ASML Q2 2025 Earnings: Numbers Meet Expectations, Narrative Falters; Recommendation to Sell.

ASML's Q2 2025 earnings report shows numbers holding up, but the narrative is cracking. The company's revenue and profit beat expectations, but guidance for the next quarter was lower than anticipated. The report highlights a slowdown in demand for semiconductor equipment, which is affecting ASML's growth prospects. Despite this, the company's financial performance remains strong.

ASML Holding NV (ASML) reported its second-quarter 2025 earnings, with total net sales of €7.7 billion and net income of €2.3 billion, both surpassing market expectations. The company's gross margin of 53.7% and operating margin of 34.6% indicated strong financial performance. However, the narrative surrounding ASML's growth prospects is more nuanced.

Revenue and Profit Highlights

ASML's total net sales for Q2 2025 were €7.7 billion, with net system sales accounting for €5.6 billion and Installed Base Management contributing €2.1 billion. The company's earnings per share reached €5.90, and net bookings totaled €5.5 billion, including €2.3 billion of EUV lithography system bookings [1].

Growth Concerns

Despite the strong quarterly results, ASML's guidance for the next quarter was lower than anticipated. The company expects total net sales between €7.4 billion and €7.9 billion for Q3 2025, with a gross margin between 50% and 52%. This slowdown in demand for semiconductor equipment is a concern for ASML's growth prospects. The company's CEO, Christophe Fouquet, acknowledged that the AI market fundamentals remain strong, but increasing macroeconomic and geopolitical uncertainties are affecting growth projections [2].

Technological Advancements

ASML's Q2 2025 results also highlighted the company's technological progress. The shipment of the first EXE:5200B system, which features improved productivity and overlay performance, demonstrates ASML's commitment to innovation in lithography technology. The EXE:5200B system delivers throughput of ≥175 wafers per hour at 50mJ/cm², showcasing ASML's advancements in EUV technology [1].

Shareholder Returns

ASML continued its commitment to returning cash to shareholders. The company paid a final dividend of €1.84 per ordinary share for 2024, bringing the total to €6.40 per share. For 2025, ASML announced a first-quarterly interim dividend of €1.60 per share, payable on August 6, 2025. Additionally, ASML repurchased approximately 2.3 million shares during Q2 for a total amount of around €1.4 billion as part of its ongoing share buyback program [1].

Long-Term Outlook

ASML remains optimistic about the semiconductor industry's long-term prospects. The company projects that the market will surpass $1 trillion in revenue by 2030, driven largely by artificial intelligence adoption. ASML expects annual revenue between €44 billion and €60 billion by 2030, with gross margins between 56% and 60% [1].

Conclusion

ASML's Q2 2025 earnings report demonstrates continued strong financial performance, with revenue and profit beating expectations. However, the company's growth prospects are tempered by a slowdown in demand for semiconductor equipment and increasing macroeconomic uncertainties. Despite these challenges, ASML's technological advancements and commitment to shareholder returns position the company well for the future.

References

[1] https://uk.investing.com/news/company-news/asml-q2-2025-presentation-sales-hit-77-billion-as-first-exe5200b-ships-93CH-4170217
[2] https://finance.yahoo.com/news/asml-reports-7-7-billion-050000710.html