LEIFRAS Co., Ltd. Reports Financial Results of Six Months Ended June 30, 2025 | LFS Stock News

, /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 six months ended June 30, 2025. Financial Highlights of the Six Months Ended June 30, 2025 Revenue was JPY5.5 billion ($38.1 million) for the six months ended June 30, 2025, an increase of 15.0% from JPY4.8 billion for the same period last year. Gross profit was JPY1.4 billion ($10.0 million) for the six months ended June 30, 2025, an increase of 16.1% from JPY1.2 billion for the same period last year. Gross margin was 26.3% for the six months ended June 30, 2025, increased from 26.0% for the same period last year. Net income was JPY53.7 million ($0.4 million) for the six months ended June 30, 2025, an increase of 25.6% from JPY42.8 million for the same period last year. Basic and diluted earnings per share was JPY2.2 ($0.01) for the six months ended June 30, 2025, compared to basic earnings per share of JPY1.7 and diluted earnings per share of JPY1.5 for the same period last year. Operational Highlights of the Six Months Ended June 30, 2025 Number of membersin the sports school businesswas69,500 for the six months ended June 30, 2025, an increase of6.4%from65,337for the same period last year. Average membershipduration in the sports school businesswas1.9 years for the six months ended June 30, 2025, an increase of 2.2% from 1.8 yearsfor the same period last year. Revenue per capita in the sport school business, which we define as the sales revenue of the sports school business divided by the number of employees involved in that business, was JPY6.1 million ($42,433) for the six months ended June 30, 2025, an increase of 4.2% from JPY5.9 million for the same period last year. Number of schoolsserved under the social business segmentwas349 for the six months ended June 30, 2025, an increase of48.5%from235for the same period last year. Revenue per capita in the social business, which we define as the sales revenue of the social business divided by the number of employees involved in that business, was JPY5.1 million ($35,121) for the six months ended June 30, 2025, an increase of 21.7% from JPY4.2 million for the same period last year. Mr. Kiyotaka Ito, the Representative Director and Chief Executive Officer of Leifras, commented, "We are pleased to share strong results for the first half of fiscal year 2025, with revenue increasing 15.0%, gross profit rising 16.1%, and net income growing 25.6% year over year. These results reflect both growth in our sports school business, where membership and event participation continued to increase, and momentum in our social business, which saw a 48.5% increase in the number of schools servedfrom the same period last year. Notably, revenue per capita in our social business rose 21.7% year over year, highlighting the growing value and impact of our community-based services. "In October 2025, we achieved an important milestone with Leifras' successful initial public offering on Nasdaq. This achievement would not have been possible without the unwavering support of so many: the children and families who use our services, the shareholders who share our vision, the business partners who advance our mission, and the dedicated instructors across Japan whose passion drives our work each day. I offer my heartfelt gratitude to everyone who has been part of this journey." Mr. Ito continued, "At Leifras, we believe in the power of sports to transcend language and borders and to enrich lives and communities. Looking ahead, we are dedicated to continuing to build on the momentum by advancing youth sports education, broadening our social initiatives, and driving operational efficiency to create sustainable, long-term value for our shareholders and the communities we serve." Financial Results of the Six Months Ended June 30, 2025 Revenue Total revenue was JPY5.5 billion ($38.1 million) for the six months ended June 30, 2025, an increase of 15.0% from JPY4.8 billion for the same period last year. Sports school business revenue was JPY3.9 billion ($27.3 million) for the six months ended June 30, 2025, an increase of 8.5% from JPY3.6 billion for the same period last year. The increase in revenue was mostly driven by: (i) an increase in the number of members by 4,163, from 65,337 as of June 30, 2024 to 69,500 as of June 30, 2025, resulting in an increase in revenue of JPY229.1 million ($1.6 million) and (ii) an increase in the number of customers who joined events hosted by the Company from 84,651 for the six months ended June 30, 2024 to 90,501 for the six months ended June 30, 2025, leading to an increase in the sports school business revenue by JPY74.8 million ($0.5 million). Social business revenue was JPY1.6 billion ($10.8 million) for the six months ended June 30, 2025, an increase of 35.4% from JPY1.1 billion for the same period last year. The increase in revenue was mostly driven by: (i) an increase in the number of schools by 114, from 235 as of June 30, 2024 to 349 as of June 30, 2025, resulting in an increase in revenue of JPY356.2 million ($2.5 million), and (ii) an increase in after-school daycare service revenue by JPY37.4 million ($0.3 million). Cost of Revenue Cost of revenue was JPY4.0 billion ($28.1 million) for the six months ended June 30, 2025, an increase of 14.6% from JPY3.5 billion for the same period last year. Gross Profit Gross profit was JPY1.4 billion ($10.0 million) for the six months ended June 30, 2025, an increase of 16.1% from JPY1.2 billion for the same period last year. Gross margin was 26.3% for the six months ended June 30, 2025, increased from 26.0% for the same period last year. Selling, General, and Administrative Expenses Selling, general, and administrative expenses were JPY1.4 billion ($9.5 million) for the six months ended June 30, 2025, an increase of 13.6% from JPY1.2 billion for the same period last year. The increase was attributed to (i) the increase in salaries and welfare expenses of JPY69.8 million ($0.5 million) due to business expansion as well as an increase in headquarters personnel in preparation for our initial public offering ("IPO"), (ii) the increase in promotion fees of JPY10.7 million ($0.07 million) due to business expansion, (iii) the increase in office rental fees of JPY12.6 million ($0.09 million) due to business expansion, (iv) the increase in system maintenance fee expenses of JPY13.9 million ($0.10 million) incurred due to the increase in the number of employees, and (v) the increase in recruitment fees of JPY33.4 million ($0.2 million) due to business expansion as well as an increase in headquarters personnel in preparation for our IPO. Other Income (Expenses) Other expenses were JPY11.3 million ($0.08 million) for the six months ended June 30, 2025, a decrease of 139.5% from other income of JPY28.6 million for the same period last year. The decrease was attributed to: (i) net franchise income collected (returned) of JPY27.4 million ($0.2 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. Net Income Net income was JPY53.7 million ($0.4 million) for the six months ended June 30, 2025, an increase of 25.6% from JPY42.8 million for the same period last year. Basic and Diluted Earnings per Share Basic earnings per share was JPY2.2 ($0.01) for the six months ended June 30, 2025, compared to JPY1.7 for the same period last year. Diluted earnings per share was JPY2.2 ($0.01) for the six months ended June 30, 2025, compared to JPY1.5 for the same period last year. Financial Condition As of June 30, 2025, the Company had cash of JPY2.5 billion ($17.3 million), compared to JPY2.5 billion as of December 31, 2024. Net cash provided by operating activities wasJPY312.8 million ($2.2 million) for the six months ended June 30, 2025, compared to net cash used in operating activities of JPY212.3 million for the same period last year. Net cash used in investing activities wasJPY47.2 million ($0.3 million) for the six months ended June 30, 2025, compared to JPY44.2 million for the same period last year. Net cash used in financing activities was JPY306.1 million ($2.1 million) for the six months ended June 30, 2025, compared to JPY35.7 million for the same period last year. Recent Development The Company consummated its IPO on October 10, 2025, in which it issued and sold 1,250,000 American Depositary Shares ("ADSs") at a price of $4.00 per ADS, resulting in gross proceeds of approximately JPY720.9 million ($5.0 million) and net proceeds of approximately JPY673.5 million ($4.7 million) after deducting the underwriting discount of approximately JPY47.4 million ($0.3 million). Financial Guidance The Company expects total revenue to be between $80.2 million and $82.6 million for the fiscal year ending December 31, 2025, an increase of approximately 11.9% to 15.3% from $71.6 million for the fiscal year ended December 31, 2024. Income from operations is projected to be between $4.0 million and $4.8 million for the fiscal year ending December 31, 2025, an increase of 11.6% to 34.0% from $3.6 million for the fiscal year ended December 31, 2024. These projections are based on the assumption that no business acquisitions, restructuring activities, or legal settlements will take place during the period. Exchange Rate Information This announcement contains translations of certain Japanese Yen ("JPY") amounts into U.S. dollars ("USD," or "$") for the convenience of the reader. Translations of amounts from JPY into USD have been made at the exchange rate of JPY144.17 = $1.00, the exchange rate on June 30, 2025 set forth in the H.10 statistical release of the United States Federal Reserve Board on July 7, 2025. 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 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 atwww.sec.gov. For more information, please contact: LEIFRAS Co., Ltd.Investor Relations DepartmentEmail: IR@leifras.co.jp Ascent Investor Relations LLCTina XiaoPhone: +1-646-932-7242Email: investors@ascent-ir.com LEIFRASCO., LTD. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS December31, June30, June30, 2024 2025 2025 JPY JPY US$ (Unaudited) (Unaudited) ASSETS CURRENT ASSETS Cash 2,538,554,638 2,498,098,518 17,327,450 Accounts receivable, net 518,398,551 487,639,054 3,382,389 Short-term investments 4,935,000 4,711,000 32,677 Inventories, net 24,468,188 23,298,191 161,602 Prepaid expenses 182,278,232 116,165,484 805,754 Other current assets 34,381,843 42,803,587 296,897 TOTAL CURRENT ASSETS 3,303,016,452 3,172,715,834 22,006,769 NON-CURRENT ASSETS Property and equipment, net 53,805,279 101,588,668 704,645 Finance lease right-of-use assets 208,611,550 239,787,178 1,663,225 Operating lease right-of-use assets 337,330,750 529,227,650 3,670,858 Intangible assets, net 39,250,078 31,471,323 218,293 Goodwill 27,999,994 27,999,994 194,215 Deferred tax assets, net 214,671,578 222,612,673 1,544,098 Deferred initial public offering ("IPO") costs 157,482,065 243,714,152 1,690,464 Long-term deposits 150,407,276 150,527,126 1,044,095 Other non-current assets 3,090,205 10,818,502 75,040 TOTAL NON-CURRENT ASSETS 1,192,648,775 1,557,747,266 10,804,933 TOTAL ASSETS 4,495,665,227 4,730,463,100 32,811,702 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term loans 700,000,000 700,000,000 4,855,379 Current portion of long-term loans 230,785,000 169,248,000 1,173,947 Bond payable, current 40,000,000 40,000,000 277,450 Accounts payable 168,281,568 147,601,943 1,023,805 Accrued liabilities 1,109,740,581 1,157,505,640 8,028,757 Income tax payable 75,374,800 2,592,200 17,980 Contract liabilities, current 147,628,310 362,794,883 2,516,438 Amount due to a director 1,000,000 - - Finance lease liabilities, current 71,681,545 83,509,650 579,244 Operating lease liabilities, current 110,889,134 127,649,484 885,409 Other current liabilities 195,952,191 142,558,262 988,821 TOTAL CURRENT LIABILITIES 2,851,333,129 2,933,460,062 20,347,230 NON-CURRENT LIABILITIES Long-term loans, net of current portion 175,452,000 80,884,000 561,032 Bond payable, non-current 56,807,020 37,491,230 260,049 Contract liabilities, non-current 10,615,635 13,393,896 92,903 Finance lease liabilities, non-current 140,333,247 154,402,355 1,070,974 Operating lease liabilities, non-current 207,353,977 385,702,563 2,675,332 Assets retirement obligations 12,914,758 30,567,335 212,023 TOTAL NON-CURRENT LIABILITIES 603,476,637 702,441,379 4,872,313 TOTAL LIABILITIES 3,454,809,766 3,635,901,441 25,219,543 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY Ordinary shares 80,500,000 80,500,000 558,369 Additional paid-in capital 748,840,080 748,840,080 5,194,146 Treasury shares (100,012,265) (100,012,265) (693,711) Retained earnings 311,527,646 365,233,844 2,533,355 TOTAL SHAREHOLDERS' EQUITY 1,040,855,461 1,094,561,659 7,592,159 TOTAL LIABILITIES AND SHAREHOLDERS'EQUITY 4,495,665,227 4,730,463,100 32,811,702 LEIFRASCO., LTD. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the six months endedJune30 2024 2025 2025 JPY JPY US$ NET REVENUE 4,773,202,759 5,488,810,821 38,071,796 Cost of revenue (3,532,146,670) (4,047,686,339) (28,075,788) GROSS PROFIT 1,241,056,089 1,441,124,482 9,996,008 Selling, general, and administrative expenses (1,208,412,234) (1,373,195,238) (9,524,833) INCOME FROM OPERATIONS 32,643,855 67,929,244 471,175 OTHER INCOME (EXPENSE) Interest income 26,102 1,299,080 9,011 Interest expense (9,169,968) (9,378,973) (65,055) Grant income 12,913,919 9,399,558 65,198 Unrealized (loss) gain on short-term investment 245,000 (224,000) (1,554) Loss on disposal of long-lived assets - (168,973) (1,172) Loss on disposal of a subsidiary (753,900) - - Other income (expense), net 16,198,568 (20,302,598) (140,824) Total other income, net 19,459,721 (19,375,906) (134,396) INCOME BEFORE INCOME TAX PROVISION 52,103,576 48,553,338 336,779 PROVISION FOR INCOME TAXES Current (3,922,389) (2,788,235) (19,340) Deferred (5,405,355) 7,941,095 55,081 Total provision for income taxes (9,327,744) 5,152,860 35,741 NET INCOME 42,775,832 53,706,198 372,520 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES Basic 24,910,660 24,910,619 24,910,619 Diluted 28,115,922 24,913,619 24,913,619 EARNINGS PER SHARE Basic 1.72 2.16 0.01 Diluted 1.52 2.16 0.01 LEIFRASCO., LTD. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the six months endedJune30, 2024 2025 2025 JPY JPY US$ Cash flows from operating activities Net income 42,775,832 53,706,198 372,520 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization expense 60,244,494 66,679,088 462,503 Loss on disposal of a subsidiary 753,900 - - Reversal of (provision for) expected credit loss (1,089,375) 5,788,690 40,152 Loss on disposal of property and equipment - 168,973 1,172 Provision for inventory impairment - 719,481 4,991 Unrealized loss (gain) on short-term investment (245,000) 224,000 1,554 Other non-cash expenses 1,846,026 215,875 1,497 Deferred tax expense 5,405,355 (7,941,095) (55,081) Changes in operating assets and liabilities Accounts receivable, net 36,039,016 24,970,807 173,204 Inventories 1,140,810 450,516 3,125 Prepaid expenses (30,483,735) 65,923,967 457,265 Long-term deposits (8,058,565) (119,850) (831) Amount due from a director 33,577,065 - - Other current assets (848,651) (8,421,744) (58,416) Other non-current assets (11,654,487) (7,728,297) (53,606) Accounts payable (93,111,459) (20,679,625) (143,439) Accrued liabilities (271,113,027) 47,765,059 331,311 Contract liabilities 214,872,458 217,944,834 1,511,721 Operating lease liabilities (21,505) 3,212,036 22,280 Income tax payable (153,014,746) (72,782,600) (504,839) Amount due to a director - (1,000,000) (6,936) Other current liabilities (39,335,511) (56,292,856) (390,462) Net cash (used in) provided by operating activities (212,321,105) 312,803,457 2,169,685 Cash flows from investing activities Cash outflow due to reduction in consolidated entities (17,257,489) - - Purchase of property and equipment (11,322,540) (42,125,175) (292,191) Purchase of intangible assets (15,621,500) (5,045,000) (34,994) Net cash used in investing activities (44,201,529) (47,170,175) (327,185) Cash flows from financing activities Payment of finance lease liabilities (27,097,591) (43,752,315) (303,477) Proceeds from bank loans 250,000,000 - - Repayment of bank loans (177,355,000) (156,105,000) (1,082,784) Repayment of bond payable (20,000,000) (20,000,000) (138,725) Payment of deferred IPO costs (61,211,064) (86,232,087) (598,128) Net cash used in financing activities (35,663,655) (306,089,402) (2,123,114) Net decrease in cash (292,186,289) (40,456,120) (280,614) Cash at the beginning of period 2,729,282,346 2,538,554,638 17,608,064 Cash at the end of the period end 2,437,096,057 2,498,098,518 17,327,450 Supplementary cash flow information Cash paid for income taxes 156,721,835 75,570,835 524,179 Cash paid for interest expenses 7,323,942 8,637,073 59,909 SOURCE LEIFRAS Co., Ltd.