Nintendo Co. (7974) Q1 2026 earnings summary

Executive summary

• Net sales surged 132.1% year-over-year to 572.3 billion yen, driven by the global launch of Nintendo Switch 2 and strong hardware demand.

• Operating profit rose 4.4% to 56.9 billion yen, while net profit increased 18.6% to 96.0 billion yen, aided by a 32.3 billion yen gain on sale of investment securities.

• Nintendo Switch 2 achieved record-breaking sell-through of 3.5 million units in four days and over 6 million units in seven weeks post-launch.

• Mario Kart World sold 5.63 million units at launch, with strong performance from both new and legacy software titles.

Financial highlights

• Gross profit increased 21.4% year-over-year to 185.1 billion yen, but gross margin dropped 29.5 points to 32.3% due to a higher hardware sales mix and lower margin on Switch 2 hardware.

• SG&A expenses rose 30.9% to 128.2 billion yen, mainly from higher advertising and R&D costs for Switch 2, but SG&A-to-sales ratio fell 17.3 points to 22.4%.

• Ordinary profit declined 15.6% to 95.8 billion yen, impacted by lower foreign exchange gains.

• Digital sales fell 13.5% to 69.8 billion yen, representing 59.3% of total software sales.

• Profit per share was 82.48 yen, up from 69.53 yen year-over-year.

Outlook and guidance

• Full-year net sales forecast remains at 1,900.0 billion yen (+63.1%), with operating profit projected at 320.0 billion yen (+13.3%) and net profit at 300.0 billion yen (+7.6%).

• Dividend forecast raised to 129 yen per share.

• U.S. tariffs are assumed to persist for the fiscal year, but no significant impact on earnings forecast is expected.

• Focus on expanding Nintendo Switch 2 user base and maximizing software sales with new releases.