Contents

Message from the CEO 03

About Espressif 07

Facts About Espressif 07

Key Technologies 08

Core Competitiveness 09

Business Highlights 10

Key Financial Data (Unaudited) 10

Key Financial Indicators (Unaudited) 10

Financial Analysis 11

Management Report 13

Industry Overview 13

Product Positioning 15

Key Products - Chip Matrix 16

Product Market Tenure 17

Key Products - M5Stack Development Kits 18

B2D2B Business Model 19

Management Report (Continued)

Developer-Centric Platform Strategy 20

Developer Community Content 21

Research and Development 22

Ownership of Securities 24

Risks and Uncertainties 25

Consolidated Financial Statements 26

(Unaudited)

Consolidated Balance Sheet 26

Consolidated Income Statement 28

Consolidated Cash Flow Statement 29

Consolidated Cash Flow Statement - Indirect Method 26

Consolidated Statement of Changes in Equity 31

Further Information 32

Terms and Conditions of the Report 32

List of abbreviations 33

Message from the CEO


"We are building more than chips we are building a developer driven platform for the AI era."

Teo Swee Ann Espressif's Founder & CEO

Espressif continued to deliver steady growth in the first half of 2026. The Company generated revenue of RMB 1.48 billion, up 18.9% year on year. Gross margin improved by 4.1 percentage points to 49.3% , while net profit attributable to shareholders increased 27.9% to RMB 334 million. Growth momentum strengthened during the period, with second-quarter revenue exceeding RMB 800 million for the first time and gross margin reaching 50.0% , reflecting continued improvement in business quality.

We believe sustained and effective R&D investment is the foundation for product differentiation and long-term profitability. In the first half of 2026, R&D investment reached RMB 330 million, representing 22.3% of revenue, with a continued focus on core technologies, software platforms and new product development. We allocate resources based on product execution, customer adoption and long-term value creation, converting our technical capabilities into more competitive products and stronger business performance.

Our first-half performance was not driven by a single product cycle, but by a broader product portfolio, a growing developer ecosystem and the supply resilience we have built over time. Together, these factors supported revenue growth, profitability improvement and the continued expansion of the markets we serve.

Broadening our addressable market

• The ESP32-P4 is an important step beyond our traditional communications portfolio. It is a high-performance microcontroller without an integrated radio, designed for applications requiring compute performance, human-machine interfaces and edge processing. In many customer designs, it can operate alongside one of our connectivity products. This allows us to address a larger share of the system while preserving the modularity customers need.

• We also continued to expand our low-power wireless portfolio. The ESP32-H4 and ESP32-H21 support Bluetooth Low Energy and IEEE 802.15.4, providing a foundation for Zigbee, Thread and Matter applications. The H4 is designed for more demanding battery-powered products requiring dual-core processing and advanced Bluetooth capabilities. The H21 extends the portfolio toward cost- and power-sensitive sensing and control nodes. This portfolio matters because connected homes, buildings and industrial systems increasingly use several communications protocols. Low-power mesh devices frequently operate alongside Wi-Fi gateways and bridges. Supporting these applications through a common development framework can reduce integration effort for customers, shorten development cycles and increase the number of applications that Espressif can serve.

• The ESP32-S31 began sampling with customers in May and officially entered mass production in July. The S31 combines our self-developed dual-core RISC-V architecture with SIMD acceleration, multi-protocol connectivity and interfaces for audio, vision and human-machine interaction. It is designed to support embedded AI and signal-processing workloads, including intelligent audio and basic computer-vision applications.

• To address the growing demand for high-performance AI computing at the edge, we are also actively advancing the development of our next-generation AI edge chip based on our self-developed RISC-V IP. Expected to be manufactured using an advanced 12nm process technology, this chip is designed to significantly improve energy efficiency and local AI inference capabilities, while enabling more complex algorithm deployment and exceptional power efficiency. This development will further strengthen Espressif's architectural independence and competitive position in edge AI.

The significance of these additions is not simply that we are releasing more chips. They expand our addressable market from connectivity-focused microcontrollers into general-purpose processing, higher-performance wireless connectivity and edge intelligence. They also give existing customers more reasons to use Espressif products across multiple functions within the same system.

The Long-Term Value of Our Ecosystem

For more than a decade, we have invested not only in silicon, but also in the broader infrastructure surrounding our chips, including ESP-IDF, open-source tools, technical documentation, reference designs and our developer community. Many of these investments began long before their financial returns became apparent.

This ecosystem reduces the practical cost of adopting Espressif products. Engineers can leverage existing software, examples and community knowledge rather than starting each project from scratch. This enables customers to move more quickly from product evaluation to working designs and increases the likelihood that an initial design win evolves into a long-term customer relationship.

AI-assisted software development has the potential to further amplify the value of this advantage. Platforms with comprehensive, well-structured documentation and extensive open-source code are generally easier for both engineers and AI-assisted development tools to understand and utilize. As these tools continue to evolve, we expect our long-term investment in open software and documentation assets to create even greater value.

We do not view Al as a replacement for engineering expertise or customer support. AI-generated firmware still requires validation for security, reliability and performance. Our goal is to make Espressif one of the most accessible and developer-friendly platforms for building reliable embedded products, whether developers use our tools directly or leverage AI assistance.

We are also actively exploring new development paradigms in the Al era. Through initiatives such as ESP-Claw and ESP-Vision, as well as our support for emerging Al development technologies such as MCP, we aim to further lower the barriers between Al and physical devices, enabling developers worldwide to build intelligent applications for the real world at lower cost.

At the same time, our chips are becoming increasingly capable of running AI workloads locally. Edge processing can reduce latency, dependence on cloud connectivity, ongoing computing costs and the transmission of sensitive data outside the device. We believe that combining more capable edge computing with a high-productivity software ecosystem will further lower adoption barriers and expand the range of commercially viable applications.

Extending our engineering capability

The ESP32-E22 provides a further demonstration of the progress in our higher-performance communications portfolio. During the second quarter, it received Wi-Fi CERTIFIED 6E certification from the Wi-Fi Alliance. The E22 supports tri-band Wi-Fi 6E across 2.4 GHz, 5 GHz and 6 GHz,

2x2 MU-MIMO and channel bandwidth of up to 160 MHz, and is supported by an open-source Linux driver.

Certification is important because it independently validates standards compliance and interoperability. More broadly, developing a Wi-Fi 6E connectivity co-processor with this level of radio, digital and software complexity demonstrates the increasing scope of our internal R&D capability. This capability will support our continued development toward Wi-Fi 7, which remains an important part of our product roadmap. Our current objective is to reach Wi-Fi 7 capability by mid-2027.

Supply and working-capital discipline

We continue to plan for tight capacity in the parts of the semiconductor supply chain relevant to our products. We have therefore maintained additional inventory and supply coverage to reduce the risk of interruptions for customers.

This strategy carries a cost. It uses working capital, increases inventory exposure and can affect cash conversion if demand or product transitions differ from our expectations. We believe the resilience it provides is valuable, particularly because reliable supply can influence customer design decisions that last for several years. We will continue to balance that benefit against demand visibility, inventory ageing and capital efficiency.

Looking ahead

The first half demonstrated progress on the priorities that matter most to Espressif's long-term value: sustainable revenue growth, improving gross margin, continued R&D investment and expansion into adjacent markets where our technology and ecosystem provide a credible advantage.

Our portfolio now extends from ultra-low-power Bluetooth LE and IEEE 802.15.4 devices through general-purpose and AI-capable processing to higher-performance Wi-Fi connectivity. The commercial opportunity is larger as a result, but so is the execution challenge. We must convert new products into durable customer designs, manage operating expenses carefully and maintain disciplined use of working capital.

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 IoT Chip Shipment (Cumulative)


Global Leader

In Wi-Fi MCU Market


230+ Patents


In AloT Technology

10,000+


Satisfied Customers Worldwide

3 Million+

Active Ecosystem Developers

Developer Flywheel

Developer Growth

More developers join, learn, and build with Espressif solutions.

Ecosystem Expansion


The ecosystem grows with more partners, tools,and integrations,enabling greater possibilities.

Application Innovation

Developers create innovative applications and solutions across diverse use cases.

Enterprise Adoption

Key Technologies

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



Wi-Fi Sensing


HMI


Multimedia


Cloud & Matter


Security

Cloud & Ecosystem


ESP RAINMAKER®


ESP PRIVATE AGENTS

ESP INSI HTS

AI & IoT SDK


matter

ESP-CLAW Edge AI Agent Framework

ESP-WHO Computer Vision

ESP-VISION Low-Code Edge AI

ESP-DL Deep Learning

ESP-SR Speech Recognition

ESP-NN Neural Network Library

IoT

ESP-Brookesia AI-Powered UI Framework

ESP-GMF Audio&Video Processing


ESP-IoT-Solution Peripheral Integration

In-House

ESP-IDF

Official IoT OS

Compilers & Tool Chains

Cloud & Ecosystem

Third-Party


WA

WEBASSEMBLY






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

AI & IoT SDK

Operating System

Computing

Core

32-bit RISC-V

IC Design


FPU | Instruction Set Extensions


Multimedia ISP | H.264 Encoder | JPEG Codec

High-Speed Interfaces PCIe | DDR | USB

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.

ESP32 Google Trends


Espressif Google Trends


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

Key Financial Data (Unaudited)

Three Months Ended

Six Months Ended

CNY

Jun 30,2026

Jun 30,2025

Jun 30,2026

Jun 30,2025

Consolidated Statement of Income Data

Revenue

832,739,862

687,690,927

1,480,711,294

1,245,540,796

Gross profit

415,932,633

321,088,233

730,254,956

563,035,750

Selling expenses

24,787,914

20,891,691

47,935,740

37,911,612

General and administrative expenses

25,665,226

20,014,920

47,402,114

37,868,504

Research and development expenses

175,180,569

142,052,489

329,666,051

268,244,538

Net income

199,233,110

168,598,092

335,278,541

263,039,765

Net income attributable to Espressif

198,583,901

167,557,823

334,226,057

261,262,177

Earnings per share:

Basic

1.4314

1.2049

Diluted

1.4314

1.2049

Consolidated Cash Flow Data

Net cash provided by operating activities

69,029,210

39,450,437

72,446,512

114,422,825

Non-GAAP Adjustment

Stock-based compensation

21,540,785

13,481,337

28,066,954

18,790,505

Non-GAAP net income attributable to Espressif

220,124,685

181,039,160

362,293,011

280,052,682

Jun 30,2026

Dec 31,2025

Consolidated Balance Sheet Data

Working capital

3,737,844,947

3,518,352,994

Total assets

5,280,396,574

5,047,755,518

Long-term obligations

154,215,210

141,345,125

Total shareholders' equity

4,737,937,020

4,489,877,928

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

Six Months Ended

Jun 30,2026

Jun 30,2025

Jun 30,2026

Jun 30,2025

Gross margin

49.95%

46.69%

49.32%

45.20%

R&D-to-sales ratio

21.04%

20.66%

22.26%

21.54%

EBITDA margin

27.88%

26.69%

26.27%

23.24%

Net income margin

23.93%

24.52%

22.64%

21.12%

Weighted ROE

7.26%

11.30%

Number of Espressif employees

954

840

Financial Analysis

Revenue & Margin:

First-half revenue reached CNY 1.48 billion, representing an 18.9% YoY increase, with second-quarter revenue growth exceeding 20%.

Although global smart home demand moderated to single-digit growth amid a challenging macroeconomic environment and ongoing geopolitical uncertainties, Espressif continued to benefit from the diversification of its application portfolio. Non-smart home segments—including industrial automation, smart agriculture, energy management, and AI-driven developer and innovation activities—continued to deliver solid growth.

Supported by the Company's strong developer ecosystem, broad customer base, and recognized brand position, Espressif continued to demonstrate pricing power in the market. Together with ongoing product mix optimization, these factors contributed to an overall gross margin of 49.3% , remaining at a high level.

Revenue by Area:

• China's Mainland revenue saw a 31.0% QoQ increase and a 15.9% YoY growth for the second quarter, bringing the H1 cumulative YoY growth to 12.2%.

• Overseas revenue grew by 23.5% QoQ and 34.1% YoY in Q2, with an H1 cumulative YoY growth rate of 35.8%.

Revenue by Product Category:

• Chips: Revenue grew by 6.6% YoY, reflecting steady demand from the customer base that prefers direct chip-level design and in-house hardware development.

• Modules & Development Kits: Revenue grew by 26.8% 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 Area in H12026


Revenue by Sales Mode in H1 2026


Top-5 Customer Concentration Rate


Revenue by Product Category


Financial Analysis (Continued)

Profitability & Resilience: Net income attributable to shareholders reached CNY 334.23 million, representing a 27.9% 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 22.9% 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 214.20 million compared with the end of 2025, which was the primary reason why net cash generated from operating activities stood at CNY 72.45 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 Q3 2025, rather than a shift in underlying profitability.

Key Financial Indicators


Industry Overview

The rapid development of artificial intelligence (AI) technology is propelling the Internet of Things (IoT) industry into a new phase of growth. As generative AI, edge computing, wireless communications, and open-source software ecosystems continue to mature, the foundational logic driving smart terminal development is undergoing a profound shift. The focus of industry competition has gradually expanded from traditional device connectivity to computing power, intelligent interaction capabilities, and software ecosystem capabilities. The convergence of Al and IoT (AloT) is continuously spawning new application scenarios, while driving the smart terminal industry toward a more open and diversified development stage.

1. AI Drives Smart Terminals from "Connectivity" to "Intelligence"

Over the past decade, the development of the IoT industry primarily revolved around device networking, data collection, and remote control, where connectivity served as the most critical foundational capability for smart terminals. With the rapid evolution of large language models (LLMs), edge AI, and multimodal technologies, terminal devices are increasingly equipped with visual perception, voice interaction, local inference, and autonomous decision-making capabilities. Consequently, the industry's focus is shifting from "whether a device is connected" to "what tasks it can accomplish."

Concurrently, AI computing architectures are undergoing structural shifts. To satisfy requirements for real-time response, privacy protection, network bandwidth, and power consumption control, an increasing volume of AI inference is migrating from the cloud to the edge. According to IDC forecasts, the global edge computing market is expected to maintain double-digit growth over the coming years, with market size exceeding $380 billion by 2028. Gartner also notes that a vast amount of enterprise data will be generated and processed at the edge in the future, making edge computing an essential component of AI deployment. This trend will continuously drive the demand for edge computing platforms, high-performance MCUs, SoCs, and related software platforms.

Meanwhile, the global volume of smart devices continues to experience long-term growth. According to forecasts by TSR, annual shipments in the wireless connectivity chip market will exceed 15 billion units by 2032, with connected endpoints continuously expanding into industrial automation, energy management, smart agriculture, commercial equipment, robotics, and various emerging fields. The continuous enhancement of AI capabilities is enabling smart terminals to gradually evolve from simple "connected devices" into a new generation of intelligent devices capable of autonomous perception and smart interaction.

2. Shifting Drivers of Innovation: Developers Emerging as a Core Force

Beyond the continuous upgrading of terminal form factors, Al is fundamentally changing the innovation model of the smart hardware industry.

In the past, new product R&D relied heavily on large terminal manufacturers, characterized by longer R&D cycles and highly concentrated innovation directions. In recent years, however, the rapid proliferation of LLMs, open-source software, open-source hardware, and AI development tools has significantly lowered the barriers to smart hardware development. An increasing number of startups, academic and research institutions, individual developers, and open-source communities are actively participating in smart terminal innovation, resulting in a more decentralized, diversified, and rapidly iterative industry landscape.

According to GitHub's Octoverse report, AI has become one of the fastest-growing open-source technology domains globally, with the number of AI-related open-source projects and developers increasing rapidly. Simultaneously, novel products such as robotics, AI toys, intelligent companion devices, edge vision terminals, wearable devices, and smart commercial terminals are continually emerging. A vast majority of these innovative applications are prototyped and verified by developers first before gradually moving toward commercialization.

Industry Overview (Continued)

Moving forward, industry innovation will increasingly originate from global developers, startup teams, and open communities, rather than relying solely on a small number of enterprise giants. The strategic importance of development efficiency, software ecosystems, and innovative toolchains will continue to elevate.

3. Platform-Based Competition Becomes a Key AloT Trend

Alongside the rapid adoption of Al applications, industry competitive dynamics are evolving.

The traditional semiconductor industry competed primarily on chip performance, process nodes, cost efficiency, and supply chain capabilities. In contrast, the Al era introduces significantly higher software complexity. Developers today focus not only on hardware performance, but even more so on development tools, software frameworks, Al model support, operating systems, open-source ecosystems, and cross-platform development capabilities.

Software ecosystems, open-source collaboration, and developer toolchains have become critical factors influencing R&D efficiency. An increasing number of enterprises are leveraging open software platforms, unified development frameworks, and comprehensive toolsets to help developers shorten product development cycles and accelerate the commercial rollout of innovations.

At the same time, the application boundaries of Al terminals continue to expand. Extending beyond smart homes into robotics, industrial automation, smart energy, smart agriculture, healthcare, and commercial terminals, many emerging applications remain in a phase of rapid exploration with fluid market boundaries. This implies that future industry growth will stem not only from increased penetration in existing markets, but also from the continuous emergence of new applications and market demands.

In summary, artificial intelligence is pushing the smart terminal industry into a brand-new phase of development. The ongoing advancement of edge intelligence, multimodal interaction, wireless connectivity, open-source software, and developer ecosystems is collectively shifting AIoT competition from standalone hardware specs to platform- and ecosystem-centric strength. As AI continuously lowers the barriers to innovation, future smart terminal innovation will become increasingly vibrant and application scenarios will continue to expand, opening up long-term strategic opportunities for the entire industry.

From Connectivity to AI


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.

Key Products - Chip Matrix

Function Driven

ESP 32

2x HP Core @240 MHz

1x ULP Core @8 MHz

4




ESP32 - S2


1x Core @240 MHz

Connectivity Driven


ESP32 - S3

2x HP Core @240 MHz

1x ULP Core @17.5 MHz







ESP32 - S31


ESP32 - P4

2x HP Core @320 MHz

1x ULP Core @40 MHz


ESP32-C5

2x HP Core @400 MHz

1x LP Core @40 MHz

H.264 encoding

AI

1x HP Core @ 240MHz

1x LP Core @ 40MHz










1x Core @160 MHz


ESP 8266

2x Core @96 MHz



ESP32 - H4






1x HP Core @160 MHz

1x LP Core @20 MHz






ESP32 - E22



1x Core @96 MHz



1x Core @120 MHz



1x Core @160 MHz


2x Core @500 MHz

2x2 MIMO




1x Core @160 MHz



ESP32 - H21

1x Core @96 MHz


Growth



Legacy

Emerging / Sampling

N.B.: All products shown above are 32-bit MCU-based chips.


Wi-Fi4



Wi-Fi 6



Wi-Fi 6E

Bluetooth


Matter


Thread

Zigbee


Ultra-Low Power

Product Market Tenure


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.

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. The initiatives were highly successful, attracting a broader base of new developers to the M5Stack brand. 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.


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.

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


Behind Every Smart Devices is a Developer Developer-Centric Platform Strategy

CONNECTED DEVICE DEVELOPERS


DESCRIPTION

Build reliable, low-power connected devices for IoT applications, with a focus on wireless connectivity energy efficiency, and security.

TYPICAL FOCUS

Smart home, Matter, Thread sensors, wearables, industrial IoT

HIGH-PERFORMANCE CONNECTIVITY DEVELOPERS

Design products that require high bandwidth, low latency, and advanced wireless connectivity.

SMART INTERACTION DEVELOPERS


Video streaming, industrial gateways, XR, multimedia, networking

TYPICAL FOCUS

DESCRIPTION


DESCRIPTION

Create devices that interact naturally with people through displays, touch, voice, cameras, and multimodal interfaces.

TYPICAL FOCUS

AI toys, smart displays, HMI education, consumer electronics

EDGE AI DEVELOPERS


DESCRIPTION

Develop intelligent devices capable of running Al inference locally for vision, audio, robotics, and automation.

LINUX APPLICATION DEVELOPERS

TYPICAL FOCUS

Machine vision, robotics, Al cameras industrial Al, edge computing


DESCRIPTION

Python, ROS, OpenCV, edge computing, robotics, AI terminals

Build sophisticated embedded applications using Linux, leveraging modern software frameworks and open-source ecosystems.

TYPICAL FOCUS

AI-NATIVE DEVELOPERS


DESCRIPTION

Build hardware applications with Al as the primary development interface using natural language, Al coding assistants, and low-code workflows.

TYPICAL FOCUS

Vibe coding, MCP, AI IDEs, rapid 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. The growing adoption of on-device AI has also expanded the Company's engagement with Edge AI Developers, while increasing demand for higher bandwidth and lower latency has created 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 technology adoption, and support long-term business growth.

Developer Community Content @20260630


Global Code Hosting Platform


235,800

Social Networking Site


ESP32 and ESP8266 Projects

Developer-written books

196,359

ESP32 Group Members

>300

Covering more than 10 languages



Chinese Video Sharing Platform

Global Video Sharing Platform

1. 17M

Most Viewed ESP32 Video (2026)

1. 76M

Most Viewed ESP32 Short (2026)

903K

Most Viewed ESP32 Video (2026)

Cumulative Number of GitHub ESP32 Projects 179 K


Daily Increase on GitHub ESP32 Projects


2016Q4

2026Q2

Always a Hot Topic on Social Media


Posted on 13 Jul 2026

Researchers built a soft floating robot for indoor interaction.

It uses helium and flapping fins instead of propellers. The result is quiet, lightweight, and safe to touch. It can follow people, give reminders, and act as a study buddy.


https://x.com/clankrmedia/status/ 2076593164744376707


Posted on 7 Jul 2026

This ESP32 Sisyphus Sand Table Creates Endless Art [D.I.Y] (THE BUILD VIDEO)

I built this DIY Sand Table for under $160! In this video, I take you through the entire engineering process—from the initial 3D design and laser cutting to the final ESP32 firmware...



Posted on 2 Feb 2026

大一小白，从零硬啃机械臂！电机用的是一体式步进+驱动，走CAN总线，主控是 ESP32-S3


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

BV1G9Nw6kEZE/


Posted on 26 June 2026

Made a coffee journal gadget ("Espresso Post") that tracks ambient humidity/temp/pressure and nudges my grind

Got tired of re-dialing every time the weather changed and never knowing if it was the climate or just me being inconsistent, so I built a thing to track it.


https://www.reddit.com/r/esp32/

comments/1ufkm1o/

made_a_coffee_journal_gadget_espre


Posted on 9 Jul 2026

I Built a Tiny World Cup Live Score Gadget

I built a tiny DIY FIFA World Cup Live Score Gadget powered by an ESP32!

In this video, I'll show you how I built a compact ESP32-based World Cup live score tracker that displays live football scores, goal alerts, match statistics,...


https://www.youtube.com/watch?

v=vdqnaEQesAk


Posted on 24 May 2026

CNX Software Follow

May 24

ESP32-C5 board with 5.9 GHz WiFi 6 to monitor signals from traffic lights, public

https://www.cnx.cn/software/cnx-esp32-c5/

See more




Posted on 26 Jul 2026

谱めくりペダル（自作）できた...

今回は大幅に手を省くためにGeminiに助けてもらっちゃいました


https://x.com/tyuuuytrewq/status/ 2081183509989949858


Searched on 16 Jul 2026

78kMianxin-eep32

Unstar

An MCP-based chatbot | 一个基于MCP的聊天机器人

http://ep32.chatbot

C++

18%

Unstarled & hours ago

expressif/arduino-exp32

Star

Arduino core for the ESP32 family of SoCs

arduino

esp32

arduino

esp32

C++

11.7K Updated 11 hours ago

expresslwp-scp

slw

AT application for ESP32-C3/ESP32-C2/ESP32-C1/ESP32-C6/ESP32-06

esp32-06 esp32 esp32 esp32

C 1.2k

Installed 8 days ago

Dronedragon/ESP32

Star

Sponsor

Ordnance驱 for ESP32 A secure and transparent telemetry link with support for WiFi and ESP-ADW, Supporting MAVLink, MSLT, LTM or any other...

Size

drone

esp22

C

841

Used on ESP32

BruceDevicesFirmware

Star

Sponsored

Prodatory E8P32 Firmware

radio

int

hardware

embedded-system

C++

6.1%

Updated 8 hours ago

xorun-tech/techx-emp32-server

true

本项目xorun-tech/techx-emp32服务器使用，服务您快速搭建EMP32设备控制服务器。

Backend service for xorun-tech/emp32，helps you quickly build an EMP32 device control server.

Research and Development

R&D Investment

As the Company's product roadmap advances from Basic IoT to Systematic Connectivity, Interactive Devices, and ultimately Physical AI & High-Interaction, R&D efforts have expanded beyond wireless connectivity to include embedded computing, multimedia processing, embedded Linux, AI software frameworks, developer tools, and edge AI technologies. The growing complexity of both hardware and software platforms requires broader engineering expertise and deeper cross-disciplinary collaboration.

Accordingly, the increase in R&D investment reflects not only the expansion of product development activities, but also the Company's continued transition from a connectivity semiconductor supplier to a provider of integrated computing, connectivity, and software platforms for intelligent edge devices.

CNY

June 30,2026

June 30,2025

change(%)

R&D Expenses

329,666,051

268,244,538

22.90

R&D-to-sales ratio

22.26%

21.54%

Intellectual Property

We seek to protect our technologies through a combination of patents, software copyright and trade secrets. As of June 30,2026,the Company had been granted 239 intellectual property rights. We continue to file new applications relating to our recent R&D innovations.


List of Intellectual Property Rights Applied and Granted

H12026

Cumulative number

Applied for

Granted

Applied for

Granted

Invention patents

15

4

196

114

Utility model patents

1

1

41

39

Design patents

5

4

20

15

Software copyright

0

0

27

27

Others

9

3

87

44

Total

30

12

371

239

N.B.: The number of intellectual property rights that have been "applied for" does not include the rejected applications in China, or the PCT patent applications not submitted to any particular 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. PCT applications, patent applications filed in the United States under the Paris Convention, and first-filed patent applications in India and Singapore.

R&D Employees

We continue to enrich our engineering organization with talent spanning embedded systems, wireless connectivity, AI, operating systems, Linux, software frameworks, graphics, multimedia, cloud services, and developer tools. This multidisciplinary expertise enables us to support a broader developer community—from embedded engineers and product designers to AI application developers and software engineers—while lowering the barriers to building intelligent connected products.

We view hardware and software as a unified technology stack rather than separate disciplines. Alongside our semiconductor roadmap, we continue to invest in Al-native software platforms, operating systems, development frameworks, toolchains, middleware, and cloud services. Our objective is to provide developers with an integrated, end-to-end development experience that accelerates innovation from prototype to mass production.

At the same time, AI is transforming the way we build products internally. Across software development, hardware design, testing, documentation, and knowledge management, our engineering teams are increasingly adopting AI-assisted tools to automate repetitive work, improve collaboration, and shorten development cycles. Rather than replacing engineers, these tools enable them to dedicate more time to system architecture, product innovation, and solving complex engineering challenges.

Looking ahead, we will continue to invest in both engineering talent and AI-enabled productivity. We believe that the combination of a world-class engineering team, an expanding software platform, and continuously improving development efficiency will strengthen our ability to serve developers worldwide and reinforce the long-term competitiveness of the Espressif ecosystem.

Fiscal Year

June 30,2026

June 30,2025

R&D employees

653

589

R&D employees as a percentage of total employees

68.45%

70.12%

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

239,268

206,006

Average compensation of R&D employees(CNY in thousands)

373

361

R&D Expenses


R&D Employees


N.B.: As the subsidiary M5Stack operates its own production lines and manufacturing workforce, its production headcount has expanded in tandem with business growth. Consequently, while the Group's total R&D headcount continued to rise, its proportion of the total workforce declined.

Ownership of Securities

Basic information of securities

Share types

Ordinary share

Share capital

234,384,311(as of June 30,2026)

Listing

Shanghai Stock Exchange(SSE)

Ticker

688018.SH

Listing Date

2019-07-22

Shareholder Structure as of June 30,2026

Shareholder

Share Numbers

Percentage(%)

Espressif(Hong Kong)InvestmentLtd.

85,694,801

36.56

HongKongSecuritiesClearingCompanyLimited

9,763,374

4.17

NSSFPortfolio114

5,826,557

2.49

WisdomshireAssetManagementCo.,Ltd.-WisdomshireYoufuPrivateEquitySecuritiesInvestmentFundNo.1

3,059,418

1.31

WisdomshireAssetManagementCo.,Ltd.-WisdomshireYoufuPrivateEquitySecuritiesInvestmentFundNo.3

2,948,417

1.26

ShinvestHoldingLtd.

2,613,100

1.11

CITICSecuritiesCo.,Ltd.-HarvestSSESTARMarketChipTradableOpen-endedIndexSecuritiesInvestmentFund

2,123,123

0.91

ShanghaiLetunEnterpriseManagementPartnership(LimitedPartnership)

2,047,763

0.87

WisdomshireAssetManagementCo.,Ltd.-WisdomshireYoufuPrivateEquitySecuritiesInvestmentFundNo.2

1,746,146

0.74

SchroderInvestmentManagement(HongKong)Limited-SchroderInternationalSelectionFundChinaA

1,743,979

0.74

Top10shareholders

117,566,678

50.16

EspressifSystems(Shanghai)Co.,Ltd.RepurchaseSpecialSecuritiesAccount

17,161

0.01

Otherpublicshareholders

116,800,472

49.83

Totalofoutstandingshares

234,384,311

100.00

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 AloT 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 AloT 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 20.32% in H1 2026.

Consolidated Financial Statements

Consolidated Balance Sheet (unaudited)

CNY

June 30,2026

December 31,2025

Assets

Current assets:

Cash and cash equivalents

1,046,434,961

1,024,792,840

Held for trading financial assets

959,223,426

876,009,608

Notes receivable

65,260,013

65,534,507

Accounts receivable, net

402,622,501

298,106,030

Accounts receivable financing

Prepayments

35,145,634

19,427,100

Other receivables

12,729,758

11,439,963

Including: Interest receivable

Inventories

841,841,457

627,637,513

Other current assets

762,831,541

1,011,937,898

Total current assets

4,126,089,291

3,934,885,459

Non-current assets:

Debt investment

227,331,300

210,430,400

Investment in other equity assets

42,036,070

42,036,070

Other non-current financial assets

41,937,416

41,937,416

Fixed assets

565,342,798

556,813,866

Right-of-use assets

31,817,803

29,091,243

Intangible assets

24,566,324

26,662,076

Goodwill

74,654,024

74,654,024

Long-term deferred expenses

35,355,949

22,753,695

Deferred income tax assets

111,265,600

108,491,271

Other non-current assets

Total assets

5,280,396,574

5,047,755,518

Consolidated Balance Sheet (unaudited)

CNY

June 30,2026

December 31,2025

Liabilities&Shareholders'Equity

Current liabilities:

Short-term loan

Accounts payable

208,799,546

187,528,762

Contract liabilities

39,540,112

23,381,055

Payroll payable

101,451,947

157,619,024

Taxes payable

14,368,511

2,581,791

Other payable

12,999,787

37,303,747

Including:Interest payable

Non-current liabilities due within one year

8,234,046

6,944,668

Other current liabilities

2,850,395

1,173,418

Total current liabilities

388,244,344

416,532,465

Non-current liabilities:

Lease liabilities

25,590,935

23,701,708

Provisions

613,480

636,582

Deferred income tax liabilities

128,010,796

117,006,835

Total liabilities

542,459,554

557,877,590

Owners'equity(or shareholders'equity):

Share capital

234,384,311

167,143,010

Capital reserves

2,931,361,639

3,040,623,359

Less:Treasury stock

2,428,497

67,433,448

Other comprehensive income

-8,865,004

17,636,423

Surplus reserves

123,024,049

123,024,049

Retained earnings

1,428,044,425

1,177,520,921

Total Espressif shareholders'equity

4,705,520,923

4,458,514,314

Non-controlling interests

32,416,097

31,363,613

Total shareholders'equity

4,737,937,020

4,489,877,928

Total liabilities and shareholders'equity

5,280,396,574

5,047,755,518

Consolidated Income Statement (unaudited)

CNY

Three Months Ended

Six Months Ended

June 30,2026

June 30,2025

June 30,2026

June 30,2025

Revenue

832,739,862

687,690,927

1,480,711,294

1,245,540,796

Cost of Revenue

416,807,229

366,602,694

750,456,338

682,505,046

Gross Profit

415,932,633

321,088,233

730,254,956

563,035,750

Taxes and surcharges

4,176,684

1,589,116

6,335,746

3,298,890

Selling expenses

24,787,914

20,891,691

47,935,740

37,911,612

General and administrative expenses

25,665,226

20,014,920

47,402,114

37,868,504

Research and development expenses

175,180,569

142,052,489

329,666,051

268,244,538

Financial expenses

-2,402,476

-5,996,833

-3,139,201

-6,651,209

Including: Interest expenses

293,088

2,052,299

563,351

3,081,212

Interest income

5,623,753

5,960,944

11,109,906

10,965,268

Add: Other income

14,517,799

23,421,071

24,250,650

31,368,576

Investment income (mark"-for loss)

8,832,122

3,834,033

16,830,951

8,433,933

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

-281,634

1,531,484

Credit impairment losses (mark"-for loss)

11,675

-350,123

45,592

-350,123

Assets impairment losses (mark"-for loss)

-1,677,242

-1,134,405

-2,346,421

-1,237,829

Assets disposal income (mark"-for loss)

-14,041

3,770

-29,598

Operating Income

209,927,436

168,293,384

342,370,531

260,548,373

Add: Non-operating revenue

200

2,120,470

330,200

Less: Non-operating expenses

19,381

21,582

59,472

68,606

Income before income taxes

209,908,055

168,272,002

344,431,529

260,809,967

Provision (benefit) for income taxes

10,674,945

-326,090

9,152,988

-2,229,798

Net Income

199,233,110

168,598,092

335,278,541

263,039,765

Net Income attributable to non-controlling interests

649,209

1,040,269

1,052,484

1,777,588

Net Income attributable to Espressif

198,583,901

167,557,823

334,226,057

261,262,177

Earnings per share

Basic

1.4314

1.2049

Diluted

1.4314

1.2049

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

Six Months Ended

CNY

June 30,2026

June 30,2025

June 30,2026

June 30,2025

Net Income

199,233,110

168,598,092

335,278,541

263,039,765

Other comprehensive income (loss), after tax

Changes to the fair value of investment in other equity instruments

Currency translation reserves

-14,307,689

-2,128,567

-26,501,427

-3,176,361

Other comprehensive income (loss)

-14,307,689

-2,128,567

-26,501,427

-3,176,361

Other comprehensive income (loss) attributable to non-controlling interests

Comprehensive income

184,925,421

166,469,525

308,777,113

259,863,404

Comprehensive income attributable to non-controlling interests

649,209

1,040,269

1,052,484

1,777,588

Comprehensive income attributable to Espressif

184,276,211

165,429,256

307,724,630

258,085,816

Consolidated Cash Flow Statement (unaudited)

CNY

Three Months Ended

Six Months Ended

June 30,2026

June 30,2025

June 30,2026

June 30,2025

Operating Activities

Cash from sales of merchandise and provision of services

830,969,409

715,198,826

1,534,393,420

1,299,783,415

Tax refund

21,187,864

13,185,173

67,576,043

28,015,360

Other received cash related to operational activities

-27,148,778

-45,501,690

15,598,124

33,464,916

Subtotal of cash inflow from operational activities

825,008,495

682,882,310

1,617,567,587

1,361,263,691

Cash paid for merchandise and services

566,020,819

463,960,282

1,051,726,843

823,406,616

Cash paid to and for employees

117,221,726

102,495,783

354,196,844

299,522,061

Cash paid for taxes and surcharges

23,311,363

32,383,487

32,074,870

51,323,421

Other paid cash related to operational activities

49,425,377

44,592,320

107,122,518

72,588,769

Subtotal of cash outflow from operational activities

755,979,285

643,431,872

1,545,121,075

1,246,840,866

Net cash provided by operating activities

69,029,210

39,450,437

72,446,512

114,422,825

Investing activities

Cash arising from the disposal of investments

1,435,334,105

140,000,000

2,325,868,418

140,000,000

Cash arising from investment income

12,428,500

12,967,233

13,328,500

12,967,233

Net cash arising from the disposal of fixed assets, intangible assets and other long-term assets

7,138

15,770

14,905

Other received cash relating to investment activities

1,212,050

922,050

2,331,103

1,500,100

Subtotal of cash inflow from investment activities

1,448,974,655

153,896,421

2,341,543,791

154,482,238

Cash paid for the purchase and construction of fixed assets, intangible assets and other long-term assets

47,134,787

429,684,593

79,326,076

444,170,619

Cash paid for investments

1,479,000,000

2,193,000,000

Net cash paid for acquisition of subsidiaries and other business units

Other paid cash relating to investment activities

900,000

1,200,000

Subtotal of cash outflow from investment activities

1,526,134,787

430,584,593

2,272,326,076

445,370,619

Net cash provided by investment activities

-77,160,131

-276,688,172

69,217,716

-290,888,381

Financing activities

Cash arising from the issuance of common stock

92,934,718

71,091,637

93,024,211

71,091,637

Including: Cash arising from subsidiaries absorbing investments by minority shareholders

Cash received from borrowings

139,750,000

362,350,000

Subtotal of cash inflow from financing activities

92,934,718

210,841,637

93,024,211

433,441,637

Cash paid to repay debt

9,900,000

10,400,000

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

83,702,554

68,546,838

83,702,554

69,199,894

Including: dividends and profits paid to minority shareholders by subsidiaries

Other paid cash relating to financing activities

7,213,678

3,533,815

103,108,735

7,321,215

Subtotal of cash outflow from financing activities

90,916,231

81,980,653

186,811,288

86,921,110

Net cash provided by financing activities

2,018,487

128,860,984

-93,787,077

346,520,527

Impact of fluctuation in exchange rates on cash and cash equivalents

-12,186,523

1,428,324

-30,741,710

1,021,156

Net increase in cash and cash equivalents

-18,298,957

-106,948,426

17,135,440

171,076,127

Add: Cash and cash equivalent at the commencement of the period

1,053,458,169

945,656,860

1,018,023,771

667,632,307

Cash and cash equivalents at the end of the period

1,035,159,212

838,708,434

1,035,159,212

838,708,434

Consolidated Cash Flow Statement - Indirect Method (unaudited)

CNY

Three Months Ended

Six Months Ended

June 30,2026

June 30,2025

June 30,2026

June 30,2025

Additional information

Net income

199,233,110

168,598,092

335,278,541

263,039,765

Adjustments to cash provided by operating activities, for the purpose of reconciling net income:

Add: provision for the impairment of assets

1,677,242

1,134,405

2,346,421

1,237,829

Credit impairment provision

-11,675

350,123

-45,592

350,123

Depreciation of fixed assets

15,627,907

6,567,933

31,593,337

12,596,104

Depreciation of right-of-use assets

2,061,678

3,023,758

4,158,780

6,105,592

Amortization of intangible assets

1,047,876

1,047,876

2,095,752

2,095,752

Amortization of long-term prepaid expenses

3,241,762

2,592,226

6,073,768

4,754,862

Losses on disposal of fixed assets, intangible assets and other long-term assets (mark"-" for income)

14,041

-3,770

29,598

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

6,642

1,631

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

281,634

-1,531,484

Financial expenses (mark"-" for income)

2,750,362

-313,428

7,074,767

3,703,390

Losses on investment (mark"-" for income)

-8,832,122

-3,834,033

-16,830,951

-8,433,933

Decrease on deferred income tax assets (mark"-" for increase)

5,097,900

4,878,478

-2,815,227

-10,066,168

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

5,432,693

3,233,445

11,003,961

7,156,215

Changes in operating assets and liabilities:

Decrease in inventories (mark"-" for increase)

-107,457,933

-42,601,732

-223,792,547

-29,798,410

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

-97,445,069

-59,874,969

-80,632,236

-88,776,390

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

24,783,061

-58,847,115

-29,600,603

-68,363,642

Others

21,540,785

13,481,337

28,066,954

18,790,505

Net cash flow provided by operating activities

69,029,210

39,450,437

72,446,512

114,422,825

Consolidated Statement of Changes in Equity (unaudited)

Equity attributable to Espresssif

CNY

Share capital

Capital reserves

Less: Treasury stock

Other comprehensive income

Surplus reserves

Retained earnings

Total Espressif equity

Non-controlling Interests

Total equity

Balance as of December 31,2024

112,200,431

1,351,379,589

208,684,568

25,620,966

76,858,747

792,599,518

2,149,974,683

29,394,537

2,179,369,221

Comprehensive income

-3,176,361

261,262,177

258,085,816

1,777,588

259,863,404

Capital increase

44,502,291

-67,134,906

-130,566,230

107,933,615

107,933,615

Repurchase

Stock-based compensation

-18,051,473

-18,051,473

-18,051,473

Surplus reserves

-66,753,437

-66,753,437

-66,753,437

Subsidiary Acquisition Dividends

Balance as of June 30,2025

156,702,722

1,266,193,209

78,118,338

22,444,605

76,858,747

987,108,258

2,431,189,203

31,172,125

2,462,361,328

CNY

Equity attributable to Espressif

Non-controlling Interests

Total equity

Share capital

Capital reserves

Less: Treasury stock

Other comprehensive income

Surplus reserves

Retained earnings

Total Espressif equity

Balance as of December 31,2025

167,143,010

3,040,623,359

67,433,448

17,636,423

123,024,049

1,177,520,921

4,458,514,314

31,363,613

4,489,877,928

Comprehensive income

-26,501,427

334,226,057

307,724,630

1,052,484

308,777,113

Capital increase

67,241,301

-92,203,253

-163,300,264

138,338,312

138,338,312

Repurchase

98,295,312

-98,295,312

-98,295,312

Stock-based compensation

-17,058,467

-17,058,467

-17,058,467

Surplus reserves

-83,702,554

-83,702,554

-83,702,554

Subsidiary Acquisition Dividends

Balance as of June 30,2026

234,384,311

2,931,361,639

2,428,497

-8,865,004

123,024,049

1,428,044,425

4,705,520,923

32,416,097

4,737,937,020

N.B.: In April 2026, the Company issued 279,258 ordinary shares at an issue price of RMB 120.29 per share, increasing share capital by RMB 279,258. The remaining proceeds, after deducting issuance expenses, were recorded in capital reserves. In June 2026, the Company capitalized its capital reserve into share capital, resulting in an increase in share capital of RMB 66,962,043.

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, 30 July 2026 Espressif Systems

Board of Directors

Executive Management

Teo Swee Ann Founder and Chairman

Teo Swee Ann

Ng Pei Chi

Founder and CEO

Information Technology Director

Wang Jue

Wang Jue

Board Secretary

Board Secretary

Shao Jingbo

Teo Teck Leong

Financial Director

Shareholder-elected

Chen Myn Independent Director

Lee Kian Soon

Independent Director

Leong Foo Leng Independent Director


Forward-looking Statements

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

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.

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

SG&A

Selling,General and Administrative

SH

Shanghai

SoCs

System on Chips

STEM

Science,Technology,Engineering and Mathematics

YoY

Year-on-Year


Investor Relations

ir@espressif.com

Social Media

Official Platforms

twitter.com/EspressifSystem

www.espressif.com

facebook.com/espressif

github.com/espressif

blog.espressif.com

linkedin.com/company/espressif-systems

esp32.com

youtube.com/EspressifSystems

instagram.com/espressif_systems_official

bilibili.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.