ASML’s EUV Surge Driven by AI Capacity Rush

Date of Call: Jan 28, 2026

Financials Results

• Revenue: Q4: EUR 9.7B; Full Year: EUR 32.7B, a 16% increase compared to 2024
• Gross Margin: Q4: 52.2%; Full Year: 52.8%

Guidance:

• Q1 net revenue expected between EUR 8.2B-EUR 8.9B.
• Q1 gross margin expected between 51%-53%.
• Q1 installed base revenue expected around EUR 2.4B.
• Full year net revenue expected between EUR 34B-EUR 39B.
• Full year gross margin expected between 51%-53%.

Business Commentary:

Strong Financial Performance in Q4 2025:

• ASML reported net revenue of EUR 9.7 billion for Q4 2025, marking a record quarter in terms of revenue, order intake, and free cash flow generation.
• The strong performance was driven by increased customer positivity regarding medium-term market perspectives, primarily due to sustainable demand for AI, leading to investments in capacity and expansion plans.

EUV Business Growth:

• EUV revenue was a significant component of ASML's business, with net bookings reaching EUR 13.2 billion, including EUR 7.4 billion for EUV.
• This growth was fueled by customers' accelerated capacity planning for AI applications, transitioning to more advanced technology nodes like 3-nm and ramping up 2-nm processes.

Installed Base and Service Revenue:

• Installed base business revenue was EUR 2.1 billion for Q4 2025, contributing to a full-year revenue of EUR 8.2 billion.
• The increase in service revenue was due to the expansion of the EUV installed base and a significant appetite for upgrade business, as customers seek to enhance output capacity rapidly.

2026 Revenue Outlook and Market Dynamics:

• ASML expects net revenue for Q1 2026 to be between EUR 8.2 billion and EUR 8.9 billion, with a full-year outlook of EUR 34 billion to EUR 39 billion.
• The optimistic outlook is supported by robust AI demand driving capacity needs in logic and DRAM sectors, with customers increasing EUV layers and engaging in advanced node transitions.

Dividend and Buyback Updates:

• ASML will pay an interim dividend of EUR 1.60 per ordinary share and proposes a final dividend of EUR 2.70, representing a 17% increase over 2024's dividend.
• A new share buyback program has been announced, valid until December 2028, with a maximum buyback amount of EUR 12 billion.

Sentiment Analysis:

Overall Tone: Positive

• CFO called Q4 a 'strong quarter' with 'record quarter in terms of revenue, order intake, and free cash flow generation.' CTO noted 'very positive dynamic' and 'strong belief that the AI demand is real,' with customers accelerating capacity planning and orders for advanced technology like EUV.

Q&A:

• Question from Moderator/Host, ASML: Can you give us some color on what you saw in terms of the business in Q4 specifically?
  Response: Q4 was a record quarter for revenue, order intake, and free cash flow, driven by improved medium-term market outlook and strong customer appetite for AI-related capacity expansion.

• Question from Moderator/Host, ASML: How are you guiding both Q1 and the full year?
  Response: Q1 revenue expected EUR 8.2B-EUR 8.9B, gross margin 51%-53%. Full year revenue expected EUR 34B-EUR 39B, gross margin 51%-53%.

• Question from Moderator/Host, ASML: Can you give us a little bit of color on how you’re seeing things [market outlook]?
  Response: Market outlook has notably improved, especially for AI capacity build-up, leading to accelerated customer capacity planning and orders for advanced technology like EUV.

• Question from Moderator/Host, ASML: How do you see that then translating into ASML’s business?
  Response: EUV revenue expected to increase significantly in 2026 vs 2025; non-EUV system business expected to be flattish; installed base business expected to grow due to EUV base expansion and upgrade demand.

• Question from Moderator/Host, ASML: Can you give us an update on how you’re seeing the technology roadmap development, for ASML?
  Response: High customer appetite for advanced nodes; Low-NA EUV ramping well; High-NA EUV qualification progressing; inspection/metrology growing strongly; key products expected to become production-worthy soon.

• Question from Moderator/Host, ASML: Would you be able to give us an update on dividend and buybacks, what we’re doing on that front?
  Response: Interim dividend of EUR 1.60 per share; final dividend proposal of EUR 2.70, making total 2025 dividend up 17% from 2024; new 3-year share buyback program up to EUR 12B announced.

• Question from Moderator/Host, ASML: If you could give us a reminder on how you’re seeing the longer-term demand and what that means for ASML.
  Response: AI demand is driving advanced technology in DRAM and logic; long-term revenue outlook for 2030 is EUR 44B-EUR 60B, gross margin 56%-60%.

Contradiction Point 1

China Business Revenue Outlook

Contradiction on whether China business will decline significantly in 2026.

How will this impact ASML's business? - Moderator/Host, ASML

2025Q4: China business expected to represent approximately 20% of revenue, aligning with its percentage of the backlog. - [Roger](CFO)

Why expect a 2026 decline despite strong H2 2025 China orders and lead times, and is this conservatism due to a soft Q1 2026 or a complete outlook? - Francois-Xavier Bouvignies (UBS Investment Bank)

2025Q3: Expectation for a significant decline in China business in 2026 is based on the view that the high sales level over the last 2-3 years was an abnormal cycle. - [Christophe Fouquet](CEO)

Contradiction Point 2

EUV Layer Count Outlook

Contradiction on the impact of the DRAM 4F² architecture transition on EUV layer count.

Could you provide details on the market outlook? - Moderator/Host, ASML

2025Q4: Strong demand for HBM and DDR is expected to cause tight supply, leading customers to ramp 1b/1c nodes which require more EUV layers. - [Christophe](CTO)

Will the transition from 6F² to 4F² DRAM architecture reduce EUV layer count long-term? - Sreekrishnan Sankarnarayanan (TD Cowen)

2025Q3: The EUV layer count is not expected to drop. In fact, it may grow as the 4F² roadmap progresses. - [Christophe Fouquet](CEO)

Contradiction Point 3

EUV Business Growth Forecast

Contradiction in the primary driver for lower EUV growth forecast.

How will this translate to ASML's business? - Moderator/Host, ASML

2025Q4: EUV Business: Expected to increase significantly in 2026 compared to 2025. - [Roger](CFO)

Why is EUV revenue growth lower than expected (30% vs. 40-50% forecast)? - Francois-Xavier Bouvignies (UBS)

2025Q2: The lower EUV revenue growth is due to a mix shift. A significant portion of the EUV capacity increase is being addressed by upgrades to existing NXE:3800E systems... The number of new EUV systems is lower... - [Roger J. M. Dassen](CFO)

Contradiction Point 4

2026 Financial Guidance & Outlook Certainty

Contradiction in the level of certainty and the factors affecting the 2026 outlook.

What is your guidance for Q1 and full-year 2026? - Moderator/Host, ASML

2025Q4: Full-Year 2026 Guidance: Net Revenue: Expected between €34 billion and €39 billion. - [Roger](CFO)

What recent changes in customer sentiment are affecting 2026 growth certainty? - Joseph Michael Quatrochi (Wells Fargo)

2025Q2: The primary change is an increased level of uncertainty due to ongoing and evolving tariff discussions... leading them to postpone or delay investment decisions. - [Christophe D. Fouquet](CTO), [Roger J. M. Dassen](CFO)

Contradiction Point 5

Order Intake and Backlog Disclosure

Shift from providing quarterly order intake to only annual backlog reporting.

What's your view on the market outlook? - Moderator/Host, ASML

2025Q4: The company believes providing robust annual guidance based on customer reviews is more meaningful. - [Roger Dassen](CFO)

Why is ASML shifting from quarterly bookings disclosure to annual backlog reporting, and is this due to heightened investor focus on bookings? - Sara Russo (Bernstein)

2024Q4: Order intake is lumpy due to the large size of semiconductor tool orders, and fluctuations don't accurately reflect business momentum. - [Roger Dassen](CFO)