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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-39012

KURA SUSHI USA, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	26-3808434
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
17461 Derian Avenue, Suite 200 Irvine, California	92614
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (657) 333-4100

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Class A Common Stock, $0.001 par value per share

     KRUS

     The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of December 30, 2025, the registrant had 11,111,427 shares of Class A common stock, $0.001 par value per share, outstanding and 1,000,050 shares of Class B common stock, $0.001 par value per share, outstanding.

Table of Contents


		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Financial Statements (Unaudited)	1
	Condensed Balance Sheets	1
	Condensed Statements of Operations and Comprehensive Income (Loss)	2
	Condensed Statements of Stockholders’ Equity	3
	Condensed Statements of Cash Flows	4
	Notes to Condensed Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23
PART II.	OTHER INFORMATION	24
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24
Item 3.	Defaults Upon Senior Securities	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information	24
Item 6.	Exhibits	25
Signatures		26

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

Kura Sushi USA, Inc.

Condensed Balance Sheets

(amounts in thousands, except for par value)

(Unaudited)


	November 30, 2025			August 31, 2025
Assets
Current assets:
Cash and cash equivalents	$	35,365		$	47,498
Short-term investments		15,336			14,964
Accounts and other receivables		6,333			6,410
Inventories		2,453			2,141
Due from affiliate		73			126
Prepaid expenses and other current assets		5,203			4,308
Total current assets		64,763			75,447
Non-current assets:
Property and equipment – net		181,921			171,190
Operating lease right-of-use assets		161,811			146,416
Long-term investments		27,846			29,542
Deposits and other assets		7,170			8,347
Total assets	$	443,511		$	430,942

Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	9,574		$	11,533
Accrued expenses and other current liabilities		4,853			4,116
Salaries and wages payable		8,215			10,310
Operating lease liabilities – current		14,778			14,083
Due to affiliate		819			525
Sales tax payable		2,087			2,213
Total current liabilities		40,326			42,780
Non-current liabilities:
Operating lease liabilities – non-current		172,634			155,932
Other liabilities		1,350			1,160
Total liabilities		214,310			199,872
Commitments and contingencies (Note 8)
Stockholders' equity:
Preferred stock, $0.001 par value; 1,000 shares authorized, no shares issued or outstanding		—			—
Class A common stock, $0.001 par value; 50,000 shares authorized, 11,111 shares issued and outstanding as of November 30, 2025 and August 31, 2025		11			11
Class B common stock, $0.001 par value; 10,000 shares authorized, 1,000 shares issued and outstanding as of November 30, 2025 and August 31, 2025		1			1
Additional paid-in capital		267,124			265,973
Accumulated deficit		(37,952	)		(34,892	)
Accumulated other comprehensive income (loss)		17			(23	)
Total stockholders' equity		229,201			231,070
Total liabilities and stockholders' equity	$	443,511		$	430,942

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Operations and Comprehensive Loss

(amounts in thousands, except for per share data)

(Unaudited)


	Three months ended November 30,
	2025			2024
Sales	$	73,455		$	64,456
Restaurant operating costs:
Food and beverage costs		21,934			18,667
Labor and related costs		23,898			21,235
Occupancy and related expenses		5,838			4,754
Depreciation and amortization expenses		3,980			3,091
Other costs		11,805			9,341
Total restaurant operating costs		67,455			57,088
General and administrative expenses		9,551			8,733
Depreciation and amortization expenses		129			109
Total operating expenses		77,135			65,930
Operating loss		(3,680	)		(1,474	)
Other expense (income):
Interest expense		18			13
Interest income		(674	)		(565	)
Loss before income taxes		(3,024	)		(922	)
Income tax expense		36			39
Net loss	$	(3,060	)	$	(961	)
Net loss per Class A and Class B shares
Basic	$	(0.25	)	$	(0.08	)
Diluted	$	(0.25	)	$	(0.08	)
Weighted average Class A and Class B shares outstanding
Basic		12,111			11,416
Diluted		12,111			11,416

Other comprehensive loss:
Unrealized gain on short-term investments	$	40		$	—
Comprehensive loss	$	(3,020	)	$	(961	)

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Stockholders’ Equity

(amounts in thousands)

(Unaudited)


	Common Stock
	Class A				Class B				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Income/(Loss)			Equity
Balances as of August 31, 2025		11,111	$	11		1,000	$	1	$	265,973	$	(34,892	)	$	(23	)	$	231,070
Stock-based compensation		—		—		—		—		1,128		—			—			1,128
Employee stock plan		—		—		—		—		23		—			—			23
Net loss		—		—		—		—		—		(3,060	)		—			(3,060	)
Other comprehensive income		—		—		—		—		—		—			40			40
Balances as of November 30, 2025		11,111	$	11		1,000	$	1		267,124	$	(37,952	)	$	17		$	229,201


	Common Stock
	Class A				Class B				Additional Paid-in		Accumulated			Accumulated Other Comprehensive			Total Stockholders'
	Shares		Amount		Shares		Amount		Capital		Deficit			Income/(Loss)			Equity
Balances as of August 31, 2024		10,253	$	10		1,000	$	1	$	195,515	$	(32,988	)	$	—		$	162,538
Stock-based compensation		—		—		—		—		1,152		—			—			1,152
Employee stock plan		11		—		—		—		493		—			—			493
Issuance of common stock in connection with follow-on public offering, net of underwriter discounts and issuance costs		800		1		—		—		64,354		—			—			64,355
Net loss		—		—		—		—		—		(961	)		—			(961	)
Balances as of November 30, 2024		11,064	$	11		1,000	$	1	$	261,514	$	(33,949	)	$	—		$	227,577

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Condensed Statements of Cash Flows

(amounts in thousands)

(Unaudited)


	Three months ended November 30,
	2025			2024
Cash flows from operating activities
Net loss	$	(3,060	)	$	(961	)
Adjustments to reconcile net loss to net cash provided by operating activities
Depreciation and amortization		4,109			3,200
Stock-based compensation, net of amounts capitalized		1,099			1,126
Bond premium amortization		62			—
Changes in operating assets and liabilities:
Accounts and other receivables		663			(426	)
Inventories		(312	)		112
Due from affiliate		53			130
Prepaid expenses and other current assets		(706	)		(181	)
Deposits and other assets		207			135
Accounts payable		(1,437	)		1,190
Accrued expenses and other current liabilities		666			(909	)
Salaries and wages payable		(2,095	)		(582	)
Operating lease liabilities and assets		1,499			1,823
Due to affiliate		(46	)		(143	)
Sales tax payable		(173	)		(152	)
Net cash provided by operating activities		529			4,362
Cash flows from investing activities
Payments for property and equipment		(13,826	)		(11,555	)
Payments for initial direct costs		(83	)		(135	)
Purchases of liquor licenses		(55	)		(810	)
Purchases of investments		(18,399	)		—
Maturities and redemptions of investments		19,700			—
Net cash used in investing activities		(12,663	)		(12,500	)
Cash flows from financing activities
Repayment of principal on finance leases		(22	)		(18	)
Proceeds from exercise of stock options		23			493
Proceeds from the follow-on public offering, net of discounts and commissions		—			64,626
Payments of costs related to the follow-on offering		—			(272	)
Net cash provided by financing activities		1			64,829
Increase (decrease) in cash and cash equivalents		(12,133	)		56,691
Cash and cash equivalents, beginning of period		47,498			50,986
Cash and cash equivalents, end of period	$	35,365		$	107,677
Supplemental disclosures of cash flow information
Cash paid for income taxes	$	21		$	—
Noncash investing activities
Acquisition of finance leases	$	22		$	78
Amounts unpaid for purchases of property and equipment	$	3,114		$	1,943
Stock-based compensation capitalized to property and equipment, net	$	29		$	26

The accompanying notes are an integral part of these condensed financial statements.

Kura Sushi USA, Inc.

Notes to Condensed Financial Statements

(Unaudited)

Note 1. Organization and Basis of Presentation

Kura Sushi USA, Inc. is a technology-enabled Japanese restaurant concept that provides guests with a distinctive dining experience by serving authentic Japanese cuisine through an engaging revolving sushi service model, which the Company refers to as the “Kura Experience.” Kura Sushi encourages healthy lifestyles by serving freshly prepared Japanese cuisine using high-quality ingredients that are free from artificial seasonings, sweeteners, colorings, and preservatives. Kura Sushi aims to make quality Japanese cuisine accessible to its guests across the United States through affordable prices and an inviting atmosphere. “Kura Sushi USA,” “Kura Sushi,” “Kura,” “our” and the “Company” refer to Kura Sushi USA, Inc. unless expressly indicated or the context otherwise requires.

Basis of Presentation

The accompanying unaudited condensed financial statements (the “Condensed Financial Statements”) have been prepared by the Company in accordance with generally accepted accounting principles in the United States (“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the SEC. As such, these Condensed Financial Statements should be read in conjunction with the Company’s audited financial statements and accompanying notes included in its Annual Report on Form 10-K for the fiscal year ended August 31, 2025.

The accounting policies followed by the Company are set forth in Part II, Item 8, Note 2, Basis of Presentation and Summary of Significant Accounting Policies, of the Notes to Financial Statements included in the Company’s Annual Report on Form 10‑K for the fiscal year ended August 31, 2025. In the opinion of management, all adjustments necessary to fairly state the Condensed Financial Statements have been made. All such adjustments are of a normal, recurring nature. The results of operations for interim periods are not necessarily indicative of results to be expected for the fiscal year ending August 31, 2026 or for any other future annual or interim period.

Reclassifications

Certain prior period amounts have been reclassified to conform to the current period presentation.

Fiscal Year

The Company’s fiscal year begins on September 1 and ends on August 31, and references made to “fiscal year 2026” and “fiscal year 2025” refer to the Company’s fiscal years ending August 31, 2026 and ended August 31, 2025, respectively.

Use of Estimates

Preparing financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods presented.

Significant items subject to such estimates include asset retirement obligations, stock-based compensation, the useful lives of assets, the assessment of the recoverability of long-lived assets, and income taxes. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could differ materially from those estimates and assumptions.

Investments

The Company invests in securities, including certificates of deposit, Treasury notes, and U.S. Government Agency debt securities. Investment classification is determined based on the accounting guidance as available for sale or held to maturity. Certificates of deposit and Treasury notes are classified as available-for-sale debt securities and measured at fair value, with unrealized gains or losses recorded in other comprehensive income (loss). U.S. Government Agency debt securities are classified as held-to-maturity and measured at amortized cost. Realized gains or losses are determined on a specific identification basis. The classification of these investments as either short-term or long-term is based on their original maturity dates, with short-term

investments having maturities greater than three months but less than one year, and long-term investments having maturities greater than one year.

Recently Issued Accounting Pronouncements

Subsequent to November 30, 2025, in December 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2025-11, Narrow-Scope Improvements (Topic 270): Interim Reporting. This update makes targeted, narrow-scope improvements to the interim reporting guidance in Topic 270 to clarify application and improve consistency in practice. The amendments do not change the underlying principles of interim reporting. The amendments in this ASU are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt the guidance in its Form 10-Q for the interim period ending November 30, 2028. The Company is currently evaluating the effects of this pronouncement on its consolidated financial statements and does not expect the adoption of this ASU to have a material effect on its consolidated financial statements.

In September 2025, the FASB issued ASU 2025-06, “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, which modernizes guidance for internal-use software costs. The amendments in this update improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods. This update is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years, though early adoption is permitted. The Company expects to adopt the guidance in its annual report on Form 10-K for the fiscal year ending August 31, 2029. The Company is currently evaluating the effects of this pronouncement on its financial statements and does not expect the update to have a material effect on its consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Disaggregation of Income Statement Expenses”, which requires public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. In January 2025, the FASB issued ASU 2025-01 “Income Statement-Reporting Comprehensive Income- Expense Disaggregation Disclosures- Clarifying the Effective Date”, which amends the effective date of ASU 2024-03 to clarify that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company expects to adopt the guidance in its annual report on Form 10-K for the fiscal year ending August 31, 2028. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”, which requires greater disaggregation of income tax disclosures related to the income tax rate reconciliation and income taxes paid and effective for fiscal years beginning after December 15, 2024. Early adoption is permitted for annual financial statements that have not yet been issued. The amendments should be applied on a prospective basis although retrospective application is permitted. The Company expects to adopt the guidance in its annual report on Form 10-K for the fiscal year ending August 31, 2026. The Company is currently evaluating the effects of this pronouncement on its financial statements and expects the update to result in additional disclosures.

Note 2. Balance Sheet Components

Accounts and Other Receivables


	November 30, 2025		August 31, 2025
	(amounts in thousands)
Lease receivables	$	2,036	$	1,450
Credit card and other receivables		4,297		4,960
Total accounts and other receivables	$	6,333	$	6,410

Property and Equipment - net


	November 30, 2025			August 31, 2025
	(amounts in thousands)
Leasehold improvements	$	138,168		$	129,909
Furniture and fixtures		82,471			76,714
Computer equipment		4,802			4,632
Vehicles		232			342
Software		1,017			1,017
Construction in progress		11,886			11,203
Property and equipment – gross		238,576			223,817
Less: accumulated depreciation and amortization		(56,655	)		(52,627	)
Total property and equipment – net	$	181,921		$	171,190

Depreciation and amortization expense for property and equipment was $4.1 million and $3.2 million for the three months ended November 30, 2025 and November 30, 2024, respectively.

Note 3. Leases

The Company has operating and finance leases for its corporate offices, restaurant locations, warehouse, office equipment, kitchen equipment and automobiles. The Company’s finance leases are immaterial. The Company’s leases have remaining lease terms of less than 1 year to 20 years, some of which include options to extend the leases.

Lease related costs recognized in the condensed statements of operations and comprehensive loss are as follows:




		Three months ended November 30,
		2025		2024
		(amounts in thousands)
Operating lease cost	Classification
Operating lease cost	Occupancy and related expenses, other costs and general and administrative expenses	$	4,580	$	3,804
Variable lease cost	Occupancy and related expenses, and general and administrative expenses		1,177		991
Total operating lease cost		$	5,757	$	4,795

Supplemental disclosures of cash flow information related to leases are as follows:


	Three months ended November 30,
	2025		2024
	(amounts in thousands)
Operating cash flows paid for operating lease liabilities	$	3,956	$	3,166
Operating right-of-use assets obtained in exchange for new operating lease liabilities	$	16,674	$	11,016

As of November 30, 2025, the Company had an additional $54.9 million of operating lease liabilities related to restaurants for which the Company had not yet taken possession.

Note 4. Related Party Transactions

Kura Sushi, Inc. (“Kura Japan”) is the majority stockholder of the Company and is incorporated and headquartered in Japan. In August 2019, the Company entered into a Shared Services Agreement with Kura Japan, pursuant to which Kura Japan provides the Company with certain strategic, operational and other support services, including assigning certain employees to work for the Company as expatriates to provide support to the Company’s operations, sending its employees to the Company on a short-term basis to provide support for the opening of new restaurants or renovation of existing restaurants, and providing the Company with certain supplies, parts and equipment for use in the Company’s restaurants. In addition, the Company has agreed to continue to provide Kura Japan with certain translational support services and market research. In exchange for such services, supplies, parts and equipment, the parties pay fees to each other as set forth under the Shared Services Agreement. A right of setoff is not required; however, from time to time, either party will net settle transactions as needed. Purchases of administrative supplies, expatriate salaries and travel and other administrative expenses payable to Kura Japan are included in general and administrative expenses in the accompanying statements of operations and comprehensive loss. Purchases of equipment from Kura Japan are included in property and equipment in the accompanying balance sheets.

In August 2019, the Company entered into an Amended and Restated Exclusive License Agreement (the “License Agreement”) with Kura Japan. Pursuant to the License Agreement, the Company pays Kura Japan a royalty fee of 0.5% of the Company’s net sales in exchange for an exclusive, royalty-bearing license for the use of certain of Kura Japan’s intellectual property rights, including, but not limited to, Kura Japan’s trademarks for “Kura Sushi,” “Mr. Fresh” and “Kura Revolving Sushi Bar,” and patents for a food management system and the Mr. Fresh protective dome, among other intellectual property rights necessary to continue operation of the Company’s restaurants. Royalty payments to Kura Japan are included in other costs at the restaurant level in the accompanying condensed statements of operations and comprehensive income loss.

On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement, as amended, to provide the Company a revolving credit line of $45.0 million (as amended, the “Revolving Credit Agreement”). For additional information, see “Note 6. Debt.”

Balances with Kura Japan are as follows:


	November 30, 2025		August 31, 2025
	(amounts in thousands)
Due from affiliate	$	73	$	126
Due to affiliate	$	819	$	525

Reimbursements and other payments by the Company to Kura Japan were as follows:


	Three months ended November 30,
	2025		2024
	(amounts in thousands)
Related party transactions:
Expatriate salaries expense	$	35	$	29
Royalty payments		368		322
Travel and other administrative expenses		4		42.00
Purchases of equipment		1,853		1,264
Total related party transactions	$	2,260	$	1,657

Reimbursements by Kura Japan to the Company were $209 thousand and $187 thousand for the three months ended November 30, 2025 and November 30, 2024, respectively. The reimbursements were primarily for travel, professional fees and other administrative expenses.

Note 5. Stock-based Compensation

The following table summarizes the stock option activity under the Company’s 2018 Incentive Compensation Plan, as amended and restated (the “Stock Incentive Plan”):


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted Average Exercise Price Per Share
Outstanding — August 31, 2025		591,421		$	44.02
Granted		6,791		$	66.90
Exercised		(685	)	$	31.55
Cancelled/forfeited		(3,688	)	$	70.13
Outstanding — November 30, 2025		593,839		$	44.14

The following table summarizes the restricted stock unit (“RSU”) activity under the Stock Incentive Plan:


	Number of Shares Underlying Outstanding RSU			Weighted Average Grant Date Fair Value
Outstanding — August 31, 2025		50,425		$	81.02
Granted		—			—
Vested		—			—
Cancelled/forfeited		(1,576	)	$	82.08
Outstanding — November 30, 2025		48,849		$	80.99

As of November 30, 2025, the Company has 8,724 performance restricted stock units (“PSUs”) outstanding with a three-year performance vesting period and a weighted average grant date fair value of $80.00.

The total stock-based compensation recognized under the Stock Incentive Plan in the condensed statements of operations and comprehensive loss is as follows:


	Three months ended November 30,
	2025		2024
	(amounts in thousands)
Restaurant-level stock-based compensation included in labor and related costs	$	181	$	179
Corporate-level stock-based compensation included in general and administrative expenses		918		947
Stock-based compensation, net of amounts capitalized		1,099		1,126
Amount capitalized to property and equipment - net		29		26
Total stock-based compensation	$	1,128	$	1,152

Note 6. Debt

On April 10, 2020, the Company and Kura Japan entered into a Revolving Credit Agreement, as amended, establishing a $45.0 million revolving credit line for the Company. The maturity date for each advance is 60 months from the date of disbursement and the last day of the period of availability for advances is April 10, 2025. The Revolving Credit Note under the Revolving Credit Agreement has an interest rate for advances (made on or after April 10, 2021) fixed at 130% of the Annual Compounding Long-Term Applicable Federal Rate on the date such advance is made. There are no financial covenants under the Revolving Credit Agreement with which the Company must comply.

On April 4, 2025, the Company and Kura Japan entered into a Third Amendment to Revolving Credit Agreement (the “Third Amendment”) to extend the last day of the period of availability for the advances under the credit line from April 10, 2025 to April 10, 2028. In connection with the Third Amendment, the Revolving Credit Note under the Revolving Credit Agreement was also amended by incorporating the same amendments as provided under the Third Amendment.

As of November 30, 2025 and August 31, 2025, the Company had no outstanding balance and $45.0 million of availability remaining under the Revolving Credit Agreement. For additional information, see “Note 4. Related Party Transactions.”

Note 7. Loss Per Share

The net loss per share attributable to common stockholders is allocated based on the contractual participation rights of the Class A common stock and Class B common stock as if the loss for the year had been distributed. As the liquidation and dividend rights for Class A and Class B common stock are identical, the net loss attributable to all common stockholders is allocated on a proportionate basis.

The following table sets forth the computation of the Company’s basic and diluted net loss per share:


	Three months ended November 30,
	2025						2024
	Class A			Class B			Class A			Class B
	(amounts in thousands, except per share data)
Net loss attributable to common stockholders	$	(2,807	)	$	(253	)	$	(877	)	$	(84	)

Weighted average common shares outstanding – basic		11,111			1,000			10,416			1,000
Dilutive effect of stock-based awards		—			—			—			—
Weighted average common shares outstanding – diluted		11,111			1,000			10,416			1,000

Net loss per share attributable to common stockholders – basic	$	(0.25	)	$	(0.25	)	$	(0.08	)	$	(0.08	)
Net loss per share attributable to common stockholders – diluted	$	(0.25	)	$	(0.25	)	$	(0.08	)	$	(0.08	)

The Company computes basic loss per common share using net loss and the weighted average number of common shares outstanding during the period, and computes diluted loss per common share using net loss and the weighted average number of common shares and potentially dilutive common shares outstanding during the period. Potentially dilutive common shares include dilutive outstanding employee stock options, RSUs and PSUs.

For the three months ended November 30, 2025 and November 30, 2024, there were 651 thousand and 631 thousand, respectively, shares of common stock subject to outstanding employee stock options, RSUs and PSUs that were excluded from the calculation of diluted income per share because their inclusion would have been anti-dilutive.

Note 8. Commitments and Contingencies

Purchase Obligations

We enter into various purchase obligations in the ordinary course of business, generally of a short-term nature. As of November 30, 2025, we had an aggregate of approximately $25.7 million in contractual obligations which consisted of $13.5 million in purchase commitments for food related to restaurant operations and $12.2 million related to the construction of new restaurants.

Legal Matters

On December 9, 2024, a former employee filed a putative class action complaint in the Superior Court of California in Los Angeles, individually and on behalf of others similarly situated, against the Company alleging certain violations of California labor laws. The complaint alleges various wage and hour violations under the California Labor Code and related statutes. Plaintiff has also served a Private Attorneys General Act (“PAGA”) notice for the same alleged wage and hour violations. The Company will continue to vigorously defend its position in this matter. The Company is currently unable to estimate the range of possible losses associated with this proceeding.

The Company is involved from time to time in various legal proceedings that arise in the ordinary course of business, including but not limited to commercial disputes, environmental matters, employee related claims, intellectual property disputes and litigation in connection with transactions, including acquisitions and divestitures.

In the opinion of management, the Company does not believe that such litigation, claims, and administrative proceedings will have a material adverse effect on its business, financial position, results of operations or cash flows. However, a significant increase in the number of these claims or an increase in amounts owing under successful claims, including the putative class action referenced

above, could materially and adversely affect its business, financial condition, results of operations or cash flows. The Company records a liability when a loss is considered probable, and the amount can be reasonably estimated.

Note 9. Income Taxes

The Company recorded an income tax expense of $36 thousand and $39 thousand for the three months ended November 30, 2025 and November 30, 2024, respectively. The Company’s effective tax rates for the three months ended November 30, 2025 substantially differed from the federal statutory tax rate of 21% primarily due to a valuation allowance for the Company’s deferred tax assets and permanent differences related to the tax credit for a portion of the Social Security and Medicare taxes (FICA taxes) paid on employer tips.

The Company continually monitors and performs an assessment of the realizability of its deferred tax assets, including an analysis of factors such as future taxable income, reversal of existing taxable temporary differences, and tax planning strategies. In assessing the need for a valuation allowance, the Company considered both positive and negative evidence related to the likelihood of realization of deferred tax assets using a “more likely than not” standard. In making such assessment, more weight was given to evidence that could be objectively verified, including recent cumulative losses. Based on the Company’s review of this evidence, management determined that a full valuation allowance against all of the Company’s net deferred tax assets at November 30, 2025 was appropriate.

On July 4, 2025, the President signed into law, the reconciliation tax bill, commonly known as the "One Big Beautiful Bill Act" (OBBA). Notable corporate provisions include the restoration of 100% bonus depreciation; the creation of Section 174A, which reinstates expensing for domestic research and experimental (R&E) expenditures; modifications to Section 163(j) interest limitations; updates to the rules for global intangible low-taxed income (GILTI) and foreign-derived intangible income (FDII); amendments to the rules for energy credits; and the expansion of Section 162(m) aggregation requirements. OBBA did not have a material impact on the Company’s effective tax rate or income tax expense for the three months ended November 30, 2025.

Note 10. Fair Value Measurements

The following table sets forth the Company’s assets measured at fair value on a recurring basis as of November 30, 2025.


	Level 1		Level 2		Level 3		Total
	(amounts in thousands)
Assets:
Certificate of Deposit	$	—	$	524	$	—	$	524
Treasury bills		20,652		—		—		20,652
U.S. Government Agency debt securities		—		21,919		—		21,919
Total assets at fair value	$	20,652	$	22,443	$	—	$	43,095

The Company’s financial statements include cash and cash equivalents, accounts and other receivables, accounts payable, accrued expenses and other current liabilities, and salaries and wages payable for which the carrying amounts approximate fair value due to their short-term maturity. The fair value of our Treasury notes are valued using Level 1 inputs of the fair value hierarchy. The fair value of our Certificate of Deposit and U.S. Government Agency debt securities are valued using Level 2 inputs of the fair value hierarchy. Level 2 inputs are based on market data that include factors such as interest rates, market and pricing activity and other market-based valuation techniques. The fair value of payments due to or from Kura Japan is not determinable due to its related-party nature.

Note 11—Segment Information

The Company operates as one reportable segment: company-owned restaurants and in one geographic area: the United States of America. The Company does not have intra-entity sales or transfers. Sales represent sales of food and beverages in restaurants. The Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), evaluates performance and allocates resources based on sales and operating income (loss). The CODM does not review segment assets at a level different than what is reported in the Company’s Consolidated Balance Sheet.

Reported segment sales and expenses are presented below:


	Three months ended November 30,
	2025			2024
	(amounts in thousands)
Sales	$	73,455		$	64,456
Restaurant operating costs:
Food and beverage costs		21,934			18,667
Labor and related costs		23,898			21,235
Occupancy and related expenses		5,838			4,754
Depreciation and amortization expenses		3,980			3,091
Other costs		11,805			9,341
Total restaurant operating costs		67,455			57,088
General and administrative expenses		9,551			8,733
Depreciation and amortization expenses		129			109
Total operating expenses		77,135			65,930
Operating loss		(3,680	)		(1,474	)

Reconciliation to net loss:
Other expense (income):
Interest expense		18			13
Interest income		(674	)		(565	)
Loss before income taxes		(3,024	)		(922	)
Income tax expense		36			39
Net loss	$	(3,060	)	$	(961	)

Note 12—Investments

As of November 30, 2025 and August 31, 2025, the Company’s investments are summarized below. The Company has one certificate of deposit of $0.5 million, which is restricted to funding a collateral account relating to a standby letter of credit. Based on the evaluation of credit risk factors guaranteed by the U.S. government, the Company has concluded that an allowance for credit losses is unnecessary for its investments.


	November 30, 2025
	Amortized cost basis		Unrealized holding gains		Unrealized holding losses			Aggregate fair value
	(amounts in thousands)
Current
Available-for-sale:
Treasury notes	$	14,795	$	17	$	—		$	14,812
Certificate of deposit		524		—		—			524
Total Current	$	15,319	$	17	$	—		$	15,336

Non-Current
Available-for-sale:
Treasury notes	$	5,840	$	—	$	—		$	5,840
Held to maturity:
U.S. Government Agency debt securities		22,006		—		(87	)	$	21,919
Total Non-Current	$	27,846	$	—	$	(87	)	$	27,759

	August 31, 2025
	Amortized cost basis		Unrealized holding gains		Unrealized holding losses			Aggregate fair value
	(amounts in thousands)
Current
Available-for-sale:
Treasury notes	$	14,463	$	—	$	(23	)	$	14,440
Certificate of deposit		524		—		—			524
Total Current	$	14,987	$	—	$	(23	)	$	14,964

Non-Current
Available-for-sale:
Treasury notes	$	1,468	$	—	$	—		$	1,468
Held to maturity:
U.S. Government Agency debt securities		28,074		—		(69	)		28,005
Total Non-Current	$	29,542	$	—	$	(69	)	$	29,473

The following table sets forth the maturities of the Company’s investments as of November 30, 2025 and August 31, 2025.


	November 30, 2025				August 31, 2025
	Carrying amount		Fair value		Carrying amount		Fair value
	(amounts in thousands)				(amounts in thousands)
Available-for-sale:
Due within one year	$	15,336	$	15,336	$	14,964	$	14,964
Due within one year through five years		5,840		5,840		1,468		1,468
	$	21,176	$	21,176	$	16,432	$	16,432
Held to maturity:
Due within one year through five years	$	22,006	$	21,919	$	28,074	$	28,005

Note 13—Subsequent Event

On December 29, 2025, the Company filed a universal shelf registration statement on Form S-3 (the “Registration Statement”) with the SEC in accordance with the Securities Act of 1933, as amended (the “Securities Act”). The Registration Statement registers Class A common stock, preferred stock, depositary shares, warrants, subscription rights, share purchase contracts, share purchase units, and any combination of the foregoing, for a maximum aggregate offering price of up to $100.0 million, which may be sold from time to time, subject to the Registration Statement being declared effective by the SEC. The terms of any securities offered under the Registration Statement and intended use of proceeds will be established at the times of the offerings and will be described in prospectus supplements filed with the SEC at the times of the offerings. The Registration Statement has a three-year term once declared effective by the SEC.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited financial statements and the related notes included in this Quarterly Report on Form 10-Q and with the audited financial statements and the related notes included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2025 (the “Annual Report”).

In addition to historical information, the following discussion and analysis contains forward-looking statements, such as statements about our plans, objectives, expectations, and intentions, which are based on current assumptions and involve risks, uncertainties and assumptions as set forth and described in the “Special Note Regarding Forward-Looking Statements” and “Risk Factors” sections of the Annual Report. You should review those sections in our Annual Report for a discussion of important factors, including the continuing development of our business and other factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in this Quarterly Report on Form 10-Q.

“Kura Sushi USA,” “Kura Sushi,” “Kura,” “we,” “us,” “our,” “our company” and the “Company” refer to Kura Sushi USA, Inc. unless expressly indicated or the context otherwise requires.

Overview

Kura Sushi USA is a technology-enabled Japanese restaurant concept that provides guests with a distinctive dining experience by serving authentic Japanese cuisine through an engaging revolving sushi service model, which we refer to as the “Kura Experience.” We encourage healthy lifestyles by serving freshly prepared Japanese cuisine using high-quality ingredients that are free from artificial seasonings, sweeteners, colorings, and preservatives. We aim to make quality Japanese cuisine accessible to our guests across the United States through affordable prices and an inviting atmosphere.

Business Trends

During the three months ended November 30, 2025, we opened four restaurants and expanded our restaurant base to 83 restaurants in 22 states and Washington, DC. We expect to open a total of 16 new restaurants in fiscal year 2026 and therefore, we expect our revenue and restaurant operating costs to increase in fiscal year 2026. We also expect our general and administrative expenses to increase on a dollar basis in fiscal 2026 to support the growth of the company.

We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations. During the three months ended November 30, 2025, tariffs had a considerable impact on our business, financial condition, results of operations and cash flows. Based on the current economic environment, tariffs are expected to continue to have a considerable impact on our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs throughout fiscal year 2026. We have historically used menu price increases to manage profitability in times of inflation or tariff increases. During the three months ended November 30, 2025, we increased menu prices, which we expect will partially offset the impact on our operations in fiscal year 2026. See our Annual Report on Form 10-K “Part I, Item 1A, “Risk Factors — Risks Related to Our Operations and Growth Strategy”.

Key Financial Definitions

Sales. Sales represent sales of food and beverages in restaurants. Restaurant sales in a given period are directly impacted by the number of restaurants we operate and comparable restaurant sales performance.

Food and beverage costs. Food and beverage costs are variable in nature, change with sales volume and are influenced by menu mix and subject to increases or decreases based on fluctuations in commodity costs. Other important factors causing fluctuations in food and beverage costs include seasonality and restaurant-level management of food waste. Food and beverage costs are a substantial expense and are expected to grow proportionally as our sales grow.

Labor and related expenses. Labor and related expenses include all restaurant-level management and hourly labor costs, including wages, employee benefits, stock-based compensation for restaurant-level employees and payroll taxes. Similar to the food and beverage costs that we incur, labor and related expenses are expected to grow proportionally as our sales grow. Factors that influence fluctuations in our labor and related expenses include minimum wage and payroll tax legislation, the frequency and severity of workers’ compensation claims, healthcare costs and by the performance of our restaurants.

Occupancy and related expenses. Occupancy and related expenses include rent for all restaurant locations and related taxes.

Depreciation and amortization expenses. Depreciation and amortization expenses are periodic non-cash charges that consist of depreciation of fixed assets, including equipment and capitalized leasehold improvements. Depreciation is determined using the straight-line method over the assets’ estimated useful lives, which range from three to 20 years.

Other costs. Other costs include credit card processing fees, repairs and maintenance, restaurant-level advertising and promotions, restaurant supplies, royalty payments to Kura Japan, utilities and other restaurant-level expenses.

General and administrative expenses. General and administrative expenses include expenses associated with corporate and regional supervision functions that support the operations of existing restaurants and development of new restaurants, including compensation and benefits, travel expenses, stock-based compensation for corporate-level employees, legal and professional fees, information systems, corporate office rent and other related corporate costs. General and administrative expenses are expected to grow as our unit base grows.

Interest expense. Interest expense includes cash and non-cash charges related to our line of credit and finance lease obligations.

Interest income. Interest income includes income earned on our money market funds and investments.

Income tax expense (benefit). Provision for income taxes represents federal, state and local current and deferred income tax expense (benefit).

Results of Operations

The following tables present selected comparative results of operations for the three months ended November 30, 2025 and 2024. Our financial results for these periods are not necessarily indicative of the financial results that we will achieve in future periods. Certain totals for the tables below may not recalculate or sum up to 100% due to rounding.


	Three months ended November 30,
	2025			2024			$ Change			% Change
	(dollar amounts in thousands)
Sales	$	73,455		$	64,456		$	8,999			14.0		%
Restaurant operating costs
Food and beverage costs		21,934			18,667			3,267			17.5
Labor and related costs		23,898			21,235			2,663			12.5
Occupancy and related expenses		5,838			4,754			1,084			22.8
Depreciation and amortization expenses		3,980			3,091			889			28.8
Other costs		11,805			9,341			2,464			26.4
Total restaurant operating costs		67,455			57,088			10,367			18.2
General and administrative expenses		9,551			8,733			818			9.4
Depreciation and amortization expenses		129			109			20			18.3
Total operating expenses		77,135			65,930			11,205			17.0
Operating loss		(3,680	)		(1,474	)		(2,206	)		(149.6	)
Other expense (income):
Interest expense		18			13			5			38.5
Interest income		(674	)		(565	)		(109	)		19.3
Loss before income taxes		(3,024	)		(922	)		(2,102	)		228.0
Income tax expense		36			39			(3	)		(7.7	)
Net loss	$	(3,060	)	$	(961	)	$	(2,099	)		218.4		%


	Three months ended November 30,
	2025				2024
	(as a percentage of sales)
Sales		100.0		%		100.0		%
Restaurant operating costs
Food and beverage costs		29.9				29.0
Labor and related costs		32.5				32.9
Occupancy and related expenses		7.9				7.4
Depreciation and amortization expenses		5.4				4.8
Other costs		16.1				14.5
Total restaurant operating costs		91.8				88.6
General and administrative expenses		13.0				13.5
Depreciation and amortization expenses		0.2				0.2
Total operating expenses		105.0				102.3
Operating loss		(5.0	)			(2.3	)
Other expense (income):
Interest expense		—				—
Interest income		(0.9	)			(0.9	)
Loss before income taxes		(4.1	)			(1.4	)
Income tax expense		—				0.1
Net loss		(4.1	)	%		(1.5	)	%

Three Months Ended November 30, 2025 Compared to Three Months Ended November 30, 2024

Sales. Sales were $73.5 million for the three months ended November 30, 2025 compared to $64.5 million for the three months ended November 30, 2024, representing an increase of $9.0 million, or 14.0%. The increase in sales was primarily driven by the sales resulting from thirteen new restaurants that opened subsequent to November 30, 2024, as well as increases in menu prices during the same period. Comparable restaurant sales decreased 2.5%, consisting of negative traffic of 2.5% and flat price/mix, for the three months ended November 30, 2025, as compared to the three months ended November 30, 2024. The decrease in traffic is a result of lower consumer spending due to the macroeconomic environment.

Food and beverage costs. Food and beverage costs were $21.9 million for the three months ended November 30, 2025 compared to $18.7 million for the three months ended November 30, 2024, representing an increase of $3.2 million, or 17.5%. The increase in food and beverage costs was primarily driven by costs associated with sales from thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, food and beverage costs increased to 29.9% in the three months ended November 30, 2025 as compared to 29.0% in the three months ended November 30, 2024, primarily due to tariffs on imported ingredients, which was partially offset by increases in menu prices.

Labor and related costs. Labor and related costs were $23.9 million for the three months ended November 30, 2025 compared to $21.2 million for the three months ended November 30, 2024, representing an increase of $2.7 million, or 12.5%. This increase in labor and related costs was primarily driven by additional labor costs incurred from thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, labor and related costs decreased to 32.5% in the three months ended November 30, 2025 as compared to 32.9% in the three months ended November 30, 2024, primarily due to increases in menu prices and initiatives relating to operations, partially offset by sales deleverage as a result of a decrease in comparable restaurant sales and labor inflation.

Occupancy and related expenses. Occupancy and related expenses were $5.8 million for the three months ended November 30, 2025 compared to $4.8 million for the three months ended November 30, 2024, representing an increase of $1.0 million, or 22.8%. The increase was primarily a result of additional lease expense related to the opening of thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, occupancy and related expenses increased to 7.9% in the three months ended November 30, 2025 as compared to 7.4% in the three months ended November 30, 2024, primarily driven by sales deleverage as a result of a decrease in comparable restaurant sales.

Depreciation and amortization expenses. Depreciation and amortization expenses incurred as part of restaurant operating costs were $4.0 million for the three months ended November 30, 2025 compared to $3.1 million for the three months ended November 30, 2024, representing an increase of $0.9 million, or 28.8%. The increase consists of depreciation of property and equipment related to the thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, depreciation and amortization expenses at the restaurant level was 5.4% for the three months ended November 30, 2025 as compared to 4.8% in the three months ended November 30, 2024, primarily driven by sales deleverage as a result of a decrease in comparable restaurant sales and remodel costs. Depreciation and amortization expenses incurred at the corporate level were $0.1 million for both the three months ended November 30, 2025 and November 30, 2024, and as a percentage of sales were both 0.2%.

Other costs. Other costs were $11.8 million for the three months ended November 30, 2025 compared to $9.3 million for the three months ended November 30, 2024, representing an increase of $2.5 million, or 26.4%. The increase was primarily driven by an increase in costs related to the thirteen new restaurants that opened subsequent to November 30, 2024. As a percentage of sales, other costs increased to 16.1% in the three months ended November 30, 2025 as compared to 14.5% in the three months ended November 30, 2024, primarily driven by higher marketing expenses, repair and maintenance costs, utilities and travel expenses, as well as sales deleverage as a result of a decrease in comparable restaurant sales.

General and administrative expenses. General and administrative expenses were $9.6 million for the three months ended November 30, 2025 compared to $8.7 million for the three months ended November 30, 2024, representing an increase of $0.9 million, or 9.4%. This increase was primarily due to litigation expenses of $0.2 million, professional fees of $0.2 million, travel expenses of $0.1 million and $0.4 million of other net increases. As a percentage of sales, general and administrative expenses decreased to 13.0% in the three months ended November 30, 2025 as compared to 13.5% in the three months ended November 30, 2024, primarily due to sales leverage.

Interest expense. Interest expense was $18 thousand for the three months ended November 30, 2025 compared to $13 thousand for the three months ended November 30, 2024.

Interest income. Interest income was $674 thousand for the three months ended November 30, 2025 compared to $565 thousand for the three months ended November 30, 2024. The increase was primarily driven by investing incremental cash from our follow-on offering completed in November 2024 into interest-bearing money market funds and investments, partially offset by lower interest rates and withdraws for cash operating needs.

Income tax expense. Income tax expense was $36 thousand for the three months ended November 30, 2025 compared to an income tax expense of $39 thousand for the three months ended November 30, 2024. For further discussion of our income taxes, see “Note 9. Income Taxes” in the Notes to Condensed Financial Statements.

Key Performance Indicators

In assessing the performance of our business, we consider a variety of financial and performance measures. The key measures for determining how our business is performing include sales, EBITDA, Adjusted EBITDA, Restaurant-level Operating Profit, Restaurant-level Operating Profit margin, comparable restaurant sales performance, and the number of restaurant openings.

Sales

Sales represents sales of food and beverages in restaurants, as shown on our condensed statements of operations and comprehensive income (loss). Several factors affect our restaurant sales in any given period, including the number of restaurants in operation, guest traffic and average check.

EBITDA and Adjusted EBITDA

EBITDA is defined as net income (loss) before interest, income taxes and depreciation and amortization. Adjusted EBITDA is defined as EBITDA plus stock-based compensation expense, non-cash lease expense and asset disposals, closure costs and restaurant impairments, as well as certain items, such as litigation that we believe are not indicative of our core operating results. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by sales. EBITDA, Adjusted EBITDA and Adjusted EBITDA margin are non-GAAP measures which are intended as supplemental measures of our performance and are neither required by, nor presented in accordance with, GAAP. We believe that EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provide useful information to management and investors regarding certain financial and business trends relating to our financial condition and operating results. However, these measures may not provide a complete understanding of the operating results of the Company as a whole and such measures should be reviewed in conjunction with our GAAP financial results.

We believe that the use of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial measures with those of comparable companies, which may present similar non-GAAP financial measures to investors. However, you should be aware when evaluating EBITDA, Adjusted EBITDA and Adjusted EBITDA margin that in the future we may incur expenses similar to those excluded when calculating these measures. In addition, our presentation of these measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our computation of Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to other similarly titled measures computed by other companies, because all companies may not calculate Adjusted EBITDA and Adjusted EBITDA margin in the same fashion.

Because of these limitations, EBITDA, Adjusted EBITDA and Adjusted EBITDA margin should not be considered in isolation or as a substitute for performance measures calculated in accordance with GAAP. We compensate for these limitations by relying primarily on our GAAP results and using EBITDA, Adjusted EBITDA and Adjusted EBITDA margin on a supplemental basis. You should review the reconciliation of net income (loss) to EBITDA, Adjusted EBITDA and Adjusted EBITDA margin below and not rely on any single financial measure to evaluate our business.

The following table reconciles net loss to EBITDA and Adjusted EBITDA:


	Three months ended November 30,
	2025			2024
	(amounts in thousands)
Net loss	$	(3,060	)	$	(961	)
Interest income, net		(656	)		(552	)
Income tax expense		36			39
Depreciation and amortization expenses		4,109			3,200
EBITDA		429			1,726
Stock-based compensation expense(a)

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

KURA SUSHI USA, INC. 10-Q