ASML Reports Strong Q1 Results Despite Market Reaction

ASML has announced its financial results for the first quarter of 2025, achieving impressive figures that position it as the second-best quarter in the company's history. The company's revenue reached EUR7.74 billion, aligning closely with the forecast provided three months earlier. Notably, ASML's net margin of 54% led to a substantial net profit of EUR2.36 billion, surpassing expectations.

In contrast, at the end of 2024, ASML recorded a net profit of nearly EUR2.7 billion from a revenue of EUR9.26 billion, with a net margin of 51.7%. The cash flow situation is not directly comparable as ASML traditionally refrains from share buybacks in the fourth quarters. Year-over-year comparisons also pose challenges due to the semiconductor industry's downturn in 2024, where ASML reported only EUR5.29 billion in revenue and EUR1.22 billion in profit for the same period.

Despite these challenges, the current results signify a strong performance. Following discussions with chip manufacturers, ASML maintains its outlook, aiming for total revenues between EUR30 billion and EUR35 billion for 2025, with expectations for a return to record revenue levels in the latter half of the year.

ASML's revenue structure remains consistent, primarily derived from the sale of new lithography systems for chip production and the maintenance of existing systems. The company generated EUR5.74 billion from new system sales. Demand for advanced extreme ultraviolet (EUV) lithography systems continues to be robust, with ASML having sold 14 such systems at the beginning of the year. Additionally, two high numerical aperture (High-NA EUV) models have been sold but will be recognized in the accounts later. Reports suggest that three clients, likely Intel, TSMC, and Samsung, currently operate High-NA EUV systems.

From existing systems, ASML generated approximately EUR2 billion, including maintenance services and upgrade modules that can enhance productivity.

Investment in research and development saw a slight increase to EUR1.16 billion. However, new orders from chip manufacturers have declined, with ASML recording bookings worth EUR3.9 billion. This decline has minimal immediate impact on production, as the company is projected to be fully booked until 2026.

ASML attributes some uncertainty in the semiconductor sector to the current geopolitical climate, particularly the US government's trade policies, which have created instability in the industry.

For the ongoing second quarter, ASML anticipates revenue between EUR7.2 billion and EUR7.7 billion, with a margin ranging from 50% to 53%. Following the announcement of these financial results, ASML's stock price dropped by approximately 8%, but has since stabilized to a 5% decrease.