Kakaku com : Summary of Main Questions and Answers at Results Briefing for the Fiscal Year ended March 31, 2024

Summary of Main Questions and Answers at the Results Briefing for

the Fiscal Year ended March 2024, held on May 9, 2024

• Consolidated Results, etc.

1. Regarding the forecast for the fiscal year ending March 2025, my impression is that there is not much improvement in the operating profit margin relative to the increase in revenue. Can you please explain what expenses you are factoring in?

1. We will be making certain investments for future growth with respect to the Kyujin Box business, to the extent that we can grow operating profit by 10% or more. However, since Tabelog, Kakaku.com, and Kyujin Box (as Internet media businesses) have high profit margins, I believe that the operating profit margin will be remain at the same level as in the fiscal year ended March 2024.

1. I understand that you are prioritizing 10% operating profit growth over 40% operating margin. Is your stance that you are willing to invest aggressively in anything that has upside potential, as long as you can maintain a 10% increase in profit?

1. We will not be spending all excess cash on costs to achieve 10% profit growth. We would like to increase our corporate value over the medium to long term, so we are thinking of investing in things that will lead to future revenue and profits.

1. At the last briefing, you mentioned that you would like to focus on new businesses that could become a fourth business pillar. What direction will your efforts take?

1. There are considering two directions. (1) expand into Internet media in other domains than Kakaku.com, Tabelog, and Kyujin Box. (2) add new businesses, including real businesses, to our portfolio of Kakaku.com, Tabelog, and Kyujin Box,

Q: What is the time frame for a new business idea to emerge? About one to two years or five to six years?

1. It takes time to start up an Internet media business, so I think it will take about five years. On the other hand, we would like to pursue M&A more actively than before (since it could shorten the timeline for creating a new business), so we would like to identify companies that can enhance our business value.

1. Could you tell us about your M&A budget and the size of the companies you are targeting?

1. We will take into consideration the cash on hand and the debt we can borrow based on that cash. We would like to target companies that are large and profitable to a certain extent, but still have factors for growth somewhere that we can expand upon, but smaller companies are also a possibility, as long as they are good. We are not looking for companies of a certain size. We want to move cautiously.

Q: In that sense, you do not have a particular target area or capability that you have set?

1. We are considering either an Internet media business or a business domain where there will be synergy with Kakaku.com, Tabelog, Kyujin Box.

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1. Lastly, I believe that are working on value-added enhancement using AI, but is there anything you are excited about in this fiscal year, such as incorporating AI into actual services?

1. I think the most anticipated use of generative AI for users is chat UI. I don't think we are at the stage of practical application yet, but we would like to continue our research and gathering information. On the other hand, AI can be utilized quite well for operational improvement and coding for engineers, so we are planning to utilize AI in these areas.

• Kakaku.com

Q: In your presentation you mention that you expect Kakaku.com will be flat or higher than the previous year, but what should we expect in terms of revenue growth for each business, i.e. shopping, services, and advertising?

1. Although the situation with respect to shopping and advertising is still unclear in some areas, the revenue decline is narrowing, and we expect these businesses to be close to flat. Services continue to perform well, so we are looking at YoY growth of around 10%.

Q: Is it too early to say that shopping has bottomed out?

A: I believe we are very close to bottoming out.

1. For FY25/3, how do you see growth of your service business? Also, you mentioned that the shopping business is close to bottoming out. Can we expect positive growth again, if external issues, such as the lack of new products are resolved? Or is there a possibility of some changes in consumer movements and needs, such consumers use other sites to choose and search for

things, etc.?

1. Most of the decline in the shopping revenue is due to external factors such as the lack of new products and rising prices for PCs and home electronics due to the weak yen, so we will see a recovery once those factors settle down. In addition, since results have already dropped to the point of decline, we believe that it will bottom out at some point and turn to positive growth again.

1. Do you believe that the ability of the Kakaku.com site to attract users and its value to consumers has not changed?

A: The ability to attract users and the value we provide to consumers has not changed

1. You said that you expect more than 0% YoY growth and the outlook for the external environment remains difficult. Is it likely that the Kakaku.com segment can return to a continuous rather than a cyclical growth trajectory? If so, under which conditions?

1. We are discussing within the Company how far we should go beyond the current Internet media business in order to return to a growth trajectory. There is a wide range of genres and business models, and if we look at them one by one, we believe that there are still opportunities.

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1. Can you follow up on the progress of Kakaku.com Travel, such as an increase in traffic or conversions?

1. The business is still in its infancy, so we are not at the stage of major growth. Although it won't have an impact on this fiscal year's budget, we are planning to steadily grow this business.

• Tabelog

1. I think that in the previous fiscal year, the financial situation for both consumers and restaurants was slightly better, due to subsidies such as travel support program in addition to the reopening. In the absence of such (positive) factors, do you expect to see the same pace of growth in this fiscal year, in terms of the number of contract restaurants, ARPU, and the number of online reservations? How do you evaluate the plan for this fiscal year? Is it conservative or slightly challenging?

1. You may see the 15% growth YoY (shown in our presentation material) as conservative. However, reservations from inbound travelers have been increasing, so I hope we can further expand on that.

1. Regarding the number of restaurants contracted for the online reservation service. the net increase is expected to accelerate from 9,300 restaurants last fiscal year to 9,700 restaurants in this fiscal year. Is this due to a large increase in direct sales staff or a further increase in partnerships with sales agencies?

1. The pace of acquisition will not slow down, even without further increasing our sales staff (because we increased our sales staff in the fiscal year ended March 2024). As such, we believe that we can achieve our target.

1. Could provide target ARPU for the promotion service and the online reservation service, respectively?

1. We expect JPY23,000 for the promotion service and JPY15,000 for the online reservation service.

1. Regarding online reservation ARPU, you said you were targeting JPY15,000 as of the end of Q4 of this fiscal year. This does not seem to be much increase from the past fiscal year. Can you give us some background on this?

1. It might be a bit conservative, but there is no other intention so much as a background. The ratio of online reservations on Tabelog was 59% at the end of the fiscal year ended March 2024 and will continue to grow, so there is room for ARPU growth.

1. Regarding your forecast for the number of online reservations on Tabelog, should we expect

the growth rate to remain this high even when the reopening after the re-classification of COVID as a class five disease, has come full circle? What is the current situation.

1. There are more than 300,000 restaurants on Tabelog, that take reservations by phone and/or online, of which 73,000 use Tabelog's online reservation service. I believe there is still room for growth. Since the online reservation service is a performance-based fee, it is relatively easy for restaurants to start without any particular concern and number of acquisitions has not declined. We hope to increase the number to about 83,000 restaurants this fiscal year.
   Since the number of restaurants that have contracted our online reservation service has

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increased considerably, the growth rate might not be as high as last year, we believe that we can increase the number of online reservations by about 23% for the full year.

1. Since the reopening has run its course, should we assume that growth in the number of online reservations will slow down?

1. Although reopening was a large factor, the number of online reservations will still grow by more than 20% and we expect this momentum to continue for some time.

1. I believe your reservation service for inbound travelers will start this fiscal year. Will you be taking the usual fees from restaurants, i.e. JPY100 for lunch and JPY200 for dinner?

1. We will receive JPY100/person for a lunch reservation and JPY200/person for dinner, but we are also planning to charge users with a usage fee of JPY400/person.

1. I correct in understanding that the fees for the online reservation service for inbound travelers, will all go to your company?

A: In the case of reservations coming through partner sites, we have a revenue share arrangement.

1. Could you please provide more information about the reservation service for inbound travelers. What are the main reservation methods used by inbound users? Also, (with respect to the online reservation service Tabelog is planning to offer) will travelers be able to make reservation via a multilingual version of Tabelog? Is the system of charging users for reservations relatively common? Wil restaurants have to do anything to accommodate inbound travelers? Since Tabelog only provides seat reservations, will same-day cancellations not be too much of an issue?

1. Reservation services for upscale restaurants are already available in English and are being used by a significant number of inbound travelers, but few reservation services for the kind of restaurants targeted by major gourmet websites are available in English and have a large market share at this time. (For reservations at these types of restaurants) Most people ask the hotel concierge, call the restaurants themselves, or go on a walk-in basis.
   The inbound reservation service on Tabelog has been pre-released for 3,000 restaurants but by the end of June, when the official release is scheduled, the number of restaurants is expected to increase to 40,000. So far, reservations have been coming in without any problems and we expect a certain level of revenue in the future. Once we offer reservations at 40,000 restaurants in English, Chinese, and Korean, we will be the largest service of its kind in Japan.
   In addition, this service requires users to register a credit card and a cancellation fee is charged in the event of a cancellation, so restaurants can feel secure in signing up for this service. We believe that charging a fee from users will be relatively acceptable, as it is done in some reservation services for high-end restaurants that are quite well known overseas. In addition, multilingual support will be provided by us. Tabelog's English, Chinese, and Korean versions will be renewed. We also plan to tie up with travel-related sites and various media. We will increase the number of online reservations through various entry points by attracting users on our own as well as through partner sites.

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Q: Will Tabelog support Chinese and Korean as well as English?

A: Tabelog will become available in English, Korean, and simplified and traditional Chinese.

1. Are the multilingual versions of Tabelog well known? I would assume that apart from travel- related websites, traffic will come from search engines.

1. I believe that once multilingual content on Tabelog is properly created and a reasonable amount of content is accumulated, there will be traffic from search engines.

1. Could you tell us why the inbound reservation service was not factored into the earnings forecast? Do you feel there are risks involved with this service?

1. Since we haven't officially started the service yet, we have no idea how many people will visit the site and how many reservations we will receive. Therefore, we have decided not to incorporate it into this year's forecast but I only see potential for this business.

• Kyujin Box

Q: I believe you plan to increase the revenue per user by about 20% to 25% this fiscal year. Can you tell us a little more about what will drive this growth?

1. There are several factors. For example, (1) the frequency of use: how often a given user visits
   Kyujin Box, (2) the number job listings, (3) the click rate: (which correlates to the number of job listings) how many job listings a user clicks on. Also (4) the cost per click, which is determined by bidding. The Kyujin Box business is growing through the multiplication of these factors. Since there is no single growth driver, we intend to increase each of these going forward.

1. What do you see as the medium-term upside in revenue per user?

1. I believe it will continue to grow. We are hoping to reach 15 million monthly users, so it is important how often these 15 million job seekers visit Kyujin Box and find a job there. We believe that the revenue per user will also increase if, in cooperation with sales agents, we can increase the number of listings on Kyujin Box, not only from job sites, but also directly from employers.

1. You mentioned that you are going to make up-front investments in Kyujin Box. Could you tell us specifically how you plan to allocate expenses. Are you going to do mass advertising,

development of additional features, or increase sales staff to approach hiring companies?

1. We will mainly focus on mass advertising, but of course there will also be agency fees related to acquiring direct listings from hiring companies.

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