For the third consecutive quarter, the company has raised its outlook, projecting fourth-quarter net sales between €14.2 billion and €15.2 billion—above analysts' prior estimate of approximately €13.97 billion. Gross margin for the quarter is expected to be around 57%, also surpassing the market consensus of 56.4%. Some customers have already begun expressing purchase intentions for equipment spanning 2029 and even 2030, while the company's existing supply plans for 2027 and 2028 can no longer fully meet market demand.
Investment in artificial intelligence infrastructure continues to heat up, positioning chip and equipment giants…$ASML Holding (ASML.US)$Push the order demand further into the future.
ASML Holding reported its third-quarter results on Wednesday, with net profit significantly exceeding market expectations and the company once again raising its full-year guidance—marking the third consecutive quarter in which it has revised its outlook upward. Even more noteworthy is that some customers have already begun expressing intent to place orders for equipment slated for delivery in 2029 or even 2030, while the company's current supply plans for 2027 and 2028 can no longer fully meet market demand.
As of now, ASML Holding is up nearly 2% in pre-market trading on Wednesday.
Faced with a growing supply-demand gap, CEO Christophe Fouquet stated that the company is evaluating whether to further exceed its previously announced 30% capacity expansion plan by 2028, in order to meet steadily rising demand.
The market's reaction to the aforementioned results and outlook will serve as an important benchmark for sentiment in the semiconductor sector in the near term. Earlier this week, chip stocks faced a global sell-off after Broadcom CEO Hock Tan likened industry investor sentiment to that of a casino, sparking concerns about the sustainability of the AI boom.
Both profit and gross margin exceeded expectations.
ASML Holding's total net sales for the third quarter reached €11.66 billion, slightly below analysts' average estimate of €11.7 billion, but its net profit stood at €4.96 billion, significantly higher than the market's expectation of €4.11 billion. The gross margin was 57.5%, also surpassing the expected 56.1%.
In his statement, Christophe Fouquet described third-quarter total net sales as "record-breaking" and noted that the results were at the upper end of the guidance range. Installed Base Management sales reached €3.3 billion, exceeding the guidance, primarily driven by strong demand for production efficiency upgrades—this was also a key factor in boosting gross margin beyond expectations.
During the quarter, ASML Holding sold a total of 113 new lithography systems and 8 used systems, up from 86 and 5 in the previous quarter, respectively. At the end of the period, cash and short-term investments totaled €12.7 billion. In addition, the company announced an interim dividend of €1.88 per share, payable on November 4, and repurchased approximately €4.1 billion worth of its own shares in the third quarter.
Both the fourth-quarter and full-year guidance exceeded analysts' expectations.
Looking ahead, ASML Holding expects fourth-quarter net sales to range between €14.2 billion and €15.2 billion, above analysts' prior estimate of approximately €13.97 billion; the fourth-quarter gross margin is expected to be around 57%, also higher than the market's forecast of 56.4%.
On an annual basis, the company has narrowed its net sales guidance range and raised the lower bound, now forecasting full-year net sales of €44.0 billion to €45.0 billion, compared with the previous range of €43.0 billion to €45.0 billion. The full-year gross margin is expected to rise to approximately 56%, up from the prior guidance of 54% to 56%, exceeding the market's earlier estimate of 54.9%.
In terms of specific business growth, ASML Holding expects its EUV (extreme ultraviolet lithography) business to grow by more than 45% this year, while its non-EUV business is projected to increase by approximately 20% year over year.
The supply-demand gap is widening, and capacity expansion plans have been further upgraded.
ASML Holding is the world's only manufacturer of EUV lithography machines, and its equipment is a critical tool for producing the most advanced chips. With order-to-delivery lead times exceeding one year, its order data is regarded by the market as an important leading indicator of capital expenditure trends among major chipmakers such as Taiwan Semiconductor and Intel.
According to Bloomberg, ASML Holding stated in July this year that it plans to increase the 2027 production capacity of its next-generation high-end product—the low NA EUV lithography machine—by 30%, with an annual shipment target of approximately 85 units, while simultaneously assessing further capacity expansion for 2028. The company has now explicitly indicated that even if this plan proceeds as scheduled, supply in both 2027 and 2028 will still fall short of meeting demand.
Christophe Fouquet stated in a declaration: "Our customers continue to refine the short- and medium-term equipment demand forecasts they have jointly developed with us, largely based on their assessments of the scale and duration of AI-related investments. Given such strong demand visibility, some customers are expressing interest in placing orders as far out as 2029 or even 2030." The company added that, building on its previous 30% capacity expansion target, it will further explore potential pathways for increasing production capacity by 2028.
AI Insights into Key Takeaways: Build an Options Strategy in Three Steps! Open Futubull > Stock Page > Tap [Company] >Earnings Flash Report
Editor/lambor