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

Rhea-AI Summary

Lead Real Estate (Nasdaq: LRE) reported fiscal year ended June 30, 2025 results: total revenue JPY18.8 billion (down 0.6% YoY) and net income attributable to common shareholders JPY846.8 million (up 35.1% YoY; EPS JPY62.07).

Real estate sales were JPY18.3 billion (down 1.0% YoY). Gross margin rose to 19.8% from 15.6% and operating income increased 64.1% to JPY1,475 million. Other revenue grew 15.5% to JPY535.3 million driven by hotel operations. Cash and cash equivalents were JPY2.7 billion as of June 30, 2025. Management highlighted hotel expansion, international condominium acquisitions, and continued dividend payments.

Positive

• Net income +35.1% to JPY846.8 million
• Operating income +64.1% to JPY1,475 million
• Gross margin increased to 19.8% from 15.6%
• Cash increased to JPY2.7 billion from JPY1.3 billion

Negative

• Total revenue declined 0.6% to JPY18.8 billion
• Real estate units delivered were fewer in FY2025 versus FY2024
• Interest expense rose to JPY44.5 million from JPY18.3 million
• Other moved to a JPY80.4 million net expense from prior-year net income

Insights

Real Estate Financial Analyst

Stronger profitability despite flat revenue; hotel ramp-up and higher ASPs drove margins and net income growth.

Gross margin climbed to 19.8% from 15.6%, lifting operating income by 64.1% to JPY1,475 million and net income by 35.1% to JPY846.8 million. Revenue was essentially flat at JPY18.8 billion (-0.6%), while the business shifted mix toward higher‑margin hotel transactions and fewer but higher‑priced residential unit deliveries.

Key dependencies and risks include continued ramp of hotel operations, sensitivity to interest costs (interest expense rose to JPY44.5 million), and execution of international acquisitions mentioned for the Philippines and Malta. Margins also benefited from a favorable sales mix and a non‑recurring impairment that reduced other income; these items could reverse if mix or one‑offs change.

Watch near term metrics: unit delivery count and average selling prices for single‑family and condominium segments, hotel average daily rates and occupancy as they scale, interest expense trends, and progress on the stated international condominium purchases. Expect meaningful updates around the conference call on November 3, 2025 and during fiscal 2026 as hotel rollout and international moves clarify performance.

• 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)	% Change Y-Y
Single-Family Home (Land)	70	71	$618		¥89,108	16.0%
Single-Family Home (Building)	24	41	$233		¥33,574	10.7%
Condominium (Land)	20	33	$2,225		¥320,736	-9.2%
Condominium (Building)	5	4	$364		¥52,460	57.4%
Hotels (Land)	4	—	$7,817		¥1,126,984	n/m
Hotels (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 Takahashi
Chief Financial Officer
Lead Real Estate Co., Ltd
d-takahashi@lead-real.co.jp
+81 3-5784-5127

AUM Advisors
Crocker Coulson
Email: crocker.coulson@aummedia.org
Tel: (646) 652-7185

Summary Financial Tables

LEAD REAL ESTATE CO., LTD CONSOLIDATED BALANCE SHEETS AS 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., LTD CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR 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., LTD CONSOLIDATED STATEMENTS OF CASH FLOWS FOR 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

FAQ

What were Lead Real Estate (LRE) fiscal 2025 total revenue and net income?

Total revenue was JPY18.8 billion and net income attributable to common shareholders was JPY846.8 million for FY2025.

How much did Lead Real Estate's operating income change in FY2025 (LRE)?

Operating income increased 64.1% year‑over‑year to JPY1,475 million.

What drove Lead Real Estate's improved gross margin in FY2025 (LRE)?

Gross margin rose to 19.8% from 15.6%, driven by a more favorable sales mix and higher‑margin hotel transactions.

How did Lead Real Estate's hotel operations affect FY2025 results (LRE)?

Other revenue grew 15.5% to JPY535.3 million, primarily from the ramp‑up of hotel operations and higher average daily rates.

What is Lead Real Estate's cash position at fiscal year end June 30, 2025 (LRE)?

Cash and cash equivalents were JPY2.7 billion as of June 30, 2025.

When is Lead Real Estate's FY2025 earnings call for investors (LRE)?

The company will host a conference call on November 3, 2025 at 8:30 a.m. ET (10:30 p.m. JST) with webcast access.