CONTENTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Contents
About Espressif 03 Management Report （Continued）
Facts About Espressif 03 Developer-Centric Platform Strategy 14
Key Technologies 04 Developer Community Content 15
Ownership of Securities 16
Core Competitiveness 05 Risks and Uncertainties 17
Business Highlights 06 Consolidated Financial Statements 18
(Unaudited)
Key Financial Data (Unaudited) 06
Consolidated Balance Sheet 18
Key Financial Indicators (Unaudited) 06
Consolidated Income Statement 20
Financial Analysis 07
Consolidated Cash Flow Statement 21
Management Report 09 Further Information 22
Product Positiong 09
Terms and Conditions of the Report 22
Key Products - Chip Matrix 10
List of abbreviations 23
Product Market Tenure 1 1
Key Products - M5Stack Development Kits 12
B2D2B Business Model 13ABOUT ESPRESSIF ESPRESSIF SYSTEMS Q3 2026 REPORT
Facts About Espressif
Espressif Systems (SSE: 688018.SH) is a leading fabless semiconductor company providing wireless connectivity
and edge intelligence solutions for IoT devices. The Company has expanded beyond chip supply to become a
platform enabler for hardware digitalization and intelligent transformation supported by an integrated combination of
silicon software tools and ecosystem resources.Built around the ESP32 product family which has emerged as a preferred and highly recognizable platform among
global developers Espressif has established strong ecosystem momentum. A large and active developer community
thousands of third-party software components and long-term platform continuity drive sustained adoption.Through this ecosystem-led approach Espressif enables customers to build scale and continuously evolve
intelligent hardware products positioning the Company to capture durable value as hardware digitalization and
intelligence continue to deepen globally.
1.5 Billion+ Global Leader 230+ Patents 10000+ 3 Million+
Global IoT Chip In Wi-Fi MCU In AIoT Satisfied Active Ecosystem
Shipment Market Technology Customers Developers
(Cumulative) Worldwide
Developer Flywheel Developer Growth More developers join
learn and build with
Espressif solutions.Ecosystem Application
Expansion Innovation
The ecosystem grows with Developers create innovative
more partners tools and applications and solutions
integrations enabling greater across diverse use cases.possibilities.Enterprise Adoption
Enterprises adopt Espressif's platform to commercialize and scale these innovations.ABOUT ESPRESSIF ESPRESSIF SYSTEMS Q3 2026 REPORT
As a global semiconductor innovator we deliver high-performance RISC-V SoCs and comprehensive solutions with
integrated AI in-house operating system robust security and seamless cloud integration—shaping the future of
smart connected systems.Al Agent Edge Al Co-processor Mesh Wi-Fi Sensing HMI Multimedia Cloud & Matter Security
Cloud &
Ecosystem
AI & IoT AI
SDK ESP-CLAW ESP-VISION ESP-SREdge AI Agent Framework Low-Code Edge AI Speech Recognition
ESP-WHO ESP-DL ESP-NN
Computer Vision Deep Learning Neural Network Library
IoT
ESP-Brookesia ESP-GMF ESP-loT-Solution
Al-Powered Ul Framework Audio&Video Processing Peripheral Integration
Operating In-House
System ESP-IDF Compilers & Tool Chains
Official loT OS
Third-Party
IC Design Connectivity
Wireless Communication
Wi-Fi 7/6E/6 | 2.4/5/6 GHz Tri-band
Bluetooth 6 (LE)｜Bluetooth Classic (BR/EDR)
IEEE 802.15.4
High-Speed Data Transmission
160 MHz Channel Bandwidth｜1024-QAM｜2x2 MU-MIMO
Computing
Core
32-bit RISC-V
AI FPU | Instruction Set Extensions
Multimedia ISP | H.264 Encoder | JPEG Codec
High-Speed Interfaces PCle | DDR | USB
CORE COMPETITIVENESS ESPRESSIF SYSTEMS Q3 2026 REPORT
Brand Awareness
The ESP32 and Espressif brands have a strong sense of recognition among users. This recognition has become a
key factor in our competitive advantage and success. Users identify with the ESP32 brand due to its reliability
performance and versatility which have been proven across various applications and industries. This strong brand
awareness not only fosters customer retention but also attracts new users thereby solidifying Espressif's position in
the market.Exceptional IC Design Capability
Espressif independently designs and develops its own chip products with core IPs being self-developed. These
chips are equipped with rich features ensuring that Espressif’s products stand out in the market and avoid the pitfalls
of homogenized competition. By controlling the entire design process Espressif can innovate rapidly and introduce
unique functionalities that set our products apart from competitors providing a distinctive edge in the IoT
semiconductor industry.Full-Stack Engineering Capability
Espressif possesses comprehensive engineering development capabilities that span from IP development to
complete chip design operating systems firmware software frameworks application solutions hardware design
edge AI cloud and apps. This full-stack engineering expertise allows Espressif to offer highly integrated solutions
that meet a wide range of customer needs. The ability to control and optimize every layer of the technology stack is
unique in the industry and enables Espressif to deliver superior products and services that are seamlessly integrated
and highly efficient.Superior Cost-Effective and Stable Support
Espressif's products are known for their high performance and low cost making them competitive in the market. We
provide the cost efficiency necessary to promote large-scale commercialization in downstream industries.Additionally we ensure the long-term availability of our products and offer stable and enduring software support
ensuring that customers can rely on their investments for extended periods. This commitment to value and reliability
strengthens customer trust.Extensive Developer Community Support
Espressif has garnered support from a vast community of professional engineers who are familiar with Espressif's
development platform and actively promote its value proposition. This large and engaged community not only aids in
the rapid adoption and dissemination of Espressif’s technologies but also contributes to continuous improvement
through feedback and shared knowledge. The robust community support amplifies Espressif's market presence and
enhances our reputation as a trusted and innovative leader in the industry.BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Business Highlights (Unaudited)
Key Financial Data (Unaudited)
Three Months Ended Nine Months Ended
CNY Sep 30 2026 Sep 30 2025 Sep 30 2026 Sep 30 2025
Consolidated Statement of Income Data
Revenue 889277202 666706221 2369988496 1912247017
Gross profit 454085724 319845390 1184340680 882881140
Selling expenses 27192217 21202823 75127957 59114434
General and administrative expenses 25023192 24222903 72425306 62091408
Research and development expenses 188725772 155163791 518391823 423408329
Net income 220015954 116499045 555294495 379538810
Net income attributable to Espressif 218695118 115500538 552921175 376762715
Earnings per share:
Basic 2.3673 1.7343
Diluted 2.3673 1.7343
Consolidated Cash Flow Data
Net cash provided by operating activities 245874272 195644872 318320784 310067697
Sep 30 2026 Dec 31 2025
Consolidated Balance Sheet Data
Working capital 3393101701 3518352994
Total assets 5258889142 5047755518
Long-term obligations 163620528 141345125
Total shareholders’ equity 4666499279 4489877928
N.B.: Due to the company's implementation of a capital reserve to equity conversion in 2026 the earnings per share for each reporting period have been recalculated
based on the adjusted share count.Key Financial Indicators (Unaudited)
Three Months Ended Nine Months Ended
Sep 30 2026 Sep 30 2025 Sep 30 2026 Sep 30 2025
Gross margin 51.06% 47.97% 49.97% 46.17%
R&D-to-sales ratio 21.22% 23.27% 21.87% 22.14%
Net income margin 24.74% 17.47% 23.43% 19.85%
Weighted ROE 11.84% 15.93%
Number of Espressif employees 995 878
Stock-based compensation 15668970 11339881 43735924 30130386
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Financial Analysis
Revenue Overview: Quarterly Revenue Seasonality
Revenue for the first three quarters reached CNY 2.37 CNY Million FY2021 FY2022 FY2023 FY2024
billion representing a YoY increase of 23.9%. Third- FY2025 FY2026
quarter revenue came in at CNY 889.28 million up 1000
33.4% YoY and 6.8% QoQ.
Although global smart home demand moderated to 800
single-digit growth amid a challenging macroeconomic
environment and ongoing geopolitical uncertainties 600
Espressif continued to benefit from the diversification of
its application portfolio. Non-smart home segments— 400
including industrial automation smart agriculture energy
management and AI-driven developer and innovation 200
activities—continued to deliver solid growth. Q1 Q2 Q3 Q4
Driven by robust community support and effective technical marketing our direct sales share has exceeded 71%
making us unique among semiconductor peers. Furthermore our customer concentration continues to decline
reflecting a healthier and more diversified revenue structure.Revenue by Area:
* China’s Mainland revenue saw a 38.5% YoY growth and a 8.4% QoQ increase for the third quarter bringing the
first three quarters' cumulative YoY growth to 21.0%.* Overseas revenue grew 23.1% YoY and a 3.2% QoQ increase for the third quarter bringing the first three quarters'
cumulative YoY growth to 30.9%.Revenue by Area Revenue by Sales Mode Top-5 Customer
in the First Three in the First Three Concentration Rate
Quarters of 2026 Quarters of 2026 2022 - Q3 2026
26.4% 28.1%
23.9% 22.3% 20.7%
68.4% 71.7%
China's Mailand Rest of the World Direct Indirect 2022 23 24 25 26 Q1-Q3
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Financial Analysis (Continued)
Revenue by Product Category:
* Chips: Revenue for the first three quarters grew by 10.4% YoY reflecting steady demand from the customer base
that prefers direct chip-level design and in-house hardware development.* Modules & Development Kits: Revenue for the first three quarters grew by 32.5% YoY as the IoT ecosystem
continues to mature. An increasing number of customers are choosing pre-certified module solutions to simplify
hardware development shorten product development cycles and concentrate engineering resources on
software AI and application innovation.Revenue by Product Category in the First Three Quarters of 2026
Chip Module & DevKits Others
2025 Q1-Q3 38.7% 60.6% 0.7%
2026 Q1-Q3 34.5% 64.8% 0.7%
Profitability & Resilience: Net income attributable to shareholders reached CNY 552.92 million representing a
46.8% year-on-year increase outpacing revenue growth. Despite a softer market environment the Company
continued to demonstrate strong operational resilience through sustained margin expansion diversified end-market
exposure and continued execution of its long-term growth strategy.R&D investment: R&D expenses increased by 22.4% YoY primarily driven by higher R&D headcount and employee
compensation. The increase reflects the Company's continued investment in expanding its technology capabilities
in response to the industry's evolution from basic IoT connectivity toward intelligent edge computing and Physical AI
applications.Cash Flow & Inventory: During the reporting period memory prices increased and procurement lead times
extended. To secure supply and ensure stable production and deliveries the Company strategically increased
inventory reserves. Consequently inventory rose by CNY 291.71 million compared with the end of 2025 which was
the primary reason why net cash generated from operating activities stood at CNY 318.32 million lower than net
profit. This deliberate working capital investment is expected to normalize as supply chain conditions stabilize.ROE & Capital: The decline in ROE was a result of capital dilution following the new share issuance completed in the
end of September 2025 rather than a shift in underlying profitability.Key Financial Indicators in the First Three Quarters of 2026
2025 Q1-Q3 2026 Q1-Q3
50.0%
46.2%
22.1% 21.9% 23.4%19.8%
15.9%
11.8%
3.1% 3.2% 3.2% 3.1%
Overall GM Selling Exp. % G&A % R&D % Net Income ROE
Margin (Q1-Q3)
MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
From Connectivity to AI
Espressif’s Product Positioning Across Device Evolution
Passive + System | Connectivity as Infrastructure AI / System-level Devices
From MCU to AI-enabled System Platforms
Systematic Connectivity Physical AI & High-Interaction
C / E / H-Series (Connectivity & Gateway) S / P-Series (AI & Computing)
* Gateway / Thread / Matter Node
* AI Hardware (Voice / Vision) Robotics AI Agent
* Systematic (Stacks / Multi-protocol)
* Multi-modal High Compute
* Low Interaction Proactive Interaction Path to
higher Add-on Value
Basic IoT Interactive Devices
ESP8266 ｜ Entry ESP32 ｜ C / H-Series Mainstream ESP32 ｜ S-Series
* Sensor Basic Connected Device Low-cost IoT
* Lightweight Voice Display Device
* Passive Connectivity-focused * Interaction Basic System Capability
Interactive Devices
Basic IoT | Connectivity as a Feature Interaction Emerges on top of Connectivity
Passive Interaction Active
Unified Developer Ecosystem across all segments
The Company's product roadmap is structured around four application-oriented capability layers: Basic IoT
Systematic Connectivity Interactive Devices and Physical AI & High-Interaction. This roadmap reflects the
evolution of connected devices from simple sensing and communication toward intelligent autonomous and
interactive systems.Basic IoT focuses on delivering reliable cost-effective connectivity for large-scale embedded devices. Products
such as the ESP32-C series provide highly integrated Wi-Fi and Bluetooth connectivity with optimized power
consumption and cost efficiency enabling broad adoption across smart home devices consumer electronics
industrial control and other mainstream IoT applications.Building upon basic connectivity Systematic Connectivity addresses increasingly complex networking
environments where multiple wireless technologies operate together. The Company's portfolio supports Wi-Fi
Bluetooth LE Thread Zigbee Matter and Wi-Fi 6/6E enabling devices to participate in heterogeneous networks
with improved bandwidth lower latency stronger reliability and lower power consumption. This capability allows
customers to build scalable and interoperable connected systems rather than isolated devices.Interactive Devices combine connectivity with local intelligence to enable richer human-device interaction.Products including the ESP32-S series integrate AI acceleration vector instructions graphics capabilities and
multimedia processing to support voice interaction vision processing display control and other real-time edge AI
applications enabling a new generation of intelligent terminals.Looking further ahead the Company is expanding toward Physical AI & High-Interaction. Products such as the
ESP32-P series provide significantly higher computing performance richer peripheral interfaces multimedia
capabilities and support for embedded Linux forming the computing foundation for next-generation intelligent
control systems robotics and AI Agent applications. At the software layer the Company is also investing in
technologies such as MCP integration ESP-Claw and AI-native development frameworks to help developers more
easily build intelligent interactive devices and Physical AI applications.Through this four-layer strategy the Company is building a unified platform that supports customers from basic IoT
connectivity to intelligent edge computing and future Physical AI applications. 9
System Integration / Capability
Low HighMANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Key Products - Chip Matrix
AI AI AI
ESP ESP32 ESP32 ESP32
32 ESP 32 S3 ESP32 - S3 P4 ESP32 - P4 S31 ESP32 - S31
2x HP Core @240 MHz 2x HP Core @240 MHz 2x HP Core @400 MHz 2x HP Core @320 MHz
1x ULP Core @8 MHz 1x ULP Core @17.5 MHz 1x LP Core @40 MHz 1x ULP Core @40 MHz
H.264 encoding
Function-
Driven ESP32ESP32
S2 ESP32 - S2 H4 ESP32 - H4
2x Core @96 MHz
1x Core @240 MHz
ESP32
C5 ESP32 - C5
1x HP Core @ 240MHz
1x LP Core @ 40MHz ESP32
E22 ESP32 -E22
2x Core @500 MHz
2×2 MIMO
ESP32
C6 ESP32 - C6
1x HP Core @160 MHz
1x LP Core @20 MHz ESP32
ESP 8266 C61 ESP32 - C61
1x Core @160 MHz 1x Core @160 MHz
ESP32
C3 ESP32 - C3
1x Core @160 MHz
Connectivity-
Driven ESP32H21 ESP32 -H21
ESP32
C2 ESP32 - C2 1x Core @96 MHz
1x Core @120 MHz
ESP32
H2 ESP32 - H2
1x Core @96 MHz
Legacy Growth Emerging / Sampling
Wi-Fi 4 Bluetooth
Wi-Fi 6 Thread
N.B.: Wi-Fi 6E Zigbee
All products shown above are 32-bit MCU-based chips.Matter Ultra-Low Power
MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Product Market Tenure
Annual Revenue Trend Legacy Growth Emerging Sampling
ESEPS3P23-E22-2E22
EESPS3P23-2H-2H1 21
ESEP3S2P-3H24-H4
EESPS3P23-S23-S1 31 <1 YEAR
ESPE3S2P-P342-P4 2 YEARS
EESPS3P23-2C-6C1 61 2 YEARS
ESEP3S2P-3C25-C5 2 YEARS
ESEP3S2P-3H2-H2 4 YEARS
ESEP3S2P-3C26-C6 4 YEARS
ESEP3S2P-3C2-C2 5 YEARS
ESEP3S2P-3C23-C3 6 YEARS
ESPE3S2P-S332-S3 6 YEARS
ESPE3S2P-S32-S2 7 YEARS
ESPE3S2P 3(O2 r(iOgriingainla) l) 11 YEARS (SINCE 2016)
ESPE82S6P68266 13 YEARS (SINCE 2014)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
Product Lifecycle Classification
* Sampling: The product has completed development and entered the sampling phase undergoing customer
design-in and validation.* Emerging: The product has achieved initial mass production and begun generating revenue though overall
scale remains limited.* Growth: The product enters a ramp-up phase making a significant contribution to revenue growth.* Legacy: The product has reached a stable shipment scale with sales trending flat or gradually declining; certain
product may enter the later stage of their lifecycle.* EOL: End of Life. No products have reached this stage yet.Market Tenure as a Core Asset
In the IoT industry a product’s market tenure serves as a critical indicator of credibility. It reflects long-term validation
and stable performance across complex application environments—reliability that cannot be replicated by speed or
short-term iteration alone.Long-Tail Value
IoT products typically have long lifecycles and prioritize reliability stability and long-term supply continuity. Once a
customer's product enters mass production the end product may remain in the market for 5–10 years or longer.Throughout this period the customer continues to require chips/modules for ongoing production replenishment
maintenance and product variants creating a recurring stream of demand.This creates a hardware equivalent of SaaS economics: not through subscription fees but through long product
lifecycles repeat purchases and durable customer relationships.The result is a “Slow Burn High Retention” model in which the value of a design win extends well beyond the initial
order generating a long tail of revenue over the product's lifetime.MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Key Products - M5Stack Development Kits
In addition to the ESP32 chip brand Espressif also owns the M5Stack development kit brand. M5Stack is renowned
for its innovative approach to hardware development and offers a modular open-source platform that simplifies the
creation of IoT and embedded system solutions greatly enhancing deployment efficiency.Beyond its hardware prowess M5Stack has cultivated an exceptionally vibrant global developer community
commanding high brand mindshare within the ecosystem. With an extensive lineup exceeding 400 products
M5Stack continues to drive rapid innovation by launching a new product every week. M5Stack enables developers
to rapidly prototype and iterate. This vast community serves as a continuous validation engine where grassroots
innovation frequently translates into mature market-ready solutions.In the first half of 2026 M5Stack successfully debuted two new products through Kickstarter crowdfunding
campaigns. Post-crowdfunding the products sustained high traction with both new acquisitions and repeat
purchases throughout standard retail underscoring a robust long-tail effect. M5Stack is progressively becoming an
'Everyday Carry' (EDC) staple for engineers further reinforcing our Direct-to-Consumer (DTC) market strategy.AI is stepping out of the screen and into
the real world. As intelligence finds its
way onto our desks into our pockets
and into field devices hardware is
evolving into the essential infrastructure
that bridges digital intelligence with
physical experiences.Throughout 2026 from the Anthropic
Developer Conference the Meta Muse
Gadget Board debut and the Qoder
exhibition at the Alibaba Apsara
Conference to the Netherlands
cybersecurity conference OrangeCon
and WorkOS’s init() event M5Stack has
repeatedly been chosen as the
hardware of choice for AI coding at
developer gatherings worldwide. Serving
variously as an interactive badge an
installation device a workshop tool or
simply the very first piece of hardware to
bring an AI concept straight to the
desktop M5Stack continues to
empower developers in turning
imagination into tangible reality.MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Business Model
Business-to-Developer-to-Business (B2D2B)
We believe developers are the primary drivers of technological innovation. By serving developers first we enable the
creation of new products new applications and ultimately new markets.Our growth model is built on the global developer ecosystem through two complementary layers: Business-to-
Developer (B2D) and Business-to-Developer-to-Business (B2D2B).B2D (Business-to-Developer) forms the foundation of our ecosystem. We regard developers as our primary direct
users and continuously invest in a comprehensive development platform including processors software
frameworks operating systems development tools development kits and technical support. Through our open-
source ecosystem technical community developer events and continuous software enhancements we maintain
long-term engagement with developers worldwide. In this sense B2D resembles a direct-to-consumer (DTC)
model where the "consumer" is the global developer community.B2D2B (Business-to-Developer-to-Business) transforms developer adoption of our platform into enterprise
adoption of our technologies. As developers build innovative products on our platform they bring our technologies
into their organizations and industries driving the development and commercialization of intelligent hardware
applications across industrial automation energy management smart agriculture consumer electronics AI-enabled
devices and many other markets.Together these two layers form Espressif's Developer Flywheel where developers create new applications that
drive enterprise adoption while growing enterprise adoption attracts more developers reinforcing a self-sustaining
cycle of developer growth application innovation enterprise adoption and ecosystem expansion.B2D2B Model
Core Chip Software Tools
Smart Home Smart Lighting Industrial Control Charging Pile
Module Branch B
2D Developer (Product Prototype)
Community
Portable Energy Storage
Branch A
(DIY Enthusiast)
Development Board
(DevKit) Photovoltaic Inverter
Smart Agriculture 3D Printer Smart Internet of Vehicles
Healthcare
MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Behind Every Smart Devices is a Developer
Developer-Centric Platform Strategy
CONNECTED DEVICE SMART INTERACTION
DEVELOPERS PHYESDICGAEL A AI DEVELOPERSDEVELOPERS I DEVELOPERS
DESCRIPTION DESCRIPTION DESCRIPTION
Build reliable low-power connected Create devices that interact naturally Develop intelligent physical devices
devices for IoT applications with a with people through displays touch that perceive interact with and
focus on wireless connectivity voice cameras and multimodal respond to the physical world through
energy efficiency and security. interfaces. AI sensing connectivity and control.TYPICAL FOCUS TYPICAL FOCUS TYPICAL FOCUS
Smart home Matter Thread AI toys smart displays HMI Robotics AI devices sensing
sensors wearables industrial IoT education consumer electronics physical interaction automation.HIGH-PERFORMANCE LINUX APPLICATION
CONNECTIVITY DEVELOPERS DEVELOPERS AI-NATIVE DEVELOPERS
DESCRIPTION DESCRIPTION
DESCRIPTION Build sophisticated embedded Build hardware applications with AI as
Design products that require high applications using Linux leveraging the primary development interface
bandwidth low latency and modern software frameworks and using natural language AI coding
advanced wireless connectivity. open-source ecosystems. assistants and low-code workflows.TYPICAL FOCUS TYPICAL FOCUS TYPICAL FOCUS
Video streaming industrial gateways Python ROS OpenCV edge Vibe coding MCP AI IDEs rapid
XR multimedia networking computing robotics AI terminals prototyping
Espressif's long-term development strategy is centered on continuously expanding the developer ecosystem served
by its technology platform. As intelligent connected devices evolve the required skill sets and development
workflows continue to diversify. Accordingly the Company is broadening its technology portfolio to support an
increasingly diverse range of developer communities.Today Espressif's platforms are widely adopted by Connected Device Developers who focus on low-power wireless
IoT applications and Smart Interaction Developers who build products featuring displays voice cameras touch
interfaces and multimodal user experiences. As AI increasingly moves beyond digital applications into the physical
world the Company is also expanding its engagement with Physical AI Developers building intelligent devices that
combine AI capabilities with sensing connectivity interaction and physical control. Meanwhile increasing demand
for higher bandwidth and lower latency is creating new opportunities among High-Performance Connectivity
Developers developing multimedia industrial networking and advanced wireless applications.Looking forward the Company is making strategic investments to support the next generation of embedded
software development. This includes ongoing research and development of Linux-capable platforms and software
frameworks intended to serve Linux Application Developers enabling more sophisticated embedded computing
applications. In parallel the Company is exploring AI-native development frameworks and workflows including AI-
assisted programming MCP integration and low-code development tools with the objective of supporting the
emerging community of AI-Native Developers as artificial intelligence reshapes embedded system development.By expanding its developer communities the Company aims to strengthen its software ecosystem accelerate 14
technology adoption and support long-term business growth.MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Developer Community Content
Cumulative Number of GitHub
ESP32 Projects
216 K
BOOKS
Global Code Hosting Platform Social Networking Site Developer-written books
275000 218850 > 300
ESP32 and ESP8266 ESP32 Group Members Covering more than 10
Projects languages
2016/12/31 2026/9/30
Daily Increase on GitHub
ESP32 Projects
Chinese Video Sharing Platform Global Video Sharing Platform 402
5.97 M 49.8 M 1017 K
Most Viewed ESP32 Most Viewed ESP32 Most Viewed ESP32
Video (2026) Short (2026) Video (2026)
2016Q4 2026Q3
Always a on Social Media
Posted on 15 Oct 2026 Posted on 20 Sep 2026 Posted on 5 Oct 2026 Posted on 16 Oct 2026
An ESP32-S3 with a 3.97-inch e-paper 成本百元！??代码不会，如何做个? Building a Tiny OLED Keychain | ESP32 ESP32-S3の?作スマートウォッチでdisplay. What would you build ?的桌??设备？【?包?作】 project with free code 画?スワイプが効かなくなった時の話です。
This Waveshare board combines an 从 ESP32 开发板出发，借助 AI 编程制 DIY electronics keychains areESP32-S3 with a 800 × 480 e-paper 作个?桌?设备，将想法变成可以使? everywhere right now so I decided to タップもスクロールも動くのに、横スscreen making it useful for low-power 的??具。 make my own! ワイプだけ通らない。タッチパネルをprojects that need to display 疑っていました。
information without constantly I built a tiny OLED keychain using a
refreshing a backlit display XIAO ESP32-S3 a 1.3-inch OLED
display and a small LiPo battery…
Think desk dashboards…
https://www.bilibili.com/video/ https://x.com/maruhanax6lq/status/
BV1M6eq6gEqg 2111037956425466113
https://x.com/Alacritic_Super/status/ https://www.youtube.com/watch
2110612903787364833 v=c_qwv6NKEDg
Posted on 16 Oct 2026 Searched on 16 Oct 2026
Wearable ESP32 cyberdeck I
designed
Posted on 6 Oct 2026 Posted on 14 Oct 2026
ESP32 par Chalaya ArduPilot Drone! Thought this group might appreciate ?"?? ESP32 LVGL level1 %??'?)????
#rcproject#shorts this project I just finished!! -??? Touchscreen ?0???34?56?
7?8 ????
??????? ?"??@???B??C?E?
http://reddit.com/r/masterhacker/ 15
https://www.youtube.com/shorts/ comments/1×76yfb/
qDi1kduxsE8 wearable_esp32_cyberdeck_i_design
ed/MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Ownership of Securities
Basic information of securities
Share types Ordinary share
Share capital 234384311 (as of Sep 30 2026)
Listing Shanghai Stock Exchange (SSE)
Ticker 688018.SH
Listing Date 2019-07-22
Shareholder Structure as of Sep 30 2026
Shareholder Share Numbers Percentage (%)
Espressif (Hong Kong) Investment Ltd. 85694801 36.56
Hong Kong Securities Clearing Company Limited 8739244 3.73
NSSF Portfolio 114 5826557 2.49
Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.1 3099418 1.32
Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.3 2918417 1.25
China Construction Bank Corporation – Guotai Haitong Innovation
Growth Mixed Asset Initiated Securities Investment Fund 2793470 1.19
Shinvest Holding Ltd. 2601600 1.11
CITIC Securities Co. Ltd. – Harvest SSE STAR Market Chip Tradable
Open-ended Index Securities Investment Fund 2336575 1.00
Shanghai Letun Enterprise Management Partnership (Limited
Partnership) 2047763 0.87
Shenwan Hongyuan Securities Co. Ltd. 1996834 0.85
Top 10 shareholders 118054679 50.37
Espressif Systems (Shanghai) Co. Ltd. Repurchase Special
Securities Account 2729203 1.16
Other public shareholders 113600429 48.47
Total of outstanding shares 234384311 100.00
MANAGEMENT REPORT ESPRESSIF SYSTEMS Q3 2026 REPORT
Financial Risk
The Company performs periodic credit evaluations of its customers’ financial condition
and generally requires of its customers no collateral. The Company provides an
allowance for expected credit losses based on the net amount expected to be
collected on such receivables. Losses have not been significant for any of the periods
presented in this report.R&D Risk
Espressif’s research and development strategy is focused on leveraging new
technologies for the creation of innovative AIoT products. Any delays or changes in
the development of these technologies by our industry partners or a failure of our
products to achieve market acceptance could compromise our competitive position.Competitors
As the market for AIoT products grows we face an increasing antagonism from
relatively large competitors such as Realtek MediaTek Infineon NXP Qualcomm
Nordic Silicon Labs and others. Intense competition from current players may reduce
our product sales and market share.Suppliers
A significant portion of the Company’s products is fabricated by the Taiwan
Semiconductor Manufacturing Company Limited (TSMC). The inability of TSMC to
deliver wafers to the Company in a timely manner could impact the production of the
Company’s products for a certain period of time which could have an adverse effect
on the Company’s business financial condition results of operations and cash flow.Customers
The Company sells directly to end customers distributors solution providers and
contract manufacturers. Our customers are a mix of several big customers and
numerous small customers. The concentration ratio for our top-five customers was
20.72% in the first three quarters of 2026.
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Consolidated Financial
Statements
Consolidated Balance Sheet (unaudited)
CNY Sep 30 2026 Dec 31 2025
Assets
Current assets:
Cash and cash equivalents 1292099654 1024792840
Held for trading financial assets 883540105 876009608
Notes receivable 82599517 65534507
Accounts receivable net 382490392 298106030
Accounts receivable financing
Prepayments 21545397 19427100
Other receivables 13101136 11439963
Including: Interest receivable
Inventories 919347083 627637513
Other current assets 227147753 1011937898
Total current assets 3821871036 3934885459
Non-current assets:
Debt investment 495941300 210430400
Investment in other equity assets 42036070 42036070
Other non-current financial assets 41937416 41937416
Fixed assets 577614152 556813866
Right-of-use assets 32747534 29091243
Intangible assets 24499504 26662076
Goodwill 74654024 74654024
Long-term deferred expenses 40118690 22753695
Deferred income tax assets 107469417 108491271
Other non-current assets
Total assets 5258889142 5047755518
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Consolidated Balance Sheet (unaudited)
CNY Sep 30 2026 Dec 31 2025
Liabilities & Shareholders’ Equity
Current liabilities:
Short-term loan
Accounts payable 214239053 187528762
Contract liabilities 43308469 23381055
Payroll payable 134252056 157619024
Taxes payable 9213239 2581791
Other payable 16709388 37303747
Including: Interest payable
Non-current liabilities due within one year 8895925 6944668
Other current liabilities 2151205 1173418
Total current liabilities 428769335 416532465
Non-current liabilities:
Lease liabilities 25955034 23701708
Provisions 613503 636582
Deferred income tax liabilities 137051991 117006835
Total liabilities 592389863 557877590
Owners’ equity (or shareholders' equity):
Share capital 234384311 167143010
Capital reserves 2947030609 3040623359
Less: Treasury stock 302427630 67433448
Other comprehensive income -15988536 17636423
Surplus reserves 123024049 123024049
Retained earnings 1646739543 1177520921
Total Espressif shareholders’ equity 4632762346 4458514314
Non-controlling interests 33736933 31363613
Total shareholders’ equity 4666499279 4489877928
Total liabilities and shareholders' equity 5258889142 5047755518
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Consolidated Income Statement (unaudited)
Three Months Ended Nine Months Ended
CNY Sep 30 2026 Sep 30 2025 Sep 30 2026 Sep 30 2025
Revenue 889277202 666706221 2369988496 1912247017
Cost of Revenue 435191478 346860831 1185647816 1029365877
Gross Profit 454085724 319845390 1184340680 882881140
Taxes and surcharges 3562984 1485439 9898731 4784329
Selling expenses 27192217 21202823 75127957 59114434
General and administrative expenses 25023192 24222903 72425306 62091408
Research and development expenses 188725772 155163791 518391823 423408329
Financial expenses 305717 -1441601 -2833484 -8092809
Including: Interest expenses 298969 1495598 862320 4576810
Interest income 6000764 5855951 17110669 16821219
Add: Other income 16674834 6965515 40925483 38334091
Investment income (mark"-" for loss) 7213830 3427000 24044782 11860933
Income from changes in fair value (mark"-" for loss) 316679 1848163
Credit impairment losses (mark"-" for loss) 528 46120 -350123
Assets impairment losses (mark"-" for loss) -46886 -353452 -2393307 -1591282
Assets disposal income (mark"-" for loss) -125 -22982 3645 -52581
Operating Income 233434702 129228116 575805232 389776488
Add: Non-operating revenue -470 27544 2120000 357744
Less: Non-operating expenses 153380 293841 212852 362447
Income before income taxes 233280852 128961819 577712381 389771785
Provision (benefit) for income taxes 13264898 12462773 22417886 10232975
Net Income 220015954 116499045 555294495 379538810
Net Income attributable to non-controlling interests 1320836 998507 2373319 2776095
Net Income attributable to Espressif 218695118 115500538 552921175 376762715
Earnings per share
Basic 2.3673 1.7343
Diluted 2.3673 1.7343
N.B.: Due to the company's implementation of a capital reserve to equity conversion in 2026 the earnings per share for each reporting period have been recalculated
based on the adjusted share count.Three Months Ended Nine Months Ended
CNY Sep 30 2026 Sep 30 2025 Sep 30 2026 Sep 30 2025
Net Income 220015954 116499045 555294495 379538810
Other comprehensive income (loss) after tax
Changes to the fair value of investment in other equity
instruments
Currency translation reserves -7123532 -6743598 -33624959 -9919960
Other comprehensive income (loss) -7123532 -6743598 -33624959 -9919960
Other comprehensive income (loss) attributable to
non-controlling interests
Comprehensive income 212892422 109755447 521669536 369618851
Comprehensive income attributable to non-controlling interests 1320836 998507 2373319 2776095
Comprehensive income attributable to Espressif 211571587 108756940 519296216 366842756
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q3 2026 REPORT
Consolidated Cash Flow Statement (unaudited)
Three Months Ended Nine Months Ended
CNY Sep 30 2026 Sep 30 2025 Sep 30 2026 Sep 30 2025
Operating Activities
Cash from sales of merchandise and provision of services 984275536 759768187 2518668956 2059551601
Tax refund 34545758 22222797 102121801 50238157
Other received cash related to operational activities 13115604 11545285 28713728 45010201
Subtotal of cash inflow from operational activities 1031936898 793536268 2649504485 2154799959
Cash paid for merchandise and services 571478021 446443968 1623204864 1269850584
Cash paid to and for employees 131243306 109983101 485440149 409505162
Cash paid for taxes and surcharges 30667885 2347759 62742754 53671180
Other paid cash related to operational activities 52673415 39116568 159795933 111705337
Subtotal of cash outflow from operational activities 786062626 597891396 2331183701 1844732262
Net cash provided by operating activities 245874272 195644872 318320784 310067697
Investing activities
Cash arising from the disposal of investments 1682789170 50000000 4008657588 190000000
Cash arising from investment income 25233260 4815000 38561760 17782233
Net cash arising from the disposal of fixed assets intangible 2986 10193 18756 25098
assets and other long-term assets
Other received cash relating to investment activities 306050 148050 2637153 1648150
Subtotal of cash inflow from investment activities 1708331466 54973243 4049875257 209455481
Cash paid for the purchase and construction of fixed assets 27588189 25448013 106914264 469618632
intangible assets and other long-term assets
Cash paid for investments 1367000000 3560000000
Net cash paid for acquisition of subsidiaries and other
business units
Other paid cash relating to investment activities 1000000 1000000 1200000
Subtotal of cash outflow from investment activities 1395588189 25448013 3667914264 470818632
Net cash provided by investment activities 312743277 29525230 381960993 -261363151
Financing activities
Cash arising from the issuance of common stock 1766553723 93024211 1837645360
Including: Cash arising from subsidiaries absorbing
investments by minority shareholders
Cash received from borrowings 21000000 383350000
Subtotal of cash inflow from financing activities 1787553723 93024211 2220995360
Cash paid to repay debt 170288327 180688327
Cash paid for the distribution of dividends and profits or 1404251 83702554 70604145
payment of interests
Including: dividends and profits paid to minority
shareholders by subsidiaries
Other paid cash relating to financing activities 302991524 4059697 406100259 11380912
Subtotal of cash outflow from financing activities 302991524 175752275 489802813 262673384
Net cash provided by financing activities -302991524 1611801449 -396778601 1958321976
Impact of fluctuation in exchange rates on cash and cash -9320364 -7169924 -40062074 -6148767
equivalents
Net increase in cash and cash equivalents 246305661 1829801627 263441102 2000877755
Add: Cash and cash equivalent at the commencement 1035159212 838708434 1018023771 667632307
of the period
Cash and cash equivalents at the end of the period 1281464873 2668510061 1281464873 2668510061
FURTHER INFORMATION ESPRESSIF SYSTEMS Q3 2026 REPORT
Further Information
Terms and Conditions of the Report
Responsibility Statement
The Board of Directors and the executive management of the Company warrant that the contents of this report are
true accurate and complete and do not contain any false information misleading statements or material omissions
severally and jointly accepting any legal responsibility thereof.Shanghai 23 October 2026
Espressif Systems
Board of Directors Executive Management
Teo Swee Ann Teo Swee Ann
Founder and Chairman Founder and CEO
Ng Pei Chi Wang Jue
Information Technology Officer Board Secretary
Wang Jue Shao Jingbo
Board Secretary Financial Director
Teo Teck Leong
Shareholder-elected
Chen Myn
Independent Director
Lee Kian Soon
Independent Director
Leong Foo Leng ESP
RESSIF
Independent Director
Declaration
Forward-looking Statements SYS MS
This report contains forward-looking statements and/or assessments about the business TE
financial condition performance and strategy of the Espressif Group. These statements and/or
assessments are based on assumptions and management expectations resting upon currently
available information and current estimates. These are subject to a multitude of uncertainties
and risks many of which are partially or entirely beyond Espressif’s control. Espressif’s actual
business development financial condition performance and strategy may therefore differ from
what is discussed in this report.FURTHER INFORMATION ESPRESSIF SYSTEMS Q3 2026 REPORT
List of abbreviations
AI Artificial Intelligence
AIoT Artificial Intelligence and Internet of Things
Bluetooth LE Bluetooth Low Energy
CEO Chief Executive Officer
Espressif ESPRESSIF SYSTEMS (SHANGHAI) CO. LTD.G&A General and Administrative
GM Gross Margin
HMI Human-Machine Interaction
IC Integrated Circuit
IoT Internet of Things
LLM Large Language Model
MCU Microcontroller Unit
MCP Model Context Protocol
QoQ Quarter-on-Quarter
R&D Research and Development
RF Radio Frequency
RISC-V Reduced Instruction Set Computer-V
ROE Return on Earnings
G&A General and Administrative
SH Shanghai
SoCs System on Chips
YoY Year-on-Year
ESPRESSIF SYSTEMS Q3 2026 REPORT
Investor Relations Social Media
ir@espressif.com x.com/EspressifSystem
facebook.com/espressif
Official Platforms linkedin.com/company/espressif-systems
www.espressif.com youtube.com/EspressifSystems
blog.espressif.com instagram.com/espressif_systems_official
github.com/espressif bilibili.espressif.com
esp32.com xhslink.espressif.com
Copyright ? 2026 Espressif Systems (Shanghai) Co. Ltd. All rights
reserved. All trade names trademarks and registered trademarks
mentioned in this document are the property of their respective
owners and are hereby acknowledged. The term “Espressif” refers to
Espressif Systems (Shanghai) Co. Ltd. and/or its subsidiaries. This
report is written in both Chinese and English. In case of any
discrepancies between Chinese and foreign interpretations the
Chinese version shall prevail.All amounts presented in these condensed Consolidated Financial
Statements are shown in CNY unless stated otherwise. Slight
discrepancies between the amounts presented may occur due to
rounding.
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