ASML HY1/2025 Earnings Review
Learn what one of the most important companies in the world was up to in the first half of 2025
Invest at your own risk; this is not financial advice! This is not a recommendation to buy or sell any securities discussed in the article.
ASML released its Q2 earnings on the 16th of July. Let us reflect on the results of the first half year and the meaning they have. ASML is a fantastic company and the very foundation of the modern-day semiconductor industry. Talking about semiconductors and AI, make sure to read my post on how you can profit from the boom of AI:
As usual, everything with a blue line on the left side is a quote. Let's dig in:
Management’s summary
That’s how the management described the results:
Our second-quarter total net sales came in at €7.7 billion, at the top end of our guidance. The gross margin was 53.7%, above guidance, primarily driven by higher upgrade business and one-offs resulting in lower costs.
We see continued progress in litho intensity, particularly in DRAM, and the introduction of the TWINSCAN NXE:3800E reinforces that momentum. Meanwhile, EUV adoption is advancing as planned, including High NA. This quarter, we shipped the first TWINSCAN EXE:5200B system.
Looking at 2026, we see that our AI customers' fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.
We expect third-quarter total net sales between €7.4 billion and €7.9 billion, with a gross margin between 50% and 52%. We expect R&D costs of around €1.2 billion and SG&A costs of around €310 million. For the full year 2025, we expect a 15% increase in total net sales and a gross margin of around 52%.
Income Statement
Revenue was very strong, both in Q1 and Q2 of 2025. Especially when compared with HY1 of 2024 (+34%). One high-NA system sale was recognized in Q2/25, a main driver for the strong revenue. The great thing about HY1 was the fantastic gross margins of 54% in Q1 and 53.7% in Q2. As a result of the strong revenue and the increased gross margins, the gross profit increased over-proportionally compared to HY1/24.
The operating expenses grew at a lower pace than the gross profit, and therefore, the operating income was significantly higher than last year. The interest income and income from equity investments added to the strong results.
Net income in Q1/25 almost doubled from Q1/24, and Q2 was way above the previous year’s result. Because ASML keeps buying back shares, the number of outstanding shares keeps dropping and boosts the earnings per share even further.
Balance Sheet
The balance sheet still looks very good, with cash and short-term investments (dark blue) sitting at twice the level of long-term debt (orange) as of Q2. The decrease in cash in the last two quarters was mostly driven by the large share repurchases that were done in Q1 (€2.6 billion) and Q2 (€1.5 billion).
Cash Flow Statement
The operating cash flow is mostly impacted by the change in working capital, and these effects were equalized in Q4 in the last years. Therefore, nothing to worry about.
The cash from financing mirrors the previously mentioned large share buybacks of more than €4 billion in the first six months of 2025. To give you an idea of the magnitude of the buybacks: In Germany, there are just 86 companies with a market cap of more than €4 billion. ASML also continues its dividend policy and paid out a generous €714 million in Q2/2025 alone.
Operational metrics
While the bookings (dark blue) have been consistently higher in 2022, the revenue has kept increasing faster than the bookings in recent quarters.
As a result, the order backlog is now at its lowest level in the last four years, driven by economic uncertainty and tariff insanity. There was a €1.4 billion adjustment made in the backlog, which basically means that a customer (in this case from China) cancelled at least a portion of one order. This affected the deep DUV business line.
I do not worry about this development, since ASML is still the only provider of the newest gen lithography machines, and customers must buy their machines if they want to play a role in the semiconductor market.
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