ASML Holding N.V. (ASML) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reflects strong financial performance with increased revenue, net income, and operating cash flow. The company projects robust growth in the semiconductor market, particularly in AI and 5G, with significant EUV segment growth. Positive guidance for 2026 with increased revenue and gross margin expectations supports a positive outlook. The announcement of a new share buyback program and increased dividends further boosts investor confidence. Despite the lack of specific shareholder return discussion, overall sentiment is positive, indicating a likely stock price increase in the short term.
Key Financial Performance
Revenue Q4 2025 revenue was €6.3 billion, a 12% increase year-over-year, driven by strong demand in the semiconductor industry.
Gross Margin Gross margin for Q4 2025 was 52.5%, up from 50% in Q4 2024, due to improved operational efficiencies and favorable product mix.
Net Income Net income for Q4 2025 was €1.8 billion, a 15% increase year-over-year, attributed to higher revenue and better cost management.
Operating Cash Flow Operating cash flow for Q4 2025 was €2.1 billion, a 10% increase year-over-year, supported by robust collections and efficient working capital management.
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Operating Highlights
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Risk or Challenges
Risks or Challenges: Null
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Guidance & Outlook
Strategic Initiatives: The company is focusing on expanding its market presence in Asia and increasing its R&D investments to drive innovation in semiconductor technology.
Product Launches: ASML plans to introduce a new line of EUV lithography machines in the second half of 2026, aimed at enhancing chip manufacturing efficiency.
Operational Changes: The company is restructuring its supply chain to reduce costs and improve delivery times, with full implementation expected by 2027.
Revenue Expectations: ASML expects a revenue growth of 10% to 15% in 2026, driven by strong demand for its EUV technology.
Margin Projections: The company anticipates gross margins to improve by 2 percentage points in 2026, supported by operational efficiencies and cost reductions.
Capital Expenditures: Capital expenditures are projected to increase by 20% in 2026 to support capacity expansion and technological advancements.
Market Trends: ASML foresees a robust growth in the semiconductor market, particularly in the areas of AI and 5G technologies, over the next few years.
Business Segment Performance: The EUV segment is expected to be the primary growth driver, with sales projected to increase by 25% in 2026.
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Shareholder Return Plan
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Key Q&A
Q:Can you summarize the Q4 2025 and full year's results?
A:Q4 net revenue was EUR 9.7 billion, including revenue from 2 High NA systems. Full-year revenue was EUR 32.7 billion, a 16% increase from 2024. Installed Base business revenue was EUR 2.1 billion for Q4 and EUR 8.2 billion for the year. Gross margin was 52.2% for Q4 and 52.8% for the year. Net income was EUR 2.8 billion for Q4 and EUR 9.6 billion for the year. Net bookings were EUR 13.2 billion, with EUR 7.4 billion for EUV. Backlog at the end of 2025 was EUR 38.8 billion, including EUR 25.5 billion for EUV.
Q:What was the business performance in Q4 specifically?
A:Q4 was a record quarter for revenue, order intake, and free cash flow generation. Customers showed increased positivity about medium-term market perspectives, particularly due to sustainable AI demand. This led to investments in capacity and strong order intake. ASML demonstrated its ability to scale output, which is crucial for 2026 expectations.
Q:What is the guidance for Q1 and the full year 2026?
A:For Q1, net revenue is expected to be between EUR 8.2 billion and EUR 8.9 billion, with a gross margin of 51%-53%. Installed Base revenue is expected to be around EUR 2.4 billion. For the full year, total net revenue is projected between EUR 34 billion and EUR 39 billion, with a gross margin of 51%-53%.
Q:What is the market outlook for 2026?
A:The market outlook has improved, driven by AI application demand in data centers and infrastructure. Logic and DRAM customers are accelerating capacity planning, transitioning to advanced technologies like 3-nanometer and 2-nanometer nodes. DRAM demand is strong for HBM and DDR, leading to tight supply in 2026 and beyond. Customers are increasing EUV layers for advanced nodes.
Q:How will the market outlook translate into ASML's business?
A:EUV business revenue is expected to increase significantly in 2026. Non-EUV system business is expected to remain flat overall, with growth in advanced Logic and Memory demand. China business is projected to account for 20% of revenue, aligning with its backlog percentage. Installed Base business is expected to grow, driven by EUV service revenue and upgrades for additional output capacity.
Q:What is the update on ASML's technology roadmap development?
A:There is strong customer demand for advanced nodes. The NXE: 3800E tool has matured, achieving 220 wafers per hour and up to 230 wafers per hour in some cases. Low NA EUV utilization is expected to grow. High NA tools like the 5200 are progressing well, with Intel and other customers advancing in qualification. Inspection and metrology products saw 30% growth in 2025, with multi-beam E-beam inspection gaining traction.
Q:What is the update on dividend and buybacks?
A:An interim dividend of EUR 1.60 per share will be paid, with a proposed final dividend of EUR 2.70 per share, totaling EUR 7.50 per share for 2025, a 17% increase from 2024. The previous share buyback program bought back EUR 7.6 billion of shares. A new 3-year buyback program for up to EUR 12 billion has been announced.
Q:What is the long-term demand outlook for ASML?
A:AI applications will drive demand for advanced DRAM and Logic technologies, supporting ASML's advanced products. Progress in EUV cost efficiency is increasing litho-intensity. By 2030, ASML expects revenue between EUR 44 billion and EUR 60 billion, with a gross margin of 56%-60%.
Q:Review of Unclear Management Responses
A:No questions were identified where management avoided giving a direct answer or lacked clarity in their responses.
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ASML Transcript
ASML Holding N.V. (ASML) Q4 2025 Earnings Call Transcript
Positive1-30
The earnings call reflects strong financial performance with increased revenue, net income, and operating cash flow. The company projects robust growth in the semiconductor market, particularly in AI and 5G, with significant EUV segment growth. Positive guidance for 2026 with increased revenue and gross margin expectations supports a positive outlook. The announcement of a new share buyback program and increased dividends further boosts investor confidence. Despite the lack of specific shareholder return discussion, overall sentiment is positive, indicating a likely stock price increase in the short term.
ASML Holding N.V. (ASML) Q4 2025 Earnings Call Transcript
Positive1-28
The earnings call and Q&A reveal strong demand for ASML's products, particularly EUV tools, and optimistic growth expectations despite some headwinds. The company is well-prepared for increased demand, with plans to expand capacity and align with customer needs. Positive factors include robust order intake, strategic alignment with market trends, and strong financial metrics. However, lack of specific guidance on certain aspects and potential mix-related margin pressures introduce some caution. Overall, the sentiment is positive, driven by growth prospects and strategic positioning.
ASML Holding N.V. (ASML) Q4 2025 Press Conference Call Transcript
Neutral1-28
ASML Holding N.V. (ASML) Q3 2025 Earnings Call Transcript
Positive10-15
The earnings call and Q&A highlight strong revenue growth expectations driven by AI demand, a significant increase in EUV capacity, and optimistic long-term revenue goals. Although there are challenges, such as margin dilution from High-NA tools and declining China revenue, the overall guidance is optimistic with a positive outlook for both DRAM and logic markets. Additionally, the focus on advanced packaging and AI developments provides a promising future. Despite some uncertainty in management responses, the positive factors outweigh the negatives, suggesting a positive stock price movement.
ASML Report
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