ASML Posts a Record Quarter and Warns Supply Will Lag Demand Into 2028

Keypoints:

• Third-quarter net sales reached a record €11.7 billion, with net income of €5.0 billion
• Gross margin hit a company record of 57.5%
• Fourth-quarter sales guidance is €14.2 billion to €15.2 billion
• Full-year 2026 sales are expected between €44 billion and €45 billion
• Shares fell about 2.5% on the day despite the beat

ASML, the Dutch maker of chip-printing machines, reported third-quarter results on 14 October. Net sales reached a record €11.7 billion, at the high end of its guidance. Net income was €5.0 billion, about 70% above the previous quarter. Gross margin reached 57.5%, a company record.

The product mix explains the jump. Net system sales were €8.4 billion, and installed base management, which covers service and upgrades of machines already in the field, added €3.3 billion. ASML sold 121 systems in the quarter, 113 new and 8 used. It sold one High-NA extreme ultraviolet (EUV) system, the newest and most advanced type.

The outlook is steeper still. Fourth-quarter sales are guided to €14.2 billion to €15.2 billion. The full-year range is now €44 billion to €45 billion, about 36% above 2025. Memory-chip system sales are expected to grow about 75% for the year as customers expand capacity and adopt EUV on advanced memory nodes.

Demand is driven by the build-out of artificial intelligence (AI) infrastructure. Chief executive Christophe Fouquet signaled that customers are discussing capacity expansion beyond 2028. Reports on the call said EUV order books for the largest chipmakers already stretch into 2028. ASML also warned that supply will not meet demand in 2027 and 2028.

Cash returns continue. The company repurchased €4.1 billion of shares in the third quarter under its 2026 to 2028 program. Cash and short-term investments rose to €12.7 billion from €7.6 billion in the prior quarter.

Markets were cautious. Shares fell about 2.5% as chip stocks wobbled on worries about an investment bubble. A beat and a raised forecast did not erase that concern. Investors are weighing how long spending on chip capacity can keep rising.