Gurunavi, Inc.

There is a risk that deterioration in the profitability of member restaurants due to soaring raw material and utility costs linked to rising crude oil prices, as well as structural increases in labor costs, could lead to a decline in the number of paying member stores and contract unit prices. Delayed adaptation to qualitative changes in inbound demand caused by geopolitical risk and exchange rate fluctuations, as well as to the growing selectivity in personal consumption, may also adversely affect business performance. As countermeasures, the company is working on expanding the functions of the "Restaurant Management Platform," building a customer referral cycle leveraging the Rakuten ecosystem, and supporting productivity improvements through agent services and mobile order services.

Large-scale natural disasters such as a Tokyo Inland Earthquake or Nankai Trough earthquake, severe disasters associated with climate change, and the emergence of new infectious diseases could cause a wave of business suspensions and closures among member restaurants, dealing a direct and potentially fatal blow to the company's revenue base. In the past, revenue from member restaurants declined sharply due to the COVID-19 pandemic, and there is also an inherent risk of prolonged service outages due to physical damage to service infrastructure such as data centers and communication networks. The company addresses this through BCP formulation and regular drills, utilization of teleworking infrastructure, and strengthening system redundancy and backup through cloud migration.

Under the medium-term management plan covering FY2027 (ending March 2027) through FY2029 (ending March 2029), if the expansion of "Restaurant Management Platform" functions in the B2B domain does not proceed as planned, delays in acquiring new member stores and other factors could affect the medium- to long-term growth foundation and financial condition. The company has made strategic investments in the first year, including a significant strengthening of its sales structure, and is working on expanding multifaceted platform functions including CRM and payment features, as well as deepening collaboration with the Rakuten Group. It aims to reduce the risk of failing to achieve the plan through capital-cost-conscious management centered on ROIC management and regular progress reviews at Board of Directors and Management Executive Committee meetings.

With the advancement of generative AI technology, consumer behavior for searching restaurants is shifting from "portal site search" to "information gathering through dialogue with AI," creating a risk that the competitiveness of the existing media-based sales promotion support model could relatively decline. Delays in investment recovery due to the short lifespan of technology in AI investment and system renewal, decreased development productivity due to technical debt in existing systems, and loss of uniqueness due to the commoditization of information assets could have a material impact on the medium- to long-term growth foundation and financial condition. The company is promoting AI-friendly transformation, building an information ecosystem, and introducing a Prototype First development process centered on a dedicated organization, and is working to maintain competitive advantage through the accumulation of real-world information via expanded restaurant touchpoints in the B2B domain.

Due to intensifying competition for talent in the IT and services industries, if the company is unable to secure, as planned, the sales personnel responsible for acquiring new member stores and supporting the management of existing member restaurants, there is a risk that sales growth could stagnate. If a rise in turnover disrupts the transfer of know-how, or if there are delays in acquiring the consulting skills needed to support restaurant DX, this could lead to a decline in sales productivity and a significant increase in recruitment and training costs, potentially having a material impact on competitiveness and business performance. The company addresses this through diversification of recruitment channels, visualization of organizational conditions via engagement surveys, strengthening of management training by hierarchical level, and company-wide use of AI to improve operational efficiency and reallocate personnel to higher value-added work.

If increasingly sophisticated cyberattacks, such as AI-enabled attacks, or security breaches exploiting supply chain vulnerabilities result in large-scale system failures or leaks of personal information, this could lead not only to reduced revenue from service interruptions but also to massive fines and damages under domestic and international regulations, as well as fatal damage to brand value. Delays in migrating to a zero-trust environment or in strengthening cyber resilience could undermine trust in the business and have a material impact on performance. The company addresses this through the establishment of a zero-trust environment, continuous monitoring systems, acquisition of the Privacy Mark, and strengthening of cyber resilience through cloud migration, centered on the "Security Management Office."

If the capital and business alliance with Rakuten Group, Inc. is dissolved or scaled back, a decline in customer referral capability through the Rakuten ecosystem and the loss of joint marketing opportunities could have a material impact on business performance. In addition to the risk that rising procurement costs associated with the upward trend in domestic interest rates and a rise in the cost of capital (WACC) could tighten investment decision criteria and slow the pace of growth investment, there is also a risk that financial condition could deteriorate through the recording of impairment losses if new businesses or M&A do not deliver the expected results. The company is deepening service integration with Rakuten Points, Rakuten Card, Rakuten Pay, and others, while practicing ROIC management under financial soundness targets of a D/E ratio of around 0.5x, an equity ratio of 45% or higher, and cash liquidity on hand equivalent to two months or more of monthly sales.

In addition to broad legal constraints such as the Act against Unjustifiable Premiums and Misleading Representations, the Act on Specified Commercial Transactions, the Antimonopoly Act, the Act on the Protection of Personal Information, and the Act on Improving Transaction Terms, the company is required to respond to new legal frameworks regarding algorithm transparency and AI use, and any deficiencies in compliance could result in administrative dispositions or fines. If the company's reputation is damaged through the rapid spread of negative opinion via social media, and in particular if a lack of effectiveness in addressing social issues is pointed out, this could lead to a loss of stakeholder trust, and through the resulting damage to medium- to long-term corporate value, have a material impact on business performance. The company addresses this through continuous monitoring of new legal and regulatory trends, maintenance of its compliance framework, thorough purpose-driven management, and enhanced disclosure of financial and non-financial information.