ASMLBy Calypso Research7 min read

ASML (ASML) Q1 2026 Earnings Analysis

Inside ASML's Q1 Earnings: Steady Growth, Big Questions

Key Takeaways

ASML (ASML) reported Q1 2026 earnings with revenue of $8.8B, representing a +13.2% year-over-year change. The stock moved -2.4% on earnings day.

The bull case: AI-driven, multi-year demand for advanced logic and memory, combined with ASML’s expanding EUV/DUV capacity and High NA roadmap, supports sustained double-digit revenue growth and structurally high margins through the decade.

The bear case: AI-related demand could normalize after 2026 while export controls tighten and High NA ramps slower than expected, exposing ASML to a sharp downshift in orders and margin pressure from underutilized capacity and mix deterioration.

Financial Highlights

  • Revenue: $8.8B (+13.2% YoY)
  • Gross Profit: $4.6B (53.0% margin, -1.0% YoY)
  • Operating Income: $3.2B (36.0% margin, +0.7% YoY)
  • Net Income: $2.8B
  • TTM Revenue: $33.7B

Stock Performance

  • Earnings Day Move: -2.4%
  • Year-to-Date: +21.2%
  • 1-Year Return: +122.2%
  • vs. S&P 500 (since earnings): +10.2%
  • vs. Nasdaq (since earnings): +8.8%

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What Management Said

Here are the key debates and direct quotes from ASML's Q1 2026 earnings call:

Sustainability and Capacity of AI‑Driven Demand for Logic and Memory

Sentiment: Positive

"This is still very much driven by investment in AI infrastructure. So this translates into a lot of demand for advanced memory, for advanced logic. And we expect, in fact, that the supply will not meet the demand for the foreseeable future." — Christophe Fouquet
"So if we look at memory, what our customers tell us is that they are sold out for 2026 and their supply constraint will last beyond 2026. For advanced logic, we see our customer building capacity for several nodes, while they also continue to ramp 2-nanometer in order to address the AI products." — Christophe Fouquet

ASML’s Ability to Add Lithography Capacity (EUV & DUV) Fast Enough

Sentiment: Positive

"What we're looking at for this year for 2026, we believe we can drive an output for this year of at least 60 systems for EUV Low NA... And added to that, we're looking at deep UV for 2026... we're still for this year expecting to get pretty close to the immersion sales that we had last year in terms of unit numbers." — R.J.M. Dassen
"When it comes to 2027, in terms of capability, we're increasing our move rate really quarter-on-quarter... we expect that we're able to get to an output for 2027... we think that we can get to at least 80 Low NA EUV units. And we're also looking at having the non-EUV business being in line with what customers are asking for, for all of their nodes." — R.J.M. Dassen

2026–2027 Revenue Outlook and Export Control Risk

Sentiment: Positive

"We are actually narrowing the window and also increasing the window of our expectation to EUR 36 billion to EUR 40 billion for this year... we believe in contrast to where we were a couple of months ago, we're looking at an increase for the non-EUV business." — R.J.M. Dassen
"When it comes to the Installed Base business, strong growth there... And I would say that within the guidance that we provided, the EUR 36 billion to EUR 40 billion, we believe we can accommodate potential outcomes of the export control discussions that are currently ongoing." — R.J.M. Dassen

Gross Margin Durability Amid Mix Shifts and Capacity Expansion

Sentiment: Positive

"If you look at the Installed Base business, as I just mentioned, the Installed Base business was higher than we anticipated. But also if you look at the components in the Installed Base business, there were components in there that actually come in at quite some strong gross margins. So as a result of that, a pretty high gross margin at 53%." — R.J.M. Dassen
"For Q2, we expect EUR 8.4 billion to EUR 9 billion of total net sales... We expect the gross margin to be between 51% and 52%... For the gross margin, we maintain our expectation of 51% to 53%." — R.J.M. Dassen

Strategic Role and Monetization of High NA EUV vs. Extending Low NA

Sentiment: Positive

"The first one was our demonstration of the 1,000-watt source. And this is very important because it means that we can secure the extendibility of Low NA EUV for many, many years. It means, in fact, that in 2031, we'll be able to run this tool at 330 wafers per hour, which is a major step-up from what we have today." — Christophe Fouquet
"DRAM and logic customers were talking about going from 3 to 1 mask for EUV using High NA. And they also mentioned that this can reduce the number of process steps from 100 to 10, which is, of course, significant... it means basically that not only High NA is getting ready for prime time, but we already know that High NA can be extended mostly for 3, 4 nodes." — Christophe Fouquet

Bull Case

AI-driven, multi-year demand for advanced logic and memory, combined with ASML’s expanding EUV/DUV capacity and High NA roadmap, supports sustained double-digit revenue growth and structurally high margins through the decade.

Bear Case

AI-related demand could normalize after 2026 while export controls tighten and High NA ramps slower than expected, exposing ASML to a sharp downshift in orders and margin pressure from underutilized capacity and mix deterioration.

Looking Ahead

With revenue growing +13.2% year-over-year, the key question is whether ASML can sustain this growth trajectory, particularly around sustainability and Capacity of AI‑Driven Demand for Logic and Memory. With operating margins at 36.0%, margin trends will remain a focal point. The muted stock reaction on earnings day suggests the market is taking a wait-and-see approach, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was ASML's revenue in Q1 2026?

ASML reported Q1 2026 revenue of $8.8B, representing a +13.2% year-over-year change.

Did ASML beat earnings expectations in Q1 2026?

The stock declined -2.4% on earnings day, suggesting the results fell short of market expectations. The current bull case centers on: AI-driven, multi-year demand for advanced logic and memory, combined with ASML’s expanding EUV/DUV capacity and High NA roadmap, supports sustained double-digit revenue growth and structurally high margins through the decade.

What is the bull case for ASML stock?

The bull case for ASML centers on: AI-driven, multi-year demand for advanced logic and memory, combined with ASML’s expanding EUV/DUV capacity and High NA roadmap, supports sustained double-digit revenue growth and structurally high margins through the decade.

What is the bear case for ASML stock?

The bear case for ASML centers on: AI-related demand could normalize after 2026 while export controls tighten and High NA ramps slower than expected, exposing ASML to a sharp downshift in orders and margin pressure from underutilized capacity and mix deterioration.

How has ASML stock performed since its Q1 2026 earnings?

ASML moved -2.4% on the day of its Q1 2026 earnings report, outperforming the S&P 500 by +10.2% since earnings. Year-to-date, the stock has returned +21.2%.

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