Product Development and Innovation - The company introduced over 130 new products in the fiscal year ended June 30, 2022, and 56 new products during the nine months ended March 31, 2023, expanding its portfolio to approximately 2,500 products[168] - The company holds a total of 910 patents and 52 patent applications in the United States, along with 971 foreign patents as of March 31, 2023, reflecting its extensive R&D efforts[168] - Timely product introductions that meet customer specifications are essential for securing design wins, with a focus on accelerating the development of new technology platforms[182] - The company continues to invest in new technologies and products, with research and development expenses expected to fluctuate over time[190] Financial Performance - Revenue for the three months ended March 31, 2023, was $132.56 million, a decrease from $203.24 million in the same period of 2022, representing a decline of approximately 34.7%[201] - Total revenue for Q1 2023 was $132.6 million, a decrease of $70.7 million, or 34.8%, compared to $203.2 million in Q1 2022[205] - Total revenue for the nine months ended March 31, 2023, was $529.8 million, a decrease of $53.8 million, or 9.2%, compared to $583.6 million for the same period last year[206] - The company reported a net income of $13.5 million for the nine months ended March 31, 2023, significantly lower than the $438.1 million reported for the same period in 2022[234][235] Cost and Margin Analysis - Cost of goods sold for the three months ended March 31, 2023, was $101.77 million, which is 76.8% of revenue, compared to 64.4% in the same period of 2022[201] - Gross profit for the three months ended March 31, 2023, was $30.79 million, down from $72.40 million in the same period of 2022, reflecting a gross margin of 23.2%[201] - Gross profit for Q1 2023 was $30.8 million, a decrease of $41.6 million, or 57.5%, with a gross margin of 23.2%, down from 35.6% in Q1 2022[207] - Gross margin for the nine months ended March 31, 2023, was 29.2%, down from 35.2% for the same period last year[208] Research and Development Expenses - Research and development expenses increased to $22.58 million for the three months ended March 31, 2023, compared to $16.55 million in the same period of 2022, representing 17.0% of revenue[201] - Research and development expenses for Q1 2023 were $22.6 million, an increase of $6.0 million, or 36.5%, compared to $16.5 million in Q1 2022[210] - Research and development expenses for the nine months ended March 31, 2023, were $65.4 million, an increase of $14.6 million, or 28.6%, compared to $50.9 million for the same period last year[211] Operating Expenses and Losses - Total operating expenses for the three months ended March 31, 2023, were $45.19 million, which is 34.1% of revenue, compared to 20.2% in the same period of 2022[201] - The company reported an operating loss of $14.40 million for the three months ended March 31, 2023, compared to an operating income of $31.23 million in the same period of 2022[201] - The company expects operating expenses as a percentage of revenue to fluctuate due to cost control measures in response to market conditions[189] Market Conditions and Revenue Influences - The company experienced a decline in the PC market, which has negatively impacted revenue, and is executing strategies to diversify its product portfolio and penetrate other market segments[178] - Revenue is subject to fluctuations based on distributor ordering patterns and seasonality, particularly influenced by economic conditions and demand from major customers[183] - The company anticipates a decline in average selling prices of existing products but aims to offset this through new product introductions and cost reductions[181] Joint Ventures and Partnerships - The company's equity interest in the joint venture (JV Company) was reduced to 42.2% as of March 31, 2023, following several transactions aimed at increasing the JV's capital flexibility[175] - The JV Company is expected to provide significant foundry capacity, with a monthly wafer production capacity guarantee established on July 12, 2022, to support the company's manufacturing needs[176] - The company entered into a license agreement for its proprietary SiC technology, with a total fee of $45 million, including an upfront fee of $18 million[187] - The Company entered into a license and engineering service agreement for its Silicon Carbide technology, with a total fee of $45 million, including an upfront fee of $18 million received in March 2023[222] Cash Flow and Financial Position - As of March 31, 2023, the company had $266.2 million in cash, cash equivalents, and restricted cash, down from $314.7 million as of June 30, 2022[231] - Net cash provided by operating activities for the nine months ended March 31, 2023 was $48.7 million, a decrease of 74.8% compared to $193.2 million for the same period in 2022[232][234] - The net cash used in investing activities was $90.6 million for the nine months ended March 31, 2023, primarily due to $91.3 million in purchases of property and equipment[236] - The company believes its current cash and cash equivalents will be sufficient to meet anticipated cash needs for at least the next twelve months, while planning to expand manufacturing capacity[230] Debt and Credit Facilities - A subsidiary in China secured a line of credit facility of approximately RMB 140 million ($20.6 million) for working capital, with no outstanding balance as of March 31, 2023[223] - Jireh Semiconductor has an outstanding balance of $40.5 million on a term loan agreement, which matures on February 16, 2027, and is in compliance with the required financial covenants[225] Taxation - Income tax expense for the three months ended March 31, 2023 was approximately $2.5 million, a decrease of $0.4 million or (13.3)% compared to $2.9 million for the same period last year[217] - The effective tax rate for the three months ended March 31, 2023 was (15.2)%, compared to 7.4% for the same period last year, influenced by changes in the mix of earnings across geographic jurisdictions[217] - The Company recognized income tax expense of approximately $5.6 million for the nine months ended March 31, 2023, a significant decrease of $32.8 million or (85.5)% compared to $38.3 million for the same period last year[218] Other Financial Information - Other income (loss), net decreased by $0.8 million to $(513,000) for the three months ended March 31, 2023, primarily due to an increase in foreign currency exchange loss, representing a change of (295.1)% compared to the same period last year[214] - Interest income (expense), net increased by $0.3 million to $5,000 for the three months ended March 31, 2023, primarily due to a $1.2 million increase in interest income, partially offset by a $0.9 million increase in interest expense, resulting in a change of (101.6)% compared to the same period last year[215] - Non-cash expenses for the nine months ended March 31, 2023 totaled $63.2 million, including $34.1 million in share-based compensation and $31.2 million in depreciation and amortization[234] - The company experienced a $21.7 million increase in inventories due to preparations for supply chain uncertainties[234] - There were no material changes in the company's contractual obligations from those disclosed in the previous fiscal year[241] - As of March 31, 2023, the company had no off-balance sheet arrangements[239] - There have been no material changes in market risks previously disclosed in the annual report for the year ended June 30, 2022[244]

Financial Data and Key Metrics Changes - Revenue for Q3 2023 was $132.6 million, down 29.8% sequentially and 34.8% year-over-year, reflecting the industry-wide inventory correction [5][16] - Non-GAAP gross margin was 25.1%, compared to 29.5% in the prior quarter and 36.7% a year ago [17] - Non-GAAP EPS was negative $0.21, compared to $0.67 last quarter and $1.34 a year ago [18] Business Line Data and Key Metrics Changes - Computing segment revenue decreased 57.7% year-over-year and 40.4% sequentially, representing 28.7% of total revenue [11] - Consumer segment revenue was slightly up year-over-year but down 5.5% sequentially, driven by strong gaming volumes [12] - Communications segment revenue declined 33.7% year-over-year and 45.4% sequentially, making up 14.5% of total revenue [13] - Power Supply and Industrial segment revenue decreased 29.6% year-over-year and 35.7% sequentially, accounting for 20% of total revenue [14] Market Data and Key Metrics Changes - End consumer demand remains weak, but there are signs of recovery in certain applications as inventory levels deplete [5][15] - The company anticipates a rebound in the second half of the year, particularly during the fall launches and holiday sales [13][15] Company Strategy and Development Direction - The company aims to grow beyond a near-term $1 billion revenue target, focusing on electrification trends and expanding into new markets such as automotive and energy generation [6][8] - Plans include deeper penetration into existing core markets and leveraging technology IP for integrated solutions [8][9] - Supply chain optimization is a priority, with exploration of additional foundry partnerships to enhance production capabilities [9] Management's Comments on Operating Environment and Future Outlook - Management believes the worst of the inventory correction is behind them, with expectations for revenue recovery in the upcoming quarters [5][15] - The company is optimistic about future demand driven by trends in electric vehicles, clean energy, and advancements in AI [7][15] Other Important Information - The company entered into a licensing and engineering service agreement worth $45 million related to Silicon Carbide technology, which will be recognized over 24 months [16][17] - Operating cash flow was $11.6 million, significantly improved from the prior quarter [18] Q&A Session Summary Question: Thoughts on gross margin recovery - Management targets a return to mid-30% gross margin but acknowledges current competitive pressures [24][25] Question: Strategy for the IC business - The company is broadening its product portfolio in ICs to address higher margin content and increase BOM [28][29] Question: Details on the Silicon Carbide licensing agreement - The agreement is expected to help enter new markets like automotive and industrial power supplies [30][31] Question: Revenue impact from the Silicon Carbide deal - $3.6 million was recognized in Q3, with expectations for $5 million to $6 million in Q4 [34][35] Question: Inventory levels and demand recovery - Most current improvements are due to inventory correction rather than underlying demand [48][49] Question: Update on manufacturing and CapEx outlook - CapEx is expected to range from $15 million to $20 million for the June quarter, with ongoing discussions regarding the CHIPS Act [62]

Title of each class Trading Symbol(s) Name of each exchange on which registered Common Shares AOSL The NASDAQ Global Select Market UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________ FORM 10-Q _________________________________ (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ...

Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q2 2023 Earnings Conference Call February 6, 2023 5:00 PM ET Company Participants Yujia Zhai - Investor Relations, The Blueshirt Group Mike Chang - Chief Executive Officer Stephen Chang - President Yifan Liang - Chief Financial Officer and Corporate Secretary Conference Call Participants David Williams - Benchmark Craig Ellis - B. Riley Securities Jeremy Kwan - Stifel Operator Good afternoon. Thank you for attending today's Alpha and Omega Semiconductor F ...

Financial Data and Key Metrics Changes - Revenue for Q1 2023 was $208.5 million, representing an 11.5% year-over-year growth and a 7.5% sequential increase [7][23] - Non-GAAP gross margin was 35.4%, up from 33.8% in the prior quarter and 35.3% a year ago [23] - Non-GAAP EPS was $1.20, compared to $0.95 in the previous quarter and $1.06 a year ago [24] Business Line Data and Key Metrics Changes - Computing segment revenue increased by 13.6% year-over-year, accounting for 42.8% of total revenue [17] - Consumer segment revenue grew 11% year-over-year and 23% sequentially, driven by record gaming volumes which increased 122.7% year-over-year [19] - Communications segment revenue rose 21.8% year-over-year and 5.1% sequentially, representing 15.1% of total revenue [20] - Power Supply and Industrial segment revenue was up 8% year-over-year and 14.3% sequentially, accounting for 19.6% of total revenue [21] Market Data and Key Metrics Changes - Total PC revenue for calendar 2022 is expected to grow slightly year-over-year despite a 20% decline in global PC units [8] - Smartphone revenue is anticipated to increase by 15% year-over-year, even as global smartphone shipments are forecasted to decline by 6.5% [8] Company Strategy and Development Direction - The company aims to achieve $1 billion in annual revenue within the next couple of years, supported by a diversified product portfolio and strong customer relationships [12] - The focus on premium tier products and partnerships with Tier 1 customers is expected to enhance resilience during economic slowdowns [9][11] - The company is actively investing in expanding manufacturing capabilities and diversifying its customer base globally [11][12] Management's Comments on Operating Environment and Future Outlook - Management anticipates a weaker performance in calendar Q4 2022 due to industry inventory corrections, particularly in PCs and smartphones [7] - Despite near-term challenges, the company believes the underlying demand for power products will remain strong due to ongoing electrification trends [12] - Management expressed confidence in navigating the current economic environment and achieving long-term growth targets [12] Other Important Information - The company has paused hiring and is taking steps to reduce discretionary spending in response to the anticipated slowdown [11] - Cash balance at the end of the quarter was $316.1 million, up from $314.4 million in the previous quarter [25] Q&A Session Summary Question: Margin profile and utilization charges - Management indicated that the December quarter's margin guidance reflects the impact of inventory correction, particularly in PCs and smartphones, leading to a less favorable product mix [30] Question: Customer behavior and order adjustments - Management noted that customer orders have been adjusted downwards, impacting backlog and production schedules [34] Question: Inventory levels in the channel - Management stated that distributor inventory remains lean, while inventory corrections are more pronounced at ODMs and OEMs, particularly in the PC segment [39] Question: Pricing environment - Management acknowledged that the pricing environment is becoming more competitive due to inventory corrections and demand slowdowns, particularly affecting lower-end products [45] Question: Oregon fab expansion considerations - Management confirmed that the expansion of the Oregon fab is proceeding as planned, with expectations that it will support higher performance products despite current demand challenges [47] Question: Update on Chongqing JV - Management indicated that the Chongqing JV continues to provide wafers and assembly services, with no current need to reallocate production back to the Oregon fab [57]

Financial Performance - The company achieved a record high revenue of $777.6 million for the fiscal year 2022, representing an 18.4% growth compared to the previous fiscal year[260]. - Total revenue for fiscal year 2022 was $777.6 million, an increase of $120.7 million or 18.4% compared to $656.9 million in fiscal year 2021[297]. - Gross profit for fiscal year 2022 was $268.6 million, representing a gross margin of 34.5%, up from 31.1% in fiscal year 2021[299]. - Cost of goods sold for fiscal year 2022 was $509.0 million, an increase of $56.6 million or 12.5% compared to $452.4 million in fiscal year 2021[300]. - Net income for fiscal year 2022 was $453.2 million, compared to $56.3 million in fiscal year 2021[296]. - Operating income for fiscal year 2022 was $102.0 million, an increase from $64.1 million in fiscal year 2021[296]. - The average selling price increased by 21.0% in fiscal year 2022, partially offset by a 2.1% decrease in unit shipments[297]. - Income tax expense for fiscal year 2022 was $39.3 million, a significant increase of $35.3 million or 897.7% compared to $3.9 million in fiscal year 2021, largely due to a discrete tax expense related to the sale of equity interest in a joint venture[316]. Product Development and Portfolio - The company introduced over 130 new products in the fiscal year ended June 30, 2022, contributing to the expansion of its portfolio to approximately 2,500 products[253]. - The company is diversifying its product portfolio to reduce reliance on the PC market and improve gross margins through cost control measures[268]. - The company introduced 49 medium and high voltage MOSFET products and 69 new Power IC products during fiscal year 2022[297]. - Research and development expenses for fiscal year 2022 were $71.3 million, an increase of $8.3 million or 13.2% compared to $63.0 million in fiscal year 2021[303]. Operational Challenges - The company faced operational disruptions due to COVID-19, including the suspension of its packaging and testing facilities in Shanghai, which adversely affected revenue for the three months ended June 30, 2022[266]. - The company experienced a significant increase in demand for PC-related products due to the COVID-19 pandemic, although future demand remains uncertain[262]. Financial Management and Expenses - The company expects operating expenses as a percentage of revenue to fluctuate as it implements cost control measures in response to market conditions[280]. - Selling, general and administrative expenses for fiscal year 2022 were $95.3 million, an increase of $17.7 million or 22.9% compared to $77.5 million in fiscal year 2021[305]. - The increase in selling, general and administrative expenses was primarily due to an $8.6 million rise in employee compensation and benefits expenses and a $10.9 million increase in share-based compensation expenses[305]. - The company’s cost of goods sold includes semiconductor wafers, packaging, testing, and personnel costs, which are expected to increase with sales volume[279]. Taxation and Regulatory Environment - The effective tax rate is influenced by the geographic distribution of profits and the application of complex tax regulations[283]. - The U.S. Tax Cuts and Jobs Act reduced the corporate tax rate from 35% to 21%, impacting the company's tax liabilities[285]. - The Chips Act provides incentives for semiconductor manufacturers, including a 25% manufacturing investment credit for qualifying investments[291]. - The company is evaluating the impact of the Chips Act on its operations and future investments[291]. Cash Flow and Financing - Cash, cash equivalents, and restricted cash amounted to $314.7 million as of June 30, 2022, up from $204.8 million in 2021[333]. - Net cash provided by operating activities for fiscal year 2022 was $218.9 million, driven by net income of $453.2 million and non-cash charges of $287.6 million[335]. - The company anticipates sufficient cash flows to meet its needs for at least the next twelve months, with plans for manufacturing capacity expansion funded by cash reserves and loans[332]. - Net cash used in investing activities for fiscal year 2022 was $130.8 million, primarily due to $138.0 million in purchases of property and equipment[339]. - Net cash used in financing activities for fiscal year 2022 was $21.9 million, with $64.3 million in proceeds from borrowings and $6.1 million from exercises of share options[341]. Debt and Obligations - Total contractual obligations as of June 30, 2022, amounted to $255.978 million, with $185.138 million due within one year[345]. - The company had an outstanding balance of $1.6 million under a renewed line of credit facility as of June 30, 2022[320]. - Jireh's term loan outstanding balance was $14.2 million as of June 30, 2022, with a fixed interest rate of 5.04% per annum[325]. Risk Management - The company is exposed to commodity price risk, particularly with gold, which has seen significant price increases in recent years[369]. - A 10% increase or decrease in raw material costs, such as gold, could affect the company's net earnings by $0.7 million[369]. - The company has been converting some products from gold wires to copper wires to mitigate commodity price risk[369]. - The management believes that foreign currency translation risk is not significant based on a 10% sensitivity analysis[367]. - The company does not enter into formal hedging arrangements to mitigate against commodity risk[369].

Alpha and Omega Semiconductor Limited (NASDAQ:AOSL) Q4 2022 Results Conference Call August 10, 2022 5:00 PM ET Company Participants Gary Dvorchak - IR Mike Chang - CEO Yifan Liang - CFO Stephen Chang - President Conference Call Participants David Williams - Benchmark Craig Ellis - B. Riley Jeremy Kwan - Stifel David Duley - Steelhead Securities Operator Good morning and -- good afternoon and thank you for attending today's Alpha and Omega Semiconductor Conference Call. My name is Austin, and I will be your ...

PART I. FINANCIAL INFORMATION [Condensed Consolidated Financial Statements](index=3&type=section&id=Condensed%20Consolidated%20Financial%20Statements) Unaudited condensed consolidated financial statements are presented, significantly impacted by the Chongqing Joint Venture deconsolidation Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 | June 30, 2021 | | :--- | :--- | :--- | | **Total Assets** | **$1,209,169** | **$918,573** | | Cash and cash equivalents | $323,134 | $202,412 | | Equity method investment | $379,824 | $0 | | **Total Liabilities** | **$382,268** | **$402,248** | | **Total Equity** | **$826,901** | **$516,325** | Condensed Consolidated Statement of Income Highlights (in thousands) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | **$203,239** | **$169,212** | **$583,593** | **$479,593** | | **Gross Profit** | **$72,402** | **$52,691** | **$205,334** | **$143,963** | | **Operating Income** | **$31,232** | **$17,796** | **$83,898** | **$41,713** | | Gain on deconsolidation of the JV Company | $0 | $0 | $399,093 | $0 | | **Net Income Attributable to AOS** | **$31,650** | **$16,100** | **$438,072** | **$38,577** | | **Diluted EPS** | **$1.11** | **$0.58** | **$15.58** | **$1.42** | - Net cash provided by operating activities for the nine months ended March 31, 2022, was **$193.2 million**, a significant increase from **$84.5 million** in the prior-year period. This was driven by higher net income, although adjusted for a large non-cash gain on the JV Company deconsolidation[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed explanations of accounting policies and financial results are provided, highlighting the JV deconsolidation gain, customer concentrations, COVID-19 impacts, and a cybersecurity incident loss [Note 1: The Company and Significant Accounting Policies](index=9&type=section&id=Note%201%3A%20The%20Company%20and%20Significant%20Accounting%20Policies) This note outlines the company's business and accounting policies, focusing on the Chongqing JV deconsolidation and significant COVID-19 impacts, including the Shanghai lockdown - Effective December 1, 2021, the Company sold a **2.1%** equity interest in its JV Company, reducing its stake from **50.9%** to **48.8%** and losing its controlling financial interest. Consequently, the JV Company was deconsolidated and is now accounted for using the equity method[31](index=31&type=chunk) - In April 2022, operations at two Shanghai packaging and testing facilities were suspended due to a government-imposed COVID-19 lockdown. This is expected to adversely affect revenue and results for the quarter ending June 30, 2022, due to production halts and logistical challenges[36](index=36&type=chunk) [Note 2: Equity Method Investment in Equity Investee](index=15&type=section&id=Note%202%3A%20Equity%20Method%20Investment%20in%20Equity%20Investee) This note details the financial impact of the JV Company deconsolidation, including a $399.1 million gain and subsequent ownership reduction to 42.2% Gain on Deconsolidation of the JV Company (in thousands) | Item | Amount | | :--- | :--- | | Cash received for sales of shares | $16,924 | | Fair value of retained equity method investment | $393,124 | | Carrying amount of non-controlling interest | $143,889 | | Cumulative translation adjustment removal | $1,793 | | Carrying amount of net assets of the JV Company | ($156,637) | | **Gain on deconsolidation of the JV Company** | **$399,093** | - Following the initial sale, further transactions reduced the Company's ownership in the JV to **42.2%** as of March 31, 2022. These changes resulted in a net loss of **$3.1 million** for the nine-month period[68](index=68&type=chunk)[69](index=69&type=chunk)[72](index=72&type=chunk) [Note 5: Concentration of Credit Risk and Significant Customers](index=19&type=section&id=Note%205%3A%20Concentration%20of%20Credit%20Risk%20and%20Significant%20Customers) The company exhibits significant customer concentration, with two distributors accounting for 63.5% of revenue and five customers representing 83.1% of accounts receivable Revenue Concentration | Customer | % of Revenue (Nine Months Ended Mar 31, 2022) | % of Revenue (Nine Months Ended Mar 31, 2021) | | :--- | :--- | :--- | | Customer A | 24.8% | 29.1% | | Customer B | 38.7% | 34.9% | Accounts Receivable Concentration | Customer | % of A/R (March 31, 2022) | % of A/R (June 30, 2021) | | :--- | :--- | :--- | | Customer A | 21.2% | 12.4% | | Customer B | 20.4% | 22.1% | | Customer C | 13.7% | 21.9% | | Customer D | 12.8% | * | | Customer E | 15.0% | * | [Note 9: Shareholders' Equity and Share-based Compensation](index=28&type=section&id=Note%209%3A%20Shareholders%27%20Equity%20and%20Share-based%20Compensation) This note details equity activities, including the share repurchase program and increased share-based compensation expense of $21.5 million for the nine-month period - The company did not repurchase any shares during the nine months ended March 31, 2022. Approximately **$13.4 million** remains available under the existing repurchase program[132](index=132&type=chunk) Share-Based Compensation Expense (in thousands) | Expense Category | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Nine Months Ended Mar 31, 2022 | Nine Months Ended Mar 31, 2021 | | :--- | :--- | :--- | :--- | :--- | | Cost of goods sold | $1,282 | $427 | $3,560 | $1,195 | | Research and development | $1,814 | $1,316 | $4,769 | $3,639 | | Selling, general and administrative | $5,177 | $2,082 | $13,125 | $5,091 | | **Total** | **$8,273** | **$3,825** | **$21,454** | **$9,925** | - As of March 31, 2022, total unrecognized compensation cost was **$86.2 million**, expected to be recognized over a weighted-average period of 3.5 years[147](index=147&type=chunk) [Note 11: Segment and Geographic Information](index=32&type=section&id=Note%2011%3A%20Segment%20and%20Geographic%20Information) The company operates as a single segment, with Hong Kong as the largest revenue region and Power Discretes as the primary product type Revenue by Geographical Location (Nine Months Ended Mar 31, in thousands) | Region | 2022 | 2021 | | :--- | :--- | :--- | | Hong Kong | $472,399 | $396,879 | | China | $91,958 | $74,250 | | South Korea | $8,862 | $4,069 | | United States | $9,004 | $3,683 | | Other countries | $1,370 | $712 | | **Total** | **$583,593** | **$479,593** | Revenue by Product Type (Nine Months Ended Mar 31, in thousands) | Product Type | 2022 | 2021 | | :--- | :--- | :--- | | Power discrete | $406,235 | $355,487 | | Power IC | $167,782 | $115,224 | | Packaging and testing services | $9,576 | $8,882 | | **Total** | **$583,593** | **$479,593** | [Note 12: Commitments and Contingencies](index=33&type=section&id=Note%2012%3A%20Commitments%20and%20Contingencies) The company has significant purchase and capital commitments, and is under an ongoing DOJ investigation regarding Huawei export control compliance - As of March 31, 2022, the company had purchase commitments of **$106.6 million** for materials/services and **$102.7 million** for property and equipment[165](index=165&type=chunk) - The company is under an ongoing investigation by the U.S. Department of Justice (DOJ) regarding compliance with export control regulations related to business with Huawei. The company has suspended shipments to Huawei since December 31, 2019, and the outcome and potential loss from the investigation are currently unknown[168](index=168&type=chunk) [Note 13: Cybersecurity Incident](index=34&type=section&id=Note%2013%3A%20Cybersecurity%20Incident) A cybersecurity incident in April 2022 resulted in a $1.5 million loss due to unauthorized payments, prompting an investigation and security enhancements - The company recorded a loss of **$1.5 million** for the three months ended March 31, 2022, due to a cybersecurity incident where payments were misdirected to unauthorized bank accounts[173](index=173&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=35&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses record quarterly revenue, the Chongqing JV deconsolidation, and significant operational challenges including the Shanghai COVID-19 lockdown [Results of Operations](index=41&type=section&id=Results%20of%20Operations) Q3 FY2022 revenue increased 20.1% to $203.2 million with improved gross margin, while operating expenses rose due to share-based compensation and a cybersecurity incident Revenue by Product Type (Three Months Ended March 31) | Product Type | 2022 (in thousands) | 2021 (in thousands) | Change (in percentage) | | :--- | :--- | :--- | :--- | | Power discrete | $140,572 | $122,615 | 14.6% | | Power IC | $60,359 | $43,385 | 39.1% | | Packaging and testing services | $2,308 | $3,212 | (28.1)% | | **Total** | **$203,239** | **$169,212** | **20.1%** | - Gross margin for the three months ended March 31, 2022, increased to **35.6%** from **31.1%** year-over-year, primarily due to a better product mix[219](index=219&type=chunk)[221](index=221&type=chunk) - Selling, general and administrative expenses for Q3 FY2022 increased by **$5.3 million** (**27.3%**) YoY, driven by a **$3.1 million** increase in share-based compensation and a **$1.5 million** loss from a cybersecurity incident[225](index=225&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity improved with $323.4 million in cash and strong operating cash flow, supported by a new $45.0 million term loan for facility expansion Cash Flow Summary (Nine Months Ended March 31, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash provided by operating activities | $193,196 | $84,524 | | Net cash used in investing activities | ($91,142) | ($40,412) | | Net cash provided by (used in) financing activities | $16,351 | ($16,323) | - In February 2022, the company's subsidiary Jireh drew down **$45.0 million** from a new term loan agreement to fund the expansion and upgrade of its Oregon fabrication facility[240](index=240&type=chunk) - Net cash from operating activities was **$193.2 million** for the nine months ended March 31, 2022, primarily resulting from net income of **$438.1 million**, adjusted for non-cash items like the **$399.1 million** gain on JV deconsolidation and a **$42.9 million** increase in inventories[253](index=253&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) No material changes in market risks have occurred since the last annual report - There have been no material changes in market risks since the last annual report filed on August 30, 2021[261](index=261&type=chunk) [Controls and Procedures](index=50&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting - Management concluded that as of March 31, 2022, the company's disclosure controls and procedures were effective[262](index=262&type=chunk) - No material changes to the internal control over financial reporting occurred during the quarter[263](index=263&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=51&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company provides an update on the ongoing DOJ investigation regarding Huawei export control compliance, with shipments suspended since December 31, 2019 - The company is cooperating with an ongoing DOJ investigation into its compliance with export control regulations concerning business with Huawei[266](index=266&type=chunk) - At the request of the Department of Commerce, the company has suspended all product shipments to Huawei since December 31, 2019[266](index=266&type=chunk) [Risk Factors](index=51&type=section&id=ITEM%201A.%20RISK%20FACTORS) Key business risks include significant COVID-19 impacts, particularly the Shanghai lockdown affecting Q2 FY2022 revenue, and potential cybersecurity incident disruptions - The COVID-19 pandemic continues to pose a significant risk. A strict lockdown in Shanghai in April 2022 forced the shutdown of the company's two packaging and testing facilities, which is expected to adversely affect revenue and results for the quarter ending June 30, 2022[273](index=273&type=chunk)[274](index=274&type=chunk)[278](index=278&type=chunk) - The company's operations are dependent on its information technology systems, which are vulnerable to cyberattacks. A recent cybersecurity incident in April 2022 resulted in a **$1.5 million** loss[284](index=284&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=54&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) The company reports no share repurchases during the quarter, with $13.4 million remaining available under the program - No shares were repurchased during the three months ended March 31, 2022[286](index=286&type=chunk) - As of March 31, 2022, approximately **$13.4 million** remained available under the company's share repurchase program[286](index=286&type=chunk)