Avino Silver & Gold Mines Ltd. (ASM) reported its Q2 2025 earnings on July 24, 2025. The company delivered solid financial results despite mixed market trends and ongoing geopolitical tensions.
Financial Highlights (Q2 2025)
Revenue: €836 million, up 23% year-on-year at constant currency, and up 7% sequentially from Q1 2025 (exceeding guidance).
Equipment Sales: Increased 25% year-on-year, led by ALD and Appy.
Spares and Services Sales: Grew strongly by 17%, with accelerated demand in China contributing.
Customer Segments: Sales were driven by Logic Foundry, followed by Memory and Logic. Advanced Logic Foundry sales, related to 2nm gate-all-around (GAA) node, were notably strong.
Gross Margin: A strong 51.8%, up from 49.8% in Q2 2024, driven by a favorable product and customer mix (including China) and operational improvements. Full-year 2025 gross margin is projected to be in the upper half of the 46-50% target range.
SG&A Expenses: Down 8% year-on-year (adjusted for a one-off tax expense in Q2 2024), reflecting cost control. Expected to be somewhat below prior year for the full year.
Net R&D: Increased 18% year-on-year, at the upper end of the high single-digit to low double-digit target range as a percentage of sales for 2025.
Operating Profit: Up roughly 40% year-on-year (adjusted), due to strong revenue growth, higher gross margin, and strict cost controls despite continued investment in R&D.
Financial Results: Included a currency translation loss of €16 million due to US dollar depreciation.
ASMPT (25% stake): Share in income remained flat at €4 million due to soft back-end equipment market conditions. An impairment reversal gain of $34 million was recognized.
New Orders: €702 million, down 10% sequentially and 4% year-on-year (constant currency). Logic Foundry was the largest segment.
Sequential drop in Logic Foundry orders due to timing of 2nm GAA orders; underlying demand remains healthy, with Q3 expected to be up.
Memory orders increased sequentially but decreased year-on-year due to high levels in Q2 2024 (including lumpy China bookings).
Power, Analog, and Wafer segment bookings remained depressed.
Financial Position: Solid, with €1 billion in cash. Generated €125 million in free cash flow.
CapEx: €44 million in Q2. Expected to exceed the annual target range, likely above €200 million for the full year, partly due to a new facility in Arizona.
Shareholder Returns: €147 million paid in annual dividend; €43 million returned through share buybacks.
Market Trends & Outlook
Overall Market: AI-driven segments (GAA technology and HBM DRAM) show strength, while other areas face softer demand. Uncertainty remains due to tariffs and geopolitical tensions, though business trends haven't shown significant changes so far.
Advanced Logic Foundry:
Revenue related to GAA technology was robust, with leading customers investing in 2nm capacity.
2nm demand is outstripping previous nodes and is expected to be a significant technology node.
ASM expects a strong increase in advanced logic foundry sales for the year.
Increased Served Available Market (SAM): 2nm GAA has driven a $400 million increase in SAM, and a further double-digit SAM increase is expected with the 1.4nm node.
ASM aims to maintain its leading ALD market share and significantly expand its AP market share from 3nm to 2nm, and at least maintain share at 1.4nm due to increasing complexity in transistor structures (e.g., multi-VT, metal ALD, selective ALD).
Memory Business:
HBM DRAM: Primary driver, with ASM strongly positioned with its HiK MetalGate ALD technology.
3D NAND: Contribution remains modest, tied to muted consumer market recovery.
Memory sales are expected to drop in 2025 against a strong 2024. As a percentage of equipment sales, memory is projected to decrease to less than 20% in 2025 (from 25% in 2024).
Longer Term: DRAM roadmap is increasingly driven by AI-related applications, aligning with ASM's strengths. Significant inflection expected with 4S-squared (vertical channel transistor DRAM).
Power, Analog, and Wafer Segment:
Equipment demand remains depressed (six-quarter cyclical downturn).
No meaningful sales recovery expected in 2025; new investments likely after 2026.
Silicon carbide is experiencing a significant correction.
China:
Sales contribution in H1 2025 was higher than H2 2024 but below H1 2024.
Driven by mature Logic Foundry, benefiting from new customer wins and innovative products for mature nodes.
China's wafer sales in 2025 as a percentage of total revenue expected at the top end of the low to high 20s guidance range, still below 2024 levels.
Q3 and Q4 sales and bookings in China are expected to be lower than H1, with demand normalizing gradually, but export controls make predictions difficult.
Spares and Service Business: Continued solid performance with double-digit growth in Q2. Grew at a CAGR of almost 20% over the past five years.
Outlook
H2 2025 Revenue: Expected to be approximately similar to H1 2025 at constant currencies.
Q3 2025 Revenue: Expected to be flat to slightly lower (0% to -5% at constant currency) compared to Q2 2025.
Q3 2025 Bookings: Advanced Logic Foundry bookings expected to be higher than Q2; China bookings expected to be lower. Overall book-to-bill ratio projected to be below one.
Full-Year 2025 Revenue Growth: Around the midpoint of the 10% to 20% guidance range at constant currencies.
ASM remains on track to outperform the Wafer Fab Equipment (WFE) market in 2025.
Q&A Session Insights
2026 Outlook: Too early for specific guidance, but 2nm GAA and HBM DRAM are expected to be strong. Recovery in power/analog market is anticipated. China demand is expected to normalize gradually rather than "fall off a cliff." Silicon carbide recovery not expected soon.
Market Share (1.4nm): Confidence in maintaining ALD and EPI market share at 1.4nm node based on internal intelligence and strong customer engagement.
MOLLE & A14 TAM: Detailed quantification will be provided at the September 23 Investor Day in London. Molybdenum incorporation in interconnect is a multi-generational shift, increasing with smaller technology nodes.
FX Impact: US dollar weakening has a negative impact on gross margin (a few digits) but a positive impact on OPEX, particularly R&D.
Order Intake Softening: Q2 was impacted by timing of GAA orders (expected to rebound in Q3). Q3 and Q4 are expected to see a significant decline in China orders, possibly related to export controls and accelerated orders in H1.
Order-to-Revenue Conversion: Average conversion is around six months, but orders can be delivered in the same quarter if needed. A lower order book doesn't necessarily mean revenue cannot increase from in-quarter orders.
Capacity Shifts: Shifts between customers for GAA CapEx have occurred, with one customer exceeding expectations and others being lower. While this has been reasonably hedged for 2025, it's not a guarantee for future periods.
China Upside Surprise: Came mainly from mature Logic Foundry, not PowerWave analog or Memory.
Memory Weakness: Primarily driven by incidental sales in China last year that haven't repeated, and also by weakness in conventional memory (not HBM).
China Restrictions: No order cancellations observed. Local Chinese players are stepping into ALD (commodity layers) and EPI segments where international players face restrictions. Most China shipments are delivered directly to fabs, not warehouses.
Backside Power Delivery: ASM sees backside power distribution network implementation increasing gradually, becoming standard by the 1nm node, and is beneficial for ASM with new ALD and EPI layers.
