Message from Management

Toward Medium-Term Profit Growth:

Revision of Medium-Term Financial Targets

When we formulated our Medium-Term Management Strategy in 2023, my top priority was to unlock further growth for the NTT Group by transforming the business portfolio. Our communications business has long provided a stable earnings base. But with technological advances, particularly in AI, accelerating and the market environment changing rapidly, we cannot stand still. Sustainable growth depends on our ability to anticipate these changes and continually transform ourselves. That means continuing to invest in growth areas, creating new value, and translating that value into future profits. Underpinning our strategy was the need to strengthen our cash generation capacity to fund these investments.

With this in mind, the Medium-Term Management Strategy we announced in May 2023 identified "Innovating a Sustainable Future for People and Planet" as our guiding principle and charted a path to sustainable profit growth through the creation of new value. Delivering on this ambition requires us to invest boldly in growth areas. We therefore committed to approximately ¥8 trillion in growth investments from FY2023 through FY2027 and set a medium-term financial target of approximately ¥4 trillion in EBITDA for FY2027 as a measure of the results of these investments.

One of my key priorities was to position customer experience (CX) and employee experience (EX) as drivers of corporate value creation. Technology alone is not what makes the NTT Group competitive. I believe our sustainable competitive strength comes from a culture in which every employee embraces new challenges and delivers new value to our customers. When employees find purpose in their work and continue to take on new challenges, they deliver greater value to customers. The trust and expectations of our customers, in turn, encourage employees to embrace further challenges. I believe this virtuous cycle of CX and EX is the very foundation for enhancing corporate value.

Revision of Medium-Term Financial Targets

Since announcing the Medium-Term Management Strategy, the NTT Group has steadily advanced its self-transformation to enhance corporate value. Our proactive investments in growth areas and transformation of the business portfolio are beginning to deliver tangible results. EBITDA in our Value-added Areas (Growth Areas) increased from approximately ¥1.3 trillion in FY2022 to approximately ¥1.8 trillion in FY2025.
At the same time, the environment surrounding our Connectivity Areas (Existing Areas) is changing faster than we anticipated when we formulated the strategy. In addition to the maturing domestic telecommunications market and intensifying competition, the rapid growth in traffic driven by the proliferation of AI and video services has significantly raised expectations for mobile network performance.
Against this backdrop, we have prioritized maintaining and strengthening our competitiveness over the long term, bringing forward investments to rebuild and expand our customer base and improve network quality. These investments are essential to our medium- to long-term growth. In the near term, however, they have weighed on profits, and performance in our Connectivity Areas has fallen short of our initial expectations.
As a result, EBITDA for the NTT Group as a whole is now expected to fall below the level originally projected. In light of these developments, we reassessed our growth strategy and investment plans from a medium- to long-term perspective and revised our medium-term financial targets in May 2026. While we have pushed back our target for achieving ¥4 trillion in EBITDA to FY2030, our fundamental strategy remains unchanged: we will continue to transform our business portfolio by investing in growth areas.

Path to Achieving EBITDA of ¥4 Trillion in FY2030

To achieve our target of ¥4 trillion in EBITDA in FY2030, we will mobilize the entire NTT Group to drive progress across both our Value-added Areas and Connectivity Areas. Two priorities will be critical: the implementation of a Group-wide AI strategy and recovery in NTT DOCOMO's performance.
AI in particular has the power to fundamentally reshape the value we deliver to customers and transform the way we do business. By combining AI with the technologies and customer base the NTT Group has built over the years, we will transform our business portfolio to drive sustainable profit growth and enhance corporate value.

FY2030 Is Just a Milestone

FY2030 represents just one stage in our pursuit of medium- to long-term profit growth. We will deepen our AI-driven business transformation while accelerating our expansion into new growth areas such as mobility, space, and optical quantum computing through co-creation with our partners. We will continue to enhance corporate value well beyond 2030 by turning solutions to social challenges into opportunities to create new value and translating that value into sustainable profit growth.

Path to Achieving Our Targets:
The NTT Group's AI Strategy
Changes in the AI Landscape

As Japan's population declines and rural depopulation continues, there are fewer people available to support daily life in local communities. Social infrastructure that communities have long relied on, including transportation and healthcare, must also evolve in response to these changing conditions. The NTT Group is harnessing the power of AI and networks to tackle these social challenges. By understanding the specific challenges facing each community and industry and applying technology to address them, we aim to create a prosperous society where everyone can continue to live safely and securely in the communities they call home.

NTT Group's AI Strategy

The NTT Group's AI strategy starts with putting AI to extensive use across our own operations and then bringing the expertise and benefits we gain to our customers' businesses. We combine the AI expertise gained through our own experience with the NTT Group's ability to provide a full range of services globally, from consulting and applications to network and data center infrastructure. This allows us to support customers seamlessly throughout their AI journey, from planning and implementation through to operation. This will enable us to go beyond improving operational efficiency through AI and help customers transform their businesses and create new value.
Underpinning the continued expansion and advancement of AI adoption is AIOWN, our AI-native infrastructure designed to support all forms of AI efficiently and effectively. To unlock the full potential of AI and ensure its safe and secure use, we will continue to bolster AI governance, with a focus on risk management and reliability.

AI-Native Infrastructure AIOWN Supporting an AI-Driven Society

With the rapid adoption of generative AI, the use of AI is expanding beyond operational efficiency into companies' core business operations and, increasingly, into social infrastructure such as transportation, logistics, and manufacturing, as well as robotics. AI workloads are also shifting from training to inference, and we expect to enter an era in which AI is used in real time throughout society. As AI agents become more widespread, the volume of tokens being processed is surging, creating new challenges as the computing resources, power consumption, and operating costs required for AI continue to grow.
These changes are placing new demands on the infrastructure that supports AI, with requirements that go beyond those of conventional ICT infrastructure, including immense computing power, advanced network performance, a stable power supply, and support for data sovereignty and security.

The NTT Group is advancing AIOWN, an AI-native infrastructure that will serve as a new foundation for society in the AI era. AIOWN is an integrated infrastructure that optimally combines computing resources such as GPUs with networks, data centers, edge environments, and power based on each customer's AI needs, enabling secure and efficient operation.
We will support the implementation of AI in society by integrating the NTT Group's communications, data center, cloud, power, and operational technologies and optimizing the resources required for AI.

Promotion of Responsible AI Use

AI will play an increasingly important role in the NTT Group's business strategy. To pursue an AI-driven growth strategy, we must use AI responsibly while earning the trust of society. With this in mind, in April 2026 we added "Promotion of Responsible AI Use" as a new activity to the NTT Group Global Sustainability Charter.
It will also become increasingly important to enhance AI governance and appropriately manage the associated risks. Since June 2024, the NTT Group has established rules and guidelines, including the NTT Group AI Charter, and appointed Co-Chief AI Officers (Co-CAIOs) to advance AI risk management.
Developing the AI talent needed to support our businesses is equally essential. By the end of FY2025, the number of employees with at least basic-level AI skills had reached 200,000, far exceeding our target of 100,000 and representing more than half of our 340,000 employees. Going forward, in addition to providing training tailored to each employee's skill level, we will provide opportunities to gain practical experience and strengthen skills through their day-to-day work. By the end of FY2027, we aim for all employees to have basic-level AI skills and 25,000 employees to have intermediate-level skills.

Using AI to Expand the Corporate Business, Not Just Improve Cost Efficiency

Discussion of AI use in corporate business often focuses on improving productivity and operational efficiency. In our dialogue with investors, we are also sometimes asked about concerns over so-called "AI disruption": whether advances in AI could erode the competitive advantage of labor-intensive IT services and fundamentally change the business model itself.
AI can certainly drive significant improvements in process efficiency and productivity. But by redirecting the human resources freed up through AI to consulting that addresses customers' management and business challenges and to the creation of new services and solutions, we can deliver even greater value to our customers. By expanding the value we provide to customers and thereby creating new demand and market opportunities, I am convinced that AI will contribute significantly not only to cost efficiency but also to revenue growth in our corporate business.
As AI becomes more widespread, the competitive landscape for corporate business will change significantly. At the same time, I believe that the role we play in deeply understanding our customers' management challenges, envisioning transformation, and working alongside them to bring it to fruition will become more important than ever in supporting value creation.

Leveraging the NTT Group's Customer Base to Expand the Value We Provide

There are approximately 2,000 companies in Japan with annual revenue of ¥100 billion or more. NTT DOCOMO BUSINESS has contact with approximately 90% of these companies, while NTT DATA has built deep relationships with around 500 of them. NTT DATA has worked closely with customers at the management and business levels, supporting business transformation and stronger competitiveness through hands-on consulting. NTT DOCOMO BUSINESS, meanwhile, has contact with a broad range of customers through its extensive portfolio of services, including network and security services.
Going forward, we will leverage the human resources freed up through the use of AI at NTT DATA to extend the company's high-value-added consulting and solutions to the NTT Group's broad customer base, including NTT DOCOMO BUSINESS customers. In doing so, we will further enhance the value we provide to customers and drive further growth in our corporate business.
These efforts will not be limited to Japan. By taking the AI expertise, successful use cases, and new business models we develop in Japan to markets around the world, we aim to expand the value we provide globally and create further opportunities for growth.

Enhancing Corporate Value by Advancing CX and EX

Under our Medium-Term Management Strategy, we have positioned "Upgrading the Customer Experience (CX)" and "Improving the Employee Experience (EX)" as key initiatives for realizing the first pillar, "NTT as a Creator of New Value and Accelerator of a Global Sustainable Society."

Creating Value from the Customer's Perspective (Upgrading CX)

Advancing CX is a key foundation for growth that supports the creation and expansion of businesses by generating new value. Based on this approach, we have appointed Chief Customer eXperience Officers (CCXOs) at our major Group companies since FY2024, and in FY2025 we worked across the Group to deliver a customer experience that makes us the preferred choice.
In FY2026, under the theme of "Making CX a Growth Driver," we are taking these efforts to the next level. By positioning CX as a source of competitive advantage and continuously improving the services and solutions provided by our Group companies through our ability to rapidly incorporate customer feedback, we will deliver new value to our customers and achieve sustainable growth.

People Who Take On Challenges Create Corporate Value (Upgrading EX)

Our people are the main driving force behind the sustainable enhancement of corporate value. As advances in AI and IOWN and the transformation of our business portfolio accelerate, we are placing investment in our people at the heart of management, with an eye to growth five and 10 years into the future. We are creating an environment in which every employee can continue to learn, embrace new challenges, and grow, while expanding opportunities for them to draw on their diverse experiences and skills to create new value. When employees embrace challenges and realize their potential, they create new value for our customers, which in turn drives further growth. I believe this virtuous cycle is the source of both the NTT Group's competitiveness and the sustainable enhancement of corporate value.

Representative Member of the Board
President and CEO
Akira Shimada