VALUFOURASML’s Sales and Margins Rose. What Should Investors Watch Next?
Sales and gross margin both rose. We examine the role of installed-base upgrades, plans to expand supply and the effect of customer down payments on cash flow.
- Results released
- Published
- Updated
- Total net sales · EUR
- €11.662B
- GAAP gross margin
- 57.5%
+55.2% YoY
+5.9 pp YoY
ASML’s results reflect more than higher equipment sales. Upgrades to installed systems also supported growth and margins. Demand forecasts, confirmed orders, revenue recognition and the timing of cash receipts need to be assessed separately. [1] [2] [4]
How did AI investment translate into equipment demand?
Third-quarter total net sales reached €11.662B, up 55.2% year over year. The number of new lithography systems sold rose 71.2%, from 66 to 113. These figures exclude used systems. [1] [2]
CFO Roger Dassen reported about €4.1B in EUV system sales and €4.3B in non-EUV system sales. The non-EUV category includes DUV equipment and should not be treated as AI-specific revenue. CEO Christophe Fouquet said customers’ expectations for AI investment were supporting demand, but ASML did not disclose a separate figure for AI-related sales. [4] [2] [1]
Upgrades to installed systems also supported margins
Installed Base Management (IBM) sales rose 67.6% year over year to €3.289B. IBM combines service and field option sales. Customers can add wafer-production capacity by improving the productivity of equipment already installed, as well as by purchasing new systems. [1] [2] [4]
Management said demand for EUV and DUV productivity upgrades exceeded expectations. A greater contribution from high-margin business within IBM helped lift GAAP gross margin to 57.5%, up 5.9 percentage points year over year. IBM includes both services and upgrades. Changes in the volume and mix of upgrades can affect IBM’s contribution to group margins. [1] [2] [4]
IBM comprises service and field option sales. System sales exclude IBM; together the two categories make up total net sales. [2]
Can ASML expand supply fast enough to meet demand?
Management said planned supply for 2027 and 2028 was unlikely to meet customer demand. The 30% capacity expansion planned for 2027 and further expansion under review for 2028 apply to Low-NA EUV and DUV immersion systems. Those percentages describe production capacity, not expected growth in total revenue. [1] [4]
Management distinguished orders already being received for 2028 from customer interest in placing orders for 2029 and 2030. Expressions of interest are not confirmed orders. Investors should monitor whether demand forecasts lead to firm orders and whether ASML’s supply chain, assembly and installation capacity—and customers’ fab readiness—allow delivery and revenue recognition to follow. [1] [4]
How could High-NA and memory investment support growth?
Third-quarter EUV revenue included the sale of one High-NA EUV system. The sale marks progress in commercialization, while ASML’s current performance still reflects a much broader range of systems and services. Customer adoption plans described by management need to be assessed against actual production use and recognized revenue. [4] [3] [1]
The CFO forecast around 75% year-over-year growth in 2026 net system sales to memory customers, citing customer capacity expansion and greater EUV adoption in advanced DRAM. This is ASML’s sales outlook for memory customers, rather than a forecast for growth in the memory-chip market as a whole. Watch whether new systems, upgrades and technology adoption continue to support equipment demand. [4] [3] [1]
What do the outlook and cash flow tell investors?
ASML forecast €14.2B–15.2B in Q4 sales, including around €3.7B from IBM, and a gross margin of around 57%. Full-year guidance was €44B–45B in sales and a gross margin of around 56%. These are management forecasts, not reported results. [3] [4]
Quarterly operating cash flow was approximately €11.798B, while the investor presentation reported €11.351B in free cash flow. The CFO linked strong cash flow to customer orders and related down payments. Customer down payments provide cash before the related revenue is recognized, so the quarter’s FCF should not be assumed to represent a recurring level of cash generation. The cash-flow contribution from changes in assets and liabilities includes more than customer down payments. [2] [3] [4] [1]
FCF is a company-defined non-GAAP measure shown at the rounded IR-reported value. Customer down payments supported cash inflows; the quarter’s level should not be assumed to recur. [3] [4]
Net income also included around €0.5B from the revaluation of the Mistral AI investment. This gain was reported below operating income and should not be assumed to recur. For investors, the key question is whether AI-related investment continues to support equipment deliveries and upgrade sales. Monitor the conversion of orders into revenue, the execution of capacity plans, the margin contribution from upgrades and cash generation after considering the timing of customer down payments. [2] [4] [1]
Detailed financial data & accounting basis
Reporting period: June 29–September 27, 2026. Quarterly consolidated US GAAP results; amounts are in EUR billions. New lithography system counts exclude used systems. Margin changes are in percentage points; growth in amounts and units is in percent.
| Metric / basis | This quarter | Year-ago quarter | YoY | Prior quarter | QoQ |
|---|---|---|---|---|---|
| Total net salesEUR B · US GAAP consolidated; quarterly | 11.662FY2026 Q3 | 7.516FY2025 Q3 | +55.162% | 9.327FY2026 Q2 | +25.042% |
| Installed Base Management salesEUR B · US GAAP consolidated; quarterly | 3.289FY2026 Q3 | 1.962FY2025 Q3 | +67.608% | 2.762FY2026 Q2 | +19.086% |
| Net system salesEUR B · US GAAP consolidated; quarterly | 8.373FY2026 Q3 | 5.554FY2025 Q3 | +50.765% | 6.565FY2026 Q2 | +27.547% |
| New lithography systems soldunits · Reported new-system units; excludes used systems | 113FY2026 Q3 | 66FY2025 Q3 | +71.212% | 86FY2026 Q2 | +31.395% |
| GAAP gross margin% · US GAAP consolidated; quarterly | 57.5FY2026 Q3 | 51.6FY2025 Q3 | +5.9 pp | 54FY2026 Q2 | +3.5 pp |
| Income from operationsEUR B · US GAAP consolidated; quarterly | 5.173FY2026 Q3 | 2.468FY2025 Q3 | +109.561% | 3.456FY2026 Q2 | +49.672% |
| GAAP net incomeEUR B · US GAAP consolidated; quarterly | 4.96FY2026 Q3 | 2.125FY2025 Q3 | +133.486% | 2.918FY2026 Q2 | +70.016% |
| Operating cash flowEUR B · US GAAP consolidated; quarterly | 11.798FY2026 Q3 | 0.559FY2025 Q3 | +2,010.106% | 1.703FY2026 Q2 | +592.754% |
| Cash purchases of PP&E and intangiblesEUR B · US GAAP consolidated; quarterly | 0.447FY2026 Q3 | 0.315FY2025 Q3 | +41.788% | 0.386FY2026 Q2 | +15.855% |
| Company-reported free cash flowEUR B · Company-defined non-GAAP; IR rounded EUR millions | 11.351FY2026 Q3 | 0.244FY2025 Q3 | +4,552.049% | 1.317FY2026 Q2 | +761.883% |
FCF is a company-defined non-GAAP measure: operating cash flow less cash purchases of property, plant and equipment and intangible assets. The investor presentation reports FCF of €11.351B. Recalculating from the financial statement’s displayed decimal figures gives €11.7976B − €0.4133B − €0.0339B = €11.3504B, a €0.0006B difference from the rounded IR presentation. The chart uses company-reported IR FCF. Changes in assets and liabilities are not a measure of customer down payments alone.
Official sources
- 01ASML FY2026 Q3 Earnings Release ↗
ASML Investor Relations · 2026.10.14
- 02ASML FY2026 Q3 US GAAP Financial Statements (unaudited) ↗
ASML Investor Relations · 2026.10.14
- 03ASML FY2026 Q3 Investor Presentation ↗
ASML Investor Relations · 2026.10.14
- 04ASML FY2026 Q3 Investor Call · CEO/CFO prepared remarks ↗
ASML Investor Relations · 2026.10.14
- 05ASML FY2025 Q3 Earnings Release · comparison ↗
ASML Investor Relations · 2025.10.15
Detailed source references
[1] Q2/Q3 results table: total net sales, IBM, new systems and gross margin; CEO statement; footnote 2: Low-NA EUV and DUV immersion capacity plans; CEO demand/capacity outlook; forward-looking statement qualifications; Q3 2026 table; Q3 2025 comparison release, p. 1; excludes used systems
[2] pp. 2, 6–7: US GAAP income statements and ratios; p. 6: net system sales and net service/field option sales; pp. 5, 9: quarterly cash flows and changes in assets and liabilities; pp. 2, 6: equity investment gain below income from operations; p. 6: Total net sales; p. 6: Net service and field option sales; p. 6: Net system sales; p. 7: Gross margin; p. 6: Income from operations; p. 6: Net income; includes equity investment gain; p. 9: quarterly Net cash provided by operating activities; p. 9: purchases of PP&E plus intangible assets
[3] pp. 4, 6: technology positioning and High-NA mask initiative; p. 16: company-defined FCF, rounded EUR millions; p. 13: Q4 and FY2026 outlook; p. 16: Free cash flow; company-rounded EUR millions
[4] p. 1: CFO Roger Dassen on EUV/non-EUV sales, IBM upgrades and gross margin; p. 3: CEO/CFO demand visibility, order interest and capacity plans; pp. 1–2, 4: High-NA system sale, memory growth outlook and technology update; p. 2: CFO links free cash flow to order momentum and customer downpayments; p. 2: CFO Q4 and full-year guidance; p. 1: CFO Mistral AI valuation gain; pp. 2–4: downpayments, customer demand and technology plans · Prepared remarks by CFO Roger Dassen and CEO Christophe Fouquet are paraphrased; no direct quotations are used.
[5]