ASM International N.V.

ASM reported Q2 revenue of €1 billion, above its €980 million constant-currency guide, up 24% year over year and 15% sequentially. Gross margin came in at 51.9%, SG&A was 7.9% of revenue, net R&D was 11.1% of revenue, and adjusted operating margin was 33%. Free cash flow was a record €355 million, cash was €1.2 billion, and days of working capital improved to 50 from 69. For Q3, management expects revenue of €1.1 billion; for the second half of 2026, revenue is projected to be up more than 20% versus the first half at constant currency. Full-year gross margin is expected to be around 51%, SG&A below 8.5%, net R&D in a low-double-digit percentage of revenue, and CapEx above the high end of the €150 million to €250 million range.

Hichem M'Saad sounded confident and upbeat, emphasizing that demand remains very favorable despite supply-chain strain. He highlighted strong AI-related investment, customer urgency around securing equipment, and ASM’s positioning in leading-edge logic/foundry, DRAM, and advanced packaging. He also said the company’s revenue visibility into 2027 has improved, with customers sharing equipment plans earlier and 2027 expected to be very strong.

Paulus Verhagen focused on the quarter’s financial strength and execution. He cited revenue of €1 billion, gross margin of 51.9%, adjusted operating margin of 33%, free cash flow of €355 million, cash of €1.2 billion, and working capital days at 50. He also flagged CapEx of €63 million in the quarter and reiterated full-year CapEx above the high end of the €150 million to €250 million range, mainly due to the new Scottsdale site. On margins, he said the company is using targeted price increases where possible, passing through cost inflation, and benefiting from a higher mix of advanced products and ongoing efficiency work.

Analysts pressed management on how much stronger 2027 could be versus WFE, especially given 1.4-nanometer, new molybdenum wins, and DRAM content. Management said ASM expects to grow at least in line with WFE and likely above it, while stopping short of giving precise 2027 guidance; they repeatedly said 2027 looks very strong and that 2026 revenue should be about €4 billion based on the current second-half outlook. Questions also centered on China maturity-mix seasonality, export controls, supply-chain constraints, and capital allocation. Management said mature logic/foundry in China should be first-half weighted this year, export-control concerns may be driving some order acceleration but not excessively, supply stress is rising but manageable, and the company is scanning for M&A while starting a €150 million buyback in the second half.