ANNUAL REPORT
CONTENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Contents
Message from the CEO 03 Management Report （Continued） 11
Developer Community Content 19
Research and Development 21
About Espressif 05
Ownership of Securities 23
Facts About Espressif 05
Stock-Based Compensation 24
Build Smart with ESP32 06
Risks and Uncertainties 25
Core Competitiveness 07 Consolidated Financial Statements 26
Consolidated Balance Sheet 26
Consolidated Income Statement 28
Business Highlights 08
Consolidated Cash Flow Statement 29
Key Financial Data 08
Consolidated Statement of Changes in Equity 31
Key Financial Indicators 08
Financial Analysis 09
Further Information 32
Terms and Conditions of the Report 32
Management Report 11
Independent Auditor’s Report 33
Business Strategy 11
List of abbreviations 37
Key Products - IoT Chips 12
Key Products - Chip Matrix 13
Key Products - M5Stack Development Kits 14
Edge AI Strategy 15
B2D2B Business Model 17
MESSAGE FROM THE CEO ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Message from the CEO
"We are seeing a structural
transition in IoT from a
connectivity-driven phase to a
capability-driven phase.”
Teo Swee Ann
Espressif’s Founder & CEO
In 2025, we delivered strong results while continuing to invest in the technologies and ecosystem
that will define the next phase of the IoT industry. Revenue increased by 27.8% year-over-year,
and net profit grew by 47.4%. At the same time, we increased R&D expenses by 23.1%, reflecting
a deliberate commitment to deepen our core capabilities and expand the long-term
competitiveness of our platform.
The broader industry context is becoming clearer. We are seeing a structural transition in IoT from
a connectivity-driven phase to a capability-driven phase. In the past, value was defined primarily
by how many devices could connect. Today, value increasingly depends on what each device
can do once connected—how much computation it can perform locally, and how effectively
those functions can evolve through software.
AI is the central driver of this transition. As intelligence moves closer to the edge, demand rises
for devices that can sense, interpret, and respond with low latency and strong privacy. In
response, we continue to strengthen our “connectivity + processing” roadmap. On the
connectivity side, we expanded into Wi-Fi 6E; on the processing side, we are advancing
products designed for edge AI workloads, powered by our increasingly sophisticated in-house
RISC-V designs.
Picture source: The Business Times SPH Media Limited. Permission required for reproduction.
MESSAGE FROM THE CEO ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Our ability to execute this strategy is powered by a truly global perspective. Espressif’s diverse
team is spread across key innovation hubs in India, Singapore, the Czech Republic, and Brazil.
This distributed footprint allows us to tap into varied talent pools, stay close to our global
customer base, and maintain 24/7 development cycles.
We also recognize that the current geopolitical climate introduces complexities to global trade.
We take these potential effects on the supply chain very seriously. Because our chips are
designed for industrial and smart-home applications that require long lifetimes, we have taken
proactive steps to build a larger strategic inventory. This ensures that we can minimize any
potential disruptions and provide our customers with the stability and continuity they require for
their long-term product roadmaps.
Our long-term advantage is reinforced by our 2D2B (Developer-to-Business) model. We build a
developer-first platform that encourages experimentation; we then support the conversion of
successful designs into mass production. In the fourth quarter of 2025, the average daily
increase of new ESP32-series projects on GitHub reached 164, a new historical high.
This creates a reinforcing cycle. Open-source tooling lowers the barriers to building. Faster
development yields more real-world feedback. As solutions mature, the probability of designs
advancing into scaled deployment increases, attracting further developer participation. Over
time, this flywheel improves the scalability and resilience of our business model.
As we look forward, we expect AI to further accelerate technology adoption. We will continue to
invest prudently in low-power computing architectures, advanced wireless technologies, and
edge AI capabilities. Internally, we will also leverage AI to improve our own productivity, enabling
faster development cycles and more efficient execution across engineering and operations.
Throughout this work, we remain committed to technological depth and sustainable long-term
value creation. On behalf of the management team, I would like to thank our employees,
customers, partners, developers, and shareholders for your continued trust and support.
ABOUT ESPRESSIF ESPRESSIF SYSTEM 2025 ANNUAL 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.
Global IoT Chip In Wi-Fi MCU In AIoT Satisfied Active Ecosystem
Shipment Market Technology Customers Developers
(Cumulative) Worldwide
R&D R&D Employees Employee Female
Centers Employees Nationalities Employees
ABOUT ESPRESSIF ESPRESSIF SYSTEM 2025 ANNUAL 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
AI & IoT
ESP-SR ESP-WHO ESP-DL
SDK Speech 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
Official loT OS
Compilers & Tool Chains
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
Computing
Core
AI FPU | Instruction Set Extensions
Multimedia ISP | H.264 Encoder | JPEG Codec
High-Speed Interfaces PCle | DDR | USB
CORE COMPETITIVENESS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Brand Awareness 100
ESP32 Google Trends
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 25
customer retention but also attracts new users, thereby solidifying
Espressif's position in the market. 0
Exceptional IC Design Capability Espressif Google Trends
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 25
in the IoT semiconductor industry.
Full-Stack Engineering Capability
Espressif possesses comprehensive engineering development capabilities that span from IP development to
complete chip design, operating systems, firmware, software frameworks, application solutions, hardware design,
edge AI, cloud, and apps. This full-stack engineering expertise allows Espressif to offer highly integrated solutions
that meet a wide range of customer needs. The ability to control and optimize every layer of the technology stack is
unique in the industry and enables Espressif to deliver superior products and services that are seamlessly integrated
and highly efficient.
Superior Cost-Effective and Stable Support
Espressif's products are known for their high performance and low cost, making them competitive in the market. We
provide the cost efficiency necessary to promote large-scale commercialization in downstream industries.
Additionally, we ensure the long-term availability of our products and offer stable and enduring software support,
ensuring that customers can rely on their investments for extended periods. This commitment to value and reliability
strengthens customer trust.
Extensive Developer Community Support
Espressif has garnered support from a vast community of professional engineers who are familiar with Espressif's
development platform and actively promote its value proposition. This large and engaged community not only aids in
the rapid adoption and dissemination of Espressif’s technologies but also contributes to continuous improvement
through feedback and shared knowledge. The robust community support amplifies Espressif's market presence and
enhances our reputation as a trusted and innovative leader in the industry.
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Business Highlights
Key Financial Data
Fiscal Year
CNY 2025 2024 2023
Consolidated Statement of Income Data
Revenue 2,565,275,432 2,006,919,687 1,433,064,911
Gross profit 1,196,087,930 881,196,912 581,248,531
Selling expenses 81,799,952 62,919,353 52,583,650
General and administrative expenses 88,725,443 69,260,100 61,618,348
Research and development expenses 603,427,213 490,297,747 403,713,557
Net income 499,809,218 339,008,315 136,204,637
Net income attributable to Espressif 497,840,142 339,323,927 136,204,637
Earnings per share:
Basic 3.1520 2.2064 0.8679
Diluted 3.1358 2.1934 0.8637
Consolidated Balance Sheet Data
Working capital 3,518,352,994 1,432,356,145 999,068,356
Total assets 5,047,755,518 2,649,465,358 2,203,800,366
Long-term obligations 141,345,125 116,956,630 74,166,946
Total shareholders’ equity 4,489,877,928 2,179,369,221 1,913,000,228
Consolidated Cash Flow Data
Net cash provided by operating activities 522,622,032 220,472,557 302,597,343
Non-GAAP Adjustment
Stock-based compensation 43,878,803 37,661,342 18,737,416
Non-GAAP net income attributable to Espressif 541,718,945 376,985,269 154,942,053
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
Fiscal Year
Gross margin 46.63% 43.91% 40.56%
R&D-to-sales ratio 23.52% 24.43% 28.17%
EBITDA margin 22.41% 18.97% 10.01%
Net income margin 19.48% 16.89% 9.50%
Weighted ROE 17.33% 17.06% 7.14%
Number of Espressif employees as of December 31 898 770 625
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Financial Analysis
The Company’s total revenue in 2025 reached CNY 2.57 billion, representing a year-on-year increase of 27.8% from
CNY 2.01 billion in 2024. This growth was primarily driven by continued expansion of the customer base and broader
adoption of the Company’s solutions.
Revenue from the smart home segment increased by more than 20% year on year. Performance across other
business segments was mixed, with industrial and energy management–related applications delivering relatively
stronger growth.
The overall gross margin stood at 46.6%, with the gross margin for IoT chips reaching 48.5%. The increase in gross
margin reflects our continuous efforts to attract new, high-value customers. Due to the growth in business volume,
our production costs have been further reduced through economies of scale. We remain committed to achieving
sustainable profitability to support continued investment in research and development.
by Sales Mode by Sales Mode Concentration Rate
Direct Indirect Direct Indirect 2021 2022 2023 2024 2025
Revenue by Product Category
Chip Module & DevKits Others
Key Financial Indicators
Overall GM Chip GM Module & DevKits EBITDA SG&A as % of R&D as % of
GM Margin sales sales 9
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Financial Analysis
Historically, the first quarter reflects a seasonal low, Quarterly Revenue Seasonality
largely attributable to the observance of the Spring
Festival holidays in China, which entails an Million FY2021 FY2022 FY2023 FY2024 FY2025
extended break across the industrial supply chain.
From Q2 to Q4, the broadening diversification of
downstream applications has effectively mitigated
seasonality, with Q4 generally outperforming or
remaining broadly in line with preceding quarters.
However, 2025 exhibited a different pattern.
Influenced by a combination of macroeconomic 400
factors, changes in China’s demand-stimulus
subsidy policies, and frequent adjustments to U.S.
tariff policies amid ongoing geopolitical instability. Q1 Q2 Q3 Q4
As a result, Q2 unexpectedly emerged as the peak
quarter for the year, potentially reflecting a pull- FY2024 Revenue FY2025 Revenue
forward of demand from the subsequent two by Area by Area
quarters.
From a full-year perspective, both China’s Mainland
and overseas markets experienced demand growth
in 2025. Revenue from China’s Mainland increased
by 23.1% year-over-year, while overseas revenue
grew by 40.4% year-over-year.
MC OS MC OS
Revenue Growth Drivers: China’s Mainland & Overseas
CNY Million Total Revenue MC+ MC- OS+ OS-
N.B.: MC refers to China’s Mainland; OS refers to Overseas.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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
Technical Depth
Dual-Band Wi-Fi 6 Zigbee
Wi-Fi 4
RISC-V Cores AI Related
Computing 96/240/400/500MHz FPU | Instruction Set Extensions
ISP | H.264 Encoder | JPEG Codec
Technical Breadth In progress
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Key Products - Chip Matrix
AI AI
ESP ESP32 ESP32
H.264 encoding
High- ESP32
Performance ESP32 H4 ESP32 - H4
S2 ESP32 - S2
ESP32 ESP32
C5 ESP32 - C5 E22 ESP32 - E22
ESP 8266 ESP32
C6 ESP32 - C6
ESP32
C61 ESP32 - C61
Cost-
ESP32
Effective
ESP32
C3 ESP32 - C3 H21 ESP32 -H21
ESP32
H2
ESP32
C2 ESP32 - C2 H2 ESP32 -
RISC-V
Legacy Growth Emerging
Wi-Fi 4 Bluetooth
Wi-Fi 6 Thread
N.B.:
Wi-Fi 6E Zigbee
All products shown above are 32-bit MCU-based chips.
Except for ESP8266, ESP32, ESP32-S2 and ESP32-S3, all other products are based on RISC-V architecture. Matter Ultra-Low Power
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Business Model
Business-to-Developer-to-Business (B2D2B)
Espressif operates under a Business-to-Developer-to-Business (B2D2B) model. By engaging developers through
open platforms, software tools, and a global community, we influence technology selection at the design stage and
ultimately convert developer adoption into long-term enterprise customer relationships.
• A vibrant and active community attracts an increasing number of developers to the platform. As ecosystem
resources expand — including open-source projects, technical documentation, and AI support — the barrier to
entry declines, reinforcing a positive feedback loop in which community growth further strengthens platform
attractiveness.
• As more developers join, they select the platform during the design phase and build commercial prototypes and
demonstration products. At this stage, technical familiarity, toolchain maturity, and ecosystem support become key
decision factors, embedding the platform into early-stage product architecture.
• Once customer products move from prototype to formal product definition and mass production planning, the
platform choice is typically locked in. In the IoT industry, redesigning core connectivity and processing
architecture involves significant validation, firmware migration, and certification efforts, making switching both
time-consuming and costly.
• After entering mass production, customer products often remain in the market for 5 to 10 years. During this period,
customers continue annual procurement while introducing model upgrades and feature enhancements based on
the same platform architecture. As functionality expands and lifecycle duration extends, the cumulative value
generated per project increases, supporting long-term and recurring revenue streams.
Revenue Growth Driven by Customer Lifetime Value
CNY Million Total Revenue Existing Cust. (≤’22) New Cust. ’23 New Cust. ’24 New Cust. ’25
N.B.: Rev. Δ denotes the revenue growth recorded in the respective year.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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.
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.
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.
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
(Product Prototype)
Community
Portable Energy Storage
Branch A
(DIY
Enthusiast)
Development Board
(DevKit) Photovoltaic Inverter
Smart Agriculture 3D Printer Smart Internet of Vehicles
Healthcare
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Developer Community Content
Cumulative Number of GitHub
ESP32 Projects 130 K
BOOKS
Global Code Hosting Platform Social Networking Site Developer-written books
ESP32 and ESP8266 ESP32 Group Members Covering more than 10
Projects languages
Daily Increase on GitHub
ESP32 Projects
Chinese Video Sharing Platform Global Video Sharing Platform 164
Most Viewed ESP32 Most Viewed ESP32 Most Viewed ESP32
Video (2025) Short (2025) Video (2025)
Always a on Social Media
Posted on 24 Jan 2026 Posted on 2 Feb 2026 Posted on 23 Jan 2026 Posted on 24 Jan 2026
Make Your Coffee Machine Smart with PID Control of a Ball and Beam System
废弃的DVD光盘机搭配ESP32开发板制作 using a ESP32 microcontroller.
Usuário 'wewillmakeitnow' no Reddit ESP32
CNC绘画仪
fez um PS4 portátil totalmente
funcional! Weekly robotics and AI insights.
Turn your OLD coffee machine into
Subscribe free:
a SMART one! "
A placa-m?e foi cortada e modificada
In this video, I show how to use an
para torná-la o mais compacta
optocoupler in a real ESP32 project.
possível, mantendo todas as
funcionalidades.
Safety Warning
This project involves working with high
voltage (mains power).
https://www.bilibili.com/video/ https://x.com/IlirAliu_/status/
BV1nLz9BJEPH 2014797453254353325
https://x.com/IlirAliu_/status/
Searched on 5 Mar 2026
Posted on 6 Dec 2025 https://www.youtube.com/watch?
v=FOOzE7EWT_Y
I made a DIY kit to learn guitar
Posted on 21 Jan 2026
"Tuitar" is is a terminal-based guitar
???? ?? ??? ??? ???? ??
training tool that runs standalone on Posted on 6 Feb 2026
? - ESP32
ESP32 hardware.
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Demo: https://www.youtube.com/
watch?v=tZm7cLaHAR0
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https://www.reddit.com/r/esp32/
comments/1pstqx9/
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Books about ESP Products
More than 300 books on how to use ESP products can be found in the developer community and cover over a
dozen languages.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Research and Development
R&D Investment
R&D investment is at the heart of Espressif Systems’ development. During the reporting period, R&D cost CNY 603
million, which marked a 23.07% increase compared with that of 2024. At the same time, the R&D-to-sales ratio was
Espressif’s escalating R&D investment cost can be attributed to the increase in the number of R&D staff and their
subsequent compensation level, which increased significantly year-over-year.
Fiscal Year
CNY 2025 2024 change (%)
R&D Expenses 603,427,213 490,297,747 23.07
R&D-to-sales ratio 23.52% 24.43%
Intellectual Property
We seek to protect our technologies through a combination of patents, software Applied for
copyright and trade secrets. As of December 31, 2025, the Company had been
granted 227 intellectual property rights. We continue to file new applications relating 227
to our recent R&D innovations. Granted
List of Intellectual Property Rights Applied and Granted
Applied for Granted Applied for Granted
Invention patents 30 12 181 110
Utility model patents 4 7 40 38
Design patents 4 0 15 11
Software copyright 0 0 27 27
Others 8 6 81 41
Total 46 25 344 227
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. the PCT patent applications, U.S. patent applications through the PCT route or the Paris
Convention route, as well as patent applications in India.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
R&D Employees
We are proud of our talented, diverse and multicultural workforce. By December 31, 2025, across our nine branches
worldwide, we had employed 898 people, more than 70% of whom are in engineering roles. Meanwhile, we have
expanded our business beyond Wi-Fi MCUs, thus offering innovative solutions to wireless connectivity and
processing, including AI, RISC-V MCU, Wi-Fi 6, Bluetooth LE, Thread, Zigbee and other IoT-related technologies.
Since the research and development of software and hardware are inextricably intertwined, we constantly invest in
software technology, too. Hence, we are currently focused on AIoT technologies, including toolchains, compilers,
operating systems, application frameworks, AI algorithms, Cloud products, apps, etc. Our aim is to make Espressif a
one-stop solution-provider offering anything relating to hardware, software and the Cloud.
Fiscal Year
December 31, 2025 December 31, 2024
R&D employees 629 553
R&D employees as a percentage of total employees 70.04% 71.82%
Total compensation of R&D employees (CNY in thousands) 450,542 354,457
.02
Average compensation of R&D employees (CNY in thousands) 762 684
R&D Expenses R&D Employees
R&D expenses (in million) R&D-to-sales ratio R&D employees R&D employees %
N.B.: Following the acquisition of M5Stack in 2024, M5Stack brought in its own production line and manufacturing staff, leading to a decrease in the proportion of R&D
personnel since 2024.
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Ownership of Securities
Basic information of securities
Share types Ordinary share
Share capital 167,143,010 (as of December 31, 2025)
Listing Shanghai Stock Exchange (SSE)
Ticker 688018.SH
Listing Date 2019-07-22
Shareholder Structure as of December 31, 2025
Shareholder Share Numbers Percentage (%)
Espressif (Hong Kong) Investment Ltd. 61,210,572 36.62
Hong Kong Securities Clearing Company Limited 4,709,176 2.82
NSSF Portfolio 114 2,759,816 1.65
Wisdomshire Asset Management Co., Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.1
CITIC Securities Co., Ltd. – Harvest SSE STAR Market Chip Tradable
Open-ended Index Securities Investment Fund
Wisdomshire Asset Management Co., Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.3
Shinvest Holding Ltd. 1,866,500 1.12
Guotai Haitong Securities Co., Ltd. 1,471,678 0.88
Shanghai Letun Enterprise Management Partnership (Limited
Partnership)
ABC – CSI 500 Exchange Traded Open-ended Index Securities
Investment Fund
Top 10 shareholders 81,564,848 48.80
Espressif Systems (Shanghai) Co., Ltd. Repurchase Special
Securities Account
Other public shareholders 84,755,817 50.71
Total of outstanding shares 167,143,010 100.00
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Stock-Based Compensation
Espressif has four ongoing restricted stock incentive plans. The fair value of the restricted stock incentive plans is
calculated by using the Black-Scholes model. The following table presents details of stock-based compensation
costs acknowledged in the Consolidated Statements of Income.
Restricted Stock Incentive Plans
Proportion
Number of Ratio of Number of
of Awarded Grant Price
Plan Award Type Underlying Underlying Employees
Employees (CNY)
Shares Shares (%) in the Plan
to Total (%)
N.B.:
RSIP: Restricted Stock Incentive Plan
The above-mentioned ratios have been recalculated on December 31, 2025.
The grant price has been adjusted due to dividend distribution and the conversion of capital reserves into share capital.
Stock-Based Compensation
Fiscal Year
CNY December 31, 2025 December 31, 2024
Selling expenses 2,036,379 2,385,585
G&A expenses 2,577,688 705,080
R&D expenses 39,264,736 34,570,676
Total stock-based compensation 43,878,803 37,661,342
MANAGEMENT REPORT ESPRESSIF SYSTEM 2025 ANNUAL 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
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Consolidated Financial
Statements
Consolidated Balance Sheet
CNY December 31, 2025 December 31, 2024
Assets
Current assets:
Cash and cash equivalents 1,024,792,840 673,884,162
Held for trading financial assets 876,009,608
Notes receivable 65,534,507 38,605,565
Accounts receivable, net 298,106,030 318,420,157
Accounts receivable financing
Prepayments 19,427,100 15,857,596
Other receivables 11,439,963 19,978,007
Including: Interest receivable
Inventories 627,637,513 485,620,281
Other current assets 1,011,937,898 233,129,885
Total current assets 3,934,885,459 1,785,495,653
Non-current assets:
Debt investment 210,430,400 413,542,900
Investment in other equity assets 42,036,070 30,967,840
Other non-current financial assets 41,937,416 34,221,626
Fixed assets 556,813,866 93,949,828
Right-of-use assets 29,091,243 25,169,744
Intangible assets 26,662,076 30,853,579
Goodwill 74,654,024 74,654,024
Long-term deferred expenses 22,753,695 19,452,629
Deferred income tax assets 108,491,271 101,157,536
Other non-current assets 40,000,000
Total assets 5,047,755,518 2,649,465,358
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Consolidated Balance Sheet
CNY December 31, 2025 December 31, 2024
Liabilities & Shareholders’ Equity
Current liabilities:
Short-term loan 500,333
Accounts payable 187,528,762 160,741,033
Contract liabilities 23,381,055 20,877,548
Payroll payable 157,619,024 129,439,567
Taxes payable 2,581,791 16,321,501
Other payable 37,303,747 12,397,576
Including: Interest payable
Non-current liabilities due within one year 6,944,668 11,705,721
Other current liabilities 1,173,418 1,156,230
Total current liabilities 416,532,465 353,139,508
Non-current liabilities:
Lease liabilities 23,701,708 14,802,190
Provisions 636,582 620,582
Deferred income tax liabilities 117,006,835 101,533,858
Total liabilities 557,877,590 470,096,138
Owners’ equity (or shareholders' equity):
Share capital 167,143,010 112,200,431
Capital reserves 3,040,623,359 1,351,379,589
Less: Treasury stock 67,433,448 208,684,568
Other comprehensive income 17,636,423 25,620,966
Surplus reserves 123,024,049 76,858,747
Retained earnings 1,177,520,921 792,599,518
Total Espressif shareholders’ equity 4,458,514,314 2,149,974,683
Non-controlling interests 31,363,613 29,394,537
Total shareholders’ equity 4,489,877,928 2,179,369,221
Total liabilities and shareholders' equity 5,047,755,518 2,649,465,358
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Consolidated Income Statement
Year Ended
CNY December 31, 2025 December 31, 2024
Revenue 2,565,275,432 2,006,919,687
Cost of Revenue 1,369,187,502 1,125,722,775
Gross Profit 1,196,087,930 881,196,912
Taxes and surcharges 6,223,116 3,420,283
Selling expenses 81,799,952 62,919,353
General and administrative expenses 88,725,443 69,260,100
Research and development expenses 603,427,213 490,297,747
Financial expenses -10,536,229 -7,802,843
Including: Interest expenses 5,000,022 964,538
Interest income 24,160,293 17,019,179
Add: Other income 61,830,963 52,414,543
Investment income (mark"-" for loss) 16,877,402 21,042,124
Income from changes in fair value (mark"-" for loss) 8,725,398
Credit impairment losses (mark"-" for loss) -865,419 -1,293,418
Assets impairment losses (mark"-" for loss) -5,653,168 -1,097,156
Assets disposal income (mark"-" for loss) -7,647 -4,355
Operating Income 507,355,966 334,164,009
Add: Non-operating revenue 840,349
Less: Non-operating expenses 508,648 1,192,230
Income before income taxes 507,687,667 332,971,779
Provision (benefit) for income taxes 7,878,449 -6,036,536
Net Income 499,809,218 339,008,315
Net Income attributable to non-controlling interests 1,969,076 -315,612
Net Income attributable to Espressif 497,840,142 339,323,927
Earnings per share
Basic 3.1520 2.2064
Diluted 3.1358 2.1934
Year Ended
CNY December 31, 2025 December 31, 2024
Net Income 499,809,218 339,008,315
Other comprehensive income (loss), after tax
Changes to the fair value of investment in other
equity instruments
Currency translation reserves -17,392,538 3,858,860
Other comprehensive income (loss) -7,984,543 13,344,860
Other comprehensive income (loss) attributable to
non-controlling interests
Comprehensive income 491,824,676 352,353,175
Comprehensive income attributable to non-controlling
interests
Comprehensive income attributable to Espressif 489,855,600 352,668,787
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.
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Consolidated Cash Flow Statement
Year Ended
CNY December 31, 2025 December 31, 2024
Operating Activities
Cash from sales of merchandise and provision of services 2,804,757,217 2,142,128,785
Tax refund 60,751,048 44,635,896
Other received cash related to operational activities 79,654,118 37,342,231
Subtotal of cash inflow from operational activities 2,945,162,383 2,224,106,912
Cash paid for merchandise and services 1,687,826,354 1,439,436,401
Cash paid to and for employees 527,894,998 425,441,190
Cash paid for taxes and surcharges 56,480,692 20,443,795
Other paid cash related to operational activities 150,338,308 118,312,968
Subtotal of cash outflow from operational activities 2,422,540,351 2,003,634,355
Net cash provided by operating activities 522,622,032 220,472,557
Investing activities
Cash arising from the disposal of investments 575,516,669 476,534,893
Cash arising from investment income 17,782,233 4,986,872
Net cash arising from the disposal of fixed assets, intangible assets and other 29,047 16,916
long-term assets
Other received cash relating to investment activities 2,143,200 2,518,600
Subtotal of cash inflow from investment activities 595,471,149 484,057,281
Cash paid for the purchase and construction of fixed assets, intangible assets and 515,730,504 97,671,199
other long-term assets
Cash paid for investments 1,990,000,000 145,000,000
Net cash paid for acquisition of subsidiaries and other business units 84,632,507
Other paid cash relating to investment activities 2,800,000 2,780,000
Subtotal of cash outflow from investment activities 2,508,530,504 330,083,706
Net cash provided by investment activities -1,913,059,355 153,973,575
Financing activities
Cash arising from the issuance of common stock 1,841,747,345 13,680,557
Including: Cash arising from subsidiaries absorbing investments by minority
shareholders
Cash received from borrowings 383,350,000 20,000,000
Subtotal of cash inflow from financing activities 2,225,097,345 33,680,557
Cash paid to repay debt 383,850,000 19,500,000
Cash paid for the distribution of dividends and profits, or payment of interests 70,900,359 78,299,414
Including: dividends and profits paid to minority shareholders by subsidiaries
Other paid cash relating to financing activities 13,397,079 104,664,429
Subtotal of cash outflow from financing activities 468,147,438 202,463,843
Net cash provided by financing activities 1,756,949,907 -168,783,287
Impact of fluctuation in exchange rates on cash and cash equivalents -16,121,119 2,403,735
Net increase in cash and cash equivalents 350,391,465 208,066,580
Add: Cash and cash equivalent at the commencement 667,632,307 459,565,727
of the period
Cash and cash equivalents at the end of the period 1,018,023,771 667,632,307
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Consolidated Cash Flow Statement
- Indirect Method
Year Ended
CNY December 31, 2025 December 31, 2024
Additional information
Net income 499,809,218 339,008,315
Adjustments to cash provided by operating activities, for the purpose of
reconciling net income:
Add: provision for the impairment of assets 5,653,168 1,097,156
Credit impairment provision 865,419 1,293,418
Depreciation of fixed assets 37,495,222 22,528,716
Depreciation of right-of-use assets 10,957,599 13,854,471
Amortization of intangible assets 4,191,504 2,938,342
Amortization of long-term prepaid expenses 9,629,474 7,413,149
Losses on disposal of fixed assets, intangible assets and other long- 7,647 4,355
term assets (mark"-" for income)
Losses on scrapping of fixed assets (mark"-" for income) 166,926 1,002,412
Losses on fair value changes（mark"-" for income） -8,725,398
Financial expenses（mark"-" for income） 12,375,175 8,284,773
Losses on investment（mark"-" for income） -16,877,402 -21,042,124
Decrease on deferred income tax assets（mark”-" for increase） -7,669,865 -40,376,467
Increase on deferred income tax liabilities（mark"-" for decrease） 14,225,927 36,855,548
Changes in operating assets and liabilities:
Decrease in inventories（mark"-" for increase） -152,161,810 -217,732,331
Decrease in operational receivables（mark"-" for increase） 130,080 -105,203,719
Increase in operational payables（mark"-" for decrease） 68,670,344 132,885,201
Others 43,878,803 37,661,342
Net cash flow provided by operating activities 522,622,032 220,472,557
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Consolidated Statement of Changes in Equity
Equity attributable to Espresssif
Non-
controlling
Total
Less: Total Interests equity
Other
Share Capital Treasury comprehensive Surplus Retained Espressif
CNY capital reserves stock income reserves earnings equity
Balance as of
December 31, 80,789,724 1,358,508,382 146,969,563 24,067,306 55,460,195 541,144,184 1,913,000,228 1,913,000,228
Comprehensive
income
Capital increase 31,410,707 -22,339,823 -27,059,984 36,130,868 36,130,868
Repurchase 88,774,989 -88,774,989 -88,774,989
Stock-based
compensation
Surplus reserves 21,398,552 -21,398,552
Subsidiary
-11,791,200 11,791,200 29,710,150 29,710,150
Acquisition
Dividends -78,261,241 -78,261,241 -78,261,241
Balance as of
December 31, 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
Equity attributable to Espresssif
Non-
controlling
Total
Less: Total Interests equity
Other
Share Capital Treasury comprehensive Surplus Retained Espressif
CNY capital reserves stock income reserves earnings equity
Balance as of
December 31, 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
-7,984,543 497,840,142 489,855,600 1,969,076 491,824,676
income
Capital increase 54,942,579 1,685,914,654 -141,251,119 1,882,108,352 1,882,108,352
Repurchase
Stock-based
compensation
Surplus reserves 46,165,302 -46,165,302
Subsidiary
Acquisition
Dividends -66,753,437 -66,753,437 -66,753,437
Balance as of
December 31, 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
N.B.: In June 2025, the Company capitalized its capital reserve into share capital, resulting in an increase in share capital of RMB 44,502,291. In September 2025, the Company
issued 10,440,288 ordinary shares at an issue price of RMB 170.29 per share, increasing share capital by RMB 10,440,288. The remaining proceeds, after deducting issuance
expenses, were recorded in capital reserves.
FURTHER INFORMATION ESPRESSIF SYSTEM 2025 ANNUAL 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 March 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 PRESSIF
ES
Independent Director
Declaration
Forward-looking Statements
SY
STE MS
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.
FURTHER INFORMATION ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Independent Auditor’s Report
To the Shareholders of
Espressif Systems (shanghai) Co., Ltd.
Opinion
We have audited the financial statements of Espressif Systems (Shanghai) Co., Ltd. (“the Company”), which
comprise the consolidated balance sheet and balance sheet as of December 31, 2025, the consolidated income
statement, the income statement, the consolidated cash flow statement, the cash flow statement, the consolidated
statement of changes in equity, and the statement of changes in equity for the year then ended, and the notes to the
financial statements.
In our opinion, the enclosed financial statements were prepared in accordance with the Accounting Standards for
Business Enterprises (the “ASBE”) in all material aspects, and present fairly the consolidated and other financial
positions of the company as of December 31, 2025, the consolidated and other results of company operations, and
the consolidated and other cash flows of the company for the year then ended.
Basis For the Opinion
We conducted our audit in accordance with the Chinese Standards on Auditing for Certified Public Accountants. Our
responsibilities under those standards are further described in the section titled “Auditors’ Responsibilities for the
Audit of the Financial Statements” of our report. We are independent of Espressif Systems (Shanghai) Co., Ltd. in
accordance with the Chinese Code of Ethics for Certified Public Accountants, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We have also complied with the independence requirements
applicable to public interest entities. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of the greatest significance in our
auditing of the financial statements for the financial year from January 1, 2025 to December 31, 2025. These matters
were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, we do not provide a separate opinion on these matters.
FURTHER INFORMATION ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Key Audit Matter How our audit addressed the Key Audit Matter
Revenue Recognition
Espressif’s main business includes the Our main auditing procedures for revenue recognition are as follows:
sales of chips, modules & devKits,
> Understanding and evaluating the effectiveness of the internal control design
which created a revenue of CNY
relating to the revenue recognition of product sales, and testing the
Since the operating revenue is a key > Evaluating the appropriateness of the sales revenue recognition policy by
performance indicator, there is an interviewing the management, reviewing the main terms of the sales contracts
inherent management risk when and the time point of major control transfers relating to the revenue recognition.
adjusting the time point of revenue
> Checking the origin of revenue by performing analytical procedures for the
recognition, in order for it to coincide
operating revenue, including monthly sales analysis, as well as gross profit
with certain goals or expectations.
analysis categorized by customers and products.
Therefore, we identify revenue
recognition, too, as a key auditing > Checking the authenticity of revenue by sampling supporting documents
matter. related to revenue recognition, such as sales contracts, shipping records and
customer receipts.
> Checking commercial information and the transaction prices paid by important
customers, in order to determine whether any abnormal transactions were made
by the company.
> Performing a cut-off test to check whether the revenue recognition is
recorded within the correct accounting period.
Inventory
As of December 31, 2025, the inventory The audit procedures we performed include, but are not limited to, the
balance amounts to CNY following:
> Evaluating the effectiveness of the internal control design of the inventory
inventory impairment CNY management, and testing the effectiveness of the critical control point.
amount of CNY 627,637,512.72. > Analyzing the rationality of the inventory balance fluctuation at the end of the
reporting period by investigating its production cycle and stock policy.
Since most inventories are stored in
warehouses entrusted by external > Calculating the inventory turnover during the reporting period and performing
a comparative analysis with the turnover rates of peer companies.
processors and third parties, and the
determination of provision for inventory > Implementing a supervision on the inventory check at the end of the reporting
impairment involves significant period.
management judgment and estimation,
> Performing confirmation procedures for inventory involving outsourced
we identify the existence of inventories
processing and those held in third-party warehouses.
and the provision for inventory
impairments as key matters. > Evaluating whether the provision for inventory impairment at the end of the
reporting period is fully accrued by conducting storage age analysis,
understanding the specific accrual process, and reviewing the calculation
results of the impairment provision.
FURTHER INFORMATION ESPRESSIF SYSTEM 2025 ANNUAL REPORT
Other Information
The management of Espressif Systems (Shanghai) Co., Ltd. (henceforth, “the management”) is responsible for any
information on all aspects of the 2025 company report, apart from the financial statements and the auditor’s report
on them.
Our opinions on the financial statements and the group management report do not cover the rest of the information
provided here, and consequently we do not express an opinion or any other form of assurance conclusion thereof.
In connection with our audit, our responsibility is to read the rest of the information provided and, in so doing,
consider whether this information:
> is materially inconsistent with the consolidated financial statements, with the group management report information
audited for content or our knowledge obtained in the audit, or
> appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. However, we have nothing to report in this regard.
Management's Responsibilities for the Financial
Statements
The management is responsible for the preparation of financial statements that give a true and fair view, in
accordance with the ASBE, and for the design, implementation and maintenance of such internal controls as the
management deems necessary, to enable the preparation of financial statements that are free from material
misstatements, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to continue
its operation, disclosing, as applicable, any matters related to ongoing concerns and using them as the basis of
accounting, unless the management either intends to liquidate the Company or cease its operations, having no
realistic alternative but to do so.
Those charged with governance are responsible for overseeing the financial reporting process of Espressif Systems.
Auditor’s Responsibilities for the Auditing of the
Financial Statements
Our objectives are to obtain reasonable assurances about whether the financial statements as a whole are free from
material misstatements, due to either fraud or errors, and to issue an auditor’s report that includes our true opinion.
Reasonable assurances provide a high level of confidence, but are not a guarantee that an audit conducted in
accordance with CSAs will always detect a material misstatement when and where it exists.
Misstatements can arise from fraud or errors and are considered substantial if, individually or in aggregate, they could
reasonably be expected to influence the economic decisions of users, taken on the basis of these financial
statements.
As part of an audit in accordance with CSAs, we exercise our professional judgment and maintain professional
skepticism throughout the audit. We also:
FURTHER INFORMATION ESPRESSIF SYSTEM 2025 ANNUAL REPORT
> Identify and assess the risks of substantial financial misstatements, due to either fraud or errors; design and
perform auditing procedures in response to those risks, and obtain auditing evidence that is sufficient and
appropriate for providing a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls.
> Obtain an understanding of internal controls relevant to the audit, in order to design auditing procedures that are
appropriate to the circumstances.
> Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
> Conclude on the appropriateness of the management’s use of a growing concern as the basis of accounting and,
according to the auditing evidence obtained, determine whether a substantial uncertainty exists about events or
conditions that may cast a significant doubt on the Company’s ability to continue its operation. If we conclude that
there is substantial uncertainty, we are required to draw users’ attention to our auditor’s report on the related
disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions
are based on the auditing evidence obtained up until the date of our auditor’s report. However, future events or
conditions may force the Company to cease its operation altogether.
> Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
determine whether the financial statements represent the underlying transactions and events in a manner that
achieves a fair presentation.
> Obtain sufficient and appropriate auditing evidence about the financial information of entities or business activities
of the Company, in order to express our auditing opinion on the Company’s consolidated financial statements. We are
responsible for directing, supervising and executing group audits and assume full responsibility for auditing opinions.
We communicate with those charged with governance, among other matters, on the planned auditing scope, timing
and significant audit findings, including any significant deficiencies in internal controls that we may identify during
our audit.
We also provide those charged with governance with a statement that we have complied with all relevant ethical
requirements regarding our independence, and we also communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence and, where applicable, any other related protections.
From the matters communicated to those charged with governance, we determine which matters are of the highest
significance in the auditing of the financial statements of the current period and are, therefore, the key auditing
findings. We describe these findings in our auditor’s report, unless a law or regulation prohibits such public
disclosure about those findings, or when -in extremely rare circumstances- we determine that a finding should not
be communicated in our report, because the adverse consequences of its disclosure would reasonably be
expected to outweigh the benefits of such communication for the public interest.
Beijing, 20 March 2026
Baker Tilly China
Ma Gang Zhang Wuyi
Chinese Certified Public Accountant Chinese Certified Public Accountant
FURTHER INFORMATION ESPRESSIF SYSTEM 2025 ANNUAL REPORT
List of abbreviations
AI Artificial Intelligence
AIoT Artificial Intelligence and Internet of Things
Bluetooth LE Bluetooth Low Energy
CEO Chief Executive Officer
CES Consumer Electronics Show
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
RTOS Real-Time Operating System
SG&A Selling, General and Administrative
SH Shanghai
SoCs System on Chips
YoY Year-on-Year
Investor 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
Copyright 2026 Espressif Systems (Shanghai) Co., Ltd. All rights
reserved. All trade names, trademarks and registered trademarks
mentioned in this document are the property of their respective
owners, and are hereby acknowledged. The term “Espressif” refers to
Espressif Systems (Shanghai) Co., Ltd. and/or its subsidiaries. This
report is written in both Chinese and English. In case of any
discrepancies between Chinese and foreign interpretations, the
Chinese version shall prevail.
All amounts presented in these condensed Consolidated Financial
Statements are shown in CNY unless stated otherwise. Slight
discrepancies between the amounts presented may occur due to
rounding.
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