Thank you for standing by. Welcome to the ASML 2025 Second Quarter Financial Results Conference Call on July 16th, 2025. At this time, all participants are in the listen-only mode. After the speaker's introduction, there will be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference call over to Mr. Jim Kavanagh. Please go ahead. Thank you, Operator. Welcome, everyone. This is Jim Kavanagh, Vice President of Investor Relations at ASML. Joining me today on the call are ASML CEO Christophe Fouquet and our CFO Roger Dassen. The subject of today's call is ASML's 2025 second quarter results. The length of this call will be 60 minutes, and questions will be taken in the order that they are received. This call is also being broadcast live over the internet at www.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 would 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 risk and uncertainties. For a discussion of risk factors, I encourage you to review the safe harbor statements contained in today's press release and presentation found on our website at www.asml.com and in ASML's annual report on Form 20-F and other documents as filed with the Securities and Exchange Commission. With that, I would like to turn the call over to Christophe Fouquet for a brief introduction. Thank you, Jim. Welcome, everyone, and thank you for joining us for our Second Quarter 2025 Results Conference Call. Before we begin the Q&A session, Roger and I would like to provide an overview and some commentary on the second quarter results, as well as provide some additional comments on the current business environment and on our future business outlook. Roger. Thank you, Christophe, and welcome, everyone. Let me start with our second quarter accomplishments. In the second quarter of 2025, total net sales were EUR 7.7 billion, which is at the upper end of our guidance, primarily due to revenue recognition of one high-NA system and additional upgrade business. Net system sales were at EUR 5.6 billion, which includes EUR 2.7 billion from EUV sales and EUR 2.9 billion from non-EUV sales. Net system sales was driven by logic at 69%, and the remaining 31% coming from memory. Installed base management sales for the quarter came in above the guidance at EUR 2.1 billion. Gross margin for the quarter was above guidance at 53.7%, driven by an increase in upgrade business, one-off items resulting in lower cost, and lower-than-expected impact from tariffs, which was partially offset by the dilutive effect from the high-NA system revenue recognition. Operating expenses came in as guided, with R&D expenses at EUR 1.2 billion and FG&A expenses at EUR 299 million. The effective tax rate for Q2 was 18.1%. For the full year 2025, we still expect an annualized effective tax rate of around 17%. Net income in Q2 was EUR 2.3 billion, representing 29.8% of total net sales and resulting in an earnings per share of EUR 5.90. Turning to the balance sheet, we ended the second quarter with cash, cash equivalents, and short-term investments at a level of EUR 7.2 billion. Moving to the order book, Q2 net system bookings came in at EUR 5.5 billion, which is made up of EUR 2.3 billion of EUV and EUR 3.2 billion of non-EUV. Net system bookings in the quarter were weighted towards logic at 84% of the bookings, while memory accounted for the remaining 16%. Regarding our backlog, we ended Q2 at around EUR 33 billion. In addition to the regular changes from system sales and bookings, this reflects an adjustment of EUR 1.4 billion in Q2 related to customers' response to the 2024 export controls. In Q2, ASML paid a final dividend of EUR 1.84 per ordinary share. Together with the interim dividend paid in 2024 and 2025, this resulted in a total dividend for 2024 of EUR 6.40 per ordinary share. The first quarterly interim dividend over 2025 will be EUR 1.60 per ordinary share and will be made payable on August the 6th, 2025. In Q2 2025, we purchased shares for a total amount of around EUR 1.4 billion, bringing the total share buyback of our 2022-2025 program to EUR 5.8 billion at the end of Q2 2025. With that, I would like to turn the call back over to Christophe. Thank you, Roger. As Roger has alighted, we finished the second quarter with good financial results. Turning to the market, as we have said in recent quarters, artificial intelligence is the key driver of growth in memory and logic at this point. For logic, we expect system revenue to increase in 2025 compared to 2024, as customers add capacity on leading-edge nodes. In memory, we expect system revenue to remain strong in 2025, as our customers transition to their next nodes in support of the latest generation HBM and DDR5 products. With respect to our China business, revenue is expected to account for over 25% of total revenue this year, as it moderates to more closely represent its proportion of the backlog. Turning to our EUV business, customers continue to add capacity on the leading edge to support AI demand, in which EUV plays an increased role. For example, our DRAM customers have recently mentioned an increase in the number of EUV layers on their latest and future nodes. In 2025, we expect our advanced customers to add about 30% more EUV capacity compared to 2024. The higher productivity of the NXE 3800E means that we can address that capacity increase with about the same number of systems as in 2024, but with higher ASP and improved gross margin. This low-NA EUV capacity increase, together with the planned revenue from high-NA systems, is expected to lead to overall EUV revenue growth of around 30% in 2025 versus 2024. The combined revenue of DeepUV and our metrology and inspection systems in 2025 is expected to be similar to 2024. With respect to installed base management, the upgrade business has been strong in the first half of the year, as we completed most of the productivity upgrades on the NXE 3800E systems in the field to bring them to full specification. We expect continued strength in installed base management for the second half of the year, driven by increasing service revenue as our installed base grows with a growing contribution from EUV services. With this, we expect installed base management revenue to grow more than 20% over last year. We now guide the full 2025 revenue to increase by around 15%, with gross margin of around 52%. We expect demand to be more skewed towards the second half of the year. As we look ahead to 2026, we continue to see strong demand related to AI for both logic and memory, and we see the positive impact of a growing number of EUV layers. On the other hand, as we said before, customers are facing increasing uncertainties based on macroeconomic and geopolitical developments. Further, some customers are navigating specific challenges that might affect the timing of their capital expenditure. Against this backdrop, while we are still praying for growth in 2026, we cannot confirm it at this stage. We will continue monitoring developments over the coming months. With that, I ask Roger to provide an update about how we are currently looking at tariffs and their potential effects. Roger? Thank you, Christophe. As Christophe highlighted, we are currently facing an increasing level of uncertainty surrounding macroeconomic and geopolitical developments, which may have both direct and indirect implications for our business. With regard to tariffs, the direct impact results from tariffs related to system sales to our customers in the United States, the import of materials for our U.S. manufacturing facilities, the import of parts and tools for our U.S. field operations, and the export of parts from the U.S. into other countries to the extent tariffs were to apply to those parts. We continue working with our customers and suppliers to try to achieve that any direct impact of tariffs on our results will be limited. The indirect impact is more complex and very difficult to determine, as it is related to the potential impact of tariffs on GDP and the resulting overall market demand. With that, I would like to turn to our expectations for the third quarter of 2025. We expect Q3 total net sales to be between EUR 7.4 billion and EUR 7.9 billion. We expect our Q3 installed base management sales to be around EUR 2 billion. Gross margin for Q3 is expected to be between 50% and 52%. The expected R&D expenses for Q3 are around EUR 1.2 billion, and FG&A is expected to be around EUR 310 million. The gross margin in the second half of the year is expected to be lower than the first half, primarily due to margin dilutive effect of the revenue recognition of a greater number of high-NA systems in the second half of the year, lower upgrade revenue, and a number of one-offs that contributed positively to the gross margin in the first half that we do not expect in the second half of this year. For the full year, we continue to expect a gross margin of around 52%, of course, with the caveat of the uncertainties around tariffs, as we just discussed. With that, I would like to again turn it back over to Christophe. Thank you, Roger. Turning to technology, we continue to make good progress on both our low-NA and high-NA EUV products, and we are building a comprehensive EUV portfolio that gives customers the flexibility to meet their advanced technology roadmap goals and optimize their cost of technology. On the NXE 3800E, we made strong progress this quarter, completing a large number of field upgrades to the final 220 wafers per hour configuration. We are on track to finish rolling out these upgrades across the installed base through 2025. New NXE 3800E systems are now all shipping at full specification. As mentioned earlier, the NXE 3800E is helping customers expand their use of EUV. On the latest DRAM nodes, they can now replace more complex multi-patterning DeepUV steps with single EUV exposures, which brings benefits like lower cost, faster cycle time, and better yield. On high-NA, we continue to work with our customer teams to mature the technology using our EXE 5000. This quarter, we also shipped and commenced the install of the first EXE 5200B system, which is intended to support the high-NA technology insertion into high-volume manufacturing. As a reminder, the system is capable of achieving at least 175 wafers per hour, which is approximately a 60% productivity improvement compared to the EXE 5000. As we shared during our 2024 Capital Market Day, the high-NA platform will enable customers' roadmap and lower their cost of technology by moving from multi-patterning low-NA EUV to single-exposed high-NA EUV. For DeepUV, the transition of customers to the advanced nodes also requires more advanced systems. This is due to the increasing critical lithography requirements driving the adoption of both the NXT 2100 and the NXT 2150 systems, as well as the latest generation carrier system, the NXT 870. Overall, continued good momentum as our customers work closely with us to further adopt our EUV and DeepUV technologies. As mentioned earlier, there is increasing uncertainty in the short term, driven by geopolitical developments impacting macroeconomic conditions. However, looking long term, we expect the semiconductor market to remain strong, with artificial intelligence continuing to drive growth. As discussed in our Capital Market Day, we expect that the end market dynamics will lead to a product mix shift more towards advanced logic and DRAM and require a more intensive use of advanced lithography systems. The combination of the strong productivity roadmap on low-NA EUV and the introduction of high-NA will support the cost of technology reduction and the conversion of more multi-patterning layers to single EUV exposure, increasing the number of EUV layers. In line with our 2024 Capital Market Day, we expect a 2030 revenue opportunity between EUR 44 billion and EUR 60 billion, with gross margin expected between 56% and 60%. With that, we would be happy to take your questions. Thank you, Roger, and thank you, Christophe. The operator will instruct you momentarily on the protocol for the Q&A session. Beforehand, I would like to ask that you kindly limit yourself to one question with one short follow-up as necessary. This will allow us to get through as many callers as possible. Now, operator, can we have your final instructions and then the first question, please? Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question. Your first question comes from the line of François Bouvignies from UBS. Please go ahead. Thank you very much. Can you hear me okay? Yes. Yes, great. Thank you. My first question would be for the mix of this year. It seems that China is a bit stronger than expected. Even though you said that EUV capacity is up 30% and your revenue is up 30%, it seems consensus was at 49%. Flat units still, like, much lower units than maybe we expected in the beginning of the year when we said below 50. We thought it would be closer to 50 rather than 40. I was just wondering if you had any change, EUV underlying, although still strong, but is there any change? Why has it come a bit lower than maybe people expected? That is my first question. Thank you, François. Let's start indeed with EUV, and then I'll go to DeepUV. In the EUV mix, I think what you see indeed is that we expect growth on EUV this year to be about 30%. At the beginning of the year, that percentage was a little bit higher. I think there was a bit of confusion maybe on our side, so I apologize for that. The big delta is actually with installed base business. What you have there is, as you probably know, we shipped quite some tools last year, but also this year to customers at a lower configuration. They did not have the full 220 wafers per hour configuration. The revenue that is associated with bringing those tools to the 220 wafers per hour level is not in system sales, but is in the upgrade business, and therefore is in the installed base business. The delta that you would see, so there is a 10% delta, if you like, so 30% growth rather than 40% growth. The delta of that number sits in the installed base business. The installed base business is actually growing faster than we anticipated and you might have in your models at the beginning of the year. It is a wash between the EUV business and the upgrade business associated with bringing the 3800s up to the 220 level. That is really what it is in terms of unit numbers for EUV. This is just by virtue of the configuration that customers have chosen. As you would have seen, this year is particularly rich in terms of the ratio between 3800 and 3600. You also would have seen that in the very high ASP for EUV that you see this year. That is because the lion's share of the tools this year, and actually all of the tools in the second half of this year, all the low-NA tools are 3800. As a result of that, the capacity needs that our customers have can be fulfilled with a lower number of tools. Revenue-wise, it does not matter because of the higher ASP of the 3800s. Gross margin-wise, it is actually a positive, I would argue. They can get the same capacity today we are looking for at a lower number of units. Finally, on DeepUV, in our current model, DeepUV ends where we expected DeepUV to be at the beginning of this year. You are right, there is a bit of a shift there where actually China is a bit higher than we expected. You might recall that last year we said we expected to be a little over 20%. Right now, we are looking at over 25%. There is a bit of a shift in the DeepUV business from the non-China business to the China business. That is the only moving part, I would say, that is there in DeepUV. Makes sense. Thank you very much, Roger. The second question is, I believe you said in the past that you price your tools in terms of value to the customer. The litho spend increases as the value to the customer is increasing. For example, this year, the throughput is increasing, so ASP is increasing for the 3800. I guess it is the same dynamic if you think about the overlay or metal pitch improvement. If you manage to improve that, you can price higher, I would imagine. There is an argument that if a customer does not adopt high-NA, it is neutral for you because you have multi-patterning low-NA. I was thinking that the value to your customer would be much higher with high-NA versus a multi-patterning low-NA. I mean, especially on the metal pitch side, they can be much more aggressive with high-NA, I would imagine, and obviously saving a lot of non-little spend. The value to the customer is much higher that therefore you can price higher. Is it really neutral for ASML, the multi-patterning low-NA versus single high-NA? I've been talking a lot to investors on that, and I wanted to ask you. I think, François, this is Christophe. You have a lot of questions in your question. On the first part, I think you summarized what we're doing very well. I'd just like to confirm what you said about the ability we have to increase the value, therefore the price of our product if we get more productivity, if we get more overlay and imaging performance. That's still correct. That's also correct, of course, for high-NA. I think what you have to add with high-NA when you simplify basically the process of the customer reduces the lead time. I think what you see then is the ability also for our customer to keep going to the next node. I think one of the reasons we've been driving those tools historically is because as customers go to the next node, then practically they will shrink further and the lithointensity will increase. High-NA fits exactly that, I would say, strategy like EUV did in the past or immersion did in the past. The benefit of a tool like high-NA is also being captured by an increase in lithointensity, basically moving to the next node. I think we have seen that happening strongly with EUV in the past. As high-NA matures, as the customer validates the value you have described, I think we will see the exact same dynamic. Makes sense. Thank you, Christophe. You're welcome. Thank you. Your next question comes from the line of Didier Simama from Bank of America. Please go ahead. Good afternoon. Thank you for taking my question. Just have a couple of quick ones. Maybe it's a question for Roger from the press conference this morning. I was a bit surprised to hear or read that you would see the removal of the export ban on AI chips to China as a positive. Maybe can you elaborate a little bit on that? I would have thought that the lethal revenues associated with those AI chips in China would not be that material. Or are you suggesting or hoping that there would be some form of relaxation of restrictions on Immersion for China as well? Thank you. I think it is a positive because I think it is a positive for the entire ecosystem. Now, are we going to sell 20 more tools as a result of that? Probably not. I think it is still a positive development that the wider ecosystem is being deployed and that restrictions are being lifted. I think in and by itself is a positive. This is not the only lifting of restrictions that has happened in the past couple of weeks. As you also know, there was a lifting of restrictions when it comes to chip design software. In and by itself, I think that happening, I think, strengthens the global reach of the ecosystem, which I think is a positive. It is based on that that I think this is a positive development for the entire ecosystem and hopefully also for us. Okay, got it. Second question is on just going back to the DUV sort of outlook for the second half. I know you had said at the time of Q1 that China group revenues would be a bit better than 25% versus 20% prior, but it does feel like it's further strengthened. How much of that do you think is potentially related to a pull-in ahead of further restrictions on certain of your foundry logic or memory customers into next year? I do not think that dynamic has materially changed, right? The 25% that we have been talking about now for the second quarter in a row is what we expect for the year. I think that is still the way, the over 25% is still what we expect for the year. I do not think that dynamic has necessarily changed in the past quarters. That is still there. Exactly what is driven by considerations by customers, it is very hard to tell. I think there is a customer need. That customer need continues to be strong as we see it. I mean, there have been discussions in the past, is China falling off the cliff. It is not. It is also not what we see. We still see China demand strong and China demand more and more being brought in line with the percentage that it represents at our backlog, which is, again, at the level that we were just talking about, slightly around 25%. Thank you. Can I have a quick follow-up on tiny one just on high-NA? I'm surprised you don't talk so much about the booking you had in the quarter. Just wondering maybe, Christophe, whether that strengthens your view that high-NA could be inserted at the 1.4 nm node. Our view, I think, has been very consistent. The question comes back every time, and I always give the same answer, which is the phase we are in today is the phase where the customers are just qualifying the tool. They qualify the tool having in mind to insert it in high-volume manufacturing in 2026, 2027. The exact format they will use for the insertion is depending basically on the progress we are making with them in the next few months. The progress has been good. I think we talked a lot about the initial data back at the end of last year, early this year. The data are still good. The more customers use the tool, I would say the more they like it. This means also that the opportunity for insertion is, of course, growing over time because there is more and more data confirming that. At the same time, we still need a few more months. As I mentioned in my introduction, there is still a lot of work happening with our customers with the 5000. The shipment of the 5200 is an important milestone because that is the tool for high-volume manufacturing. This also means that this tool will be available on time. There also, we need to qualify it. I think the progress is good. We feel good about the way the customers look at the system. I think we will continue to share with you the progress in the coming months. We are happy with the progress, and I think so are our customers. Didier, indeed confirming that the EUV order intake was a mix of low-NA and high-NA. We also mentioned before that customers have asked us to not be specific about the high-NA order intake. That is the reason why we might not make as much music around that as some people might like. Understood. Thank you so much. Thank you. Your next question comes from the line of Joe Quatrochi from Wells Fargo. Please go ahead. Yeah, thanks for taking the question. I wanted to ask one on 2026, your commentary. I guess I wanted to try to better understand what has changed over the last 90 days just in your customer conversations. It sounds like you kind of mentioned customers are navigating specific challenges that might impact their CapEx. Can you just help us understand what's changed since 90 days ago? I will start, and I think Roger can add. I think when we talked 90 days ago, this was a couple of weeks after both Liberation Day, but also the announcement that the tariff we have put on hold for 90 days. I think we said back then that we were not at the end of the discussion. We were most probably at the beginning of it. I think today we're still not at the end of it. Three months have passed. I think those discussions are in all our customers' minds. They are trying basically to understand what it means for them in the short term. I think what has happened in the last 90 days is, I would say, the impact of the announcement is there. There's a lot of discussion. No one knows even today what is the end state. Some people are getting more optimistic. Some people are getting more pessimistic. I think when we talk about uncertainties, we mean both, basically. I think our visibility because of discussion has a bit reduced, and therefore we are being more cautious. I think Roger was mentioning the H20 chips. In the course of the last three months, they were both restricted and then allowed again yesterday. A lot of this is still happening. As you know, this type of uncertainty usually invites people who make investments to be more cautious. I think what we report is the results of the discussion we are having basically with those people. Roger. Yeah, I think, Christophe, that's the story, right? There is the direct impact. If you're considering expanding in the United States, you still don't know today exactly what tariffs are going to apply to you because on the one hand, you have the tariffs, the generic tariffs. On the other hand, there is also the 232 review that at this stage, we don't know what the outcome of that is going to be. If you have investment plans in the United States, obviously, the uncertainty around the tariff discussion is a pretty significant component in your business case. How much are you going to invest in the United States and in what timeframe? That's the direct implication. To Christophe's point, there is the indirect impact. We still don't know today. The noise levels are pretty high on tariffs. The potential implications it could have for GDP growth are pretty significant. Therefore, customers are cautious and are waiting with their investment decisions up until the point. They're maximizing the waiting time they have for their investment decision. That's what Christophe is signaling. The clarity from the customers, the uncertainty that they have to navigate is quite substantial. That leads to them holding the cards a little bit closer to the chest than they typically would do in this timeframe. That could be a positive. Christophe just gave you one example. There is also risk involved there. As a result of that, we have made the statement that we made. Thanks for that. I appreciate it. As a follow-up on the gross margin side, I think if we kind of look at the implied December quarter guide, any sort of help on just what's kind of driving the, I think, gross margin to take a bit of a step down sequentially? Is that just mix as you look to it looks like you're implying maybe three high-NA tools being recognized in that quarter. Is that the right way to think about it? Is there anything else we should be thinking about? Yeah, Joe, that is an important one, right? The high-NA one is an important one. That will have an impact because the second half, we will have more high-NA tools red-recked than in the first half. That is a driver. The second driver is that, as I mentioned before, we had quite some upgrade business in the first half. I would expect that upgrade business to be a little lower in the second half. That is a driver. We also had some one-off cost benefits in the first half that we cannot count on in the second half. It is a bit of a mix of those, as a result of which we do believe that the second half is going to be slightly weaker. Thank you. Thank you. Your next question comes from the line of Krish Sanker from TD Cowen. Please go ahead. Hi, thanks for taking my question. I have two of them. Roger, first one on calendar 2026, I understand that it's hard for you to confirm at this stage. I am just curious, when you look at the bookings you had in Q2, what kind of a bookings run rate should we assume you need to get in Q3 to get some conviction on calendar 2026 as a growth year or not? Yeah, Krish, very nice try. I think some tried this before. We're not going there, right? We have made a comment that we have made on bookings. We believe bookings are lumpy because we believe bookings are not necessarily a good reflection of the business momentum. I do not think it would be wise to entertain that. We move away from giving guidance on 2026, and I do not think it would be appropriate to indirectly give guidance on 2026. I am going to pass on this one. Gotcha. No worries. I have a two-part question again on bookings, so sorry to be annoying. On the Q2 bookings, can you tell us a little bit of how much of the EUR 2.3 billion in EUV, how was it split between logic and DRAM for EUV bookings? On the EUR 3 billion or so in DeepUV bookings, how much will ship this year versus next year on DeepUV? On the first question on EUV, it's multiple customers. It's both logic and memory, although I would say it is skewed towards logic. Logic is the better half of the number. On Deep UV, it's a bit of a mixed bag. All I would say is, last time we told you that we were getting closer and closer to being fully booked for this year, also on Deep UV, I think by now we can say that we're virtually covered for the full year. That means that some of the orders that came in on Deep UV helped bridge the gap that we still needed to be fully covered or virtually fully covered for this year. The balance is there for 2026. Thanks a lot, Roger. You're welcome. Thank you. Your next question comes from the line of CJ Muse from Cantor Fitzgerald. Please go ahead. Yeah, good morning. Good afternoon. I wanted to revisit the first question, Roger, where you guys have kind of reduced your outlook for EUV revenues from 50% to 30%. That's roughly EUR 1.7 billion. I don't think you're suggesting that your service business grew by that much. Curious what changed on the toolfront. Was it simply further de-risking of logic to much more kind of de minimis type unit levels, or is there something else going on there? I'm a bit confused, CJ, where you got the 50% from because I think what we've been talking about was 40% at the start of the year. That's the number that we've given. If you add it all up, right, at the midpoint, at the current levels of installed-based business and keeping the DeepUV slash application business constant, then we were looking at a 40% increase at the beginning of the year. This delta from 40% growth to 30% growth, that delta is explained by what I just gave you in terms of a shift from the system business to the upgrade business as included in the installed-based. The 50% is a number that I honestly don't recognize, the 50% growth. It tied to roughly 50 tools. Okay, now we're to the 50 tools. 50 tools, an important explanation of the 50 tools versus the lower number of tools, the low 40-ish tools that we were just talking about, that is explained by the mix of tools in this year. This year is completely dominated by the 3800s, only a handful of 3600 tools. That's the reason why the tool number is lower, simply because people get a much higher productivity on a per-tool basis. That still gives them the 30% capacity increase that they were looking for, albeit with a lower number of tools. It's the tool mix that has led to a lower number of unit numbers. Perfect. To follow up on your 2026 outlook, where 90 days ago you talked about growth and now greater uncertainty, I would think on the tariff front, there would be more certainty. I am curious why that has gotten worse, I guess, in your minds. From a bottoms-up perspective, has anything changed in terms of the build plans that you are seeing from your customers, whether it is domestic China, emerging, high-NA ramp, or low-NA demand that is causing you to kind of retract that outlook? Or is it simply just a top-down kind of macro view that is driving that? Thank you. I would say on your first question, CJ, it's interesting that we have such a different perspective on what the world looked like three months ago versus today. I would say three months ago, I think versus today, I can tell you that our customers are more concerned about the tariffs discussion today than they were three months ago. Three months ago, there was the indication of a pause in the tariffs. Right now, I think we're in it seems like the countries are in full battle mode again when it comes to tariffs. Every single day, there is a new percentage. The 232 review, which, of course, is very meaningful in our industry, there is no line of sight there. When we have conversations with our customers, we do sense that they're uncertain as to what the tariff discussion might land and what the implications are for GDP growth and, as a result of that, what that means for the demand of their customers. We sense in our conversations with customers a higher level of uncertainty than three months ago. That's the reason why, as I mentioned before, they keep the cards closer to the chest and wait with confirming their demands up to the point in time that they can do that. That's what we observe. Christophe, anything on customer dynamics as you see it? Yeah, no, I think you summarized it well again. As I said before, we also appreciate that there is a different view and different level of optimism or pessimism. I think what we try to do is to reflect basically the nature of the discussion we are having. Of course, to your question, is it top-down, bottoms-up? It is first top-down, but the interrogation on the business is, of course, also a more detailed discussion we are having. That is a bit where we are. We will continue to have those discussions, by the way, because every day brings new news. Yesterday was good news, as we discussed, and we will see what is happening in the next few months. That is really where our customers are today. Thank you. You're welcome. Thank you. Your next question comes from the line of Tammy Qiu from Berenberg. Please go ahead. Hi. Thank you for taking my question. The first one is regarding your comment on that 30% efficiency helped addressing customers' requirement of expanding capacity by 30%. Is it right to say going forward, you need customers to expand capacity aggressively if we're to sell more tools to your customers versus previously that the demand for litho tools is actually a function of how much capacity the customer will be willing to add? I think we usually define the EUV capacity need by the total need for wafer output. I think this is the number we monitor. I think you have seen that in the capital market there also where we look at the total wafer start per month and how this evolves over time. I think this defines our market. We try always to serve that market by shipping the most effective tool, the most productive tool. The reason for that is that a tool with higher productivity will allow us to deliver the highest value to our customer with a lower cost on our side and therefore a better gross margin. I think we are more sensitive to the total capacity need of our customer than to how many tools we're going to need to fulfill it. I will say the less number of tools we need to fulfill it, usually the better our margin and profitability will be. For our customer, also the value is better because they have more space basically to run more capacity. To give you an idea, when we shipped the first EUV system and the 3400B, we were at about half the productivity of the tool we are shipping today. Of course, this has an effect on the total number of tools. If we are still shipping the 3400B today, the number of units will be at least twice as much. What we look at, what's really important, what you should look at is really the total capacity added by our customer on EUV year -on -year. Okay. Thank you, Roger. The follow-up will be on 2026. You mentioned that you can't really confirm 2026 to be a growth year, but also at the same time, you are preparing for a growth year for 2026, I guess, from your capacity perspective. Is it right to say that it's just uncertainty for the time being, but based on your conversation with your customers, they are still leaning towards adding, just that they're not sure about what is the discussion of tariffs? We're probably still leaning towards the positive side instead of a cloudy picture that we may actually see the whole industry pulling back from investment? I think we also say that today, I think that the fundamentals of our customers are still strong. I think AI is still very strong. I think you also get signs of that in many news in the last few months. The fundamentals are strong. I think that the discussion around tariffs, around geopolitics, is just inviting some time customers to be a bit more careful. If this discussion was not there, I think the fundamentals are out there and we will be pretty much on the line we had a few months ago. I think the way this will get solved in the next few months is very, very important to bring back both stability, confidence, et cetera, et cetera, to our customers. Hopefully, this is a short-term discussion. Just to confirm, is it right to say potentially it's a delay of decision instead of a change of decision? Of course, I know it's depending on what's the result of the tariff discussion. I think we're looking more at, I would say, some question on the decision. It doesn't have to be either a delay or a change, but there's more interrogation about the decisions that have to be made. Okay. Thank you. Thank you. Your next question comes from the line of Alexander Duval from Goldman Sachs. Please go ahead. Yes, May. Thanks for the question. You talked about how lithography intensity can benefit from leading-edge memory specifically. I wondered if you could elaborate this and how that's helping lithointensity and to what extent you see that as a sustainable trend into next year. As a quick follow-up, you talked in the past about the focus at ASML on moving towards leveraging common platforms. I wondered if you could give the latest update on progress there and how you're thinking about the timeline to that helping customers and helping ASML. Many thanks. Yeah. On the first question, I think we talked quite a bit about lithointensity at the Capital Market Day. I think what is very positive about the last few months is we see basically this increased adoption of EUV happening, I think, especially with the DRAM customer. The trend, I think, will be sustained. That is what our customers tell us. We see on the latest node quite a jump on the EUV layer for some of the customers. The DRAM roadmap, the technology roadmap, is so complex that EUV more and more is seen basically as a way to simplify a bit the process flow and to get to the performance needed faster. If we look at, I would say, the next three, four, five nodes, and that includes four F-squared, by the way, we see a very positive trend with our DRAM customer. I think we were forcing that last year, and we now have many confirmation points of that. That is a bit where we are on this. On the next platform, I think what we explained last year is that we want to continue to improve the performance of EUV. We want to continue to scale productivity. We are going to do that as far as we can on this platform, most probably all the way to the end of this decade. We can continue to improve the performance of the tool on the current platform, basically in terms of productivity and overlay. When we see that this becomes more difficult, then the next platform, which is pretty much the same as the high- NA platform, will also become available for low- NA so that we can continue this journey for another 10-15 years. This will happen most probably, I would say, at the beginning of the next decade. That's at least our current estimation. Thank you very much. Thank you. Your next question comes from the line of Chris Caso from Wolfe Research. Please go ahead. Yes, thank you. Good afternoon. I guess the first question is with regard to memory. It looks like the revenue and bookings were down a bit in the quarter. Could you talk a little bit about the trends that you're seeing in memory? Earlier in the call, you talked about some of the trends with regard to HBM driven by AI. What and when do you expect to see some of those benefits coming into the order book for memory? I think what we said today is if we look at the memory revenue, this is still strong in 2025. Basically, about the same level as 2024. The demand on advanced memory is still strong. That is driven, as you mentioned, by HBM. What really happened this year is, I would say, logic has increased again. This is, I would say, the biggest change. If we look forward, AI is both about logic and HBM. Capacity has to be built on both. I talked about AI fundamentals before. That covers both logic and memory. I think logic was behind last year because the investments were not happening. That is now happening. I think if we look at the next mostly couple of years, we should still see strong demand on both, basically. I guess what you saw in the material was that the bookings for memory were rather low in the quarter. I think at 16%. To be honest, that was on the back of a few quarters where actually the order intake for memory was very high. Last quarter, in Q1, it was 40%. For a number of quarters, memory order intake was very, very strong. This quarter, it was lower. You know what we say about order intake. I think that also pertains to the composition of the order intake for memory versus logic. It's lumpy. Yes. Understood. As a follow-up question with regard to China, given that China does seem to be above what you had expected at the start of the year, do you feel that has any implications for China revenue as you're going into next year? There's always concerns about pull forwards with regard to China. Obviously, the restrictions there are changing. Because of the upside you're seeing to China this year, does it have any effect on your expectations for China going into next year? Of course, not going to give any projection on 2026, and that would include China. Frankly, for quite a while now, we're seeing there is healthy demand in China. The demand is not falling off a cliff. I think we see that confirmed year after year, right, that the demand in China remains quite strong. We do not see a pattern of extreme pulling in and as a result of that demand falling off a cliff. That is not a dynamic that we see. We believe there is a healthy business in China in mainstream logic and in memory. We are ready to serve that continued development of that market. Thank you. Thank you. Your next question comes from the line of Adithya Metuku from HSBC. Please go ahead. Yeah. Good afternoon, guys. Hopefully, can you hear me? Yes. I can hear you fine. Yeah. Yeah. Yeah. Roger, just a clarification first. I think you said at the beginning of the call that you had order adjustments in the backlog. Can you explain a bit around what proportion of this order adjustment was EUV-related and what proportion was DUV and whether this was across multiple customers or whether this was just one or two customers? Any color around that adjustment would be helpful. I have got a follow-up. No, the adjustment I specifically talked about was related to China. There was a EUR 1.4 billion adjustment in the backlog that you need to understand. That is related to customers now, in light of the export restrictions of last year, customers have now made up their mind what they want to do. That has led to the debooking or the cancellation of orders for about EUR 1.4 billion. That is the comment that I made. That is a data point you need in order to understand the EUR 33 billion backlog that we ended the quarter with. This is all DPV and a bit of application business, but in essence, most of this is DPV. Understood. Just following on from that, look, I get the uncertainty around tariffs, but putting that aside, my calculation suggested if you get another EUR 6 billion in orders in the second half of this year, that should be enough for you to deliver flattish growth in 2026. Anything on top of this will drive revenue growth in 2026. Now, when I look at this EUR 6 billion number, it does not seem demanding given you have had almost EUR 5 billion in average quarterly order intake over the last four quarters. If tariffs were to turn out to be benign, would you agree with my maths that roughly EUR 6 billion in order intake cumulatively over the next two quarters will set you up for flattish growth and anything on top of this will help drive revenue growth in 2026? I'm not going to give you a grade on your math, Adithya. I'm not going to do that. For obvious reasons, as I just shared with Krish, we're not going to go into that. There are heavy assumptions in your math on exactly the composition of the order book, what pertains to which year. In light of what we said at the beginning, we're not going there. Okay. No worries. Can I just ask another question then if that's okay? So your interpretation is if I get a lousy answer, I'm entitled to another question. That's okay. Go ahead. Okay. Thank you. Just a slightly different topic. Recently, there's been this thesis going around that within the logic end market, there won't be a rise in lithointensity now until 2030 when your largest customers are expected to adopt high-NA EUV. This seems a bit pessimistic to me, but I just wondered how you see if you would agree with the statement or do you think there will be logic node transitions before 2030 that will lead to a rise in lithointensity, potentially the 14 angstrom node. Any color you can give around this would be helpful. I think this statement should start with the fact that 2 nm, we discussed that many times, is a node basically where we do not see an increase of EUV layers. Now, of course, what has happened after that is that gate all around is the new architecture and customers are going to go back to drive more density. Many ways to do that. One way is to use, of course, more lithointensity. I think that after the 1.4 nm node, we will see again some lithointensity increase, some more EUV layers. If you look at the long term also there, the logic customers are extremely bullish about the need for more EUV layers. Yes, there is one node, as it happened before with FinFET, where there is a bit of a pause. I always explain the only reason for that pause is to enable more shrink moving forward. For every node where you pause basically to change your transistor architecture, usually you will see three, four, five nodes where you continue basically to shrink and there drive more lithointensity. Timing detail, this is still a very competitive market. AI is driving innovation. Our customers are not standing still. I think we will see more opportunity in the next few years for sure. Understood. Thank you. Okay. We have time for one very last, very quick question. If you were unable to get through on this call and still have questions, please feel free to contact ASML Investor Relations with your question. Now, Operator, can we have that last quick question, please? Thank you. Your last quick question comes from the line of Timm Schulze- Melander from Rothschild & Co Redburn today. Hey there. Thanks so much for taking my questions. I do. do. Maybe I'll ask them both right at the get-go. The first one was just some clarification, please, from Roger about installed base management. If I look at the 3Q guide, the full year guide, it looks like there's about a EUR 400 million decline sequentially in the fourth quarter. Is that the scale of the sort of NXE 3800E contribution to installed base management? Because I was thinking we'd have quite a lot of argon fluoride shipments from 2023 and 2024 starting to contribute. Just maybe some color about sequentially what's happening in the fourth quarter in your guide. A question for Christophe just on high- NA adoption. 175 wafers per hour, an impressive achievement. Clearly, you're shipping qualifying a lot. Maybe just in sort of layman's terms, could you share what are the milestones that are still needed for your customers to cross before we can be more confident about when volume manufacturing begins and just the dilution on high- NA? Is the program already above break-even? Thank you so much. On the first one, very quickly, what I gave, the 20% obviously is a rounded number, right? If 20% or 23% or 24%, I think you would already have made up for the big delta that you have there. I think the installed base business, particularly the upgrade business, as we mentioned before, was particularly high in the first half. We do expect that to decline a little bit. We also do expect a continued increase in the service revenue, not necessarily from RFI, but definitely from EUV, right? On EUV, you see more and more tools getting out of warranty. That contributes to an increase in the service business. Upgrade business going down a bit, service business continuing to grow up. I do not think you should expect a draconian movement between the third quarter and the fourth quarter. There's a bit of rounding there. That might confuse the analysis. Yeah. On high- NA, I think we talked about the three phases in the past. I think we're still in what I call phase I, which is basically R&D customer really qualifying the technology with the 5,000. There, I think the good news is the imaging is doing great. Overlay is good. So performance of high- NA has been validated. Some of the data shared a few months ago. The shipment of the first 5,200 means that we are heading towards phase II, which will be the qualification of the tool for high-volume manufacturing insertion. There, the key word is maturity, right? Can the tool run without major interruptions so that the customer not only likes the performance, but can trust the performance to basically be repeatable in high-volume manufacturing? I think the next key milestone is about the maturity of the tool. This will be a lot of work this year, next year. When this is validated, this is where customers start to really count on the system to do some good work in manufacturing. That is a bit the sequence of the milestone. Great. Many thanks. All right. On behalf of ASML, I'd like to thank you all for joining us today. I'll ask the operator if you could formally conclude the call. I would really appreciate it. Thank you. Thank you. This concludes the ASML 2025 Second Quarter Financial Results Conference Call. Thank you for participating. You may now disconnect.