8 unchanged sentences
We differentiate ourselves by integrating our expertise in technology, design and advanced manufacturing and packaging to optimize product performance and cost.
−Removed: Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, flat panel TVs, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for TVs, computers, servers and telecommunications equipment.
−Removed: During fiscal year 2024, we accelerated the development of new technology platforms which allowed us to introduce 36 medium and high voltage MOSFET products, targeting primarily the industrial markets and computing marketing, as well as 17 low voltage MOSFET products primarily for the computing market.
+Added: Our portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for computers, servers and telecommunications equipment.
+Added: During fiscal year 2025, we accelerated the development of new technology platforms which allowed us to introduce 33 medium and high voltage MOSFET products, targeting primarily the power supply markets and industrial markets, as well as 11 low voltage MOSFET products primarily for the communication market.
In addition, we introduced 38 Power IC new products for computing applications, communication and consumer markets.
9 unchanged sentences
The joint venture was accounted under the provisions of the consolidation guidance since we had controlling financial interests until December 1, 2021.
−Removed: On December 1, 2021 (the “Effective Date”), Alpha & Omega Semiconductor (Shanghai) Ltd.
−Removed: (“AOS SH”) and Agape Package Manufacturing (Shanghai) Limited (“APM SH” and, together with AOS SH, the “Sellers”), each a wholly-owned subsidiary of the Company, entered into a share transfer agreement ("STA") with a third-party investor to sell a portion of the Company's equity interest in the JV Company which consists of a power semiconductor packaging, testing and 12-inch wafer fabrication facility in Chongqing, China (the “Transaction”).
−Removed: The Transaction closed on December 2, 2021 (the “Closing Date”), which reduced the Company’s equity interest in the JV Company from 50.9% to 48.8%.
−Removed: Also, the Company’s right to designate directors on the board of JV Company was reduced to three (3) out of seven (7) directors, from four (4) directors prior to the Transaction.
−Removed: As a result of the Transaction and other factors, the Company no longer has a controlling financial interest in the JV Company.
−Removed: The JV Company was deconsolidated from the Company’s Consolidated Financial Statements effective as of the Closing Date.
−Removed: On December 24, 2021, we entered into a share transfer agreement with another third-party investor, pursuant to which the Company sold to this investor 1.1% of outstanding equity interest held by the Company in the JV Company.
−Removed: In addition, the JV Company adopted an employee equity incentive plan and issued an equity interest equivalent to 3.99% of the JV Company in exchange for cash.
−Removed: As a result of these two transactions, the Company owned 45.8% of the equity interest in the JV Company as of December 31, 2021.
−Removed: On January 26, 2022, the JV Company completed a financing transaction pursuant to a corporate investment agreement (the “Investment Agreement”) between the JV Company and certain third-party investors (the “New Investors”).
−Removed: Under the Investment Agreement, the New Investors purchased newly issued equity interest of the JV Company, representing approximately 7.82% of post-transaction outstanding equity interests of the JV Company, for a total purchase price of RMB
−Removed: 509 million (or approximately USD 80 million based on the currency exchange rate as of January 26, 2022) (the “Investment”).
−Removed: Following the closing of the January 26, 2022 Investment, the percentage of outstanding JV equity interest beneficially owned by the Company was reduced to 42.2% at June 30, 2022.
−Removed: In February 2024, the JV Company repurchased certain shares that were previously issued to employees under the employee equity incentive plan, which increased the Company’s percentage of equity ownership in the JV Company by 0.54%.
+Added: In December 2021, we sold a portion of our equity interest in the JV Company to a third-party investor, pursuant to which we reduced our ownership from 50.9% to 48.8% of outstanding equity of the JV Company, and reduced our representation on the board of directors of the JV Company.
+Added: As a result, the JV Company was deconsolidated from our consolidated financial statements effective as of December 2, 2021.
+Added: From December 2021 to June 2024, we completed several transactions to sell additional equity interests of the JV Company to third-party investors, while the JV Company also issued additional equity interests to new investors that diluted our ownership interest.
+Added: Accordingly, as of June 30, 2024, the percentage of outstanding JV equity interest beneficially owned by us was further reduced to 42.8%.
+Added: 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 the currency exchange rate between RMB and U.S.
+Added: Dollar on December 31, 2024) in the JV Company in exchange for a 7.09% interest.
+Added: This transaction 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%.
+Added: The funding of the investment was agreed to be made in three installments.
+Added: The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024.
+Added: However, the JV Company has not received the remaining two installments as of the filing date.
As of June 30, 2025, the percentage of outstanding JV equity interest beneficially owned by the Company was 39.2%.
−Removed: We reduced our ownership of the JV Company to below 50% to increase the flexibility of the JV Company to raise capital to fund its future expansion.
−Removed: The JV Company is also contemplating an eventual listing on the Science and Technology Innovation Board, or STAR Market, of the Shanghai Stock Exchange.
−Removed: The reduction of our ownership assists the JV Company in meeting certain regulatory listing requirements.
−Removed: A potential STAR Market listing may take several years to consummate and there is no guarantee that such listing by the JV Company will be successful or will be completed in a timely manner, or at all.
+Added: On July 14, 2025, we entered into an equity transfer agreement with a strategic investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of $150 million to be paid in four installments, subject to satisfaction of certain conditions.
+Added: We expect to receive all four installment payments and close the transaction prior to the end of calendar year 2025.
+Added: We believe this sale will provide additional and significant capital for us to continue investment in technology, R&D projects and acquisition of assets complementary to our business operations, which will facilitate and accelerate our efforts to develop and distribute innovative and diverse power semiconductor products to customers worldwide.
In addition, the JV Company will continue to provide us with significant level of foundry capacity to enable us to develop and manufacture our products.
−Removed: On July 12, 2022, the current shareholders of the JV Company entered into a shareholders contract, pursuant to which the JV Company committed to provide us with a monthly wafer production capacity until December 2023, and additional commitment to provide wafer capacity after December 2023 if the JV Company’s production capacity reaches certain specified level.
+Added: Pursuant to an agreement with the JV Company and other shareholders of the JV Company, the JV Company is committed to provide us with a specified level of monthly wafer production capacity.
Other Factors Affecting Our Performance
4 unchanged sentences
The PC markets have experienced a modest global decline in recent years due to continued growth of demand in tablets and smart phones, worldwide economic conditions and the industry inventory correction which had and may continue to have a material impact on the demand for our products.
+Added: In addition, the PC market may be affected by evolving laws and regulations governing international trade, such as export control regulations.
A decline of the PC market may have a negative impact on our revenue, factory utilization, gross margin, our ability to resell excess inventory, and other performance measures.
5 unchanged sentences
If we are unable to utilize our manufacturing facilities at a desired level, our gross margin may be adversely affected.
−Removed: In addition, from time to time, we may experience wafer capacity
−Removed: constraints, particularly at third party foundries, that may prevent us from meeting fully the demand of our customers.
+Added: In addition, from time to time, we may experience wafer capacity constraints, particularly at third party foundries, that may prevent us from meeting fully the demand of our customers.
While we can mitigate these constraints by increasing and re-allocating capacity at our own fab, we may not be able to do so quickly or at sufficient level, which could adversely affect our financial conditions and results of operations.
−Removed: We also rely on the JV Company to provide foundry capacity to manufacture our products, therefore it is critical that we maintain continuous access to such capacity, which may not be available at sufficient level or at a pricing terms favorable to us because of lack of control over the JV Company’s operation.
−Removed: We continue to maintain a business relationship with the JV Company to ensure uninterrupted supply of manufacturing capacity.
−Removed: Because we continue to rely on the JV Company to provide us with manufacturing capacity, if the JV Company take actions or make decisions that prevents us from accessing required capacity, our operations may be adversely affected.
+Added: We also rely on third parties to provide foundry capacity to manufacture our products, including the JV Company, therefore it is important that we maintain continuous access to such capacity, which may not be available at sufficient level or at pricing terms favorable.
+Added: If these third-party foundries, including the JV Company, take actions or make decisions that prevent us from accessing required capacity, our operations may be adversely affected.
Erosion and fluctuation of average selling price:
4 unchanged sentences
Product introductions and customers’ product requirements:
−Removed: Our success depends on our ability to introduce products on a timely basis that meet or are compatible with our customers' specifications and performance requirements.
−Removed: Both factors, timeliness of product introductions and conformance to customers' requirements, are equally important in securing design wins
−Removed: with our customers.
+Added: Our success depends on our ability to introduce products on a timely basis that meet or are compatible with our customers' specifications and performance requirements, including our Tier 1 customers who often have stringent requirements.
+Added: Both factors, timeliness of product introductions and conformance to customers' requirements, are equally important in securing design wins with our customers.
As we accelerate the development of new technology platforms, we expect to increase the pace at which we introduce new products and seek and acquire design wins.
2 unchanged sentences
Our distributors place purchase orders with us based on their forecasts of end customer demand, and this demand may vary significantly depending on the sales outlook and market and economic conditions of end customers.
−Removed: Because these forecasts may not be accurate, channel inventory held at our distributors may fluctuate significantly, which in turn may prompt distributors to make significant adjustments to their purchase orders placed with us.
+Added: Because these forecasts may not be accurate, channel inventory held at our distributors may fluctuate significantly, which in turn may prompt distributors to make significant adjustments to their purchase orders
+Added: placed with us.
As a result, our revenue and operating results may fluctuate significantly from quarter to quarter.
1 unchanged sentence
Our sales seasonality is affected by numerous factors, including global and regional economic conditions as well as the PC market conditions, revenue generated from new products, changes in distributor ordering patterns in response to channel inventory adjustments and end customer demand for our products and fluctuations in consumer purchase patterns prior to major holiday seasons.
−Removed: In recent periods, broad fluctuations in the semiconductor markets and the global and regional economic conditions, in particular the changing PC market conditions, have had a more significant impact on our results of operations than seasonality.
+Added: Typically, we generate lower revenue during the first quarter of the calendar year as compared to other quarters.
+Added: However, broad fluctuations in the semiconductor markets and the global and regional economic conditions, in particular the changing PC market conditions, have had a more significant impact on our results of operations than seasonality.
Furthermore, our revenue may be impacted by the level of demand from our major customers due to factors outside of our control.
9 unchanged sentences
Stock rotation returns are governed by contract and are limited to a specified percentage of the monetary value of products purchased by the distributor during a specified period.
−Removed: At our discretion or upon our direct negotiations with the original design manufacturers (“ODMs”) or original equipment manufacturers (“OEMs”), we may elect to grant special pricing that is below the prices at which we sold our products to the distributors.
+Added: At our discretion or upon our direct negotiations with the original design manufacturers or original equipment manufacturers, we may elect to grant special pricing that is below the prices at which we sold our products to the distributors.
In certain situations, we will grant price adjustments to the distributors reflecting such special pricing.
We estimate the price adjustments for inventory at the distributors based on factors such as distributor inventory levels, forecasted distributor selling prices, distributor margins and demand for our products.
−Removed: In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $45.0 million.
−Removed: We received payments of such fees in the amount of $18.0 million, $6.8 million and $9.0 million in March 2023, July 2023 and February 2024, respectively, with the remaining amount to be paid upon the achievement of specified engineering services and product milestones.
−Removed: The license and development fee is determined to be one performance obligation and is recognized over the 24 months during which we perform the engineering and development services.
−Removed: We use the input method to measure progression of the transfer of services.
−Removed: During the fiscal years ended June 30, 2024 and 2023, we recorded $21.2 million and $9.9 million of license and development revenue, respectively.
−Removed: We also entered an accompanying supply agreement to provide limited wafer supply to the customer.
+Added: In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and provided 24-months of engineering and development services for a total fee of $45.0 million.
+Added: The license and development fee required significant integration to create a combined output to the customer and was determined to be one performance obligation and was recognized over the 24 months during which we performed the engineering and development services.
+Added: We use the input method to measure progress and recognize revenue, based on the effort expended relative to the estimated total effort to satisfy the performance obligation.
+Added: During the fiscal years ended June 30, 2025, 2024 and 2023, we recorded $13.8 million, $21.2 million and $9.9 million of license and development revenue, respectively.
+Added: As of June 30, 2025, all revenue has been recognized and all consideration has been received associated with the license agreement, therefore we no longer have any obligations under the license agreement.
+Added: We also entered into an accompanying supply agreement to provide limited wafer supply to the customer.
Cost of goods sold
Our cost of goods sold primarily consists of costs associated with semiconductor wafers, packaging and testing, personnel, including share-based compensation expense, overhead attributable to manufacturing, operations and procurement, and costs associated with yield improvements, capacity utilization, warranty and valuation of inventories.
−Removed: As the volume of sales
−Removed: increases, we expect cost of goods sold to increase.
+Added: As the volume of sales increases, we expect cost of goods sold to increase.
While our utilization rates cannot be immune to the market conditions, our goal is to make them less vulnerable to market fluctuations.
9 unchanged sentences
Selling, general and administrative expenses.
−Removed: Our selling, general and administrative expenses consist primarily of salaries, bonuses, benefits, share-based compensation expense, product promotion costs, occupancy costs, travel expenses, expenses related to sales and marketing activities, amortization of software, depreciation of equipment, maintenance costs and other expenses for general and administrative functions as well as costs for outside professional services, including legal, audit and accounting services.
+Added: Our selling, general and administrative expenses consist primarily of salaries, bonuses, benefits, share-based compensation expense, product promotion costs, occupancy costs, travel expenses, expenses related to sales and marketing activities, amortization of software, depreciation of equipment, maintenance costs, other expenses for general and administrative functions, and costs for outside professional services, including legal, audit and accounting services, as well as impairment of long-lived assets.
+Added: We review all long-lived assets whenever events or changes in circumstance indicate that these assets may not be recoverable.
+Added: When evaluating long-lived assets, if we conclude that the estimated undiscounted cash flows attributable to the assets are less than their carrying value, we recognize an impairment loss based on the excess of the carrying amount of the assets over their respective fair values.
We expect our selling, general and administrative expenses to fluctuate in the near future as we continue to exercise cost control measures.
11 unchanged sentences
Our effective tax rate is highly dependent upon the geographic distribution of our worldwide profits or losses, the tax laws and regulations in each geographical region where we have operations, the availability of tax credits and carry-forwards and the effectiveness of our tax planning strategies.
−Removed: Tax Cuts and Jobs Act", Enacted December 22, 2017
−Removed: On December 22, 2017, the United States enacted tax reform legislation through the Tax Cuts and Jobs Act (“the Tax Act”), which significantly changes the existing U.S.
−Removed: tax laws, including, but not limited to, (1) a reduction in the corporate tax rate from 35% to 21%, (2) a shift from a worldwide tax system to a territorial system, (3) eliminating the corporate alternative minimum tax (AMT) and changing how existing AMT credits can be realized, (4) bonus depreciation that will allow for full expensing of qualified property, (5) creating a new limitation on deductible interest expense and (6) changing rules related to uses and limitations of net operating loss carryforwards created in tax years beginning after December 31, 2017.
−Removed: The Company is not currently subject to the Base Erosion and Anti-Abuse (BEAT) tax, which is a tax imposed on certain entities who make payments to their non U.S.
−Removed: affiliates, where such payments reduce the U.S.
−Removed: The BEAT tax is imposed at a rate of 10% on Adjusted Taxable Income, excluding certain payments to foreign related entities.
−Removed: incremental tax over and above the corporate income tax and is recorded as a period cost.
−Removed: It is possible that this tax could be applicable in future periods, which would cause an increase to the effective tax rate and cash taxes.
−Removed: “The Chip and Science Act of 2022”, Enacted August 2, 2022
−Removed: In August 2022 the U.S.
−Removed: enacted the Chip and Science Act of 2022 (the Chips Act).
−Removed: The Chips Act provides incentives to semiconductor chip manufacturers in the United States, including providing manufacturing investment credits of 25% for investments in semiconductor manufacturing property placed in service after December 31, 2022, for which construction begins before January 1, 2027.
−Removed: 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.
−Removed: Currently, we are evaluating the impact of the Chips Act to us.
−Removed: “The Inflation Reduction Act”, Enacted August 16, 2022
−Removed: In August 2022 the United States enacted tax legislation through the Inflation Reduction Act (IRA).
−Removed: The IRA introduces a 15% corporate alternative minimum tax (CAMT) for corporations whose average annual adjusted financial statement income (AFSI) for any consecutive three-tax-year period preceding the applicable tax year exceeds $1 billion.
−Removed: The CAMT is effective for tax years beginning after 31 December 2022.
−Removed: The CAMT is currently not applicable to the Company.
Bermuda Corporate Income Tax for Tax Years Beginning in 2025
4 unchanged sentences
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.
−Removed: 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.
+Added: The Company did not generate more than 750 million euro revenue in any of the four fiscal years before the tax year starting July 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.
−Removed: Equity method investment income/loss from equity investee
+Added: One Big Beautiful Bill Act, Enacted July 4, 2025
+Added: On July 4, 2025, H.R.
+Added: 1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law.
+Added: This includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the
+Added: 2017 Tax Cuts and Jobs Act.
+Added: 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.
+Added: 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.
+Added: The OBBB was enacted after the June 30, 2025 year end.
+Added: As of June 30, 2025, we are continuing to assess the potential impact of the OBBB.
+Added: Equity method investment loss
We use the equity method of accounting when we have the ability to exercise significant influence, but we do not have control, as determined in accordance with generally accepted accounting principles, over the operating and financial policies of the company.
1 unchanged sentence
As a result, we record our investment under equity method of accounting.
−Removed: Since we are unable to obtain accurate financial information from the JV Company in a timely manner, we record our share of earnings or losses of such affiliate on a one quarter lag.
+Added: Since we are unable to obtain accurate financial information from the JV Company in a timely manner, we record our share of earnings or losses of the JV Company on a one quarter lag.
We record our interest in the net earnings of the equity method investee, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within earnings or loss from equity interests in the Consolidated Statements of Operations.
1 unchanged sentence
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.
−Removed: Equity method goodwill is not amortized or tested for impairment.
+Added: Equity method goodwill is not amortized.
Instead the total equity method investment balance, including equity method goodwill, is tested for impairment.
−Removed: We review for impairment whenever factors indicate that the carrying amount of the investment might not be recoverable.
−Removed: In such a case, the decrease in value is recognized in the period the impairment occurs in the Consolidated Statement of Operations.
+Added: 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 the currency exchange rate between RMB and U.S.
+Added: Dollar on December 31, 2024) in the JV Company in exchange for a 7.09% interest.
+Added: This transaction 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%.
+Added: We recorded a gain of $0.5 million on the change of equity interest in the JV Company, which was included in the equity method investment loss line in the consolidated statements of operations.
+Added: The funding of the investment was agreed to be made in three installments.
+Added: The JV Company received the first installment of RMB 40 million (or $5.5 million) on December 31, 2024.
+Added: However, the JV Company has not received the remaining two installments as of the filing date.
+Added: On July 14, 2025, we entered into an equity transfer agreement (“Agreement”) with the investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of $150 million.
+Added: We identified the negotiations of the equity transfer agreement throughout the fourth quarter of fiscal year 2025 as an impairment indicator and performed a quantitative impairment test as of June 30, 2025.
+Added: Based on the implied valuation of the JV Company per the transaction price in the equity transfer agreement, the fair value of the equity method investment was determined to be lower than its carrying value, and a $76.8 million other-than-temporary impairment of the equity method investment was recognized as of June 30, 2025.
+Added: The impairment loss is recorded within equity method investment loss in the consolidated statement of operations for the fiscal year ended June 30, 2025.
+Added: Results of Operations
+Added: A discussion of our results of operations for the fiscal year ended June 30, 2025 to June 30, 2024 is included below.
+Added: For a discussion and comparison of the results of our operations for the fiscal year ended June 30, 2024 with the fiscal year ended June 30, 2023, refer to “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” in our Form 10-K for the fiscal year ended June 30, 2024 filed with the SEC on August 23, 2024.
Operating results
11 unchanged sentences
Total operating expenses 189,440 175,674 27.2 % 26.7 %
−Removed: Operating income (loss)
+Added: Operating loss
(28,436) (3,756) (4.1) % (0.5) %
−Removed: Other income (loss), net (73) (1,730) 999 — % (0.3) % 0.1 %
−Removed: Interest income (expense), net 1,186 (1,087) (3,920) 0.2 % (0.2) % (0.5) %
−Removed: Gain on deconsolidation of the JV Company — — 399,093 — % — % 51.3 %
−Removed: Loss on changes of equity interest in the JV Company, net — — (3,140) — % — % (0.4) %
−Removed: Net income (loss) before income taxes (2,643) 19,712 495,070 (0.3) % 2.8 % 63.5 %
−Removed: Income tax expense 3,649 5,937 39,258 0.6 % 0.9 % 5.0 %
−Removed: Net income (loss) before loss from equity method investment (6,292) 13,775 455,812 (0.9) % 1.9 % 58.5 %
−Removed: Equity method investment loss from equity investee (4,789) (1,411) (2,629) (0.7) % (0.1) % (0.3) %
−Removed: Net income (loss) (11,081) 12,364 453,183 (1.6) % 1.8 % 58.2 %
−Removed: Net income attributable to noncontrolling interest — — 20 0.0 % 0.0 % 0.0 %
−Removed: Net income (loss) attributable to Alpha and Omega Semiconductor Limited $ (11,081) $ 12,364 $ 453,163 (1.6) % 1.8 % 58.2 %
+Added: Other loss, net
+Added: (1,004) (73) (0.1) % — %
+Added: Interest income 4,283 5,168 0.6 % 0.8 %
+Added: Interest expenses (2,639) (3,982) (0.4) % (0.6) %
+Added: Net loss before income taxes and equity method investment loss
+Added: (27,796) (2,643) (4.0) % (0.3) %
+Added: Income tax expense (benefit) (8,625) 3,649 (1.2) % 0.6 %
+Added: Net loss before equity method investment loss
+Added: (19,171) (6,292) (2.8) % (0.9) %
+Added: Equity method investment loss (77,805) (4,789) (11.1) % (0.7) %
+Added: $ (96,976) $ (11,081) (13.9) % (1.6) %
(1) Includes share-based compensation expense as follows:
8 unchanged sentences
Year Ended June 30, Change
−Removed: 2024 2023 2022 2024 2023
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
Power discrete $ 449,507 $ 426,146 $ 23,361 5.5 %
6 unchanged sentences
Year Ended June 30, Change
−Removed: 2024 2023 2022 2024 2023
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
Computing $ 324,127 $ 282,411 $ 41,716 14.8 %
6 unchanged sentences
$ 696,162 $ 657,274 $ 38,888 5.9 %
−Removed: Fiscal 2024 vs 2023
−Removed: Total revenue was $657.3 million for fiscal year 2024, a decrease of $34.0 million, or 4.9%, as compared to $691.3 million for fiscal year 2023.
−Removed: The decrease was primarily due to a decrease of $32.6 million and $12.8 million in sales of power discrete products and power IC products, respectively.
−Removed: The decrease in power discrete and power IC product sales was primarily due to a 17.3% decrease in average selling price as compared to last fiscal year due to a shift in product mix, offset by a 12.3% increase in unit shipments.
−Removed: The decrease in revenues was primarily driven by the decreased sales in the consumer markets, particularly in gaming products, offset by the increase in the computing market, particularly in notebook and motherboard products.
−Removed: The increase in revenue from packaging and testing services and other for the fiscal year 2024 as compared to last fiscal year was primarily due to increased demand.
−Removed: The increase in license and development services for the fiscal year 2024 was related to the license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services in February 2023.
−Removed: Fiscal 2023 vs 2022
−Removed: Total revenue was $691.3 million for fiscal year 2023, a decrease of $86.2 million, or 11.1%, as compared to $777.6 million for fiscal year 2022.
−Removed: The decrease was primarily due to a decrease of $86.3 million and $2.3 million in sales of power discrete products and power IC products, respectively.
−Removed: The decrease in power discrete and power IC product sales was primarily due to a 30.1% decrease in unit shipments, offset by a 26.9% increase in average selling price as compared to last fiscal year due to a shift in product mix.
−Removed: The decrease in revenues was primarily driven by the significant decrease in the computing market, reflecting weaker demand for computers and inventory correction by our customers, in response to the industry-wide downturn in the semiconductor industry, partially offset by increased sales in the consumer markets, particularly in gaming products.
−Removed: The decrease in revenue from packaging and testing services for the fiscal year 2023 as compared to last
−Removed: fiscal year was primarily due to decreased demand.
−Removed: The increase in license and development services for the fiscal year 2023 was related to the license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services in February 2023.
+Added: Total revenue was $696.2 million for fiscal year 2025, an increase of $38.9 million, or 5.9%, as compared to $657.3 million for fiscal year 2024.
+Added: The increase was primarily due to an increase of $23.4 million and $24.1 million in sales of power discrete products and power IC products, respectively, offset by a decrease of $1.2 million in sales of packaging and testing services and other, as well as a decrease of $7.4 million in license and development services.
+Added: The increase in power discrete and power IC product sales was primarily due to a 17.1% increase in unit shipments, offset by an 8.0% decrease in average selling price as compared to last fiscal year due to a shift in product mix.
+Added: The decrease in revenue from packaging and testing services and other for fiscal year 2025 as compared to the last fiscal year was primarily due to decreased demand.
+Added: The decrease in license and development services for the fiscal year 2025 was related to the license agreement with a customer to license our proprietary SiC technology and provided 24-month engineering and development services, which was completed in February 2025.
Cost of goods sold and gross profit
Year Ended June 30, Change
−Removed: 2024 2023 2022 2024 2023
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
Cost of goods sold $ 535,158 $ 485,356 $ 49,802 10.3 %
2 unchanged sentences
Percentage of revenue 23.1 % 26.2 %
−Removed: Fiscal 2024 vs 2023
−Removed: Cost of goods sold was $485.4 million for fiscal year 2024, a decrease of $6.4 million, or 1.3%, as compared to $491.8 million for fiscal year 2023.
−Removed: The decrease was primarily due to 4.9% decrease in revenue.
−Removed: Gross margin decreased by 2.7 percentage points to 26.2% for the fiscal year 2024, as compared to 28.9% for the fiscal year 2023.
−Removed: The decrease in gross margin was primarily due to higher material costs and less favorable product mix during the fiscal year ended June 30, 2024.
+Added: Cost of goods sold was $535.2 million for fiscal year 2025, an increase of $49.8 million, or 10.3%, as compared to $485.4 million for fiscal year 2024.
+Added: The increase was primarily due to 5.9% increase in revenue.
+Added: Gross margin decreased by 3.1 percentage points to 23.1% for fiscal year 2025, as compared to 26.2% for fiscal year 2024.
+Added: The decrease in gross margin was primarily due to average selling pricing erosion, higher material costs and less favorable product mix during fiscal year ended June 30, 2025.
We expect our gross margin to continue to fluctuate in the future as a result of variations in our product mix, semiconductor wafer and raw material pricing, manufacturing labor cost and general economic and PC market conditions.
−Removed: Fiscal 2023 vs 2022
−Removed: Cost of goods sold was $491.8 million for fiscal year 2023, a decrease of $17.2 million, or 3.4%, as compared to $509.0 million for fiscal year 2022.
−Removed: The decrease was primarily due to 11.1% decrease in revenue.
−Removed: Gross margin decreased by 5.6 percentage points to 28.9% for the fiscal year 2023, as compared to 34.5% for the fiscal year 2022.
−Removed: The decrease in gross margin was primarily due to higher material costs and lower unit shipments during the fiscal year ended June 30, 2023.
Research and development expenses
Year Ended June 30, Change
−Removed: 2024 2023 2022 2024 2023
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
Research and development $ 94,265 $ 89,940 $ 4,325 4.8 %
−Removed: Fiscal 2024 vs 2023
Research and development expenses were $94.3 million for fiscal year 2025, an increase of $4.3 million, or 4.8%, as compared to $89.9 million for fiscal year 2024.
−Removed: The increase was primarily attributable to a $3.0 million increase in employee compensation and benefit expense mainly due to increased headcount and higher business and medical insurance expenses as well as higher bonus expense and vacation expense, a $0.8 million increase in depreciation expenses, and a $2.1 million increase in allocation expenses, partially offset by a $4.2 million decrease in share-based compensation expense as a result of a cancellation of certain performance-based restricted stock units and an assessment of zero attainment for certain market-based restricted stock units.
+Added: The increase was primarily attributable to a $2.9 million increase in share-based compensation as a result of a modification of market-based restricted stock units in August 2024, a $0.9 million increase in employee compensation and benefit expense mainly due to increased headcount, higher medical insurance expenses and higher severance expenses, a $0.3 million increase in product prototyping engineering expense as a result of increased engineering activities, as well as a $0.1 million increase in office rent expenses.
We continue to evaluate and invest resources in developing new technologies and products utilizing our own fabrication and packaging facilities.
We believe the investment in research and development is important to meet our strategic objectives.
−Removed: Fiscal 2023 vs 2022
−Removed: Research and development expenses were $88.1 million for fiscal year 2023, an increase of $16.9 million, or 23.7%, as compared to $71.3 million for fiscal year 2022.
−Removed: The increase was primarily attributable to a $3.9 million increase in employee compensation and benefit expense mainly due to increased headcount and higher medical insurance expenses, partially offset by lower vacation accrual and lower bonus accrual, a $2.4 million increase in share-based compensation expense due to an
−Removed: increase in stock awards granted, a $3.6 million increase in depreciation expenses, a $2.2 million increase in allocation expenses, and a $4.8 million increase in product prototyping engineering expense as a result of increased engineering activities.
Selling, general and administrative expenses
Year Ended June 30, Change
−Removed: 2024 2023 2022 2024 2023
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
Selling, general and administrative $ 95,175 $ 85,734 $ 9,441 11.0 %
−Removed: Fiscal 2024 vs 2023
−Removed: Selling, general and administrative expenses were $85.7 million for fiscal year 2024, a decrease of $3.1 million, or 3.5%, as compared to $88.9 million for fiscal year 2023.
−Removed: The decrease was primarily attributable to a $9.2 million decrease in share-based compensation expense as a result of a cancellation of certain performance-based restricted stock units and an assessment of zero attainment for certain market-based restricted stock units, partially offset by a $1.5 million increase in employee compensation and benefits expenses mainly due to increased headcount and higher bonus expense and vacation expense, offset by lower business insurance expenses, a $1.0 million increase in consulting fees, a $1.0 million increase in audit fees, a $1.8 million increase in allocation expenses and $0.7 million increase in employee business expenses.
−Removed: Fiscal 2023 vs 2022
−Removed: Selling, general and administrative expenses were $88.9 million for fiscal year 2023, a decrease of $6.4 million, or 6.7%, as compared to $95.3 million for fiscal year 2022.
−Removed: The decrease was primarily attributable to a $11.3 million decrease in employee compensation and benefits expenses mainly due to lower bonus expenses accrual and lower vacation accrual, partially offset by increased headcount, higher medical and business insurance expenses, as well as a $1.5 million decrease in loss incurred in connection with a cyber security incident, partially offset by a $3.1 million increase in share-based compensation expense due to an increase in stock award granted and the incremental expenses for one of our former officers' equity shares resulting from the modification, a $1.1 million increase in legal expenses, a $0.7 million increase in recruiting and consulting fees, a $1.2 million increase in allocation expenses, and a $0.8 million increase in employee business expenses.
−Removed: Other income (loss), net
+Added: Selling, general and administrative expenses were $95.2 million for fiscal year 2025, an increase of $9.4 million, or 11.0%, as compared to $85.7 million for fiscal year 2024.
+Added: The increase was primarily attributable to a one-time settlement fee of $4.3 million for the export control investigation case, a $4.2 million increase in share-based compensation expense as a result of a modification of market-based restricted stock units in August 2024, and a $2.4 million increase in employee compensation and benefits expenses mainly due to merit-based compensation increases for certain personnel, higher insurance expenses and higher severance expenses, offset by a $0.8 million decrease in audit fees, a $0.7 million decrease in consulting fees, a $0.5 million decrease in marketing related expenses, and a $0.6 million decrease in allocation expenses.
+Added: In addition, during the fiscal year ended June 30, 2025, we identified certain purchased manufacturing equipment that we were unable to meet our production process requirements.
+Added: Because the equipment had no alternative uses, we recorded an impairment of $1.0 million related to such equipment.
+Added: Other loss, net
Year Ended June 30, Change
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
+Added: Other loss, net
$ (1,004) $ (73) $ (931) 1,275.3 %
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
−Removed: Other income (loss), net $ (73) $ (1,730) $ 999 $ 1,657 (95.8) % $ (2,729) (273.2) %
−Removed: Other income (loss), net decreased by $1.7 million in fiscal year 2024 as compared to the last fiscal year primarily due to decrease in foreign currency exchange loss as a result of the appreciation of RMB against USD.
−Removed: Other income (loss), net increased by $2.7 million in fiscal year 2023 as compared to the last fiscal year primarily due to increase in foreign currency exchange loss as a result of the depreciation of RMB against USD.
−Removed: Interest income (expense), net
+Added: Other loss, net increased by $0.9 million in fiscal year 2025 as compared to the last fiscal year primarily due to increase in foreign currency exchange loss as a result of the appreciation of RMB and Taiwan dollar against the U.S.
+Added: Interest income
Year Ended June 30, Change
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
+Added: Interest income
$ 4,283 $ 5,168 $ (885) (17.1) %
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
−Removed: Interest income (expense), net
+Added: Interest income decreased by $0.9 million in fiscal year 2025 as compared to fiscal year 2024 primarily due to a result of lower interest rate and lower cash balance during fiscal year 2025.
+Added: Interest expenses
+Added: Year Ended June 30, Change
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
+Added: Interest expenses
$ (2,639) $ (3,982) $ 1,343 (33.7) %
−Removed: Interest income (expense), net increased by $2.3 million in fiscal year 2024 as compared to the prior fiscal year primarily due to a $1.4 million increase in interest income as a result of higher interest rate as well as a $0.9 million decrease in interest expense as a result of a decrease in bank borrowings during the fiscal year 2024.
−Removed: Interest income (expense), net decreased by $2.8 million in fiscal year 2023 as compared to the fiscal year 2022 primarily due to a $3.6 million increase in interest income as a result of higher interest rate, offset by a $0.7 million increase in interest expense as a result of an increase in bank borrowings during the fiscal year 2023.
+Added: Interest expenses decreased by $1.3 million in fiscal year 2025 as compared to fiscal year 2024 primarily due to less outstanding loan balance during fiscal year 2025.
+Added: Equity method investment loss
+Added: Year Ended June 30, Change
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
+Added: Equity method investment loss $ (77,805) $ (4,789) $ (73,016) 1,524.7 %
+Added: 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.
+Added: dollar on December 31, 2024) in the JV Company.
+Added: This transaction 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%.
+Added: As such, we recorded a gain of $0.5 million on the change of equity interest in the JV Company during fiscal year ended June 30, 2025.
+Added: On July 14, 2025, we entered into an equity transfer agreement with the investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of $150 million.
+Added: We identified the negotiations of the equity transfer agreement throughout the fourth quarter of fiscal year 2025 as an impairment indicator and performed a quantitative impairment test as of June 30, 2025.
+Added: Based on the implied valuation of the JV Company per the transaction price in the equity transfer agreement, the fair value of the equity method investment was determined to be lower than its carrying value, and a $76.8 million other-than-temporary impairment of the equity method investment was recognized as of June 30, 2025.
Income tax expense
Year Ended June 30, Change
+Added: 2025 2024 FY25 vs.
+Added: (in thousands) (in thousands) (in percentage)
+Added: Income tax expense (benefit)
$ (8,625) $ 3,649 $ (12,274) (336.4) %
−Removed: (in thousands) (in thousands) (in percentage) (in thousands) (in percentage)
−Removed: Income tax expense $ 3,649 $ 5,937 $ 39,258 $ (2,288) (38.5) % $ (33,321) (84.9) %
−Removed: Fiscal 2024 vs 2023
−Removed: Income tax expense for fiscal years 2024 and 2023 was $3.6 million and $5.9 million, respectively.
−Removed: Income tax expense decreased by $2.3 million, or 38.5% in fiscal year 2024 as compared to fiscal year 2023.
−Removed: The income tax expense of $3.6 million for the year ended June 30, 2024 included a $0.2 million discrete tax expense, and the income tax expense of $5.9 million for the year ended June 30, 2023 included a $0.1 million discrete tax expense.
−Removed: Excluding the discrete income tax items, the effective tax rate for the years ended June 30, 2024 and 2023 was (130.6)% and 29.4%, respectively.
−Removed: The changes in the tax expense and effective tax rate between the periods resulted primarily from the Company reporting pretax book loss of $2.6 million for the year ended June 30, 2024 as compared to a pretax book income of $19.7 million for year ended June 30, 2023 as well as changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year.
−Removed: Fiscal 2023 vs 2022
−Removed: Income tax expense for fiscal years 2023 and 2022 was $5.9 million and $39.3 million, respectively.
−Removed: Income tax expense decreased by $33.3 million, or 84.9% in fiscal year 2023 as compared to fiscal year 2022.
−Removed: The income tax expense of $5.9 million for the year ended June 30, 2023 included a $0.1 million discrete tax expense, and the income tax expense of $39.3 million for the year ended June 30, 2022 included a $33.5 million discrete tax expense related to the Company’s $396.0 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain as the Company changed from the consolidation method of accounting to the equity method of accounting.
−Removed: In addition, for the year ended June 30, 2022 we recorded a tax benefit of $0.4 million from other discrete income tax items.
+Added: Income tax expense (benefit) for fiscal years 2025 and 2024 was $(8.6) million and $3.6 million, respectively.
+Added: Income tax expense decreased by $12.3 million in fiscal year 2025 as compared to fiscal year 2024.
+Added: The decrease was primarily related to the tax benefits reported in connection with the Company’s investment in the JV Company.
+Added: In fiscal year 2025, the Company reported a $77.8 million equity method investment loss, generating a $12.5 million tax benefit in fiscal year 2025 as compared to a $4.8 million equity method investment loss in fiscal year 2024 that generated a $0.7 million tax benefit in fiscal year 2024.
+Added: Excluding the $12.5 million tax benefit related to the $77.8 million of equity method loss in fiscal 2025, the fiscal 2025 tax
+Added: would be $3.9 million of income tax expense.
+Added: The remaining difference in tax expense between fiscal years 2025 and 2024 was primarily due to changes in various book-tax permanent differences, discrete tax adjustments between the two years, and changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year.
+Added: The income tax benefit of $8.6 million for the year ended June 30, 2025 also included a $0.2 million discrete tax benefit and the income tax expense of $3.6 million for the year ended June 30, 2024 included a $0.2 million discrete tax expense.
Excluding the discrete income tax items, the effective tax rate for the years ended June 30, 2025 and 2024 was 30.4% and (130.6%), respectively.
−Removed: The changes in the tax expense and effective tax rate between the periods resulted primarily from the Company reporting pretax book income of $19.7 million for the year ended June 30, 2023 as compared to a pretax book income of $495.0 million ($99.0 million of pretax book income plus the $396.0 million of income from the sale of equity interest in a joint venture and the related deconsolidation gain) for the year ended June 30, 2022 as well as changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year.
Liquidity and Capital Resources
1 unchanged sentence
To date, we finance our operations and capital expenditures primarily through funds generated from operations and borrowings under our term loans, financing lease and other debt agreements.
−Removed: In March 2024, Bank of Communications Limited in China provided a line of credit facility to one of the Company's subsidiaries in China.
−Removed: The purpose of the credit facility is to provide working capital borrowings.
−Removed: The Company could borrow up to approximately RMB 140 million o r $19.3 million based on currency exchange rate between RMB and U.S.
−Removed: Dollar on June 30, 2024 with a maturity date of March 15, 2025.
−Removed: As of June 30, 2024, there was no outstanding balance for this loan.
−Removed: In December 2023, Industrial and Commercial Bank of China provided a line of credit facility to one of the Company's subsidiaries in China.
−Removed: The purpose of the credit facility was to provide working capital borrowings.
−Removed: The Company could borrow up to approximately RMB 72.0 million, or $9.9 million based on currency exchange rate between RMB and U.S.
−Removed: Dollar on June 30, 2024, with a maturity date of December 31, 2024.
−Removed: As of June 30, 2024, there was no outstanding balance for this loan.
−Removed: In September 2023, China Construction Bank provided a line of credit facility to one of the Company's subsidiaries in China.
−Removed: The purpose of the credit facility is to provide working capital borrowings.
−Removed: The Company could borrow up to approximately RMB 50 million or $6.9 million based on currency exchange rate between RMB and U.S.
−Removed: Dollar on June 30, 2024 with a maturity date of September 8, 2025.
−Removed: As of June 30, 2024, there was no outstanding balance for this loan.
−Removed: On February 6, 2023, we entered into a license and engineering service agreement with a leading power semiconductor automotive supplier related to our Silicon Carbide (SiC) MOSFET and diode technology.
−Removed: Pursuant to the agreement, we license and provide 24-months of engineering support for our proprietary SiC technology to the supplier for a total fee of $45.0 million.
−Removed: We received payments of such fees in the amount of $18.0 million, $6.8 million and 9.0 million in March 2023, July 2023 and February 2024, respectively, and the remaining amount to be paid upon our achievements of specified business and product milestones.
−Removed: In addition, we entered an accompanying supply agreement with the supplier to provide it with limited wafer supply.
−Removed: 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.
+Added: In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the Company’s wholly-owned subsidiaries, entered into a financing arrangement agreement with a company (“Lender”) for the lease and purchase of a machinery equipment manufactured by a supplier.
This agreement has a 5 years term, after which Jireh has the option to purchase the equipment for $1.
16 unchanged sentences
Jireh is required to make consecutive quarterly payments of principal and interest.
−Removed: The loan accrues interest based on adjusted LIBOR plus the applicable margin based on the outstanding balance of the loan.
+Added: The loan accrues interest based on the SOFR plus the applicable margin based on the outstanding balance of the loan.
This agreement contains customary restrictive covenants and includes certain financial covenants that the Company is required to maintain.
1 unchanged sentence
As of June 30, 2025, Jireh was in compliance with these covenants and the outstanding balance of this loan was $20.3 million.
+Added: In August 2025, the Company paid the outstanding balance in full.
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.
−Removed: 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.
+Added: This factoring agreement allows the Borrower to borrow up to 70% of the net amount of its eligible accounts receivable with a maximum amount of $30.0 million.
The interest rate is based on the Secured Overnight Financing Rate (“SOFR”), plus 2.01% per annum.
The Company is the guarantor for this agreement.
−Removed: The Company is accounting for this transaction as a secured borrowing under the Transfers and Servicing of Financial Assets
+Added: 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.
2 unchanged sentences
Other terms remain the same.
−Removed: The Borrower was in compliance with these covenants as of June 30, 2024.
−Removed: As of June 30, 2024, there was no outstanding balance of this factoring agreement.
+Added: As of June 30, 2025, there was no outstanding balance for this loan.
The Chinese government imposes certain currency exchange controls on cash transfers out of China.
−Removed: Regulations in China permit foreign owned entities to freely convert the Renminbi into foreign currency for transactions that fall under the “current account,” which includes trade related receipts and payments, interests, and dividend payments.
−Removed: Accordingly, subject to the review and verification of the underlying transaction documents and supporting documents by the account banks in China, our Chinese subsidiaries may use Renminbi to purchase foreign exchange currency for settlement of such “current account” transactions without the pre-approval from China's State Administration of Foreign Exchange (SAFE) or its provincial branch.
+Added: Regulations in China permit foreign owned entities to freely convert the RMB into foreign currency for transactions that fall under the “current account,” which includes trade related receipts and payments, interests, and dividend payments.
+Added: Accordingly, subject to the review and verification of the underlying transaction documents and supporting documents by the account banks in China, our Chinese subsidiaries may use RMB to purchase foreign exchange currency for settlement of such “current account” transactions without the pre-approval from SAFE or its provincial branch.
Pursuant to applicable regulations, foreign-invested enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations.
−Removed: A Chinese company must pay 10% of its annual after-tax profits into the statutory reserve fund to fund the statutory reserve fund unless it has reached 50% of the registered capital of the company.
+Added: A Chinese company must pay 10% of its annual after-tax profits to fund its statutory reserve fund unless it has reached 50% of the registered capital of the company.
Where the accumulative amount of the company’s statutory reserve is not enough to make up for the losses of the previous year, the current year’s profits must first be used to make up for the losses before the statutory reserve is accrued.
While SAFE approval is not statutorily required for eligible dividend payments to the foreign parent, in practice, before making the dividend payment, the account bank may seek SAFE’s opinion with respect to a dividend payment if the payment involves a relatively large amount, which may delay the dividend payment depending on the then overall status of cross-border payments and receipts of China.
−Removed: Transactions that involve conversion of Renminbi into foreign currency in relation to foreign direct investments and provision of debt financings in China are classified as “capital account” transactions.
+Added: Transactions that involve conversion of RMB into foreign currency in relation to foreign direct investments and provision of debt financings in China are classified as “capital account” transactions.
Examples of “capital account” transactions include repatriations of investments by foreign owners and repayments of loan principal to foreign lenders.
−Removed: "Capital account" transactions require prior approval from SAFE or its provincial branch or an account bank delegated by SAFE to convert a remittance into a foreign currency, such as U.S.
+Added: "Capital account"
+Added: transactions require prior approval from SAFE or its provincial branch or an account bank delegated by SAFE to convert a remittance into a foreign currency, such as U.S.
dollars, and transmit the foreign currency outside of China.
1 unchanged sentence
As of June 30, 2025 and 2024, such restricted portion amounted to approximately $93.9 million and $93.5 million, or 11.4% and 10.5%, of our total consolidated net assets attributable to the Company, respectively.
+Added: As disclosed above, in July 2025, we entered into an equity transfer agreement with a third-party strategic investor to sell approximately 20.3% of outstanding equity interest in the JV Company for an aggregate cash consideration of $150 million to be paid in four installments, provided that certain conditions are satisfied.
+Added: We expect to receive all four payments by the end of calendar year 2025, and the majority of the consideration, approximately $94 million, is expected to be paid in the first installment, which we anticipate to receive during the quarter ending September 30, 2025.
+Added: We plan to use the cash proceeds from the sale to invest in technology, R&D projects and acquisition of assets complimentary to our business operations.
+Added: See also “Risk Factors—Our recent sale of equity interest in the JV Company is subject to certain closing conditions, and if the conditions are not met, we may not receive a portion or any of the cash proceeds from the sale”.
We believe that our current cash and cash equivalents and cash flows from operations will be sufficient to meet our anticipated cash needs, including working capital and capital expenditures, for at least the next twelve months.
2 unchanged sentences
The sale of additional equity securities could result in dilution to our shareholders.
−Removed: The incurrence of indebtedness would result in increased debt service obligations and may include operating and financial covenants that would restrict our operations.
+Added: The incurrence of indebtedness would result in increased debt obligations and may include operating and financial covenants that would restrict our operations.
We cannot be certain that any financing will be available in the amounts we need or on terms acceptable to us, if at all.
5 unchanged sentences
Year Ended June 30,
−Removed: 2024 2023 2022
(in thousands)
1 unchanged sentence
Net cash used in investing activities (36,441) (35,744)
−Removed: Net cash provided by (used in) financing activities (9,903) (29,611) 21,854
+Added: Net cash used in financing activities
+Added: (15,496) (9,903)
Effect of exchange rate changes on cash, cash equivalents and restricted cash 227 (126)
−Removed: Net increase (decrease) in cash, cash equivalents and restricted cash $ (20,063) $ (119,048) $ 109,838
+Added: Net decrease in cash, cash equivalents and restricted cash
+Added: $ (22,042) $ (20,063)
Cash flows from operating activities
−Removed: Net cash provided by operating activities of $25.7 million for fiscal year 2024 resulted primarily from net loss of $11.1 million, non-cash charges of $79.4 million and net change in assets and liabilities using net cash of $42.6 million.
−Removed: The non-cash charges of $79.4 million included depreciation and amortization expenses of $53.8 million, share-based compensation expense of $21.6 million, equity method investment loss from equity investee of $4.8 million, the net deferred income taxes of $0.9 million, and loss on disposal of property and equipment of $0.1 million.
−Removed: The net change in assets and liabilities using net cash of $42.6 million was primarily due to $33.8 million decrease in accrued and other liabilities, $12.5 million increase in inventories, $2.4 million decrease in accounts payable primarily due to timing of payment, $5.5 million decrease in deferred revenue, and $2.0 million decrease in income taxes payable, partially offset by $9.9 million decrease in accounts receivable due to timing of billings and collection of payments, increase in other payable on equity investee of $1.7 million, $1.9 million decrease in other current and long-term assets primarily due to decrease in advance payments to suppliers.
−Removed: Net cash provided by operating activities of $20.5 million for fiscal year 2023 resulted primarily from net income of $12.4 million, non-cash charges of $80.9 million and net change in assets and liabilities using net cash of $72.8 million.
−Removed: The non-cash charges of $80.9 million included depreciation and amortization expenses of $43.2 million, share-based compensation expense of $37.5 million, equity method investment loss from equity investee of $1.4 million, the net deferred income taxes of $1.4 million and loss on disposal of property and equipment of $0.2 million.
−Removed: The net change in assets and liabilities using net cash of $72.8 million was primarily due to $45.5 million decrease in accrued and other liabilities, decrease in other payable on equity investee of $17.0 million, and $19.6 million decrease in accounts payable primarily due to timing of payment, $25.2 million increase in inventories, $18.7 million increase in other current and long-term assets primarily due to decrease in advance payments to suppliers, partially offset by $43.3 million decrease in accounts receivable due to timing of billings and collection of payments, $8.1 million increase in deferred revenue, and $2.0 million increase in income taxes payable.
−Removed: Net cash provided by operating activities of $218.9 million for fiscal year 2022 resulted primarily from net income of $453.2 million, non-cash charges of $287.6 million and net change in assets and liabilities providing net cash of $53.3 million.
−Removed: The non-cash charges of $287.6 million included depreciation and amortization expenses of $42.9 million, share-based compensation expense of $31.3 million, gain on deconsolidation of the JV Company of $399.1 million, loss on changes of equity interest in the JV Company, net of $3.1 million, deferred income tax on deconsolidation and changes of equity interest in the JV Company of $30.0 million, equity method investment loss from equity investee of $2.6 million, and net deferred income taxes of $1.6 million.
−Removed: The net change in assets and liabilities providing net cash of $53.3 million was primarily due to $76.4 million increase in accrued and other liabilities, income taxes payable on deconsolidation and changes of equity interest in the JV company of $3.5 million, other payable on equity investee of $48.2 million, and $23.8 million increase in accounts payable primarily due to timing of payment, partially offset by $30.1 million increase in accounts receivable due to timing of billings and collection of payments, $57.4 million increase in inventories, $9.4 million increase in other current and long-term assets primarily due to decrease in advance payments to suppliers, and $1.7 million decrease in income taxes payable.
+Added: For the fiscal year ended June 30, 2025, the $4.0 million increase in cash provided by operating activities compared to the fiscal year ended June 30, 2024 was primarily due to an increase of net loss of $85.9 million and an increase of non-cash expenses of $78.3 million, a decrease of $18.6 million in inventory purchases, an increase of accounts payable of $15.7 million primarily due to timing of payment, an increase of $6.9 million in accrued and other liabilities, an increase of $2.9 million in deferred revenue, an increase of $1.6 million in income tax payable, offset by an increase of $32.1 million in accounts receivable due to timing of billings and collection of payments, and an increase of $2.4 million in other current and long term assets due to increase in advance payments to suppliers.
Cash flows from investing activities
−Removed: Net cash used in investing activities of $35.7 million for the fiscal year 2024 was primarily attributable to $37.1 million purchases of property and equipment, partially offset by $1.0 million government grant related to equipment and $0.4 million in proceeds from sale of property and equipment.
−Removed: Net cash used in investing activities of $109.6 million for the fiscal year 2023 was primarily attributable to $110.4 million purchases of property and equipment, partially offset by $0.6 million government grant related to equipment and $0.2 million in proceeds from sale of property and equipment.
−Removed: Net cash used in investing activities of $130.8 million for the fiscal year 2022 was primarily attributable to $138.0 million purchases of property and equipment, and $20.7 million deconsolidation of cash and cash equivalents of the JV Company, partially offset by $1.4 million government grant related to equipment in the JV Company, $26.3 million proceeds from sale of equity interest in the JV Company and $0.1 million proceeds from sale of property and equipment.
+Added: For the fiscal year ended June 30, 2025, the $0.7 million increase in cash used in investing activities compared to the fiscal year ended June 30, 2024 was primarily due to a $0.1 million increase in purchases of property and equipment, a $0.3
+Added: million decrease in the proceeds of sales of property and equipment, as well as a $0.3 million decrease in government grants related to equipment.
Cash flows from financing activities
−Removed: Net cash used in financing activities of $9.9 million for the fiscal year 2024 was primarily attributable to $7.7 million in common shares acquired to settle withholding tax related to vesting of restricted stock units, $0.9 million in payments of finance lease obligations, and $11.5 million in repayments of borrowings, partially offset by $10.1 million of proceeds from exercises of share options and issuance of shares under the ESPP.
−Removed: Net cash used in financing activities of $29.6 million for the fiscal year 2023 was primarily attributable to $6.4 million in common shares acquired to settle withholding tax related to vesting of restricted stock units, $0.8 million in payments of finance lease obligations, $26.6 million in repayments of borrowings, and $13.4 million of payments for repurchase of common shares, partially offset by $8.6 million of proceeds from borrowings and $9.0 million of proceeds from exercises of share options and issuance of shares under the ESPP.
−Removed: Net cash used in financing activities of $21.9 million for the fiscal year 2022 was primarily attributable to $64.3 million of proceeds from borrowings and $6.1 million of proceeds from exercises of share options and issuance of shares under the ESPP, partially offset by $8.6 million in common shares acquired to settle withholding tax related to vesting of restricted stock units, $4.2 million in payments of finance lease obligations, and $35.7 million in repayments of borrowings.
−Removed: Contractual Obligations
−Removed: Our contractual obligations as of June 30, 2024 are as follows:
−Removed: Payments Due by Period
−Removed: Less than More than
−Removed: Total 1 year 1-3 years 3-5years 5 years
−Removed: (in thousands)
−Removed: Recorded liabilities:
−Removed: Bank borrowings $ 38,415 $ 11,664 $ 26,215 $ 536 $ —
−Removed: Finance leases 3,624 1,144 2,289 191 —
−Removed: Operating leases 29,436 6,291 10,001 8,008 5,136
−Removed: $ 71,475 $ 19,099 $ 38,505 $ 8,735 $ 5,136
−Removed: Capital commitments with respect to property and equipment $ 6,879 $ 6,879 $ — $ — $ —
−Removed: Purchase commitments with respect to inventories and others 100,807 100,807 — — —
−Removed: $ 107,686 $ 107,686 $ — $ — $ —
−Removed: Total contractual obligations $ 179,161 $ 126,785 $ 38,505 $ 8,735 $ 5,136
−Removed: As of June 30, 2024, we had recorded liabilities of $3.0 million for uncertain tax positions and $0.5 million for potential interest and penalties, which are not included in the above table because we are unable to reliably estimate the amount of payments in individual years that would be made in connection with these uncertain tax positions.
+Added: For the fiscal year ended June 30, 2025, the $5.6 million increase in cash used in financing activities compared to the fiscal year 2024 was primarily due to $2.3 million decrease in proceeds from exercise of stock options and the Employee Share Purchase Plan (“ESPP”), and $3.0 million increase in withholding tax paid on behalf of employees for net share settlement.
See Note 15 of the Notes to the consolidated financial statements contained in this Annual Report on Form 10-K for a description of commitments.
−Removed: Off-Balance Sheet Arrangements
−Removed: As of June 30, 2024, we had no off-balance sheet arrangements.
−Removed: Critical Accounting Policies and Estimates
−Removed: The preparation of our consolidated financial statements requires us to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses.
−Removed: To the extent there are material differences between these estimates and actual results, our consolidated financial statements will be affected.
−Removed: On an ongoing basis, we evaluate the estimates, judgments and assumptions including those related to stock rotation returns, price adjustments, allowance for doubtful accounts, valuation of inventories, warranty accrual, income taxes, leases, equity method investment, share-based compensation, recoverability of and useful lives for property, plant and equipment and intangible assets.
+Added: Critical Accounting Estimates
+Added: Our accounting policies are more fully described in Note 1 of the Notes to the consolidated financial statements contained in this Annual Report on Form 10-K.
+Added: As disclosed in Note 1, the preparation of consolidated financial statements in conformity with U.S.
+Added: GAAP requires management to make estimates and assumptions about future events that affect the amounts reported in the financial statements and accompanying notes.
+Added: Management believes it is unlikely that applying other estimates and assumptions would have a material impact on the financial statements.
+Added: We consider the following accounting policies to be those that are most important to the portrayal of our financial condition and that require a higher degree of judgment.
Revenue recognition
5 unchanged sentences
and (5) recognition of revenue when, or as, a performance obligation is satisfied.
−Removed: We recognize revenue at a point in time when product is shipped to the customer, net of estimated stock rotation returns and price adjustments to certain distributors.
+Added: We recognize 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 we expect to provide to certain distributors.
We present revenue net of sales taxes and any similar assessments.
Our standard payment terms range from 30 to 60 days.
−Removed: We sell our products primarily to distributors, who in turn sell our products globally to various end customers.
−Removed: Our revenue is net of the effect of the variable consideration relating to estimated stock rotation returns and price adjustments that we expect to provide to certain distributors.
−Removed: Stock rotation returns are governed by contract and are limited to a specified percentage of the monetary value of the products purchased by distributors during a specified period.
−Removed: We estimate provision for stock rotation returns based on historical returns and individual distributor agreements.
−Removed: We also provide special pricing to certain distributors primarily based on volume, to encourage resale of our products.
−Removed: We estimate the expected price adjustments at the time the revenue is recognized based on distributor inventory levels, forecasted future distributor selling prices, distributor margins and demand for our products.
−Removed: If actual stock rotation returns or price adjustments differ from our estimates, adjustments may be recorded in the period when such actual information is known.
−Removed: Allowance for price adjustments is recorded against accounts receivable and provision for stock rotation is recorded in accrued liabilities on the consolidated balance sheets.
−Removed: Our performance obligations relate to contracts with a duration of less than one year.
−Removed: We elected to apply the practical expedient provided in ASC 606, “Revenue from Contracts with Customers”.
−Removed: Therefore, we are 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.
−Removed: We recognize 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.
−Removed: Applying the practical expedient, we recognize commissions as expense when incurred, as the amortization period of the commission asset we would have otherwise recognized is less than one year.
−Removed: Packaging and testing services revenue is recognized at a point in time upon shipment of serviced products to the customer.
−Removed: License and Development Revenue Recognition
−Removed: In February 2023, we entered into a license agreement with a customer to license our proprietary SiC technology and to provide 24-months of engineering and development services for a total fee of $45.0 million, consisting of an upfront fee of $18.0 million, $6.8 million and $9.0 million paid to us in March 2023, July 2023 and February 2024, respectively, with the remaining amount to be paid upon the achievement of specified engineering services and product milestones.
−Removed: The license and development fee is determined to be one performance obligation and is recognized over the 24 months when we perform the engineering and development services.
−Removed: We use the input method to measure progression, representing a faithful depiction of the transfer of services.
−Removed: During the fiscal years ended June 30, 2024 and 2023, we recorded $21.2 million and $9.9 million of license and development revenue.
−Removed: The amount of contract liability is recorded as deferred revenue on the consolidated balance sheets.
−Removed: In addition, we also entered an accompanying supply agreement to provide limited wafer supply to the customer.
−Removed: Equity method investment
−Removed: We use the equity method of accounting when we have the ability to exercise significant influence, but not control, as determined in accordance with general accepted accounting principles, over the operating and financial policies of the investee.
−Removed: Effective December 2, 2021, we reduced our equity interest in the JV Company, which resulted in deconsolidation of our investment in the JV Company.
−Removed: As a result, beginning December 2, 2021, we record our investment under equity method of accounting.
−Removed: Due to difficulties in obtaining accurate financial information from the JV Company in a timely manner, we record our share of earnings or losses of such affiliate on a one quarter lag.
−Removed: Therefore, our share of losses of the
−Removed: JV Company for the period from December 2, 2021 to March 31, 2022 was recorded in our Consolidated Statement of Operations for the fiscal year ended June 30, 2022.
−Removed: And our share of losses of the JV Company for the periods of April 1, 2022 to March 31, 2023 and April 1 2023 to March 31, 2024 were recorded in our Consolidated Statement of Operations for the fiscal years ended June 30, 2023 and 2024.
−Removed: We recognize and disclose intervening events at the JV Company in the lag period that could materially affect our consolidated financial statements.
−Removed: We record our interest in the net earnings of the equity method investee, along with adjustments for unrealized profits or losses on intra-entity transactions and amortization of basis differences, within earnings or loss from equity interests in the Consolidated Statements of Operations.
−Removed: Profits or losses related to intra-entity sales with the equity method investee are eliminated until realized by the investor and investee.
−Removed: 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.
−Removed: Equity method goodwill is not amortized or tested for impairment;
−Removed: instead the equity method investment is tested for impairment.
−Removed: We review for impairment whenever factors indicate that the carrying amount of the investment might not be recoverable.
−Removed: In such a case, the decrease in value is recognized in the period the impairment occurs in the Consolidated Statements of Operations.
+Added: We sell our products primarily to distributors, who in turn sell the products globally to various end customers.
+Added: Sales to most distributors are made under terms allowing certain price adjustments of the Company’s products held in their inventory or upon sale to their end customers.
+Added: Revenue from sales to distributors is recognized upon the transfer of control to the distributor.
+Added: In the ordinary course of business, our distributors may need to sell our products to end customers at prices below the standard distribution price in order to remain competitive and secure sales.
+Added: After the distributors sell the Company’s products to their end customers, the distributors submit a “ship-and-debit” price adjustment claim to the Company to adjust the distributor’s cost from the standard price to the pre-approved lower price.
+Added: After the Company verifies that the claim was pre-approved, a credit memo is issued to the distributors for the ship-and-debit claim.
+Added: In determining the transaction price, the Company considers ship-and-debit price adjustments to be variable consideration.
+Added: The Company estimates the variable consideration of the allowance for price adjustments at the time revenue is recognized.
+Added: Estimating the allowance for price adjustments requires management to make certain assumptions including distributor inventory levels, forecasted distributor selling prices, distributor margins and future demand for products.
+Added: These assumptions could be affected by current and future economic and market conditions.
+Added: We also allow stock rotation returns from certain distributors.
+Added: 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.
+Added: We record an allowance for stock rotation returns based on historical returns, expected sales volumes and individual distributor agreements.
+Added: 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.
Valuation of inventories
−Removed: We carry inventories at the lower of cost (determined on a first-in, first-out basis) or net realizable value.
−Removed: Cost primarily consists of semiconductor wafers and raw materials, labor, depreciation expenses and other manufacturing expenses and overhead, and packaging and testing fees paid to third parties if subcontractors are used.
−Removed: Valuation of inventories is based on our periodic review of inventory quantities on hand as compared with our sales forecasts, historical usage, aging of inventories, production yield levels and current product selling prices.
−Removed: If actual market conditions are less favorable than those forecasted by us, additional future inventory write-downs may be required that could adversely affect our operating results.
−Removed: Adjustments to inventory, once established are not reversed until the related inventory has been sold or scrapped.
−Removed: If actual market conditions are more favorable than expected and the products that have previously been written down are sold, our gross margin would be favorably impacted.
−Removed: Accounting for income taxes
−Removed: We are subject to income taxes in a number of jurisdictions.
−Removed: We must make certain estimates and judgments in determining income tax expense for financial statement purposes.
−Removed: These estimates and judgments occur in the calculation of tax credits, benefits and deductions, and in the calculation of certain tax assets and liabilities which arise from differences in the timing of recognition of revenue and expense for tax and financial statement purposes, as well as interest and penalties related to uncertain tax positions.
−Removed: There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
−Removed: We establish accruals for certain tax contingencies based on estimates of whether additional taxes may be due.
−Removed: 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.
−Removed: As a result, significant changes to these estimates may result in an increase or decrease to our tax provision in a subsequent period.
−Removed: Significant management judgment is also required in determining whether deferred tax assets will be realized in full or in part.
−Removed: When it is more likely than not that all or some portion of specific deferred tax assets such as net operating losses or foreign 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.
−Removed: We consider 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.
−Removed: We consider evidence such as our past operating results, the existence of cumulative losses in recent years and our forecast of future taxable income.
−Removed: We will maintain a partial valuation allowance equal to the state research and development credit carryforwards until sufficient positive evidence exists to support reversal of the valuation allowance.
−Removed: We intend to reinvest the undistributed earnings of its foreign subsidiaries indefinitely, except for Alpha and Omega Semiconductor (Cayman) Ltd.
−Removed: and AOS International LP.
−Removed: As of June 30, 2024, the cumulative earnings of Alpha and Omega Semiconductor (Cayman) and AOS International LP totaled $46.2 million, and there was no deferred tax liability recorded as there is no income nor withholding tax amongst the applicable jurisdictions.
−Removed: As of June 30, 2024, the cumulative amount of undistributed earnings of its foreign entities considered permanently reinvested is $414.6 million.
−Removed: Should the Company decide to remit this income to its Bermuda parent company in a future period, its provision for income taxes may increase materially in that period.
−Removed: The determination of the unrecognized deferred tax liability on these earnings is not practicable due to the complexity and variety of assumptions necessary to estimate the tax.
−Removed: As of June 30, 2024, the Company has recorded a deferred tax liability of $26.3 million for the basis difference related to our investment in the JV Company.
−Removed: The Financial Accounting Standards Board ("FASB") has 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.
−Removed: 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.
−Removed: 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.
−Removed: The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax law and regulations in a multitude of jurisdictions.
−Removed: 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.
−Removed: If the ultimate resolution of tax uncertainties is different from what is currently estimated, a material impact on income tax expense could result.
−Removed: Our 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.
−Removed: We are subject to the continuous examination of our income tax returns by the Internal Revenue Service and other tax authorities.
−Removed: We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our provision for income taxes.
−Removed: There can be no assurance that the outcomes from these continuous examinations will not have an adverse effect on our operating results and financial condition.
−Removed: To the extent that the final tax outcome of these matters is different than the amounts recorded, such differences will impact the provision for income taxes in the period in which such determination is made.
−Removed: The provision for income taxes includes the impact of changes to reserves, as well as the related net interest and penalties.
−Removed: Share-based compensation expense
−Removed: We maintain an equity-settled, share-based compensation plan to grant restricted share units and stock options.
−Removed: We recognize expense related to share-based compensation awards that are ultimately expected to vest based on estimated fair values on the date of grant.
−Removed: The fair value of restricted share units is based on the fair value of our common share on the date of grant.
−Removed: For restricted stock awards subject to market conditions, the fair value of each restricted stock award is estimated at the date of grant using the Monte-Carlo pricing model.
−Removed: The fair value of stock options is estimated on the date of grant using the Black-Scholes option valuation model.
−Removed: Share-based compensation expense is recognized on the accelerated attribution basis over the requisite service period of the award, which generally equals the vesting period.
−Removed: The Employee Share Purchase Plan (the “ESPP”) is accounted for at fair value on the date of grant using the Black-Scholes option valuation model.
−Removed: Share-based compensation expense is significant to the consolidated financial statements and is calculated using our best estimates, which involve inherent uncertainties and the application of management's judgment.
−Removed: The Black-Scholes option valuation model requires the input of subjective assumptions, including the expected term and stock price volatility.
−Removed: In addition, judgment is also required in estimating the number of stock-based awards that are expected to be forfeited.
−Removed: Forfeitures are estimated based on historical experience at the time of grant.
−Removed: Changes in estimated forfeitures are recognized in the period of change and impact the amount of stock compensation expenses to be recognized in future periods, which could be material if actual results differ significantly from estimates.
+Added: We evaluate our inventory for salability, obsolescence and other available applicable information.
+Added: When evaluating the adequacy of our provision for excess and obsolete inventory, we identify excess and obsolete products and also analyze historical usage, forecasted demand, and current economic trends.
+Added: Demand for our products can fluctuate significantly from period to period.
+Added: A significant decrease in demand could result in an increase in the amount of excess inventory on hand.
+Added: In addition, our industry is characterized by frequent new product development and technological changes that could result in an increase in the amount of obsolete inventory quantities on hand.
+Added: Also our estimates of forecasted demand and judgement to determine excess inventory may prove to be inaccurate, in which case we may have understated or overstated the reduction to the total carrying value of our inventory for excess and obsolete inventory.
+Added: If actual economic trends are less favorable than those forecasted, additional future inventory write-downs may be required, which could adversely affect our operating results.
+Added: Inventory adjustments, once established, are not reversed until the related inventory has been sold or scrapped.
+Added: If actual economic trends are more favorable than expected and the products that have previously been written down are sold, our gross margin would be favorably impacted.
Recently Issued Accounting Pronouncements
1 unchanged sentence
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.