Sankyo (6417) Q4 2025 earnings summary

Executive summary

• Achieved record-high profit for FY3/2025, driven by significant growth in the high-margin pachislot machines business, offsetting sluggish pachinko demand.

• Captured top market share in both pachinko and pachislot markets for the first time in the industry.

• Pachislot business expanded to one-third of segment composition, with sales volume up 3.6x and net sales up 4x vs. five-year average.

• Achieved record high operating income to net sales ratio of 38.4% and return on equity of 20.2%.

Financial highlights

• Net sales: ¥191.8B (down 3.7% YoY); Operating income: ¥73.6B (up 1.5% YoY); Net income: ¥54.0B (up 0.4% YoY); EPS: ¥245.93 (up ¥42.12 YoY).

• Gross margin improved to 58.6% (+3.0pt YoY); Operating margin rose to 38.4% (+2.0pt YoY).

• Pachislot net sales nearly doubled to ¥63.5B (+97.4% YoY); operating income up 133.4% YoY.

• Pachinko net sales fell 26.7% YoY to ¥107.7B; operating income down 28.4% YoY.

• Ball bearing supply business net sales up 3.4% YoY; operating income down 7.5% YoY.

Outlook and guidance

• FY3/2026 net sales forecast: ¥185.0B (down 3.6% YoY); operating income: ¥63.0B (down 14.4% YoY); net income: ¥44.0B (down 18.5% YoY); EPS: ¥216.33.

• Planned annual dividend for FY2026 is ¥90 per share, targeting a payout ratio of 41.6%.

• Sales volume targets: 230,000 pachinko machines and 132,000 pachislot machines.

• Ball bearing supply business sales projected to drop 48.9% YoY.

• Share buyback of up to 30M shares (13.66% of shares) or ¥60B announced.