Howtelevision, Inc.

Revenue from the Career Platform Business is heavily dependent on "Gaishishukatsu.com," and a decline in the competitiveness of this service poses a risk of directly impacting overall business performance. If differentiation from competitors becomes insufficient, there is a possibility of a significant impact on net sales through a decrease in the number of members and recruiting companies. As countermeasures, the Group is promoting service diversification through the expansion of "Liiga," RPO Service, and new businesses.

Revenue is concentrated during the periods of new graduate job hunting and internship recruitment, resulting in significant fluctuations in quarterly performance. In the results for FY2025 (ended January 2025), there was a large divergence, with net sales of ¥778,564 thousand and operating profit of ¥323,551 thousand in the second quarter compared to net sales of ¥362,419 thousand and an operating loss of ¥29,753 thousand in the first quarter. This seasonality poses a risk that a deterioration in performance in a specific quarter could affect the achievement of the full-year plan.

Numerous operators, including major companies, have entered the Career Platform Business domain, resulting in an intense competitive environment. While the Group seeks to differentiate itself through the construction of a platform for high-caliber talent and the careful selection of recruiting companies, if differentiation from competing operators becomes insufficient, there is a possibility of an impact on business performance in both member acquisition and recruiting company acquisition. The decline in the young population due to the declining birthrate and aging population could also further intensify competition for member acquisition.

As a personal information handling business operator holding personal information of numerous users, business partners, and employees, in the event of an information leak, there is a possibility of a significant impact on business continuity due to claims for damages and loss of social credibility. As countermeasures, the Group has established "Personal Information Protection Regulations," conducts training for officers and employees, strengthens system security, and conducts internal audits, in addition to obtaining Privacy Mark certification and taking out information leakage insurance.

Amid frequent cyberattacks targeting specific companies and organizations, if the Group's platform suffers unauthorized access, there is a possibility of an impact on business development and performance through service suspension and information leakage. Although the Group implements antivirus measures and information system security measures, complete protection is difficult, and there is also a risk of loss of social credibility in the event that damage occurs.

The stable operation of the systems for "Gaishishukatsu.com" and "Liiga" is fundamental to revenue, and if service interruptions occur due to surges in access, computer viruses, natural disasters, human error, or other causes, this would result in a loss of social credibility and a direct impact on business performance. There is also a risk that a failure in the content submission management system could prevent accurate recording of sales. The Group has established a system for continuous monitoring of servers and networks to enable timely response to signs of failure.

The recruitment placement business requires a license from the Minister of Health, Labour and Welfare based on the Employment Security Act (valid from November 1, 2022 to October 31, 2027), and there is a risk that if grounds for disqualification are discovered, the license could be subject to revocation, business suspension order, or business improvement order. At present, no event has occurred that impedes business continuity, but future legal amendments or regulatory tightening could affect business operations.

Founder and Representative Director and President Yosuke Onjo plays a central role in formulating and executing management strategy, and there is a risk that if he becomes unable to carry out his duties, this could have a significant impact on business development and performance. The Group has adopted a policy of reducing dependence on a specific individual by strengthening its organizational structure, but at present, the degree of dependence remains high.

In connection with the acquisition of all shares of Loglio, Inc. on April 1, 2024, goodwill of ¥186,191 thousand arose, and if the future profitability of the company declines, it may become necessary to recognize an impairment loss, which could have a significant impact on the financial position and business results. In the consolidated fiscal year under review, operating profit exceeded the amortization amount, and the goodwill balance is judged to appropriately reflect future earning power; however, the amortization period for the goodwill is estimated at five years.

Since the financial statements of mond, Inc., a consolidated subsidiary established in Delaware, USA in February 2025, are prepared in the local currency, fluctuations in exchange rates may affect business performance when translating into yen for the preparation of consolidated financial statements. In the future, if foreign currency-denominated transactions increase and a significant divergence arises between the assumed exchange rate and the actual market rate, a further impact on business performance is expected.