Nintendo Co. (7974) Q1 2027 earnings summary

Executive summary

• Net sales declined 9.5% year-over-year to 517.8 billion yen, but operating profit surged 150.5% to 142.6 billion yen, driven by strong software sales and a significant reduction in cost of sales from IEEPA tariff refunds.

• Ordinary profit rose 115.1% to 206.2 billion yen, and net profit increased 53.5% to 147.4 billion yen, with net profit ratio improving by 11.7 points to 28.5%.

• Hardware sales for Nintendo Switch 2 and Nintendo Switch declined sharply, but software sales for both platforms increased, supported by new releases and evergreen titles.

• Digital sales grew 90.0% year-over-year to 132.7 billion yen, now accounting for 61.5% of total software sales.

• IP-related business sales more than doubled to 34.8 billion yen, driven by The Super Mario Galaxy Movie.

Financial highlights

• Gross profit increased 52.0% year-over-year to 281.3 billion yen, with gross margin rising 22.0 points to 54.3%.

• SG&A expenses rose 8.2% to 138.8 billion yen, mainly due to higher R&D and foreign currency expenses, while advertising expenses fell.

• Operating profit margin improved by 17.6 points to 27.5%.

• Non-operating income, including foreign exchange gains, increased 62.3% to 63.7 billion yen.

• Comprehensive income rose 120.7% year-over-year to 167.8 billion yen.

Outlook and guidance

• Full-year forecast remains unchanged: net sales expected at 2,050.0 billion yen, operating profit at 370.0 billion yen, ordinary profit at 430.0 billion yen, and net profit at 310.0 billion yen.

• Hardware sales for Nintendo Switch 2 forecasted at 16.5 million units (-16.9%), software at 60 million units (+23.2%).

• Assumptions include exchange rates of 150 yen/USD and 175 yen/euro, and 100 billion yen impact from rising component prices and tariffs.

• No changes to the original financial forecast; focus remains on expanding Switch 2 installed base and software lineup.