ASML Holding(ASML) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q4 2025, total net sales were EUR 9.7 billion, with net system sales at EUR 7.6 billion, including EUR 3.6 billion from EUV system sales and EUR 4 billion from non-EUV system sales [6][8] - Gross margin for Q4 was 52.2%, and net income was EUR 2.8 billion, representing 29.2% of total net sales, resulting in earnings per share of EUR 7.35 [7][8] - For the full year 2025, net sales were EUR 32.7 billion, with a gross margin of 52.8% and net income of EUR 9.6 billion, resulting in earnings per share of EUR 24.73 [9][10] Business Line Data and Key Metrics Changes - EUV system sales for 2025 were EUR 11.6 billion, a 39% increase from 2024, while DUV system sales decreased by 6% year-over-year to EUR 12 billion [9] - Installed base management sales increased by 26% year-over-year to EUR 8.2 billion [9] - R&D spending for 2025 was EUR 4.7 billion, approximately 14% of sales, while SG&A expenses increased to EUR 1.3 billion [10] Market Data and Key Metrics Changes - Logic system revenue was EUR 16.1 billion, a 22% increase from 2024, while memory system revenue was EUR 8.4 billion, a 2% decrease from 2024 [9] - Q4 net bookings were EUR 13.2 billion, with 56% from memory and 44% from logic [8] Company Strategy and Development Direction - The company is focused on innovation and capacity expansion, particularly in EUV technology, to meet the growing demand from advanced logic and DRAM customers [15][19] - The strategy includes increasing the share of EUV systems in the product mix and enhancing productivity through R&D investments [20] - The company anticipates significant revenue growth in EUV systems due to increased capacity needs driven by AI-related infrastructure [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted an improved market outlook, particularly due to the buildup of data centers and AI infrastructure, leading to increased demand for advanced logic and DRAM [15][16] - There is a positive sentiment among foundry customers regarding long-term demand sustainability, with expectations for capacity expansion [15][16] - The company expects Q1 2026 total net sales to be between EUR 8.2 billion and EUR 8.9 billion, with a gross margin between 51% and 53% [11] Other Important Information - The company plans to return EUR 8.5 billion to shareholders through dividends and share buybacks in 2025, with a new share buyback program announced for up to EUR 12 billion [12][13] - The company expects to declare a total dividend of EUR 7.50 per ordinary share for 2025, a 17% increase compared to 2024 [11] Q&A Session Summary Question: Outlook for calendar 2026 regarding EUV bookings - Management indicated that the guidance is influenced by customer progress in completing fabs and the ability to ramp production accordingly [23][24] Question: Changes in vision for High-NA tools in 2026 - Management expects continued progress in both DRAM and logic customer adoption, with qualification data collection expected to last most of the year [26][27] Question: Revenue growth guidance for 2026 - Management stated that growth is largely driven by customer readiness to take tools and their ability to complete fab construction [33][34] Question: Manufacturing capacity capabilities for Low-NA EUV tools - Management confirmed that capacity is dynamic and will increase gradually, with a focus on ramping up production in response to demand signals [35][36] Question: Customer visibility on equipment needs for the coming years - Management noted that customers are increasingly vocal about their capacity planning and expectations for demand, which aligns with public statements [41][42] Question: Impact of China on revenue guidance - Management indicated that China is expected to account for about 20% of total sales, and its performance will influence overall revenue guidance [50][51] Question: EUV capacity and booking trends - Management clarified that customers are not waiting for confirmation of capacity before booking, as they are aware of the company's plans to increase capacity [64][66]