Visional, Inc.

Of the consolidated net sales of ¥80,161 million for FY2025 (ending July 2025), the BizReach business accounted for ¥68,610 million (85.6%), indicating an extremely high degree of dependence on a specific business. If changes in social awareness or business practices regarding job changes and mid-career hiring do not progress as expected, or if changes in the business environment or a decline in competitiveness occur, this would have a direct and significant impact on the performance of the entire group. The Company aims to diversify its revenue structure by providing services across a broad range of recruitment areas, but the current level of dependence remains high.

The core HR Tech segment is highly susceptible to economic fluctuations and employment trends, as changes in corporate performance and government employment policy directly affect recruitment demand. A deterioration in economic conditions could also affect the growth of the Incubation segment and may further increase downward price pressure on services. The Company aims to enhance its resilience to environmental changes by providing services across a broad range of recruitment areas, but an impact on performance is unavoidable if corporate demand for hiring declines.

In the recruitment market for business professionals in which the BizReach business operates, competition may intensify due to the expansion of online services by domestic recruitment agencies and job information providers, as well as the strengthening of the Japanese market presence by globally operating overseas competitors. The HR Tech cloud market, in which the HRMOS business operates, is also relatively new, and an increase in new entrants is expected. In addition, if the Company falls behind in responding to technological innovation, there is a risk that its service competitiveness could decline.

The Group holds large volumes of personal information and confidential information, including job seekers' resumes and application data. If an information leak occurs due to a cyberattack, unauthorized access, computer virus, or similar cause, it could significantly impact performance through reputational damage, claims for damages, and other consequences. The Group has established the "Basic Information Security Regulations" under the Group Chief Information Security Officer and has implemented measures such as access rights management, log retention, and internal training; however, complete protection cannot be guaranteed. Strengthening of regulations such as the Personal Information Protection Act may also impose an additional compliance burden.

The Group's services depend on internet infrastructure, and if a system failure occurs due to a natural disaster, accident, unauthorized access, or other cause, service provision could be suspended, affecting performance. In particular, the Group relies heavily on Amazon Web Services (AWS) for the majority of its cloud services, concentrating risk in the event of an AWS system failure or contract termination. The Group has implemented redundancy measures such as utilizing multiple regions and availability zones and conducting regular vulnerability assessments, but complete preparedness against large-scale failures is difficult.

The Group is actively working to create new businesses funded by revenue from the BizReach business, but many of these new businesses have not yet achieved profitability, and there is a risk that invested funds may not be recovered if expansion and growth do not proceed as planned. In addition, if a strategic withdrawal is decided due to costs exceeding expectations or delays in realizing revenue, substantial expenses may be incurred, affecting performance. There is also a chain risk in which insufficient revenue from the BizReach business itself limits the Group's capacity to invest in new businesses.

As of the end of July 2025, the Group recorded goodwill of ¥3,741 million and customer-related assets of ¥877 million arising from business combinations. If expected cash flows are not generated due to divergence from future business plans or other factors, recording an impairment loss could affect performance and financial condition. There is also a risk that undisclosed liabilities or contingent liabilities may be discovered after an M&A transaction, or that integration costs may exceed expectations. Although detailed due diligence is conducted in advance, the risk that post-acquisition business development will not proceed as planned cannot be eliminated.

The Group's services are subject to numerous laws and regulations, including the Telecommunications Business Act, the Employment Security Act, the Personal Information Protection Act, and the Consumer Contract Act. If new laws and regulations are enacted or amended, or if the interpretation of existing laws changes, the Group may need to obtain additional permits, change its operations, or incur increased costs, which could affect performance and financial condition. There is also a risk that Trabox, in the Incubation segment, could become subject to new regulations due to amendments to laws related to the transportation business. The Group continues to strengthen its compliance system and provide internal training, but there are limits to its ability to respond to changes in the regulatory environment.

Soichiro Minami, Representative Director and President, has played an extremely important role in formulating and executing management strategy since the Company's founding, and if he becomes unable to perform his duties, this could affect performance. In addition, securing and developing personnel with expertise in each business area and function is a prerequisite for business expansion, and difficulty in acquiring talented personnel, delays in development plans, or outflow of personnel could affect performance. The Company is working to strengthen its management structure to reduce dependence on specific individuals and to acquire personnel through diverse recruitment methods, including direct recruiting.

The Company jointly manages Standby, Inc., a joint venture with LINE Yahoo Corporation (in which the Company holds a 40.0% equity stake), and Soichiro Minami, Representative Director and President of the Company, also serves concurrently as Representative Director and President of Standby, Inc. If an unforeseen event occurs at Standby, Inc. that holds Mr. Minami responsible for management, if the burden of his concurrent duties becomes excessive, or if there is a change in the equity stake or other factors, this could affect the Group's business development and operating results. The joint venture structure, in which the Company cannot control decision-making on its own, is also a risk factor.