ASML Holding NV Q2 FY2025 earnings call

• Second quarter accomplishments: Total net sales at upper end of guidance due to High NA system revenue recognition and upgrade business; net system sales driven by Logic (69%) and Memory (31%); installed base management sales above guidance; gross margin above guidance; R&D and SG&A expenses as guided; effective tax rate 18.1%; cash position strong; dividend paid; share buyback ongoing.
• Market commentary: AI is key driver for Logic and Memory; EUV capacity increase expected as customers add leading-edge capacity; China revenue expected to account for over 25% of total revenue; installed base management revenue expected to grow over 20% y-o-y; 2025 revenue guided to increase ~15% with gross margin ~52%; 2026 outlook uncertain due to macroeconomic and geopolitical uncertainties.
• Tariffs: Direct impacts from tariffs on system sales, material import, part import/export; indirect impacts on GDP and market demand; working with customers and suppliers to limit direct tariff impact.
• Technology progress: NXE:3800E field upgrades completed to 220 wafers per hour; EXE:5200B shipped for High NA technology insertion; Deep UV technology adoption ongoing; long-term semiconductor market expected strong with AI growth.

In the second quarter of 2025, total net sales were EUR 7.7 billion, at the upper end of guidance. Net system sales were EUR 5.6 billion, with EUR 2.7 billion from EUV (35.5% of net system sales) and EUR 2.9 billion from non-EUV (38.2% of net system sales). Installed base management sales for the quarter were EUR 2.1 billion, above guidance. Gross margin was 53.7%. Net income in Q2 was EUR 2.3 billion, representing 29.8% of total net sales and EPS of EUR 5.90. Q2 net system bookings were EUR 5.5 billion, with EUR 2.3 billion of EUV and EUR 3.2 billion of non-EUV, weighted 84% towards Logic and 16% towards Memory. Backlog ended Q2 at around EUR 33 billion, with a EUR 1.4 billion adjustment related to China.

• Q3 2025: Total net sales expected between EUR 7.4 billion and EUR 7.9 billion; installed base management sales around EUR 2 billion; gross margin between 50% and 52%; R&D expenses around EUR 1.2 billion; SG&A around EUR 310 million.
• 2025 full-year: Revenue guided to increase ~15% with gross margin ~52%; demand skewed towards second half.
• 2026: Uncertainty due to macro and geopolitical developments; cannot confirm growth at this stage, will monitor developments.

• Macro and geopolitical uncertainties affecting customer capital expenditure timing.
• Tariffs with direct (system sales, material import, part import/export) and indirect (impact on GDP and market demand) impacts on business results.

Q: Mix of EUV and Deep UV, China impact A: EUV growth offset by upgrade business related to bringing NXE:3800 to 220 wafers per hour; China revenue expected over 25% of total, with Deep UV business shifting from non-China to China Q: High NA adoption impact A: High NA qualification ongoing, milestone reached with EXE:5200B shipment; customers qualifying technology for high-volume manufacturing insertion in 2026/27 Q: 2026 customer CapEx challenges A: Uncertainty from tariffs and macro factors causing customers to be cautious about capital expenditure timing