ASML Holding NV Q1 FY2025 earnings call

• Christophe Fouquet and Roger Dassen provided an overview of Q1 results. Total net sales were in line with guidance. Net system sales were driven by Logic and Memory. Installed Base Management sales were EUR2.0 billion. - Gross margin was above guidance at 54% due to customer productivity milestones on EUV systems, favorable EUV product mix, and enriched configurations. - Operating expenses were in line with guidance. Effective tax rate for Q1 was 16.7%, expected 17% annualized for 2025. - Technology updates: EUV Low NA NXE:3800E upgraded to 220 wafers per hour and now ships at full specification. High NA NXE:5000 shipped 5th system, with NXE:5200 shipping Q2. AI demand driving growth, but tariff uncertainty present.

In the first quarter of 2025, total net sales were EUR7.7 billion. Net system sales were EUR5.7 billion, with EUR3.2 billion from EUV sales (41.6% of net system sales) and EUR2.5 billion from non-EUV sales (32.5% of net system sales). Net system sales were driven by Logic at 58% and Memory at 42%. Installed Base Management sales for the quarter were EUR2.0 billion. Gross margin was 54%. Net income in Q1 was EUR2.4 billion, resulting in an EPS of EUR6. Cash, cash equivalents, and short-term investments ended the first quarter at EUR9.1 billion. Q1 net system bookings came in at EUR3.9 billion, composed of EUR1.2 billion of EUV and EUR2.8 billion of non-EUV. Bookings were weighted 60% towards Logic and 40% towards Memory.

• Expect 2025 revenue between EUR30 billion and EUR35 billion. - Q2 total net sales expected to be between EUR7.2 billion and EUR7.7 billion. - Q2 Installed Base Management sales expected to be around EUR2 billion. - Q2 gross margin expected to be between 50% and 53%. - Full-year gross margin expected to be between 51% and 53% with tariff uncertainty. - 2026 expected to be a growth year based on business conversations and market demand.

• Uncertainty around tariffs, which may have direct impacts on system sales, parts import, and indirect impacts on end market demand. The end state of tariff discussions is unknown, leading to ongoing uncertainty for customers, suppliers, and ASML.

Q: On High NA, considering cost of ownership vs multi-patterning, any flexibility in pricing to facilitate adoption?

A: Christophe Fouquet stated that maturity of the tool is key; lowering price at low maturity would cause issues for customers as the tool wouldn't be reliable.

Q: Comment on single expose EUV adoption timing, especially for DRAM.

A: Christophe Fouquet said adoption is ongoing, with Low NA EUV maturity and productivity gains providing opportunities, already happening with customers.

Q: Bookings run rate for growth and 2026 being a growth year?

A: Roger Dassen said 2026 is expected to be a growth year based on technology, customer conversations, and market demand, but wouldn't quantify booking run rate.

Q: China sales percentage and backlog composition?

A: Roger Dassen said China is expected to be a little over 25% of sales, with backlog composition around the same 20%-25% range for China.

Q: Tariff customer conversations and 3600 tool salability?

A: Christophe Fouquet said tariff discussions haven't changed business planning with customers; Roger Dassen said no concerns on selling remaining 3600 tools.

Q: EUV gross margins and China IBM revenues?

A: Roger Dassen confirmed ASP of Low NA EUV around EUR227 million, but wouldn't disclose product-specific gross margins; on China IBM, it's normal business dynamics with a couple of hundred million shift.

Q: China alternative EUV lithography and AI demand impact?

A: Christophe Fouquet said China's progress on EUV is research-level, not product-ready; Roger Dassen said AI inferencing becoming a larger component of demand.

Q: Gross margin full-year expectations and geographic diversity impact?

A: Roger Dassen said tariff impact on full-year gross margin is uncertain due to dynamic tariff situation; geographic diversity may drive WFE spending but uncertain due to tariffs.

Q: NXE platform milestones and High NA phases?

A: Christophe Fouquet explained phases of High NA adoption: R&D, early production, high volume manufacturing, with 5200 shipping Q2.

Q: China domestic chipmakers and DEEP UV tools?

A: Roger Dassen said China sales to domestic chipmakers have diversified, and 1950/1940 tools can make 28-nanometer using multi-patterning.

Q: Order backlog pricing and High NA rev rec?

A: Roger Dassen said tariff burden allocation unclear, but ASML works to minimize impact; 5200 will contribute to rev rec in 2025.

Q: AI visibility beyond 2026 and EUV single expose progression?

A: Christophe Fouquet said AI visibility beyond 2026 uncertain, but EUV single expose adoption is gradual, happening now with Low NA.

Q: Order volatility and EUV mid-range coverage?

A: Roger Dassen said order volatility due to governance steps, not tariff impact, and EUV mid-range covered.

Q: Tariffs and U.S. semiconductor manufacturing inconsistency?

A: Roger Dassen said industry is seeing tariff exemptions, but U.S. is reviewing to reconcile onshoring and tariffs.

Q: High NA phase three orders timing?

A: Christophe Fouquet said phase three orders not expected soon, still in phase one.

Q: 2025-2026 order book and High NA phase three?

A: Roger Dassen said order book has good bookings for 2026, phase three orders not expected by end of 2025.