ASML (NASDAQ:ASML) reported first-quarter 2026 results in line with guidance and raised its full-year revenue outlook as demand for advanced semiconductor manufacturing capacity remains strong, driven largely by AI-related infrastructure investment.
Q1 results: sales within guidance, gross margin at high end
On the company’s first-quarter earnings call, CFO Roger Dassen said total net sales were EUR 8.8 billion, within ASML’s guidance. Net system sales were EUR 6.3 billion, including over EUR 4.1 billion from EUV system sales—“including sales from two High-NA systems”—and over EUR 2.1 billion from non-EUV system sales.
Gross margin came in at 53%, the high end of guidance, which Dassen attributed “primarily [to] the contribution of very high-margin components within our installed base business.” Operating expenses were in line with guidance, including R&D expenses of about EUR 1.2 billion and SG&A of about EUR 0.3 billion.
ASML posted net income of EUR 2.8 billion, or 31.4% of total net sales, resulting in EPS of EUR 7.15. The effective tax rate was 17.1%, and Dassen said the company expects an annualized effective tax rate of “around 17%” for full-year 2026.
On cash generation, Dassen said ASML ended the quarter with EUR 8.4 billion in cash equivalents and short-term investments. Free cash flow was -EUR 2.6 billion, “largely driven by the timing of down payments,” he said.
Q2 outlook: revenue range maintained, margin expected to moderate
For the second quarter, ASML guided to total net sales of EUR 8.4 billion to EUR 9.0 billion, with installed base management sales “around EUR 2.5 billion,” Dassen said. Gross margin is expected to be 51% to 52%, with R&D of around EUR 1.2 billion and SG&A of around EUR 0.3 billion.
CEO Christophe Fouquet said the expected sequential margin step-down is largely tied to installed base mix and ramp-related costs. He noted that Q1 included “very high-margin elements in the upgrade business” that ASML is “not counting on” repeating at the same strength in Q2. He also pointed to costs related to hiring and training as ASML increases its “move rate.”
Raised 2026 revenue guidance as AI-driven demand outpaces supply
Fouquet said the semiconductor industry growth outlook is “solidifying,” driven by AI-related infrastructure investment that is “increasing demand for advanced logic and memory chips.” For the “foreseeable future,” he said, demand is expected to outpace supply, creating constraints “across end markets from AI to mobile and PCs,” and prompting customers to “aggressively add capacity.”
In memory, Fouquet said “many customers have confirmed that they are sold out for the remaining of the year,” and expect supply limitations to persist “beyond 2026” despite capacity expansion plans. In logic, he said customers are adding capacity across advanced nodes while continuing to ramp 2-nanometer, and also expect supply limitations beyond 2026.
Against that backdrop, ASML updated its full-year 2026 outlook. Fouquet said the company is “narrowing and increasing” expected revenue to EUR 36 billion to EUR 40 billion, while maintaining gross margin guidance of 51% to 53%. He reiterated that revenue is expected to be weighted to the second half of the year.
Fouquet said EUV revenue is expected to rise significantly in 2026. He added that while ASML previously expected non-EUV revenue to be similar to last year, it now expects non-EUV growth “as a result of customer adding more Deep UV lithography to support their expansion plans.” Installed base management revenue is also expected to “grow significantly,” driven by service revenue from the expanding EUV installed base and demand for performance upgrades.
Management also said the 2026 guidance range is intended to “accommodate potential outcomes of ongoing discussions around export control,” according to Fouquet.
Capacity expansion: “at least 60” Low-NA EUV systems in 2026; “at least 80” next year
Fouquet said ASML is executing an output plan of at least 60 Low-NA EUV systems in 2026. He added that, despite what he described as a “slow start” previously discussed, the company is working to drive immersion system output “close to” 2025 levels. Based on demand and order intake, he said ASML is “quarter-by-quarter increasing the move rates for our HBM product,” raising Low-NA EUV capacity to at least 80 systems next year and scaling DUV and application products accordingly.
In response to questions about the geographic mix of the raised outlook, Dassen said the increased immersion expectation is “primarily non-China,” adding that the company’s China view remains unchanged with China “at the midpoint around 20%.” He said ASML now believes it can get immersion output “close to the levels that we had last year,” which would “primarily flow to the non-Chinese customers.”
On whether 2027 demand could exceed the “at least 80” Low-NA EUV capacity target, Fouquet said discussions with customers are ongoing and the number reflects “very close discussion with our customers.” Dassen later described “at least” as the current customer alignment factoring in customers’ view of the market, fab-building progress, and ASML’s approach to supplying capacity through multiple levers beyond unit volumes.
Fouquet also addressed cleanroom readiness, saying ASML saw cleanroom capacity as “one of the factor[s], if not the key factor,” influencing what could be done this year, but added that 2026 plans are “solidifying,” with more clarity on “the number of pedestal[s] that will be available when.”
Technology updates: EUV productivity roadmap, High-NA progress, and 3D integration
Fouquet highlighted technology developments discussed at the SPIE Advanced Lithography and Patterning Conference in February, including an updated Low-NA EUV productivity roadmap. He said ASML is targeting at least 330 wafers per hour on Low-NA EUV “at the start of the next decade,” enabled in large part by source power improvements, including a “recent 1,000-watt source demonstration.”
Near-term, Fouquet said all NXE:3800E systems can benefit from an upgrade that increases output by 10 wafers per hour, with “230 wafers per hour available immediately to all customers.” He also said ASML raised the throughput specification for the NXE:3800F system to 260 wafers per hour from 250, with shipments planned to start in 2027 and full volume in 2028. In response to a question on EUV mix next year, Dassen said 2026 shipments are “the lion’s share” NXE:3800E, with “about 20% maybe” older D systems. For 2027, he said “hardly, if any” D systems, with the majority still E systems and a “clear minority” of F systems—while adding that average selling prices should improve due to the mix shift.
On High-NA, Fouquet said the High-NA platform has processed “over half a million wafers” and achieved “over 80% availability.” He said customer presentations showed use cases in both logic and DRAM where a single High-NA exposure could replace multi-patterning approaches requiring “three or four Low-NA exposures,” and that for some critical layers, High-NA can reduce process steps “by a factor of 10.” Still, he cautioned that it is “a bit too early” to say how market tightness will affect adoption timelines, as customers are in the process of testing High-NA on product wafers.
Separately, Fouquet said ASML views 3D integration as increasingly important and described activities to support customers, including its “Holistic Lithography” approach combining metrology and process control. He also referenced ASML’s move into advanced packaging with the XC260, which he said is seeing “good traction,” while noting hybrid bonding is still limited in practical use in front-end manufacturing, with “some discussion for the future” on how ASML could help.
On capital return, Dassen said ASML paid a EUR 1.60 per share interim dividend in Q1 and intends to declare a EUR 7.50 total dividend for 2025, a 17% increase from 2024. The company also repurchased about EUR 1.1 billion of shares in Q1 2026.
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.
