LEIFRAS Co., Ltd. Reports Financial Results for the First Quarter of Fiscal Year 2026

Record High Revenue, Adjusted Income from Operations, and Net Income, Up 10.0%, 1.0%, and 1.5% Year-over-Year, Respectively [1]

TOKYO, June 18, 2026 /PRNewswire/ -- LEIFRAS Co., Ltd. (Nasdaq: LFS) (the "Company" or "Leifras"), a sports and social business company dedicated to youth sports and community engagement and Japan's leading operator of children's sports schools and school club activity support businesses, today announced its unaudited financial results for the three months ended March 31, 2026.

First Quarter of Fiscal Year 2026 Financial Highlights

First Quarter of Fiscal Year 2026 Operational Highlights

Sports School Business

Social Business

Management Commentary

Mr. Kiyotaka Ito, the Representative Director and Chief Executive Officer of Leifras, commented, "For the first quarter of fiscal year 2026, we achieved record highs in revenue, adjusted income from operations, and net income. [1]

"For the sports school business, despite a temporary slight decrease in membership due to graduations, revenue increased by 5.6% due to higher monthly fees. Moving forward, we plan to focus on expanding our sports school membership base through both organic growth and strategic M&A.

"For the social business, the school club support business expanded under the tailwind of national policy, while the after-school daycare business grew in both scale and revenue, driving an increase in social business revenue by 24.1%. Although strategic investments and M&A-related expenses led to a slight decrease in operating income, we believe these investments are essential to supporting future expansion and unlocking long-term growth through business synergies.

"Fiscal year 2026 marks the first year of the Japanese government's 'reform implementation period' for school club activities, during which these activities are being transitioned to private-sector providers. We plan to fully leverage this powerful policy tailwind and continue to execute with focus. We remain committed to supporting the smiles and growth of children across borders and appreciate the continued support from our valued customers, partners, and shareholders."

Financial Condition

Financial Guidance

Following these financial results, there are no changes to Leifras' financial guidance last provided in its press release issued on April 8, 2026.

The guidance is based on the assumption that no business acquisitions, restructuring activities, or legal settlements will take place during the period.

The guidance is translated at the FY2025 assumed exchange rate of ¥156.80 = $1.00 to eliminate the impact of foreign exchange volatility.

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 JPY159.08 = $1.00, the exchange rate on March 31, 2026 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, 2025, 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/.

Non-GAAP Financial Measures

In the Company's report, it discusses key financial measures that are not calculated in accordance with the United States Generally Accepted Accounting Principles ("GAAP") to supplement its unaudited interim condensed consolidated financial statements presented on a GAAP basis. These non-GAAP financial measures are reconciled from their most directly comparable financial measures determined in accordance with GAAP as follows:

For the

Three Months Ended

March 31,

2025

2026

JPY

US$

INCOME FROM OPERATIONS

166,146,066

153,308,100

963,717

Plus: acquisition-related costs (a)

14,505,152

91,181

Adjusted INCOME FROM OPERATIONS

166,146,066

167,813,252

1,054,898

(a)

Represents acquisition-related costs incurred in connection with the Company's acquisition activities, including transaction-related

costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related costs. These costs have been

added back for normalization purposes as they are not considered reflective of the Company's core operating performance.

The Company's primary non-GAAP financial measures and corresponding metrics reflect how it evaluates its current and prior year operating results. As new events or circumstances arise, these definitions could change. When the Company's definitions change, it provides the updated definitions. When items no longer impact its current or future presentation of non-GAAP operating results, it removes these items from its non-GAAP definitions.

Adjusted income from operations is a financial measure that is not calculated in accordance with GAAP (collectively referred to as the "non-GAAP financial measures"), and the use of the term adjusted income from operations may differ from similar measures reported by other companies and may not be comparable to other similarly titled measures. The Company believes the non-GAAP financial measure provides investors with useful information with respect to its historical operations. The Company presents the non-GAAP financial measure as a supplemental performance measure because the Company believes it facilitates a comparative assessment of the Company's operating performance relative to its performance based on its results under GAAP, while isolating the effects of some items that vary from period to period. Specifically, adjusted income from operations allows the Company to assess its performance without the impact of the specifically identified items that it believes do not directly reflect its core operations, including acquisition-related costs and other items that management does not consider reflective of its core operating performance. The non-GAAP financial measure also functions as a key performance indicator used to evaluate the Company's operating performance internally, and it is used in connection with the determination of incentive compensation for management, including executive officers.

As the Company's initial public offering was completed during the fiscal year ended December 31, 2025, and the related listing-related and transformational expenses were specific to its initial public offering and related transformation activities, the Company does not expect to incur such expenses in the fiscal year ending December 31, 2026 or future periods. Accordingly, beginning with the fiscal year ending December 31, 2026, the Company has revised its presentation of adjusted income from operations and removed listing-related and transformational expenses from the adjustments to adjusted income from operations for all historical periods presented.

Adjusted income from operations is not a measurement of the Company's financial performance under GAAP and should not be considered in isolation or as an alternative to income from operations or any other financial statement data presented as indicators of financial performance or liquidity, each as presented in accordance with GAAP. Consequently, the Company's non-GAAP financial measure should be considered together with its unaudited interim condensed consolidated financial statements, which are prepared in accordance with GAAP. The Company understands that although adjusted income from operations is frequently used by securities analysts, lenders and others in their evaluation of companies, it has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of the Company's results as reported under GAAP. Some of these limitations are: adjusted income from operations does not fully reflect the Company's cash expenditures, future requirements for capital expenditures or contractual commitments; adjusted income from operations does not reflect changes in, or cash requirements for, the Company's working capital needs; adjusted income from operations does not reflect the interest expense, or the cash requirements necessary to service interest or principal payments, on debt; and, although depreciation and amortization expenses are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted income from operations does not reflect any cash requirements for such replacements.

Because of these limitations, adjusted income from operations should not be considered as discretionary cash available to the Company to reinvest in the growth of the Company's business or as measure of cash that will be available to the Company to meet its obligations.

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]

Note: [1] Record high in US-GAAP figures since 2025.

LEIFRAS CO., LTD. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

December 31,

March 31,

2025

2026

JPY

US$

(Unaudited)

ASSETS

CURRENT ASSETS

Cash

2,524,082,266

2,477,567,162

15,574,347

Accounts receivable, net

731,083,491

786,776,869

4,945,794

Inventories, net

21,578,477

13,735,828

86,345

Prepaid expenses

158,040,280

253,474,342

1,593,377

Other current assets

38,219,685

45,019,332

282,998

TOTAL CURRENT ASSETS

3,473,004,199

3,576,573,533

22,482,861

NON-CURRENT ASSETS

Property and equipment, net

96,456,471

99,659,727

626,475

Intangible assets, net

29,631,015

26,881,643

168,982

Operating lease right-of-use assets

482,694,859

477,316,039

3,000,478

Finance lease right-of-use assets

236,908,226

227,724,404

1,431,509

Long-term deposits

150,216,792

155,815,142

979,477

Long-term investment

5,736,500

25,056,000

157,506

Deferred tax assets, net

164,082,227

147,566,531

927,625

Goodwill

27,999,994

176,012

Other non-current assets

8,470,398

9,030,715

56,768

TOTAL NON-CURRENT ASSETS

1,202,196,482

1,197,050,195

7,524,832

TOTAL ASSETS

4,675,200,681

4,773,623,728

30,007,693

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES

Short-term loans

100,000,000

628,615

Current portion of long-term loans

151,030,000

114,826,000

721,813

Bond payable, current

40,000,000

80,000,000

502,892

Accounts payable

196,849,154

215,326,762

1,353,575

Accrued liabilities

1,160,996,435

1,068,999,496

6,719,886

Income tax payable

43,499,500

28,193,977

177,232

Contract liabilities, current

154,074,620

79,376,490

498,972

Operating lease liabilities, current

138,880,117

145,575,433

915,108

Finance lease liabilities, current

88,017,810

88,531,359

556,521

Other current liabilities

176,592,537

193,682,649

1,217,517

TOTAL CURRENT LIABILITIES

2,249,940,173

2,114,512,166

13,292,131

NON-CURRENT LIABILITIES

Long-term loans, net of current portion

24,422,000

8,370,000

52,615

Bond payable, non-current

18,175,440

171,589,348

1,078,635

Contract liabilities, non-current

12,817,448

8,660,455

54,441

Operating lease liabilities, non-current

347,365,643

332,648,745

2,091,078

Finance lease liabilities, non-current

144,989,192

135,920,091

854,414

Assets retirement obligations

30,775,915

30,880,049

194,117

TOTAL NON-CURRENT LIABILITIES

578,545,638

688,068,688

4,325,300

TOTAL LIABILITIES

2,828,485,811

2,802,580,854

17,617,431

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY

Ordinary shares, 80,000,000 shares authorized; 26,560,660 shares issued

and 26,160,619 shares outstanding as of December 31, 2025 and

March 31, 2026

409,833,241

2,576,271

Additional paid-in capital

786,906,631

4,946,610

Treasury shares, 400,041 shares as of December 31, 2025 and March 31,

2026

(100,012,265)

(628,692)

Retained earnings

749,987,263

874,315,267

5,496,073

TOTAL SHAREHOLDERS' EQUITY

1,846,714,870

1,971,042,874

12,390,262

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

4,675,200,681

4,773,623,728

30,007,693

LEIFRAS CO., LTD. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

For the three months ended

March 31,

2025

2026

JPY

US$

NET REVENUE

2,686,214,407

2,954,324,120

18,571,311

Cost of revenue

(1,895,769,261)

(2,002,020,892)

(12,584,995)

GROSS PROFIT

790,445,146

952,303,228

5,986,316

Selling, general, and administrative expenses

(624,299,080)

(798,995,128)

(5,022,599)

INCOME FROM OPERATIONS

166,146,066

153,308,100

963,717

OTHER INCOME (EXPENSE)

Interest income

1,202,167

2,569,001

16,149

Interest expense

(4,701,295)

(2,615,163)

(16,439)

Dividend income

87,500

550

Grant income

8,524,957

12,400,890

77,954

Unrealized loss on short-term investment

(161,000)

Unrealized gain on long-term investment

2,735,074

17,193

Loss on disposal of long-lived assets

(168,969)

(4)

Other income (expense), net

(15,705,413)

852,524

5,359

Total other income (expense), net

(10,922,053)

16,029,822

100,766

INCOME BEFORE INCOME TAX PROVISION

155,224,013

169,337,922

1,064,483

PROVISION FOR INCOME TAXES

Current

(3,626,835)

(28,494,222)

(179,119)

Deferred

(29,056,916)

(16,515,696)

(103,820)

Total provision for income taxes

(32,683,751)

(45,009,918)

(282,939)

NET INCOME

122,540,262

124,328,004

781,544

WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES

Basic

24,910,619

26,160,619

Diluted

24,913,619

26,163,619

EARNINGS PER SHARE

Basic

4.92

4.75

0.03

Diluted

4.92

4.75

0.03

LEIFRAS CO., LTD. AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended

March 31,

2025

2026

JPY

US$

Cash flows from operating activities

Net income

122,540,262

124,328,004

781,544

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

Depreciation and amortization expense

33,078,421

29,860,560

187,708

Provision for expected credit loss

2,231,985

2,098,333

13,190

Loss on disposal of property and equipment

168,969

Provision for inventory impairment

58,982

538,926

3,388

Unrealized loss on short-term investment

161,000

Unrealized gain on long-term investment

(2,735,074)

(17,193)

Unrealized foreign currency exchange loss

1,325,417

Other non-cash expenses (income)

(830,871)

685,062

4,307

Deferred tax expense

29,056,916

16,515,696

103,820

Changes in operating assets and liabilities

Accounts receivable, net

(34,680,981)

(57,791,711)

(363,287)

Inventories

792,788

7,303,723

45,912

Prepaid expenses

(114,612,715)

(95,467,062)

(600,120)

Long-term deposits

(2,019,600)

(5,598,350)

(35,192)

Other current assets

(17,654,864)

(6,799,647)

(42,744)

Other non-current assets

271,028

(560,317)

(3,522)

Accounts payable

218,656

18,477,608

116,153

Accrued liabilities

(99,770,693)

(91,996,939)

(578,306)

Contract liabilities

(85,961,299)

(78,855,123)

(495,695)

Operating lease liabilities

(416,121)

(2,642,777)

(16,613)

Income tax payable

(72,177,900)

(15,305,523)

(96,213)

Amount due to a director

(1,000,000)

Other current liabilities

(264,810)

17,090,112

107,431

Net cash used in operating activities

(239,485,430)

(140,854,495)

(885,432)

Cash flows from investing activities

Purchase of investment securities

(16,584,426)

(104,252)

Purchase of property and equipment

(1,795,476)

(5,821,892)

(36,597)

Purchase of intangible assets

(3,085,000)

(132,800)

(835)

Net cash used in investing activities

(4,880,476)

(22,539,118)

(141,684)

Cash flows from financing activities

Payment of finance lease liabilities

(20,256,439)

(23,698,391)

(148,972)

Repayment of bank loans

(103,388,000)

(52,256,000)

(328,489)

Proceeds from bond payable

192,832,900

1,212,176

Payment of deferred IPO costs

(58,000,138)

Net cash (used in) provided by financing activities

(181,644,577)

116,878,509

734,715

Effect of exchange rate

(1,325,417)

Net decrease in cash

(427,335,900)

(46,515,104)

(292,401)

Cash at the beginning of period

2,538,554,638

2,524,082,266

15,866,748

Cash at the end of period

2,111,218,738

2,477,567,162

15,574,347

Supplementary cash flow information

Cash paid for income taxes

75,804,735

43,799,745

275,332

Cash paid for interest expenses

4,345,433

1,930,021

12,132

Non-GAAP Financial Measures and Reconciliation

Adjusted INCOME FROM OPERATIONS

For the

Three Months Ended

March 31,

2025

2026

JPY

US$

INCOME FROM OPERATIONS

166,146,066

153,308,100

963,717

Plus: acquisition-related costs (a)

14,505,152

91,181

Adjusted INCOME FROM OPERATIONS

166,146,066

167,813,252

1,054,898

(a)

Represents acquisition-related costs incurred in connection with the Company's acquisition activities, including

transaction-related costs, legal, financial and tax due diligence expenses, integration costs and other acquisition-related

costs. These costs have been added back for normalization purposes as they are not considered reflective of the Company's core operating performance.

SOURCE LEIFRAS Co., Ltd.