ALPHA & OMEGA SEMICONDUCTOR Ltd 10-Q

ITEM 1. Financial Statements ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands except par value per share) March 31, 2026 June 30, 2025 ASSETS Current assets: Cash and cash equivalents $ 190,253 $ 153,079 Restricted cash 429 419 Accounts receivable, net 38,335 34,772 Receivable from sale of equity interest in the JV Company 15,601 — Inventories 199,049 189,677 Other current assets 9,157 18,215 Total current assets 452,824 396,162 Property, plant and equipment, net 314,248 314,097 Operating lease right-of-use assets 22,481 21,288 Intangible assets, net 1,475 269 Equity method investment 142,082 279,122 Deferred income tax assets 8,367 599 Other long-term assets 34,936 22,766 Total assets $ 976,413 $ 1,034,303 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 45,046 $ 60,044 Accrued liabilities 59,006 59,027 Payable related to equity investee, net 16,701 15,809 Income taxes payable 4,217 1,790 Short-term debt 3,036 11,852 Deferred revenue 1,326 — Finance lease liabilities 1,065 1,007 Operating lease liabilities 6,053 4,978 Total current liabilities 136,450 154,507 Long-term debt 1,332 14,872 Income taxes payable - long-term 4,419 4,201 Deferred income tax liabilities 12,251 13,192 Finance lease liabilities - long-term 468 1,274 Operating lease liabilities - long-term 17,181 16,925 Other long-term liabilities 4,131 7,000 Total liabilities 176,232 211,971 Commitments and contingencies (Note 12) Shareholders' equity: Preferred shares, par value $ 0.002 per share: Authorized: 10,000 shares; issued and outstanding: none at March 31, 2026 and June 30, 2025 — — Common shares, par value $ 0.002 per share: Authorized: 100,000 shares; issued and outstanding: 37,957 shares and 29,916 shares, respectively at March 31, 2026 and 37,127 shares and 30,009 shares, respectively at June 30, 2025 76 74 Treasury shares at cost: 8,041 shares at March 31, 2026 and 7,118 shares at June 30, 2025 ( 97,187 ) ( 79,058 ) Additional paid-in capital 396,979 379,779 Accumulated other comprehensive loss ( 4,264 ) ( 12,390 ) Retained earnings 504,577 533,927 Total shareholders' equity 800,181 822,332 Total liabilities and shareholders' equity $ 976,413 $ 1,034,303 See accompanying notes to these condensed consolidated financial statements. 1 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED STATEMENTS OF LOSS (Unaudited, in thousands except per share data) Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 Revenue $ 163,792 $ 164,635 $ 508,556 $ 519,678 Cost of goods sold 1 129,262 129,458 396,357 399,964 Gross profit 34,530 35,177 112,199 119,714 Operating expenses Research and development 26,052 23,398 75,402 69,844 Selling, general and administrative 22,536 22,437 69,004 66,688 Total operating expenses 48,588 45,835 144,406 136,532 Operating loss ( 14,058 ) ( 10,658 ) ( 32,207 ) ( 16,818 ) Other income (expense), net 1 587 ( 65 ) 3,949 ( 52 ) Interest income 990 927 3,006 3,327 Interest expenses ( 139 ) ( 596 ) ( 653 ) ( 2,109 ) Net loss before income taxes and equity method investment (loss) income ( 12,620 ) ( 10,392 ) ( 25,905 ) ( 15,652 ) Income tax expense 1,015 660 4,432 2,942 Net loss before equity method investment (loss) income ( 13,635 ) ( 11,052 ) ( 30,337 ) ( 18,594 ) Equity method investment (loss) income ( 152 ) 245 1,135 ( 1,323 ) Net loss $ ( 13,787 ) $ ( 10,807 ) $ ( 29,202 ) $ ( 19,917 ) Net loss per common share Basic $ ( 0.46 ) $ ( 0.37 ) $ ( 0.98 ) $ ( 0.68 ) Diluted $ ( 0.46 ) $ ( 0.37 ) $ ( 0.98 ) $ ( 0.68 ) Weighted average number of common shares used to compute net loss per share Basic 29,807 29,530 29,887 29,232 Diluted 29,807 29,530 29,887 29,232 (1) Amounts include related party transactions. Refer to Note 3, Related Party Transaction. See accompanying notes to these condensed consolidated financial statements. 2 Table of Contents ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited, in thousands) Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 Net loss $ ( 13,787 ) $ ( 10,807 ) $ ( 29,202 ) $ ( 19,917 ) Other comprehensive income (loss), net of tax Foreign currency translation adjustments, net of $( 84 ) and $ 573 tax in each of the three months ended March 31, 2026 and 2025, respectively, and $( 635 ) and $ 48 in each of the nine months ended March 31, 2026 and 2025, respectively 473 ( 3,241 ) 134 ( 544 ) Cumulative translation adjustment release from sale of equity interest in the JV Company in the three and nine months ended March 31, 2026, net of tax nil and $( 1,209 ), respectively — — 7,992 — Comprehensive loss $ ( 13,314 ) $ ( 14,048 ) $ ( 21,076 ) $ ( 20,461 ) See accompanying notes to these condensed consolidated financial statements. 3 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited, in thousands) Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Shares Amount Balance, December 31, 2024 36,367 $ 73 ( 7,135 ) $ ( 79,192 ) $ 370,494 $ ( 10,722 ) $ 621,927 $ 902,580 Release of restricted stock units 808 1 — — ( 1 ) — — — Reissuance of treasury stock upon release of restricted stock units — — 16 128 — — ( 128 ) — Withholding tax on restricted stock units ( 306 ) — — — ( 9,377 ) — — ( 9,377 ) Issuance of shares under ESPP — — — — — — — Share-based compensation — — — — 7,136 — — 7,136 Net loss — — — — — — ( 10,807 ) ( 10,807 ) Foreign currency translation adjustment, net of tax — — — — — ( 3,241 ) — ( 3,241 ) Balance, March 31, 2025 36,869 $ 74 ( 7,119 ) $ ( 79,064 ) $ 368,252 $ ( 13,963 ) $ 610,992 $ 886,291 Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Loss Retained Earnings Total Shareholders' Equity Shares Amount Shares Amount Balance, June 30, 2024 36,107 $ 72 ( 7,138 ) $ ( 79,213 ) $ 353,109 $ ( 13,419 ) $ 631,058 $ 891,607 Exercise of common stock options and release of restricted stock units 917 1 — — 90 — — 91 Reissuance of treasury stock upon release of restricted stock units — — 19 149 — — ( 149 ) — Withholding tax on restricted stock units ( 332 ) — — — ( 10,355 ) — — ( 10,355 ) Issuance of shares under ESPP 177 1 — — 3,420 — — 3,421 Share-based compensation — — — — 21,988 — — 21,988 Net loss — — — — — — ( 19,917 ) ( 19,917 ) Foreign currency translation adjustment, net of tax — — — — — ( 544 ) — ( 544 ) Balance, March 31, 2025 36,869 $ 74 ( 7,119 ) $ ( 79,064 ) $ 368,252 $ ( 13,963 ) $ 610,992 $ 886,291 4 ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Unaudited, in thousands) Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders' Equity Shares Amount Shares Amount Balance, December 31, 2025 37,426 $ 75 ( 7,844 ) $ ( 93,138 ) $ 398,072 $ ( 4,737 ) $ 518,496 $ 818,768 Release of restricted stock units 823 2 — — ( 1 ) — — 1 Reissuance of treasury stock upon release of restricted stock units — — 17 132 — — ( 132 ) — Withholding tax on restricted stock units ( 292 ) ( 1 ) — — ( 6,193 ) — — ( 6,194 ) Repurchase of common shares under shares repurchase program — — ( 214 ) ( 4,181 ) — — — ( 4,181 ) Share-based compensation — — — — 5,101 — — 5,101 Net loss — — — — — — ( 13,787 ) ( 13,787 ) Foreign currency translation adjustment, net of tax — — — — — 473 — 473 Balance, March 31, 2026 37,957 $ 76 ( 8,041 ) $ ( 97,187 ) $ 396,979 $ ( 4,264 ) $ 504,577 $ 800,181 Common Shares Treasury Shares Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Shareholders' Equity Shares Amount Shares Amount Balance, June 30, 2025 37,127 $ 74 ( 7,118 ) $ ( 79,058 ) $ 379,779 $ ( 12,390 ) $ 533,927 $ 822,332 Release of restricted stock units 920 2 — — ( 1 ) — — 1 Reissuance of treasury stock upon release of restricted stock units — — 19 148 — — ( 148 ) — Withholding tax on restricted stock units ( 319 ) ( 1 ) — — ( 6,894 ) — — ( 6,895 ) Issuance of shares under ESPP 229 1 — — 3,589 — — 3,590 Repurchase of common shares under shares repurchase program — — ( 942 ) ( 18,277 ) — — — ( 18,277 ) Share-based compensation — — — — 20,506 — — 20,506 Net loss — — — — — — ( 29,202 ) ( 29,202 ) Foreign currency translation adjustment, net of tax — — — — — 8,126 — 8,126 Balance, March 31, 2026 37,957 $ 76 ( 8,041 ) $ ( 97,187 ) $ 396,979 $ ( 4,264 ) $ 504,577 $ 800,181 See accompanying notes to these condensed consolidated financial statements. 5 Table of Contents ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) Nine Months Ended March 31, 2026 2025 Cash flows from operating activities Net loss $ ( 29,202 ) $ ( 19,917 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 42,763 46,949 Equity method investment (gain) loss ( 1,135 ) 1,323 Share-based compensation expense 20,506 21,988 Deferred income taxes, net ( 8,709 ) ( 650 ) Other 388 127 Changes in operating assets and liabilities Accounts receivable ( 3,563 ) ( 15,893 ) Inventories ( 9,372 ) 7,624 Other current and long-term assets 3,729 4,670 Accounts payable ( 15,255 ) 5,628 Net payable, equity investee 892 5,964 Income taxes payable 2,645 59 Deferred revenue 1,326 ( 2,591 ) Accrued and other liabilities ( 11,293 ) ( 22,787 ) Net cash (used in) provided by operating activities ( 6,280 ) 32,494 Cash flows from investing activities Proceeds from sale of equity interest in the JV Company 133,494 — Purchases of property and equipment ( 36,854 ) ( 22,845 ) Purchase of intangible assets ( 569 ) — Proceeds from sale of property and equipment 11 — Government grant related to equipment 145 678 Loan receivable from supplier ( 8,040 ) — Net cash provided by (used in) investing activities 88,187 ( 22,167 ) Cash flows from financing activities Withholding tax on restricted stock units ( 6,894 ) ( 10,355 ) Proceeds from exercise of stock options and ESPP 3,590 3,512 Payments for repurchases of common shares ( 18,156 ) — Repayments of borrowings ( 22,383 ) ( 8,729 ) Principal payments on finance leases ( 748 ) ( 694 ) Net cash used in financing activities ( 44,591 ) ( 16,266 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash ( 132 ) ( 35 ) Net increase (decrease) in cash, cash equivalents and restricted cash 37,184 ( 5,974 ) Cash, cash equivalents and restricted cash at beginning of period 153,498 175,540 Cash, cash equivalents and restricted cash at end of period $ 190,682 $ 169,566 Supplemental disclosures of non-cash investing and financing information: Property and equipment purchased but not yet paid $ 11,618 $ 9,933 Reconciliation of cash, cash equivalents and restricted cash: Cash and cash equivalents $ 190,253 $ 169,359 Restricted cash 429 207 Total cash, cash equivalents, and restricted cash $ 190,682 $ 169,566 6 Table of Contents ALPHA AND OMEGA SEMICONDUCTOR LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands) See accompanying notes to these condensed consolidated financial statements. 7 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The Company and Significant Accounting Policies The Company Alpha and Omega Semiconductor Limited and its subsidiaries (the “Company”, “AOS”, “we” or “us”) design, develop and supply a broad range of power semiconductors. The Company’s portfolio of products targets high-volume applications, including personal computers, graphic cards, game consoles, home appliances, power tools, smart phones, battery packs, consumer and industrial motor controls and power supplies for computers, servers and telecommunications equipment. The Company conducts its operations primarily in the United States, Hong Kong, China, and South Korea. Basis of Preparation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions to Article 10 of Securities and Exchange Commission Regulation S-X, as amended. They do not include all information and footnotes necessary for a fair presentation of financial position, results of operations and cash flows in conformity with U.S. GAAP for complete financial statements. These Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and related notes contained in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025 (the “2025 Form 10-K”). For a complete discussion of the Company's accounting policies, refer to Part II, Item 8, Note 1 — Significant Accounting Policies in our 2025 Form 10-K. All significant intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, all adjustments (consisting of normal recurring adjustments and accruals) considered necessary for a fair presentation of the results of operations for the periods presented have been included in the interim periods. Operating results for the nine months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the fiscal year ending June 30, 2026 or any other interim period. The consolidated balance sheet at June 30, 2025 is derived from the audited financial statements included in our 2025 Form 10-K. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. To the extent there are material differences between these estimates and actual results, the Company's consolidated financial statements will be affected. On an ongoing basis, the Company evaluates the estimates, judgments and assumptions including those related to reserve of stock rotation returns, allowance for price adjustments, allowance for expected credit loss, inventory reserves, warranty accrual, income taxes, leases, share-based compensation, and recoverability of and useful lives for property, plant and equipment. Recent Accounting Pronouncements Recently Issued Accounting Standards not yet adopted In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures”, which enhances the transparency, effectiveness and comparability of income tax disclosures by requiring consistent categories and greater disaggregation of information related to income tax rate reconciliations and the jurisdictions in which income taxes are paid. This will impact only the Company’s disclosures for the annual reporting period ending June 30, 2026, with no impacts to its financial condition or results of operations. In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures”, which improves disclosure requirements and provides more detailed information about an entity’s expenses, specifically amounts related to purchases of inventory, employee compensation, depreciation, intangible asset amortization, and selling expenses, along with qualitative descriptions of certain other types of expenses. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements. 8 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets”, which provides an optional practical expedient for estimating future credit losses based on current conditions as of the balance sheet date and assuming those conditions do not change over the remaining life of the accounts receivable. The guidance will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company does not expect this ASU to have a material impact on its consolidated financial statements. In September 2025, the FASB issued ASU No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software”. The ASU removes references to prescriptive software development stages and includes an updated framework for capitalizing internal software costs. The guidance will be effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements. In December 2025, the FASB issued ASU No. 2025-10, “Accounting for Government Grants Received by Business Entities”. This amendment provides guidance on the recognition, measurement, and presentation of government grants. This amendment will be effective for annual reporting periods beginning after December 15, 2028, and interim reporting periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact of the ASU on its consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-scope Improvements”. This update makes targeted, narrow-scope improvements to the interim reporting guidance in Topic 270 to clarify application and improve consistency in practice. The amendments do not change the underlying principles of interim reporting. The ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the ASU on its condensed consolidated financial statements and disclosures. 9 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 2. Equity Method Investment in Equity Investee The Company has accounted for its investment in the JV Company (as defined herein) using the equity method of accounting. For details of its equity method investment, please refer to Part II, Item 8, Note 2 — Equity Method Investment in Equity Investee in its 2025 Form 10-K. On July 14, 2025, the Company entered into an equity transfer agreement to sell approximately 20.3 % of outstanding equity interest in the JV Company for an aggregate cash consideration of $ 150 million. On August 29, 2025, the amended shareholders’ agreement for the JV Company was signed, which reduced the Company’s equity interest in the JV Company by 20.3 % to an ownership percentage of 18.9 %. As a result, the Company received its first installment of RMB 676 million (or $ 94.5 million based on the currency exchange rate between RMB and U.S. Dollar on August 29, 2025), and paid transaction costs related to this sale of approximately $ 2.4 million. In addition, the Company received $ 11.1 million for the second installment payment during the three months ended December 31, 2025, and $ 30.3 million for the third installment payment during the three months ended March 31, 2026, and had a receivable balance of $ 15.6 million as of March 31, 2026, which is included in the receivable from sale of equity interest in the JV Company line on the Condensed Consolidated Balance Sheets. The remaining installment will be received subject to satisfaction of certain conditions, which require the Company's continuing involvement, including voting in shareholder meetings to complete the transaction in accordance with the equity transfer agreement, plus other administrative actions. As a result of the sales transaction, the Company evaluated the factors that indicate the ability to exercise its significant influence to the JV Company, including but not limited to representation on the board, material intra-entity transactions, and participation in policy making process. The Company concluded that it continues to have the ability to exercise significant influence over the operating and financial policies of the JV Company and accordingly accounts for the investment using the equity method of accounting. The Company reports its equity in earnings or loss of the JV Company on a three-month lag due to an inability to timely obtain financial information from the JV Company. During the three months ended March 31, 2026, the Company recorded a $ 0.2 million loss, using lag reporting. During the nine months ended March 31, 2026, the Company recorded $ 1.1 million income, including the $ 1.1 million gain on the related sale of a portion of its interest in the equity method investment and immaterial income of its equity share of the JV Company, using lag reporting. During the three and nine months ended March 31, 2025, the Company recorded a $ 0.3 million loss and a $ 1.8 million loss, respectively, on its equity share of the JV Company, using lag reporting, as well as a gain of $ 0.5 million on the change of equity interest in the JV Company. 10 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. Related Party Transactions As of March 31, 2026, the Company owned approximately 18.9 % equity interest in the JV Company, which, by definition, is a related party to the Company. The JV Company supplies 12-inch wafers and provides assembly and testing services to AOS. The JV Company reimbursed AOS for purchases made on its behalf of nil and $ 1.1 million for the three and nine months ended March 31, 2026, respectively and $ 2.0 million and $ 7.3 million for the three and nine months ended March 31, 2025, respectively. The purchases by AOS for the three and nine months ended March 31, 2026 were $ 26.5 million and $ 81.9 million, respectively, and for the three and nine months ended March 31, 2025 were $ 25.9 million and $ 82.4 million, respectively. Due to the right of offset of receivables and payables with the JV Company, as of March 31, 2026 and June 30, 2025, AOS recorded the net amount of $ 16.7 million and $ 15.8 million, respectively, as a payable related to equity investee, net, on the Condensed Consolidated Balance Sheet. During the three and nine months ended March 31, 2026, the Company also recorded nil and approximately $ 1.9 million, respectively, of other income for certain services the Company provided to the JV Company. 11 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 4. Net Loss Per Common Share The following table presents the calculation of basic and diluted net loss per share attributable to common shareholders: Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 (in thousands, except per share data) Numerator: Net loss $ ( 13,787 ) $ ( 10,807 ) $ ( 29,202 ) $ ( 19,917 ) Denominator: Basic: Weighted average number of common shares used to compute basic net loss per share 29,807 29,530 29,887 29,232 Diluted: Weighted average number of common shares used to compute diluted net loss per share 29,807 29,530 29,887 29,232 Net loss per common share: Basic $ ( 0.46 ) $ ( 0.37 ) $ ( 0.98 ) $ ( 0.68 ) Diluted $ ( 0.46 ) $ ( 0.37 ) $ ( 0.98 ) $ ( 0.68 ) The following potential dilutive securities were excluded from the computation of diluted net loss per common share as their effect would have been anti-dilutive: Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 (in thousands) (in thousands) Employee stock options and RSUs 2,221 2,322 2,367 2,493 ESPP 1,200 524 1,009 652 Total potential dilutive securities 3,421 2,846 3,376 3,145 12 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 5. Concentration of Credit Risk and Significant Customers The Company manages its credit risk associated with exposure to distributors and direct customers on outstanding accounts receivable through the application and review of credit approvals, credit ratings and other monitoring procedures. In some instances, the Company also obtains letters of credit from certain customers. Credit sales, which are mainly on credit terms of 30 to 60 days, are only made to customers who meet the Company’s credit requirements, while sales to new customers or customers with low credit ratings are usually made on an advance payment basis. The Company considers its trade accounts receivable to be of good credit quality because its key distributors and direct customers have long-standing business relationships with the Company and the Company has not experienced any significant bad debt write-offs of accounts receivable in the past. The Company closely monitors the aging of accounts receivable from its distributors and direct customers, and regularly reviews their financial positions, where available. Summarized below are individual customers whose revenue or accounts receivable balances were 10% or higher than the respective total consolidated amounts: Three Months Ended March 31, Nine Months Ended March 31, Percentage of revenue 2026 2025 2026 2025 Customer A 17.0 % 22.9 % 20.0 % 22.1 % Customer B 53.8 % 50.5 % 53.1 % 51.6 % March 31, 2026 June 30, 2025 Percentage of accounts receivable Customer A * 14.9 % Customer B 65.4 % 52.3 % * Less than 10% 13 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 6. Balance Sheet Components Accounts receivable, net: March 31, 2026 June 30, 2025 (in thousands) Accounts receivable $ 75,136 $ 75,604 Less: Allowance for price adjustments ( 36,771 ) ( 40,802 ) Less: Allowance for credit losses ( 30 ) ( 30 ) Accounts receivable, net $ 38,335 $ 34,772 Inventories: March 31, 2026 June 30, 2025 (in thousands) Raw materials $ 71,651 $ 81,341 Work-in-process 100,149 91,591 Finished goods 27,249 16,745 $ 199,049 $ 189,677 Other current assets: March 31, 2026 June 30, 2025 (in thousands) Value-added tax receivable $ 374 $ 339 Other prepaid expenses 1,944 2,383 Prepaid insurance 1,656 3,669 Prepaid maintenance 1,229 1,990 Deposit with supplier 587 7,073 Prepaid income tax 582 336 Interest receivable 187 191 Short term deposit 744 534 Other receivables 1,854 1,700 $ 9,157 $ 18,215 14 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Property, plant and equipment, net: March 31, 2026 June 30, 2025 (in thousands) Land $ 4,877 $ 4,877 Building and building improvements 73,382 71,961 Manufacturing machinery and equipment 465,159 442,462 Equipment and tooling 39,580 37,918 Computer equipment and software 54,031 53,509 Office furniture and equipment 3,617 3,267 Leasehold improvements 43,810 43,901 684,456 657,895 Less: Accumulated depreciation and amortization ( 409,022 ) ( 371,836 ) 275,434 286,059 Equipment and construction in progress 38,814 28,038 Property, plant and equipment, net $ 314,248 $ 314,097 Intangible assets, net: March 31, 2026 June 30, 2025 (in thousands) Patents and technology rights $ 18,037 $ 18,037 Software license 1,485 — Trade name 268 268 Customer relationships 1,150 1,150 20,940 19,455 Less: Accumulated amortization ( 19,734 ) ( 19,455 ) 1,206 — Goodwill 269 269 Intangible assets, net $ 1,475 $ 269 F uture amortization expense of intangible assets is as follows (in thousands): Year ending June 30, 2026 (Remaining) $ 128 2027 513 2028 513 2029 52 $ 1,206 15 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Other long-term assets: March 31, 2026 June 30, 2025 (in thousands) Prepayments for property and equipment $ 1,496 $ 1,973 Customs deposit 702 814 Deposit with supplier 23,042 18,080 Long-term loan receivable 8,040 — Office leases deposits 1,127 1,358 Other 529 541 $ 34,936 $ 22,766 Accrued liabilities: March 31, 2026 June 30, 2025 (in thousands) Accrued compensation and benefits $ 21,421 $ 17,766 Warranty accrual 2,060 2,118 Stock rotation accrual 6,442 6,184 Accrued professional fees 2,662 3,399 Accrued inventory 862 1,465 Accrued facilities related expenses 2,373 2,184 Accrued property, plant and equipment 4,208 2,704 Other accrued expenses 4,994 4,755 Customer deposits 10,358 17,030 ESPP payable 3,626 1,422 $ 59,006 $ 59,027 Short-term customer deposits are payments received from customers for securing future product shipments. As of March 31, 2026, $ 5.0 million for such deposits were from Customer A, $ 1.0 million were from Customer B, and $ 4.4 million were from other customers. As of June 30, 2025, $ 7.0 million were from Customer A, $ 2.0 million were from Customer B, and $ 8.0 million were from other customers. The activities in the warranty accrual, included in accrued liabilities, are as follows: Nine Months Ended March 31, 2026 2025 (in thousands) Beginning balance $ 2,118 $ 2,407 Additions 1,342 884 Released — ( 700 ) Utilization ( 1,400 ) ( 542 ) Ending balance $ 2,060 $ 2,049 16 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) The activities in the stock rotation accrual, included in accrued liabilities, are as follows: Nine Months Ended March 31, 2026 2025 (in thousands) Beginning balance $ 6,184 $ 4,660 Additions 11,806 8,175 Utilization ( 11,548 ) ( 7,860 ) Ending balance $ 6,442 $ 4,975 Other long-term liabilities: March 31, 2026 June 30, 2025 (in thousands) Customer deposits $ 3,457 $ 7,000 Other 674 — Other long-term liabilities $ 4,131 $ 7,000 Customer deposits in other long-term liabilities are payments received from customers for securing future product shipments. As of March 31, 2026, there were no customer deposits from Customer A and $ 3.5 million were from other customers. As of June 30, 2025, $ 5.0 million were from Customer A and $ 2.0 million were from other customers. 17 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 7. Bank Borrowings Accounts Receivable Factoring Agreement On August 9, 2019, one of the Company’s wholly-owned subsidiaries (the "Borrower") entered into a factoring agreement with the Hongkong and Shanghai Banking Corporation Limited (“HSBC”), whereby the Borrower assigns certain of its accounts receivable with recourse. This factoring agreement allows the Borrower to borrow up to 70 % of the net amount of its eligible accounts receivable of the Borrower with a maximum amount of $ 30.0 million. 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. The Company is accounting for this transaction as a secured borrowing under the Transfers and Servicing of Financial Assets guidance. In addition, any cash held in the restricted bank account controlled by HSBC has a legal right of offset against the borrowing. This agreement, with certain financial covenants required, has no expiration date. On August 11, 2021, the Borrower signed an agreement with HSBC to decrease the borrowing maximum amount to $ 8.0 million with certain financial covenants required. Other terms remain the same. In August 2025, this factoring agreement was terminated. As of March 31, 2026, there was no outstanding balance. Debt financing In September 2021, Jireh Semiconductor Incorporated (“Jireh”), one of the Company’s wholly-owned subsidiaries, entered into a financing arrangement agreement with a company (“Lender”) for the lease and purchase of a machinery equipment manufactured by a supplier. This agreement includes a payment term of five (5) years, pursuant to which Jireh commenced payments of interest and principal to the Lender in September 2022 when the final installation and acceptance of the equipment were completed. After the end of such payment term, Jireh has the option to purchase the equipment for $ 1 . The implied interest rate was 4.75 % per annum which was adjustable based on every five basis point increase in 60-month U.S. Treasury Notes. The total purchase price of this equipment was euro 12.0 million. In April 2021, Jireh made a down payment of euro 6.0 million, representing 50 % of the total purchase price of the equipment, to the supplier. In June 2022, the equipment was delivered to Jireh after Lender paid 40 % of the total purchase price, for euro 4.8 million, to the supplier on behalf of Jireh. In September 2022, Lender paid the remaining 10 % payment for the total purchase price and reimbursed Jireh for the 50 % down payment, after the installation and configuration of the equipment. The title of the equipment was transferred to Lender following such payment. The agreement was amended with fixed implied interest rate of 7.51 % and monthly payment of principal and interest effective in October 2022. Other terms remain the same. In addition, Jireh purchased hardware for the machine under this financing arrangement. The purchase price of this hardware was $ 0.2 million. The financing arrangement is secured by this equipment and other equipment at Jireh, which had a net book value of $ 10.9 million as of March 31, 2026. As of March 31, 2026, the outstanding balance of this debt financing was $ 4.4 million. Long-term bank borrowings On August 18, 2021, Jireh entered into a term loan agreement with a financial institution (the “Bank”) in an amount up to $ 45.0 million for the purpose of expanding and upgrading the Company’s fabrication facility located in Oregon. The obligation under the loan agreement is secured by substantially all assets of Jireh and guaranteed by the Company. The agreement has a 5.5-year term and matures on February 16, 2027. Jireh is required to make consecutive quarterly payments of principal and interest. The loan accrues interest based on adjusted SOFR plus the applicable margin based on the outstanding balance of the loan. This agreement contains customary restrictive covenants and includes certain financial covenants that the Company is required to maintain. Jireh drew down $ 45.0 million on February 16, 2022 with the first payment of principal beginning in October 2022. As of June 30, 2025, Jireh was in compliance with these covenants and the outstanding balance of this loan was $ 20.3 million. In August 2025, the Company paid the outstanding balance in full and this agreement was terminated. As of March 31, 2026, there was no outstanding balance. 18 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Maturities of short-term debt and long-term debt were as follows (in thousands): Year ending June 30, 2026 (Remaining) $ 737 2027 3,095 2028 536 Total principal $ 4,368 Short-term Debt Long-term Debt Total Principal amount 3,036 1,332 $ 4,368 8. Leases The Company evaluates contracts for lease accounting at contract inception and assesses lease classification at the lease commencement date. The finance lease is related to the $ 5.1 million of a machinery lease financing with a vendor. The Company does not record leases on the Condensed Consolidated Balance Sheets with a term of one year or less. The components of the Company’s operating and finance lease expenses are as follows for the periods presented (in thousands): Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 Operating leases: Fixed rent expense $ 1,644 $ 1,611 $ 4,922 $ 4,756 Variable rent expense 249 289 788 828 Finance lease: Amortization of equipment 128 128 385 385 Interest 32 50 110 164 Short-term leases Short-term lease expenses 74 48 154 122 Total lease expenses $ 2,127 $ 2,126 $ 6,359 $ 6,255 19 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Supplemental balance sheet information related to the Company’s operating and finance leases is as follows (in thousands, except lease term and discount rate): March 31, 2026 June 30, 2025 Operating Leases : Right-of-use assets associated with operating leases $ 22,481 $ 21,288 Finance Lease: Property, plant and equipment, gross $ 5,133 $ 5,133 Accumulated depreciation ( 2,069 ) ( 1,684 ) Property, plant and equipment, net $ 3,064 $ 3,449 Weighted average remaining lease term (in years) Operating leases 4.24 5.00 Finance lease 1.50 2.25 Weighted average discount rate Operating leases 4.91 % 4.88 % Finance lease 7.51 % 7.51 % Supplemental cash flow information related to the Company’s operating and finance leases is as follows (in thousands): Nine Months Ended March 31, 2026 2025 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 5,151 $ 4,830 Operating cash flows from finance lease $ 110 $ 164 Financing cash flows from finance lease $ 748 $ 694 Non-cash investing and financing information: Operating lease right-of-use assets obtained in exchange for lease obligations $ 5,508 $ 945 Future minimum lease payments are as follows as of March 31, 2026 (in thousands): Year ending June 30, Operating Leases Finance Leases The remainder of fiscal 2026 $ 1,764 $ 286 2027 6,986 1,144 2028 6,416 191 2029 4,773 — 2030 3,729 — Thereafter 2,094 — Total minimum lease payments 25,762 1,621 Less: Amounts representing interest ( 2,528 ) ( 88 ) Total lease liabilities $ 23,234 $ 1,533 20 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 9. Shareholders’ Equity and Share-based Compensation Share Repurchase In November 2025, the Board of Directors of the Company approved a new share repurchase program (the “Repurchase Program”) that authorizes the Company to repurchase its common shares from the open market pursuant to a pre-established Rule 10b5-1 trading plan or through privately negotiated transactions up to an aggregate of $ 30.0 million. The amount and timing of any repurchases under the Repurchase Program depend on a number of factors, including but not limited to, the trading price, volume and availability of the Company’s common shares. Shares repurchased under this program are accounted for as treasury shares and the total cost of shares repurchased is recorded as a reduction of shareholders' equity. From time to time, treasury shares may be reissued as part of the Company’s share-based compensation programs. Gains on the reissuance of treasury stock are credited to additional paid-in capital; losses are charged to additional paid-in capital to offset the net gains, if any, from previous sales or reissuance of treasury stock. Any remaining balance of the losses is charged to retained earnings. During the nine months ended March 31, 2026, the Company repurchased an aggregate of 941,883 shares from the open market, for a total cost of $ 18.1 million, excluding fees and related expenses, at an average price of $ 19.22 per share. As of March 31, 2026, approximately $ 11.9 million remained available under the Repurchase Program. Time-based Restric ted Stock Units ( “ TRSUs ” ) The following table summarizes the Company’s TRSU activities for the nine months ended March 31, 2026: Number of Time-based Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Nonvested at June 30, 2025 1,491,926 $ 28.50 1.66 $ 38,282,821 Granted 756,381 $ 22.42 Vested ( 533,089 ) $ 30.63 Forfeited ( 94,803 ) $ 29.27 Nonvested at March 31, 2026 1,620,415 $ 24.91 1.85 $ 35,908,396 Market-based Restricted Stock Units ( “ MSUs ” ) During the quarters ended of December 31, 2021 and September 30, 2018, the Company granted 1.0 million and 1.3 million of MSUs to certain personnel, respectively. For additional information, refer to “Note 10 — Share-based Compensation” in the Notes to the Consolidated Financial Statements within Item 8 of the Company’s 2025 Form 10-K. In March 2026, the Company reassessed the estimated achievement of the performance conditions associated with the MSUs granted in December 2021, and concluded that a lower outcome was estimated to be achieved. As a result, the Company reversed $ 3.2 million of expenses previously recognized in prior periods during the quarter ended March 31, 2026. The Company recorded $(2.3) million and $ 0.5 million of MSUs expenses for the three and nine months ended March 31, 2026, respectively, and $ 1.5 million and $ 4.1 million of expenses during the three and nine months ended March 31, 2025, respectively. The following table summarizes the Company’s MSUs activities for the nine months ended March 31, 2026: Number of Market-based Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Nonvested at June 30, 2025 1,436,000 $ 32.32 2.89 $ 36,847,760 Vested ( 267,500 ) $ 5.17 Forfeited ( 74,000 ) $ 48.44 Nonvested at March 31, 2026 1,094,500 $ 37.86 2.64 $ 24,254,120 21 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Performance-based Restricted Stock Units (“PRSUs”) In March of each year since year 2017, the Company granted PRSUs to certain personnel. The number of shares to be earned under the PRSUs is determined based on the level of attainment of predetermined financial goals. The PRSUs vest in four equal annual installments from the first anniversary date after the grant date if certain predetermined financial goals were met. The Company recorded approximately $ 1.1 million and $ 3.4 million of expe ns es, using the accelerated attribution method, for these PRSUs during the three and nine months ended March 31, 2026, respectively, and $ 1.0 million and $ 2.9 million for the three and nine months ended March 31, 2025, respectively. The following table summarizes the Company’s PRSUs activities for the nine months ended March 31, 2026: Number of Performance-based Restricted Stock Units Weighted Average Grant Date Fair Value Per Share Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Nonvested at June 30, 2025 409,563 $ 27.71 1.85 $ 10,509,387 Granted 204,000 $ 21.43 Vested ( 138,808 ) $ 30.75 Forfeited ( 11,817 ) $ 46.07 Nonvested at March 31, 2026 462,938 $ 23.56 2.07 $ 10,258,706 Employee Share Purchase Plan (“ESPP”) The assumptions used to estimate the fair values of common shares issued under the ESPP were as follows: Nine Months Ended March 31, 2026 Volatility rate 76.0 % Risk-free interest rate 3.7 % Expected term 1.3 years Dividend yield — % Share-based Compensation Expense The total share-based compensation expense recognized in the Condensed Consolidated Statements of Loss for the periods presented was as follows: Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 (in thousands) (in thousands) Cost of goods sold $ 1,071 $ 1,047 $ 3,368 $ 3,185 Research and development 1,231 1,890 5,378 6,018 Selling, general and administrative 2,799 4,199 11,760 12,785 $ 5,101 $ 7,136 $ 20,506 $ 21,988 As of March 31, 2026, total unrecognized compensation cost under the Company’s share-based compensation plans was $ 47.2 million, which is expected to be recognized over a weighted-average period of 2.0 years. 22 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 10. Income Taxes The Company recognized income tax expense of approximately $ 1.0 million and $ 0.7 million for the three months ended March 31, 2026 and 2025, respectively. The income tax expense of $ 1.0 million for the three months ended March 31, 2026 included a $ 0.1 million discrete tax expense. The income tax expense of $ 0.7 million for the three months ended March 31, 2025 included a $ 0.1 million discrete tax expense. Excluding the discrete income tax items, the income tax expense for the three months ended March 31, 2026 and 2025 was $ 0.9 million and $ 0.6 million, respectively, and the effective tax rate for the three months ended March 31, 2026 and 2025 was ( 7.4 )% and ( 5.8 )%, respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current period and the same period of last year. The Company recognized income tax expense of approximately $ 4.4 million and $ 2.9 million for the nine months ended March 31, 2026 and 2025, respectively. The income tax expense of $ 4.4 million for the nine months ended March 31, 2026 included a $ 0.2 million discrete tax expense. The income tax expense of $ 2.9 million for the nine months ended March 31, 2025 included a $ 0.2 million discrete tax expense. Excluding the discrete income tax items, income tax expense for the nine months ended March 31, 2026 and 2025 was $ 4.2 million and $ 2.7 million, respectively, and the effective tax rate for the nine months ended March 31, 2026 and 2025 was ( 17.0 )% and ( 16.1 )%, respectively. The changes in the tax expense and effective tax rate between the periods resulted primarily from changes in the mix of earnings in various geographic jurisdictions between the current year and the same period of last year, including reporting $ 0.7 million of income tax expense related to the Company’s income from its investment in CQJV for the nine months ended March 31, 2026 versus a $ 0.2 million tax benefit for the nine months ended March 31, 2025. In addition, income tax payable increased by $ 10.4 million and deferred tax liability decreased by $ 10.5 million as a result of the sale of approximately 20.3 % of the Company’s equity interest in the JV company for $ 150 million during the nine months ended March 31, 2026. T he Company made income tax payments of approximately $ 0.7 million and $ 9.3 million during the three and nine months ended March 31, 2026, respectively, as a result of the sale transaction. The Company files its income tax returns in the United States and in various foreign jurisdictions. The tax years 2004 to 2025 remain open to examination by U.S. federal and state tax authorities. The tax years 2019 to 2025 remain open to examination by foreign tax authorities. In accordance with the guidance on the accounting for uncertainty in income taxes, the Company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. These assessments can require considerable estimates and judgments. As of March 31, 2026, the gross amount of unrecognized tax benefits was approximately $ 10.9 million, of which $ 7.5 million, if recognized, would reduce the effective income tax rate in future periods. If the Company’s estimate of income tax liabilities proves to be less than the ultimate assessment, then a further charge to expense would be required. If events occur and the payment of these amounts ultimately proves to be unnecessary, the reversal of the liabilities would result in tax benefits being recognized in the period when the Company determines the liabilities are no longer necessary. One Big Beautiful Bill Act, Enacted July 4, 2025 On July 4, 2025, H.R. 1, commonly known as the One Big Beautiful Bill Act (the “OBBB”), was signed into law. This includes significant changes to the federal corporate tax provisions and extends certain otherwise expiring provisions of the 2017 Tax Cuts and Jobs Act. The key provisions include allowing immediate expensing of domestic research and experimental expenditures, new limitations on interest expense deductibility, reinstatement of 100% bonus depreciation for qualified assets placed in service in the United States after January 19, 2025 as well as changes to the calculation of taxable income resulting from the foreign derived intangible income deduction. ASC 740 Income Taxes requires the effects of changes in tax rates and laws to be recognized in the period in which the relevant legislation is enacted. The Company has concluded that the impact of OBBB for the current quarter is immaterial. 23 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 11. Segment and Geographic Information The Company is organized as, and operates in, one operating segment: the design, development and supply of power semiconductor products for computing, consumer electronics, communication and industrial applications. The chief operating decision-maker is the Chief Executive Officer. The financial information presented to the Company’s Chief Executive Officer is on a consolidated basis, accompanied by information about revenue by customer and geographic region, for purposes of evaluating financial performance and allocating resources. The Chief Executive Officer assesses performance of the Company, monitors budget versus actual results and determines how to allocate resources based on the consolidated net income or loss as reported on the Company’s Condensed Consolidated Statements of Income (Loss). There are no other expense categories regularly provided to the Chief Executive Officer that are not already included in the Condensed Consolidated Statements of Income (Loss). The Company has one business segment, and there are no segment managers who are held accountable for operations, operating results and plans for products or components below the consolidated unit level. Accordingly, the Company reports as a single operating segment. The Company sells its products primarily to distributors in the Asia Pacific region, who in turn sell these products to end customers. Because the Company’s distributors sell their products to end customers which may have a global presence, revenue by geographical location is not necessarily representative of the geographical distribution of sales to end user markets. The revenue by geographical location in the following tables is based on the country or region in which the products were shipped to: Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 (in thousands) (in thousands) Hong Kong $ 155,655 $ 141,316 $ 489,833 $ 445,451 China 4,602 18,701 9,623 55,871 South Korea 520 515 1,468 1,214 United States 2,151 1,167 4,595 2,939 Other countries 864 2,936 3,037 14,203 $ 163,792 $ 164,635 $ 508,556 $ 519,678 The following is a summary of revenue by product type: Three Months Ended March 31, Nine Months Ended March 31, 2026 2025 2026 2025 (in thousands) (in thousands) Power discrete $ 115,051 $ 106,822 $ 324,542 $ 342,232 Power IC 46,890 54,576 178,425 161,251 Packaging and testing services and other 1,851 438 5,589 2,354 License and development services — 2,799 — 13,841 $ 163,792 $ 164,635 $ 508,556 $ 519,678 24 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) Long-lived assets, net consisting of property, plant and equipment and operating lease right-of-use assets, net by geographical area are as follows: March 31, 2026 June 30, 2025 (in thousands) China $ 104,041 $ 99,389 United States 226,447 230,518 Other countries 6,241 5,478 $ 336,729 $ 335,385 25 ALPHA AND OMEGA SEMICONDUCTOR LIMITED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 12. Commitments and Contingencies Purchase Commitments As of March 31, 2026, the Company had approximately $ 57.2 million of outstanding purchase commitments primarily for purchases of semiconductor raw materials, wafers, spare parts, packaging and testing services and others, as well as $ 14.8 million of capital commitments for the purchase of property and equipment. Purchase commitments are generally restricted to a purchase forecast as mutually agreed between the parties. This purchase forecast can vary among different suppliers. Other Commitments See Note 7 and Note 8 of the Notes to the Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q for descriptions of commitments including bank borrowings and leases. Contingencies and Indemnities The Company has in the past, and may from time to time in the future, become involved in legal proceedings arising from the normal course of business activities. The semiconductor industry is characterized by frequent claims and litigation, including claims regarding patent and other intellectual property rights as well as improper hiring practices. Irrespective of the validity of such claims, the Company could incur significant costs in the defense of such claims and suffer adverse effects on its operations. The Company is a party to a variety of agreements contracted with various third parties. Pursuant to these agreements, the Company may be obligated to indemnify another party to such an agreement with respect to certain matters. Typically, these obligations arise in the context of contracts entered into by the Company, under which the Company customarily agrees to hold the other party harmless against losses arising from a breach of representations and covenants related to such matters as title to assets sold, certain intellectual property rights, specified environmental matters and certain income taxes. In these circumstances, payment by the Company is customarily conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, which procedures typically allow the Company to challenge the other party’s claim. Further, the Company's obligations under these agreements may be limited in time and/or amount, and in some instances, the Company may have recourse against third parties for certain payments made by it under these agreements. The Company has not historically paid or recorded any material indemnifications, and no accrual was made at March 31, 2026 and June 30, 2025. The Company has agreed to indemnify its directors and certain employees as permitted by law and pursuant to its By-laws, and has entered into indemnification agreements with its directors and executive officers. The Company has not recorded a liability associated with these indemnification arrangements, as it historically has not incurred any material costs associated with such indemnification obligations. Costs associated with such indemnification obligations may be mitigated by insurance coverage that the Company maintains. However, such insurance may not cover any, or may cover only a portion of, the amounts the Company may be required to pay. In addition, the Company may not be able to maintain such insurance coverage at a reasonable cost, if at all, in the future. 26