ASML Holding NV - New York Shares

Record Q3 performance; strong profitability and cash generation (good/surprising) - Total net sales: €11.7B, a record and toward the high end of guidance. - Gross margin: 57.5%, above guidance. - Net system sales: €8.4B (includes €4.1B EUV: 1 High-NA EUV system + €4.3B non-EUV). - Installed base management (IBMM): €3.3B, ~€400M above guidance, driven by demand for productivity upgrades (EUV + DUV). - Net income: €5.0B; EPS: €12.95 (includes ~€500M fair-value uplift from Mistral AI stake). - Free cash flow (FCF): €11.4B; cash/investments: €12.7B.

Clear forward outlook: Q4 and full-year 2026 growth remains strong (good) - Q4 2026 guidance: Net sales €14.2B–€15.2B, gross margin ~57%, IBMM ~€3.7B, R&D ~€1.2B, SG&A ~€400M. - Full-year 2026 guidance: Net sales €44B–€45B, gross margin ~56%. - YoY sales growth expected ~36% (management framing): >45% growth in EUV, ~20% growth in non‑EUV system sales, ~50% growth in IBMM. - End-market mix expectation: Logic systems ~+10%, Memory systems ~+75% (capacity expansion + increased EUV adoption on advanced DRAM nodes).

Capacity constraints are the dominant “challenge,” but ASML sees demand still outpacing supply (good demand signals; risk of execution) - Customers indicate they expect demand outpacing supply through at least 2028, driving accelerated capacity build-out. - ASML is ramping capacity aggressively; management said it has no ceiling from Zeiss/VDL today and is managing supply-chain rampability. - Order intake/contracting behavior: management emphasized POs involve real commitments (down payments that “hurt”) and expects demand to be “real,” not just speculative—but acknowledged suppliers must sustain steep ramp rates.