ASML's Q4 net sales and full-year revenue both hit record highs, with a surge in orders prompting the company to raise its growth expectations for 2026, leading to a 10% increase in stock price during after-hours trading

Dutch lithography giant ASML's fourth-quarter performance exceeded expectations, and based on optimistic expectations for the sustainability of AI demand from customers, it significantly raised its future growth targets. Benefiting from strong demand for extreme ultraviolet (EUV) equipment and upgrades to customer expansion plans, the company expects to achieve sustained growth by 2026.

On January 28, ASML announced its fourth-quarter and full-year results for 2025, showing that fourth-quarter net sales reached a record high of €9.7 billion, which includes revenue recognition from two High NA systems. The company's full-year net sales for 2025 reached €32.7 billion, with a net profit of €9.6 billion, both setting historical highs.

The financial report indicated that fourth-quarter orders amounted to €13.2 billion, with EUV orders at €7.4 billion, and the backlog reached €38.8 billion. This is nearly double the average analyst expectation of €6.85 billion compiled by Bloomberg. This record performance benefited from the rapid development of AI infrastructure, with tech giants like Meta Platforms Inc. and Microsoft investing hundreds of billions of dollars in building data centers.

ASML CEO Christophe Fouquet stated that customers' assessments of the mid-term market situation have recently shifted significantly to a positive outlook, primarily based on stronger expectations for the sustainability of AI-related demand. 2026 will be another growth year for ASML.

ASML expects net sales in 2026 to be between €34 billion and €39 billion, with a gross margin maintained in the range of 51% to 53%, with the market estimating 52.9%. The expected net sales for the first quarter are between €8.2 billion and €8.9 billion, with market expectations at €8.13 billion. The first-quarter gross margin is expected to be between 51% and 53%, with the market estimating 52.5%.

The company also announced the launch of a new stock buyback program of up to €12 billion, effective until December 31, 2028, and plans to increase the full-year dividend for 2025 by 17% to €7.50 per share.

After the financial report was released, ASML's stock price rose by 10% in after-hours trading.

ASML is the only company in the world capable of producing cutting-edge lithography machines, which are core tools for manufacturing advanced semiconductors and are key to producing NVIDIA's AI accelerators. Leading global chip manufacturers such as TSMC and Intel are among its customers. The company's order data is seen as an important indicator of chip manufacturers' confidence in future AI demand.

Surge in EUV Demand Drives Record Orders

ASML's fourth-quarter performance reflects a strong recovery trend in the semiconductor equipment market.

The financial report showed quarterly net sales of €9.7 billion, a gross margin of 52.2%, and a net profit of €2.8 billion. The fourth-quarter order amount reached a record of €13.2 billion, with EUV orders accounting for €7.4 billion, indicating strong demand for advanced process capacity expansion.

For the full year of 2025, ASML achieved net sales of €32.7 billion, a gross margin of 52.8%, and a net profit of €9.6 billion, with all annual performance metrics setting historical highs. By the end of 2025, the company's backlog reached €38.8 billion, providing ample support for future growthThe fourth quarter performance includes revenue recognition from two High NA systems, representing the cutting-edge level of lithography equipment with the latest generation EUV technology. The surge in orders reflects customers accelerating their expansion plans in the context of AI-driven chip demand.

Customer Expansion Plans Upgrade Drives Growth Expectations

ASML is optimistic about the outlook for 2026, primarily based on a significant enhancement in customers' mid-term capacity planning.

Fouquet stated that in recent months, customers' assessments of the mid-term market situation have clearly shifted to a positive outlook, mainly based on stronger expectations for the sustainability of AI-related demand, which is reflected in the significant upgrades to customers' mid-term capacity plans and the company's record order volume.

The company expects 2026 to be another growth year, primarily driven by significant growth in EUV sales and sales growth from the installed base of equipment. ASML continues to invest in personnel and facilities to support growth in 2026 and beyond.

The company expects net sales in the first quarter of 2026 to be between €8.2 billion and €8.9 billion, with a gross margin in the range of 51% to 53%. Full-year net sales are expected to be between €34 billion and €39 billion, with a gross margin maintained at 51% to 53%. The company anticipates R&D expenses of approximately €1.2 billion and sales and management expenses of approximately €300 million.

Launch of €12 Billion Share Buyback Program

ASML announced an increase in shareholder returns.

The company plans to raise the full-year dividend for 2025 to €7.50 per share, a 17% increase from 2024. An interim dividend of €1.60 per share will be paid on February 18, 2026, and the final dividend proposal in the annual dividend will be €2.70 per share, which will be submitted for shareholder meeting approval.

In the fourth quarter, the company repurchased approximately €1.7 billion in shares under the 2022-2025 share buyback program. This program will be completed by December 2025, with a total repurchase of €7.6 billion, not reaching the maximum planned limit of €12 billion.

ASML announced the launch of a new round of share buyback program, effective immediately, with an execution period until December 31, 2028. The company plans to repurchase shares totaling up to €12 billion, of which up to 2 million shares are expected to be used for employee stock plans, and the remaining portion will be canceled. This program will be executed within the authorization scope of existing and future shareholder meetings and may be suspended, modified, or terminated at any time.

Organizational Restructuring Focused on Technological Innovation

ASML announced that it will streamline its technology and IT organizational structure to strengthen its focus on engineering and innovation. This initiative aims to enhance operational efficiency while ensuring the company maintains its technological leadership and better supports future business growth needs.

The company continues to invest resources to expand capacity and personnel to meet the order growth driven by customer expansion demands. In the context of the ongoing expansion of AI-driven semiconductor demand, ASML, as the world's only supplier of high-end lithography machines, is in a core beneficiary position of the industry's prosperity cycle