ASML is a world-class technology monopoly where the core debate pits its exceptional quality, durable moat, and secular growth tailwinds against a demanding valuation that appears to price in a flawless operational and geopolitical future; our analysis concludes that the current price offers no margin of safety, creating an unclear risk/reward profile for new capital.
The Investment Rationale: The rationale for an "Unclear" recommendation is that while ASML represents one of the highest-quality businesses globally, its current market price fully reflects its technological dominance and long-term growth prospects, leaving no discernible margin of safety for investors at this level.
Our Core Variant Perception: The market is pricing ASML for a perfect, accelerated ramp in profitability, implying a Year 5 operating margin of 38.8%. Our analysis suggests the market is underappreciating management's explicit warnings of near-term margin dilution from the critical High NA product cycle, leading to a more conservative intrinsic value estimate and the conclusion that the stock is fully valued.
The Nature of the Bet: This is not an investment at the current price, but rather a high-priority name for a watchlist. An investor buying today is making a speculative bet on continued multiple expansion or growth that exceeds already optimistic expectations, rather than a value-oriented bet on the compounding of intrinsic value from an attractive entry point.
| Metric | Score | Justification |
|---|---|---|
| Industry Attractiveness | 4/4 | The industry operates as a highly rational oligopoly, confirmed by the "Price War Test." Tier 1 peers (LRCX, KLAC, AMAT) maintain high and stable gross margins, with the peer median Gross Margin at 49.3% TTM. KLA Corporation (KLAC) demonstrates exceptional stability, with its Gross Margin only compressing marginally from 61.0% to 59.9% during a period of revenue contraction (-6.5% YoY in 2024). Furthermore, competitor Applied Materials (AMAT) management explicitly noted that the pricing environment is "rational" and they successfully implemented price improvements to capture value (P12). |
| Capital Cycle | 1/4 | The industry is in the "Peak/Overheating" phase, failing the "Supply Discipline Test." The aggregate capital flow is surging ahead of realized demand, driven by AI optimism. ASML's 3-year CapEx CAGR (26.6%) is significantly outpacing its 3-year Revenue CAGR (17.7%). Similarly, Applied Materials (AMAT) shows CapEx CAGR (15.6%) outpacing Revenue CAGR (5.4%). This aggressive investment is focused on "Growth/New Capacity Expansion" (P14, P12), and management commentary signals an "inflection in the AI-related fab equipment spending" in the second half of calendar 2026 (P12), indicating a massive supply ramp is underway. |
| Moat Durability (Mature Compounder Lens) | 4/4 | The company possesses a "Wide" and "Widening" moat, classified primarily as Intangible Assets (Patents/Technology) combined with Switching Costs (Workflow Dependency). The financial proof is overwhelming: ASML's TTM ROIC of 60.2% is 1790 basis points higher than the Tier 1 peer median ROIC of 42.3%. The moat is widening because the company is aggressively investing $4.3 billion in R&D (15.2% of revenue) and $2.1 billion in CapEx (7.3% of revenue) (P14) to develop next-generation EXE systems and ramp the NXE:3800E to 220 wafers per hour (P7), ensuring its technological lead remains insurmountable for the foreseeable future. |
Part A: The Company & Its Competitive Environment
Core Business Model & Strategy: ASML Holding N.V. is the world's leading supplier of lithography systems for the semiconductor industry, providing chipmakers with the critical hardware, software, and services required to mass-produce microchips. The company generates revenue through two primary streams: the sale of new and used lithography systems (both Extreme Ultraviolet - EUV, and Deep Ultraviolet - DUV) and recurring sales from its Installed Base Management division, which provides services and upgrades. Management's stated strategy is to extend its technological leadership through massive R&D investment, deepen customer trust, and drive operational excellence to capitalize on the long-term growth of the semiconductor market.
Key Products & Assets: ASML's most critical assets are intangible, centered on its proprietary EUV and next-generation High-NA EUV lithography technologies. This technological leadership, protected by a vast intellectual property portfolio, represents a multi-decade, multi-billion-dollar R&D effort that is practically impossible for competitors to replicate. These systems, which can cost over $200 million per unit, are the indispensable tools required by all leading-edge semiconductor manufacturers to produce the world's most advanced chips for applications like artificial intelligence and high-performance computing.
Competitive Landscape: The competitive landscape is a rational oligopoly. In the most advanced EUV lithography segment, ASML operates as a near-monopoly with no direct competitors. In the less advanced DUV market, it competes with Nikon and Canon, but still holds a dominant market share. In the broader semiconductor equipment space, its primary peers are Applied Materials (AMAT), Lam Research (LRCX), and KLA Corporation (KLAC). Competition is based on technological performance and innovation, not price, allowing ASML to maintain exceptional profitability, as evidenced by its TTM gross margin of 52.0%.
Part B: The Historical Situation
| Metric | Score | Justification |
|---|---|---|
| Management Narrative Credibility | 2.5/4 | Management has a strong track record of hitting profitability targets, evidenced by an 83% quarterly EPS hit rate over the last 18 quarters. However, credibility is weakened by a 0% annual revenue hit rate over the last five years, signaling persistent difficulty in accurately forecasting cyclical system sales. |
| Analyst & Sell-Side Conviction | 3/4 | Sell-side conviction is high and active, with three of the four most recent price targets implying significant upside (e.g., Redburn at $1,200.00, +17.5% implied upside). However, analysts maintain persistent skepticism regarding 2026 growth visibility due to geopolitical risks, preventing a top score. |
| Management's Own Conviction (Say vs. Do) | 3/4 | While insiders have been neutral, reporting no open-market purchases or sales in the last 12 months, management demonstrates strong corporate conviction through disciplined capital allocation, achieving a value-accretive 5-year share count CAGR of -1.1% and generating an exceptional 49.3% TTM ROIC. |
| Buy-Side & Institutional Conviction | 3.5/4 | Buy-side conviction is strong, evidenced by net institutional inflows of +1,943,880 shares in the most recent quarter (ending 2025-09-30). This inflow was driven by major funds like JPMORGAN CHASE & CO increasing their position by 35.0%, indicating rising institutional belief in the cyclical upturn. |
| Overall Market Conviction | 4/4 | The market conviction is exceptional, driven by a strong, stable uptrend where the stock trades above its 200-day simple moving average ($799.54) and has outperformed the S&P 500 (SPY) by 32.40% over the last 12 months. Bearish sentiment is negligible, with short interest at an extremely low 0.4% of float. |
Bull vs. Bear Case Summary
Bull Case Summary:
Possesses a wide, widening, and insurmountable technological moat in EUV lithography.
Positioned as a primary beneficiary of the secular growth in AI, HPC, and 5G.
Exceptional financial profile with high, stable margins and a world-class 49.3% TTM ROIC.
Bear Case Summary:
Demanding valuation with a TTM P/E of 42.2x leaves no margin of safety.
Significant exposure to geopolitical risk via export controls and China/Taiwan tensions.
Poor management track record on annual revenue forecasting (0% hit rate in 5 years) creates execution risk.
Narrative Argument
The Prevailing Market Narrative: The market views ASML as an indispensable technology champion and a "must-own" asset for exposure to the AI megatrend. This narrative, reflected in the stock's 44.3% return over the last 12 months and negligible short interest of 0.4%, is driven by the belief that its monopolistic position justifies a significant valuation premium and that any cyclical weakness is merely a temporary pause in a long-term structural growth story.
Macro & Industry Context: The company is operating within a highly attractive industry structure, a rational oligopoly that allows for high and stable margins. This is a significant tailwind. However, the industry is currently in an overheating phase of the capital cycle, with ASML's 3-year CapEx CAGR of 26.6% significantly outpacing its 17.7% revenue CAGR, signaling a potential oversupply risk in 2026. This cyclical headwind is compounded by a material geopolitical headwind from U.S. and Dutch export controls on China. The net environment is one where powerful secular tailwinds are being challenged by near-term cyclical and geopolitical risks.
Our Differentiated View: While we agree with the market's assessment of ASML's exceptional quality, our differentiated view is that the market is underappreciating near-term profitability pressures and execution risk. Our analysis of earnings call transcripts reveals management's explicit warnings that the initial ramp of its next-generation High NA systems will be margin-dilutive, a factor our DCF model incorporates but the consensus appears to be ignoring. Our reverse DCF analysis shows that to justify the current price, the market is pricing in a Year 5 operating margin of 38.8%, a level significantly above the company's historical peak of 36.3%. This suggests the market is pricing in a flawless technological transition that is not supported by management's own qualitative guidance.
Conclusion on the Debate: Therefore, while ASML's long-term compounding potential is undeniable, our analysis concludes that the current valuation has extrapolated the best-case scenario into perpetuity, leaving no room for the cyclical volatility, geopolitical friction, and product-cycle margin pressures that are likely to occur. The price has disconnected from a conservative estimate of intrinsic value, creating an unfavorable risk/reward profile at this moment.
Our Analytical Edge: Our analytical edge comes from a deeper appreciation of management's qualitative commentary on product cycle margins and a quantitative assessment of their historical forecasting accuracy, leading us to believe the market is underestimating near-term profitability headwinds and overestimating the certainty of future growth.
| Metric | Score | Justification |
|---|---|---|
| Capital Allocation Skill | 4/4 | Capital allocation is stellar, evidenced by an outstanding 49.3% TTM Return on Invested Capital (ROIC) on internal investments. Share repurchases have been highly effective, reducing the 5-year share count by a 1.1% CAGR, and have been well-timed, reflected in a TTM Opportunism Score of 62.5%. There has been no material M&A activity. |
| Incentive & Ownership Alignment | 3/4 | Incentive metrics are strongly aligned with a compounder thesis, as the 2024-2026 long-term incentive plan is tied to Return on Average Invested Capital (ROAIC) and Relative TSR. However, a significant weakness exists as the company's filings do not disclose the specific share ownership levels for the CEO or other executive officers, creating a material gap in confirming personal financial alignment. |
| External Track Record & Experience | 3/4 | The CEO is a long-tenured insider who was instrumental in the successful commercialization of the company's critical EUV technology. As Chief Business Officer from 2020 to 2024, he presided over a period where net sales nearly doubled from €14.0 billion to €27.6 billion. While he does not have a prior public company CEO track record, his internal performance is exceptional and directly relevant. |
| Board Oversight & Governance | 3/4 | The Supervisory Board possesses exceptional, archetype-specific expertise. It includes highly successful former public company CEOs with deep capital allocation track records in the semiconductor industry, most notably Warren East (former CEO of ARM Holdings) and Mark Durcan (former CEO of Micron Technology). This strength is slightly offset by weaker structural shareholder rights, including a classified board. |
Part A: Leadership Assessment
Leadership Track Record: The current CEO, Christophe Fouquet, is a long-tenured insider promoted in April 2024. He has an exceptional internal track record, having been instrumental in the development and commercialization of the company's monopolistic EUV technology. In his prior role as Chief Business Officer from 2020 to 2024, he presided over a period where net sales nearly doubled from €14.0 billion to €27.6 billion.
Capital Allocation Skill: Management's capital allocation skill is stellar and perfectly aligned with a compounder thesis. Internal reinvestment generates world-class returns, evidenced by a TTM Return on Invested Capital of 49.3%. The share repurchase program has been consistently value-accretive, reducing the 5-year share count by a 1.1% CAGR, and has been well-timed, as reflected in a favorable TTM Opportunism Score of 62.5%.
Credibility & Communication: Management's credibility is mixed. They communicate with a high degree of candor regarding technological challenges and geopolitical risks, as seen in earnings call transcripts. However, this is offset by a very poor track record in financial forecasting, with a 0% hit rate on annual revenue guidance over the past five years, suggesting a persistent difficulty in predicting the timing of large system sales.
Part B: Governance & Alignment Scorecard
Board Independence: The company operates with an independent Supervisory Board.
Chairman/CEO Roles: Separate (Two-Tier Board Structure).
Chairman Tenure: Not Disclosed.
Insider Ownership: Not Disclosed for Executive Officers.
Shareholder Rights: Supermajority vote required to amend Articles of Association.
Part C: Final Stewardship Verdict
Part A: Final Method Marks Table
| Method | Implied Value / Share | Weight | Contribution ($/sh) | vs. Current |
|---|---|---|---|---|
| DCF (PWER) | $926.59 | 45.0% | $416.97 | -11.0% (Downside) |
| Comps | $991.09 | 30.0% | $297.33 | -4.8% (Downside) |
| Historicals | $1,275.81 | 15.0% | $191.37 | +22.6% (Upside) |
| Price Targets | $1,045.00 | 10.0% | $104.50 | +0.4% (Upside) |
| Weighted Implied Value | $1,010.16 | 100.0% | $1,010.16 | -3.0% (Downside) |
Part B: Valuation & Weighting Justification
DCF (PWER)
Weight Justification: The DCF is assigned the highest weight, serving as the primary valuation anchor. The company's profitability has been exceptionally predictable, highlighting a history of stable, high gross margins around 51% and strong operating margins consistently above 30%. This operational strength, driven by a near-monopolistic market position, provides high confidence in the long-term cash flow projections that underpin the DCF valuation. While cash flow can exhibit short-term volatility due to working capital swings related to inventory builds, the underlying cash-generating power of the business is robust and well-suited for intrinsic valuation.
Valuation Context: Based on PWER-weighted scenarios from the DCF Valuation Calculation.
Comps
Weight Justification: Comps analysis is assigned a significant weight as a secondary, market-based anchor. The Comparable Companies appendix details a high-quality peer set composed of Tier 2 direct sector peers (LRCX, KLAC, AMAT) that share similar high-margin, high-return financial profiles. The selection of these direct competitors, rather than a broad index, provides a highly relevant market signal for valuing a best-in-class operator. The methodology's reliability is strong, justifying a substantial weight in the final blend.
Valuation Context: Based on a qualitatively-adjusted blend of peer median multiples (60% P/FCF, 40% P/E).
Historicals
Weight Justification: Historical Multiples are assigned a lower weight. While the company has no structural breaks in its business model, making its past a relevant guide, the Historical Multiples appendix shows that its TTM valuation multiples are elevated relative to 5-year averages. Furthermore, the Qualitatively-Adjusted Multiples Valuation report notes that the multiples used were constrained by a "Valuation Ceiling" rule, indicating the stock is already trading at a premium. This suggests that anchoring heavily to the most recent historical valuation introduces a risk of overvaluation, warranting a more conservative weight.
Valuation Context: Based on a qualitatively-adjusted blend of TTM multiples (60% P/FCF, 40% P/E).
Price Targets
Weight Justification: Price Targets are assigned the lowest weight among the relevant methodologies. The Analyst Price Targets appendix shows a wide dispersion in targets, with a range from $800 to $1,200, indicating a lack of strong consensus. More importantly, the appendix reveals a 0% annual revenue forecast hit rate over the last five years. This documented difficulty in accurately forecasting the company's top line significantly reduces our confidence in the reliability of sell-side price targets as a valuation anchor.
Valuation Context: Average of 5 targets published between Jul-2025 and Nov-2025.
Part C: Defining the Margin of Safety
Valuation Floor: $551.55
Justification: The valuation floor is anchored to the Bear Case DCF value of $551.55, which models a scenario where geopolitical shocks and a cyclical downturn lead to a muted 2025 recovery, a 5.0% revenue contraction in 2026, and operating margins compressing to a floor of 29.0%.
Part D: Defining the Range of Outcomes (Scenario Analysis)
Base Case Narrative & Assumptions: Our Base Case models a strong cyclical recovery in 2025 (33.5% revenue growth), followed by a "digestion" year in 2026 (2.4% growth) as guided by management. Operating margins are modeled with near-term dilution from the High NA product ramp before gradually expanding from 31.7% to 32.7% by Year 5.
Bull Case Narrative & Assumptions ("Blue-Sky Potential"): Our Bull Case models an "Accelerated AI-Driven Cycle" where demand pulls forward, driving 10.0% growth in 2026 and faster operating margin expansion to 36.5% by Year 5. This scenario implies a potential "blue-sky" valuation of $1,193.65 per share.
Bear Case Narrative & Assumptions (The Floor Value): Our Bear Case DCF models a "Geopolitical Shock & Cyclical Downturn" with muted 2025 growth and a revenue contraction in 2026. In this scenario of moat erosion and declining profitability, the final floor value is determined directly by the Bear Case DCF scenario, resulting in a value of $551.55 per share.
Part A: Key Catalysts
Catalyst #1: Re-acceleration of Quarterly EUV System Bookings. A sustained increase in the quarterly order rate for EUV systems would provide tangible evidence that the 2025/2026 cyclical recovery is on track, validating the market's optimistic growth assumptions and potentially driving the stock higher.
Impact: High
Likelihood: Medium
Timing: Mid-Term (6-18 months)
Supporting Evidence: Our analysis of earnings call transcripts shows that the lumpiness of quarterly bookings is a primary source of analyst concern and a key focus in every Q&A session. A positive inflection here would directly address a key market debate.
Catalyst #2: Faster-Than-Expected Margin Accretion from High NA EUV. If the company can ramp its next-generation High NA systems to be margin-accretive faster than guided, it would invalidate our core variant perception and prove that current consensus earnings estimates are too low.
Impact: High
Likelihood: Low
Timing: Long-Term (18+ months)
Supporting Evidence: Management has been consistent in guiding for near-term margin dilution from the High NA ramp, as noted in our transcript analysis. An early reversal of this trend would be a significant positive surprise.
Catalyst #3: Significant Market Pullback Creating an Attractive Entry Point. A broader market correction or a company-specific operational misstep that drives the stock price down towards our Base Case intrinsic value of $916.38 would create a compelling opportunity to acquire a world-class compounder with a margin of safety.
Impact: Critical
Likelihood: Medium
Timing: Near-Term (0-6 months)
Supporting Evidence: The stock has experienced significant drawdowns in the past, including a -16.26% one-day drop on October 15, 2024, following an earnings report, demonstrating its volatility and the potential for attractive entry points to emerge.
Part B: Context for Timeliness
Risk #1: Geopolitical Escalation & Expanded Export Controls. The most significant risk is an escalation of geopolitical tensions leading to broader and more restrictive U.S. or Dutch export controls, which could permanently impair ASML's access to the Chinese market or disrupt the critical Taiwan-based supply chain.
Supporting Factors: Our external macro check confirms that export controls are a primary regulatory issue. Management has acknowledged in earnings calls that these controls will cause China DUV business to be "significantly lower" in 2026. Customer concentration is high, with four customers accounting for 53.8% of 2024 sales, many of whom are located in Taiwan.
Existing Mitigants: ASML's technological monopoly in EUV provides some insulation, as leading-edge customers have no alternative. Management has also proven adept at reallocating DUV production slots to other customers when one region is restricted.
Residual Concern: High
Risk #2: Cyclical Demand "Air Pocket". A key risk is that the anticipated 2025/2026 industry recovery fails to materialize as expected. Widespread customer fab push-outs, driven by a global macro slowdown, could lead to an "air pocket" in demand, causing revenue to stagnate or decline and pressuring margins from underutilization of newly built capacity.
Supporting Factors: Our analysis of management's guidance hit rate reveals a 0% success rate on forecasting annual revenue over the past five years, indicating a structural difficulty in predicting demand. Management has also expressed significant caution about the 2026 outlook, refusing to guide for growth.
Existing Mitigants: The company's massive €36 billion order backlog provides a significant cushion against short-term demand fluctuations and offers a degree of revenue visibility.
Residual Concern: Medium
Risk #3: Technological Disruption. A long-term risk is the emergence of a viable, lower-cost alternative to EUV lithography, such as nanoimprint lithography. A breakthrough by a competitor could fundamentally challenge ASML's technological moat, leading to permanent pricing pressure and market share loss.
Supporting Factors: Our external checks confirm that alternative technologies are a recurring theme in independent bear theses on the company.
Existing Mitigants: ASML mitigates this risk through its massive R&D budget ($4.3 billion in FY2024) and deep, multi-year integration with the technology roadmaps of its key customers, creating extremely high switching costs.
Residual Concern: Low
Part A: Implementation Parameters
Suggested Entry Target (USD): N/A
Entry Target Rationale: An entry target is not applicable as the investment recommendation is not 'Buy'.
Stop-Loss Target (USD): 799.00
Stop-Loss Rationale: The primary stop-loss is fundamental—the materialization of a "Thesis Killer." A secondary, technical stop is set just below the 200-day moving average ($799.54), as a sustained weekly close below this level would signal a major break in the long-term uptrend and a significant negative shift in market sentiment.
Recommended Position Size: None
Position Sizing Rationale: A position is not recommended as the "Unclear" rating reflects an unfavorable risk/reward profile at the current market price, with our valuation target of $1,010.16 implying -3.0% downside.
Recommended Time Horizon: N/A
Time Horizon Rationale: Not applicable as the recommendation is not 'Buy'.
Part B: Thesis Monitoring Plan
Key Monitoring Factors:
1. Quarterly System Bookings: Track the net bookings figure, particularly for EUV systems, as this is the leading indicator of future revenue and confirmation of the cyclical recovery thesis.
2. Gross Margin Evolution: Monitor gross margin performance, especially in quarters with High NA revenue recognition, to assess whether the dilutive effects are worse or better than guided.
3. Geopolitical Developments: Watch for any new government announcements from the U.S. or the Netherlands regarding semiconductor export controls, as this is the primary thesis risk.
Thesis Invalidation ("Thesis Killer"): The long-term compounder thesis would be invalidated by the announcement from a major customer (e.g., TSMC, Intel, or Samsung) of a successful, commercially viable deployment of a non-ASML technology (e.g., nanoimprint lithography) for a leading-edge logic or memory node, as this would signal a fundamental and permanent breach of the company's technological moat.
Price Targets: Last 6M ending 2025-11-26
Latest per analyst within window.
| Analyst | Published | Price @ Post | Price Target | % PT vs Price @ Post |
|---|---|---|---|---|
| Redburn Partners | 2025-11-07 | $1,021.31 | $1,200.00 | +17.5% |
| Wells Fargo | 2025-10-16 | $1,009.81 | $1,140.00 | +12.9% |
| Susquehanna | 2025-10-10 | $980.54 | $1,150.00 | +17.3% |
| Bernstein | 2025-10-09 | $987.81 | $935.00 | -5.3% |
| KeyBanc | 2025-07-17 | $754.45 | $800.00 | +6.0% |
Guidance Hit Rate (Annual)
Hit defined as Actual ≥ Estimate.
| FYE Date | Rev Est (M USD) | Rev Actual (M USD) | % Diff | EPS Est | EPS Actual | Diff ($) | Rev Hit | EPS Hit |
|---|---|---|---|---|---|---|---|---|
| 2024-12-31 | 29,488 | 28,263 | -4.2% | 19.97 | 19.25 | -0.72 | No | No |
| 2023-12-31 | 29,399 | 27,558 | -6.3% | 21.03 | 19.91 | -1.12 | No | No |
| 2022-12-31 | 22,388 | 21,173 | -5.4% | 14.71 | 14.14 | -0.57 | No | No |
| 2021-12-31 | 21,455 | 18,611 | -13.3% | 15.63 | 14.36 | -1.27 | No | No |
| 2020-12-31 | 16,219 | 13,978 | -13.8% | 9.34 | 8.49 | -0.85 | No | No |
Guidance Hit Rate (Quarterly)
Hit defined as Actual ≥ Estimate.
| Report Date | Rev Est (M USD) | Rev Actual (M USD) | % Diff | EPS Est | EPS Actual | Diff ($) | Rev Hit | EPS Hit |
|---|---|---|---|---|---|---|---|---|
| 2025-10-15 | 9,023 | 8,737 | -3.2% | 6.27 | 6.41 | +0.14 | No | Yes |
| 2025-07-16 | 8,793 | 8,725 | -0.8% | 5.94 | 4.55 | -1.39 | No | No |
| 2025-04-16 | 8,917 | 8,252 | -7.5% | 6.12 | 6.31 | +0.19 | No | Yes |
| 2025-01-29 | 7,618 | 9,880 | +29.7% | 7.41 | 7.30 | -0.11 | Yes | No |
| 2024-10-15 | 9,749 | 8,341 | -14.4% | 5.29 | 5.74 | +0.45 | No | Yes |
| 2024-07-17 | 7,151 | 6,733 | -5.8% | 4.06 | 4.36 | +0.30 | No | Yes |
| 2024-04-17 | 5,875 | 5,739 | -2.3% | 3.00 | 3.31 | +0.31 | No | Yes |
| 2024-01-24 | 7,441 | 7,778 | +4.5% | 5.18 | 5.64 | +0.46 | Yes | Yes |
| 2023-10-18 | 7,193 | 7,262 | +1.0% | 4.86 | 5.10 | +0.24 | Yes | Yes |
| 2023-07-19 | 7,403 | 7,514 | +1.5% | 5.06 | 5.49 | +0.43 | Yes | Yes |
| 2023-04-19 | 6,835 | 7,237 | +5.9% | 4.81 | 5.74 | +0.93 | Yes | Yes |
| 2023-01-25 | 6,777 | 6,566 | -3.1% | 4.84 | 5.11 | +0.27 | No | Yes |
| 2022-10-19 | 5,490 | 5,817 | +5.9% | 3.94 | 4.25 | +0.31 | Yes | Yes |
| 2022-07-20 | 5,542 | 5,778 | +4.3% | 3.89 | 3.85 | -0.04 | Yes | No |
| 2022-04-20 | 3,860 | 3,962 | +2.6% | 1.89 | 3.59 | +1.70 | Yes | Yes |
| 2022-01-19 | 5,943 | 5,698 | -4.1% | 4.83 | 5.67 | +0.84 | No | Yes |
| 2021-10-20 | 6,348 | 6,176 | -2.7% | 5.58 | 5.84 | +0.26 | No | Yes |
| 2021-07-21 | 6,348 | 4,846 | -23.7% | 3.45 | 3.58 | +0.13 | No | Yes |
Appendix: Financial Statements - ASML
TTM and Latest (Q) Data as of: 2025-03-30
Income Statement
All figures in Millions of USD unless otherwise noted.
| Item | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Revenue | 30,714.4 | 28,262.9 | 27,558.5 | 21,173.4 | 18,611.0 | 13,978.5 |
| Cost of Revenue | 14,739.3 | 13,770.9 | 13,422.4 | 10,473.3 | 8,802.0 | 7,181.3 |
| Gross Profit | 15,975.1 | 14,492.0 | 14,136.1 | 10,700.1 | 9,809.0 | 6,797.2 |
| SG&A | 1,173.1 | 1,165.7 | 1,113.2 | 945.9 | 725.6 | 544.9 |
| R&D | 4,432.9 | 4,303.7 | 3,980.6 | 3,253.5 | 2,547.0 | 2,200.8 |
| Operating Expenses | 5,606.0 | 5,469.4 | 5,093.8 | 4,199.4 | 3,058.9 | 2,745.7 |
| Operating Income | 10,369.1 | 9,022.6 | 9,042.3 | 6,500.7 | 6,750.1 | 4,051.5 |
| EBITDA | 11,527.2 | 10,151.0 | 9,973.4 | 7,222.3 | 7,420.2 | 4,630.9 |
| EBIT | 10,581.7 | 9,232.4 | 9,233.6 | 6,638.7 | 6,949.2 | 4,140.1 |
| Interest Expense | -42.8 | -19.8 | -41.2 | 44.6 | 44.6 | 34.9 |
| Tax Expense | 1,921.7 | 1,680.6 | 1,435.8 | 969.9 | 1,021.4 | 551.5 |
| Net Income (Cmn) | 8,702.8 | 7,571.6 | 7,839.0 | 5,624.2 | 5,883.2 | 3,553.7 |
| Net Income | 8,702.8 | 7,571.6 | 7,839.0 | 5,624.2 | 5,883.2 | 3,553.7 |
| EPS | $6.00 | $19.25 | $19.91 | $14.14 | $14.36 | $8.49 |
| EPS Diluted | $6.00 | $19.24 | $19.89 | $14.13 | $14.34 | $8.48 |
| Shares (WA) | 392.3M | 393.3M | 393.8M | 397.7M | 409.8M | 418.3M |
| Shares (Diluted) | 392.5M | 393.6M | 394.1M | 398.0M | 410.4M | 419.1M |
| DPS | $1.57 | $6.78 | $6.58 | $8.42 | $3.98 | $2.91 |
Income Statement - Supplemental
| Item | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Revenue YoY | 17.7% | 2.6% | 30.2% | 13.8% | 33.1% | - |
| Gross Margin | 52.0% | 51.3% | 51.3% | 50.5% | 52.7% | 48.6% |
| SG&A Margin | 3.8% | 4.1% | 4.0% | 4.5% | 3.9% | 3.9% |
| R&D Margin | 14.4% | 15.2% | 14.4% | 15.4% | 13.7% | 15.7% |
| Operating Margin | 33.8% | 31.9% | 32.8% | 30.7% | 36.3% | 29.0% |
| Net Margin | 28.3% | 26.8% | 28.4% | 26.6% | 31.6% | 25.4% |
Balance Sheet
All figures in Millions of USD unless otherwise noted.
| Item | Latest (Q) | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Cash & Equivalents | 9,098.4 | 12,735.9 | 7,004.7 | 7,268.3 | 6,951.8 | 6,049.4 |
| Receivables | 4,597.5 | 4,477.5 | 4,334.1 | 5,323.8 | 3,028.0 | 1,310.3 |
| Inventory | 11,024.7 | 10,891.5 | 8,850.7 | 7,199.7 | 5,179.2 | 4,569.4 |
| Current Assets | 27,524.4 | 30,737.4 | 24,393.9 | 23,064.9 | 18,190.2 | 15,930.0 |
| PP&E (Net) | 7,518.3 | 7,234.0 | 5,799.8 | 4,136.9 | 3,147.5 | 2,815.2 |
| Intangibles | 5,180.2 | 5,209.9 | 5,330.3 | 5,398.0 | 5,507.7 | 5,678.0 |
| Non-Current Assets | 17,954.4 | 17,852.2 | 15,563.6 | 13,235.5 | 12,040.8 | 11,337.4 |
| Total Assets | 45,478.8 | 48,589.6 | 39,957.5 | 36,300.4 | 30,231.0 | 27,267.4 |
| Payables | 0.0 | 3,500.4 | 2,347.3 | 2,565.2 | 2,116.3 | 1,377.9 |
| Current Liabilities | 18,123.9 | 20,051.4 | 16,274.7 | 17,983.6 | 12,298.0 | 6,603.5 |
| Non-Current Liabilities | 9,854.2 | 10,061.4 | 10,230.4 | 9,506.0 | 7,792.4 | 6,798.5 |
| Total Liabilities | 27,978.1 | 30,112.8 | 26,505.1 | 27,489.6 | 20,090.4 | 13,402.0 |
| Debt | 3,681.0 | 4,687.6 | 4,631.6 | 4,260.4 | 4,584.1 | 4,678.2 |
| Equity | 17,500.7 | 18,476.8 | 13,452.4 | 8,810.8 | 10,140.6 | 13,865.4 |
Balance Sheet - Supplemental
| Item | Latest (Q) | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Tangible Book | 12,320.5 | 13,266.9 | 8,122.1 | 3,412.8 | 4,632.9 | 8,187.4 |
| Net Debt | -5,417.4 | -8,048.3 | -2,373.1 | -3,007.9 | -2,367.7 | -1,371.2 |
| Debt/Equity | 21.0% | 25.4% | 34.4% | 48.4% | 45.2% | 33.7% |
| Debt/Assets | 8.1% | 9.6% | 11.6% | 11.7% | 15.2% | 17.2% |
Cash Flow Statement
All figures in Millions of USD unless otherwise noted.
| Item | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Net Cash from Ops | 11,359.5 | 11,166.2 | 5,443.4 | 8,486.8 | 10,845.8 | 4,627.6 |
| Depreciation & Amort. | 945.5 | 918.6 | 739.8 | 583.6 | 471.0 | 490.8 |
| CapEx | -2,064.9 | -2,067.2 | -2,155.6 | -1,281.8 | -900.7 | -962.0 |
| Investing Cash Flow | -2,301.4 | -2,609.3 | -2,689.3 | -1,028.9 | -72.0 | -1,352.2 |
| Financing Cash Flow | -5,056.1 | -2,832.1 | -3,003.9 | -7,138.3 | -9,891.7 | -753.0 |
| Net Cash Flow | 3,997.6 | 5,731.2 | -263.6 | 316.5 | 902.4 | 2,517.1 |
Cash Flow Statement - Supplemental
| Item | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 |
|---|---|---|---|---|---|---|
| Free Cash Flow | 13,424.4 | 13,233.4 | 7,599.0 | 9,768.6 | 11,746.5 | 5,589.6 |
| FCF Margin | 43.7% | 46.8% | 27.6% | 46.1% | 63.1% | 40.0% |
Historical Ratios & Multiples - ASML
Historical data as of Fiscal Year End. TTM Market Data as of 2025-11-26; TTM Financial Data as of 2025-03-30.
Valuation
Comparative Analysis
| Metric | TTM | 3Y Avg | % Chg vs 3Y | 5Y Avg | % Chg vs 5Y |
|---|---|---|---|---|---|
| Market Cap | $408.37B | $293.56B | +39.1% | $293.56B | +39.1% |
| Enterprise Value | $402.35B | $288.48B | +39.5% | $288.48B | +39.5% |
| EV/Sales | 11.8x | 10.6x | +11.1% | 10.6x | +11.1% |
| EV/EBIT | 34.2x | 32.7x | +4.5% | 32.7x | +4.5% |
| EV/EBITDA | 31.4x | 30.0x | +4.6% | 30.0x | +4.6% |
| EV/FCF | 43.3x | 59.9x | -27.7% | 59.9x | -27.7% |
| Price/Sales | 12.0x | 10.8x | +11.5% | 10.8x | +11.5% |
| P/E | 42.2x | 39.6x | +6.6% | 39.6x | +6.6% |
| P/FCF | 43.9x | 60.7x | -27.6% | 60.7x | -27.6% |
| P/B | 21.0x | 21.9x | -4.0% | 21.9x | -4.0% |
| P/Tangible Book | 10.1x | 38.0x | -73.3% | 38.0x | -73.3% |
| Graham Number | 157.14 | 120.54 | +30.4% | 120.54 | +30.4% |
Historical Data
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Market Cap | $408.37B | $280.29B | $333.33B | $267.06B |
| Enterprise Value | $402.35B | $270.85B | $330.75B | $263.83B |
| EV/Sales | 11.8x | 9.2x | 11.0x | 11.6x |
| EV/EBIT | 34.2x | 28.2x | 33.0x | 37.0x |
| EV/EBITDA | 31.4x | 25.6x | 30.5x | 34.0x |
| EV/FCF | 43.3x | 31.0x | 109.3x | 39.4x |
| Price/Sales | 12.0x | 9.5x | 11.1x | 11.7x |
| P/E | 42.2x | 35.5x | 39.1x | 44.2x |
| P/FCF | 43.9x | 32.1x | 110.2x | 39.9x |
| P/B | 21.0x | 14.6x | 22.8x | 28.2x |
| P/Tangible Book | 10.1x | 19.7x | 34.3x | 60.0x |
| Graham Number | 157.14 | 145.59 | 128.97 | 87.06 |
Growth
Comparative Analysis
| Metric | TTM | 3Y Avg | Delta vs 3Y | 5Y Avg | Delta vs 5Y |
|---|---|---|---|---|---|
| Revenue YoY | 29.7% | 9.9% | +19.8% | 9.9% | +19.8% |
| FCF YoY | 258.5% | 44.0% | +214.5% | 44.0% | +214.5% |
| Equity YoY | 19.0% | 28.8% | -9.8% | 28.8% | -9.8% |
Historical Data
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Revenue YoY | 29.7% | -0.6% | 31.6% | -1.1% |
| FCF YoY | 258.5% | 185.7% | -54.9% | 1.1% |
| Equity YoY | 19.0% | 33.1% | 54.3% | -1.1% |
Profitability & Quality
Comparative Analysis
| Metric | TTM | 3Y Avg | Delta vs 3Y | 5Y Avg | Delta vs 5Y |
|---|---|---|---|---|---|
| Gross Margin | 52.0% | 51.0% | +1.0% | 51.0% | +1.0% |
| Operating Margin | 30.4% | 44.8% | -14.4% | 44.8% | -14.4% |
| EBIT Margin | 34.5% | 32.5% | +1.9% | 32.5% | +1.9% |
| Pretax Margin | 31.1% | 28.5% | +2.6% | 28.5% | +2.6% |
| Net Margin | 28.3% | 23.9% | +4.4% | 23.9% | +4.4% |
| Effective Tax Rate | 18.1% | 17.2% | +0.9% | 17.2% | +0.9% |
| Operating CF Margin | 33.3% | 29.3% | +4.0% | 29.3% | +4.0% |
| FCF Yield | 2.3% | 2.2% | +0.1% | 2.2% | +0.1% |
| ROA | 19.7% | 18.6% | +1.1% | 18.6% | +1.1% |
| ROCE | 43.6% | 44.3% | -0.6% | 44.3% | -0.6% |
| ROE | 52.1% | 60.1% | -8.0% | 60.1% | -8.0% |
| Return on Tangible Assets | 24.0% | 22.2% | +1.8% | 22.2% | +1.8% |
| ROIC | 60.2% | 60.0% | +0.2% | 60.0% | +0.2% |
Historical Data
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Gross Margin | 52.0% | 51.3% | 51.3% | 50.5% |
| Operating Margin | 30.4% | 47.3% | 43.4% | 43.7% |
| EBIT Margin | 34.5% | 32.7% | 33.5% | 31.4% |
| Pretax Margin | 31.1% | 30.2% | 28.5% | 26.9% |
| Net Margin | 28.3% | 24.7% | 24.1% | 23.0% |
| Effective Tax Rate | 18.1% | 18.9% | 16.8% | 15.8% |
| Operating CF Margin | 33.3% | 36.4% | 16.7% | 34.7% |
| FCF Yield | 2.3% | 3.1% | 0.9% | 2.5% |
| ROA | 19.7% | 17.8% | 21.0% | 16.9% |
| ROCE | 43.6% | 38.9% | 51.7% | 42.1% |
| ROE | 52.1% | 48.0% | 68.4% | 63.9% |
| Return on Tangible Assets | 24.0% | 18.9% | 26.7% | 21.0% |
| ROIC | 60.2% | 51.4% | 68.3% | 60.2% |
Capital Structure & Liquidity
Comparative Analysis
| Metric | TTM | 3Y Avg | % Chg vs 3Y | 5Y Avg | % Chg vs 5Y |
|---|---|---|---|---|---|
| Cash Flow Coverage | 3.09 | 1.84 | +67.8% | 1.84 | +67.8% |
| Cash Ratio | 0.50 | 0.49 | +2.5% | 0.49 | +2.5% |
| Current Ratio | 1.52 | 1.44 | +5.6% | 1.44 | +5.6% |
| Quick Ratio | 0.91 | 0.94 | -3.4% | 0.94 | -3.4% |
| Debt/Assets | 0.62 | 0.68 | -9.5% | 0.68 | -9.5% |
| Debt/Equity | 1.60 | 2.24 | -28.6% | 2.24 | -28.6% |
| Intangibles / Total Assets | 11.4% | 13.0% | -1.6% | 13.0% | -1.6% |
| Interest Coverage | n/a | n/a | n/a | n/a | n/a |
| Net Debt/EBITDA | -0.4x | -0.4x | nmf | -0.4x | nmf |
Historical Data
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Cash Flow Coverage | 3.09 | 2.80 | 0.99 | 1.72 |
| Cash Ratio | 0.50 | 0.64 | 0.43 | 0.40 |
| Current Ratio | 1.52 | 1.53 | 1.50 | 1.28 |
| Quick Ratio | 0.91 | 0.99 | 0.96 | 0.88 |
| Debt/Assets | 0.62 | 0.62 | 0.66 | 0.76 |
| Debt/Equity | 1.60 | 1.63 | 1.97 | 3.12 |
| Intangibles / Total Assets | 11.4% | 10.7% | 13.3% | 14.9% |
| Interest Coverage | n/a | -485.71 | -243.60 | 160.05 |
| Net Debt/EBITDA | -0.4x | -0.8x | -0.1x | -0.3x |
Efficiency & Turnover
Comparative Analysis
| Metric | TTM | 3Y Avg | % Chg vs 3Y | 5Y Avg | % Chg vs 5Y |
|---|---|---|---|---|---|
| Asset Turnover | 0.70 | 0.68 | +2.6% | 0.68 | +2.6% |
| Receivables Turnover | 7.36 | 6.13 | +20.0% | 6.13 | +20.0% |
| Fixed Asset Turnover | 4.87 | 5.75 | -15.3% | 5.75 | -15.3% |
| Payables Turnover | 21.05 | 10.21 | +106.2% | 10.21 | +106.2% |
Historical Data
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Asset Turnover | 0.70 | 0.66 | 0.74 | 0.63 |
| Receivables Turnover | 7.36 | 7.07 | 6.70 | 4.62 |
| Fixed Asset Turnover | 4.87 | 4.77 | 6.52 | 5.95 |
| Payables Turnover | 21.05 | 12.11 | 10.35 | 8.17 |
Capital Allocation
Comparative Analysis
| Metric | TTM | 3Y Avg | Delta vs 3Y | 5Y Avg | Delta vs 5Y |
|---|---|---|---|---|---|
| Dividend Yield | 1.1% | 1.0% | +0.1% | 1.0% | +0.1% |
| Payout Ratio | 0.28 | 0.40 | -30.6% | 0.40 | -30.6% |
| CapEx / Revenue | 6.1% | 6.2% | -0.1% | 6.2% | -0.1% |
| CapEx / Depreciation | 218.4% | 245.4% | -27.0% | 245.4% | -27.0% |
Historical Data
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Dividend Yield | 1.1% | 1.0% | 0.8% | 1.2% |
| Payout Ratio | 0.28 | 0.34 | 0.30 | 0.55 |
| CapEx / Revenue | 6.1% | 6.7% | 6.6% | 5.2% |
| CapEx / Depreciation | 218.4% | 225.0% | 291.4% | 219.6% |
Comparable Companies - ASML
As of 2025-11-26; Current Price: $1,040.97 Peer Average/Median exclude target. Selection based on Dual-Axis Scoring: Product Fit vs. Financial Fit (1-5 Scale). Averages and Medians exclude extreme outliers (Growth > 1,000% or < -100%) and metrics with mixed signs.
Peer Selection Rationale
LRCX (Tier 2: Sector Peer | Prod: 4/5, Fin: 5/5): Direct semiconductor equipment peer (etch and deposition). LRCX exhibits an almost identical financial profile to ASML, with comparable Growth (25.7% vs 20.7%), Margin (33.0% vs 33.8%), and ROIC (56.7% vs 60.2%). This qualifies it as an Economic Twin (B=5). The size ratio (0.48x) is ideal.
KLAC (Tier 2: Sector Peer | Prod: 4/5, Fin: 4/5): Direct equipment peer specializing in process control, metrology, and inspection, which directly overlaps with ASML’s YieldStar products. Financials show strong alignment, particularly in Growth (22.1% vs 20.7%) and high Margins (41.3% vs 33.8%), justifying a Strong Match (B=4).
AMAT (Tier 2: Sector Peer | Prod: 4/5, Fin: 4/5): Core competitor in the semiconductor equipment space (deposition, etch). While AMAT's growth (6.6%) is lower than ASML's (20.7%), its margins (30.1%) and ROIC (42.3%) are highly comparable to the target, providing a strong valuation anchor within the equipment sector (B=4).
TSM (Tier 3: Financial Proxy | Prod: 3/5, Fin: 3/5): Selected as a critical adjacent player (foundry customer). The Value Chain Rule caps the Product Score at 3. However, TSM shares ASML's high-growth (25.5%) and high-margin (49.5%) profile, providing a crucial benchmark for profitability within the advanced semiconductor ecosystem. The size ratio (3.68x) is acceptable for a Financial Score 3.
Valuation
Comparative Analysis
| Metric | ASML | Median | % vs Med | Average | % vs Avg |
|---|---|---|---|---|---|
| Market Cap | $408.37B | $197.00B | +107.3% | $512.54B | -20.3% |
| Enterprise Value | $402.35B | $196.33B | +104.9% | $500.80B | -19.7% |
| EV/Sales | 11.8x | 11.1x | +6.6% | 10.4x | +13.4% |
| EV/EBIT | 34.2x | 26.4x | +29.5% | 26.2x | +30.5% |
| EV/EBITDA | 31.4x | 24.4x | +29.0% | 23.5x | +33.8% |
| EV/FCF | 43.3x | 34.5x | +25.4% | 27.8x | +56.0% |
| Price/Sales | 12.0x | 11.1x | +8.6% | 10.4x | +14.8% |
| P/E | 42.2x | 31.4x | +34.4% | 31.9x | +32.1% |
| P/FCF | 43.9x | 34.7x | +26.8% | 27.6x | +59.3% |
| P/B | 21.0x | 14.7x | +43.3% | 17.2x | +21.7% |
| P/Tangible Book | 10.1x | 8.1x | +24.4% | 6.8x | +48.6% |
| Graham Number | 157.14 | 116.58 | +34.8% | 181.23 | -13.3% |
Peer Data (TTM)
| Metric | ASML | LRCX | KLAC | AMAT | TSM |
|---|---|---|---|---|---|
| Market Cap | $408.37B | $194.86B | $152.29B | $199.14B | $1,503.88B |
| Enterprise Value | $402.35B | $192.65B | $156.23B | $200.01B | $1,454.29B |
| EV/Sales | 11.8x | 9.8x | 12.5x | 7.0x | 12.3x |
| EV/EBIT | 34.2x | 29.5x | 30.2x | 21.8x | 23.3x |
| EV/EBITDA | 31.4x | 27.9x | 28.1x | 20.8x | 17.1x |
| EV/FCF | 43.3x | 34.7x | 40.3x | 34.3x | 1.6x |
| Price/Sales | 12.0x | 9.9x | 12.2x | 7.0x | 12.7x |
| P/E | 42.2x | 33.5x | 35.9x | 29.1x | 29.3x |
| P/FCF | 43.9x | 35.1x | 39.3x | 34.2x | 1.7x |
| P/B | 21.0x | 19.1x | 30.5x | 10.2x | 9.2x |
| P/Tangible Book | 10.1x | 9.7x | 10.8x | 6.6x | 0.2x |
| Graham Number | 157.14 | 28.76 | 165.02 | 68.13 | 463.02 |
Growth
Comparative Analysis
| Metric | ASML | Median | Delta vs Med | Average | Delta vs Avg |
|---|---|---|---|---|---|
| Revenue YoY | 29.7% | 23.8% | +5.9% | 19.9% | +9.8% |
| FCF YoY | 258.5% | 8.6% | +249.9% | 7.2% | +251.3% |
| Equity YoY | 19.0% | 18.4% | +0.5% | 20.1% | -1.1% |
Peer Data (TTM)
| Metric | ASML | LRCX | KLAC | AMAT | TSM |
|---|---|---|---|---|---|
| Revenue YoY | 29.7% | 25.7% | 22.1% | 6.6% | 25.5% |
| FCF YoY | 258.5% | 14.7% | 22.7% | -11.3% | 2.5% |
| Equity YoY | 19.0% | 20.3% | 40.0% | 3.5% | 16.6% |
Profitability & Quality
Comparative Analysis
| Metric | ASML | Median | Delta vs Med | Average | Delta vs Avg |
|---|---|---|---|---|---|
| Gross Margin | 52.0% | 54.1% | -2.1% | 54.5% | -2.5% |
| Operating Margin | 30.4% | 37.1% | -6.7% | 405.4% | -375.0% |
| EBIT Margin | 34.5% | 37.3% | -7.6% | 39.8% | -13.5% |
| Pretax Margin | 31.1% | 36.1% | -5.0% | 427.0% | -395.8% |
| Net Margin | 28.3% | 31.8% | -3.5% | 32.7% | -4.4% |
| Effective Tax Rate | 18.1% | 15.2% | +2.9% | 16.1% | +2.0% |
| Operating CF Margin | 33.3% | 33.3% | +0.0% | 481.3% | -448.0% |
| FCF Yield | 2.3% | 2.9% | -0.6% | 16.9% | -14.6% |
| ROA | 19.7% | 24.7% | -5.0% | 24.4% | -4.7% |
| ROCE | 43.6% | 39.9% | +3.7% | 31.5% | +12.1% |
| ROE | 52.1% | 48.2% | +3.9% | 57.2% | -5.1% |
| Return on Tangible Assets | 24.0% | 25.8% | -1.8% | 20.6% | +3.4% |
| ROIC | 60.2% | 43.3% | +16.9% | 45.6% | +14.6% |
Peer Data (TTM)
| Metric | ASML | LRCX | KLAC | AMAT | TSM |
|---|---|---|---|---|---|
| Gross Margin | 52.0% | 49.3% | 61.3% | 48.5% | 59.0% |
| Operating Margin | 30.4% | 33.0% | 41.3% | 30.1% | 1,517.1% |
| EBIT Margin | 34.5% | 33.3% | 41.3% | 32.0% | 52.7% |
| Pretax Margin | 31.1% | 33.3% | 38.9% | 31.1% | 1,604.6% |
| Net Margin | 28.3% | 29.7% | 33.8% | 23.9% | 43.3% |
| Effective Tax Rate | 18.1% | 10.9% | 13.1% | 23.2% | 17.3% |
| Operating CF Margin | 33.3% | 32.6% | 33.9% | 26.9% | 1,831.8% |
| FCF Yield | 2.3% | 2.8% | 2.5% | 2.9% | 59.4% |
| ROA | 19.7% | 28.0% | 27.1% | 20.2% | 22.3% |
| ROCE | 43.6% | 44.6% | 45.1% | 35.3% | 1.1% |
| ROE | 52.1% | 60.6% | 98.1% | 35.9% | 34.1% |
| Return on Tangible Assets | 24.0% | 28.9% | 30.0% | 22.6% | 0.7% |
| ROIC | 60.2% | 56.7% | 38.9% | 42.3% | 44.3% |
Capital Structure & Liquidity
Comparative Analysis
| Metric | ASML | Median | % vs Med | Average | % vs Avg |
|---|---|---|---|---|---|
| Cash Flow Coverage | 3.09 | 1.33 | +132.5% | 1.41 | +118.1% |
| Cash Ratio | 0.50 | 0.84 | -40.3% | 1.02 | -51.0% |
| Current Ratio | 1.52 | 2.60 | -41.5% | 2.52 | -39.8% |
| Quick Ratio | 0.91 | 1.82 | -50.0% | 1.93 | -52.7% |
| Debt/Assets | 0.62 | 0.48 | +27.6% | 0.49 | +24.6% |
| Debt/Equity | 1.60 | 0.95 | +68.0% | 1.16 | +37.8% |
| Intangibles / Total Assets | 11.4% | 10.0% | +13.9% | 8.4% | +35.0% |
| Interest Coverage | n/a | 17.75 | nmf | 19.24 | nmf |
| Net Debt/EBITDA | -0.4x | nmf | nmf | nmf | nmf |
Peer Data (TTM)
| Metric | ASML | LRCX | KLAC | AMAT | TSM |
|---|---|---|---|---|---|
| Cash Flow Coverage | 3.09 | 1.42 | 0.72 | 1.23 | 2.28 |
| Cash Ratio | 0.50 | 1.00 | 0.48 | 0.68 | 1.94 |
| Current Ratio | 1.52 | 2.21 | 2.69 | 2.50 | 2.69 |
| Quick Ratio | 0.91 | 1.60 | 1.88 | 1.76 | 2.47 |
| Debt/Assets | 0.62 | 0.53 | 0.69 | 0.43 | 0.32 |
| Debt/Equity | 1.60 | 1.15 | 2.27 | 0.75 | 0.46 |
| Intangibles / Total Assets | 11.4% | 8.3% | 13.4% | 11.7% | 0.3% |
| Interest Coverage | n/a | n/a | 17.75 | 34.71 | 5.26 |
| Net Debt/EBITDA | -0.4x | -0.3x | 0.7x | 0.1x | -17.9x |
Efficiency & Turnover
Comparative Analysis
| Metric | ASML | Median | % vs Med | Average | % vs Avg |
|---|---|---|---|---|---|
| Asset Turnover | 0.70 | 0.82 | -15.4% | 0.78 | -10.3% |
| Receivables Turnover | 7.36 | 5.39 | +36.5% | 4.29 | +71.5% |
| Fixed Asset Turnover | 4.87 | 8.12 | -40.0% | 6.66 | -26.9% |
| Payables Turnover | 21.05 | 8.12 | +159.3% | 7.89 | +166.9% |
Peer Data (TTM)
| Metric | ASML | LRCX | KLAC | AMAT | TSM |
|---|---|---|---|---|---|
| Asset Turnover | 0.70 | 0.94 | 0.80 | 0.84 | 0.52 |
| Receivables Turnover | 7.36 | 5.94 | 5.70 | 5.08 | 0.44 |
| Fixed Asset Turnover | 4.87 | 8.27 | 10.36 | 7.97 | 0.03 |
| Payables Turnover | 21.05 | 12.12 | 11.39 | 3.20 | 4.84 |
Capital Allocation
Comparative Analysis
| Metric | ASML | Median | Delta vs Med | Average | Delta vs Avg |
|---|---|---|---|---|---|
| Dividend Yield | 1.1% | 0.8% | +0.3% | 0.8% | +0.3% |
| Payout Ratio | 0.28 | 0.22 | +27.5% | 0.23 | +19.6% |
| CapEx / Revenue | 6.1% | 5.4% | +11.7% | 273.0% | -97.8% |
| CapEx / Depreciation | 218.4% | 197.6% | +10.5% | 231.7% | -5.7% |
Peer Data (TTM)
| Metric | ASML | LRCX | KLAC | AMAT | TSM |
|---|---|---|---|---|---|
| Dividend Yield | 1.1% | 0.6% | 0.6% | 1.0% | 1.0% |
| Payout Ratio | 0.28 | 0.21 | 0.23 | 0.20 | 0.29 |
| CapEx / Revenue | 6.1% | 4.3% | 3.0% | 6.6% | 1,078.1% |
| CapEx / Depreciation | 218.4% | 211.8% | 95.0% | 436.7% | 183.4% |
Buyback Timing Analysis - ASML (Ref Price: $1040.97 | 5Y Avg Price: $649.08)
| Period | Buybacks ($M) | Net Share Δ | Avg Price | Tranche ROI | vs 5Y Avg | EV/EBITDA | vs 5Y | P/TB | vs 5Y | Timing Score |
|---|---|---|---|---|---|---|---|---|---|---|
| 2025-03-30 | 2,554.6 | -1.1M | $728.58 | 42.9% | +12.2% | 21.1x | -40.5% | 20.2x | -57.4% | 62.5% |
| 2024-06-30 | 83.7 | -0.2M | $961.34 | 8.3% | +48.1% | 41.7x | +17.4% | 38.9x | -18.1% | 31.4% |
| 2024-03-31 | 355.8 | -0.7M | $887.02 | 17.4% | +36.7% | 38.8x | +9.3% | 42.1x | -11.3% | 32.3% |
| 2023-10-01 | 85.4 | -0.3M | $664.15 | 56.7% | +2.3% | 23.6x | -33.5% | 34.5x | -27.3% | 55.7% |
| 2023-07-02 | 467.5 | -0.8M | $679.87 | 53.1% | +4.7% | 29.8x | -16.0% | 53.6x | +13.0% | 38.5% |
| 2023-04-02 | 373.5 | -3.2M | $642.12 | 62.1% | -1.1% | 28.0x | -21.2% | 55.7x | +17.5% | 42.2% |
| 2022-12-31 | 316.2 | 2.8M | $523.80 | 98.7% | -19.3% | 36.9x | +3.8% | 78.9x | +66.4% | 40.6% |
| 2022-12-31 | 316.1 | -1.4M | $523.80 | 98.7% | -19.3% | 36.5x | +2.8% | 78.4x | +65.2% | 42.7% |
| 2022-10-02 | 1,068.0 | 0.5M | $501.83 | 107.4% | -22.7% | 23.8x | -33.1% | 66.5x | +40.1% | 47.7% |
| 2022-07-03 | 1,157.1 | -5.4M | $554.66 | 87.7% | -14.5% | 26.9x | -24.2% | 103.4x | +117.9% | 36.7% |
| 2022-04-03 | 2,016.7 | -3.5M | $669.65 | 55.4% | +3.2% | 38.0x | +7.0% | 76.4x | +61.0% | 29.8% |
| 2021-12-31 | 2,595.1 | 0.0M | $794.39 | 31.0% | +22.4% | 36.8x | +3.6% | 59.5x | +25.4% | 20.0% |
| 2021-12-31 | 2,595.2 | -3.6M | $794.39 | 31.0% | +22.4% | 36.7x | +3.4% | 59.5x | +25.4% | 20.0% |
| 2021-10-03 | 2,389.3 | -3.6M | $788.59 | 32.0% | +21.5% | 43.7x | +23.0% | 52.4x | +10.5% | 28.7% |
| 2021-07-04 | 1,970.4 | -3.6M | $660.66 | 57.6% | +1.8% | 46.4x | +30.5% | 46.7x | -1.6% | 45.9% |
| 2021-04-04 | 1,556.6 | -1.8M | $555.95 | 87.2% | -14.3% | 46.6x | +31.1% | 33.8x | -28.7% | 69.9% |
| 2020-12-31 | 692.1 | -0.8M | $420.81 | 147.4% | -35.2% | 50.8x | +43.0% | 28.9x | -39.1% | 80.9% |
| 2020-12-31 | 692.1 | -0.8M | $420.81 | 147.4% | -35.2% | 50.9x | +43.3% | 29.0x | -38.9% | 78.8% |
Execution Details
2025-03-30
Action: Repurchased 2,554.6M at Avg Price $728.58 (Tranche ROI: 42.9%). Net shares change: -1.1M.
Valuation: EV/EBITDA 21.1x (vs 5Y: 35.5x / -40.5%); P/TB 20.2x (vs 5Y: 47.4x / -57.4%).
Context: Net Leverage -0.5x; FCF Margin 30.3%; Qtr Buyback Yield 1.0%.
2024-06-30
Action: Repurchased 83.7M at Avg Price $961.34 (Tranche ROI: 8.3%). Net shares change: -0.2M.
Valuation: EV/EBITDA 41.7x (vs 5Y: 35.5x / +17.4%); P/TB 38.9x (vs 5Y: 47.4x / -18.1%).
Context: Net Leverage -0.0x; FCF Margin 11.6%; Qtr Buyback Yield 0.0%.
2024-03-31
Action: Repurchased 355.8M at Avg Price $887.02 (Tranche ROI: 17.4%). Net shares change: -0.7M.
Valuation: EV/EBITDA 38.8x (vs 5Y: 35.5x / +9.3%); P/TB 42.1x (vs 5Y: 47.4x / -11.3%).
Context: Net Leverage -0.1x; FCF Margin 9.3%; Qtr Buyback Yield 0.1%.
2023-10-01
Action: Repurchased 85.4M at Avg Price $664.15 (Tranche ROI: 56.7%). Net shares change: -0.3M.
Valuation: EV/EBITDA 23.6x (vs 5Y: 35.5x / -33.5%); P/TB 34.5x (vs 5Y: 47.4x / -27.3%).
Context: Net Leverage -0.0x; FCF Margin 20.8%; Qtr Buyback Yield 0.0%.
2023-07-02
Action: Repurchased 467.5M at Avg Price $679.87 (Tranche ROI: 53.1%). Net shares change: -0.8M.
Valuation: EV/EBITDA 29.8x (vs 5Y: 35.5x / -16.0%); P/TB 53.6x (vs 5Y: 47.4x / +13.0%).
Context: Net Leverage -0.2x; FCF Margin 22.3%; Qtr Buyback Yield 0.2%.
2023-04-02
Action: Repurchased 373.5M at Avg Price $642.12 (Tranche ROI: 62.1%). Net shares change: -3.2M.
Valuation: EV/EBITDA 28.0x (vs 5Y: 35.5x / -21.2%); P/TB 55.7x (vs 5Y: 47.4x / +17.5%).
Context: Net Leverage -0.4x; FCF Margin 33.8%; Qtr Buyback Yield 0.2%.
2022-12-31
Action: Repurchased 316.2M at Avg Price $523.80 (Tranche ROI: 98.7%). Net shares change: 2.8M.
Valuation: EV/EBITDA 36.9x (vs 5Y: 35.5x / +3.8%); P/TB 78.9x (vs 5Y: 47.4x / +66.4%).
Context: Net Leverage -0.4x; FCF Margin 34.0%; Qtr Buyback Yield 0.1%.
2022-12-31
Action: Repurchased 316.1M at Avg Price $523.80 (Tranche ROI: 98.7%). Net shares change: -1.4M.
Valuation: EV/EBITDA 36.5x (vs 5Y: 35.5x / +2.8%); P/TB 78.4x (vs 5Y: 47.4x / +65.2%).
Context: Net Leverage -0.5x; FCF Margin 34.0%; Qtr Buyback Yield 0.1%.
2022-10-02
Action: Repurchased 1,068.0M at Avg Price $501.83 (Tranche ROI: 107.4%). Net shares change: 0.5M.
Valuation: EV/EBITDA 23.8x (vs 5Y: 35.5x / -33.1%); P/TB 66.5x (vs 5Y: 47.4x / +40.1%).
Context: Net Leverage 0.0x; FCF Margin 42.8%; Qtr Buyback Yield 0.6%.
2022-07-03
Action: Repurchased 1,157.1M at Avg Price $554.66 (Tranche ROI: 87.7%). Net shares change: -5.4M.
Valuation: EV/EBITDA 26.9x (vs 5Y: 35.5x / -24.2%); P/TB 103.4x (vs 5Y: 47.4x / +117.9%).
Context: Net Leverage 0.0x; FCF Margin 50.7%; Qtr Buyback Yield 0.6%.
2022-04-03
Action: Repurchased 2,016.7M at Avg Price $669.65 (Tranche ROI: 55.4%). Net shares change: -3.5M.
Valuation: EV/EBITDA 38.0x (vs 5Y: 35.5x / +7.0%); P/TB 76.4x (vs 5Y: 47.4x / +61.0%).
Context: Net Leverage -0.1x; FCF Margin 57.6%; Qtr Buyback Yield 0.8%.
2021-12-31
Action: Repurchased 2,595.1M at Avg Price $794.39 (Tranche ROI: 31.0%).
Valuation: EV/EBITDA 36.8x (vs 5Y: 35.5x / +3.6%); P/TB 59.5x (vs 5Y: 47.4x / +25.4%).
Context: Net Leverage -0.3x; FCF Margin 53.4%; Qtr Buyback Yield 0.9%.
2021-12-31
Action: Repurchased 2,595.2M at Avg Price $794.39 (Tranche ROI: 31.0%). Net shares change: -3.6M.
Valuation: EV/EBITDA 36.7x (vs 5Y: 35.5x / +3.4%); P/TB 59.5x (vs 5Y: 47.4x / +25.4%).
Context: Net Leverage -0.4x; FCF Margin 53.4%; Qtr Buyback Yield 0.9%.
2021-10-03
Action: Repurchased 2,389.3M at Avg Price $788.59 (Tranche ROI: 32.0%). Net shares change: -3.6M.
Valuation: EV/EBITDA 43.7x (vs 5Y: 35.5x / +23.0%); P/TB 52.4x (vs 5Y: 47.4x / +10.5%).
Context: Net Leverage -0.0x; FCF Margin 47.7%; Qtr Buyback Yield 0.8%.
2021-07-04
Action: Repurchased 1,970.4M at Avg Price $660.66 (Tranche ROI: 57.6%). Net shares change: -3.6M.
Valuation: EV/EBITDA 46.4x (vs 5Y: 35.5x / +30.5%); P/TB 46.7x (vs 5Y: 47.4x / -1.6%).
Context: Net Leverage -0.1x; FCF Margin 41.6%; Qtr Buyback Yield 0.7%.
2021-04-04
Action: Repurchased 1,556.6M at Avg Price $555.95 (Tranche ROI: 87.2%). Net shares change: -1.8M.
Valuation: EV/EBITDA 46.6x (vs 5Y: 35.5x / +31.1%); P/TB 33.8x (vs 5Y: 47.4x / -28.7%).
Context: Net Leverage 0.2x; FCF Margin 21.2%; Qtr Buyback Yield 0.6%.
2020-12-31
Action: Repurchased 692.1M at Avg Price $420.81 (Tranche ROI: 147.4%). Net shares change: -0.8M.
Valuation: EV/EBITDA 50.8x (vs 5Y: 35.5x / +43.0%); P/TB 28.9x (vs 5Y: 47.4x / -39.1%).
Context: Net Leverage -0.3x; FCF Margin 26.2%; Qtr Buyback Yield 0.3%.
2020-12-31
Action: Repurchased 692.1M at Avg Price $420.81 (Tranche ROI: 147.4%). Net shares change: -0.8M.
Valuation: EV/EBITDA 50.9x (vs 5Y: 35.5x / +43.3%); P/TB 29.0x (vs 5Y: 47.4x / -38.9%).
Context: Net Leverage -0.3x; FCF Margin 26.2%; Qtr Buyback Yield 0.3%.
Capital Allocation Profile (TTM)
Buyback Quality: Timing Score 62.5% (Higher=Better); Net Yield 0.9%; SBC Offset 1.6%.
Return on Invested Capital: ROIC 49.3%; Stability (5Y) 0.09; Incremental (1Y) -.
Working Capital Efficiency: DSO 54.64; DIO 273.01; DPO 0.00; CCC 327.65 days.
Growth Decomposition (5Y): Share Reduction 1.1% (CAGR); EPS Operating Growth 13.5% vs Accretion 1.1%.
Balance Sheet: Net Leverage -0.5x; Interest Coverage 247.2x; Effective Int Rate 1.0%.
Capital Deployment: Reinvestment Rate 10.3%; Div Yield -; M&A Spend $0.0M.
Metric Definitions
Timing Score: Percentile rank of the Purchase Valuation (Price & P/TB) relative to the 5-Year range. Higher (>50%) implies buying at the bottom of the 5-year cycle.
SBC Offset: Stock-Based Comp Expense / Buyback Spend. >100% means buybacks didn't fully offset dilution.
Net Yield: (Buybacks - Share Issuance) / Market Cap.
Reinvestment Rate: (CapEx + M&A) / Operating Cash Flow (TTM).
ROIC Stability: Standard Deviation of ROIC over 20 quarters (lower is more stable).
Incremental ROIC: Change in NOPAT / Change in Invested Capital (1Y). Return on new capital deployed.
Growth Decomposition:
Operating: CAGR of Net Income (Growth from business performance).
Accretion: Negative CAGR of Share Count (Growth from shrinking denominator).
Tranche ROI: % Return on the specific buyback quarter based on current stock price. (Current Price / Avg Buyback Price - 1). Measures outcome of capital deployment.
DCF Valuation & Sensitivity Analysis: ASML Holding N.V. - ASML
| Item | Value |
|---|---|
| Discount Rate | 12.0% |
| Latest Net Debt | -5.4 B USD |
| Diluted Shares Outstanding | 392,500,000 |
| Current Share Price | $987.82 (as of 2025-11-24) |
| Base Case Exit Multiple | 30.0x |
All figures in Millions of USD unless otherwise noted
| Metric | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|---|---|---|---|---|---|
| Revenue | 37,738.8 | 38,646.6 | 43,284.2 | 48,045.5 | 52,369.6 |
| Revenue Growth (%) | 33.5% | 2.4% | 12.0% | 11.0% | 9.0% |
| R&D (% of Revenue) | 14.5% | 14.5% | 14.0% | 14.0% | 13.5% |
| SG&A (% of Revenue) | 4.0% | 4.0% | 4.0% | 4.0% | 4.0% |
| EBITDA | 13,170.9 | 13,350.3 | 15,264.0 | 17,094.2 | 18,804.8 |
| EBIT | 11,963.5 | 12,113.2 | 13,879.7 | 15,554.4 | 17,128.5 |
| Operating Margin (%) | 31.7% | 31.3% | 32.1% | 32.4% | 32.7% |
| EBIAT | 10,000.0 | 10,114.5 | 11,589.6 | 12,987.9 | 14,302.3 |
| D&A | 1,207.4 | 1,237.1 | 1,384.3 | 1,539.8 | 1,676.3 |
| CapEx | -2,641.7 | -2,705.3 | -2,856.8 | -2,978.8 | -3,246.9 |
| Change in NWC | -1,137.1 | -108.9 | -556.5 | -571.4 | -518.9 |
| Projected FCFF | 7,428.6 | 8,537.4 | 9,560.6 | 10,977.5 | 12,212.8 |
2.1 Base Case Valuation Bridge
| Metric | Value |
|---|---|
| (+) Sum of PV of FCFFs | 34.1 B USD |
| (+) PV of Terminal Value | 320 B USD |
| (=) Enterprise Value (EV) | 354 B USD |
| (-) Net Debt | (-5.4 B USD) |
| (=) Equity Value | 360 B USD |
| Implied Value per Share | $916.38 |
| % Upside vs. Current | -7.2% |
| Item | Bear Case | Base Case | Bull Case |
|---|---|---|---|
| Enterprise Value | 211 B | 354 B | 463 B |
| Implied Value / Share | $551.55 | $916.38 | $1,193.65 |
| % Upside vs. Current | -44.2% | -7.2% | +20.8% |
3.1 Probability-Weighted Implied Value
| Case | Implied Value / Share | Assigned Probability | Weighted Value |
|---|---|---|---|
| Bear Case | $551.55 | 20.0% | $110.31 |
| Base Case | $916.38 | 50.0% | $458.19 |
| Bull Case | $1,193.65 | 30.0% | $358.09 |
Probability-Weighted Implied Value: $926.59
% vs. Current Price: -6.2%
Methodology: The Exit Multiple Method will be used, based on the EV/EBITDA multiple.
Justification & Data-Driven Weighting:
Step A: Assess Data Quality & Establish a Weighted Anchor.
Data Hygiene: A review of the historical EV/EBITDA multiples (25.6x, 30.5x, 34.0x) shows no extreme outliers caused by the denominator effect. The 5-year historical average of 30.0x is a Strong anchor.
Peer Set Quality: The peer set has a moderate-to-high average similarity score of 0.77. The peer EV/EBITDA multiples show reasonable dispersion, with a median of 25.4x. This is considered a Moderate anchor.
Justify Weighting: Based on the strong quality of the historical data and the moderate quality of the peer set, we establish a quantitative anchor using a 60% weight on the historical average and a 40% weight on the peer median. The resulting weighted anchor is 28.2x (0.60 * 30.0x + 0.40 * 25.4x).
Step B: Apply Qualitative Adjustment.
The Comparative Rule: We assess if ASML is "Best-in-Class" relative to its high-quality peer group.
The Adjustment: A significant premium is justified. The primary driver is the ROIC Gap: ASML's TTM ROIC of 60.2% is massively superior to the peer median of 40.6%. This exceptional capital efficiency is a direct result of its technological monopoly. This is further supported by the narrative conclusion that its Moat Trajectory is "Widening," which implies its competitive and financial advantages are growing, not just stable. These factors warrant a +1.8x qualitative premium to the quantitative anchor.
Step C: State the Final Multiple.
This section varies the Discount Rate (columns) and Exit Multiple (rows) around the Base Case assumptions; FCFF path is Base Case.
Valuation Sensitivity Matrix ($ / Share)
| Exit Multiple \ Discount Rate | 10.0% | 11.0% | 12.0% | 13.0% | 14.0% |
|---|---|---|---|---|---|
| 28.0x | $938.67 | $899.31 | $862.01 | $826.62 | $793.03 |
| 29.0x | $968.42 | $927.75 | $889.19 | $852.62 | $817.91 |
| 30.0x | $998.16 | $956.18 | $916.38 | $878.62 | $842.80 |
| 31.0x | $1,027.91 | $984.61 | $943.56 | $904.63 | $867.68 |
| 32.0x | $1,057.66 | $1,013.04 | $970.75 | $930.63 | $892.56 |
Upside Sensitivity Matrix (%)
| Exit Multiple \ Discount Rate | 10.0% | 11.0% | 12.0% | 13.0% | 14.0% |
|---|---|---|---|---|---|
| 28.0x | -5.0% | -9.0% | -12.7% | -16.3% | -19.7% |
| 29.0x | -2.0% | -6.1% | -10.0% | -13.7% | -17.2% |
| 30.0x | +1.0% | -3.2% | -7.2% | -11.1% | -14.7% |
| 31.0x | +4.1% | -0.3% | -4.5% | -8.4% | -12.2% |
| 32.0x | +7.1% | +2.6% | -1.7% | -5.8% | -9.6% |
Prob Wtd. Value - Discount Rate
| Discount Rate | 10.0% | 11.0% | 12.0% | 13.0% | 14.0% |
|---|---|---|---|---|---|
| PWER ($/sh) | $1,009.40 | $966.89 | $926.59 | $888.37 | $852.10 |
Prob Wtd. Value - Multiples
| Base Case Multiple | 28.0x | 29.0x | 30.0x | 31.0x | 32.0x |
|---|---|---|---|---|---|
| PWER ($/sh) | $872.25 | $899.42 | $926.59 | $953.76 | $980.93 |
Coverage: November 27, 2020 - November 27, 2025
Tier legend: Tier 1 = material; Tier 2 = secondary context.
Date: July 16, 2025
Close Price: $754.45
SPY Return: +0.33%
XLK Return: +0.31%
Primary Event: ASML reported Q2 2025 results with €7.7 billion net sales and €2.3 billion net income.
Core Event: ASML reported Q2 2025 results with €7.7 billion net sales and €2.3 billion net income. Key Details:
Press release dated July 16, 2025
Expected 2025 sales growth ~15% with 52% gross margin Financial Impact: Maintained full-year guidance with margin target
EPS Beat/Miss: -23.4%
Actual: $4.55
Estimated: $5.94 Revenue Beat/Miss: -0.8%
Actual: $8,724,755,700
Estimated: $8,792,650,719
Date: April 16, 2025
Close Price: $634.93
SPY Return: -2.22%
XLK Return: -3.47%
Primary Event: ASML reported Q1 2025 results with €7.7 billion net sales and €2.4 billion net income.
Core Event: ASML reported Q1 2025 results with €7.7 billion net sales and €2.4 billion net income. Key Details:
Press release dated April 16, 2025
2025 sales guidance between €30-35 billion Financial Impact: Significant year-over-year growth projected
EPS Beat/Miss: +3.1%
Actual: $6.31
Estimated: $6.12 Revenue Beat/Miss: -7.5%
Actual: $8,251,961,684
Estimated: $8,916,707,062
Date: October 15, 2024
Close Price: $730.43
SPY Return: -0.78%
XLK Return: -2.20%
Primary Event: ASML reported Q3 2024 results with €7.5 billion net sales and €2.1 billion net income.
Core Event: ASML reported Q3 2024 results with €7.5 billion net sales and €2.1 billion net income. Key Details:
Press release dated October 15, 2024
Expected 2024 sales around €28 billion Financial Impact: Maintained full-year sales target
EPS Beat/Miss: +8.5%
Actual: $5.74
Estimated: $5.29 Revenue Beat/Miss: -14.4%
Actual: $8,340,824,754
Estimated: $9,748,556,751
Firm: Raymond James Analyst: Srini Pajjuri Price Target: $1,100.00 Price When Posted: $872.27 Implied Upside: +26.1% Source: https://www.streetinsider.com/Analyst+Comments/ASML+Inc.+%28ASML%29+PT+Lowered+to+%241%2C100+at+Raymond+James/23833834.html
Date: July 17, 2024
Close Price: $932.06
SPY Return: -1.40%
XLK Return: -3.89%
Primary Event: ASML reported Q2 2024 results with €6.2 billion net sales and €1.6 billion net income.
Core Event: ASML reported Q2 2024 results with €6.2 billion net sales and €1.6 billion net income. Key Details:
Press release dated July 17, 2024
Maintained 2024 sales outlook similar to 2023 Financial Impact: Anticipated stronger second-half performance
EPS Beat/Miss: +7.4%
Actual: $4.36
Estimated: $4.06 Revenue Beat/Miss: -5.8%
Actual: $6,733,436,013
Estimated: $7,150,556,246
Date: April 17, 2024
Close Price: $907.61
SPY Return: -0.59%
XLK Return: -1.44%
Primary Event: ASML reported Q1 2024 results with €5.3 billion net sales and €1.2 billion net income.
Core Event: ASML reported Q1 2024 results with €5.3 billion net sales and €1.2 billion net income. Key Details:
Press release dated April 17, 2024
2024 outlook unchanged Financial Impact: Maintained full-year financial guidance
EPS Beat/Miss: +10.3%
Actual: $3.31
Estimated: $3.00 Revenue Beat/Miss: -2.3%
Actual: $5,739,313,293
Estimated: $5,875,481,349
Date: January 24, 2024
Close Price: $847.31
SPY Return: +0.11%
XLK Return: +0.69%
Primary Event: ASML reported 2023 annual results with €27.6 billion net sales and €7.8 billion net income.
Core Event: ASML reported 2023 annual results with €27.6 billion net sales and €7.8 billion net income. Key Details:
Press release dated January 24, 2024
2024 expected to be transition year with similar sales Financial Impact: Flat year-over-year sales projection
EPS Beat/Miss: +8.9%
Actual: $5.64
Estimated: $5.18 Revenue Beat/Miss: +4.5%
Actual: $7,777,745,625
Estimated: $7,440,656,447
Event Date: July 19, 2023
Price Move Date: July 20, 2023
Close Price: $676.13
SPY Return: -0.66%
XLK Return: -2.00%
Primary Event: ASML reported Q2 2023 results with €6.9 billion net sales and €1.9 billion net income.
Core Event: ASML reported Q2 2023 results with €6.9 billion net sales and €1.9 billion net income. Key Details:
Press release dated July 19, 2023
Expected 2023 sales growth towards 30% Financial Impact: Increased DUV revenue driving growth
EPS Beat/Miss: +8.5%
Actual: $5.49
Estimated: $5.06 Revenue Beat/Miss: +1.5%
Actual: $7,513,867,913
Estimated: $7,403,193,242
Date: November 10, 2022
Close Price: $560.79
SPY Return: +5.50%
XLK Return: +8.22%
Primary Event: ASML provided updated demand outlook and capacity plans at Investor Day meeting.
Other Events on This Date:
Core Event: ASML provided updated demand outlook and capacity plans at Investor Day meeting. Key Details:
Press release dated November 10, 2022
Incorporated by reference in multiple Form S-8 filings
Date: October 19, 2022
Close Price: $424.02
SPY Return: -0.71%
XLK Return: -0.29%
Primary Event: ASML reported Q3 2022 results with €5.8 billion net sales and €1.7 billion net income.
Core Event: ASML reported Q3 2022 results with €5.8 billion net sales and €1.7 billion net income. Key Details:
Press release dated October 19, 2022
Expected 2022 sales around €21 billion Financial Impact: Maintaining annual sales target
EPS Beat/Miss: +7.9%
Actual: $4.25
Estimated: $3.94 Revenue Beat/Miss: +5.9%
Actual: $5,816,579,272
Estimated: $5,490,245,656
Event Date: July 20, 2022
Price Move Date: July 21, 2022
Close Price: $542.27
SPY Return: +1.02%
XLK Return: +1.41%
Primary Event: ASML reported Q2 2022 results with €5.4 billion net sales and €1.4 billion net income.
Core Event: ASML reported Q2 2022 results with €5.4 billion net sales and €1.4 billion net income. Key Details:
Press release dated July 20, 2022
Supply chain constraints impacting shipments
Expected 2022 sales growth ~10% Financial Impact: Reduced growth projection due to operational challenges
EPS Beat/Miss: -1.0%
Actual: $3.85
Estimated: $3.89 Revenue Beat/Miss: +4.3%
Actual: $5,777,811,248
Estimated: $5,541,778,680
Event Date: March 15, 2022
Price Move Date: March 16, 2022
Close Price: $650.63
SPY Return: +2.22%
XLK Return: +3.25%
Primary Event: ASML published agenda for 2022 Annual General Meeting.
Core Event: ASML published agenda for 2022 Annual General Meeting. Key Details:
Press release dated March 15, 2022
Included notice, agenda, and proposed Articles amendments
AGM materials attached as exhibits
Date: July 21, 2021
Close Price: $721.00
SPY Return: +0.81%
XLK Return: +0.96%
Primary Event: ASML reported Q2 2021 results with €4.0 billion net sales and €1.0 billion net income.
Core Event: ASML reported Q2 2021 results with €4.0 billion net sales and €1.0 billion net income. Key Details:
Press release dated July 21, 2021
Revised 2021 sales growth to ~35% Financial Impact: Increased growth projection from prior guidance
EPS Beat/Miss: +3.8%
Actual: $3.58
Estimated: $3.45 Revenue Beat/Miss: -23.7%
Actual: $4,846,400,148
Estimated: $6,347,800,000
Date: April 21, 2021
Close Price: $655.49
SPY Return: +0.95%
XLK Return: +1.01%
Primary Event: ASML reported Q1 2021 results with €4.4 billion net sales and €1.3 billion net income.
Core Event: ASML reported Q1 2021 results with €4.4 billion net sales and €1.3 billion net income. Key Details:
Press release dated April 21, 2021
Expected 30% sales growth for 2021 Financial Impact: Strong demand driving increased growth projection
EPS Beat/Miss: +28.0%
Actual: $4.66
Estimated: $3.64 Revenue Beat/Miss: +66.8%
Actual: $5,254,253,083
Estimated: $3,150,100,000
Earnings Call Transcript Summary: ASML
This report is a summary of 12 available earnings call transcripts for the period spanning January 2023 to October 2025.
Part 1: Individual Transcript Summaries
FY2025 Q3 Earnings Call Summary (Date: 2025-10-15)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Net sales were €7.5 B, including €2.0 B from installed base revenue and the recognition of one High NA system. Gross margin was 51.6%, within guidance. Net income was €2.1 B. Net bookings for the quarter were €5.4 B, including €3.6 B for EUV systems.
Strategic Narrative & Initiatives: The strategic narrative is centered on leveraging AI to drive demand for advanced logic and DRAM, increasing lithography intensity (especially EUV), and expanding into 3D integration/advanced packaging. A key initiative is the strategic partnership with Mistral AI, where ASML was the lead investor in their Series C funding, taking an approximately 11.0% share, to enhance software content, precision, and speed of ASML tools, and accelerate product development time-to-market.
Business Segment Performance: The dynamics are expected to favor EUV, which is projected to increase, while Deep UV business is expected to be lowered due to reduced demand from China in 2026. The first advanced packaging product, the XT260 high productivity scanner (offering up to 4.0x productivity improvement), was shipped to support 3D integration.
Macro & Industry Environment: Management noted positive news reducing uncertainty, specifically strong commitments to AI leading to investments in advanced logic and DRAM, and the benefit of AI extending to a larger customer base. However, demand from Chinese customers is expected to be significantly lower in 2026 compared to the strong performance in 2024 and 2025.
Guidance & Outlook: Q4 2025 revenue is guided between €9.2 B and €9.8 B, with installed base revenue of approximately €2.1 B. Q4 gross margin is expected between 51.0% and 53.0%. Full year 2025 net sales are expected to be around €32.5 B, with a gross margin around 52.0%. For 2026, net sales are expected to not be below 2025 levels, despite the anticipated reduction in China Deep UV business. Long-term 2030 revenue opportunity remains between €44 B and €60 B, with gross margin between 56.0% and 60.0%.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary themes were the outlook for 2026 sales growth given geopolitical uncertainties, the impact of the High NA EUV technology roadmap and adoption timing, and the strategic rationale behind the Mistral AI partnership.
Challenging Questions & Management Response: Analysts probed the impact of reduced China demand on the 2026 outlook. Management acknowledged the expected decline in Deep UV sales to China but maintained confidence that overall 2026 net sales would not be below 2025 levels, driven by strong AI-related demand favoring EUV and advanced nodes globally.
Notable Insights & Clarifications: Management clarified that the High NA system maturity is ahead of Low NA at a similar stage of introduction. They also emphasized that the collaboration with Mistral AI is strategic, focusing on improving software content for precision and speed in their lithography and metrology tools.
FY2025 Q2 Earnings Call Summary (Date: 2025-07-16)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Total net sales were €7.7 B, at the upper end of guidance, driven by the revenue recognition of one High NA system and additional upgrade business. Net system sales were €5.6 B (EUV: €2.7 B; non-EUV: €2.9 B), with Logic accounting for 69.0%. Installed Base Management sales were €2.1 B, above guidance. Gross margin was 53.7%, above guidance, benefiting from upgrade business, one-off cost items, and lower-than-expected tariff impact, partially offset by the High NA system's dilutive effect. EPS was $5.90. Net system bookings were €5.5 B (EUV: €2.3 B; non-EUV: €3.2 B), skewed 84.0% towards Logic. Backlog ended at around €33 B, reflecting a €1.4 B adjustment related to customer response to 2024 export restrictions (Deep UV/Applications).
Strategic Narrative & Initiatives: AI remains the key growth driver for both Memory (HBM/DDR5) and Logic (leading-edge nodes). The focus is on increasing EUV capacity (expected up 30.0% in 2025) and transitioning to higher productivity tools (NXE:3800E and EXE:5200B). Management highlighted the completion of NXE:3800E productivity upgrades to the 220 wafers per hour configuration. The first EXE:5200B system (High NA, 175 wafers per hour) was shipped and commenced installation for high-volume manufacturing insertion.
Business Segment Performance: Logic system revenue is expected to increase in 2025. Memory system revenue is expected to remain strong. China revenue is expected to account for over 25.0% of total revenue this year, moderating towards its backlog proportion. EUV revenue growth is expected to be around 30.0% in 2025 (Low NA capacity increase + High NA revenue). Deep UV and Metrology/Inspection revenue is expected to be similar to 2024. Installed Base Management revenue is expected to grow more than 20.0% year-over-year, driven by service and EUV service contribution.
Macro & Industry Environment: Increasing uncertainty due to macroeconomic and geopolitical developments, particularly surrounding tariffs, which could have direct and indirect impacts (e.g., on GDP and market demand). Some customers are navigating specific challenges that might affect CapEx timing.
Guidance & Outlook: Full year 2025 revenue is guided to increase by around 15.0%, with gross margin around 52.0%. Q3 2025 net sales are expected between €7.4 B and €7.9 B, with Installed Base Management sales around €2.0 B. Q3 gross margin is expected between 50.0% and 52.0%. The gross margin is expected to be lower in H2 due to more margin-dilutive High NA revenue recognition, lower upgrade revenue, and the absence of H1 one-off benefits. For 2026, management cannot confirm growth at this stage due to increasing uncertainties, despite strong underlying AI-related demand. Long-term 2030 revenue opportunity remains €44 B to €60 B, with gross margin 56.0% to 60.0%.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary focus areas were the revised 2025 EUV revenue growth outlook (down from 40.0% to 30.0%), the increasing uncertainty regarding 2026 growth, the impact of tariffs, and the timing/value proposition of High NA EUV adoption.
Challenging Questions & Management Response: Analysts questioned the reduction in EUV revenue growth guidance (from 40.0% to 30.0%) and the lower implied unit count. Management clarified that the 10.0% delta was a shift in revenue recognition from system sales to Installed Base Management (upgrade business) related to bringing NXE:3800E tools to full 220 wafers per hour specification. The lower unit count was due to the favorable mix shift towards the higher-ASP, higher-productivity NXE:3800E model. Analysts also pressed on the increased uncertainty for 2026, which management attributed to the ongoing, unresolved tariff discussions and the resulting caution among customers regarding large CapEx decisions, especially for US-based expansions.
Notable Insights & Clarifications: Management confirmed that the €1.4 B backlog adjustment was entirely Deep UV and Applications related to China export restrictions from 2024. They reiterated that High NA pricing is based on value (process simplification, cost reduction) and that the current focus is on achieving maturity (Phase II) with the EXE:5200B before volume manufacturing (Phase III) begins in 2027/2028.
FY2025 Q1 Earnings Call Summary (Date: 2025-04-16)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Total net sales were €7.7 B, in line with guidance. Net system sales were €5.7 B (EUV: €3.2 B; non-EUV: €2.5 B), with Logic at 58.0%. Installed Base Management sales were €2.0 B. Gross margin was 54.0%, above guidance, driven by achieving customer productivity milestones on installed EUV systems, favorable EUV product mix, and enriched configurations leading to higher ASPs. EPS was $6.00. Net system bookings were €3.9 B (EUV: €1.2 B; non-EUV: €2.8 B), with Logic at 60.0%. Share buybacks totaled €2.7 B in Q1.
Strategic Narrative & Initiatives: AI remains the key growth driver, potentially pushing results towards the upper end of the guidance range, though uncertainties persist. Strategic focus is on the EUV product portfolio (Low NA NXE:3800E and High NA EXE:5000/5200) to support customer roadmaps and optimize cost of technology. The NXE:3800E is now shipping at full 220 wafers per hour specification, with field upgrades underway. The fifth and final EXE:5000 High NA system was shipped, and the higher-productivity EXE:5200 is scheduled to ship from Q2 2025 for high-volume manufacturing insertion.
Business Segment Performance: Logic revenue is expected to increase in 2025 compared to 2024, driven by leading-edge node ramps. Memory revenue is expected to remain strong, similar to 2024. Installed Base Management revenue is expected to grow, driven by service, EUV contribution, and upgrades. China revenue is expected to be a little over 25.0% of total sales this year, up from the previously guided low 20.0% range, reflecting resilient demand in mainstream business.
Macro & Industry Environment: Uncertainty is increasing due to dynamic discussions around recently announced tariffs, which could have direct and indirect impacts on ASML, customers, and suppliers. The end state of these discussions is unknown.
Guidance & Outlook: Full year 2025 revenue is reiterated between €30 B and €35 B, with 2026 still expected to be a growth year, despite tariff uncertainties. Q2 2025 net sales are expected between €7.2 B and €7.7 B, with Installed Base Management sales around €2.0 B. Q2 gross margin is expected between 50.0% and 53.0% (wider bandwidth due to tariff uncertainty). Full year gross margin is maintained between 51.0% and 53.0%. H2 gross margin is expected to be lower due to the margin-dilutive effect of High NA revenue recognition, lower upgrade revenue, and potential tariff impacts. Long-term 2030 revenue opportunity remains €44 B to €60 B, with gross margin 56.0% to 60.0%.
Question & Answer (QA) Summary:
Key Analyst Themes: High NA EUV adoption timeline and pricing strategy, the impact of new tariffs on business planning and customer behavior, and the visibility/confidence in 2026 growth.
Challenging Questions & Management Response: Analysts questioned if ASML would consider flexible pricing for High NA to accelerate adoption. Management firmly stated that the primary barrier to rapid adoption is tool maturity, not price. Lowering the price prematurely on an immature tool would create reliability issues and sub-optimal cost of technology for customers. The focus remains on achieving maturity (Phase II) with the EXE:5200. Analysts also pressed on the impact of tariffs on customer delivery schedules. Management noted that while uncertainty is high, the discussions have not fundamentally changed business planning or led to significant alterations in delivery schedules, as fab space remains the primary gating factor for customers.
Notable Insights & Clarifications: The blended ASP for Low NA EUV in Q1 was high at €227 M, but the expected blended rate going forward is around €220 M. Management confirmed that the double-digit High NA backlog is sufficient to cover both Phase I (R&D) and Phase II (early production) insertion, with Phase III (HVM) orders expected later (mostly 2027/2028). The increase in China revenue expectation (to over 25.0%) is due to resilient demand in the mainstream business, not a change in the overall market dynamic.
FY2024 Q4 Earnings Call Summary (Date: 2025-01-29)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Total net sales were €9.3 B, above guidance, including revenue recognition on two High NA EUV systems. Net system sales were €7.1 B (EUV: €2.9 B; non-EUV: €4.2 B), with Logic at 61.0%. Installed Base Management sales were €2.1 B, above guidance due to additional upgrade business. Gross margin was 51.7%, above guidance, due to upgrade business and lower-than-planned High NA new product introduction costs. EPS was $6.85. Net system bookings were €7.1 B (EUV: €3.0 B; non-EUV: €4.1 B), with Logic at 61.0%. Full year 2024 revenue was €28.3 B (Gross Margin: 51.3%). Full year EUV system sales (44 systems including High NA) were €8.3 B. Backlog ended at around €36 B.
Strategic Narrative & Initiatives: AI is the key driver for growth, creating a shift towards HPC and HBM, requiring more advanced Logic and DRAM. Management highlighted key technology milestones: NXE:3800E (Low NA) demonstrated 220 wafers per hour throughput and new record overlay; High NA (EXE:5000) completed installation and customer acceptance on two systems, with over 10,000 wafers run; DUV NXT:870B (KrF, >400 wph) and NXT:2150i (Immersion, >310 wph, <1 nm overlay) were shipped; and first revenue from eScan 1100 Multi-beam Inspection systems was recognized.
Business Segment Performance: For 2024, Logic system revenue was €13.2 B (down 17.0% YoY), Memory system revenue was €8.6 B (up 44.0% YoY), and Installed Base Management sales were €6.5 B (up 16.0% YoY). For 2025, Logic is expected to be up, Memory is expected to remain strong (similar to 2024), and Installed Base revenue is expected to grow. China business is expected to return to a more normalized percentage of sales in 2025 and beyond, after high sales in 2023/2024 due to backlog execution.
Macro & Industry Environment: AI is creating growth but also a shift in market dynamics. Risks related to customers and geopolitics could drive results towards the lower end of the guidance range.
Guidance & Outlook: Full year 2025 revenue is expected between €30 B and €35 B, with gross margin between 51.0% and 53.0%. Q1 2025 net sales are expected between €7.5 B and €8.0 B, with Installed Base Management sales around €2.1 B. Q1 gross margin is expected between 52.0% and 53.0% (positive effect from no High NA revenue recognition, offset by lower immersion volume). Long-term 2030 revenue opportunity remains €44 B to €60 B, with gross margin 56.0% to 66.0%. Management announced that quarterly bookings reporting will cease after 2025, moving to annual backlog reporting from 2026 due to lumpiness.
Question & Answer (QA) Summary:
Key Analyst Themes: Confidence in the 2025 guidance range, the normalization of China demand, the impact of AI on demand and litho intensity, and the rationale for discontinuing quarterly bookings reporting.
Challenging Questions & Management Response: Analysts questioned the factors that could push 2025 revenue to the low end of the guidance. Management cited potential customer pushouts (similar to 2024 experience) and geopolitical risks (new export control restrictions) as reasons for prudence, despite strong underlying AI demand. Analysts also pressed on the timing of High NA insertion. Management confirmed that all EUV customers have ordered High NA tools and are engaged in R&D, with the first node insertion (Phase II) supported by current backlog, and larger insertion (Phase III) expected later (2027/2028).
Notable Insights & Clarifications: The strong Q4 EUV bookings (€3.0 B) covered the EUV requirement for the 2025 midpoint guidance, suggesting the balance is for the high end or 2026. China sales are expected to normalize to a low 20.0% percentage of total sales in 2025, driven by the depletion of the accumulated backlog and increased caution regarding potential export controls. Management reiterated that 2026 is viewed as a potential growth year.
FY2024 Q3 Earnings Call Summary (Date: 2024-10-16)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Total net sales were €7.5 B, above the high end of guidance, driven by higher Deep UV system sales and Installed Base Management sales (€1.54 B). Net system sales were €5.9 B (EUV: €2.1 B; non-EUV: €3.8 B), with Logic at 64.0%. Gross margin was 50.8%, within guidance. EPS was $5.28. Net system bookings were €2.6 B (EUV: €1.4 B; non-EUV: €1.2 B), balanced between Memory (54.0%) and Logic (46.0%). The relatively low order intake was attributed to slow recovery in traditional end markets. Backlog remained over €36 B. Free cash flow was pressured by low order intake (less down payments) and high inventory (EUV High NA/Low NA).
Strategic Narrative & Initiatives: AI is the key driver of industry recovery and potential upside. Technology focus remains on ramping NXE:3800E (Low NA) systems (now demonstrated 220 wph throughput, full specification delivery/upgrades starting early 2025) and High NA (EXE:5000) systems (two systems installed, 10,000+ wafers exposed, 8 nm resolution achieved). High NA provides significant cost reduction opportunities for Logic and DRAM.
Business Segment Performance: Logic ramp is slower due to slow recovery in mobile/PC and specific competitive foundry dynamics, leading to pushouts. Memory focus is on technology transition (HBM/DDR5) rather than capacity addition. China business is expected to normalize to around 20.0% of total revenue in 2025, in line with its backlog share, after high sales in 2023/2024.
Macro & Industry Environment: Slower-than-anticipated recovery in traditional end markets (mobile, PC, automotive) extending into 2025, leading to customer cautiousness and investment pushouts. Geopolitical speculation around export controls also contributes to caution regarding China sales.
Guidance & Outlook: Q4 2024 net sales are expected between €8.8 B and €9.2 B, including revenue recognition of two High NA systems. Q4 Installed Base Management sales are expected around €1.9 B (due to EUV performance milestones/upgrades). Q4 gross margin is expected between 49.0% and 50.0% (dilutive effect of High NA revenue recognition, approximately 3.5% drag). Full year 2024 revenue is expected around €28 B (Gross Margin: 50.6%). 2025 revenue guidance is narrowed to the lower half of the previous range: €30 B to €35 B, driven by a significant reduction in expected Low NA shipments (fewer than 50 units) and the China normalization. 2025 Gross Margin is lowered to 51.0% to 53.0% (due to lower EUV volume/less favorable mix). Long-term secular growth drivers remain strong.
Question & Answer (QA) Summary:
Key Analyst Themes: The magnitude and drivers of the 2025 guidance reduction (Low NA unit cut, China normalization), the spillover of pushouts into 2026, and the progress/adoption timeline of High NA EUV.
Challenging Questions & Management Response: Analysts questioned the significant cut in Low NA EUV units (fewer than 50) for 2025. Management attributed this to the materialization of previously discussed uncertainties: slower end-market recovery (mobile/PC/auto) and competitive dynamics among logic customers, leading to fab delays/pushouts. The pushouts are viewed as delays, not cancellations, and are expected to spill into 2026. Analysts also pressed on the China normalization, which management confirmed was due to both the depletion of the accumulated backlog and increased prudence due to geopolitical speculation.
Notable Insights & Clarifications: To reach the 2025 midpoint guidance (€32.5 B), ASML needs approximately €2 B in EUV orders in Q4 2024. The non-China Deep UV business is expected to grow at a rate similar to EUV growth in 2025, reflecting the strong attach rate for advanced nodes. High NA progress is strong, with data generation helping customers define insertion plans, but the 12-inch reticle discussion is a long-term technical topic unrelated to current 5000/5200 adoption.
FY2024 Q2 Earnings Call Summary (Date: 2024-07-17)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Total net sales were €6.2 B, slightly above guidance. Net system sales were €4.8 B (EUV: €1.5 B; non-EUV: €3.3 B), with Logic at 54.0%. Gross margin was 51.5%, above guidance, driven by more immersion systems than planned. EPS was $4.01. Net system bookings were €5.6 B (EUV: €2.5 B; non-EUV: €3.1 B), mainly driven by Logic (73.0%). Backlog ended at around €39 B. Free cash flow improved but remains pressured by customer support and higher inventory (in preparation for 2025 demand).
Strategic Narrative & Initiatives: 2024 is a transition year, with investments continuing in capacity ramp (targeting 600 DUV and 90 EUV tools) and technology (NXE:3800E and High NA). AI is the primary driver of industry recovery and growth. High NA (EXE:5000) shipped its second system, with the first running qualification wafers, and achieved the 8 nm imaging resolution specification.
Business Segment Performance: Logic revenue is expected to be lower in 2024 compared to 2023 due to capacity digestion. Memory revenue is expected to grow, driven by DRAM node transitions (DDR5/HBM). Installed Base revenue is expected to be similar to 2023, with potential upgrades in H2. EUV revenue is expected to grow in 2024, recognizing revenue on a similar number of systems as 2023, plus 1-2 High NA systems. Non-EUV business is expected to be down, primarily due to lower immersion sales.
Macro & Industry Environment: Macro uncertainty remains, but overall semiconductor industry levels and lithography tool utilization are improving.
Guidance & Outlook: Full year 2024 revenue outlook is unchanged (similar to last year), with a stronger second half expected. Q3 2024 net sales are expected between €6.7 B and €7.3 B, with Installed Base Management sales around €1.4 B. Q3 gross margin is expected between 50.0% and 51.0%. H2 gross margin is expected to be slightly lower than H1 due to increased High NA costs and the dilutive effect of High NA revenue recognition, despite higher volume and favorable EUV Low NA mix. 2025 is expected to be a strong growth year, driven by secular trends, the cyclical upturn, and new fab construction (supported by government incentives). Long-term 2025-2030 market scenarios will be updated at the Investor Day on November 14, 2024.
Question & Answer (QA) Summary:
Key Analyst Themes: The composition of the strong Q2 bookings (Logic/2-nanometer), the confidence in the 2025 outlook, the potential impact of US trade restrictions on China, and the High NA adoption timeline for DRAM.
Challenging Questions & Management Response: Analysts pressed on the specific details of the Q2 bookings, particularly the N2 (2-nanometer) orders and High NA contribution. Management confirmed that N2 foundry business orders were in the mix (consistent with H2 2025 ramp plans) but High NA orders were not. They reiterated the 2025 guidance range (€30 B to €40 B) and deferred narrowing the guidance until the November Investor Day. Analysts also asked about the potential impact of new US trade restrictions on China service activity. Management confirmed they follow all applicable laws (US and Dutch) and still have access to customer fabs, though limitations exist on parts and technology transfer for certain fabs.
Notable Insights & Clarifications: The deferred revenue expected to be recognized in H2 2024 is around €1 B, resulting from fast shipments, 3800 tools awaiting site acceptance, and High NA tools awaiting site acceptance. The majority of the 2025 shipments are expected to go to new fabs (over 50.0%), though the impact of CHIPS Act funding is expected mostly beyond 2025. High NA insertion for DRAM is anticipated around the 2025/2026 horizon, supported by positive data from the joint ASML-imec lab.
FY2024 Q1 Earnings Call Summary (Date: 2024-04-17)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Q1 net sales were EUR5.3 B, meeting the midpoint of guidance. Gross margin was 51.0%, above guidance due to favorable product mix (immersion DUV). Net income was EUR1.2 B, resulting in an EPS of EUR3.11. System sales were EUR4 B (63% Logic, 37% Memory). Installed Base Management sales were EUR1.3 B. Net system bookings were EUR3.6 B (EUR656 M EUV, EUR2.9 B non-EUV), driven by Memory (59%) over Logic (41%). Backlog remains strong at EUR38 B.
Strategic Narrative & Initiatives: Management views 2024 as a transition year, making investments in capacity ramp (including High NA) and technology to prepare for the expected strong upturn in 2025. The first NXE:3800E (0.33 NA EUV) was shipped for qualification, offering 220 wafers per hour (37.0% increase over NXE:3600D) and improved imaging/overlay. The first High NA (0.55 NA EUV) system was shipped and is under installation, with the second system starting shipment this month. High NA achieved first light and first images with resolution below 10 nanometer.
Business Segment Performance: Logic revenue is expected to be lower in 2024 as customers digest capacity installed over the past year. Memory revenue is expected to grow, primarily driven by technology node transitions (DDR5, HBM). EUV revenue is expected to grow in 2024, recognizing revenue from a similar number of 0.33 NA systems as 2023, plus one to two High NA systems. Non-EUV business is expected to be down due to lower immersion system sales. Installed Base revenue is expected to be similar to last year, with potential upside from upgrades in H2 2024.
Macro & Industry Environment: The industry is recovering from a downturn. Semiconductor inventory levels continue to improve toward healthy levels. Lithography tool utilization is also improving at both Logic and Memory customers. Demand momentum is noted from AI-related applications.
Guidance & Outlook: Q2 2024 net sales are expected to be between EUR5.7 B and EUR6.2 B. Q2 Gross Margin is expected to be between 50.0% and 51.0%. R&D expenses are guided at EUR1.70 B, and SG&A at EUR295 M. Full-year 2024 outlook is unchanged, with revenue similar to 2023, expecting a stronger second half relative to the first half. Management expects 2025 to be a strong year driven by secular growth (AI, electrification), the cyclical upturn, and new global fab construction.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary themes were the low Q1 EUV bookings and the required order run rate for 2025 targets, the sustainability and nature of China demand (especially mature nodes), and the progress/adoption timeline for High NA EUV.
Challenging Questions & Management Response: Analysts questioned the low Q1 EUV bookings (EUR656 M) and whether the required EUR4 B+ quarterly order run rate for the rest of 2024 (to hit the 2025 midpoint) was sufficient, given the long lead times (12-18 months). Management reiterated that order flow is lumpy, citing EUR13 B in the past six months. They confirmed that significant orders, particularly from Foundry/Logic customers for 2 nm capacity, must materialize in the next few quarters to meet 2025 targets, but expressed confidence due to strong customer dialogue and mutual dependency.
Notable Insights & Clarifications: Management clarified that the majority of recent Memory bookings are technology-related (DDR5, HBM) rather than conventional DRAM capacity additions, though they expect capacity additions to begin in H2 2024. They confirmed that the EUV layer count for 2 nm is similar to 3 nm. The first High NA image resolution below 10 nanometer was a major technical milestone, proving the technology works and is expected to drive the next wave of adoption decisions after customer testing in the lab. Management confirmed that the 10.0% to 15.0% China sales impact estimate from export controls remains unchanged.
FY2023 Q4 Earnings Call Summary (Date: 2024-01-24)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Q4 net sales were EUR7.2 B, slightly above guidance, driven by higher Installed Base business. Gross margin was 51.4%, above guidance due to Installed Base business. Net income was EUR2.0 B, resulting in an EPS of EUR5.21. Full-year 2023 net sales grew 30.0% to EUR27.6 B, with a gross margin of 51.3%. Q4 net system bookings were EUR9.2 B (EUR5.6 B EUV, EUR3.6 B non-EUV), the highest ever, balanced between Logic (53%) and Memory (47%). Backlog ended the year at EUR39 B.
Strategic Narrative & Initiatives: 2024 is viewed as a transition year, preparing for strong demand in 2025. The company continues to invest in capacity ramp (targeting 90 EUV and 600 DPV systems) and technology (High NA). Management reiterated the 2025 gross margin ambition of 54.0% to 56.0%, driven by higher volume, transition to the higher-ASP NXE:3800E systems, reduced capacity ramp headwinds, and the introduction of the higher-margin High NA 5200 system.
Business Segment Performance: Logic revenue grew 60.0% in 2023 but is expected to pause in 2024 for digestion. Memory revenue grew 9.0% in 2023 and is expected to grow in 2024, driven by technology node transitions (DDR5, HBM) supporting AI. EUV revenue is expected to grow in 2024, recognizing revenue on a similar number of low-NA systems as 2023 (with higher ASPs from the NXE:3800E) plus one or two High NA systems. Non-EUV business is expected to be down due to lower immersion sales. Installed Base revenue is expected to be similar to 2023.
Macro & Industry Environment: The semiconductor industry is working through the bottom of the cycle. Inventory levels are improving, and lithography tool utilization is increasing. Strong Q4 order intake supports future demand. Geopolitical export controls are expected to impact 2024 China system revenue by 10.0% to 15.0% of 2023 China system revenue, primarily by restricting advanced immersion systems (NXE:2000 and up) to certain Chinese fabs.
Guidance & Outlook: Q1 2024 net sales are expected to be between EUR5.0 B and EUR5.5 B. Q1 Gross Margin is expected to be between 48.0% and 49.0% due to lower volume and unfavorable product mix. Full-year 2024 revenue is expected to be similar to 2023, with a stronger second half. Management remains confident in the strong 2025 outlook driven by secular growth (AI, electrification), the cyclical upturn, and new global fab construction.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary focus was the strong EUR9.2 B Q4 bookings (especially EUV), the implications for the 2025 outlook, the sustainability of China demand for mature nodes, and the technical/economic viability of High NA EUV.
Challenging Questions & Management Response: Analysts probed the strong Q4 EUV orders (EUR5.6 B) and whether they represented a pull-in or sustained demand, given the need for continued healthy order intake in H1 2024 to meet 2025 targets. Management confirmed the orders were exceptional but supported the 2025 view, noting that the low end of the 2025 scenario range (EUR30 B to EUR40 B) is now considered too conservative. They confirmed that significant Logic orders for 2025 delivery still need to be placed in the next couple of quarters.
Notable Insights & Clarifications: The Memory portion of the Q4 EUV bookings was high (around 50.0%), driven by technology transitions (HBM, DDR5) rather than broad capacity additions. Management confirmed that the adoption of High NA EUV is expected to be cost-effective compared to multi-patterning Low NA, citing double-digit High NA orders in the backlog from multiple customers (Logic and Memory) as proof of customer conviction. The NXE:3800E throughput will ramp in stages, reaching 220 wafers per hour early in 2025, with revenue recognition deferred until full spec is achieved.
FY2023 Q3 Earnings Call Summary (Date: 2023-10-18)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Q3 net sales were EUR6.7 B, near the midpoint of guidance. Gross margin was 51.9%, above guidance due to DUV product mix and one-off cost effects. Net income was EUR1.9 B, resulting in an EPS of EUR4.81. System sales were EUR5.3 B (76% Logic, 24% Memory). Q3 net system bookings were EUR2.6 B (EUR0.5 B EUV, EUR2.1 B non-EUV), showing moderation as customers delayed purchase orders. Backlog remains strong at over EUR35 B.
Strategic Narrative & Initiatives: 2024 is viewed as a transition year, preparing for significant growth expected in 2025. The company continues to build capacity to meet long-term demand. Management highlighted that over 50.0% of expected 2025 EUV and DUV shipments will go to new fab projects globally.
Business Segment Performance: DUV revenue growth expectation for 2023 was increased to 55.0% year-over-year (up from 50.0%), driven by strong China demand for mature and mid-critical nodes, as ASML fulfills backlog orders due to demand shifts from other customers. EUV revenue growth remains around 25.0% for 2023. Installed Base revenue expectation was lowered to down 5.0% (from flat) as customers delay productivity and performance upgrades due to market uncertainty.
Macro & Industry Environment: The industry is passing through the cycle trough, with some improvement in downstream inventory, though upstream inventory remains elevated. Lithography tool utilization is still low but improving in Logic; Memory utilization has yet to turn. Customers expect an inflection point by the end of the year, though the shape of the recovery remains uncertain.
Guidance & Outlook: Q4 2023 net sales are expected to be between EUR6.7 B and EUR7.1 B. Q4 Gross Margin is expected to be between 50.0% and 51.0%. Full-year 2023 net sales growth is still expected toward 30.0% with a slight improvement in gross margin. For 2024, revenue is expected to be similar to 2023, reflecting a conservative view due to macroeconomic uncertainties. Management expects a stronger second half of 2024 relative to the first half.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary themes were the implications of the new US export controls on China sales (especially DUV), the confidence level in the strong 2025 recovery, and the low Q3 order intake relative to the expected 2025 demand.
Challenging Questions & Management Response: Analysts questioned whether the geopolitical environment and pushouts should lead to leaning towards the low end of the 2025 guidance range (EUR30 B to EUR40 B). Peter Wennink strongly rejected this, arguing that the deeper the downturn, the higher the upturn, and that the three drivers (secular trends, cyclical upturn, new fabs) make 2025 a "very strong year." He confirmed that orders must recover in H1 2024 to support the 2025 view, given the 12-18 month lead times.
Notable Insights & Clarifications: Management clarified that the new US export controls (published the day prior) are not expected to materially affect 2023 or long-term scenarios. The restrictions apply only to a "handful of fabs" identified for advanced manufacturing, meaning the vast majority of China DUV demand (mid-critical/mature nodes) remains unaffected, including the NXT:1980 system. The estimated financial impact of the combined Dutch/US rules is 10.0% to 15.0% of 2023 China system revenue. Management confirmed they will reallocate slots if customers push out orders, as demand still exceeds supply.
FY2023 Q2 Earnings Call Summary (Date: 2023-07-19)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Q2 net sales were EUR6.9 B, at the high end of guidance. Gross margin was 51.3%, above guidance due to additional DUV immersion revenue. Net income was EUR1.9 B, resulting in an EPS of EUR4.93. System sales were EUR5.6 B (84% Logic, 16% Memory). Q2 net system bookings were EUR4.5 B (EUR1.6 B EUV, EUR2.9 B non-EUV). Backlog remains strong at EUR38 B.
Strategic Narrative & Initiatives: The company is actively adding and improving capacity to meet future demand, driven by long-term megatrends (electrification, AI). Due to an agreement with customers on a reduced acceptance test procedure for immersion systems, ASML now recognizes revenue upon shipment for these fast-shipped tools, resulting in an expected additional EUR700 M revenue in 2023 and reducing the delayed revenue carried into 2024 to EUR2.3 B (from EUR3 B).
Business Segment Performance: DUV revenue growth expectation for 2023 was increased to 50.0% year-over-year (up from 30.0%) due to the revenue recognition change and strong demand for mature/mid-critical nodes, particularly in China. EUV system shipments were lowered to around 52 systems (from 60), translating to 25.0% revenue growth (from 40.0%), primarily due to customer delays in fab readiness and some supply chain issues. Installed Base revenue is now expected to be similar to last year (down from 5.0% growth) as customers delay upgrades.
Macro & Industry Environment: Significant uncertainty remains due to macro concerns. The industry is running at high inventory levels, leading customers to moderate wafer output and run tools at lower utilization. Customers are now more cautious, with the expected recovery moving from H2 2023 to 2024.
Guidance & Outlook: Q3 2023 net sales are expected to be between EUR6.5 B and EUR7.0 B. Q3 Gross Margin is expected to be around 50.0%. Full-year 2023 net sales growth is now expected toward 30.0% (up from over 25.0%), with a slight improvement in gross margin. Management views the longer-term scenarios (2025, 2030) as intact, but 2024 remains uncertain.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary themes were the impact of the new Dutch export controls, the sustainability of strong China DUV demand, the EUV shipment push-out, and the drivers for the expected gross margin improvement in 2025.
Challenging Questions & Management Response: Analysts questioned the sustainability of China demand, given weak end markets and high utilization rates. Peter Wennink stressed that China demand is driven by strategic, long-term investments in mid-critical/mature nodes (electrification, energy transition, industrial IoT) to reduce reliance on imports, making the demand "very sustainable for the next couple of years." The EUV push-out was attributed mainly to customer fab readiness delays (construction skills gap) rather than technology roadmap changes.
Notable Insights & Clarifications: The Dutch export regulations (effective September 1, 2023) are aligned with expectations, requiring licenses for the most advanced immersion DUV systems (NXT:2000i and subsequent). Management does not expect a material impact from the Dutch or potential additional US measures on 2023 or long-term scenarios. The new NXE:3800E EUV system has an ASP north of EUR200 M, providing a strong revenue and gross margin driver starting in 2024. The 2025 gross margin target (54.0% to 56.0%) is supported by the 3800E, utilization of new capacity, and the introduction of High NA.
FY2023 Q1 Earnings Call Summary (Date: 2023-04-19)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Q1 net sales were EUR6.7 B, above guidance due to faster installation and acceptance of EUV and DUV systems. Gross margin was 50.6%, above guidance. Net income was EUR2.0 B, resulting in an EPS of EUR4.96. System sales were EUR5.3 B (70% Logic, 30% Memory). Q1 net system bookings were EUR3.8 B (EUR1.6 B EUV, EUR2.2 B non-EUV), showing moderation after several strong quarters. Backlog remains strong at EUR39 B, representing almost two years of tool shipments.
Strategic Narrative & Initiatives: The company continues to push output capacity to the maximum and plans to expand capacity. Chinese domestic customers, focusing on mid-critical and mature applications, are expected to absorb demand changes from other customers, increasing their allocation of system revenue this year (over 20.0% of backlog).
Business Segment Performance: EUV business growth is expected to be around 40.0% year-over-year. Non-EUV business growth is expected to be around 30.0%. Installed Base Management revenue growth is expected to be around 5.0%.
Macro & Industry Environment: Significant uncertainty remains due to macro concerns (inflation, interest rates, geopolitics). Customers see demand weakness in consumer markets, leading to inventory reduction and lower utilization, though demand in automotive and industrial remains strong. Memory customers are aggressively lowering CapEx. Logic customers are moderating output but sticking to technology roadmaps.
Guidance & Outlook: Q2 2023 net sales are expected to be between EUR6.5 B and EUR7.0 B. Q2 Gross Margin is expected to be between 50.0% and 51.0%. Full-year 2023 outlook remains unchanged: net sales increase of over 25.0% and a slight improvement in gross margin. Management expects 2024 to be an "up year" compared to 2023, driven by technology transitions and new fab openings.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary themes were the outlook for 2024 given the slowing order rate, the impact of new Dutch export controls on China DUV sales, the sustainability of China demand for mature nodes, and the long-term EUV intensity roadmap.
Challenging Questions & Management Response: Analysts questioned if the slowing order rate posed a risk to 2024 growth. Peter Wennink expressed confidence that 2024 will be an "up year," noting that the current downturn is expected to be short, and customers are maintaining strategic investment plans for new fabs and technology transitions, which require higher tool shipments. He confirmed that orders for the back half of 2024 still need to be booked in the next couple of quarters.
Notable Insights & Clarifications: The Dutch export controls focus on advanced immersion DUV systems (NXT:2XXX). Management believes the impact will not be material, as the vast majority of China demand is for mid-critical/mature nodes (e.g., NXT:1980), which are outside the scope of the new restrictions. The strong China DUV demand (estimated at 45.0% to 50.0% of DUV backlog) is considered highly sustainable due to massive domestic demand for electrification, automotive, and industrial IoT. EUV intensity (layers per node) is expected to increase, not stagnate, driven by technology roadmaps and the introduction of High NA.
FY2022 Q4 Earnings Call Summary (Date: 2023-01-31)
Prepared Remarks (PR) Summary:
Overall Performance & Key Metrics: Q4 net sales were EUR6.4 B, near the midpoint of guidance. Gross margin was 51.5%, above guidance due to additional upgrade revenue and an insurance settlement. Net income was EUR1.8 B, resulting in an EPS of EUR4.60. Full-year 2022 net sales grew 14.0% to EUR21.2 B. Q4 net system bookings were EUR6.3 B (EUR3.4 B EUV, EUR2.9 B non-EUV). Backlog ended the year at EUR40.4 B, a 67.0% increase year-over-year.
Strategic Narrative & Initiatives: The company is focused on maximizing system output due to strong demand exceeding supply. Management reiterated capacity plans: 600 DUV, 90 EUV low-NA systems by 2025-2026, and 20 EUV high-NA systems by 2027-2028. The company is committed to ESG goals, including achieving carbon neutrality in operations by 2025 and net zero in the supply chain by 2030.
Business Segment Performance: Full-year 2022 EUV system sales grew 12.0% to EUR7.0 B (40 systems recognized, 54 shipped). DUV system sales grew 13.0% to EUR7.7 B. For 2023, EUV revenue growth is expected around 40.0%, non-EUV revenue growth around 30.0%, and Installed Base Management revenue growth around 5.0%.
Macro & Industry Environment: Near-term uncertainty exists due to macro concerns (inflation, recession, geopolitics). Customers are seeing weakness in consumer-driven end markets (PCs, smartphones) but strength in automotive and industrial. Customers expect inventory rebalancing in H1 2023, with a rebound in H2, potentially driven by China's post-COVID opening. Lithography investments remain strategic, and demand still exceeds capacity.
Guidance & Outlook: Q1 2023 net sales are expected to be between EUR6.1 B and EUR6.5 B. Q1 Gross Margin is expected to be between 49.0% and 50.0% due to lower upgrade revenue and DUV mix effect. Full-year 2023 outlook is for strong growth with net sales increasing over 25.0% and a slight improvement in gross margin. Management reiterated the 2025 revenue scenario of EUR30 B to EUR40 B.
Question & Answer (QA) Summary:
Key Analyst Themes: The primary themes were the visibility into 2024, the impact of inflation on ASPs and gross margin, the status of fast shipments and revenue recognition changes, and the composition of the record backlog.
Challenging Questions & Management Response: Analysts questioned how ASML maintains strong visibility into 2024 despite customer utilization reductions. Peter Wennink explained that customers view the current downturn as short-term (shorter than ASML's lead times) and are maintaining strategic, long-term capacity expansion plans, which is reflected in the EUR40.4 B backlog. They confirmed that slots freed up by pushouts are immediately reallocated to other customers who raise their hands.
Notable Insights & Clarifications: The total backlog is approximately 55.0% EUV. The EUV backlog is split roughly 75.0% Logic and 25.0% Memory. Management is in discussions with customers to reprice the backlog for inflation, expecting to recover most of the 2022 inflation drag (1.5% of gross margin). The average ASP for the NXE:3600D EUV system is expected to be between EUR165 M and EUR170 M in 2023. The fast shipment revenue deferral (EUR3.1 B carried into 2023) is expected to be neutral for 2023 revenue, but ASML is seeking customer agreement to accept full risk upon shipment, which would eliminate the deferral and provide an upside to revenue.
Part 2: Narrative Evolution Overview (Cross-Transcript Synthesis)
Evolution of Strategic Priorities:
The core strategic priority remained consistent: leveraging secular growth drivers (AI, electrification) by maximizing capacity ramp (targeting 90 EUV and 600 DUV systems) and driving the technology roadmap, particularly the transition to High NA EUV (EXE:5000/5200).
The focus shifted from raw capacity expansion (early 2023) to enhancing tool productivity and efficiency (mid-2024), highlighted by the successful ramp and upgrade of the NXE:3800E to 220 wafers per hour.
A significant strategic pivot emerged in late 2025 with the lead investment in Mistral AI, signaling a new priority: integrating advanced AI/software content to improve the precision, speed, and time-to-market of lithography and metrology tools.
The company also initiated a new segment focus on advanced packaging and 3D integration, marked by the shipment of the XT260 high productivity scanner in Q3 2025.
Throughout the period, managing geopolitical risk, specifically the normalization of China Deep UV sales following export controls, became a persistent operational priority.
Recurring Themes & KPIs:
AI as the Primary Driver: AI consistently served as the key secular growth driver, underpinning demand for advanced Logic and Memory (HBM/DDR5) and justifying long-term CapEx plans.
High NA EUV Maturity: The progress, technical milestones (e.g., sub-10 nanometer resolution), and adoption timeline of High NA (EXE:5000/5200) were recurring topics, alongside the associated margin dilution (3.5% drag noted in Q4 2024) during early revenue recognition.
Geopolitical Uncertainty: The impact of US/Dutch export controls on China DUV sales and the broader effect of tariffs on global customer CapEx decisions were discussed in every summary, moving from an estimated 10.0% to 15.0% impact on China revenue (2023) to a major factor driving 2026 uncertainty (2025).
Backlog and Bookings Lumpiness: The massive backlog (consistently around €36 B to €40 B) was frequently cited as proof of long-term demand, but the lumpiness of quarterly bookings (e.g., €2.6 B in Q3 2023 vs. €9.2 B in Q4 2023) required constant management reassurance regarding the 2025 outlook.
Installed Base Management (IBM) Revenue: IBM revenue (service and upgrades) was consistently highlighted as a stable, growing segment, often exceeding guidance and providing margin support, especially through EUV upgrades.
Evolution of Guidance:
2024 Outlook (Transition Year): The outlook for 2024 remained remarkably consistent from Q4 2023 through Q2 2024, characterized as a "transition year" with revenue expected to be similar to 2023, driven by customer capacity digestion and inventory rebalancing.
2025 Outlook (Growth Confirmation): Initially, the 2025 revenue scenario (€30 B to €40 B) was viewed as highly achievable, with management suggesting the low end was too conservative (Q4 2023). However, due to slower end-market recovery and customer pushouts, the guidance was narrowed to the lower half (€30 B to €35 B) in Q3 2024 and maintained through 2025.
2026 Outlook (Uncertainty Management): Confidence in 2026 growth eroded over time. Initially expected to be a strong growth year (Q1 2024), management later stated they "cannot confirm growth" due to increasing tariff uncertainties (Q2 2025). By Q3 2025, despite anticipating a "significantly lower" Deep UV business in China, management committed to 2026 net sales "not be below 2025 levels," relying heavily on global AI-driven EUV demand.
Gross Margin: Full-year gross margin guidance generally hovered between 51.0% and 53.0%, with consistent warnings that H2 margins would be lower due to the margin-dilutive effect of High NA revenue recognition and lower upgrade revenue.
Persistent Analyst Concerns:
2026 Growth Visibility: Analysts consistently questioned the confidence in the strong 2025/2026 outlook, given the volatility of quarterly bookings and increasing macro/geopolitical headwinds.
China Demand Sustainability and Controls: The market repeatedly pressed management on the long-term sustainability of China's demand for mature/mid-critical nodes and the precise financial and operational impact of evolving US and Dutch export controls on DUV systems and service contracts.
High NA Adoption and Pricing: Analysts persistently probed the High NA EUV roadmap, specifically the timing of the transition from Phase II (early production) to Phase III (HVM), and whether ASML would use flexible pricing to accelerate adoption, a strategy management consistently rejected, prioritizing tool maturity over price.
Impact of Tariffs: Following the emergence of significant tariff discussions (Q1 2025), analysts focused heavily on how these uncertainties might affect customer CapEx timing, especially for US-based expansions, and the resulting risk of customer pushouts.
Part 3: Limitations of Summary
This report is a summary of management's self-reported narrative from earnings calls and is not an independent verification of facts or an investment analysis. The scope is strictly limited to the provided transcript documents.
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