Camtek Ltd. ( CAMT ) shares fell after the company reported third-quarter 2025 results, which showed record revenue and strong operational execution, despite one-time charges that weighed on GAAP earnings.

The quarter reflected continued momentum across Camtek’s semiconductor inspection business, supported by robust demand in high-performance computing and AI-related applications.

Revenue for the third quarter totaled $125.993 million, up 12% from $112.3 million in the prior-year period, marking a quarterly record. GAAP gross margin was 50.0%, while non-GAAP gross margin reached 51.5%.

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GAAP operating income rose 8% year over year to $31.8 million, and non-GAAP operating income increased 10% to $37.6 million, representing operating margins of 25.3% and 29.9%, respectively.

GAAP results included a one-time capital loss of $89 million, net, related to the repurchase of 83% of the company’s 2021 convertible notes, leading to a GAAP net loss of $53.2 million, or $(1.16) per share.

On a non-GAAP basis, net income increased 10% to $40.9 million, or 82 cents per diluted share. Camtek’s adjusted EPS of 82 cents beat the 80-cent analyst estimate, while revenue of $125.993 million exceeded expectations of $125.124 million.

During the quarter, Camtek ( CAMT ) raised $500 million through a new offering of convertible notes and repurchased a portion of its 2021 issuance.

Cash, cash equivalents, deposits, and marketable securities totaled $794.0 million as of September 30, 2025, compared with $543.9 million at the end of the second quarter. The company generated $34.3 million in operating cash flow during the quarter.

Management Commentary

“With the recent industry-wide announcements regarding large scale investments in data centers and AI applications, we anticipate that Camtek’s annual growth will continue in 2026. At this stage, we expect that the revenues will be more second half weighted, following a somewhat slower start to the year,” commented Rafi Amit, CEO of Camtek ( CAMT ).

Outlook

Looking ahead, Camtek ( CAMT ) expects fourth-quarter 2025 revenue of approximately $127.0 million, compared with analyst estimates of $127.179 million. This would bring full-year revenue to around $495 million, representing 15% year-over-year growth and a record year for the company.

Management also reaffirmed expectations for continued expansion in 2026, supported by accelerating AI-related demand and second-half weighting of results.

“With Camtek’s leading market position and the cutting-edge technological capabilities that we have recently added, we are well positioned to capitalize on the massive AI investments and to pursue significant growth while increasing our market share over the coming years,” Amit concluded.

Price Action: CAMT shares were trading lower by 8.23% to $109.32 at last check Monday.

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