ASML Holding NV Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
ASML Holding NV's Q3 2025 earnings call highlighted strong financial results, driven by demand in both Logic and Memory segments, particularly related to AI infrastructure. The company anticipates a decline in China customer demand in 2026 but expects overall net sales to remain above 2025 levels. ASML is also making progress in EUV technology, including High NA, and expanding into 3D integration solutions.
Key Financial Results
Q3 2025 net sales were €7.5 billion.
Net system sales reached €5.6 billion, including €2.1 billion from EUV system sales (one High NA system) and €3.4 billion from non-EUV system sales.
Logic accounted for 65% of net system sales, while Memory contributed 35%.
Installed Base Management sales were €2 billion.
Gross margin was 51.6%.
R&D expenses were €1.1 billion, and SG&A expenses were €303 million.
The effective tax rate for Q3 was 17.8%.
Net income was €2.1 billion, representing 28.3% of total net sales, with an EPS of €5.49.
Cash, cash equivalents, and short-term investments ended the quarter at €5.1 billion.
Q3 net system bookings were €5.4 billion, with €3.6 billion from EUV systems and €1.8 billion from non-EUV systems.
Logic accounted for 53% of net system bookings, and Memory accounted for 47%.
Shares were purchased for a total amount of around €148 million in Q3 2025.
As of September 28, 2025, 9 million of shares have been acquired under the program for a total consideration of €5.9 billion.
The second quarterly interim dividend over 2025 will also be €1.60 per ordinary share and will be made payable on November 6, 2025.
Business Segment Results
Net system sales were driven by Logic at 65% and Memory at 35%.
Net system bookings were slightly weighted towards Logic at 53%, while Memory accounted for the remaining 47%.
Capital Allocation
ASML paid the first interim dividend over 2025 of €1.60 per ordinary share in Q3.
The second quarterly interim dividend over 2025 will also be €1.60 per ordinary share and will be made payable on November 6, 2025.
In Q3 2025, ASML purchased shares for a total amount of around €148 million.
ASML does not expect to complete the €12 billion share buyback program in full within the 2022-2025 timeframe.
ASML intends to announce a new share buyback program in January 2026.
Industry Trends and Dynamics
Continued investment in AI infrastructure supports demand in both leading-edge Logic and advanced DRAM.
Positive momentum around AI extends to more customers in both Logic and DRAM.
Continued momentum around customers adopting more EUV layers in both Logic and DRAM, migrating multi-patterning deep UV to single-exposure EUV and continuing to support litho intensity.
End market dynamics are leading to a product mix shift towards more advanced Logic and DRAM, requiring more intensive use of advanced lithography systems.
The combination of a strong productivity road map on Low NA and the introduction of High NA supports further cost of technology reduction and the conversion of more multi-patterning layers to a single EUV exposure, especially on DRAM advanced nodes.
3D integration is of increasing importance to the road maps of customers and the semiconductor industry.
Competitive Landscape
ASML is engaging with Mistral AI to embed AI across its holistic portfolio to increase the performance and productivity of its systems and the yield of customers' processes.
ASML has invested €1.3 billion in Mistral AI's Series C funding round as lead investor, resulting in ASML holding around an 11% share in Mistral AI and having a seat at their strategic committee.
The XT:260 is an i-line scanner designed for applications that include advanced packaging and offers up to 4 times the productivity compared to existing solutions.
Macroeconomic Environment
Uncertainties around tariffs have decreased, providing more clarity for customers' capacity building plans.
Growth Opportunities and Strategies
ASML is focused on driving its technology road map forward in support of its customers.
ASML is releasing new 3D packaging lithography systems.
ASML is strategically engaging with Mistral AI.
ASML shipped its first 3D integration product, the XT:260, which is an i-line scanner designed for applications that include advanced packaging and offers up to 4 times the productivity compared to existing solutions.
ASML expects to ship the XT:260 tool to quite a few more customers in the coming quarters, reflecting the strong interest in this technology solution.
ASML expects a 2030 revenue opportunity between €44 billion and €60 billion with a gross margin expected between 56% and 60%.
Financial Guidance and Outlook
ASML expects Q4 total net sales to be between €9.2 billion and €9.8 billion.
ASML expects Q4 Installed Base Management sales to be around €2.1 billion.
Gross margin for Q4 is expected to be between 51% and 53%.
The expected R&D expenses for Q4 are around €1.2 billion, and SG&A is expected to be around €320 million.
For the full year, ASML continues to expect total net sales to be around €32.5 billion with a gross margin of around 52%.
ASML expects China customer demand and therefore total net sales in China in 2026 to decline significantly compared to 2024 and 2025.
ASML does not expect 2026 total net sales to be below 2025.
ASML expects the 2026 EUV business to be up, driven by the dynamic in advanced DRAM and leading-edge Logic, and the deep UV business to be down compared to 2025, driven by the dynamics with Chinese customers.
