Camtek Q3 2026 Earnings: Revenue Reaches a Record $161.3 Million

Camtek (NASDAQ: CAMT) reported Q3 2026 revenue of $161.3 million, up 28% from $126.0 million a year earlier, while GAAP diluted EPS was $0.84 versus a loss of $1.16 per share. The quarter generated $71.1 million in operating cash flow, although operating margins narrowed slightly as expenses grew faster than revenue. Management expects approximately $180 million of revenue in Q4 and about $595 million for full-year 2026.

Core Earnings Data

Revenue for the quarter ended September 30, 2026 reached a company record and increased 21% sequentially. GAAP and non-GAAP operating profit also grew by more than 20% year over year, but at slightly slower rates than revenue.

The sharp improvement in GAAP net income was partly caused by the absence of a major capital-note extinguishment charge recorded in Q3 2025. Non-GAAP net income, which excludes that prior-year item and other adjustments, rose 23%.

The results are preliminary and unaudited. Camtek’s non-GAAP measures exclude share-based compensation, acquisition-related expenses, facility restructuring costs and, where applicable, one-time tax expenses.

Profitability, Cash Flow, and Balance Sheet

GAAP gross margin remained unchanged at 50.0%, indicating that revenue growth translated proportionately into gross profit. Non-GAAP gross margin declined modestly to 51.1% from 51.5%.

The larger pressure appeared below gross profit. Operating expenses increased approximately 31% to $40.8 million, slightly faster than the 28% revenue increase. Research and development expense rose about 33% to $17.9 million, while selling, general and administrative expense increased about 29% to $22.9 million. As a result, GAAP operating margin fell by 0.6 percentage points and non-GAAP operating margin declined by 0.4 percentage points.

Operating cash flow of $71.1 million exceeded GAAP net income for the quarter. Cash, short-term deposits and marketable securities totaled $877.1 million at September 30, up $61.3 million from $815.8 million at June 30.

Prior-Year Capital-Note Charge Magnifies the GAAP Profit Swing

Camtek’s move from a $53.2 million GAAP net loss in Q3 2025 to $42.8 million of net income in Q3 2026 should not be attributed solely to current operating growth. The prior-year quarter included a $100.9 million loss from extinguishing Capital Notes, partly offset by a $12.3 million related tax benefit. The resulting after-tax non-GAAP adjustment was $88.7 million.

No comparable charge was reported in Q3 2026. Consequently, the 23% increase in non-GAAP net income and the 25% to 26% growth in operating income provide more comparable measures of underlying year-over-year performance.

Revenue Guidance

Management reiterated the expectations previously presented at its October investor and analyst event. The approximately $180 million Q4 revenue target would represent about 40% year-over-year growth and roughly 12% sequential growth from Q3.

The 2027 outlook implies approximately 35% growth over the expected 2026 level. Management said the outlook is supported by its order backlog and sales pipeline, although the company did not disclose a backlog value.

Management Commentary

CEO Rafi Amit attributed Camtek’s momentum to its exposure to high-growth semiconductor markets, particularly high-end advanced packaging driven by expanding AI demand. Management said business momentum remained positive across its key indicators following the October investor event.

Amit also said Camtek has year-ahead visibility for the first time in its history, supporting management’s confidence in the 2027 outlook. The company did not provide product-level or end-market revenue figures to quantify the contribution from AI, HBM or advanced packaging during Q3.

Risks Investors Need to Watch

• Execution against rapid growth targets: The Q4 and 2027 outlooks depend on Camtek converting its backlog and sales pipeline into shipments. Delays or weaker order conversion could affect the expected revenue trajectory.
• Operating expense growth: Quarterly operating expenses grew slightly faster than revenue, contributing to lower GAAP and non-GAAP operating margins. Continued spending growth above the revenue growth rate could create additional margin pressure.
• Dependence on advanced packaging and AI-related demand: Management identified advanced packaging, HBM and other AI-driven applications as important growth drivers. Any slowdown in customer investment or changes in these markets could affect equipment demand.
• Supply-chain, regional and trade-policy exposure: Camtek identified Middle East hostilities, shipping disruptions, higher freight or energy costs, and changing export or import restrictions as risks that could affect deliveries, costs and access to customers.

Summary

Camtek’s Q3 2026 results combined record revenue, higher operating profit and substantial operating cash flow, while operating margins narrowed modestly because expenses grew slightly faster than sales. The headline GAAP profit recovery was amplified by a large prior-year charge, making the growth in non-GAAP earnings a more comparable indicator. The next points to monitor are execution on the approximately $180 million Q4 revenue target, expense discipline and whether backlog and AI-related advanced packaging demand support the company’s outlook for more than $800 million of revenue in 2027.