ASML Q2 2025 Pre Recorded Earnings Report

ASML EPS Results

• Actual EPS: $4.55
• Consensus EPS: $5.94
• Beat/Miss: Missed by -$1.39
• One Year Ago EPS: $4.01

ASML Revenue Results

• Actual Revenue: $8.94 billion
• Expected Revenue: $8.72 billion
• Beat/Miss: Beat by +$217.83 million
• YoY Revenue Growth: +23.20%

ASML Announcement Details

• Quarter: Q2 2025 Pre Recorded
• Date: 7/16/2025
• Time: Before Market Opens
• Conference Call Date: Wednesday, July 16, 2025
• Conference Call Time: 1:00AM ET

ASML (NASDAQ:ASML) develops, produces, markets, sells, and services advanced semiconductor equipment systems for chipmakers. It offers advanced semiconductor equipment systems, including lithography, metrology, and inspection systems. The company also provides extreme ultraviolet lithography systems; and deep ultraviolet lithography systems comprising immersion and dry lithography solutions to manufacture various range of semiconductor nodes and technologies. In addition, it offers metrology and inspection systems, including YieldStar optical metrology systems to assess the quality of patterns on the wafers; and HMI electron beam solutions to locate and analyze individual chip defects. Further, the company provides computational lithography solutions, and lithography systems and control software solutions; and refurbishes and upgrades lithography systems, as well as offers customer support and related services. It operates in Japan, South Korea, Singapore, Taiwan, China, rest of Asia, the Netherlands, rest of Europe, the Middle East, Africa, and the United States. The company was formerly known as ASM Lithography Holding N.V. and changed its name to ASML Holding N.V. in 2001. ASML Holding N.V. was founded in 1984 and is headquartered in Veldhoven, the Netherlands.

ASML Q2 2025 Pre Recorded Earnings Call Transcript

Key Takeaways

• Positive Sentiment: ASML reported Q2 revenue of €7.7 billion and a gross margin of 53.7%, beating guidance thanks to installed base upgrades and lower-than-expected tariffs.
• Neutral Sentiment: For Q3, ASML expects revenue of CHF 7.4–7.9 billion with a gross margin of 50–52% and about €2 billion in installed base revenue.
• Positive Sentiment: The 2025 outlook calls for ~15% revenue growth over 2024, about 30% growth in EUV, ~20% growth in installed base business, and a full-year gross margin near 52%.
• Negative Sentiment: Tariff and macroeconomic uncertainties remain elevated, with both direct and indirect impacts still unpredictable despite mitigation efforts.
• Positive Sentiment: Technology advances continue, with the NXE 3800 upgrade delivering 37% higher throughput and the EXE 5200 High-NA tool achieving a 60% productivity boost.

Presentation

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

Hello, and welcome to ASML's Q2 twenty twenty five video. Roger, can I start with you by asking you to give us a summary of our Q2 twenty twenty five results?

[Roger Dassen, EVP & CFO at ASML NV]

Absolutely. Revenue came in at EUR 7,700,000,000.0. Part of that was also the revenue recognition for one High NA tool in the quarter and included in the $7700000000.02100000000.0 euros of installed base revenue. Gross margin came in at 53.7%. That was above guidance.

[Roger Dassen, EVP & CFO at ASML NV]

The 7.7% was at the high end of the guidance. 53.7% at the above guidance. What are the reasons why it was higher? A couple of reasons. First off, there was installed base revenue in there, upgrades.

[Roger Dassen, EVP & CFO at ASML NV]

As we said before, we're upgrading some of the 3800s that we shipped before, we're upgrading them in the field. And that leads to upgrade revenue, and that has a positive impact on the gross margin. Secondly, we had some one off cost benefits in the quarter. Thirdly, actually the tariffs panned out to be a bit less negative than anticipated. So those are the positives.

[Roger Dassen, EVP & CFO at ASML NV]

On the negative side, we had as I mentioned before, we had one High NA tool that we recognized for revenue in the quarter. That still has a dilutive effect on the gross margin. But all in all, that led to strong gross margin of 53.7%. Order intake, 5,500,000,000.0 for the quarter included in there DKK 2,300,000,000.0 for EUV. Net income for the quarter came in at DKK 2,300,000,000.0.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

And as a follow on question, can you also provide some guidance on the Q3 quarter please?

[Roger Dassen, EVP & CFO at ASML NV]

For Q3, we expect revenue between CHF7.4 billion and CHF7.9 billion. We expect a gross margin between 5052%. 2,000,000,000 approximately installed base revenue is what we're expecting for the quarter.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

Christophe, can turn to you and ask, can you give us a view on how you're seeing the short term market dynamics as they are today?

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

Yes. So I think as we have said in the previous quarters, artificial intelligence is currently the main driver for growth for both logic and memory. If we look at logic, we expect logic to grow compared to 2024 because our customers are adding capacity in the most advanced node. Memory remains very strong because there also our customer are investing in their latest HBM and DDR product. When we look at China, we expect China revenue to be over 25%, which is in line with our backlog.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

Going into 2026, there, the fundamentals of our AI customer remains strong, and we are still preparing for growth. However, as we discussed last time, the level of uncertainty is increasing, mostly due to macroeconomic and geopolitics consideration and that's include of course tariff.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

And with those insights, Roger, can you give us some more color then on how you see 2025 for ASML and our business?

[Roger Dassen, EVP & CFO at ASML NV]

Yes. So if you look at the different components and the different technologies, so if we start with EUV, I think as Christophe already mentioned, obviously, AI is largely driving the latest nodes, both on Logic and on DRAM. And of course, that is a big driver for EUV because EUV is more and more significant, if you like, on those leading nodes. Instance, if at you DRAM, we do see that customers are more and more shifting towards EUV and have more and more layers on the latest node, but also on future nodes for DRAM. So that's of course a positive for for for EUV.

[Roger Dassen, EVP & CFO at ASML NV]

If you then look at look at the total capacity expansion that our customers are looking for when it comes to when it comes to this, you know, you're looking for EUV, you're looking at approximately 30% extra capacity that they are looking for. Of course, as you know, the 3,800 tool that we have has significantly improved throughput in comparison to its predecessor. So we're actually able to accommodate that 30% increase of capacity that customers are asking for. We're actually able to accommodate that with about the same number of tools for EUV low NA as we had it last year. And then if you look at the full picture then for EUV, so with that number of tools with higher throughput and you add to that the number of high NA tools that we're recognizing revenue this year, then you're looking at approximately 30% increase of the EUV business.

[Roger Dassen, EVP & CFO at ASML NV]

Deep UV and application business, about the same, so about the same as we had last year. Installed base business, we talked quite a bit about that previous quarter and also this quarter. So on the one hand, we have the upgrade business, which is strong, particularly I would say in the first half as a result of what I mentioned before, the upgrades that we do on the 3,800 in the field. So that was a big boost, I would say, in the first half. In the second half, you will see a sustained improvement of our service business, tools coming out of warranty, particularly the EUV tools coming out of warranty, and therefore the service on those tools really adding to the service revenue.

[Roger Dassen, EVP & CFO at ASML NV]

If you take that altogether then on the installed base business, you're looking at approximately 20% increase. If you piece it all together for total ASML, we're looking at approximately 15% increase for 2025 in terms of revenue over last year. And we expect a gross margin of approximately 52% for the full year. In terms of revenue, final comment there. You will see, obviously, as we mentioned before, that the second half of the year is bigger in terms of revenue than the first half.

[Roger Dassen, EVP & CFO at ASML NV]

And within that second half year, you will see that revenue, based on our current shipment plan, is very much also skewed towards the last quarter.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

And if we dive a little bit into the gross margins, I think last quarter you said that you would expect the second half of the year to be a little lower than the first half. Can you remind us again on what some of the drivers are for that?

[Roger Dassen, EVP & CFO at ASML NV]

That's right. So if you look at a few data points, so as I mentioned before, margin for the quarter, 53.7%. If you look at the gross margin for the first half, 53.8%. As I mentioned, we expect for the full year approximately 52%. And as I mentioned before, we're looking at 50% to 52% for the third quarter.

[Roger Dassen, EVP & CFO at ASML NV]

Why 52% for the full year? So why is it going down a bit in the second half? A couple of reasons. First off, as I mentioned before, the upgrade business on the 3,800, we expect that to decline a bit, and that is a big driver of gross margin. Secondly, we had some one off cost effects that will we expect not to be there.

[Roger Dassen, EVP & CFO at ASML NV]

And we will have a bit more dilutive effect of the High NA tools that we talked about, and we'll have more High NA tools recognized in revenue in the second half than we have in the in the first half. So that all brings you to approximately 52% for the full for the full year. Of course, little bit, you know, dependent on what's gonna happen on the tariffs.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

I think you spent a bit of time last quarter talking about the effects of tariffs. Can you remind us again, in short, how you see that progressing and So the potential impacts

[Roger Dassen, EVP & CFO at ASML NV]

tariffs, last quarter, talked about direct effect and indirect effect. If you look at the direct effect of tariffs, the things we mentioned at that point in time. First off, obviously, when we sent new systems to our customers in The United States, there could be tariffs on that. So that's the first one. The second is if we send parts for manufacturing in The United States.

[Roger Dassen, EVP & CFO at ASML NV]

So that's the second component. The third component is if we send parts for service in the field operations in The United States. And the fourth one, to the extent that other countries would be putting tariffs on parts or modules that get out of The United States into, for instance, the EU. That could be a fourth category. We're looking at all of those.

[Roger Dassen, EVP & CFO at ASML NV]

We're trying to mitigate the effect for the entire ecosystem on all four of those accounts. Last time we spoke about free trade zones that we're looking into to mitigate some of the dynamic. And we are working with the supply chain and with our customers to at least make sure that the impact for ASML is as limited as possible. And then, obviously, there is the indirect impact, you know, to what extent could tariffs what what kind of impact could that have on the overall macroeconomic situation? Quite frankly, Jim, it's it's all very uncertain.

[Roger Dassen, EVP & CFO at ASML NV]

You know, both the direct and the indirect impact are still very uncertain. So we just have to navigate that as best as we can.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

Christophe, if I can turn to you and maybe if you can give us an update on where we are on our road map from a technology point of view and some of the highlights perhaps from the quarter?

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

Yes. So let me start with EUV, of course. I think we continue to make very good progress on both Low NA and High NA. And this really allow us to build a portfolio that will address our customer needs when it comes to technology roadmap, but also optimization of their cost of technology. On the NX 3,800, we now ship all our system in final specification, two twenty wafer per hour, which is 37% more than what we had on the NXE 3,600, so a major boost of productivity.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

We have done also a lot of upgrades to two twenty wafer per ounce on the installed base. And we are in track basically to complete all those upgrades by the end of the year. Now I think we explained that already a few times. This tool, thanks to the higher productivity, really allow customer to shift more multi patterning layer to single expose. So this basically allow a customer to reduce complexity, reduce yield loss, improve cycle time.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

And we have seen that happening quite a bit in the last few months with DRAM, where for the last nodes, we really see a shift basically towards more EUV layer. And this is, of course, in our case, a nice increase in litho intensity. INA, we are continuing to mature the platform with our EXE 5,000 system, which is at several customers. So this is basically the work we do with our R and D customer to prepare the technology for high volume manufacturing. And for that, we have shipped our first EXE5200, which is the tool that is going to be used in high volume manufacturing.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

The tool is under installed. And as a reminder, this will provide our customer with 60% productivity improvement compared to the 5,000. So we're talking about 175 wafer per hour. So now we are starting also to prepare insertion in high volume manufacturing. All of that, of course, as I mentioned on low NA, will help us over time as low NA EUV gets into multi patterning, will allow us basically to also shift against some more layer to single exposed INA to continue this trend.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

Short word about Deep UV as well. As our customers move to more advanced node, they also need better Deep UV machine. That's true for Immersion. That's true for KRF. And also our latest product, the NXT 2,100, our latest immersion tool, the NXT eight seventy, our latest KREF tool are seeing good adoption and good performance our customer to response basically to this need.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

So overall, I would say great progress on technology. I think we are validating that better cost of technology allow us to translate more multi patterning layer into single exposed. And I think we have done good progress on our litho intensity.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

If I switch again back to you, Roger, and talk a little bit about our cash. So we ended last year with quite a good position there. Can you expand a little bit then on what our plans are in terms of managing the cash towards shareholders?

[Roger Dassen, EVP & CFO at ASML NV]

Well, so capital allocation, some comments there. So we did quite some share buyback this year. In the last quarter, we did for 1,400,000,000.0 worth of shares we purchased back from market. In terms of dividends, in Q2, we paid the final dividend of for last fiscal year at an amount of €1.84 and that got the total dividend for 2024 to 6.4. For Q3, we expect to pay our first interim dividend at an amount of EUR 1.6, and we expect that to be payable by August 6.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

Then to finish up, Christoph, can you give us an overview again of where you see maybe more longer term the market and what that means for ASML and our business in the long term?

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

Yes. I think long term, the semiconductor market remains very strong. And I think a lot of people say that AI is really a great opportunity. And we have seen again the fundamentals around AI to be very, very strong. Now of course, short term, Roger talked about it, some uncertainty.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

There's a lot happening, discussion around tariff, export control, macroeconomic uncertainties. All of that is also part of the things we have to manage. As we discussed in the Capital Market Day, the shift of our customer towards more advanced logic, advanced memory will also drive the need for most advanced lithography. And this will basically be a good thing for litho intensity. The progress we make on our EUV roadmap with low NA, INA, providing the right cost of technology will continue to allow us basically to convert more multi patterning layer to single exposed.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

And we will see that happening in the course of the next few years. So in term of long term forecast, we remain consistent with what we have said in our Capital Market Day. We see an opportunity for 2030 of a total revenue between EUR44 billion and EUR60 billion and a gross margin between 5660%.

[Jim Kavanagh, VP - IR Worldwide at ASML NV]

Great. With that, thank you, Christophe. Thank you, Roger.

[Christophe Fouquet, President, CEO & Member of Management Board at ASML NV]

Pleasure. Thank you.

Participants

Executives

• Jim Kavanagh, VP - IR Worldwide
• Roger Dassen, EVP & CFO
• Christophe Fouquet, President, CEO & Member of Management Board