Key Highlights
- First quarter 2026 revenue reached €8.8B with 53% gross margins and €2.8B in net income
- Annual revenue forecast upgraded to €36B–€40B range, representing approximately 16% growth year-over-year
- Leadership commits to avoiding capacity constraints through strategic investments
- Chinese market expected to comprise roughly 20% of annual sales; potential export rule changes remain unclear
- Dividend boosted by 17% while new €12B share repurchase initiative extends through 2028
The Netherlands-based semiconductor equipment giant ASML delivered impressive first-quarter 2026 results that exceeded analyst expectations, prompting the company to elevate its full-year projections amid robust artificial intelligence chip demand. The quarter generated €8.8 billion in revenue, achieved a 53% gross profit margin, and produced €2.8 billion in net earnings — translating to a 31.8% net profit margin.
Management elevated its annual revenue projection to a range of €36 billion to €40 billion, accompanied by gross margin expectations between 51% and 53%. The midpoint of this guidance suggests approximately 16% revenue expansion compared to the prior year.
During Wednesday’s annual shareholder gathering in Veldhoven, CEO Christophe Fouquet delivered a clear message to investors: ASML is determined to prevent the supply bottlenecks that constrained the chip sector earlier this decade.
“We will prevent this scenario through every available measure,” Fouquet stated. He credited recent capital investments in manufacturing capacity and operational efficiency for enabling the company to match escalating customer demand.
The CEO identified delayed equipment deliveries as the primary threat to ASML’s market dominance, potentially creating openings for alternatives. While acknowledging emerging ventures like Substrate, xLight, and Lace, Fouquet characterized them as “concepts rather than current competitors.”
Regarding market conditions, memory chip manufacturers informed ASML their 2026 production capacity is fully committed, with supply limitations projected to persist through 2027. Logic chip producers continue expanding manufacturing capabilities across various technology nodes while accelerating 2-nanometer production for artificial intelligence workloads.
Artificial Intelligence Buildout Powers Equipment Bookings
ASML maintains essentially exclusive control over extreme ultraviolet (EUV) lithography systems — specialized equipment essential for manufacturing cutting-edge semiconductor circuitry. Major customers include TSMC, Samsung, and Intel, which deploy these machines to produce chips for Nvidia, Broadcom, AMD, and Micron.
During the first quarter, ASML delivered only 2 High-NA EUV systems, representing its most sophisticated technology. Annual production targets call for 60 Low-NA EUV systems, which currently generate the majority of revenue. EUV equipment accounted for 46.6% of quarterly sales, non-EUV systems contributed 23.9%, and service operations represented 28.4%.
The company presented a technology development timeline extending to 2033, encompassing both existing High-NA EUV platforms and next-generation systems under development. Service income from the installed equipment base exceeded research and development expenditures by more than double during the quarter.
Chinese Market Exposure and Regulatory Uncertainty
CFO Roger Dassen responded to inquiries regarding possible new American restrictions on ASML’s Chinese operations. China represents approximately 20% of projected 2026 sales.
Dassen indicated the ultimate impact of proposed regulatory measures remains uncertain at this stage. He observed that reduced capacity in any single geography doesn’t eliminate underlying demand — alternative producers must compensate for any shortfall.
Regarding shareholder returns, ASML revealed a 17% dividend enhancement alongside a fresh €12 billion stock repurchase program spanning 2026 through 2028. The company completed €1.1 billion in buybacks during Q1 alone, adding to €7.6 billion repurchased between 2022 and 2025.
Trading near $1,410 per share at publication, the stock reflects a forward price-to-earnings ratio of 39.3, modestly above its ten-year median of 36. Reaching the $2,000 per share threshold would require approximately 42% appreciation from current levels.
