乐鑫科技:EspressifSystemsQ12026

ESPRESSIF SYSTEMSCONTENTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Contents

About Espressif 03 Management Report （Continued）

Business Model 15

Developer Community Content 16

Core Competitiveness 05 Ownership of Securities 17

Risks and Uncertainties 18

Business Highlights 06 Consolidated Financial Statements 19

(Unaudited)

Key Financial Data 06

Consolidated Balance Sheet 19

Key Financial Indicators 06

Consolidated Income Statement 21

Financial Analysis 07

Consolidated Cash Flow Statement 22

Management Report 08

Further Information 24

Business Strategy 08

Terms and Conditions of the Report 24

Key Products - IoT Chips 09

List of abbreviations 25

Key Products - Chip Matrix 10

Product Market Tenure 11

Key Products - M5Stack DevKits 12

Edge AI Strategy 13ABOUT ESPRESSIF ESPRESSIF SYSTEMS Q1 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 200+ Patents 10000+ 3 Million+

Global IoT Chip In Wi-Fi MCU In AIoT Satisfied Active Ecosystem

Shipment Market Technology Customers Developers

(Cumulative) Worldwide

970%9153335%

R&D R&D Employees Employee Female

Centers Employees Nationalities Employees

3ABOUT ESPRESSIF ESPRESSIF SYSTEMS Q1 2026 REPORT

Build Smart with ESP32

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-SR ESP-WHO ESP-DLSpeech Recognition Image Recognition Deep Learning

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)

IEEE 802.15.4

High-Speed Data Transmission

160 MHz Channel Bandwidth｜1024-QAM｜2x2 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

4CORE COMPETITIVENESS ESPRESSIF SYSTEMS Q1 2026 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

2019-072026-03

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.

2019-072026-03

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.

5BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Business Highlights

Key Financial Data

Three Months Ended Fiscal Year

CNY March 31 2026 March 31 2025 2025

Consolidated Statement of Income Data

Revenue 647971432 557849869 2565275432

Gross profit 314322323 241947517 1196087930

Selling expenses 23147827 17019921 81799952

General and administrative expenses 21736889 17853584 88725443

Research and development expenses 154485482 126192049 603427213

Net income 136045431 94441673 499809218

Net income attributable to Espressif 135642156 93704355 497840142

Earnings per share:

Basic 0.8160 0.6088 3.1520

Diluted 0.8160 0.6088 3.1358

Consolidated Cash Flow Data

Net cash provided by operating activities 3417302 74972387 522622032

Non-GAAP Adjustment

Stock-based compensation 6526170 5309168 43878803

Non-GAAP net income attributable to Espressif 142168326 99013522 541718945

March 31 2026 December 31 2025

Consolidated Balance Sheet Data

Working capital 3542304356 3518352994

Total assets 5041543851 5047755518

Long-term obligations 151064525 141345125

Total shareholders’ equity 4527483104 4489877928

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 Fiscal Year

March 31 2026 March 31 2025 2025

Gross margin 48.51% 43.37% 46.63%

R&D-to-sales ratio 23.84% 22.62% 23.52%

EBITDA margin 24.19% 18.98% 22.41%

Net income margin 21.00% 16.93% 19.48%

Weighted ROE 3.01% 4.26% 17.33%

Number of Espressif employees 915 803 898

6BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Financial Analysis

Revenue & Margin: Q1 revenue reached CNY 647.97 million (+16.16% YoY). Overall gross margin stood at 48.5%

underpinned by 49.6% for IoT chips and 47.7% for modules/kits. This robust margin reflects the industry’s shift

toward "functionality-driven" growth where our products serve as high-value development platforms.Profitability & Resilience: Structurally revenue growth experienced a temporary slowdown due to the

macroeconomic environment while the expense side reflected front-loaded investments for mid-to-long-term

growth resulting in a timing mismatch between the two. However benefiting from a steady expansion in gross

margin the company still achieved robust profit growth demonstrating significant operational resilience.Cash Flow & Inventory: Operating cash flow was lower than net profit due to a proactive inventory strategy. In

anticipation of potential price increases for key raw materials we increased strategic stockpiling to lock in costs and

ensure supply stability thereby enhancing delivery certainty for downstream customers. This deliberate mismatch is

expected to normalize as supply chain price volatility moderates.ROE & Capital: The decline in ROE was a result of capital dilution following the new share issuance completed in Q3

2025 rather than a shift in underlying profitability.

Revenue by Area Revenue by Sales Top-5 Customer

in Q1 2026 Mode in Q1 2026 Concentration Rate

29.0%28.1%

26.4%

23.9%22.3%

20.3%

67.0%72.0%

China's Mailand Rest of the World Direct Indirect 2021 2022 2023 2024 2025 2026Q1

Revenue by Product Category

Chips Modules & DevKits Others

Q1 2025 37.0% 62.1% 0.9%

Q1 2026 36.0% 63.3% 0.7%

Key Financial Indicators

Q1 2025 Q1 2026

48.5%

43.4%

24.2%22.6%23.8%

19.0%21.0%16.9%

6.3%6.9%4.3%3.0%

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

Margin sales sales Margin 7MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 20265 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

8MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 20265 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 6 (LE)

Bluetooth Classic (BR/EDR) 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 Bluetooth 6 (LE)

Tri-Band Wi-Fi 6E Bluetooth Classic (BR/EDR)

Connectivity 2×2 MU-MIMO Thread

Dual-Band Wi-Fi 6 Zigbee

Wi-Fi 4

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 FPU | Instruction Set Extensions

32-bit Multiple-Core Multimedia

ISP | H.264 Encoder | JPEG Codec

Technical Breadth In progress

Technical DepthMANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

Key Products - Chip Matrix

AI AI AI

ESP 32 ESP32 ESP32 ESP3232 ESP S3 ESP32 - S3 P4 ESP32 - P4 S3 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

10MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

Product Market Tenure

Annual Revenue Trend Legacy Growth Emerging Sampling

ESP32-S31

ESP32-E22

ESP32-H21

ESP32-H4

ESP32-P4 2 YEARS

ESP32-H2 4 YEARS

ESP32-C61 2 YEARS

ESP32-C5 2 YEARS

ESP32-C6 4 YEARS

ESP32-C2 5 YEARS

ESP32-C3 6 YEARS

ESP32-S3 6 YEARS

ESP32-S2 7 YEARS

ESP32 (Original) 11 YEARS (SINCE 2016)

ESP8266 13 YEARS (SINCE 2014)

20142015201620172018201920202021202220232024202520262027

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

Products within the IoT ecosystem are capable of sustaining revenue contributions over extended periods.Unlike consumer mobile devices IoT chips typically follow a "Slow Burn High Retention" model where reliability is

the primary purchasing driver.

11MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 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.Beyond its hardware prowess M5Stack has cultivated an exceptionally vibrant global developer community

commanding high brand mindshare within the ecosystem. With an impressive pace of launching one new hardware

product every week and a diversified portfolio of over 400 SKUs 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.M5Stack’s modular and standardized development kits significantly lower the barrier to entry for

students educators and creative developers. Its plug-and-play design makes embedded systems and

IoT development more accessible supporting classroom adoption STEM programs and hands-on

experimentation.Developers who gain experience with Espressif-based platforms during their education or prototyping phase are

more likely to continue using the same ecosystem in future professional or commercial projects.

12MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

Edge AI Strategy

In recent years Espressif has expanded its software capabilities around AI-enabled IoT applications. The Company

has released multiple on-device AI frameworks including ESP-WHO (image recognition) ESP-DL (deep learning

inference) and ESP-SR (speech recognition) as well as cloud-side tools such as the ESP Private Agents Platform to

support large-model-based applications and device–cloud collaboration. These components enable customers to

deploy perception interaction and autonomous operation features on existing device categories with limited

additional system complexity.On the hardware side the Company observes that the IoT industry is transitioning from a connectivity-driven phase

to a capability-driven phase. Historically device value was primarily determined by the number of connected nodes.As local computing performance improves devices increasingly undertake recognition decision-making and

continuous operation tasks. As a result value is shifting toward the functional richness achievable per node rather

than connectivity scale alone.In response to this shift the Company has identified edge-side capability enhancement as a long-term

development direction. While maintaining advantages in cost efficiency and power consumption next-generation

products will progressively improve local execution capability and supporting software environments. This allows

customers to expand functionality within existing device form factors without materially increasing system

complexity.The Company expects the adoption of edge intelligence to occur gradually with commercialization driven by

increasing feature penetration rather than a single product replacement cycle. Accordingly future business growth

is expected to expand from shipment volume alone toward value growth per device node. As devices undertake

more tasks over their lifecycle customers are placing greater emphasis on platform stability compatibility and long-

term support.

13MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

AI Solutions

AI COMPUTING EDGE AI

Large Language Models (LLM) ESP-WHO Image Recognition Framework

Espressif enables edge devices to access advanced AI A vision framework supporting face detection recognition

capabilities through secure low-latency connections to liveness and gestures. It delivers real-time edge inference

cloud-based large language models. for smart cameras and access control systems.ESP Private Agents Platform ESP-SR Speech Recognition Framework

The ESP Private Agents Platform enables IoT device A low-power speech solution integrating Acoustic Front-

makers to deploy AI agents entirely within their own AWS End (AFE) wake word and command recognition. Enables

environments. With a ready-to-use runtime flexible LLM fast accurate and ready-to-use voice interaction for edge

support and a unified dashboard it simplifies agent devices.development and lifecycle management for secure

scalable IoT products.ESP-DL Deep-Learning Library for AIoT

A lightweight neural network inference framework

optimized for Espressif ESP-series SoCs. It enables

efficient on-device AI by providing APIs to load debug

and run AI models with low memory and high

performance.

14MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

Business Model

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

The market for IoT is truly diverse encompassing applications for smart homes consumer electronics industrial

automation tools and equipment smart agriculture healthcare energy control and the Internet of Vehicles. Given

this high degree of market fragmentation the company’s B2D2B business model provides significant competitive

advantages.

1. Foundation for Sustained Demand

The Developer Platform Model operates on a fundamental multiplier: total demand is driven by the volume of design-

in projects and the longevity of their lifecycles. By consistently increasing the number of active design projects the

platform establishes a long-term foundation for recurring demand. Each project integration represents a multi-year

commitment to the platform’s technology ensuring a predictable and stable growth trajectory.

2. Market Penetration and Diversification

The scaling of design projects naturally leads to increased industry fragmentation and a broader range of application

scenarios. As the platform expands its technology penetrates a diverse array of sectors moving beyond specialized

markets into a wide variety of commercial and industrial uses. This horizontal expansion allows the platform to

capture value across multiple independent growth drivers simultaneously.

3. Structural Resilience Against Volatility

This diversified footprint serves as a strategic hedge against systemic risk. By distributing the platform’s presence

across a vast range of industries overall performance becomes increasingly decoupled from the cyclical volatility of

any single sector. Consequently the business achieves greater structural resilience maintaining steady performance

even when specific market segments face temporary downturns.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

Enth(DuIsYia st)

Development Board

(DevKit) Photovoltaic Inverter

Smart Agriculture 3D Printer Smart Internet of Vehicles

Healthcare

15MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

Developer Community Content

Cumulative Number of

GitHub ESP32 Projects 150 K

BOOKS

Global Code Hosting Platform Social Networking Site Developer-written books

204900176386>300

ESP32 and ESP8266 ESP32 Group Members Covering more than 10

Projects languages

2016/3/312018/9/302021/3/312023/9/302026/3/31

Daily Increase on GitHub

ESP32 Projects

Chinese Video Sharing Platform Global Video Sharing Platform 222

239 K 2.10 M 357 K

Most Viewed ESP32 Most Viewed ESP32 Most Viewed ESP32

Video (2026) Short (2026) Video (2026)

2016Q4 2026Q1

Always a on Social Media

Posted on 4 Apr 2026 Posted on 11 Apr 2026 Posted on 13 Apr 2026 Posted on 12 Apr 2026

【2026祖娅纳惜??会】蓝??乐吧唧 I made a Tamagotchi for my AI agent This is how the smoking works

开箱视频 so I know if it’s stuck generally:

液晶ドールアイが出来た！意外と違和

感なく楽しめそう。 1、本来想做成伪开箱视频，但是想加? I’ve been running AI agents locally with The pellets are loaded into a……いろんなデザインを試したいなぁ～　视频的东?实在是太多了所以后?就跑题 OpenClaw and wanted a simple way to

視線移動も出来ます！了…… see what they’re doing without

丸形液晶モジュール+ESP32の構成で constantly checking logs.す。

So I built a small desk device using a

XIAO ESP32-C3 that visualizes……

https://x.com/ric_orna/status/

2043344067262632184

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

BV1yqQABLEQ7

https://x.com/DancingDoll_rz/status/

2040268534673244172 https://www.reddit.com/r/esp32/ Searched on 14 Apr 2026

comments/1sk90we/

Posted on 9 Apr 2026 i_made_a_tamagotchi_for_my_ai_agent

_so_i_know_if/

EleksCava 固件 v2.0.7 更新 !

Posted on 11 Mar 2026 这次是?个?版本，?乎重做了所有界?"

Build The Smallest ESP32 Brushless # 两种全新?情布局 Posted on 6 Mar 2026

Rocket Drone | ESP-BLAST - BlockClock 模式：全?底?字显示，复古电?屏?格This is the ESP-BLAST - a DIY ESP32 - Ticker 模式：左侧代码?板 + 右侧

Mini Rocket Drone you can build for 价格涨跌

crazy fast first-person-view flights - 加密货币和股票都?持，配置??exceeding 100 km/h. 键切换

……MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 REPORT

Ownership of Securities

Basic information of securities

Share types Ordinary share

Share capital 167143010 (as of March 31 2026)

Listing Shanghai Stock Exchange (SSE)

Ticker 688018.SH

Listing Date 2019-07-22

Shareholder Structure as of March 31 2026

Shareholder Share Numbers Percentage (%)

Espressif (Hong Kong) Investment Ltd. 61210572 36.62

Hong Kong Securities Clearing Company Limited 5275688 3.16

NSSF Portfolio 114 3004979 1.80

Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu 2191013 1.31

Private Equity Securities Investment Fund No.1

CITIC Securities Co. Ltd. – Harvest SSE STAR Market Chip Tradable 2104037 1.26

Open-ended Index Securities Investment Fund

Wisdomshire Asset Management Co. Ltd. - Wisdomshire Youfu 2028155 1.21

Private Equity Securities Investment Fund No.3

Shinvest Holding Ltd. 1866500 1.12

China Universal AM – China Life – Participating Insurance – 1496273 0.90

Balanced Equity Portfolio (Single Asset Management Plan)

Shanghai Letun Enterprise Management Partnership (Limited 1462688 0.88

Partnership)

CZBank-Bosera Select Quant Multi-Factor Equity Fund 1449911 0.87

Top 10 shareholders 82089816 49.13

Espressif Systems (Shanghai) Co. Ltd. Repurchase Special 1440174 0.86

Securities Account

Other public shareholders 83613020 50.01

Total of outstanding shares 167143010 100.00

17MANAGEMENT REPORT ESPRESSIF SYSTEMS Q1 2026 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 TI

Silicon Labs Nordic 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

20.3% in Q1 2026.

18CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Consolidated Financial

Statements

Consolidated Balance Sheet (unaudited)

CNY March 31 2026 December 31 2025

Assets

Current assets:

Cash and cash equivalents 1061728185 1024792840

Held for trading financial assets 703304644 876009608

Notes receivable 54255028 65534507

Accounts receivable net 328889686 298106030

Accounts receivable financing

Prepayments 16533470 19427100

Other receivables 9648898 11439963

Including: Interest receivable

Inventories 740194524 627637513

Other current assets 990746143 1011937898

Total current assets 3905300577 3934885459

Non-current assets:

Debt investment 211310600 210430400

Investment in other equity assets 42036070 42036070

Other non-current financial assets 41937416 41937416

Fixed assets 568700215 556813866

Right-of-use assets 34215240 29091243

Intangible assets 25614200 26662076

Goodwill 74654024 74654024

Long-term deferred expenses 21405594 22753695

Deferred income tax assets 116369916 108491271

Other non-current assets

Total assets 5041543851 5047755518

19CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Consolidated Balance Sheet (unaudited)

CNY March 31 2026 December 31 2025

Liabilities & Shareholders’ Equity

Current liabilities:

Short-term loan

Accounts payable 197451769 187528762

Contract liabilities 33952016 23381055

Payroll payable 68134418 157619024

Taxes payable 5337004 2581791

Other payable 48356548 37303747

Including: Interest payable

Non-current liabilities due within one year 7780297 6944668

Other current liabilities 1984169 1173418

Total current liabilities 362996222 416532465

Non-current liabilities:

Lease liabilities 27861631 23701708

Provisions 624792 636582

Deferred income tax liabilities 122578103 117006835

Total liabilities 514060747 557877590

Owners’ equity (or shareholders' equity):

Share capital 167143010 167143010

Capital reserves 3047112218 3040623359

Less: Treasury stock 160168823 67433448

Other comprehensive income 5442685 17636423

Surplus reserves 123024049 123024049

Retained earnings 1313163078 1177520921

Total Espressif shareholders’ equity 4495716216 4458514314

Non-controlling interests 31766888 31363613

Total shareholders’ equity 4527483104 4489877928

Total liabilities and shareholders' equity 5041543851 5047755518

20CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Consolidated Income Statement (unaudited)

Three Months Ended

CNY March 31 2026 March 31 2025

Revenue 647971432 557849869

Cost of Revenue 333649109 315902352

Gross Profit 314322323 241947517

Taxes and surcharges 2159062 1709774

Selling expenses 23147827 17019921

General and administrative expenses 21736889 17853584

Research and development expenses 154485482 126192049

Financial expenses -736725 -654376

Including: Interest expenses 270263 1028913

Interest income 5486153 5004324

Add: Other income 9732851 7947506

Investment income (mark"-" for loss) 7998830 4599900

Income from changes in fair value (mark"-" for loss) 1813119

Credit impairment losses (mark"-" for loss) 33916.56

Assets impairment losses (mark"-" for loss) -669179 -103424

Assets disposal income (mark"-" for loss) 3770 -15558

Operating Income 132443095 92254989

Add: Non-operating revenue 2120470 330000

Less: Non-operating expenses 40091 47024

Income before income taxes 134523474 92537965

Provision (benefit) for income taxes -1521957 -1903708

Net Income 136045431 94441673

Net Income attributable to non-controlling interests 403275 737319

Net Income attributable to Espressif 135642156 93704355

Earnings per share

Basic 0.8160 0.6088

Diluted 0.8160 0.6088

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

CNY March 31 2026 March 31 2025

Net Income 136045431 94441673

Other comprehensive income (loss) after tax

Changes to the fair value of investment in other equity instruments

Currency translation reserves -12193738 -1047794

Other comprehensive income (loss) -12193738 -1047794

Other comprehensive income (loss) attributable to

non-controlling interests

Comprehensive income 123851693 93393879

Comprehensive income attributable to non-controlling interests 403275 737319

Comprehensive income attributable to Espressif 123448418 92656560

21CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Consolidated Cash Flow Statement (unaudited)

Three Months Ended

CNY March 31 2026 March 31 2025

Operating Activities

Cash from sales of merchandise and provision of services 703424011 584584589

Tax refund 46388179 14830187

Other received cash related to operational activities 42746902 78966606

Subtotal of cash inflow from operational activities 792559092 678381381

Cash paid for merchandise and services 485706024 359446334

Cash paid to and for employees 236975117 197026278

Cash paid for taxes and surcharges 8763506 18939933

Other paid cash related to operational activities 57697142 27996449

Subtotal of cash outflow from operational activities 789141789 603408994

Net cash provided by operating activities 3417302 74972387

Investing activities

Cash arising from the disposal of investments 890534313

Cash arising from investment income 900000

Net cash arising from the disposal of fixed assets intangible assets and other 15770 7767

long-term assets

Other received cash relating to investment activities 1119053 578050

Subtotal of cash inflow from investment activities 892569136 585817

Cash paid for the purchase and construction of fixed assets intangible assets and 32191289 14486027

other long-term assets

Cash paid for investments 714000000

Net cash paid for acquisition of subsidiaries and other business units

Other paid cash relating to investment activities 300000

Subtotal of cash outflow from investment activities 746191289 14786027

Net cash provided by investment activities 146377847 -14200210

Financing activities

Cash arising from the issuance of common stock 89493

Including: Cash arising from subsidiaries absorbing investments by minority

shareholders

Cash received from borrowings 222600000

Subtotal of cash inflow from financing activities 89493 222600000

Cash paid to repay debt 500000

Cash paid for the distribution of dividends and profits or payment of interests 653056

Including: dividends and profits paid to minority shareholders by subsidiaries

Other paid cash relating to financing activities 95895057 3787400

Subtotal of cash outflow from financing activities 95895057 4940456

Net cash provided by financing activities -95805564 217659544

Impact of fluctuation in exchange rates on cash and cash equivalents -18555188 -407168

Net increase in cash and cash equivalents 35434398 278024554

Add: Cash and cash equivalent at the commencement 1018023771 667632307

of the period

Cash and cash equivalents at the end of the period 1053458169 945656860

22CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS Q1 2026 REPORT

Consolidated Cash Flow Statement

- Indirect Method (unaudited)

Three Months Ended

CNY March 31 2026 March 31 2025

Additional information

Net income 136045431 94441673

Adjustments to cash provided by operating activities for the purpose of

reconciling net income:

Add: provision for the impairment of assets 669179 103424

Credit impairment provision -33917

Depreciation of fixed assets 15965429 6028171

Depreciation of right-of-use assets 2097102 3081834

Amortization of intangible assets 1047876 1047876

Amortization of long-term prepaid expenses 2832006 2162637

Losses on disposal of fixed assets intangible assets and other long- -3770 15558

term assets (mark"-" for income)

Losses on scrapping of fixed assets (mark"-" for income) 6642 1631

Losses on fair value changes（mark"-" for income） -1813119

Financial expenses（mark"-" for income） 4324405 4016817

Losses on investment（mark"-" for income） -7998830 -4599900Decrease on deferred income tax assets（mark”-" for increase） -7913127 -14944646

Increase on deferred income tax liabilities（mark"-" for decrease） 5571268 3922770

Changes in operating assets and liabilities:

Decrease in inventories（mark"-" for increase） -116334614 12803322

Decrease in operational receivables（mark"-" for increase） 16812834 -28901421

Increase in operational payables（mark"-" for decrease） -54383664 -9516527

Others 6526170 5309168

Net cash flow provided by operating activities 3417302 74972387

23FURTHER INFORMATION ESPRESSIF SYSTEMS Q1 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 20 April 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 Director 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 SPRESE SIF

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.

24FURTHER INFORMATION ESPRESSIF SYSTEMS Q1 2026 REPORT

List of abbreviations

2B to Business

2D to Developer

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.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

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

25Investor 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.

行情