Q3
2023
REPORT
Contents
03
About
Espressif
04
Business 04 Key Financial Data (Unaudited)
Highlights
04 Financial Indicators (Unaudited)
05 Financial Analysis
06
Management 06 Business Strategy 12 Developer Community Content
Report
07 Core Technologies 13 Business Model
09 Key Products - IoT Chips 14 Books about ESP Products
10 Key Products - AIoT Chip Portfolio 15 Ownership of Securities
11 Market 16 Risks and Uncertainties
17
Consolidated 17 Consolidated 20 Consolidated Cash Flow
Financial Balance Sheet Statement
Statements
(Unaudited) 19 Consolidated
Income Statement
21
Further 21 Terms and Conditions
Information of the Report
22 List of abbreviations
ESPRESSIF SYSTEMS | Q3 2023 REPORT | ABOUTABOUT ESPRESSIF
About Espressif
Espressif Systems is a public, multinational, fabless, semiconductor company focused on developing cutting-edge,
wireless-communication, low-power chipsets. By leveraging wireless computing, we provide green, versatile and cost-
effective AIoT solutions. We have accomplished a hardware-and-software, closed-loop development cycle for a series
of core technologies, including RF, Wi-Fi & Bluetooth LE network protocol stacks, RISC-V MCUs, AI instruction sets
and algorithms, operating systems, toolchains, compilers, IoT software application frameworks, Cloud, etc.
We have a diverse team of engineers from around the world. All company branches employ around 600 members of
staff from almost 30 countries and regions, +77% of whom are based in our Research & Development Department. We
have eight R&D centers in ve countries, including China (4 out of 8), India, the Czech Republic, Brazil and Singapore.
The company’s increasing reputation in recent years has been instrumental in attracting talented engineers from across
the world. Being united by our passion for technology, our diversity is our strength, as it allows the creative blending of
different kinds of knowledge, perspectives and ways of thinking.
1
global Wi-Fi MCU products distributed millions of users
market share* all over the world
Our R&D Centers
China
Shanghai Hefei
Suzhou Wuxi
Brazil India
Campinas Pune
Czech Singapore
Republic
Brno
* Market share data from TSR
3
ESPRESSIF SYSTEMS | Q3 2023 REPORT | BUSINESS HIGHLIGHTS (UNAUDITED)
Business Highlights (Unaudited)
Key Financial Data (Unaudited)
Three Months Ended Nine Months Ended
CNY Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
Consolidated Statement of Income Data
Revenue 359,958,768 335,492,468 1,026,956,744 949,311,349
Gross prot 146,055,551 133,299,795 418,510,206 380,143,573
Selling expenses 12,683,522 13,104,619 38,207,772 32,684,306
General and administrative expenses 15,803,022 17,068,928 44,749,984 44,022,027
Research and development expenses 107,661,031 86,731,045 285,845,605 239,185,604
Net income 22,598,780 20,572,966 87,169,123 83,848,190
Earnings per share:
Basic 1.0875 1.0435
Diluted 1.0875 1.0435
Sep 30, 2023 Dec 31, 2022
Consolidated Balance Sheet Data
Net Cash (Debt) [1] 1,369,440,716 1,200,219,436
Working capital 1,083,033,825 1,518,383,808
Total assets 2,201,908,794 2,082,796,825
Long-term obligations 70,128,556 65,591,788
Total shareholders’ equity 1,928,984,960 1,826,677,535
Three Months Ended Nine Months Ended
Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
Consolidated Cash Flow Data
Net cash ow from operating activities 106,592,463 20,360,925 206,292,105 -9,163,918
Non-GAAP Adjustment
Stock-based compensation 11,353,705 6,384,147 23,621,273 11,847,884
Non-GAAP net income 33,952,485 26,957,113 110,790,397 95,696,074
Key Financial Indicators (Unaudited)
Three Months Ended Nine Months Ended
Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
Gross margin 40.58% 39.73% 40.75% 40.04%
R&D-to-sales ratio 29.91% 25.85% 27.83% 25.20%
EBITDA margin 6.70% 9.35% 9.01% 11.05%
Weighted ROE 4.59% 4.59%
N.B.：
[1]: Net cash (debt) represents period-end balance and is calculated as cash and cash equivalents, plus term deposits and others, minus borrowings
and notes payable. 4
ESPRESSIF SYSTEMS | Q3 2023 REPORT | BUSINESS HIGHLIGHTS (UNAUDITED)
Financial Analysis
Espressif’s total revenue in the rst three quarters of the current scal year (2023) was CNY 1,026.96 million, marking
an increase of 8.18% from CNY 949.31 million in the rst three quarters of 2022, due to the expansion of product
categories. Therefore, the net income was CNY 87.17 million, which marked an increase of 3.96% YoY, mainly due to
the increase of revenue.
The overall gross margin is 40.75%. We successfully reached our targeted overall gross prot margin of 40% for the
current period. In China's mainland, customers prefer purchasing chips, whereas customers from the rest of the world
and China's mainland OEM or ODM prefer modules. Despite direct sales outside China's mainland accounting for less
than 30% of the total, module revenue comprises over 60%, representing both our direct and indirect sales beyond
China's mainland.
Revenue by Revenue by Sales Top-5 Customer
Area in the First Three Mode in the First Three Concentration Rate,
Quarters of 2023 Quarters of 2023 2020 - Q3 2023
42.2%
29.0% 28.3%
26.4%
73.0% 69.7%
China's
Rest of
Direct Indirect 2020 2021 2022 Q1-Q3 2023
Mainland the World
Revenue by Product Category in the First Three Quarters of 2023
Chip Module Others
2023 35.9% 63.0% 1.1%
2022 30.7% 68.6% 0.7%
Key Financial Indicators in the First Three Quarters of 2023
2022 2023
48.2% 46.8%
40.0% 40.8%
36.2% 37.1%
27.8%
25.2%
11.1%
9.0% 8.1% 8.1%
Overall GM Chip GM Module GM EBITDA
SG&A as % of R&D as % of
Margin sales sales
5
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Management Report
Business Strategy
Espressif Systems’ business strategy emanates from our service/product areas and our engagement with the
developer ecosystem.
Our product and service areas include AIoT chips, OS-level development environments, software tools, application
solutions, and value-added services, such as Cloud and Matter. The above-mentioned products ensure that we are in
the heart of numerous commercial AIoT applications in different markets, including smart home, consumer electronics,
industrial automation, healthcare, etc.
Products Solutions Value-added services
Cloud
SoCs HMI Smart
Audio
service
Displays Solutions
Modules
Matter
Face
Low-Power
Solution
Recognition Solutions
DevKits
… …
OS-level development environments & software tools
Customers
Brands OEM/ODMs Module Houses Solution providers Makers
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ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Core Technologies
SoCs AI
AFE (Audio Front-End) Algorithms
ESP8266, ESP32, ESP32-S, ESP32-
qualied as a“Software Audio Front-End
C, ESP32-H and ESP32-P Series Solution” for Amazon Alexa Built-in devices.
Espressif offers integrated, reliable, and
energy-efcient SoCs for Wi-Fi, 3A Audio Algorithms
Bluetooth Low Energy, Thread and Zigbee including Acoustic Echo Cancelation (AEC),
to various segments of the IoT market. Audio Noise Suppression (ANS) and Automatic
Gain Control (AGC), which signicantly reduce
noise and echo in calls, keeping high-quality
voice intercoms stable at all times.
OS
ESP-IDF
Espressif’s ofcial IoT Development Framework.
Cloud
It provides a self-sufcient SDK for any generic ESP RainMaker
application-development on these platforms,
A comprehensive, development-free and
using programming languages such as C and
maintenance-free AIoT solution for private
C++.
Cloud deployment.
ESP-IDF currently powers millions of devices in
It is an all-inclusive solution that covers
the eld, and enables building a variety of
everything from the underlying chip to device
network-connected products, ranging from
rmware, third-party voice-assistant
simple light bulbs and toys to major appliances
integrations, mobile apps and the dashboard.
and industrial devices.
Customers can build their own AIoT devices
and ecosystem, with ESP RainMaker.
Software
With our open-source software,
Matter
such as Espressif's IoT
Development Framework ESP-IDF, One-stop Matter Solution
Audio Development Framework
ESP-ADF, Mesh Development This is the culmination of
Framework ESP-MDF, Cloud Espressif’s ongoing contribution to
Connectivity Platform ESP the Matter platform in various
RainMaker, Facial Recognition areas, including protocol
Development Framework ESP- formulation, core stack
WHO, and Voice-Controlled implementation and certication
Assistant ESP-Skainet, we have test events.
developed a framework for
building AIoT applications, which
is both complete and innovative.
7
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
ESP RainMaker is a private IoT cloud platform that customers can deploy in their AWS account, giving them full control
over data and feature customizations. ESP RainMaker is built on AWS Server-less architecture and leverages AWS-
managed services to offer resource scalability, pay-as-you-go pricing, and low maintenance.
ESP RainMaker is a complete solution that customers can use to build their connected products without any
development and maintenance efforts. However, with customers' differentiated business requirements, they can also
utilize ESP RainMaker as a foundational platform to fully customize the functionality with its open-source SDK, mobile
apps and voice assistants, device management dashboard, and open-architecture cloud backend. In this way,
customers can build their own IoT platform without reinventing the wheel.
Improve Time-To-Market Complete Control
Simplify connected device With ESP RainMaker deployed in
development, eliminating the need customers' own AWS accounts,
for signicant upfront investments in customers have full control over end
both software and hardware. user and device data, as well as
customization.
Pay-As-You-Grow Pricing Facilitating Innovation
Our high exibility enables ESP RainMaker provides all the
customers to pay as their business required and undifferentiated yet
expands, avoiding the burden of critical functionality for connected
expenses related to idle resources. It devices allowing customers to focus
eliminates the need for provisioning on their key differentiators.
and managing servers, allowing Furthermore, open-source SDKs &
customers to focus solely on their components, phone apps, voice
business logic and delivering value assistant skills, device dashboard,
to their users. and open-API cloud backend allow
customers to easily build custom
solutions.
8
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Key Products - AIoT Chips
Espressif is recognized as a market leader in the eld of Wi-Fi MCUs. We released our rst Wi-Fi MCU in 2014, and our
rst Wi-Fi/Bluetooth LE combo chip in 2016. In 2020, we successfully developed our own RISC-V MCU core, adding it
to our product portfolio, while in 2021, we released our rst Thread/Zigbee/Bluetooth LE 5 combo chip and a 2.4GHz
Wi-Fi 6 chip. In 2022, we released our rst 2.4 & 5GHz Wi-Fi 6 chip and our product range has expanded to Wireless
SoCs. In 2023, we revealed ESP32-P4, a dual-core RISC-V MCU, expanding the current portfolio to address the high-
performance computation needs of IO-Rich, HMI, and AIoT applications.
In fact, we have been constantly diversifying our product portfolio, introducing new solutions through our numerous
investments. Thus, we now have various product lines in the main short- and medium-range connectivity technologies.
Our core technologies are self-developed, including connectivity IPs, RF components, RISC-V IPs, software
frameworks, tools, AI functions etc.
We also provide IoT modules based on our chips. The benet for customers is that they can get direct support from us,
shortening and optimizing their supply chain, even in case of chip shortages.
Wireless SoC
Medium Range Short Range
Wi-Fi 6E Bluetooth 5.3 (LE) Thread
5GHz Wi-Fi 6 Bluetooth 5.2 (LE) Zigbee
Connectivity
2.4GHz Wi-Fi 6 Bluetooth 5 (LE)
Technical Depth
Wi-Fi 4 Bluetooth 4.2
RISC-V MCU AI Multimedia
32-bit Single-Core 96MHz Voice Wake-up H.264 Encoding
32-bit Single-Core 120MHz Voice Control
32-bit Single-Core 160MHz Face Recognition AI
Computing 32-bit Single-Core 240MHz
32-bit Dual-Core 400MHz
32-bit Multiple-Core
Technical Breadth
In progress
9
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Key Products - AIoT Chip Portfolio
ESP32 - P4 AI
Dual-Core
32-bit RISC-V MCU
400 MHz H.264 encoding
ESP 32 ESP32 - S3 AI
32-bit Xtensa MCU 32-bit Xtensa MCU
Dual-Core
Wi-Fi 4 Wi-Fi 4
240 MHz Bluetooth 4.2 Bluetooth 5 (LE)
ESP32 - S2 ESP32 - C5
32-bit Xtensa MCU 32-bit RISC-V MCU
Single-Core
Wi-Fi 4 2.4&5 GHz Wi-Fi 6
240 MHz Bluetooth 5 (LE)
Thread
Zigbee
ESP 8266 ESP32 - C3 ESP32 - C6
32-bit Tensilica MCU 32-bit RISC-V MCU 32-bit RISC-V MCU
Single-Core
Wi-Fi 4 Wi-Fi 4 2.4GHz Wi-Fi 6
160 MHz
Bluetooth 5 (LE) Bluetooth 5 (LE)
Thread
Zigbee
ESP32 - C2
Single-Core
32-bit RISC-V MCU
120 MHz
Wi-Fi 4
Bluetooth 5 (LE)
ESP32 - H2
Single-Core
32-bit RISC-V MCU
96 MHz Bluetooth 5 (LE)
Thread
Zigbee
2014 2016 2019 2020 2021 2022 2023
N.B.：
In chronological order of chip release dates. 10
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Market
The market for wireless SoCs is truly diverse, including applications for smart homes (e.g., smart lights, air conditioners,
ovens, coffee machines, etc.), consumer electronics (e.g., smart speakers, drones, etc.), industrial automation (e.g.,
mechanical arms), smart agriculture (e.g., soil PH detector, CO2 detector, etc.), healthcare (e.g., monitoring devices for
diabetes, blood pressure, etc.), energy control (solar energy devices, EV chargers, etc.), the internet of vehicles (OBD
devices, dashboards, etc.), and education (talking pens, interactive whiteboards, etc.).
Although the consumer market shrunk in 2022 due to various macroeconomic factors, digitalization in the non-
consumer sectors has brought us many new customers. Moreover, we are encouraged by the gradual recovery in
demand observed during the rst three quarters of 2023.
Consumer Industrial Smart
Smart Home
Electronics Automation Agriculture
Smart Ovens Smart Speakers Mechanical Arms Soil PH Detector
Energy Internet of
Healthcare Education
Management Vehicles
Smart Solar Intelligent
Medical Detectors Talking Pens
Panels instrument panel
11
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Developer Community Contents
ITEM Sep 30, 2023 Dec 31, 2022 change%
GitHub (Worldwide open-source development platform)
ESP32 Projects 54,800 41,891 31%
ESP8266 Projects 42,700 39,294 9%
Gitee (Chinese open-source development platform)
ESP32 Projects 2,871 2,629 9%
ESP8266 Projects 1,994 1,868 7%
CSDN (Chinese Tech-blog platform)
Search results for ESP32 114,053 93,242 22%
Search results for ESP8266 45,458 36,286 25%
Hackaday (open-source hardware platform)
ESP32 projects 5,431 4,702 16%
ESP8266 projects 6,220 6,101 2%
Reddit
ESP32 group members 70,435 59,619 18%
ESP8266 group members[1] / 59,004
bilibili (Chinese video-sharing platform)
Ocial account followers 29,009 24,064 21%
Ocial account views 873,858 658,235 33%
YouTube
Ocial account subscribers 17,700 14,800 20%
Ocial account views[2] 879,129 810,523 8%
ESP32 community videos 755,973 641,926 18%
ESP8266 community videos 809,857 778,090 4%
Views of most watched ESP32 community video around 4.0m around 3.4m
Views of most watched ESP8266 community video around 1.7m around 1.6m
N.B.：
Statistical data derived from dierent platforms may be based on dierent collecting methods. It is possible for certain platforms to modify their algorithms from
time to time and, therefore, impact the resulting statistical data. The above-mentioned data resulted from the Company’s research at the end of each quarter
reported here, unless otherwise stated.
The search results of the keyword "ESP32" include the ESP32 series, ESP32-C series, ESP32-S series, and ESP32-H series.
[1] On May 31, 2023, Reddit announced a policy change that will kill essentially some third-party Reddit app now operating. There have been Reddit-wide
blackouts in protest to this, andr/esp32& r/esp8266 have gone private as well. So we will stop updating the member numbers of the Reddit.
[2] Due to the conversion of certain previously published videos to private, the views on the ocial YouTube account have increased slowly compared to the end of
2022.
12
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Business Model
Business-to-Developer-to-Business (B2D2B)
Espressif has deployed the Business-to-Developer type of marketing, not only because it has gained prominence in
recent years, but also because it has proven to be more effective since the inuence of developers on organizations of
all sizes has gained traction. In other words, most developers are R&D employees in various companies and bring forth
business opportunities from the companies they work for.
This way, the developer ecosystem we have created at Espressif demonstrates how the value of networks can grow
exponentially:
The more developers we attract as customers, the more hardware and software solutions we generate.
The more successful hardware and software solutions we create, the more our reputation spreads with positive
feedback from happy customers/developers.
The above-mentioned interaction between people in our network prompts the creation of more content, which -in
turn- attracts more users/developers searching for new content.
Likewise, other third-party development platforms join our ecosystem and bring in new developers, as our inuence
continues to grow.
Having successfully applied the B2D2B model, Espressif can now focus on R&D investments, while maintaining a small
business team that supports a large number of customers directly. In fact, most of our revenue is gained through direct
sales.
13
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Books about ESP Products
More than 200 books on how to use ESP products can be found in the developer community and cover over a dozen
languages.
14
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Ownership of Securities
Basic information of securities
Share types Ordinary share
Share capital 80,787,946 (as of Sep 30, 2023)
Listing Shanghai Stock Exchange (SSE)
Ticker 688018.SH
Listing Date 2019-07-22
Shareholder Structure as of Sep 30, 2023
Shareholder Share Numbers Percentage (%)
Espressif (Hong Kong) Investment Ltd. 33,047,244 40.91
Shinvest Holding Ltd. 2,226,179 2.76
Dajia Life Insurance Co., Ltd. – Universal Products 1,978,918 2.45
Hong Kong Securities Clearing Company Limited 1,442,173 1.79
Ningbo Meishan Free Trade Port Le Tun Investment Management 1,046,030 1.29
Partnership (Limited Partnership)
CCB - Zheshang Fengli Strengthen Bond Fund 1,000,000 1.24
GTJA Allianz CSI All-share Semi-conductor Product and 887,706 1.10
Equipment ETF
BOC - Franklin Templeton Sealand Fund 729,766 0.90
Changjiang Securities Company Limited 605,097 0.75
BOC - Zhong Ou High-quality Enterprise Mixed Fund 585,798 0.73
Top 10 shareholders 43,548,911 53.92
Espressif Systems (Shanghai) Co., Ltd. Repurchase Dedicated 905,758 1.12
Securities Account
Other public shareholders 36,333,277 44.96
Total of outstanding shares 80,787,946 100.00
15
ESPRESSIF SYSTEMS | Q3 2023 REPORT | MANAGEMENT REPORT
Risks and Uncertainties
Financial Risk
The Company performs periodic credit evaluations of its customers’ nancial
condition and generally requires of its customers no collateral. The Company
provides an allowance for expected credit losses, based on the net amount
expected to be collected on such receivables. Losses have not been signicant
for any of the periods presented.
R&D Risk
Espressif’s research and development strategy is focused on leveraging new
technologies for the creation of innovative AIoT products. Any delays or changes
in the development of these technologies by our industry partners, or a failure of
our products to achieve market acceptance, could compromise our competitive
position.
Competitors
As the market for AIoT products grows, we face an increasing antagonism from
relatively large competitors, such as Realtek, MediaTek, Inneon, NXP, Qualcomm
and others. Intense competition from current players, as well as new entrants,
such as Silicon Labs and Nordic, may reduce our product sales and market share.
Suppliers
A signicant portion of the Company’s products is fabricated by the Taiwan
Semiconductor Manufacturing Company Limited (TSMC). The inability of TSMC to
deliver wafers to the Company in a timely manner could impact the production of
the Company’s products for a certain period of time, which could have an adverse
effect on the Company’s business, nancial condition, results of operations and
cash ow.
Customers
The Company sells directly to end customers, distributors, solution providers and
contract manufacturers. Our customers are a mix of several big customers and
numerous small customers. The concentration ratio for our top-ve customers
was 28.3% in the rst three quarters of 2023.
16
ESPRESSIF SYSTEMS | Q3 2023 REPORT | CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Financial
Statements (Unaudited)
Consolidated Balance Sheet (Unaudited)
CNY Sep 30, 2023 Jan 1, 2023 Dec 31, 2022
Assets
Current assets:
Cash and cash equivalents 442,045,799 350,677,354 350,677,354
Held for trading nancial assets 65,143,616 461,223,082 461,223,082
Notes receivable 3,601,118 789,099 789,099
Accounts receivable, net 251,747,841 198,406,116 198,406,116
Accounts receivable, nancing 20,578,517 1,441,520 1,441,520
Prepayments 8,415,199 9,724,045 9,724,045
Other receivables 11,656,645 9,578,753 9,578,753
Including: Interest receivable 3,160,190 838,168 838,168
Inventories 304,561,961 448,981,896 448,981,896
Other current assets 178,078,407 228,089,444 228,089,444
Total current assets 1,285,829,103 1,708,911,310 1,708,911,310
Non-current assets:
Debt investment 717,036,000 212,484,600 212,484,600
Investment in other equity assets 35,340,648 35,340,648 35,340,648
Other non-current nancial assets 19,879,347 19,879,347 19,879,347
Fixed assets 66,936,465 60,243,507 60,243,507
Construction work in progress
Right-of-use assets 19,045,128 21,692,767 21,692,767
Intangible assets 1,828,053 2,412,317 2,412,317
Long-term deferred expenses 10,423,630 6,565,887 6,565,887
Deferred income tax assets 45,590,421 18,987,186 15,266,444
Total assets 2,201,908,794 2,086,517,567 2,082,796,825
0 0
17
ESPRESSIF SYSTEMS | Q3 2023 REPORT | CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Balance Sheet (Unaudited)
CNY Sep 30, 2023 Jan 1, 2023 Dec 31, 2022
Liabilities & Shareholders’ Equity
Current liabilities:
Accounts payable 95,671,305 77,918,867 77,918,867
Contract liabilities 20,992,616 9,044,287 9,044,287
Payroll payable 64,646,889 85,041,335 85,041,335
Taxes payable 7,552,662 5,211,995 5,211,995
Other payable 3,617,689 2,925,552 2,925,552
Non-current liabilities due within one year 9,606,920 9,607,030 9,607,030
Other current liabilities 707,198 778,437 778,437
Total current liabilities 202,795,278 190,527,502 190,527,502
Non-current liabilities:
Lease liabilities 10,243,587 12,839,126 12,839,126
Provisions 613,410
Deferred income tax liabilities 59,271,560 56,473,404 52,752,662
Total liabilities 272,923,834 259,840,032 256,119,290
Owners’ equity (or shareholders' equity):
Share capital 80,787,946 80,484,430 80,484,430
Capital reserves 1,363,228,945 1,309,813,001 1,309,813,001
Less: Treasury stock 91,110,366 40,966,012 40,966,012
Other comprehensive income 28,509,570 16,946,374 16,946,374
Surplus reserves 46,570,910 46,570,910 46,570,910
Retained earnings 500,997,955 413,828,832 413,828,832
Total shareholders’ equity 1,928,984,960 1,826,677,535 1,826,677,535
Total liabilities and shareholders' equity 2,201,908,794 2,086,517,567 2,082,796,825
N.B.：
Starting from 2023, the company will implement the "Accounting Treatment for Deferred Income Tax Related to Asset and Liability Arising from a Single Transaction
That Does Not Qualify for Initial Recognition Exemption" as stipulated in Interpretation No. 16 of the Enterprise Accounting Standards issued by the Ministry of
Finance. The company will adjust the application of this standard to single transactions that occurred between the beginning of the earliest period reported in the
nancial statements and the date of the rst implementation of this standard. This includes adjusting the lease liabilities, right-of-use assets, estimated liabilities
related to disposal obligations and corresponding related assets that were recognized due to the application of this standard on the initial period reported in the
nancial statements when the standard was rst implemented. If there are temporary dierences that result in taxable or deductible amounts related to the above-
mentioned adjustments, the cumulative impact on retained earnings and other relevant nancial statement items at the beginning of the reporting period will be
adjusted according to the provisions of this standard and Enterprise Accounting Standard No. 18 - Income Taxes. So, the amount of deferred income tax assets of
January 1, 2023 exceeds the amount of December 31, 2022 disclosed in the 2022 annual report by CNY 3,720,742. The amount of deferred income tax liabilities is
also the same.
18
ESPRESSIF SYSTEMS | Q3 2023 REPORT | CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Income Statement (Unaudited)
Three Months Ended Nine Months Ended
CNY Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
Revenue 359,958,768 335,492,468 1,026,956,744 949,311,349
Cost of Revenue 213,903,217 202,192,673 608,446,538 569,167,776
Gross Prot 146,055,551 133,299,795 418,510,206 380,143,573
Taxes and surcharges 1,924,317 2,080,094 5,238,905 3,827,043
Selling expenses 12,683,522 13,104,619 38,207,772 32,684,306
General and administrative expenses 15,803,022 17,068,928 44,749,984 44,022,027
Research and development expenses 107,661,031 86,731,045 285,845,605 239,185,604
Financial expenses 1,238,018 -2,253,881 -2,721,347 1,012,633
Including: Interest expenses 215,920 161,664 722,742 558,727
Interest income 3,323,868 829,660 7,974,518 2,368,282
Add: Other income 581,160 666,153 1,158,794 3,898,623
Investment income (mark"-" for loss) 9,071,593 7,110,887 20,559,009 17,596,549
Income from changes in fair value (mark"-" for loss) -28,763 -631,226 143,616 1,349,993
Credit impairment losses (mark"-" for loss) -231,635 -234,750
Assets impairment losses (mark"-" for loss) -1,968,775 -331,229 -4,629,613 -736,511
Assets disposal income (mark"-" for loss) -1,046 3,344
Operating Income 14,399,809 23,151,940 64,424,439 81,285,864
Add: Non-operating revenue 164,572
Less: Non-operating expenses 9,898 22,284 15,435 55,689
Income before income taxes 14,389,911 23,129,656 64,573,576 81,230,175
Provision (benet) for income taxes -8,208,869 2,556,690 -22,595,547 -2,618,015
Net Income 22,598,780 20,572,966 87,169,123 83,848,190
Earnings per share
Basic 1.0875 1.0435
Diluted 1.0875 1.0435
Three Months Ended Nine Months Ended
CNY Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
Net Income 22,598,780 20,572,966 87,169,123 83,848,190
Other comprehensive income (loss), after tax
Changes to the fair value of investment in other
-1,347,760 -1,280,620
equity instruments
Currency translation reserves -2,923,303 15,116,842 11,563,196 34,605,421
Other comprehensive income (loss) -2,923,303 13,769,082 11,563,196 33,324,801
Comprehensive income 19,675,477 34,342,048 98,732,319 117,172,991
19
ESPRESSIF SYSTEMS | Q3 2023 REPORT | CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Consolidated Cash Flow Statement (Unaudited)
Three Months Ended Nine Months Ended
CNY Sep 30, 2023 Sep 30, 2022 Sep 30, 2023 Sep 30, 2022
Operating Activities
Cash from sales of merchandise and provision of
411,037,941 353,024,916 1,079,713,764 1,069,255,332
services
Tax refund 20,167,820 9,534,652 53,672,523 37,477,287
Other received cash related to operational activities -2,385,723 620,848 8,108,387 13,416,056
Subtotal of cash inow from operational activities 428,820,038 363,180,416 1,141,494,674 1,120,148,675
Cash paid for merchandise and services 209,720,135 219,595,203 532,158,481 776,358,077
Cash paid to and for employees 76,173,208 71,251,555 284,929,089 242,018,321
Cash paid for taxes and surcharges 16,643,337 20,868,020 52,894,426 46,154,144
Other paid cash related to operational activities 19,690,894 31,104,713 65,220,572 64,782,051
Subtotal of cash outow from operational activities 322,227,574 342,819,491 935,202,568 1,129,312,593
Net cash provided by operating activities 106,592,463 20,360,925 206,292,105 -9,163,918
Investing activities
Cash arising from the disposal of investments 400,316,287 726,570,870 1,683,105,838 2,367,674,727
Cash arising from investment income 1,914,306 1,595,172 5,743,953 4,488,622
Net cash arising from the disposal of xed assets, intangible 4,163 23,413
assets and other long-term assets
Other received cash relating to investment activities 203,000 1,856,000
Subtotal of cash inow from investment activities 402,437,756 728,166,042 1,690,729,204 2,372,163,349
Cash paid for the purchase and construction of xed assets, 8,988,571 617,742 33,767,598 15,978,266
intangible assets and other long-term assets
Cash paid for investments 395,000,000 789,000,000 1,746,000,000 2,327,100,000
Other paid cash relating to investment activities 300,000 900,000
Subtotal of cash outow from investment activities 404,288,571 789,617,742 1,780,667,598 2,343,078,266
Net cash used by investment activities -1,850,815 -61,451,701 -89,938,394 29,085,083
Financing activities
Cash arising from the issuance of common stock 6,141,170 30,098,186 26,273,338
Including: Cash arising from subsidiaries absorbing
investments by minority shareholders
Subtotal of cash inow from nancing activities 6,141,170 30,098,186 26,273,338
Cash paid for the distribution of dividends and prots, or 128,722,856
payment of interests
Including: dividends and prots paid to minority
shareholders by subsidiaries
Other paid cash relating to nancing activities 53,897,561 37,955,764 60,961,795 39,960,171
Subtotal of cash outow from nancing activities 53,897,561 37,955,764 60,961,795 168,683,027
Net cash used for nancing activities -47,756,391 -37,955,764 -30,863,609 -142,409,689
Impact of uctuation in exchange rates on cash and cash -6,225,437 8,168,018 5,878,343 17,024,110
equivalents
Net increase in cash and cash equivalents 50,759,820 -70,878,522 91,368,445 -105,464,413
Add: Cash and cash equivalent at the commencement
391,285,979 332,556,835 350,677,354 367,142,726
of the period
Cash and cash equivalents at the end of the period 442,045,799 261,678,313 442,045,799 261,678,313
20
ESPRESSIF SYSTEMS | Q3 2023 REPORT | FURTHER INFORMATION
Further Information
Terms and Conditions of the Report
Responsibility Statement
The Board of Directors, the Board of Supervisors and executive management of the Company warrant that the
contents of this report are true, accurate and complete, and do not contain any false information, misleading
statements or material omissions, severally and jointly accepting any legal responsibility thereof.
Shanghai, 23 October 2023
Espressif Systems
Board of Directors Board of Supervisors
Teo Swee Ann Lv Zhihua
Founder and Chairman Employee-elected
Ng Pei Chi Fu Hanyu
Information Technology Ocer Shareholder-elected
Wang Jue Wang Yiwen
Deputy General Manager Shareholder-elected
Teo Teck Leong
Shareholder-elected
Executive Management
Lan Yuzhe Teo Swee Ann
Independent Director Founder and CEO
Koh Chuan Koon Wang Jue
Independent Director Deputy General Manager
PRESSIF
Lee Sze Chin Shao Jingbo
ES
Independent Director Financial Director
Declaration
Forward-looking Statements SY
STE MS
This report contains forward-looking statements and/or assessments about the business,
nancial condition, performance and strategy of the Espressif Group. These statements and/
or assessments are based on assumptions and management expectations resting upon
currently available information and current estimates. These are subject to a multitude of
uncertainties and risks, many of which are partially or entirely beyond Espressif’s control.
Espressif’s actual business development, nancial condition, performance and strategy may,
therefore, dier from what is discussed in this report.
21
ESPRESSIF SYSTEMS | Q3 2023 REPORT | FURTHER INFORMATION
List of abbreviations
AI Articial Intelligence
AIoT Articial Intelligence and Internet of Things
Bluetooth LE Bluetooth Low Energy
CEO Chief Executive Ocer
EBITDA Earnings Before Interest, Taxes, Depreciation and Amortization
Espressif ESPRESSIF SYSTEMS (SHANGHAI) CO., LTD.
GM Gross Margin
IC Integrated Circuit
IoT Internet of Things
IP Intellectual Property
OBD On-Board Diagnostics
ODM Original Design Manufacturer
OEM Original Equipment Manufacturer
R&D Research & Development
RF Radio Frequency
RISC-V MCU Reduced Instruction Set Computer-V Microcontroller Unit
ROE Return on Earnings
SG&A Selling, General and Administrative
SH Shanghai
SoCs System on Chips
TSR Techno Systems Research
22
Investor Relations
ir@espressif.com
Ofcial Platforms Social Media
www.espressif.com twitter.com/EspressifSystem
blog.espressif.com facebook.com/espressif
github.com/espressif linkedin.com/company/espressif-systems
esp32.com youtube.com/EspressifSystems
esp8266.com instagram.com/espressif_systems_ofcial
bbs.espressif.com bilibili.espressif.com
Copyright 2023 Espressif Systems (Shanghai) Co., Ltd. All rights reserved. All trade names, trademarks and registered trademarks
mentioned in this document are the property of their respective owners, and are hereby acknowledged. The term “Espressif” refers to
Espressif Systems (Shanghai) Co., Ltd. and/or its subsidiaries. This report is written in both Chinese and English. In case of any
discrepancies between Chinese and foreign interpretations, the Chinese version shall prevail.
Copyright (c) 2011-2012, Julieta Ulanovsky (julieta.ulanovsky@gmail.com), with Reserved Font Names ‘Montserrat’. This Font
Software is licensed under the SIL Open Font License, Version 1.1. This license is available with a FAQ at: http://scripts.sil.org/OFL
All amounts presented in these condensed Consolidated Financial Statements are shown in CNY unless stated otherwise. Slight
discrepancies between the amounts presented may occur due to rounding.
