Camtek Ltd. (NASDAQ:CAMT) Q3 2024 Earnings Call Transcript

Camtek Ltd. (NASDAQ:CAMT) Q3 2024 Earnings Call Transcript November 12, 2024

Kenny Green: Ladies and gentlemen, thank you for standing by. I would like to welcome all of you to Camtek’s Results Zoom Webinar. My name is Kenny Green, and I am part of the Investor Relations team at Camtek. All participants other than the presenters are currently muted. Following the formal presentation, I will provide some instructions for participating in the live Q&A session. I would like to remind everyone that this conference call is being recorded and the recording will be available on Camtek’s website from tomorrow. You should have all by now received the company’s press release. If not, please view it on the company’s website. With me today on the call, we have Mr. Rafi Amit, Camtek’s CEO; Mr. Moshe Eisenberg, Camtek’s CFO; and Mr. Ramy Langer, Camtek’s COO.

Rafi will open by providing an overview of Camtek’s results and discuss recent market trends. Moshe will then summarize the financial results of the quarter. Following that, Rafi, Moshe and Ramy will be available to take your questions. Before we start, I would like to note that certain statements made on this call constitute forward-looking statements within the meaning of the Securities Act of 1933 as amended and the Securities Exchange Act of 1934 as amended and the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements may use terminology such as believes, expects, may, will, may, should, anticipates, plans, or similar expressions to identify forward-looking statements. Such statements reflect only current beliefs, expectations, and assumptions of Camtek.

However, actual results, performance, or achievements of Camtek may differ materially as they are subject to certain risks and uncertainties. Such risks and uncertainties include, but are not limited to, those that are described in Camtek’s most recent Annual Report on Form 20-F and as may be supplemented from time to time in Camtek’s other filings with the SEC, including today’s earlier filing of the earnings PR, all of which are expressly incorporated herein by reference. Camtek undertakes no obligation to update any such forward-looking statements unless required by law. Camtek’s public filings are available on the Securities and Exchange Commission’s website at www.sec.gov and may also be obtained from Camtek’s website at www.camtek.com.

Also, today’s call will include certain non-GAAP financial numbers. For a reconciliation between GAAP and non-GAAP results, please see the table included in today’s press release, which is also posted in the IR section of Camtek’s website. And I would now like to hand the call over to Rafi, Camtek’s CEO. Rafi, please go ahead.

Rafi Amit: Hi, thank Kenny. Good morning or good afternoon, everyone. Camtek ended this quarter with a record quarterly revenue of $112 million, representing 40% growth compared with Q3 ’23. The distribution of revenue in this quarter is as follows: around 50% of our sales were for HPC or high-performance computing-related products for the third quarter in a row, approximately 20% for other applications of advanced packaging and the rest were split between other segments. This trend in product mix resulted in favorable profitability parameters of 51% gross margin and slightly over 30% operating margin. The main growth driver in the semiconductor market continues to be HPC modules for Generative AI for which we are a key equipment provider.

Q&A Session

The demand in the HPC segment remained healthy and overall, we expect the contribution of HPC to our business this year to be around 50%. Our future forecasts take into consideration a positive HPC trend. From order we have on hand in our pipeline and from discussion with customers, we expect demand for our system for HPC-related products to continue into 2025. We also see increased demand for our systems for a wide range of other applications. Based on our current order flow, backlog and pipeline, our revenue guidance for the fourth quarter is around $115 million representing about 30% growth year over year with sequential growth in Q1 2025. Given the guidance for Q4, we expect 2024 to be a record year for Camtek with revenue around $427 million representing 35% growth year over year.

Our expectation is that 2025 will be another year of growth. During SEMICON Taiwan, in early September, we introduced our fifth generation of the Eagle system, Eagle G5. The new system offer superior wafer throughput coupled in — with improved optical resolution, meeting both current market demand and the customer’s future roadmap. Since the introduction, as we announced last week, we have already received order for over $20 million with delivery starting in Q4 this year. This system is the first in several new products that we have been developing in the recent years and will provide inspection and metrology solutions for the upcoming advanced packaging technologies that are characterized by the fine pitch or micro bump and hybrid bonding interconnects.

In addition to the Eagle G5 which has been officially presented, we also introduced our new and advanced system for the next generation of advanced packaging to several key customers. Some of them have already installed the new system for qualification while others have placed initial orders for it. This new system will be officially launched in SEMICON Korea in the beginning of 2025 and is expected to contribute tens of millions of dollars already within 2025. I would like to add a comment about the confusing estimates regarding the growth forecast of the HPC segment in 2025. Our understanding is that the demand for HPC modules continues to be high. And the reason some see a slowdown is due to a lack of production capacity. The cornerstones of HPC modules are logic and HBM component and the 2.5D substrate that pack all the components into one module.

In our caution opinion, the bottleneck is currently due to missing capacity of 2.5D substrates. We estimate that this bottleneck will be released in 2025. The strong order flow and backlog for delivery in 2025 gives us a relatively clear long-term vision, which allows us to organize our operations — of efficiently to meet the expected demand and as indicated in previous calls, we are adding new manufacturing capacity in Europe that will start operating in 2025. To sum it up, I am excited about our business and outlook and expect 2025 to be another year of growth. And now Moshe will review the financial result. Moshe?

Moshe Eisenberg: Thanks, Rafi. In my financial summary ahead, I will provide the results on a non-GAAP basis. The reconciliation between the GAAP results and the non-GAAP results appear in the tables at the end of the press release issued earlier today. Revenue for the third quarter came in at a record $112.3 million, an increase of 40% compared with the third quarter of 2023 and a sequential increase of 10% from the second quarter of 2024. The geographic revenue split for the quarter was as follows. Asia was 87%, U.S. and Europe accounted for 13%. Gross profit for the quarter was $57.1 million. The gross margin for the quarter was 50.8%, similar to the second quarter of 2024 and improved from 49% in the third quarter of 2023.

This is within our expected range with the changes from prior periods mainly due to product mix in the quarter and increased revenue from last year. We expect similar levels in the next couple of quarters. Operating expenses in the quarter were $22.9 million compared to $18.6 million in the third quarter of last year and $21.6 million in the previous quarter. The increase is mostly due to a planned expansion to support growth of operations and the continued investment in the development of new products referred to by Rafi. We expect a similar level of OpEx in Q4 as well. Operating profit in the quarter was $34.2 million compared to the $22.2 million reported in the third quarter of last year and $30.8 million in the previous quarter. The increase is mostly due to the increase in revenue and the improvement in the gross profit from last year.

Operating margin was 30.4% compared to 30% and 27.6% respectively. Financial income for the quarter was $6.4 million compared to the $5.7 million reported in the third quarter of last year and $5 million in the previous quarter. The increase is mostly due to the increased cash balances and the positive impact of exchange rate differences. Net income for the third quarter of 2024 was $37 million or $0.75 per diluted share. This is compared to a net income of $25.2 million or $0.51 per share in the third quarter of last year. Total number diluted of shares as of the end of the third quarter was 49.4 million. Turning to the balance sheet and the cash flow metrics. Cash and cash equivalents, including short-term and long-term deposits and marketable securities as of September 30, 2024, were $489 million.

This compared with $454 million at the end of the second quarter. We generated $36 million in cash from operations in the quarter on the back of an increased revenue and profitability and strong collection. Inventory level increased by $7 million to $116 million. The increase over the previous quarter is to support the anticipated sales growth in the coming quarters. Accounts receivables increased slightly from $68.2 million to $70.7 million in the quarter. I’m especially pleased to report that our days sales outstanding continue to improve and they now stand at just 57 days, down from over 100 days last year. As Rafi said before, we expect revenue of around $115 million in the fourth quarter with sequential growth in Q1 of 2025. And with that, Rafi, Ramy, and I will be open the call to take your questions.

A – Kenny Green: [Operator Instructions] Our first question will be from Charles Shi of Needham. Charles, you may go ahead.

Charles Shi: Yes. Good afternoon. Thanks for taking my question. Thanks for that color. The Camtek’s understanding about the HPC market going forward with respect to the pretty much a lot of noise about HBM overcapacity concerns. So I do want to ask a little bit more on this topic because from the — from your perspective, it does sound like the chiplet side of the HPC demand, maybe it will be stronger next year given that it seems like it’s the bottleneck for the industry. But on the other hand, it does sound like on the HBM alone, not just the overall HPC, on HBM alone, you’re still expecting a good year next year. I want to understand if this is the understanding of the management, maybe chiplet grow a little bit faster next year, HBM still grow but not growing as much as the chiplet side, I wonder if this is the case. Thanks.

Ramy Langer: Hi, Charles, this is Ramy. No, look, this is hands in hands. And I think Rafi, in his prepared notes, the HPC includes the chiplets and the HBMs. And they basically go hand by hand and the growth will be together. Now what we do see, it’s quarter-by-quarter, and it depends on the order entry. So it’s not that every order we get exactly the same percentages. They may differ from quarter to quarter. But as we go into ’25, we expect to see a similar pattern as this year with growth on both the chiplet side and the HBM side.

Charles Shi: Thanks. On the other hand, I think I want to ask about China, used to be contributing more than 40% of the revenue for Camtek last year and the year before, but what’s the expectation for China this year as a percentage of revenue? And any early view on 2025, whether that the China contribution will go up or stay where it is to this year or go down? Thanks.

Ramy Langer: So first of all, this year, it will be lower. It will be in the range of about 30% to 35%. Going into ’25, China in general seems — the business seems to be solid, seems to be healthy. So we expect it will be at least similar or maybe a little bit larger than this year. But all in all, China continues to invest.

Charles Shi: Thanks.

Kenny Green: Thanks, Charles. Our next question is going to be from Brian Chin of Stifel. Brian, you may go ahead and ask.

Brian Chin: Hi there. Good afternoon. Thanks for letting us ask a few questions. Maybe given what that the commentary around kind of explaining some of the confusion about whether a slowdown or pause that some suppliers maybe have referenced around AI advanced packaging is more supply or demand related. You talked about constraints for advanced packaging substrates. I’m curious when in 2025 do you think those constraints will be relieved? And do you see that impacting either your 4Q revenue outlook or revenue trajectory into Q1 of next year?

Ramy Langer: So let’s see what we see today and what we said. So first of all, we continue to see a positive trend of the HPC, which means both the 2.5D substrates and the HBM. Now we continue to see the pattern. We are — we feel very comfortable based on our backlog and our pipeline regarding the business in Q4. And we said that there will be a sequential growth into the first quarter of ’25. And this is something that is very visible to us. Looking ahead, definitely, we believe that HPC will be a main contributor to our business next year. To go into better or more accurate numbers, obviously, it is a little bit too early. But we are very confident about the fourth quarter and the first quarter.

Brian Chin: Yes, that’s helpful. And then maybe referencing the new product and then being sensitive that it hasn’t formally, or won’t be formally introduced into Q1 until Q1 of next year. But since you have referenced it in the slide, can you share some details on maybe the types of applications for this new product or — and/or maybe the size of the addressable market? You did reference that you could have tens of millions, maybe $20 million, $30 million, something like that contribution in ’25. What’s the addressable market? And I guess also in terms of that tens of millions, do you think it will be more Q1 first half or second half or kind of across the year?

Ramy Langer: So first of all, of course, we will start the launch and gradually ramp it up to production. So there will be an increased revenues over the year because this is a new product. And I think Rafi discussed it in his prepared remarks, this is a high-end product that will go side by side with the Eagle. It will go to the higher-end applications. We’re talking about here, obviously, inspection, what we call 2D capabilities where we are looking at much faster machine and also with the ability to see much smaller defects than we are currently — that we currently inspect on the Eagle machine. So obviously, this is application such as the hybrid bonding and other applications in the advanced packaging such as the discussion — the number of bumps is going up to hundreds of millions of bumps per wafer with very fine pitch going down to five micron pitch. These are the kind of applications that this machine will address. Rafi, do you want to add anything?

Rafi Amit: No, I think actually, you summarized it very well. And okay, if they understand the road map of the customer, where they want to go or what does it mean small pitch to go from 15 micron to five, six or eight micron, what does it mean in terms of amount of bumps, all of it, you cannot do it with the current system because you need much more, I would say, better accuracy and also customers expect higher throughput. So this is totally a new platform that can meet this type of demand.

Brian Chin: Okay. Maybe just one quick clarification on that. Do you think that in terms of this increased sensitivity and productivity? Do you think that sort of is ushered in with HBM 4 as an example and maybe more TSV interconnects? Is that sort of an example of where these capabilities would be required?

Ramy Langer: Well, I wouldn’t go now to specific applications as TSVs, but in general, the capabilities of this machine in the inspection space are far more superior than what we can achieve on our current machines. From the total available market, definitely it will substantially increase our total available market. It’s hard for us to say at this stage to take a number, but definitely, it will significantly increase it.

Brian Chin: Okay, thank you.

Kenny Green: Thanks, Brian. Our next question is going to be from Tom O’Malley from Barclays. Tom, you may go ahead and ask.

Kyle Bleustein: Guys, thank you for taking my questions. So this is Kyle Bleustein on for Tom. The first question I have is last earnings, you guys kind of talked about countries investing in domestic manufacturing as one of your growth drivers and it seems like most of your geos were up sequentially. So my question is, how much of like that sequential growth was from like the memory guys in each country either increasing orders or versus some of those domestic initiatives that you guys talked about last time?

Moshe Eisenberg: We’re not sure that we fully understand the question. If you can just repeat it again for us.

Kyle Bleustein: Sure. So like one of — on the last earnings call, you guys mentioned sovereign growth being like a potential driver like companies invested like independent like semiconductor assets to build up their domestic manufacturing. So with all your geos pretty much doing better sequentially, I was curious like how much of that is from like are you seeing from those countries like initiatives for domestic manufacturing versus just some of your large like memory customers in Korea or the U.S. increasing their own orders? Like if there’s like kind of sizing the split of what caused the sequential increase.

Ramy Langer: So I think our discussion on longer-term geographic diversity of manufacturing, this is something that is ongoing, but it’s not something that happened this quarter. And I think we will see probably new facilities in different geographies going up. It will take some time. But I think definitely from longer-term prediction definitely will contribute to our business, but it’s not in the short term.

Kyle Bleustein: Okay. That makes a lot of sense. And then just a quick follow-up on that. You talked about like your new capacity that you guys are building in Europe. What is like the total revenue number that you guys are able to support? I think last time I have it, it was greater than $600 million.

Ramy Langer: Yes.

Kyle Bleustein: And like, do you have like an expectation of I know this is like a longer-term trail question, like when you might be able to get closer to filling that capacity or when you would need to increase it again?

Ramy Langer: So at this stage in our current capacity, in our current facility, we can go over $600 million. We are adding at least 10% in this European location which will happen next year. So this will bring us closer to $660 million, and that capacity can be grown further. So definitely, from a capacity point of view, we don’t have any limitations to grow in the foreseeable future.

Kyle Bleustein: All right. Awesome. Thank you guys for taking my questions.

Kenny Green: Thanks, Tom. Our next question will be from Craig Ellis from B. Riley. Craig, you may go ahead and ask.

Craig Ellis: Thanks for taking the question, guys, and congratulations on the nice execution. I wanted to start just by asking a contextual question for some of the nice comments around the fourth quarter guide and the first quarter strength. And that is, can you comment a little bit on what you’ve seen over the last three months with just pipeline discussions with customers on the chiplet and HBM side and the degree to which activity is trending versus what you saw in the first half of the year or accelerating or decelerating as we think about the implications for 2025?

Ramy Langer: It’s seemed — obviously, there is a lot of discussions about HBM and you know how much the capacity will grow and the 2.5D substrates. From the discussions with our customers, most of the players are very optimistic and continue to add capacity. So we don’t see, at this stage, something that is going slow or less optimism. I think there is a lot of a — the discussions are ongoing. And then it goes to a customer by customer. Some are ready to commit and asking for slots. Some are a little bit more hesitant. But overall, I think the atmosphere, specifically about the HPC in general is positive.

Craig Ellis: That’s helpful, Ramy, and it clarifies some of those comments. Are you seeing yet — because we’re seeing it reported, especially, out of Eastern press, intents to pull in either HBM4 or 16 high or 20 high stacks? Are you seeing customers engaged at the pipeline level for those things or is that still further out in time?

Ramy Langer: I think it’s a little bit further out in time. I don’t think there is a pulling at this stage.

Craig Ellis: Got it. And then looking at the color on calendar ’25 continuing to reiterate growth potential. The question is, after all the attention on chiplets and HBM, can you comment on the degree to which other things, whether it’s a recovery in the CMOS Image Sensor side of the business, things like the potential benefit from specialty materials or silicon carbide or other things are going to contribute to growth next year? Thank you.

Ramy Langer: So that’s interesting. You’re asking, yes, it is. Actually, CMOS Image Sensors is starting to — we’re seeing a lot of interest, a lot of discussions from customers and it seems that this market is going to contribute a lot more that it has contributed over the last couple of years that this business was pretty down. So definitely there is growth there. I think on the fan out, there is going to be more activities than we saw lately. So definitely we are seeing interest in actually shipping machines to these applications. We are seeing more and more front-end applications and we are getting more market traction. And I think we will make some progress or increase our market share. And definitely, silicon carbide, which was very low in the last 12 months or was not really in a good shape. I think it’s starting to pick up.

Craig Ellis: Got it. And is the silicon carbide point a point that dovetails with growth in China next year or is that in other regions, Ramy?

Ramy Langer: I think it’s also China.

Craig Ellis: Got it. Thanks, guys. Appreciate the help.

Ramy Langer: Thank you.

Kenny Green: Thanks, Craig. Our next question is going to be from Gus Richard of Northland. Gus, you may go ahead.

Gus Richard: Thanks for taking the questions and congratulations on the strong results. I’m curious about the increase in demand for fan out. Can you provide any more color on what that application is? Is it mobile phones, is it regular old PCs? Can you just talk a little bit about where that’s coming from?

Ramy Langer: This is coming and — this is coming from OSATs. And here we don’t really see the application. They’re sort of very careful about letting you know we — sometimes they need support in the application, sometimes they don’t even need that. But what I’m seeing is more requests for fan out. And I do not have the information about the specific applications here.

Gus Richard: Got it. And okay, I think that’s it for me. Thanks so much.

Ramy Langer: Yes. All right. Bye, Gus.

Kenny Green: Thanks, Gus. Our next question is going to be from Vivek Arya from Bank of America. Vivek, you may go ahead and ask.

Michael Mani: This is Michael Mani on for Vivek Arya. So to start, it seems like it’s been well-reported that one of your customers may be encountering some issues in the qualification process for their latest HBM products. So in the scenario that they might be unsuccessful in qualification, how should we think about any impact to your ability to grow next year? And should we think about this demand potentially being made up somewhere else at another customer? Thank you.

Ramy Langer: This is a question that we’ve always been asked. If I can look at ’24, I think all the players made investments. Moving forward, obviously, this may change, but then you would probably see more capacity request on the others that are serving this market. But at least at this stage, we did not encounter any changes in our customers’ plans. But I don’t think this will make a major change next year.

Michael Mani: I see. Thank you. And just on gross margins, just what are the puts and takes for gross margins heading into next year, especially as you release these new products and they ramp into production? Should we think about those potential tailwinds given that they’re coming at higher ASPs and what I’m assuming is a more margin-accretive profile? Thanks a lot.

Moshe Eisenberg: Hi, Michael, this is Moshe. In the last 1.5 years, we’ve made — we took certain initiatives to improve gross margin. But the main factor around gross margin is, as you said, is the product mix. We are currently operating at a range of, I would say, between 50.5% to 51.5%, could be even 52%. So that’s kind of the range. It will be highly impacted by the product mix. And yes, the new product offering may be gross margin-accretive, but still early to assess the contribution. And yes, we did mention that we expect tens of millions of contribution. But in the big picture, it’s not going to be the majority. So it can have a slightly positive impact, but not much.

Michael Mani: Great. Thank you very much.

Moshe Eisenberg: Thank you.

Kenny Green: Thanks, Vivek. Our next question is going to be from Vedvati Shrotre from Evercore. Vedvati, you may go ahead and ask your question.

Vedvati Shrotre: Hi, thanks for taking my question. So the first one I had was, I think last quarter you talked about the HPC contribution being 50% to 60% for the total year and now it’s 50%. Is there something in the second half that sort of pulled it down to 50%? Just trying to make sure I fully understand that change.

Ramy Langer: Hi, Vedvati. This is Ramy. So, when we looked at the beginning of the year, we had this discussion and we said we’ll do 50% to 60% in revenues for the HPC. At that time, the revenues we assumed for this year were lower than what we eventually finished the year or going to finish the year with a — our estimates for the fourth quarter. So actually from the numbers we anticipated that we will do for the HPC, we are very close to the target. And therefore, the 50% is really for the good news of the whole business this year and rather bad news, it’s not a bad news for the HPC. There we are really on the target that we anticipated.

Vedvati Shrotre: Noted. The second question I had was more longer term. So we are transitioning into HBM 3E and then potentially HBM 4 maybe end of ’25, ’26. How is this impacting the inspection or the 3D metrology intensity you’re seeing on your tools? Maybe are you seeing more color on how that’s shaping up to be?

Ramy Langer: No, I don’t think that we are going to see any change in the intensity. In general, we are looking for the nongood dies in this part of the business. And therefore, even if the yield changes, still are going to inspect the entire wafer to make sure there is a nongood die. From the — what we are seeing obviously is that the HBMs are having more stacks and this really means that we are going to scan more wafers. So from that point of view, as they continue into 12 and 16 stacks, this is good news for us from the business point of view. And yes, we are involved in this — in the development of these generations. We’re working very closely with our customers, trying to add more steps in inspection and metrology and that’s something ongoing that hasn’t changed in the last year. And I don’t think will change at least in ’25.

Vedvati Shrotre: Understood. And then on the HBM side, are you — is there a hypothesis that it’s been one year where the capacities has doubled and tripled and now next year, it seems like the demand will be strong? Are the Korean manufacturers sort of looking for local suppliers within Korea that kind of help their process? Is that something that’s shaping up? Are you seeing more competitors come out as this continues to be strong? Yes.

Ramy Langer: There is, in Korea, a small competitor that we know very well. But I don’t think we’ve known him for, I don’t know, 10 years, he’s been out there. But no, I don’t think that he is here a major contender in this market. I think it’s really from the — most of the business is between us and Onto, and they are also a little bit with KLA, but I think it’s — we are here the main players. I don’t think there’s really anything drastic changing in the — from this point of view. And I don’t see any local contenders in Korea at this stage.

Vedvati Shrotre: Understood. Thank you. That’s all from my end.

Ramy Langer: Thank you.

Kenny Green: Thanks, Vedvati. Our next question is going to be from Blayne Curtis of Jefferies. Blayne, you may go ahead and ask.

Blayne Curtis: Thanks so much. I have two questions. I just wanted to go back to the outlook for HPC. I mean this has been much covered that there’s lack of clean room space. If you look at the additions of CoWoS capacity, it does seem to incrementally go up every quarter. So I’m just kind of curious, is the equipment orders a little bit more lumpy? And when you say growth in March, are you expecting it to resume there, or is it further in ’25?

Ramy Langer: So yes, first of all, you’re correct that there is also a discussion about room, say, clean room space and how they are going to make and find the capacity. This has been ongoing in Taiwan for the past few quarters, but I think they are managing to find a place and getting hold of clean room space, and that’s at least the information that I have. And there are not too many competitors there or players there. So I think from a capacity point of view, they are on track. I think that from the forecast that we are seeing, and I said it earlier, we have very good visibility six months forward. And of course, we understand how the business is going, but our visibility is not as good when we look further into next year.

What we are seeing today is, as we said, we gave the guidance for the fourth quarter. We will have sequential growth in the first quarter. And definitely, we have a positive outlook into ’25 that we feel that it will be and we expect it to be a growth year. And this is more or less what we can really see today or can discuss it. I mean, more details about it. I think things will become more clear as we go into the beginning of a finish this year, get into the beginning of next year, people will make their plans. And obviously, the picture will get clearer, but always it’s around two quarters ahead that we really have a very good closure and understanding of the situation.

Blayne Curtis: Thanks. And then maybe I’ll reverse the question for my second one. Just if HBM, it sounds like you’re not seeing a huge pickup even in Q1. So can you talk about the strength you’re seeing outside of HPC, particularly September quarter? I think you’ve mentioned compound semis. What else grew in kind of September? Where are you seeing the strength that’s giving you this growth while you wait for HBM to reaccelerate?

Ramy Langer: So first of all, let’s clear it, HBM is on track and the business is healthy into the first quarter. As we said, the fourth and in the first quarter is HPC, which includes the chiplet business and the HBM. Both are healthy. Where we are seeing, we’re starting to see some pickup in others, as I said, CMOS Image Sensor is picking-up, fan out, and other smaller applications that we have. And definitely, so we see a lot of interest from many other customers, a lot of ones in tools. We are now — we’re shipping machines to about close to 40 machines every — close to 40 customers every quarter. So we have a lot of smaller players that are starting to buy equipment for all kind of applications. And obviously, a few big ones for the agency and other applications that obviously take a larger number of machines. So if we look at the entire picture, this is where our positive outlook is coming from.

Blayne Curtis: Thank you.

Kenny Green: Thank you, Blayne. And that will end the question-and-answer session. Before I hand back over to Rafi, I would like to let you all know that in the coming hours, we will upload the recording of the conference call to the Investor Relations section of Camtek’s website at camtek.com. I would like to thank everybody for joining this call and hand back to Rafi for his closing statement.

Rafi Amit: Okay. I would like to thank you all for your continued interest in our business. I want to especially thank the employees and my management team for their tremendous performance. To our investors, I thank you for your long-term support. I look forward to talking with you again next quarter. Thank you and goodbye.