Camtek (CAMT) — Analyst Day 2026 (October 14, 2026) — Full Verbatim

*Source: https://stockanalysis.com/stocks/camt/transcripts/765438-analyst-day-2026/*

Kenny Green (Managing Partner, EK Global Investor Relations):

Thank you everybody for coming.Welcome all of you.Is everybody okay.Welcome all of you to Camtek's investor and analyst breakfast, which we're holding in conjunction with SEMICON West.Today is October 14th.I know you all have packed schedules, so we appreciate you coming.My name is Kenny Green.I am part of the investor relations team at Camtek.I want to remind everybody that we are webcasting this event live, and it will also be recorded, and the recording will be available following the event in the next day or two on Camtek's website.Earlier today, we released a press release pre-announcing the Q3 revenues as well as guidance for 2026 and 2027, which we will also cover today in our presentation.In addition, we have also filed this presentation, which you can find on Camtek's website, as well as through the SEC filings.

I just want to refer you all to the safe harbor statement, which I am not going to read, but I will summarize.Statements made today by management will contain forward-looking statements within the meaning of the federal securities laws.Those statements are subject to a range of changes, risks, and uncertainties that may cause the actual events and results to vary materially.For more information regarding the risk factors, please review Camtek's SEC filings and specifically the sections covering forward-looking statements.Other such risk factors can also be viewed in Camtek's most recent annual report, filed with the SEC in Form 20-F in March 2026.I note that Camtek does not undertake the obligation to update forward-looking statements in light of new information or future events.

Today's discussion of financial results will also be typically presented on a non-GAAP financial basis, and a detailed reconciliation can be found at the end of the presentation.Just to introduce everyone.Today we have Lior Aviram, Executive Chairman, Rafi Amit, Camtek's CEO, Mr. Moshe Eisenberg, Camtek's CFO, Ramy Langer, Camtek's President and COO, and Eyal Segev, Director of Marketing.Over the next hour or so, all five will present, and following that, we will open it up for a question and answer session.We will probably have about 20, 25 minutes for Q&A.With that, I would like to hand over to Rafi Amit, Camtek's CEO.

Rafi Amit (CEO, Camtek):

Good morning, everyone.On behalf of the entire Camtek team, I would like to welcome you to our Investor Day here in San Francisco.Thank you all for joining us today.We are delighted to have you with us.I would like to open today's Investor Day with the important announcement we made earlier this morning regarding our forecast for Q3, for Q4, and the outlook for 2027.Revenue expected in Q3 is $160 million- $161 million.Revenue guidance for Q4 is $180 million.Revenue look for 2027 is more than $800 million.Until now, we have not been in a position to provide revenue guidance a full year in advance, simply because our customer visibility and forecast typically extended only a few months ahead.

However, the exceptional demand for computing power driven by AI applications is creating a level of demand for our equipment unlike anything we have experienced before.This extraordinary market environment is giving us something we have never had before, visibility approximately one year ahead.For the first time, this increased visibility allows us to share with you our revenue expectation for 2027.This is an exceptional moment, an important milestone for Camtek.The semiconductor industry is experiencing an extraordinary acceleration in growth driven by the AI revolution.Just a year ago, most industry forecasts projected a semiconductor market of approximately $1 trillion by 2030.Today, those expectations have changed dramatically.Recent forecasts range from approximately $1.7 trillion in 2026 to $3 trillion by 2030.This is not just another growth cycle.We are witnessing a fundamental transformation in the semiconductor industry, creating a great opportunity for Camtek.

Looking further ahead, assuming that demand for computing power and physical AI continues to grow in line with current market forecast, we believe we have the potential to double our annual revenue within three years.Compared to 2026, reaching $1.2 billion, representing a CAGR above 26%.Importantly, this target is based on organic growth without factoring in any potential contribution from substantial M&A.Do not get me wrong, we are dedicating significant resources and management efforts to pursuing M&A opportunities.At the same time, we are being extremely careful not to divert management attention from what we see as a once in a generation opportunity to grow our core business organically at about 26% annually over the coming year.We are aware that we are taking an ambitious target.We recognize that we have set a highly ambitious goal, but we plan to work very hard to achieve it.

One of the fastest-growing segments of the semiconductor industry is the advanced packaging, which is Camtek's core business.We see three major growth engines driving this market, HBM, 2.5D and 3D integration, and photonics.Each of these segments is experiencing rapid technological advancement, increasing manufacturing complexity, and growing demand for advanced inspection and metrology solutions.Later in today's presentation, we will take a closer look at the technological development in each of these areas and explain how they are creating significant growth opportunity for Camtek.Later today, we also will explain in greater detail why we are confident in our ability to achieve $1.2 billion in annual revenue within the next three years.First, let me briefly highlight a few of our key strengths that support this confidence.

Camtek is a market leader with a strong and well-established position in advanced packaging, particularly in 2D inspection and metrology.Regarding our technological strengths, over the years, we have developed exceptional technologies in our optical systems, along with hundreds of innovative features and customized solutions for our advanced packaging customers.We continue to develop unique capabilities to address the increasingly complex requirements of emerging advanced packaging technologies.More recently, we have integrated into our system advanced AI capabilities, which is redefining the inspection and metrology capabilities.Further strengthening our competitive advantage while creating new opportunity to expand our software portfolio and generate additional software revenue streams.Regarding our operation, we are expanding our manufacturing capacity and strengthening our supply chain to support the next phase of growth.Our manufacturing partners who produce our core systems have already increased their production capacity to meet our anticipated demand.

We have built longstanding relationship with all the leading customers in our industry.We work closely with them and are involved from the early stage of developing their next generation technologies.This close collaboration gives us early insight into their future requirement and enables us to develop and integrate advanced inspection and metrology solution into our system tailored to their evolving needs.This combination of market leadership, technological excellence, and deep customer relationships gives us the confidence in our ability to achieve our target.I will hand over to Eyal, who will elaborate on the latest technological development and market trend.Eyal, please.

Eyal Segev (Director of Marketing, Camtek):

Okay.Good morning.I am Eyal Segev, Director of Marketing, and I will talk about Camtek organic growth strategy and begin with the market analysis and growth potential analysis for Camtek.Technology trends are mostly driven by AI and AI data centers requirements and challenges.These challenges are best-in-class computing power, extremely high memory capacity, efficient power consumption, and high bandwidth for massive data transfer.For these challenges, the advanced packaging evolves with high-end technology.First, the 2.5D interposer, which enables the combination or the integration of the GPUs together with the memory on a single interposer.Then interconnect that becomes smaller and denser to accommodate this high data transfer, at smaller distances to improve the power efficiency.Hybrid bonding, which even takes this interconnect dynamics further.Then photonics that enables the communication between packages at a very high transfer rate.

When looking beyond AI data centers that we all know, the next phase or the next wave for implementing AI is the edge devices or what we call edge AI or physical AI.In fact, AI will be inferenced at the edge.Computers like autonomous cars, humanoids, PCs, and mobile phones, as well as wearables, will require smaller and more energy-efficient variation of logic and memory compared to what we have today with data centers.These actually would be data centers building blocks that we know today, but they will be scaled for usage on the edge devices.Smaller spec HBM structures, for example, HBA or HBC, other variations of high-bandwidth memory.Altogether, these existing advanced packaging technologies that we know today, like 2.5D, 3D IC, and fan-out, will all still be utilized on this next wave of edge AI and the physical AI.

Having seen this silicon demand for AI data centers, the technology trends, and future outlook of edge AI, it is clear that the semiconductor wafer fabrication experiencing significant growth in the past and for the foreseeable future.In this chart, we can see the percentage of wafers that are undergoing advanced packaging as portion of the entire semiconductor wafers.Note that this chart is presented in wafer count, which is more relevant to us because we inspect wafer.We see that the growth rate of these advanced packaging wafers is almost doubling the pace of the growth rate of the entire semiconductor industry.This is significant to us because advanced packaging is our main business.Taking another step or zooming in.We saw that advanced packaging is growing faster than the total semiconductor market.

Now, we take the advanced packaging market and segment it into two segments.One would be the standard advanced packaging, and the other would be the high-end advanced packaging.These would be packaging technologies of 2.5D interposers, 3D IC, sometimes fan-out.The important thing is that these are packaging technologies which are mostly related to silicon packages for AI data centers, components for data centers.Thus, it's not surprising to see that this growth rate of the high-end advanced packaging segment is, again, almost twice faster than the advanced packaging segment.This is even more significant for us because 60%-70% of our business is right there at the high-end advanced packaging segment.So when referring to the semiconductor market growth, I'd like to discuss a few growth engines for advanced packaging and naturally for Camtek.

The first one would be edge AI and physical AI.The usage of silicon for computing and memory in data centers today is actually only a fraction of what will be needed for edge AI and physical AI.What we see today is that the amount of GPU modules that are manufactured for data centers is estimated by about 10 million modules.But the annual number, and now moving to 2030, the annual number of the logic and memory that will be required for humanoids and autonomous vehicles is already in the tens of millions.When going to PCs, it's going to be in the hundreds of millions.And mobile phones, billion or even billions.Furthermore, the amount of HBM memory a single humanoid or a single autonomous vehicle requires is 200 GB.

This is similar in the range of the memory that is packed with today's GPU by NVIDIA.This is enormous additional capacity for advanced packaging because they will all undergo advanced packaging.This is huge opportunity for Camtek.Another growth engine is silicon photonics.When looking at the market forecast for silicon photonics in terms of die shipments, we can see outstanding growth.This is for the next years, and the numbers are huge in a multiplier of 24.This growth is basically stimulated by a new technology that is based on silicon photonics, which will be used for communicating between GPUs packages.I will elaborate on this.Today, the communication-based silicon photonics is mainly between racks at the AI data centers.

There are foundries such as TSMC, Tower, GlobalFoundries, that have mature processes for fabricating the photonic engine, as well as the co-package optics, encapsulating together the ASIC for generating photon-based communication between the server racks.However, the trend that will drive the silicon photonic massive growth, which we saw in the previous slide, is using this silicon photonic technology for communicating directly between GPU assemblies.This is a method for faster, reliable, energy-efficient, and higher bandwidth for the data transfer, which corresponds with what the industry trend needs.It's actually more powerful AI-related processing.But what has it got to do with Camtek?This is benefiting Camtek in several levels.First, the transmitting and receiving silicon photonic communication module will be integrated with the GPU and the HBM on the same 2.5 interposer, as you can see on the illustration to the right side.

Second, the DFB lasers, which is the source for photons, is going to be fabricated, for instance, or it's already been fabricated, for instance, at Coherent or Lumentum.But this is a new process which requires new inspection and metrology steps, and this is additional potential for Camtek.Third, the photonic engine, the PIC, again, it's a mature node fabrication process.It requires, again, new inspection and metrology process steps along the fabrication process.So wrapping it up together, the new process steps that are required, together with the utilization or the massive utilization of advanced packaging or high-end advanced packaging with these processes, also adding to the increase of die quantity altogether benefit dramatically to, or will benefit dramatically to Camtek business.Now, as a core technology for Camtek, we see that micro-bump interconnects continue to grow.

As technology trends to higher bandwidth and faster communication, as well as reduced latency and better power dissipation or efficient power dissipation, the interconnect becomes smaller and denser.Bump height at the most advanced HBM applications are going as small as 6 μm today, with a trend of reducing the bump height even to 5 μm and possibly even down to 3 μm.These are outstanding numbers that nobody thought about two, three years ago.In fact, the interconnect design of the future HBM5, which was supposed to be based on hybrid bonding, to remind you, bumpless interconnect, is not going to be like that.It's going to continue to be based on bumps.Camtek is right there, dominant with bump metrology and advanced packaging.

Our bump height metrology sensors are industry reference for HBM4, HBM4e, CoWoS-like, or CoWoS variants all over the world, and dominant at OSAT with fan-in and fan-out applications worldwide.Our plan to support the future requirements of smaller than 5-μm bumps, as we know, are with our next generation sensor, which will be released next year, the 10th generation bump height metrology sensor.As I said before, interconnect technology evolution is based on market demands for reduced latency, better power efficiency, and higher bandwidth.Hybrid bonding interconnect, which eliminates the need for micro-bumps and metal or reduce the amount of metal there, actually addresses all these market needs.Hybrid bonding is utilized rather at the high-end advanced packaging applications, 2.5D interposers, chiplets, 3D IC, HBMs.It's ramping up, as we can see here.However, it's slower than we expected.

It's ramping up slower than we expected, but it's reaching a share of 10% of the advanced packaging applications interconnect by 2030.This is, for Camtek, is a source of new business opportunities because these are new process steps for inspection and metrology, such as post-bond void detection, pre-bond defect detection, very small particles, dishing metrology, wafer geometry metrology, and others.So I return to this slide that we saw before, in which we see that the AI data centers demand and the following packaging technologies that are responding to these demands.My point here is that the result of this technology shift due to the demands is an increased complexity, which in turn drives our business to new opportunities.Let me elaborate on this topic a bit.How does increased complexity accelerate Camtek growth?

So generally, increased complexity contributes more inspection and metrology steps, but also contributes to demand of new tools beyond the capability of the installed tool base.I will show you four examples to illustrate how new inspection and metrology process steps and demand for new inspection and metrology technology.The first example is moving to high-density fan-out, where it requires tripling the amount of RDL layers from three to nine layers.Now, it is the same process, but now it is three times more steps.This in turn requires more tools.Second example, today, we measure wafer warp for a spec of 1 mm, full wafer warp metrology.But moving to die metrology or die warp metrology, as required with specking the HBM specs, it is actually a requirement for a tighter spec of 100 µm and even lower.This cannot be met with a current sensor.

Then it can only be met on a different tool with a different technology.The third example is detecting defects on hybrid bonding wafers, pre-bonding.This requires the capability of detecting sub 150 nm particles.These are crucial because they create voids after the bonding.This is a different detection technology than we use on high runner advanced packaging applications, where the defect size is roughly hundreds of nanometers.The last example, our bump height measurement sensor, the 9th generation, measures the most demanding bump heights applications with bumps down to 6 μm.But as we saw before, when moving to 5-μm height and lower, this technology does not suffice anymore.So it can only be measured on our next generation, our 10th generation sensor.Eventually, additional process steps, a new technology, result with more system demand for Camtek.

So actually, the increase in complexity drives higher inspection and metrology intensity.With this, I hand over to Ramy, who will take this from here.

Ramy Langer (President and COO, Camtek):

Thank you, Eyal.So far, we discussed the market, the potential to Camtek.Let me move on and discuss the products, roadmaps, and our plans.So we have three product families: the Hawk, the Eagle, and the NanoProf.The Hawk is our newest and most advanced inspection and metrology platform for high-end advanced packaging application, 2.5D interposers, high bandwidth memory, and hybrid bonding.It can detect, today, defects down to 150 nm and applies the most advanced AI-powered detection and classification engines.The Hawk main products are two.A dedicated model for advanced packaging with 2D inspection and 3D metrology, and a model for just inspection.Each model can be equipped with additional options ranging from the 360 Scan, that you see here on the right, infrared, and many other capabilities.The Eagle has an install base of thousands of tools.

The most advanced Eagle is the G5.It is best in class for inspection and metrology tool for the advanced packaging market.This family includes a wide variety of products and options.The latest Eagle model we just launched is a product with fluorescence illumination to detect organic residues.In the metrology family, we have launched last SEMICON Taiwan, the NanoProf, which includes a wide variety of capabilities designed for the most demanding advanced packaging, hybrid bonding, wafer fabrication applications, metrology for TSV, wafer geometry, and post-CMP.Now, of course, we are constantly improving the performance and adding capabilities to all of our products.The 360 Scan module was designed to increase the envelope of capabilities of detecting additional facets of the wafer.

It performs backside inspection as well as wafer periphery inspection, and can be attached to the Eagle or the Hawk, and it is seamless part of the overall inspection process.A couple of words about the panel.We have configurations for panel for all the three products.Furthermore, we have a cost-efficient configuration combining the NanoProf with the Eagle and the Hawk.Now, let us discuss the technology roadmap.We provide solutions today to the high-end advanced packaging, including hybrid bonding applications with our current technology, enabling detection down to 150 nm.We plan to deepen our presence in the specialty market targeting photonic as well as other applications.What are we developing?We are developing technologies to enable detection well below 150 nm sensitivity.We are evaluating several technologies to address the crucial requirement for post hybrid bonding, the ability to detect voids at high sensitivity and production throughput.

For obtaining superior defect detection faster, more accurate, and with no false calls, we are implementing AI into our detection engines, but not only there.The AI is also added to the classification engines and for fast and intuitive machine setup.We are designing the next generation platform to accommodate the accuracy and repeatability levels required with the most demanding applications while allowing better cost of ownership.This is obviously through higher throughput.For the metrology roadmap, we will address hybrid bonding and several additional challenges to increase the market share.Starting with our unique sensor for measuring depths of very small TSVs, continuing for post-CMP metrology, where we plan to improve topology sensor for measuring accurate roughness, and the sensor for measuring copper pad dishing, both prior to the hybrid bonding process.

Before hybrid bonding, we are improving our current capability to measure not only the wafer warpage, but also the die warpage at very high throughputs.As for the bump metrology, as we mentioned before, we intend to release the next generation sensor, which is our 10th generation, to provide us with capabilities to measure bumps significantly lower than 5 μm.On top of the new developments, we have improved drastically our metrology platform in terms of accuracy and robustness.And we are in the process of applying AI technology into our metrology algorithms as well.Let us talk about our SAM.We have discussed the growth engines, market potential, and technology roadmaps for our products.Let me discuss now how these translate to growth.Looking at the SAM of Camtek today, the advanced packaging inspection is dominant with about $1.5 billion.

While macro inspection in wafer fabrication is about half a billion, metrology counts to $200 million.When we look to 2030, the contributors for increase of our SAM are the significant market growth of advanced packaging, both in inspection and metrology, and in parallel, of course, our technology develop roadmap that will enable us to address additional applications that we have discussed earlier today.The outcome of this is an increased SAM of about $6 billion in 2030.Now, let me talk a little bit about our inspection business and our bump metrology.Significant potential for our growth will come from the inspection.Therefore, I would like to discuss our current business.When looking at the split by application of Camtek's tools sold this year, in 2026, 85% of our tools were sold for inspection applications.

Where tools that were sold solely for bump height metrology reach only about 15% of our tools.This trend is true for the past years as well, and it proved that although Camtek is a dominant market leader for 3D bump height metrology for advanced packaging, in fact, we're a significant player in 2D inspection as well.As we mentioned earlier, one part of our roadmap strategy is to maintain our dominance and market leadership with bump height metrology.The other part, which is even more important, is our roadmap strategy to develop capabilities and increase drastically our market share in inspection applications.Let me discuss the plan to reach the ambitious goal of $1.2 billion in revenues in about three years.First, we will continue to strengthen our position in 2D inspection with hybrid bonding, 2.5D, 3D IC, high bandwidth memory applications.

We're expanding our presence at specialty wafer fabrication, including the silicon photonics market, in which we aim to become a major player.We plan to expand our market in metrology, penetrating new process steps at advanced packaging, hybrid bonding, and wafer fabrication.We expect, in parallel, to increase our revenues from software and service to a level of 12%.The acquisition of Visual Layer has accelerated the development of software products, and we plan to generate revenues from this product starting 2027.We will maintain our leadership and market dominance with 3D bump metrology.Regarding the competition, something that we have been discussing, and especially the competition with larger players.We have competitive technology.Our products are designed for customizations for a dynamic advanced packaging market.

We hold a dominant position at OSAT all around the world, and of course, we have a strong position at all the top IDMs and foundries.We have a proven portfolio with dedicated solutions for advanced packaging, including the bump metrology, fluorescence inspection, flexible handling, and many others.While the larger players do not necessarily have these capabilities.Last but not least, the large players are much bigger than Camtek.However, in our market, we're significantly larger.In fact, advanced packaging is our home ground.Lastly, we have built the capacity for expansion.Our operation infrastructure is already in place to support the huge ramp up to $1.2 billion and beyond.With that, I will hand the presentation to Moshe.

Moshe Eisenberg (CFO, Camtek):

Thank you, Ramy.Thank you, Ramy, and good morning to everybody.Thank you for coming.Over the next few minutes, my job would be to translate everything that you heard so far this morning into numbers.My message basically boils down to one sentence.Camtek is in its best position it has ever been, and we have the best visibility and a clear path to reach our ambitious goal of doubling our revenues within a matter of three years.You've all seen the press release that we've issued earlier this morning pre-announcing our Q3 numbers to a range of $160 million-$161 million, representing over 27% year-over-year.We also provided an initial outlook for Q4 for $180 million, which translates to 40% year-over-year, and basically sums or brings our total revenues for this year to around $595 million, just shy of $600 million.

Most importantly, we have provided an initial outlook for the first time of $800 million for next year, representing 35% over this year, which is acceleration of the 20% that we will show this year.In fact, this is the first time in the history of our company that we are able, and we have the visibility to provide a revenue outlook so far out.Let me start by saying or explaining why we are so confident and why we feel so comfortable saying this.You probably remember a couple of months ago, when we announced our Q3 results, we provided a number for the incoming orders since the beginning of the year.We said that we received $600 million worth of orders.

It's been couple of months now since this announcement, and we are happy to say that today we have added over $200 million of additional incoming orders, bringing the total incoming orders since the beginning of the year to over $800 million.We are only three quarters throughout this year, and the order momentum continues.If you look at the breakdown a little bit, around 80%, there's not much difference between what we said a couple of months ago and what we see today in terms of the breakdown. 80% comes for advanced packaging, and we heard a lot about the advanced packaging before from Eyal and Ramy.This is our main market, and 80% of the business came from this market to support HBM applications, 2.5D, and the like.Almost all of the advanced packaging is high-end advanced packaging to support AI applications.

If you look at the breakdown by customer type, a little over 50% came from OSATs, where we enjoy a strong and dominant market position across the different customers and the different geographies.The result of all of that is that we have now the strongest backlog and the best visibility we have ever had in the company.These deliveries will be for 2026 and for 2027.This order book and visibility is the starting point of the model that I'm going to discuss in a few minutes.Before looking forward, a quick look back.Over the past, we have proven our business model with a long-track record of ongoing growth and improving profitability.We also manage not only to grow but also to ramp up quickly and efficiently the operations to support the growth, and we plan to do the same in the future.

If you look at the revenue growth, we almost doubled the revenue between 2023 and 2026, translating to close to 24% CAGR over this period of time.In terms of margin, we improved our gross margin by 3.2 points and improved our operating margin by 3.6 points over that period of time, driven by the scale, driven by the leverage that we have in the model, and driven also by the richer mix, the Eagle Gen5 and the Hawk.Over the longer term, we have consistently outperformed the industry.If you look at the industry numbers since 2017 until 2026, our revenue grew sixfold by 540%, while wafer fab equipment or WFE grew a little over 200%, which basically means that this is 2.5 times more than the pace of the WFE.

The reasons, I think that you heard the presentation so far, is that early on, we took a decision to focus on the advanced packaging market.This was way before it became so popular.It turns out that this was the fastest-growing segment in the industry.The fact that we focused on this market segment enabled us to grow faster together with the market share that we were able to take from the competition.As you can see, the market definitely recognize it.Since the end of 2022, our share price is up over 650% compared to the Nasdaq which grew 160%, and even the SOX, which is closer to our market, grew by 423% over that period of time.Now to the new model.

We are targeting $1.2 billion of revenue in about three years, doubling from $600 million that we plan to end this year with, substantially organically.We are looking into three buckets or engines that will support the growth.First, the bread and butter and our main market, which is the inspection and metrology, mainly inspection and to some degree the bump metrology, will contribute around $380 million to the growth, led by the newer tools that we use, the Eagle Gen5 and the Hawk.We believe that growth will come also with the market trends that we discussed earlier, and we will benefit also from the strong market position that we have.Second is the metrology market, which is originated from the acquisition of FRT a couple of years ago.This will add about $120 million to the revenue.

Third, service and software that will contribute around $110 million.Again, some of the growth potential here is originated from the acquisition that we've done only six months ago of Visual Layer that is adding to our AI capabilities.These engines don't just add to the revenue, but each and every one is enabling us to lift a little bit the margins, and I'll show you in a second.I want to spend a moment on the third engine, which is the software and the service, because it brings a new kind of dimension or a new revenue stream to our model.Today, we have around 4,000 systems installed at customer sites.Service revenue is based on install base.The nice thing about it is that we have built the infrastructure.The infrastructure is there to support customers.But we never really monetized it.

The focus of the company in the early years was to take market share, was to sell more machines, but not as much on the service part.A couple of years back, we started to focus more on the service, given the size and given the bigger install base, and it's already paying off.If you look at 2025, we grew 40% the service revenue, which is faster than the growth of the products sales.We plan to maintain this momentum in the next few years ahead.On the software side, I think we've mentioned the fact that we plan to launch AI-based software offering in 2027, and we plan that this will contribute also to the mix.

All in all, together, we plan to increase revenue from this business from $28 million today, which accounts for 6% of the revenue, all the way to over $140 million, which will be 12% of the mix.This revenue is actually accretive to gross margin, obviously.One word on R&D.I don't have enough words, needless to say, to emphasize the importance of R&D to our business.Our growth is really depending on staying ahead of the competition, ahead technologically.So over the years, we have increased the investment in R&D to maintain our leadership position and the growing technological challenges.If you look at the chart, you see that we increased the investment in R&D from a little less than 8% in 2024 to a little less than 10% this year.

The idea is that as we discussed, the challenges that we have ahead of us and the increased complexity will require additional investment in R&D.We plan to, basically, in our model, we assume that R&D will account for around 10% of the mix to support and to fund everything that we have discussed beforehand.So now, I would like to talk how the growth turns into profitability or into margins.In our baseline, we know the starting point is our 2025 operating margin of 30%.A richer mix, and when I say richer mix, I mean, first of all, the Eagle Gen5 and the Hawk, which are gross margin accretive, as well as software and services, and as I've mentioned, also are gross margin accretive.Together, they will add around 3.4 points to the profitability on the gross margin level.

SG&A, we have leverage on the SG&A level.Revenue grow faster than the overhead and the fixed expenses.As a result, this will contribute around 2.4 points.As I said, as we increase a little bit, the R&D spending or the investment in R&D, this will take back a little over one point from the profitability.The end result will be that we will grow our profitability, the operating margin, from 30% last year to 34%-36% at the $1.2 billion revenue level.So putting it all together, this is our updated model, our target model, replacing the model that we had up until now of $750 million.This is 60% higher than the previous model, and we are basically reached the $750 million, or very soon we will reach the $750 million model.So it's about time to introduce a new model.

We plan to double, and we target a $1.2 billion within around three years.Gross margin goes from 51%-52% nowadays, to 55%-56% under the $1.2 billion revenue level.Operating margin will grow from 27%, 28% in the first half of this year to 34%-36% in this model.Models are models, but our model can accelerate if adoption of, for example, edge or physical AI will be faster than expected.At the same time, things can go a little bit sour, and there could be challenges. It could be that, for example, the WFE will get into a CapEx digestion period.This could challenge the numbers.All in all, our model takes into account a balanced set of market assumptions, and this is what you see here in front of you.Just to wrap it up, four key takeaways.

We are targeting an ambitious $1.2 billion revenue within around three years, substantially organically, and we have a very nice start already, next year, of over $800 million, supported by the nice order momentum.Second, there will be a big shift to the newer product lines and software offering and service offerings.Margins are going up.Finally, we have a strong balance sheet.We have over $800 million to support the growth and to fund potential M&A activities.With that, I will hand it over to Lior to discuss our M&A strategies.

Lior Aviram (Executive Chairman, Camtek):

Thank you, Moshe.Do you hear me?Do you hear me, guys?Great.Good morning.For those of you who do not know me yet, I am Lior Aviram.I am the Executive Chairman of Camtek, and my role on top of leading the board, is to lead the M&A and strategic initiatives activities of Camtek.We get questions about the M&A strategy of the company, and we wanted to shed some light on it.As we understand that people are moving from here to the next meeting at 9:00, and we want to leave enough time for Q&A, I will try to stress what we find to be important in our strategy on top of the slides.The slides you can review, and they are part of the deck anyway.In principle, there are two basic channels of activity for straightforward M&A.

The first is aimed at gaining additional capabilities to our core business.Here you are.These are the two work streams on the left side of the slide.In most cases, we are looking here at the acquisition of smaller companies, which have either the technology or the team, and preferably both, that our core business requires to fill certain gaps or to achieve a certain competitive advantage.The other stream on the right side of the slide is about acquiring businesses, not necessarily in our immediate core business.This could be private companies as well as public companies.We have looked at both during the last year or so.The bigger the businesses are, of course, the fewer opportunities arise, and they tend to appear in a more sporadic timing.

If the first channel of activity is an ongoing one with an established deal flow, the second requires us basically to be ready and able for the opportunity.Knowing the landscape, having the relationship in place to make sure that the opportunities reach our table for an early as possible look, and of course, having the balance sheet and the organization capacity to act quickly when the right one comes along.I can tell you that during the last year and a half, we have looked at over 100 opportunities among all work streams.What is vital to the larger acquisition of businesses where the stakes are higher is discipline in applying the criteria that we have defined to be required in each and every opportunity.First and foremost is a strong management, leadership that we can build on, since it is an additional business, not necessarily in our core.

The next two are the growth and profitability profiles.We preferably have those at the pace of our growth and rate of profitability, or at least with a clear path to achieve that, again, in a reasonable time.The last, but maybe also as far to the leadership, is the significant synergies.Basically, it is a clear understanding or actually a conviction why one plus one will be much more than two.It is clear that each case is different.Every opportunity has its stronger and weaker points, and they are to do is to do the integration of the factors and to take the right decision.

I can assure you that we are very disciplined, and we continuously challenge ourselves during the M&A process, whether what we know after more due diligence still supports our initial thesis, and we, with no hesitation, abort processes where we find the answer to be negative.I will touch briefly on the strategic partnership or acquisition-less acquisition, as I prefer to look at it.Strategic partnerships offer another way to achieve a strategic combination without an acquisition.It may expand our core business.We bring together basically the partner's technology and Camtek's capabilities to collaborations while each company remains independent.Our aim is to bring innovative and sometimes breaking tools, technologies to market at scale and at speed.We can integrate, in this channel, a partner's technology into our systems, integrate our technology into partner system, or combine them alongside in a cluster tool.

The application determines which approach makes sense, and I can tell you that we are actively pursuing this channel of initiatives as well.Why partnering?This is clear.Not every opportunity is justifying an acquisition.It opens for us, or it may open for us at least, the door to collaborate with larger players in the industry that cannot be an acquisition target, and a partnership give us a way to work with technology without owning the company behind it.I wanted to quickly touch upon the acquisition that we closed just about six months ago of Visual Layer.This is a good case study.At least for me, this is the model.There, we actually acquired both talent and technology, and that one has already boosted our AI capabilities.We found in Visual Layer a strong leadership and an established team with an amazing AI research depth.

Today, six months into working together, I can tell you that the PMI has already been completed.The team is fully integrated in Camtek's AI initiatives, and it feels like our AI development power is on steroids.It has accelerated the implementation of AI algorithms in our tools already in 2026, and at the same time, allows us to look at developing an additional line of AI software businesses that were mentioned before here, that will contribute to our top and bottom line with better margins as early as 2027.We are very happy with this acquisition, which has proven itself to be maybe not very big in its dollar value, but truly strategic to us.With this, I hand over to Rafi to wrap up.Rafi?

Rafi Amit (CEO, Camtek):

Okay.Thank you all for your attention, patience.Before I conclude, I would like to leave you with four key messages.One, a powerful and substantial growth market.We operate in a rapidly expanding market with strong growth drivers for years to come.Two, increasing complexity creates new opportunities.The growing complexity of advanced packaging drives demand for more inspection and metrology steps, while raising barrier to entry for competitor.Three, a clear competitive advantage.Our advantaged technological, extensive install base, and deep customer relationship position us to strengthen our market leadership and capture additional market share.Four, ready to scale.We have the technology, manufacturing capacities, supply chain, and organizational infrastructure in place to support our next phase of growth.We have proven our ability to win in the past.We are confident in our ability to do it again on a larger scale.Thank you very much.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay.We will open now for the question and answer session.I think the way we will do it is put your hand up, we will choose you for a question, and I will bring over the mic, and introduce yourself and feel free to ask.Let us attend to the Okay.All right.

Charles Shi (Analyst, Needham):

Hi.Charles Shi from Needham.Thanks for the update.I know, next year, preliminary guidance very strong.Maybe not the questions I was going to ask, it did not really matter for next year, but I think, still some questions remaining regarding your market position, et cetera.Maybe the first part of the question, your competitor did announce 200 million OSAT orders for CoWoS offload.OSAT has been your traditional strength.

So wonder, what is your plan to regain back that opportunity, maybe beyond 2027?Because I am sure that is important, that piece, for you to get to that $1.2 billion.The second part of the question, more on the HBM side.We did hear over the last couple of days, there seems to be some hesitation.I do not know if you agree or not, please tell us, that the customers have some hesitation to buy the dedicated 3D bump metrology.

2D is still ongoing for HBM-related demand, but 3D seems to be some hesitation.We do not know exactly the reason.Interpretation may be they are kind of stuck in the limbo of HBM de-spec.Go to hybrid bonding or not go to hybrid bonding.We heard some of those.I am wondering if you can address that.That is a two-part question.Thank you.

Ramy Langer (President and COO, Camtek):

Let me start with the de-specing question, and then I will move to the first one regarding the OSAT.

We do not see this hesitancy that you have just discussed.I think in general, we are seeing orders for what we call 3D bump metrology.This is ongoing, so I do not know the source of your information.This is not what we are seeing.Regarding the de-specing, I think you need to look at it in a different way.Currently, because of all the announcements and the plans that NVIDIA and others are making, there is a tendency not to go with higher memory density in each of the module, actually to reduce it.But when you look at the capacity that being built for HBM, they are adding a lot of capacity.And I think on the other side, you will see some increase in other applications that are focusing also on the server side.

I think that this is, I would say, one point on a market that is going to grow drastically in the very foreseeable future.I do not see any hesitancy from ordering.We are seeing part of the $800 million.There are orders for HBM and specifically for 3D bump metrology.On the first question that you asked.First of all, the announcement from our competitor about the $200 million, we have received a very significant order, not much smaller from the same customer.Yes, there is a tendency to move from the big foundry to offload some of the CoWoS capacity.This is part of it.I am expecting that our share in 2028 will be larger.But I want to make another comment.

If you look globally at all the countries that have OSATs, I think we are the strongest across all the regions and even specifically the OSATs, the area we are talking about, Taiwan.Even there, I expect that our share is at least 50%.

Blayne Curtis (Analyst, Jefferies):

Thanks.Blayne Curtis , Jefferies.I wanted to just expand on the silicon photonics opportunity.Today you are seeing PICs added into pluggable transceivers.There is a lot of debate as to CPO timing.Just curious your visibility into that and then just your positioning, on the silicon photonic PIC side today.You said you want to improve your positioning.Obviously, there is a big opportunity as you get to CPO, but what is the opportunity with CPO as well?

Ramy Langer (President and COO, Camtek):

First of all, I think we mentioned it in our call, and it is not different when we look at the orders that we have on hand.About 5% are going to photonics.Obviously, I cannot elaborate which customers and exactly the application, but all in all, we are seeing orders on the silicon photonics and what we call the DFB lasers, which is the indium phosphide part or the compound semiconductors.We are seeing strength on both sides.I think there the opportunity is just building.It is very small today.We will see the customers ramping.I think the ramp will be steep, but at this stage, we are well, I think, in a position to take a significant market share from the photonics market.It will take.I think we will see it more of a 2028 and onwards.I think the ramp will happen.

I do not think the growth.No. 2027 we are seeing, but I think the big step in the business, the main growth you will see the ramp will be in 2028.

Jim Schneider (Analyst, Goldman Sachs):

Jim Schneider, Goldman Sachs.Thanks for the presentation.I was wondering if you maybe sort of address the forward outlook.Very nice outlook, 26% compounded growth embedded over the next three years.However, I think at the same time, a lot of market participants believe that maybe the WFE growth could even be stronger than that level.Wanted to kind of understand and gauge your confidence in, if WFE is much stronger than that growth rate, your ability to match or exceed that growth.Thank you.

Ramy Langer (President and COO, Camtek):

We are still one quarter away from 2027, and like Moshe said in his presentation, no doubt our visibility today is much, much better than we ever had.If the WFE will be stronger, I am sure that our results will be probably better than the WFE as we historically over exceeded it over the past years.I think it is too early now to give a different number.This is still the outlook as we see today from the backlog, the pipeline, the discussions with customers.But no doubt, as we move along this year, we will have a much better and clearer position.I do not think we have any technical limitation, not from our equipment, competitiveness on one side, and from capacity point of view, we will be able to increase the revenues if they are required.

Moshe Eisenberg (CFO, Camtek):

Maybe just to add, let us split the issue to two parts. 2027, we obviously have good visibility.We provided over 35% growth in 2027, which is well within the WFE expectation for 2027.For the model, indeed, we assume 26%.This is initial number.We said that we did not commit to a specific three years, so the number could be bigger or different from the 26%.The assumption is a medium assumption.As I said, we wanted to have a base case and we will update the number, as we progress throughout the years.But we are committed and as Ramy said, I think I said it very clearly, we have managed to consistently outperform the WFE.

Given the fact that we are focused and exposed to the highest growth drivers in the market, I do not see any reason why we will not be able to outperform the WFE in the next three years.

Ed Yang (Analyst, Oppenheimer):

Ed Yang, Oppenheimer, and thank you for this Analyst Day, it was very informative.If I could ask the revenue question a different way.Eyal talked about a high-end advanced packaging wafers growing 24% CAGR versus, again, your revenue forecast CAGR of 26%, so about 2% outgrowth versus that high-end advanced packaging wafer growth.How does that compare historically, to your experience?What is the possible range of outcomes around that outgrowth of that 2%?What would bring it to have you grow faster, slower than that 2% outgrowth?

Ramy Langer (President and COO, Camtek):

First of all, we are talking about 60% or 70% of our revenues are going to go to that segment.Of course, we are targeting other applications like photonics that are going to grow more or less in this range, even faster.We plan with our new capabilities, specifically the AI that we have implemented into our inspection and metrology algorithms.We expect them to even make us stronger and be able to take some market share.All in all, of course, we are trying to build also the other segments that historically have been slower than the advanced package to catch up with these kind of numbers.Of course, this is something that is too early to make a comment, but definitely we would like to find other applications that are going to grow as fast as the most advanced packaging segment.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay, we will take some questions from the back.Let us point the mic.

Vedvati Shrotre (Analyst, Evercore):

Thanks for taking my question.This is Vedvati from Evercore.The first one I had is, you mentioned almost three kind of big revenue growth areas, hybrid bonding, silicon photonics.How would you think about, where do you have the most conviction in terms of gaining market share, and which one has the highest revenue generating opportunity for you?

Ramy Langer (President and COO, Camtek):

You want to take this one?

Eyal Segev (Director of Marketing, Camtek):

Yeah, sure.I think it's a matter of the way that the market goes.Those two segments are growing nicely.Hybrid bonding is moving slowly than the other segment of photonics.I think it would be more mature to take bigger portion or bigger revenue from the silicon photonics before hybrid bonding will actually be in full steam.I think it wouldn't be full steam before the end of this decade.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay.

Gus Richard (Analyst, Northland):

Gus Richard, Northland.There's levels of customer commitment forecast.

Ramy Langer (President and COO, Camtek):

We can't hear you.

Moshe Eisenberg (CFO, Camtek):

Gus, we can't hear you.

Gus Richard (Analyst, Northland):

Can you hear me now?

Ramy Langer (President and COO, Camtek):

Yeah.

Gus Richard (Analyst, Northland):

All right.I work for Verizon.There's levels of commitments from customers, forecast, orders, and prepays, and I was wondering if you could sort the $800 million for next year into those three buckets, and then also, where are you slotting deliveries for next year at this point?

Ramy Langer (President and COO, Camtek):

What was the last question?What are we slotting?

Gus Richard (Analyst, Northland):

Yeah.Where are you slotting deliveries for next year at this point?

Ramy Langer (President and COO, Camtek):

Okay.First of all, I think we made a general comment regarding, first of all, it is backlog.The backlog is significant.We did not say the numbers, but it is a meaningful number.When we talk about pipeline, it is not just somebody we met is going to place an order, maybe.This means that we know that a customer has the budget, and he intends to place the order.Most of the cases, very high percentage, when we refer to pipeline, those orders are actually received on time.Many cases, it is a case that a customer already asked us to slot already, to give him a slot, and committed to give the purchase order at a later date.These are the cases of the pipeline, and of course, discussions with customers.

Talking to all the customers, and we have so many of them, you get the sense where the market is going to.Historically, I think you followed, we have been pretty conservative on our forecasts, and we have met them so far.I do not think we ever missed one of our forecasts in the last few years.We feel comfortable with this number.

I think, as I said, there is a lot of substance and work that was made before we put these numbers.Regarding slotting.We are getting today slots for all of 2027.The reason for that, customers that already know exactly when they are going to finish their clean room, let us say they are going to finish it in the third quarter of next year, they will ask us for slots now.Some customers are more interested in getting the machines as fast as they can.But in general, yes, there are slots throughout 2027 as we speak.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay.You can go.

Daniela Talio (Analyst, Stifel):

Thank you.Hi, Daniela Talio with Stifel.I want to go back to your SAM.If I look at 2026, your estimated sales just under $600 million on the $2.2 billion SAM, that implies about a high 20% share of the market.Then if I look at your three-year revenue target of $1.2 billion on your $5.8 billion SAM, that implies a lower 20% share.I wanted to see how we should think about that change in share, if it is a matter of the markets.Thank you.

Moshe Eisenberg (CFO, Camtek):

Okay.Thank you.Just referring you to the fact that the SAM refers to 2030, which is one year after the three-year model.This is why you see slightly lower share in the market.Obviously, if you look at the 2029, we plan to increase our market share with everything that we have mentioned.

Shane Brett (Analyst, Morgan Stanley):

Hi, Shane Brett, Morgan Stanley.The messaging I felt from the last hour is that Camtek is well-positioned for 3D metrology, and you gave a lot of reasons why you are well-positioned.But when I look at slide 25, I was pretty surprised to see 60% of your portfolio is 2D inspection. 2D is where your two American peers are continuing to strengthen their product suite.Just how do you see the competition there through 2030?Thank you.

Ramy Langer (President and COO, Camtek):

First of all, no doubt that 2D inspection is the largest market, and there are going to be additional players that are trying to enter it.We have heard the announcement yesterday.It is not a surprise.We have heard the rumors before.Definitely, and I think I discussed it, why we believe that we will be able to compete very well in our market, also against the larger player.When you look today at the competitive landscape, there are smaller players, and you get the local ones in Korea, in Taiwan, in China, that are there, and they are doing an excellent work and takes a market share.But I believe that we have a much better position as a global player.I think regarding specifically the big large player, yes, no doubt it is competition.We will need to address and work very hard to meet the requirements.

But I think all the discussion that I mentioned from all the different aspects, our understanding of this market, the way we built the business, our ability to respond very fast, all those hundreds of capabilities that we've built over the years that give us a very strong position within the customers.We understand where the market is going to go.And I think very much like the way we've been able to compete with KLA, give me the confidence that we will be able to compete with also larger players that enter this market.The market is growing.There are many opportunities, and I think we're very well-positioned to meet the ambitious target that we put today.

Shane Brett (Analyst, Morgan Stanley):

Can I have the next one?

Kenny Green (Managing Partner, EK Global Investor Relations):

Sure.

Shane Brett (Analyst, Morgan Stanley):

So yeah, over the last hour and a half, you also didn't mention China.This might just be a clarification, but when we get to $1.2 billion, what's your expectation, what percentage of that revenue China will make up?And if there's any comments on local competition.Thank you.

Ramy Langer (President and COO, Camtek):

First of all, China is around 45% of our business, and I expect us to maintain the market share in China.I think it will continue to be in the foreseeable future, a big opportunity for us.So yes, there are local competition in China.It's not a secret.There are many small players.There are a couple, I would say, of good companies there.And that manufacture good equipment, competitive equipment, and no doubt that the local players will play a significant role.But the market opportunity there is very large.But I want to talk about our position in China.We've been there from the very first day.We sold the first machines to all of the big OSATs today that are playing in the Chinese market.And we have a huge install base there, and the relationships are very close.

I do not see people that bought so many machines from us and made such a big investment not continuing working with us.I think the Chinese players want to get equipment from global companies because they want to make sure that the capabilities are those capabilities that are being done in other OSATs.They want to see in their machines experience that we gained in Korea and Taiwan and elsewhere.I do not think this market is going to go away.Yes, there is going to be competition more and more from the locals.We see it on the inspection, we see it on the metrology side.But definitely, we are confident that China will continue to be a big opportunity for us.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay, I think we have time for one last question.

Moshe Eisenberg (CFO, Camtek):

Yeah, just one.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay

Moshe Eisenberg (CFO, Camtek):

Sentence just to complete the answer.As we said, we have good visibility already for 2027 and a strong backlog.Based on that visibility and backlog, I can tell you that China is expected to be at least as strong as it is this year, in 2027.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay.

Matt Prisco (Analyst, Cantor):

Thanks.Matt Prisco, Cantor.I guess digging a little more into the 2027 side of things, it seems like the $800 million is a very reasonable bar today, as you guys are booking almost $300 million per quarter in orders and exiting the year at a $180 million run rate.If we were to believe there's upside to that number, what would be the rank order most likely sources in your view?Is there an ability for Camtek to supply upside to that $800 million number today?Thanks.

Ramy Langer (President and COO, Camtek):

So obviously, it depends on the market.Is there a potential upside?Yes, there is potential upside in all the numbers that we have seen.Of course, it's too early to size the upside.We'll need to wait for another one or two quarters, and we'll be able to size it, but I do believe that there is an upside at this stage.At least this is what we see.

Eyal Segev (Director of Marketing, Camtek):

About 2027.Look, this is not a guidance.This is an outlook.This is what we see now.It can be more than that, and we will have the ability to supply more.This reflects what we know now about 2027, and it can be more than that.

Ramy Langer (President and COO, Camtek):

From capacity point of view, I think I mentioned it also during the discussion.Our operational infrastructure will be able to supply more machines if they are needed.

I don't think this is a limitation.I think we discussed it yesterday.We're set up with a lot of subcontracting.Very big subcontracting companies are supporting us.They have enough capacity to increase.If the market will be there and our customers will want more equipment, yes, we will be able to supply it.

Kenny Green (Managing Partner, EK Global Investor Relations):

Okay.That brings us to the end of the Analyst Day.Thank you very much all for coming.We appreciate your time.The webcast will be posted on the Camtek's website and also is available from the link, in the coming hours.Thank you very much.Have a good day.