Dear Shareholders,

Over the course of its 29-year history, HTC has successfully executed two major strategic transformations,each pioneering new markets, aligning its engineering and design capabilities with evolving marketdynamics and emerging opportunities, and redefining how we empower creators and connect people.

The Company is now embarking on a third phase, centered on enabling the future of immersive content. By integrating accessible creation tools, a world-class hosting and discovery platform, and a new generation of intelligent devices, HTC is building a scalable ecosystem designed to enable new forms of engagement, one that unlocks creator potential and establishes a sustainable growth platform within the evolving digital content landscape.

As part of this strategy, we completed the transfer of some of the VR team to Google in early 2025, reinforcing HTC’s objective of accelerating the growth of the XR ecosystem while further concentrating resources on the highest-priority growth areas through a more streamlined product portfolio and greater financial flexibility. This in turn will help boost adoption of immersive technologies around the world, and serves to strengthen our commitment to building the VIVE brand around the world.

Business Operations

VIVERSE

In 2025, VIVERSE advanced its “build, play, and share” strategy, evolving into a web-first ecosystem that accelerates immersive content creation, publishing, and discovery. It launched VIVERSE Worlds, a crossdevice hosting and discovery platform supporting engine-agnostic WebXR development, and introduced VIVERSE Studio with broad support for tools such as Unity WebGL and Three.js. Creation workflows expanded with AI tools, Polygon Streaming upgrades, and enhanced avatar commerce. The platform reached 1 million monthly active users, surpassed 23,000 Worlds, and supported 140+ Creator Program projects, reflecting a scalable and growing creator economy.

HTC introduced the VIVE AI platform in 2025, a central core integrating LLMs and AI Agents for advanced semantic and visual intelligence. Through “privacy-by-design” architecture and optimized firmware, HTC maintains total harmony between its hardware and software. Following its initial rollout on VIVE Eagle, HTC is scaling the platform in 2026 to encompass VIVERSE, led by the VIVERSE Persona and other AI initiatives.

VIVERSE strengthened partnerships across culture, gaming, and education, launched monetization tools with a creator-first revenue share model and expanded into subscriptions and one-time purchases. In Location-Based Entertainment, VIVERSE scaled synchronized XR deployments through GEM, highlighted by The Little Prince: Call to Adventure. Looking ahead, VIVERSE will deepen AI-powered workflows, expand monetization models, and reinforce its open, cross-device immersive ecosystem across cultural, educational, and commercial sectors.

G REIGNS

In 2025, G REIGNS sustained strong growth in the global 5G private network market, leveraging its independently developed O-RAN architecture to deliver high-performance, flexible, and cost-eective solutions for enterprise and government clients. The company advanced its core technologies while expanding internationally, particularly into defense and strategic technology sectors across Europe and North America. In Europe, G REIGNS became an authorized supplier to a German manufacturer after meeting stringent certification standards and successfully deployed a ruggedized 5G private network. In North America, it partnered with a global defense leader to co-develop a 5G Pixel Streaming Kit enabling ultra-low-latency, real-time remote control applications.

As 5G drives growth in smart factories, ports, remote control, and AR/VR applications, the enterprise private network market is entering a rapid expansion phase. G REIGNS will continue prioritizing technological innovation, strengthening its role within the O-RAN ecosystem, and focusing on high-value vertical markets. Building on its proven reliability and strategic partnerships, the company aims to expand defense and industrial applications while supporting digital transformation and sustainable growth.

VIVE Intelligent Systems

In 2025, VIVE Intelligent Systems introduced VIVE Eagle, its first AI-powered smart glasses and the newest milestone in its Spatial Computing strategy. Weighing approximately 49 grams, VIVE Eagle integrates Qualcomm processing, edge AI architecture, Zeiss optics, immersive open-ear audio, and multilingual large language model (LLM) support including Google Gemini and OpenAI GPT. Designed with privacy-by-design security and modular scalability, it balances high-performance computing with everyday wearability. As HTC’s latest product line, VIVE Eagle represents the company’s transition from immersive headsets to AI-native wearables, establishing a long-term foundation for its intelligent device ecosystem.

Centered on the VIVE AI Platform, VIVE Eagle’s multiple LLMs enable deep semantic understanding, real-time visual analysis, and multilingual translation. With a modular software design, VIVE Eagle establishes an extensible smart wearable technology foundation that can rapidly adapt to diverse use cases, ranging from everyday assistance to professional and industrial applications.

Alongside this new category, HTC continued advancing its established VIVE VR product line through ongoing hardware and software updates that remain central to professional and enterprise applications. In partnership with Axon, HTC delivers immersive VR training solutions for law enforcement and public safety, combining high-precision 6DoF tracking, realistic controllers, and scenario-based simulations. Widely deployed across North America under a subscription model, VIVE VR continues to generate stable B2B revenue while reinforcing HTC’s leadership in professional XR solutions.

VIVE Arts

VIVE Arts, launched by HTC in 2017, advances artistic creation and access through immersive technologies. With over 75 global museum and cultural partnerships, 2025 marked a major expansion year, doubling deployments from 2024 and debuting three flagship Paris collaborations. At the Palace of Versailles, Versailles: Lost Gardens of the Sun King revived vanished royal sites in interactive VR. La Magie Opéra at Palais Garnier celebrated its 150^th anniversary through a multi-user operatic journey, while Playing with Fire at Philharmonie de Paris oered a mixed-reality concert experience with renowned pianist Yuja Wang.

Beyond Paris, VIVE Arts expanded globally through licensing and touring immersive works. In China, Terracotta Warriors: Secrets of the First Emperor’s Mausoleum brought Qin Shi Huang’s tomb to life in VR. We also toured major experiences including Horizon of Khufu, Eternal Notre-Dame, Le Bal de Paris de Blanca Li , and Gaudí: The Atelier of the Divine. Looking ahead to 2026, VIVE Arts will deepen innovation across XR, blockchain, and Web3, partnering with leading artists and institutions to shape the future of immersive digital art worldwide.

VIVE ORIGINALS

HTC VIVE ORIGINALS produces original XR works and virtual entertainment IP using volumetriccapture, blockchain, and immersive technologies. Since 2016, it has created eleven award-winning projects showcased at major international festivals, and has pioneered new revenue models through broadcast licensing and digital art editions, with collaborations spanning museums and film festivals. Its BEATDAY holographic platform further expanded into immersive concerts and metaverse dramas, leveraging 6DoF motion capture and interactive virtual performance formats.

BEATDAY has advanced virtual idol entertainment with interactive concerts, and upgraded to a WebGL browser-based platform in 2025, lowering access barriers while expanding commercial performances in partnership with TAICCA. Looking toward 2026, VIVE ORIGINALS will deepen virtual idol IP development, talent management, and music publishing through initiatives such as VPOP ASIA , Asia’s first virtual idol TV talent show. It will also expand VR location-based entertainment, including a VTuberfocused LBE project and a culturally adapted VR LBE version of Gloomy Eyes in collaboration with Atlas V.

DeepQ

In 2025, HTC DeepQ achieved significant advancements in public health technology with its Disease Control Butler (DCB) platform. The system expanded its health education eorts by launching targeted Q&A campaigns covering measles, influenza, COVID-19, and pneumococcal vaccines, strengthening public awareness of infectious disease prevention. A major technological milestone was the introduction of a next-generation semantic retrieval engine based on embedding models, enabling a vector-based knowledge repository for more accurate intent recognition and semantic analysis. This upgrade allowed real-time synchronization with global epidemic data sources, improving the speed and accuracy of public responses. By the end of 2025, the DCB had reached 10.56 million users, demonstrating its critical role in disseminating public health information and supporting national health policy communication.

More broadly, these 2025 developments reflect HTC DeepQ’s continued leadership in integrating AIdriven solutions into healthcare systems. Leveraging advanced AI to improve accessibility, responsiveness, and trust in public health services with its ongoing ecosystem of AI platforms, hospital chatbots, and medical technologies, HTC DeepQ has reinforced its position as a key innovator in digital health, delivering scalable, intelligent solutions that improve healthcare eciency, patient engagement, and overall public health outcomes.

Financial Performance

Revenue remained broadly in line with last year at NT$2.9 billion in 2025, compared to $3.08 billion in 2024, reflecting resilient core performance amid a year of portfolio optimization. Despite a challenging environment, the company maintained a gross margin of 35.9% and recorded an operating loss of NT$3.45 billion (with operating margin of -119.0%). Over the year, we completed the transfer of some of the VR team to Google and disposed of certain Taoyuan factory buildings as part of our strategic realignment. These actions have streamlined our operations and strengthened our balance sheet. As a result of improved cost structure, disciplined execution, and focused investment, the Company achieved a net profit of NT$6.03 billion, resulting in an EPS of NT$7.21.

At the same time, we continue to prioritize resource eciency and operational excellence across the organization. By optimizing processes, enhancing asset utilization, and embedding greater financial discipline into day-to-day decision-making over the last few years, we have been building a leaner and more agile operating model. Our teams remain focused on improving productivity, reducing waste, and aligning investments with long-term strategic priorities. This disciplined approach ensures that we are not only strengthening near-term financial performance, while also creating a more resilient foundation for sustainable growth in the years ahead.

Environment, Social and Governance (ESG)

In the first half of 2025, HTC strengthened its sustainability leadership through major global recognitions and continued progress in climate strategy, value chain responsibility, and ESG transparency. The company maintained top CDP Supplier Engagement Assessment ratings, earned repeated EcoVadis distinctions, and was included in leading ESG indices, including the FTSE4Good TIP Taiwan ESG Index. HTC also advanced its climate disclosures aligned with TCFD and leveraged Microsoft Cloud for Sustainability to complete verified greenhouse gas inventories and product carbon footprints, reinforcing its data-driven, accountable approach to environmental management.

HTC further deepened its ESG commitment through multiple prestigious awards, including four Taiwan Corporate Sustainability Awards, a TRIPs 1.5°C “EXCELLENT” rating by CommonWealth magazine, ISS STOXX Prime status, and three ESG for Culture Impact Awards recognizing its immersive cultural initiatives. The launch of an Internal Carbon Pricing mechanism marked another milestone, embedding climate accountability into strategic and financial decision-making. Together, these achievements demonstrate HTC’s integrated approach to sustainability — combining governance, innovation, cultural impact, and measurable climate action to advance its long-term net-zero target.

In 2025, we strengthened our foundation, advanced our innovation roadmap, and moved decisively toward sustainable profitability. The energy and strategic thinking behind our innovation ensures that we will be well positioned to seize the opportunities ahead. I would like to thank shareholders from the bottom of my heart for your unwavering trust and commitment to our vision of VIVE Reality.

HTC Corporation

Chairwoman and CEO

Cher Wang