What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2026-03-12 compared with 2025-03-11 · 359 added, 265 removed, 1095 unchanged (36% of the section changed)

4 unchanged sentences

Consolidated Statements of Operations for the Years Ended December 31, 202 5 , 202 4 and 202 3

Consolidated Statements o f Comprehensive Income (Loss) for the Years Ended December 31, 202 4 , 202 3 and 202 2

Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 20 25 , 20 24 and 202 3

Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 202 5, 202 4 and 202 3

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We have audited the accompanying consolidated balance sheets of Universal Electronics Inc.

(a Delaware corporation) and subsidiaries (the "Company") as of December 31, 2024, and 2023, the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the "consolidated financial statements").

(a Delaware corporation) and subsidiaries (the "Company") as of December 31, 2025, and 2024, and the related consolidated statements of operations, comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements").

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America.

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Revenue recognition - Determination of over time versus point in time revenue recognition

As described further in Note 2 and Note 4 to the consolidated financial statements, product revenue is generated through manufacturing and delivering home entertainment control products, climate control solutions, wireless sensor and smart home control products and and audio-video accessories.

The Company recognizes revenue over time when performance creates an asset with no alternative use (custom products) and when the Company has an enforceable right to payment for performance completed to date, including a reasonable margin, through a contractual commitment from the customer.

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Goodwill impairment (Note 7) — — 49,075

Operating income (loss) ( 15,297 ) ( 85,301 ) 14,548

Interest income (expense), net ( 3,361 ) ( 4,332 ) ( 2,200 )

Operating loss ( 6,404 ) ( 15,297 ) ( 85,301 )

Interest expense, net ( 935 ) ( 3,361 ) ( 4,332 )

Other income (expense), net ( 4,621 ) 60 ( 2,621 )

Income (loss) before provision for income taxes ( 18,598 ) ( 92,254 ) 11,393

Loss before provision for income taxes ( 11,960 ) ( 18,598 ) ( 92,254 )

Provision for income taxes 6,639 5,431 5,984

Net income (loss) $ ( 24,029 ) $ ( 98,238 ) $ 407

Net loss $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 )

Earnings (loss) per share:

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2025 2024 2023

Net income (loss) $ ( 24,029 ) $ ( 98,238 ) $ 407

Net loss $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 )

Other comprehensive income (loss):

Change in foreign currency translation adjustment 9,235 ( 7,592 ) 429

Comprehensive income (loss) $ ( 31,621 ) $ ( 97,809 ) $ ( 7,256 )

Comprehensive loss $ ( 9,364 ) $ ( 31,621 ) $ ( 97,809 )

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flows from operating activities:

Net income (loss) $ ( 24,029 ) $ ( 98,238 ) $ 407

Net loss $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 )

Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:

1 unchanged sentence

Provision for credit losses 454 1,081 70

Gain on sale of property, plant, and equipment ( 312 ) — —

Deferred income taxes 866 ( 256 ) ( 1,149 )

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Accrued income taxes 1,909 1,310 ( 3,539 )

Net cash provided by (used for) operating activities 14,822 25,190 10,926

Net cash provided by operating activities 23,626 14,822 25,190

Cash flows from investing activities:

Purchase of term deposit — — ( 7,487 )

Redemption of term deposit — — 7,803

Acquisition of the net assets of Qterics, Inc.

Purchase of Blue Chip Swap securities (Note 16) ( 2,544 ) — —

Sale of Blue Chip Swap securities (Note 16) 2,314 — —

Proceeds on sale of property, plant, and equipment 344 — —

Acquisitions of property, plant and equipment ( 3,875 ) ( 4,572 ) ( 8,116 )

Acquisitions of intangible assets ( 2,990 ) ( 3,856 ) ( 5,761 )

Net cash provided by (used for) investing activities ( 8,428 ) ( 13,877 ) ( 21,208 )

Net cash used for investing activities ( 6,751 ) ( 8,428 ) ( 13,877 )

Cash flows from financing activities:

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Repayments on lines of credit ( 117,222 ) ( 120,000 ) ( 111,000 )

Proceeds from stock options exercised — — 1,536

Treasury stock purchased ( 3,086 ) ( 1,957 ) ( 1,779 )

Net cash provided by (used for) financing activities ( 19,764 ) ( 34,779 ) 20,501

Net cash used for financing activities ( 16,658 ) ( 19,764 ) ( 34,779 )

Effect of foreign currency exchange rate changes on cash and cash equivalents 5,306 ( 2,598 ) ( 523 )

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("UEI"), based in Scottsdale, Arizona, is a global leader in universal wireless control solutions for the home.

We design, develop, manufacture, ship and support home entertainment control products, technology and software solutions, climate control solutions, wireless sensor and smart home control products and audio-video ("AV") accessories that are used by the world's leading brands in the home entertainment, climate control, consumer electronics, security, home automation and home appliance markets.

We design, develop, manufacture, ship and support climate control solutions, wireless sensor and smart home control products, home entertainment control products, technology and software solutions and audio-video ("AV") accessories that are used by the world's leading brands in the climate control, security, home automation, home appliance, home entertainment and consumer electronics markets.

In addition, over the past 39 years, we have developed a broad portfolio of patented technologies and cloud-based connectivity and control software solutions that we license to our customers, including many leading Fortune 500 companies.

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Operating segments may be aggregated only to a limited extent.

Our chief operating decision maker, the Chief Executive Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance.

Our chief operating decision maker, the Interim Chief Executive Officer and Chief Operating Officer, reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues for purposes of making operating decisions and assessing financial performance.

Accordingly, we only have a single operating and reportable segment.

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We believe that the costs associated with production are most closely aligned with the revenue associated with those products.

Costs to obtain a contract are expensed when incurred because the amortization period would have been one year or less.

These costs are recorded in selling, general, and administrative expense in the consolidated statements of operations.

We recognize revenue at a point in time if the criteria for recognizing revenue over time are not met, the title of the goods has transferred (based upon the terms of the contract, which can be upon shipment or delivery) and we have a present right to payment.

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Changes in such accruals may be required if future rebates and incentives differ from our estimates.

Such discounts were $ 12.3 million, $ 10.5 million and $ 12.2 million at December 31, 2024, 2023 and 2022, respectively.

Such discounts were $ 12.8 million, $ 12.3 million and $ 10.5 million for the years ended December 31, 2025, 2024 and 2023, respectively.

We allow product returns of certain products sold to business-to-consumer customers based upon contract terms.

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Contract liabilities - A contract liability is recorded when consideration is received from a customer prior to fully satisfying a performance obligation in a contract.

Our contract liabilities primarily consist of cash received in advance of providing our cloud-based software services.

These contract liabilities will be recognized as revenues when control of the related product or service is transferred to the customer.

See Note 4 for further information concerning contract liabilities.

Our contract liabilities primarily consist of cash received in advance of

UNIVERSAL ELECTRONICS INC.

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DECEMBER 31, 2025

providing our cloud-based software services.

These contract liabilities will be recognized as revenues when control of the related product or service is transferred to the customer.

Other sales-related matters - Trade receivables are recorded at the invoiced amount and do not bear interest.

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Any adjustment to the net deferred tax asset valuation allowance would be recorded in the income statement for the period that the adjustment is determined to be required.

We continue to have a valuation allowance against U.S.

federal and state deferred tax assets and certain foreign deferred tax assets in jurisdictions where we have cumulative losses or otherwise are not expected to utilize certain tax attributes.

If projected future taxable income in the U.S., for example, were to increase from what we assumed in our estimates, in periods subsequent to recording valuation allowances, it may be more likely than not that a proportional amount of the valuation against deferred tax assets will be released, resulting in an impact to our tax provision (benefit).

The Tax Cuts and Jobs Act (the "Tax Act") subjects a U.S.

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See Note 10 for further information concerning income taxes.

Research and Development

Research and development ("R&D") costs are expensed as incurred and consist primarily of salaries, employee benefits, supplies and materials.

UNIVERSAL ELECTRONICS INC.

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DECEMBER 31, 2025

Research and Development

Research and development ("R&D") costs are expensed as incurred and consist primarily of salaries, employee benefits, supplies and materials.

Advertising costs are expensed as incurred.

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See Note 15 for further information regarding stock-based compensation.

Performance-Based Common Stock Warrants

The measurement date for performance-based common stock warrants is the date on which the warrants vest.

We recognize the fair value of performance-based common stock warrants as a reduction to net sales ratably as the warrants vest based on the projected number of warrants that will vest, the proportion of the performance criteria achieved by the customer within the period relative to the total performance required (aggregate purchase levels) for the warrants to vest and the fair value of the related unvested warrants.

If we do not have a reliable forecast of future purchases to be made by the customer by which to estimate the number of warrants that will vest, then the maximum number of potential warrants is assumed until such time that a reliable forecast of future purchases is available.

To the extent that our projections change in the future as to the number of warrants that will vest, a cumulative catch-up adjustment will be recorded in the period in which our estimates change.

On January 1, 2023, all 275,000 of the vested and outstanding warrants expired unexercised.

Foreign Currency Translation and Foreign Currency Transactions

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The translation of foreign currencies into U.S.

Dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and for revenue and expense accounts using the average

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

exchange rate during each period.

Dollars is performed for balance sheet accounts using exchange rates in effect at the balance sheet dates and for revenue and expense accounts using the average exchange rate during each period.

The gains and losses resulting from the translation are included in the foreign currency translation adjustment account, a component of accumulated other comprehensive income in stockholders' equity, and are excluded from net income.

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Our intercompany foreign investments and long-term debt that are not intended for settlement are translated using historical exchange rates.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Transaction gains and losses generated by the effect of changes in foreign currency exchange rates on recorded assets and liabilities denominated in a currency different than the functional currency of the applicable entity are recorded in other income (expense), net.

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See Notes 3, 4, 9, 11, 12 and 18 for further information concerning our financial instruments.

Cash, Cash Equivalents and Term Deposit

Cash and cash equivalents include cash accounts and all investments purchased with initial maturities of three months or less.

Our term deposit, entered into on January 24, 2022, had an initial maturity of one year , but was redeemed prior to December 31, 2022.

Cash and Cash Equivalents

Cash and cash equivalents include cash accounts and all investments purchased with initial maturities of three months or less and investments purchased with longer maturities which can be liquidated at any time prior to maturity without penalty or forfeiture of interest earned to date.

Domestically, we generally maintain balances in excess of federally insured limits.

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We value our inventories at the lower of cost or net realizable value.

Cost is determined using the

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

first-in, first-out method.

Cost is determined using the first-in, first-out method.

We attempt to carry inventories in amounts necessary to satisfy our customer requirements on a timely basis.

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These estimates are based upon management's judgment about future demand and market conditions.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Property, Plant, and Equipment

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See Note 7 for further information concerning goodwill and goodwill impairment.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Intangible Assets

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Intangible assets are amortized using the straight-line method over their estimated period of benefit.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Estimated useful lives are as follows:

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Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option.

Some of our leases include options to extend with a range of three years to five years with two extensions at the then current market rate.

Some of our leases include options to extend with a range of three years to five years with one extension at the then current market rate.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

When we commit to a plan to abandon an operating lease at a future date, the amortization of the operating lease ROU asset and depreciation of the associated leasehold improvements are accelerated based on the revised useful life of the operating lease.

Leases with an initial term of twelve months or less are not recorded on the balance sheet and are recognized on a straight-line basis over the lease term.

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See Note 8 for further information concerning our leases.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Our foreign currency exposures are primarily concentrated in the Brazilian Real, British Pound, Chinese Yuan Renminbi, Euro, Hong Kong Dollar, Indian Rupee, Japanese Yen, Korean Won, Mexican Peso and Vietnamese Dong.

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• brand awareness and market position, as well as assumptions regarding the period of time the brand will continue to be used in our product portfolio;

• discount rates utilized in discounted cash flow models.

Results of operations and cash flows of acquired businesses are included in our operating results from the date of acquisition.

UNIVERSAL ELECTRONICS INC.

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DECEMBER 31, 2025

• discount rates utilized in discounted cash flow models.

Results of operations and cash flows of acquired businesses are included in our operating results from the date of acquisition.

In those circumstances where an acquisition involves a contingent consideration arrangement, we recognize a liability equal to the fair value of the contingent payments we expect to make as of the acquisition date.

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Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update ("ASU") 2023-07, "Segment Reporting – Improvements to Reportable Segments Disclosures." The guidance enhances disclosures of significant segment expenses by requiring the disclosure of significant segment expenses regularly provided to the chief operating decision maker, extends certain annual disclosures to interim periods, and permits more than one measure of segment profit or loss to be reported under certain conditions.

All disclosure requirements are also required for companies with a single reportable segment.

We adopted this guidance in the fourth quarter of 2024, using the retrospective transition method.

This guidance impacts our disclosures only, with no impact to our consolidated balance sheets, statements of operations or cash flows.

In December 2023, the FASB issued ASU 2023-09, "Income Taxes – Improvements to Tax Disclosures." The guidance expands income tax disclosures by requiring public business entities, on an annual basis, to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold, equal to or greater than 5% of the amount computed by multiplying the income (loss) from continuing operations before income taxes by the applicable statutory income tax rate, and disaggregation of certain items that are significant.

Additionally, this guidance requires that all entities disaggregate disclosures by jurisdiction on the amount of income taxes paid (net of refunds received), income or loss from continuing operations before income tax expense (or benefit) and income tax expense (or benefit) from continuing operations.

The guidance applies to all entities subject to income taxes and is effective for annual periods beginning after December 15, 2024.

The Company adopted this standard on a prospective basis for the year ended December 31, 2025.

See Note 10 for additional information.

Accounting Pronouncements Not Yet Effective

In September 2025, the FASB issued Accounting Standards Update ("ASU") 2025-06, "Intangibles-Goodwill and Other-Internal Use Software (Subtopic 350-40):

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

This guidance removes all references to software development project stages so that the guidance is neutral to different software development methods.

Therefore, under the ASU, software capitalization will begin when management has authorized and committed to funding the software project and when it is probable that the project will be completed and the software will be used to perform the function intended.

This guidance is effective for annual periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods.

The guidance is to be applied on a prospective basis, or on a modified transition approach or a retrospective transition approach, with early adoption permitted.

We are currently evaluating the impact of adopting this guidance on our consolidated financial statements and disclosures.

In July 2025, the FASB issued ASU 2025-05, "Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets".

This guidance allows entities to elect a practical expedient that assumes that the current conditions as of the balance sheet date do not change for the remaining life of the asset.

This guidance is effective for annual periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods.

The guidance is to be applied on a prospective basis, with early adoption permitted.

The adoption of this ASU is not expected to have a material impact on our consolidated financial statements and disclosures.

In November 2024, the FASB issued ASU 2024-03 "Income Statement – Reporting Comprehensive Income (Topic 220):

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We are currently evaluating the impact of adopting this guidance on our disclosures.

This guidance is effective for annual periods beginning after December 15, 2024, and therefore will be effective beginning with our financial statements issued for the year ending December 31, 2025.

We are currently evaluating the impact of adopting this guidance on our consolidated financial statements and disclosures.

We have assessed all other ASUs issued but not yet adopted and concluded that those not disclosed are not relevant to the Company or are not expected to have a material impact.

Note 3 — Cash, Cash Equivalents and Term Deposit

Note 3 — Cash and Cash Equivalents

Cash and cash equivalents were held in the following geographic regions:

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

(In thousands) 2025 2024

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$ 32,306 $ 26,783

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

On January 25, 2022, we entered into a one-year term deposit cash account with Banco Santander (Brasil) S.A., denominated in Brazilian Real.

The term deposit earned interest at a variable annual rate based upon the Brazilian CDI overnight interbank rate.

As of December 31, 2022, all of this term deposit was redeemed.

Note 4 — Revenue and Accounts Receivable, Net

6 unchanged sentences

Net sales $ 368,288 $ 394,879 $ 420,457

Our net sales to external customers by channel were as follows:

Year Ended December 31,

(In thousands) 2025 2024 2023

Connected home (1)

$ 125,384 $ 108,258 $ 125,546

Home entertainment (2)

242,904 286,621 294,911

Net sales $ 368,288 $ 394,879 $ 420,457

(1) The connected home channel represents climate control, smart home and security product sales sold primarily to HVAC, security, home automation and home appliance customers.

(2) The home entertainment channel represents entertainment-related product sales sold primarily to video service providers, consumer electronics original equipment manufacturers ("OEMs") and retailers.

It also includes sales associated with intellectual property licensing and our cloud-based software solution.

Our net sales to external customers by geographic area were as follows:

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Specific identification of the customer billing location was the basis used for attributing revenues from external customers to geographic areas.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Accounts Receivable, Net

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(2) Accounts receivable, net at December 31, 2023 was $ 112.6 million.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Allowance for Credit Losses

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Additions (reductions) to costs and expenses 454 1,081 70

Cash receipts ( 1,063 ) — —

Write-offs/Foreign exchange effects ( 531 ) ( 33 ) ( 212 )

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Balance at end of period $ 2,879 $ 3,236

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Significant Customers

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Comcast Corporation $ 45,431 12.3 % (1)

$ 75,917 14.0 %

(1) Sales associated with this customer did not total more than 10% of our net sales for the indicated period.

There were no significant customers that totaled more than 10% of our accounts receivable at December 31, 2024 or December 31, 2023.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

At December 31, 2025, Daikin Industries Ltd.

represented 12.3 % of the Company's consolidated accounts receivable balance.

Note 5 — Inventories

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(1) Purchases associated with this supplier did not total more than 10% of our total inventory purchases for the indicated period.

There were no trade payable balances from suppliers that totaled more than 10% of our total accounts payable at December 31, 2024 and December 31, 2023.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Note 6 — Property, Plant, and Equipment, Net

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Depreciation expense was $ 9.1 million, $ 12.9 million and $ 18.0 million for the years ended December 31, 2025, 2024 and 2023, respectively.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

During the three months ended September 30, 2023, as part of our manufacturing footprint optimization efforts, we made the decision to close our southwestern PRC factory and manufacturing operations were stopped in September 2023.

During the year ended December 31, 2023 , as part of our manufacturing footprint optimization efforts, we made the decision to close our southwestern PRC factory and manufacturing operations at this factory were stopped in September 2023.

We also downsized and streamlined the Mexico operations by moving to a smaller, more efficient facility.

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During the year ended December 31, 2023, we incurred $ 7.9 million in impairment charges , recorded in cost of sales, relating to the underutilization of certain property, plant and equipment in our Mexico factory.

We have continued to evaluate our global manufacturing footprint as part of our overall cost optimization and return to profitability strategy and, in July 2025, we decided to cease all production activities and began to shut down our Mexico manufacturing facility.

As a result of this decision, we recorded impairment charges of $ 1.2 million in cost of sales on our consolidated statements of operations during the year ended December 31, 2025.

Construction in progress was as follows:

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We will begin to depreciate the cost of these assets under construction once they are placed into service.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Long-lived tangible assets by geographic area, which include property, plant, and equipment, net and operating lease ROU assets, were as follows:

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therefore, we recorded an impairment charge of $ 49.1 million during the year ended December 31, 2023.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Changes in the carrying amount of goodwill were as follows:

(In thousands)

Balance at December 31, 2022 $ 49,085

Goodwill impairment ( 49,075 )

Foreign exchange effects ( 10 )

Balance at December 31, 2023 $ —

Intangible Assets, Net

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Total amortization expense $ 5,062 $ 5,167 $ 4,883

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Estimated future annual amortization expense related to our intangible assets at December 31, 2025 is as follows:

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At December 31, 2025, our operating leases had remaining lease terms of up to 35 years, including any reasonably probable extensions.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Lease balances within our consolidated balance sheets were as follows:

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$ 9,406 $ 12,785

We entered into lease amendments for our southwestern PRC and Mexico factories during the year ended December 31, 2023 as a part of our manufacturing footprint optimization efforts.

As a result of these modifications, our operating lease right-of-use assets decreased by $ 1.2 million and our total lease liabilities decreased by $ 1.3 million.

Operating lease expense, operating lease cash flows and supplemental cash flow information were as follows:

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Operating lease right-of-use assets obtained in exchange for lease obligations $ 4,806 $ 1,249 $ 4,360

As part of our continued evaluation of our global manufacturing footprint and our overall cost optimization and return to profitability strategy, we ceased production activities and shut down our manufacturing facility in Mexico and vacated and abandoned our office space in Carlsbad, California.

As a result of these actions, we reassessed our Mexico factory lease and recorded a decrease of $ 0.7 million and $ 0.8 million to our Mexico operating lease ROU asset and lease liability, respectively, during the year ended December 31, 2025.

In addition, the estimated useful lives of the Mexico and Carlsbad related ROU assets were revised to reflect shorter lease terms than those originally estimated at lease inception.

A change in the estimated useful life of a long-lived asset represents a change in accounting estimate and is accounted for prospectively.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

ROU asset was fully amortized by December 31, 2025.

The Carlsbad ROU asset was fully amortized by December 31, 2025 and we recognized accelerated amortization of $ 1.3 million during the year ended December 31, 2025.

The weighted average remaining lease liability term and the weighted average discount rate were as follows:

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At December 31, 2025, we did not have any operating leases that had not yet commenced.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Prepaid Land Lease

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The buildings located on this land had a net book value of $ 10.6 million at December 31, 2025 and are being depreciated over a remaining weighted average period of approximately 14 years.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Note 9 — Lines of Credit

Line of Credit

On December 16, 2024, we executed an amendment to our Second Amended and Restated Credit Agreement ("Second Amended Credit Agreement") with U.S.

On November 17, 2025, we executed an amendment to our Second Amended and Restated Credit Agreement ("Second Amended Credit Agreement") with U.S.

Bank National Association ("U.S.

Bank"), which provides for a revolving line of credit ("U.S.

Credit Line") through April 30, 2026.

Credit Line") through September 30, 2027.

Credit Line may be used for working capital and other general corporate purposes including acquisitions, share repurchases and capital expenditures.

Credit Line has a maximum availability up to $ 75.0 million, subject to meeting certain financial conditions, including an accounts receivable coverage ratio ("AR Ratio").

This AR Ratio is calculated monthly and adjusts the current U.S.

Credit Line total availability.

Credit Line has a maximum availability up to $ 60.0 million, subject to meeting certain financial conditions.

Availability is based on Borrowing Base defined as 75 % of accounts receivable aged less than 90 days less reserves for doubtful accounts and returns.

The Borrowing Base is calculated monthly.

At December 31, 2025, the U.S.

Credit Line availability was $ 58.3 million based upon the AR Ratio.

Credit Line availability was $ 48.5 million.

At February 24, 2026, the U.S.

Credit Line total availability was $ 60.5 million based upon the AR Ratio.

Credit Line total availability was $ 47.1 million.

Amounts available for borrowing under the U.S.

Credit Line are reduced by the balance of any outstanding letters of credit, of which there were none at December 31, 2024.

Credit Line are reduced by the balance of any outstanding letters of credit, of which there was $ 0.5 million at December 31, 2025 and none at December 31, 2024.

At February 19, 2026 the balance of the letter of credit was $ 1.9 million.

All obligations under the U.S.

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Credit Line by our wholly-owned subsidiary, Universal Electronics BV.

Under the Second Amended Credit Agreement, up through March 13, 2024, we may elect to pay interest on the U.S.

Credit Line based on the Secured Overnight Financing Rate (" SOFR ") plus an applicable margin (varying from 2.00 % to 2.75 %), or base rate (based on the prime rate of U.S.

Bank or as otherwise specified in the Second Amended Credit Agreement) plus an applicable margin (varying from — % to 0.75 %).

Subsequent to March 13, 2024, we pay interest on the U.S.

Credit Line based on SOFR plus a 3.00 % margin.

Additionally, subsequent to March 13, 2024, the Second Amended Credit Agreement also contains a facility fee of 0.25 %.

Under the Second Amended Credit Agreement, we pay interest on the U.S.

Credit Line based on the Secured Overnight Financing Rate (" SOFR ") plus a 3.00 % margin.

The Second Amended Credit Agreement also contains a facility fee of 0.25 %.

The interest rates in effect at December 31, 2025 and 2024 were 6.65 % and 7.31 %, respectively.

The Second Amended Credit Agreement includes financial covenants and contains other customary affirmative and negative covenants and events of default.

From January 1, 2024 to September 30, 2024, our covenants were based upon EBITDA and a minimum accounts receivable coverage ratio.

From October 1, 2024 to December 31, 2024, our covenants were based upon a minimum fixed charge coverage ratio.

Subsequent to December 31, 2024, our covenants will be based upon a minimum fixed charge coverage ratio and a maximum cash flow leverage ratio.

Our covenants are based upon a minimum fixed charge coverage ratio and a maximum cash flow leverage ratio.

We were in compliance with the covenants and conditions of the Second Amended Credit Agreement at and during the years ended December 31, 2025 and 2024.

On March 11, 2026, the Company entered into a Twelfth Amendment (the "Twelfth Amendment") to the Second Amended Credit Agreement with U.S.

The Twelfth Amendment increases the limit on Restricted Payments (as defined in the Second Amended Credit Agreement) from $ 4.0 million to $ 8.0 million.

All other provisions of the Second Amended Credit Agreement remain substantially the same.

At December 31, 2025, we had $ 5.5 million outstanding under the U.S.

6 unchanged sentences

China Line of Credit

On August 29, 2024, our subsidiary Gemstar Technology (Yangzhou) Co.

("GTY"), executed a Line of Credit Agreement (the "Line of Credit Agreement") with the Bank of China, which provides for a revolving line of credit ("China Credit Line")

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

through July 24, 2025.

We expect to renew our Line of Credit Agreement with the Bank of China prior to its expiration;

In August 2024, our subsidiary, Gemstar Technology (Yangzhou) Co.

("GTY"), executed a Line of Credit Agreement (the "Line of Credit Agreement") with the Bank of China, which provides for a revolving line of credit (the "China Credit Line").

As a continuation of the agreement, on July 30, 2025, we executed an amendment to the Line of Credit Agreement, which extended the term of the China Credit Line to July 16, 2026.

We expect to renew our China Credit Line prior to its expiration;

however, no assurance can be given that future financing will be available or, if available, that we will be offered terms satisfactory to us.

1 unchanged sentence

The China Credit Line has a maximum availability up to RMB 130.0 million (approximately $ 18.6 million), subject to meeting certain financial conditions.

Amounts available for borrowing under the China Credit Line are reduced by the balance of any outstanding letters of credit, of which there were none at December 31, 2024.

Amounts available for borrowing under the China Credit Line are reduced by the balance of any outstanding letters of credit, of which there were none at December 31, 2025 or December 31, 2024.

All obligations under the China Credit Line are secured by GTY's buildings and land use rights.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Under the Line of Credit Agreement, we pay interest on the China Credit Line based on the one-year rate from the National Interbank Funding Center less a 0.1 % margin.

There are no associated commitment fees on the China Credit Line.

The interest rate in effect at December 31, 2024 was 3.07 %.

The interest rate in effect at December 31, 2025 and December 31, 2024 was 2.92 % and 3.07 %, respectively.

The Line of Credit Agreement includes financial covenants and contains other customary affirmative and negative covenants and events of default.

3 unchanged sentences

At December 31, 2025, we had no remaining availability under our China Credit Line.

Our total interest expense on borrowings under the China Credit Line was RMB 0.5 million (approximately $ 0.1 million) during the year ended December 31, 2024.

Our total interest expense on borrowings under the China Credit Line was RMB 3.0 million (approximately $ 0.4 million) and RMB 0.5 million (approximately $ 0.1 million) during the years ended December 31, 2025 and 2024.

Note 10 — Income Taxes

19 unchanged sentences

Total provision for income taxes $ 6,639 $ 5,431 $ 5,984

Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate

Below is a tabular rate reconciliation for the year ended December 31, 2025:

Year Ended December 31,

(In thousands) Amount Percent

Tax provision at U.S.

federal statutory rate $ ( 2,512 ) 21.0 %

State and local income taxes, net of U.S.

federal income tax effect * 28 ( 0.2 ) %

Foreign tax effect

Statutory tax rate difference between Brazil & the United States 301 ( 2.5 ) %

UNIVERSAL ELECTRONICS INC.

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DECEMBER 31, 2025

Net deferred tax assets were comprised of the following:

(In thousands) 2024 2023

Deferred tax assets:

Accounts receivable $ 464 $ —

Accrued liabilities 4,820 3,958

Amortization of intangible assets 9,223 9,999

Capitalized inventory costs 3,553 3,369

Capitalized research and development costs 10,245 8,035

Depreciation 3,797 4,058

Income tax credits 20,375 19,615

Inventory reserves 2,371 2,154

Net operating losses 14,003 12,053

Operating lease obligations 2,865 4,112

Preferential income tax rate ( 291 ) 2.4 %

Non-taxable and nondeductible items:

Non-taxable legal settlement income ( 126 ) 1.1 %

Other adjustments 11 ( 0.1 ) %

Statutory tax rate difference between China & the United States 230 ( 1.9 ) %

Research and development super deduction ( 437 ) 3.7 %

Changes in unrecognized tax benefits ( 152 ) 1.3 %

Changes in valuation allowance ( 2,013 ) 16.8 %

Effect of cross-border tax laws:

Withholding taxes 312 ( 2.6 ) %

Other adjustments:

DTA write-off from factory shutdown 1,743 ( 14.6 ) %

Miscellaneous other items ( 41 ) 0.3 %

Statutory tax rate difference between Hong Kong & the United States ( 775 ) 6.5 %

Non-taxable and nondeductible items:

Non-territorial income ( 1,812 ) 15.2 %

Non-taxable foreign exchange gain ( 282 ) 2.4 %

Other adjustments 107 ( 0.9 ) %

Effect of cross-border tax laws:

Withholding taxes 1,227 ( 10.3 ) %

Other adjustments 21 ( 0.2 ) %

Statutory tax rate difference between Mexico & the United States 197 ( 1.7 ) %

Non-taxable and nondeductible items:

Annual inflationary adjustment ( 192 ) 1.6 %

Employee fringe benefits 174 ( 1.5 ) %

Other adjustments:

Fixed asset provision to return adjustment 192 ( 1.6 ) %

Intercompany sale of fixed assets ( 229 ) 1.9 %

Miscellaneous other items 168 ( 1.4 ) %

Netherlands 318 ( 2.7 ) %

Other foreign jurisdictions 323 ( 2.7 ) %

Effect of changes in taw laws or rates enacted in the current period

Effect of cross-border tax laws:

Global intangible low-taxed income 6,459 ( 54.0 ) %

Subpart F income 331 ( 2.8 ) %

( 571 ) 4.8 %

Changes in valuation allowance:

2,606 ( 21.8 ) %

Non-taxable or nondeductible items:

Stock-based compensation 872 ( 7.3 ) %

Total deferred tax assets 74,631 71,806

Deferred tax liabilities:

Accounts receivable — ( 20 )

Right-of-use assets ( 3,175 ) ( 4,385 )

Other ( 1,333 ) ( 2,920 )

Total deferred tax liabilities ( 4,508 ) ( 7,325 )

Net deferred tax assets before valuation allowance 70,123 64,481

Valuation allowance ( 65,629 ) ( 59,686 )

Net deferred tax assets $ 4,494 $ 4,795

Provision to return 412 ( 3.4 ) %

Miscellaneous other items 46 ( 0.4 ) %

UNIVERSAL ELECTRONICS INC.

1 unchanged sentence

DECEMBER 31, 2025

Changes in unrecognized tax benefits 1 — %

Other adjustments ( 7 ) 0.1 %

Total provision for income taxes $ 6,639 ( 55.5 ) %

* The Company is subject to state & local minimum taxes, with Texas, Mississippi, and North Carolina comprising greater than 50 % .

The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S.

statutory federal income tax rate to pre-tax income from operations as a result of the following:

statutory federal income tax rate to pre-tax income from operations, for the years ended December 31, 2024 and December 31, 2023, as a result of the following:

Year Ended December 31,

(In thousands) 2024 2023 2022

(In thousands) 2024 Percent 2023 Percent

Tax provision (benefit) at statutory U.S.

11 unchanged sentences

Provision to return ( 350 ) 1.9 ( 19 ) —

Sale of intangible asset — — ( 3,385 )

State and local taxes, net ( 992 ) 5.3 ( 2,629 ) 2.9

5 unchanged sentences

Tax provision $ 5,431 ( 28.7 ) % $ 5,984 ( 6.5 ) %

Net deferred tax assets were comprised of the following:

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

(In thousands) 2025 2024

Deferred tax assets:

Accounts receivable $ 2,245 $ 464

Accrued liabilities 1,850 4,820

Amortization of intangible assets 8,404 9,223

Capitalized inventory costs 3,391 3,553

Capitalized research and development costs 10,744 10,245

Depreciation 3,510 3,797

Income tax credits 21,560 20,375

Inventory reserves 3,143 2,371

Net operating losses 15,296 14,003

Operating lease obligations 1,953 2,865

Stock-based compensation 2,664 2,915

Total deferred tax assets 74,760 74,631

Deferred tax liabilities:

Right-of-use assets ( 2,026 ) ( 3,175 )

Other ( 1,386 ) ( 1,333 )

Total deferred tax liabilities ( 3,412 ) ( 4,508 )

Net deferred tax assets before valuation allowance 71,348 70,123

Valuation allowance ( 67,359 ) ( 65,629 )

Net deferred tax assets $ 3,989 $ 4,494

At December 31, 2025, we had U.S.

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Due to cumulative operating losses for the three years ended December 31, 2025, we have recorded a valuation allowance against our U.S.

federal and state deferred tax assets of $ 39.3 million and $ 23.8 million, respectively, as we have determined that it is more likely than not that the tax benefits will not be realized in the future.

federal, state, and foreign deferred tax assets of $ 41.9 million, $ 24.8 million, and $ 0.7 million respectively, as we have determined that it is more likely than not that the tax benefits will not be realized in the future.

The valuation allowance increased by $ 1.7 million and $ 6.0 million during the years ended December 31, 2025 and 2024, respectively.

The Company had an overall U.S.

federal deferred tax liability as of December 31, 2024 for foreign withholding taxes that cannot be used as a source of income to offset deferred tax assets.

In general, under Section 382, a corporation that undergoes an "ownership change" is subject to limitations on its ability to utilize pre-change net operating losses and tax credits to offset future taxable income.

4 unchanged sentences

Uncertain Tax Positions

At December 31, 2024 and 2023, we had gross unrecognized tax benefits of approximately $ 3.7 million and $ 3.4 million, respectively, including interest and penalties.

At December 31, 2025 and 2024, we had gross unrecognized tax benefits of approximately $ 3.7 million including interest and penalties.

In accordance with accounting guidance, we have elected to classify interest and penalties as components of tax expense.

6 unchanged sentences

Additions as a result of tax positions taken during the current year 153 322 165

Other ( 150 ) — —

Balance at end of period $ 3,640 $ 3,637 $ 3,315

Approximately $ 3.7 million, $ 3.7 million and $ 3.3 million of the total amount of unrecognized tax benefits at December 31, 2025, 2024 and 2023, respectively, would favorably effect the annual effective tax rate if not for the valuation allowance.

We are unaware of any positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly increase within the next twelve months.

We do not anticipate a decrease in unrecognized tax benefits within the next twelve months based on federal, state, and foreign statute expirations in various jurisdictions.

We have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year.

4 unchanged sentences

for 2019 through 2024.

Income Taxes Paid

Disclosed below is a summary of income taxes paid by jurisdiction for the year ended December 31, 2025

(In thousands) Year Ended December 31, 2025

United States - Federal $ ( 316 )

United States - State and local ( 10 )

Hong Kong 1,223

Total income taxes paid, net $ 2,624

Indefinite Reinvestment Assertion

5 unchanged sentences

DECEMBER 31, 2025

Enactment of H.R.1

On July 4, 2025, H.R.1, commonly referred to as the One Big Beautiful Bill Act, was enacted in the U.S., which includes a broad range of tax reform provisions, including extending and modifying certain key Tax Cuts and Jobs Act provisions (both domestic and international), and provisions allowing accelerated tax deductions for qualified property and research expenditures.

The legislation has multiple effective dates, with certain provisions effective in 2025 and others to be implemented through 2027.

The legislation’s enactment did not materially impact our effective income tax rate or cash tax position for the year ended December 31, 2025.

Note 11 — Accrued Compensation

8 unchanged sentences

Total accrued compensation $ 17,496 $ 20,927

(1) For the year ended December 31, 2024, accrued severance expenses of $ 0.8 million and $ 0.1 million related to our Mexico and Asia manufacturing footprint optimization efforts, respectively, are included in this amount.

See Note 13 for further information related to our restructuring activities.

(2) Includes $ 0.1 million of accrued severance expenses at December 31, 2023, related to our Asia manufacturing footprint optimization efforts.

(1) For the year ended December 31, 2025, this includes $ 0.8 million of accrued severance expenses related to our 2025 restructuring plan and global reduction in force.

At December 31, 2024, this includes $ 0.9 million of accrued severance expenses related to our 2023 - 2024 restructuring plan.

See Note 13 for further information related to our restructuring activities.

2 unchanged sentences

This amount represents our estimate of the amounts due to the PRC government for social insurance on December 31, 2025 and 2024.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Note 12 — Other Accrued Liabilities

15 unchanged sentences

(2) Includes $ 0.2 million and $ 0.1 million at December 31, 2025 and 2024, respectively, associated with the purchase of property, plant and equipment.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Note 13 — Commitments and Contingencies

13 unchanged sentences

These amounts are expected to be paid within the next twelve months.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Product Warranties

7 unchanged sentences

Balance at end of period $ 11 $ 35 $ 522

Restructuring Activities

In conjunction with our plan to restructure and optimize our manufacturing footprint while reducing our concentration risk in the PRC, we stopped all production activities and began to shut down our southwestern PRC factory beginning in the third quarter of 2023.

In addition, during the fourth quarter of 2024, we stopped production activities and shut down one of our eastern PRC factories.

We incurred $ 0.5 million of severance and $ 0.1 million of other exit costs during the year ended December 31, 2024 and $ 3.4 million of severance and $ 0.6 million of other exit costs for the year ended December 31, 2023.

These costs are included within factory restructuring charges on our consolidated statements of operations.

We have recognized a total of $ 4.6 million in factory restructuring charges since September 2023.

This factory restructuring was completed in the fourth quarter of 2024 and we do not expect any further expenses associated with this plan.

As part of our plan to restructure and optimize our factory footprint, we have worked to downsize our factory in Mexico due to decreased demand in the U.S.

market and our Vietnam facility's ability to supply our North American customers.

Restructuring

In conjunction with our long term factory planning strategy to de-risk our reliance on a PRC-based supply chain and optimize our global manufacturing footprint, beginning in 2023 we have undertaken the restructuring activities further described below.

Restructuring costs are included within factory restructuring charges on our consolidated statements of operations.

Beginning in the third quarter of 2023, we stopped all production activities and began to shut down our southwestern PRC factory.

In addition, during the fourth quarter of 2024, we stopped production activities and shut down one of our two eastern PRC factories.

In connection with these factory closures, we incurred $ 0.5 million of severance and $ 0.1 million of other exit costs during the year ended December 31, 2024, and $ 3.4 million of severance and $ 0.6 million of other exit costs during the year ended December 31, 2023.

We have recognized a cumulative total of $ 4.6 million in factory restructuring charges in connection with the PRC factory closures, and we do not expect any further associated expenses.

UNIVERSAL ELECTRONICS INC.

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DECEMBER 31, 2025

leased a smaller facility and reduced our factory headcount during the year ended December 31, 2024.

We incurred $ 1.5 million of severance and $ 1.5 million of other exit costs during the year ended December 31, 2024.

These costs are included within factory restructuring charges on our consolidated statements of operations.

We have recognized a total of $ 3.0 million in factory restructuring charges since January 2024.

This factory restructuring is scheduled to be completed in the second quarter of 2025 and we do not expect any further expenses associated with this plan.

In 2024, we downsized our factory in Mexico due to decreased demand in the U.S.

market and our Vietnam facility's ability to supply our North American customers.

In July 2025, the further decision was made to cease production activities and shut down our Mexico manufacturing facility.

In connection with this wind down and closure, we incurred $ 0.8 million of severance and $ 0.4 million of other exit costs during the year ended December 31, 2025, and $ 1.5 million of severance and $ 1.5 million of other exit costs during the year ended December 31, 2024.

We have recognized a cumulative total of $ 4.2 million in factory restructuring charges in connection with the wind down of our Mexico manufacturing facility, and we do not expect to incur additional factory restructuring charges in connection with this shutdown.

Restructuring liabilities are included in accrued compensation, accounts payable and other accrued liabilities on our consolidated balance sheets.

Total restructuring activities for the years ended December 31, 2024 and December 31, 2023 are as follows:

Total restructuring activities for the years ended December 31, 2025, December 31, 2024, and December 31, 2023 are as follows:

Restructuring Costs

8 unchanged sentences

Balance at December 31, 2024 $ 1,011 $ 867 $ 144

Restructuring charges 1,221 776 445

Cash payments ( 1,793 ) ( 1,267 ) ( 526 )

Balance at December 31, 2025 $ 439 $ 376 $ 63

Total costs incurred inception to date $ 8,821 $ 6,209 $ 2,612

2 unchanged sentences

("Roku") and certain of its customers have been in litigation in various forums since 2018—i.e., two actions in the Central District of California ("CDCA") beginning in 2018 and 2020 including related cases against certain of Roku's customers (collectively, the "CDCA cases"), the International Trade Commission ("ITC"), the Patent and Trademark Office ("PTO") ( ex parte reexams) and the Patent and Trademark Appeals Board ("PTAB").

The CDCA cases have all been stayed on various grounds since 2019.

The CDCA cases were all stayed on various grounds.

The 2018 case was stayed in November 2019 pending resolution of Roku-initiated PTO and PTAB matters, all of which have since been resolved.

The 2020 case was also immediately stayed due to UEI's related ITC action against Roku, in which UEI ultimately prevailed when on July 9, 2021, the Administrative Law Judge ("ALJ") issued an initial determination finding Roku in violation of Section 337.

The Commission issued a final determination on November 10, 2021, affirming the ALJ’s finding.

The Commission then issued a limited exclusion order and cease and desist order against Roku, which went into effect following the expiration of the Presidential Review Period on January 9, 2022.

The Federal Circuit affirmed on January 19, 2024.

The 2020 case was also immediately stayed due to UEI's related ITC action against Roku, in which UEI ultimately prevailed when in July 2021, the Administrative Law Judge ("ALJ") issued an initial determination finding Roku in violation of Section 337.

The Commission issued a final determination in November 2021, affirming the ALJ’s finding.

The Commission then issued a limited exclusion order and cease and desist order against Roku, which went into effect following the expiration of the Presidential Review Period in January 2022.

The Federal Circuit affirmed in January 2024.

Following UEI's win and affirmance by the Federal Circuit, Roku sought rehearing en banc and sought cert from the Supreme Court on a domestic industry question.

On January 13, 2025, the Supreme Court denied cert.

While this ITC matter has been finally resolved and Roku has no more ability to appeal, we have agreed to continue the stay of the CDCA cases pending the outcome of one final PTAB action involving one of our patents, which we expect to occur in the first half of 2025.

Roku also filed its own retaliatory ITC action against UEI and certain of our customers on two patents it purchased for this purpose.

Roku’s action failed when on June 24, 2022, the ALJ found on of Roku’s patents to be invalid as indefinite.

Thereafter, on June 28, 2022, the ALJ issued its initial determination ("ID") fully exonerating us and our customers finding Roku’s second patent invalid and that Roku failed to establish the requisite domestic industry and thus no violation of the Tariff Act.

Roku and we filed petitions to appeal certain portions of the ID.

On October 28, 2022, the full ITC issued its final determination affirming the ID, ruling there was no violation of the Tariff Act and terminated the investigation.

In December 2022, Roku filed an appeal, which remains pending.

Further, on October 23, 2023, the PTBA issued its Final Written Decision invalidating all of the claims Roku alleges we infringe.

As a companion to its ITC request, on April 8, 2021, Roku also filed a

In January 2025, the Supreme Court denied cert.

While this ITC matter has been finally resolved and Roku has no more ability to appeal, we agreed to continue the stay of the CDCA cases pending the outcome of one final PTAB action involving one of our patents.

UEI and Roku participated in a hearing in July 2025 regarding the consolidation of the 2018 and 2020 cases, the stay of the cases, and amending the claims that

UNIVERSAL ELECTRONICS INC.

1 unchanged sentence

DECEMBER 31, 2025

lawsuit against us in Federal CDCA alleging that we are infringing the same two patents they alleged being infringed in the ITC investigation explained above.

This District Court case has been stayed pending their ITC case, and will likely continue to be stayed pending the conclusion of Roku's appeal of their ITC case.

Court of International Trade Action against the United States of America, et.

On October 9, 2020, we and our subsidiaries, Ecolink Intelligent Technology, Inc.

("Ecolink") and RCS Technology, LLC ("RCS"), filed an amended complaint (20-cv-00670) in the Court of International Trade (the "CIT") against the United States of America;

the Office of the United States Trade Representative;

Lighthizer, U.S.

Trade Representative;

Customs & Border Protection;

Customs & Border Protection Acting Commissioner, challenging both the substantive and procedural processes followed by the United States Trade Representative ("USTR") when instituting Section 301 Tariffs on imports from the PRC under Lists 3 and 4A.

On January 8, 2025, the U.S.

Court of Appeals for the Federal Circuit ("USCAFC") heard oral arguments on the appeal by the lead plaintiff from the Court of International Trade's ("CIT") March 17, 2023 decision in which the CIT sustained the List 3 and List 4 tariffs, concluding that USTR's rationale in support of the tariffs was not impermissibly post hoc.

A decision from the USCAFC is expected by the end of 2025.

UEI would be allowed to move forward with a consolidated case by the court if unstayed.

On July 29, 2025 the Judge issued an order lifting the stay, consolidating the cases and allowing UEI to move forward on 25 claims in the case.

O n September 4, 2025, the Court set various dates and deadlines for the case, including a trial date of March 16, 2027.

On December 15, 2025, UEI filed a second amended complaint in the consolidated case, and on January 20, 2026, Roku filed a motion to dismiss one of the patents in suit, to which UEI filed a response on February 24, 2026.

Roku also filed its own retaliatory ITC action against UEI and certain of our customers on two patents it purchased for this purpose.

Roku’s action failed when in June 2022, the ALJ found on of Roku’s patents to be invalid as indefinite.

Thereafter, in June 2022, the ALJ issued its initial determination ("ID") fully exonerating us and our customers, finding Roku’s second patent invalid and that Roku failed to establish the requisite domestic industry and thus no violation of the Tariff Act.

Roku and UEI filed petitions to appeal certain portions of the ID.

In October 2022, the full ITC issued its final determination affirming the ID, ruling there was no violation of the Tariff Act and terminating the investigation.

In December 2022, Roku filed an appeal.

Further, in October 2023, the PTAB issued its Final Written Decision invalidating all of Roku's infringement claims.

Roku also filed an appeal of this decision.

On June 17, 2025, the Federal Circuit affirmed the PTAB decision that invalidated the Roku patent and also remanded the case to the PTAB with respect to one remaining claim.

On January 21, 2026, the PTAB issued a ruling invalidating the final remaining claim, and thus all claims of both asserted patents have been invalidated.

As a companion to its ITC request, on April 8, 2021, Roku also filed a lawsuit against us in Federal CDCA alleging that we are infringing the same two patents they alleged were infringed in the ITC investigation explained above.

On February 27, 2026, Roku voluntarily dismissed this District Court case.

Tongshun Matters

On January 23, 2024, Tongshun Company ("TS") filed suit against one of our subsidiaries, Gemstar Technology (Yangzhou) Co.

("GTY"), claiming among other things, breach of an employment agency, and as is standard in Chinese litigation matters such as these, TS had also requested the Court to order a hold on GTY's bank account for the total claimed amount of RMB 35 million (approximately $ 4.8 million).

On December 20, 2024, the Court rendered a decision in favor of TS and ordered a judgment of RMB 27.4 million (approximately $ 3.8 million) plus interest and costs totaling approximately RMB 30.4 million (approximately $ 4.2 million).

We recorded an accrual for this judgment during the fourth quarter of 2024.

This accrual is included in other accrued expenses on our consolidated balance sheets.

The legal fees associated with this matter are expensed as incurred.

We filed an appeal against this judgment and on February 11, 2025, the Jiangsu Province Yangzhou Intermediate People's Court heard oral argument and we expect a decision during the first half of 2025.

("GTY"), claiming among other things, breach of an employment agency, and as is standard in Chinese litigation matters such as these, TS requested the Court to order a hold on GTY's bank account for the total claimed amount.

On February 8, 2024, we deposited RMB 35.0 million (approximately $ 4.9 million) with the court.

On July 12, 2024, we were refunded RMB 10.0 million (approximately $ 1.4 million) of the original deposit.

This deposit was included in prepaid expenses and other current assets on our consolidated balance sheets at December 31, 2024.

On December 20, 2024, the Jiangsu Province Baoying People’s Court rendered a decision in favor of TS and ordered a judgment of RMB 27.4 million (approximately $ 3.8 million) plus interest and costs totaling approximately RMB 30.4 million (approximately $ 4.2 million).

We recorded an accrual of RMB 30.4 million (approximately $ 4.2 million) for this judgment during the fourth quarter of 2024.

This accrual is included in other accrued expenses on our consolidated balance sheets at December 31, 2024.

We filed an appeal of this judgment and on May 20, 2025, the Jiangsu Province Yangzhou Intermediate People's Court affirmed the lower court’s decision in its entirety.

The full judgment amount of RMB 30.4 million (approximately $ 4.2 million) was paid to TS during the second quarter of 2025.

Both the deposit and accrual have been released from our consolidated balance sheets at September 30, 2025.

IT Convergence Matters

In mid-2024, an arbitration proceeding commenced between UEI and IT Convergence, Inc.

("IT Convergence"), in which IT Convergence alleged misappropriation of confidential information and theft of trade secrets, and we denied these claims and filed a counterclaim asserting breach of contract.

The arbitration hearing took place in August 2025 and the arbitrator issued his decision on October 29, 2025.

After making rulings on various claims and counterclaims, the arbitrator awarded the net amount of approximately $ 0.2 million in favor of UEI and against IT Convergence, which amount was received by the Company during the quarter ended December 31, 2025.

Other Litigation Matters

3 unchanged sentences

However, no assurances can be made as to the outcome of any of these matters, nor can we estimate the range of potential losses to us.

In our opinion, final judgments, if any, which might be rendered against us in potential or pending litigation would not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

In our opinion, final judgments, if any, which might be rendered against us in potential or pending

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

litigation would not have a material adverse effect on our consolidated financial condition, results of operations, or cash flows.

Moreover, we believe that our products do not infringe any third parties' patents or other intellectual property rights.

7 unchanged sentences

Upon the termination, resignation or retirement of an eligible employee, we are liable to pay the employee an amount equal to 15 days salary for each full year of service completed.

The total amount of liability outstanding at December 31, 2024 and 2023

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

for the India Plan was not material.

The total amount of liability outstanding at December 31, 2025 and 2024 for the India Plan was not material.

During the years ended December 31, 2025, 2024 and 2023, the net periodic benefit costs were also not material.

Note 14 — Treasury Stock

From time to time, our Board of Directors authorizes management to repurchase shares of our issued and outstanding common stock.

On October 26, 2023, our Board approved a new share repurchase program with an effective date of November 7, 2023.

Pursuant to the program, we are authorized to repurchase up to 1,000,000 shares of our common stock.

At December 31, 2024, we had 778,362 shares available for repurchase under the program.

We may utilize various methods to effect the repurchases under the program, including open market repurchases, negotiated block transactions, accelerated share repurchases or open market solicitations for shares, some or all of which could be effected through Rule 10b5-1 plans.

From time to time, our Board of Directors (the "Board") authorizes management to repurchase shares of our issued and outstanding common stock.

On October 26, 2023, our Board approved a share repurchase program with an effective date of November 7, 2023 (the "Share Repurchase Program").

Pursuant to the Share Repurchase Program, we are authorized to repurchase up to 1,000,000 shares of our common stock and to date, we have repurchased 986,444 shares of our common stock.

On March 11, 2026, the Board authorized an amendment to the Share Repurchase Program to repurchase up to an additional 1,000,000 shares, or a total of 1,013,556 shares (including the 13,556 shares remaining available under the prior Board authorization for repurchase under the Share Repurchase Program).

This authorization will remain in effect until such time as the Board terminates the authorization or the Share Repurchase Program is executed in full.

We may utilize various methods to effect the repurchases, including in privately negotiated and/or open-market transactions, and pursuant to plans complying with Rule 10b5-1 promulgated under the Securities Exchange Act of 1934.

Neither this authorization nor the Share Repurchase Program obligates us to repurchase any shares of our common stock, and any repurchase of shares will be subject to market and other conditions and may be discontinued at any time.

We also repurchase shares of our issued and outstanding common stock to satisfy income tax withholding obligations relating to the stock-based compensation of our employees and directors and/or the cost of stock option exercises.

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Stock-based compensation related shares repurchased 107 85 65

Privately negotiated repurchase 515 — —

Total shares repurchased 872 206 165

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Cost of stock-based compensation related shares repurchased 781 848 915

Cost of privately negotiated repurchase 1,524 $ — $ —

Total cost of shares repurchased $ 3,086 $ 1,957 $ 1,779

Repurchased shares are recorded as shares held in treasury at cost.

We hold these shares for future use as management and the Board of Directors deem appropriate.

We hold these shares for future use as management and the Board deem appropriate.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Note 15 — Stock-Based Compensation

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Income tax benefit $ 767 $ 1,026 $ 1,369

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Restricted Stock

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Performance Stock

Our performance stock awards (PSUs) vest subject to a service condition over a three-year period and stock price-based market conditions over a three to five-year performance period.

PSU awards are divided into three vesting tranches.

Each tranche will vest upon the later of the service retention date as set forth in the agreement (provided the employee is continuously employed by the Company through such date) and the achievement of the applicable volume weighted average share price goal.

In the event the applicable service condition is not met or the applicable performance goals are not achieved during the performance period, any unvested PSUs will be forfeited.

Non-vested performance stock award activity was as follows:

(in 000s) Weighted-Average Grant Date Fair Value Shares

(in 000s) Weighted-Average Grant Date Fair Value

Non-vested at December 31, 2023

Non-vested at beginning of the year 116 $ 4.72 — $ —

Granted 744 1.87 116 4.72

Vested — — — —

Forfeited ( 116 ) 2.84 — —

Non-vested at December 31, 2024

Non-vested at end of the year 744 $ 2.16 116 $ 4.72

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

The assumptions we utilized in the Monte Carlo simulation model and the resulting weighted average fair value of performance stock grants were the following:

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As of December 31, 2025, we expect to recognize $ 1.1 million of total unrecognized pre-tax stock-based compensation expense related to non-vested performance stock awards over a weighted-average life of 2.4 years.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Stock Options

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This amount will change based on the fair market value of our stock.

There were no option exercises in the years ended December 31, 2024 and 2023.

The value of shares withheld in lieu of receiving cash from option exercises in the year ended December 31, 2022 was $ 1.5 million.

There was no cash received from option exercises for the year ended December 31, 2022.

The actual tax benefit realized from option exercises was $ 0.1 million for the year ended December 31, 2022.

The assumptions we utilized in the Black-Scholes option pricing model and the resulting weighted average fair value of stock option grants were the following:

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Significant option groups outstanding at December 31, 2025 and the related weighted average exercise price and life information were as follows:

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Options Outstanding Options Exercisable

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856 4.96 $ 24.29 576 $ 34.61

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

As of December 31, 2024, we expect to recognize $ 1.0 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 1.0 year.

As of December 31, 2025, we expect to recognize $ 0.5 million of total unrecognized pre-tax stock-based compensation expense related to non-vested stock options over a remaining weighted-average life of 2.8 years.

Stock Incentive Plans

Our active stock-based incentive plans include those adopted in 2014 and 2018 ("Stock Incentive Plans").

Under the Stock Incentive Plans, we may grant restricted stock units, performance stock units, stock options, stock appreciation rights, or any combination thereof for a period of ten years from the approval date of each respective plan, unless the plan is terminated by resolution of our Board of Directors.

No stock appreciation rights have been awarded under our Stock Incentive Plans as of December 31, 2024.

Our active stock-based incentive plan was adopted in 2018 ("Stock Incentive Plan").

Under the Stock Incentive Plan, we may grant restricted stock units, performance stock units, stock options, stock appreciation rights, or any combination thereof for a period of ten years from the approval date of each respective plan, unless the plan is terminated by resolution of our Board.

No stock appreciation rights have been awarded under our Stock Incentive Plan as of December 31, 2025.

Only directors and employees meeting certain employment qualifications are eligible to receive stock-based awards.

The grant price of restricted stock and stock option awards granted under our Stock Incentive Plans is the average of the high and low trades of our stock on the grant date.

The grant price of restricted stock and stock option awards granted under our Stock Incentive Plan is the average of the high and low trades of our stock on the grant date.

We prohibit the re-pricing or backdating of stock options.

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Stock options have a maximum ten-year term.

Our performance stock awards vest in various proportions over a three-year term, subject to a service condition and stock price-based market conditions.

Our performance stock awards vest in various proportions over a three to five-year term, subject to a service condition and stock price-based market conditions.

Detailed information regarding our active Stock Incentive Plans was as follows at December 31, 2025:

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Under the Plan

2014 Stock Incentive Plan 6/12/2014 1,100,000 — 87,660

Amended and Restated 2018 Equity and Incentive Compensation Plan (1)

6/11/2024 3,391,794 — 2,094,545

970,387 1,489,808

(1) The 2018 Equity and Incentive Compensation Plan, as amended on June 8, 2021, was amended and restated on June 11, 2024 to create the Amended and Restated 2018 Equity and Incentive Compensation Plan which added an additional 1,000,000 shares.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Note 16 — Other Income (Expense), Net

The Central Bank of Argentina maintains certain currency controls that limit the amount of U.S.

Dollars that may be remitted from Argentine entities, including certain of our customers.

As a result of these controls, an indirect foreign exchange mechanism known as a Blue Chip Swap ("BCS") emerged in Argentina, which allows entities to remit U.S.

Dollars from Argentina through the purchase and sale of BCS securities.

During the year ended December 31, 2025, in order to collect an open accounts receivable balance with an Argentine customer, we purchased $ 2.5 million and sold $ 2.3 million of BCS securities and incurred a loss on the transactions of $ 0.2 million which is recorded in other income (expense) on our consolidated statements of operations.

Other income (expense), net consisted of the following:

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See Note 18 for further information concerning our foreign currency exchange contracts.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

(2) Included in this amount is $ 0.2 million of loss related to BCS security transactions during the year ended December 31, 2025.

Note 17 — Earnings (Loss) Per Share

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Stock options 366 796 900

Common stock warrants — — 275

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Note 18 — Derivatives

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Unrealized losses on foreign currency exchange contracts are recorded in other accrued liabilities.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2024

Note 19 — Employee Benefit Plans

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Prior to October 1, 2024, we matched 50 % of the participants' contributions up to 15 % of their gross salary in the form of newly issued shares of our common stock.

As of October 1, 2024 we match 25 % of the participants' contributions up to 15 % of their gross salary in the form of newly issued shares of our common stock.

Between October 1, 2024 and October 3, 2025, we matched 25 % of the participants' contributions up to 15 % of their gross salary in the form of newly issued shares of our common stock.

Beginning on October 3, 2025, we no longer match participants' contributions.

We may also make other discretionary contributions to the plan.

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Note 20 — Reportable Segment

Our chief operating decision maker, our Chief Executive Officer, reviews financial information presented on a consolidated basis, including consolidated net income and its components, as reported on our consolidated statements of operations, accompanied by disaggregated information about revenues, for purposes of making operating decisions and assessing financial performance of our single consolidated segment, primarily by monitoring actual results versus our internal budget and forecasts.

Our chief operating decision maker, our Interim Chief Executive Officer and Chief Operating Officer, reviews financial information presented on a consolidated basis, including consolidated net income and its components, as reported on our consolidated statements of operations, accompanied by disaggregated information about revenues, for purposes of making operating decisions and assessing financial performance of our single consolidated segment, primarily by monitoring actual results versus our internal budget and forecasts.

UNIVERSAL ELECTRONICS INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2025

Our reported segment revenue, segment profit or loss, and significant segment expenses were as follows:

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(2) R&D expenses from the consolidated statements of operations, adjusted to exclude stock-based compensation expense.

(3) Operating expenses less R&D expenses from the consolidated statements of operations, adjusted to exclude stock-based compensation, amortization of acquired intangible assets, costs associated with our Roku litigation, factory restructuring charges, legal judgment, severance, lease termination costs and goodwill impairment.

(4) Other segment items include the adjustments described in the notes above;

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Interest expense is disclosed in Note 9 and income taxes are disclosed in Note 10.

Note 21 — Business Combination

On February 17, 2022, we acquired substantially all of the net assets of Qterics, a U.S.-based provider of multimedia connectivity solutions and services for internet-enabled consumer products.

Under the terms of the Asset Purchase Agreement, we paid a cash purchase price of approximately $ 0.9 million.

The acquisition of these assets has allowed us to expand our customer base in the consumer electronics market.

UNIVERSAL ELECTRONICS INC.

1 unchanged sentence

DECEMBER 31, 2025

Our consolidated income statement for the year ended December 31, 2024 includes net sales of $ 3.1 million and net income of $ 1.2 million attributable to Qterics.

Our consolidated income statement for the year ended December 31, 2023 includes net sales of $ 2.1 million and net income of $ 16 thousand attributable to Qterics.

Our consolidated income statement for the year ended December 31, 2022 includes net sales of $ 2.1 million and net income of $ 145 thousand attributable to Qterics for the period commencing on February 17, 2022.

Pro Forma Results (unaudited)

The unaudited pro forma financial information of combined results of our operations and the operations of Qterics as if the transaction had occurred on January 1, 2022, is immaterially different from the net sales, net income and income per share amounts reported in the Consolidated Statements of Operations for the year ended December 31, 2022.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 8. Financial Statements and Supplementary Data