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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Mr. Dassen, can you give us a summary of the first quarter?
Net sales for the quarter came in at EUR 5.3 billion, included in there EUR 1.3 billion for Installed Base business. That EUR 5.3 billion was smack in the middle of the guidance that we provided last quarter. As to gross margin, that came in at 51%, 51% was better than what we guided. A couple of reasons. First, there were some mixed effects. There was a bit more immersion and EUV in there in comparison to the dry business. There were also some one-off effects in there that drove up the gross margin to 51%. Net income for the quarter at EUR 1.2 billion. In terms of order intake, the order intake came in at EUR 3.6 billion, included in there EUR 656 million for EUV. There's been quite some speculation, I have to say around the order intake for ASML. So it's maybe good to make a few comments on the order intake and also how people might want to look at that on a go-forward basis. So first off, I think it's important to recognize that the order intake over the past 6 months. So if you take the Q4 and the Q1 order intake together, you're looking at nearly EUR 13 billion, which I think is a pretty significant number. I think people have recognized by now that the order intake process is typically quite lumpy. But I think it's good to also look a little bit at what do we need in order to get to the different scenarios that have been articulated for 2025. So maybe bring back to people's mind in the Investor Day for 2022. We were looking at different scenarios for revenue for 2025. And there was a bandwidth between EUR 30 billion and EUR 40 billion for the 2025 net sales. And then if you try to look at it from that vantage point, if you try to look at the backlog that we have today, the question then is if you want to get, let's say, to the midpoint of that bandwidth that we provided, so the EUR 35 billion, what do you still need?
So if you look at, what's in the backlog today for '24, for '25, beyond '25, then in the next 3 quarters, we would need a little bit over EUR 4 billion for the 3 quarters to come in order to, at the beginning of 2025, be fully booked for that midpoint.
And what's your guidance for the second quarter?
For the second quarter, we guide a net sales level of EUR 5.7 billion to EUR 6.2 billion, included in there would be EUR 1.4 billion of Installed Base business. And we're looking at a gross margin of between 50% and 51%.
Have there been any changes to your outlook for the full year, 2024?
Essentially, the way we look at 2024 has not changed. So as we said last time, we look at 2024 very much as a transition year. In terms of revenue, that means that we would be looking at revenue for '24, which is similar to the revenue that we had for 2023. But we're really looking at that as a transition year in which the momentum is building up during the year. So that means a stronger second half than the first half and also really gearing up towards what we think is going to be a strong year of 2025. And that is really backed up, I think, by some of the industry trends as we see them today. So we do see the utilization of our tools, both for Memory customers and for Logic customers, further improving. We do see that the inventory, particularly downstream inventory, is being navigated quite nicely and is being driven down to what we would see as normal levels. So all of that, I think, is very much in sync with our expectation that we will see recovery for the industry in 2024. And that, as I mentioned, we are building up for a stronger year in 2025. And that means for us building a capacity and preparing for that ramp.
And are there any changes to your view on margins for the year?
Yes. I think for '24, I would say, margin, we set a little bit lower than the gross margin that we had in 2023. I would still be looking at that. I would still look at that similarly. We gave the different puts and takes to the gross margin for this year on the last quarter.
I would still look at that in a similar vein. I think important to recognize still that the gross margin for 2025, which would mean a pretty significant step up from the gross margin this year, that we still think about that the way we've mentioned that during the Capital Markets Day in 2022, which is somewhere between 54% and 56%. So a big step up. Why is that? Just reiterating the key points there. First off, the lion's share of our EUV tools, Low-NA EUV tools by 2025 will be 3800s, and that will come with a better ASP and also a better gross margin.
Also on the Installed Base business, we believe 2025 is going to be a stronger year. First off, because we continue to improve the gross margin that we have on service for EUV, but also because we believe that, with the recovery in the market as we see it, we believe that the update -- the upgrade business in 2025 will be better than what we've seen so far.
High-NA, we'll be looking at higher volumes for High-NA, so that will give us better fixed cost coverage for High-NA. We'll also look at the introduction in terms of revenue for the 5200, which also will come with a better gross margin profile. And very importantly, as you know, we're very much investing this year in the ramp, right? The ramp for the second half, but definitely also for the ramp in 2025, and that means that we're already hiring people, training people in the factory, in the field. The revenue of that and the benefit of that we will yield, particularly in 2025. So in 2025, really -- we will really utilize the higher capacity that we've been building over the past couple of quarters. And all of those factors combined will lead to this step up in gross margin to the 54% to 56% that we've been indicating in 2022.
Let's have a look at EUV. Can you update us on the progress you make with your EUV technology?
Yes. So I would say, pretty exciting both for Low-NA and for High-NA. If we look at Low-NA first off, in Q1, we shipped the first 3800 Low-NA machine to a customer for qualification purposes. As we mentioned before, it's a tool that comes with significant improvements in its specification. So most notably, I would say, on the throughput side that we will see an increase in throughput from 160 wafers per hour to 220 wafers per hour in final configuration. So that's a 37.5% increase in productivity. So that's a big deal. But it also comes with better overlay. It comes with better imaging. So all in all, clearly a tool that will drive value for the customer in a big way.
So it will drive down the cost of ownership for the customers. And that also means that there is quite some customer interest in the tools. So you will also gradually see there that the second half of this year. But also as I mentioned in next year that the 3800 will become a more and more significant part of the EUV sales. So -- and with the value that obviously, this tool is driving for the customer, also comes a better ASP for us and also a better gross margin for us. So that's the story, I would say, on Low-NA.
On High-NA, big moment obviously, that we could report in Q4 because that's when we started shipping the first modules of the High-NA tool to its initial customer. So that system, we're now in the process of installing. We actually just very recently also started shipping the second tool -- the second High-NA tool to a customer. So I think really good progress on that front. At the SPIE conference in February, we could actually report first light, which was a big moment for everyone engaged that we were able to report that. And we also see the first images coming from the High-NA tool. So all in all, I think very much on track and good progress. The industry is really excited around High-NA and for very good reasons because if you look at the specifications of the High-NA tool, it will provide a transistor density that actually is 3x of the transistor density that you will have with low-NA tool. So it's a really big step up. And if you combine that as we do with similar productivity on the High-NA tool, as you have it for a Low-NA tool, it's very clear the value that it brings to customers. So for customers, there's a lot of interest in High-NA. As you probably know, we have this joint ASML-Imec lab here in Veldhoven -- High-NA lab here in Veldhoven, where customers are working with the tool. Next couple of weeks, we hope to really see the first wafers being exposed with that tool, and that's again a big moment for us because that means that our customers can really experience the tool, can understand how they are going to insert that tool into their road map. So big interest from customers in working with this tool in the lab. And obviously, something that is further going to drive up the adoption of High-NA in the production road map for our customers.
Then your capital allocation plans, can you update us on that chapter?
Absolutely. So policy hasn't changed and start sounding like a broken record here, but we first use the cash that is generated to support the business and then whatever is left will be distributed back to shareholders.
And when you talk about what is needed in the business, in the current circumstances that we're looking at for customers, you really see customers working their way back to profitability, working their way back to higher cash levels. In that circumstance, we still support customers just as we did last year. So that is still going on. And on the other hand, as I mentioned, we're looking at momentum really being increased over the quarters to come, leading up to what we think is going to be a very strong 2025.
And that momentum being built up, obviously also means that we're currently taking in quite a bit of inventory, quite a bit of material in order to be able to accommodate that, that ramp going forward. So that obviously puts pressure on the free cash flow. It has clearly put pressure on the free cash flow in the first quarter. Pretty sure that, that will yield and that investment will yield in the period to come. On the dividend side, we paid EUR 1.45 per share in interim dividend in the last quarter. So we have proposed a final dividend of EUR 1.75 to the AGM. And if you add it all up, so 3x EUR 1.45 plus the EUR 1.75 final, means a total dividend for 2023 of EUR 6.10 per ordinary share. And finally, in terms of share buyback, we've executed share buybacks in the past quarter of around EUR 400 million.
To close off, what are your expectations on demand and your business beyond 2024?
So yes, I mean, there are still some uncertainties, I would say, primarily macro uncertainties. That's still clearly there. But as I mentioned before, if you look at the trends in the industry, if you look at and I'm kind of talking about the cyclicality trends in the industry. So like the utilization going up, inventory downstream being managed to more normal levels. I think it's pretty clear that the industry is in its upturn and therefore, we do believe that by 2024, we're going to see recovery, clearly, a recovery of the industry. So if I then fast forward to 2025, then what do we find ourselves in? Well, first off, I think we will find ourselves in 2025 in the midst of the upturn. So that's a positive. Second we've talked about that many, many times, but the secular trends are really strong. I mean, if you look at AI, if you look at electrification, if you look at the energy transition, it's all very strong, very positive momentum behind it. So the secular trends are very, very strong. And that is also something that I think will yield in 2025.
And then finally, if you just look at all the fab openings that have been indicated by our customers. The recent news on positive outcomes of CHIPS Act money allocation. I mean all of that is very strong, very supportive, I think, for new fab openings across the globe.
And I think by 2025, you will see all 3 of those coming together; new fab openings, strong secular trends and the industry in the midst of its upturn. So that's why we're doing what we're doing, which is really preparing that ramp for that momentum that we see being built up. And that's also the reason why also, not just for 2025, but also beyond that, we are having all these building plans. We are expanding our capacity to the 90 EUV tools of Low-NA, to the 600 DPV tools and to the midterm, 20 High-NA tools. So we're building that capacity because we believe it's needed, and we believe it's needed for what we think is going to be a very bright future for this industry altogether and for ASML in particular.
And just comparing notes on that is something that I very much look forward to that. As you know, we have a Capital Markets Day planned by November of 2024, the 14th of November. So we look forward to sharing our view on how the market is going to develop there, and really look forward to seeing all of you there.