Message from the President

I would like to take this opportunity to express my gratitude to our shareholders and investors for their continued support.

In the fiscal year ended December 31, 2025, the Japanese economy recovered moderately despite impact from US trade policies, particularly in the automotive industry. Looking ahead, this gradual recovery seems likely to continue with the help of various government policies and improvements in employment and income conditions. However, we must remain mindful of the risk future price trends and developments surrounding US trade policy could inflict downward pressure on the Japanese economy. Furthermore, we must also continue focusing our attention on potential impact from fluctuations in financial and capital markets.

In markets served by the Cyberlinks Group (the “Group”), investment in digital transformation (DX) and digitalization continues to grow thanks to changes in social structure stemming from population decline and diversification of lifestyles and work styles triggered by the COVID-19 pandemic.

In the food retail industry, consumers remain firmly cost‑conscious and continue to hold back on spending in response to rising prices. At the same time, we continue to face a challenging operating environment, with businesses facing mounting cost pressures (higher procurement costs, utility costs, logistics costs, labor costs, etc.). From a medium- to long-term perspective, in addition to concerns over market contraction and increasingly acute labor shortages associated with population decline, the industry is expected to incur both heightened M&A activity and intensified competition crossing traditional industry boundaries as companies from other sectors enter the market. To navigate this challenging business environment, it is essential to advance efforts to improve productivity, for example by promoting DX to improve the efficiency of store operations and optimizing our supply chain by collaborating with wholesalers and manufacturers.

At present, there is a growing movement to improve logistics efficiency across the barriers between companies through collaboration and shared use of resources in non-competitive areas.

In accordance with the Municipal Digital Transformation (DX) Promotion Plan proposed by Japan’s Ministry of Internal Affairs and Communications (MIC), government and municipal offices are migrating to standard-compliant systems utilizing the Government Cloud, targeting completion by the end of March 2026 in principle. These efforts are expected to lead to wide-ranging deployment of DX across national and local government offices. Furthermore, progress is underway on initiatives aiming to improve resident services and administrative efficiency. These initiatives include promoting the use of the My Number Card, such as through its integration with health insurance cards and driver’s licenses, as well as the simplification of administrative procedures.

As DX progresses in every sphere, from commercial transactions to administrative procedures, demand for “trust services”—which serve as data distribution infrastructure enabling various paper-based or face-to-face interactions to be conducted in cyberspace—is growing dramatically. We anticipate demand for simple and highly reliable services will continue to expand moving forward.

In the mobile phone sales market, the number of units sold in stores is trending downward due to the lengthening replacement cycle caused by the high prices of mobile devices, increased sales through online shops, and expanded circulation of used devices. With respect to store count and size, NTT Docomo has indicated a market‑driven policy of strategic store openings and efficiency measures. Meanwhile, demand for device replacement is growing ahead of the planned conclusion of 3G services in March 2026.

Navigating these circumstances in a manner consistent with its brand concept, “LINK Smart: Moving into the Era of Hands-Free Connectivity,” the Cyberlinks Group has proactively proposed safe, secure, low-cost, high-quality, and highly functional cloud services based on “shared cloud” (i.e., a shared infrastructure for cloud services).

In addition, under the vision of “WorkSmart: Every individual plays a leading role in creating a healthy, vibrant, and rewarding workplace,” in fiscal 2025 we raised salary levels by up to 9.0% (companywide average of 3.9%). We will continue to invest in human capital, including through measures to improve employee compensation in a stable and continuous manner.

Regarding future economic trends, the diversified lifestyles and work styles that took hold due to the COVID-19 pandemic have become firmly established. Furthermore, with the rapid proliferation of AI, the digitalization of society as a whole is accelerating. New business models are being rolled out across all industries, and companies are pushing DX aggressively in order to maintain and strengthen their competitiveness. Meanwhile, investment demand, particularly in cloud services and AI-related fields, remains high. In addition, with the implementation of MIC’s Municipal Digital Transformation (DX) Promotion Plan, initiatives targeting the standardization and shared use of information systems, the transition toward online administrative procedures, and the utilization of AI are underway among government agencies and local government offices. Accordingly, we anticipate ongoing investment aimed at improving productivity and operational efficiency.

Meanwhile, in the labor market, demand for human resources with digital expertise continues to grow as DX advances, and securing and developing outstanding talent have become key challenges in the information services industry as well. In response, the Cyberlinks Group will adopt initiatives aiming to create rewarding workplaces, improve operational and development efficiency through the proactive use of AI, and reduce manpower requirements through workflow automation.

In this business environment, based on its newly formulated Medium-Term Management Plan which runs from FY2026 through FY2030, the Group will target further growth under its brand concept (“LINK Smart: Moving into the Era of Hands-Free Connectivity”) by enhancing and expanding its delivery of safe, secure, low-cost, and high-quality cloud services based on “shared cloud” (a shared infrastructure for cloud services).

We will continue to strive for further business expansion and continuous improvement of corporate value to meet the expectations of our shareholders and investors. We humbly ask for your continued support as we move forward.

March 2026
Cyberlinks Co., Ltd.

President　Naoki Higashi