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By Brian Nelson, CFA
ASML Holding (ASML) recently reported fourth quarter results that were mixed, but its quarterly net bookings were quite strong. Fourth quarter total net sales were €9.7 billion with a gross margin of 52.2%, resulting in net income of €2.8 billion. Net bookings in the fourth quarter were €13.2 billion (better than consensus expectations of €6.85 billion), of which €7.4 billion is EUV (extreme ultraviolet lithography). Backlog at the end of 2025 was €38.8 billion, roughly in-line with 2026 sales expectations.
Management had the following to say about the results:
ASML reported another record year in 2025, with total net sales of €32.7 billion and a gross margin of 52.8%. The fourth quarter was particularly strong: we reported record total net sales of €9.7 billion, including the revenue recognized for two High NA systems. Our gross margin for Q4 was in line with our guidance at 52.2%.
In the last months, many of our customers have shared a notably more positive assessment of the medium-term market situation, primarily based on more robust expectations of the sustainability of AI-related demand. This is reflected in a marked step-up in their medium-term capacity plans and in our record order intake.
Therefore, we expect 2026 to be another growth year for ASML’s business, largely driven by a significant increase in EUV sales and growth in our installed base business sales. We continue to invest in people and footprint to support that growth in 2026 and beyond.
Looking to the first quarter of 2026, management expects total net sales between €8.2 billion and €8.9 billion (consensus was at €8.14 billion), with a gross margin between 51%-53%. For the full year 2026, ASML Holding expects total net sales to be between €34 billion and €39 billion, with a gross margin between 51% and 53%. The executive team announced a new share buyback program of up to €12 billion to be executed by December 31, 2028. We liked ASML’s record fourth quarter results in terms of revenue, order intake, and free cash flow generation, and the company remains a core holding in the ESG Newsletter portfolio.
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Brian Nelson owns shares in SPY, SCHG, QQQ, QQQM, DIA, VOT, RSP, and IWM. Valuentum owns SPY, SCHG, QQQ, QQQM, VOO, and DIA. Brian Nelson’s household owns shares in HON, DIS, HAS, NKE, DIA, RSP, SCHG, QQQ, QQQM, and VOO. Some of the other securities written about in this article may be included in Valuentum’s simulated newsletter portfolios. Contact Valuentum for more information about its editorial policies.
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