ASML HOLDING NV

1. General information / summary of general accounting policies

ASML is a leading supplier to the semiconductor industry. We provide chipmakers with hardware, software and

services to mass produce the patterns of integrated circuits (microchips). Together with our partners, we drive the

advancement of more affordable, more powerful and more energy-efficient microchips. We enable groundbreaking

technology to solve some of humanity’s toughest challenges in healthcare, energy use and conservation, mobility and

agriculture. Headquartered in Europe’s top tech hub, the Brainport Eindhoven region in the Netherlands, we are a

global team of more than 44,000 employees (FTEs). Our principal operations are in EMEA, North America and Asia.

Our shares are listed for trading in the form of registered shares on Euronext Amsterdam and Nasdaq. The principal

trading market of our ordinary shares is Euronext Amsterdam.

Basis of preparation

The accompanying Consolidated financial statements are stated inmillionsof euros unless indicated otherwise.

The accompanying Consolidated financial statements have been prepared in conformity with US GAAP.

Use of estimates

The preparation ofour Consolidated financial statements in conformity with US GAAP requires managementto make

estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent

assets and liabilities on thebalance sheet dates, and the reported amounts of net sales and costs for the reported

periods. The inputs into our estimates and assumptions consider economic implications including supply chain

constraints, inflation anduncertainty in the macroeconomic environment. ASML will continue to monitor the impacts

of economic implications and incorporate them into accounting estimates. We evaluate our estimates on a regular

basis and we base our estimates on historical experience and on various other assumptions that we believe to be

reasonable under the circumstances. Actual results may differ from these estimates if the assumptions prove

incorrect. To the extent there are material differences between actual results and these estimates, our future results

could be materially and adversely affected.

We believe that the accounting policies described below require us to make judgments and estimates in the

preparation of our Consolidated financial statements. We believe that these estimates and the related assumptions

are appropriate, however we do not believe any of them constitute critical accounting estimates that involve a

significant level of uncertainty that is reasonably likely to have a material impact on the Consolidated financial

Principles of consolidation

The Consolidated financial statements include the Financial statements of ASML Holding N.V. and all of its

subsidiaries. Subsidiaries are all entities over which ASML controls the financial and operating activities, generally

accompanying a shareholding of more than 50.0% of the outstanding voting rights. Subsidiaries are fully consolidated

from the date on which control is obtained by ASML. All intercompany transactions, balances and unrealized results

on transactions with subsidiaries are eliminated. We also assess if we are the primary beneficiary of, and thus should

consolidate, any variable interest entity (VIE).

Foreign currency translation

The financial information for subsidiaries with a functional currency outside the Eurozone is measured using a mix of

local currencies or the euro as the functional currency. The Financial statements of those foreign subsidiaries with a

functional currency different than the euro are translated into euros in the preparation of ASML’s Consolidated

financial statements. Assets and liabilities are translated into euros at the exchange rate on the respective balance

sheet dates, and income and costs are translated into euros based on the average exchange rate for the

corresponding period. The resulting translation adjustments are recorded directly in shareholders’ equity.

New US GAAP accounting pronouncements adopted

We have applied the following accounting pronouncements for the first time for the annual reporting period

commencing 1 January 2025:

•ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures

Applicable disclosures are included in Note 21 Income taxes.

New US GAAP accounting pronouncements issued but not adopted

The new and amended accounting pronouncements that are issued, but not yet effective, up to the date of issuance

of the Consolidated financial statements, and for which a material effect is expected, are disclosed below. We intend

to adopt these new and amended accounting pronouncements, if applicable, when they become effective.

ASU 2024-03 – Disaggregation of Income Statement Expenses

The standard requires disaggregated disclosure of income statement expenses. It requires disaggregation of certain

expense captions into specified categories in disclosures within the notes to the financial statements. ASU 2024-03 is

effective for fiscal years beginning after December 15, 2026, with early adoption permitted.

We are currently evaluating the effect of this new guidance on our Consolidated financial statements.

2. Revenue from contracts with customers

We measure revenue based on the consideration specified in the contracts with our customers, adjusted for any

significant financing components, and excluding any taxes collected on behalf of third parties. We recognize revenue

when we satisfy a performance obligation by transferring control over a good or service to our customer. We bill our

customers for, and recognize as revenue, charges for shipping and handling costs.

Depending on the contract, we generally obtain a right to payment for our systems through a reservation of a

production slot and/or upon delivery of our systems, with the remaining portion upon final acceptance of our

systems. Right to payment for our service and field options occurs upon delivery or completion of the service unless

described otherwise. The payment is typically due 15–45 days after the aforementioned events. Our contracts

typically include cancellation penalties that provide economic protection from the risk of customer cancellation. The

costs related to our sales are recognized as cost of sales.

We generate revenue from the sale of integrated patterning solutions for the semiconductor industry, which mainly

consist of systems, system-related options and upgrades, other holistic lithography solutions and customer services.

The main portion of our net sales is derived from volume purchase agreements with our customers that have multiple

performance obligations, which mainly include the sales of our systems, system-related options, installation, training,

and extended and enhanced warranties. In our volume purchase agreements we offer customers discounts in the

normal course of sales negotiations. As part of these volume purchase agreements, we may also offer free goods or

services and credits that can be used toward future purchases. Occasionally, systems, with the related extended and

enhanced warranties, installation and training services, are ordered individually. Our sales agreements do not include

a right of return for any reason other than not meeting the agreed-upon specifications.

We account for individual goods and services as separate and distinct performance obligations, including the free or

discounted goods or services, if a product or service is separately identifiable from other items and if a customer can

benefit from it on its own or with other resources that are readily available to the customer. Options to buy goods or

services in addition to the purchase commitment are assessed to determine if they provide a material right to the

customer that they would not have received if they had not entered into this contract. Each option to buy additional

goods or services provided at a discount from the standalone selling price is considered a material right, for which

the likelihood that the option will be exercised is evaluated based on the customer roadmap and their requirements.

The consideration paid for our performance obligations is typically fixed. However, most of our volume purchase

agreements with customers contain some component of variable consideration, typically dependent on the final

volume of systems ordered by the customer or the system performance. Variable consideration is estimated at

contract inception for each performance obligation based on communication with the customer to understand their

requirements and roadmap. This is subsequently updated each quarter, using either the expected value method or

the most likely amount method, whichever is determined to best predict the consideration to be collected from the

customer. Variable consideration is only included in the transaction price if it is considered probable that a significant

revenue reversal will not occur.

In certain scenarios when entering into a volume purchase agreement, free goods or services are provided directly or

through a voucher that can be used on future contracts. Consideration from the contract will be allocated to these

performance obligations and revenue recognized when control transfers based on the nature of the goods or

services provided.

As a practical expedient, we do not record a significant financing component when we expect, at contract inception,

that the period between the transfer of the products or services to the customer and customer payment for the

products or services will be one year or less. In addition, most of our contracts require our customers to pay a down

payment on systems to be shipped. We do not record a significant financing component for down payments, as the

timing difference between when the consideration is paid and when the system is transferred to the customer arises

from reasons other than financing.

The total consideration of the contract is allocated between all distinct performance obligations in the contract

based on their standalone selling prices. The standalone selling prices are determined based on other standalone

sales that are directly observable, when possible. However, for the majority of our performance obligations these are

not available. If no directly observable evidence is available, the standalone selling price is determined using the

adjusted market assessment approach, which requires judgment and is based on multiple factors including, but not

limited to, historical pricing practices and discounting trends for products and services.

For options to buy goods or services that are considered a material right, the discount offered from the standalone

selling price will be allocated from the consideration of the other goods and services in the contract if it is

determined the customer will exercise the option to buy, adjusted for thelikelihood that the customer will exercise

the option. Revenue will be recognized in line with the nature of the related goods or services. If it is subsequently

determined that the customer will not exercise the option to buy, or the option expires, revenue will be recognized.

Occasionally we enter into bill-and-hold transactions, where we invoice a customer for a system that is ready for

delivery but not shipped to the customer until a later date, based on the customer’s request. Transfer of control is

determined to have occurred only when there is a substantive reason for the arrangement, the system is separately

identified as belonging to the customer, the good has been accepted by the customer and is ready for delivery, and

we do not have the ability to direct the use of the system.

We generate revenue from lessor agreements, which we classify as asales-type lease when the lease meets any of

the following criteria at lease commencement:

•The lease transfers ownership of the underlying asset to the lessee by the end of the lease term;

•The lease grants the lessee an option to purchase the underlying asset, that the lessee is reasonably certain to

exercise;

•The lease term is for the major part of the remaining economic life of the underlying asset. However, if the

commencement date falls at or near the end of the economic life of the underlying asset, this criterion shall not

be used for the purposes of classifying the lease;

•The present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not

already reflected in the lease payments equals or exceeds substantially all of the fair value of the underlying asset;

or

•The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at

the end of the lease term.

Forsales-type leases where substantially all the risks and rewards incidental to ownership of an asset are transferred

to the lessee, revenue is recognized at commencement of the lease. If material, the difference between the gross

finance receivable and the present value of the minimum lease payments is initially recognized as unearned interest

and presented as a deduction to the gross finance receivable. Interest income is recognized in the Consolidated

statements of operations over the term of the lease contract using the effective interest method.

Leases that are not asales-type lease are operating lease arrangements. If we have offered the customer an

operating lease arrangement, the system is included in Property, plant and equipment upon commencement of the

lease. If material, revenue from operating lease arrangements is recognized in the Consolidated statements of

operations on a straight-line basis over the term of the lease contract.

Disaggregation of revenue

Our revenue from contracts with customers, on a disaggregated basis, aligns with our reportable segment disclosures

with the addition of disaggregation of net system sales per technology and per end-use.

Net system sales per technology were as follows:

Net system sales per end-use were as follows:

Contract assets and liabilities

The contract assets relate to our right to a consideration in exchange for goods or services delivered, when that right

is conditional on something other than the passage of time. The contract assets are transferred to the receivables

when the receivables become unconditional. The contract liabilities primarily relate to remaining performance

obligations for which consideration has been received for goods and services not yet recognized in revenue, as well

as deferred revenue from goods and services delivered, based on the allocation of the consideration to the related

performance obligations in the contract.

The majority of our customer contracts result in both asset and liability positions. At the end of each reporting period,

these positions are netted on a contract basis and presented as either an asset or a liability in the Consolidated

balance sheets. Consequently, a contract balance can change between periods from a net contract asset balance to

a net contract liability balance in the balance sheet, and vice versa.

Significant changes in the contract assets and the contract liabilities balances during the periods are as follows.

Theincrease in the net contract liabilities to€18.9 billion as of December 31, 2025, compared to€17.9 billion as of

December 31, 2024, is mainly driven by anincrease indown payments for goods and services which will be delivered

in the future. Cumulative catch-up adjustments recognized in our current year’s revenue are due to updated estimates

for system volume, discounts and credits included in our volume purchase agreements. The increase in ‘other’,

compared to 2024, is mainly due to an increase of down payments refunded to customers during 2025. Refund

liabilities outstanding at the end of 2025 are presented as accrued and other liabilities in the Consolidated balance

sheets.

Remaining performance obligations

Our customers generally commit to purchase systems, service or field options through separate sales orders and

service contracts. Typically the terms and conditions of these sales orders come from volume purchase agreements

with our customers which cover up tofive years. The revenues for each committed performance obligation are

estimated based on the terms and conditions agreed through the volume purchase agreements.

When revenues will be recognized is mainly dependent on when systems are delivered or installed, as well as when

service projects and field upgrades are performed and completed. All of which is estimated based on contract terms

and communication with our customers, including the customer facility readiness to take delivery of our goods or

services, as well as applicable export control restrictions. The volume purchase agreements may be subject to

modifications or changes in estimates, impacting the amount and timing of revenue recognition for the anticipated

revenues.

As of December 31, 2025, the remaining performance obligations amount to€46.5 billion (December 31, 2024:

€43.3 billion). The remaining performance obligations mainly include orders related to NXT immersion, NXE and EXE

lithography systems. We estimate that 65% (December 31, 2024:59%) of these anticipated revenues will be

recognized during the next 12 months.

3. Segment disclosure

ASML has one reportable segment, since we are a holistic lithography solution provider, for the development,

production, marketing, sales, upgrading and servicing of advanced semiconductor equipment systems, consisting

of lithography, metrology and inspection systems. The Chief Operating Decision Maker regularly sets and monitors

goals and boundaries on a consolidated basis to make decisions about resource allocation and assess

performance. ASML’s Chief Operating Decision Maker is the combination of the functions of the CEO and CFO.

Management reporting includes net system sales figures of new and used systems, sales per technology and sales

per end-use. For sales per technology and end-use, see Note 2 Revenue from contracts with customers. The Chief

Operating Decision Maker predominantly uses consolidated US GAAP net income and sales to evaluate income

generated from segment assets in deciding whether to reinvest profits into the segment or invest in other activities,

such as share buybacks or payments of dividends. Consolidated net income and sales are used to monitor budget

versus actual results. The monitoring of budgeted versus actual results is used in assessing performance of the

segment.

All significant segment expenses are presented in the Consolidated statements of operations and are regularly

reviewed by the Chief Operating Decision Maker.

Net system sales for new and used systems were as follows:

For geographical reporting, total net sales are attributed to the geographic location in which the customers’ facilities

are located. Long-lived assets, consisting of Property, plant and equipment and Right-of-use assets are attributed to

the geographic location in which these assets are located. Total net sales and long-lived assetsby geographic region

were as follows:

In 2025, four customers each individually exceeded 10% of total net sales, totaling€20.0 billion, or 61.2%, of total net

sales. In 2024 four customers andin 2023, two customers exceeded 10% of total net sales, in 2024 totaling€15.2

billion, or 53.8% (2023:€14.9 billion, or 53.9%). Ourthree largest customers (based on total net sales) accounted for

€1.3 billion, or 35.4%, of accounts receivable and finance receivables at December 31, 2025, compared with€2.6

billion, or 54.1%, at December 31, 2024 and€3.7 billion, or 64.4%, at December 31, 2023.

Theincrease in total net sales of€4.4 billion, or 15.6%, to€32.7 billion in 2025, from€28.3 billion in 2024 was

primarily driven by greater NXE and NXT immersion adoption supported by leading-edge foundry investments for AI

demand, EXE systems being delivered to and installed at more customers, andhigher net service and field option

sales. This was partially offset by the decrease in the sales volumes of other DUV lithography systems.

Net service and field option sales increased mainly due to the growing installed base of systems, higher levels of

lithography tool use for certain customers, and more NXE field upgrades.

The Logic sector benefited from positive momentum in AI-related demand across leading-edge foundry and capacity

additions for next nodes. The Memory sector showed a continuation of high demand, fueled by investment in high-

bandwidth memory and DDR5 to support AI-related applications. Taiwan and South Korea recorded the largest

absolute geographic sales growth, driven by capacity expansions to support increasing AI-related demand.

The increase in long-lived assets in the Netherlands during 2025 is primarily related to factory and research facility

expansions in Veldhoven. The increase in the US is primarily related to the expansion of the Wilton factory site, the

increase in South Korea to new office space in Hwaseong and the increase in Taiwan to a new multifunctional

campus in Taipei.

4. Cash and cash equivalents and short-term investments

Cash and cash equivalents consist primarily of highly liquid investments, such as bank deposits, deposits with

governments and government-related bodies, money market funds and bank accounts readily convertible to known

amounts of cash with insignificant interest rate risk and original maturities to the entity holding the investments for

three months or less at the date of acquisition.

Investments with original maturities at the date of acquisition greater than three months and less thanone year are

presented as short-term investments. Fair value changes in these investments, which are not temporary, are

recognized in the Consolidated statements of operations. Short-term investments have immaterial interest rate risk.

Cash and cash equivalents and short-term investments consist of the following:

Cash and cash equivalents mainly increased due to net cash provided by operating activities, driven by net income

and down payments. This increase is partly offset by purchases of property, plant and equipment, purchases of

treasury shares, loans issued and dividend paid.

Deposits with financial institutions, governments and government-related bodies and investments in money market

funds have an investment-grade credit rating as rated by credit rating institutions such as Standard & Poor's,

Moody’s or Fitch. Our cash and cash equivalents are predominantly denominated in euros and to some extent in US

dollars, Taiwanese dollars, South Korean won and Chinese yuan.

The carrying amount of these assets approximates their fair value.

As of December 31, 2025, no restrictions on usage of cash and cash equivalents exist (2024: no restrictions).

5. Accounts receivable, net

Accounts receivable are initially measured at fair value and are subsequently measured at amortized cost, less

allowance for credit losses, if material. The carrying amount of the accounts receivable approximates the fair value.

We perform ongoing credit evaluations on our customers’ financial condition. We periodically review whether an

allowance for credit losses is needed by considering factors such as historical payment experience, credit quality,

aging of the accounts receivable balances, expected lifetime losses and current economic conditions that may affect

a customer’s ability to pay.

When entering into arrangements to sell our receivable, we derecognize the receivable only when meeting the

derecognition criteria. The criteria require isolation from the seller, granting the buyer the right to pledge or exchange

the receivables and/or ensuring no continuing involvement in the transferred receivables, and legal transfer ofcontrol

over the receivable.

Accounts receivable consist of the following:

Thedecrease in accounts receivable as of December 31, 2025, compared to December 31, 2024, is mainly due to

increased factoring of receivables and the timing of cash receipts from our customers.

In 2025,€6,212.5 million of receivables were sold through factoring arrangements(2024:€2,042.7 million). The

amounts consist of€2,704.8 million (2024:€1,639.9 million) of regular trade receivables and€3,507.7 million (2024:

€402.8 million) of absolute, unconditional, irrevocable accounts receivable for down payments on systems to be

shipped in 2026 and thereafter. These receivables have been derecognized, since the assets were isolated from the

seller, control was transferred to the buyer and there were no restrictions on the buyer related to the factored items.

The fair value of the receivables sold was substantially the same as their carrying value. The cash receipt is treated as

an operating cash flow within the Consolidated statements of cash flows.

6. Finance receivables, net

Finance receivables consist of receivables in relation tosales-type leases. We perform ongoing credit evaluations of

our customers’ financial condition. We periodically review whether an allowance for credit losses is needed by

considering factors such as historical payment experience, credit quality, the aging of the finance receivables

balances, expected lifetime losses and current economic conditions that may affect a customer’s ability to pay.

The following table lists the components of the finance receivables as of December 31,2025 and 2024:

Theincrease in finance receivables as of December 31,2025, compared to December 31, 2024, is the result of

additional systems shipped with a free-use or evaluation period, partially offset by systems being purchased at the

end of their free-use or evaluation period. These sales-type leases mainly support the capacity ramp-up ofhigh-end

systems which are part of the early-insertion life cycle of the technology or system type. It is expected that these

systems will be purchased at the end of the free-use or evaluation period.

Gross profit recognized at the commencement date of the lease for oursales-type leases amounted to€186.4 million

during 2025 (2024:€114.3 million;2023:€460.9 million).

At December 31,2025, payments of the finance receivables in the next three years and thereafter are:

In 2025,2024 and 2023 we did not record any expected credit losses from finance receivables. As of December 31,

2025, the finance receivables were neither past due nor impaired. A finance receivable is considered past due when a

scheduled payment has not been received by its contractual due date.

7. Inventories, net

Inventory costs approximate costs determined on the first-in first-out basis. Our inventory values comprise

purchased materials, freight expenses, customs, duties, production labor and overhead. The valuation of inventory

includes determining which fixed production overhead costs should be capitalized into inventory based on the

normal capacity of our manufacturing and assembly facilities. During periods when production is below our

established normal capacity level, some of our fixed overhead costs are not included in the cost of inventory;

instead, they are recognized as cost of sales as incurred.

Inventory is valued at the lower of cost or net realizable value, based on assumptions about future demand and

market conditions. Valuation of inventory also requires us to establish reserves for inventory that is defective,

obsolete or in excess. We use our demand forecast to develop manufacturing plans and utilize this information to

compare against raw materials and work-in-progress and finished product levels to determine the amount of

defective, obsolete or excess inventory.

Inventories consist of the following:

Theincrease in gross inven tory in 2025, compared to 2024, is mainly due to increasing raw materials to support our

growing install base as well as increased number of systems bought back from our customers.

A summary of movements in the inventory reserves is as follows:

The additions for 2025, 2024 and 2023 are recorded in cost of sales. The additions for the year mainly relate to

inventory items which became obsolete due to technological developments and design changes.

8. Other assets

Other current and non-current assets consist of the following:

1. For further details on advance payments to Carl Zeiss SMT GmbH, see Note 26 Related parties and variable interest entities.

2. For further details on derivative financial instruments, see Note 25 Financial risk management.

Prepaid expenses mainly include prepaid income taxes of intercompany profit on inventory that has not yet been

realized by ASML of€375.6 million (2024:€380.1 million).

9. Equity investments

Our equity investments do not have a readily determinable fair value and do not qualify for the Net Asset Value

practical expedient, therefore we elect to measure these investments at cost, less any impairment, plus or minus

changes resulting from observable price changes in orderly transactions for identical or similar investments of the

same issuer, if any.

We perform a qualitative assessment considering impairment indicators to evaluate whether investments are

impaired at each reporting date. If a qualitative assessment indicates that the investment is impaired, we estimate

the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s

carrying value, we recognize an impairment loss.

To identify observable price changes, we consider relevant transactions that occurred on or before the balance sheet

date.

On September 9, 2025, ASML and Mistral AI announced an investment and partnership agreement for which ASML

invested€1.3 billion in Mistral AI’s Series C funding round as lead investor. This resulted in ASML holding an 11.1%

shareon a fully diluted basis in Mistral AI as per December 31,2025.

The following table shows changes in equity investments:

10. Equity method investments

Equity investments which we are able to exercise significant influence over but do not control, are accounted for

using the equity method and presented on our Consolidated balance sheets within Equity method investments. The

difference between the cost of our investment and our proportionate share in the carrying value of the investee’s

underlying net assets as of the acquisition date is the basis difference. The basis difference is allocated to the

identifiable assets and liabilities based on their fair value as of the acquisition date (i.e. the date on which we obtain

significant influence), with the excess costs of the investment over our proportional fair value of the identifiable

assets and liabilities being equity method goodwill.

We amortize the basis difference related to the other intangible assets over the estimated remaining useful lives of

these assets that gave rise to this difference. The remaining weighted-average life of the finite-lived intangible assets

acquired is 11.1 years and is amortized using a straight-line method. In-process R&D is initially capitalized at fair

value as anintangible asset with an indefinite life. When the R&D project is complete, it is reclassified as an

amortizable purchased intangible asset and is amortized over its estimated useful life. If the project is abandoned, we

will record the full basis difference charge for the value of the related intangible asset in our Consolidated statements

of operations in the period of abandonment. Equity method goodwill is not amortized or tested for impairment;

instead the equity method investment is tested for impairment whenever events or changes in circumstances

indicate that the carrying value of the investment may not be recoverable.

Under the equity method, after initial recognition at cost, our Equity method investments are adjusted for our

proportionate share in the profit or loss and other comprehensive income of the investee, recognized on a one-

quarter time lag to allow for the timely preparation of financial information and presented within Profit from equity

method investments. Our proportionate share in the profit or loss of the investee is adjusted for any differences in

accounting principles and policies, basis difference adjustments and intra-entity profits. Receipt of dividends

reduces our Equity method investments, which is presented as an operating cash flow based on the nature of the

distributions.

Equity method investments consists of a 24.9% equity interest acquired on June 29, 2017, in Carl Zeiss SMT Holding

GmbH & Co. KG, a limited partnership that owns Carl Zeiss SMT GmbH, our single supplier of optical columns.

For the year ended December 31, 2025, we recorded aprofit from Equity method investments of€216.7 million (2024:

€209.8 million) in our Consolidated statements of operations. This profit includes the following components:

•Profit of€322.8 million (2024:€216.4 million)related to our share of Carl Zeiss SMT Holding GmbH & Co. KG’s net

income after accounting policy alignment

•Cost due to basis difference amortization related to intangible assets of€29.7 million (2024:€27.4 million)

•Cost/(Gain) due to intercompany profit elimination of€76.4 million (2024:€(20.8) million)

In 2025, we received a dividend of€320.5 million (2024:€225.4 million) from Carl Zeiss SMT Holding GmbH & Co. KG.

Carl Zeiss SMT Holding GmbH & Co. KG is a privately held company; therefore, quoted market prices for its stock are

not available.

11. Goodwill

Goodwill represents the excess of the costs of an acquisition over the fair value of the amounts assigned to assets

acquired and liabilities incurred or assumed of the acquired subsidiary at the date of acquisition. Goodwill on

acquisition of subsidiaries is allocated toreporting units for the purpose of impairment testing. The allocation is

made to those reporting units that are expected to benefit from the business combination in which the goodwill

arose. Goodwill is stated at cost less accumulated impairment losses.

Goodwill is tested for impairment annually or whenever events or changes in circumstances indicate that the carrying

amount of the goodwill may not be recoverable. To determine whether it is necessary to perform the quantitative

goodwill impairment test, we perform a step-zero qualitative assessment annually. If we determine that it is more

likely than not that the fair value of a reporting unit will exceed its carrying amount, we do not perform a quantitative

goodwill impairment test.

Goodwill mainly resulted from the acquisitions of Cymer and HMI. The balance as of December 31, 2025, is€4,588.6

million (2024:€4,588.6 million).

We have identifiedtwo reporting units: Repo rting Unit ASML and reporting unit Cymer Light Sources. As of

December 31, 2025, the goodwill allocated to reporting unit ASML amounts to€4,126.3 million (2024:€4,126.3

million) and reporting unit Cymer Light Sources amounts to€462.3 million (2024:€462.3 million).

Based on our assessment during the annual goodwill impairment test, we believe it is more likely than not that the fair

values of the reporting units exceed their carrying amounts, and therefore goodwill was not impaired as of

December 31, 2025. The accumulated impairment as of December 31, 2025, isnil (2024: nil).

12. Intangible assets, net

Intangible assets include brands, intellectual property, developed technology, customer relationships and other

intangible assets not yet available for use. These finite-lived intangible assets are stated at cost, less accumulated

amortization and accumulated impairment losses. Amortization is calculated using the straight-line method based on

the estimated useful lives of the assets.

Finite-lived intangible assets are assessed for impairment annually, or whenever there is an indication that the

balance sheet carrying amount may not be recoverable using cash flow projections for the useful life.

The following table shows the respective useful lives for intangible assets:

As of December 31, 2025, intangible assets consist mainly ofbrands, intellectual property, developed technology, customer relationships obtained from the acquisitions of Cymer (2013) and HMI (2016) as well as capitalized costs relating

to internal use software:

The Consolidated statements of operations include the following amortization charges:

As of December 31, 2025, the intangible assets not yet available for use, as included in Other, amount to €54.3 million

(2024:€11.8 million) and are allocated to reporting unit ASML.

As of December 31, 2025, theestimated amortization expenses for intangible assets for the next five years and

thereafter are as follows:

13. Property, plant and equipment, net

Property, plant and equipment is stated at cost, less accumulated depreciation and accumulated impairment losses.

Costs of assets manufactured by ASML include direct manufacturing costs, production overhead and interest costs

incurred for qualifying assets during the construction period. Property, plant and equipment are depreciated on a

straight-line basis in the Consolidated statements of operations over their estimated useful lives, except for land,

which is not depreciated. Government grants related to assets are recognized when the grant conditions have been

substantially met. Government grants are presented as a deduction of the carrying amount of the asset they relate to

and recognized in the Consolidated statements of operations on a systematic basis over the useful life of the asset.

Evaluation systems leased to our customers under an operating lease are capitalized as Property, plant and

equipment at cost and depreciated over the respective lease term. Leased assets that are returned to ASML upon

expiration of the lease term are either taken back into Property, plant and equipment, as they will be used internally

by D&E or transferred back to Inventories to be reworked and sold.

The carrying values of prototypes, tooling and equipment that are intended to be sold, but first internally utilized for

R&D purposes, are reclassified from Inventories to Property, plant and equipment and depreciated while being

internally used. When no longer required for R&D activities, the assets’ carrying value is reclassified back to

Inventories and reworked to make them ready for sale to our customers. These transfers are reported as Net non-

cash movements to/from inventories in our Property, plant and equipment movement schedule.

Property, plant and equipment is assessed for impairment whenever there is an indication that the carrying amount

may not be recoverable using cash flow projections for the useful life.

The following table shows the respective useful lives for Property, plant and equipment:

Property, plant and equipment consists of the following:

As of December 31, 2025, the carrying amount includes assets under construction of€1,771.0 million (2024:€1,729.7

million) primarily consisting of buildings, as well as machinery and equipment.

As of December 31, 2025, the carrying amount of land amounts to€377.1 million (2024:€304.3 million).

The addi tions in 2025 in land and buildings, as well as furniture, fixtures and other mainly relate to factory expansions

in Wiltonand Veldhoven, research facility expansions in Veldhoven, office space in Hwaseong and multifunctional

campus in Taipei, all in order to support our continued growth.

The additions in 2025 in machinery and equipment mainly relate to the upgrade and expansion of production tooling

to support the growth of our business, as well as investments in prototypes of new technologies.

The additions in 2025 in leasehold improv ements mainly relate to installation of cleanrooms and warehouses for

leased properties inboth the Netherlands, US and China.

The Consolidated statements of operations include the following depreciation charges:

14. Right-of-use assets and lease liabilities

We determine whether an arrangement contains a lease at inception. Leases are included in Right-of-use assets,

Accrued & other current liabilities and Accrued & other non-current liabilities in our Consolidated balance sheets.

Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent

our obligation to make lease payments arising from the lease. Right-of-use assets and lease liabilities are recognized

at commencement date based on the present value of lease payments over the lease term. As our leases do not

provide an implicit rate, we use our incremental borrowing rate based on the information available at

commencement date in determining the present value of lease payments. The Right-of-use assets include any lease

payments made at or before the commencement date and are reduced by lease incentives. Our Right-of-use asset

and lease liability valuation may include options to extend or terminate the lease when it is reasonably certain that we

will exercise that option. Lease expensesare recognized on a straight-line basis over the lease term.

We have lease agreements with lease and non-lease components. The lease components are accounted for

separately from non-lease components. The allocation of the consideration between lease and non-lease

components is based on the relative standalone prices of lease components included in the lease contracts.

Right-of-use assets consist of the following leases:

ASML owns the majority of real estate for manufacturing, supply chain management, R&D and general administration

at our headquarters in Veldhoven, the Netherlands. Our other locations worldwide, mostly related to customer

support, are mainly leased. The total right-of-use assets related to properties includesa finance lease arrangement for

land of €32.0 million per December 31, 2025 and€32.0 million per December 31, 2024.

The right-of-use assets decreased in 2025 compared to 2024 mainly due to amortization, partially offset by additions

in properties and in warehouses.

Lease liabilities are split between current and non-current and are presented as part of Accrued and other liabilities.

The non-current portion mainly consists of properties and warehouses. From the total lease liability€16.5 million

(December 31, 2024:€16.9 million) relates to a finance lease while the rest relates to operating leases. For the year

ended December 31, 2025, Lease liabilities decreased by€54.6 million, mainly due to lease payments during 2025.

The Consolidated statements of operations include the following lease expenses:

The total cash flows relating to the leases are as follows:

The weighted average remaining lease term and weighted average discount rate related to the leases are as follows:

15. Accrued and other liabilities

Accrued and other liabilities consist of the following:

1. Costs to be paid includes an amount payable to related parties. For further details, see Note 26 Related parties and variable interest entities.

2. For further details on derivative financial instruments, see Note 25 Financial risk management.

3. For further details onlease liabilities, see Note 14 Right-of-use assets and lease liabilities.

Costs to be paid represent ASML’s estimate of contractual liabilities as of the reporting date, to be settled in a future

period, based upon the underlying terms and conditions. Costs to be paid as of December 31, 2025, include VAT

payables and accrued costs for unbilled services provided by suppliers, including contracted labor, outsourced

services and consultancy.

Personnel-related items primarily consist of accrued short-term incentive (STI) bonus plans, vacation days, pension

premiums, wage tax, and vacation allowances. The year-over-year increase in these accruals was mainly driven by an

increase in the average salary per FTE, reflecting our ongoing investment in talent to support the growth and

expansion of our business.

The refund liability represents the amount of consideration received from customers to which ASML does not expect

to be entitled. Refund liabilities do not meet the definition of a contract liability.

The standard warranty reserve is based on historical product performance and total expected costs to fulfill our

warranty obligation. Annually, we assess and update the standard warranty reserve based on the latest actual

historical warranty costs and expected future warranty costs. Total movements in standard warranty reserve for the

years 2025 and 2024 are as follows:

16. Long-term debt, short-term borrowings, interest and other, net

Long-term debt represents debt issued privately without registration with a government authority and is payable to

others under the terms of a signed agreement. Long-term debt is initially recognized at fair value and subsequently

measured at amortized cost. Debt is qualified as long-term debt as long as the group has an unconditional right to

defer settlement of the liability for at least 12 months after the reporting period.

Short-term borrowings comprise commercial paper issued under the Euro Commercial Paper (ECP) program. We

classify borrowings as short-term when the group does not have an unconditional right to defer settlement of the

liability for at least 12 months after the reporting period. Short-term borrowings are initially recognized at the amount

of proceeds received and subsequently measured at amortized cost using the effective interest method. Interest on

ECP notes is typically prepaid and deducted from the proceeds at issuance, resulting in a discounted carrying

amount. The amortization of this discount is recognized as interest expense in the Consolidated statements of

operations over the term of the note. Net proceeds from the issuance of borrowings and the repayment of

commercial paper are presented on a gross basis within the cash flows from financing activities in the Consolidated

statements of cash flows.

Interest accruals and payments relating to long-term debt are accounted for as part of Accrued and other liabilities.

Interest and other costs are accrued and recognized with the passage of time over the agreed term, regardless of

when the actual payment of interest or other costs occurs.

Long-term debt consists of the following (amounts for bonds represent carrying amount, not the principle amount):

All senior notes are redeemable at the option of ASML, in whole or in part, at any time by paying a make whole

premium, and unless previously redeemed, will be redeemed at 100% of their principal amount on the maturity date.

Our obligations to make principal repayments under our senior notes, short-term borrowings and other borrowing

arrangements excluding interest expense as of December 31, 2025, are as follows:

Eurobonds

The following table summarizes the carrying amount of our outstanding Eurobonds, including the fair value of interest

rate swaps used to hedge the change in the fair value of the Eurobonds:

1. The fair value of the interest rate swaps excludes accrued interest.

We use interest rate swaps to minimize the net interest exposure for the group by aligning the interest terms of the

available cash and the interest-bearing debt. The fair value changes of these interest rate swaps are recorded on the

Consolidated balance sheets under Current and non-current accrued and other liabilities, as well as Current and non-

current other assets, and the carrying amount of the Eurobonds is adjusted for these fair value changes.

The following table summarizes the estimated fair value of our Eurobonds:

1. Source: Bloomberg Finance LP.

The fair value of our Eurobonds is estimated based on quoted market prices as of December 31, 2025. The fair value

deviates from the principal amount, due to changes in market interest rates and credit spreads since the issue of our

Eurobonds, which carry a fixed coupon interest rate.

Debt acquired from Berliner Glas (ASML Berlin GmbH)

The loan of Berliner Glas (ASML Berlin GmbH) is a mortgage loan of€16.4 million with an annual interest rate of 0.5%,

repayable in 2034. Debt decreased compared to 2024, due to repayments made in 2025.

Lines of credit

We maintain an available committed credit facility of€1.5 billion as of December 31, 2025 (2024:€1.5 billion), with a

group of banks. No amounts were outstanding under the committed credit facility at the end of 2025 and 2024. This

facility has a maturity date of May 2030 withone uncommittedone year extension option extending the maturity to

2031. Outstanding amounts under this credit facility will bear an interest of Euribor plus a margin. The margin

depends on our credit rating. In addition, there is a fee based on the utilization percentage of the facility.

ASML also has non-committed lines of credit available. These facilities provide ASML with the ability to request short-

term unsecured loans from time to time for an aggregate amount not exceeding€3.0 billion. No amounts have been

drawn under these lines of credit. Outstanding amounts under the non-committed facility will bear interest based on

market conditions at the moment of drawdown.

Furthermore, ASML has non-committed guarantee facilities under which guarantees in the ordinary course of

business, such as customs or rental guarantees, can be provided to third parties. These facilities also cover standby

letters of credit, corporate credit cards and foreign exchange limits and are available in Euro, US dollar, Japanese yen

and Taiwanese dollar. As of December 31, 2025 amounts of€40.5 million (2024:€44.1 million), JPY 10,200.0 million

(2024: JPY 4,825.0 million) and TWD 268.7 million (2024: TWD 553.7 million) were utilized under these facilities.

Short-term borrowings

The€1.5 billion ECP program allows ASML to issue commercial paper up to 364 days in tenor, in a number of

currencies. As of December 31, 2025, we had €693.0 million (2024: nil) outstanding under our €1.5 billion ECP

program and the carrying amount was€691.7 million (2024: nil) with a weighted-average interest rate of 2.03%.

Interest and other, net

Interest and other, net consists mainly of interest income and interest expenses. In 2025, the interest income

component is€223.0 million (2024:€182.4 million;2023:€193.9 million). Income mainly relates to interest income on

cash and cash equivalents. In 2025, the interest expense component is€118.3 million (2024:€162.6 million;2023:

€152.7 million). The expenses mainly relate to interest expense on our short-term borrowings, Eurobonds and interest

rate swaps.

17. Commitments and contingencies

Commitments

We have various contractual obligations, some of which are required to be recorded as liabilities in our Consolidated

balance sheets, including long-term debt, short-term borrowings and lease commitments. Other contractual

obligations, including unconditional purchase obligations, are generally not required to be recognized as liabilities but

are required to be disclosed.

Ourcontractual obligations as of December 31,2025, can be summarized as follows:

1. Long-term debt obligations mainly relate to principal amounts and interest payments of our Eurobonds. For the amounts excluding interest

expenses and for further details, see Note 16 Long-term debt, short-term borrowings, interest and other, net.

2. For further details, see Note 14 Right-of-use assets and lease liabilities.

We have purchase obligations toward suppliers in the ordinary course of business which mainly relate togoods and

services for our operations and obligations relating to further expansion and upgrade of our facilities. The general

terms and conditions of the agreements relating to the major part of our purchase obligations as of December 31,

2025, contain clauses that enable us to delay or cancel delivery of ordered goods and services up to the dates

specified in the purchase agreements, in line with the timing of future sales. The terms and conditions that we

normally agree with our suppliers give us additional flexibility to adapt our purchase obligations to our requirements in

light of the cyclicality and technological developments inherent in the industry in which we operate.

Contingencies

ASML is subject to proceedings, litigation and other actual or potential claims, including those related to alleged or

potential violation of laws and regulations. ASML’s customers may be subject to claims of infringement from third

parties alleging that the ASML equipment used by those customers in themanufacture of semiconductor products,

and/or the methods relating to use of the ASML equipment, infringesone or more patents issued to those third

parties. If these claims were successful, ASML could be required to indemnify such customers for some or all of the

losses incurred or damages assessed against them as a result of that infringement.

In connection with any proceedings and claims, our management evaluates, based on the relevant facts and legal

principles, the likelihood of an unfavorable (or favorable) outcome, and whether the amount of the loss (or gain) can be

reasonably estimated. Judgment is required in these evaluations, including judgments regarding the validity of

asserted claims and the likely outcome of legal and administrative proceedings. The outcome of these proceedings,

however, is subject to a number of factors beyond our control, most notably the uncertainty associated with

predicting decisions by courts and administrative agencies. In addition, estimates of the potential costs (or gains)

associated with legal and administrative proceedings frequently cannot be subjected to any sensitivity analysis, as

damage estimates or settlement offers by claimants may bear little or no relation to the eventual outcome. Finally,

in any particular proceeding, we may agree to settle or to terminate a claim or proceeding in which we believe that

we would ultimately prevail where we believe that doing so, when taken together with other relevant commercial

considerations, is more effective than engaging in an expensive and protracted litigation, the outcome of which

is uncertain.

As of December 31, 2025, management has determined that ASML does not have any material contingencies which

are considered probable or reasonably possible for each year presented in our Consolidated balance sheets.

18. Personnel expenses and employee information

Personnel expenses for all payroll employees were as follows:

The continued increase in personnel expenses is primarily attributable to higher average wages and salaries per FTE,

reflecting our ongoing investment in talent to support the growth and expansion of our business.

Short-term incentive bonus plans

We offer annual performance-based STI bonus plans to our employees. Bonus payouts vary depending on job grade,

plan type, and both company and individual performance. For employees excluding the Board of Management, the

payout average is 17% of annual base gross salary. The 2025 STI bonus is accrued for as part of Accrued and other

liabilities in the Consolidated balance sheets and will be paid in the first quarter of 2026.

The STI bonus expenses for the (former) Board of Management and other employees were as follows:

1. On April 24, 2024, Peter T.F.M. Wennink and Martin A. van den Brink stepped down from their roles as Presidents of ASML and are, therefore,

presented as former Board of Management in 2024.

Theaverage number of payroll employees in FTEs was:

The total number of payroll and temporary employees as of December 31 in FTE per sector was:

19. Employee benefits

Contributions to defined contribution retirement benefit plans are recognized as an expense when employees have

rendered service entitling them to the contributions. Payments made to state-managed retirement benefit schemes

are dealt with as payments to defined contribution plans where our obligations under the plans are equivalent to

those arising in a defined contribution retirement benefit plan.

We maintainone multi-employer union-defined benefit pension plan and various other defined contribution pension

plans covering a substantial number of our employees. ASML accounts for its multi-employer defined benefit plan as

if it were a defined contribution plan for the following reasons:

•ASML is affiliated to an industry-wide pension fund and uses the pension scheme in common with other

participating companies.

•Under the regulations of the pension plan, the only obligation these participating companies have toward the

pension fund is to pay the annual premium liability. Participating companies are under no obligation whatsoever

to pay off any deficits the pension plan may incur. Nor have they any claim to any potential surpluses.

Our pension and retirement expenses for all employees for the years ended December 31,2025,2024 and 2023, were:

The accrued pension premiums were €75.8 million as of December 31, 2025, and€75.9 million as of December 31, 2024.

Multi-employer union plan

In accordance with the collective bargaining agreements effective for the industry in which we operate, which have no

expiration date, there are 23,711 eligible payroll employees in the Netherlands (54.5% of our total payroll FTEs) that

participate in a multi-employer union plan. Our net periodic pension cost for this multi-employer union plan for any

period is the amount of the required employer contribution for that period.

This multi-employer union plan is managed by PME (Stichting Pensioenfonds van de Metalektro) and this plan covers

approximately 1,618 companies and approximately 184,847 contributing members. Every participating company

contributes a premium that is based on the same contribution rate. This contribution rate can fluctuate yearly based

on the coverage ratio of the multi-employer union plan. For 2025, the contribution rate was 28.0% (2024:28.0%;

2023:28.0%). For 2025, our contribution to this multi-employer union plan (including the premiums paid by

employees) was 19.5% (2024:18.2%;2023:18.3%) of the total contribution to this plan. For 2026, we expect to

contribute around €437.0 million to this plan (including the premiums paid by employees). The pension rights of each

employee are based upon the employee’s average salary during employment.

The PME multi-employer union plan monitors its risks on a global basis and is subject to regulation by Dutch

governmental authorities. By Dutch law (the Dutch Pension Act), a multi-employer union plan must be monitored

against specific criteria, including the coverage ratio of the plan’s assets to its obligations. The coverage ratio is

calculated by dividing the fund’s capital by the total sum of pension liabilities and is based on actual market interest

rates. The legally required minimal coverage ratio is 104.3% (2024:104.3%). Compared to the previous year, the

coverage ratio of PME increased to 125.3% as per December 31, 2025 (December 31, 2024: 113.1%), which is higher

than the intended minimum coverage ratio of 118.1%. ASML has no obligation to pay any deficits the pension fund

may incur, nor does it have any claim to any potential surpluses.

Other defined contribution and pension plans

We also participate in several other defined contribution pension plans (inside and outside the Netherlands), with our

expenses for these plans equaling the employer contributions made in the relevant period.

Deferred compensation plans

For more senior US employees we have a non-qualified deferred compensation plan that allows them to defer a

portion of their salary, bonus and commissions. The plan allows us to credit additional amounts to the participants’

account balances. The participants divide their funds among the investments available in the plan. Participants elect

to receive their funds in future periods after the earlier of their employment termination or their withdrawal election,

at least three years after deferral. Expenses were close tonil relating to this plan in 2025,2024 and 2023. As of

December 31, 2025, our liability under deferred compensation plans was€127.7 million (2024:€111.8 million).

The related compensation plan assets are €129.9 million (2024:€113.1 million).

20. Share-based compensation

ASML has the following share-based compensation plans in place for its employees:

•Long-term incentive (LTI) bonus plans

•Option plans

•Employee Share Purchase Plan

Long-term incentive bonus plans

Our long-term incentive (LTI) bonus plans are governed by the Employee Umbrella Share Plan, effective since January

1, 2014, and is applicable to all employees. The primary objective of this plan is to attract, reward, and retain qualified

and experienced professionals in a competitive international labor market. Equity incentives granted under this plan

typically have a vesting period of 2.5-to-3 years and are subject to service and/or performance criteria.

Employees may be granted either service-based or performance-based share plans. Under service-based plans,

shares are granted at the start and vest after a defined service period. Performance-based plans follow a similar

structure but are conditionally granted and subject to company-specific performance criteria, which may include both

market-based and non-market-based elements. These shares vest upon completion of the service period and

achievement of the performance targets at the vesting date.

The General Meeting approved the adoption of the most recent Remuneration Policy for the Board of Management,

including the number of shares to be issued. The updated policy outlines the target and maximum levels of the long-

term incentive plans, associated performance measures, and payout zone percentages. Remuneration policies for

employees are approved by the Board of Management. Additionally, the General Meeting authorized the Board of

Management to issue and grant ordinary shares, set limits on restricting or excluding shareholders’ pre-emption

rights, and repurchase ordinary shares on behalf of the company within defined parameters.

The table below outlines the performance criteria and their respective weightings for the LTI performance plans

granted in 2025.

Following the US executive order 14173, the non-financial ESG performance metrics were modified as follows:

•For theemployees based in the US, the gender diversity performance measures are omitted, and an increased

weighting is applied on the Employee engagement and Inclusion score(13.33%), and

•For theemployees outside the US, the gender diversity performance measures are calculated excluding US

employees.

All employees who are eligible for the LTI plan 2023-2025 and 2024-2026 will be impacted by this modification. There

are no incremental fair value and no incremental compensation costs arising from the modifications.

The fair value of the market-based element is measured at the grant date incorporating the expected vesting and

expected value at vesting, using a tailored Monte Carlo simulation model. The fair value of the service plans and the

non-market-based elements of the performance plans is the share price at grant date less the present value of

expected dividends during the vesting period, as participants are not entitled to dividends payable during the vesting

period. The likelihood of the conditions being met for service and non-market performance plans is assessed as part

of the company’s best estimate of the number of equity instruments that will ultimately vest.

Participants are entitled to a conditional grant of company shares upon awarding. Performance plans are subject to

cliff vesting and are accounted for on a straight-line basis. Service-only plans are subject to graded vesting. Each

installment of the plan is therefore accounted as a separate grant with a separate fair value. This means that each

installment will be separately measured and attributed to expense over the related vesting period. Expenses for the

market-based element are recognized during vesting at a fixed vesting level (as the vesting expectation is

incorporated in the fair value) provided that all other performance conditions are met. Expenses for the non-market-

based elements and service plans are recognized during vesting at expected vesting levels, which are updated

during the vesting period as necessary, with a final update/adjustment at vesting date. All share-based remuneration

expenses for equity-settled awards are recognized as personnel expense, with a corresponding entry in equity,

during the vesting period of the award. Share-based remuneration expenses are included in the same income

statement line or lines in the functional grouped Consolidated statements of operations as the compensation paid to

the employees receiving the stock-based awards.

The most important assumptions for the calculation of the fair value of shares for the LTI performance plans, which

include market-based performance criteria, are set out in this table:

An overview of the incurred and expected expenses for the LTI plans are set out in the following table:

Details with respect to shares granted and vested during the year are set out in the following table:

A summary of the status of conditionally outstanding shares as of December 31, 2025, and changes during the year

ended December 31,2025, is presented below:

Option plans

Since 2017, we no longer grant any options, but there are still outstanding options which may be exercised by

employees.

The grant-date fair value of stock options was estimated using a Black–Scholes option valuation model. This Black–

Scholes model required the use of assumptions, including expected share price volatility, the estimated life of each

award and the estimated dividend yield. The risk-free interest rate used in the model is determined, based on an

index populated with euro-denominated European government agency bonds with high credit ratings and with a life

equal to the expected life of the equity-settled share-based payments. Our option plans typically vest over athree-

year service period, with any unexercised stock options expiring 10 years after the grant date. Options granted have

fixed exercise prices equal to the closing price of our shares listed at Euronext Amsterdam on grant date. The

purchase of shares against the exercise price is settled with the employees involved through deductions on their

salary and the issuance of shares upon exercising the stock options is deducted from our treasury shares.

Details with respect to stock options exercised and outstanding are set out in the following table:

The number and weighted average exercise prices of stock options as of December 31, 2025, and changes during the

year then ended are presented below:

Details with respect to stock options exercised in the relevant year and outstanding stock options as of December 31,

2025, are set out in the following table:

Employee Share Purchase Plan

Additionally, we offer an Employee Share Purchase Plan to our payroll employees, except the Board of Management,

which is excluded from participation in this plan. Through this plan, payroll employees are given the opportunity to

buy our shares through their monthly paycheck. The maximum amount for which employees can participate in the

plan amounts to 10.0% of their annual gross base salary. When employees retain the shares for a minimum of 12

months, ASML will pay out a 20.0% retention bonus in cash on the initial participation amount. This bonus is recorded

as part of personnel expenses.

The employee’s entitlements to a bonus under employee share purchase plans are accounted for on an accrual

basis. The shares for employee share purchase plans are issued on a quarterly basis and the share purchase price is

based on the closing share price of our listed shares on grant date, which is the date after our quarterly filings. The

purchased shares by employees are issued from our treasury shares.

In 2025, ASML received€142.3 million (2024:€124.0 million;2023:€99.4 million) from issuance of shares for our

employee share purchase plan.

21. Income taxes

The asset and liability method is used in accounting for income taxes. Under this method, deferred tax assets and

liabilities are recognized for the tax effect of operating loss and tax credit carry forwards as well as for tax

consequences attributable to differences between the balance sheets carrying amounts of existing assets and

liabilities and their respective tax bases. If it is more likely than not that some portion or all of a deferred tax asset will

not be realized, a valuation allowance is recorded for the difference.

Income tax expense includes current and deferred taxes on profit, related interest and penalties andnon-recoverable

withholding taxes insofar these qualify as income tax, as well as actual or potential withholding taxes on current and

expected dividend income from group companies.

Consistent with the rules of intra-period allocation, current and deferred tax expense in principle are allocated to

statement of operations or OCI in conjunction with the allocation of the underlying transaction.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the

years in which temporary differences, operating loss carry forwards and tax credit carry forwards are expected to be

recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the

Consolidated statements of operations in the period that includes the enactment date.

Deferred income taxes originally recognized through OCI are recycled through earnings in future periods upon

release of the connected item from OCI to the statement of operations.

We assess unrecognized tax benefits based on a two-step process. The first step is to evaluate the tax position for

recognition by determining if the weight of available evidence indicates that it is more likely than not that the position

will be realized upon settlement with a taxing authority or in a dispute with taxing authorities if the taxpayer takes the

dispute to the court of last resort. The second step is to measure the tax benefit as the largest amount that is more

than 50% likely to be realized upon settlement. While we believe we have appropriate support for the positions taken

on our tax returns, we regularly assess the potential outcomes of examinations by tax authorities in determining the

adequacy of our income tax expense, and adjust the income tax expense, income taxes payable and deferred taxes

in the period in which the facts that give rise to a revision become known.

Effective 2025, we adopted the guidance of ASU 2023-09 ‘Income Taxes (Topic 740): Improvements to Income Tax

Disclosures’, prospectively, with no impact on the financial statements only on the notes associated.

Income taxes are affecting our Consolidated statements of operations, Consolidated statements of comprehensive

income and Consolidated balance sheets. The disclosure of the income taxes is therefore split into:

•Income tax expense

•Liability for unrecognized tax benefits

•Deferred taxes

Income tax expense

The components of income tax expense are as follows:

As of 2025, we have applied the guidance of ASU 2023-09 - Income Taxes (Topic 740)based on which allocation of

income tax (expense) / benefit is determined according to the tax authorities to whom the income tax is eventually

paid. For years 2023 and 2024 allocation is based on the entities bearing the tax, whereby the income tax expense for

Netherlands also includes foreign tax expense that is born by our Dutch group entities.

Current and deferred tax (expense) / benefit can be further broken down into:

Above current year tax expense includes estimated global minimum tax expense of 0.0 million (2024:2.5 million)that

can be broken out as follows:

1. QDMTT = Qualifying Domestic Minimum Top-up Tax.

2. IIR = Income Inclusion Rule.

3. Global Minimum Tax rules first became effective as of 2024. As such, no 2023 comparatives are presented above.

The Dutch statutory income tax rate was 25.8% in 2025 (2024:25.8%;2023:25.8%). Tax amounts in other

jurisdictions are calculated at the rates prevailing in the relevant jurisdictions.

The effective tax rate (ETR)decreased to 17.7% in 2025, compared to 18.6% in 2024. This reduction is primarily due

to a correction for a historic tax position recognized in 2024 that pertained to multiple years, for which the underlying

tax position has a lower impact in 2025.

ASML is domiciled in the Netherlands; therefore, the Dutch statutory income tax rate of 25.8% is used in the

reconciliation to the Company’s effective tax rate for the year ended December 31, 2025. The reconciliation table

below is prepared in accordance with the disclosure requirements of ASU 2023-092, whereby reconciling items that

individually or at aggregated country level are equal or greater than 5% of expected total tax expense in case of using

the Dutch domestic rate, are presented separately.

1. As a percentage of income before income taxes.

2. The ASU 2023-09 guidance became effective as of 2025. As such no 2024 and 2023 comparatives are presented above.

Explanatory notes on the 2025 reconciling items appear below the table presenting the effective tax rates for 2024

and 2023.

The following table is a reconciliation of the Dutch statutory rate of 25.8% to the Company’s effective rate for the

years ended December 31, 2023 and 2024 in accordance with the guidance prior to the adoption of ASU 2023-09.

1. As a percentage of income before income taxes.

The individual elements in these tables are explained in more detail below. While the explanations are based on the

captures of the 2025 table, they also reference the corresponding items from the 2024 and 2023 table for context.

Income tax expense based on ASML’s domestic rate

The income tax expense based on ASML’s domestic rate is based on the Dutch statutory income tax rate. It reflects

the income tax expense that would apply if our entire taxable income were subject to the Dutch statutory tax rate,

with no tax incentives applied. No state or local taxes are applicable in the Netherlands.

Foreign tax effects

This category includes the cumulative effect of the reconciling items applicable in the foreign (i.e. non-Dutch)

jurisdictions where we operate. It includes the benefit of the R&D credits claimed at the level of our US group

companies, the income tax expense relating to our investment in Carl Zeiss SMT Holding GmbH & Co. KG as well as

other items that individually do not meet the separate disclosure threshold of 5%, such as non-deductible items, tax

exempt income items, prior year adjustments, effects of differences in tax rates, valuation adjustments, Global

Minimum Taxes and tax effects on intercompany elimination allocated to Foreign jurisdictions.

Adjustment in respect of tax incentives

This category includes the impact of the reduced tax rate as a result of application of the Dutch Innovation Box, which

is the only reconciling item exceeding the 5% threshold of ASU 2023-09. The innovation box is a facility under Dutch

corporate tax law pursuant to which qualified income associated with R&D is subject to an effective tax rate of 9.0%.

The innovation box benefit is determined according to Dutch laws and published tax policy, whereby for all years

mentioned the application has been confirmed in agreements between ASML and the Dutch tax authorities. As of

2024 this agreement has been renewed, now being applicable for the years 2024 through 2028 assuming facts and

circumstances do not change.

Decline in absolute amount of the 2024 benefit of tax incentives as compared to 2023 is driven by a lower innovation

box allocation percentage applicable as of 2024 as compared to 2023.

Other nontaxable or nondeductible items

This category reflects the impact of permanent nontaxable or nondeductible items at the level of our group companies

in the Netherlands that do not meet the separate disclosure threshold of 5%. It includes, amongst others, the effect of

nondeductible withholding taxes, nondeductible shared-based compensation expenses and non-deductible

employee related expenses.

Other adjustments

The category ‘Other adjustments’ includes items relating to our group companies in the Netherlands that individually

do not meet the separate disclosure threshold of 5%. It includes prior year adjustments and tax effects on

intercompany elimination allocated to our Dutch operations.

2024 prior years’ current taxes included a corrective tax expense in relation to a historic tax position.

In 2025 and 2024 there were no tax rate changes in the Netherlands with a revaluation impact. The tax rate change

reflected for 2023 mainly related to revaluation of deferred tax positions of our Dutch fiscal unity following from the

renewed innovation box agreement with the Dutch tax authorities.

Changes in the liability for unrecognized tax benefits

This category includes movements in our liability for unrecognized tax benefits for the worldwide consolidated group.

No netting with underlying tax positions has been applied.

In 2025, similar to prior years, the effective tax rate was impacted by movements in the liability for unrecognized tax

benefits. The movement for 2025 is mainly driven by continued dialogues with Dutch and foreign tax authorities in the

area of transfer pricing and the use of foreign tax credits. Additionally, some prior-year positions have been released

as a result of the lapse ofstatute.

US Tax Reforms

The year-end tax positions also reflect the regulations of US Tax Reforms, thereby taking into account the guidance

issued by the US government. Hereby the most recent guidance for the final FDII regulations has been applied. With

regard to the global intangible low taxed income (GILTI) and base erosion and anti-abuse tax (BEAT)regulations, the

decision has been taken to treat these as a period permanent item.

In 2022, the US enacted the CHIPS and Science Act, which, among other provisions, introduced a 25% investment

tax credit for semiconductor manufacturing equipment. These credits are accounted for as reductions to capitalized

Property, plant and equipment costs, rather than as income taxes.

Additionally, in 2022 the US enacted the Inflation Reduction Act (IRA), which, among other things, implemented a

15% minimum tax on book income of certain large corporations, a 1% excise tax on share buybacks, several clean

energy provisions and additional funding for the IRS. Relevant tax aspects of the IRA have been assessed and

included in our tax positions reported for 2025.

The same applies for the provisions of the One Big Beautiful Bill Act(OBBBA) that was enacted in 2025. Based on our

current analysis, the OBBBA has nomaterial impact on our Consolidated financial statements for 2025 and we do not

believe it will have material impact for upcoming financial years.

Global Minimum Tax

ASML falls within the scope of the Organisation for Economic Co-operation and Development (OECD) global

minimum tax rules. Global minimum tax legislation was enacted in the Netherlands, the jurisdiction in which ASML is

incorporated, and came into effect from January 1, 2024.

In conformity with the FASB staff comments of February 1, 2023, we have treated the global minimum tax as an

alternative minimum tax and did not recognize deferred tax impacts or remeasure existing deferred taxes under local

regular income tax systems.

ASML recognized an estimated current tax expense related to Global minimum tax, amounting to €0.0 million (2024:

2.5 million).

Income taxes paid 1

1. The ASU 2023-09 guidance became effective as of 2025. As such no 2024 and 2023 comparatives are presented above.

Income taxes paid include withholding taxes paid on certain payments between group companies that qualify as

income taxes within the scope of ASC 740. These withholding taxes have been presented as income taxes paid in the

countries of remittance to the local tax authorities.

Liability for unrecognized tax benefits and deferred taxes

The liability for unrecognized tax benefits and related accrued interest and penaltiesand total deferred tax position

recorded on the Consolidated balance sheets is as follows:

Liability for unrecognized tax benefits

We have operations in multiple jurisdictions, where we are subject to the application of complex tax laws. Application

of these complex tax laws may lead to uncertainties on tax positions. We aim to resolve these uncertainties in

discussions with the tax authorities. We record unrecognized tax benefits in line with the requirements of ASC 740,

which requires us to estimate the potential outcome of any tax position. Our estimate for the potential outcome of any

uncertain tax position is highly judgmental. We believe that we have adequately provided for uncertain tax positions.

However, settlement of these uncertain tax positions in a manner inconsistent with our expectations could have a

material impact on our Consolidated financial statements.

Consistent with the requirements of ASC 740, as of December 31,2025, the liability forunrecognized tax benefits

(excluding interest and penalties)amounts to€160.8 million (2024:€214.0 million), which is classified as Deferred and

other income tax liabilities. If recognized, these unrecognized tax benefits would positively affect our effective tax rate

by approximately€160.7 million (2024:€188.4 million benefit).

Interest and penalties related to the liability forunrecognized tax benefits amount to€13.7 million (2024:€39.1 million)

and are included in the total liability position, as specified below. Theimpact on the Consolidated statements of

operations of accrued interest and penalties in 2025 amount toa benefit of€22.0 million (2024:€17.7 million benefit).

The following table is a reconciliation of the beginning and ending balance of the liability for unrecognized tax

benefits:

We conclude our liability forunrecognized tax benefits to be appropriate. Settlements reported in 2025 mainly relate

to an agreement reached with the Dutch tax authorities in relation to the use of foreign withholding tax credits. The

settlements reported in 2024 mainly relate to an agreement reached with South Korean tax authorities in the area of

transfer pricing.

Increase in prior period and current period tax positions mainly relate to dialogues with the Dutch tax authorities in

relation to Transfer Pricing and the use of foreign withholding tax credits.

We file income tax returns in all jurisdictions where we operate, with the Netherlands, US, Taiwan, South Korea and

China being themajor jurisdictions. The years for which tax returns are still open for examination for respective

jurisdictions are as follows:

We are routinely subject to examinations and audits from tax and other authorities in the various jurisdictions in which

we operate. We believe that adequate amounts of taxes and related interest and penalties have been provided for,

and any adjustments as a result of examinations are not expected to have a material adverse effect.

Deferred taxes

The composition of total deferred tax assets and liabilities reconciled to the classification in the Consolidated balance sheets is:

1. The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.

1. The valuation allowance disclosed above relates to R&D and other tax credit carry forwards and operating loss carry forwards that may not be realized.

Operating loss carry forwards and taxcredit carry forwards

The deferred tax assets from operating loss carry forwards, R&D credits and other tax credit carry forwards

recognized as per December 31, 2025, are largely offset by means of a valuation allowance. R&D and other tax credit

carry forwards for the amount of€232.7 million haveno expiration date. The remaining R&D and other tax credit carry

forwards of€79.4 million have an expiration date between 2028 and 2045. For an amount of€212.6 million the

operating losses carry forward have an expiration date between 2035 and 2045. The remaining operating loss carry

forwards of€207.3 million have no expiration date.

Unrecognized deferred tax liability related to investments in foreign subsidiaries

ASML periodically reviews the capital structure of each group entity and may distribute retained earnings, repay

capital or inject fresh capital, should the projected cash flows, freely available funds of the respective entity and

capital adequacy requirements in the respective country allow/require for this. At December 31, 2025, the

undistributed retained earnings of our non-Dutch subsidiaries are generally considered indefinitely reinvested, except

for some ad hoc dividend distributions that may take place in 2026 for some of our Asian group entities with expected

limited tax impact. As such, no deferred tax liability has been recognized in respect of undistributed retained earnings

of our non-Dutch subsidiaries. As the tax implications of such distributions are dependent on local tax and accounting

regulations applying at the moment of distribution, these can also not practically be determined. As per December 31,

2025, the aggregate amount of unrecognized temporary differences approximately amounts to€1,267.6 million (2024:

€1,010.2 million).