Camtek Ltd.

Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtech's results zoom webinar. My name is Kenny Green and I'm part of the investor relations team at Camtech. All participants other than presenters are currently muted. Following the formal presentation, I will provide some instructions for participating in the live question and answer session. I would like to remind everyone that this conference call is being recorded and the recording will be available from the link in the earnings press release and on Camtech's website from tomorrow. You should have all received by now the company's press release. If not, please review it on the company's website. With me today on the call, we have Mr. Rafi Amit, Camtech CEO, Mr. Moshe Eisenberg, Camtech CFO, and Mr. Rami Langa, Camtech CEO. Rafi will open by providing an overview of Camtech's results and discuss recent market trends. Moshe will then summarize the financial results of the quarter. Following that, Rafi, Moshe, and Rami will be available to take your questions. Before we begin, I'd like to remind everyone that the statements made by management on this call 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 actual results to differ and vary materially. For more information regarding the risk factors that may impact Camtech's results, please review Camtech's earnings release and SEC filings, and specifically the forward-looking statements and risk factors identified in the results press release issued earlier today and other risk factors as discussed in Camtech's most recent annual report on SEC form 20f. Camtech does not undertake the obligation to update these forward-looking statements in light of new information or future events. Today's discussion of the financial results will be presented on a non-GAAP financial basis, unless otherwise specified. As a reminder, a detailed reconciliation between GAAP and non-GAAP results can be found in today's earnings release. And now I'd like to hand the call over to Mr. Rafi Ami, Camtech CEO. Rafi, please go ahead.

Thanks, Kenny. Hello, everyone. Camtech concluded the second quarter with record performance. Q2 revenues reached $123.3 million, reflecting over 20% gross year over year. We also maintained our gross margin at around 52%, contributing a record operating income of over $37 million. Revenue distribution remained in line with our expectations and closely matched last quarter results. High-performance computing applications contributed approximately 45% to 50% of total revenue, while other advanced packaging applications accounted for about 20%. The balance came from CMOS image sensor, compound semiconductor, front-end applications, and other general applications. We continue to observe a shift in coax-like production towards OSAT, a trend that plays to our advantages, given Camtech's strong market position in this segment. We continue to see strong momentum heading into the third quarter. Based on the current orders, our sales pipeline and ongoing customer engagement, we expect Q3 2025 revenue to be approximately $125 million, representing an annualized run rate of half a billion dollars, a significant milestone for the company. In addition, we have healthy orders flow and pipeline into the fourth quarter. The advanced packaging segment is rapidly evolving with technological changes to support the fast-paced evolution of high-performance computers for AI applications. Based on analyst research on the semiconductor industry, the advanced packaging market that supports AI applications is expected to grow at an exceptionally rapid rate over the next few years. This growth is being driven by the adoption of new packaging technologies such as hybrid bonding, micro copper bumps with densities below 10 microns, Rdl with line widths of 2 microns and below, and more. This advancement requires -the-art inspection and metrology capabilities combined with AI-based algorithms to detect defects, filter out non-critical issues, and classify defects. Hence, ensure that only high-quality components enter the HPC module assembly line. By integrating advanced inspection and metrology tools, manufacturers can significantly increase yield and gain valuable insight into defect types, empowering continuous process refinement and production optimization. Caltech anticipated the upcoming technological shift several years in advance and made significant strategic investment to develop innovative solutions addressing these emerging opportunities. We have invested heavily in developing cutting-edge platforms that combine exceptional mechanical precision with -the-art optical technologies. These efforts have culminated in the launch of the AUK and Eagle V systems, delivering breakthrough performance and significantly higher throughput compared to our existing system. In parallel, we have been developing software solutions such as enhanced defect detection, EDC, and automatic defect classification, EDC, technologies that will strengthen our competitive edge in the market. The AUK and Eagle G5 have been exceptionally well received by our customers and are expected to generate approximately 30% of total revenue this year, with an even larger contribution projected for the next year. In addition, our micro-proof metrology system, originated from the FRT acquisition, has been successfully adapted and accepted by a tier 1 customer for multiple metrology applications. Over 30 systems have already been installed and are now operating seamlessly in full-scale production environments. In summary, CapTech has solidified itself position for a market leader in its domain. We believe the packaging technologies highlighted today represent significant growth opportunities for us in the coming year. And now, Moshe will review the financial result. Moshe?

Thanks Rafi. Revenue for the second quarter came in at a record $123.3 million, an increase of 20% compared with the second quarter of 2024. The geographic revenue split was similar to last quarter as follows. Asia, 90% and the rest of the world accounted for 10%. Gross profit for the quarter was $64 million. The gross margin for the quarter was 51.9%, similar to the previous quarter, and an improvement from the second quarter of last year. Operating expenses in the quarter were $26.6 million compared to $21.6 million in the second quarter of last year and $24.4 million in the previous quarter. Operating profit in the quarter was $37.4 million compared to the $30.8 million reported in the second quarter of last year and $37.3 million in the first quarter. These record results were achieved despite an increase in the operating expenses, which were mainly due to the exceptionally high shipping expenses related to the conflict with Iran. Operating margin was .3% compared to 30% and .5% respectively. Financial income for the quarter was $4.9 million, similar to the $5 million reported last year, and a decrease from the $5.4 million in the previous quarter. The decrease from the previous quarter was mainly an impact of the weakness of the US dollars on revaluation of certain balance items. Net income for the second quarter of 2025 was $38.8 million or 79 cents per diluted share. This is compared to a net income of $32.6 million or 66 cents per share in the second quarter of last year. Total diluted number of shares as of the end of the second quarter was $49.3 million. Turning now to some high-level balance sheet and cash flow metrics. So cash equivalents, including short and long-term deposits and marketable securities, as of June 30, 2025, were $544 million. This compared with $523 million at the end of the first quarter. We generated over $23 million in cash flow operations in the quarter. Accounts increased to $112 million from $100 million in the previous quarter, mainly due to timing of collection. Inventory level increased to $149 million from $142 million. The increase over the quarter is primarily to support the anticipated sales growth of our new Eagle Gen 5 and Hawk products in the coming quarters. As Rafi said before, we expect revenues of around $125 million in the third quarter. And with that, Rafi, Rami, and I will be open to take your questions. Kenny?