ASML Holding NV (ASML) Q2 2026 Earnings Call Highlights: Surpassing Guidance with Strong EUV ...

ASML Holding NV (ASML) Q2 2026 Earnings Call Highlights: Surpassing Guidance with Strong EUV ...

Stocks end higher as PPI data, Mag 7 gains offset slide in chips, Iran tensions GuruFocus - - Total Net Sales: EUR9.3 billion, above guidance due to higher Installed Base Management sales. - Net System Sales: EUR6.6 billion, with EUR3.8 billion from EUV system sales and EUR2.8 billion from non-EUV system sales. - Installed Base Management Sales: EUR2.8 billion, EUR300 million above guidance.

- Gross Margin: 54%, above guidance due to high-margin components. - R&D Expenses: EUR1.3 billion. - SG&A Expenses: EUR0.3 billion.

- Effective Tax Rate: 17.5% for Q2. - Net Income: EUR2.9 billion, 31.3% of total net sales. - Earnings Per Share: EUR7.59.

- Cash and Equivalents: EUR7.6 billion at the end of Q2. - Free Cash Flow: EUR1.3 billion. - Share Buyback: EUR1.1 billion worth of shares purchased under the 2026-2028 program.

- Interim Dividend: EUR1.88 per ordinary share, payable on August 5, 2026. - Q3 Net Sales Guidance: EUR11 billion to EUR12 billion. - Q3 Gross Margin Guidance: 55% to 57%.

- Full Year 2026 Net Sales Guidance: EUR43 billion to EUR45 billion. - Full Year 2026 Gross Margin Guidance: 54% to 56%. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points - ASML Holding NV (NASDAQ:ASML) reported total net sales of EUR9.3 billion for Q2 2026, exceeding the high end of their guidance. - The company achieved a gross margin of 54%, surpassing their guidance due to high-margin components within their Installed Base Management business. - ASML Holding NV (NASDAQ:ASML) increased its full-year 2026 guidance, expecting total net sales between EUR43 billion and EUR45 billion, driven by strong customer demand.

- The company plans to ship around 65 low NA EUV systems in 2026, resulting in a year-over-year EUV net system sales growth of over 45%. - ASML Holding NV (NASDAQ:ASML) is seeing strong demand for advanced lithography solutions, with advanced logic/foundry-related net system sales expected to grow over 25% this year. - Operating expenses were higher than guided due to estimated costs related to Technology and IT transformation, primarily in R&D. -

The effective tax rate for Q2 was 17.5%, slightly higher than the expected annualized rate of around 17% for the full year. - There are concerns about the pricing of High NA systems, with some customers finding them too expensive compared to low NA systems. - ASML Holding NV (NASDAQ:ASML) faces challenges in balancing demand and supply, with ongoing discussions needed to align capacity with customer needs.

- The company is experiencing fluctuations in demand, particularly for 2027 and 2028, which requires continuous adjustments in capacity planning. A: Roger Dassen, CFO: The logic for High NA is to provide a cost benefit to our customers once the platform reaches the right maturity. For Low NA, we continue to increase productivity, which allows for potential price improvements.

The current environment provides more flexibility for pricing due to the higher value our products bring to customers. Q: You noted that you’re close to receiving all the orders you need for 2027 to be covered on low NA. Is the implied 85 tools for next year the ceiling of what you can support, or is there a possibility that this can move higher?

A: Roger Dassen, CFO: The 85 tools represent the balance between customer demand and our supply capabilities. If customers require more, we will assess our supply chain to see if further increases are possible.

Christophe Fouquet, CEO, added that the capacity increase is based on optimizing existing clean room space. Q: Regarding the 75% memory growth in 2026, how much is driven by HBM-driven lithography intensity versus volume addition? A:

Roger Dassen, CFO: The demand is a combination of increased volume for both HBM and DDR, with DRAM nodes using more EUV layers. This combination creates a strong demand for ASML’s products in DRAM this year and likely in the coming years. Q: Can you provide more details on the capacity additions and how long it takes to effect these changes?

A: Roger Dassen, CFO: We are optimizing our existing footprint by freeing up cabin space and reducing cycle times. The 30% capacity increase planned for next year is based on these optimizations. The supply chain is also being leveraged to maximize output.

Q: With the transition from E to F models, how are customers deciding between upgrading an existing E platform versus purchasing an F system? A: Christophe Fouquet, CEO: Customers want both upgrades and new systems. The transition from E to F will depend on the maturity of the platform and our ability to ramp production.

Customers are interested in both options to meet their capacity needs. For the complete transcript of the earnings call, please refer to the full earnings call transcript.