MAGNACHIP SEMICONDUCTOR Corp

Previous wording

As of June 30, 2025, approximately $7.0 million aggregate principal amount of the CAPEX Loans was outstanding, which bears interest at 2.68% per annum and matures on June 26, 2035.

Current wording

As of September 30, 2025, the aggregate principal amount outstanding under the CAPEX Loans was approximately $10.4 million, which bears a weighted average interest rate of 2.66% per annum and matures on June 26, 2035.

Previous wording

On October 7, 2022, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce published changes to U.S. export control regulations (U.S. Export Regulations), including new restrictions on Chinese entities’ ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. Further, on October 12, 2022, a new rule went into effect requiring U.S. persons to obtain a license prior to engaging in certain activities that could “support” certainend-uses andend-users, including those related to weapons of mass destruction. Additionally, on October 21, 2022, BIS brought into effect a series of new Foreign Direct Product (FDP) rules and various new controls on advanced computing items, significantly expanding the scope of items that are subject to export control under the U.S. Export Regulations. More recently, on October 25, 2023, BIS published additional rules, which went into effect on November 17, 2023 to expand, clarify, and correct the rules published in October 2022. A further corrected and clarified version of these rules went into effect on April 4, 2024. On January 16, 2025, BIS published amendments and clarifications of the U.S. Export Regulations which further tightened controls of advanced computing items. Based on our understanding of the U.S. Export Regulations and related rules currently in effect, we do not anticipate that they will have a material impact on our current business, but we will continue reviewing and assessing these rules and regulations and their potential impact on our business. Additional changes to the U.S. Export Regulations are expected, such as recently proposed rule changes that may expand restrictions on export transactions involving end users or end uses with military connections; but the scope or timing of such changes is uncertain. We will continue to monitor such developments, including potential additional trade restrictions, and other regulatory or policy changes by the U.S. and foreign governments.

Current wording

On October 7, 2022, the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce published changes to U.S. export control regulations (U.S. Export Regulations), including new restrictions on Chinese entities’ ability to obtain advanced computing chips, develop and maintain supercomputers, and manufacture advanced semiconductors. Further, on October 12, 2022, a new rule went into effect requiring U.S. persons to obtain a license prior to engaging in certain activities that could “support” certainend-uses andend-users, including those related to weapons of mass destruction. Additionally, on October 21, 2022, BIS brought into effect a series of new Foreign Direct Product (FDP) rules and various new controls on advanced computing items, significantly expanding the scope of items that are subject to export control under the U.S. Export Regulations. More recently, on October 25, 2023, BIS published additional rules, which went into effect on November 17, 2023 to expand, clarify, and correct the rules published in October 2022. A further corrected and clarified version of these rules went into effect on April 4, 2024. On January 16, 2025, BIS published amendments and clarifications of the U.S. Export Regulations which further tightened controls of advanced computing items. On September 30, 2025, BIS published an “Affiliates Rule,” effective immediately, to expandend-user controls to cover certain affiliates of entities designated on BIS Entity List or Military End User List or designated on the Specially Designated Nationals and Blocked Persons (SDN) List administered by the U.S. Department of the Treasury, Office of Foreign Assets Control. Based on our understanding of the U.S. Export Regulations and related rules currently in effect, we expect to invest additional resources and efforts in the screening of prospects, customers, andend-users in order to comply with the new Affiliates Rule; while we do not anticipate that the rest of the rules will have a material impact on our current business, we will continue reviewing and assessing these rules and regulations and their potential impact on our business. Additional changes to the U.S. Export Regulations are expected, such as recently proposed rule changes that may expand restrictions on export transactions involving end users or end uses with military connections; but the scope or timing of such changes is uncertain. We will continue to monitor such developments, including potential additional trade restrictions, and other regulatory or policy changes by the U.S. and foreign governments.

Previous wording

We use the terms Adjusted EBITDA, Adjusted Operating Income (Loss) and Adjusted Net Income (Loss) (including on a per share basis) in this Report. Adjusted EBITDA, as we define it, is anon-U.S. GAAP measure. We define Adjusted EBITDA for the periods indicated as EBITDA (as defined below), adjusted to exclude (i) equity-based compensation expense, (ii) foreign currency loss (gain), net, (iii) derivative valuation loss (gain), net and (iv) other charges. EBITDA for the periods indicated is defined as net income (loss) before interest income, interest expense, income tax benefit, net and depreciation and amortization.

Current wording

We use the terms Adjusted EBITDA, Adjusted Operating Income (Loss) and Adjusted Net Income (Loss) (including on a per share basis) in this Report. Adjusted EBITDA, as we define it, is anon-U.S. GAAP measure. We define Adjusted EBITDA for the periods indicated as EBITDA (as defined below), adjusted to exclude (i) equity-based compensation expense, (ii) foreign currency loss (gain), net, (iii) derivative valuation loss (gain), net and (iv) early termination and other charges. EBITDA for the periods indicated is defined as net income (loss) before interest income, interest expense, income tax expense (benefit), net and depreciation and amortization.

Previous wording

We encourage you to evaluate each adjustment and the reasons we consider them appropriate. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Adjusted EBITDA is not a measure defined in accordance with U.S. GAAP and should not be construed as an alternative to income (loss) from continuing operations or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flows from operating activities as a measure of liquidity. A reconciliation of income (loss) to Adjusted EBITDA from continuing operations is as follows:

Current wording

We encourage you to evaluate each adjustment and the reasons we consider them appropriate. In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Adjusted EBITDA is not a measure defined in accordance with U.S. GAAP and should not be construed as an alternative to income (loss) from continuing operations or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flows from operating activities as a measure of liquidity. A reconciliation of loss to Adjusted EBITDA from continuing operations is as follows:

Previous wording

Adjusted Operating Income (Loss) is not a measure defined in accordance with U.S. GAAP and should not be construed as an alternative to operating income (loss) or any other performance measure derived in accordance with U.S. GAAP. We encourage you to evaluate each adjustment and the reasons we consider them appropriate. Other companies in our industry may calculate Adjusted Operating Income (Loss) differently than we do, limiting its usefulness as a comparative measure. In addition, in evaluating Adjusted Operating Income (Loss), you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. We define Adjusted Operating Income (Loss) for the periods indicated as operating income (loss) adjusted to exclude (i) equity-based compensation expense and (ii) other charges.

Current wording

Adjusted Operating Income (Loss) is not a measure defined in accordance with U.S. GAAP and should not be construed as an alternative to operating income (loss) or any other performance measure derived in accordance with U.S. GAAP. We encourage you to evaluate each adjustment and the reasons we consider them appropriate. Other companies in our industry may calculate Adjusted Operating Income (Loss) differently than we do, limiting its usefulness as a comparative measure. In addition, in evaluating Adjusted Operating Income (Loss), you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. We define Adjusted Operating Income (Loss) for the periods indicated as operating income (loss) adjusted to exclude (i) equity-based compensation expense and (ii) early termination and other charges.

Previous wording

Adjusted Net Income (Loss) (including on a per share basis) is not a measure defined in accordance with U.S. GAAP and should not be construed as an alternative to income (loss) from continuing operations or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flows from operating activities as a measure of liquidity. We encourage you to evaluate each adjustment and the reasons we consider them appropriate. Other companies in our industry may calculate Adjusted Net Income (Loss) (including on a per share basis) differently than we do, limiting its usefulness as a comparative measure. In addition, in evaluating Adjusted Net Income (Loss) (including on a per share basis), you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. We define Adjusted Net Income (Loss) (including on a per share basis); for the periods indicated as net income (loss), adjusted to exclude (i) equity-based compensation expense, (ii) foreign currency loss (gain), net, (iii) derivative valuation loss (gain), net, (iv) other charges and (v) income tax effect onnon-GAAP adjustments.

Current wording

Adjusted Net Income (Loss) (including on a per share basis) is not a measure defined in accordance with U.S. GAAP and should not be construed as an alternative to income (loss) from continuing operations or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flows from operating activities as a measure of liquidity. We encourage you to evaluate each adjustment and the reasons we consider them appropriate. Other companies in our industry may calculate Adjusted Net Income (Loss) (including on a per share basis) differently than we do, limiting its usefulness as a comparative measure. In addition, in evaluating Adjusted Net Income (Loss) (including on a per share basis), you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. We define Adjusted Net Income (Loss) (including on a per share basis); for the periods indicated as net income (loss), adjusted to exclude (i) equity-based compensation expense, (ii) foreign currency loss (gain), net, (iii) derivative valuation loss (gain), net, (iv) early termination and other charges and (v) income tax effect onnon-GAAP adjustments.

Previous wording

The following table summarizes the adjustments to income (loss) from continuing operations that we make in order to calculate Adjusted Income (Loss) (including on a per share basis) from continuing operations for the periods indicated:

Current wording

The following table summarizes the adjustments to loss from continuing operations that we make in order to calculate Adjusted Loss (including on a per share basis) from continuing operations for the periods indicated:

Previous wording

We recognize revenue when a customer obtains control of the product, which is generally upon product shipment, delivery at the customer’s location or upon customer acceptance, depending on the terms of the arrangement. For the six months ended June 30, 2025 and 2024, we sold products to 163 and 135 customers, respectively, and our net sales to our ten largest customers represented 74% and 73% of our net sales – Power solutions business, respectively.

Current wording

We recognize revenue when a customer obtains control of the product, which is generally upon product shipment, delivery at the customer’s location or upon customer acceptance, depending on the terms of the arrangement. For the nine months ended September 30, 2025 and 2024, we sold products to 173 and 147 customers, respectively, and our net sales to our ten largest customers represented 74.2% and 72.5% of our net sales – Power solutions business, respectively.

Previous wording

Labor Costs. A significant portion of our employees are located in Korea. Under Korean labor laws, most employees and certain executive officers with one or more years of service are entitled to severance benefits upon the termination of their employment based on their length of service and rate of pay. As of June 30, 2025, 96% of our employees were eligible for severance benefits.

Current wording

Labor Costs. A significant portion of our employees are located in Korea. Under Korean labor laws, most employees and certain executive officers with one or more years of service are entitled to severance benefits upon the termination of their employment based on their length of service and rate of pay. As of September 30, 2025, 97% of our employees were eligible for severance benefits.

Previous wording

Depreciation Expense. We periodically evaluate the carrying values of long-lived assets, including property, plant and equipment and intangible assets, as well as the related depreciation periods. We depreciated our property, plant and equipment using the straight-line method over the estimated useful lives of our assets. Depreciation rates vary from 30-40 years on buildings to 3-12 years for certain equipment and assets. Our evaluation of carrying values is based on various analyses including cash flow and profitability projections. If our projections indicate that future undiscounted cash flows are not sufficient to recover the carrying value of the related long-lived assets, the carrying value of the assets is impaired and will be reduced, with the reduction charged to expense so that the carrying value is equal to fair value.

Current wording

Depreciation Expense. We periodically evaluate the carrying values of long-lived assets, including property, plant and equipment and intangible assets, as well as the related depreciation periods. We depreciate our property, plant and equipment using the straight-line method over the estimated useful lives of our assets. Depreciation rates vary from 30-40 years on buildings to 3-12 years for certain equipment and assets. Our evaluation of carrying values is based on various analyses including cash flow and profitability projections. If our projections indicate that future undiscounted cash flows are not sufficient to recover the carrying value of the related long-lived assets, the carrying value of the assets is impaired and will be reduced, with the reduction charged to expense so that the carrying value is equal to fair value.

Previous wording

Impact of Foreign Currency Exchange Rates on Reported Results of Operations. Historically, a portion of our revenues and cost of sales and greater than the majority of our operating expenses have been denominated innon-U.S. currencies, principally the Korean won, and we expect that this will remain true in the future. Because we report our results of operations in U.S. dollars converted from ournon-U.S. revenues and expenses based on monthly average exchange rates, changes in the exchange rate between the Korean won and the U.S. dollar could materially impact our reported results of operations and distort period to period comparisons. In particular, because of the difference in the amount of our consolidated revenues and expenses that are in U.S. dollars relative to Korean won, depreciation in the U.S. dollar relative to the Korean won could result in a material increase in reported costs relative to revenues, and therefore could cause our profit margins and operating income to appear to decline materially, particularly relative to prior periods. The converse is true if the U.S. dollar were to appreciate relative to the Korean won. Moreover, our foreign currency gain or loss would be affected by changes in the exchange rate between the Korean won and the U.S. dollar as a substantial portion ofnon-cash translation gain or loss is associated with the intercompany long-term loans to one of our Korean subsidiaries, Magnachip Semiconductor, Ltd. or MSK, which is denominated in U.S. dollars. As of June 30, 2025, the outstanding intercompany loan balance including accrued interest between MSK and our Dutch subsidiary was $241.7 million. As a result of such foreign currency fluctuations, it could be more difficult to detect underlying trends in our business and results of operations. In addition, to the extent that fluctuations in currency exchange rates cause our results of operations to differ from our expectations or the expectations of our investors, the trading price of our stock could be adversely affected.

Current wording

Impact of Foreign Currency Exchange Rates on Reported Results of Operations. Historically, a portion of our revenues and cost of sales and greater than the majority of our operating expenses have been denominated innon-U.S. currencies, principally the Korean won, and we expect that this will remain true in the future. Because we report our results of operations in U.S. dollars converted from ournon-U.S. revenues and expenses based on monthly average exchange rates, changes in the exchange rate between the Korean won and the U.S. dollar could materially impact our reported results of operations and distort period to period comparisons. In particular, because of the difference in the amount of our consolidated revenues and expenses that are in U.S. dollars relative to Korean won, depreciation in the U.S. dollar relative to the Korean won could result in a material increase in reported costs relative to revenues, and therefore could cause our profit margins and operating income to appear to decline materially, particularly relative to prior periods. The converse is true if the U.S. dollar were to appreciate relative to the Korean won. Moreover, our foreign currency gain or loss would be affected by changes in the exchange rate between the Korean won and the U.S. dollar as a substantial portion ofnon-cash translation gain or loss is associated with the intercompany long-term loans to one of our Korean subsidiaries, Magnachip Semiconductor, Ltd. or MSK, which is denominated in U.S. dollars. As of September 30, 2025, the outstanding intercompany loan balance including accrued interest between MSK and our Dutch subsidiary was $244.7 million. As a result of such foreign currency exchange rate fluctuations, it could be more difficult to detect underlying trends in our business and results of operations. In addition, to the extent that fluctuations in currency exchange rates cause our results of operations to differ from our expectations or the expectations of our investors, the trading price of our stock could be adversely affected.

Previous wording

Total revenues were $47.6 million for the three months ended June 30, 2025, a $1.2 million, or 2.6%, increase compared to $46.4 million for the three months ended June 30, 2024. This increase was primarily due to an increase in revenue related to our Power solutions business as described below.

Current wording

Total revenues were $45.9 million for the three months ended September 30, 2025, a $9.5 million, or 17.1%, decrease compared to $55.4 million for the three months ended September 30, 2024. This decrease was primarily due to a decrease in revenue related to our Power solutions business as described below.

Previous wording

The Power solutions business. Net sales from our Power solutions business were $47.6 million for the three months ended June 30, 2025, a $3.6 million, or 8.1%, increase compared to $44.1 million for the three months ended June 30, 2024. The increase in net sales from our Power solutions business line was attributable to a higher demand for power products such as MOSFETs, including high-end MOSFETs in the communication and computing applications. A higher demand for our Power IC products, primarily for LED televisions and OLED IT devices, also had a favorable impact on net sales.

Current wording

The Power solutions business. Net sales from our Power solutions business were $45.9 million for the three months ended September 30, 2025, a $7.0 million, or 13.3%, decrease compared to $53.0 million for the three months ended September 30, 2024. The decrease in net sales from our Power solutions business line was primarily attributable to the competitive pricing pressure on our older generation products, particularly in China, which was offset in part by a higher demand forlow-voltage MOSFETs in communication applications. A lower demand for our Power IC products, primarily for OLED IT devices, also had an unfavorable impact on net sales.

Previous wording

Total gross profit was $9.7 million for the three months ended June 30, 2025 compared to $9.8 million the three months ended June 30, 2024, a $0.1 million, or 0.8%, decrease. Gross profit as a percentage of net sales for the three months ended June 30, 2025 decreased to 20.4% compared to 21.1% for the three months ended June 30, 2024. The decrease in gross profit and gross profit as a percentage of net sales was primarily due to our Power solutions business as further described below.

Current wording

Total gross profit was $8.5 million for the three months ended September 30, 2025 compared to $11.5 million for the three months ended September 30, 2024, a $3.0 million, or 25.8%, decrease. Gross profit as a percentage of net sales for the three months ended September 30, 2025 decreased to 18.6% compared to 20.8% for the three months ended September 30, 2024. The decrease in gross profit and gross profit as a percentage of net sales was primarily due to our Power solutions business as further described below.

Previous wording

The Power solutions business. Gross profit from our Power solutions business was $9.7 million for the three months ended June 30, 2025, which represented a $0.2 million, or 2.0%, decrease from gross profit of $9.9 million for the three months ended June 30, 2024. Gross profit as a percentage of net sales for the three months ended June 30, 2025 decreased to 20.4% compared to 22.5% for the three months ended June 30, 2024. The year-over-year decrease in gross profit as a percentage of net sales was primarily attributable to an unfavorable product mix primarily relating to ASP erosion due to increased pricing pressure on our older generation products, particularly in China.

Current wording

The Power solutions business. Gross profit from our Power solutions business was $8.5 million for the three months ended September 30, 2025, which represented a $3.1 million, or 26.8%, decrease from gross profit of $11.7 million for the three months ended September 30, 2024. Gross profit as a percentage of net sales for the three months ended September 30, 2025 decreased to 18.6% compared to 22.0% for the three months ended September 30, 2024. The year-over-year decrease in gross profit and gross profit as a percentage of net sales was primarily attributable to an unfavorable product mix primarily relating to ASP erosion due to increased pricing pressure on our older generation products, particularly in China.

Previous wording

Research and Development Expenses. Research and development expenses were $7.0 million, or 14.7% of total revenues, for the three months ended June 30, 2025, compared to $5.8 million, or 12.4% of total revenues, for the three months ended June 30, 2024. The increase of $1.2 million, or 20.9%, was primarily attributable to higher personnel costs resulting from the increased headcount of research and development staff and an increase in material costs for power products based on the timing of development activities.

Current wording

Research and Development Expenses. Research and development expenses were $7.8 million, or 16.9% of total revenues, for the three months ended September 30, 2025, compared to $6.5 million, or 11.7% of total revenues, for the three months ended September 30, 2024. The increase of $1.3 million, or 20.1%, was primarily attributable to higher personnel costs resulting from the increased headcount of research and development staff and an increase in material costs for power products based on the timing of development activities.

Previous wording

As a result of the foregoing, operating loss of $7.4 million was recorded for the three months ended June 30, 2025 compared to operating loss of $5.7 million for the three months ended June 30, 2024. As discussed above, the increase in operating loss of $1.7 million resulted primarily from a $1.2 million increase in research and development expenses, a $0.8 million increase in other charges and a $0.1 million decrease in gross profit, which was offset in part by a $0.4 million decrease in selling, general and administrative expenses.

Current wording

As a result of the foregoing, operating loss of $11.5 million was recorded for the three months ended September 30, 2025 compared to operating loss of $4.5 million for the three months ended September 30, 2024. As discussed above, the increase in operating loss of $7.1 million resulted primarily from a $4.0 million increase in early termination and other charges, a $3.0 million decrease in gross profit and a $1.3 million increase in research and development expenses, which was offset in part by a $1.2 million decrease in selling, general and administrative expenses.

Previous wording

Interest Income. Interest income was $1.3 million and $2.1 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Interest Income. Interest income was $1.3 million and $1.9 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Interest Expense. Interest expense was $0.4 million and $0.5 million for the three months ended June 30, 2025 and 2024, respectively.

Current wording

Interest Expense. Interest expense was $0.5 million and $0.5 million for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Foreign Currency Gain (Loss), Net. Net foreign currency gain for the three months ended June 30, 2025 was $10.8 million compared to net foreign currency loss of $3.6 million for the three months ended June 30, 2024. The net foreign currency gain for the three months ended June 30, 2025 was due to the appreciation in value of the Korean won relative to the U.S. dollar during the period. The net foreign currency loss for the three months ended June 30, 2024 was due to the depreciation in value of the Korean won relative to the U.S. dollar during the period.

Current wording

Foreign Currency Gain (Loss), Net. Net foreign currency loss for the three months ended September 30, 2025 was $4.3 million compared to net foreign currency gain of $5.2 million for the three months ended September 30, 2024. The net foreign currency loss for the three months ended September 30, 2025 was due to the depreciation in value of the Korean won relative to the U.S. dollar during the period. The net foreign currency gain for the three months ended September 30, 2024 was due to the appreciation in value of the Korean won relative to the U.S. dollar during the period.

Previous wording

A substantial portion of our net foreign currency gain or loss isnon-cash translation gain or loss associated with intercompany long-term loans to one of our Korean subsidiaries, which are denominated in U.S. dollars, and are affected by changes in the exchange rate between the Korean won and the U.S. dollar. As of June 30, 2025 and 2024, the outstanding intercompany loan balances, including accrued interest between our Korean subsidiary, Magnachip Semiconductor, Ltd., and our Dutch subsidiary, were $241.7 million and $261.5 million, respectively. Foreign currency translation gain or loss from intercompany balances were included in determining our consolidated net income (loss) since the intercompany balances were not considered long-term investments in nature because management intended to settle these intercompany balances at their respective maturity dates.

Current wording

A substantial portion of our net foreign currency gain or loss isnon-cash translation gain or loss associated with intercompany long-term loans to one of our Korean subsidiaries, which are denominated in U.S. dollars, and are affected by changes in the exchange rate between the Korean won and the U.S. dollar. As of September 30, 2025 and 2024, the outstanding intercompany loan balances, including accrued interest between our Korean subsidiary, Magnachip Semiconductor, Ltd., and our Dutch subsidiary, were $244.7 million and $259.7 million, respectively. Foreign currency translation gain or loss from intercompany balances were included in determining our consolidated net income (loss) since the intercompany balances were not considered long-term investments in nature because management intended to settle these intercompany balances at their respective maturity dates.

Previous wording

Income tax benefit was $4.1 million for the three months ended June 30, 2025, which was primarily attributable to the estimated taxable loss in our Korean subsidiary for the respective period, including loss recognized in connection with the shutdown of the discontinued Display business during the second quarter of 2025.

Current wording

Income tax benefit was $4.2 million for the three months ended September 30, 2025, which was primarily attributable to the estimated taxable loss in our Korean subsidiary for the respective period, including loss recognized in connection with the shutdown of the discontinued Display business during the second quarter of 2025.

Previous wording

Loss from discontinued operations, net of tax for the three months ended June 30, 2025 was $8.2 million, compared to loss from discontinued operations, net of tax of $10.8 million for the three months ended June 30, 2024. The $2.6 million improvement in loss from discontinued operations, net of tax primarily resulted from a $3.6 million decrease in income tax expense, which was offset in part by a $0.4 million increase in operating loss.

Current wording

Loss from discontinued operations, net of tax for the three months ended September 30, 2025 was $2.5 million, compared to loss from discontinued operations, net of tax of $5.7 million for the three months ended September 30, 2024. The $3.2 million improvement in loss from discontinued operations, net of tax primarily resulted from a $4.6 million improvement in operating loss, which was offset in part by a $1.7 million decrease in income tax benefit.

Previous wording

As a result of the foregoing, a net loss of $8.6 million was recorded for the six months ended June 30, 2025 compared to a net loss of $28.4 million for the six months ended June 30, 2024. As discussed above, the improvement in net loss of $19.9 million primarily resulted from a $19.9 million decrease in loss from continuing operations.

Current wording

As a result of the foregoing, a net loss of $13.1 million was recorded for the three months ended September 30, 2025 compared to a net loss of $9.6 million for the three months ended September 30, 2024. As discussed above, the increase in net loss of $3.5 million primarily resulted from a $6.7 million increase in loss from continuing operations, which was offset by a $3.2 million improvement in loss from discontinued operations, net of tax.

Previous wording

Results of Operations – Comparison of Six Months Ended June 30, 2025 and 2024

Current wording

Results of Operations – Comparison of Nine Months Ended September 30, 2025 and 2024

Previous wording

The following table sets forth consolidated results of operations for the six months ended June 30, 2025 and 2024:

Current wording

The following table sets forth consolidated results of operations for the nine months ended September 30, 2025 and 2024:

Previous wording

The Power solutions business. Net sales from our Power solutions business were $92.3 million for the six months ended June 30, 2025, an $8.4 million, or 10.0%, increase compared to $84.0 million for the six months ended June 30, 2024. The increase in net sales from our Power solutions business line was attributable to a higher demand for power products such as MOSFETs in the communication applications. A higher demand for our Power IC products, primarily for LED televisions and OLED IT devices, also had a favorable impact on net sales.

Current wording

The Power solutions business. Net sales from our Power solutions business were $138.3 million for the nine months ended September 30, 2025, a $1.3 million, or 1.0%, slightly increase compared to $137.0 million for the nine months ended September 30, 2024. The increase in net sales from our Power solutions business line was attributable to a higher demand for power products such aslow-voltage MOSFETs in communication applications, which was mostly offset by a decreased revenue due mainly to the competitive pricing pressure on our older generation products in consumer and industrial applications. A higher demand for our Power IC products, primarily for LED televisions, also had a favorable impact on net sales.

Previous wording

Total gross profit was $19.1 million for the six months ended June 30, 2025 compared to $16.1 million for the six months ended June 30, 2024, a $2.9 million, or 18.1%, increase. Gross profit as a percentage of net sales for the six months ended June 30, 2025 increased to 20.7% compared to 18.0% for the six months ended June 30, 2024. The increase in gross profit and gross profit as a percentage of net sales was primarily due to our Power solutions business as further described below.

Current wording

Total gross profit was $27.6 million for the nine months ended September 30, 2025, which remained almost flat, compared to $27.7 million for the nine months ended September 30, 2024. Gross profit as a percentage of net sales for the nine months ended September 30, 2025 increased to 20.0% compared to 19.0% for the nine months ended September 30, 2024.

Previous wording

The Power solutions business. Gross profit from our Power solutions business was $19.1 million for the six months ended June 30, 2025, which represented a $2.1 million, or 12.5%, increase from gross profit of $17.0 million for the six months ended June 30, 2024. Gross profit as a percentage of net sales for the six months ended June 30, 2025 increased to 20.7% compared to 20.2% for the six months ended June 30, 2024. The year-over-year increase in gross profit as a percentage of net sales was primarily attributable to the appreciation in value of U.S. dollar against the Korean Won in the first quarter of 2025, which was offset in part by an unfavorable product mix primarily relating to ASP erosion due to increased pricing pressure on our older generation products, particularly in China.

Current wording

The Power solutions business. Gross profit from our Power solutions business was $27.6 million for the nine months ended September 30, 2025, which represented a $1.0 million, or 3.5%, decrease from gross profit of $28.6 million for the nine months ended September 30, 2024. Gross profit as a percentage of net sales for the nine months ended September 30, 2025 decreased to 20.0% compared to 20.9% for the nine months ended September 30, 2024. The year-over-year decrease in gross profit and gross profit as a percentage of net sales was primarily attributable to an unfavorable product mix primarily relating to ASP erosion due to increased pricing pressure on our older generation products, particularly in China.

Previous wording

We report net sales – Power solutions business by geographic region based on the location to which the products are billed. The following table sets forth our net sales – Power solutions business by geographic region and the percentage of total net sales – Power solutions business represented by each geographic region for the six months ended June 30, 2025 and 2024:

Current wording

We report net sales – Power solutions business by geographic region based on the location to which the products are billed. The following table sets forth our net sales – Power solutions business by geographic region and the percentage of total net sales – Power solutions business represented by each geographic region for the nine months ended September 30, 2025 and 2024:

Previous wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $9.3 million, or 19.6% of total revenues, for the three months ended June 30, 2025, compared to $9.7 million, or 21.0% of total revenues, for the three months ended June 30, 2024. The decrease of $0.4 million, or 4.3%, was primarily attributable to a decrease in professional fees mainly comprised of legal and consulting fees.

Current wording

Selling, General and Administrative Expenses. Selling, general and administrative expenses were $26.5 million, or 19.2% of total revenues, for the nine months ended September 30, 2025, compared to $28.3 million, or 19.5% of total revenues, for the nine months ended September 30, 2024. The decrease of $1.9 million, or 6.5%, was primarily attributable to a decrease in employee compensation, mainly due to the forfeiture of equity-based compensation in connection with the separation of certain executive officers, as well as a decrease in professional fees mainly comprised of legal and consulting fees.

Previous wording

Research and Development Expenses. Research and development expenses were $12.9 million, or 14.0% of total revenues, for the six months ended June 30, 2025, compared to $12.0 million, or 13.3% of total revenues, for the six months ended June 30, 2024. The increase of $0.9 million, or 7.8%, was primarily attributable to higher personnel costs resulting from the increased headcount of research and development staff.

Current wording

Research and Development Expenses. Research and development expenses were $19.7 million, or 14.2% of total revenues, for the nine months ended September 30, 2025, compared to $18.5 million, or 12.7% of total revenues, for the nine months ended September 30, 2024. The increase of $1.2 million, or 6.7%, was primarily attributable to higher personnel costs resulting from the increased headcount of research and development staff and an increase in material costs for power products based on the timing of development activities.

Previous wording

Other Charges. For the three months ended June 30, 2025, we recorded $0.5 million ofone-time employee incentives and $0.3 million of certain executive separation benefit related accruals.

Current wording

Early Termination and Other Charges. For the nine months ended September 30, 2025, we recorded $2.6 million of termination-related charges in connection with the voluntary resignation program, $1.7 million of certain executive separation benefits and $0.5 million ofone-time employee incentives.

Previous wording

As a result of the foregoing, operating loss of $13.7 million was recorded for the six months ended June 30, 2025 compared to operating loss of $15.1 million for the six months ended June 30, 2024. As discussed above, the improvement in operating loss of $1.4 million resulted primarily from a $2.9 million increase in gross profit and a $0.2 million decrease in selling, general and administrative expenses, which was offset in part by a $0.9 million increase in research and development expenses, and a $0.8 million increase in other charges.

Current wording

As a result of the foregoing, operating loss of $23.4 million was recorded for the nine months ended September 30, 2025 compared to operating loss of $19.1 million for the nine months ended September 30, 2024. As discussed above, the increase in operating loss of $4.3 million resulted primarily from a $4.8 million increase in early termination and other charges and a $1.2 million increase in research and development expenses, which was offset in part by a $1.9 million decrease in selling, general and administrative expenses.

Previous wording

Interest Income. Interest income was $2.9 million and $4.3 million for the six months ended June 30, 2025 and 2024, respectively.

Current wording

Interest Income. Interest income was $4.1 million and $6.2 million for the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Foreign Currency Gain (Loss), Net. Net foreign currency gain for the six months ended June 30, 2025 was $10.4 million compared to net foreign currency loss of $8.6 million for the six months ended June 30, 2024. The net foreign currency gain for the six months ended June 30, 2025 was due to the appreciation in value of the Korean won relative to the U.S. dollar during the period. The net foreign currency loss for the six months ended June 30, 2024 was due to the depreciation in value of the Korean won relative to the U.S. dollar during the period.

Current wording

Foreign Currency Gain (Loss), Net. Net foreign currency gain for the nine months ended September 30, 2025 was $6.1 million compared to net foreign currency loss of $3.4 million for the nine months ended September 30, 2024. The net foreign currency gain for the nine months ended September 30, 2025 was due to the appreciation in value of the Korean won relative to the U.S. dollar during the period. The net foreign currency loss for the nine months ended September 30, 2024 was due to the depreciation in value of the Korean won relative to the U.S. dollar during the period.

Previous wording

A substantial portion of our net foreign currency gain or loss isnon-cash translation gain or loss associated with intercompany long-term loans to one of our Korean subsidiaries, which are denominated in U.S. dollars, and are affected by changes in the exchange rate between the Korean won and the U.S. dollar. As of June 30, 2025 and 2024, the outstanding intercompany loan balances, including accrued interest between our Korean subsidiary, Magnachip Semiconductor, Ltd., and our Dutch subsidiary, were $241.7 million and $261.5 million, respectively. Foreign currency translation gain or loss from intercompany balances were included in determining our consolidated net income (loss) since the intercompany balances were not considered long-term investments in nature because management intended to settle these intercompany balances at their respective maturity dates.

Current wording

A substantial portion of our net foreign currency gain or loss isnon-cash translation gain or loss associated with intercompany long-term loans to one of our Korean subsidiaries, which are denominated in U.S. dollars, and are affected by changes in the exchange rate between the Korean won and the U.S. dollar. As of September 30, 2025 and 2024, the outstanding intercompany loan balances, including accrued interest between our Korean subsidiary, Magnachip Semiconductor, Ltd., and our Dutch subsidiary, were $244.7 million and $259.7 million, respectively. Foreign currency translation gain or loss from intercompany balances were included in determining our consolidated net income (loss) since the intercompany balances were not considered long-term investments in nature because management intended to settle these intercompany balances at their respective maturity dates.

Previous wording

Income tax benefit was $4.5 million for the six months ended June 30, 2025, which was primarily attributable to the estimated taxable loss in our Korean subsidiary for the respective period, including loss recognized in connection with the shutdown of the discontinued Display business during the second quarter of 2025.

Current wording

Income tax benefit was $8.7 million for the nine months ended September 30, 2025, which was primarily attributable to the estimated taxable loss in our Korean subsidiary for the respective period, including loss recognized in connection with the shutdown of the discontinued Display business during the second quarter of 2025.

Previous wording

Income from continuing operations for the three months ended June 30, 2025 was $8.5 million compared to loss from continuing operations of $2.2 million for the three months ended June 30, 2024. The $10.7 million improvement in results from continuing operations was primarily attributable to a $14.4 million improvement in net foreign currency gain or loss, which was offset in part by a $1.7 million increase in operating loss and a $1.2 million decrease in income tax benefit.

Current wording

Loss from continuing operations for the nine months ended September 30, 2025 was $5.5 million compared to loss from continuing operations of $19.6 million for the nine months ended September 30, 2024. The $14.2 million improvement in results from continuing operations was primarily attributable to a $9.5 million improvement in net foreign currency gain or loss, and an $11.0 million increase in income tax benefit, which was offset in part by a $4.3 million increase in operating loss and a $2.1 million decrease in interest income.

Previous wording

As a result of the foregoing, a net income of $0.3 million was recorded for the three months ended June 30, 2025 compared to a net loss of $13.0 million for the three months ended June 30, 2024. As discussed above, the improvement in net loss of $13.3 million primarily resulted from a $10.7 million increase in income from continuing operations and a $2.6 million decrease in loss from discontinued operations, net of tax.

Current wording

As a result of the foregoing, a net loss of $21.6 million was recorded for the nine months ended September 30, 2025 compared to a net loss of $38.0 million for the nine months ended September 30, 2024. As discussed above, the improvement in net loss of $16.4 million primarily resulted from a $14.2 million decrease in loss from continuing operations and a $2.2 million decrease in loss from discontinued operations, net of tax.