UNIVERSAL ELECTRONICS INC 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) 42 Consolidated Balance Sheets at December 31, 202 5 and 202 4 44 Consolidated Statements of Operations for the Years Ended December 31, 202 5 , 202 4 and 202 3 45 Consolidated Statements of Comprehensive Income (Loss) for the Years Ended December 31, 20 25 , 20 24 and 202 3 46 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 202 5, 202 4 and 202 3 47 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 5 , 202 4 and 202 3 48 Notes to Consolidated Financial Statements 49 All schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. 41 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Universal Electronics Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Universal Electronics Inc. (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. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) ("PCAOB"), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"), and our report dated March 12, 2026, expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 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 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. Revenue is recognized at a point in time if the criteria for recognizing revenue over time are not met. For each new product and/or contract, management performs an analysis to determine whether the asset created is a product with no alternative use and whether the terms and conditions of the contract indicate the Company has an enforceable right to payment for performance completed to date, including a reasonable margin. We identified the determination of over time versus point in time revenue recognition as a critical audit matter. The principal considerations for our determination that over time versus point in time revenue recognition is a critical audit matter is the significant judgment exercised by management in identifying and evaluating whether new products and/or 42 Table of Contents contracts meet the criteria for over time or point in time revenue recognition. Significant judgments include the evaluation of whether it is possible, contractually or economically, to repurpose or redirect products for an alternative use, as well as the evaluation of contractual legal terms and rights within each jurisdiction in which the Company operates. Our audit procedures related to the over time versus point in time revenue recognition included the following, among others : • We tested the design and operating effectiveness of key controls associated with the Company's classification of new products, including those associated with the determination and classification of a product as having no alternative use. • We tested the design and operating effectiveness of key controls over the Company's new and amended contract review process, specifically those related to the identification and evaluation of terms and conditions associated with an enforceable right to payment, including a reasonable margin. • For a selection of products from the Company's active products listing, we performed testing to determine whether products identified as having no alternative use are restricted, either contractually or economically, to be repurposed or redirected. This includes evaluating management judgments regarding the economic feasibility of repurposing a finished product and evidence to support that the final product has no alternative use. • For a selection of products, we traced the products into the Company's listing of active products and determined whether that product was appropriately classified as having no alternative use or not. For transactions selected with no alternative use, we also obtained and read the contract to determine whether the contract terms specifically identified an enforceable right to payment, including a reasonable margin, for performance completed to date. The two parts to this test serve to determine whether the revenue was appropriately recorded over time or at a point in time. /s/ GRANT THORNTON LLP We have served as the Company's auditor since 2005. Phoenix, Arizona March 12, 2026 43 Table of Contents UNIVERSAL ELECTRONICS INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share-related data) December 31, 2025 December 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 32,306 $ 26,783 Accounts receivable, net 79,320 114,182 Contract assets 8,091 10,346 Inventories 77,793 79,355 Prepaid expenses and other current assets 6,803 9,478 Income tax receivable 806 2,350 Total current assets 205,119 242,494 Property, plant and equipment, net 27,600 34,207 Intangible assets, net 21,968 24,038 Operating lease right-of-use assets 10,203 14,322 Deferred income taxes 5,496 6,425 Other assets 3,611 1,868 Total assets $ 273,997 $ 323,354 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 48,945 $ 72,031 Lines of credit 24,079 36,960 Accrued compensation 17,496 20,927 Accrued sales discounts, rebates and royalties 6,132 5,204 Accrued income taxes 2,524 2,161 Other accrued liabilities 20,134 21,008 Total current liabilities 119,310 158,291 Long-term liabilities: Operating lease obligations 6,193 9,232 Deferred income taxes 1,507 1,931 Income tax payable 74 72 Other long-term liabilities 729 723 Total liabilities 127,813 170,249 Commitments and contingencies (Note 13) Stockholders' equity: Preferred stock, $ 0.01 par value, 5,000,000 shares authorized; none issued or outstanding — — Common stock, $ 0.01 par value, 50,000,000 shares authorized; 26,146,367 and 25,712,940 shares issued on December 31, 2025 and 2024, respectively 261 257 Paid-in capital 350,222 344,697 Treasury stock, at cost, 13,537,944 and 12,666,443 shares on December 31, 2025 and 2024, respectively ( 375,016 ) ( 371,930 ) Accumulated other comprehensive income (loss) ( 19,115 ) ( 28,350 ) Retained earnings 189,832 208,431 Total stockholders' equity 146,184 153,105 Total liabilities and stockholders' equity $ 273,997 $ 323,354 The accompanying notes are an integral part of these consolidated financial statements. 44 Table of Contents UNIVERSAL ELECTRONICS INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31, 2025 2024 2023 Net sales $ 368,288 $ 394,879 $ 420,457 Cost of sales 261,827 280,885 322,897 Gross profit 106,461 113,994 97,560 Research and development expenses 26,269 29,723 31,281 Selling, general and administrative expenses 85,375 91,811 98,490 Factory restructuring charges (Note 13) 1,221 3,585 4,015 Legal judgment (Note 13) — 4,172 — Goodwill impairment (Note 7) — — 49,075 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 ) Loss before provision for income taxes ( 11,960 ) ( 18,598 ) ( 92,254 ) Provision for income taxes 6,639 5,431 5,984 Net loss $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 ) Earnings (loss) per share: Basic $ ( 1.41 ) $ ( 1.85 ) $ ( 7.64 ) Diluted $ ( 1.41 ) $ ( 1.85 ) $ ( 7.64 ) Shares used in computing earnings (loss) per share: Basic 13,172 12,959 12,855 Diluted 13,172 12,959 12,855 The accompanying notes are an integral part of these consolidated financial statements. 45 Table of Contents UNIVERSAL ELECTRONICS INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands) Year Ended December 31, 2025 2024 2023 Net loss $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 ) Other comprehensive income (loss): Change in foreign currency translation adjustment 9,235 ( 7,592 ) 429 Comprehensive loss $ ( 9,364 ) $ ( 31,621 ) $ ( 97,809 ) The accompanying notes are an integral part of these consolidated financial statements. 46 Table of Contents UNIVERSAL ELECTRONICS INC. CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (In thousands) Common Stock Issued Common Stock in Treasury Paid-in Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Totals Shares Amount Shares Amount Balance at January 1, 2023 25,000 $ 250 ( 12,295 ) $ ( 368,194 ) $ 326,839 $ ( 21,187 ) $ 330,698 $ 268,406 Net income ( 98,238 ) ( 98,238 ) Currency translation adjustment 429 429 Shares issued for employee benefit plan and compensation 317 3 1,290 1,293 Purchase of treasury shares ( 165 ) ( 1,779 ) ( 1,779 ) Stock options exercised — — — — Shares issued to directors 29 — — — Employee and director stock-based compensation 8,809 8,809 Balance at December 31, 2023 25,346 253 ( 12,460 ) ( 369,973 ) 336,938 ( 20,758 ) 232,460 178,920 Net loss ( 24,029 ) ( 24,029 ) Currency translation adjustment ( 7,592 ) ( 7,592 ) Shares issued for employee benefit plan and compensation 338 4 1,059 1,063 Purchase of treasury shares ( 206 ) ( 1,957 ) ( 1,957 ) Shares issued to directors 29 — — — Employee and director stock-based compensation 6,700 6,700 Balance at December 31, 2024 25,713 257 ( 12,666 ) ( 371,930 ) 344,697 ( 28,350 ) 208,431 153,105 Net loss ( 18,599 ) ( 18,599 ) Currency translation adjustment 9,235 9,235 Shares issued for employee benefit plan and compensation 365 3 428 431 Purchase of treasury shares ( 872 ) ( 3,086 ) ( 3,086 ) Shares issued to directors 68 1 ( 1 ) — Employee and director stock-based compensation 5,098 5,098 Balance at December 31, 2025 26,146 $ 261 ( 13,538 ) $ ( 375,016 ) $ 350,222 $ ( 19,115 ) $ 189,832 $ 146,184 The accompanying notes are an integral part of these consolidated financial statements. 47 Table of Contents UNIVERSAL ELECTRONICS INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2025 2024 2023 Cash flows from operating activities: Net loss $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 ) Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization 14,188 18,058 22,927 Provision for credit losses 454 1,081 70 Gain on sale of property, plant, and equipment ( 312 ) — — Deferred income taxes 866 ( 256 ) ( 1,149 ) Shares issued for employee benefit plan 431 1,063 1,293 Employee and director stock-based compensation 5,098 6,700 8,809 Impairment of goodwill — — 49,075 Impairment of long-lived assets 1,309 333 7,963 Changes in operating assets and liabilities: Accounts receivable and contract assets 41,536 ( 12,174 ) 5,040 Inventories 4,571 6,239 51,458 Prepaid expenses and other assets 5,401 764 2,860 Accounts payable and accrued liabilities ( 33,226 ) 15,733 ( 21,379 ) Accrued income taxes 1,909 1,310 ( 3,539 ) Net cash provided by operating activities 23,626 14,822 25,190 Cash flows from investing activities: 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 used for investing activities ( 6,751 ) ( 8,428 ) ( 13,877 ) Cash flows from financing activities: Borrowings under lines of credit 103,650 102,193 78,000 Repayments on lines of credit ( 117,222 ) ( 120,000 ) ( 111,000 ) Treasury stock purchased ( 3,086 ) ( 1,957 ) ( 1,779 ) 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 ) Net increase (decrease) in cash and cash equivalents 5,523 ( 15,968 ) ( 23,989 ) Cash and cash equivalents at beginning of period 26,783 42,751 66,740 Cash and cash equivalents at end of period $ 32,306 $ 26,783 $ 42,751 Supplemental cash flow information: Income taxes paid $ 2,624 $ 3,481 $ 13,176 Interest paid $ 1,967 $ 4,738 $ 7,015 The accompanying notes are an integral part of these consolidated financial statements. 48 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Note 1 — Description of Business Universal Electronics Inc. ("UEI"), based in Scottsdale, Arizona, is a global leader in universal wireless control solutions for the home. 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. Distribution methods for our control solutions vary depending on the sales channel. We distribute remote control devices, connected thermostats, integrated circuits ("ICs"), smart home automation and security sensors and AV accessories directly to video and security service providers and original equipment manufacturers ("OEMs"), both domestically and internationally. We distribute connected and smart thermostats and home security sensors to pro-security installers and hospitality system integrators in the United States and Europe through a network of national and regional distributors and dealers. Additionally, we sell our wireless control devices and AV accessories under the One For All ® , Ecolink ® and private label brand names to retailers in key markets, such as in the United States, United Kingdom, Germany, France and Spain. We utilize third-party distributors for the retail channel in countries where we do not have subsidiaries. As used herein, the terms "we", "us" and "our" refer to Universal Electronics Inc. and its subsidiaries unless the context indicates the contrary. Note 2 — Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include our accounts and those of our wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated in the consolidated financial statements. Reportable Segment An operating segment, in part, is a component of an enterprise whose operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance. Operating segments may be aggregated only to a limited extent. 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. Estimates and Assumptions The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, we evaluate our estimates and assumptions, including those related to revenue recognition, allowance for credit losses, inventory valuation, impairment of long-lived assets, intangible assets and goodwill, business combinations, income taxes and related valuation allowances and stock-based compensation expense. Actual results may differ from these assumptions and estimates, and they may be adjusted as more information becomes available. Any adjustment may be material. Revenue Recognition Revenue is recognized when control of a good or service is transferred to a customer. Control is considered to be transferred when the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of that good or service. Revenues are generated from manufacturing, shipping and supporting home entertainment products, climate control solutions, wireless sensor and smart home control products and AV accessories that are used in the home entertainment, climate 49 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 control, consumer electronics, security, home automation and home appliance markets, which are sold through multiple channels, and licensing intellectual property that is embedded in these products or licensed to others for use in their products. We also generate revenues from a cloud-based software solution enabling software updates, digital rights management provisioning and remote technical support to consumer electronics customers. Revenue - Product revenue is generated through manufacturing, shipping and supporting our products, as described above. Our performance obligations are satisfied over time or at a point in time, depending on the nature of the product. Our contracts have an anticipated duration of less than a year and consideration may be variable based on indeterminate volumes. Revenue is recognized over time when our performance creates an asset with no alternative use to us (custom products) and we have an enforceable right to payment for performance completed to date, including a reasonable margin, through a contractual commitment from the customer. Custom products are those products for which we are unable to redirect the asset to another customer in the foreseeable future without significant rework or due to contract restrictions. The method for measuring progress towards satisfying a performance obligation for a custom product is based on the costs incurred to date (input method). 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. While unit prices are generally fixed, we have variable consideration for certain of our customers, typically in the form of discounts and rebates based on product volumes and indeterminate volumes themselves. We utilize the most likely amount to estimate the effect of uncertainty on the amount of variable consideration to which we would be entitled. The most likely amount method considers the single most likely amount from a range of possible consideration amounts which, for us, is typically based on historical experience and our expectations regarding future sales to our customers. Accruals for discounts and rebates are recorded as a reduction to sales in the same period as the related revenue. We have concluded that our estimates of variable consideration are not constrained according to the definition within the accounting standard. Changes in such accruals may be required if future rebates and incentives differ from our estimates. 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. A provision is recorded for estimated sales returns and allowances and is deducted from gross sales to arrive at net sales in the period the related revenue is recorded. These estimates are based on historical sales returns and allowances, analysis of credit memo data and other known factors. Actual returns and claims in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected future returns and claims are significantly greater or lower than the reserves that we have established, we will record a reduction or increase to net sales in the period in which we make such a determination. We license our [symbolic] intellectual property which includes our patented technologies and database of control codes. Royalty revenue is recognized for these licensing arrangements on an over time basis. We record license revenue for per-unit based licenses when our customers manufacture or ship a product incorporating our intellectual property and we have a present right to payment. We record per-unit-based licenses with minimum guarantees ratably over the license period to which the minimum guarantee relates and any per-unit sales in excess of the minimum guarantee in the period in which the sale occurs. We record licenses with fixed consideration ratably over the license period. Tiered royalties are recorded on a straight-line basis according to the forecasted per-unit fees taking into account the pricing tiers. We recognize service revenues related to our cloud-based software solution on an over-time basis, as our customers simultaneously receive and consume the benefits provided by our performance. Revenues are recognized over the period during which the performance obligations are satisfied, and control of the service is transferred to the customers. Contract assets - Contract assets represent the value of revenue recognized over time for which we have not yet invoiced the customer. Generally, we invoice the customer within 90 days of revenue recognition. 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 50 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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. Payment terms typically range from 30 to 120 days, are typically on open credit terms consistent with industry practice and do not have significant financing components. We provide our customers an assurance-type warranty, generally for periods of 12 to 36 months. Assurance-type warranties are not considered a performance obligation. A provision is recorded for estimated product warranty claim costs and is included in cost of sales. Estimates are based on analysis of product warranty claims and other known factors. Actual product warranty claim costs are inherently uncertain and thus may differ from our estimates. If actual product warranty claims costs are greater or lower than the reserves that we have established, we will record an increase or reduction to cost of sales in the period in which we make such determination. We present all non-income government-assessed taxes (sales, use and value added taxes) collected from our customers and remitted to governmental agencies on a net basis (excluded from revenue) in our financial statements. The government-assessed taxes are recorded in our consolidated balance sheets until they are remitted to the government agency. See Notes 4 and 13 for further information concerning revenue, contract assets, contract liabilities and other sales-related matters. Income Taxes We provide for income taxes utilizing the asset and liability approach of accounting for income taxes. Under this approach, deferred taxes represent the future tax consequences expected to occur when the reported amounts of assets and liabilities are recovered or paid. Deferred taxes are presented net as non-current by jurisdiction. The provision for income taxes generally represents income taxes paid or payable for the current year plus the change in deferred taxes during the year. Deferred taxes result from the differences between the financial and tax bases of our assets and liabilities and are adjusted for changes in tax rates and tax laws when changes are enacted. Valuation allowances are recorded to reduce deferred tax assets when a judgment is made that is considered more likely than not that a tax benefit will not be realized. A decision to record a valuation allowance results in an increase in income tax expense or a decrease in income tax benefit. If the valuation allowance is released in a future period, income tax expense will be reduced accordingly. The calculation of tax liabilities involves dealing with uncertainties in the application of complex global tax regulations. The impact of an uncertain income tax position is recognized at the largest amount that is more likely than not to be sustained upon audit by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. If the estimate of tax liabilities proves to be less than the ultimate assessment, a further charge to expense would result. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not, on a jurisdiction-by-jurisdiction basis, that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We continue to assess the need for a valuation allowance on deferred tax assets by evaluating both positive and negative evidence that may exist. 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. shareholder to tax on Global Intangible Low-Taxed Income ("GILTI") earned by certain foreign subsidiaries. We have elected to account for GILTI in the year the tax is incurred as a period expense. See Note 10 for further information concerning income taxes. 51 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 Advertising costs are expensed as incurred. Advertising expense totaled $ 0.6 million, $ 0.7 million and $ 0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively. Shipping and Handling Fees and Costs We include shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with in-bound freight or amounts reimbursable by customers are recorded in cost of sales. All other shipping and handling activities performed prior to or after the customer obtains control of a good are treated as part of fulfilling the promise of transferring the good to the customer and are including in selling, general and administrative ("SG&A") expenses. These costs recorded in SG&A expenses totaled $ 7.3 million, $ 8.6 million and $ 8.3 million for the years ended December 31, 2025, 2024 and 2023, respectively. Stock-Based Compensation We recognize the grant date fair value of stock-based compensation awards as expense in proportion to vesting during the derived service period, which ranges from one to three years . Forfeitures of stock-based awards are accounted for as they occur. Upon the vesting of restricted stock awards, the vesting of performance stock awards or exercise of stock options, newly issued shares of our common stock are issued. Our stock-based compensation awards are made at the discretion of the Compensation Committee and are not timed or coordinated with the release of material, non-public information. We determine the fair value of restricted stock awards with a service condition utilizing the average of the high and low trading prices of our common shares on the date they were granted. The fair value of performance stock awards with a service and market condition is determined utilizing a Monte Carlo simulation model as of the grant date. The assumptions utilized in a Monte Carlo simulation model include the risk-free interest rate, expected volatility, term of the award and dividend yield. The risk-free interest rate over the expected term is equal to the prevailing U.S. Treasury note rate over the same period. Expected volatility is determined utilizing historical volatility. The dividend yield is assumed to be zero since we have not historically declared dividends and do not have any plans to declare dividends in the future. The fair value of stock options awards is determined utilizing the Black-Scholes option pricing model. The assumptions utilized in the Black-Scholes model include the risk-free interest rate, expected volatility, expected life in years and dividend yield. The risk-free interest rate over the expected term is equal to the prevailing U.S. Treasury note rate over the same period. Expected volatility is determined utilizing historical volatility over a period of time equal to the expected life of the stock option. Expected life is computed utilizing historical exercise patterns and post-vesting behavior. The dividend yield is assumed to be zero since we have not historically declared dividends and do not have any plans to declare dividends in the future. See Note 15 for further information regarding stock-based compensation. Foreign Currency Translation and Foreign Currency Transactions We use the U.S. Dollar as our functional currency for financial reporting purposes. The functional currency for most of our foreign subsidiaries is their local currency. 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 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. The portions of intercompany accounts receivable and accounts payable that are intended for settlement are translated at exchange rates in effect at the balance sheet date. Our intercompany foreign investments and long-term debt that are not intended for settlement are translated using historical exchange rates. 52 Table of Contents 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. See Note 16 for further information concerning transaction gains and losses. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed by dividing net income by the weighted average number of common shares and dilutive potential common shares, including the dilutive effect of restricted stock, performance stock, stock options and common stock warrants, outstanding during the period. Dilutive potential common shares for all periods presented are computed utilizing the treasury stock method; however, dilutive potential common shares are excluded where their inclusion would be anti-dilutive. See Note 17 for further information concerning our earnings (loss) per share. Financial Instruments Our financial instruments consist primarily of cash and cash equivalents, term deposit, accounts receivable, accounts payable, accrued liabilities, debt and derivatives. The carrying value of our financial instruments, excluding derivatives, approximates fair value as a result of their short maturities. Our derivatives are carried at fair value. See Notes 3, 4, 9, 11, 12 and 18 for further information concerning our financial instruments. 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. We attempt to mitigate our exposure to liquidity, credit and other relevant risks by placing our cash, cash equivalents and term deposit with financial institutions we believe are high quality. These financial institutions are located in many different geographic regions. As part of our cash and risk management processes, we perform periodic evaluations of the relative credit standing of our financial institutions. We have not sustained credit losses from instruments held at financial institutions. See Note 3 for further information concerning cash, cash equivalents and term deposit. Allowance for Credit Losses We maintain an allowance for credit losses for estimated losses on our trade receivables, resulting from the inability of our customers to make payments for products sold or services rendered. The allowance for credit losses is based on a variety of factors, including credit reviews, historical experience, length of time receivables are past due, current economic trends and changes in customer payment behavior. We also record specific provisions for individual accounts when we become aware of a customer's inability to meet its financial obligations to us, such as in the case of bankruptcy filings or deterioration in the customer's operating results or financial position. If circumstances related to a customer change, our estimates of the recoverability of the receivables would be further adjusted. See Note 4 for further information concerning our allowance for credit losses. Inventories Inventories consist of remote controls, thermostats, wireless sensors and AV accessories, as well as the related component parts and raw materials. Inventoriable costs include materials, labor, freight-in and manufacturing overhead related to the purchase and production of inventories. We value our inventories at the lower of cost or net realizable value. 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. See Note 5 for further information concerning our inventories and suppliers. Product innovations and technological advances may shorten a given product's life cycle. We continually monitor our inventories to identify any excess or obsolete items on hand. We write down our inventories for estimated excess and obsolescence in an amount equal to the difference between the cost of the inventories and estimated net realizable value. These estimates are based upon management's judgment about future demand and market conditions. 53 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Property, Plant, and Equipment Property, plant, and equipment are recorded at cost. The cost of property, plant, and equipment includes the purchase price of the asset and all expenditures necessary to prepare the asset for its intended use. We capitalize additions and improvements and expense maintenance and repairs as incurred. We capitalize certain internal and external costs incurred to acquire or create internal use software, principally related to software coding, designing system interfaces and installation and testing of the software. For financial reporting purposes, depreciation is calculated using the straight-line method over the estimated useful lives of the respective assets. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the appropriate accounts and any gain or loss is included as a component of depreciation expense. Estimated useful lives are as follows: Buildings 25 years Tooling and equipment 2 - 8 years Computer equipment 3 - 5 years Software 3 - 7 years Furniture and fixtures 5 - 8 years Leasehold and building improvements Lesser of lease term or useful life (approximately 3 - 8 years) See Note 6 for further information concerning our property, plant, and equipment. Goodwill We record the excess purchase price of net tangible and intangible assets acquired over their estimated fair value as goodwill. We evaluate the carrying value of goodwill on December 31 of each year and between annual evaluations if events occur or circumstances change that may reduce the fair value of the reporting unit below its carrying amount. Such circumstances may include, but are not limited to: (1) a significant adverse change in legal factors or in business climate, (2) a decline in macroeconomic conditions, (3) a significant decline in our financial performance or (4) a significant decline in the price of our common stock for a sustained period of time. We perform our annual impairment test, and any required interim tests, using the optional qualitative assessment, weighing the relative impact of factors that are specific to our single reporting unit including our market capitalization compared to the carrying value of our stockholders' equity, as well as industry and macroeconomic factors. Based on the qualitative assessment performed, we consider the aggregation of the relevant factors, and conclude whether it is more likely than not that the fair value of our single reporting unit is less than the carrying value. If we conclude that it is more likely than not that the fair value of our single reporting unit is less than the carrying value, or if we decide not to elect the optional qualitative assessment, we perform a quantitative impairment test, using cash flow projections, discounted by our weighted-average cost of capital. In addition to any quantitative impairment analysis, we also consider the implied control premium compared to our market capitalization. See Note 7 for further information concerning goodwill and goodwill impairment. Intangible Assets Intangible assets consist of capitalized software development costs, customer relationships, developed and core technologies, patents and trademarks and trade names. Capitalized amounts related to patents represent external legal costs for the application, maintenance and extension of the useful life of patents. Intangible assets are amortized using the straight-line method over their estimated period of benefit. 54 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Estimated useful lives are as follows: Capitalized software development 2 years Customer relationships 6 - 10 years Developed and core technology 6 - 14 years Patents 10 years Trademarks and trade names 6 - 8 years See Note 7 for further information concerning intangible assets. Long-Lived and Intangible Assets Impairment We assess the impairment of long-lived and intangible assets whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors considered important which may trigger an impairment review may include the following, but are not limited to: (1) significant underperformance relative to historical or projected future operating results; (2) significant changes in the manner or use of the assets, their physical condition or strategy for the overall business; (3) significant negative industry or economic trends; (4) a current expectation that a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life; or (5) a significant decline in our stock price for a sustained period. We conduct an impairment review when we determine that the carrying value of a long-lived or intangible asset may not be recoverable based upon the existence of one or more of the above indicators of impairment. The asset is impaired if its carrying value exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. An impairment loss is the amount by which the carrying value of an asset exceeds its fair value. We estimate fair value utilizing the projected discounted cash flow method and a discount rate determined by our management to be commensurate with the risk inherent in our current business model. See Note 6 for further information concerning long-lived assets. See Note 7 for further information concerning intangible assets. Leases We determine if an arrangement is a lease at inception and determine the classification of the lease, as either operating or finance, at commencement. Operating leases are included in operating lease right-of-use ("ROU") assets, other accrued liabilities and long-term operating lease obligations on our consolidated balance sheets. We presently do not have any finance leases. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date of the lease based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at the commencement date, including the lease term, in determining the present value of lease payments. Operating lease ROU assets also factor in any lease payments made, initial direct costs and lease incentives received. 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 one extension at the then current market rate. Lease expense for lease payments is recognized on a straight-line basis over the lease term. 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. If applicable, we combine lease and non-lease components, which primarily relate to ancillary expenses associated with real estate leases such as common area maintenance charges and management fees. See Note 8 for further information concerning our leases. 55 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Derivatives 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. We periodically enter into foreign currency exchange contracts with terms normally lasting less than nine months , to protect against the adverse effects that exchange-rate fluctuations may have on our foreign currency-denominated receivables, payables, cash flows and reported income. We do not enter into financial instruments for speculation or trading purposes. The derivatives we enter into have not qualified for hedge accounting. The gains and losses on both the derivatives and the foreign currency-denominated balances are recorded as foreign exchange transaction gains or losses and are classified in other income (expense), net. The gains and losses on the derivatives are reflected in cash provided by (used for) operating activities in our consolidated statements of cash flows. Derivatives are recorded on the balance sheet at fair value. The estimated fair value of derivative financial instruments represents the amount required to enter into similar offsetting contracts with similar remaining maturities based on quoted market prices. See Note 18 for further information concerning derivatives. Fair-Value Measurements We measure fair value using the framework established by the Financial Accounting Standards Board ("FASB") in ASC Topic 820 for fair value measurements and disclosures. This framework requires fair value to be determined based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants. The valuation techniques are based upon observable and unobservable inputs. Observable or market inputs reflect market data obtained from independent sources. Unobservable inputs require management to make certain assumptions and judgments based on the best information available. Observable inputs are the preferred data source. These two types of inputs result in the following fair value hierarchy: Level 1: Quoted prices (unadjusted) for identical instruments in active markets. Level 2: Quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Prices or valuations that require management inputs that are both significant to the fair value measurement and unobservable. Business Combinations We allocate the purchase price of acquired businesses to the tangible and intangible assets and the liabilities assumed based on their estimated fair values on the acquisition date. The excess of the purchase price over the fair value of net assets acquired is recorded as goodwill. We engage independent third-party appraisal firms to assist us in determining the fair values of assets acquired and liabilities assumed. Such valuations require management to make significant fair value estimates and assumptions, especially with respect to intangible assets and contingent consideration. Management estimates the fair value of certain intangible assets and contingent consideration by utilizing the following (but not limited to): • future cash flow from customer contracts, customer lists, distribution agreements, acquired developed technologies, trademarks, trade names and patents; • expected costs to complete development of in-process technology into commercially viable products and cash flows from the products once they are completed; • 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; and • 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. 56 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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. We re-measure this liability at each reporting period and record changes in the fair value within operating expenses. Increases or decreases in the fair value of the contingent consideration liability can result from changes in discount periods and rates, as well as changes in the timing and amount of earnings estimates or in the timing or likelihood of achieving earnings-based milestones. Contingent consideration is recorded in other accrued liabilities and long-term contingent consideration in our consolidated balance sheets. Recently Adopted Accounting Pronouncements 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): Disaggregation of Income Statement Expenses." This guidance requires additional disclosures by disaggregating the costs and expense line items that are presented on the face of the consolidated statements of operations. This guidance is effective for annual periods beginning in 2027 and interim periods beginning in 2028, with early adoption permitted. This guidance requires a public company to apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. We are currently evaluating the impact of adopting this guidance on our 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 and Cash Equivalents Cash and cash equivalents were held in the following geographic regions: 57 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 December 31, (In thousands) 2025 2024 North America $ 1,556 $ 1,986 People's Republic of China ("PRC") 8,980 10,117 Asia (excluding the PRC) 4,579 2,343 Europe 9,980 7,035 South America 7,211 5,302 Total cash and cash equivalents $ 32,306 $ 26,783 Note 4 — Revenue and Accounts Receivable, Net Revenue Details The pattern of revenue recognition was as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Goods and services transferred at a point in time $ 294,337 $ 321,410 $ 324,433 Goods and services transferred over time 73,951 73,469 96,024 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: Year Ended December 31, (In thousands) 2025 2024 2023 United States $ 110,564 $ 106,718 $ 129,528 Asia (excluding the PRC) 81,186 78,225 85,347 Europe 98,108 90,622 90,221 Latin America 24,135 34,433 28,870 PRC 32,463 60,338 63,334 Other 21,832 24,543 23,157 Total net sales $ 368,288 $ 394,879 $ 420,457 Specific identification of the customer billing location was the basis used for attributing revenues from external customers to geographic areas. 58 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Accounts Receivable, Net Accounts receivable, net were as follows: December 31, (In thousands) 2025 2024 Trade receivables, gross $ 71,410 $ 93,773 Allowance for credit losses ( 723 ) ( 1,863 ) Allowance for sales returns ( 283 ) ( 383 ) Trade receivables, net 70,404 91,527 Other (1) 8,916 22,655 Accounts receivable, net (2) $ 79,320 $ 114,182 (1) Other accounts receivable is primarily comprised of supplier, supplier rebate and interest receivables. (2) Accounts receivable, net at December 31, 2023 was $ 112.6 million. Allowance for Credit Losses Changes in the allowance for credit losses were as follows: (In thousands) Year Ended December 31, 2025 2024 2023 Balance at beginning of period $ 1,863 $ 815 $ 957 Additions (reductions) to costs and expenses 454 1,081 70 Cash receipts ( 1,063 ) — — Write-offs/Foreign exchange effects ( 531 ) ( 33 ) ( 212 ) Balance at end of period $ 723 $ 1,863 $ 815 Contract Assets Contract assets were $ 8.1 million, $ 10.3 million, and $ 4.2 million at December 31, 2025, 2024 and 2023, respectively. The change in balances between periods is due to the fluctuation of custom product inventory balances for which we have an enforceable right to payment for performance completed to date. Contract Liabilities We have current and non-current contract liability balances primarily consist of cash received in advance of providing our cloud-based software services. Contract liabilities are included within other accrued liabilities and other long-term liabilities in our consolidated balance sheets. Changes in the carrying amount of contract liabilities were as follows: (In thousands) Year Ended December 31, 2025 2024 Balance at beginning of period $ 3,236 $ 3,501 Payments received 4,270 5,524 Revenue recognized ( 4,640 ) ( 5,736 ) Foreign exchange effects 13 ( 53 ) Balance at end of period $ 2,879 $ 3,236 59 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Significant Customers Net sales to the following customers totaled more than 10% of our net sales: Year Ended December 31, 2025 2024 2023 $ (thousands) % of Net Sales $ (thousands) % of Net Sales $ (thousands) % of Net Sales Daikin Industries Ltd. $ 67,511 18.3 % $ 52,421 13.3 % $ 58,843 14.0 % Comcast Corporation $ 45,431 12.3 % (1) (1) (1) (1) (1) Sales associated with this customer did not total more than 10% of our net sales for the indicated period. At December 31, 2025, Daikin Industries Ltd. represented 12.3 % of the Company's consolidated accounts receivable balance. Note 5 — Inventories Inventories were as follows: December 31, (In thousands) 2025 2024 Raw materials $ 18,678 $ 21,245 Components 9,923 10,820 Work in process 1,241 1,896 Finished goods 47,951 45,394 Inventories $ 77,793 $ 79,355 Significant Supplier We purchase integrated circuits, components and finished goods from multiple sources. Purchases from the following supplier totaled 10% of our total inventory purchases: Year Ended December 31, 2025 2024 2023 $ (thousands) % of Total Inventory Purchases $ (thousands) % of Total Inventory Purchases $ (thousands) % of Total Inventory Purchases Qorvo International Pte Ltd. $ 17,908 10.2 % (1) (1) (1) (1) (1) Purchases associated with this supplier did not total more than 10% of our total inventory purchases for the indicated period. 60 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Note 6 — Property, Plant, and Equipment, Net Property, plant, and equipment, net ("PP&E") were as follows: December 31, (In thousands) 2025 2024 Buildings $ 18,019 $ 17,273 Computer equipment 9,381 9,159 Furniture and fixtures 2,623 2,501 Leasehold and building improvements 28,674 29,404 Machinery and equipment 73,906 75,637 Software 25,075 25,411 Tooling 31,824 30,314 189,502 189,699 Accumulated depreciation ( 163,683 ) ( 156,804 ) 25,819 32,895 Construction in progress 1,781 1,312 Total property, plant, and equipment, net $ 27,600 $ 34,207 Depreciation expense was $ 9.1 million, $ 12.9 million and $ 18.0 million for the years ended December 31, 2025, 2024 and 2023, respectively. 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. As a result of these decisions, we recorded impairment charges of $ 7.7 million, of which $ 7.6 million and $ 0.1 million was recorded in cost of sales and SG&A expenses, respectively. In addition, during the year ended December 31, 2023, we recorded an additional $ 0.2 million of impairment charges , recorded in cost of sales, relating to the underutilization of property, plant and equipment in our other PRC-based factories. 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: December 31, (In thousands) 2025 2024 Leasehold and building improvements $ 45 $ 102 Machinery and equipment 775 483 Software 10 60 Tooling 752 638 Other 199 29 Total construction in progress $ 1,781 $ 1,312 We expect that most of the assets under construction will be placed into service during the first six months of 2026. We will begin to depreciate the cost of these assets under construction once they are placed into service. 61 Table of Contents 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: December 31, (In thousands) 2025 2024 United States $ 5,637 $ 9,683 PRC 19,935 22,139 Vietnam 7,630 8,520 Mexico 698 5,164 All other countries 3,903 3,023 Total long-lived tangible assets $ 37,803 $ 48,529 Note 7 — Goodwill and Intangible Assets, Net Goodwill During the year ended December 31, 2023, a decline in our financial performance, overall negative trend in the video service provider channel and an uncertain economic environment contributed to a significant decline in our market capitalization. We considered this to be an impairment trigger. We, therefore, performed a quantitative valuation analysis under an income approach to estimate our reporting unit's fair value. The income approach used projections of estimated operating results and cash flows that were discounted using a discount rate based on the weighted-average cost of capital. The main assumptions supporting the cash flow projections include, but are not limited to, revenue growth, margins, discount rate, and terminal growth rate. The financial projections reflect our best estimate of economic and market conditions over the projected period, including forecasted revenue growth, margins, capital expenditures, depreciation and amortization. In addition to our valuation analysis under an income approach, we also considered the implied control premium compared to our market capitalization. We determined that the implied control premium over our market capitalization to be substantial; therefore, we recorded an impairment charge of $ 49.1 million during the year ended December 31, 2023. Intangible Assets, Net The components of intangible assets, net were as follows: December 31, 2025 2024 (In thousands) Gross (1) Accumulated Amortization (1) Net (1) Gross (1) Accumulated Amortization (1) Net (1) Capitalized software development costs $ 1,675 $ ( 677 ) $ 998 $ 2,575 $ ( 1,150 ) $ 1,425 Customer relationships 6,340 ( 5,250 ) 1,090 6,340 ( 4,526 ) 1,814 Developed and core technology 740 ( 493 ) 247 740 ( 398 ) 342 Patents 35,171 ( 15,557 ) 19,614 34,758 ( 14,339 ) 20,419 Trademarks and trade names 50 ( 31 ) 19 450 ( 412 ) 38 Total intangible assets, net $ 43,976 $ ( 22,008 ) $ 21,968 $ 44,863 $ ( 20,825 ) $ 24,038 (1) This table excludes the gross value of fully amortized intangible assets totaling $ 52.5 million and $ 49.3 million on December 31, 2025 and 2024, respectively. Amortization expense is recorded in SG&A expenses, except amortization expense related to capitalized software development costs, which is recorded in cost of sales. Amortization expense by statement of operations caption was as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Cost of sales $ 650 $ 729 $ 443 Selling, general and administrative expenses 4,412 4,438 4,440 Total amortization expense $ 5,062 $ 5,167 $ 4,883 62 Table of Contents 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: (In thousands) 2026 $ 4,913 2027 4,176 2028 3,122 2029 2,972 2030 2,371 Thereafter 4,414 Total $ 21,968 The remaining weighted average amortization period of our intangible assets at December 31, 2025 is 6.1 years. Note 8 — Leases We have entered into various operating lease agreements for automobiles, offices and manufacturing facilities throughout the world. At December 31, 2025, our operating leases had remaining lease terms of up to 35 years, including any reasonably probable extensions. Lease balances within our consolidated balance sheets were as follows: (In thousands) December 31, 2025 December 31, 2024 Assets: Operating lease right-of-use assets $ 10,203 $ 14,322 Liabilities: Other accrued liabilities $ 3,213 $ 3,553 Long-term operating lease obligations 6,193 9,232 Total lease liabilities $ 9,406 $ 12,785 Operating lease expense, operating lease cash flows and supplemental cash flow information were as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Cost of sales $ 1,312 $ 2,390 $ 3,012 Selling, general and administrative expenses 5,954 5,017 4,378 Total operating lease expense $ 7,266 $ 7,407 $ 7,390 Operating lease expenses from variable and short-term lease costs $ 1,401 $ 1,146 $ 1,033 Operating cash outflows from operating leases $ 6,002 $ 8,152 $ 7,736 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. The Mexico 63 Table of Contents 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: Year Ended December 31, 2025 2024 Weighted average lease liability term (in years) 4.3 4.6 Weighted average discount rate 5.80 % 5.45 % The following table reconciles the undiscounted cash flows for each of the first five years and thereafter to the operating lease liabilities recognized in our consolidated balance sheet at December 31, 2025. The reconciliation excludes short-term leases that are not recorded on the balance sheet. (In thousands) 2026 $ 3,519 2027 2,958 2028 1,201 2029 584 2030 487 Thereafter 1,661 Total lease payments 10,410 Less: imputed interest ( 1,004 ) Total lease liabilities $ 9,406 At December 31, 2025, we did not have any operating leases that had not yet commenced. Prepaid Land Lease We operate one factory within the PRC on which the land is leased from the government as of December 31, 2025. This land lease was prepaid to the PRC government at the time our subsidiary occupied the land. We have obtained a land-use right certificate for the land pertaining to this factory. The factory is located in the city of Yangzhou in the Jiangsu province. The remaining net book value of this operating lease ROU asset was $ 2.1 million at December 31, 2025, and is being amortized on a straight-line basis over the remaining term of approximately 33 years. 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. 64 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Note 9 — Lines of Credit U.S. Line of Credit 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 September 30, 2027. The U.S. Credit Line may be used for working capital and other general corporate purposes including acquisitions, share repurchases and capital expenditures. The U.S. 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 $ 48.5 million. At February 24, 2026, the U.S. 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 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. Credit Line are secured by substantially all of our U.S. personal property and tangible and intangible assets, as well as a guaranty of the U.S. Credit Line by our wholly-owned subsidiary, Universal Electronics BV. 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. 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. Bank. 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. Credit Line. At December 31, 2025, our remaining availability under the U.S. Credit Line was $ 42.5 million. Our total interest expense on borrowings under the U.S. Credit Line was $ 1.6 million, $ 4.2 million and $ 6.0 million during the years ended December 31, 2025, 2024 and 2023, respectively. Our total facility fee expense under the U.S. Credit Line was $ 0.2 million during the year ended December 31, 2025. China Line of Credit In August 2024, our subsidiary, Gemstar Technology (Yangzhou) Co. Ltd. ("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. The China Credit Line may be used for working capital purposes. 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, 2025 or December 31, 2024. All obligations under the China Credit Line are secured by GTY's buildings and land use rights. 65 Table of Contents 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, 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. Our covenants are based on a debt to asset ratio and a dividends paid to net income ratio. We were in compliance with the covenants and conditions of the Line of Credit Agreement at and during the year ended December 31, 2025. At December 31, 2025, we had RMB 130.0 million (approximately $ 18.6 million) outstanding under the China Credit Line. 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 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 In 2025, 2024 and 2023, pre-tax income (loss) was attributed to the following jurisdictions: Year Ended December 31, (In thousands) 2025 2024 2023 Domestic operations $ ( 47,871 ) $ ( 53,708 ) $ ( 95,876 ) Foreign operations 35,911 35,110 3,622 Total pre-tax income (loss) $ ( 11,960 ) $ ( 18,598 ) $ ( 92,254 ) The provision for income taxes charged to operations was as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Current tax expense: U.S. federal $ 90 $ 37 $ 23 State and local 35 45 44 Foreign 6,012 5,068 7,193 Total current 6,137 5,150 7,260 Deferred tax (benefit) expense: U.S. federal — 269 ( 813 ) State and local — — ( 126 ) Foreign 502 12 ( 337 ) Total deferred 502 281 ( 1,276 ) 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 Brazil Statutory tax rate difference between Brazil & the United States 301 ( 2.5 ) % 66 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 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 ) % China 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 % Hong Kong 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 ) % Korea Effect of cross-border tax laws: Withholding taxes 1,227 ( 10.3 ) % Other adjustments 21 ( 0.2 ) % Mexico 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 ) % Tax credits: ( 571 ) 4.8 % Changes in valuation allowance: 2,606 ( 21.8 ) % Non-taxable or nondeductible items: Stock-based compensation 872 ( 7.3 ) % Provision to return 412 ( 3.4 ) % Miscellaneous other items 46 ( 0.4 ) % 67 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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, for the years ended December 31, 2024 and December 31, 2023, as a result of the following: Year Ended December 31, (In thousands) 2024 Percent 2023 Percent Tax provision (benefit) at statutory U.S. rate $ ( 3,906 ) 21.0 % $ ( 19,373 ) 21.0 % Increase (decrease) in tax provision (benefit) resulting from: Distribution of previously taxed foreign earnings and profits — — ( 9,450 ) 10.2 Federal research and development credits ( 816 ) 4.3 ( 1,043 ) 1.1 Foreign participation exemption — — ( 12,571 ) 13.6 Foreign permanent benefit ( 650 ) 3.5 % ( 1,426 ) 1.6 Foreign tax rate differential ( 295 ) 1.6 21,794 ( 23.6 ) Foreign undistributed earnings, net of credits 6,231 ( 33.2 ) 7,198 ( 7.8 ) Goodwill impairment — — 5,383 ( 5.8 ) Non-deductible items 635 ( 3.4 ) 594 ( 0.6 ) Non-territorial income ( 2,088 ) 11.1 ( 945 ) 1.0 Provision to return ( 350 ) 1.9 ( 19 ) — State and local taxes, net ( 992 ) 5.3 ( 2,629 ) 2.9 Stock-based compensation 2,045 ( 10.9 ) 980 ( 1.1 ) Tax rate change ( 2,286 ) 12.2 1,648 ( 1.8 ) Valuation allowance 5,943 ( 31.8 ) 15,090 ( 16.4 ) Withholding tax 1,521 ( 8.1 ) 1,229 ( 1.3 ) Other 439 ( 2.2 ) ( 476 ) 0.5 Tax provision $ 5,431 ( 28.7 ) % $ 5,984 ( 6.5 ) % Net deferred tax assets were comprised of the following: 68 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 December 31, (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 Less: Valuation allowance ( 67,359 ) ( 65,629 ) Net deferred tax assets $ 3,989 $ 4,494 At December 31, 2025, we had U.S. federal and state Research and Development ("R&D") income tax credit carryforwards of approximately $ 6.5 million and $ 18.4 million, respectively. The federal R&D income tax credits begin expiring in 2039. The state R&D income tax credits do not have an expiration date. At December 31, 2025, we had U.S. federal, state and local, and foreign net operating loss carryforwards of approximately $ 38.7 million, $ 108.1 million and $ 1.3 million, respectively. The U.S. federal net operating loss carryforwards do not have an expiration date. The state and local and foreign net operating loss carryforwards begin to expire in 2025 and 2028, respectively. At December 31, 2025, we assessed the realizability of the Company's deferred tax assets by considering whether it is more likely than not some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. We considered the scheduled reversal of deferred tax liabilities, tax planning strategies and projected future taxable income in making this assessment. Due to cumulative operating losses for the three years ended December 31, 2025, we have recorded a valuation allowance against our U.S. 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. 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. We do not believe that we have experienced such an ownership change and do not expect our net operating losses and tax credits to be subject to the limitations under Section 382. 69 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Uncertain Tax Positions 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. Interest and penalties were immaterial for the year ended December 31, 2025, 2024 and 2023. Interest and penalties are included in the unrecognized tax benefits. Changes to our gross unrecognized tax benefits were as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Balance at beginning of period $ 3,637 $ 3,315 $ 3,150 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 have classified uncertain tax positions as non-current income tax liabilities unless expected to be paid within one year. We file income tax returns in the U.S. and in various state and foreign jurisdictions. As of December 31, 2025, the open statutes of limitations for our significant tax jurisdictions are as follows: U.S. federal for 2022 through 2024, state and local for 2021 through 2024, and non-U.S. 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 ) Brazil 466 China 237 Hong Kong 1,223 India 302 Mexico 275 Vietnam 260 Other 187 Total income taxes paid, net $ 2,624 Indefinite Reinvestment Assertion Beginning in 2018, the Tax Act generally provides a 100% federal deduction for dividends received from foreign subsidiaries. Nevertheless, companies must still apply the guidance of ASC Topic 740 to account for the tax consequences of outside basis differences and other tax impacts of their investments in foreign subsidiaries, including potential foreign withholding taxes on distributions. For the years ended December 31, 2025, 2024 and 2023, we recorded a deferred tax liability of $ 1.9 million, $ 0.4 million and $ 0.4 million, respectively, relating to state tax and foreign tax withholding liabilities on future distributions. 70 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 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 The components of accrued compensation were as follows: December 31, (In thousands) 2025 2024 Accrued bonus $ 1,863 $ 2,386 Accrued commission 577 1,545 Accrued salary/wages (1) 4,606 4,676 Accrued social insurance (2) 7,065 6,718 Accrued vacation/holiday 1,175 3,036 Other accrued compensation 2,210 2,566 Total accrued compensation $ 17,496 $ 20,927 (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) PRC employers are required by law to remit the applicable social insurance payments to their local government. Social insurance is comprised of various components such as pension, medical insurance, job injury insurance, unemployment insurance, and a housing assistance fund, and is administered in a manner similar to social security in the United States. This amount represents our estimate of the amounts due to the PRC government for social insurance on December 31, 2025 and 2024. 71 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Note 12 — Other Accrued Liabilities The components of other accrued liabilities were as follows: December 31, (In thousands) 2025 2024 Contract liabilities $ 2,158 $ 2,521 Duties 2,966 543 Expense associated with fulfilled performance obligations 817 678 Freight and handling fees 2,754 2,275 Interest 16 10 Legal judgment (1) 43 4,162 Operating lease obligations 3,213 3,553 Product warranty claim costs 11 35 Professional fees 1,173 1,128 Sales and value added taxes 3,946 2,684 Other (2) 3,037 3,419 Total other accrued liabilities $ 20,134 $ 21,008 (1) This amount relates to the judgment of a lawsuit with an employment agency in the PRC. See Note 13 for further information related to this matter. (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. Note 13 — Commitments and Contingencies Indemnifications We indemnify our directors and officers to the maximum extent permitted under the laws of the state of Delaware and we have entered into indemnification agreements with each of our directors and executive officers. In addition, we insure our individual directors and officers against certain claims and attorney's fees and related expenses incurred in connection with the defense of such claims. The amounts and types of coverage may vary from period to period as dictated by market conditions. Management is not aware of any matters that require material indemnification of its officers or directors. Fair Price Provisions and Other Anti-Takeover Measures Our Restated Certificate of Incorporation, as amended, contains certain provisions restricting business combinations with interested stockholders under certain circumstances and imposing higher voting requirements for the approval of certain transactions ("fair price" provisions). Any of these provisions may delay or prevent a change in control. The "fair price" provisions require that holders of at least two-thirds of our outstanding shares of voting stock approve certain business combinations and significant transactions with interested stockholders. Purchase Commitments We have entered into various inventory and property, plant and equipment related purchase agreements with suppliers. Certain of these agreements have provisions for a binding forecast (inventory) or non-cancellable purchase orders (inventory and PP&E). As of December 31, 2025, we had non-cancellable purchase commitments with suppliers for inventory and PP&E of $ 4.3 million and $ 0.7 million, respectively. These amounts are expected to be paid within the next twelve months. 72 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Product Warranties Changes in the liability for product warranty claim costs were as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Balance at beginning of period $ 35 $ 522 $ 522 Additions (reductions) to costs and expenses 11 ( 305 ) — Settlements (in cash or in kind) ( 35 ) ( 182 ) — Foreign currency translation gain (loss) — — — Balance at end of period $ 11 $ 35 $ 522 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. Asia 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. 73 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Mexico 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, 2025, December 31, 2024, and December 31, 2023 are as follows: Restructuring Costs (In thousands) Total Severance Expense Other Exit Expense Balance at December 31, 2022 $ — $ — $ — Restructuring charges $ 4,015 $ 3,425 $ 590 Cash payments $ ( 3,553 ) $ ( 3,278 ) $ ( 275 ) Balance at December 31, 2023 $ 462 $ 147 $ 315 Restructuring charges 3,585 2,008 1,577 Cash payments ( 3,036 ) ( 1,288 ) ( 1,748 ) 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 Total estimated expense to be incurred after December 31, 2025 $ — $ — $ — Litigation Roku Matters UEI and Roku Inc. ("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 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 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. 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 74 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 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. Ltd. ("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 There are no other material pending legal proceedings to which we or any of our subsidiaries is a party or of which our respective property is the subject. However, as is typical in our industry and to the nature and kind of business in which we are engaged, from time to time, various claims, charges and litigation are asserted or commenced by third parties against us or by us against third parties arising from or related to product liability, infringement of patent or other intellectual property rights, breach of warranty, contractual relations, or employee relations. The amounts claimed may be substantial, but may not bear any reasonable relationship to the merits of the claims or the extent of any real risk of court awards assessed against us or in our favor. 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 75 Table of Contents 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. We maintain directors' and officers' liability insurance which insures our individual directors and officers against certain claims, as well as attorney's fees and related expenses incurred in connection with the defense of such claims. Defined Benefit Plan Our subsidiary in India maintains a defined benefit pension plan ("India Plan") for local employees, which is consistent with local statutes and practices. The pension plan was adequately funded on December 31, 2025 based on its latest actuarial report. The India Plan has an independent external manager that advises us of the appropriate funding contribution requirements to which we comply. At December 31, 2025, approximately 52 percent of our India subsidiary employees had qualified for eligibility. An individual must be employed by our India subsidiary for a minimum of five years before becoming eligible. 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, 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 (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. Repurchased shares of our common stock were as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Open market shares repurchased 250 121 100 Stock-based compensation related shares repurchased 107 85 65 Privately negotiated repurchase 515 — — Total shares repurchased 872 206 165 Cost of open market shares repurchased $ 781 $ 1,109 $ 864 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 deem appropriate. 76 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Note 15 — Stock-Based Compensation Stock-based compensation expense for each employee and director is presented in the same statement of operations caption as their cash compensation. Stock-based compensation expense by statement of operations caption and the related income tax benefit were as follows: Year Ended December 31, (In thousands) 2025 2024 2023 Cost of sales $ 55 $ 106 $ 125 Research and development expenses 567 769 1,098 Selling, general and administrative expenses: Employees 3,402 5,379 6,980 Outside directors 1,074 446 606 Total employee and director stock-based compensation expense $ 5,098 $ 6,700 $ 8,809 Income tax benefit $ 767 $ 1,026 $ 1,369 Restricted Stock Non-vested restricted stock award activity was as follows: 2025 2024 2023 Shares (in 000's) Weighted-Average Grant Date Fair Value Shares (in 000's) Weighted-Average Grant Date Fair Value Shares (in 000's) Weighted-Average Grant Date Fair Value Non-vested at beginning of the year 595 $ 13.07 486 $ 21.66 376 $ 36.82 Granted 367 6.73 391 10.55 340 14.15 Vested ( 362 ) 14.48 ( 264 ) 24.85 ( 211 ) 35.77 Forfeited ( 106 ) 9.04 ( 18 ) 17.40 ( 19 ) 17.72 Non-vested at end of the year 494 $ 8.25 595 $ 13.07 486 $ 21.66 As of December 31, 2025, we expect to recognize $ 2.7 million of total unrecognized pre-tax stock-based compensation expense related to non-vested restricted stock awards over a weighted-average life of 1.5 years. 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: 2025 2024 Shares (in 000s) Weighted-Average Grant Date Fair Value Shares (in 000s) Weighted-Average Grant Date Fair Value 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 end of the year 744 $ 2.16 116 $ 4.72 77 Table of Contents 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: Year Ended December 31, 2025 2024 Weighted average fair value of grants 1.87 $ 4.72 Risk-free interest rate 3.71 % 4.08 % Expected volatility 55.86 % 57.00 % Expected life in years 2.86 2.73 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. Stock Options Stock option activity was as follows: 2025 2024 2023 Number of Options (in 000's) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Number of Options (in 000's) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Number of Options (in 000's) Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in 000's) Outstanding at beginning of the year 779 $ 35.67 901 $ 38.78 782 $ 44.16 Granted 280 3.07 — — 235 24.77 Exercised — — $ — — — $ — — — $ — Forfeited/canceled/expired ( 203 ) 38.68 ( 122 ) 58.52 ( 116 ) 46.59 Outstanding at end of the year (1) 856 $ 24.29 4.96 $ 150 779 $ 35.67 3.12 $ — 901 $ 38.78 3.67 $ — Vested and expected to vest at the end of the year (1) 856 $ 24.29 4.96 $ 150 779 $ 35.67 3.12 $ — 901 $ 38.78 3.67 $ — Exercisable at the end of the year (1) 576 $ 34.61 2.54 $ — 673 $ 37.24 2.79 $ — 620 $ 44.06 2.60 $ — (1) The aggregate intrinsic value represents the total pre-tax value (the difference between our closing stock price on the last trading day of 2025, 2024 and 2023 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had they all exercised their options on December 31, 2025, 2024 and 2023. This amount will change based on the fair market value of our stock. 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: Year Ended December 31, 2025 2024 2023 Weighted average fair value of grants $ 1.60 $ — $ 10.83 Risk-free interest rate 3.72 % — % 3.86 % Expected volatility 54.46 % — % 45.89 % Expected life in years 5.27 0.00 4.70 Significant option groups outstanding at December 31, 2025 and the related weighted average exercise price and life information were as follows: 78 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Options Outstanding Options Exercisable Range of Exercise Prices Number Outstanding (in 000's) Weighted-Average Remaining Contractual Term (in years) Weighted-Average Exercise Price Number Exercisable (in 000's) Weighted-Average Exercise Price $ 2.97 to $ 3.21 280 9.92 $ 3.07 — $ — $ 24.77 to $ 34.56 411 2.83 27.66 411 27.66 $ 46.17 to $ 59.43 165 2.24 51.93 165 51.93 856 4.96 $ 24.29 576 $ 34.61 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 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 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. Restricted stock awards vest in various proportions over a one - to three-year time period. Our stock options become exercisable in various proportions over a three-year time frame. Stock options have a maximum ten-year term. 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: Name Approval Date Total Shares Available for Grant Under the Plan Remaining Shares Available for Grant Under the Plan Outstanding Shares Granted Under the Plan Amended and Restated 2018 Equity and Incentive Compensation Plan (1) 6/11/2024 3,391,794 — 2,094,545 — 2,094,545 (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. 79 Table of Contents 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: Year Ended December 31, (In thousands) 2025 2024 2023 Net gain (loss) on foreign currency exchange contracts (1) $ ( 271 ) $ ( 727 ) $ ( 3,238 ) Net gain (loss) on foreign currency exchange transactions ( 5,053 ) 403 ( 262 ) Other income (expense) (2) 703 384 879 Other income (expense), net $ ( 4,621 ) $ 60 $ ( 2,621 ) (1) This represents the gains (losses) incurred on foreign currency hedging derivatives. See Note 18 for further information concerning our foreign currency exchange contracts. (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 Earnings (loss) per share was calculated as follows: Year Ended December 31, (In thousands, except per-share amounts) 2025 2024 2023 BASIC Net income (loss) $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 ) Weighted-average common shares outstanding 13,172 12,959 12,855 Basic earnings (loss) per share $ ( 1.41 ) $ ( 1.85 ) $ ( 7.64 ) DILUTED Net income (loss) $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 ) Weighted-average common shares outstanding for basic 13,172 12,959 12,855 Dilutive effect of restricted stock, performance stock awards, stock options and common stock warrants — — — Weighted-average common shares outstanding on a diluted basis 13,172 12,959 12,855 Diluted earnings (loss) per share $ ( 1.41 ) $ ( 1.85 ) $ ( 7.64 ) The following number of restricted stock awards, performance stock awards, stock options and common stock warrants were excluded from the computation of diluted earnings per common share as their inclusion would have been anti-dilutive: Year Ended December 31, (In thousands) 2025 2024 2023 Restricted stock awards 666 526 440 Performance stock awards 20 104 — Stock options 366 796 900 80 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 Note 18 — Derivatives The following table sets forth the total net fair value of derivatives: December 31, 2025 December 31, 2024 Fair Value Measurement Using Total Balance Fair Value Measurement Using Total Balance (In thousands) Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Foreign currency exchange contracts $ — $ 136 $ — $ 136 $ — $ ( 249 ) $ — $ ( 249 ) We held foreign currency exchange contracts which resulted in a net pre-tax loss of $ 0.3 million, $ 0.7 million, and $ 3.2 million for the years ended December 31, 2025, 2024 and 2023, respectively. See Note 16 for further information concerning our foreign currency exchange contracts. Details of foreign currency exchange contracts held were as follows: Date Held Currency Position Held Notional Value (in millions) Forward Rate Unrealized Gain/(Loss) Recorded at Balance Sheet Date (in thousands) (1) Settlement Date December 31, 2025 USD/CNY CNY $ 40.0 6.9884 $ 132 January 29, 2026 December 31, 2025 USD/EUR USD $ 1.0 1.8110 $ 4 January 29, 2026 December 31, 2024 USD/CNY CNY $ 28.0 7.2316 $ ( 406 ) January 10, 2025 December 31, 2024 USD/EUR USD $ 8.0 1.0569 $ 157 January 10, 2025 (1) Unrealized gains on foreign currency exchange contracts are recorded in prepaid expenses and other current assets. Unrealized losses on foreign currency exchange contracts are recorded in other accrued liabilities. Note 19 — Employee Benefit Plans We maintain a retirement and profit sharing plan under Section 401(k) of the Internal Revenue Code for all of our domestic employees that meet certain qualifications. Participants in the plan may elect to contribute up to the maximum allowed by law. 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. 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. We recorded $ 0.4 million, $ 1.1 million and $ 1.3 million of expense for company contributions for the years ended December 31, 2025, 2024 and 2023, respectively. Note 20 — Reportable Segment 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. 81 Table of Contents 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: Year Ended December 31, (In thousands) 2025 2024 2023 Revenue $ 368,288 $ 394,879 $ 420,457 Less: Adjusted cost of sales (1) 260,586 280,779 315,049 Adjusted research and development expenses (2) 25,702 28,954 30,183 Adjusted operating expenses (3) 75,721 82,952 85,345 Other segment items (4) 24,878 26,223 88,118 Net income (loss) $ ( 18,599 ) $ ( 24,029 ) $ ( 98,238 ) (1) Cost of sales from the consolidated statements of operations, adjusted to exclude impairment of long-lived assets and stock-based compensation expense. (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 abandonment costs and goodwill impairment. (4) Other segment items include the adjustments described in the notes above; as well as interest income (expense), net; other income (expense), net; and provision for income taxes. The measure of segment assets is reported on our consolidated balance sheets as consolidated total assets. Long-lived assets by geographic area are disclosed in Note 6. The measure of revenues from external customers is reported on the consolidated statements of operations as net sales. Revenues by geographic region and information about major customers are disclosed in Note 4. Depreciation expense is disclosed in Note 6. Amortization expense is disclosed in Note 7. Interest expense is disclosed in Note 9 and income taxes are disclosed in Note 10. 82 Table of Contents UNIVERSAL ELECTRONICS INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 2025 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.