Dutch lithography giant ASML reported fourth-quarter results that exceeded expectations and significantly raised its future growth targets, driven by customer optimism about the sustainability of AI-related demand. Benefiting from strong demand for Extreme Ultraviolet (EUV) equipment and upgraded customer capacity expansion plans, the company anticipates sustained growth in 2026. On January 28, ASML announced its 2025 fourth-quarter and full-year results, revealing a record quarterly net sales figure of €9.7 billion, which included revenue recognition for two High NA systems. For the full year 2025, the company achieved record net sales of €32.7 billion and a net profit of €9.6 billion. The financial report showed fourth-quarter bookings surged to €13.2 billion, with EUV orders accounting for €7.4 billion, pushing the order backlog to a massive €38.8 billion. This record performance, nearly double the Bloomberg-compiled analyst average estimate of €6.85 billion, is fueled by the rapid development of AI infrastructure, with tech giants like Meta Platforms Inc. and Microsoft investing hundreds of billions of dollars in data center construction. ASML CEO Christophe Fouquet stated that customers' assessments of the mid-term market situation have turned significantly more positive in recent months, primarily based on stronger expectations for the sustainability of AI-related demand. He confirmed that 2026 will be another year of growth for ASML. ASML forecasts its 2026 net sales to be between €34 billion and €39 billion, with a gross margin maintained in the range of 51% to 53%, compared to a market estimate of 52.9%. For the first quarter, it expects net sales of €8.2 billion to €8.9 billion, surpassing the market expectation of €8.13 billion, with a gross margin projected between 51% and 53%, versus a market forecast of 52.5%. Concurrently, the company announced the initiation of a new share buyback program worth up to €12 billion, effective until December 31, 2028, and plans to increase its total dividend for 2025 by 17% to €7.50 per share. Following the earnings release, ASML's U.S.-listed shares soared by as much as 10% in late trading.

ASML is the world's sole manufacturer of cutting-edge lithography machines; its equipment is essential for producing advanced semiconductors and is critical for manufacturing NVIDIA's AI accelerators. Leading global chipmakers such as TSMC and Intel are among its key clients. The company's order book is widely regarded as a crucial barometer of chipmakers' confidence in future AI demand. The surge in EUV demand has been a primary driver behind the record-breaking order intake. ASML's fourth-quarter performance reflects a robust recovery in the semiconductor equipment market. The financial report details quarterly net sales of €9.7 billion, a gross margin of 52.2%, and a net profit of €2.8 billion. The record quarterly bookings of €13.2 billion, with EUV orders comprising €7.4 billion, underscore the intense demand for expanding advanced process node capacity. For the full year 2025, ASML achieved net sales of €32.7 billion, a gross margin of 52.8%, and a net profit of €9.6 billion, setting new annual records across all key metrics. The company's order backlog stood at €38.8 billion by the end of 2025, providing substantial visibility for future growth. The fourth-quarter results included revenue recognition for two High NA systems, representing the forefront of EUV technology. The explosive growth in orders signals customers are accelerating their capacity expansion plans against the backdrop of AI-driven chip demand. Upgraded customer expansion plans are fueling the company's optimistic growth outlook. ASML expressed strong optimism for its 2026 prospects, largely based on significant upgrades to customers' mid-term capacity planning. CEO Fouquet emphasized that customers' mid-term market assessments have turned markedly positive in recent months, rooted in stronger convictions about sustainable AI demand, which is directly reflected in their upgraded capacity plans and ASML's unprecedented order volume. The company expects 2026 to be another year of growth, primarily driven by a significant increase in EUV sales and growth in its installed base business. ASML continues to invest in personnel and facilities to support growth in 2026 and beyond. For the first quarter of 2026, ASML anticipates net sales between €8.2 billion and €8.9 billion, with a gross margin in the 51% to 53% range. Full-year 2026 net sales are forecast between €34 billion and €39 billion, with a gross margin maintained at 51% to 53%. The company expects R&D expenses of approximately €1.2 billion and SG&A expenses of around €300 million. ASML has announced a significant enhancement to its shareholder returns. The company plans to increase the total dividend for 2025 to €7.50 per share, a 17% increase from 2024. An interim dividend of €1.60 per share will be payable on February 18, 2026, while a final dividend of €2.70 per share, part of the annual dividend proposal, will be submitted for shareholder approval at the Annual General Meeting. In the fourth quarter, ASML repurchased shares worth approximately €1.7 billion under its 2022-2025 program. This program concluded in December 2025, with cumulative buybacks totaling €7.6 billion, falling short of the maximum €12 billion initially authorized. ASML announced the immediate launch of a new share buyback program, effective until December 31, 2028. The company plans to repurchase shares up to a total of €12 billion, of which up to 2 million shares are intended for employee stock plans, with the remainder to be canceled. This program will be executed within existing and future shareholder authorizations and may be suspended, modified, or discontinued at any time. ASML is implementing organizational changes to sharpen its focus on technological innovation. The company announced it will streamline its technology and IT organizations to strengthen its focus on engineering and innovation. This move aims to enhance operational efficiency, ensuring ASML maintains its technological leadership while better supporting future business growth requirements. ASML continues to commit resources to expand its own capacity and workforce to meet the growing order intake driven by customer expansion. Positioned as the globe's only supplier of high-end lithography systems, ASML stands at the epicenter of benefiting from the ongoing industry upcycle, fueled by persistently expanding AI-driven semiconductor demand.