Review|ASML 2Q26: Looking Forward to EUV Capacity Expansion; DUV Re-accelerates

Financial Performance and Guidance

ASML's Q2 financial performance and Q3 guidance both exceeded market expectations, and the company has once again raised its full-year 2026 revenue guidance from EUR 36bn–40bn to EUR 43bn–45bn; the midpoint of the guidance is 12% higher than the consensus.

ASML expects its Q3 gross margin to be 55%–57%, significantly beating the market expectation of 52%. The Q3 gross margin exceeded expectations due to strong demand in the Installed Base Management business. Benefiting from the service revenue brought by the expanding EUV installed base and customers' urgent need to upgrade the capacity of their existing fabs, ASML now expects the high-margin Installed Base Management business to grow by more than 30% in 2026. In the current market environment, customers are actively seeking any method to boost capacity immediately; ASML can provide software upgrades that require minimal machine installation or downtime, allowing customers to gain immediate productivity benefits after installation.

EUV

ASML expects to ship 65 low NA EUV units in 2026, exceeding our original expectation of 62 units; the company has also guided a target to increase low NA EUV capacity by 30% in 2027 and is evaluating the feasibility of a further 30% increase in 2028. Using 65 units as a baseline, the company's guidance implies that EUV capacity will reach 85 and 110 units in 2027 and 2028, respectively. However, we believe the company is likely to address capacity bottlenecks further and increase 2027 low-NA EUV capacity to nearly 90 units, or even over 90 units.