LEIFRAS Co., Ltd. Reports Financial Results for the Nine Months Ended September 30, 2025

TOKYO, Dec. 18, 2025 /PRNewswire/ -- LEIFRAS Co., Ltd. (Nasdaq: LFS) (the "Company" or "Leifras"), a sports and social business company dedicated to youth sports and community engagement, today announced its unaudited financial results for the nine months ended September 30, 2025.

Financial Highlights for the Nine Months Ended September 30, 2025

Operational Highlights for the Nine Months Ended September 30, 2025

Mr. Kiyotaka Ito, the Representative Director and Chief Executive Officer of Leifras, commented, "We delivered solid financial results in the first nine months of fiscal year 2025, with meaningful growth across our key financial and operational metrics. Revenue increased 15.3% and net income grew 0.7% from the same period last year. By segment, sports school business achieved revenue growth of 8.9% and social business revenue increased by 36.4% year over year. Our performance shows continued strength of our sports school business and expanding demand for our social business. Notably, revenue per capita in our social business rose by 18.6% year over year, highlighting the increasing value and impact of our community-based services. Looking ahead, we see meaningful opportunities in Japan's shifting policy landscape. The government's ongoing Club Activity Reform, which focuses on shifting school-based club activity management to regional and private organizations, is expected to create an important long-term growth pathway for Leifras. We recently secured a new contract with the City of Nagoya, Aichi Prefecture, to manage facilities at municipal junior high schools in Nagoya, marking an important step in our expansion strategy. We intend to actively pursue additional opportunities as municipalities seek specialized partners to deliver high-quality sports and community programs. In the future, we remain committed to cultivating the non-cognitive skills of children, strengthening community well-being, enhancing our service offerings, and delivering sustainable value to our shareholders and society."

Financial Results for the Nine Months Ended September 30, 2025

Revenue

Total revenue was JPY8.6 billion ($57.8 million) for the nine months ended September 30, 2025, an increase of 15.3% from JPY7.4 billion for the same period last year.

Sports school business revenue was JPY6.2 billion ($41.9 million) for the nine months ended September 30, 2025, an increase of 8.9% from JPY5.7 billion for the same period last year. The increase in revenue was mostly driven by: (i) an increase in the number of members by 1,605, from 69,924 as of September 30, 2024 to 71,529 as of September 30, 2025, resulting in an increase in revenue of JPY315.7 million ($2.1 million) and (ii) an increase in the number of customers who joined events hosted by the Company from 136,695 for the nine months ended September 30, 2024 to 142,843 for the nine months ended September 30, 2025, leading to an increase in the sports school business revenue by JPY112.6 million ($0.8 million).

Social business revenue was JPY2.4 billion ($15.9 million) for the nine months ended September 30, 2025, an increase of 36.4% from JPY1.7 billion for the same period last year. The increase in revenue was mostly driven by: (i) an increase in the number of schools by 125, from 235 as of September 30, 2024 to 360 as of September 30, 2025, resulting in an increase in revenue of JPY505.1 million ($3.4 million), and (ii) an increase in after-school daycare service revenue by JPY86.1 million ($0.6 million).

Cost of Revenue

Cost of revenue was JPY6.1 billion ($41.5 million) for the nine months ended September 30, 2025, an increase of 14.2% from JPY5.4 billion for the same period last year.

Gross Profit

Gross profit was JPY2.4 billion ($16.3 million) for the nine months ended September 30, 2025, an increase of 18.1% from JPY2.0 billion for the same period last year.

Gross margin was 28.2% for the nine months ended September 30, 2025, which increased from 27.5% for the same period last year.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses were JPY2.1 billion ($13.9 million) for the nine months ended September 30, 2025, an increase of 14.0% from JPY1.8 billion for the same period last year. The increase was attributed to (i) the increase in salaries and welfare expenses of JPY137.5 million ($0.9 million) due to business expansion as well as an increase in headquarters personnel in preparation for the Company's initial public offering ("IPO"), (ii) the increase in promotion fees of JPY8.2 million ($0.06 million) due to business expansion, (iii) the increase in office rental fees of JPY14.1 million ($0.1 million) due to business expansion, (iv) the increase in system maintenance fee expenses of JPY17.3 million ($0.1 million) incurred due to the increase in the number of employees, and (v) the increase in recruitment fees of JPY53.8 million ($0.4 million) due to business expansion as well as an increase in headquarters personnel in preparation for the Company's IPO.

Other Income (Expenses), Net

Other expenses, net were JPY1.9 million ($0.01 million) for the nine months ended September 30, 2025, compared to other income, net of JPY28.7 million for the same period last year. The decrease was attributed to: (i) net franchise income collected (returned) of JPY27.4 million ($0.02 million), which was the payments refunded to the franchisees in connection with the transfer of certain business rights, (ii) an eviction compensation of JPY5.5 million ($0.04 million) received in connection with the vacating of a leased building. Interest expenses, net were JPY9.7 million ($0.07 million) for the nine months ended September 30, 2025, a decrease of 21.8% from JPY12.4 million for the same period last year.

Net Income

Net income was JPY226.7 million ($1.5 million) for the nine months ended September 30, 2025, an increase of 0.7% from JPY225.1 million for the same period last year.

Basic and Diluted Earnings per Share

Basic earnings per share was JPY9.10 ($0.06) for the nine months ended September 30, 2025, compared to JPY9.04 for the same period last year.

Diluted earnings per share was JPY9.10 ($0.06) for the nine months ended September 30, 2025, compared to JPY8.32 for the same period last year.

Financial Condition

As of September 30, 2025, the Company had cash of JPY2.4 billion ($16.5 million), compared to JPY2.5 billion as of December 31, 2024.

Net cash provided by operating activities was JPY326.7 million ($2.2 million) for the nine months ended September 30, 2025, compared to net cash used in operating activities of JPY105.4 million for the same period last year.

Net cash used in investing activities was JPY48.5 million ($0.3 million) for the nine months ended September 30, 2025, compared to JPY45.7 million for the same period last year.

Net cash used in financing activities was JPY380.1 million ($2.6 million) for the nine months ended September 30, 2025, compared to JPY224.1 million for the same period last year.

Financial Guidance

The Company is projecting total revenue to be between JPY11.6 billion and JPY11.9 billion ($78.1 million and $80.5 million) for the fiscal year ending December 31, 2025, an increase of approximately 11.9% to 15.3% from JPY10.3 billion ($69.8 million) for the fiscal year ended December 31, 2024.

Income from operations is projected to be between JPY580.0 million and JPY696.5 million ($3.9 million and $4.7 million) for the fiscal year ending December 31, 2025, an increase of 11.6% to 34.0% from JPY519.8 million ($3.5 million) for the fiscal year ended December 31, 2024.

These projections are based on the assumption that no business acquisitions, restructuring activities, or legal settlements will take place during the period.

Exchange Rate Information

This announcement contains translations of certain Japanese Yen ("JPY") amounts into U.S. dollars ("USD," or "$") for the convenience of the reader. Translations of amounts from JPY into USD have been made at the exchange rate of JPY147.97 = $1.00, the exchange rate on September 30, 2025 set forth in the H.10 statistical release of the United States Federal Reserve Board.

About LEIFRAS Co., Ltd.

Headquartered in Tokyo, Leifras is a sports and social business company dedicated to youth sports and community engagement. The Company primarily provides services related to the organization and operations of sports schools and sports events for children. As of December 31, 2024, Leifras was recognized as one of Japan's largest operators of children's sports schools in terms of both membership and facilities by Tokyo Shoko Research. The Company's approach to sports education emphasizes the development of non-cognitive skills, following the teaching principle "acknowledge, praise, encourage, and motivate." The holistic approach that integrates physical and mental development sets Leifras apart in the industry. Building upon deep experience and know-how in sports education, Leifras also operates a robust social business sector, dispatching sports coaches to meet various community needs with the aim to promote physical health, social inclusion, and community well-being across different demographics. For more information, please visit the Company's website: https://ir.leifras.co.jp/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may," or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. These statements are subject to uncertainties and risks, including, but not limited to, the uncertainties related to market conditions, and other factors discussed in the "Risk Factors" section of the registration statement filed with the U.S. Securities and Exchange Commission (the "SEC"). Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the registration statement and other filings with the SEC. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov.

For more information, please contact:

LEIFRAS Co., Ltd.

Investor Relations Department

Email: [email protected]

Ascent Investor Relations LLC

Tina Xiao

Phone: +1-646-932-7242

Email: [email protected]

LEIFRAS CO., LTD. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

September 30,

2024

2025

JPY

US$

(Unaudited)

ASSETS

CURRENT ASSETS

Cash

2,538,554,638

2,436,675,605

16,467,362

Accounts receivable, net

518,398,551

555,775,583

3,756,002

Short-term investments

4,935,000

5,075,000

34,297

Inventories, net

24,468,188

20,757,063

140,279

Prepaid expenses

182,278,232

201,888,793

1,364,390

Other current assets

34,381,843

57,886,907

391,207

TOTAL CURRENT ASSETS

3,303,016,452

3,278,058,951

22,153,537

NON-CURRENT ASSETS

Property and equipment, net

53,805,279

99,293,143

671,035

Finance lease right-of-use assets

208,611,550

228,794,098

1,546,219

Operating lease right-of-use assets

337,330,750

513,349,897

3,469,284

Intangible assets, net

39,250,078

27,980,475

189,096

Goodwill

27,999,994

189,228

Deferred tax assets, net

214,671,578

189,283,332

1,279,201

Deferred initial public offering ("IPO") costs

157,482,065

254,764,117

1,721,728

Long-term deposits

150,407,276

150,210,192

1,015,140

Other non-current assets

3,090,205

9,784,796

66,127

TOTAL NON-CURRENT ASSETS

1,192,648,775

1,501,460,044

10,147,058

TOTAL ASSETS

4,495,665,227

4,779,518,995

32,300,595

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Short-term loans

700,000,000

4,730,689

Current portion of long-term loans

230,785,000

169,252,000

1,143,826

Bond payable, current

40,000,000

270,325

Accounts payable

168,281,568

114,243,578

772,073

Accrued liabilities

1,109,740,581

1,184,636,104

8,005,921

Income tax payable

75,374,800

3,301,800

22,314

Contract liabilities, current

147,628,310

267,364,483

1,806,883

Amount due to a director

1,000,000

Finance lease liabilities, current

71,681,545

83,549,523

564,638

Operating lease liabilities, current

110,889,134

132,923,377

898,313

Other current liabilities

195,952,191

156,907,705

1,060,403

TOTAL CURRENT LIABILITIES

2,851,333,129

2,852,178,570

19,275,385

NON-CURRENT LIABILITIES

Long-term loans, net of current portion

175,452,000

38,568,000

260,648

Bond payable, non-current

56,807,020

37,833,335

255,682

Contract liabilities, non-current

10,615,635

14,507,411

98,043

Finance lease liabilities, non-current

140,333,247

143,881,183

972,367

Operating lease liabilities, non-current

207,353,977

364,551,378

2,463,684

Assets retirement obligations

12,914,758

30,671,626

207,283

TOTAL NON-CURRENT LIABILITIES

603,476,637

630,012,933

4,257,707

TOTAL LIABILITIES

3,454,809,766

3,482,191,503

23,533,092

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY

Ordinary shares

80,500,000

544,029

Additional paid-in capital

748,840,080

778,624,844

5,262,045

Treasury shares

(100,012,265)

(675,896)

Retained earnings

311,527,646

538,214,913

3,637,325

TOTAL SHAREHOLDERS' EQUITY

1,040,855,461

1,297,327,492

8,767,503

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

4,495,665,227

4,779,518,995

32,300,595

LEIFRAS CO., LTD. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the nine months ended

September 30

2024

2025

JPY

US$

NET REVENUE

7,419,460,643

8,556,096,390

57,823,183

Cost of revenue

(5,378,876,612)

(6,145,159,916)

(41,529,769)

GROSS PROFIT

2,040,584,031

2,410,936,474

16,293,414

Selling, general, and administrative expenses

(1,802,047,253)

(2,055,180,818)

(13,889,172)

INCOME FROM OPERATIONS

238,536,778

355,755,656

2,404,242

OTHER INCOME (EXPENSE)

Interest income

325,182

3,801,610

25,691

Interest expense

(12,751,685)

(13,514,164)

(91,330)

Grant income

14,205,788

14,902,919

100,716

Unrealized (loss) gain on short-term investment

(168,000)

140,000

946

Loss on disposal of long-lived assets

(168,973)

(1,142)

Loss on disposal of a subsidiary

(753,900)

Other income (expense), net

15,438,598

(16,773,644)

(113,358)

Total other income (expense), net

16,295,983

(11,612,252)

(78,477)

INCOME BEFORE INCOME TAX PROVISION

254,832,761

344,143,404

2,325,765

PROVISION FOR INCOME TAXES

Current

(69,425,173)

(92,067,891)

(622,206)

Deferred

39,664,246

(25,388,246)

(171,577)

Total provision for income taxes

(29,760,927)

(117,456,137)

(793,783)

NET INCOME

225,071,834

226,687,267

1,531,982

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES

Basic

24,910,660

24,910,619

Diluted

27,066,715

24,913,619

EARNINGS PER SHARE

Basic

9.04

9.10

0.06

Diluted

8.32

9.10

0.06

LEIFRAS CO., LTD. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the nine months ended

September 30,

2024

2025

JPY

US$

Cash flows from operating activities

Net income

225,071,834

226,687,267

1,531,982

Adjustments to reconcile net income to net cash provided by operating activities

Depreciation and amortization expense

90,057,762

96,233,315

650,357

Loss on disposal of a subsidiary

753,900

Provision for expected credit loss

2,771,782

9,208,096

62,229

Loss on disposal of property and equipment

168,973

1,142

Accounts receivable written off as uncollectible

28,558

193

Provision for inventory impairment

3,403,261

424,180

2,867

Unrealized loss (gain) on short-term investment

168,000

(140,000)

(946)

Other non-cash expenses (income)

1,100,148

29,173,060

197,155

Deferred tax expense (benefit)

(39,664,246)

25,388,246

171,577

Changes in operating assets and liabilities

Accounts receivable, net

(1,051,687)

(46,613,686)

(315,021)

Inventories

(13,808,125)

3,286,945

22,214

Prepaid expenses

(105,900,505)

(19,854,842)

(134,182)

Long-term deposits

(6,998,055)

197,084

1,332

Amount due from a director

33,577,065

Other current assets

(25,969,080)

(23,505,064)

(158,850)

Other non-current assets

(10,722,988)

(6,694,591)

(45,243)

Accounts payable

(61,359,477)

(54,037,990)

(365,196)

Accrued liabilities

(204,167,728)

74,895,523

506,153

Contract liabilities

121,711,898

123,627,949

835,493

Operating lease liabilities

(400,151)

3,212,497

21,710

Income tax payable

(149,952,500)

(72,073,000)

(487,078)

Amount due to a director

(1,000,000)

(6,758)

Other current liabilities

36,020,082

(41,875,805)

(283,002)

Net cash (used in) provided by operating activities

(105,358,810)

326,736,715

2,208,128

Cash flows from investing activities

Cash outflow due to reduction in consolidated entities

(17,257,489)

Purchase of property and equipment

(11,926,248)

(42,598,215)

(287,884)

Purchase of intangible assets

(16,521,500)

(5,880,000)

(39,738)

Net cash used in investing activities

(45,705,237)

(48,478,215)

(327,622)

Cash flows from financing activities

Payment of finance lease liabilities

(43,259,590)

(64,438,481)

(435,483)

Proceeds from bank loans

250,000,000

Repayment of bank loans

(280,815,000)

(198,417,000)

(1,340,927)

Repayment of bond payable

(20,000,000)

(135,163)

Payment of deferred IPO costs

(129,983,403)

(97,282,052)

(657,445)

Net cash used in financing activities

(224,057,993)

(380,137,533)

(2,569,018)

Net decrease in cash

(375,122,040)

(101,879,033)

(688,512)

Cash at the beginning of period

2,729,282,346

2,538,554,638

17,155,874

Cash at the end of the period end

2,354,160,306

2,436,675,605

16,467,362

Supplementary cash flow information

Cash paid for income taxes

202,070,573

115,154,307

778,227

Cash paid for interest expenses

11,651,537

12,325,868

83,300

SOURCE LEIFRAS Co., Ltd.