LEIFRAS Co., Ltd. Reports Financial Results for the Nine Months Ended September 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 nine months ended September 30, 2025.Financial Highlights for the Nine Months Ended September 30, 2025Revenue 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.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.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 was JPY9.1 ($0.06) for the nine months ended September 30, 2025, compared to basic earnings per share of JPY9.0 and diluted earnings per share of JPY8.3 for the same period last year.Operational Highlights for the Nine Months Ended September 30, 2025Number of members in the sports school business was 71,529 for the nine months ended September 30, 2025, an increase of 2.3% from 69,924 for the same period last year.Average membership duration in the sports school business was 1.84 years for the nine months ended September 30, 2025, an increase of 1.1% from 1.82 years for 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 JPY9.6 million ($0.06 million) for the nine months ended September 30, 2025, an increase of 6.2% from JPY9.0 million for the same period last year.Number of schools served under the social business segment was 360 for the nine months ended September 30, 2025, an increase of 53.2% from 235 for 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 JPY7.6 million ($0.05 million) for the nine months ended September 30, 2025, an increase of 18.6% from JPY6.4 million for the same period last year.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 RevenueCost 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 ProfitGross 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 ExpensesSelling, 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), NetOther 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 IncomeNet 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 ShareBasic 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 ConditionAs 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 GuidanceThe 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 ($3.5 million) for the fiscal year ended December 31, 2024.These projections are based on the assumption that no business acquisitions, restructuring activities, or legal settlements will take place during the period.Exchange Rate InformationThis announcement contains translations of certain Japanese Yen ("JPY") amounts into U.S. dollars ("USD," or "$") 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 StatementsCertain 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 DepartmentEmail: IR@leifras.co.jp Ascent Investor Relations LLCTina XiaoPhone: +1-646-932-7242Email: investors@ascent-ir.comLEIFRAS CO., LTD. AND SUBSIDIARIESUNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETSDecember 31,September 30,September 30,202420252025JPYJPYUS$(Unaudited)(Unaudited)ASSETSCURRENT ASSETSCash2,538,554,6382,436,675,60516,467,362Accounts receivable, net518,398,551555,775,5833,756,002Short-term investments4,935,0005,075,00034,297Inventories, net24,468,18820,757,063140,279Prepaid expenses182,278,232201,888,7931,364,390Other current assets34,381,84357,886,907391,207TOTAL CURRENT ASSETS3,303,016,4523,278,058,95122,153,537NON-CURRENT ASSETSProperty and equipment, net53,805,27999,293,143671,035Finance lease right-of-use assets208,611,550228,794,0981,546,219Operating lease right-of-use assets337,330,750513,349,8973,469,284Intangible assets, net39,250,07827,980,475189,096Goodwill27,999,99427,999,994189,228Deferred tax assets, net214,671,578189,283,3321,279,201Deferred initial public offering ("IPO") costs157,482,065254,764,1171,721,728Long-term deposits150,407,276150,210,1921,015,140Other non-current assets3,090,2059,784,79666,127TOTAL NON-CURRENT ASSETS1,192,648,7751,501,460,04410,147,058TOTAL ASSETS4,495,665,2274,779,518,99532,300,595LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESShort-term loans700,000,000700,000,0004,730,689Current portion of long-term loans230,785,000169,252,0001,143,826Bond payable, current40,000,00040,000,000270,325Accounts payable168,281,568114,243,578772,073Accrued liabilities1,109,740,5811,184,636,1048,005,921Income tax payable75,374,8003,301,80022,314Contract liabilities, current147,628,310267,364,4831,806,883Amount due to a director1,000,000--Finance lease liabilities, current71,681,54583,549,523564,638Operating lease liabilities, current110,889,134132,923,377898,313Other current liabilities195,952,191156,907,7051,060,403TOTAL CURRENT LIABILITIES2,851,333,1292,852,178,57019,275,385NON-CURRENT LIABILITIESLong-term loans, net of current portion175,452,00038,568,000260,648Bond payable, non-current56,807,02037,833,335255,682Contract liabilities, non-current10,615,63514,507,41198,043Finance lease liabilities, non-current140,333,247143,881,183972,367Operating lease liabilities, non-current207,353,977364,551,3782,463,684Assets retirement obligations12,914,75830,671,626207,283TOTAL NON-CURRENT LIABILITIES603,476,637630,012,9334,257,707TOTAL LIABILITIES3,454,809,7663,482,191,50323,533,092COMMITMENTS AND CONTINGENCIESSHAREHOLDERS' EQUITYOrdinary shares80,500,00080,500,000544,029Additional paid-in capital748,840,080778,624,8445,262,045Treasury shares(100,012,265)(100,012,265)(675,896)Retained earnings 311,527,646538,214,9133,637,325TOTAL SHAREHOLDERS' EQUITY1,040,855,4611,297,327,4928,767,503TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY4,495,665,2274,779,518,99532,300,595LEIFRAS CO., LTD. AND SUBSIDIARIESUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOMEFor the nine months endedSeptember 30202420252025JPYJPYUS$NET REVENUE7,419,460,6438,556,096,39057,823,183Cost of revenue(5,378,876,612)(6,145,159,916)(41,529,769)GROSS PROFIT2,040,584,0312,410,936,47416,293,414Selling, general, and administrative expenses(1,802,047,253)(2,055,180,818)(13,889,172)INCOME FROM OPERATIONS238,536,778355,755,6562,404,242OTHER INCOME (EXPENSE)Interest income325,1823,801,61025,691Interest expense(12,751,685)(13,514,164)(91,330)Grant income14,205,78814,902,919100,716Unrealized (loss) gain on short-term investment(168,000)140,000946Loss on disposal of long-lived assets-(168,973)(1,142)Loss on disposal of a subsidiary(753,900)--Other income (expense), net15,438,598(16,773,644)(113,358)Total other income (expense), net16,295,983(11,612,252)(78,477)INCOME BEFORE INCOME TAX PROVISION254,832,761344,143,4042,325,765PROVISION FOR INCOME TAXESCurrent(69,425,173)(92,067,891)(622,206)Deferred39,664,246(25,388,246)(171,577)Total provision for income taxes(29,760,927)(117,456,137)(793,783)NET INCOME225,071,834226,687,2671,531,982WEIGHTED AVERAGE NUMBER OF ORDINARY SHARESBasic24,910,66024,910,61924,910,619Diluted27,066,71524,913,61924,913,619EARNINGS PER SHAREBasic9.049.100.06Diluted8.329.100.06LEIFRAS CO., LTD. AND SUBSIDIARIESUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFor the nine months endedSeptember 30,202420252025JPYJPYUS$Cash flows from operating activitiesNet income225,071,834226,687,2671,531,982Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization expense90,057,76296,233,315650,357Loss on disposal of a subsidiary753,900--Provision for expected credit loss2,771,7829,208,09662,229Loss on disposal of property and equipment-168,9731,142Accounts receivable written off as uncollectible-28,558193Provision for inventory impairment3,403,261424,1802,867Unrealized loss (gain) on short-term investment168,000(140,000)(946)Other non-cash expenses (income)1,100,14829,173,060197,155Deferred tax expense (benefit)(39,664,246)25,388,246171,577Changes in operating assets and liabilitiesAccounts receivable, net(1,051,687)(46,613,686)(315,021)Inventories(13,808,125)3,286,94522,214Prepaid expenses(105,900,505)(19,854,842)(134,182)Long-term deposits(6,998,055)197,0841,332Amount due from a director33,577,065--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)74,895,523506,153Contract liabilities121,711,898123,627,949835,493Operating lease liabilities(400,151)3,212,49721,710Income tax payable(149,952,500)(72,073,000)(487,078)Amount due to a director-(1,000,000)(6,758)Other current liabilities36,020,082(41,875,805)(283,002)Net cash (used in) provided by operating activities(105,358,810)326,736,7152,208,128Cash flows from investing activitiesCash 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 activitiesPayment of finance lease liabilities(43,259,590)(64,438,481)(435,483)Proceeds from bank loans250,000,000--Repayment of bank loans(280,815,000)(198,417,000)(1,340,927)Repayment of bond payable(20,000,000)(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 period2,729,282,3462,538,554,63817,155,874Cash at the end of the period end2,354,160,3062,436,675,60516,467,362Supplementary cash flow informationCash paid for income taxes202,070,573115,154,307778,227Cash paid for interest expenses11,651,53712,325,86883,300SOURCE LEIFRAS Co., Ltd.