乐鑫科技:EspressifSystems2025Q2&Half-

ESPRESSIF SYSTEMS

2025 Q2 & HALF-YEAR REPORTCONTENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Contents

About Espressif 03 Management Report （Continued）

Business Model 14

Developer Community Content 15

Core Competitiveness 04

Research and Development 16

Ownership of Securities 18

Core Technologies Risks and Uncertainties 1905

Edge-Cloud AI 06 Consolidated Financial Statements 20

(Unaudited)

Business Highlights 07 Consolidated Balance Sheet 20

Key Financial Data 07 Consolidated Income Statement 22

Key Financial Indicators 07 Consolidated Cash Flow Statement 23

Financial Analysis 08 Consolidated Cash Flow Statement - Indirect 24

Method

Management Report Consolidated Statement of Changes in Equity 2509

Business Strategy 09

Further Information 26

Key Products - IoT Chips 10

Terms and Conditions of the Report 26

Key Products - Chip Matrix 11

List of abbreviations 27

Key Products - M5Stack DevKits 12

Market 13ABOUT ESPRESSIF ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Build Smart with Espressif

As a publicly traded multinational fabless semiconductor

company (Espressif Systems SSE: 688018.SH) we

develop low-power wireless communication chipsets

and AIoT solutions that are green versatile and cost-

effective. With a closed-loop development cycle we

advance core technologies including Wi-Fi Bluetooth

LE IEEE 802.15.4 RF RISC-V MCUs AI operating

systems and cloud services. As IoT evolves our

expanding software capabilities have transformed

Espressif into a comprehensive AIoT technology

ecosystem company.

1 Billion+ Global 200+ Patents 10000+ 2 Million+

Global IoT Chip Leader In AIoT Satisfied Active Ecosystem

Shipment In Wi-Fi MCU Technology Customers Developers

Market Worldwide

SHARE CONNECT INNOVATE

Open-source Conferences & Education Diverse

Communities Initiatives Applications

3CORE COMPETITIVENESS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Brand Awareness ESP32 Google Trends100

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 50

versatility which have been proven across various applications

and industries. This strong brand awareness not only fosters 25

customer retention but also attracts new users thereby solidifying

Espressif's position in the market. 0

2019-072025-06

Exceptional IC Design Capability Espressif Google Trends

100

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 50

can innovate rapidly and introduce unique functionalities that set

our products apart from competitors providing a distinctive edge 25

in the IoT semiconductor industry.

2019-072025-06

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.

4CORE TECHNOLOGIES ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Core Technologies

SoCs AI

ESP8266 ESP32 ESP32-S ESP32- AFE (Audio Front-End) AlgorithmsC ESP32-H and ESP32-P Series qualified as a “Software Audio Front-EndSolution” for Amazon Alexa Built-in devices.Espressif offers integrated reliable and

energy-efficient SoCs for Wi-Fi 3A Audio Algorithms

Bluetooth Low Energy Thread and Zigbee

to various segments of the IoT market. including Acoustic Echo Cancelation (AEC) Audio Noise Suppression (ANS) and Automatic

Gain Control (AGC) which significantly reduce

noise and echo in calls keeping high-quality

voice intercoms stable at all times.OS

ESP-IDF Cloud

Espressif’s official IoT Development Framework.It provides a self-sufficient SDK for any generic ESP RainMaker

application-development on these platforms

using programming languages such as C and A comprehensive development-free and

C++. maintenance-free AIoT solution for private Cloud deployment.ESP-IDF currently powers millions of devices in

the field and enables building a variety of It is an all-inclusive solution that covers

network-connected products ranging from everything from the underlying chip to device

simple light bulbs and toys to major appliances firmware third-party voice-assistant

and industrial devices. integrations mobile apps and the dashboard.Customers can build their own AIoT devices

and ecosystem with ESP RainMaker.Software

With our open-source software Matter

such as Espressif's IoT

Development Framework ESP-IDF

Audio Development Framework One-stop Matter Solution

ESP-ADF Mesh Development

Framework ESP-MDF Cloud This is the culmination of

Connectivity Platform ESP Espressif’s ongoing contribution to

RainMaker Facial Recognition the Matter platform in various

Development Framework ESP- areas including protocol

WHO and Voice-Controlled formulation core stack

Assistant ESP-Skainet we have implementation and certification

developed a framework for building test events.AIoT applications which is both

complete and innovative.

5CORE TECHNOLOGIES ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Edge-Cloud AI

Leveraging AI and NLP technologies Espressif’s edge-cloud AI and Human-Machine Interface (HMI) solutions

deliver a seamless and intuitive interaction experience. ESP32-S3 and ESP32-P4 support localized voice

assistants and graphical touch interaction while integrating with cloud-based LLMs for more accurate semantic

understanding and contextual engagement.The LLM solution enables natural language processing and on-device voice recognition which reduces cloud

dependency lowers latency and enhances privacy. Meanwhile the HMI solution combines voice touch and

gesture recognition to provide a more intuitive and efficient user experience. Backed by a comprehensive

support system our solutions unlock the full potential of intelligent interactions at lower costs and higher

efficiency driving IoT devices to evolve from mere "tools" into "companions."

Audio Solutions HHMMI SI oSloultuitoinons s

6BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Business Highlights

Key Financial Data

Three Months Ended Six Months Ended

CNY Jun 30 2025 Jun 30 2024 Jun 30 2025 Jun 30 2024

Consolidated Statement of Income Data

Revenue 687690927 533020855 1245540796 920212266

Gross profit 321088233 235129242 563035750 397496784

Selling expenses 20891691 16063290 37911612 28915851

General and administrative expenses 20014920 17125846 37868504 31997654

Research and development expenses 142052489 114836190 268244538 218682370

Net income 168598092 98797587 263039765 152713070

Net income attributable to Espressif 167557823 97726982 261262177 151642464

Earnings per share:

Basic 1.6868 1.2940

Diluted 1.6868 1.2940

Consolidated Cash Flow Data

Net cash provided by operating activities 39450437 -13668172 114422825 -25676834

Non-GAAP Adjustment

Stock-based compensation 13481337 8929762 18790505 15331190

Non-GAAP net income attributable to Espressif 181039160 106656744 280052682 166973654

Jun 30 2025 Dec 31 2024

Consolidated Balance Sheet Data

Working capital 1467140559 1432356145

Total assets 3217701484 2649465358

Long-term obligations 122223035 116956630

Total shareholders’ equity 2462361328 2179369221

N.B.: Due to the company's implementation of a capital reserve to equity conversion in 2025 the earnings per share for each reporting period have been recalculated

based on the adjusted share count.Key Financial Indicators

Three Months Ended Six Months Ended

Jun 30 2025 Jun 30 2024 Jun 30 2025 Jun 30 2024

Gross margin 46.69% 44.11% 45.20% 43.20%

R&D-to-sales ratio 20.66% 21.54% 21.54% 23.76%

EBITDA margin 26.69% 19.08% 23.24% 17.78%

Net income margin 24.52% 18.54% 21.12% 16.60%

Weighted ROE 11.30% 7.91%

Number of Espressif employees 840 728

7BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Financial Analysis

Espressif’s total revenue in the first half of 2025 was CNY 1.246 billion representing a 35.35% year-on-year increase

from CNY 920.21 million in the first half of 2024. The overall gross margin was 45.20% slightly higher than the same

period last year mainly due to a more favorable product mix and improved cost control. Consequently the net

income attributable to Espressif was CNY 261.26 million reflecting a 72.29% year-on-year increase driven by strong

revenue growth and higher profitability.This performance was supported by the rising penetration of intelligent solutions across multiple sectors. Beyond

the continued expansion in smart home and consumer electronics industries such as industrial automation energy

management and healthcare are increasingly adopting wireless SoC solutions to accelerate digital transformation.The broad-based demand reflects a structural shift toward more connected intelligent devices in both consumer

and industrial markets.Revenue by Area Revenue by Sales Top-5 Customer

in H1 2025 Mode in H1 2025 Concentration Rate

42.2%

29.0%

26.4%28.1%

23.9%24.9%

71.8%71.9%

China's Rest of Direct Indirect 2020 21 22 23 24 H1 25

Mainland the World

Revenue by Product Category

Chip Module & DevKits Others

H1 2024 41.4% 57.8% 0.8%

H1 2025 38.9% 60.5% 0.6%

Key Financial Indicators

H1 2024 H1 2025

43.2%45.2%

23.2%23.8%21.5%21.1%

17.8%16.6%

11.3%

6.6%6.1%7.9%

Overall GM EBITDA SG&A as % of R&D as % of Net Income ROE (H1)

Margin sales sales Margin

8MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Management Report

Business Strategy

Espressif Systems’ business strategy emanates from our service/product areas and our engagement with the

developer ecosystem.Our product and service areas include AIoT chips OS-level development environments software tools application

solutions and value-added services such as Cloud and Matter. The above-mentioned products ensure that we are

in the heart of numerous commercial AIoT applications in different markets including smart home consumer

electronics industrial automation healthcare etc.Products Solutions Value-added services

SoCs HMI Smart Audio Cloud

Displays Solutions service

Modules Matter

Solution

Face Low-Power

Recognition Solutions

DevKits

……

OS-level development environments & software tools

Customers

Brands OEM/ODMs Module Houses Solution Providers Makers

9MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Key Products - IoT Chips

Espressif Systems is a global leader in wireless connectivity SoCs and AIoT solutions. Since launching our first Wi-Fi

MCU in 2014 we have continuously expanded our product portfolio and deepened our technology stack. Today

Espressif offers a comprehensive range of self-developed wireless SoCs covering Wi-Fi 4/6/6E Bluetooth LE (up to

BLE 5.4) Thread Zigbee and Matter protocols enabling diverse smart connectivity applications across consumer

industrial and commercial domains.In recent years Espressif has made notable progress in the development of advanced edge computing platforms.Our RISC-V-based SoCs now integrate AI accelerators and multimedia processing capabilities enabling efficient

deployment of voice vision and large language model (LLM)-based applications on cloud.Espressif's competitive edge lies in its end-to-end in-house technology development including RF components

connectivity IPs RISC-V processor cores secure boot and OTA frameworks real-time operating systems AI

toolchains and developer toolkits. This vertical integration enables us to deliver consistent software and hardware

experiences across platforms ensuring seamless development high integration and long-term support for our

customers.To simplify product adoption we also offer a wide range of IoT modules and development kits fully supported by

Espressif’s software ecosystem and global community. This helps customers accelerate time-to-market while

optimizing their supply chain through direct technical and logistical support from Espressif.Key Technologies

Wi-Fi Technologies Other Wireless Technologies

Wi-Fi 7 Fully supports Bluetooth 5.4

Wi-Fi 6E (Qualified against Bluetooth Core 6.0)

Connectivity 2.4GHz & 5GHz Wi-Fi 6 Thread

Wi-Fi 4 Zigbee

RISC-V Cores AI Related

32-bit Single-Core Voice Wake-up

96/120/160/240MHz Offline Voice Commands

32-bit Dual-Core Face and Object Recognition

Computing 96/240/400/500MHz

32-bit Multiple-Core Multimedia

H.264 Encoder & Decoder

Technical Breadth In progress

Technical DepthMANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Key Products - Chip Matrix

AI AI

ESP ESP32

32 ESP 32

ESP32

S3 ESP32 - S3 P4 ESP32 - P4

32-bit Xtensa MCU 32-bit Xtensa MCU 32-bit RISC-V MCU

Dual-Core 240 MHz Dual-Core @240 MHz Dual-Core @400 MHz

H.264 encoding

ESP32 ESP32

High- S2 ESP32 - S2 H4 ESP32 - H4

Performance 32-bit Xtensa MCU 32-bit RISC-V MCU

Single-Core @240 MHz Dual-Core @96 MHz

ESP32 ESP32

ESP 8266 C6 ESP32 - C6 C5 ESP32 - C5

32-bit Tensilica MCU 32-bit RISC-V MCU 32-bit RISC-V MCU

Single-Core @160MHz Single-Core @160MHz Single-Core @240MHz

ESP32 ESP32

C3 ESP32 - C3 C61 ESP32 - C61

Cost- 32-bit RISC-V MCU

32-bit RISC-V MCU

Single-Core @160MHz Single-Core @160MHz

Effective

ESP32 ESP32

C2 ESP32 - C2 H2 ESP32 - H2

32-bit RISC-V MCU 32-bit RISC-V MCU

Single-Core @120MHz Single-Core @96 MHz

RISC-V

Legacy Growth Emerging

11MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Key Products - M5Stack Development Kits

Espressif acquired a majority stake in M5Stack in 2024 Q2. 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. The M5Stack ecosystem is built around its flagship main

control module powered by Espressif’s all ESP32 series of chips highlighting the deep technical synergy between

the two companies.M5Stack’s product portfolio primarily comprises controllers and other hardware modules needed in IoT application

solutions and is mainly sold to the industrial education and developer markets.M5Stack maintains an impressive pace of launching one new hardware product

every week. A diversified product portfolio with over 300 SKUs helps developers

rapidly prototype end products accelerating the design-in process for Espressif's

products with end customers. This ultimately brings more business opportunities

for Espressif's chips and modules.Controller

AI Chatbot Kit Tab5 IoT DevKit PLC Controller Rotary Knob

…

Camera Sensor Module Kits

PoE Camera Weight I2C Unit Lora Unit Stamp-Fly

…

12MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Market

The market for wireless SoCs is truly diverse including applications for smart homes (e.g. smart lights air

conditioners ovens coffee machines etc.) consumer electronics (e.g. smart speakers drones etc.) industrial

automation (e.g. mechanical arms) smart agriculture (e.g. soil PH detector CO2 detector etc.) healthcare (e.g.monitoring devices for diabetes blood pressure etc.) energy control (solar energy devices EV chargers etc.) the

internet of vehicles (OBD devices dashboards etc.) and education (talking pens interactive whiteboards etc.).The smart home sector continues to be our main revenue contributor delivering growth in line with expectations. At

the same time IoT adoption across non-smart-home applications is accelerating with these segments growing at a

significantly faster pace and helping to support our gross margin.This year we have also seen new application scenarios for Espressif’s chips in areas such as electronic musical

instruments automated pig feeding systems and the apparel manufacturing industry. We believe that as

engineering communities share and apply their expertise across different industries our technologies are reaching

an ever-wider range of sectors.Consumer Industrial Smart

Smart Home

Electronics Automation Agriculture

Smart Ovens Smart Speakers Mechanical Arms Soil PH Detector

Energy Internet of

Healthcare Management Vehicles Education

Smart Solar Intelligent

Medical Detectors Talking Pens

Panels instrument panel

13MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Business Model

Business-to-Developer-to-Business (B2D2B)

Espressif has deployed the Business-to-Developer type of marketing not only because it has gained prominence in

recent years but also because it has proven to be more effective since the influence of developers on organizations

of all sizes has gained traction. In other words most developers are R&D employees in various companies and bring

forth business opportunities from the companies they work for.This way the developer ecosystem we have created at Espressif demonstrates how the value of networks can grow

exponentially:

* The more developers we attract as customers the more hardware and software solutions we generate.* The more successful hardware and software solutions we create the more our reputation spreads with positive

feedback from happy customers/developers.* The above-mentioned interaction between people in our network prompts the creation of more content which -in

turn- attracts more users/developers searching for new content.* Likewise other third-party development platforms join our ecosystem and bring in new developers as our

influence continues to grow.Having successfully applied the B2D2B model Espressif can now focus on R&D investments while maintaining a

small business team that supports a large number of customers directly. In fact most of our revenue is gained

through direct sales.

14MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Developer Community Content

Cumulative Number of GitHub

ESP32 Projects 101 K

BOOKS

Global Code Hosting Platform Social Networking Site Developer-written books

151300133000>200

ESP32 and ESP8266 ESP32 Group Members Covering more than 10

Projects languages

2016-122025-06

Daily Increase on GitHub

ESP32 Projects

Chinese Video Sharing Platform Global Video Sharing Platform 123

1.32 M 15.00 M 787 K

Most Viewed ESP32 Most Viewed ESP32 Most Viewed ESP32

Video (2025) Short (2025) Video (2025)

2016-122025-06

Always a on Social Media

Posted on 15 Aug 2025 Posted on 5 Aug 2025 Posted on 19 Aug 2025 Posted on 5 Aug 2025Bojíte se o své auto kolo nebo psa —— AI ESP32-Based DryAger/Homebrew Why This 1.8” Knob Board Is Perfect

Ano Pak se mrkněte na tenhle Heltec Fermenter for Remote Projects (With My Free UI!)

Capsule Sensor vybaveny ?ídícím

?ipem ESP32-S3 LoRa konektivitou a Overall this was a fun mix of

GNSS (GPS) lokaliza?ním systémem s electronics and basically playing with

Meshtastic podporou. food. The ESP32 made it super easy to

tie everything together: sensors

relays fans and remote control via ……

https://www.bilibili.com/video/ https://www.youtube.com/watch

BV1zp4RzgE9B v=8pHF0OAG2TI

https://x.com/laska_kit/status/

1956245312676483406 https://www.reddit.com/r/esp32/ Searched on 19 Aug 2025

comments/1mtksw9/

Posted on 14 Aug 2025 esp32based_dryagerhomebrew_fermen

ter/

MCP

Posted on 6 Aug 2025 基于ESP32的智能家居控制系统，通过I made a pokedex with esp32 and MCP协议实现?模型对?爱?箱和?家

vision model 设备的深度控制。 Posted on 13 Jun 2025Hey everyone ? 核?功能 How to make a DIY Pixel Art Camera for

I wanted to share a project I've been * ?家平台集成 Flipper Zero

working on: a Pokédex based on the * ?爱?箱设备控制 ESP32 CAM module can make gameboy-

ESP32 that can identify Pokémon. * TTS?本语?播报 styled pixel art photos right on your

The Problem I Wanted to Solve: * ?持40+款?爱?箱型号

Many existing Pokémon identification… ……MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Research and Development

R&D Investment

R&D investment is at the heart of Espressif Systems’ development. During the reporting period R&D cost CNY

268.24 million which marked a 22.66% increase compared with that of 2024. At the same time the R&D-to-sales

ratio was 21.54% in H1 2025.Espressif’s escalating R&D investment cost can be attributed to the increase in the number of R&D staff and their

corresponding compensation levels driven by the ongoing expansion of the team to support a growing portfolio of

major projects.Fiscal Year

CNY June 30 2025 June 30 2024 change (%)

R&D Expenses 268244538 218682370 22.66

R&D-to-sales ratio 21.54% 23.76%

Intellectual Property

317

We seek to protect our technologies through a combination of patents software Applied for

patents. We continue to submit new patent applications relating to our recent R&D 210

innovations. Granted

List of Intellectual Property Rights Applied and Granted

H1 2025 Cumulative number

Applied for Granted Applied for Granted

Invention patents 10 3 161 101

Utility model patents 3 3 39 33

Design patents 0 0 11 11

Software copyright 0 0 27 26

Others 5 4 79 39

Total 18 10 317 210N.B.: The number of patents that have been “applied for" does not include the rejected applications in China or the PCT patent applications not submitted to anyparticular country or any patent applications beyond the reporting period. The number of “granted" patents includes those with expired IP rights. The category of“others” includes overseas (non-Chinese) patent applications i.e. the PCT patent applications U.S. patent applications through the PCT route or the Paris Convention

route as well as patent applications in India.

16MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

R&D Employees

We are proud of our talented diverse and multicultural workforce. By June 30 2025 across our nine branches

worldwide we had employed 840 people more than 70% of whom are in engineering roles. Meanwhile we have

expanded our business beyond Wi-Fi MCUs thus offering innovative solutions to wireless connectivity and

processing including AI RISC-V MCU Wi-Fi 6 Bluetooth LE Thread Zigbee and other IoT-related technologies.Since the research and development of software and hardware are inextricably intertwined we constantly invest in

software technology too. Hence we are currently focused on AIoT technologies including toolchains compilers

operating systems application frameworks AI algorithms Cloud products apps etc. Our aim is to make Espressif a

one-stop solution-provider offering anything relating to hardware software and the Cloud.Fiscal Year

June 30 2025 June 30 2024

R&D employees 589 519

R&D employees as a percentage of total employees 70.12% 71.29%

Total compensation of R&D employees (CNY in thousands) 206006 169820

Average half-year compensation of R&D employees (CNY in thousands) 361 339

R&D Expenses R&D Employees

28.2%75.0%76.1%77.4%

26.5%71.8%70.1%

24.4%

589

49021.5%

19.6%553

404484

440

337388

272268

2021 2022 2023 2024 H1 2025 2021 2022 2023 2024 H1 2025

R&D expenses (in million) R&D-to-sales ratio R&D employees R&D employees %

N.B.: Following the acquisition of M5Stack in 2024 M5Stack brought in its own production line and manufacturing staff leading to a decrease in the proportion of R&D

personnel.

17MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Ownership of Securities

Basic information of securities

Share types Ordinary share

Share capital 156702722 (as of June 30 2025)

Listing Shanghai Stock Exchange (SSE)

Ticker 688018.SH

Listing Date 2019-07-22

Shareholder Structure as of June 30 2025

Shareholder Share Numbers Percentage (%)

Espressif (Hong Kong) Investment Ltd. 62777599 40.06

Hong Kong Securities Clearing Company Limited 5182159 3.31

Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu 2354848 1.50

Private Equity Securities Investment Fund No.1

CITIC Securities Co. Ltd. – Harvest SSE STAR Market Chip Tradable 2234078 1.43

Open-ended Index Securities Investment Fund

Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu 1922822 1.23

Private Equity Securities Investment Fund No.3

Shinvest Holding Ltd. 1890000 1.21

Shanghai Letun Enterprise Management Partnership (Limited 1510450 0.96

Partnership)

Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu 1317579 0.84

Private Equity Securities Investment Fund No.2

Shenwan Hongyuan Securities Co. Ltd. 1299873 0.83

CMS – Oriental Alpha Advantage Industry Hybrid Initiated Securities 1217509 0.78

Top 10 shareholders 81706917 52.14

Espressif Systems (Shanghai) Co. Ltd. Repurchase Special 944702 0.60

Securities Account

Other public shareholders 74051103 47.26

Total of outstanding shares 156702722 100.00

18MANAGEMENT REPORT ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Risks and Uncertainties

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 and

others. Intense competition from current players as well as new entrants such as

Silicon Labs and Nordic 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

24.86% in H1 2025.

19CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Consolidated Financial

Statements

Consolidated Balance Sheet (unaudited)

CNY June 30 2025 December 31 2024

Assets

Current assets:

Cash and cash equivalents 846020176 673884162

Held for trading financial assets

Notes receivable 38296281 38605565

Accounts receivable net 386350913 318420157

Accounts receivable financing

Prepayments 22402853 15857596

Other receivables 13061791 19978007

Including: Interest receivable

Inventories 513598113 485620281

Other current assets 280527554 233129885

Total current assets 2100257680 1785495653

Non-current assets:

Debt investment 275680900 413542900

Investment in other equity assets 30967840 30967840

Other non-current financial assets 34221626 34221626

Fixed assets 524386126 93949828

Right-of-use assets 19639888 25169744

Intangible assets 28757827 30853579

Goodwill 74654024 74654024

Long-term deferred expenses 17841629 19452629

Deferred income tax assets 111293944 101157536

Other non-current assets 40000000

Total assets 3217701484 2649465358

20CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Consolidated Balance Sheet (unaudited)

CNY June 30 2025 December 31 2024

Liabilities & Shareholders’ Equity

Current liabilities:

Short-term loan 352649679 500333

Accounts payable 146061047 160741033

Contract liabilities 21356164 20877548

Payroll payable 86165340 129439567

Taxes payable 1025741 16321501

Other payable 16939654 12397576

Including: Interest payable

Non-current liabilities due within one year 7932209 11705721

Other current liabilities 987289 1156230

Total current liabilities 633117121 353139508

Non-current liabilities:

Lease liabilities 12877802 14802190

Provisions 655160 620582

Deferred income tax liabilities 108690073 101533858

Total liabilities 755340156 470096138

Owners’ equity (or shareholders' equity):

Share capital 156702722 112200431

Capital reserves 1266193209 1351379589

Less: Treasury stock 78118338 208684568

Other comprehensive income 22444605 25620966

Surplus reserves 76858747 76858747

Retained earnings 987108258 792599518

Total Espressif shareholders’ equity 2431189203 2149974683

Non-controlling interests 31172125 29394537

Total shareholders’ equity 2462361328 2179369221

Total liabilities and shareholders' equity 3217701484 2649465358

21CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Consolidated Income Statement (unaudited)

Three Months Ended Six Months Ended

CNY June 30 2025 June 30 2024 June 30 2025 June 30 2024

Revenue 687690927 533020855 1245540796 920212266

Cost of Revenue 366602694 297891612 682505046 522715482

Gross Profit 321088233 235129242 563035750 397496784

Taxes and surcharges 1589116 409396 3298890 866924

Selling expenses 20891691 16063290 37911612 28915851

General and administrative expenses 20014920 17125846 37868504 31997654

Research and development expenses 142052489 114836190 268244538 218682370

Financial expenses -5996833 1492903 -6651209 -408615

Including: Interest expenses 2052299 205800 3081212 443113

Interest income 5960944 3309886 10965268 7173410

Add: Other income 23421071 4948006 31368576 18164613

Investment income (mark"-" for loss) 3834033 5327726 8433933 11636081

Income from changes in fair value (mark"-" for loss) -71822

Credit impairment losses (mark"-" for loss) -350123 -50844 -350123 -50844

Assets impairment losses (mark"-" for loss) -1134405 43693 -1237829 -209761

Assets disposal income (mark"-" for loss) -14041 -506 -29598 -558

Operating Income 168293384 95397871 260548373 146982131

Add: Non-operating revenue 200 1589 330200 1589

Less: Non-operating expenses 21582 4673633 68606 4699729

Income before income taxes 168272002 90725827 260809967 142283991

Provision (benefit) for income taxes -326090 -8071760 -2229798 -10429078

Net Income 168598092 98797587 263039765 152713070

Net Income attributable to non-controlling interests 1040269 1070606 1777588 1070606

Net Income attributable to Espressif 167557823 97726982 261262177 151642464

Earnings per share

Basic 1.6868 1.2940

Diluted 1.6868 1.2940

N.B.: Due to the company's implementation of a capital reserve to equity conversion in 2025 the earnings per share for each reporting period have been recalculated

based on the adjusted share count.Three Months Ended Six Months Ended

CNY June 30 2025 June 30 2024 June 30 2025 June 30 2024

Net Income 168598092 98797587 263039765 152713070

Other comprehensive income (loss) after tax

Changes to the fair value of investment in other equity 9486000 9486000

instruments

Currency translation reserves -2128567 1279812 -3176361 -773016

Other comprehensive income (loss) -2128567 10765812 -3176361 8712984

Other comprehensive income (loss) attributable to

non-controlling interests

Comprehensive income 166469525 109563399 259863404 161426053

Comprehensive income attributable to non-controlling interests 1040269 1070606 1777588 1070606

Comprehensive income attributable to Espressif 165429256 108492793 258085816 160355448

22CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Consolidated Cash Flow Statement (unaudited)

Three Months Ended Six Months Ended

CNY June 30 2025 June 30 2024 June 30 2025 June 30 2024

Operating Activities

Cash from sales of merchandise and provision of services 715198826 539670869 1299783415 979986644

Tax refund 13185173 14348735 28015360 22039088

Other received cash related to operational activities -45501690 5459397 33464916 13066919

Subtotal of cash inflow from operational activities 682882310 559479001 1361263691 1015092651

Cash paid for merchandise and services 463960282 457075056 823406616 744342308

Cash paid to and for employees 102495783 80517004 299522061 235965098

Cash paid for taxes and surcharges 32383487 6081313 51323421 7382465

Other paid cash related to operational activities 44592320 29473800 72588769 53079614

Subtotal of cash outflow from operational activities 643431872 573147173 1246840866 1040769485

Net cash provided by operating activities 39450437 -13668172 114422825 -25676834

Investing activities

Cash arising from the disposal of investments 140000000 185297048 140000000 455877171

Cash arising from investment income 12967233 3450779 12967233 4235229

Net cash arising from the disposal of fixed assets intangible 7138 2210 14905 9664

assets and other long-term assets

Other received cash relating to investment activities 922050 1213000 1500100 1739000

Subtotal of cash inflow from investment activities 153896421 189963036 154482238 461861063

Cash paid for the purchase and construction of fixed assets 429684593 16924485 444170619 25200081

intangible assets and other long-term assets

Cash paid for investments 102175231 222175231

Net cash paid for acquisition of subsidiaries and other

business units

Other paid cash relating to investment activities 900000 600000 1200000 1600000

Subtotal of cash outflow from investment activities 430584593 119699716 445370619 248975311

Net cash provided by investment activities -276688172 70263321 -290888381 212885752

Financing activities

Cash arising from the issuance of common stock 71091637 10949956 71091637 10949956

Including: Cash arising from subsidiaries absorbing

investments by minority shareholders

Cash received from borrowings 139750000 362350000

Subtotal of cash inflow from financing activities 210841637 10949956 433441637 10949956

Cash paid to repay debt 9900000 10400000

Cash paid for the distribution of dividends and profits or 68546838 78261241 69199894 78261241

payment of interests

Including: dividends and profits paid to minority

shareholders by subsidiaries

Other paid cash relating to financing activities 3533815 3716887 7321215 96838779

Subtotal of cash outflow from financing activities 81980653 81978128 86921110 175100020

Net cash provided by financing activities 128860984 -71028172 346520527 -164150064

Impact of fluctuation in exchange rates on cash and cash 1428324 -8037252 1021156 -13753458

equivalents

Net increase in cash and cash equivalents -106948426 -22470275 171076127 9305396

Add: Cash and cash equivalent at the commencement 945656860 506706793 667632307 474931121

of the period

Cash and cash equivalents at the end of the period 838708434 484236518 838708434 484236518

23CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Consolidated Cash Flow Statement

- Indirect Method (unaudited)

Three Months Ended Six Months Ended

CNY June 30 2025 June 30 2024 June 30 2025 June 30 2024

Additional information

Net income 168598092 98797587 263039765 152713070

Adjustments to cash provided by operating activities for

the purpose of reconciling net income:

Add: provision for the impairment of assets 1134405 -43693 1237829 209761

Credit impairment provision 350123 50844 350123 50844

Depreciation of fixed assets 6567933 5543158 12596104 10922933

Depreciation of right-of-use assets 3023758 3226029 6105592 6455716

Amortization of intangible assets 1047876 397071 2095752 591825

Amortization of long-term prepaid expenses 2592226 1589624 4754862 2942916

Losses on disposal of fixed assets intangible assets and 14041 506 29598 558

other long-term assets (mark"-" for income)

Losses on scrapping of fixed assets (mark"-" for income) 4656083 1631 4656083

Losses on fair value changes mark"-" for income 71822

Financial expenses mark"-" for income -313428 4623920 3703390 6450037

Losses on investment mark"-" for income -3834033 -5327726 -8433933 -11636081Decrease on deferred income tax assets mark”-" for 4878478 -14329853 -10066168 -29671227

increase

Increase on deferred income tax liabilities mark"-" for 3233445 13220613 7156215 23297884

decrease

Changes in operating assets and liabilities:

Decrease in inventories mark"-" for increase -42601732 -68083650 -29798410 -109637148

Decrease in operational receivables mark"-" for -59874969 -151075340 -88776390 -141299427

increase

Increase in operational payables mark"-" for -58847115 84085072 -68363642 42944232

decrease

Others 13481337 8929762 18790505 15331190

Net cash flow provided by operating activities 39450437 -13668172 114422825 -25676834

24CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

Consolidated Statement of Changes in Equity

Equity attributable to Espresssif

Less: Other Total Non-

Share Capital Treasury comprehensive Surplus Retained Espressif controlling Total

CNY capital reserves stock income reserves earnings Equity Interests equity

Balance as of

December 31 80789724 1358508382 146969563 24067306 55460195 541144184 1913000228 1913000228

2023

Comprehensive

income 8712984 151642464 160355448 1070606 161426053

Capital increase 31398781 -14689138 -22495821 39205464 39205464

Repurchase 88774989 -88774989 -88774989

Stock-based

compensation -12924318 -12924318 -12924318

Surplus reserves

Subsidiary

Acquisition -11791200 11791200 28985002 28985002

Dividends -78261241 -78261241 -78261241

Balance as of

June 30 2024 112188505 1330894926 213248731 20989090 55460195 626316607 1932600591 30055607 1962656198

Equity attributable to Espresssif

Less: Other Total Non-

Share Capital Treasury comprehensive Surplus Retained Espressif controlling Total

CNY capital reserves stock income reserves earnings Equity Interests equity

Balance as of

December 31 112200431 1351379589 208684568 25620966 76858747 792599518 2149974683 29394537 2179369221

2024

Comprehensive

income -3176361 261262177 258085816 1777588 259863404

Capital increase 44502291 -67134906 -130566230.03 107933615 107933615

Repurchase

Stock-based

compensation -18051473 -18051473 -18051473

Surplus reserves

Subsidiary

Acquisition

Dividends -66753437 -66753437 -66753437

Balance as of

June 30 2025 156702722 1266193209 78118338 22444605 76858747 987108258 2431189203 31172125 2462361328

25FURTHER INFORMATION ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR 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 August 29 2025

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 Deputy General Manager

Wang Jue Shao Jingbo

Deputy General Manager Financial Director

Teo Teck Leong

Shareholder-elected

Chen Myn

Independent Director

Lee Kian Soon

Independent Director

Leong Foo Leng SPRESE SIF

Independent Director

Declaration

Forward-looking Statements SYS

This report contains forward-looking statements and/or assessments about the business TEM

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.

26FURTHER INFORMATION ESPRESSIF SYSTEMS 2025 Q2 & HALF-YEAR REPORT

List of abbreviations

AI Artificial Intelligence

AIoT Artificial Intelligence and Internet of Things

Bluetooth LE Bluetooth Low Energy

CEO Chief Executive Officer

EBITDA Earnings Before Interest Taxes Depreciation and Amortization

Espressif ESPRESSIF SYSTEMS (SHANGHAI) CO. LTD.GM Gross Margin

HMI Human-Machine Interaction

IC Integrated Circuit

IoT Internet of Things

LLM Large Language Model

MCU Microcontroller Unit

OBD On-Board Diagnostics

R&D Research and Development

RF Radio Frequency

RISC-V Reduced Instruction Set Computer-V

ROE Return on Earnings

SG&A Selling General and Administrative

SH Shanghai

SoCs System on Chips

YoY Year-on-Year

27Investor Relations Social Media

ir@espressif.com twitter.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

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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