ALPHA & OMEGA SEMICONDUCTOR Ltd
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
AOSL$23.61+27.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-06.
0001628280-26-031360
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001628280-26-071659
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 84 current paragraphs.
58 unchanged; 18 reworded; 8 added; 20 removed; 5 previous and 0 current paragraphs rearranged.
Tables are not compared: 13 previous and 13 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
In the first quarter of fiscal year 2027, an existing investor of the JV Company paid RMB 2.3 billion, or approximately $343.7 million based on the currency exchange rate between RMB and U.S. Dollar on August 31, 2026, to increase its share of ownership in the JV Company. As a result, the Company’s equity interest in the JV Company decreased to approximately 15.1%.
Current report
In 2024, the semiconductor industry was impacted by a global memory chip shortage, which has intensified through the first three calendar quarters of 2026, and such shortages have materially affected the market for power semiconductor products we sell. Driven by the concentration of manufacturing capacity — particularly for high-bandwidth memory used in AI applications — among a limited number of manufacturers, DRAM prices increased significantly. These cost increases have elevated the retail prices of personal computers, laptops, and related devices, reducing consumer affordability and contributing to an expected decline in the worldwide PC market.
Current report
Selling, general and administrative expenses were $24.1 million for the three months ended September 30, 2026, an increase of $0.8 million, or 3.4%, as compared to $23.3 million for the same quarter last year. The increase was primarily due to a $0.4 million increase in employee compensation and personnel related expenses primarily due to higher bonus expense, increased headcount and merit salary increase, a $0.6 million increase in a fixed asset impairment, and a $0.4 million increase on loss of fixed asset disposals, offset by a $0.2 million decrease in audit and tax professional service fees, a $0.1 million decrease in consulting fees, and $0.3 million decrease in share-based compensation expense as a result of the change in estimated achievement of the performance conditions associated with the MSUs granted in December 2021.
Current report
Interest income in the three months ended September 30, 2026, as compared to the same quarter last year remained flat.
Current report
Interest expenses
Current report
Equity method investment income
Current report
Equity method investment income increased in the three months ended September 30, 2026, as compared to the same quarter last year. During the three months ended September 30, 2026, we recognized income of $4.2 million related to our investment in the JV Company, including a $4.0 million gain resulting from the dilution of our ownership interest in the JV Company. During the three months ended September 30, 2025, we recorded income of $1.4 million, including $1.1 million on the sale of a portion of our interest in the equity method investment.
Current report
For three months ended September 30, 2026, the $20.2 million decrease in cash used in financing activities compared to the same period last year was primarily due to less repayments of borrowings due to less loan borrowings.
Removed paragraphs (20)
Previous report
In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and provided 24-months of engineering and development services for a total fee of $45.0 million. The license and development fee required significant integration to create a combined output to the customer and was determined to be one performance obligation and was recognized over the 24 months during which we performed the engineering and development services. We use the input method to measure progress and recognize revenue, based on the effort expended relative to the estimated total effort to satisfy the performance obligation. As of June 30, 2025, all revenue has been recognized and all consideration has been received associated with the license agreement, therefore we no longer have any obligations under the license agreement. During the three and nine months ended March 31, 2026, we recorded nil of license and development revenue, respectively. During the three and nine months ended March 31, 2025 we recorded $2.8 million and $13.8 million of license and development revenue, respectively. We also entered into an accompanying supply agreement to provide limited wafer supply to the customer.
Previous report
One Big Beautiful Bill Act, Enacted July 4, 2025
Previous report
On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law. This includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act. The key provisions include allowing immediate expensing of domestic research and experimental expenditures, new limitations on interest expense deductibility, reinstatement of 100% bonus depreciation for qualified assets placed in service in the United States after January 19, 2025 as well as changes to the calculation of taxable income resulting from the foreign derived intangible income deduction. ASC 740 Income Taxes requires the effects of changes in tax rates and laws to be recognized in the period in which the relevant legislation is enacted. We have concluded that the impact of OBBB for the current quarter is immaterial.
Previous report
Equity method investment gain (loss)
Previous report
Three and Nine Months Ended March 31, 2026 and 2025
Previous report
Cost of goods sold was $396.4 million for the nine months ended March 31, 2026, a decrease of $3.6 million, or
Previous report
0.9%, as compared to $400.0 million for the same period last year. The decrease was primarily due to 2.1% decrease in sales. Gross margin decreased by 0.9 percentage points to 22.1% for the nine months ended March 31, 2026, as compared to 23.0% for the same period last year. The decrease in gross margin was primarily due to higher material costs and lower unit shipments during the current periods.
Previous report
Research and development expenses were $75.4 million for the nine months ended March 31, 2026, an increase of $5.6 million, or 8.0%, as compared to $69.8 million for the same period last year. The increase was primarily attributable to a
Previous report
Selling, general and administrative expenses were $22.5 million for the three months ended March 31, 2026, an increase of $0.1 million, or 0.4%, as compared to $22.4 million for the same quarter last year. The increase was primarily due to a $0.5 million increase in employee compensation and benefit expenses primarily due to merit salary increases and higher bonus expense, a $0.4 million increase in legal expenses, $0.3 million increase in design-win commission and a $0.1 million increase in audit and tax professional service fees, offset by $1.4 million decrease in share-based compensation expense as a result of the change in estimated achievement of the performance conditions associated with the MSUs granted in December 2021. In addition, during the three months ended March 31, 2026, we identified one purchased manufacturing equipment, for which we were unable to meet our production process requirements. Because the equipment had no alternative uses, we recorded an impairment of $0.3 million related to such equipment.
Previous report
Selling, general and administrative expenses were $69.0 million for the nine months ended March 31, 2026, an increase of $2.3 million, or 3.5%, as compared to $66.7 million for the same period last year. The increase was primarily due to a $1.7 million increase in employee compensation and benefits expenses primarily due to merit salary increases and higher bonus expense, a $0.9 million increase in legal expenses, and a $0.6 million increase in audit and tax professional service fees, offset by a $1.0 million decrease in share-based compensation expense as a result of the change in estimated achievement of the performance conditions associated with the MSUs granted in December 2021. and $0.1 million decrease in design-win commission expense. In addition, during the nine months ended March 31, 2026, we recorded an impairment of $0.3 million related to an equipment.
Previous report
Interest income increased in the three months ended March 31, 2026, as compared to the same quarter last year primarily due to higher cash balances in the current quarter.
Previous report
Interest income decreased in the nine months ended March 31, 2026, as compared to the same period last year primarily due to lower interest rates in the current periods.
Previous report
Interest expense
Previous report
Equity method investment loss increased in the three months ended March 31, 2026, as compared to the same quarter last year as a result of a $0.5 million gain on the change of equity interest in the JV Company recorded in the three months ended March 31, 2025. On December 30, 2024, the JV Company signed an investment agreement with an investor, pursuant to which the investor agreed to invest RMB 500 million (or $68.5 million based on currency exchange rate between RMB and U.S. Dollar on December 31, 2024) in the JV Company. This transaction closed on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by us was reduced to approximately 39.2%.
Previous report
Equity method investment income increased in the nine months ended March 31, 2026, as compared to the same period last year as a result of the gain from the sales of 20.3% outstanding equity interest in the JV Company in August 2025, as well as an income recorded from the equity method investment during the nine months ended March 31, 2026, compared to the equity method investment loss in the same period last year.
Previous report
We recognized income tax expense of approximately $4.4 million and $2.9 million for the nine months ended March 31, 2026 and 2025, respectively. The income tax expense of $4.4 million for the nine months ended March 31, 2026 included a
Previous report
$0.2 million discrete tax expense. The income tax expense of $2.9 million for the nine months ended March 31, 2025 included a $0.2 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the nine months ended March 31, 2026 and 2025 was $4.2 million and $2.7 million, respectively, and the effective tax rate for the nine months ended March 31, 2026 and 2025 was (17.0)% and (16.1%), respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year, including reporting $0.7 million of income tax expense related to the Company’s income from its investment in CQJV for the nine months ended March 31, 2026 versus a $0.2 million tax benefit for the nine months ended March 31, 2025. In addition, income tax payable increased by $10.4 million and deferred tax liability decreased by $10.5 million as a result of the sale of approximately 20.3% of the Company’s equity interest in the JV company for $150 million during the nine months ended March 31, 2026 . We made income tax payments of approximately $0.7 million and $9.3 million during the three and nine months ended March 31, 2026, respectively, as a result of the sale transaction.
Previous report
On August 18, 2021, Jireh entered into a term loan agreement with a financial institution (the “Bank”) in an amount up to $45.0 million for the purpose of expanding and upgrading our fabrication facility located in Oregon. The obligation under the loan agreement is secured by substantially all assets of Jireh and guaranteed by us. The agreement has a 5.5-year term and matures on February 16, 2027. Jireh is required to make consecutive quarterly payments of principal and interest. The loan accrues interest based on adjusted SOFR plus the applicable margin based on the outstanding balance of the loan. This agreement contains customary restrictive covenants and includes certain financial covenants that we are required to maintain. Jireh drew down $45.0 million on February 16, 2022 with the first payment of principal beginning in October 2022. As of June 30, 2025, Jireh was in compliance with these covenants and the outstanding balance of this loan was $20.3 million. In August 2025, we paid the outstanding balance in full and this agreement was terminated. As of March 31, 2026, there was no outstanding balance.
Previous report
On August 9, 2019, one of our wholly-owned subsidiaries (the “Borrower”) entered into a factoring agreement with the Hongkong and Shanghai Banking Corporation Limited (“HSBC”), whereby the Borrower assigns certain of its accounts receivable with recourse. This factoring agreement allows the Borrower to borrow up to 70% of the net amount of its eligible accounts receivable of the Borrower with a maximum amount of $30.0 million. The interest rate is based on the Secured Overnight Financing Rate (“SOFR”), plus 2.01% per annum. We are the guarantor for this agreement. We are accounting for this transaction as a secured borrowing under the Transfers and Servicing of Financial Assets guidance. In addition, any cash held in the restricted bank account controlled by HSBC has a legal right of offset against the borrowing. This agreement, with certain financial covenants required, has no expiration date. On August 11, 2021, the Borrower signed an agreement with HSBC to decrease the borrowing maximum amount to $8.0 million with certain financial covenants required. Other terms remain the same. In August 2025, this factoring agreement was terminated. As of March 31, 2026, there was no outstanding balance.
Previous report
For the nine months ended March 31, 2026, the $28.3 million increase in cash used in financing activities compared to the same period last year was primarily due to $13.7 million of repayment of loan borrowings and $18.2 million of payment for repurchases of common shares, partially offset by $3.5 million of withholding tax on restricted stock units.
Reworded paragraphs (18)
Previous wording
We are a designer, developer, and global supplier of a broad range of discrete power devices, wide band gap power devices, power management ICs and modules, including a wide portfolio of Power MOSFET, SiC, IGBT, IPM, TVS, HV Gate Drivers, Power IC, and Digital Power products. Our portfolio of power semiconductors includes approximately 2,800 products, and has grown with the introduction of over 100 new products in the fiscal year ended June 30, 2025, and over 100 and 60 new products in the fiscal years ended June 30, 2024 and 2023, respectively. During the nine months ended March 31, 2026, we introduced 48 new products. Our teams of scientists and engineers have developed extensive intellectual properties and technical knowledge that encompass major aspects of power semiconductors, which we believe enables us to introduce and develop innovative products to address the increasingly complex power requirements of advanced electronics. We have an extensive patent portfolio that consists of 956 patents and 74 patent applications in the United States as of March 31, 2026. We also have a total of 1,087 foreign patents, which primarily were based on our research and development efforts through March 31, 2026. We differentiate ourselves by integrating our expertise in technology, design and advanced manufacturing and packaging to optimize product performance and cost. Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for computers, servers and telecommunications equipment.
Current wording
We are a designer, developer, and global supplier of a broad range of discrete power devices, wide band gap power devices, power management ICs and modules, including a wide portfolio of Power MOSFET, SiC, IGBT, IPM, TVS, HV Gate Drivers, Power IC, and Digital Power products. Our portfolio of power semiconductors includes approximately 2,900 products, and has grown with the introduction of over 70 new products in the fiscal year ended June 30, 2026, and over 100 new products in each of the fiscal years ended June 30, 2025 and 2024. During the three months ended September 30, 2026, we introduced 14 new products. Our teams of scientists and engineers have developed extensive intellectual properties and technical knowledge that encompass major aspects of power semiconductors, which we believe enables us to introduce and develop innovative products to address the increasingly complex power requirements of advanced electronics. We have an extensive patent portfolio that consists of 968 patents and 74 patent applications in the United States as of September 30, 2026. We also have a total of 1,097 foreign patents, which primarily were based on our research and development efforts through September 30, 2026. We differentiate ourselves by integrating our expertise in technology, design and advanced manufacturing and packaging to optimize product performance and cost. Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for computers, servers and telecommunications equipment.
Previous wording
On March 29, 2016, we formed a joint venture (the “JV Company”) with two investment funds owned by the Municipality of Chongqing (the “Chongqing Funds”), for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility (“Fab”) in the LiangJiang New Area of Chongqing, China in which we initially owned 50.9%, and the Chongqing Funds owned 49.1% of the equity interest in the JV Company. From December 2021 to June 2025, we completed several transactions to sell additional equity interests of the JV Company to third-party investors, while the JV Company also issued additional equity interests to new investors that diluted our ownership interest. Accordingly, as of June 30, 2025, the percentage of outstanding JV equity interest beneficially owned by us was further reduced to 39.2%.
Current wording
On March 29, 2016, we formed a joint venture (the “JV Company”) with two investment funds owned by the Municipality of Chongqing (the “Chongqing Funds”), for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility (“Fab”) in the LiangJiang New Area of Chongqing, China in which we initially owned 50.9%, and the Chongqing Funds owned 49.1% of the equity interest in the JV Company. From December 2021 to June 2026, we reduced our ownership of the JV Company by completing several transactions to sell additional equity interests of the JV Company to third-party investors, while the JV Company also issued additional equity interests to new investors that diluted our ownership interest. Accordingly, as of June 30, 2026, the percentage of outstanding JV equity interest beneficially owned by us was further reduced to 18.9%.
Previous wording
adverse effect on our revenue and results of operations. The PC markets have experienced a modest global decline in recent years due to continued growth of demand in tablets and smart phones, worldwide economic conditions and the industry inventory correction which had and may continue to have a material impact on the demand for our products. In addition, the PC market may be affected by evolving laws and regulations governing international trade, such as export control regulations.
Current wording
The global, regional economic and PC market conditions: Because our products primarily serve consumer electronic applications, any significant changes in global and regional economic conditions could materially affect our revenue and results of operations. A significant amount of our revenue is derived from sales of products in the PC markets, such as notebooks, motherboards and notebook battery packs. Therefore, a substantial decline in the PC market could have a material adverse effect on our revenue and results of operations. The PC markets have experienced a modest global decline in recent years due to continued growth of demand in tablets and smart phones, worldwide economic conditions and the industry inventory correction which had and may continue to have a material impact on the demand for our products. In addition, the PC market may be affected by evolving laws and regulations governing international trade, such as export control regulations.
Previous wording
Distributor ordering patterns, customer demand and seasonality: Our distributors place purchase orders with us based on their forecasts of end customer demand, and this demand may vary significantly depending on the sales outlook and market and economic conditions of end customers. Because these forecasts may not be accurate, channel inventory held at our distributors may fluctuate significantly, which in turn may prompt distributors to make significant adjustments to their purchase orders placed with us. As a result, our revenue and operating results may fluctuate significantly from quarter to quarter. In addition, because our products are used in consumer electronics products, our revenue is subject to seasonality. Our sales seasonality is affected by numerous factors, including global and regional economic conditions as well as the PC market conditions, revenue generated from new products, changes in distributor ordering patterns in response to channel inventory adjustments and end customer demand for our products and fluctuations in consumer purchase patterns prior to major holiday seasons. Typically, we generate lower revenue during the first quarter of the calendar year as compared to other quarters. However, broad fluctuations in the semiconductor markets and the global and regional economic conditions, in particular the changing PC market conditions, have had a more significant impact on our results of operations than seasonality. Furthermore, our revenue may be impacted by the level of demand from our major customers due to factors outside of our control. If these major customers
Current wording
Distributor ordering patterns, customer demand and seasonality: Our distributors place purchase orders with us based on their forecasts of end customer demand, and this demand may vary significantly depending on the sales outlook and market and economic conditions of end customers. Because these forecasts may not be accurate, channel inventory held at our distributors may fluctuate significantly, which in turn may prompt distributors to make significant adjustments to their purchase orders placed with us. As a result, our revenue and operating results may fluctuate significantly from quarter to quarter. In addition, because our products are used in consumer electronics products, our revenue is subject to seasonality. Our sales seasonality is affected by numerous factors, including global and regional economic conditions as well as the PC market conditions, revenue generated from new products, changes in distributor ordering patterns in response to channel inventory adjustments and end customer demand for our products and fluctuations in consumer purchase patterns prior to major holiday seasons. Typically, we generate lower revenue during the first quarter of the calendar year as compared to other quarters. However, broad fluctuations in the semiconductor markets and the global and regional economic conditions, in particular the changing PC market conditions, have had a more significant impact on our results of operations than seasonality. Furthermore, our revenue may be impacted by the level of demand from our major customers due to factors outside of our control. If these major customers experience significant decline in the demand of their products, encounter difficulties or defects in their products, or otherwise fail to execute their sales and marketing strategies successfully, it may adversely affect our revenue and results of operations.
Previous wording
We record our interest in the net earnings of the equity method investee, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within earnings or loss from equity interests in the Consolidated Statements of Operations. Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor or investee. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to them. Equity method goodwill is not amortized. Instead the total equity method investment balance, including equity method goodwill, is tested for impairment. In the fourth quarter of fiscal year 2025, the impairment loss of $76.8 million was recorded within equity method investment loss in the consolidated statement of operations.
Current wording
We record our interest in the net earnings of the equity method investee, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within earnings or loss from equity interests in the Consolidated Statements of Operations. Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor or investee. Basis differences represent differences between the cost of the investment and the underlying equity in net assets of the investment and are generally amortized over the lives of the related assets that gave rise to them. Equity method goodwill is not amortized. Instead the total equity method investment balance, including equity method goodwill, is tested for impairment.
Previous wording
The following tables set forth statements of loss, also expressed as a percentage of revenue, for the three and nine months ended March 31, 2026 and 2025. Our historical results of operations are not necessarily indicative of the results for any future period.
Current wording
The following tables set forth statements of loss, also expressed as a percentage of revenue, for three months ended September 30, 2026 and 2025, respectively. Our historical results of operations are not necessarily indicative of the results for any future period.
Previous wording
On July 14, 2025, we entered into an equity transfer agreement with a strategic investor to sell approximately 20.3% of outstanding equity interest in the JV Company held by us for an aggregate cash consideration of $150 million to be paid in four installments, subject to satisfaction of certain conditions. On August 29, 2025, the amended Shareholders’ agreement for the JV Company was signed, which reduced our equity interest in the JV Company by 20.3% to an ownership percentage of 18.9%. As of August 29, 2025, all of the conditions for the first installment were satisfied, and we received our first installment payment of RMB 676 million (or $94.5 million based on the currency exchange rate between RMB and U.S. Dollar on August 29, 2025). In addition, we received $11.1 million for the second installment payment during the three months ended December 31, 2025, and $30.3 million for the third installment payment during the three months ended March 31, 2026. We expect to receive the remaining installment payment of approximately $15.6 million and close the transaction in the near future. We believe this sale provides additional and significant capital for us to continue investment in technology, R&D projects and acquisition of assets complementary to our business operations, which will facilitate and accelerate our efforts to develop and distribute innovative and diverse power semiconductor products to customers worldwide.
Current wording
Three Months Ended September 30, 2026 and 2025
Previous wording
Total revenue was $163.8 million for the three months ended March 31, 2026, a decrease of $0.8 million, or 0.5% as compared to $164.6 million for the same quarter last year. The decrease was primarily due to a decrease of $7.7 million in sales of power IC products and a decrease of $2.8 million in license and development services, partially offset by an increase of $8.2 million in sales of power discrete products and an increase of $1.4 million in packaging and testing services and other. The net increase in power discrete products and power IC products sales was primarily due to a 4.1% increase in average selling price, partially offset by a 3.6% decrease in unit shipment as compared to same quarter last year due to a shift in product mix. Such net increase in revenues was primarily driven by an increase in communication markets, particularly in battery products, offset by a decrease in power supply and industrial markets, particularly in power tools products. The increase in revenue of packaging and testing services and other for the three months ended March 31, 2026, as compared to same quarter last year, was primarily due to increased demand. The decrease in license and development services for the three months ended March 31, 2026 was related to the license agreement with a customer to license our proprietary SiC technology and provided 24-month engineering and development services, which was completed during the three months ended March 31, 2025.
Current wording
Total revenue was $177.8 million for the three months ended September 30, 2026, a decrease of $4.7 million, or 2.6% as compared to $182.5 million for the same quarter last year. The decrease was primarily due to a decrease of $34.0 million in sales of power IC products, partially offset by an increase of $28.7 million in sales of power discrete products and an increase of $0.6 million in packaging and testing services and other. The net decrease in power discrete products and power IC products sales was primarily due to a 19.4% decrease in unit shipment, partially offset by a 20.4% increase in average selling price as compared to same quarter last year due to a shift in product mix. Such net decrease in revenues was primarily driven by a decrease in computing markets, particularly in notebooks, and a decrease in consumer markets, particularly in gaming products, offset by an increase in communication markets, particularly in battery products, and an increase in power supply and industrial markets, particularly in power tools products. The increase in revenue of packaging and testing services and other for the three months ended September 30, 2026, as compared to same quarter last year, was primarily due to increased demand.
Previous wording
Cost of goods sold was $129.3 million for the three months ended March 31, 2026, a decrease of $0.2 million or 0.2%, as compared to $129.5 million for the same quarter last year. The decrease was primarily due to 0.5% decrease in sales. Gross margin decreased by 0.3 percentage points to 21.1% for the three months ended March 31, 2026, as compared to 21.4% for the same quarter last year. The decrease in gross margin was primarily due to higher material costs and lower unit shipments during the three months ended March 31, 2026.
Current wording
Cost of goods sold was $134.3 million for the three months ended September 30, 2026, a decrease of $5.4 million or 3.9%, as compared to $139.7 million for the same quarter last year. The decrease was primarily due to 2.6% decrease in sales. Gross margin increased by 1.0 percentage points to 24.5% for the three months ended September 30, 2026, as compared to 23.5% for the same quarter last year. The increase in gross margin was primarily due to better product mix during the three months ended September 30, 2026.
Previous wording
Research and development expenses were $26.1 million for the three months ended March 31, 2026, an increase of $2.7 million, or 11.3%, as compared to $23.4 million for the same quarter last year. The increase was primarily attributable to a $1.7 million increase in employee compensation and benefit expense mainly due to higher bonus expense, increased headcount and merit salary increases, a $1.3 million increase in product prototyping engineering expense as a result of increased engineering activities, a $0.5 million increase in consulting and recruiting fees and $0.8 million increase in allocation, partially offset by a $1.1 million decrease in depreciation expenses and a $0.7 million decrease in share-based compensation expense as a result of the change in estimated achievement of the performance conditions associated with the MSUs granted in December 2021.
Current wording
Research and development expenses were $28.4 million for the three months ended September 30, 2026, an increase of $4.3 million, or 17.8%, as compared to $24.1 million for the same quarter last year. The increase was primarily attributable to a $2.9 million increase in employee compensation and personnel related expenses mainly due to higher bonus expense, increased headcount and merit salary increases, a $0.7 million increase in product prototyping engineering expense as a result of increased engineering activities, a $0.3 million increase in share-based compensation expense as a result of more participants in the stock plan programs, and $0.4 million increase in allocation.
Previous wording
Other income (loss), net increased in the nine months ended March 31, 2026, as compared to the same periods last year primarily due to an increase in foreign currency exchange gain as a result of the appreciation of RMB against USD, as well as $1.9 million of certain services were provided by the Company to the JV Company.
Current wording
Other income (loss), net decreased by $3.0 million in the three months ended September 30, 2026 as compared to the same quarter last year primarily due to a decrease in foreign currency exchange gain as a result of the appreciation of RMB and South Korean Won against USD, as well as income of $1.9 million from certain services provided by the Company to the JV Company during the three months ended September 30, 2025.
Previous wording
Interest expense decreased in the three and nine months ended March 31, 2026 as compared to the same period last year primarily due to lower outstanding loan balance in the current periods.
Current wording
Interest expenses decreased in the three months ended September 30, 2026 as compared to the same period last year primarily due to lower outstanding loan balance in the current quarter.
Previous wording
We recognized income tax expense of approximately $1.0 million and $0.7 million for the three months ended March 31, 2026 and 2025, respectively. The income tax expense of $1.0 million for the three months ended March 31, 2026 included a $0.1 million discrete tax expense. The income tax expense of $0.7 million for the three months ended March 31, 2025 included a $0.1 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the three months ended March 31, 2026 and 2025 was $0.9 million and $0.6 million, respectively, and the effective tax rate for the three months ended March 31, 2026 and 2025 was (7.4)% and (5.8%), respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current period and the same period of last year.
Current wording
We recognized income tax expense of approximately $1.5 million and $1.9 million for the three months ended September 30, 2026 and 2025, respectively. The income tax expense of $1.5 million for the three months ended September 30, 2026 included a $0.1 million discrete tax expense. The income tax expense of $1.9 million for the three months ended September 30, 2025 included a $0.1 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the three months ended September 30, 2026 and 2025 was $1.4 million and $1.9 million, respectively, and the effective tax rate for the three months ended September 30, 2026 and 2025 was (31.7)% and (952.4%), respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current period and the same period of last year.
Previous wording
In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of March 31, 2026, the gross amount of unrecognized tax benefits was approximately $10.9 million, of which $7.5 million, if recognized, would reduce the effective income tax rate in future periods. If the Company's estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determine the liabilities are no longer necessary.
Current wording
In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of September 30, 2026, the gross amount of unrecognized tax benefits was approximately $11.4 million, of which $7.9 million, if recognized, would reduce the effective income tax rate in future periods. If the Company's estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determine the liabilities are no longer necessary.
Previous wording
In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the wholly-owned subsidiaries, entered into a financing arrangement agreement with a company (“Lender”) for the lease and purchase of a machinery equipment manufactured by a supplier. This agreement includes a payment term of five (5) years, pursuant to which Jireh commenced payments of interest and principal to the Lender in September 2022 when the final installation and acceptance of the equipment were completed. After the end of such payment term, Jireh has the option to purchase the equipment for $1. The implied interest rate was 4.75% per annum which was adjustable based on every five basis point increase in 60-month U.S. Treasury Notes. The total purchase price of this equipment was euro 12.0 million. In April 2021, Jireh made a down payment of euro 6.0 million, representing 50% of the total purchase price of the equipment, to the supplier. In June 2022, the equipment was delivered to Jireh after Lender paid 40% of the total purchase price, for euro 4.8 million, to the supplier on behalf of Jireh. In September 2022, Lender paid the remaining 10% payment for the total purchase price and reimbursed Jireh for the 50% down payment, after the installation and configuration of the equipment. The title of the equipment was transferred to Lender following such payment. The agreement was amended with fixed implied interest rate of 7.51% and monthly payment of principal and interest effective in October 2022. Other terms remain the same. In addition, Jireh purchased hardware for the machine under this financing arrangement. The purchase price of this hardware was $0.2 million. The financing arrangement is secured by this equipment and other equipment at Jireh, which had a net book value of $10.9 million as of March 31, 2026. As of March 31, 2026, the outstanding balance of this debt financing was $4.4 million.
Current wording
In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the Company’s wholly-owned subsidiaries, entered into a financing arrangement agreement with a company (“Lender”) for the lease and purchase of a machinery equipment manufactured by a supplier. This agreement includes a payment term of five (5) years, pursuant to which Jireh commenced payments of interest and principal to the Lender in September 2022 when the final installation and acceptance of the equipment were completed. After the end of such payment term, Jireh has the option to purchase the equipment for $1. The implied interest rate was 4.75% per annum which was adjustable based on every five basis point increase in 60-month U.S. Treasury Notes. The total purchase price of this equipment was euro 12.0 million. In April 2021, Jireh made a down payment of euro 6.0 million, representing 50% of the total purchase price of the equipment, to the supplier. In June 2022, the equipment was delivered to Jireh after Lender paid 40% of the total purchase price, for euro 4.8 million, to the supplier on behalf of Jireh. In September 2022, Lender paid the remaining 10% payment for the total purchase price and reimbursed Jireh for the 50% down payment, after the installation and configuration of the equipment. The title of the equipment was transferred to Lender following such payment. The agreement was amended with fixed implied interest rate of 7.51% and monthly payment of principal and interest effective in October 2022. Other terms remain the same. In addition, Jireh purchased hardware for the machine under this financing arrangement. The purchase price of this hardware was $0.2 million. The financing arrangement is secured by this equipment and other equipment at Jireh, which had a net book value of $10.1 million as of September 30, 2026. As of September 30, 2026, the outstanding balance of this debt financing was $2.9 million.
Previous wording
As of March 31, 2026 and June 30, 2025, we had $190.7 million and $153.5 million of cash, cash equivalents and restricted cash, respectively. Our cash, cash equivalents and restricted cash primarily consist of cash on hand, restricted cash, and short-term bank deposits with original maturities of three months or less. Of the $190.7 million and $153.5 million cash, cash equivalents and restricted cash, $81.2 million and $40.7 million, respectively, are deposited with financial institutions outside the United States.
Current wording
As of September 30, 2026 and June 30, 2026, we had $175.7 million and $181.4 million of cash, cash equivalents and restricted cash, respectively. Our cash, cash equivalents and restricted cash primarily consist of cash on hand, restricted cash, and short-term bank deposits with original maturities of three months or less. Of the $175.7 million and $181.4 million cash, cash equivalents and restricted cash, $76.8 million and $60.7 million, respectively, are deposited with financial institutions outside the United States.
Previous wording
For the nine months ended March 31, 2026, the $38.8 million decrease in cash provided by operating activities compared to the same period last year was primarily due to an increase of net loss of $9.3 million, a decrease of non-cash expenses of $15.9 million, which includes an increase of $8.1 million in deferred income tax, net, a decrease of $4.2 million in depreciation and amortization, and an increase of $2.5 million in equity method investment gain due to the 20.3% equity method investment sale and income recorded from the equity method investment in current period, compared to a loss recorded from the equity method investment in the same period last year, an increase of $17.0 million in inventory purchase, a decrease of accounts payable of $20.9 million primarily due to timing of payment, and a decrease of $5.1 million in net payable, equity investee. These sources of cash were offset by a decrease of $12.3 million in accounts receivable, $4.0 million increase in deferred revenue, an increase of $11.5 million in accrued and other liabilities, and an increase of $2.6 million in income tax payable primarily due to the sale of the 20.3% interest in the equity method investment.
Current wording
For three months ended September 30, 2026, the $4.6 million decrease in cash provided by operating activities compared to the same period last year was primarily due to an increase of net loss of $4.0 million, an increase of $8.1 million in accounts receivable, an increase of $0.4 million in other current and long term assets, a decrease of $4.7 million in net payable, equity investee, a decrease of $10.6 million in income tax payable, a $0.7 million decrease in deferred revenue, and a decrease of $0.6 million in accrued and other liabilities. These sources of cash were offset by an increase of non-cash expenses of $7.0 million, which includes an increase of $8.5 million in deferred income tax, net, an increase of $0.3 million in depreciation and amortization, an increase of $0.4 million in loss on disposal of property and equipment, an increase of $0.6 million on impairment of property and equipment, offset by an increase of $2.8 million in equity method investment gain, a decrease of $11.6 million in inventory purchase, as well as an increase of accounts payable of $6.0 million primarily due to timing of payment.
Previous wording
For the nine months ended March 31, 2026, the $110.4 million increase in cash provided by investing activities compared to the same period last year was primarily due to $133.5 million of proceeds from sale of equity interest in the JV Company, net with transaction costs, partially offset by $14.0 million of more purchases of property and equipment, $8.0 million of a loan issued to a supplier, and $0.6 million of more purchase of intangible assets, as well a $0.5 million less government grant related to equipment in the nine months ended March 31, 2026 compared to the same period last year.
Current wording
For three months ended September 30, 2026, the $91.9 million increase in cash used in investing activities compared to the same period last year was primarily due to $92.1 million of proceeds from the sale of equity interest in the JV Company during the three months ended September 30, 2025, as well as $0.1 million of more purchase of intangible assets, a $0.4 million increase in a loan issued to a supplier, partially offset by $0.6 million of less purchases of property and equipment in three months ended September 30, 2026 compared to the same period last year.
Rearranged previous paragraphs (5)
Previous report — wording carried elsewhere
The global, regional economic and PC market conditions: Because our products primarily serve consumer electronic applications, any significant changes in global and regional economic conditions could materially affect our revenue and results of operations. A significant amount of our revenue is derived from sales of products in the PC markets, such as notebooks, motherboards and notebook battery packs. Therefore, a substantial decline in the PC market could have a material
Previous report — wording carried elsewhere
experience significant decline in the demand of their products, encounter difficulties or defects in their products, or otherwise fail to execute their sales and marketing strategies successfully, it may adversely affect our revenue and results of operations.
Previous report — wording carried elsewhere
Total revenue was $508.6 million for the nine months ended March 31, 2026, a decrease of $11.1 million, or 2.1% as compared to $519.7 million for the same period last year. The decrease was primarily due to a decrease of $17.7 million in sales of power discrete products, as well as a decrease of $13.8 million in license and development services, partially offset by an increase of $17.2 million in sales of power IC products and an increase of $3.2 million in packaging and testing services and other. The net decrease in power discrete products and power IC products sales was primarily due to a 2.9% decrease in unit shipment, partially offset by a 2.9% increase in average selling price as compared to same period last year due to a shift in product mix. Such net decrease in revenues was primarily driven by a decrease in consumer markets, particularly in home appliances and gaming products, and a decrease in power supply and industrial markets, particularly in power tools products and quick chargers products, partially offset by an increase in the computing markets, particularly in notebook. The increase in revenue from packaging and testing services and other for the nine months ended March 31, 2026, as compared to same period last year, was primarily due to increased demand. The decrease in license and development services for the nine months ended March 31, 2026 was related to the license agreement with a customer to license our proprietary SiC technology and provided 24-month engineering and development services, which was completed during the three months ended March 31, 2025.
Previous report — wording carried elsewhere
$4.6 million increase in employee compensation and benefit expense mainly due to higher bonus expense, increased headcount and merit salary increases, a $2.6 million increase in product prototyping engineering expense as a result of increased engineering activities, a $0.7 million increase in consulting and recruiting fees and $1.4 million increase in allocation, partially offset by a $3.3 million decrease in depreciation expenses and a $0.6 million decrease in share-based compensation expense as a result of the change in estimated achievement of the performance conditions associated with the MSUs granted in December 2021.
Previous report — wording carried elsewhere
Other income (loss), net increased in the three months ended March 31, 2026, as compared to the same quarter last year primarily due to an increase in foreign currency exchange gain as a result of the appreciation of RMB against USD.