What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-05-08 · 148 added, 315 removed, 518 unchanged (47% of the section changed)

3 unchanged sentences

(Unaudited, in thousands except par value per share)

September 30,

2025 June 30,

3 unchanged sentences

Accounts receivable, net 37,099 34,772

Receivable from sale of equity interest in the JV Company 56,410 —

Inventories 196,156 189,677

13 unchanged sentences

Payable related to equity investee, net 21,157 15,809

19,646 13,682

Income taxes payable 13,115 1,790

Short-term debt 2,925 11,852

Deferred revenue — 2,591

Finance lease liabilities 1,026 1,007

13 unchanged sentences

issued and outstanding:

none at March 31, 2025 and June 30, 2024

none at September 30, 2025 and June 30, 2025

Common shares, par value $ 0.002 per share:

1 unchanged sentence

issued and outstanding:

36,869 shares and 29,750 shares, respectively at March 31, 2025 and 36,107 shares and 28,969 shares, respectively at June 30, 2024

37,171 shares and 30,053 shares, respectively at September 30, 2025 and 37,127 shares and 30,009 shares, respectively at June 30, 2025

Treasury shares at cost:

7,119 shares at March 31, 2025 and 7,138 shares at June 30, 2024

7,118 shares at September 30, 2025 and 7,118 shares at June 30, 2025

( 79,058 ) ( 79,058 )

1 unchanged sentence

Accumulated other comprehensive loss ( 5,187 ) ( 12,390 )

( 13,963 ) ( 13,419 )

Retained earnings 531,805 533,927

5 unchanged sentences

(Unaudited, in thousands except per share data)

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

Three Months Ended September 30,

Revenue $ 182,501 $ 181,887

8 unchanged sentences

Other income (loss), net 1

2,468 ( 650 )

Interest income 892 1,265

Interest expenses ( 360 ) ( 812 )

Gain on change of equity interest in equity method investment 505 — 505 —

Net loss before income taxes and loss from equity method investment ( 9,887 ) ( 9,925 ) ( 15,147 ) ( 1,621 )

Net loss before income taxes and equity method investment income (loss) ( 1,584 ) ( 449 )

Income tax expense 1,927 1,040

Net loss before loss from equity method investment ( 10,547 ) ( 10,536 ) ( 18,089 ) ( 4,264 )

Equity method investment loss from equity investee ( 260 ) ( 676 ) ( 1,828 ) ( 4,085 )

Net loss before equity method investment income (loss) ( 3,511 ) ( 1,489 )

Equity method investment income (loss) 1,389 ( 1,007 )

Net loss $ ( 2,122 ) $ ( 2,496 )

6 unchanged sentences

(1) - Amounts include related party transactions.

Refer to footnote 3, Related Party Transaction.

Refer to Note 3, Related Party Transaction.

See accompanying notes to these condensed consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited, in thousands)

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

Three Months Ended September 30,

Net loss $ ( 2,122 ) $ ( 2,496 )

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments, net of $ 573 and $( 571 ) tax in each of the three months ended March 31, 2025 and 2024, respectively, and $ 48 and $ 497 tax in each of the nine months ended March 31, 2025 and 2024, respectively

Foreign currency translation adjustments, net of $( 476 ) and $ 103 tax in each of the three months ended September 30, 2025 and 2024, respectively

( 789 ) ( 159 )

Comprehensive loss $ ( 14,048 ) $ ( 8,400 ) $ ( 20,461 ) $ ( 11,363 )

Cumulative translation adjustment release from sale of equity interest in the JV Company, net of tax $( 1,209 )

Comprehensive income (loss)

$ 5,081 $ ( 2,655 )

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders' Equity

Balance, December 31, 2023 35,205 $ 70 ( 7,154 ) $ ( 79,343 ) $ 342,636 $ ( 13,937 ) $ 645,132 $ 894,558

Exercise of common stock options and release of restricted stock units 918 2 — — 1,053 — — 1,055

Reissuance of treasury stock upon exercise of common stock options and release of RSUs — 15 123 — — ( 123 ) 0

Withholding tax on restricted stock units ( 287 ) — — — ( 6,741 ) — — ( 6,741 )

Share-based compensation — — — — 8,465 — — 8,465

Net income — — — — — — ( 11,212 ) ( 11,212 )

Foreign currency translation adjustment, net of tax — — — — — 2,812 — 2,812

Balance, March 31, 2024 35,836 $ 72 ( 7,139 ) $ ( 79,220 ) $ 345,413 $ ( 11,125 ) $ 633,797 $ 888,937

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss

2 unchanged sentences

Exercise of common stock options and release of restricted stock units 73 — — — 91 — — 91

Reissuance of treasury stock upon exercise of common stock options and release of RSUs — — 18 145 — — ( 145 ) 0

Withholding tax on restricted stock units ( 18 ) — — — ( 673 ) — — ( 673 )

Issuance of shares under ESPP 177 — — — 3,423 — — 3,423

Share-based compensation — — — — 6,902 — — 6,902

Net income — — — — — — ( 8,349 ) ( 8,349 )

Foreign currency translation adjustment, net of tax — — — — — ( 3,014 ) — ( 3,014 )

Balance, March 31, 2024 35,836 $ 72 ( 7,139 ) $ ( 79,220 ) $ 345,413 $ ( 11,125 ) $ 633,797 $ 888,937

See accompanying notes to these condensed consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited, in thousands)

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss)

Retained Earnings Total Shareholders' Equity

Balance, December 31, 2024 36,367 $ 73 ( 7,135 ) $ ( 79,192 ) $ 370,494 $ ( 10,722 ) $ 621,927 $ 902,580

Release of restricted stock units 808 1 — — ( 1 ) — — 0

Reissuance of treasury stock upon release of RSUs

— — — — — — ( 2,496 ) ( 2,496 )

Withholding tax on restricted stock units ( 306 ) — — — ( 9,377 ) — — ( 9,377 )

Issuance of shares under ESPP — — — — — — —

Share-based compensation — — — — 7,136 — — 7,136

— — — — — — ( 10,807 ) ( 10,807 )

Foreign currency translation adjustment, net of tax — — — — — ( 159 ) — ( 159 )

Balance, March 31, 2025 36,869 $ 74 ( 7,119 ) $ ( 79,064 ) $ 368,252 $ ( 13,963 ) $ 610,992 $ 886,291

Balance, September 30, 2024 36,162 $ 72 ( 7,138 ) $ ( 79,213 ) $ 359,429 $ ( 13,578 ) $ 628,562 $ 895,272

Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss)

1 unchanged sentence

Balance, June 30, 2025

Exercise of common stock options and release of restricted stock units 917 1 — — 90 — — 91

Reissuance of treasury stock upon release of RSUs

37,127 $ 74 ( 7,118 ) $ ( 79,058 ) $ 379,779 $ ( 12,390 ) $ 533,927 $ 822,332

Release of restricted stock units

60 — — — — — — —

Withholding tax on restricted stock units ( 16 ) — — — ( 441 ) — — ( 441 )

Issuance of shares under ESPP 177 1 — — 3,420 — — 3,421

Share-based compensation — — — — 7,132 — — 7,132

1 unchanged sentence

Foreign currency translation adjustment, net of tax — — — — — 7,203 — 7,203

Balance, March 31, 2025 36,869 $ 74 ( 7,119 ) $ ( 79,064 ) $ 368,252 $ ( 13,963 ) $ 610,992 $ 886,291

Balance, September 30, 2025

37,171 $ 74 ( 7,118 ) $ ( 79,058 ) $ 386,470 $ ( 5,187 ) $ 531,805 $ 834,104

See accompanying notes to these condensed consolidated financial statements.

2 unchanged sentences

(Unaudited, in thousands)

Nine Months Ended March 31,

Three Months Ended September 30,

Cash flows from operating activities

1 unchanged sentence

Adjustments to reconcile net loss to net cash provided by operating activities:

Gain on change of equity interest in the equity method investment ( 505 ) —

Depreciation and amortization 14,341 14,562

Loss from equity investment 1,828 4,085

Equity method investment (gain) loss ( 1,389 ) 1,007

Share-based compensation expense 7,132 6,902

1 unchanged sentence

Loss on disposal of property and equipment — 15

Impairment of property and equipment 7 —

Impairment of privately-held investment — 100

2 unchanged sentences

Inventories ( 6,480 ) 10,782

Contract assets — ( 3,050 )

Other current and long-term assets 840 137

6 unchanged sentences

Cash flows from investing activities

Proceeds from sale of equity interest in the JV Company 92,100 —

Purchases of property and equipment ( 9,767 ) ( 6,918 )

Proceeds from sale of property and equipment — 357

Purchase of intangible assets ( 388 ) —

Government grant related to equipment — 180

Net cash used in investing activities ( 22,167 ) ( 28,593 )

Net cash provided by (used in) investing activities 81,945 ( 6,738 )

Cash flows from financing activities

Withholding tax on restricted stock units ( 441 ) ( 673 )

Proceeds from exercise of stock options and ESPP 3,512 5,650

Proceeds from exercise of stock options — 91

Repayments of borrowings ( 20,948 ) ( 2,897 )

2 unchanged sentences

Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 66 ) 105

Net decrease in cash, cash equivalents and restricted cash ( 5,974 ) ( 21,008 )

Net increase in cash, cash equivalents and restricted cash 70,432 682

Cash, cash equivalents and restricted cash at beginning of period 153,498 175,540

11 unchanged sentences

Alpha and Omega Semiconductor Limited and its subsidiaries (the “Company”, “AOS”, “we” or “us”) design, develop and supply a broad range of power semiconductors.

The Company's portfolio of products targets high-volume applications, including personal and portable computers, graphic cards, flat panel TVs, home appliances, smart phones, battery packs, quick chargers, home appliances, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.

The Company conducts its operations primarily in the United States of America (“USA”), Hong Kong, China, and South Korea.

The Company's 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.

The Company conducts its operations primarily in the United States, Hong Kong, China, and South Korea.

Basis of Preparation

4 unchanged sentences

These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

For a complete discussion of the Company's accounting policies, refer to Part II, Item 8, Note 1 — Significant Accounting Policies in our 2025 Form 10-K.

All significant intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included in the interim periods.

Operating results for the nine months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2025 or any other interim period.

Operating results for the three months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026 or any other interim period.

The consolidated balance sheet at June 30, 2025 is derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025.

2 unchanged sentences

GAAP requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses.

To the extent there are material differences between these estimates and actual results, the consolidated financial statements will be affected.

On an ongoing basis, the Company evaluates the estimates, judgments and assumptions including those related to stock rotation returns, price adjustments, inventory reserves, income taxes, leases, equity method investment, share-based compensation, recoverability of and useful lives for property, plant and equipment and intangible assets.

Revenue recognition

The Company determines revenue recognition through the following steps:

(1) identification of the contract with a customer;

(2) identification of the performance obligations in the contract;

(3) determination of the transaction price;

(4) allocation of the transaction price to the performance obligations in the contract;

and (5) recognition of revenue when, or as, a performance obligation is satisfied.

The Company recognizes product revenue at a point in time when product is shipped to the customer, as determined by the agreed upon shipping terms, net of estimated stock rotation returns and price adjustments that it expects to provide to certain distributors.

The Company presents revenue net of sales taxes and any similar assessments.

Our standard payment terms range from 30 to 60 days.

The Company sells its products primarily to distributors, who in turn sell the products globally to various end customers.

The Company allows stock rotation returns from certain distributors.

Stock rotation returns are governed by contract and are limited to a specified percentage of the monetary value of products purchased by distributors during a specified period.

The Company records an allowance for stock rotation returns based on historical returns, expected sales volumes and individual distributor agreements.

The Company also provides special pricing to certain distributors, primarily based on volume, to encourage resale of the Company’s products.

Allowance for price adjustments is recorded against accounts receivable and the provision for stock rotation rights is included in accrued liabilities on the consolidated balance sheets.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company’s performance obligations relate to contracts with a duration of less than one year.

The Company elected to apply the practical expedient provided in ASC 606, “ Revenue from Contracts with Customers ”.

Therefore, the Company is not required to disclose the aggregate amount of transaction price allocated to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period.

The Company recognizes the incremental direct costs of obtaining a contract, which consist of sales commissions, when control over the products they relate to transfers to the customer.

Applying the practical expedient, the Company recognizes commissions as expense when incurred, as the amortization period of the commission asset the Company would have otherwise recognized is less than one year.

Packaging and testing services revenue is recognized at a point in time upon shipment of serviced products to the customer.

License and Development Revenue Recognition

In February 2023, the Company entered into a license agreement with a customer, pursuant to which the Company agreed to license its proprietary Silicon Carbide (SiC) technology to the customer and engineering and development services for 24 months for a total fee of $ 45.0 million, consisting of an upfront fee and various milestone payments over the 24 months.

In addition, the Company also entered into an accompanying supply agreement to provide limited wafer supply to the customer.

The license and development fee was determined to be one performance obligation and was recognized over the 24 months during which the Company performs the engineering and development services.

The Company used 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.

The Company recognized a contract liability when payments were in excess of revenue recognized, which was presented as deferred revenue on the balance sheet.

When the Company’s performance under the contract preceded its receipt of consideration from the customer, and the receipt of consideration was conditional upon factors other than the passage of time, a contract asset was recorded.

During the three and nine months ended March 31, 2025, the Company recorded license and development revenue of $ 2.8 million and $ 13.8 million, respectively.

During the three and nine months ended March 31, 2024, the Company recorded license and development revenue of $ 5.1 million and $ 16.2 million, respectively.

As of March 31, 2025, all revenue has been recognized and all consideration has been received associated with the license agreement.

Restricted Cash

The Company maintains restricted cash in connection with cash balances temporarily restricted by the local custom authority for regular business operations.

These balances have been excluded from the Company’s cash and cash equivalents balance and are classified as restricted cash in the Condensed Consolidated Balance Sheets.

As of March 31, 2025 and June 30, 2024, the amount of restricted cash was $ 0.2 million and $ 0.4 million, respectively.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Equity method investment

On March 29, 2016, the Company entered into a joint venture contract (the “JV Agreement”) with two investment funds owned by the Municipality of Chongqing (the “Chongqing Funds”), pursuant to which the Company and the Chongqing Funds formed a joint venture (the “JV Company”).

The Company uses the equity method of accounting when it has the ability to exercise significant influence, but not control, as determined in accordance with generally accepted accounting principles, over the operating and financial policies of the investee.

Effective December 1, 2021, the Company reduced its equity interest in the JV Company and no longer controlled the JV Company.

As a result, beginning December 2, 2021, the Company recorded its investment under the equity method of accounting.

Since the Company is unable to obtain accurate financial information from the JV Company in a timely manner, the Company records its share of earnings or losses of such affiliate on a one quarter lag.

The Company discloses and recognizes intervening events at the JV Company in the lag period that could materially affect its consolidated financial statements, if applicable.

The Company records its 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 Condensed Consolidated Statements of Income (Loss).

Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor and 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 or tested for impairment;

instead the equity method investment is tested for impairment.

The Company reviews for impairment whenever factors indicate that the carrying amount of the investment is determined to be other than temporary.

In such a case, the decrease in value is recognized in the period the impairment occurs in the Condensed Consolidated Statements of Income (Loss).

Accounting for income taxes

Income tax expense or benefit is based on income or loss before income taxes.

The Company’s interim period tax provision for (or benefit from) income taxes is determined using an estimate of its annual effective tax rate, adjusted for discrete items, if any, that arise during the period.

Each quarter, the Company updates its estimate of the annual effective tax rate, and if the estimated annual effective tax rate changes, the Company makes a cumulative adjustment in such period.

The Company’s quarterly tax provision and estimate of its annual effective tax rate are subject to variation due to several factors, including variability in forecasting its pre-tax income or loss and the mix of jurisdictions to which they relate, and changes in how the Company does business.

Deferred tax assets and liabilities are recognized principally for the expected tax consequences of temporary differences between the tax basis of assets and liabilities and their reported amounts.

The Company is subject to income taxes in a number of jurisdictions.

Significant judgment is required in determining the worldwide provision for income taxes.

There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.

The Company establishes accruals for certain tax contingencies based on estimates of whether additional taxes may be due.

While the final tax outcome of these matters may differ from the amounts that were initially recorded, such differences will impact the income tax and deferred tax provisions in the period in which such determination is made.

The Company is subject to income tax expense or benefit based upon pre-tax income or loss reported in the Condensed Consolidated Statements of Income (Loss) and the provisions of currently enacted tax laws.

The parent company is incorporated under the laws of Bermuda and is subject to Bermuda law with respect to taxation.

Under current Bermuda law, the Company is not subject to any income or capital gains taxes in Bermuda.

As we have previously disclosed, the Government of Bermuda announced in December 2023 that it enacted the Corporate Income Tax Act 2023, imposing a 15% corporate income tax (CIT) on Bermuda companies that are within the scope of the CIT, that will be effective for tax years beginning on or after January 1, 2025.

In particular, the CIT applies to multinational companies with annual revenue of 750 million euros or more in the consolidated financial statements of the ultimate parent entity for at least two of the four fiscal years immediately preceding the fiscal year when the CIT may apply.

The Company is not in a position to determine whether the annual revenues may meet and/or cross the 750 million Euro threshold for at least two of the four fiscal years immediately preceding the fiscal year when CIT may apply.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

continues to monitor and assess if and when it may be within the scope of the CIT.

If we become subject to the Bermuda CIT, we may be subject to additional income taxes, which may adversely affect our financial position, results of operations and our overall business.

Significant management judgment is also required in determining whether deferred tax assets will be realized in full or in part.

When it is more likely than not that all or some portion of specific deferred tax assets such as net operating losses or research and development tax credit carryforwards will not be realized, a valuation allowance must be established for the amount of the deferred tax assets that cannot be realized.

The Company considers all available positive and negative evidence on a jurisdiction-by-jurisdiction basis when assessing whether it is more likely than not that deferred tax assets are recoverable.

The Company considers evidence such as our past operating results, the existence of cumulative losses in recent years and our forecast of future taxable income.

The Financial Accounting Standards Board (FASB), issued guidance which clarifies the accounting for income taxes by prescribing a minimum probability threshold that a tax position must meet before a financial statement benefit is recognized.

The minimum threshold is defined as a tax position that is more likely than not to be sustained upon examination by the applicable taxing authority, including resolution of any related appeals or litigation processes, based on the technical merits of the position.

The tax benefit to be recognized is measured as the largest amount of benefit that is greater than fifty percent likely to be realized upon ultimate settlement.

Although the guidance on the accounting for uncertainty in income taxes prescribes the use of a recognition and measurement model, the determination of whether an uncertain tax position has met those thresholds will continue to require significant judgment by management.

If the ultimate resolution of tax uncertainties is different from what is currently estimated, a material impact on income tax expense could result.

The Company's provision for income taxes is subject to volatility and could be adversely impacted by changes in earnings or tax laws and regulations in various jurisdictions.

The Company is subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities.

The Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.

To the extent that the final tax outcome of these matters is different from the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.

The provision for income taxes includes the impact of changes to reserves, as well as the related net interest and penalties.

Comprehensive Income (Loss)

Comprehensive income (loss) is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources.

The Company’s accumulated other comprehensive income (loss) consists of cumulative foreign currency translation adjustments.

Total comprehensive income (loss) is presented in the Condensed Consolidated Statements of Comprehensive Income (Loss).

To the extent there are material differences between these estimates and actual results, the Company's consolidated financial statements will be affected.

On an ongoing basis, the Company evaluates the estimates, judgments and assumptions including those related to reserve of stock rotation returns, allowance for price adjustments, allowance for expected credit loss, inventory reserves, warranty accrual, income taxes, leases, share-based compensation, and recoverability of and useful lives for property, plant and equipment.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No.

2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid.

This will impact only the Company's disclosures for the annual reporting period ending June 30, 2026, with no impacts to its financial condition or results of operations.

Recently Issued Accounting Standards not yet adopted

In November 2024, the FASB issued ASU No.

2023-07, “ Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures ”, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This ASU also expands disclosure requirements to enable users of financial statements to better understand the entity’s measurement and assessment of segment performance and resource allocation.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The Company plans to adopt the ASU in the fourth quarter of fiscal year 2025 and

is currently evaluating the impact of the ASU on its disclosures within the consolidated financial statements.

In December 2023, the FASB issued ASU No.

2023-09, “ Income Taxes (Topic 740) – Improvements to Income Tax Disclosures ”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in

2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures”, which improves disclosure requirements and provides more detailed information about an entity’s expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

which income taxes are paid.

This guidance is effective for annual periods beginning after December 15, 2024 with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its income tax disclosures within the consolidated financial statements.

In November 2024, the FASB issued ASU No.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted.

15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its consolidated financial statements.

In July 2025, the FASB issued ASU No.

2025-05, “Financial Instruments – Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides an optional practical expedient for estimating future credit losses based on current conditions as of the balance sheet date and assuming those conditions do not change over the remaining life of the accounts receivable.

The guidance will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company does not expect this ASU to have a material impact on its consolidated financial statements.

In September 2025, the FASB issued ASU No.

2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software”.

The ASU removes references to prescriptive software development stages and includes an updated framework for capitalizing internal software costs.

The guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact of the ASU on its consolidated financial statements.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Equity Method Investment in Equity Investee

On March 29, 2016, the Company entered into the JV Agreement to form a joint venture, (the “JV Company”) for the purpose of constructing and operating a power semiconductor packaging, testing and 12-inch wafer fabrication facility in the Liangjiang New Area of Chongqing, China (the “JV Transaction”).

Prior to December 1, 2021, the JV Company was accounted for as a consolidated subsidiary since the Company had controlling financial interest.

As of December 2, 2021, the Company ceased having control over the JV Company.

Therefore, the Company deconsolidated the JV Company as of that date.

Subsequently, the Company has accounted for its investment in the JV Company using the equity method of accounting.

In the past three years, the Company has been reducing its equity ownership of the JV Company to increase the flexibility of the JV Company to raise capital to fund its future expansion.

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.

The funding of the investment will be made in three installments.

The JV Company received the first installment of RMB 40 million (or $ 5.5 million) on December 31, 2024.

The remaining installments are expected to be paid by July 31, 2025.

This transaction was closed on January 15, 2025, at which time, the percentage of outstanding JV Company’s equity interest owned by the Company was reduced to approximately 39.2 %.

During the three and nine months ended March 31, 2025, the Company recorded a gain of $ 0.5 million on the change of equity interest in the JV Company.

As of March 31, 2025, the percentage of outstanding JV equity interest beneficially owned by the Company was 39.2 %.

The Company accounts for its investment in the JV Company as an equity method investment and reports its equity in earnings or loss of the JV Company on a three-month lag due to an inability to timely obtain financial information of the JV Company.

During the three and nine months ended March 31, 2025, the Company recorded a $ 0.3 million loss and $ 1.8 million loss of its equity share of the JV Company, respectively, using lag reporting.

During the three and nine months ended March 31, 2024, the Company recorded a $ 0.7 million loss and $ 4.1 million loss, respectively, of its equity share of the JV Company, using lag reporting.

The Company has accounted for its investment in the JV Company using the equity method of accounting .

For details of its equity method investment, please refer to Part II, Item 8, Note 2 — Equity Method Investment in Equity Investee in its 2025 Form 10-K.

On July 14, 2025, the Company entered into an equity transfer agreement to sell approximately 20.3 % of outstanding equity interest in the JV Company for an aggregate cash consideration of $ 150 million.

On August 29, 2025, the amended shareholders’ agreement for the JV Company was signed, which reduced the Company’s equity interest in the JV Company by 20.3 % to an ownership percentage of 18.9 %.

As a result, the Company received its first installment of RMB 676 million (or $ 94.5 million based on the currency exchange rate between RMB and U.S.

Dollar on August 29, 2025), and paid transaction costs related to this sale of approximately $ 2.4 million.

In addition, the Company recorded a receivable of $ 56.4 million for the remaining installments, which is included in the receivable from sale of equity interest in the JV Company line on the Condensed Consolidated Balance Sheets.

The remaining installments will be received subject to satisfaction of certain conditions, which require the Company's continuing involvement, including voting in shareholder meetings to complete the transaction in accordance with the equity transfer agreement, plus other administrative actions.

As a result of the sales transaction, the Company evaluated the factors that indicate the ability to exercise its significant influence to the JV Company, including but not limited to representation on the board, material intra-entity transactions, and participation in policy making process.

The Company concluded that it continues to have the ability to exercise significant influence over the operating and financial policies of the JV Company and accordingly accounts for the investment using the equity method of accounting.

The Company reports its equity in earnings or loss of the JV Company on a three-month lag due to an inability to timely obtain financial information of the JV Company.

During the three months ended September 30, 2025 and 2024, the Company recorded a $ 1.4 million gain, including the $ 1.1 million on the related sale of a portion of its interest in the equity method investment and $ 1.0 million loss of its equity share of the JV Company, respectively, using lag reporting.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Related Party Transactions

As of March 31, 2025, the Company owned a 39.2 % equity interest in the JV Company, which, by definition, is a related party to the Company.

As of September 30, 2025, the Company owned approximately 18.9 % equity interest in the JV Company, which, by definition, is a related party to the Company.

The JV Company supplies 12-inch wafers and provides assembly and testing services to AOS.

AOS previously sold 8-inch wafers to the JV Company for further assembly and testing services until January 1, 2023, when it changed to consigning the 8-inch wafers to the JV Company.

Due to the right of offset of receivables and payables with the JV Company, as of March 31, 2025, AOS recorded the net amount of $ 19.6 million as payable related to equity investee, net, in the Condensed Consolidated Balance Sheet.

The purchases by AOS for the three and nine months ended March 31, 2025 were $ 25.9 million and $ 82.4 million, respectively, and the sales by AOS for the three and nine months ended March 31, 2025 were $ 2.0 million and $ 7.3 million, respectively.

The purchases by AOS for the three and nine months ended March 31, 2024 were $ 22.4 million and $ 80.8 million, respectively, and the sales by AOS for the three and nine months ended March 31, 2024 were $ 2.6 million and $ 6.3 million, respectively.

The JV Company reimbursed AOS for purchases made on its behalf of $ 0.1 million and $ 2.2 million for the three months ended September 30, 2025 and 2024, respectively.

The purchases by AOS for the three months ended September 30, 2025 and 2024 were $ 30.4 million and $ 28.3 million, respectively.

Due to the right of offset of receivables and payables with the JV Company, as of September 30, 2025 and June 30, 2025, AOS recorded the net amount of $ 21.2 million and $ 15.8 million, respectively, as a payable related to equity investee, net, on the Condensed Consolidated Balance Sheet.

During the three months ended September 30, 2025, the Company also recorded approximately $ 1.9 million other income for certain service the Company provided to the JV Company.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

2 unchanged sentences

The following table presents the calculation of basic and diluted net loss per share attributable to common shareholders:

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

Three Months Ended September 30,

(in thousands, except per share data)

6 unchanged sentences

The following potential dilutive securities were excluded from the computation of diluted net loss per common share as their effect would have been anti-dilutive:

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

(in thousands) (in thousands)

Three Months Ended September 30,

(in thousands)

Employee stock options and RSUs 2,420 2,583

ESPP 524 1,008 652 1,046

Total potential dilutive securities 2,747 3,287

8 unchanged sentences

Summarized below are individual customers whose revenue or accounts receivable balances were 10% or higher than the respective total consolidated amounts:

Three Months Ended March 31, Nine Months Ended March 31,

Three Months Ended September 30,

Percentage of revenue 2025 2024

1 unchanged sentence

Customer B 53.8 % 51.5 %

September 30,

2025 June 30,

2 unchanged sentences

Customer B 72.9 % 52.3 %

Customer C * 33.4 %

Customer D * 33.4 %

* Less than 10%

3 unchanged sentences

Accounts receivable, net:

September 30,

2025 June 30,

4 unchanged sentences

Accounts receivable, net $ 37,099 $ 34,772

September 30,

2025 June 30,

5 unchanged sentences

Other current assets:

September 30,

2025 June 30,

13 unchanged sentences

Property, plant and equipment, net:

September 30,

2025 June 30,

13 unchanged sentences

Intangible assets, net:

September 30,

2025 June 30,

1 unchanged sentence

Patents and technology rights $ 18,037 $ 18,037

Software license 1,181 —

Trade name 268 268

10 unchanged sentences

Other long-term assets:

September 30,

2025 June 30,

1 unchanged sentence

Prepayments for property and equipment $ 1,844 $ 1,973

Investment in a privately held company — 100

Customs deposit 824 814

4 unchanged sentences

Accrued liabilities:

September 30,

2025 June 30,

12 unchanged sentences

Short-term customer deposits are payments received from customers for securing future product shipments.

As of March 31, 2025, $ 7.0 million for such deposits were from Customer A, $ 2.0 million were from Customer B, and $ 9.9 million were from other customers.

As of September 30, 2025, $ 7.0 million for such deposits were from Customer A, $ 2.0 million were from Customer B, and $ 10.6 million were from other customers.

As of June 30, 2025, $ 7.0 million were from Customer A, $ 2.0 million were from Customer B, and $ 8.0 million were from other customers.

The activities in the warranty accrual, included in accrued liabilities, are as follows:

Nine Months Ended March 31,

Three Months Ended September 30,

(in thousands)

7 unchanged sentences

The activities in the stock rotation accrual, included in accrued liabilities, are as follows:

Nine Months Ended March 31,

Three Months Ended September 30,

(in thousands)

4 unchanged sentences

Other long-term liabilities:

September 30,

2025 June 30,

1 unchanged sentence

Customer deposits $ 2,000 $ 7,000

Computer software liabilities 53 —

Other long-term liabilities $ 2,504 $ 7,000

Customer deposits are payments received from customers for securing future product shipments.

As of March 31, 2025, $ 5.0 million for such deposits were from Customer A, $ 1.0 million were from Customer B, and $ 2.0 million were from other customers.

As of June 30, 2024, $ 12.0 million were from Customer A, $ 2.0 million were from Customer B, and $ 5.7 million were from other customers.

As of September 30, 2025, $ 1.0 million for such deposits were from Customer A, and $ 1.0 million were from other customers.

As of June 30, 2025, $ 5.0 million were from Customer A and $ 2.0 million were from other customers.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

1 unchanged sentence

Bank Borrowings

Short-term borrowings

In March 2024, Bank of Communications Limited in China provided a line of credit facility to one of the Company’s

subsidiaries in China.

The purpose of the credit facility is to provide working capital borrowings.

The Company could borrow up to approximately RMB 140 million or $ 19.3 million based on currency exchange rate between RMB and U.S.

Dollar on March 31, 2025.

This line of credit expired on March 15, 2025.

As of March 31, 2025, there was no outstanding balance for this loan.

In September 2023, China Construction Bank provided a line of credit facility to one of the Company’s subsidiaries in

The purpose of the credit facility is to provide working capital borrowings.

The Company could borrow up to approximately RMB 50 million or $ 6.9 million based on currency exchange rate between RMB and U.S.

Dollar on March 31, 2025 with a maturity date of September 8, 2025.

As of March 31, 2025, there was no outstanding balance for this loan.

Accounts Receivable Factoring Agreement

On August 9, 2019, one of the Company’s wholly-owned subsidiaries (the “Borrower”) entered into a factoring agreement with Hongkong and Shanghai Banking Corporation Limited (“HSBC”), whereby the Borrower assigns certain of its accounts receivable with recourse.

On August 9, 2019, one of the Company's 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.

1 unchanged sentence

The Company is the guarantor for this agreement.

The Company is accounting for this transaction as a secured borrowing.

The Company is 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 reduce the borrowing maximum amount to $ 8.0 million with certain financial covenants required.

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.

As of March 31, 2025, the Borrower was in compliance with these covenants.

As of March 31, 2025, there was no outstanding balance and the Company had unused credit of approximately $ 8.0 million.

In August 2025, this factoring agreement was terminated with no outstanding balance.

Debt financing

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 has a 5 years term, after which Jireh has the option to purchase the equipment for $ 1 .

This agreement includes a payment term of five (5) years, pursuant to which Jireh commenced payments of interests 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, until the final installation and acceptance of the equipment .

Treasury Notes.

The total purchase price of this equipment was euro 12.0 million.

7 unchanged sentences

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 the net book value of $ 12.5 million as of March 31, 2025.

As of March 31, 2025, the outstanding balance of this debt financing was $ 7.2 million.

The financing arrangement is secured by this equipment and other equipment at Jireh, which had the net book value of $ 11.7 million as of September 30, 2025.

As of September 30, 2025, the outstanding balance of this debt financing was $ 5.8 million.

Long-term bank borrowings

6 unchanged sentences

Jireh drew down $ 45.0 million on February 16, 2022 with the first payment of principal beginning in October 2022.

As of March 31, 2025, Jireh was in compliance with these covenants and the outstanding balance of this loan was $ 22.5 million.

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, the Company paid the outstanding balance in full.

As of August 2025, this agreement was terminated with no outstanding balance.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

4 unchanged sentences

Total principal $ 5,804

debt issuance costs ( 33 )

Total principal, less debt issuance costs $ 29,653

Short-term Debt Long-term Debt Total

Principal amount $ 2,925 $ 2,879 $ 5,804

debt issuance costs ( 21 ) ( 12 ) ( 33 )

Total debt, less debt issuance costs $ 11,797 $ 17,856 $ 29,653

The Company evaluates contracts for lease accounting at contract inception and assesses lease classification at the lease commencement date.

2 unchanged sentences

The components of the Company’s operating and finance lease expenses are as follows for the periods presented (in thousands):

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

Three Months Ended September 30,

Operating leases:

10 unchanged sentences

Supplemental balance sheet information related to the Company’s operating and finance leases is as follows (in thousands, except lease term and discount rate):

March 31, 2025 June 30,

September 30, 2025 June 30, 2025

Operating Leases :

12 unchanged sentences

Supplemental cash flow information related to the Company’s operating and finance leases is as follows (in thousands):

Nine Months Ended March 31,

Three Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

4 unchanged sentences

Operating lease right-of-use assets obtained in exchange for lease obligations $ 4,430 $ 832

Future minimum lease payments are as follows as of March 31, 2025 (in thousands):

Future minimum lease payments are as follows as of September 30, 2025 (in thousands):

Year ending June 30, Operating Leases Finance Leases

1 unchanged sentence

$ 5,186 $ 858

2027 4,829 1,144

2028 4,276 191

Thereafter 1,878 —

6 unchanged sentences

Time-based Restric ted Stock Units ( “ TRSUs ” )

The following table summarizes the Company’ TRSU activities for the nine months ended March 31, 2025:

The following table summarizes the Company’ TRSU activities for the three months ended September 30, 2025:

Number of Time-based Restricted Stock

7 unchanged sentences

Forfeited ( 32,165 ) $ 26.77

Nonvested at March 31, 2025 1,508,949 $ 28.61 1.82 $ 37,512,472

Nonvested at September 30, 2025 1,491,972 $ 28.31 1.52 $ 41,715,537

Market-based Restricted Stock Units ( “ MSUs ” )

12 unchanged sentences

risk-free interest rate of 3.93 %, expected term of 2.40 years, expected volatility of 57.81 % and dividend yield of 0 %.

The Company recorded $ 1.4 million and $ 3.6 million of expenses for the three and nine months ended March 31, 2025.

The Company recorded $ 1.1 million of expenses for the three months ended March 31, 2024, and a negative $ 4.0 million of expenses for the nine months ended March 31, 2024 due to a $ 6.4 million of reversal of the prior recognized expenses.

The Company recorded $ 1.4 million and $ 0.8 million of expenses for the three months ended September 30, 2025 and 2024, respectively.

During the quarter ended September 30, 2018, the Company granted 1.3 million MSUs to certain personnel.

4 unchanged sentences

The fair value of these MSUs was recalculated to reflect the change as of August 31, 2020 and the unrecognized compensation amount was adjusted to reflect the increase in fair value.

The Company recorded $ 0.1 million and $ 0.5 million of expenses for MSUs during the three and nine months ended March 31, 2025, respectively, and $ 0.2 million and $ 0.8 million of

expenses during the three and nine months ended March 31, 2024, respectively.

The following table summarizes the Company’ MSUs activities for the nine months ended March 31, 2025:

The Company recorded $ 0.1 million and $ 0.2 million of expenses for MSUs during the three months ended September 30, 2025 and 2024, respectively.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the Company’ MSUs activities for the three months ended September 30, 2025:

Number of Market-based Restricted Stock

5 unchanged sentences

Nonvested at June 30, 2025 1,436,000 $ 32.32 2.89 $ 36,847,760

Vested ( 270,000 ) $ 5.17

Forfeited ( 43,000 ) $ 48.44

Nonvested at March 31, 2025 1,436,000 $ 32.32 3.14 $ 35,698,960

Nonvested at September 30, 2025 1,393,000 $ 31.82 2.60 $ 38,948,280

Performance-based Restricted Stock Units (“PRSUs”)

2 unchanged sentences

The PRSUs vest in four equal annual installments from the first anniversary date after the grant date if certain predetermined financial goals were met.

The Company recorded approximately $ 1.0 million and $ 2.9 million of expe ns e for these PRSUs during the three and nine months ended March 31, 2025, respectively, and $ 0.8 million and $ 2.0 million of expense for the three and nine months ended March 31, 2024, respectively.

The following table summarizes the Company’s PRSUs activities for the nine months ended March 31, 2025:

The Company recorded approximately $ 1.2 million and $ 0.9 million of expe ns es, using the accelerated attribution method, for these PRSUs during the three months ended September 30, 2025 and 2024, respectively.

The following table summarizes the Company’s PRSUs activities for the three months ended September 30, 2025:

Number of Performance-based Restricted Stock

5 unchanged sentences

Nonvested at June 30, 2025 409,563 $ 27.71 1.85 $ 10,509,387

Granted 209,750 $ 27.61

Vested ( 133,910 ) $ 33.60

Forfeited ( 10,402 ) $ 48.65

Nonvested at March 31, 2025 409,563 $ 27.71 2.10 $ 10,181,736

Stock Options

The Company did no t grant any stock options during the nine months ended March 31, 2025 and 2024.

The following table summarizes the Company’s stock option activities for the nine months ended March 31, 2025:

Weighted Average

Average Remaining

Number of Exercise Price Contractual Aggregate

Shares Per Share Term (in years) Intrinsic Value

Outstanding at June 30, 2024 10,000 $ 9.07 0.13 $ 283,000

Exercised ( 10,000 ) $ 9.07 $ 265,267

Outstanding at March 31, 2025 0 $ 0.00 0.00 $ 0.00

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nonvested at September 30, 2025 409,563 $ 27.71 1.59 $ 11,451,381

Employee Share Purchase Plan (“ESPP”)

The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows:

Nine Months Ended March 31,

Three Months Ended September 30,

Volatility rate 71.0 %

4 unchanged sentences

The total share-based compensation expense recognized in the Condensed Consolidated Statements of Loss for the periods presented was as follows:

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

(in thousands) (in thousands)

Three Months Ended September 30,

(in thousands)

Cost of goods sold $ 1,065 $ 1,015

2 unchanged sentences

$ 7,132 $ 6,902

As of March 31, 2025, total unrecognized compensation cost under the Company’s share-based compensation plans was $ 56.6 million, which is expected to be recognized over a weighted-average period of 2.8 years.

The Company recognized income tax expense of approximately $ 0.7 million and $ 0.6 million for the three months ended March 31, 2025 and 2024, respectively.

The income tax expense of $ 0.7 million for the three months ended March 31, 2025 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 0.6 million for the three months ended March 31, 2024 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, 2025 and 2024 was $ 0.6 million and $ 0.6 million, respectively, and the effective tax rate for the three months ended March 31, 2025 and 2024 was ( 5.8 )% and ( 5.3 )%, respectively.

The Company recognized income tax expense of approximately $ 2.9 million and $ 2.6 million for the nine months ended March 31, 2025 and 2024, respectively.

The income tax expense of $ 2.9 million for the nine months ended March 31, 2025 included a $ 0.2 million discrete tax expense.

The income tax expense of $ 2.6 million for the nine months ended March 31, 2024 included a $ 0.2 million discrete tax expense.

Excluding the discrete income tax items, income tax expense for the nine months ended March 31, 2025 and 2024 was $ 2.7 million and $ 2.5 million, respectively, and the effective tax rate for the nine months ended March 31, 2025 and 2024 was ( 16.1 )% and ( 43.4 )%, 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 year and the same period of last year as well as from reporting pretax book loss of $ 17.0 million for the nine months ended March 31, 2025 as compared to $ 5.7 million of pretax book loss for the nine months ended March 31, 2024.

As of September 30, 2025, total unrecognized compensation cost under the Company’s share-based compensation plans was $ 45.7 million, which is expected to be recognized over a weighted-average period of 2.4 years.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company recognized income tax expense of approximately $ 1.9 million and $ 1.0 million for the three months ended September 30, 2025 and 2024, respectively.

The income tax expense of $ 1.9 million for the three months ended September 30, 2025 included a $ 0.1 million discrete tax expense.

The income tax expense of $ 1.0 million for the three months ended September 30, 2024 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, 2025 and 2024 was $ 1.9 million and $ 1.0 million, respectively, and the effective tax rate for the three months ended September 30, 2025 and 2024 was ( 952.4 )% and ( 65.8 )%, 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, including reporting $ 0.6 million of income tax expense related to the Company’s income from its investment in CQJV for the three months ended September 30, 2025 versus an $ 0.2 million tax benefit for the three months ended September 30, 2024.

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 three month ended September 30, 2025.

The Company files its income tax returns in the United States and in various foreign jurisdictions.

3 unchanged sentences

The Company’s income tax returns are subject to examinations by the Internal Revenue Service and other tax authorities in various jurisdictions.

In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes.

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, 2025, the gross amount of unrecognized tax benefits was approximately $ 10.3 million, of which $ 7.0 million, if recognized, would reduce the effective income tax rate in future periods.

As of September 30, 2025, the gross amount of unrecognized tax benefits was approximately $ 10.8 million, of which $ 7.4 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.

1 unchanged sentence

The Company does not anticipate any material changes to its uncertain tax positions during the next twelve months.

“The Chip and Science Act of 2022”, Enacted August 2, 2022

In August 2022 the U.S.

enacted the Chip and Science Act of 2022 (the Chips Act).

The Chips Act provides incentives to semiconductor chip manufacturers in the United States, including providing a 25% manufacturing investment credits for investments in semiconductor manufacturing property placed in service after December 31, 2022, for which construction begins before January 1, 2027.

Property investments qualify for the 25% credit if, among other requirements, the property is integral to the operation of an advanced manufacturing facility, defined as having a primary purpose of manufacturing semiconductors or semiconductor manufacturing equipment.

Currently, we are evaluating the impact of the Chips Act to us.

Bermuda Corporate Income Tax for Tax Years Beginning in 2025

The parent company is incorporated under the laws of Bermuda and is subject to Bermuda law with respect to taxation.

Under current Bermuda law, the Company is not subject to any income or capital gains taxes in Bermuda.

As we have previously disclosed, the Government of Bermuda announced in December 2023 that it enacted the Corporate Income Tax Act 2023, potentially imposing a 15% corporate income tax (CIT) on Bermuda companies that are within the scope of the CIT, that will be effective for tax years beginning on or after January 1, 2025.

The Company continues to monitor and assess if and when it may be within the scope of the CIT.

If we become subject to the Bermuda CIT, we may be subject to additional income taxes, which may adversely affect our financial position, results of operations and our overall business.

One Big Beautiful Bill Act, Enacted July 4, 2025

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.

The Company has concluded that the impact of OBBB for the current quarter is immaterial.

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

5 unchanged sentences

The financial information presented to the Company’s Chief Executive Officer is on a consolidated basis, accompanied by information about revenue by customer and geographic region, for purposes of evaluating financial performance and allocating resources.

The Chief Executive Officer assesses performance of the Company, monitors budget versus actual results and determines how to allocate resources based on the consolidated net income or loss as reported on the Company’s Condensed Consolidated Statements of Income (Loss).

There are no other expense categories regularly provided to the Chief Executive Officer that are not already included in the Condensed Consolidated Statements of Income (Loss).

The Company has one business segment, and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level.

3 unchanged sentences

The revenue by geographical location in the following tables is based on the country or region in which the products were shipped to:

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

(in thousands) (in thousands)

Three Months Ended September 30,

(in thousands)

Hong Kong $ 178,411 $ 153,495

5 unchanged sentences

The following is a summary of revenue by product type:

Three Months Ended March 31, Nine Months Ended March 31,

2025 2024 2025 2024

(in thousands) (in thousands)

Three Months Ended September 30,

(in thousands)

Power discrete $ 108,506 $ 122,454

3 unchanged sentences

$ 182,501 $ 181,887

ALPHA AND OMEGA SEMICONDUCTOR LIMITED

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Long-lived assets, net consisting of property, plant and equipment and operating lease right-of-use assets, net by geographical area are as follows:

September 30,

2025 June 30,

8 unchanged sentences

Purchase Commitments

As of March 31, 2025, the Company had approximately $ 91.8 million of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others, as well as $ 18.2 million of capital commitments for the purchase of property and equipment.

As of September 30, 2025, the Company had approximately $ 77.8 million of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others, as well as $ 21.5 million of capital commitments for the purchase of property and equipment.

Purchase commitments are generally restricted to a purchase forecast as mutually agreed between the parties.

6 unchanged sentences

Irrespective of the validity of such claims, the Company could incur significant costs in the defense of such claims and suffer adverse effects on its operations.

As previously disclosed, the Company continues to cooperate with the Department of Commerce (“DOC”) in connection with its ongoing administrative investigation regarding certain transactions by the Company.

On April 16, 2025, the Company received a letter from the DOC, which included certain allegations of administrative violations of export control regulations.

The Company is evaluating the letter and held an initial meeting with DOC to discuss the alleged violations and resolution of the matter.

The discussion with DOC is ongoing and at this time, the Company is unable to determine the outcome or estimate possible loss and therefore cannot determine the likelihood of loss or estimate a range of possible loss, if any.

The Company is a party to a variety of agreements contracted with various third parties.

3 unchanged sentences

Further, the Company's obligations under these agreements may be limited in time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by it under these agreements.

The Company has not historically paid or recorded any material indemnifications, and no accrual was made at March 31, 2025 and June 30, 2024.

The Company has not historically paid or recorded any material indemnifications, and no accrual was made at September 30, 2025 and June 30, 2025.

The Company has agreed to indemnify its directors and certain employees as permitted by law and pursuant to its By-laws, and has entered into indemnification agreements with its directors and executive officers.

2 unchanged sentences

However, such insurance may not cover any, or may cover only a portion of, the amounts the Company may be required to pay.

In addition, the Company may not be able to maintain such insurance coverage at a reasonable cost.

In addition, the Company may not be able to maintain such insurance coverage at a reasonable cost, if at all, in the future.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements