Nintendo Co. (7974) Q2 2026 earnings summary

Executive summary

• Net sales for the first half of FY26 rose 110.1% year-over-year to ¥1,099.6 billion, driven by the successful launch of Nintendo Switch 2 and strong hardware sales.

• Operating profit increased 19.5% to ¥145.2 billion, while net profit jumped 83.1% to ¥198.9 billion, reflecting higher sales and a ¥32.3 billion gain on sale of investment securities.

• Ordinary profit surged 60.5% to ¥236.0 billion, aided by foreign exchange gains and higher equity method profits.

• The Americas accounted for the largest regional sales share, with 79.5% of total sales generated outside Japan.

• Comprehensive income reached ¥191.8 billion, up 120.6% year-over-year.

Financial highlights

• Nintendo Switch 2 hardware sold 10.36 million units and software 20.62 million units since launch in June 2025.

• Gross profit rose 25.3% to ¥398.5 billion, but gross margin declined by 24.6 points to 36.2% due to a higher proportion of lower-margin hardware sales.

• SG&A expenses increased 29.0% to ¥253.2 billion, mainly from higher advertising and R&D costs for Switch 2.

• Digital sales fell 2.8% to ¥155.5 billion, with the digital sales ratio down 1.8 points to 54.5%.

• IP-related business sales declined 12.4% to ¥33.3 billion, mainly due to lower revenue from The Super Mario Bros. Movie.

Outlook and guidance

• Full-year net sales forecast revised up to ¥2,250.0 billion, with operating profit forecast raised to ¥370.0 billion and profit attributable to owners of parent to ¥350.0 billion.

• Switch 2 hardware sales forecast increased by 4 million units to 19 million; software forecast up by 3 million to 48 million units.

• Switch hardware forecast reduced to 4 million units, but software forecast increased to 125 million units.

• Dividend policy revised, with annual dividend forecast increased to ¥181 per share.

• Forecasts incorporate current US tariff rates and updated exchange rate assumptions.