Nippon Telegraph & Telephone (NTT)

Thank you for joining us today. I am Sekine, the head of the NTT Public Relations Department. First of all, I would like to introduce today's speakers. The President and CEO of the President and CEO of the President and CEO of the President and CEO of the President and CEO of the President and CEO of the President Shikkouyakuin Kei-kikaku-bumon-cho Hattoriya Kito-shi. Ijo no sanmei de gozaimasu. Nao, honjitsu no shiryou wa 13-di-han ni NTT Koushiki-homu-teiji ni appu shite orimasu no de awasete gokakunin kudasai. Soredewa, kaiken wo hajimemasu. Shimada-sachou yoroshiku onegai itashimasu.

Thank you for participating today. I am Shimada, president of NTT Inc. I will now explain the financial results for the nine months ended December 31st, 2025. The consolidated financial results for Q3 FY2025 show increased revenue and profit the year-on-year. Opening revenue reached new record high levels in Q3. Although operating revenue was impacted negatively by approximately 55 billion yen due to foreign exchange, as a result of expansion of enterprise business across great companies and increase in revenue by transferring data centers for REIT, operating revenue increased by 371.3 billion yen year-on-year to 10,421,000,000 yen. Regarding EBITDA, while there were cost investments at Docomo to reinforce its customer base and to implement measures to improve mobile network quality... due to increased profits from the expansion of enterprise business at the grid companies and transferring data centers for REIT EBITDA increased by 104.8 billion yuan a year to 2,657,300,000 yuan, and operating profit increased by 57.9 billion yuan a year to 1,457,100,000 yuan. Profit, driven by a rise in operating profit and other factors, increased by 75.4 billion yuan a year to 926.1 billion yuan. As for operating revenue and operating profit by segment, in the integrated ICT business segment, consumer communications business declined due to factors including reduced mobile communications service revenue, However, growth in smart life business centered on finance services and enterprise business led to an increase in open revenue year-on-year. Despite profit growth in smart life business and enterprise business, because of cost to reinforce a customer base and improve network quality, Operating profit declined a year on year. As a result of measures to reinforce customer base, sales capability is steadily improving and MNP was positive during Q3. In the global solutions business segment, despite an approximately 55 billion yen negative impact from foreign exchange rates, driven by business growth domestically and internationally and transferring data centers for a REIT, operating revenue and operating profit increased year on year. In the regional communications business segment, although there was a decline in legacy business revenue due to factors such as growth in enterprise business and fiber optic business revenue, operating revenue and operating profit increased year on year. Net ads in fiber optic service increased year on year due to strengthened sales of 10 giga plant and comprehensive bundled service for condominiums. In others, such as real estate, energy, etc., due to expansion in office, commercial and residential businesses within NTT Urban Solutions, operating revenue increased year-on-year. Next, I will explain the four-year financial results forecast. In order to reflect the revised forecast of Docomo and NTT Data Group, we have revised down with the consolidated forecast for NTT this fiscal year. Details will be explained later by each company. Regarding Docomo, amid intensifying and prolonged competition requiring greater than expected investment to reinforce its customer base, it is necessary to make sure to continue implementing key measures for future growth, such as measures to reinforce customer base and improve network quality. As a result, operating profit has been revised down with by 83 billion yen.

With respect to data group, reflecting the realized profits of gain on the transfer of data centers for REIT based on market environment exchange rate fluctuation, the operating profit was revised downward to 26 billion yen. Particularly at Docomo, intensified competitive environment is expected to continue. In addition to the achievement of the results by strengthening of customer base and improvement of mobile network quality, we endeavor to recover performance by accelerating efforts through growth in smart life business, focusing on finance and enterprise business, and cost reduction through fundamental review on organization and business processes. The summary of fiscal year 2025 financial result forecast by company is shown on the slide. Next, I would like to go over four topics. First, let me talk about the mass production of photonics electronic convergence devices. The switches using photonics electronics convergent devices through collaboration with supply chain partners including Broadcom and Acton Technology will begin commercial provision within FY2026. Furthermore, for the mass production of photonics electronic convergence devices, innovative device is continuously preparing to increase production volume per line through automation of assembly, mounting, and inspection processes to expand production lines in response to demand. Through these efforts, up to 30,000 units production per month will be feasible. and we would like to proactively cater to the demands of hyperscalers and cloud operators. Next is social implementation of AI integrating digital and physical domain. Till now, NTT has been promoting introductory support to respond extensively to globally major LLM, in addition to the development and provision of genuinely Japan-made LLM Tsutsumi. The order amount for our AI business for FY2023Q3 was 147.8 billion yen for the entire group, far exceeding the pace of achieving annual target of 150 billion yen. Currently, initiatives at Toyota Motors, Mujin, and Trial Holding are making progress, and while we continue to collaborate with the leading companies of each industry domestically and overseas, we will accelerate the social implementation of AI that integrates digital and physical domains. Next, I will talk about exhibition at MWC Barcelona 2026. At MWC Barcelona 2026 to be held in Barcelona in March, Photonics Unlocks an Intelligent Power Optimized Future is our key message. After seven years, we will jointly exhibit as entity group. I will deliver keynote speech on March 4th and speak about our efforts to reduce power consumption through optical technology centered on ion, such as photonics, electronics, convergence devices, and optical quantum computers. Please come to the event. On the progress under medium-term management strategy, our effort since November is shown on the slide. This concludes my presentation. Thank you for your attention.