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Lead Real Estate Co., Ltd Announces Fiscal Year 2025 Results

1. Net income for LRE rose 35.1% to JPY846.8 million. 2. Total revenue decreased slightly by 0.6% to JPY18.8 billion. 3. Real estate sales fell by 1.0% due to fewer deliveries. 4. Gross margin improved to 19.8%, reflecting higher-margin hotel transactions. 5. LRE plans expansion into international markets with new projects.

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Why Bullish?

LRE's substantial net income growth and enhanced profit margins suggest strong performance, which typically attracts investor interest. Historical precedent shows that companies demonstrating significant profitability often see a positive market response, enhancing share values.

How important is it?

The article presents critical financial achievements and future expansion plans of LRE, indicating strong fundamentals that can influence market perception and valuation.

Why Short Term?

The immediate financial results and optimistic outlook may stimulate short-term interest from investors, especially as LRE enters fiscal 2026 with positive forecasts. Positive sentiment is often reflected in stock prices shortly after strong earnings announcements.

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NDAQ:LRENDAQ:MARNDAQ:HLT
Net income attributable to common shareholders increased by 35.1% to JPY846.8 million, or $5.9 million TOKYO, Nov. 03, 2025 (GLOBE NEWSWIRE) -- Lead Real Estate Co., Ltd (Nasdaq: LRE) ("LRE" or the "Company"), a Japanese real estate developer of luxury residential properties, including single-family homes and condominiums across Tokyo, Kanagawa prefecture and Sapporo, and which develops and operates the ENT TERRACE brand of extended-stay hotels, today announced financial results for the fiscal year ended June 30, 2025. Total revenue was JPY18.8 billion ($130.7 million) for the fiscal year ended June 30, 2025, compared to JPY19.0 billion for the fiscal year ended June 30, 2024, a decrease of 0.6%. The primary revenue component, real estate sales, was JPY18.3 billion ($127 million), compared to JPY18.5 billion in the prior fiscal year, representing a 1.0% year-over-year decline in the fiscal year ended June 30, 2025. This reflects the Company’s strategic initiative to build out its hotel business as well as a stable performance amid fewer unit deliveries and higher average selling prices for single-family homes and condominiums. Real estate sales included the following.  Units Delivered (FY2025)Units Delivered (FY2024)FY2025 Average Sale Price (USD thousands)FY2025 Average Sale Price (JPY thousands)% ChangeY-YSingle-Family Home (Land)7071$618 ¥89,108 16.0% Single-Family Home (Building)2441$233 ¥33,574 10.7% Condominium (Land)2033$2,225 ¥320,736 -9.2% Condominium (Building)54$364 ¥52,460 57.4% Hotels (Land)4—$7,817 ¥1,126,984 n/mHotels (Building)1—$549 ¥79,120 n/m Other revenue increased by 15.5% to JPY535.3 million ($3.7 million), compared to JPY463.6 million in the prior fiscal year, primarily driven by the continued ramp-up of the Company's hotel operations and an increase in average daily rates. The cost of revenue for real estate sales declined by 6.1% to JPY14.8 billion ($102.4 million), from JPY15.7 billion for the fiscal year ended June 30, 2024. Gross margin increased to 19.8% from 15.6% in the prior year, reflecting a more favorable sales mix and higher-margin hotel transactions. Selling, general, and administrative expenses were JPY2.3 billion ($15.6 million), an increase of 9.9% from JPY2.1 billion in the prior fiscal year. As a percentage of revenue, these expenses increased to 12.0% from 10.8% in fiscal year 2024. Operating income increased by 64.1% year over year to JPY1,475 million ($10.2 million), compared to JPY898.6 million in the fiscal year ended June 30, 2024. The operating profit margin was 7.8%, compared to 4.7% in the prior fiscal year. Interest expenses were JPY44.5 million ($309 thousand), compared to JPY18.3 million in the fiscal year ended June 30, 2024, reflecting higher market interest rates. Other expense was JPY35.9 million ($249 thousand), compared to other income of JPY73.8 million in the prior year, primarily due to a non-recurring impairment loss on equity securities of JPY23.5 million. Total other income (expense) was a net expense of JPY80.4 million ($558 thousand), compared to net income of JPY55.5 million in the prior year. Net income attributable to common shareholders increased by 35.1% to JPY846.8 million ($5.9 million), or earnings per ADS of JPY62.07 ($0.43), compared to JPY627 million, or earnings per ADS of JPY46.93, in the fiscal year ended June 30, 2024. Cash and cash equivalents were JPY2.7 billion ($18.4 million) as of June 30, 2025, compared to JPY1.3 billion as of June 30, 2024. "We are pleased with the improved profitability we were able to achieve in 2025, which reflected Lead Real Estate's strong positioning in the Japanese real estate market, sustained demand from both individual and institutional buyers, and our increased focus on high-value locations and stylish, luxury designs and finishes," said Mr. Eiji Nagahara, Chief Executive Officer of LRE. "We are committed to delivering quality products to our customers and generating long-term value for our shareholders, as demonstrated by our recent payment of our third consecutive annual dividend." Business Outlook “Building on another year of solid revenue and continued improvement in our bottom line, we enter fiscal year 2026 with confidence and focus,” said Mr. Nagahara. “Market conditions remain favorable — inbound tourism has reached record levels, and housing demand in Tokyo’s core wards continues to strengthen amid rising land values." “We will continue to target prime real estate opportunities, leveraging our strong brand and trusted relationships with local partners to drive growth. In Japan, our strategy centers on expanding hotel operations nationwide, extending beyond our flagship ENT TERRACE brand with two new concepts and the continued rollout of our Master Lease model." “This fiscal year we also expect to make progress in expanding our presence internationally. We plan to acquire condominium units in the Philippines and Malta as part of our risk-hedging strategy and our commitment to identifying high-value opportunities both locally and globally. We continue to evaluate opportunities for expansion in the United States as well." “Supported by strong market fundamentals, we expect to deliver renewed revenue growth in fiscal 2026, and further enhance profitability while maintaining disciplined execution and a commitment to delivering long-term shareholder value through sustained earnings growth and continued dividend payments.” Conference Call Details The Company will host a conference call to discuss its financial results for the fiscal year ended June 30, 2025, and business outlook on Monday, November 3, 2025, at 8:30 a.m. Eastern Time (10:30 p.m. Japan Standard Time). To access the live call, participants in the United States should dial 1-877-407-9208, and international participants should dial 1-201-493-6784, approximately 15 minutes prior to the start time and use conference ID:13756898. The call will also be broadcast live over the Internet at https://viavid.webcasts.com/starthere.jsp?ei=1741003&tp_key=2c0fb29124. For those unable to participate in the live event, a telephone replay will be available approximately three hours after the call concludes and will remain accessible until 11:59 p.m. Eastern Time on November 17, 2025, by dialing 1-844-512-2921 (U.S.) or 1-412-317-6671 (International) and entering the conference ID: 13756898. The fiscal year 2025 earnings release will be available on the Company's website prior to the event: https://www.lead-real.co.jp/en/. Exchange Rate Information The Company's functional currency and reporting currency are the Japanese yen. Convenience translations included in this press release of Japanese yen into U.S. dollars have been made at the exchange rate of JPY144.1700 = $1.00, which was the foreign exchange rate on June 30, 2025, as reported by the Board of Governors of the Federal Reserve System in its weekly release on July 1, 2025. About Lead Real Estate Co., Ltd Lead Real Estate Co., Ltd is a Japanese developer of luxury residential properties, including single-family homes and condominiums, across Tokyo, Kanagawa prefecture, and Sapporo. In addition, the Company operates hotels in Tokyo and leases apartment building units to individual customers in Japan and Dallas, Texas. The Company's mission is to serve its customers by offering stylish, safe, and luxurious living. The Company's vision is to adopt the Kaizen (continuous improvement) approach to seek to improve its operations, and to leverage its nationally recognized, award-winning luxury homes and strong market position in the luxury residential property market in Tokyo, Kanagawa prefecture, and Sapporo to create a global transaction platform allowing access to prime Japanese condominiums as well as overseas condominiums, including in the U.S. and Hong Kong. For more information, please visit the Company's website at https://www.lead-real.co.jp/en/. About "ENT TERRACE" "ENT TERRACE" Series is an extended-stay hotel brand operated by Lead Real Estate Co., Ltd. The Company will continue to develop its hotels with the aim of providing a space where guests can relax as if they were at home while ensuring privacy and easing the burden of long-term stays. Learn more at https://ent-terrace.com/en/. Forward-Looking Statements Statements in this press release about future expectations, plans, and prospects, as well as any other statements regarding matters that are not historical facts, may constitute "forward-looking statements" within the meaning of The Private Securities Litigation Reform Act of 1995. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "target," "will," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors, including: the uncertainties related to market conditions and other factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events, or otherwise. Contact Information For Media and Investor Relations:Daisuke TakahashiChief Financial OfficerLead Real Estate Co., Ltdd-takahashi@lead-real.co.jp+81 3-5784-5127 AUM AdvisorsCrocker CoulsonEmail: crocker.coulson@aummedia.orgTel: (646) 652-7185 Summary Financial Tables LEAD REAL ESTATE CO., LTDCONSOLIDATED BALANCE SHEETSAS OF JUNE 30, 2025 AND 2024(Japanese yen in thousands, except share data)   June 30,   2025  2024  ASSETS       Current assets:       Cash and cash equivalents ¥2,656,860  ¥1,300,684  Accounts receivable, net  38,523   22,859  Real estate inventory  10,134,739   9,267,825  Contract assets  141,418   236,499  Prepaid and other current assets  381,581   493,819  Total current assets  13,353,121   11,321,686  Property and equipment, net  5,796,381   5,449,101  Intangible asset, net  35,396   54,138  Investments in marketable securities  25,303   20,844  Right-of-use assets, operating lease, net  820,786   154,613  Investments  122,101   46,394  Other assets  326,746   170,588  Total assets ¥20,479,834  ¥17,217,364  LIABILITIES AND SHAREHOLDERS’ EQUITY       Current liabilities:       Accounts payable ¥1,035,712  ¥602,013  Current portion of notes payable  7,599,606   6,815,181  Contract liabilities  337,483   130,259  Current portion of operating lease liabilities  201,313   67,938  Accrued expenses and other current liabilities  764,920   356,856  Total current liabilities  9,939,034   7,972,247  Notes payable, net of current portion  4,557,855   4,598,151  Deferred tax liabilities, net  89,638   85,018  Operating lease liabilities, net of current portion  621,962   91,471  Other liabilities  240,632   233,109  Total liabilities  15,449,121   12,979,996  COMMITMENTS AND CONTINGENCIES       SHAREHOLDERS’ EQUITY       Common stock, 50,000,000 shares authorized, 15,628,000 shares issued and 13,641,900 shares outstanding as of June 30, 2025 and 2024 with no stated par value  1,207,055   1,206,765  Retained earnings  3,965,673   3,159,815  Treasury stock, at cost, 1,986,100 shares as of June 30, 2025 and 2024  (154,121)  (154,121) Non-controlling interest  (8,456)  (7,558) Accumulated translation gain  20,562   32,467  Total shareholders’ equity  5,030,713   4,237,368  Total liabilities and shareholders’ equity ¥20,479,834  ¥17,217,364             LEAD REAL ESTATE CO., LTDCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FISCAL YEARS ENDED JUNE 30, 2025, 2024, AND 2023(Japanese yen in thousands, except share and per share data)   For the Fiscal Years Ended June 30,  2025  2024  2023         (as restated)Revenue:         Real estate sales ¥18,307,409  ¥18,487,074  ¥17,098,308 Other revenue  535,254   463,609   316,940 Total revenue  18,842,663   18,950,683   17,415,248 Expenses:         Cost of sales – real estate  14,756,750   15,721,271   14,466,459 Cost of sales – other  357,279   279,806   191,544 Selling, general and administrative  2,253,653   2,051,040   1,817,970 Total expenses  17,367,682   18,052,117   16,475,973 Operating income  1,474,981   898,566   939,275 Other income (expense):         Interest expenses  (44,544)  (18,286)  (16,731)Other, net  (35,881)  73,759   6,268 Total other income (expense), net  (80,425)  55,473   (10,463)Income before income taxes  1,394,556   954,039   928,812 Income taxes  548,331   327,869   317,418 Net income  846,225   626,170   611,394 Net loss attributable to the noncontrolling interests  (559)  (789)  (524)Net income attributable to common stockholders  846,784   626,959   611,918 Foreign currency translation gain (loss)  (11,905)  10,512   5,241 Total Comprehensive income ¥834,879  ¥637,471  ¥617,159 Earnings per share:         Basic ¥62.07  ¥46.93  ¥48.96 Diluted ¥62.07  ¥46.93  ¥48.96 Weighted average shares outstanding:         Basic  13,641,900   13,360,834   12,498,900 Diluted  13,641,900   13,360,834   12,498,900   LEAD REAL ESTATE CO., LTDCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE FISCAL YEARS ENDED JUNE 30, 2025, 2024, AND 2023(Japanese yen in thousands)            For the Fiscal Years Ended June 30,  2025  2024  2023         (as restated)Cash flows from operating activities:         Net income ¥846,225  ¥626,170  ¥611,394 Adjustments to reconcile net income to net cash used in operating activities:         Depreciation and amortization  110,448   102,713   82,865 Loss on disposal of assets  320   5,852   — Gain on sales of assets  (1,000)  —   — Impairment loss on property and equipment  14,741   —   — Impairment loss on real estate inventories  6,013   —   — Non-cash finance lease expense  28,503   23,847   20,523 Investment revaluation (gain) loss  (4,459)  1,965   96 Impairment loss on equity securities without readily determinable fair values  23,509   —   — Deferred income taxes, net  4,418   50,993   3,334 Changes in assets and liabilities:         Accounts receivable, net  (15,664)  (16,246)  (3,302)Real estate inventory  1,204,545   1,122,406   (1,569,350)Contract assets  95,081   199,522   (178,305)Prepaid and other current assets  112,238   (290,238)  47,429 Operating lease, net  (2,307)  2,655   (805)Other assets  (156,158)  15,890   11,963 Accounts payable  433,699   (130,709)  50,699 Contract liabilities  207,224   (130,271)  4,552 Accrued expenses and other current liabilities  405,722   (12,654)  (730)Net cash provided by (used in) operating activities  3,313,098   1,571,895   (919,637)Cash flows from investing activities:         Purchases of property and equipment  (2,521,787)  (2,221,499)  (1,250,451)Proceeds from sale of property and equipment  3,182   —   — Purchases of intangible assets  (2,351)  (6,359)  (2,438)Purchase of investments and investments in marketable securities  (100,841)  (15,203)  (8,150)Proceeds from sale of investments in marketable securities  —   —   5,000 Net cash used in investing activities  (2,621,797)  (2,243,061)  (1,256,039)Cash flows from financing activities:         Proceeds from notes payable  14,734,600   15,014,801   14,580,822 Payments on notes payable  (13,969,871)  (14,745,923)  (11,944,327)Payments on IPO costs  —   (229,046)  (63,702)Proceeds from common stock issuance  —   1,187,428   — Dividend payments  (40,926)  (24,998)  — Purchases of noncontrolling interest  (49)  —   — Repayments of principal portion of finance lease liability  (27,999)  (25,689)  (18,262)Net cash provided by financing activities  695,755   1,176,573   2,554,531 Effect of exchange rate change on cash and cash equivalents  (30,880)  8,904   4,410 Net increase in cash and cash equivalents  1,356,176   514,311   383,265 Cash and cash equivalents, beginning of year  1,300,684   786,373   403,108 Cash and cash equivalents, end of year ¥2,656,860  ¥1,300,684  ¥786,373 Supplemental disclosures of cash flow information:         Cash paid during the year for         Interest ¥44,544  ¥352,355  ¥292,581 Income taxes ¥309,482  ¥316,050  ¥396,669 Non-cash investing and financing activities         Operating lease right-of-use assets obtained in exchange for operating lease liabilities ¥747,616  ¥2,613  ¥103,771 Finance lease right - of - use assets obtained in exchange for finance lease liabilities ¥38,066  ¥38,673  ¥50,685 

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