ASML Holding N.V.

Good morning, everyone. Good afternoon, depending on where you are. Maybe even good night. Welcome to the Q4 full year 2025 financial results press conference. You may not see that when you're dialing in online and you're watching us online, but we are actually in a different location than we were last year. Today, we host the press conference in our training center in the ASML Academy, and that is located at the Brainport Industries campus in Eindhoven. This is actually the place where we plan our expansion in the Netherlands, so we thought it would be a good idea to invite everyone here in the room to see what our new location is going to look like. There's nothing there to see yet. But this is where we are planning our expansion, and Christoph will talk more about that later in the presentation. My name is Monique Mols. I'm head of media relations, so welcome to you all. I'm really happy to see that there are people in the room and people online. For those online, if you have a question later on, you can fill out the form on the website, and we will take your question from here. If you're in the room, my colleague Mark will walk around with a microphone and pick up your question. So this is our annual results. Forward-looking statements for those who like it. So again, we are here at the Academy. We have several of those training centers all around the world. Here we have quite a big center where on average 400 employees come here every day to get a training. So they actually work on the machines that our customers have in their fabs. and every year we have about 26,500 people coming here to train. So this is a very important location for us, and we're very happy that we can host a press conference here today. With that, I'm not the only one who's going to talk to you today. Of course, I have our CEO Christophe Fouquet and our CFO Roger Dasse and they will talk you through the numbers, through the developments and everything that's happening at ASML. So I would like to invite on stage Christophe Fouquet.

Thank you very much Monique. So Roger will be the one doing the good numbers later on. As you have noticed, we finished the year very, very, very strong with a record quarter, record year, record booking. And this is basically a sign of the direction this industry is taking. We are very happy, of course, with the work the ASML team has done, being able to execute on such a big quarter in Q4 and also prepare us basically for 2026. So a lot of good news today, and again, Roger will get into the number. I'd like to say that we welcome also that clarification. In the course of 2025, you have seen that sometimes the business was still a bit uncertain. The last three months have really clarified basically at least the horizon for 2026 and most probably a bit beyond that. So before we go into the numbers, I'd like to provide you some context about what's happening in the industry, what is driving basically this type of news today. And of course, the very first thing is AI. You have been hearing about AI already for a couple of years. You have heard major, major announcements about AI infrastructure. I think from the very beginning in ASMR, we have been a believer that AI will be a big thing. And this is true because, as we said before, any major application moving forward will not only use semiconductor, but it will also use AI. And I put a few examples of those applications on this slide. It's pretty much everything you can think about when it comes to technology, when it comes to the future of society. These will all rely on AI. If you look at the opportunity, this has been said also before, this will drive basically advanced technology, advanced logic, advanced DRAM. This will also basically drive the entire data infrastructure. And the effect AI can have on the overall GDP is pretty big. In fact, if you look at the U.S., even in 2025, AI was counting for a very large part of the growth. And we expect that basically to be applied to the entire worldwide GDP. So the opportunity is there. What was a bit, I would say, frustrating for us for a while is that when we heard all those news, we heard about all those investments, but basically this was not yet translating into capacity addition at our customer. I think what the last three months have done is changed that. We have seen our customer basically moving forward. They start to really believe in the sustainability of the AI demand. That's true for memory. That's true for logic. And as a result, they started to invest, they started to plan for capacity, and of course, this will drive demand for our product at ASML. And when you look at the demand for our product, what's interesting with AI is that this basically touches on all products. Of course, AI is going to require very advanced chips. And this is going to drive EUV, for example. So this year will be a big year for EUV. Roger will talk about that. It's going to drive advanced inspection tool. But at the same time, AI needs a lot of data generation, a lot of sensor. And this will be still created by the use of more mature technology, such as DeepUV. So AI will have also this effect, basically, to really drive our entire product portfolio in the coming years. This is a bit of a summary of what our customers have told us. So I talked already about the fact that they are more confident that AI is here to last and therefore they are going to invest. I think in fact for a lot of our customers in 2026, capacity will mean market share. So we will see them very eager to get the capacity as quickly as possible. There's a few more good news when it comes to AI. AI also drives very advanced technology. This drive, an increased use of EUV, and one of the things we have been talking in 2025 quite a bit, is the fact basically that we have seen the number of layers of EUV increasing basically at our key customer. And this means practically that the overall litho intensity is going up, which means basically more use of our advanced lithography tool. 2026, you know, we expect, as you understand, as the number will show, an improvement of the business, a significant growth, especially on the advanced tool, EUV. As I said before, it will be a big year, and again, on the midterm, we expect that to continue. Long term, we stick basically to what we have told the market already several times, which is what we share basically at our capital market day in November 2024. We still expect for 2030 revenue between 44 and 60 billion euros with a gross margin of 56 to 60%. Going a bit now to the effect of AI on the market. So this graph is showing a bit what AI will do. What you see here basically is the growth of the different segments of semiconductors. At the bottom you see the historical growth of memory logic, which is about 6-7% year-on-year. 6-7% year-on-year is pretty great already. There are many, many industries that will wish to see this kind of number. But what you see with AI is that when we look at advanced logic, when we look at advanced memory, the growth on those segments is going to be more than 20% year-on-year for the foreseeable future. And this is really what is going to drive basically more demand on lithography. Why is that? So we've talked in the past a lot about Moore's Law, of course. And Moore's Law is a law that says that every couple of years, we need to double the number of transistors per chip. And that law has been true for many, many years for PC, for mobile applications. Now when you look at AI, and this started to happen in 2010, the curve is far more aggressive. When you look at the most advanced AI product today, NVIDIA product for example, The request is not to grow two times every two years, but in the last few years to grow 16 times every two years. So you see a major acceleration, basically, of the need for silicon. And, of course, we provide that in two different ways. We provide that with scaling. You know, by making transistors smaller, we can put more transistors per chips. And this has been a good way, basically, to provide more transistors and follow Moore's law for many, many years. But that's not enough anymore. And if you cannot put enough transistors per unit of area, per chips, then the only option would be to make more wafers. And that's a bit what we see happening with AI. So the most advanced AI application are going to drive up volume. And this is why when we look at DRAM customer today, when we look at logic customer today, they are building mega fabs. Some of them are talking about hyper cycle because they have to be able basically to also provide this volume to the market. So just to illustrate that. I pick one example, and I picked it from NVIDIA because all of you are, of course, very much aware of what's happening there. Today, on the Blackwell system, you need about two and a half wafers to create the product. If you look at 2027 on the Rubin product, this number will go up to 10 wafers. So to provide the same product to their customer, NVIDIA will need four times more wafers than today. And this is one of the reasons why, again, we will see capacity extension driven, again, by this type of application. That's what you see here. And this is, again, I would say, a bit of a new dynamic we have in our market. AI, by this acceleration of the need for performance, of power reduction, is going to drive both volume and technology a lot harder than any technology before. So what does it mean for technology? EUV is key. 2026 is going to be a good year for EUV. We are looking at more shipments and this despite the fact that we have increased the productivity of our tool by more than 40%. So we're going to ship a lot of capacity of EUV this year. If you look at it historically, we have already been adding quite a bit of capacity. So the capacity added of EUV in the last few years have been in average 25% year-on-year growth, which is quite significant. So we have seen all our customers basically already adopting this. It was Logic first, then DRAM, but we expect basically to see that even more moving forward. Then we have INA. And INA, of course, is not going to be the tool that provides the capacity of EUV in 2026, 2027, but that's the tool that will enable our customer to shift to even more advanced technology around 2028, 2029. And that's important for DRAM, that's important for logic, and it's important for AI, because as I said before, AI is going to be looking for more advanced chips with lower power consumption, and INA is going to play into that very strongly. So good progress on INA in the last few months. Our customers are still qualifying the tools. This takes a bit of time. The results are good. This year is going to be used to prepare a bit for insertion. And again, you know, if we look at 2027-28, we are going to see the first product being manufactured using some INA system. deep uv remains very important as i said you know it's not all about advanced semiconductor as you know a lot of technologies still require deep uv so we continue to drive the roadmap both on immersion where we have launched our 2150 which basically give us sub nanometer accuracy and more than 300 with the prowls productivity is important. Productivity is, of course, a way to get capacity. So we continue to drive that on immersion. I think the example of the NXT 870B, which is a carrier system, is even more spectacular because there we have been capable to achieve more than 400 WFH per hour. And that tool today is creating a lot of interest at our customer because productivity, again, is capacity. We talked also last quarter about us starting to help our customer with what we call 3D integration. So I told you, you know, when you cannot put all the transistors in one chip, you just make more chips and bring them together with 3D integration. We have our first system, the TwinScan XT260 that was shipped last quarter. A lot of interest from our customer. For us, this is the first product looking at this new market opportunity. And we will continue to work with our customer basically to define more product moving forward to support them also on that segment. A few words on metrology and inspection. So we don't talk always about metrology and inspection. But when you drive technology, yield becomes very, very important. And yield can be improved by doing more metrology and more inspection. So in 2025, we have seen our metrology inspection business going up by almost 30%, which is a major growth number. It has to do with the need for more metrology inspection. It has to do also with the quality of our product in optical metrology for overlay, but also in eBIM. And one of the products where we have seen quite some progress in 2025 is multi-beam. Multi-beam is going to provide e-beam inspection at higher speed. And most probably in the next, I would say, couple of years, really enable our customer to move this technology to high-volume manufacturing. So a lot of good progress there as well. You all heard about Mistral back in the end of the summer when we announced our collaboration but also our investment in Mistral. The rationale there was to get AI in ASML and to get the very best people, the very best competence in ASML in order to be able to first strengthen our core competencies, read putting AI in our product, support the connected market, so offer some of those capability to our customers, and also create new opportunity basically moving forward. That's a project we are going to talk more about in 26, in 27. We are making great progress with Mistral, our partner. Our teams are working very, very closely together to basically execute on each one of those points. Going a bit into some of the Other things we are very, very proud of at ASML, this is our engagement in the community. We have been spending, I would say, both the time, talent, money, in order to work together with the community on a few very important topics. The first one is mobility. Well, we are here today. As you know, this is also close to our next campus, which I will explain in a minute. We plan to have a groundbreaking this year in a few months. We want to continue basically to work with the Brentport community to improve the infrastructure because we are very much aware also that as we grow, we can sometimes create more headache and it's very important to address that. So we have major investment there. Also, of course, for the Beethoven program. Affordable housing, there's been quite some press in 2025 about some of the progress we have done there. This is ongoing now for a few years. This remains very, very important, and we will continue to invest. You see the number there. I don't need to stress it, to basically create more housing. We also understand that this is a broader challenge across the Netherlands, and we definitely want to do our part helping the community here. Culture, so we are, you know, very proud to be one of the, I would say, initial partner for the future RAC Museum here in Eindhoven. We love the city of Eindhoven, we love this place, but sometimes we feel that if we can bring a bit more culture, a bit more activity, I think this will help our people to enjoy it even more, to attract even more people moving forward. That's also why we stay very committed to the PSV football club, as you know. But this, we thought, was a very, very nice initiative from the City of Eindhoven and we really wanted to be there. Finally, education. You know that we have a long standing relationship with the TUI University here in Eindhoven. I could extend that to many other universities across the Netherlands. This is key. We want to develop talent that will be able to walk, in semiconductor moving forward and we will continue to do that of course very strongly one last word we need to continue to grow i will come back to some of the other announcements we had today about our focus on innovation and engineering at the same time we see more demand for our product and therefore our footprint needs to continue to grow because we need to invest in customer service, we need to invest in manufacturing, we need to invest in space. So last year, we opened two major sites, one in Korea, one in the US, and that intends to support basically our activity here. The big event in 2026 will be the groundbreaking of the big campus, which is our second big campus in the community. We'll do that mostly in May, June, and I'm sure you will be invited to join us. with the idea that we can already start moving people as early as in 2028. So this would be very good for our people. It would be very good also to de-bottleneck a bit the campus in Veldemen, of course. This is a project, as you know, that is very, very important for ASML. This is my update. I will come back in a bit to talk a bit about, again, the action we are taking on our engineering team to strengthen our innovation. In the meantime, I'll give a chance to Roger to give us those very nice numbers. Thank you.

Thank you, Christophe. And good morning, good afternoon, everyone. So, indeed, I will present the financials for 2025 and the outlook. Christoph said it, clearly Q4 2025, a record quarter by any standard. It was a record quarter in terms of sales. It was a record quarter in terms of order intake. It was a record quarter in terms of the cash flow generation on the back of all the good developments that Christoph just shared with you. So I won't call them out here, but just looking at the quarter, it's pretty clear that it was indeed a very strong quarter. If we look at 2025, And if we look at the total business for ASML, we ended the year with $32.7 billion in net revenue, 52.8% gross margin. And you see the key elements in here, a net income of $9.6 billion and an EPS, earnings per share, of close to 25 euros per ordinary share. Ordinal, very, very strong year in which we also paid back and returned quite some money to our shareholders and also were able to do the participation in Mistral that Christophe just alluded to. Very clearly, EUV was the main driver behind it. And you will see it in the pie chart that I will share with you in a moment. It will clarify that it is particularly the leading technology that really contributed to the growth. So both immersion, but first and foremost, also EUV. So EUV grew 39% in comparison to 2020. in comparison to last year, to 2024. A mix of both more tools, significantly higher sales price of the tools because most of the tools that we sold, most of the low-in-aid tools that we sold in 2025 were 3800 tools. which, as you know, saw an increase in productivity from 160 wafers per hour to 220 wafers per hour, and, of course, a commensurate increase in the sales price. And, obviously, we also had the recognition of a number of EXE tools, high-end tools. So it's in that combination that really EUV was the big driver of growth for us this year. Big moment indeed, and Christophe showed it as well, the revenue recognition of the first 5200B. Really a big moment for us because that is the high-volume manufacturing tool on high NA, and the fact that we were able to not just ship it but also get it installed and get accepted by the customer, and the customer really looking at putting that tool into high-volume manufacturing for its leading nodes is a very significant moment for the company. DPV went down a bit, decreased 6%. If you look at the geographies, you would see that most of the decline would actually come from China. So that's where most of the decline on DPV was. Immersion is still quite strong, but particularly on the dry side, it was lower than it was in 2024. But there, the step into the 3D integration market with the introduction of the 260, obviously, was another big, big moment. Application very strong, Christophe alluded to it, 28% increase right there with the need for more process control for our customers at the leading nodes. And finally, very, very strong 26% increase in our installed base business, both on the back of service. Our installed base in EUV is obviously growing. Therefore, you see a continuous step up of our service revenue from EUV, but also increased appetite in upgrades. I'll come back to that later. This gives you some breakdowns, and I won't call them out all, but I think if you look at technology, it's interesting to see that the leading technologies, so both EUV and immersion combined, give you 90% of our system's revenue, and I think that really talks volumes, I think, about the shift that Christophe was also talking about, the shift to more and more leading nodes, clearly represented here in the share of technology. In terms of end use, you see memory at 34%, logic at 66%. You see memory actually declining a little bit in terms of percentage. We actually see that flip in 2026. So in 2026, you will see that memory becomes more and more important. In terms of regions, a lot to be said there. But I think, you know, China is still very, very big, but smaller than it was last time, both in terms of percentage of system sales and also in absolute numbers. You see a bit of a decline in the China market. We expect that decline to continue as expected. As we said, we expect the China business for this year to be around 20% of our total sales. So here it was 33% of system sales. It was 29% in terms of total sales. We expect the 29 percentage number to go down to approximately 20% this year. This gives you the net sales by end use over the years. I won't spend too much time on it. Just one fun fact. If you look at the install-based business at $8.2 billion, that comes pretty close to the total revenue for ASML in 2017. That just tells you how unbelievably rapidly the company grew. And the fact that we have such a big number in terms of uninstalled-based business obviously also provides a lot of resilience for the company. So therefore, it's an important number for us to focus on and to continue to increase. This gives you the business over the years. So if you take the four-year increase from 2021 to 2025, you would see that the company has grown 75% at the top line. You also see that R&D increases from 2.5 to 4.7, which of course was absolutely critical in getting us prepared for all the beautiful products that we're currently shipping to our customers. But I think it's also fair to acknowledge that this huge increase in R&D number has also driven some organizational complexity that Christoph will talk about after my contribution. So this gives you the overview, and as you see, earnings per share, an interesting number, rounded 25. 25 by 25 is something that you might easily recall on a go-forward basis. In terms of return to shareholders, if we look at dividends, the total dividend that we proposed to the AGM for the year is 7.50%. This quarter we'll do 1.60 euros per ordinary share as an interim dividend in Q1. And therefore, if the AGM accepts our proposal, we would have a final dividend of 2.70. And that's a significant increase over last year. In terms of share buyback, we did not complete the full program of share buyback, as you see here, $7.6 billion out of the total program of $12 billion. We did announce a new program, $12 billion over a three-year period. In terms of outlook for the quarter, we expect net revenue between $8.2 and $8.9 billion with a gross margin between 51% and 53%. Look again at the install-based management sales, 2.4%. So last quarter, 2.1%. This goes up to 2.4%. What it really tells you is that the appetite from customers when it comes to upgrades is very, very high. Because in the climate that Christoph was describing, where customers really have a lot of appetites to increase their capacity as quickly as they can. Of course, on the one hand, they will try and complete their FAT building as soon as they can, such that they can take our new tools in. But in the meantime, once these fabs are still in construction, the fastest way to get extra capacity is really to make sure that the tools are squeezed to the max and therefore to put as much upgrades on the tool as possible. And that's what you see here, and that really contributes to very, very strong install-based sales going up again this quarter. Solid gross margin, 51% to 53% R&D and SG&A cost nicely under control. For the full year, 34 to 39 billion, really on the back of all the developments that Christophe talked about. So the real steam engine behind this growth is once again EUV. So we once again expect the EUV business to go up significantly this year. We also expect the installed base business to go up this year. And it will go a little bit at the detriment of the non-EUV business. We expect that to be about flattish. So non-EUV business is expected to flattish from 25 to 26. With us moving parts for the leading nodes, so for the big customers both in memory business and advanced logic, we actually expect the DPV business to go up a bit. As I mentioned, in China, we expect the China business to go down. Metrology and inspection, we expect to be quite strong. So those are more or less the moving parts within the non-EUV business. Again, for the full year, $34 to $39 billion, which at the midpoint, after a growth of 16% in 2025, at the midpoint, you would be looking at a 12% increase in this year with good potential, as the bandwidth also suggests. Gross margin 51% to 53%, and annualized effective tax rate of 17%. Friends, that concludes my presentation. And as I mentioned, Christophe still has a part for you on the streamlining of our engineering and innovation function.