ASML (NASDAQ:ASML) raised its 2026 outlook after reporting second-quarter results that exceeded its own guidance, citing stronger-than-expected installed base sales, robust demand from advanced logic and memory customers, and improving output across its supply chain and manufacturing operations.
On the July 15 earnings call, CFO Roger Dassen said second-quarter total net sales were €9.3 billion, above the high end of guidance, driven by higher Installed Base Management sales. Net income was €2.9 billion, equal to 31.3% of total net sales, and earnings per share were €7.59.
Second-Quarter Results Beat Guidance
Dassen said second-quarter net system sales were €6.6 billion, including €3.8 billion from EUV systems and €2.8 billion from non-EUV systems. EUV sales included one High-NA system. System sales were nearly evenly split between logic, at 51%, and memory, at 49%.
Installed Base Management sales totaled €2.8 billion, nearly €300 million above guidance, primarily due to additional upgrade business. Gross margin was 54%, also above guidance, which Dassen attributed mainly to very high-margin components within the Installed Base Management business.
ASML ended the quarter with cash, cash equivalents and short-term investments of €7.6 billion, and free cash flow was €1.3 billion. The company paid a final 2025 dividend of €2.70 per ordinary share during the quarter, bringing the total 2025 dividend to €7.50 per ordinary share. It also repurchased about €1.1 billion of shares under its 2026-2028 share buyback program. The first quarterly interim dividend for 2026 will be €1.88 per ordinary share, payable Aug. 5.
Guidance Raised on Strong Logic and Memory Demand
For the third quarter, ASML expects total net sales of €11 billion to €12 billion, Installed Base Management sales of about €2.9 billion, and gross margin between 55% and 57%. Dassen said R&D expenses are expected to be about €1.2 billion, with SG&A of about €0.4 billion.
For the full year, the company now expects total net sales of €43 billion to €45 billion, with gross margin between 54% and 56%. Dassen said the raised outlook is supported by continued strong demand and ASML’s ability to increase output.
Fouquet said customers have increased capital expenditure plans as they seek to add capacity on leading-edge nodes. In logic, he pointed to ongoing investment in 3-nanometer capacity for AI accelerators, as well as 5-nanometer and 4-nanometer nodes supporting a broader range of AI-related chips. He added that 2-nanometer continues to ramp for high-performance computing and mobile applications, while customers are already planning investments for 1.4-nanometer development.
ASML now expects advanced logic foundry-related net system sales to grow more than 25% this year. In memory, the company expects memory-related net system sales to grow more than 75%, supported by DRAM fab expansion, demand for DDR and HBM, and rising lithography intensity as customers migrate to advanced nodes.
EUV, DUV and Installed Base Sales Expected to Grow
Dassen said ASML now expects to ship about 65 Low-NA EUV systems in 2026, resulting in year-over-year EUV net system sales growth of more than 45%. He said demand is being driven by both DRAM and advanced logic customers.
For immersion DUV systems, ASML expects about 130 shipments this year, similar to 2025 output. Dassen said the company has worked with supply chain partners to re-accelerate output of these systems. Dry DUV shipments have also increased markedly, and ASML has seen stronger adoption of optical and metrology products across key customers due to greater process control intensity at advanced nodes.
As a result, ASML expects non-EUV net system sales to grow about 25% this year. Installed Base Management sales are expected to grow more than 30%, driven by service revenue from the expanding EUV installed base and customer demand for performance and productivity upgrades.
Dassen said China-related business is still expected to account for about 20% of total 2026 net sales, increasing in line with overall business and mainly tied to demand in mainstream logic.
Capacity Plans Extend Into 2028
ASML said customer order momentum remained “extremely strong” through the first half of the year, with backlog continuing to increase across a broad customer mix. Dassen said ASML is close to being fully covered with Low-NA EUV orders for 2027 and plans to increase Low-NA EUV capacity by about 30% next year.
For 2028, ASML has already received a significant number of Low-NA EUV orders and is investigating a further 30% capacity increase. The company also plans to increase immersion system capacity by 30% in 2027 and is evaluating another 30% expansion for 2028.
During the Q&A session, Fouquet said the planned and potential capacity increases are based on ASML’s existing footprint, rather than new cleanroom construction. Dassen said the company is optimizing current facilities by freeing up cabins, reducing cycle times and working with suppliers to leverage prior investments in long-lead-time items.
Dassen also emphasized that a 30% increase in EUV tool units next year would translate into roughly 45% more wafer capacity for customers because the 2027 EUV mix is expected to shift toward higher-productivity NXE:3800E and F systems.
High-NA Progress and Pricing Discussions
Fouquet said High-NA EUV continues to make progress as ASML works with customers to demonstrate its value and improve platform maturity toward high-volume manufacturing requirements. He highlighted ASML’s announcement that Intel Foundry is using ASML High-NA EUV technology on the Intel 18A process node to produce a subset of Intel Core Ultra Series 3 processors, calling it an important milestone for High-NA readiness in production.
Asked about pricing, Dassen said ASML continues to follow a value-based pricing approach. He said the current environment, in which ASML’s tools provide substantial value to customers facing capacity needs, gives the company more flexibility on pricing than in the past. However, he noted that long order lead times mean pricing effects would not appear immediately.
ASML said it will update its longer-term views at its next Capital Markets Day, scheduled for June 10, 2027.
About ASML (NASDAQ:ASML)
ASML Holding N.V. (NASDAQ: ASML) is a Dutch company that develops, manufactures and services advanced photolithography systems used to produce semiconductor chips. Headquartered in Veldhoven, Netherlands, ASML supplies capital equipment and associated software and services that enable semiconductor manufacturers to pattern the intricate circuits on silicon wafers. The company is widely recognized for its leadership in extreme ultraviolet (EUV) lithography as well as its deep ultraviolet (DUV) platforms used across multiple process nodes.
ASML’s product portfolio includes EUV and DUV lithography machines, light sources, imaging optics and control software, together with spare parts, upgrades and field services.
