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EarningsQ2 2026 Earnings Report
LFS Q2 2026 EPS Results
Actual EPS-$0.01
Consensus EPS―
Beat/Miss―
One Year Ago EPS$0.01
LFS Q2 2026 Revenue Results
Actual Revenue$19.15M
Expected Revenue―
Beat/Miss―
YoY Revenue Growth-47.79%
Earnings Announcement Details
QuarterQ2 2026
Date10/08/2026
TimeBefore Open
Conference CallThursday, October 8, 2026
LFS Upcoming Earnings
LEIFRAS Co., Ltd. Sponsored ADR's next earnings date is estimated for December 17, 2026, based on past reporting schedules.
Q2 2026 Earnings Call Audio
LFS Q2 2026 Earnings Call
0:00 / 0:00
Q2 2026 Earnings Slide Deck
Q2 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was broadly positive: first-half revenue, profitability, both segment results, school club contracts, geographic coverage and liquidity all improved, and full-year guidance was maintained. The main challenges were the 0.9% decline in Sports School membership, seasonal concentration of profit in the second half, acquisition-related costs, lower operating cash flow, increased competition in tenders and a still-slow start to some school club reform opportunities.Company Guidance
First-Half Revenue and Profit Reached Record Highs
First-half FY2026 net revenue increased 8.9% year-over-year to USD 36.8 million, gross profit increased 22.6% to USD 10.9 million, income from operations increased 35.9% to USD 0.6 million, and net income increased 43.5% to USD 0.5 million. Net revenue, gross profit, income from operations, operating margin, adjusted income from operations and net income all reached record highs for the first half of the fiscal year in the period shown since FY2025.
Operating Margin and Core Profitability Improved
Operating margin increased from 1.2% to 1.5%, an improvement of 0.3 percentage points. Adjusted income from operations increased 105.6% year-over-year to USD 0.9 million, or JPY 139.7 million, compared with USD 0.4 million in the first half of FY2025.
Sports School Business Delivered Revenue and Segment Profit Growth
Sports School net revenue increased 5.4% year-over-year to USD 25.5 million and segment profit increased 2.5% to USD 5.3 million. Revised monthly membership fees and higher average spending per customer enabled growth in both net revenue and segment profit despite a slight membership decline.
Social Business Growth Accelerated
Social business net revenue increased 18.0% year-over-year to USD 11.3 million, while segment profit increased 156.7% to USD 1.7 million. Expansion of school club support contracts was identified as the key driver, and both the Sports School and Social businesses reached record highs in the first-half comparison period.
Sports School Network Reached All 47 Japanese Prefectures
Leifras completed its expansion to all 47 prefectures in Japan through an alliance with Blaublitz Akita and the opening of a collaborative school in Odate City, Akita Prefecture. The company plans to deepen its presence in underserved areas, add sports in existing markets, pursue further M&A, expand school club support and expand overseas.
New Sports Services and Alliances Expanded the Offering
The company developed SIX SHOOT in collaboration with the anime Blue Lock, launched 1v1 DRIBBLE ACADEMY D-UNLOCK under the supervision of Masakazu Okabe, and launched L-Spo, a multisport school for younger children and those seeking a more casual introduction to sports.
Tokai Sports Acquisition Added Members and Partner Institutions
The Tokai Sports acquisition added approximately 1,185 members and a business-to-business-to-consumer platform serving around 20 partner kindergartens and nursery schools. None of those partner institutions had terminated its contract over the past 3 years. Leifras expects the combination of Tokai Sports' athletic teaching expertise and its own noncognitive-skills methods to support member retention, customer acquisition and customer lifetime value.
School Club Support Contracts Expanded
As of the end of June 2026, Leifras supported 478 schools and 2,224 school club activities under contract, up 37.0% and 6.2% year-over-year, respectively. Contracted local governments increased from 19 to 24, while contracted schools increased from 349 to 478 and contracted club activities increased from 2,095 to 2,224.
Strong Client Retention and New Local Government Wins
The company secured 5 new local government contracts, including contracts in Tokyo special wards and government-designated cities, and retained all 19 existing local government clients, achieving a 100% retention rate. It serves 24 local governments and 7 private schools.
Urban Contract Win Rates Improved
Including contracts secured from July through September 2026, Leifras held contracts in 5 of 9 government-designated cities that had conducted public tenders, representing a 55.6% win rate, and in 10 of 14 Tokyo wards, representing a 71.4% win rate. The company also secured contracts in Sapporo, Kyoto, Adachi and Edogawa.
After-School Daycare Network Expanded 45%
The after-school daycare network expanded from 20 to 29 locations, an increase of 9 locations or 45% year-over-year. The expansion included 4 locations acquired through Well Resource, as well as FLEI's motor learning support and ILFE's independent learning support, including computer skills.
Entry Into Childcare Through Swift Japan
Swift Japan became a subsidiary on July 1, 2026, following a share transfer agreement signed on June 23, 2026. The acquisition added 5 small-scale licensed daycare centers, 1 corporate-sponsored daycare center and an after-school care facility, marking Leifras' full-scale entry into childcare.
Childcare and Education Platform Synergies Identified
Leifras plans to collaborate with HR Produce, which partners with more than 10,000 preschools nationwide, introduce Milabo for assessing noncognitive skills and open sports schools within childcare facilities. The company also cited partnerships with Mainichi Kobetsu Juku 5 Days and a planned partnership with Ando Juku to expand collaboration across the broader education sector.
Financial Position and Liquidity Remained Solid
As of June 30, 2026, total assets were USD 30.4 million, up 5.6% from December 31, 2025, and total shareholders' equity was USD 11.8 million, up 4.2%. Cash and cash equivalents increased by USD 0.4 million during the first half to USD 15.9 million, compared with USD 15.4 million at the end of the prior-year first half.
Full-Year FY2026 Outlook Was Maintained
The full-year outlook remained unchanged. Leifras expects net revenue of USD 82.9 million to USD 95.7 million, representing growth of 10.8% to 27.9% compared with FY2025, and income from operations of USD 4.5 million to USD 5.4 million, representing growth of 13.2% to 33.9%. Expected operating margin is 5.5% to 5.6%.
Disciplined M&A and Overseas Expansion Approach
Management said its M&A focus is on areas adjacent to sports and education where synergies are expected, supported by rigorous due diligence, investment recovery criteria and integration planning. For Canada, Leifras deliberately chose a test-market scale to assess revenue generation and profitability per customer before committing additional capital and scaling.
Operating Leverage and Efficiency Initiatives
Management stated that the business model has operating leverage and plans to improve operating margin over the medium to long term through higher capacity utilization at existing schools and economies of scale from M&A and alliances. The company is also standardizing back-office processes and investing in digital transformation so administrative headcount does not increase excessively as the business grows.
LFS Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed