Camtek reported its second quarter on 10 August 2026, before the open. We are writing about it today.
Errors or inaccuracies are possible. Spotted something that looks wrong? Write to me and I will correct it.
What Camtek Does
Camtek, based in Migdal Ha'emek, makes optical inspection and metrology systems for chip fabs.
Its systems scan silicon wafers through the production process, find defects and measure dimensions - from the front end of manufacturing through to the beginning of assembly.
And the phrase to know in this report is advanced packaging. In the past, once a chip was made it went into a simple casing. Today, in AI processors, the packaging itself has become a complex engineering step: several chips and several layers of memory are joined onto one substrate, to micron precision. The more complex the packaging, the more inspection it needs - and that is Camtek's market.
The Quarter: Record Revenue, Falling Profit
| The quarter | A year ago | |
|---|---|---|
| Revenue | $133.2 million | $123.3 million |
| GAAP gross profit | $66.7 million · 50.1% | $62.6 million · 50.8% |
| GAAP operating income | $27.2 million · 20.4% | $32.0 million · 25.9% |
| GAAP net income | $23.3 million | $33.7 million |
| GAAP diluted EPS | $0.46 | $0.69 |
| Non-GAAP net income | $39.4 million | $38.8 million |
| Non-GAAP EPS | $0.78 | $0.79 |
Revenue is a record. Profit fell.
GAAP operating income fell 15% and the margin compressed from 25.9% to 20.4% - a drop of 5.5 percentage points. GAAP net income fell 31%.
And the adjusted picture is not glowing either: adjusted net income rose just 2%, and adjusted EPS actually slipped, from $0.79 to $0.78.
And two more lines not to skip past.
Operating cash flow for the quarter was just $12.2 million - against GAAP net income of $23.3 million. And cash, deposits and marketable securities fell from $849.7 million at the end of March to $815.8 million at June, roughly $34 million less in a single quarter.
At a company declaring a jump in shipments for the second half, this is what building inventory and headcount ahead of the revenue looks like. But it needs to reverse in the coming quarters.
And Then the Guidance
And here the report turns over.
For the third quarter management expects revenue of $158 million to $160 million.
Against $133.2 million in the quarter just reported, that is a jump of roughly 20% in one quarter.
And not only that: management expects growth of more than 30% in the second half of 2026 against the first, followed by continued growth into 2027.
The Number That Holds the Guidance Up
In the release, CEO Rafi Amit put it this way:
"Since the beginning of 2026, we have experienced a significant acceleration in order intake, bringing total orders received year-to-date to more than $600 million, with deliveries scheduled throughout the remainder of 2026 and into 2027"
More than $600 million of orders year to date.
For scale: guidance for the entire third quarter is $158 million to $160 million. Which means orders taken in eight months are worth roughly four quarters of sales at the current run rate.
This is not a promise about the future, it is contracts already signed, with a delivery schedule running through the rest of 2026 and into 2027. That is why the guidance does not rest on hope.
And one more figure from the CEO: advanced packaging revenue is expected to grow roughly 70% between the first and fourth quarters of 2026.
The company also completed the Visual Layer acquisition during the quarter.
The Balance Sheet
Equity rose to $710.2 million, from $617.0 million at the end of 2025. The total balance sheet stands at $1,339.1 million.
And liquidity, as noted, is $815.8 million - still a very large cushion, even after the quarter's decline.
The Conference Call
It is held today at 16:00 Israel time, with Rafi Amit (CEO), Moshe Eisenberg (CFO) and Ramy Langer (COO).
What I would be asking there: why operating income fell 15% while revenue rose 8%, and how much of that is structural against temporary ahead of the ramp.
הזווית שלי
דעה אישית של אילן אברמוב - לא ייעוץ ולא המלצה
This is the first report this week running in the opposite direction, and that is exactly what makes it interesting.
Last week we saw the same pattern five times: SolarEdge, Taboola, Datadog, nLIGHT and Trade Desk. A decent-to-good quarter, a guide weaker than it, and a sharp fall. I wrote then that the guide moves the price, not the quarter.
Camtek is the inverse case: a relatively weak quarter and exceptional guidance. And if my thesis is right, it has to work in this direction too.
But I do not want to skip the less comfortable part. Operating income fell 15% while revenue rose 8%. That means costs grew faster than sales, and operating cash flow of $12.2 million on a record quarter is low. The reasonable explanation is preparation for the second half - inventory, headcount, and a completed acquisition - but a reasonable explanation is not proof.
What makes the guidance credible to me is the $600 million. Guidance resting on a sales pipeline is a guess; guidance resting on signed orders with a delivery schedule is something else. And management named a measurable number we can hold them to.
And what I will be tracking is simple: whether the third quarter lands in the range. If revenue reaches $158 million to $160 million and the operating margin starts rising again, this quarter was a dip and not a signal. If revenue arrives and the margin stays compressed, then the story is not demand, it is pricing.
