GMO TECH Holdings, Inc.

Internet advertising media spending is expected to exceed ¥3.2 trillion in FY2025, continuing to grow, but there is a risk that advertising placements will decline due to economic downturns or changes in advertisers' strategies. Because the Customer Acquisition Support Business, the Group's core business, is directly affected by trends in the advertising market, a market contraction phase would have a significant negative impact on business performance. As countermeasures, the Group is continuously monitoring market trends and diversifying its business portfolio.

The pace of adoption of new technologies such as AI, blockchain, and IoT is rapid, and customer needs in smartphone-related services are also changing quickly. If the Group is slow to respond to new advertising methods or technological changes, or if existing services or technologies become obsolete, this could lead to a decline in competitiveness and affect business performance. The Group is focusing on recruiting and developing engineers, building a creative working environment, and acquiring new technologies and knowledge, including AI.

In the internet advertising industry, the number of players is increasing along with market expansion, raising concerns about price competition and increased cost burdens due to intensifying competition. In the Real Estate Tech Business as well, new competitors are entering the market, creating a risk that increased competitive response costs in both businesses will squeeze profit margins. The Group is seeking to differentiate itself by strengthening relationships with leading media outlets and enhancing its own sales capabilities.

The Group's Customer Acquisition Support Business is highly dependent on Apple Inc.'s App Store, Google Inc.'s Google Play, and the search platforms of Google and Yahoo!. If the operators of these platforms change their business strategies, the Group's service delivery model could be fundamentally affected. At present, measures to diversify into alternative platforms remain limited, and this high degree of dependency constitutes a structural risk.

In the internet-related field, multiple laws and regulations exist, including the Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers, the Act on the Prohibition of Unauthorized Computer Access, and the Act on the Protection of Personal Information, and strengthening of privacy protection regulations, including cookie regulations, continues to be under consideration. If new laws are enacted or existing laws are amended or regulations strengthened, this could result in changes to the business model or increased compliance costs. In the Real Estate Tech Business as well, amendments to or changes in the interpretation of related legal systems could give rise to new burdens.

The Group's business is highly dependent on communication networks, and there is a risk that network disconnections or system outages caused by natural disasters, accidents, or overload could hinder normal service provision. In addition, if a system failure occurs due to a virus infection or intrusion by hackers, this could lead to claims for damages from clients and loss of trust. The Group has implemented countermeasures such as appropriate security measures, regular backups, and continuous monitoring of server operating status.

Representative Director, President and CEO Akihito Suzuki is the founder of the Group and plays an important role in determining management policy and strategy, as well as in development, sales, and finance. If he becomes unable to continue performing his management duties, this could cause significant disruption to business operations. The Group is promoting information sharing at Board of Directors and management meetings and delegating authority through a divisional system, but efforts to reduce this dependency remain a work in progress.

Stable operation of high-quality services and improved competitiveness require personnel with advanced technical and planning capabilities, particularly in the development department, and continuous recruitment and development are important elements of business growth. If the Group is unable to secure excellent personnel meeting its recruitment criteria or if personnel development does not proceed as planned, this could lead to a decline in service quality or delays in business expansion. The Group is working to strengthen engineer recruitment and development and to build a creative working environment.

GMO Internet Group, Inc. is the largest shareholder, holding 51.8% of the Group's shares (as of December 31, 2025), and the Group has transactional relationships with this group, including OEM provision of SEO services. If GMO Internet Group changes its basic policies or significantly alters transaction terms, or if it takes time to secure an alternative business partner, this could affect the Group's business and performance. Two of the Group's nine officers also serve concurrently as officers of GMO Internet Group or sister companies, and ensuring management independence remains an ongoing challenge.

The Group is advancing into new business areas such as the Real Estate Tech Business, which requires additional investment in personnel recruitment, system development, and strengthening the sales structure. If it takes a long time for a new business to generate stable revenue, or if market expansion proceeds more slowly than expected, the Group may be forced to suspend or withdraw from the business, potentially resulting in losses on disposal of business assets or impairment losses. It should also be noted that the addition of risk factors specific to new businesses creates a risk profile different from that of existing businesses.