ASML Holding N.V.

ASML reported Q2 2026 total net sales of EUR 9.3 billion, above the high end of guidance, helped by higher-than-expected Installed Base Management sales. Net system sales were EUR 6.6 billion, including EUR 3.8 billion from EUV systems and EUR 2.8 billion from non-EUV systems; Installed Base Management sales were EUR 2.8 billion. Gross margin was 54%, operating expenses were higher than guided, net income was EUR 2.9 billion, and EPS was EUR 7.59. Free cash flow was EUR 1.3 billion, cash and short-term investments were EUR 7.6 billion, and the effective tax rate was 17.5%. For Q3 2026, ASML guided to EUR 11 billion to EUR 12 billion of net sales, Installed Base Management sales of around EUR 2.9 billion, gross margin of 55% to 57%, R&D of around EUR 1.2 billion, and SG&A of around EUR 0.4 billion. For full-year 2026, management now expects net sales of EUR 43 billion to EUR 45 billion and gross margin of 54% to 56%; they also expect the annualized effective tax rate to be around 17%.

Christophe Fouquet emphasized that the raised outlook reflects continued strong customer demand and ASML’s ability to increase output through its supply chain, manufacturing, and field teams. He said customers are adding leading-edge capacity in both logic and DRAM, with more long-term agreements and better visibility extending several years out. He also highlighted High-NA progress, calling Intel’s use of ASML High-NA on Intel 18A an important step toward production readiness, while stressing that ASML will keep investing to stay aligned with customer needs.

Roger Dassen focused on the quarter’s operating beats and the outlook math behind the raised guidance. He noted the Q2 sales beat came from Installed Base Management, gross margin was 54% because of very high-margin components in that business, and Q2 free cash flow was EUR 1.3 billion with EUR 7.6 billion in cash and short-term investments. He also detailed shareholder returns: a EUR 2.70 final dividend for 2025, total 2025 dividend of EUR 7.50 per share, EUR 1.1 billion of share buybacks in Q2, and a first interim 2026 dividend of EUR 1.88 per share payable on August 5, 2026. For the back half, he tied higher sales and margins to better EUV mix, more immersion volume, strong installed base growth, and volume/fixed-cost leverage.

Analysts pressed on pricing, capacity, and whether customers would choose more upgrades or new tools. Management said Low-NA pricing has some flexibility because tool productivity keeps improving and customers are seeing higher value, but any pricing benefit will come over time due to long order lead times. On capacity, ASML said the 30% Low-NA EUV increase for 2027 and the investigated 30% increase for 2028 can be achieved within the existing footprint by optimizing clean-room space, freeing cabins, and improving cycle times; they are not waiting for full purchase orders, but are acting on strong demand signals. They also said 2026 High-NA rev rec remains four to five systems and that High-NA readiness is improving, with both logic and DRAM seen as candidates over time.