Asml Holding N.V. ((ASML)) has held its Q2 earnings call. Read on for the main highlights of the call.
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ASML Holding N.V.’s recent earnings call for Q2 2025 painted a picture of robust financial health, marked by significant growth in sales, EUV revenue, and gross margin, largely fueled by the burgeoning demand in AI. However, the call was not without its concerns, as uncertainties surrounding tariffs, challenges in the China market, and potential growth slowdown in 2026 were highlighted as potential hurdles.
Strong Financial Performance
ASML reported total net sales of EUR 7.7 billion, hitting the upper end of its guidance. The company achieved a net income of EUR 2.3 billion, which accounts for 29.8% of the total net sales, underscoring a strong financial performance for the quarter.
EUV Revenue Growth
The company expects EUV revenue to grow by approximately 30% in 2025 compared to 2024. This growth is attributed to increased EUV capacity and higher average selling prices (ASP), reflecting strong market demand.
Record Gross Margin
ASML’s gross margin for Q2 was an impressive 53.7%, surpassing guidance. This was driven by an increase in the upgrade business and a lower-than-expected impact from tariffs, showcasing operational efficiency.
Strong Installed Base Management
Installed Base Management sales exceeded expectations, reaching EUR 2.1 billion. The company anticipates revenue growth of more than 20% over the previous year, highlighting effective management strategies.
Positive Outlook for AI-driven Demand
AI continues to be a significant growth driver for ASML, particularly in the Memory and Logic sectors. The company expects sustained strong demand in these areas, driven by AI advancements.
Uncertainty with Tariffs
The earnings call highlighted increasing uncertainty due to macroeconomic and geopolitical developments, particularly tariffs. These factors may impact business operations and customer decision-making.
Challenges in China Market
ASML faced a EUR 1.4 billion adjustment in its backlog due to export restrictions in China, affecting its Deep UV and application business, which poses a challenge to its operations in the region.
Potential Slowdown in Growth for 2026
Despite strong demand drivers like AI, ASML expressed hesitation in confirming growth for 2026. Ongoing geopolitical uncertainties and tariff concerns contribute to this cautious outlook.
Lower Expected Gross Margin in Second Half of 2025
The company anticipates a lower gross margin in the second half of 2025, attributed to the margin-dilutive effect of High NA systems and reduced upgrade revenue.
Forward-looking Guidance
ASML’s guidance for 2025 reflects a 15% revenue increase, driven by strong demand for EUV and AI-related growth in Logic and Memory. The company projects a gross margin of 52%, but acknowledges macroeconomic and geopolitical uncertainties, including tariffs, as risks to future growth, particularly in 2026.
In conclusion, ASML Holding N.V.’s Q2 2025 earnings call showcased a strong financial performance with promising growth prospects driven by AI demand. However, the company remains cautious due to geopolitical uncertainties and tariff concerns, which could impact future growth, particularly in 2026. Investors should keep an eye on these developments as they could influence ASML’s trajectory in the coming years.