en Inc.

The Group's business is highly susceptible to economic trends and employment conditions, and changes in the economic environment beyond expectations could directly affect business performance. In particular, a large-scale infectious disease outbreak could disrupt overall business activities. As a countermeasure, the Group has established a business continuity system incorporating BCP development and infection prevention measures.

Given the nature of operating recruitment and job-seeking services, the Group holds large volumes of personal information. If a serious incident such as external leakage, improper use, or falsification occurs, pursuit of legal liability and damage to brand image could affect business performance. The Group has established personal information protection regulations, in-house training via e-learning, and a compliance framework for relevant laws and regulations, but complete elimination of such risk cannot be guaranteed.

As part of its business expansion, the Group actively pursues M&A, which entails uncertainty based on future projections. If, after an M&A transaction, contingent liabilities arise or changes in the business environment prevent business development from proceeding as planned, impairment of goodwill or shares in affiliated companies may occur, potentially affecting business performance. The Group strives to eliminate uncertainty through detailed prior due diligence.

With the increase in domestic and overseas subsidiaries and affiliated companies, the likelihood of legal violations arising from misconduct and similar issues is increasing. The Group has established internal control systems and conducts audits through an internal audit office reporting directly to the President and Representative Director; however, if internal controls do not function adequately due to human factors or rapid changes in the business environment, litigation, damages claims, and similar issues may arise, potentially affecting business performance.

The internet-related business is subject to remarkable technological innovation, and if competitors develop highly innovative new services, a delay in offering competing services could reduce competitiveness within the industry and affect business performance. The Group addresses technological innovation by establishing a system to reflect user and client requests in its own systems, as well as through business and capital alliances and M&A with companies possessing new technologies.

Because the business depends on computer systems and communication networks, network failures caused by natural disasters, power outages, unauthorized external intrusions, or similar events could make business continuity difficult, resulting in direct damage, loss of trust, and litigation risk. In the event of a large-scale disaster, a simultaneous contraction in consumer activity is also anticipated, which could compound the impact on business performance.

In addition to foreign exchange rate risk, the operation of overseas subsidiaries entails risks specific to each country and region, including changes in economic and political conditions, laws and regulations, tax systems, and differences in business practices. If the proportion of overseas subsidiaries' sales and profit within the Group increases in the future, the impact of changes in conditions in each country on business performance may expand.

Numerous competitors exist in each field of the markets in which the Group operates. If competitors offer services of comparable quality at lower prices, or attract individual users with innovative services, the Group's market share may decline, affecting business performance. The Group strives to maintain competitiveness by leveraging the know-how and brand strength it has cultivated in the areas of recruitment and post-hire success support.

If the Group is unable to secure and develop the talented personnel essential for strengthening its sales organization and technology development, or if personnel possessing business know-how leave the company, this could affect business activities and performance. Even if personnel recruitment proceeds smoothly, an unexpectedly larger-than-anticipated increase in fixed costs such as personnel expenses and facility costs could put pressure on profitability.

Each of the Group's services relies heavily on customer acquisition through search sites. If changes in ranking policies by search engine operators or system troubles work against the Group in search results, customer acquisition effectiveness may decline, affecting business performance. The Group has established a dedicated department to build a system capable of responding to changes in search engine specifications and related matters.