Sony (NYSE:SONY) raised its fiscal 2026 earnings forecast after record second-quarter sales and operating income, driven by stronger performance in its gaming and entertainment businesses.
Sales for the quarter ended Sept. 30 rose 10% from a year earlier to 3,429.4 billion yen, while operating income climbed 45% to 622.3 billion yen, Chief Financial Officer Lin Tao said on the earnings call. Net income increased 44% to 449.6 billion yen.
Sony raised its full-year sales forecast by 4% from its previous outlook to 13 trillion yen. It increased its operating income forecast by 9% to 1.87 trillion yen and its net income forecast by 10% to 1.33 trillion yen. The company now expects operating cash flow of 1.6 trillion yen.
Tao said Sony recorded more than 1 trillion yen in operating income in the first half, the first time it had reached that level in either half of a fiscal year. She noted that some first-half profit came from U.S. tariff refunds and demand being brought forward.
PlayStation engagement supports gaming outlook
Sales in the Game & Network Services segment rose 9% to 1,208.5 billion yen, and operating income increased 83% to a second-quarter record of 220.1 billion yen. Excluding one-time losses recorded a year earlier, operating income rose 29%.
Sony lifted its full-year gaming sales forecast by 6% to 4.83 trillion yen and its operating income outlook by 6% to 700 billion yen. Tao attributed the higher profit forecast primarily to stronger third-party software and network service sales and lower costs.
PlayStation monthly active users reached 127 million accounts in September, up 7% from a year earlier, while total playtime for the quarter increased 4%. Tao said stronger engagement helped third-party software sales exceed expectations.
Cumulative sales of Marvel’s Wolverine, released in September, exceeded 2.4 million units, Tao said. Sony also postponed the release of God of War Laufey to the first quarter of the next fiscal year to continue developing the game.
Tao said Sony had offset higher memory prices for PlayStation 5 hardware through promotional and pricing adjustments and cost reductions. The company expects hardware profitability for the current fiscal year to remain on par with the prior year and has aligned with suppliers on the quantity of memory needed for projected hardware sales next fiscal year.
Although new PS5 unit sales are gradually declining as the console ages, Tao said development of Sony’s next-generation platform is progressing on schedule. She added that some related costs would fall in the next fiscal year because of differences in timing.
Music and pictures raise forecasts
Music sales increased 10% to 598.4 billion yen, while operating income rose 6% to 122.8 billion yen, a second-quarter record. Tao said increased streaming revenue helped offset the absence of a hit theatrical release that contributed in the prior-year quarter. Sony raised its full-year music operating income forecast by 6% to 445 billion yen.
In pictures, sales rose 48% to 513.7 billion yen and operating income reached 92.6 billion yen, approximately seven times the year-earlier level. Sony raised its full-year pictures operating income forecast by 33% to 200 billion yen, primarily because of higher theatrical revenue.
Tao said Spider-Man: Brand New Day, released in July, generated more than $2.5 billion in cumulative worldwide box-office revenue. Following its release, unit sales of related games approximately doubled, she said.
Sony also plans to introduce a dedicated Crunchyroll hub on the PS5 home screen next spring. Tao said the feature is intended to help users discover related games and anime.
Sensor market and cybersecurity risks
Sales in Sony’s image sensor segment declined 6% to 577.6 billion yen, but operating income rose 12% to a quarterly record of 154.6 billion yen. Sony increased its full-year segment operating income forecast by 7% to 450 billion yen.
Tao said the smartphone market declined approximately 20% year over year during the quarter, with a sharper decline in mid-range and lower-end phones than in high-end devices. Sony’s mobile sensor shipments generally tracked the market, she said.
Operations at the Kumamoto Technology Center have recovered to pre-earthquake levels after damage from the July 28 earthquake, Tao said. Sony included an approximately 16 billion yen loss in its fiscal-year forecast, primarily for damaged work-in-progress inventory, equipment repairs and lost opportunities during production downtime.
Asked about cyberattacks, Tao said Sony was aware of a series of incidents and apologized to affected customers and stakeholders. She declined to provide incident details, but said the company was investigating an attack involving PlayStation accounts and had taken measures for affected customers.
Sony also recorded an additional loss of approximately 30 billion yen related to Sony Honda Mobility during the quarter. Tao said that substantially completed recognition of losses associated with downsizing the venture’s operations.
About Sony (NYSE:SONY)
Sony Group Corporation is a Japan-based global entertainment and technology company, founded in Tokyo in 1946 by Masaru Ibuka and Akio Morita. Initially known as Tokyo Tsushin Kogyo, the company adopted the name Sony in 1958.
Sony’s businesses include video games and network services through PlayStation; music recording and publishing; film and television production and distribution; consumer electronics, including televisions and cameras; and imaging and sensing technologies, including image sensors.
