ASML Reports Record Q3 Sales and Provides 2026 Outlook

On Wednesday, ASML Holding (NASDAQ: ASML ) discussed third-quarter financial results during its earnings call. The full transcript is provided below. This content is powered APIs. 7 billion euros for Q3 2026, with strong EUV and non-EUV system sales contributing significantly.

5%, exceeding guidance due to high-margin components in its installed base management business. 2 billion euros, and a full-year 2026 sales increase of 36%, driven by significant growth in EUV and memory net system sales. Strategic initiatives include ramping capacity for low-NA EUV systems, exploring further capacity expansion in 2028, and introducing next-generation systems like the NXE:3800F. Management highlighted strong demand driven by AI and advanced logic and memory nodes, and mentioned successful customer discussions leading to long-term commitments and interest in placing orders for 2029 and 2030.

Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the ASML 2026 third quarter financial results conference call on October 14, 2026. At this time all participants are in 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 Cavanagh. Please go ahead. Jim Cavanagh, Head of Investor Relations Thank you, operator.

Welcome everyone. This is Jim Cavanagh, Head of Investor Relations at ASML Holding. Joining me today on the call are ASML Holding CEO Christophe Fouquet and our CFO Roger Dassen. The subject of today's call is ASML's 2026 third quarter results.

The length of the 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 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 risks and uncertainties.

For a discussion of risk factors, I encourage you to review the safe harbor statement contained in today's press release and presentation found on our website at 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. Christophe Fouquet, President and Chief Executive Officer Thank you, Jim. Welcome everyone and thank you for joining us for our third quarter 2026 results conference call.

Before we begin the Q&A session, Roger and I would like to provide an overview and some commentary on the third quarter 2026 results as well as provide some additional comments on the current business environment and on our future business outlook. Roger Dassen, Executive Vice President and Chief Financial Officer Thank you, Christophe, and welcome everyone. I will first review the third quarter 2026 financial accomplishments and then provide guidance on the fourth quarter and the full year of 2026. Let me start with our third quarter accomplishments.

7 billion euros, towards the high end of our guidance and reflecting strong execution of our capacity ramp. 3 billion euros from non-EUV system sales. Net system sales were split between logic at 54% and memory at 46%. 4 billion euros, primarily due to the strong demand for our productivity upgrade products in both EUV and DUV.

5%, primarily due to the contribution of very high margin components within our installed base management business. 4 billion euros. 1%. For the full year 2026, the expected annualized effective tax rate is around 17%.

95. 7 billion euros. 4 billion euros, underpinning the strong order momentum of our customers and related down payments. 88 euro per ordinary share.

1 billion euros worth of shares under the current 2026-20 buyback program. 88 euro per ordinary share and will be made payable on November 4, 2026. With that, I would like to turn to our expectations for the fourth quarter and the full year 2026. 2 billion euros with a gross margin of around 57%.

7 billion euros. 4 billion euros. Regarding our full year expectations, we expect our full year 2026 total net sales to be between 44 billion euros and 45 billion euros with a gross margin of around 56%. This anticipated year-over-year total net sales increase of around 36% reflects our expectation of over 45% growth in EUV, around 20% growth in non-EUV related system sales, and around 50% growth in installed base management sales.

Turning to end use, this year we expect logic net system sales to grow around 10% and memory net system sales to grow around 75%. The growth in memory is driven by the combination of capacity expansion of our customers and the increasing adoption of EUV on advanced DRAM nodes. As previously mentioned, we continue to expect the China region to account for around 20% of our total net sales this year. In summary, the third quarter was a record for both total net sales and gross margin, and we expect our business to continue to accelerate in the fourth quarter as we execute against a backdrop of very strong customer demand for all our products and services.

With that, I would like to turn the call back over to Christophe. Christophe Fouquet, President and Chief Executive Officer Thank you, Roger. If we take a step back to look at the market environment, we see that the pace of the AI build-out continues to be very robust. Supply shortages across advanced logic and memory nodes continue to increase in size and in time horizon.

Against this backdrop, we had very constructive discussions with our customers throughout the quarter, and the demand signals we have received have continued to strengthen. Our leading-edge, high-volume customers are sharing very good visibility as a result of the increasing number of long-term commitments they are securing with their customers. This extended visibility has led them to conclude that demand for their product will outpace supply through at least 2028. As a result, customers are accelerating capacity build-out plans and preparing for further expansion beyond 2028 in order to better meet the anticipated level of demand.

For us, their drive to add capacity is translating into not only greater short-term demand across our entire holistic lithography portfolio, but also improved longer-term visibility and demand, especially for our EUV products. As customers shift focus to their needs beyond 2027, our order momentum continues to build. We are increasingly receiving orders for 2028, and customers are also expressing interest in placing orders for 2029 and even 2030. As our customers are preparing to meet rising demand, we in turn continue our focus on adding capacity to support their needs.

Roger will now share further details on our latest plans on providing our customers additional capacity. Roger Dassen, Executive Vice President and Chief Financial Officer Thank you, Christophe. We have been very successful in ramping capacity this year for low-NA EUV. We anticipate output of roughly 65 systems for 2026, which is nearly 50% more than the 44 systems that we shipped last year.

For DUV immersion systems, while our initial output target for these systems was well below the prior year, we now expect we will deliver a similar quantity in 2026 as we did in 2025. Looking further ahead, we shared our intent last quarter to increase our capacity in 2027 by 30% for both low-NA EUV and DUV immersion systems, as well as to investigate adding a further 30% in 2028. However, given the dynamics of this quarter, we now anticipate that our current planned levels of output in ’27 and ’28 will not fully meet the demand of our customers. Therefore, we continue to strengthen our efforts to produce more systems, especially beyond ’27.

With that goal in mind, we are now looking into expanding our 2028 capacity even above the 30% year-on-year growth target that was under investigation last quarter for both low-NA EUV and immersion systems. In addition to shipping new systems, we support customer needs for more wafer capacity through productivity upgrades across our EUV and DUV installed base, as well as with the introduction of new products. The ability to enable an increase in capacity through upgrades on the same footprint is very compelling for our customers, as the effect is an immediate increase in output capability.

We will continue to work on this important value driver, expanding the upgrade portfolio and offering new productivity options to our customers in the coming years. The introduction of new products is the other lever that we have to support increased wafer capacity. We plan to introduce our next-generation low-NA EUV system, the NXE:3800F, starting in small quantities at the beginning of 2027. This system is specified at throughput of 260 wafers per hour, compared to the 230 wafers per hour capability of the NXE:3800E system.

We also plan to introduce the next-generation critical DUV immersion running at 330 wafers per hour. These new products will provide incrementally more wafer capacity to the industry as they ramp in the coming years. With that, I will hand it back over to Christophe for a technology update. Christophe Fouquet, President and Chief Executive Officer Thank you, Roger.

This quarter we saw meaningful momentum around High-NA EUV, with several industry announcements providing evidence of the technology's progress from development to production. Intel announced that it has exposed more than 1 million wafers using its High-NA EUV systems, with performance that meets or exceeds comparable layers patterned using Low-NA EUV. Additionally, Samsung and TSMC announced plans to introduce High-NA EUV into high-volume manufacturing in 2028 and 2030 respectively, with availability across the existing High-NA EUV fleet approaching 90%. We now expect to see adoption increase node-on-node moving forward.

To further ensure chipmakers can fully leverage the advantages of High-NA EUV, we also, in collaboration with TSMC, began an industry-wide initiative to develop larger-format EUV photomasks. This collaborative effort aims to establish a 12-inch mask pilot line by 2031 and enter production in 2033. The broad support for this transition reflects customer interest in maximizing the value of High-NA EUV and in investing in the next generation of this technology. In closing, the combination of very strong demand fundamentals, improved visibility and rising litho intensity reinforce our confidence in the trajectory of our business.

Our focus continues to be on supporting our customers as they ramp their logic and memory nodes by continuing to expand our capacity over a multi-year horizon while also delivering enhanced productivity. By executing our technology roadmap, in Q3 we have also shipped the first YieldStar 550B metrology stack. This overlay measurement system is designed with improved accuracy and precision to support the tighter process control requirements of the 14-angstrom node in logic and the 1D node in DRAM.

The system is designed to deliver more than 6% greater productivity over the previous-generation YieldStar, allowing customers to measure more wafers and therefore more quickly drive yield improvement in their processes. This latest-generation system continues to support major adoption of YieldStar, with demand that is expected to more than double for the coming years versus 2025. Finally, the transition of High-NA EUV into high-volume manufacturing creates a compelling opportunity for customers to enhance the economics of their future roadmap, and we remain fully committed to helping them execute a successful insertion. With that, we will be happy to take your questions.

Jim Cavanagh, Head of Investor Relations Thank you, Roger, and thank you, Christophe. The operator will instruct you momentarily on the protocol for the Q and A session. Before that, I would like to ask you to kindly limit yourself to one question with one short follow-up if necessary. This will allow us to get to as many callers as possible.

Now, operator, could we have your final instructions and then the first question, please? OPERATOR 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 go to the first question, and your first question today comes from the line of Joe Kotracki from Wells Fargo. Please go ahead. Joe Kotracki, Analyst at Wells Fargo Yeah, thanks for taking the questions. I was wondering if you could provide maybe just a little additional color on the capacity expansion that you need beyond the 30% previously talked about.

And just what do you think you can do in 2027 relative to that kind of mid-80s that we talked about last quarter? Christophe Fouquet, President and Chief Executive Officer Well, I think that we are basically working very hard to increase capacity, and I think this is true now. As Roger explained, we've done that this quarter. That's going to be true next year, and that's going to be true in 2028.

And the reason for that, as we explain, is we continue to see customers asking for tools. Now if we look at some of the opportunity we see, of course it's a bit easier for us to enable those opportunities later, so mostly in 2028 rather than on the shorter term. So this is what we are focusing on. I won't give new numbers for 27 or 28 because it's far too early to give those numbers as we continue to basically do everything we can to get extra capacity.

Joe Kotracki, Analyst at Wells Fargo Thanks. And then as a follow-up, you talked about in the prepared remarks or in the transcript, you know, value-based pricing impacting more 2027, 2028. Can you share any, just a few more additional details on that, how to think about just kind of the trajectory of gross margin from here? Roger Dassen, Executive Vice President and Chief Financial Officer Yeah, so those are two questions, right?

So first on the pricing, as we mentioned in July, we at that point were entering into conversations with customers on price increases. Those conversations have been completed and have indeed led to pricing increases for what we call the most critical products for our customers. So that has been done. As we also made reference to it, as we said in the prepared remarks, this is not going to have an impact on 26.

You will see some impact on 27, but I would say that the full impact of that is really going to start in 28. So from 28 onwards you're going to see a sustained impact of that. But you will see in the course of 2027, you will see that starting to manifest itself in a positive way in both revenue, in the ASPs and in the gross margin. Your second question on gross margin is obviously a much broader question, but let me take that one then.

So what are the puts and takes on the gross margin? So as you have seen, gross margin this quarter very, very strong and stronger than we anticipated, I would say primarily as a result of the 400 million more upgrade business that we have. But we should also not forget that if you look at the total year at 56%, it's not just the upgrade business, right. It's also higher volume.

It's also the fact that we had a very strong Low-NA EUV business in there, very strong immersion business in there. So those are all things that help. And then obviously the question is how will that develop into the years beyond this year? So what's the implication for 27 and beyond?

And of course we're not going to give you a gross margin percentage for 27. That will come in January of 2027. But if you look at the key drivers of the gross margin this year, you have to ask yourself how much of that can be sustained into 2027.