CONTENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Contents
Message from the CEO 03 Management Report （Continued）
Developer-Centric Platform Strategy 20
About Espressif 07 Developer Community Content 21
Facts About Espressif 07 Research and Development 22
Key Technologies 08 Ownership of Securities 24
Risks and Uncertainties 25
Core Competitiveness 09
Consolidated Financial Statements 26
(Unaudited)
Business Highlights 10
Consolidated Balance Sheet 26
Key Financial Data (Unaudited) 10
Consolidated Income Statement 28
Key Financial Indicators (Unaudited) 10
Consolidated Cash Flow Statement 29
Financial Analysis 11
Consolidated Cash Flow Statement - Indirect
Method
Consolidated Statement of Changes in Equity 31
Management Report 13
Industry Overview 13
Product Positioning 15 Further Information 32
Key Products - Chip Matrix 16 Terms and Conditions of the Report 32
Product Market Tenure 17 List of abbreviations 33
Key Products - M5Stack Development Kits 18
B2D2B Business Model 19
MESSAGE FROM THE CEO ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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.
Picture source: The Business Times SPH Media Limited. Permission required for reproduction.
MESSAGE FROM THE CEO ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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.
MESSAGE FROM THE CEO ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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 AI 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 AI era. Through initiatives such
as ESP-Claw and ESP-Vision, as well as our support for emerging AI development technologies
such as MCP, we aim to further lower the barriers between AI 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,
MESSAGE FROM THE CEO ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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.
ABOUT ESPRESSIF ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR 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
Developer Flywheel Developer Growth More developers join,
learn, and build with
Espressif solutions.
Ecosystem Application
Expansion Innovation
The ecosystem grows with Developers create innovative
more partners, tools, and applications and solutions
integrations, enabling greater across diverse use cases.
possibilities.
Enterprise Adoption
Enterprises adopt Espressif's platform to commercialize and scale these innovations.
ABOUT ESPRESSIF ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
As a global semiconductor innovator, we deliver high-performance RISC-V SoCs and comprehensive solutions with
integrated AI, in-house operating system, robust security, and seamless cloud integration—shaping the future of
smart, connected systems.
Al Agent Edge Al Co-processor Mesh Wi-Fi Sensing HMI Multimedia Cloud & Matter Security
Cloud &
Ecosystem
AI
AI & IoT
ESP-CLAW ESP-VISION ESP-SR
SDK Edge AI Agent Framework Low-Code Edge AI Speech Recognition
ESP-WHO ESP-DL ESP-NN
Computer Vision Deep Learning Neural Network Library
IoT
ESP-Brookesia ESP-GMF ESP-loT-Solution
Al-Powered Ul Framework Audio&Video Processing Peripheral Integration
Operating In-House
System ESP-IDF
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)｜Bluetooth Classic (BR/EDR)
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 SYSTEMS 2026 Q2 & HALF-YEAR 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 SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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 Revenue by Sales Top-5 Customer
in H1 2026 Mode in H1 2026 Concentration Rate
China's Mailand Rest of the World Direct Indirect 2022 2023 2024 2025 H1 2026
Revenue by Product Category
Chip Module & DevKits Others
H1 2025 38.9% 60.5% 0.6%
H1 2026 34.9% 64.5% 0.6%
BUSINESS HIGHLIGHTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Financial Analysis (Continued)
Profitability & Resilience: Net income attributable to shareholders reached CNY 334.23 million, representing a
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
Key Financial Indicators
H1 2025 H1 2026
Overall GM EBITDA SG&A as % of R&D as % of Net Income ROE (H1)
Margin sales sales Margin
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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 AI and IoT (AIoT)
is continuously spawning new application scenarios, while driving the smart terminal industry toward a more open
and diversified development stage.
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.
Beyond the continuous upgrading of terminal form factors, AI 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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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.
Alongside the rapid adoption of AI 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 AI era introduces significantly higher software complexity. Developers today
focus not only on hardware performance, but even more so on development tools, software frameworks, AI 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 AI 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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
From Connectivity to AI
Espressif’s Product Positioning Across Device Evolution
Passive + System | Connectivity as Infrastructure AI / System-level Devices
From MCU to AI-enabled System Platforms
High
Systematic Connectivity Physical AI & High-Interaction
C / E / H-Series (Connectivity & Gateway) S / P-Series (AI & Computing)
System Integration / Capability
• Gateway / Thread / Matter Node
• AI Hardware (Voice / Vision), Robotics, AI Agent
• Systematic (Stacks / Multi-protocol)
• Multi-modal, High Compute,
• Low Interaction Proactive Interaction Path to
higher Add-on Value
Basic IoT Interactive Devices
ESP8266 ｜ Entry ESP32 ｜ C / H-Series Mainstream ESP32 ｜ S-Series
• Sensor, Basic Connected Device, Low-cost IoT
• Lightweight Voice, Display Device
• Passive, Connectivity-focused • Interaction, Basic System Capability
Low
Interactive Devices
Basic IoT | Connectivity as a Feature Interaction Emerges on top of Connectivity
Passive Active
Interaction
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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Key Products - Chip Matrix
AI AI AI
ESP ESP32 ESP32
ESP32
H.264 encoding
Function-
Driven ESP32
ESP32 - S2
ESP32
H4 ESP32 - H4
S2
ESP32
C5 ESP32 - C5
E22 ESP32 - E22
ESP32
C6 ESP32 - C6
ESP 8266 C61 ESP32 - C61
ESP32
C3 ESP32 - C3
Connectivity-
Driven ESP32
H21 ESP32 -H21
ESP32
C2 ESP32 - C2 1x Core @96 MHz
ESP32
H2 ESP32 - H2
Legacy Growth Emerging / Sampling
Wi-Fi 4 Bluetooth
Wi-Fi 6 Thread
N.B.: Wi-Fi 6E Zigbee
All products shown above are 32-bit MCU-based chips.
Matter Ultra-Low Power
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Product Market Tenure
Annual Revenue Trend Legacy Growth Emerging Sampling
ESP32-E22
ESP32-E22
ESP32-H21
ESP32-H21
ESP32-H4
ESP32-H4
ESP32-S31
ESP32-S31 <1 YEAR
ESP32-P4
ESP32-P4 2 YEARS
ESP32-C61
ESP32-C61 2 YEARS
ESP32-C5
ESP32-C5 2 YEARS
ESP32-H2
ESP32-H2 4 YEARS
ESP32-C6
ESP32-C6 4 YEARS
ESP32-C2
ESP32-C2 5 YEARS
ESP32-C3
ESP32-C3 6 YEARS
ESP32-S3
ESP32-S3 6 YEARS
ESP32-S2
ESP32-S2 7 YEARS
ESP32
ESP32 (Original)
(Original) 11 YEARS (SINCE 2016)
ESP8266
ESP8266 13 YEARS (SINCE 2014)
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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Key Products - M5Stack Development Kits
In addition to the ESP32 chip brand, Espressif also owns the M5Stack development kit brand. M5Stack is renowned
for its innovative approach to hardware development and offers a modular, open-source platform that simplifies the
creation of IoT and embedded system solutions, greatly enhancing deployment efficiency.
Beyond its hardware prowess, M5Stack has cultivated an exceptionally vibrant global developer community,
commanding high brand mindshare within the ecosystem. With an extensive lineup exceeding 400 products,
M5Stack continues to drive rapid innovation by launching a new product every week. M5Stack enables developers
to rapidly prototype and iterate. This vast community serves as a continuous validation engine, where grassroots
innovation frequently translates into mature, market-ready solutions.
In the first half of 2026, M5Stack successfully debuted two new products through Kickstarter crowdfunding
campaigns. 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.
HK$ 3,582,197
HK$ 14,960,226
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 SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Business Model
Business-to-Developer-to-Business (B2D2B)
We believe developers are the primary drivers of technological innovation. By serving developers first, we enable the
creation of new products, new applications, and ultimately new markets.
Our growth model is built on the global developer ecosystem through two complementary layers: Business-to-
Developer (B2D) and Business-to-Developer-to-Business (B2D2B).
B2D (Business-to-Developer) forms the foundation of our ecosystem. We regard developers as our primary direct
users and continuously invest in a comprehensive development platform, including processors, software
frameworks, operating systems, development tools, development kits, and technical support. Through our open-
source ecosystem, technical community, developer events, and continuous software enhancements, we maintain
long-term engagement with developers worldwide. In this sense, B2D resembles a direct-to-consumer (DTC)
model, where the "consumer" is the global developer community.
B2D2B (Business-to-Developer-to-Business) transforms developer adoption of our platform into enterprise
adoption of our technologies. As developers build innovative products on our platform, they bring our technologies
into their organizations and industries, driving the development and commercialization of intelligent hardware
applications across industrial automation, energy management, smart agriculture, consumer electronics, AI-enabled
devices, and many other markets.
Together, these two layers form Espressif's Developer Flywheel, where developers create new applications that
drive enterprise adoption, while growing enterprise adoption attracts more developers, reinforcing a self-sustaining
cycle of developer growth, application innovation, enterprise adoption, and ecosystem expansion.
B2D2B Model
Core Chip Software Tools
Smart Home Smart Lighting Industrial Control Charging Pile
Module Branch B
(Product Prototype)
Community
Portable Energy Storage
Branch A
(DIY Enthusiast)
Development Board
(DevKit) Photovoltaic Inverter
Smart Agriculture 3D Printer Smart Internet of Vehicles
Healthcare
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Behind Every Smart Devices is a
Developer-Centric Platform Strategy
CONNECTED DEVICE SMART INTERACTION EDGEAIAIDEVELOPERS
EDGE DEVELOPERS
DEVELOPERS DEVELOPERS
DESCRIPTION DESCRIPTION DESCRIPTION
Build reliable, low-power connected Create devices that interact naturally Develop intelligent devices capable
devices for IoT applications, with a with people through displays, touch, of running AI inference locally for
focus on wireless connectivity, voice, cameras, and multimodal vision, audio, robotics, and
energy efficiency, and security. interfaces. automation.
TYPICAL FOCUS TYPICAL FOCUS TYPICAL FOCUS
Smart home, Matter, Thread, AI toys, smart displays, HMI, Machine vision, robotics, AI cameras,
sensors, wearables, industrial IoT education, consumer electronics industrial AI, edge computing
HIGH-PERFORMANCE LINUX APPLICATION AI-NATIVE DEVELOPERS
CONNECTIVITY DEVELOPERS DEVELOPERS
DESCRIPTION DESCRIPTION
DESCRIPTION Build sophisticated embedded Build hardware applications with AI as
Design products that require high applications using Linux, leveraging the primary development interface,
bandwidth, low latency, and modern software frameworks and using natural language, AI coding
advanced wireless connectivity. open-source ecosystems. assistants, and low-code workflows.
TYPICAL FOCUS TYPICAL FOCUS TYPICAL FOCUS
Video streaming, industrial gateways, Python, ROS, OpenCV, edge Vibe coding, MCP, AI IDEs, rapid
XR, multimedia, networking computing, robotics, AI terminals prototyping
Espressif's long-term development strategy is centered on continuously expanding the developer ecosystem served
by its technology platform. As intelligent connected devices evolve, the required skill sets and development
workflows continue to diversify. Accordingly, the Company is broadening its technology portfolio to support an
increasingly diverse range of developer communities.
Today, Espressif's platforms are widely adopted by Connected Device Developers, who focus on low-power wireless
IoT applications, and Smart Interaction Developers, who build products featuring displays, voice, cameras, touch
interfaces, and multimodal user experiences. 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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Developer Community Content @20260630
Cumulative Number of GitHub
ESP32 Projects 179 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 319
Chinese Video Sharing Platform Global Video Sharing Platform
Most Viewed ESP32 Most Viewed ESP32 Most Viewed ESP32
Video (2026) Short (2026) Video (2026)
Always a on Social Media
Posted on 13 Jul 2026 Posted on 2 Feb 2026 Posted on 9 Jul 2026 Posted on 26 Jul 2026
????，从零硬啃机械臂！电机?的是 谱めくりペダル（?作）できた…
Researchers built a soft floating robot I Built a Tiny World Cup Live Score
?体式步进+驱动，? CAN 总线，主控是
for indoor interaction.
ESP32-S3 Gadget 今回は?幅に?を省くためにGeminiに
It uses helium and flapping fins instead 助けてもらっちゃいました
of propellers. I built a tiny DIY FIFA World Cup Live
The result is quiet, lightweight, and Score Gadget powered by an ESP32!
safe to touch.
It can follow people, give reminders, In this video, I'll show you how I built a
and act as a study buddy. compact ESP32-based World Cup live
score tracker that displays live football
scores, goal alerts, match statistics,……
https://www.bilibili.com/video/
https://x.com/tyuuuytrewq/status/
BV1G9Nw6kEZE/
https://x.com/clankrmedia/status/
Searched on 16 Jul 2026
Posted on 26 June 2026 https://www.youtube.com/watch?
v=vdqnaEQesAk
Made a coffee journal gadget
("Espresso Post") that tracks ambient
Posted on 7 Jul 2026 humidity/temp/pressure and nudges
my grind
This ESP32 Sisyphus Sand Table
Posted on 24 May 2026
Creates Endless Art [D.I.Y] (THE BUILD Got tired of re-dialing every time the
VIDEO) weather changed and never knowing if
it was the climate or just me being
I built this DIY Sand Table for under inconsistent, so I built a thing to track
$160! In this video, I take you through it.
the entire engineering process—from
the initial 3D design and laser cutting
to the final ESP32 firmware……
https://www.reddit.com/r/esp32/ 21
comments/1ufkm1o/
made_a_coffee_journal_gadget_espre
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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.
Fiscal Year
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 Applied for
copyright and trade secrets. As of June 30, 2026, the Company had been granted
recent R&D innovations. Granted
List of Intellectual Property Rights Applied and Granted
H1 2026 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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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 AI-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
R&D expenses (in million) R&D-to-sales ratio R&D employees 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.
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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) Investment Ltd. 85,694,801 36.56
Hong Kong Securities Clearing Company Limited 9,763,374 4.17
NSSF Portfolio 114 5,826,557 2.49
Wisdomshire Asset Management Co., Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.1
Wisdomshire Asset Management Co., Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.3
Shinvest Holding Ltd. 2,613,100 1.11
CITIC Securities Co., Ltd. – Harvest SSE STAR Market Chip Tradable
Open-ended Index Securities Investment Fund
Shanghai Letun Enterprise Management Partnership (Limited
Partnership)
Wisdomshire Asset Management Co., Ltd. - Wisdomshire Youfu
Private Equity Securities Investment Fund No.2
Schroder Investment Management (Hong Kong) Limited –
Schroder International Selection Fund China A
Top 10 shareholders 117,566,678 50.16
Espressif Systems (Shanghai) Co., Ltd. Repurchase Special
Securities Account
Other public shareholders 116,800,472 49.83
Total of outstanding shares 234,384,311 100.00
MANAGEMENT REPORT ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Risks and Uncertainties
Financial Risk
The Company performs periodic credit evaluations of its customers’ financial condition
and generally requires of its customers no collateral. The Company provides an
allowance for expected credit losses, based on the net amount expected to be
collected on such receivables. Losses have not been significant for any of the periods
presented in this report.
R&D Risk
Espressif’s research and development strategy is focused on leveraging new
technologies for the creation of innovative AIoT products. Any delays or changes in
the development of these technologies by our industry partners, or a failure of our
products to achieve market acceptance, could compromise our competitive position.
Competitors
As the market for AIoT products grows, we face an increasing antagonism from
relatively large competitors, such as Realtek, MediaTek, Infineon, NXP, Qualcomm,
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
CONSOLIDATED FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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 FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
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 FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Consolidated Income Statement (unaudited)
Three Months Ended Six Months Ended
CNY 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 FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Consolidated Cash Flow Statement (unaudited)
Three Months Ended Six Months Ended
CNY 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 7,138 15,770 14,905
assets and other long-term assets
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, 47,134,787 429,684,593 79,326,076 444,170,619
intangible assets and other long-term assets
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 83,702,554 68,546,838 83,702,554 69,199,894
payment of interests
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 -12,186,523 1,428,324 -30,741,710 1,021,156
equivalents
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 1,053,458,169 945,656,860 1,018,023,771 667,632,307
of the period
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 FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Consolidated Cash Flow Statement
- Indirect Method (unaudited)
Three Months Ended Six Months Ended
CNY 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 14,041 -3,770 29,598
other long-term assets (mark"-" for income)
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 5,097,900 4,878,478 -2,815,227 -10,066,168
increase）
Increase on deferred income tax liabilities（mark"-" for 5,432,693 3,233,445 11,003,961 7,156,215
decrease）
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 -97,445,069 -59,874,969 -80,632,236 -88,776,390
increase）
Increase in operational payables（mark"-" for 24,783,061 -58,847,115 -29,600,603 -68,363,642
decrease）
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 FINANCIAL STATEMENTS ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Consolidated Statement of Changes in Equity
(unaudited)
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
-3,176,361 261,262,177 258,085,816 1,777,588 259,863,404
income
Capital increase 44,502,291 -67,134,906 -130,566,230 107,933,615 107,933,615
Repurchase
Stock-based
-18,051,473 -18,051,473 -18,051,473
compensation
Surplus reserves
Subsidiary
Acquisition
Dividends -66,753,437 -66,753,437 -66,753,437
Balance as of
June 30, 2025
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, 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
-26,501,427 334,226,057 307,724,630 1,052,484 308,777,113
income
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
-17,058,467 -17,058,467 -17,058,467
compensation
Surplus reserves
Subsidiary
Acquisition
Dividends -83,702,554 -83,702,554 -83,702,554
Balance as of
June 30, 2026
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 ESPRESSIF SYSTEMS 2026 Q2 & HALF-YEAR REPORT
Further Information
Terms and Conditions of the Report
Responsibility Statement
The Board of Directors, and the executive management of the Company warrant that the contents of this report are
true, accurate and complete, and do not contain any false information, misleading statements or material omissions,
severally and jointly accepting any legal responsibility thereof.
Shanghai, 30 July 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 SYSTEMS 2026 Q2 & HALF-YEAR REPORT
List of abbreviations
AI Artificial Intelligence
AIoT Artificial Intelligence and Internet of Things
Bluetooth LE Bluetooth Low Energy
CEO Chief Executive Officer
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization
Espressif ESPRESSIF SYSTEMS (SHANGHAI) CO., LTD.
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 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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