ASML Holding NV

XMUN:ASME

Yes, indeed, a very strong quarter. So net sales came in at EUR 11.7 billion for the quarter. Included in there EUR 3.3 billion for installed base revenue. So that's EUR 11.7 billion that was within guidance towards the higher end of the guidance. The EUR 3.3 billion was EUR 400 million more than we guided, which I think is a very strong reflection of the desire of our customers to provide upgrades on their installed base. That was the primary driver for that higher number.

The gross margin for the quarter, 57.5%, again, largely driven, I would say, by installed base revenue and the upgrades business as a result of that higher than what we guided. Net income for the quarter, EUR 5 billion, included in there EUR 500 million for the revaluation, if you like, of the first tranche that we bought from Mistral.

So yes, all in all, I would say a very, very strong quarter, a record quarter, I think, it's fair to say, both at the sales level and also at the gross margin level. And I think it's a clear indication of the very strong execution that we have against the backdrop of a very, very strong market demand.

For Q4, we expect revenue between EUR 14.2 billion and EUR 15.2 billion. So again, a very good step-up, and that is also what we expected, right? We said that we expect the second half to be stronger than the first half. And you see that momentum really very, very strongly building up. So EUR 14.2 billion to EUR 15.2 billion there.

In terms of installed base business, again, we expect an increase there. We expect EUR 3.7 billion installed base business for the quarter, again, largely driven, I would say, by upgrades. A gross margin, we expect around 57% for the quarter. If we translate all of that into what does it mean for the full year? So for the full year '26, we therefore now expect our sales to be between EUR 44 billion and EUR 45 billion for the year, and we expect a gross margin of around 56%.

So against the backdrop of an overall 36% increase for '26 in comparison to '25, you see that, that is largely driven by EUV. So the EUV business grows over 45% this year. We expect the non-EUV business to be around 20% growth for -- in comparison to last year and the installed base business around 50%. The China part of the total business, we expect to be around 20%.

Absolutely. So what are the key drivers? Of course, volume helps, right? Clearly, we have increased our expectation in terms of total sales and higher volume obviously leads to better fixed cost coverage. So that is a positive for the gross margin. Also, mix is important. If you look at EUV and immersion as key drivers for the gross margin, both of them are pretty strong.

And also, obviously, as I mentioned before, the installed base business and the upgrade business included in there is a very, very strong driver of the gross margin. So as a result of that, indeed, as you say, 56% is the expectation for the full year, which is a very, very nice step-up from the expectations at the beginning of the year.

Yes. So we completed those conversations. So that's been done with the key customers. The effect of that is not really visible in '26. It will start to become visible partly in the course of 2027. I think the full impact of that you will start to see in '28 and beyond.

Well, we did indeed spend a lot of time with our customers. And I think all of them are commenting that they see their demand increasing in the short term, but also extending in time. I think that their visibility is very good at this point of time. Today, they expect that their supply will not meet the demand at least until 2028. So this is a very, very strong demand on their side. And of course, this means that they want to build up more capacity faster. So they are accelerating their plan. They are announcing new fabs.

And for us, this translates on the short term into more demand, as Roger mentioned, overall basically for our holistic product portfolio. And on the long term, increased visibility for our demand, especially with EUV. So a lot of our discussion with our customers now are shifting, in fact, beyond 2027, a lot of order intake for 2028, but also some strong interest to already place order for 2029 and sometime even 2030.

Well, I think it's a very clear picture. I think Roger mentioned it. So first, we are very happy of the execution of the team at ASML on the ramp this year. We expect to ship about 65 systems, which is more than 50% increase compared to last year. So this is already quite an exceptional step-up. Deep UV immersion at this time last year, we are planning to ship quite a few less tools.

We moved back to a very strong year, and we are planning to ship about the same amount of tools as last year. So this is clear that we've done some good work to be able to start the ramp very aggressively.

Last quarter, we talked about 30% more capacity next year and also the aspiration to have another 30% increase in 2028. A lot of focus was there. But to be honest, it's becoming very clear that 30% in '27, 30% in '28 will not allow us to meet our customer demand. So we have to do more. And we are looking basically at ways, especially in 2028 and beyond to further extend our capacity. And this is very important, of course, to be able to fulfill our customer demand as much as we can.

Absolutely. So in addition to increase in unit shipments that Christophe talked about, one important driver, obviously, is the installed base business that we've talked about quite a bit. So of course, that is a major driver. And it's something that customers really like, right? Because what it does is it gives you within your existing footprint, you get pretty fast incremental capacity there. So that's been very successful so far, and we expect that to continue to be quite successful on a go-forward basis.

We're also very aggressively developing upgrades. So we will get more and more upgrades on our installed base available to our customers. So in that way, we try to help customers in getting instantaneous access to more capacity. So that's one driver. The second driver is the execution of our road map and productivity, again, there is an important driver. So with new releases of new products, you will see more and more productivity.

We talked in the past about a 3800F, which gets you from the 230 wafers per hour that we have today to 260 wafers per hour. That will be introduced in 2027. That will be in small quantities. But obviously, for '28 and beyond, you will see that obviously really helping to increase the capacity of our customers. But also on the immersion front, you will see that we're going to increase the specifications of the key immersion tools that we ship in 2027, and they will actually show 330 wafers per hour. So in that combination, installed base business and improvement of the throughput of the tools that we ship to customers, that will be a significant enhancement to our customers' capacity.

Well, I think that there's been indeed a lot of news around High NA, and we are very happy with that. As you know, the program, the High NA program started more than 10 years ago. And we are all very happy to see that our customers are now about to start using the tool in high-volume manufacturing. I'd like to start with TSMC and ASML announcements.

So TSMC has asked us to lead with them a consortium basically to bring 12-inch reticle to the industry. This will happen sometime in the first half of the next decade.

But it's also the sign of how important High NA has become in their plan. And that's also why they have basically confirmed that they will also introduce High NA around 2030 in high-volume manufacturing. So this is a very important announcement because it shows basically that over time, customers are looking at using High NA more. This is why they want to use 12-inch reticle.

Now you have noticed that all other major customers also joined that consortium. And at the same time, Samsung has also announced that they will be using High NA in high-volume manufacturing starting in 2028. And Intel, I think we talked about that before, they continue to run the system in high-volume manufacturing, increasing the number of layers. And of course, we look now at a significant amount of wafers being run there. So great news on High NA. I think this is the set of milestones we have been working on very hard for quite a few years.

Yes. So there also, I think we talked in the last few quarters as Roger mentioned it a few times. We have a huge momentum on metrology. We have seen major, major growth. This is true for our overlay metrology system, YieldStar. So the 550 is the latest generation of this tool. It's going to improve once again accuracy, and we are now ready for 14 angstrom node in logic, 1D for DRAM.

So very, very accurate tool. And it's going to increase the productivity by 60%, which is very important because customers in order to get performance needs more and more metrology, and if we are not to improve productivity a bit like with our scanner, capacity will also be an issue. So 60% productivity improvement, of course, will boost both the performance of the tool, but also our capacity moving forward.

Well, I think it's very clear. It's more capacity as we discussed today. Our customers are asking us every single day to get more tools. And the reason for that is because they have very high visibility on what is needed in the future. And as a result, we also have this very high visibility. So there is no doubt in our mind that we need to continue to get more output. It's a lot of work, but this is, for sure, one of the key focus of everyday life at ASML today.

The other one is technology. High NA, YieldStar, we talked about that. We talked in the past also about boosting the productivity of Low NA. Those things also help our customers first to transition to the next technology, but they also help with capacity. So these are the 2 things we have to do in parallel. And I think as we discussed today, I think we are very happy to see progress on both counts.

Thank you.