Live Updates: ASML Drops 7% After Earnings

ASML still down 10% as of noon EDT and lets review the guidance that left investors less enthused about the stock.

After management signaled lower than expected sales guidance, ASML opened trading down 10%. Stay tuned to the conference call to see if glimmers of good news can help alleviate this mornings sell off.

Taiwan Semiconductor (TSM): Down .48%

Applied Materials (AMAT): Down 2.69%

Lam Research (LRCX): Down 3.04%

KLA Corporation (KLAC): Down 2.49%

ASML’s Q3 sales guidance of €7.4B to €7.9B are significantly below Wall Street’s estimates.

We’ll see what commentary the company provides on their conference call. The stock is still down 7.1% in premarket trading.

So, if ASML beat on the revenue and earnings last quarter, why is the company down 7% in premarket trading?

There are two primary reasons I’m seeing.

1. The company narrowed their revenue guidance to 15% growth this year. Previously ASML had listed a range of €30 billion to €35 billion. That 15% growth target is right in the middle 0f that range (€32.5 billion or so). While Wall Street estimates were a bit below that number at €32.2 billion, ASML had also rallied strongly in the past month. Its likely that institutional investors had anchored on ASML hitting above the midpoint of its prior targets, especially with so many other AI-adjacent stocks seeing phenomenal sales growth recently.
2. And in ASML’s CEO commentary on its earnings release the company had this to say: ““Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.” 

I’ve bolded the last part for emphasis. ASML saying they can’t confirm growth in 2026 introduces significant uncertainty, especially since Wall Street currently expects the company to more than 7% sales growth next year.

ASML Holding NV Q2’25 Earnings Highlights:

• Adj. EPS: €5.90 ✅ (Wall St. Estimate of €5.23)
• Revenue: €7.7B (Wall St. Estimate of €7.54)
• Adj. Gross Margin: 53.7% ✅; DOWN -30 bps QoQ
• Net Income: €2.3B
• Net Bookings: €5.5B

Q3’25 Outlook:
• Revenue: €7.4B to €7.9B
– ASML expects total net sales for Q3 2025 to be between €7.4 billion and €7.9 billion, with a gross margin between 50% and 52%. The guidance reflects ongoing demand in the semiconductor sector, particularly driven by advancements in lithography technology and EUV adoption.
– R&D costs are projected to be around €1.2 billion, while SG&A costs are expected to be approximately €310 million.

Q2 Segment Performance:
• Installed Base Management Revenue: €2.1B
• New Lithography Systems Sold: 67 units
• Used Lithography Systems Sold: 9 units

Other Key Q2 Metrics:
• Adj. Operating Income: €4.13B
• Adj. Operating Expenses: €1.5B
• R&D Expenses: €1.2B
• Free Cash Flow: €1.4B
• Effective Tax Rate: 15.0%
• Cash and Cash Equivalents: €7.2B

CEO Commentary:
– Christophe Fouquet: “Our second-quarter total net sales came in at €7.7 billion, at the top end of our guidance. The gross margin was 53.7%, above guidance, primarily driven by higher upgrade business and one-offs resulting in lower costs. We see continued progress in litho intensity, particularly in DRAM, and the introduction of the TWINSCAN NXE:3800E reinforces that momentum. Meanwhile, EUV adoption is advancing as planned, including High NA. This quarter, we shipped the first TWINSCAN EXE:5200B system. Looking at 2026, we see that our AI customers’ fundamentals remain strong. At the same time, we continue to see increasing uncertainty driven by macro-economic and geopolitical developments. Therefore, while we still prepare for growth in 2026, we cannot confirm it at this stage.”

Strategic Updates:
– An interim dividend of €1.60 per ordinary share will be made payable on August 6, 2025. In the second quarter, ASML purchased around €1.4 billion worth of shares under the current 2022–2025 share buyback program.