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01/09 22:51
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call shows strong financial performance with net sales at the upper end of guidance and gross margin above expectations. Despite a shift in EUV growth and lower unit shipments, the upgrade business and High NA tools offer value. The dividend and share buyback plans are positive, while AI drives demand. The Q&A highlights cautious customer behavior and tariff uncertainties, but overall sentiment remains positive, supported by strong financial metrics and optimistic guidance.
Total Net Sales EUR 7.7 billion, at the upper end of guidance, primarily due to revenue recognition of one High NA system and additional upgrade business.
Net System Sales EUR 5.6 billion, including EUR 2.7 billion from EUV sales and EUR 2.9 billion from non-EUV sales. Driven by Logic at 69% and Memory at 31%.
Installed Base Management Sales EUR 2.1 billion, above guidance, driven by strong upgrade business and increasing service revenue.
Gross Margin 53.7%, above guidance, driven by increased upgrade business, one-off items resulting in lower costs, and lower-than-expected impact from tariffs, partially offset by the dilutive effect of High NA system revenue recognition.
R&D Expenses EUR 1.2 billion, as guided.
SG&A Expenses EUR 299 million, as guided.
Effective Tax Rate 18.1% for Q2, with an annualized effective tax rate expectation of around 17% for 2025.
Net Income EUR 2.3 billion, representing 29.8% of total net sales, resulting in earnings per share of EUR 5.90.
Cash, Cash Equivalents, and Short-term Investments EUR 7.2 billion at the end of Q2.
Net System Bookings EUR 5.5 billion, with EUR 2.3 billion from EUV and EUR 3.2 billion from non-EUV. Weighted towards Logic at 84% and Memory at 16%.
Backlog EUR 33 billion at the end of Q2, reflecting an adjustment of EUR 1.4 billion related to customer responses.
Dividend Final dividend of EUR 1.84 per ordinary share for 2024, resulting in a total dividend of EUR 6.40 per ordinary share for 2024. First quarterly interim dividend for 2025 is EUR 1.60 per ordinary share.
Share Buyback EUR 1.4 billion in Q2, bringing the total share buyback for the 2022-2025 program to EUR 5.8 billion.
EUV technology: Customers are increasing the use of EUV technology, particularly for AI-driven demand. Advanced customers are expected to add 30% more EUV capacity in 2025 compared to 2024. The NXE:3800E system is now shipping at full specification, enabling higher productivity and cost efficiency.
High NA systems: The first EXE:5200B system was shipped and installed, supporting High NA technology for high-volume manufacturing. This system offers a 60% productivity improvement compared to its predecessor.
Deep UV systems: Advanced nodes are driving the adoption of NXT:2100, NXT:2150, and NXT:870 systems to meet increasing lithography requirements.
AI-driven growth: Artificial intelligence is driving growth in both Logic and Memory markets. Logic system revenue is expected to increase in 2025, while Memory system revenue remains strong due to transitions to next-generation HBM and DDR5 products.
China market: Revenue from China is expected to account for over 25% of total revenue in 2025, aligning with its proportion of the backlog.
Financial performance: Q2 2025 net sales reached EUR 7.7 billion, with a gross margin of 53.7%. Installed Base Management sales exceeded guidance at EUR 2.1 billion. Full-year 2025 revenue is expected to grow by 15% with a gross margin of 52%.
Installed Base Management: Upgrade business has been strong, particularly for NXE:3800E systems. Installed Base Management revenue is expected to grow by over 20% in 2025.
Long-term outlook: ASML expects the semiconductor market to remain strong, driven by AI. The company projects a 2030 revenue opportunity between EUR 44 billion and EUR 60 billion, with gross margins between 56% and 60%.
Geopolitical and macroeconomic uncertainties: The company is monitoring uncertainties that could impact customer capital expenditures and overall market demand.
Macroeconomic and Geopolitical Uncertainties: The company is facing increasing uncertainties due to macroeconomic and geopolitical developments, which could impact customer demand and the timing of capital expenditures.
Tariffs and Trade Barriers: Direct and indirect impacts of tariffs on system sales, material imports, and exports could affect financial performance. The indirect effects on GDP and market demand are complex and difficult to quantify.
Customer-Specific Challenges: Some customers are navigating specific challenges that might delay their capital expenditure plans, potentially impacting ASML's revenue growth.
Gross Margin Pressure: The gross margin in the second half of 2025 is expected to be lower due to the margin-dilutive effect of high NA system revenue recognition, lower upgrade revenue, and the absence of one-off benefits seen in the first half.
China Revenue Moderation: Revenue from China is expected to moderate to align more closely with its proportion of the backlog, which could impact overall revenue growth.
Revenue Growth: ASML expects full-year 2025 revenue to increase by around 15% compared to 2024, with demand skewed towards the second half of the year. For 2026, the company anticipates continued strong demand driven by AI for both Logic and Memory, though macroeconomic and geopolitical uncertainties may impact growth timing.
Gross Margin: The company projects a gross margin of around 52% for the full year 2025, with Q3 gross margin expected to be between 50% and 52%. The second half of 2025 is expected to see a lower gross margin due to the dilutive effect of High NA system revenue recognition and reduced upgrade revenue.
EUV Revenue Growth: EUV revenue is expected to grow by approximately 30% in 2025 compared to 2024, driven by increased customer capacity for AI demand and higher productivity of the NXE:3800E systems. Advanced customers are expected to add about 30% more EUV capacity in 2025.
Installed Base Management Revenue: Installed base management revenue is projected to grow by more than 20% in 2025, supported by strong upgrade business and increasing service revenue from a growing installed base, particularly in EUV services.
China Revenue Contribution: Revenue from China is expected to account for over 25% of total revenue in 2025, moderating to align more closely with its proportion of the backlog.
Q3 2025 Financial Expectations: Total net sales for Q3 2025 are expected to be between EUR 7.4 billion and EUR 7.9 billion, with installed base management sales around EUR 2 billion. R&D expenses are projected at EUR 1.2 billion, and SG&A expenses at EUR 310 million.
Long-Term Revenue Opportunity: ASML reaffirms its 2030 revenue opportunity of EUR 44 billion to EUR 60 billion, with gross margins between 56% and 60%, driven by advanced logic and DRAM demand and increased adoption of EUV and High NA technologies.
Final Dividend for 2024: EUR 1.84 per ordinary share
Total Dividend for 2024: EUR 6.40 per ordinary share
First Quarterly Interim Dividend for 2025: EUR 1.60 per ordinary share, payable on August 6, 2025
Share Buyback in Q2 2025: EUR 1.4 billion
Total Share Buyback (2022-2025 Program): EUR 5.8 billion at the end of Q2 2025
The earnings call and Q&A highlight strong revenue growth expectations driven by AI demand, a significant increase in EUV capacity, and optimistic long-term revenue goals. Although there are challenges, such as margin dilution from High-NA tools and declining China revenue, the overall guidance is optimistic with a positive outlook for both DRAM and logic markets. Additionally, the focus on advanced packaging and AI developments provides a promising future. Despite some uncertainty in management responses, the positive factors outweigh the negatives, suggesting a positive stock price movement.
The earnings call reveals strong financial performance with a 10% YoY revenue increase and a 1.2% gross margin improvement. The positive sentiment is bolstered by a 10% dividend increase and a new €6 billion share buyback program. The partnership with Mistral AI and optimistic guidance for Q4 and 2025 further enhance the outlook. Despite a potential decline in Chinese demand, the overall market trends and strategic partnerships suggest a positive stock price movement over the next two weeks.
The earnings call shows strong financial performance with net sales at the upper end of guidance and gross margin above expectations. Despite a shift in EUV growth and lower unit shipments, the upgrade business and High NA tools offer value. The dividend and share buyback plans are positive, while AI drives demand. The Q&A highlights cautious customer behavior and tariff uncertainties, but overall sentiment remains positive, supported by strong financial metrics and optimistic guidance.
The earnings call reveals mixed signals: while financial performance shows strong gross margins and a significant share repurchase program, uncertainties in the macroeconomic environment and supply chain challenges pose risks. The Q&A session indicates confidence in future growth, but management's lack of clarity on key metrics and the impact of tariffs adds to uncertainty. Despite a positive dividend announcement, the overall sentiment remains neutral, reflecting a balance between positive financial metrics and external challenges.
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