ASML Holding NV (ASML.US) released its fourth-quarter 2025 financial results (for the period ending December 2025) ahead of U.S. market opening on January 28, 2026, Beijing time. During the earnings call, ASML management highlighted two key points: 1) The significant volume of orders booked this quarter is primarily scheduled for 2027, implying a limited impact on 2026 performance; 2) The company's broad guidance range is primarily influenced by the progress of customer fab construction, which directly dictates the pace of ASML's shipments. The management's commentary effectively tempered near-term performance expectations. The most notable "highlight"—the surge in orders—is concentrated in the medium to long term, offering little immediate boost; the "broad" guidance also reflects underlying uncertainties. While this appears to be a standard practice for ASML to manage market expectations, the company remains an indispensable player in the current wave of aggressive fab expansions by chipmakers, even if it affects the timing of revenue recognition. Given the substantial increase in capital expenditure by downstream customers, the certainty of ASML's order book and earnings growth remains relatively clear.
ASML's fourth-quarter 2025 net sales reached €9.7 billion, aligning with guidance. Net system sales amounted to €7.6 billion (including €3.6 billion from EUV systems, which comprised 2 High-NA EUV systems, and €4.0 billion from non-EUV systems). The logic segment contributed 70% of sales, while the memory segment accounted for 30%. Installed Base Management sales were €2.1 billion. The consolidated gross margin was 52.2%, meeting expectations. Net profit stood at €2.8 billion (29.2% of net sales), with earnings per share (EPS) of €7.35. Net bookings for the quarter were €13.2 billion (including €7.4 billion for EUV systems and €5.8 billion for non-EUV systems). The memory segment represented 56% of bookings, while the logic segment accounted for 44%.
For the full year 2025, net sales totaled €32.7 billion, with a gross margin of 62.8%. EUV system sales reached €11.6 billion (48 systems delivered, including High-NA systems), a 39% year-over-year increase. Deep Ultraviolet (DUV) lithography system sales were €12.0 billion, down 6% year-over-year. Applications (Metrology & Inspection) sales grew 28% to €825 million. By market segment: Logic system sales were €16.1 billion (up 22%); Memory system sales were €8.4 billion (down 2%); Installed Base Management sales grew 26% to €8.2 billion. Net profit for the year was €9.6 billion (29.4% of net sales), with EPS of €24.73. Free cash flow was €11.0 billion, and the order backlog at the end of the period was approximately €38.8 billion.
ASML paid an interim 2025 dividend of €1.60 per share and plans a total annual dividend of €7.50 per share for 2025 (a 17% increase from 2024). A proposed final dividend of €2.70 per share was announced. Share repurchases in Q4 were approximately €1.7 billion; total shareholder returns for 2025 via dividends and buybacks reached €8.5 billion. A new share buyback program was announced, with a maximum value of €12.0 billion, effective until the end of 2028.
The market outlook has improved significantly, primarily driven by the ongoing expansion of data center and AI-related infrastructure. This demand has translated into additional capacity requirements from advanced logic and DRAM customers, boosting demand across ASML's product portfolio, particularly for EUV. The capacity expansion plans of the vast majority of customers have accelerated notably over the past few quarters. In the advanced logic segment, customer confidence in the long-term sustainability of demand has strengthened. AI accelerators are transitioning from 4nm to 3nm nodes, while customers are also progressing towards high-volume manufacturing at the 2nm node to support next-generation high-performance computing and mobile applications. In the memory segment, demand for HBM and DDR products remains extremely robust, with tight supply conditions expected to persist at least through 2026. DRAM customers continue to increase the number of EUV layers at relevant nodes and are transitioning multi-patterning DUV processes to single-exposure EUV; lithography intensity is expected to continue increasing for future nodes.
For 2026, ASML expects significant revenue growth in its EUV business, driven by both advanced logic and DRAM demand. Revenue for the non-EUV business is projected to be roughly flat compared to 2025. Sales to China are expected to account for a percentage of total net sales consistent with the current share of system bookings (approximately 20%). Applications (Metrology & Inspection) business is anticipated to show significant growth as customers increase investments in process control strategies. Installed Base Management revenue is forecast to grow for the second consecutive year, benefiting from service revenue growth tied to the expanding EUV installed base and customer performance upgrade plans aimed at meeting capacity demands. Specific guidance for the first quarter of 2026 includes total net sales projected between €8.2 billion and €8.9 billion; Installed Base Management revenue expected around €2.4 billion; a gross margin between 51% and 53%; R&D costs of approximately €1.2 billion; and SG&A expenses of around €300 million. For the full year 2026, net sales are guided to be between €34 billion and €39 billion, with a gross margin maintained in the 51%-53% range. Looking ahead to 2030, the company reaffirmed its expectation for revenue between €44 billion and €60 billion, with a gross margin between 56% and 60%, consistent with disclosures made at the 2024 Capital Markets Day.
Regarding EUV technology, ASML continues to drive down the cost of ownership for customers' most advanced processes. Production planning for the NXE:3800E tool has been advanced into 2025; its productivity improvements are expected to enable the replacement of complex multi-patterning processes with single-exposure EUV in DRAM manufacturing. As customers transition from 6F² to 4F² architectures, lithography intensity for both immersion and EUV is set to increase. For High-NA EUV, customer qualification work in R&D facilities is progressing well. Intel has announced the qualification and productive use of its EXE:5200B system for high-volume manufacturing at leading-edge nodes. ASML expects to deliver more High-NA systems in 2026 to support customers preparing for high-volume manufacturing applications.
During the Q&A session, management clarified that the 2026 delivery guidance for approximately 56 Low-NA EUV tools, which is lower than the current order book of around 114 tools, is primarily influenced by the timing of customer fab readiness and ASML's own quarterly capacity ramp-up, rather than specific supply chain constraints like Carl Zeiss lenses. Regarding High-NA adoption, no significant changes were reported from the previous quarter's discussions; both DRAM and logic customers are making good progress, with qualification work expected to continue through 2026, meaning adoption decisions are likely in late 2026 or 2027. The wide revenue guidance range for 2026 (4% to 19% growth) is largely dependent on factors outside ASML's direct control, chiefly the pace of customer factory construction and their ability to accept tool installations. ASML's manufacturing capacity for Low-NA EUV tools is dynamic and can be increased over a period of approximately 12 months or slightly longer through hiring, training, and supply chain coordination; a significant jump in output within a single year is not feasible. The record order intake in Q4, heavily weighted towards 2027, reflects strong customer confidence in the sustainability of AI-driven demand, as communicated in their public commentary and private discussions with ASML. The 2026 guidance range does not assume a significant downturn in China sales, which are modeled to remain around 20% of total sales across the entire range. The potential for a "demand cliff" for EUV tools from DRAM customers during the transition to 4F² architecture is considered a diminishing risk, as the new architecture actually requires more advanced lithography (increasing both immersion and EUV layers), and customers actively seek to avoid such operational disruptions. The 2026 gross margin guidance reflects a mix headwind from a higher proportion of older 3600 EUV models and dry DUV systems, partially offset by the positive impact of strong upgrade demand from the Installed Base Management business. Looking to 2027, the EUV product mix is expected to improve significantly with a higher proportion of the more advanced 3800E model and potentially newer generations. The current industry focus on rapid capacity expansion using existing technologies is not expected to delay the adoption timeline for High-NA, which is intended for future nodes and follows a carefully planned qualification and insertion process.
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