Sega Sammy Holdings Inc.

No exact consolidated revenue or EPS figure was stated in the transcript. Management said Q1 sales were generally at expected levels and operating income was better than expected, while adjusted EBITDA was generally in line due to non-operating FX losses. They cited an approximately JPY2.9 billion foreign exchange loss in Q1, mainly from revaluation and settlement of foreign-currency receivables/payables and Rovio-related USD assets. On cash flow, approximate Q1 figures were operating cash flow of minus JPY11.7 billion, investing cash flow of minus JPY19.5 billion, financing cash flow of minus JPY17.9 billion, and total cash flow of negative JPY50.6 billion including a minus JPY1.3 billion translation adjustment. Cash and deposits declined due to the Stakelogic and GAN acquisitions, goodwill increased, and 20 million treasury shares were cancelled, leaving 11 million treasury shares at quarter-end. For guidance, management said they expect full-fledged results from Q2 onward as mainstay titles roll out, but the exact impact of Stakelogic and GAN on the full-year forecast is still under review. They also said P5X is in guidance at more than JPY1 billion of monthly sales, while Sonic Rumble will contribute little this fiscal year because launch has been delayed until after winter and marketing spend will be high.

Takahashi’s message was that Q1 was a solid start rather than a breakout quarter, with the business broadly tracking plan and several segments beating internal expectations. He emphasized that the real earnings contribution should come from Q2 onward as key titles such as Tokyo Revengers, Sonic Racing, Football Manager, and other mainline releases hit the market. His tone was cautiously constructive: confident in the pipeline, but careful about compliance timing in pachislot and about not changing the plan prematurely.

The financial commentary centered on mix, timing, and acquisition effects. Takahashi highlighted about JPY2.9 billion of foreign exchange loss in non-operating items, and said adjusted EBITDA was only in line because of that hit even though operating income exceeded expectations. He also walked through cash flow estimates of minus JPY11.7 billion from operations, minus JPY19.5 billion from investing, and minus JPY17.9 billion from financing, with overall cash flow at negative JPY50.6 billion including a minus JPY1.3 billion FX translation effect. He noted that cash and deposits fell because of the Stakelogic and GAN acquisitions, while goodwill rose and treasury stock was reduced through repurchases and the cancellation of 20 million shares.

Analysts pressed on several pressure points: pachislot compliance approval rates, the weakness in repeat game sales, the softness at Rovio, and the earnings impact from delaying Sonic Rumble. Management said pachislot compliance remains low at about 13% to less than 20%, though it may be improving slightly, and stressed they will prioritize major titles while keeping backup development options open. On games, they said repeat sales were weak across the market in recent months, possibly affected by Switch 2 timing, but July trends had returned to plan. On Rovio, they acknowledged sales and profit are below plan because Angry Birds titles remain weak, but said higher ad spending and a major Angry Birds 2 update should help recovery from Q2 onward.