Nintendo Co. (7974) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 FY25 declined 46.5% year-over-year to 246.6 billion yen, with operating profit down 70.6% to 54.5 billion yen and net profit down 55.3% to 80.9 billion yen.

• Hardware sales fell 46.3% and software sales dropped 41.3% year-over-year, reflecting the absence of major releases and special factors that boosted the prior year.

• Digital sales fell 32.6% year-over-year but accounted for a higher proportion (58.9%) of total software sales.

• Mobile and IP-related sales dropped 53.8% due to lower movie-related revenue.

Financial highlights

• Gross profit decreased 45.8% year-over-year to 152.4 billion yen, but gross margin improved by 0.9 percentage points to 61.8% due to higher digital sales and yen depreciation.

• SG&A expenses rose 2.4% to 97.9 billion yen, with the SG&A-to-sales ratio increasing to 39.7% due to lower sales.

• Ordinary profit dropped 55.3% to 113.4 billion yen, reflecting lower operating profit and reduced foreign exchange gains.

• Comprehensive income was 135.4 billion yen, down 43.0% year-over-year.

• EPS for Q1 FY2025 was 69.53 yen, compared to 155.48 yen in Q1 FY2024.

Outlook and guidance

• Full-year forecasts remain unchanged: net sales of 1,350.0 billion yen, operating profit of 400.0 billion yen, and net profit of 300.0 billion yen for FY25.

• Dividend forecast for FY25 is 129 yen per share, down from 211 yen in FY24.

• Hardware and software unit sales are projected to decline 14.0% and 17.4% year-over-year, respectively.

• Focus remains on maximizing Switch hardware and software sales with new releases and platform engagement.