ASML: Second best quarter in company history leads to stock market loss

ASML met and in some cases exceeded its expectations in the first quarter of 2025. At 7.74 billion euros, turnover is in the middle of the outlook from three months ago. Because the net margin is unexpectedly high at 54 percent, ASML generated a high net profit of 2.36 billion euros.

In comparison: at the end of 2024, ASML made a net profit of just under 2.7 billion euros on sales of 9.26 billion euros. The net margin at that time was 51.7 percent. The cash flow is not comparable because ASML traditionally only does not buy back shares in the fourth quarter.

Likewise, the comparison with the same period of the previous year says little because the semiconductor industry was in a hole in 2024. In the first quarter of 2024, ASML only generated revenue of 5.29 billion euros and a profit of 1.22 billion euros.

The bottom-line remains: The beginning of 2025 still represents the second-best quarter in the company's history. Following discussions with chip manufacturers, ASML is sticking to its expectation of achieving sales of around 30 billion to 35 billion euros in 2025 as a whole. In the second half of the year, sales should therefore return to record levels.

EUV demand remains high

As usual, ASML's revenue is split between the sale of new lithography systems for chip production and the maintenance of systems already sold. The company generates 5.74 billion euros in revenue from the sale of new equipment.

Meanwhile, demand for advanced systems with extreme ultraviolet (EUV) exposure technology remains constant: ASML sold 14 such systems at the beginning of the year. According to the annual report, two further top models with high numerical aperture (High-NA EUV) were sold to customers, but these will not be booked until later. Three customers are now said to have high-NA EUV systems, presumably Intel, TSMC, and Samsung. Meanwhile, demand for all cheaper non-EUV systems is collapsing.

ASML has a turnover of almost exactly 2 billion euros with existing systems. This includes on-site maintenance at chip manufacturers, but also replacement with upgrade modules. The latter can increase productivity, for example.

Billions spent on research

Meanwhile, expenditure on research and development rose slightly to 1.16 billion euros. New bookings from chip manufacturers collapse again – ASML has taken orders worth 3.9 billion euros. This is irrelevant for production for now because ASML is fully booked until 2026 anyway.

According to ASML, the current geopolitical situation is causing uncertainty in the semiconductor industry. In particular, the US government's customs policy is causing the industry to waver.

In the current second quarter, ASML expects sales of between 7.2 billion and 7.7 billion euros, with a margin of 50 to 53 percent. The share fell by around eight percent after the announcement of the annual report, but has since stabilized at a minus of five percent.

(mma)