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) (NASDAQ: ASML) is a Dutch company that develops, manufactures and services advanced photolithography systems used to produce semiconductor chips. Headquartered in Veldhoven, Netherlands, ASML supplies capital equipment and associated software and services that enable semiconductor manufacturers to pattern the intricate circuits on silicon wafers. The company is widely recognized for its leadership in extreme ultraviolet (EUV) lithography as well as its deep ultraviolet (DUV) platforms used across multiple process nodes.

ASML's product portfolio includes EUV and DUV lithography machines, light sources, imaging optics and control software, together with spare parts, upgrades and field services. Its systems are integrated into customers' fabs and supported through installation, maintenance, refurbishment and application engineering to optimize throughput and yield. The company collaborates closely with suppliers and technology partners to develop the optics, illumination and source technologies required for increasingly fine patterning.

Founded in 1984 as a technology joint venture out of the Netherlands, ASML has grown into a global supplier serving major semiconductor manufacturers and foundries across Asia, North America and Europe. The company has expanded capabilities through strategic partnerships and acquisitions to secure critical subsystems, including light-source and optics technologies, while maintaining a strong emphasis on long-term research and development to keep pace with Moore's Law-driven demand for denser, more powerful chips.

ASML is a publicly traded company listed on European and U.S. exchanges and is led by an executive team experienced in semiconductor equipment and systems businesses. Because its tools are central to advanced node production, ASML occupies a strategic position in the semiconductor supply chain, supplying the specialized equipment many leading chipmakers rely on to manufacture high-performance processors and memory devices.

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 of Investor Relations at ASML]

Hello, welcome to ASML's Q2 2025 video. Roger, can I start with you by asking you to give us a summary of our Q2 2025 results?

[Roger Dassen, EVP and CFO at ASML]

Absolutely. Revenue came in at EUR 7.7 billion. A part of that was also the revenue recognition for one High-NA tool in the quarter and included in the 7.7, EUR 2.1 billion of installed base revenue. Gross margin came in at 53.7%. That was above guidance. 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. As we said before, we're upgrading some of the 3800s that we shipped before.

[Roger Dassen, EVP and CFO at ASML]

We're upgrading them in the field, and that leads to, you know, 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, you know, panned out to be a bit less negative than we anticipated. Those are the positives. On the negative side, 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. All in all, that led to, you know, strong gross margin of 53.7%.

[Jim Kavanagh, VP of Investor Relations at ASML]

Yeah.

[Roger Dassen, EVP and CFO at ASML]

Order intake, EUR 5.5 billion for the quarter, included in there EUR 2.3 billion for EUV. Net income for the quarter came in at EUR 2.3 billion.

[Jim Kavanagh, VP of Investor Relations at ASML]

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

[Roger Dassen, EVP and CFO at ASML]

For Q3, we expect revenue, between EUR 7.4 billion and EUR 7.9 billion. We expect a gross margin, between 50% and 52%. EUR 2 billion approximately installed base revenue is what we're expecting for the year, for the quarter.

[Jim Kavanagh, VP of Investor Relations at ASML]

Christophe, if I 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 and CEO at ASML]

Yes. 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 customer are adding capacity in the most advanced node. Memory remains very strong because they 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. 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 include, of course, tariff.

[Jim Kavanagh, VP of Investor Relations at ASML]

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 and CFO at ASML]

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

[Roger Dassen, EVP and CFO at ASML]

That's of course a positive for EUV. You then look at the total capacity expansion that our customers are looking for, 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 3800 tool that we have has significantly improved throughput in comparison to its predecessor. We're actually able to accommodate that 30% increase of capacity that customers are asking for. We're actually able to accommodate that with, you know, about the same number of tools for EUV Low-NA as we had at last year.

[Roger Dassen, EVP and CFO at ASML]

If you look at the full picture then for EUV, 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 a 30% increase of the EUV business. DUV and application business, about the same as we had last year. Install base business, we talked quite a bit about that previous quarter and also this quarter.

[Roger Dassen, EVP and CFO at ASML]

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 3800 in the field. 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, you know, tools coming out of warranty, particularly the EUV tools coming out of warranty, and therefore, the service on those tools really, you know, adding to the service revenue. If you take that all together on the installed base business, you're looking at approximately 20% increase.

[Roger Dassen, EVP and CFO at ASML]

If you piece it all together, you know, for total ASML, we're looking at approximately 15% increase for 2025 in terms of revenue over last year. 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, 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 of Investor Relations at ASML]

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 and CFO at ASML]

That's right. If you look at a few data points, as I mentioned before, gross 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%. As I mentioned before, we're looking at 50%-52% for the third quarter. Why 52% for the full year? Why is it going down a bit in the second half? A couple of reasons.

[Roger Dassen, EVP and CFO at ASML]

As I mentioned before, the upgrade business on the NXE:3800, we expect that to decline a bit, and that is a big driver of gross margin. We had some one-off cost effects that will, you know, we expect not to be there. We will have a bit more dilutive effect of the High-NA tools that we talked about and, you know, we'll have more High-NA tools recognized in revenue in the second half than we have in the first half. That all brings you to approximately 52% for the full year. Of course, a little bit, you know, dependent on what's gonna happen on the tariffs.

[Jim Kavanagh, VP of Investor Relations at ASML]

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?

[Roger Dassen, EVP and CFO at ASML]

Yeah

[Jim Kavanagh, VP of Investor Relations at ASML]

The potential impacts there?

[Roger Dassen, EVP and CFO at ASML]

Tariffs, last quarter we 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, you know, when we send 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, so that's the second component. The third component is if we send, you know, parts for service in the field operations in the United States.

[Roger Dassen, EVP and CFO at ASML]

The fourth one, you know, to the extent that other countries would be putting tariffs on, you know, parts or modules that get out of the United States into, for instance, the EU, that could be a fourth category. You know, we're looking at all of those. We're trying to mitigate, you know, the effect for the entire ecosystem, you know, on all four of those accounts. Last time we spoke, we spoke about free trade zones that we're looking into to mitigate some of the dynamic. 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.

[Roger Dassen, EVP and CFO at ASML]

Obviously there is the indirect impact, you know, to what extent could tariffs, what kind of impact could it have on the overall macroeconomic situation? Quite frankly, Jim, it's all very uncertain. 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 of Investor Relations at ASML]

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

[Christophe Fouquet, President and CEO at ASML]

Yeah. Let me start with EUV, of course. I think, we continue to make very good progress on both Low-NA and High-NA. 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 NXE:3800, we now ship all our system in final specification, 220 wafer per hours, which is 37% more than what we had on the NXE:3600, so a major boost of productivity. We have done also a lot of upgrades to 220 wafer per hours on the install base, and we are in track basically to complete all those upgrade by the end of the year.

[Christophe Fouquet, President and CEO at ASML]

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 exposure. This basically allow a customer to reduce complexity, reduce yield loss, improve cycle time. 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. This is of course in our case a nice increase in litho intensity. High-NA, we are continuing to mature the platform with our EXE 5000 system, which is at several customers, so this is basically the work we do with our R&D customer to prepare the technology for high-volume manufacturing.

[Christophe Fouquet, President and CEO at ASML]

For that, we have shipped our first EXE 5200, which is the tool that is going to be used in high-volume manufacturing. The tool is under install. As a reminder, this will provide our customer with 60% productivity improvement compared to the 5000, so we're talking about 175 wafer per hour. Now, you know, 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 again some more layer to single expose High-NA to continue this trend. Short word about Deep UV as well. As our customer move to more advanced node, they also need better DUV machine.

[Christophe Fouquet, President and CEO at ASML]

That's true for immersion, that's true for KrF, and ArF, also our latest product, the NXT 2100, our latest immersion tool, the NXT870, our latest KrF tool, are seeing good adoption and good performance our customer to response basically to this need. 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 exposure, I think we have done good progress on our litho intensity.

[Jim Kavanagh, VP of Investor Relations at ASML]

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 and CFO at ASML]

Capital allocation, some comments there. We did quite some share buyback this year. In the last quarter, we did EUR 1.4 billion worth of shares we purchased back from the market. In terms of dividends, in Q2, we paid the final dividends of, you know, for last fiscal year at an amount of EUR 1.84, and that got the total dividend for 2024 to EUR 6.40. For Q3, we expect to, you know, pay our first interim dividend at an amount of EUR 1.60. We expect that to be payable by August 6th.

[Jim Kavanagh, VP of Investor Relations at ASML]

To finish up, Christophe, 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 and CEO at ASML]

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. 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 Markets Day, the shift of our customer towards more advanced logic, advanced memory, will also drive the need for more advanced lithography, and this will basically be a good thing for litho intensity.

[Christophe Fouquet, President and CEO at ASML]

The progress we make on our EUV roadmap with Low-NA, High-NA, providing the right cost of technology will continue to allow us basically to convert more multi-patterning layer to single exposure, and we will see that happening in the course of the next few years. In terms of long-term forecast, we remain consistent with what we have said in our Capital Markets Day. We see an opportunity for 2030 of a total revenue between EUR 44 billion and EUR 60 billion and a gross margin between 56% and 60%.

[Jim Kavanagh, VP of Investor Relations at ASML]

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

[Roger Dassen, EVP and CFO at ASML]

Pleasure.

[Christophe Fouquet, President and CEO at ASML]

Thank you.

Participants

Executives

• Christophe Fouquet, President and CEO
• Jim Kavanagh, VP of Investor Relations
• Roger Dassen, EVP and CFO