ASML Holding N.V. Q2 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Q2 2020 net sales were €3.3 billion, up over 35% from Q1 2020. Adjusting for delayed EUV revenue, hypothetical revenue would have been €3.6 billion (about 50% growth vs. Q1).
  • Net income rose to €751 million (22.6% net margin), with EPS at €1.79.
  • Gross margin improved to 48.2% from 46.1% in Q1, driven by Deep UV mix and improving EUV installed-base margins.
  • Cash & short-term investments increased to €4.4 billion, up €300 million from Q1.
  • Installed Base Management revenue reached €887 million; first half total was €1.7 billion.
  • System bookings were €1.1 billion (down materially vs. prior two strong quarters), evenly split between Logic and Memory, including €461 million from three EUV systems.

EUV and DUV Business Performance

  • ASML shipped 9 EUV systems in Q2, recognizing revenue on 7. Four systems shipped without factory acceptance testing; revenue for these will be recognized after site acceptance in 2H20.
  • EUV revenue strength continues, with ASML reaffirming its target of 35 EUV system shipments in 2020 (about €4.5 billion revenue).
  • EUV service margins expected to breakeven in 2H 2020, with system gross margins on track to exceed the 40% full-year target.
  • 2021 EUV capacity remains 45–50 systems; backlog sits at 54 units, with 28 already allocated for 2021.

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Operator: Thank you for standing by. Welcome to the ASML 2020 Second Quarter Financial Results Conference Call on July 15, 2020. Throughout today's introduction, all participants will be in a listen-only mode. After ASML's introduction, there will be an opportunity to ask questions. I would now like to open the Q&A – question-and-answer queue. [Operator Instructions] I would now like to turn the conference call over to Mr. Skip Miller. Please go ahead, sir. Skip Miller: Thank you, operator. Welcome, everyone. This is Skip Miller, Vice President of Investor Relations at ASML. Joining me today on the call is ASML's CEO, Peter Wennink; and our CFO, Roger Dassen. The subject of today's call is ASML's 2020 second quarter results. The length of this call will be 60 minutes and questions will be taken in the order they are received. This call is also being broadcast live over the internet at asml.com. A transcript of management's opening remarks and a replay of the call will be available on our website shortly following the conclusion of this call. Before we begin, I'd like to caution listeners that comments made by management during this conference call will include forward-looking statements within the meaning of the Federal Securities Laws. These forward-looking statements involve material risks and uncertainties. For a discussion of risk factors, I encourage you to review the Safe Harbor statement contained in today's press release and presentation found on our website at asml.c

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