GAKUJO CO.,Ltd.

The Company's business is highly susceptible to employment conditions driven by economic trends, and in the event of major changes in the economic environment such as a global financial crisis, companies may reduce the number of hires and recruitment budgets, potentially affecting business results. While the impact of economic trends has been on a declining trend due to structural labor shortages, an economic downturn exceeding expectations remains a risk factor. As countermeasures, the Company is closely monitoring domestic and overseas economic trends and diversifying its client base.

The Company holds large volumes of personal information—including names, addresses, and email addresses—of young working professionals and students engaged in job-changing and job-hunting activities. If external leakage or improper use of such information occurs, it could cause a significant loss of trust from customers and users and severely damage the Company's brand image, posing a risk of material impact on business results and social credibility. As countermeasures, the Company employs encrypted communications (SSL/TLS), multi-factor authentication, access rights management, and EDR implementation, and conducts personal information protection training and targeted phishing email drills at least once a year. The Company has maintained Privacy Mark certification (the first such certification among job-hunting media companies) since 1998.

If a pandemic occurs at a level comparable to COVID-19 or involving a new infectious disease, client companies may reduce recruitment budgets due to deteriorating business performance, and in-person events (such as job fairs and career fairs) may be forced to cancel or operate under restrictions, posing a risk of decreased revenue. As countermeasures, the Company is strengthening web media services such as "Re Shukatsu" and "Re Shukatsu Campus", and expanding online joint corporate seminars and recruitment video services.

Web media service provision may be temporarily suspended due to natural disasters such as earthquakes, typhoons, or floods causing power outages or communication failures, or due to unauthorized external intrusion or infection with malicious software. There is also a risk of service outages due to excessive load. As countermeasures, the Company has implemented a redundant configuration using multiple geographically dispersed data centers, regular backups, and failure detection systems; however, in the event of a large-scale natural disaster or an unavoidable network failure, business results may still be affected.

The Company has designated the period from FY2024 (ending October 2024) through FY2026 (ending October 2026) as an "investment period" and is pursuing growth investments and new business development. However, there is a risk of delays in the planned schedule, the possibility of additional investments being required, and the possibility that expected earnings may not be secured. If circumstances arise that differ from the plan, this poses a risk of affecting business development and performance. To mitigate this risk, the Company has adopted a policy of gathering necessary information and conducting various forms of verification.

The recruitment information business, which accounts for 98.1% of net sales, is primarily specialized in recruiting young talent such as working professionals and students in their twenties. While a decline in the young workforce could serve as a business expansion opportunity due to increased difficulty in hiring, if the supply-demand balance becomes extremely skewed, it could affect business performance. Additionally, if the proportion of regular full-time employment relatively declines due to the expansion of diverse work styles such as freelancing and side jobs/dual employment, this could affect the Company's business activities and performance.

Net sales tend to be weighted toward the second half of the fiscal year, centered on products for new graduate recruitment. In the 48th fiscal year (FY2025, ending October 2025), the first-half/second-half net sales composition ratios were 39.6%/60.4% respectively, and operating income ratios were 20.0%/80.0%, showing a pronounced concentration in the second half. From FY2024 (ending October 2024) through FY2026 (ending October 2026), the Company expects this seasonal fluctuation to ease as the proportion of career recruitment services expands; however, during this process, the timing of net sales concentration may shift to a pattern different from that seen historically.

From the standpoint of employee protection, regulations concerning the provision of job-change and job-hunting information through recruitment media and similar channels may be strengthened, and there is a risk that revisions to relevant laws and regulations or the introduction of new legal restrictions could affect the Company's business activities. The Company holds licenses for its fee-charging employment placement business (licensed by the Minister of Health, Labour and Welfare, valid until June 30, 2026) and worker dispatching business (same authority, valid until July 31, 2030), and any revision of the relevant laws and regulations governing these licenses could also affect its business. The Company currently recognizes no obstacles to the renewal of these licenses.

The government-led "Inter-Ministerial Liaison Conference on the Schedule for Job-Hunting and Recruitment Activities" is discussing the framework for new graduate recruitment activities. Currently, the existing rules—company information sessions opening on March 1 and selection processes beginning on June 1—are expected to remain in place through the spring 2027 intake. However, if the schedule is significantly changed in the future, this could affect the timing of the Company's revenue recognition and its business activities. The Company gathers information and responds to such developments through year-round exchanges of views with relevant government ministries and university career center personnel via the Japan Association of Employment Information Providers (a public interest incorporated association).

Since the fiscal year ended October 2009, the Company has undertaken employment support projects and recruitment assistance projects commissioned by the Ministry of Economy, Trade and Industry, the Small and Medium Enterprise Agency, local governments, and other entities. These projects are subject to national policy and the number of publicly solicited projects may fluctuate accordingly, which could affect the Company's business performance. If commissioned projects decrease due to changes in national policy or budget cuts, there is a risk that this revenue source could shrink.