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Sega Sammy returns to profit as Q1 revenue rises 17.3%

Gaming and pachislot growth helped lift first-quarter earnings as the company kept its full-year guidance unchanged.

2 min read
sega
Key Points
Net sales increased 17.3% to JP¥95.03bn (US$600.06m) in Q1
Operating income reached JP¥2.38bn, compared with a loss a year earlier
Full-year guidance was maintained despite stronger-than-expected first-quarter results

Sega Sammy returned to profit in the first quarter of fiscal 2027 after revenue growth across its entertainment, pachislot and gaming businesses offset a quieter release schedule for major video game titles. The company said first-quarter performance was generally in line with expectations, while operating income and adjusted EBITDA exceeded internal forecasts.

For the three months ended June 30, net sales increased 17.3% year over year to JP¥95.03bn. Operating income improved to JP¥2.38bn from an operating loss of JP¥519m a year earlier, while ordinary income reached JP¥3.61bn compared with a loss of JP¥2.12bn in the prior-year period. Profit attributable to owners of the parent totaled JP¥2.17bn, reversing a JP¥3.39bn loss recorded a year earlier. Adjusted EBITDA climbed 437.0% to JP¥7.85bn.

The Entertainment Contents segment generated net sales of JP¥68.59bn, up 1.1%, with ordinary income rising 16.7% to JP¥5.86bn. Catalogue sales of full-game titles, Rovio Entertainment's operations and licensing revenue met expectations, while amusement machine sales exceeded expectations. The company also benefited from distribution revenue related to the Sonic films and the theatrical release of Detective Conan: Fallen Angel of the Highway, which has generated more than JP¥13.6bn at the Japanese box office since its April debut. 

The Pachislot & Pachinko Machines business delivered the strongest improvement among the group's established segments. Net sales rose 58.5% to JP¥17.56bn, while ordinary income recovered to JP¥2.86bn from a loss of JP¥3.63bn in the prior year, supported by sales of Smart Pachislot Big Dream The Golden Pusher and continued demand for titles released during the previous fiscal year.

The Gaming Business also expanded significantly following the inclusion of GAN and Stakelogic, with segment sales increasing 491.5% to JP¥8bn. However, the business reported an ordinary loss of JP¥1.8bn as integration of the acquired companies continued. The company noted that Paradise City’s casino operations performed steadily during the quarter, supported by Japanese VIP and mass-market customers. Looking ahead, Sega Sammy said it will continue developing its omnichannel gaming strategy while advancing GAN's platform migration and expanding Stakelogic's online gaming portfolio.

Despite the stronger start to the year, Sega Sammy left its full-year guidance unchanged. The company continues to forecast net sales of JP¥510bn, operating income of JP¥44.5bn and profit attributable to owners of the parent of JP¥32.5bn for the fiscal year ending March 31, 2027.

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The company's largest full-game releases remain scheduled for the second half of the fiscal year

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