ASML Holding NV Earnings - Q4 2025 Analysis & Highlights
ASML Holding NV's Q4 2025 earnings call highlighted strong financial results, increased demand driven by AI and data center expansion, and a positive outlook for 2026 and beyond, with particular focus on EUV and High NA technologies.
Key Financial Results
Total net sales in Q4 2025 were €9.7 billion.
Net system sales in Q4 2025 were €7.6 billion, including €3.6 billion from EUV system sales (two High NA systems) and €4 billion from non-EUV system sales.
Installed Base Management sales for the quarter were €2.1 billion.
Gross margin for Q4 was 52.2%.
Net income in Q4 was €2.8 billion, representing 29.2% of total net sales.
Earnings per share in Q4 was €7.35.
Q4 net bookings came in at €13.2 billion, split between €7.4 billion of EUV systems and €5.8 billion of non-EUV systems.
Full year 2025 net sales came in at €32.7 billion, with a gross margin of 52.8%.
Full year 2025 net income was €9.6 billion, 29.4% of net sales, resulting in an earnings per share of €24.73.
Free cash flow for Q4 was €10.9 billion.
Free cash flow for the full year 2025 was €11 billion.
Cash, cash equivalents, and short-term investments at the end of Q4 were €13.3 billion.
Backlog at the end of 2025 was around €38.8 billion.
Business Segment Results
Net system sales in Q4 were driven by Logic at 70%, with the remaining 30% coming from Memory.
Q4 net bookings were slightly weighted towards Memory, with 56% of bookings, and Logic accounting for the remaining 44%.
Full year 2025 EUV system sales from 48 systems (including High NA) were €11.6 billion, 39% higher than 2024.
Deep UV system sales decreased 6% year-over-year to €12 billion.
Metrology and inspection systems sales increased 28% from 2024 to €825 million.
Logic system revenue for 2025 was €16.1 billion, 22% higher than 2024.
Memory system revenue for 2025 was €8.4 billion, 2% lower than 2024.
Installed Base Management sales for 2025 were €8.2 billion, 26% higher than 2024.
Capital Allocation
ASML declared a second interim dividend for 2025 of €1.60 per ordinary share in Q4.
ASML intends to declare a total dividend for 2025 of €7.50 per ordinary share, a 17% increase compared to 2024.
An interim dividend of €1.60 per ordinary share will be payable on February 18, 2026.
The final dividend proposal to the Annual General Meeting is €2.70 per ordinary share.
In Q4 2025, shares were purchased for a total of around €1.7 billion.
The share buyback program finished in December 2025, with €7.6 billion purchased out of an up to €12 billion program.
€8.5 billion was returned to shareholders in 2025 through dividends and share buybacks.
A new share buyback program was announced, effective immediately and to be executed by December 31, 2028, for an amount up to €12 billion.
Up to 2 million shares from the new buyback program are expected to cover employee share plans.
The remainder of the repurchased shares are intended to be canceled.
Industry Trends and Dynamics
The market outlook has improved notably due to the continued buildup of data centers and AI-related infrastructure.
This buildup translates into additional capacity needs at advanced Logic and DRAM customers.
There has been a notable increase and acceleration of capacity expansion planning across a large majority of ASML's customer base.
AI accelerators are migrating from the 4-nanometer node to the more litho-intensive 3-nanometer node.
Customers continue to ramp the 2-nanometer node for next-generation HPC and mobile applications.
Memory customers are reporting very strong demand for both HBM and DDR products, with supply remaining very tight through at least 2026.
DRAM customers are ramping their 1b and 1c nodes and continue to adopt more EUV layers on these nodes.
The migration from multi-patterning deep UV to single-expose EUV is expected to increase litho intensity on future nodes.
Customers in both segments are increasing and accelerating capacity expansion plans to support strong demand.
The continuing increase of 3D structure in advanced Logic and Memory leads to more adoption of multi e-beam inspection systems.
The last few months have confirmed the positive impact of AI on customer demand for advanced products, especially EUV systems.
End market dynamics support a shift in product mix towards more demand for advanced lithography products and an increase in litho intensity.
Competitive Landscape
ASML's product portfolio roadmap remains focused on supporting the roadmap requirements of customers and driving overall competitiveness.
The combination of a strong productivity roadmap on Low NA and the introduction of High NA supports further cost of technology reduction.
This also supports the conversion of more multi-patterning deep UV to single EUV exposure, especially on advanced DRAM nodes.
Growth Opportunities and Strategies
ASML expects EUV revenues to be up significantly in 2026 due to dynamics in advanced Logic and DRAM.
Non-EUV revenues for 2026 are expected to be similar to 2025 as advanced Logic and Memory customers expand capacity.
Metrology and inspection businesses are expected to grow significantly as customers invest in enhancing their process control strategy.
Installed Base Management is expected to have another year of revenue growth, driven by increasing service revenue from the growing EUV installed base and customer plans for performance upgrades.
ASML continues to make progress driving down the cost of technology on customer's most advanced processes in EUV.
The NXE:3800E ramped through 2025, with its productivity gains supporting further replacement of complex multi-patterning with single-expose EUV for multiple layers on current and future DRAM.
Both immersion and EUV litho intensity are expected to increase as customers migrate from 6F2 technology to 4F2 architectures.
Customers are making good progress on qualification of High NA technology for Logic and DRAM applications in their R&D facilities.
Intel announced the qualification and acceptance of their EXE:5200B system for high-volume manufacturing on leading-edge nodes.
More High NA systems are expected to be released to customers in 2026 to support preparation for insertion in high-volume manufacturing.
ASML is increasing its move rate quarter-on-quarter to meet demand, which will continue beyond 2026 if demand remains sustainable.
ASML has put in place the infrastructure for long lead time items to respond to demand within 12 months or a little over.
ASML will continue to push the roadmap on Low NA tools to drive higher productivity per tool.
Financial Guidance and Outlook
Q1 2026 total net sales are expected to be between €8.2 billion and €8.9 billion.
Q1 Installed Base Management sales are expected to be around €2.4 billion.
Gross margin for Q1 is expected to be between 51% and 53%.
Expected R&D expenses for Q1 are around €1.2 billion.
SG&A is expected to be around €0.3 billion for Q1.
For the full year 2026, net sales are expected to be between €34 billion and €39 billion, with a gross margin of between 51% and 53%.
The China region's share in total net sales in 2026 is expected to be in line with the current system backlog, which is around 20%.
ASML expects a 2030 revenue opportunity between €44 billion and €60 billion, with an expected gross margin between 56% and 60%.
The second half of 2026 is expected to be stronger than the first half for deliveries.
The majority of orders received in Q4 2025 are for 2027.
Research and Development (R&D)
R&D expenses were slightly higher than expected at rounded €1.3 billion in Q4, mainly due to higher non-recurring personnel costs and the recognition of a grant that shifted into 2026.
Full year 2025 R&D spending increased to €4.7 billion, or about 14% of sales.
ASML will share more performance data at the SPIE Advanced Lithography Conference in February.
