Company: XCH
Filing Date: 2025-04-23
Form Type: 20-F
Source: 0000950170-25-056976
Chunk: 114

Company: XCHG Ltd
Filing Date: 2025-04-23
Form: 20-F
Item: Item 5
Chunk 114
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-276802) incorporated by reference into this annual report.

Non-GAAP Financial Measures

We consider adjusted net income (loss), a non-GAAP financial measure as a supplemental measure to review and assess our operating performance. The presentation of this non-GAAP financial measure is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U. S. GAAP. We believe that the use of this non-GAAP measure facilitates investors’ assessment of our operating performance.

This non-GAAP financial measure is not defined under U. S. GAAP and is not presented in accordance with U. S. GAAP. This non-GAAP financial measure has limitations as an analytical tool. One of the key limitations of using this non-GAAP financial measure is that it does not reflect all items of income and expense that affect our operations. Further, this non-GAAP measure may differ from the non-GAAP information used by other companies, including peer companies, and therefore its comparability may be limited. We compensate for these limitations by reconciling this non-GAAP financial measures to the nearest U. S. GAAP performance measure, all of which should be considered when evaluating our performance.

We encourage you to review our financial information in its entirety and not rely on a single financial measure.

Adjusted Net Income (Loss)

We define adjusted net income (loss) as net income (loss) excluding share-based compensation, changes in fair value of financial instruments and gain on extinguishment of convertible debts.

The following table reconciles our adjusted net income (loss) for the periods indicated to the most directly comparable financial measure calculated and presented in accordance with U. S. GAAP, which is net income (loss):

                                                      For the Year Ended December 31,                                                          
                                                      2022                                            2023                  2024               
                                                      US$                                             US$                   US$                
                                                      (in thousands)                                                                           
 ───────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Net income (loss)                                                                        1,610                (8,084                (11,941  
  Add:                                                                                                                                         
  Share-based compensation                                                                 —                     7,457                  7,031  
  Changes in fair value of financial instruments                                           191                   1,472                     88  
  Gain on extinguishment of convertible debts                                              —                         —                   (233  
  Adjusted net income (loss)                                                               1,801                   845                 (5,