kubell Co., Ltd.

Demand for DX and BPO among small and medium-sized enterprises (SMEs) is expanding against the backdrop of labor shortages caused by the declining birthrate and aging population. However, if IT investment and outsourcing expenditures are curtailed due to deterioration in the economic situation or business conditions, market expansion may fall short of the Group's expectations. While the adoption rate among SMEs remains low compared to large enterprises, indicating substantial latent demand, sensitivity to changes in the external environment is also high. The Group positions BPaaS for SMEs as a pillar of growth, and a slowdown in market expansion would directly affect the Group's business results and financial position.

In the SaaS market for business chat, cloud storage, attendance management and similar services, as well as in the BPO market, a diverse range of domestic and overseas companies are entering the space, and competition is accelerating through the utilization of AI services. Because barriers to entry in cloud services and BPaaS are relatively low, if price competition intensifies in specific business areas or if the Group's advantages in customer base and systems are undermined, competitiveness may decline, potentially affecting the Group's business results and financial position. The Group seeks to differentiate itself through network effects derived from having one of the largest numbers of client companies and registered IDs in Japan, as well as through continuous enhancement of AI functionality.

In the internet industry, changes in the market, technology, and customer needs—including the rapid advancement of AI technology—are occurring extremely quickly, with new services being launched one after another. If the Group finds it difficult to respond to new technologies or changes in customer demand, or if its response is delayed, the competitiveness of the Group's services may decline, potentially affecting the Group's business results and financial position. The Group is actively working to implement AI functionality into its products and services and to improve operational efficiency through the use of AI, while continuing to gather information on the latest technology trends and acquire relevant know-how.

The majority of the Group's consolidated net sales consists of revenue from the business chat service "Chatwork." Although the Group is aiming to rapidly expand its BPaaS domain, its current revenue base is heavily dependent on this service. If changes in the market environment affecting Chatwork exceed expectations or if its competitiveness declines, this could have a significant impact on the Group's overall business results and financial position. A decline in the conversion rate to paid plans under the freemium model, as well as an increase in the cancellation rate following price revisions, are also recognized as factors that could worsen revenue.

User acquisition for "Chatwork" is primarily based on a freemium model, and conversion from the free plan to paid plans is an important method for expanding revenue. If in the future the proportion of light users who remain satisfied within the scope of the free plan increases, this would fail to translate into growth in paid plans, and business growth may not proceed as expected, potentially affecting the Group's business results and financial position. The Group encourages conversion through functional limitations such as the number of contacts, the message viewing period, and storage capacity, as well as by adding value to paid plans.

The Group has adopted a policy of strengthening M&A and capital alliances to realize a business super-app and expand the scope of its BPaaS offerings. Although the Group conducts due diligence in advance, contingent or unrecognized liabilities may be discovered, or business integration plans may fail to be achieved, after an investment is made. If such issues arise, impairment of the acquired company's share value or the transferred business assets may become necessary, which could have a significant impact on the Group's financial position and business results. Because the materialization of integration risk is directly related to the core of the Group's growth strategy, it is a risk that requires particular attention.

The Group's services are provided via the internet, and there is a risk that system failures may occur due to natural disasters, fires, failures at outsourced service providers, computer viruses, hacking intrusions, sudden surges in access, and other factors. If a large-scale system failure occurs or recovery is delayed, this could disrupt the continuity of services, leading to a decline in reliability and the occurrence of complaints, as well as the repayment of usage fees under the SLA provisions for the enterprise plan and KDDI Chatwork, potentially affecting the Group's business results and financial position. The Group implements preventive measures such as regular backups and system redundancy.

The Group handles large volumes of personal information, confidential information, and communications secrets belonging to client companies, and there is a risk that information could be leaked externally due to unauthorized access, password list attacks, impersonation phishing, human error, and other causes. If an information leak occurs, this could result in a loss of social trust and claims for damages, potentially affecting the Group's business results and financial position. The Group has implemented measures such as obtaining ISO27001, ISO27017, and ISO27701 certification, conducting regular vulnerability assessments, encouraging two-factor authentication, and monitoring and suspending impersonation accounts.

As of the end of December 2025, the Group had 658 employees, and securing and developing personnel as well as strengthening internal management systems have become challenges amid rapid business expansion. If the Group is unable to flexibly secure personnel, if a sudden decrease in employees occurs, or if the development of internal management systems appropriate to the scale of the business is delayed, this could make it difficult to conduct appropriate business operations, potentially affecting business operations and business results. The Group recognizes the enhancement of its corporate governance framework as an important management issue and is working to strengthen its organizational structure.

The Group's business is subject to regulations such as the Act on the Protection of Personal Information and the Telecommunications Business Act, and additional regulations may be imposed due to the enactment of new laws or changes in the interpretation and operation of existing laws, both in Japan and overseas. In addition, if third parties hold intellectual property rights of which the Group is unaware, or if new patents are established, the Group could face claims for damages or requests for injunctions, potentially affecting its business results and financial position. The Group works to reduce risk by confirming the possibility of intellectual property rights infringement through experts such as patent attorneys and by registering necessary trademark rights and the like.