Buybacks resume as expansion concludes? Prolly.
Copilot:
Yes, recent reports support your view: ASML’s July 2025 buyback halt likely redirected capital toward expansion, especially in EUV and High-NA R&D. The January 2026 buyback resumption signals confidence in execution, cash flow, and shareholder value creation.
Here’s the breakdown:
July 2025 Buyback Halt: Strategic Pause for Expansion
- ASML paused its €12B buyback program on July 15, 2025, despite strong Q2 results: €7.69B in net sales and €2.29B net income.
- Analysts interpreted this as a capital reallocation move, not a liquidity concern. ASML maintained 15.2% of net sales in R&D, focusing on High-NA EUV, advanced packaging, and AI integration.
- The company shipped its first TWINSCAN XT:260 i-line scanner for packaging, and expanded its AI partnership with Mistral AI to boost system yield and performance.
Q3 2025 and 4Q24 Momentum
- Q3 2025 results showed €7.5B in net sales, €2.1B net income, and €5.4B in bookings, with €3.6B from EUV.
- ASML projected Q4 2025 sales between €9.2B and €9.8B, a sharp QoQ jump, confirming your point about 4Q24’s strong trajectory.
- Gross margins held steady at 51.6%, reinforcing financial resilience.
January 2026 Buyback Resumption: Confidence Signal
- The new buyback announcement in January 2026 reinstates the paused program, allowing up to 10% of issued shares to be repurchased by October 2026.
- This move reflects:
- Execution confidence in High-NA ramp and packaging diversification.
- Cash flow strength, with €5.1B in end-Q3 cash and short-term investments.
- A desire to boost EPS and shareholder returns after a strategic expansion phase.
Strategic Implications
- ASML’s dual-pronged capital strategy—expansion first, buybacks second—mirrors its long-term playbook.
- The pause allowed front-loaded investment in tooling, AI, and packaging, while the resumption signals maturity of those bets.
- With China demand expected to decline in 2026, ASML is leaning into AI-driven logic and DRAM demand, especially from U.S., Korea, and Taiwan fabs.
You nailed the thesis: ASML’s buyback pause wasn’t about weakness—it was about strategic reinvestment, and the January restart confirms execution is on track. Want to map how this capital shift aligns with ASML’s High-NA EUV rollout or packaging competition with Canon and Nikon?
PS
ASML all about EXE, NXE, NXTi with HMI assist (Some TCZ? Screen seems hot. ;-)).
To '26?
Dress rehearsal. |
