth came from chiplets, and what is Camtek's share position?
  Response: High-performance computing (AI) is about 50% of business; chiplet is part of this. Camtek is a significant vendor to TSMC and expects to gain share in multiple steps, not just one.

• Question from Michael Mani (BofA Securities): What is Camtek's capacity and ability to expand?
  Response: Current capacity is over $700 million; no limitations foreseen. Additional capacity in Europe expected late 2026. Company is prepared for demand strength.

• Question from Vedvati Shrotre (Evercore ISI Institutional Equities): How far does Camtek's visibility extend beyond 2026?
  Response: Seeing signs for 2027, with customers discussing shipments in Q1 and Q2 2027. Industry is ramping up with multi-year planning.

• Question from Vedvati Shrotre (Evercore ISI Institutional Equities): What is the advanced packaging growth outlook?
  Response: Growth is definitely double-digit, but the exact rate is not quantified yet. Leading application is Fan-Out, and the market is growing well.

Contradiction Point 1

Characterization of 2026 Growth and Demand Visibility

The 2025Q4 answer provides a detailed, confident forecast with specific customer-driven step-ups, while the 2025Q3 response acknowledges limited predictability beyond 3-4 months.

What is Brian Chin's question for the earnings call? - Brian Chin (Stifel, Nicolaus & Company, Incorporated)

2025Q4: The demand acceleration is driven by high-performance computing/AI-related products. The step-up is expected in the second half of 2026, but the exact quarter (Q3 or Q4) depends on the customer. - Ramy Langer(COO)

Is the accelerating demand increase more prevalent in HBM or chiplet logic, and is the larger step-up occurring in Q3 or Q4? - Yu Shi (Needham & Company, LLC)

2025Q3: It is difficult to predict demand more than 3-4 months ahead due to delivery times. - Ramy Langer(COO)

Contradiction Point 2

Operational Capacity and Ramp Preparedness

The 2025Q4 answer asserts readiness for any demand level and significant internal capacity, while the 2025Q3 response highlights reliance on external capacity buffers and potential limitations.

What are your expectations for revenue growth in the upcoming quarter? - Craig Ellis (B. Riley Securities, Inc.)

2025Q4: The company is ready operationally to respond to any demand level. - Ramy Langer(COO)

Can you confirm operational capacity and flexibility to meet WFE-like demand and provide expectations for Q1 gross margin and annual OpEx? - Craig Ellis (B. Riley Securities, Inc.)

2025Q3: Capacity has been expanded in recent years, and additional cleanroom space is being added in Europe as a buffer. The company currently runs two shifts and can extend to three if needed. - Ramy Langer(COO)

Contradiction Point 3

Gross Margin Trajectory and Drivers

The 2025Q4 answer cites new orders and supply chain improvements as drivers for margin improvement, while the 2025Q3 response attributed the trend to the mix of higher-margin new tools.

Earnings outlook? - James Schneider (Goldman Sachs Group, Inc.)

2025Q4: Gross margin is expected to improve throughout the year and grow with the revenue increase in the second half. Measures have been taken to improve the bill of materials and supply chain to support this. - Moshe Eisenberg(CFO)

What is the expected trajectory for your gross margin this year? - Michael Mani (BofA Securities)

2025Q3: Gross margin should gradually improve over the coming quarters as higher-margin new tools (Hawk and Gen 5) ship in greater volumes. - Moshe Eisenberg(CFO)

Contradiction Point 4

HPC/AI Revenue Contribution and Growth Outlook

Contradiction on the expected growth driver and contribution of HPC/AI to revenues.

What are your key priorities for the upcoming quarter? - Brian Chin (Stifel, Nicolaus & Company, Incorporated)

2025Q4: The demand acceleration is driven by high-performance computing/AI-related products. The step-up is expected in the second half of 2026. - Ramy Langer(COO)

Is the accelerating demand increase more prevalent in HBM or chiplet logic, and is the larger step-up occurring in Q3 or Q4? - Yu Shi (Needham & Company)

2025Q2: There is a positive momentum in the second half... HPC contribution to revenues in the second half is expected to be not much different than the first half (45% to 50% range). - Ramy Langer(COO)

Contradiction Point 5

China Revenue Contribution

Contradiction on the expected revenue contribution from China for the year.

What are your key takeaways from the earnings call? - Yu Shi (Needham & Company)

2025Q4: The expectation for China is positive and stable... growth in the OSAT sector... is expected to continue. - Ramy Langer(COO)

What are the expectations for China this year for revenue or YoY growth? - Yu Shi (Needham & Company)

2025Q2: Last year, its contribution was around 30%. This year, the contribution is expected to be a little higher than that. - Moshe Eisenberg(CFO)