What ASML (ASML) Said on Its Q3 Earnings Call

Key Points

• ASML reported record third-quarter 2026 results, with €11.7 billion in sales, €5 billion in net income and a 57.5% gross margin, driven by strong demand, favorable product mix and €3.3 billion in installed-base upgrades.
• The company raised its outlook, forecasting fourth-quarter revenue of €14.2 billion to €15.2 billion and full-year 2026 sales of €44 billion to €45 billion—about 36% growth from 2025—with EUV and installed-base revenue expected to be major contributors.
• Customers are accelerating chip-factory expansion because they expect supply shortages to persist through at least 2028. ASML is evaluating capacity increases beyond its planned 2027–2028 expansion while advancing High-NA EUV, faster wafer-processing systems and new YieldStar metrology technology.

ASML NASDAQ: ASML reported record third-quarter results for 2026, citing strong customer demand, higher installed-base upgrade activity and favorable product mix. The semiconductor equipment maker said it expects momentum to continue into the fourth quarter, while customers accelerate capacity plans amid expectations that chip supply will remain constrained through at least 2028.

Third-quarter net sales totaled €11.7 billion, toward the upper end of the company’s guidance range, while net income reached €5 billion. Gross margin was 57.5%, which Executive Vice President and Chief Financial Officer Roger Dassen said was driven largely by installed-base revenue and upgrade activity.

Installed-base revenue was €3.3 billion, exceeding the company’s guidance by €400 million. Dassen said the result reflected customers’ desire to add upgrades to their existing equipment footprints.

“All in all, I would say a very, very strong quarter,” Dassen said, calling it a record quarter for both sales and gross margin and attributing the performance to execution amid strong market demand.

Fourth-Quarter and Full-Year Outlook

For the fourth quarter, ASML forecast revenue of between €14.2 billion and €15.2 billion, with installed-base business expected to reach €3.7 billion. The company expects gross margin of about 57% for the period.

The outlook points to a stronger second half of 2026 than the first half, Dassen said. For the full year, ASML now expects sales of €44 billion to €45 billion and a gross margin of about 56%.

The company said its 2026 sales outlook represents growth of roughly 36% from 2025. By business category, ASML expects:

• EUV business to grow more than 45% during 2026.
• Non-EUV business to grow about 20% from the prior year.
• Installed-base business to grow about 50%.
• China to account for about 20% of total business.

Dassen said the improvement in gross-margin expectations from the company’s initial 51% to 53% forecast for the year reflects higher sales volume, stronger fixed-cost coverage, a favorable mix in EUV and immersion systems, and installed-base upgrades. Discussions with key customers regarding higher value-based pricing have been completed, he said, but the financial effect is not expected to be meaningful in 2026. The impact is expected to begin appearing partly in 2027, with the full effect more visible from 2028 and beyond.

Customers Increase Capacity Plans

President and Chief Executive Officer Christophe Fouquet said customers are reporting increasing demand that is extending further into the future. According to Fouquet, customers currently expect their supply will not meet demand through at least 2028, prompting them to accelerate investment plans and announce new fabrication facilities.

“They want to build up more capacity faster,” Fouquet said. The customer activity is translating into near-term demand across ASML’s product portfolio and greater long-term visibility, particularly for EUV systems, he added.

Fouquet said discussions with customers are increasingly focused on periods beyond 2027. ASML is seeing order intake for 2028, as well as interest in placing orders for 2029 and, in some cases, 2030.

ASML expects to ship about 65 systems in 2026, representing an increase of more than 50% from the prior year, according to Fouquet. The company also expects deep ultraviolet immersion shipments to be about the same as last year, despite earlier plans for fewer tools.

Capacity Expansion and Technology Roadmap

ASML had previously discussed plans to expand capacity by 30% in 2027 and a further 30% in 2028. Fouquet said it is becoming clear that those increases alone will not meet customer demand, and the company is examining ways to expand capacity further, particularly from 2028 onward.

Beyond increasing tool shipments, the company plans to help customers add capacity through installed-base upgrades and productivity improvements. Dassen said the company’s NXE:3800F system is expected to raise throughput from 230 wafers per hour to 260 wafers per hour. The system will be introduced in small quantities in 2027, with a broader capacity effect expected in 2028 and beyond.

On the immersion side, ASML plans to increase specifications for key tools shipped in 2027 to 330 wafers per hour, Dassen said.

Fouquet also highlighted progress in High-NA EUV adoption. He said TSMC has asked ASML to lead a consortium focused on bringing 12-inch reticles to the industry during the first half of the next decade. TSMC has confirmed plans to introduce High-NA into high-volume manufacturing around 2030, while Samsung has said it plans to begin High-NA high-volume manufacturing in 2028. Intel continues to run High-NA systems in high-volume manufacturing and is increasing the number of layers and wafers processed, Fouquet said.

ASML also introduced its next-generation YieldStar 550 overlay metrology system. Fouquet said the system is designed for 14-angstrom logic nodes and 1d DRAM, with improved accuracy and a 60% productivity increase. He said higher metrology productivity is increasingly important as customers require more measurement capability to support chip performance.

Looking ahead, Fouquet said the company’s central operational priorities are expanding output and advancing technologies including High-NA, YieldStar and productivity improvements for Low-NA systems.

About ASML (NASDAQ:ASML)

ASML Holding N.V. is a Netherlands-based technology company that develops and manufactures advanced lithography systems used by semiconductor manufacturers to produce integrated circuits. Its equipment projects patterns onto silicon wafers, enabling the creation of increasingly smaller and more powerful semiconductor features.

ASML's product portfolio includes extreme ultraviolet (EUV) lithography systems, deep ultraviolet (DUV) lithography systems, and related metrology and inspection solutions.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.