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

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 NineMonths Ended September30, 2025

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

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

— Gross marginwas 28.2%for the ninemonths ended September 30, 2025, which increased from 27.5% for the same period last year.

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

— Basic and diluted earnings per share was JPY9.1 ($0.06) for the ninemonths ended September 30, 2025, compared to basic earnings per share of JPY9.0 and diluted earnings per share of JPY8.3for the same period last year.

Operational Highlights for the NineMonths Ended September30, 2025

— Number of membersin the sports school businesswas71,529 for the ninemonths ended September 30, 2025, an increase of2.3%from69,924for the same period last year.

— Average membershipduration in the sports school businesswas1.84 years for the ninemonths ended September 30, 2025, an increase of 1.1% from 1.82yearsfor 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 JPY9.6million ($0.06 million) for the nine monthsended September 30, 2025, an increase of 6.2% from JPY9.0million for the same period last year.

— Number of schoolsserved under the social business segmentwas360 for the ninemonths ended September 30, 2025, an increase of53.2%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 JPY7.6million ($0.05 million) for the ninemonths ended September 30, 2025, an increase of 18.6% from JPY6.4million 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 achievedrevenue growth of 8.9% and social business revenue increased by 36.4% year over year. Ourperformance shows continued strength ofour 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 shiftingschool-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 NineMonths Ended September 30, 2025

Revenue

Total revenue was JPY8.6billion ($57.8million) for the ninemonths ended September 30, 2025, an increase of15.3% from JPY7.4billion for the same period last year.

Sports school business revenue was JPY6.2billion ($41.9 million) for the ninemonths 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 136,695for the nine months ended September 30, 2024 to 142,843for the ninemonths 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 JPY2.4billion ($15.9 million) for the ninemonths ended September 30, 2025, an increase of 36.4% from JPY1.7billion 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 360as of September30, 2025, resulting in an increase in revenue of JPY505.1 million ($3.4million), and (ii) an increase in after-school daycare service revenue by JPY86.1 million ($0.6 million).

Cost of Revenue

Cost of revenue was JPY6.1billion ($41.5 million) for the ninemonths 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 ninemonths ended September 30, 2025, an increase of 18.1% from JPY2.0billion for the same period last year.

Gross margin was 28.2% for the ninemonths 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 JPY2.1billion ($13.9million) for the ninemonths ended September 30, 2025, an increase of 14.0% from JPY1.8billion 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, netwere JPY1.9million ($0.01million) for the ninemonths ended September 30, 2025, compared to other income, netof JPY28.7million 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 JPY5.5million($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 ninemonths ended September 30, 2025, an increase of 0.7% from JPY225.1million for the same period last year.

Basic and Diluted Earnings per Share

Basic earnings per share was JPY9.10 ($0.06) for the ninemonths ended September30, 2025, compared to JPY9.04for the same period last year.

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

Financial Condition

As of September30, 2025, the Company had cash of JPY2.4billion ($16.5million), compared to JPY2.5 billion as of December 31, 2024.

Net cash provided by operating activities wasJPY326.7 million ($2.2 million) for the ninemonths ended September 30, 2025, compared to net cash used in operating activities of JPY105.4million for the same period last year.

Net cash used in investing activities wasJPY48.5million ($0.3 million) for the ninemonths ended September 30, 2025, compared to JPY45.7million for the same period last year.

Net cash used in financing activities wasJPY380.1 million ($2.6million) for the ninemonths ended September30, 2025, compared to JPY224.1million for the same period last year.

Financial Guidance

The Company is projecting total revenue to be between JPY11.6 billionand JPY11.9 billion($78.1million and $80.5million)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 JPY580.0millionand 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 JPY519.8million($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 December31, 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 atwww.sec.gov.

For more information, please contact:

LEIFRAS Co., Ltd. Investor Relations Department Email: IR@leifras.co.jp

Ascent Investor Relations LLC Tina Xiao Phone: +1-646-932-7242 Email: investors@ascent-ir.com

LEIFRAS CO., LTD. AND SUBSIDIARIESUNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS December31, September30, September30, 2024 2025 2025 JPY JPY US$ (Unaudited) (Unaudited)ASSETSCURRENT ASSETSCash 2,538,554,638 2,436,675,605 16,467,362Accounts receivable, net 518,398,551 555,775,583 3,756,002Short-term investments 4,935,000 5,075,000 34,297Inventories, net 24,468,188 20,757,063 140,279Prepaid expenses 182,278,232 201,888,793 1,364,390Other current assets 34,381,843 57,886,907 391,207TOTAL CURRENT ASSETS 3,303,016,452 3,278,058,951 22,153,537NON-CURRENT ASSETSProperty and equipment, net 53,805,279 99,293,143 671,035Finance lease right-of-use assets 208,611,550 228,794,098 1,546,219Operating lease right-of-use assets 337,330,750 513,349,897 3,469,284Intangible assets, net 39,250,078 27,980,475 189,096Goodwill 27,999,994 27,999,994 189,228Deferred tax assets, net 214,671,578 189,283,332 1,279,201Deferred initial public offering (“IPO”) costs 157,482,065 254,764,117 1,721,728Long-term deposits 150,407,276 150,210,192 1,015,140Other non-current assets 3,090,205 9,784,796 66,127TOTAL NON-CURRENT ASSETS 1,192,648,775 1,501,460,044 10,147,058TOTAL ASSETS 4,495,665,227 4,779,518,995 32,300,595LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIESShort-term loans 700,000,000 700,000,000 4,730,689Current portion of long-term loans 230,785,000 169,252,000 1,143,826Bond payable, current 40,000,000 40,000,000 270,325Accounts payable 168,281,568 114,243,578 772,073Accrued liabilities 1,109,740,581 1,184,636,104 8,005,921Income tax payable 75,374,800 3,301,800 22,314Contract liabilities, current 147,628,310 267,364,483 1,806,883Amount due to a director 1,000,000 – -Finance lease liabilities, current 71,681,545 83,549,523 564,638Operating lease liabilities, current 110,889,134 132,923,377 898,313Other current liabilities 195,952,191 156,907,705 1,060,403TOTAL CURRENT LIABILITIES 2,851,333,129 2,852,178,570 19,275,385NON-CURRENT LIABILITIESLong-term loans, net of current portion 175,452,000 38,568,000 260,648Bond payable, non-current 56,807,020 37,833,335 255,682Contract liabilities, non-current 10,615,635 14,507,411 98,043Finance lease liabilities, non-current 140,333,247 143,881,183 972,367Operating lease liabilities, non-current 207,353,977 364,551,378 2,463,684Assets retirement obligations 12,914,758 30,671,626 207,283TOTAL NON-CURRENT LIABILITIES 603,476,637 630,012,933 4,257,707TOTAL LIABILITIES 3,454,809,766 3,482,191,503 23,533,092COMMITMENTS AND CONTINGENCIESSHAREHOLDERS' EQUITYOrdinary shares 80,500,000 80,500,000 544,029Additional paid-in capital 748,840,080 778,624,844 5,262,045Treasury shares (100,012,265) (100,012,265) (675,896)Retained earnings 311,527,646 538,214,913 3,637,325TOTAL SHAREHOLDERS' EQUITY 1,040,855,461 1,297,327,492 8,767,503TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 4,495,665,227 4,779,518,995 32,300,595LEIFRAS CO., LTD. AND SUBSIDIARIESUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME For theninemonths ended September30 2024 2025 2025 JPY JPY US$NET REVENUE 7,419,460,643 8,556,096,390 57,823,183Cost of revenue (5,378,876,612) (6,145,159,916) (41,529,769)GROSS PROFIT 2,040,584,031 2,410,936,474 16,293,414Selling, general, and administrative expenses (1,802,047,253) (2,055,180,818) (13,889,172)INCOME FROM OPERATIONS 238,536,778 355,755,656 2,404,242OTHER INCOME (EXPENSE)Interest income 325,182 3,801,610 25,691Interest expense (12,751,685) (13,514,164) (91,330)Grant income 14,205,788 14,902,919 100,716Unrealized (loss) gain on short-term investment (168,000) 140,000 946Loss on disposal of long-lived assets – (168,973) (1,142)Loss on disposal of a subsidiary (753,900) – -Other income (expense), net 15,438,598 (16,773,644) (113,358)Total other income (expense), net 16,295,983 (11,612,252) (78,477)INCOME BEFORE INCOME TAX PROVISION 254,832,761 344,143,404 2,325,765PROVISION FOR INCOME TAXESCurrent (69,425,173) (92,067,891) (622,206)Deferred 39,664,246 (25,388,246) (171,577)Total provision for income taxes (29,760,927) (117,456,137) (793,783)NET INCOME 225,071,834 226,687,267 1,531,982WEIGHTED AVERAGE NUMBER OF ORDINARY SHARESBasic 24,910,660 24,910,619 24,910,619Diluted 27,066,715 24,913,619 24,913,619EARNINGS PER SHAREBasic 9.04 9.10 0.06Diluted 8.32 9.10 0.06LEIFRAS CO., LTD. AND SUBSIDIARIESUNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the ninemonths ended September30, 2024 2025 2025 JPY JPY US$Cash flows from operating activitiesNet income 225,071,834 226,687,267 1,531,982Adjustments to reconcile net income to net cash provided by operating activitiesDepreciation and amortization expense 90,057,762 96,233,315 650,357Loss on disposal of a subsidiary 753,900 – -Provision for expected credit loss 2,771,782 9,208,096 62,229Loss on disposal of property and equipment – 168,973 1,142Accounts receivable written off as uncollectible – 28,558 193Provision for inventory impairment 3,403,261 424,180 2,867Unrealized loss (gain) on short-term investment 168,000 (140,000) (946)Other non-cash expenses (income) 1,100,148 29,173,060 197,155Deferred tax expense (benefit) (39,664,246) 25,388,246 171,577Changes in operating assets and liabilitiesAccounts receivable, net (1,051,687) (46,613,686) (315,021)Inventories (13,808,125) 3,286,945 22,214Prepaid expenses (105,900,505) (19,854,842) (134,182)Long-term deposits (6,998,055) 197,084 1,332Amount 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) 74,895,523 506,153Contract liabilities 121,711,898 123,627,949 835,493Operating lease liabilities (400,151) 3,212,497 21,710Income 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 2,208,128Cash 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 loans 250,000,000 – -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 period 2,729,282,346 2,538,554,638 17,155,874Cash at the end of the period end 2,354,160,306 2,436,675,605 16,467,362Supplementary cash flow informationCash paid for income taxes 202,070,573 115,154,307 778,227Cash paid for interest expenses 11,651,537 12,325,868 83,300

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