ASML Third-Quarter Earnings Beat Expectations: AI Chip Demand Drives Revenue Surge, Full-Year Guidance Raised Again

TradingKey - On October 14, global lithography leader ASML (ASML) released its third-quarter financial results for 2026. The company achieved net sales of 11.662 billion euros (approximately $13.066 billion) this quarter, setting a record high, up about 25% from 9.326 billion euros in the previous quarter and up about 55% from 7.516 billion euros in the same period last year; net profit reached 4.96 billion euros, with basic earnings per share of 12.95 euros. Gross margin rose to 57.5%, near the upper end of the company's previous guidance range of 55%-57%.

During the quarter, ASML sold a total of 113 new lithography systems, up from 86 in the second quarter; Installed Base Management revenue reached 3.289 billion euros, also higher than the 2.762 billion euros recorded in the previous quarter. ASML stated that growing customer demand for equipment upgrades and productivity enhancements was a key driver of higher-than-expected service and upgrade revenues and improved gross margins in the quarter.

Christophe Fouquet, President and CEO of ASML, stated in the earnings report that third-quarter net sales of 11.662 billion euros were at the upper end of the company's previous guidance, reflecting progress in capacity ramp-up and growing customer demand.

More notably, Fouquet said customers continue to revise up their short- and medium-term equipment demand forecasts, primarily driven by further raised expectations for the scale and duration of AI-related investments. As demand visibility extends, some customers have already begun expressing interest in equipment orders for 2029 or even 2030.

Meanwhile, ASML provided a clearer outlook on future capacity supply and demand. Fouquet noted that order momentum has strengthened quarter by quarter this year, and under current production plans, supply capacity in 2027 and 2028 may not fully meet customer demand. Consequently, the company is evaluating options to further increase capacity by 2028, with the potential increase exceeding the previously announced 30% expansion plan.

Looking ahead to the fourth quarter, ASML expects net sales to be between 14.2 billion and 15.2 billion euros, with a gross margin of around 57%; R&D expenses are projected at approximately 1.2 billion euros, and SG&A expenses at around 400 million euros.

The company also revised its full-year 2026 net sales forecast to between 44 billion and 45 billion euros, up from the previous forecast of 43 billion to 45 billion euros; full-year gross margin is expected to be around 56%, compared with the prior guidance range of 54%-56%. Based on the midpoint of the latest guidance at 44.5 billion euros, this represents an increase of approximately 36% compared to full-year 2025 revenue of 32.667 billion euros.

In addition to operational results, ASML repurchased approximately 4.1 billion euros of shares in the third quarter under its existing 2026-2028 share buyback program, and announced an interim dividend for 2026 of 1.88 euros per share, payable on November 4.