ASML Holding Reports Strong Bookings in Second Quarter

Image: ASML Holding has been a strong stock performer since the beginning of 2023.

By Brian Nelson, CFA

On July 17, ASML Holding (ASML) reported disappointing second quarter 2024 results where revenue fell 10% and operating income dropped 18.9% from the same period a year ago. Net income fell 18.7% in the quarter on a year-over-year basis, with diluted net income per share falling to €4.01 from €4.93 in the same period a year ago. Though the firm’s second quarter performance left a lot to be desired, its bookings number of €5.6 billion (€2.5 billion were EUV) in the quarter was strong, coming in better than the €4.5 billion in bookings won in the same period last year.

Management had the following to say about the quarterly performance:

Our second-quarter total net sales came in at €6.2 billion, at the high-end of our guidance, with a gross margin of 51.5% which is above guidance, both primarily driven by more immersion systems sales…In line with previous quarters, overall semiconductor inventory levels continue to improve, and we also see further improvement in litho tool utilization levels at both Logic and Memory customers. While there are still uncertainties in the market, primarily driven by the macro environment, we expect industry recovery to continue in the second half of the year. 

Looking to the third quarter, management expects third-quarter total net sales in the range of €6.7 billion and €7.3 billion. Its gross margin is targeted in the range of 50%-51%, and the firm expects to spend €1.1 billion in R&D and €295 million in SG&A in the period. Though performance in the second quarter could have been better, ASML reiterated its outlook for 2024, which it describes as a “transition year.” Total net sales in 2024 are expected to be similar to 2023. The company ended the quarter with €4.6 billion in long-term debt and €5.0 billion in cash and short-term investments. Second quarter results were disappointing, but we continue to like ASML as one of the most prolific innovators in the semiconductor industry.