ASML Q2 Earnings Call Highlights

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ASML (NASDAQ:ASML) reported second-quarter 2026 net sales and gross margin above its own guidance, driven by stronger-than-expected demand from its installed base business and continued customer investment tied to artificial intelligence, memory and advanced logic production.

Roger Dassen, ASML’s executive vice president and chief financial officer, said total net sales for the quarter were EUR 9.3 billion, with gross margin of 54%. Net income came in at EUR 2.9 billion, a figure Dassen said included an estimate of costs associated with the company’s tech and IT transformation.

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“All in all, I would say a very strong quarter, both from a market dynamic perspective and from an execution perspective,” Dassen said.

Installed Base Demand Lifts Second-Quarter Results

Dassen attributed the upside in the quarter primarily to ASML’s installed base business, which generated EUR 2.8 billion in revenue, about EUR 300 million above the company’s expectations.

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He said customers are seeking productivity improvements in the current demand environment, supporting higher upgrade activity. Much of that upgrade business is software-led, he said, allowing customers to improve productivity without significant machine downtime.

“Customers in the current environment, whatever they can do to increase productivity, they will take it, particularly if it's instant upgrade of productivity,” Dassen said.

ASML expects the installed base business to continue growing, with Dassen guiding to approximately EUR 2.9 billion in installed base revenue for the third quarter. For the full year, he said ASML expects more than 30% growth in the installed base business, supported by both upgrades and service revenue as the EUV installed base expands.

ASML Raises 2026 Outlook

For the third quarter, ASML guided total net sales between EUR 11 billion and EUR 12 billion, with gross margin between 55% and 57%. For the full year, the company now expects total net sales between EUR 43 billion and EUR 45 billion, with gross margin between 54% and 56%.

Dassen said gross margin is benefiting from the higher level of upgrade activity in installed base management. He also cited better fixed-cost coverage from higher system volumes and a positive mix effect from strong performance in EUV and immersion systems.

Christophe Fouquet, ASML’s president and chief executive officer, said the improved outlook reflects both strong customer demand and ASML’s ability to respond through its supply chain, manufacturing operations and field installation teams.

“The end market demand has motivated our customer to increase their CapEx but also accelerate all their plans,” Fouquet said. He added that customers are gaining longer-term visibility through agreements with their own customers, leading them to commit further out.

AI Demand Drives Logic and Memory Investment

Fouquet said ASML is seeing strong dynamics in both logic and DRAM. In logic, he pointed to capacity additions at advanced nodes including 5 nanometer, 4 nanometer and 3 nanometer, driven by demand from AI applications. He also said customers are ramping 2 nanometer production “as aggressively as possible” and are beginning to look at 1.4 nanometer.

As a result, Fouquet said ASML expects revenue from advanced foundry logic to increase by about 25% this year.

In memory, Fouquet said pricing for DDR and high-bandwidth memory indicates a clear need for additional supply, which is translating into accelerated capacity plans by customers. He also said newer memory nodes require higher lithography intensity, including both EUV and advanced immersion systems.

ASML expects memory revenue to increase by 75% this year, according to Fouquet.

System Shipments and Regional Trends

Fouquet said ASML expects to ship about 65 Low-NA EUV machines in 2026, supporting expected EUV business growth of about 45%. In DUV immersion, the company has reaccelerated output and now expects to ship about 130 systems, roughly in line with last year’s level. He also said DUV dry shipments are expected to rise “quite a bit” in 2026.

The company also expects strong growth in metrology and inspection. Fouquet said customers are using more process control as nodes become more advanced and complex, while ASML is also seeing increased adoption of its optical metrology and e-beam inspection products. Combined DUV, metrology and inspection revenue is expected to grow about 25% in 2026, he said.

On China, Dassen said the region remains approximately 20% of ASML’s total net sales, though that percentage applies to a higher revenue base than expected earlier in the year. He said additional demand in China is primarily in logic and is mainly serving domestic-led demand.

Orders Build for 2027 and 2028; High-NA Reaches Intel Production

Looking beyond 2026, Fouquet said customer discussions remain constructive, with stronger-than-usual visibility into future demand. He said ASML has seen “very strong order booking” through the first half of 2026.

For 2027, Fouquet said ASML is close to receiving all the orders it needs, even as it plans to add about 30% EUV capacity versus 2026. For 2028, he said the company has already received a large number of EUV orders and is investigating another 30% increase in EUV capacity. He added that immersion capacity is also expected to increase by 30% in both 2027 and 2028.

Fouquet also highlighted progress in High-NA EUV technology, citing a press release that Intel is now using High-NA in production on its most advanced products. He called it an important milestone and “proof of the maturity of the tool.”

ASML also said it plans to hold its next Capital Markets Day on June 10, 2027, when it intends to revisit market assumptions and discuss the longer-term outlook for the business.

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.

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