Internetworking and Broadband Consulting Co.,Ltd.

In FY2025 (ended September 2025), revenue from license sales such as "System Answer G3" accounted for 51.9% of total revenue, indicating a high degree of dependence on specific products. If a strong competitor emerges or changes in the market environment cause a decline in sales of these products, it could have a material impact on business performance. The Company is working to expand its product portfolio and diversify risk through the development and provision of new services.

License sales such as "System Answer G3" are premised on continuous contract renewals, and while the recent renewal rate has remained at a high level, a sharp decline in the future could have a material impact on business performance. The Company strives to create an environment that facilitates continued customer usage by implementing version upgrades and adding new features as appropriate.

Revenue and operating profit tend to be lower in the first quarter due to the timing of customer acceptance inspections. In actual results for FY2025 (ended September 2025), first-quarter revenue was ¥419,123 thousand (17.4% of the full year) and operating profit was ¥13,813 thousand (2.4% of the full year), compared to fourth-quarter revenue of ¥749,147 thousand (31.2% of the full year) and operating profit of ¥172,019 thousand (30.4% of the full year), showing a significant imbalance. Since selling, general and administrative expenses are incurred at a roughly constant amount throughout the year, the Company faces a structural risk of large quarterly fluctuations in profit.

Some license sales involve long-term collection transactions based on contract periods, and a portion of trade receivables have expected collection dates exceeding one year. If a business partner's credit condition deteriorates or it goes bankrupt, this could affect business performance and financial condition. The Company seeks to reduce credit risk through the establishment of credit management regulations and the introduction of a receivables management system, but the impact on overall trade receivables is currently considered minor.

IT infrastructure investment is accelerating against the backdrop of strengthened security and DX promotion, and the Company's products and services are expected to trend steadily; however, if the customers' system investment environment deteriorates due to economic fluctuations or sudden changes in industry trends, this could affect business performance. Where dependence on specific industries or customer segments is high, there is a risk that a macroeconomic downturn could directly lead to a decline in demand.

As software products become more advanced and complex, it is difficult to completely prevent the occurrence of defects, and if a critical defect occurs and cannot be properly resolved, this could lead to a decline in creditworthiness and affect business performance. The Company strives to prevent the occurrence of defects, but the risk increases structurally as product complexity increases.

The Company strives to maintain technical capabilities and provide services promptly in order to respond to technological innovation in network-related equipment; however, if such response is delayed, the renewal rate for licensed products and the service provision rate could decline, affecting business performance. The pace of technological change in the IT field is rapid, and responding to new technologies such as AI and cloud computing in particular is key to maintaining competitiveness.

The Company positions information security as one of its most important management priorities and is working to strengthen its systems and provide employee training; however, in the event that an incident such as an information leak occurs, costs such as damages could arise and affect business performance. Given the nature of the business, which provides IT infrastructure management software and in some cases handles customers' critical infrastructure information, the risk of reputational damage in the event of a security incident is particularly significant.

Founder and Representative Director, President and CEO Hiroyuki Kato plays an important role in determining management policy and business strategy, and if he becomes unable to perform his duties, this could affect the business and business performance. The Company is working to expand and develop its executive personnel, but as of September 30, 2025, the number of employees was only 82, a small scale, making the development of a succession framework a challenge.

The hardware required to configure IT infrastructure uses a large number of semiconductors, and if supply is disrupted due to a stagnation or breakdown in the supply chain, this could impede customers' IT infrastructure development and affect the Company's business performance. Semiconductor shortages caused by geopolitical risks or natural disasters are external factors that the Company cannot control on its own, and could directly affect the schedule for providing products and services to customers.