ASML Holding N.V. ASML reported second-quarter 2026 earnings of €7.59 per share, which increased 28.6% year over year. Converted to U.S. dollars, earnings were $8.81 per share, which beat the Zacks Consensus Estimate of $7.98.
Total net sales rose 21.2% year over year to €9.33 billion. Converted to U.S. dollars, revenues of $10.84 billion surpassed the consensus estimate by 5.43%.
ASML’s results were supported by higher-than-expected sales of Installed Base Management and total sales of 91 lithography systems, up from 76 a year earlier.
ASML's Sales Mix Favors EUV and Logic
Net system sales totaled €6.6 billion, including €3.8 billion from EUV systems and €2.8 billion from non-EUV products. ASML recognized sales of one High NA EUV system during the quarter.
ASML Holding N.V. Price, Consensus and EPS Surprise
ASML Holding N.V. price-consensus-eps-surprise-chart | ASML Holding N.V. Quote
EUV accounted for 57% of second-quarter system revenues, while ArFi systems contributed 29%. Logic represented 51% of net system sales, and Memory accounted for the remaining 49%, reflecting balanced demand across advanced semiconductor applications.
ASML Holding's Installed Base Lifts Margins
Installed Base Management sales were €2.76 billion, nearly €300 million above management’s guidance. The outperformance was primarily driven by additional upgrade activity as customers sought to improve the performance and productivity of existing systems.
Gross margin expanded 30 basis points year over year to 54%. Management attributed the stronger-than-expected profitability to very high-margin components within the Installed Base Management business. Operating margin increased to 37.1% from 34.6% a year earlier.
ASML's Costs Rise on Technology Investments
Research and development expenses increased to €1.28 billion from €1.17 billion in the year-ago quarter. The increase partly reflected estimated costs tied to the company’s technology and information technology transformation.
Selling, general and administrative expenses were €303 million compared with €299 million a year earlier. Despite higher operating costs, operating income advanced 29.7% to €3.46 billion, supported by revenue growth and gross-margin expansion.
ASML Holding Sees Broad AI-Led Demand
Management cited continued artificial intelligence investments as a key catalyst for advanced Logic and Memory chip demand. Logic customers are expanding capacity at the 3-nanometer, 5-nanometer and 4-nanometer nodes, while the 2-nanometer node continues to ramp.
ASML now expects advanced Logic foundry-related net system sales to grow more than 25% in 2026. Memory-related net system sales are projected to increase more than 75%, driven by DRAM capacity additions and rising lithography intensity across EUV and DUV immersion technologies.
ASML Expands EUV and DUV Capacity
The company expects to ship around 65 Low NA EUV systems in 2026, supporting EUV net system sales growth of more than 45%. It also anticipates about 130 immersion DUV shipments and roughly 25% growth in non-EUV net system sales.
ASML plans to raise Low NA EUV and immersion capacity by approximately 30% in 2027. It is evaluating another 30% increase for 2028 as customer forecasts extend further into the future. The company is nearly fully covered by Low NA EUV orders for 2027.
ASML’s Balance Sheet Supports Expansion
At the end of the second quarter, ASML’s cash, cash equivalents and short-term investments stood at €7.58 billion.
ASML repurchased around 0.8 million shares for approximately €1.1 billion and declared a first quarterly interim dividend of €1.88 per share, payable Aug. 5, 2026.
ASML generated €1.70 billion in operating cash flow during the quarter. After €386 million in purchases of property, plant, equipment and intangible assets, free cash flow totaled €1.32 billion.
ASML Raises Its 2026 Sales Outlook
For the third quarter of 2026, ASML expects total net sales between €11 billion and €12 billion, including approximately €2.9 billion of Installed Base Management revenues. The Zacks Consensus Estimate for ASML’s third-quarter 2026 revenues is pegged at $11.34 billion, indicating a year-over-year rise of 17.8%.
ASML projects its gross margin between 55% and 57%.
The Zacks Consensus Estimate for ASML’s third-quarter 2026 earnings is pegged at $7.98, indicating a year-over-year rise of 75.4%.
Driven by strong customer demand and increased production capacity, ASML raised its 2026 revenue outlook to €43 billion to €45 billion. The Zacks Consensus Estimate for ASML’s 2026 revenues is pegged at $45.4 billion, indicating a year-over-year increase of 22.7%.
The company expects a full-year gross margin of 54-56% and an annualized effective tax rate of around 17%.
The Zacks Consensus Estimate for ASML’s 2026 earnings is pegged at $36.6, indicating year-over-year growth of 31%.
ASML’s Zacks Rank & Stocks to Consider
Currently, ASML carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the broader Zacks Computer and Technology sector include ASE Technology ASX, Bandwidth BAND and Fortinet FTNT, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of ASE Technology have rallied 152.9% in the year-to-date period. ASX is set to report its second-quarter 2026 results on July 30.
Shares of Bandwidth have surged 359.4% in the year-to-date period. BAND is slated to report its second-quarter 2026 results on July 29.
Fortinet shares have gained 107.2% in the year-to-date period. FTNT is set to report its second-quarter 2026 results on July 29.
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