Oricon Inc.

Domestic internet advertising spending reached a record high of ¥4,045.9 billion in 2025, up 10.8% year on year, accounting for 50.2% of total advertising spending. However, if the market structure changes due to shifts in search behavior driven by the spread of generative AI, an increase in zero-click searches, the spread of ad-blocking applications, or reductions in corporate advertising expenditure resulting from economic downturns in major countries including the United States, the Group's business performance may be affected. A situation in which trust in the internet is significantly undermined would constitute a similar risk factor.

Internet-based services are subject to significant technological and market change, and user preferences shift rapidly. If the Group is unable to provide attractive content in a timely manner or fails to maintain price competitiveness, business performance may be affected by a decline in the number of users. The Group works to improve profitability by providing content for mobile devices and PCs while accurately grasping and analyzing user needs.

The Group's music marketing data sales business targets the music industry. Music software production in 2025 rose 5% year on year to ¥215.7 billion, but if market trends in the music industry undergo further significant change going forward, business performance may be affected. Changes in music consumption patterns and market contraction are the main risk factors.

The Group provides services centered on smartphone users. Smartphone shipments in 2025 were robust, up 11.6% year on year, but if the discontinuation of services by telecommunications carriers causes a decrease in users themselves and profitability declines more than expected, business performance may be affected. With 5G-compatible smartphones accounting for 99.5% of total smartphone shipments, changes in the communications environment also warrant close monitoring.

The Group's business depends on communication networks. If systems are halted or impaired due to natural disasters, hardware defects, unauthorized external intrusion, or other causes, this may result in direct damage as well as a decline in customer trust, affecting business performance and business development. As countermeasures, the Group utilizes highly earthquake-resistant data centers, backs up data to remote locations, has introduced EDR products, and conducts real-time threat detection through a 24/7 MDR service.

If confidential or personal information leaks to outside parties, this may result in claims for damages or a decline in credibility, having a material impact on business performance and business development. In addition to obtaining Privacy Mark certification, network monitoring, entry/exit management, and physical access control via surveillance cameras, the Group is strengthening its information protection framework through personal information protection training for all employees, targeted attack email drills, and education to prevent mis-sent emails.

If technological innovation or the introduction of new services occurs beyond the Group's expectations, this may lead to increased response costs or a decline in competitiveness due to an inability to respond quickly, affecting business performance. Technological innovation is particularly remarkable in the internet advertising field, and while the Group responds to new technologies as appropriate, continuous response to rapid technological change, including generative AI, is required.

Some of the content provided by the Group on websites and for smartphones is provided with the permission of rights holders. If such permission cannot be obtained, or if content usage fees rise sharply, business performance may be affected. Rising content procurement costs represent a risk that directly pressures profitability.

Key management personnel, including Representative Director Koike Hisashi, play a central role in the Group, and if for any reason they become unable to perform their duties, business performance may be affected. In addition, securing and developing human resources has become an important issue as the business expands, and business performance may be affected if this does not proceed as planned or if suitable personnel leave the Group. The Group promotes the development of an environment conducive to human resource utilization by appointing personnel to management positions based on ability regardless of gender.

Among the investment securities held by the Group, those with market prices are valued at fair value at the end of the fiscal period, and fluctuations in the stock market may result in the recognition of valuation losses. In addition, for shares and other securities without market prices, if impairment is judged necessary based on the issuing company's financial condition and future outlook, a valuation loss will be recognized, which may affect business performance.