NASDAQ: ASML · EURONEXT: ASML
ASML Q1 2026
ASML Q1 2026
Earnings Call — Deep Dive
CEO: Christophe Fouquet · CFO: Roger Dassen · Report compiled: June 11, 2026
⚠ Disclaimer: This report is for educational and informational purposes only.
It does not constitute investment advice, a buy/sell recommendation, or a solicitation to trade.
Always consult a licensed financial advisor before investing.
Q1 Revenue
€8.8B
+14% YoY; seasonal dip from Q4
Gross Margin
53.0%
At high end of guided range
EPS
€7.15
+19% vs consensus €6.00
FY2026 Guide
€36–40B
Raised from €34–39B
EUV Units 2026
≥60
vs 48 in 2025
EUV Units 2027
≥80
Targeted capacity
China Share
19%
Q1 system sales; down from 36%
Net Income
€2.8B
31.4% margin
01
The 5 Biggest Takeaways
Takeaway #1 — Growth: Beat-and-Raise
ASML beat top and bottom line estimates, then raised full-year 2026 guidance from €34–39B to €36–40B — all while China system revenue fell sharply from 36% in Q4 2025 to just 19% in Q1 2026. Non-China demand (AI fabs in Taiwan, Korea, US) is now strong enough to more than absorb the China pullback.
Takeaway #2 — AI Demand: Sold Out Through 2026
CEO Fouquet stated memory customers told ASML they are “sold out for 2026 and their supply constraint will last beyond 2026.” Customer capex is not discretionary spending — it is a capacity emergency. Both logic and memory customers are increasing EUV and immersion tool adoption.
Takeaway #3 — Technology: High-NA Maturity
Two major tech updates: (1) ASML confirmed a 1,000-watt EUV light source proof-of-concept, targeting 330 wafers/hour by ~2031. (2) NXE:3800E throughput upgraded from 220 to 230 WpH. Customers demonstrated mask reduction from 3 to 1 and process step reduction from 100 to 10 using High-NA.
Takeaway #4 — EUV Capacity Ramp
CFO Dassen confirmed ASML targeting “at least 60” Low-NA EUV systems in 2026 (vs 48 in 2025, +25%) and “at least 80” in 2027. DUV immersion demand also reversed its expected decline — both EUV and DUV growing simultaneously is a strong concurrent demand signal.
Takeaway #5 — Investor Concern: Bookings Stopped
Starting Q1 2026, ASML discontinued reporting quarterly net bookings — the single most important leading indicator for ASML’s revenue pipeline. The stated rationale: quarterly bookings are volatile and often misread. The unstated concern: this coincides exactly with tighter China export controls and the proposed US MATCH Act, raising questions about whether declining bookings visibility is hiding a deteriorating demand picture.
02
Key Metrics — Latest vs Prior Quarter
| Metric | Q1 2026 | Q4 2025 | Q1 2025 | Why It Matters |
|---|---|---|---|---|
| Total Net Sales | €8.8B | €9.7B | €7.7B | Seasonal Q1 dip normal. Strong YoY growth confirms structural demand. |
| EUV Revenue | €4.1B | ~€4.8B | ~€3.0B | EUV is highest-margin product. Growing YoY confirms AI-driven fab expansion. |
| IBM (Service) | €2.5B | ~€2.5B | ~€2.0B | Recurring. Grows with fleet size — counter-cyclical anchor. |
| Gross Margin | 53.0% | 52.2% | ~51.0% | At HIGH END of guided range. Driven by EUV mix + high-margin IBM upgrades. |
| Operating Margin | 36.0% | ~34.5% | 35.4% | Operating leverage improving. R&D steady at ~€1.2B/qtr. |
| EPS (Basic) | €7.15 | €7.35 | €6.00 | Beat consensus of ~€6.00 by +19%. YoY expansion confirms earnings growth. |
| Net Income | €2.8B | €2.8B | €2.4B | Net income margin of 31.4% — high for industrial manufacturer. |
| Cash & Investments | €8.4B | €13.3B | ~€7.2B | Q4→Q1 drop normal: down payments received in Q4, deployed in Q1. |
| Share Buybacks (Q1) | €1.1B | ~€1.0B | ~€0.8B | Part of €12B buyback program through 2028. |
| Dividend per Share | €7.50 | €6.40 | €6.40 | 17% dividend increase signals management confidence. |
| Guidance | FY2026 | Q2 2026 | Comment |
|---|---|---|---|
| Revenue | €36–40B (was €34–39B) | €8.4–9.0B | Both floor and ceiling raised. Reflects EUV strength + DUV recovery. |
| Gross Margin | 51–53% | 51–52% | Slight Q2 step-down due to normalizing upgrade mix. |
| EUV Units | ≥60 units (vs 48 in 2025) | 16 shipped in Q1 | Each additional unit at ~€180M+ ASP. |
| EUV Units 2027 | ≥80 units | — | Forward capacity commitment signals supply investment. Bullish. |
03
Management Tone & Key Quotes
“2026 is panning out very nicely. It’s a very strong year. We’re looking at a strong growth year.”
— Roger Dassen, CFO, ASML Q1 2026 Earnings Call, April 15, 2026“We see our memory and logic customers increasing their capital expenditure and trying to accelerate basically their capacity ramp in 2026 and beyond. What’s also very interesting is that a lot of this demand is supported by long-term commitment at their customer.”
— Christophe Fouquet, CEO, ASML Q1 2026 Earnings Call“We expect, in fact, that the supply will not meet the demand for the foreseeable future. So this is creating a strong constraint in the end market from AI to mobile and PC.”
— Christophe Fouquet, CEO, ASML Q1 2026 Earnings Call
04
Analyst Concerns on the Call
Top Concern #1 — MATCH Act
US bipartisan bill that would ban ALL DUV exports to China — specifically naming ASML. Would also restrict maintenance services on already-sold equipment, threatening IBM revenue in China. ASML response: guidance range “accommodates potential regulatory outcomes” but no quantification given.
Top Concern #2 — Bookings Transparency
ASML discontinuing quarterly bookings reporting. Analysts noted this eliminates a key forward demand indicator. Timing suspicious: coincides with China pull-forward ending and tighter export environment. Management argued backlog + full-year guidance is more relevant.
Concern #3 — China Revenue Sustainability
ASML guided China at ~20% of 2026 revenue — but they made the same forecast for 2025 then hit 33%. Q1 DUV beat may reflect pre-buying by Chinese customers ahead of new restrictions. Today’s “resilience” may be borrowed demand from future quarters.
Concern #4 — Q2 Guidance Softness
Q2 midpoint of €8.7B came in slightly below some analyst models. Gross margin guided at 51–52%, step-down from Q1’s 53%. Management attributed to timing: ramp costs front-loaded, volume benefit arrives H2 2026.
Concern #5 — Negative Free Cash Flow
Q1 FCF of −€2.6B was unusual. CFO attributed to “timing of down payments” — customer prepayments hit in Q4, not Q1. Annual FCF remains strongly positive — quarterly swing is noise, not signal.
Concern #6 — Valuation
Trailing P/E of ~52–59x implies perfection. GuruFocus flags stock as trading 51% above estimated intrinsic value. Counter-view: premium justified by monopoly + backlog visibility.
05
Positive & Negative Surprises
✅ Positive Surprises
- IBM above guidance: €2.5B driven by high-margin upgrades outperforming
- DUV demand revival: Memory recovery adding second growth driver alongside AI logic
- South Korea surge: Korea jumped to 45% of Q1 system sales — accelerated HBM capex
- EPS beat magnitude: €7.15 vs ~€6.00 consensus — +19% beat
❌ Negative Surprises
- Bookings disclosure removed: Ending quarterly transparency without prior warning
- China fell faster: 36% → 19% in one quarter, steeper than models projected
- Negative Q1 FCF: −€2.6B surprised some investors
- Stock sold off on strong earnings: “Buy the rumor, sell the news” dynamic
06
What Investors Should Watch Next
- MATCH Act Progress: US bipartisan bill banning ALL DUV exports to China, specifically naming ASML. Monitor Congressional hearings in H2 2026. Could reduce China revenue from ~20% toward 5–10%.
- Q2 2026 Results (July 2026): First quarter where raised guidance must materialize. Watch revenue range, gross margin, China share, and H2 backlog conversion.
- High-NA EUV Adoption: Intel 18A and Samsung 2nm are lead customers. Any delay or yield problem would dent 2027–2028 High-NA revenue ramp.
- EUV Unit Shipments: 16 shipped in Q1. Needs 15+ per quarter in Q2–Q4 to hit ≥60 target. Supply chain disruptions could shift units.
- TSMC Capex Guidance: TSMC (~40% of ASML EUV demand) reports July 2026. Any capex cut would be leading indicator 12–18 months out.
- AI Infrastructure Sustainability: Hyperscaler capex (MSFT, Google, Meta, Amazon) must sustain. Any AI investment fatigue would ripple into ASML orders.
- NXE:3800F Launch: Next-gen Low-NA EUV targeting ≥260 wafers/hour in 2027. Watch SPIE conference presentations for qualification milestones.
Primary Sources Referenced
ASML Q1 2026 Earnings Call Transcript (Insider Monkey, Apr 2026) · ASML Q1 2026 Press Release (asml.com) · ASML SEC Form 6-K · Tickeron (Jun 2026) · Tech-Insider.org (Apr 2026) · Yahoo Finance / Simply Wall St (Apr 2026) · TIKR.com (Apr 2026) · Investing.com (Apr 2026) · Tom’s Hardware (May 2026) · HeyGoTrade (May 2026) · CNBC (Apr 2026)