ASML Holding NV 2026 Q3 Earnings Call

Yeah, indeed, a very strong quarter. Net sales came in at EUR 11.7 billion for the quarter. Included in there, EUR 3.3 billion for installed base revenue. That EUR 11.7 billion, that was within guidance, towards the higher end of the guidance. The EUR 3.3 billion was EUR 400 million more than we guided, which I think is a very strong reflection of the desire of our customers to provide upgrades on their installed base. That was the primary driver for that higher number. The gross margin for the quarter, 57.5%, again, largely driven, I would say, by installed base revenue and the upgrade business as a result of that higher than what we guided. Net income for the quarter, EUR 5 billion. Included in there, EUR 500 million for the revaluation, if you like, of the first tranche that we bought from Mistral AI. All in all, I would say a very, very strong quarter.

A record quarter, I think is fair to say, both at the sales level and also at the gross margin level. I think it's a clear indication of the very strong execution that we have against the backdrop of a very, very strong market demand.

For Q4, we expect revenue between EUR 14.2 billion and EUR 15.2 billion. Again, a very good step up, and that is also what we expected. We said that we expect the second half to be stronger than the first half. And you see that momentum really very, very strongly building up. So EUR 14.2 billion to EUR 15.2 billion there. In terms of installed base business, again, we expect an increase there. We expect EUR 3.7 billion installed base business for the quarter. Again, largely driven, I would say, by upgrades. A gross margin, we expect around 57% for the quarter. If you translate all of that into what does it mean for the full year, so for the full year 2026, we therefore now expect our sales to be between EUR 44 billion and EUR 45 billion for the year, and we expect a gross margin of around 56%.

Against the backdrop of an overall 36% increase of 2026 in comparison to 2025, you see that that is largely driven by EUV. So the EUV business grows over 45% this year. We expect the non-EUV business to be around 20% growth in comparison to last year, and the installed base business, around 50%. The China part of the total business we expect to be around 20%.

Absolutely. What are the key drivers? Of course, volume helps. Clearly, we have increased our expectation in terms of total sales, and higher volume obviously leads to better fixed cost coverage. That is a positive for the gross margin. Also, mix is important. If you look at EUV and immersion as key drivers for the gross margin, both of them are pretty strong. Also obviously, as I mentioned before, the installed base business and the upgrade business included in there is a very, very strong driver of the gross margin. As a result of that, indeed, as you say, 56% is the expectation for the full year, which is a very, very nice step up from the expectations at the beginning of the year.

Yeah, so we completed those conversations. That's been done with the key customers. The effect of that is not really visible in 2026. It will start to become visible partly in the course of 2027. I think the full impact of that you will start to see in 2028 and beyond.

Well, we did indeed spend a lot of time with our customers, and I think all of them are commenting that they see their demand increasing on the short term, but also extending in time. I think that their visibility is very good at this point of time. Today, they expect that their supply will not meet the demand at least until 2028. This is a very, very strong demand on their side. And of course, this means that they want to build up more capacity faster, so they are accelerating their plan. They are announcing new fabs. And for us, this translates on the short term into more demand, as Roger mentioned, overall basically for our holistic product portfolio. And on the long term, increased visibility for our demand, especially with EUV. A lot of our discussion with our customer now are shifting, in fact, beyond 2027.

A lot of order intake for 2028, but also some strong interest to already place order for 2029 and sometime even 2030.