Sega Sammy (6460) Q2 2025 earnings summary

Executive summary

• Q2 FY2025/3 results exceeded initial expectations, with strong performance in Consumer and Animation within Entertainment Contents, and steady sales of new Pachislot & Pachinko titles, despite a 4.5% YoY net sales decline to ¥211.7 billion due to a high prior-year comparison.

• Operating income decreased 18.1% to ¥32.8 billion, while profit attributable to owners of parent rose 31.1% to ¥30.4 billion, driven by extraordinary income from the sale of Phoenix Resort Co., Ltd.

• Extraordinary income from the Phoenix Resort sale was offset by a ¥5.9 billion loss on the transfer of Amplitude Studios.

• Share buyback completed, acquiring 3,549,800 shares for approximately ¥10 billion.

• Adjusted EBITDA was ¥34.8 billion, down 7.3% YoY but above initial expectations.

Financial highlights

• Q2 consolidated sales: ¥211.7 billion (down 4.5% YoY); full-year forecast: ¥445.0 billion.

• Operating income: ¥32.8 billion (down 18.1% YoY); full-year forecast: ¥45.0 billion.

• Profit attributable to owners of parent: ¥30.4 billion (up 31.1% YoY); full-year forecast: ¥39.0 billion.

• Adjusted EBITDA: ¥34.8 billion (down 7.3% YoY); full-year forecast: ¥62.0 billion.

• Net income per share: ¥140.75 (up 34.0% YoY).

Outlook and guidance

• Full-year forecast for FY2025 maintained: net sales ¥445.0 billion (+5.1%), operating income ¥45.0 billion (+22.2%), profit attributable to owners of parent ¥39.0 billion (+19.7%), EPS ¥180.54.

• Focus on launching new mainstay titles and promoting Transmedia development in Entertainment Contents.

• Pachislot & Pachinko lineup to be reviewed due to recent weak order situation; aim to create hit titles leveraging large-scale IPs.

• No changes to previously announced guidance.

• Dividend forecast for FY2025 is ¥50 per share, unchanged from prior year.