ASML Shareholders Approve 4.9% Dividend Hike Amid Mixed Q1 Results: A Strategic Balance?

ASML Holding N.V. (ASML) shareholders approved a final dividend of €1.84 per ordinary share for fiscal year 2024 (FY24), marking a 4.9% increase from the €6.10 total dividend paid in 2023. The move underscores the Dutch semiconductor equipment giant’s commitment to rewarding shareholders even as it navigates near-term demand volatility. Here’s a breakdown of the dividend details, financial performance, and strategic priorities shaping this decision.

Dividend Approval: A Steady Hand in a Volatile Market

The FY24 dividend structure totals €6.40 per share, composed of three interim payments of €1.52 each and the final €1.84 approved at the April 2025 Annual General Meeting (AGM). The final payout was made on May 7, 2025, with an ex-dividend date of April 26, 2024. This follows ASML’s historical practice of quarterly dividends, signaling confidence in its financial health. The increase aligns with a 5-year dividend CAGR of ~7%, reflecting sustained cash generation from its dominance in extreme ultraviolet (EUV) lithography—a critical technology for advanced semiconductor manufacturing.

Financial Performance: A Strong Finish to 2024, But Q1 2025 Stumbles

ASML’s Q4 2024 results were a triumph, with record net sales of €9.3 billion (up 22% year-over-year) driven by EUV system upgrades and revenue recognition from two High-NA EUV units. Gross margins hit 51.7%, while net income surged to €2.7 billion. Full-year 2024 sales reached €28.3 billion, with €7.6 billion in net income. However, Q1 2025 sales fell to €7.74 billion, down 16% from the prior-year period, as net bookings slumped to €3.94 billion—well below Q4 2024’s €7.1 billion. This softness, partly attributed to AI spending shifts (e.g., Chinese startup DeepSeek’s low-cost model), raises near-term concerns.

Strategic Moves: Buybacks and Governance

At the AGM, shareholders also greenlit a €10 billion share buyback program—allowing repurchase of up to 10% of issued shares through October 2026. Combined with the dividend hike, this signals a focus on capital returns while maintaining liquidity. ASML’s cash hoard of €12.7 billion at year-end 2024 provides ample flexibility. Additionally, the appointment of new Supervisory Board members and a renewed auditor mandate aim to strengthen governance amid rapid growth.

Outlook: AI-Driven Long-Term Growth vs. Near-Term Headwinds

ASML remains bullish on long-term demand, particularly for EUV tools in AI, high-performance computing, and 3D chip packaging. CEO Christophe Fouquet emphasized that AI adoption, while uneven, will drive €30–€35 billion in 2025 sales, with gross margins of 51–53%. The company also reaffirmed its 2026 growth outlook, leveraging its 7nm+ node leadership. Despite Q1’s softness, ASML’s order backlog and multiyear EUV supply agreements with foundries like TSMC and Samsung suggest structural demand resilience.

Conclusion: A Dividend Win for Patient Investors

ASML’s dividend approval and buyback authorization reflect a strategic balancing act: rewarding shareholders while preserving capital for R&D and M&A. The 4.9% dividend hike, supported by a €6.40 total payout and a five-year track record of growth, positions ASML as a reliable income play. While Q1 2025’s stumble may pressure short-term sentiment, the company’s dominance in EUV (90% market share) and AI-driven secular tailwinds justify its long-term narrative. Investors should weigh the dividend’s stability against near-term execution risks—but for those focused on ASML’s unrivaled position in semiconductor innovation, this remains a compelling call.