ASML Holding(ASML) - 2025 Q3 - Quarterly Results

Executive Summary ASML reports strong Q3 2025 results, provides Q4 and full-year guidance, and outlines long-term strategic initiatives Q3 2025 Performance Highlights ASML reported Q3 2025 net sales and income aligning with guidance, alongside significant net bookings including EUV systems Q3 2025 Financial Highlights | Metric | Value | | :--- | :--- | | Total net sales | €7.5 billion | | Gross margin | 51.6% | | Net income | €2.1 billion | | Net bookings | €5.4 billion | | EUV bookings | €3.6 billion | CEO Commentary and Strategic Initiatives CEO highlighted lithography intensity, EUV adoption, High NA EUV, Advanced Packaging, and AI integration - Lithography intensity developing positively with increasing EUV adoption and High NA EUV progress[5] - Shipped first Advanced Packaging product, TWINSCAN XT:260, offering up to 4x productivity[5][28] - Partnership with Mistral AI to embed AI across the holistic portfolio, enhancing system performance, productivity, and customer yield[5][24][25] - Continued positive momentum from AI investments, extending to more customers in leading-edge Logic and advanced DRAM[7][22] Outlook and Guidance Summary ASML forecasts strong Q4 2025 sales and full-year growth, expecting 2026 sales not to fall below 2025 despite DUV shifts Q4 2025 Guidance | Metric | Range | | :--- | :--- | | Total net sales | €9.2 billion - €9.8 billion | | Gross margin | 51% - 53% | | R&D costs | around €1.2 billion | | SG&A costs | around €320 million | Full-Year 2025 Guidance | Metric | Value | | :--- | :--- | | Total net sales growth (YoY) | around 15% | | Gross margin | around 52% | - ASML does not expect 2026 total net sales to be below 2025, with more details to be provided in January[6][8][23] - Anticipates significant decline in China customer demand and total net sales in 2026 compared to 2024/2025, impacting DUV business, but offset by increased EUV demand[7][22][23] Investor Key Messages ASML's investor messages emphasize semiconductor industry strength, lithography's central role, and ambitious 2030 financial targets Industry and Technology Vision The semiconductor industry is projected to exceed $1 trillion by 2030, driven by AI, with lithography remaining central to innovation - Semiconductor industry expected to surpass $1 trillion in revenue by 2030, driven by AI adoption[35] - Lithography will remain at the heart of customer innovation, with an anticipated increase in critical lithography exposures for advanced logic and memory[35] - ASML's portfolio is positioned to address customer needs by extending holistic lithography to 3D integration, improving DUV/EUV performance, and scaling EUV technology[35] Long-Term Financial Targets ASML targets significant annual revenue and gross margin by 2030, based on various market and lithography intensity scenarios 2030 Financial Opportunity Targets | Metric | Range | | :--- | :--- | | Annual Revenue | €44 billion - €60 billion | | Gross Margin | 56% - 60% | Business Summary ASML's Q3 2025 business summary details financial performance, system sales, technology developments, and capital allocation strategies Q3 2025 Financial Summary ASML's Q3 2025 results included total net sales, net system sales, installed base management sales, and strong gross margin Q3 2025 Detailed Financial Summary | Metric | Value | | :--- | :--- | | Total net sales | €7.5 billion | | Net system sales | €5.6 billion | | Installed Base Management sales | €2.0 billion | | Gross Margin | 51.6% | | Operating margin | 32.8% | | Net income as % of total net sales | 28.3% | | Earnings per share (basic) | €5.49 | | Net bookings | €5.4 billion | | of which EUV bookings | €3.6 billion | System Sales and Bookings Analysis Q3 2025 net system sales showed Logic and EUV dominance, with regional shifts compared to the previous quarter Net System Sales Breakdown Q3 2025 Net System Sales Breakdown | Category | Sub-category | % of Sales | | :--- | :--- | :--- | | End-Use | Logic | 69% | | | Memory | 31% | | Technology | EUV | 48% | | | ArFi | 43% | | | ArF Dry | 2% | | | KrF | 4% | | | I-line | 1% | | | Metrology & Inspection | 2% | | Region (ship to location) | Taiwan | 35% | | | China | 27% | | | South Korea | 19% | | | USA | 10% | | | Japan | 5% | | | Rest of Asia | 2% | | | EMEA | 2% | - Compared to Q2 2025, China's share of net system sales by region decreased from 42% to 27%, while Taiwan's increased from 30% to 35%[44] Net Systems Bookings Quarterly Net System Bookings by End-use | End-use | Q3 2025 | Q2 2025 | | :--- | :--- | :--- | | Logic | 84% | 53% | | Memory | 16% | 47% | - Total net system bookings decreased slightly from €5,541 million in Q2 2025 to €5,399 million in Q3 2025[49] Technology and Product Developments ASML continues strong technology roadmap execution, with High NA EUV progress, EXE:5200 installation, and new Advanced Packaging products - Over 300,000 wafers run on High NA EUV at customer sites, with maturity ahead of Low NA at a comparable stage[28] - SK hynix began installation of the first EXE:5200 in their production fab, positioning it as a key enabler for future DRAM[28] - Shipped the first Advanced Packaging product, TWINSCAN XT:260 i-line scanner, providing up to 4x productivity for 3D integration[5][28][29] - Collaboration with Mistral AI to embed AI across the holistic portfolio, improving system performance, precision, speed, and accelerating product development. ASML was the lead investor in Mistral AI's Series C funding, taking an 11% share and a seat on their Strategic Committee[5][24][25][26] Capital Allocation and Shareholder Returns ASML declared an interim dividend, repurchased shares, and plans a new buyback program, not expecting to complete the current one Dividend Information | Item | Value | Payment Date | | :--- | :--- | :--- | | Interim dividend (Q3 2025) | €1.60 per share | Paid | | Interim dividend (Q4 2025) | €1.60 per share | November 6, 2025 | Share Buyback Program Update | Metric | Value | | :--- | :--- | | Shares purchased in Q3 2025 | ~218 thousand shares | | Amount spent in Q3 2025 | ~€148 million | | Total shares acquired (as of Sep 28, 2025) | 9.0 million shares | | Total consideration (as of Sep 28, 2025) | €5.9 billion | | Current program target | €12 billion (2022-2025) | - ASML does not expect to complete the €12 billion share buyback program in full by end of 2025 and intends to announce a new program in January 2026[11][55] Outlook ASML's outlook includes Q4 2025 guidance, full-year projections, and a 2026 forecast, emphasizing AI and 3D integration opportunities Q4 2025 Guidance ASML forecasts Q4 2025 net sales between €9.2 billion and €9.8 billion, with a gross margin of 51% to 53% Q4 2025 Financial Guidance | Metric | Range | | :--- | :--- | | Total net sales | €9.2 billion - €9.8 billion | | Installed Base Management sales | around €2.1 billion | | Gross margin | 51% - 53% | | R&D costs | around €1.2 billion | | SG&A costs | around €320 million | Full-Year 2025 Guidance ASML anticipates full-year 2025 net sales growth of around 15%, a gross margin of approximately 52%, and an effective tax rate Full-Year 2025 Financial Guidance | Metric | Value | | :--- | :--- | | Total net sales growth (YoY) | around 15% | | Gross margin | around 52% | | Annualized effective tax rate | around 17% | 2026 and Beyond Outlook ASML expects 2026 sales not below 2025, with EUV offsetting DUV decline, and AI driving long-term technology roadmap opportunities - 2026 total net sales are not expected to be below 2025, with further details in January[6][8][23] - Anticipated significant decline in China customer demand and DUV business in 2026, with product mix favoring EUV[7][22][23] - AI is expected to drive more advanced applications and higher litho intensity, continuing a strong technology roadmap opportunity[30] - 3D integration is identified as a new market opportunity ASML will pursue[29][30] Financial Statements ASML's Q3 2025 financial statements detail operations, cash flows, and balance sheet, reflecting key quarterly performance metrics Consolidated Statements of Operations Q3 2025 total net sales were €7,516 million, with a 51.6% gross margin and net income of €2,125 million Consolidated Statements of Operations (QoQ) | (in millions €, except otherwise indicated) | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total net sales | 7,467 | 9,263 | 7,742 | 7,692 | 7,516 | | Gross profit | 3,793 | 4,790 | 4,180 | 4,130 | 3,880 | | Gross margin % | 50.8 | 51.7 | 54.0 | 53.7 | 51.6 | | R&D costs | (1,055) | (1,116) | (1,161) | (1,167) | (1,109) | | SG&A costs | (297) | (318) | (281) | (299) | (303) | | Income from operations | 2,441 | 3,356 | 2,738 | 2,664 | 2,468 | | Operating income as a % of total net sales | 32.7 | 36.2 | 35.4 | 34.6 | 32.8 | | Net income | 2,077 | 2,693 | 2,355 | 2,290 | 2,125 | | Net income as a % of total net sales | 27.8 | 29.1 | 30.4 | 29.8 | 28.3 | | Earnings per share (basic) € | 5.28 | 6.85 | 6.00 | 5.90 | 5.49 | | Earnings per share (diluted) € | 5.28 | 6.84 | 6.00 | 5.90 | 5.48 | | Lithography systems sold (units) | 116 | 132 | 77 | 76 | 72 | | Net bookings | 2,633 | 7,088 | 3,936 | 5,541 | 5,399 | Consolidated Statements of Cash Flows Q3 2025 net cash from operations was €559 million, with €244 million in free cash flow, and decreased cash equivalents Consolidated Statements of Cash Flows (QoQ) | (in millions €) | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Cash and cash equivalents, beginning of period | 4,814 | 4,979 | 12,736 | 9,098 | 7,243 | | Net cash provided by (used in) operating activities | 950 | 9,545 | (58) | 748 | 559 | | Net cash provided by (used in) investing activities | (215) | (1,233) | (416) | (428) | (1,928) | | Net cash provided by (used in) financing activities | (565) | (567) | (3,151) | (2,164) | (742) | | Effect of changes in exchange rates on cash | (4) | 12 | (12) | (11) | (6) | | Net increase (decrease) in cash and cash equivalents | 166 | 7,757 | (3,637) | (1,855) | (2,117) | | Cash and cash equivalents, end of period | 4,979 | 12,736 | 9,098 | 7,243 | 5,126 | | Short-term investments | 5 | 5 | 5 | 5 | 2 | | Cash and cash equivalents and short-term investments | 4,985 | 12,741 | 9,104 | 7,249 | 5,128 | | Purchases of property, plant and equipment and intangible assets | (416) | (706) | (417) | (429) | (315) | | Free cash flow | 534 | 8,839 | (475) | 319 | 244 | Consolidated Balance Sheets As of Q3 2025, total assets were €45,097 million, with inventories at €11,763 million and shareholders' equity at €18,993 million Consolidated Balance Sheets (Quarter End) | (in millions €) | Q3 2024 | Q4 2024 | Q1 2025 | Q2 2025 | Q3 2025 | | :--- | :--- | :--- | :--- | :--- | :--- | | Assets | | | | | | | Cash & cash equivalents and short-term investments | 4,985 | 12,741 | 9,104 | 7,249 | 5,128 | | Accounts receivable and finance receivables, net | 6,171 | 4,877 | 5,132 | 5,703 | 6,030 | | Inventories, net | 11,414 | 10,892 | 11,025 | 11,576 | 11,763 | | Total assets | 41,766 | 48,590 | 45,479 | 44,849 | 45,097 | | Liabilities and shareholders' equity | | | | | | | Current liabilities | 16,026 | 20,051 | 18,124 | 18,616 | 19,225 | | Non-current liabilities | 9,589 | 10,062 | 9,854 | 8,615 | 6,879 | | Shareholders' equity | 16,151 | 18,477 | 17,501 | 17,618 | 18,993 | | Total liabilities and shareholders' equity | 41,766 | 48,590 | 45,479 | 44,849 | 45,097 | Corporate Information ASML provides an overview of its role as a leading semiconductor supplier, its reporting standards, and forward-looking statement disclaimers About ASML ASML is a leading multinational semiconductor supplier, headquartered in Veldhoven, with over 44,000 employees globally - ASML is a leading supplier to the semiconductor industry, providing hardware, software, and services for mass producing microchips[15] - Headquartered in Veldhoven, the Netherlands, with over 44,000 employees globally[15] - Traded on Euronext Amsterdam and NASDAQ under the symbol ASML[15] US GAAP Reporting and Regulated Information ASML uses US GAAP for unaudited Q3 2025 financial statements, which contain inside information under EU Market Abuse Regulation - ASML's primary accounting standard for financial reporting is US GAAP[16] - The consolidated financial statements for Q3 2025 are unaudited[17] - The press release contains inside information under Article 7(1) of the EU Market Abuse Regulation[18] Forward-Looking Statements The document contains forward-looking statements on plans, industry trends, and financial outlooks, subject to known and unknown risks - The document contains forward-looking statements regarding future plans, strategies, industry trends, and financial outlooks, including 2030 targets[19][66] - These statements are based on current expectations and involve substantial known and unknown risks and uncertainties, such as customer demand, supply chain, and geopolitical factors[19][66] - ASML undertakes no obligation to update forward-looking statements after the report date, except as required by law[19][66]