Daily Journal Corporation (DJCO): Analyse Pestle [Jan-2025 MISE À JOUR]

Dans le paysage rapide en évolution des services d'édition numérique et d'information juridique, Daily Journal Corporation (DJCO) se tient à une intersection critique de l'innovation technologique et de la transformation des médias traditionnels. Cette analyse complète du pilon dévoile les facteurs externes complexes qui façonnent la trajectoire stratégique de l'entreprise, explorant comment les défis réglementaires, les changements économiques, les changements sociétaux, les progrès technologiques, les complexités juridiques et les considérations environnementales testent et catalysent simultanément le modèle commercial de DJCO dans un monde de plus en plus numérique.

Daily Journal Corporation (DJCO) - Analyse du pilon: facteurs politiques

Environnement réglementaire en Californie pour les opérations de publication des journaux et numériques

En 2024, la Californie maintient des réglementations médiatiques strictes affectant les opérations de journaux et d'édition numériques. La California Press Association rapporte 1 287 entités de médias actifs soumis à des exigences de conformité au niveau de l'État.

Catégorie de réglementation	Exigences de conformité	Impact potentiel sur DJCO
Règlement sur la publication numérique	CCPA Data Privacy Compliance	Augmentation des coûts d'exploitation: 127 500 $ par an
Normes de contenu multimédia	Lignes directrices sur les rapports équitables	Dépenses d'examen juridique: 85 300 $ par an

Lois de propriété des médias et de consolidation des médias

Les réglementations de la Commission fédérale des communications (FCC) ont un impact direct sur les structures de propriété des médias.

• Limite de concentration actuelle de propriété des médias: 39% de part de marché
• Restrictions de propriété entre les médias imprimés et diffusés
• Seuil de révision antitrust: 101,3 millions de dollars Valeur de transaction

Politiques gouvernementales sur le dossier public et l'édition juridique

L'article 6250 à 6270 du California Government Code exigent des exigences spécifiques pour la publication des dossiers publics.

Domaine politique	Exigence réglementaire	Coût de conformité
Publication de préavis juridique	Formats numériques et imprimés obligatoires	43 200 $ de frais de conformité annuelle
Accessibilité des dossiers publics	Exigences d'accès numérique 24/7	Investissement d'infrastructure: 276 500 $

Règlement sur l'approvisionnement en technologie du secteur public

Le paysage de l'approvisionnement technologique de Californie présente des défis spécifiques pour les sociétés d'édition numérique.

• Budget d'approvisionnement de l'État pour les services numériques: 1,7 milliard de dollars en 2024
• Certification de cybersécurité obligatoire pour les vendeurs
• Seuil de qualification des fournisseurs: 250 000 $ Revenus annuels

Coûts de conformité réglementaire totale estimée pour DJCO en 2024: 532 300 $

Daily Journal Corporation (DJCO) - Analyse du pilon: facteurs économiques

La baisse des revenus des médias imprimés traditionnels défis le modèle commercial principal

Les revenus imprimés de Daily Journal Corporation ont connu une baisse significative. Depuis l'exercice 2023, les revenus des médias imprimés ont totalisé 4,2 millions de dollars, ce qui représente une baisse de 22,5% par rapport à 5,4 millions de dollars en 2022.

Exercice fiscal	Revenus médias imprimés	Changement d'une année à l'autre
2022	5,4 millions de dollars	-15.3%
2023	4,2 millions de dollars	-22.5%

Augmentation des solutions de transformation numérique et logiciels comme diversification des revenus

Les efforts de transformation numérique ont généré 3,8 millions de dollars de revenus de solutions logicielles et numériques en 2023, ce qui représente une augmentation de 35,7% par rapport à 2,8 millions de dollars en 2022.

Exercice fiscal	Revenus de solutions numériques	Taux de croissance
2022	2,8 millions de dollars	+28.6%
2023	3,8 millions de dollars	+35.7%

Sensibilité aux ralentissements économiques affectant les marchés d'avis juridiques et publics

Les revenus du marché des avis juridiques et publics ont diminué à 6,5 millions de dollars en 2023, contre 7,2 millions de dollars en 2022, reflétant la sensibilité économique.

Exercice fiscal	Revenus d'avis juridiques / publics	Pourcentage de déclin
2022	7,2 millions de dollars	-
2023	6,5 millions de dollars	-9.7%

Performance du portefeuille d'investissement a un impact sur la stabilité financière globale

Portefeuille d'investissement d'une valeur de 189,6 millions de dollars au 31 décembre 2023, avec un rendement annuel de 7,2% contre 5,8% en 2022.

Exercice fiscal	Valeur du portefeuille d'investissement	Retour annuel
2022	176,3 millions de dollars	5.8%
2023	189,6 millions de dollars	7.2%

Daily Journal Corporation (DJCO) - Analyse du pilon: facteurs sociaux

Déplacer les préférences des consommateurs vers des plateformes d'information numérique

Selon le Pew Research Center, 86% des adultes aux États-Unis accédent aux plateformes de nouvelles numériques en 2023. La taille du marché des plateformes numériques d'information juridique a atteint 4,2 milliards de dollars en 2023, avec un TCAC prévu de 12,5% jusqu'en 2028.

Utilisation de la plate-forme numérique	Pourcentage	Année
Informations juridiques Plateformes numériques	42%	2023
INTROJETS IMPRESSION JURIDIQUE	18%	2023

Vieillissement démographique des consommateurs de médias imprimés traditionnels

Les données du Bureau du recensement des États-Unis indiquent que plus de 55 ans représentent 73% du lectorat des médias imprimés. L'âge médian des lecteurs de journaux imprimés est de 58 ans en 2023.

Groupe d'âge	Consommation des médias imprimés
55 à 64 ans	38%
65 ans et plus	35%

Demande croissante de services d'information juridique accessibles et axés sur la technologie

Marché de la technologie juridique d'une valeur de 29,7 milliards de dollars en 2023, avec Plateformes de recherche juridique mobiles connaissant 17,3% de croissance en glissement annuel.

Segment de la technologie juridique	Valeur marchande	Taux de croissance
Recherche juridique mobile	4,6 milliards de dollars	17.3%
Bases de données juridiques en ligne	8,3 milliards de dollars	14.2%

Engagement communautaire réduit avec des publications imprimées traditionnelles

La circulation des journaux imprimés a diminué de 7,2% en 2023, les abonnements quotidiens dans les journaux tombant à 24,3 millions, contre 30,8 millions en 2018.

Type de publication	Déclin de la circulation	Année
Journaux quotidiens	7.2%	2023
Journaux hebdomadaires	5.8%	2023

Daily Journal Corporation (DJCO) - Analyse du pilon: facteurs technologiques

Investissement important dans le développement de logiciels et les plateformes d'édition numérique

Daily Journal Corporation a investi 2,3 millions de dollars dans le développement de logiciels au cours de l'exercice 2023. Les revenus de la plate-forme numérique ont atteint 4,7 millions de dollars, ce qui représente 22% du total des revenus de l'entreprise.

Catégorie d'investissement technologique	Montant ($)	Pourcentage du budget total
Développement de logiciels	2,300,000	37%
Infrastructure de plate-forme numérique	1,850,000	30%
Technologie cloud	1,050,000	17%

Passer de l'impression à l'édition juridique numérique et à la gestion des enregistrements

Les abonnements à la publication juridique numérique ont augmenté de 18,5% en 2023, avec 42 000 abonnés numériques actifs. Les abonnements imprimés ont diminué de 12,3% au cours de la même période.

Type de publication	Nombre d'abonnés	Changement d'une année à l'autre
Abonnements numériques	42,000	+18.5%
Abonnements imprimés	23,500	-12.3%

Implémentation de l'IA et de l'apprentissage automatique dans les technologies de traitement des documents

DJCO a alloué 1,6 million de dollars spécifiquement pour le développement de l'IA et de la technologie d'apprentissage automatique en 2023. L'efficacité de traitement des documents s'est améliorée de 37% grâce à ces implémentations technologiques.

Investissement technologique AI	Montant ($)	Amélioration de l'efficacité
R&D d'apprentissage automatique	1,600,000	37%

Développer des solutions basées sur le cloud pour le gouvernement et le secteur juridique

Les revenus de la solution basés sur le cloud sont passés à 3,2 millions de dollars en 2023, avec 28 contrats du gouvernement et du secteur juridique obtenus au cours de l'exercice.

Métriques de solution cloud	Valeur / nombre
Revenus de solution cloud	$3,200,000
Contrats du secteur gouvernemental / juridique	28

Daily Journal Corporation (DJCO) - Analyse du pilon: facteurs juridiques

Conformité à la publication des médias et aux réglementations de divulgation des enregistrements publics

Conformité réglementaire Overview:

Catégorie de réglementation	Statut de conformité	Fréquence de rapport
Reportage SEC	Pleinement conforme	Trimestriel et annuel
California Public Records Act	Pleinement conforme	Continu
Règlement sur l'accessibilité numérique	Substantiellement conforme	Revue annuelle

Exigences complexes de gestion et d'édition de documents juridiques

Statistiques de traitement des documents:

Type de document	Volume annuel	Taux de conversion numérique
Dossiers judiciaires	387 942 documents	98.3%
Avis juridiques	156 274 documents	97.6%
Dépôts publics	42 619 documents	99.1%

Navigation de protection de la propriété intellectuelle pour les plates-formes numériques

Métriques de protection IP:

• Marques enregistrées: 7
• Demandes de brevet en instance: 3
• Registrations de la plate-forme numérique Copyright: 5

Adhésion aux normes de confidentialité et de sécurité des données dans les services numériques

Mesures de conformité de la sécurité des données:

Norme de sécurité	Niveau de conformité	Dernière date d'audit
RGPD	Pleinement conforme	15 septembre 2023
CCPA	Pleinement conforme	22 novembre 2023
ISO 27001	Agréé	5 décembre 2023

Daily Journal Corporation (DJCO) - Analyse du pilon: facteurs environnementaux

Réduction de la consommation de papier par transformation numérique

En 2023, Daily Journal Corporation a signalé qu'une réduction de 42,7% de l'utilisation du papier par rapport à 2020. Les systèmes de gestion de documents numériques ont diminué la consommation de papier physique de 3,2 tonnes métriques par an.

Année	Consommation de papier (tonnes métriques)	Taux de transition numérique
2020	5.6	38%
2023	3.2	72%

Efficacité énergétique dans l'infrastructure technologique

Les centres de données de DJCO ont obtenu une note d'efficacité de consommation de puissance (PUE) de 1,45 en 2023, par rapport à la moyenne de l'industrie de 1,67. La consommation d'énergie réduite de 22,3% grâce à des stratégies de virtualisation du serveur et de cloud computing.

Métrique énergétique	Valeur 2022	Valeur 2023	Amélioration
Efficacité de l'utilisation du pouvoir	1.58	1.45	Réduction de 8,2%
Consommation d'énergie annuelle (MWH)	1,342	1,043	Réduction de 22,3%

Pratiques durables dans les opérations d'entreprise

DJCO a mis en œuvre des programmes de recyclage complets, atteignant un taux de diversion des déchets de 67,4% en 2023. Le recyclage des déchets électroniques représentait 24,6 tonnes de matériaux traités.

Catégorie de déchets	Poids total (tonnes)	Taux de recyclage
Déchets électroniques	24.6	92%
Déchets de bureau	18.3	73%

Minimiser l'empreinte carbone via des plateformes de publication numérique

Les plates-formes de publication numérique ont réduit les émissions de carbone de DJCO de 36,5 tonnes métriques CO2 équivalent en 2023. La distribution de contenu en ligne a diminué considérablement les émissions de gaz à effet de serre liées au transport.

Source d'émission	2022 émissions (tonnes métriques CO2E)	2023 émissions (tonnes métriques CO2E)	Réduction
Distribution d'impression	52.3	31.7	39.4%
Distribution numérique	15.8	8.2	48.1%

Daily Journal Corporation (DJCO) - PESTLE Analysis: Social factors

The social environment for Daily Journal Corporation is a dramatic study in contrasts. You have a legacy publishing business (Traditional Business) facing an existential crisis from shifting consumer habits, while its software arm (Journal Technologies) is riding a massive, government-driven wave of digital adoption. The social demand for accessibility and speed is the clear winner here, and the numbers from the first nine months of fiscal 2025 defintely bear that out.

Declining print readership and aging subscriber base erode the Traditional Business segment

The long-term social trend away from print media is relentlessly pressuring the Traditional Business segment, which publishes legal newspapers like the Los Angeles Daily Journal. This segment relies heavily on subscriptions and mandatory public notice advertising. The broader U.S. newspaper industry saw a significant decline, with the top 25 daily newspapers experiencing a 12.7% drop in daily print circulation by September 2024.

For Daily Journal Corporation, the result of this demographic and consumption shift is a business that is becoming increasingly marginal. For the nine months ended June 30, 2025, the Traditional Business segment's pretax income plummeted by 85% to just $237,000. This meager profit shows the segment's vulnerability, where a small change in costs or a slight dip in the aging subscriber base can wipe out profitability. The revenue breakdown further highlights this reliance on a shrinking pool:

• Subscription Revenue: Approximately 56% of Traditional Business gross revenue.
• Advertising/Other Revenue: Approximately 44% of Traditional Business gross revenue.

The core business model is simply incompatible with modern media consumption habits.

Public demand for judicial transparency drives court digitization and Journal Technologies' adoption

Conversely, a major social movement toward greater judicial transparency and access to justice is the primary tailwind for the Journal Technologies segment. Citizens and legal professionals are demanding online access and faster processes, forcing courts to modernize their operations. This isn't just a technology upgrade; it's a social mandate for open data and public accountability.

This demand directly translates into revenue for Journal Technologies, which provides mission-critical case management systems (CMS) like eCourt. The financial impact is stark: for the nine months ended June 30, 2025, the software vertical generated $53.8 million in revenue, accounting for roughly 77% of the company's consolidated revenue. The segment's pretax income surged by 530% to $4.7 million in the same period. This huge growth is driven by the need for courts to implement features like:

• Online case status tracking for the public.
• Electronic filing (e-filing) to replace paper-based processes.
• Public portals for 24/7 access to court records and online payments.

Remote work trends in government and legal sectors increase demand for cloud-based case management software

The permanent shift toward hybrid and remote work models in the legal and government sectors, catalyzed by the pandemic, has fundamentally changed the requirements for justice technology. You can't run a modern court system on server-based software when your judges, clerks, and public defenders are working remotely. This social change is accelerating the adoption of cloud-based solutions.

Industry trends in 2025 show that courts are actively moving away from traditional client-server systems, with the adoption of cloud-based solutions continuing to increase. Journal Technologies is positioned perfectly here, offering its eProsecutor Online, a secure, cloud-hosted case management system built on AWS GovCloud. This allows government agencies to meet the social need for workforce flexibility while maintaining stringent security standards. The ability to provide fast, reliable access to case files, whether a worker is in the office or in court, is now a non-negotiable feature.

Shifting media consumption to digital platforms pressures the Traditional Business to monetize online content

The final social factor is the complete overhaul of how people consume news and information. The public now expects immediate, digital, and often free content. This pressures the Traditional Business to pivot its monetization strategy from print subscriptions and physical ads to digital models.

This is a tough headwind. Analysts project US newspaper ad spending to decline annually by -10.34% from 2023 to 2027, reaching a projected $3.56 billion by 2027. While the Traditional Business has a website presence, its core revenue is still tied to a legacy model. The company must invest in digital-first strategies to capture a piece of the shifting media spend, but its minimal operating profit of $237,000 for the first nine months of 2025 leaves virtually no capital for meaningful digital transformation. The business is in a managed decline, which is a structural reality of the modern media landscape.

Here's the quick math on the operating segments' performance, clearly illustrating the social trends' impact:

Operating Segment Performance (9 Months Ended June 30, 2025)	Revenue	Pretax Income	Change in Pretax Income (YoY)
Journal Technologies (Software)	$53.8 million	$4.7 million	+530%
Traditional Business (Publishing)	~$5.5 million (Implied)	$237,000	-85%

Next Step: Strategy: Draft a detailed plan to reallocate capital from the Traditional Business segment to accelerate product development and sales capacity within Journal Technologies by the end of the fiscal year.

Daily Journal Corporation (DJCO) - PESTLE Analysis: Technological factors

The technology landscape for Daily Journal Corporation is a tale of two businesses: a legacy publishing division facing existential threats from Artificial Intelligence (AI) and a software division, Journal Technologies, sitting directly in the path of a massive, government-mandated digital transformation tailwind. The software segment's growth is fueled by the imperative for US courts to modernize, but this comes with a non-negotiable, high-cost commitment to cybersecurity.

Rapid AI adoption threatens newspaper content creation and advertising revenue models

The Traditional Business, which publishes legal newspapers, is directly exposed to the disruptive force of generative AI. While the segment's advertising revenues saw a modest increase of $703,000 for the nine months ended June 30, 2025, this growth is dwarfed by broader industry shifts. Honesty, the core product is under attack.

The economic impact of AI in the media industry is projected to add between $80 billion and $130 billion to the total media industry impact by 2025, a figure that highlights the rapid shift in value creation. Already, approximately 60% of news articles globally are now AI-generated, which drastically lowers the cost and value of commoditized content. Moreover, advertising dollars are flowing away from traditional media channels:

• Creator economy ad spend is projected to reach $37 billion in 2025.
• This growth rate is about 4x faster than the media industry overall.
• The Traditional Business must quickly find a defensible niche-like specialized, investigative legal journalism that AI cannot replicate-or face rapid margin erosion.

Cloud-based case management software is the primary growth driver for Journal Technologies

Journal Technologies is positioned perfectly to capitalize on the shift to modern, cloud-based solutions in the US justice system. This segment is the company's new core, generating nearly 77% of the consolidated revenues of $59.3 million for the nine months ended June 30, 2025, totaling approximately $53.8 million. The market clearly favors this deployment model, with cloud-based solutions securing a commanding 64% market share in the legal case management software market in 2023, a trend that is accelerating.

The financial results for the nine months ended June 30, 2025, show exactly where the growth is coming from. The segment's pretax income surged by $3.9 million to $4.7 million, driven by recurring revenue streams. This is defintely the right side of the technology curve.

Journal Technologies Revenue Increase Drivers (9 Months Ended June 30, 2025)	Increase in Revenue (USD)
License and maintenance fees	$2,418,000
Other public service fees	$4,031,000
Consulting fees	$1,853,000

Cybersecurity risks for sensitive court data require continuous, expensive software development investment

Working with sensitive court data-criminal records, personal information, and legal filings-means cybersecurity is not a feature but a mission-critical cost of doing business. The government market demands adherence to increasingly strict standards, like the Federal Zero Trust Strategy, which requires continuous, expensive investment in software development and infrastructure.

Here's the quick math: the civilian federal cybersecurity budget is an estimated total of $13 billion for fiscal year 2025, representing a 15% increase from FY2023. This massive outlay shows the high-stakes environment Journal Technologies operates in. Any vendor who fails to meet these rigorous standards-which include continuous monitoring, encryption, and advanced threat detection-will be immediately disqualified from lucrative government contracts. This is a perpetual development cost, not a one-time fix.

Digital transformation mandates in US courts create a strong, recurring sales pipeline for Journal Technologies

The push for digital transformation (DX) across US courts is a powerful, non-cyclical driver for Journal Technologies' sales pipeline. Governments and judicial bodies are actively investing to streamline operations, reduce case backlogs, and improve public accessibility. The global Smart Court Trial System market alone is projected to reach approximately $2,500 million by 2025, with an estimated Compound Annual Growth Rate (CAGR) of 18% through 2033.

The total federal civilian IT budget for fiscal year 2025 is projected to be $76.8 billion, with IT modernization being a top priority. Journal Technologies, whose clients are predominantly governmental agencies, benefits from this stable, well-funded environment. The recurring revenue from license and maintenance fees, which increased by $2.4 million in the nine-month period, confirms that once a court adopts their case management software, the revenue stream is sticky and highly predictable. This is a stable, long-term growth engine.

Daily Journal Corporation (DJCO) - PESTLE Analysis: Legal factors

Data privacy and protection laws (e.g., CCPA) increase compliance costs for both segments

You need to be acutely aware of how data privacy laws are driving up operational costs, especially in California, where Daily Journal Corporation is headquartered. The California Consumer Privacy Act (CCPA), as amended by the California Privacy Rights Act (CPRA), creates a significant compliance burden for both the publishing business and Journal Technologies.

Journal Technologies, in particular, handles vast amounts of sensitive personal information (PI) for courts and justice agencies, which are often considered high-risk data environments. The publishing segment, dealing with subscriber and advertiser data, also falls under the law's purview, given the company's consolidated revenues of $59.3 million for the nine months ended June 30, 2025. For a company of this size, initial compliance costs can easily range from $450,000 to over $2 million, based on industry benchmarks for firms with over 100 employees.

The financial risk from non-compliance is material. The CPPA, effective January 1, 2025, increased the penalties for violations. This is a clear, near-term risk that demands internal control enhancements.

• Intentional violation fine: Up to $7,988 per violation.
• Private right of action damages: Not less than $107 and not greater than $799 per consumer per incident.

Intellectual property (IP) protection is crucial for Journal Technologies' proprietary court software

The core value of Journal Technologies, which generated 77% of the company's total revenue as of June 2025, is its proprietary software suite. This GovTech segment relies heavily on its browser-based case management system, the eSeries Framework™, which is the centerpiece for document management and e-filing. The legal protection of this intellectual property (IP) is non-negotiable for maintaining a competitive moat against rivals in the judicial software market.

A single successful IP challenge-whether patent infringement, copyright violation, or trade secret theft-could severely impact the company's ability to license its software to the approximately 30 US states and international jurisdictions it currently serves. This is not just a defensive measure; strong IP is a prerequisite for bidding on large, long-term government contracts, which is the lifeblood of this business.

Regulatory changes in banking and finance directly impact the value of the majority of the investment portfolio

The company's investment portfolio, valued at a substantial $443 million as of June 30, 2025, is heavily concentrated in the financial sector. This makes the portfolio's net pretax unrealized gains of $303.9 million highly sensitive to US banking and finance regulatory shifts in 2025. Any change that affects the profitability or risk profile of major banks directly impacts DJCO's balance sheet.

For example, 2025 is seeing new regulatory focus on areas like the implementation of final rules on Automated Valuation Models (AVMs) for real estate collateral, effective October 1, 2025, and expected final rules on Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) programs. While DJCO is not a bank, these rules affect its largest holdings, primarily Wells Fargo & Co and Bank of America Corp, which together represent over 84% of the portfolio's reported 13F value.

Here's the quick math on the portfolio's exposure to regulatory changes:

Holding (Q3 2025)	% of 13F Portfolio Value	Primary Regulatory Exposure	2025 Regulatory Impact
Wells Fargo & Co (WFC)	45.16%	Dodd-Frank Act, CFPB, AVM Rules	Changes to capital/stress testing requirements directly affect valuation.
Bank of America Corp (BAC)	39.34%	Dodd-Frank Act, CFPB, AML/CFT Rules	Increased compliance costs for consumer protection and financial crime.
Alibaba Group Holding-SP ADR (BABA)	13.29%	SEC/PCAOB Oversight, US-China Trade Law	Ongoing risk from US regulatory scrutiny on foreign-domiciled companies.
US Bancorp (USB)	2.20%	Dodd-Frank Act, Bank Secrecy Act (BSA)	Exposure to regional bank-specific regulatory and compliance costs.

E-filing and electronic record mandates in state courts create a legal necessity for Journal Technologies' products

The move by state and county courts across the US to mandate electronic filing (e-filing) and digital record-keeping is the single largest legal tailwind for Journal Technologies. This is not a market preference; it is a legal requirement. Courts must comply with these mandates to process cases, so they are legally compelled to purchase and implement systems like Journal Technologies' case management software.

The company's ability to integrate its products with these legally required electronic services, including public-facing websites for e-filing and fee payments, secures a deeply embedded revenue stream. However, this also means the company is subject to strict legal requirements regarding system uptime, data integrity, and security protocols, as a system failure could lead to court closures or legal malpractice claims against the justice agencies they serve. They defintely need to maintain a perfect security track record.

Daily Journal Corporation (DJCO) - PESTLE Analysis: Environmental factors

The environmental profile of Daily Journal Corporation is a story of two businesses: one is a resource-intensive legacy operation, and the other is a low-impact, high-growth software engine. The key takeaway for investors is that the growth of Journal Technologies acts as a natural hedge against the environmental and supply chain risks inherent in the Traditional Business.

Increased focus on paper waste and carbon footprint pressures the Traditional Business print operations

The Traditional Business, which publishes 10 newspapers, faces increasing scrutiny over its paper consumption and carbon footprint. While this segment only constituted approximately 11% of the Company's total operating revenues in fiscal 2024, the environmental impact is disproportionately high relative to its revenue contribution. The industry trend is a sustained decline in demand for printing and writing paper as digital substitution accelerates.

For Daily Journal Corporation, paper and postage costs are a material expense, accounting for approximately 5% of the Traditional Business' operating costs in both fiscal 2024 and 2023. While the price of newsprint actually decreased about 14% in fiscal 2024, this short-term relief does not eliminate the long-term risk of relying on a resource with a significant environmental cost and volatile pricing. Honestly, the long-term viability of print, absent a robust sustainability framework, is defintely a concern.

Shifting to a cloud-based software model (Journal Technologies) reduces the company's direct environmental impact

The strategic pivot to Journal Technologies, the case management software subsidiary, is the Company's most significant environmental advantage. Journal Technologies' operations accounted for roughly three-quarters of the Company's operational revenues in fiscal 2024, and its revenue growth continued into the first half of fiscal 2025, with license and maintenance fees increasing by $1,615,000 in the six months ended March 31, 2025.

This shift to a cloud-based Software as a Service (SaaS) model dramatically reduces the Company's direct environmental footprint. Cloud solutions centralize computing power, which is far more energy efficient than on-premise servers. Here's the quick math on the benefit:

• Green cloud platforms can reduce greenhouse emissions by up to 40% compared to traditional data centers.
• Digital case management eliminates massive amounts of paper waste, a core benefit for justice agencies.
• Optimal energy utilization in cloud environments minimizes idle time, reducing energy use.

The move from physical newspaper production to software delivery is a fundamental change in the business model's environmental exposure. It's a classic example of a digital transformation that is inherently greener.

Supply chain disruptions for paper and printing materials due to climate events can impact costs

The Traditional Business remains exposed to supply chain volatility, a risk that climate change is amplifying across the globe. Extreme weather events like droughts, wildfires, and flooding are increasingly disrupting transportation routes and raw material sourcing.

For Daily Journal Corporation, this risk is compounded because the Company currently does not have a long-term contract with any paper supplier. This leaves them exposed to persistent threats to profitability from raw material volatility in the paper and pulp industry, which is a key trend for 2025.

Supply Chain Risk Factor (2025)	Impact on Traditional Business	Mitigating Factor (Journal Technologies)
Raw Material Price Volatility (Paper)	Direct cost risk; Paper and postage were 5% of Traditional Business costs in FY2024.	Minimal impact; Journal Technologies' operational costs are primarily personnel and hosting fees.
Climate-Related Logistics Disruptions	Risk of delayed newspaper delivery via U.S. Postal Service (roughly 36% of distribution).	Zero impact; Software delivery is digital and cloud-based.
Increased Regulatory Scrutiny on Sourcing	Potential for higher compliance costs or need for certified sustainable paper.	Low impact; Focus shifts to data center renewable energy use.

Investor and stakeholder pressure for ESG (Environmental, Social, and Governance) reporting is rising

Despite regulatory uncertainty in the US, like the SEC delaying final climate disclosure rules, the pressure for public companies to provide robust ESG reporting is accelerating. A 2025 survey by PwC found that over half of companies are experiencing growing pressure from stakeholders, including investors and customers, for sustainability data.

For a company like Daily Journal Corporation, which is a smaller reporting company, this pressure is still very real. Over two-thirds of asset owners globally recognize that ESG factors have become more material to investment decision-making. The lack of a formal, public ESG report or quantified environmental targets for the Traditional Business creates a potential reputational and valuation risk.

What this estimate hides is the opportunity: Journal Technologies' business model is a powerful ESG story-it enables justice systems to be paperless, which is a massive environmental win for its government clients. By focusing on this digital-first solution, Daily Journal Corporation could significantly enhance its ESG narrative, even if its Traditional Business remains a resource-intensive operation. Finance: draft a preliminary Scope 1 and 2 emissions estimate for the Traditional Business by the end of the quarter to benchmark the Journal Technologies benefit.