ASML Orders Fall Short, Lowers 2025 Outlook

On October 15, ASML Holding experienced its steepest stock decline in over two decades, as its third-quarter orders came in at nearly half of market expectations. Additionally, the company revised its 2025 performance outlook downward, further impacting investor sentiment.

ASML, originally scheduled to release its quarterly earnings on October 16, unexpectedly posted the report early on its website during New York trading hours on the 15th. The report was quickly taken down, with ASML attributing the incident to a "technical issue." However, the brief appearance of the report led to a sharp drop in ASML's stock, which also weighed on broader semiconductor stocks in Europe and the U.S.

According to data released on ASML's website, the company's Q3 orders amounted to €2.63 billion (approximately $2.87 billion), a slight improvement from last year's €2.6 billion. However, market analysts had significantly higher expectations, with Bloomberg estimating an average of €5.39 billion and Visible Alpha projecting €5.59 billion—both far exceeding the actual figures.

ASML also revised its 2025 net sales forecast, lowering it to a range of €30 billion to €35 billion, down from its previous guidance. This is below the market's estimated €35.8 billion. The company also adjusted its projected gross margin for 2024 to between 51% and 53%, slightly below its earlier guidance.

ASML CEO Christophe Fouquet commented that the delay in demand for EUV (Extreme Ultraviolet) technology was a key factor in the revised outlook. He stated that the recovery pace is slower than initially anticipated and is expected to continue at a subdued rate through 2025, leading customers to adopt a more cautious approach.

Despite these challenges, ASML's Q3 revenue and profits exceeded market expectations. According to Dow Jones, ASML reported sales of €7.47 billion, higher than the analyst estimate of €7.12 billion and surpassing the company’s earlier guidance of €6.7 billion to €7.3 billion. Net income for the quarter was €2.08 billion, also beating market forecasts of €1.9 billion. The gross margin for the quarter was 50.8%, in line with market expectations and the company’s prior guidance of 50% to 51%. For 2024, ASML expects annual sales to reach around €28 billion.

ASML, Europe's largest technology company by market capitalization, has seen its stock decline by 30% since reaching a record high in July. Factors contributing to this drop include increased U.S. restrictions on its business in mainland China and broader industry weakness. The Chinese market continues to account for nearly half of ASML's sales as of the last quarter.