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htc HTC CORPORATION 2Q26 RESULTS SUMMARY
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DISCLAIMER STATEMENT 2 • This presentation and release contain “forward-looking statements” which may include projections of future results of operations, financial condition or business prospects based on our own information and other sources. • Our actual results of operations, financial condition or business prospects may differ from those expressed or implied in these forward-looking statements for a variety of reasons, including but not limited to market demand, price fluctuations, competition, international economic conditions, supply chain issues, exchange rate fluctuations and other risks and factors beyond our control. • The forward-looking statements in this release reflect the current belief of HTC as of the date of this release. HTC undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such date.
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EXECUTIVE SUMMARY 3 2Q26 Financial Highlights: • Quarterly revenue of NT$0.61 billion with a gross margin of 42.6%. • Quarterly operating loss of NT$0.57 billion with an operating margin of -93.2%. • Quarterly net loss attributable to owners of the parent was NT$0.28 billion, or an EPS of -NT$0.33.
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EXECUTIVE SUMMARY 4 2Q26 Business Update: • HTC has announced that its AI smart glasses, VIVE Eagle, has partnered with Japan's KDDI to officially enter the Japanese market. VIVE Eagle is now officially launched in Japan through au +1 collection, and start sales and display experiences at KDDI and Okinawa Cellular directly operated stores, au Online Shop, and designated channels, further expanding HTC's presence in Japan's AI wearable market. • VIVE Arts has collaborated with the Musée national Picasso-Paris and French immersive content production company Lucid Realities to launch a new XR experience of “The Metamorphoses of Guernica”. This immersive experience is exhibited at the Musée National Picasso- Paris, using immersive technology to guide audiences into the creative background, historical context, and significance of Picasso's iconic masterpiece Guernica. • VIVERSE has collaborated with Taiwan‘s Ministry of Culture and international immersive content studio, Wevr, to launch the multi-user free-roam XR experience “The Blu: Expedition Taiwan“. Taking the ocean surrounding Taiwan as the starting point for the global ocean- themed immersive content project, and through large-scale free-roam XR technology to lead the audience to experience the deep and real connection between Taiwan and the ocean, creating an immersive experience that combines cultural content, marine education, and location-based entertainment. • G REIGNS, in collaboration with Taiwan-based communications technology provider Microelectronics Technology Inc. and Alaska-based U.S. communications service provider Microcom, successfully completed the system integration and laboratory validation of an end-to- end Open RAN solution, marking a key milestone for future expansion into the U.S. market and communications deployment in remote areas.
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REVENUES AND OPERATING PROFIT 5 Revenues NT$bn Operating Profit (Loss) NT$bn 0.7 0.7 0.8 0.7 0.6 25Q2 25Q3 25Q4 26Q1 26Q2 (0.8) (0.9) (0.6) (0.6) (0.6) 25Q2 25Q3 25Q4 26Q1 26Q2
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Gross Margin % GROSS AND OPERATING MARGINS 6 Operating Margin % 36.5 35.2 34.4 41.7 42.6 25Q2 25Q3 25Q4 26Q1 26Q2 (120.3) (119.2) (79.1) (86.2) (93.2) 25Q2 25Q3 25Q4 26Q1 26Q2
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2Q 2026 P&L (CONSOLIDATED) NT$bn 2Q25 1Q26 2Q26 REVENUES 0.7 0.7 0.6 GROSS PROFIT 0.3 0.3 0.3 OPERATING EXPENSE 1.1 0.9 0.9 SALES MKTING. 0.4 0.4 0.4 RESEARCH DEV. 0.4 0.2 0.2 GENERAL ADM. 0.3 0.3 0.3 OPERATING PROFIT (LOSS) -0.8 -0.6 -0.6 NPBT -0.7 -0.2 -0.3 NPAT1 -0.7 -0.2 -0.3 GROSS MARGIN (%) 36.5% 41.7% 42.6% OPERATING MARGIN (%) -120.3% -86.2% -93.2% EPS2 (NT$) -0.86 -0.29 -0.33 71 Attributable to stockholders of parent company, excluding minority interest. 2 EPS was calculated based on number of outstanding shares at that time.
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2Q 2026 BALANCE SHEET (CONSOLIDATED) NT$bn 2025/06/30 2026/03/31 2026/06/30 TOTAL ASSETS 39.0 39.0 38.9 Cash 1 12.7 3.2 2.7 AR 0.5 0.4 0.5 INVENTORY 0.5 0.5 0.5 OTHER ASSETS 25.3 34.9 35.2 TOTAL LIABILITIES 16.6 11.9 12.7 TOTAL EQUITY 2 22.4 27.1 26.2 8 1. Includes time deposits with original maturities more than 3 months 2. Attributable to stockholders of parent company, excluding minority interest.
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- 3 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands of New Taiwan Dollars) June 30, 2026 December 31, 2025 June 30, 2025 ASSETS Amount % Amount % Amount % CURRENT ASSETS Cash and cash equivalents (Note 6) $ 2,195,693 6 $ 2,909,535 8 $ 12,410,525 32 Financial assets at fair value through profit or loss - current (Notes 7 and 30) 14,976,642 39 12,826,683 33 6,773,421 17 Financial assets at fair value through other comprehensive income - current (Notes 8 and 30) 146,607 - 206,397 1 291,145 1 Notes and trade receivables (Notes 10 and 24) 468,743 1 506,730 1 526,575 1 Other receivables (Note 10) 97,723 - 2,604,460 7 19,213 - Current tax assets 161,595 - 191,124 - 214,717 1 Inventories (Note 11) 501,943 1 450,243 1 510,736 1 Prepayments (Note 12) 182,373 1 193,044 1 258,023 1 Other current financial assets (Notes 9 and 32) 435,630 1 113,036 - 109,357 - Other current assets 36,263 - 30,371 - 37,185 - Total current assets 19,203,212 49 20,031,623 52 21,150,897 54 NON-CURRENT ASSETS Financial assets at fair value through profit or loss - non-current (Notes 7 and 30) 3,313,623 9 2,216,058 6 465,832 1 Financial assets at fair value through other comprehensive income - non-current (Notes 8 and 30) 5,152,367 13 4,731,637 12 4,549,598 12 Investments accounted for using equity method (Note 14) 857,226 2 862,292 2 890,235 2 Property, plant and equipment (Notes 15 and 32) 6,288,307 16 6,326,356 17 6,797,990 18 Right-of-use assets (Note 16) 35,931 - 38,545 - 47,888 - Investment properties, net (Notes 17 and 32) 1,509,122 4 1,539,993 4 2,435,163 6 Intangible assets (Note 18) 375,674 1 414,134 1 418,150 1 Deferred tax assets 1,061,248 3 1,067,262 3 1,136,057 3 Refundable deposits 350,179 1 345,162 1 327,959 1 Net defined benefit assets - non-current 643,920 2 640,113 2 564,103 2 Other non-current financial assets (Notes 9 and 32) 75,876 - 121,338 - 139,343 - Other non-current assets (Note 12) 2,614 - 1,659 - 2,682 - Total non-current assets 19,666,087 51 18,304,549 48 17,775,000 46 TOTAL $ 38,869,299 100 $ 38,336,172 100 $ 38,925,897 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Note 19) $ 500,000 2 $ 1,000,000 3 $ 600,000 1 Financial liabilities at fair value through profit or loss - current (Notes 7 and 30) 13,933 - 9,441 - 94,616 - Notes and trade payables (Notes 20 and 31) 4,639,080 12 4,783,207 13 4,703,341 12 Other payables (Notes 21 and 31) 2,739,453 7 2,716,734 7 2,578,952 7 Current tax liabilities 67,047 - 54,240 - 52,088 - Provisions - current (Note 22) 251,596 1 285,207 1 323,787 1 Lease liabilities - current (Notes 16 and 31) 19,920 - 15,930 - 20,187 - Other current liabilities (Notes 21 and 24) 490,181 1 480,261 1 400,346 1 Total current liabilities 8,721,210 23 9,345,020 25 8,773,317 22 NON-CURRENT LIABILITIES Long-term borrowings (Notes 19 and 32) 3,750,000 10 2,200,000 6 7,500,000 19 Deferred tax liabilities 99,401 - 104,435 - 56,246 - Lease liabilities - non-current (Notes 16 and 31) 19,462 - 26,000 - 30,790 - Guarantee deposits received 65,693 - 64,026 - 150,044 1 Total non-current liabilities 3,934,556 10 2,394,461 6 7,737,080 20 Total liabilities 12,655,766 33 11,739,481 31 16,510,397 42 EQUITY (Note 23) Share capital - ordinary shares 8,360,971 21 8,360,211 22 8,353,400 22 Capital surplus 16,342,365 42 16,340,444 43 16,323,321 42 Retained earnings Legal reserve 1,012,760 3 815,365 2 815,365 2 Special reserve 3,283,907 8 2,390,621 6 2,390,621 6 (Accumulated deficits) unappropriated earnings (42,581) - 1,973,957 5 (755,956) (2) Total retained earnings 4,254,086 11 5,179,943 13 2,450,030 6 Other equity (2,743,889) (7) (3,283,907) (9) (4,711,251) (12) Total equity 26,213,533 67 26,596,691 69 22,415,500 58 TOTAL $ 38,869,299 100 $ 38,336,172 100 $ 38,925,897 100 The accompanying notes are an integral part of the consolidated financial statements.
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- 4 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except (Loss) Earnings Per Share) For the Three Months Ended June 30 For the Six Months Ended June 30 2026 2025 2026 2025 Amount % Amount % Amount % Amount % OPERATING REVENUE (Notes 24 and 31) $ 614,205 100 $ 695,012 100 $ 1,266,828 100 $ 1,403,324 100 OPERATING COSTS (Notes 11, 25 and 31) 352,355 57 441,629 64 732,807 58 883,535 63 GROSS PROFIT 261,850 43 253,383 36 534,021 42 519,789 37 OPERATING EXPENSES (Notes 25 and 31) Selling and marketing 342,534 56 418,851 60 690,279 54 927,512 66 General and administrative 258,421 42 292,084 42 509,302 40 605,990 43 Research and development 233,541 38 378,284 55 469,863 37 966,262 69 Total operating expenses 834,496 136 1,089,219 157 1,669,444 131 2,499,764 178 OPERATING LOSS (572,646 ) (94 ) (835,836 ) (120 ) (1,135,423 ) (89 ) (1,979,975 ) (141 ) NON-OPERATING INCOME AND EXPENSES Interest income (Note 25) 10,488 2 163,151 23 22,479 2 381,423 27 Other income (Notes 25 and 31) 238,128 39 300,538 43 413,809 33 507,286 36 Other gains and losses (Note 25) 111,178 18 (213,979 ) (31 ) 283,236 22 6,867,224 490 Finance costs (Notes 25 and 31) (22,982 ) (4 ) (77,973 ) (11 ) (43,019 ) (4 ) (169,646 ) (12 ) Share of profit or loss of associates and joint ventures (Note 14) (24,229 ) (4 ) (50,989 ) (7 ) (29,626 ) (2 ) (152,251 ) (11 ) Total non-operating income and expenses 312,583 51 120,748 17 646,879 51 7,434,036 530 (LOSS) INCOME BEFORE INCOME TAX (260,063 ) (43 ) (715,088 ) (103 ) (488,544 ) (38 ) 5,454,061 389 INCOME TAX EXPENSE (Note 26) (19,400 ) (3 ) (490 ) - (32,593 ) (3 ) (2,115,110 ) (151 ) (LOSS) INCOME FOR THE PERIOD (279,463 ) (46 ) (715,578 ) (103 ) (521,137 ) (41 ) 3,338,951 238 (Continued)
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- 5 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except (Loss) Earnings Per Share) For the Three Months Ended June 30 For the Six Months Ended June 30 2026 2025 2026 2025 Amount % Amount % Amount % Amount % OTHER COMPREHENSIVE INCOME AND LOSS, NET OF INCOME TAX Items that will not be reclassified subsequently to profit or loss: Unrealized (loss) gain on investments in equity instruments designated as at fair value through other comprehensive income $ (79,057 ) (13 ) $ 110,825 16 $ 280,378 22 $ (170,848 ) (12 ) Items that may be reclassified subsequently to profit or loss: Exchange differences on translating foreign operations (93,142 ) (15 ) (2,910,401 ) (419 ) 272,953 22 (2,244,688 ) (160 ) Other comprehensive (loss) income for the period, net of income tax (172,199 ) (28 ) (2,799,576 ) (403 ) 553,331 44 (2,415,536 ) (172 ) TOTAL COMPREHENSIVE INCOME AND LOSS FOR THE PERIOD $ (451,662 ) (74 ) $ (3,515,154 ) (506 ) $ 32,194 3 $ 923,415 66 (LOSS) EARNINGS PER SHARE (Note 27) Basic $ (0.33) $ (0.86) $ (0.62) $ 4.00 Diluted $ (0.33) $ (0.85) $ (0.62) $ 3.97 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)
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- 6 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars) Other Equity Retained Earnings Exchange Unrealized Losses on Financial Assets Share Capital (Accumulated Deficits) Unappropriated Differences on Translating Foreign at Fair Value through Other Comprehensive Ordinary Shares Capital Surplus Legal Reserve Special Reserve Earnings Operations Income Total Equity BALANCE, JANUARY 1, 2025 $ 8,335,340 $ 16,277,565 $ 2,490,682 $ 3,080,480 $ (6,365,177) $ (920,620) $ (1,470,001) $ 21,428,269 Legal reserve in covering accumulated deficits - - (1,675,317) - 1,675,317 - - - Reversal of special reserve - - - (689,859) 689,859 - - - Net income for the six months ended June 30, 2025 - - - - 3,338,951 - - 3,338,951 Other comprehensive income and loss for the six months ended June 30, 2025 - - - - - (2,244,688) (170,848) (2,415,536) Total comprehensive income and loss for the six months ended June 30, 2025 - - - - 3,338,951 (2,244,688) (170,848) 923,415 Issuance of shares due to exercise of employee share options 18,060 45,756 - - - - - 63,816 Disposal of investments in equity instruments at fair value through other comprehensive i ncome - - - - (94,906) - 94,906 - BALANCE, JUNE 30, 2025 $ 8,353,400 $ 16,323,321 $ 815,365 $ 2,390,621 $ (755,956) $ (3,165,308) $ (1,545,943) $ 22,415,500 BALANCE, JANUARY 1, 2026 $ 8,360,211 $ 16,340,444 $ 815,365 $ 2,390,621 $ 1,973,957 $ (1,271,223) $ (2,012,684) $ 26,596,691 Legal reserve - - 197,395 - (197,395) - - - Special reserve - - - 893,286 (893,286) - - - Cash dividends - - - - (418,033) - - (418,033) Net loss for the six months ended June 30, 2026 - - - - (521,137) - - (521,137) Other comprehensive income and loss for the six months ended June 30, 2026 - - - - - 272,953 280,378 553,331 Total comprehensive income and loss for the six months ended June 30, 2026 - - - - (521,137) 272,953 280,378 32,194 Issuance of shares due to exercise of employee share options 760 1,921 - - - - - 2,681 Disposal of investments in equity instruments at fair value through other comprehensive income - - - - 13,313 - (13,313) - BALANCE, JUNE 30, 2026 $ 8,360,971 $ 16,342,365 $ 1,012,760 $ 3,283,907 $ (42,581) $ (998,270) $ (1,745,619) $ 26,213,533 The accompanying notes are an integral part of the consolidated financial statements.
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- 7 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Six Months Ended June 30 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES (Loss) income before income tax $ (488,544) $ 5,454,061 Adjustments for: Depreciation expense 90,837 112,681 Amortization expense 8,888 8,563 Expected credit loss recognized on trade receivables - 908 (Gain) loss on financial assets at fair value through profit or loss (352,811) 66,219 Finance costs 43,019 169,646 Interest income (22,479) (381,423) Dividend income (221,561) (4,095) Share of the loss of associates and joint ventures accounted for using the equity method 29,626 152,251 Net (gain) loss on disposal of property, plant and equipment (1,301) 3,149 Net gain on disposal of assets and licensing income (Note 25) - (8,045,926) Impairment (reversal gain) loss on non-financial assets (8,288) 557,619 Gain from lease modifications (7) (1) Changes in operating assets and liabilities Increase in financial assets mandatorily classified as at fair value through profit or loss (16,520) (50,819) Decrease (increase) in notes and trade receivables 37,987 (30,475) Decrease in other receivables 16,195 4,223 (Increase) decrease in inventories (14,567) 45,665 Decrease in prepayments 10,671 147,845 Increase in other current assets (5,892) (7,277) Increase in other non-current assets (4,762) (5,346) Decrease in notes and trade payables (75,842) (605,264) Decrease in other payables (396,601) (479,851) Decrease in provisions (33,611) (60,138) Increase (decrease) in other current liabilities 9,920 (49,845) Cash used in operations (1,395,643) (2,997,630) Interest received 21,206 473,604 Interest paid (41,992) (188,692) Income tax paid (56,919) (541,847) Net cash used in operating activities (1,473,348) (3,254,565) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income (108,812) (813,316) Proceeds from disposal of financial assets at fair value through other comprehensive income 43,074 434 Purchase of financial assets at fair value through profit or loss (11,725,007) (7,446,726) (Continued)
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- 8 - HTC CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands of New Taiwan Dollars) For the Six Months Ended June 30 2026 2025 Proceeds from disposal of financial assets at fair value through profit or loss $ 9,075,566 $ 165,978 Acquisition of investments accounted for using equity method (9,299) (134,658) Payments for property, plant and equipment (11,756) (282,911) Proceeds from disposal of property, plant and equipment 4,307 1,558 Increase in refundable deposits (5,017) - Decrease in refundable deposits - 37,666 Decrease in other receivables from disposal of investments 2,543,117 - Payments for intangible assets - (134,738) Proceeds from disposal of intangible assets 8 - Payments for investment properties - (833) Increase in other financial assets (277,132) - Decrease in other financial assets - 10,141,097 Dividends received 166,671 4,095 Proceeds from disposal of assets and licensing income (Note 25) - 8,045,926 Net cash (used in) generated from investing activities (304,280) 9,583,572 CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings (500,000) (2,800,000) Repayments of long-term borrowings - (4,300,000) Increase in long-term borrowings 1,550,000 - Increase in guarantee deposits received 1,667 - Decrease in guarantee deposits received - (2,074) Repayments of the principal portion of lease liabilities (11,095) (13,469) Employee share options executed 2,681 63,816 Net cash generated from (used in) financing activities 1,043,253 (7,051,727) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS 20,533 (1,105,964) NET DECREASE IN CASH AND CASH EQUIVALENTS (713,842) (1,828,684) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 2,909,535 14,239,209 CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,195,693 $ 12,410,525 The accompanying notes are an integral part of the consolidated financial statements. (Concluded)