• Total Net Sales: EUR7.7 billion.
• Net System Sales: EUR5.7 billion (EUV: EUR3.2 billion, Non-EUV: EUR2.5 billion).
• Install Base Management Sales: EUR2 billion.
• Gross Margin: 54%.
• R&D Expenses: EUR1.161 billion.
• SG&A Expenses: EUR281 million.
• Effective Tax Rate: 16.7%.
• Net Income: EUR2.4 billion.
• Earnings Per Share (EPS): EUR6.
• Cash, Cash Equivalents, and Short-term Investments: EUR9.1 billion.
• Free Cash Flow: Minus EUR475 million.
• Net System Bookings: EUR3.9 billion (EUV: EUR1.2 billion, Non-EUV: EUR2.8 billion).
• Dividend: EUR1.52 per ordinary share for Q1 2025; total 2024 dividend proposal of EUR6.40 per ordinary share.
• Share Purchases: EUR2.7 billion in Q1 2025.

• Warning! GuruFocus has detected 2 Warning Sign with CFG.

Release Date: April 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ASML Holding NV (NASDAQ:ASML) reported total net sales of EUR7.7 billion for Q1 2025, in line with guidance.
• The company achieved a gross margin of 54%, exceeding expectations due to favorable EUV product mix and customer productivity milestones.
• Net income for Q1 2025 was EUR2.4 billion, representing 30.4% of total net sales, with an earnings per share of EUR6.
• ASML Holding NV (NASDAQ:ASML) continues to see strong demand in the AI sector, which is expected to drive growth in 2025 and 2026.
• The company is making significant progress in EUV technology, with milestones achieved in both low NA and high NA platforms, supporting customer roadmaps and cost optimization.

Negative Points

• ASML Holding NV (NASDAQ:ASML) experienced a negative free cash flow of EUR475 million in Q1 2025 due to customer payment dynamics and investments in fixed assets.
• There is increased uncertainty in the business environment due to ongoing discussions about tariffs, which could impact ASML Holding NV (NASDAQ:ASML) and its customers.
• The gross margin for the second half of 2025 is expected to be lower than the first half due to potential tariff impacts and lower upgrade revenue.
• ASML Holding NV (NASDAQ:ASML) faces challenges with the geopolitical situation, particularly regarding tariffs that could affect the semiconductor supply chain.
• The company anticipates a wider range of gross margins for Q2 2025 due to uncertainties around tariffs and their absorption in the value chain.

Q & A Highlights

Q: Could you consider flexibility around the pricing of high-NA to facilitate adoption? A: Christophe Fouquet, CEO: The main reason for not adopting new systems quickly is tool maturity, not price. We focus on achieving maturity to ensure optimized cost of technology. Lowering prices without maturity would create issues for customers.

Q: What kind of bookings run rate should we expect to see growth in 2025 and 2026? A: Roger Dassen, CFO: We believe 2026 will be a growth year based on technology and market demand, despite macroeconomic uncertainties. While we have a strong backlog, additional bookings are needed for growth, but we won't quantify the exact run rate needed.

Q: Is China still expected to account for around 25% of sales this year? A: Roger Dassen, CFO: Yes, we expect China to be slightly over 25% of sales this year, with demand particularly strong in the mainstream business. The backlog composition for China remains in the 20% to 25% range.

Q: How are customer conversations regarding tariffs affecting delivery schedules? A: Christophe Fouquet, CEO: Tariff announcements have not changed business conversations with customers. There is uncertainty, but discussions have not fundamentally altered business planning or delivery schedules.

Q: Can you provide an update on the adoption of single-exposed EUV versus multi-patterning? A: Christophe Fouquet, CEO: Adoption is happening gradually. Each new customer node with better cost of technology, like the 3800E, presents an opportunity for more single-exposed adoption. This is an ongoing effort with customers.

Q: What is the expected impact of tariffs on gross margins for the full year? A: Roger Dassen, CFO: It's difficult to predict the full-year impact due to uncertainty around tariffs. We aim to minimize exposure and believe the tariff burden should be shared across the value chain, not solely by ASML.

Q: How does the geographic diversification of fabs affect your business? A: Roger Dassen, CFO: Dispersed fabs may lead to increased capacity needs, potentially driving semiconductor demand. However, tariff uncertainties add complexity to this scenario.

Q: What are the key milestones for the EXE platform from R&D to production? A: Christophe Fouquet, CEO: There are three phases: R&D validation with EXE5000, early production testing with EXE5200, and high-volume manufacturing expected in 2027-2028. Progress is ongoing with customers.

Q: How does the order volatility relate to tariff uncertainties? A: Roger Dassen, CFO: Order volatility is more related to the lumpiness of order intake rather than tariff uncertainties. Major orders require significant governance, affecting subsequent quarters' order intake.

Q: How are you addressing the US tariffs in relation to encouraging semiconductor manufacturing in the US? A: Roger Dassen, CFO: The complexity of tariffs is recognized by all parties, including the US administration. There is a need for more time to understand how to reconcile onshoring goals with tariff impacts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.