Sony (SONY) Q2 2026 earnings review
Sony raises profit outlook, but second-half sales plan is flat
Spider-Man and PlayStation software carried Sony to a record quarter, while its sensor and electronics sales shrank. Sales rose 10% and operating profit 45%, helped by last year's write-downs and a weaker yen. Finance chief Lin Tao raised the full-year profit plan, but by our math it leaves second-half sales no higher than a year ago.
| Sales | ¥3,429 billion +10% from a year ago |
|---|---|
| Operating profit | ¥622 billion +45%; +28% excluding last year's write-downs |
| Full-year operating profit outlook | Raised ¥150 billion to ¥1,870 billion, 29% above last year |
| Second-half sales implied by the plan | ¥6.73 trillion −0.3% from a year ago, by our math |
⚖️ Verdict: 🟢 Bullish
The story got better because Sony raised its full-year operating profit plan by 150 billion yen on films, game software and music streaming. One caution: the raised plan still has the operating margin falling back near 11% in the second half. Tao said some first-half profit came from tariff refunds and demand pulled forward.
The question now is whether the second-half plan is cautious or a true slowdown. If cautious, the December quarter will come in above what the plan implies. If not, weaker phone sensors and a stronger yen will eat what films and games earned. February's December-quarter results will tell.
🐂 Bull Case
Spider-Man Made Pictures the Quarter's Biggest Profit Gain
Pictures, Sony's film and television unit, earned the lowest return on capital of the group's five businesses last year, at 5%, because its profit rests on a few big releases each year.
Spider-Man: Brand New Day, released in July, took more than $2.5 billion at the box office, which finance chief Lin Tao called "the highest-grossing film of all time in North America". Theatrical revenue reached $1.28 billion, from $114 million a year ago.
- Pictures operating profit: ¥92.6 billion, from ¥13.9 billion
- Operating margin, in dollars: 18.0%, from 4.0%
- Full-year Pictures profit plan: raised ¥50 billion to ¥200 billion
The film is the largest single piece of the group's profit jump, because Pictures added ¥78.7 billion of the ¥193.4 billion increase. A hit this size does not repeat on schedule, but Tao said it also "generates significant revenue opportunities in the future through post-theatrical distribution windows".
What to watch: Pictures operating profit in the December quarter, when Jumanji: Open World opens. By our math the plan leaves about ¥83 billion for the second half, below the ¥100 billion of a year ago before a write-down. A higher figure would mean the later windows pay sooner than planned.
PlayStation Earns More From Fewer Consoles
Sony's games unit, G&NS, sells PlayStation 5 consoles and then earns from the games, add-on content and PlayStation Plus subscriptions that owners buy afterwards. The console is now in its sixth year.
- PlayStation 5 consoles sold: 2.6 million, from 4.0 million a year ago
- Console revenue: down 5%, so Sony earned more per console after it adjusted promotions and pricing
- Network services revenue, mainly PlayStation Plus: up 19%
- Digital full-game sales: up 23%, helped by Marvel's Wolverine, 2.4 million copies in 50 days
Excluding last year's write-downs at the Bungie studio, operating profit rose 29%, and the yen contributed only ¥8.7 billion of the gain. Finance chief Lin Tao said: "Although new PS5 unit sales are gradually declining as expected in this stage of the console life cycle, the PS platform continues to expand and grow in a stable manner." The software numbers support that: players bought 88 million full games, 10% more than a year ago.
What to watch: first-party software sales in the March quarter, now that God of War Laufey has moved into next fiscal year and the plan assumes a "decrease in sales of first-party game software titles". If network and third-party revenue keep rising without it, the unit's profit no longer depends on Sony's release calendar.
Streaming Lifted Music to a Record Quarter
Sony Music earns most of its revenue when people stream songs on Spotify and similar services. Finance chief Lin Tao said streaming revenue rose 7% in dollars for recorded music and 6% for publishing, the business that licenses the words and music of songs.
- Recorded-music streaming revenue: ¥242 billion, up 16% in yen
- Choosin' Texas by Ella Langley: more than 1.8 billion streams and 26 weeks at No. 1 on the Billboard singles chart
Sony raised the unit's full-year profit plan by ¥25 billion on "higher revenues from streaming services". Profit still grew more slowly than sales, because Visual Media & Platform, its Japanese anime and games arm, lost last year's Demon Slayer film income.
What to watch: Visual Media & Platform revenue in the December quarter, which fell 15% this quarter. If it keeps shrinking while streaming climbs, Music's profit will keep lagging its sales.
🐻 Bear Case
Sony's Own Plan Has Second-Half Sales Flat
Sony gives one full-year forecast and updates it each quarter, so the second half is whatever the full year leaves after the first. Finance chief Lin Tao raised the sales plan to ¥13.0 trillion and the operating profit plan to ¥1.87 trillion.
Subtract the first half and the plan reads differently. By our math it leaves ¥6.73 trillion of sales for the second half, slightly below the same period a year ago, after a first half that grew 9%.
- Second-half operating profit implied: ¥771 billion, an 11.5% margin against 17.5% in the first half
- Image sensor sales implied for the second half: down 9% from a year ago
Tao gave the reasons separately: "tariff refunds and demand being brought forward" lifted the first half, God of War Laufey moved into next fiscal year, the phone market shrank, and the plan assumes a stronger yen. Tao spoke of "record highs" and of plans to "maintain this momentum", yet the numbers have that momentum stopping in October.
What to watch: December-quarter sales against the ¥3.71 trillion of a year ago, the year's biggest quarter. Sales above that would mean the plan was cautious, as the July plan proved to be.
Sensor Profit Rose Only Because of the Yen
Sony's chip unit, I&SS, makes image sensors, mostly for smartphone cameras, so its sales follow phone demand. Finance chief Lin Tao said smartphone-market "growth declined approximately 20% year-on-year mainly due to the impact of conditions in the memory market", as memory prices pushed up the cost of phones.
- Segment sales: ¥578 billion, down 6%, or about 13% at last year's exchange rates by our math
- Operating profit: up ¥16.4 billion to a record ¥154.6 billion, with the yen contributing ¥25.9 billion
- Wafers started: 147,000, 5% fewer than a year ago, using 92% of capacity
- Kumamoto earthquake: about ¥16 billion of losses built into this year's plan
So the record profit came from the exchange rate; at last year's rates it fell about 7% by our math. The company still raised the unit's profit plan by ¥30 billion, citing lower costs and the yen. But the plan has second-half sensor sales down 9%, and Tao said shipments will split between the halves differently "due to supply chain inventory levels and changes in customer product cycles".
What to watch: wafer starts in the March quarter against the 148,000 Sony plans for December. A further cut would mean customers are still working down inventory rather than ordering.
Operating Cash Flow Will Fall as Profit Rises
Sony raised its operating cash flow plan, but it still sits 19% below last year's result while the operating profit plan sits 29% above it. Profit and cash are moving in opposite directions, and the first half shows why.
- Trade receivables, the money customers owe, since March: up ¥352 billion, or 19%
- Income taxes paid in the first half: ¥252 billion, nearly triple a year earlier
- Net cash since March: down ¥605 billion, including ¥309 billion of debt secured by a music catalog Sony bought for ¥256 billion
Receivables usually follow a big film release and Sony collects them later, so part of the build should reverse. The catalog deal does not: it added ¥543 billion of content assets to a Music unit whose return on capital Sony expects to slip to 9.6% this year.
What to watch: full-year operating cash flow against the ¥1.6 trillion plan, reported in May. A figure well below it would mean film receivables are not the only thing holding cash back.
Tariff Refunds, Not Sales, Lifted Electronics Profit
Sony's electronics unit, ET&S, sells cameras, headphones, televisions and phones. Its sales slipped 1% to ¥568 billion. At last year's exchange rates they fell about 6% by our math, as unit sales dropped in cameras and other lines.
Operating profit still rose 5% to ¥64.1 billion, and finance chief Lin Tao credited "U.S. tariff refunds" without sizing them. The yen added ¥6.1 billion, so at last year's rates profit fell by our math, before the refunds. Inventory rose 18% from a year ago while sales shrank, which sits oddly with Tao's claim of "expanding market share, led by new products".
What to watch: ET&S inventory at the end of December, the quarter when it normally clears. Stock near ¥440 billion after the holiday season would mean the unit built product its customers did not want.
👓 Other Themes
Sony Books a Final Loss on Its Car Venture
Sony Honda Mobility, the electric-car venture with Honda, cost Sony another ¥30 billion in the quarter, booked in the All Other segment. Finance chief Lin Tao said this "substantially completed the recognition of losses associated with the downsizing of that company’s operations". The charge explains most of the segment's ¥21.9 billion operating loss, against ¥2.9 billion a year ago, and it should not recur if Tao is right.
💲 Other KPIs
Down 14% from a year ago, to 5.0% of sales. A year ago the ratio was 6.4%. Spending has fallen for two quarters after holding near ¥198 billion through last year's second half. The full-year plan, ¥710 billion, sits ¥52 billion below last year, and Sony did not say which units cut.
Down 2.4% from a year ago, so profit per share grew faster than profit. Sony spent ¥263 billion on buybacks in the first half, ¥44 billion more than a year earlier. Cancelling treasury stock does not change the count, but it cut issued shares to 5,965 million.
Up 24% since March. Contract liabilities are cash customers have paid for games, subscriptions and content not yet delivered, so they tend to lead reported revenue. The ¥141 billion rise outpaced the 9% growth in first-half sales.
🔮 Guidance
Raised. The plan now has sales up 4% this fiscal year, after a ¥500 billion increase. By our math that leaves ¥6.73 trillion for the second half, 0.3% below a year ago. The first half grew 9%. The plan assumes a yen at 153 per dollar, against 159 in the quarter; a delayed game and weaker sensor demand explain the rest.
Raised. The plan has operating profit 29% above last year after a ¥150 billion increase. Pictures, games, sensors and music all moved up; electronics did not. By our math the second half gets ¥771 billion, a margin near 11%. The first half ran at 17.5%. Tao said the effect of tariff refunds and memory prices on the plan "remains largely unchanged" from July.
Raised. Pre-tax profit follows operating profit up ¥150 billion, so the plan assumes little from financial income or from the Sony Financial Group stake, which Sony now carries at market value rather than by its share of earnings.
Raised. Profit to shareholders is planned 29% above last year, after a ¥120 billion increase. By our math the second half gets ¥538 billion, 17% above a year ago, a bigger rise than the plan gives operating profit, because last year's second half carried write-downs and a heavier tax charge.
Raised, by ¥100 billion. The plan still sits 19% below last year's figure, while operating profit climbs 29%. Profit and cash point in opposite directions. By our math the second half must deliver ¥945 billion, 36% below the same period a year ago.
Unchanged. The plan keeps the dividend at ¥35 for the year, up 40%. Sony pays the interim half on December 4. It also bought back shares in the first half, so cash returned to shareholders exceeds the dividend.
Raised. The games plan has profit at ¥700 billion, 51% above last year. Sales move up ¥290 billion on third-party titles and network services, partly offset by a first-party title that slipped into next year. By our math the second half gets ¥278 billion, a margin near 10%.
Raised. Music's profit plan moved up ¥25 billion on streaming, to ¥445 billion. That still sits just under last year, which included a one-off gain on the Peanuts stake. By our math the second half gets ¥216 billion, about 10% above a year ago once that gain is excluded.
Raised. Pictures' profit plan rose 33% to ¥200 billion on Spider-Man's theatrical run. The unit earned ¥117 billion in the first half. By our math the plan leaves ¥83 billion for the second half, below the ¥100 billion of a year ago before a write-down at the Pixomondo effects studio. Either the plan is cautious or the film's later windows pay out mostly next year.
Unchanged. Electronics keeps a profit plan of ¥150 billion, 5% below last year. Sales stay at ¥2.25 trillion. By our math the second half gets ¥43 billion, 21% below a year ago, a steeper fall than the first half showed. The plan assumes a stronger yen than the quarter had.
Raised. The sensor plan moved up ¥30 billion on lower costs and the yen, despite about ¥16 billion of earthquake losses at the Kumamoto plant. Sales stay near ¥2.12 trillion. By our math the second half gets sales 9% below a year ago and profit of ¥173 billion. The raise is a cost and currency story; demand is not in it.
Raised, by ¥20 billion. Most of the increase is in content and other intangible assets, up ¥30 billion, while lease additions fall ¥15 billion. Spending on sensor factories goes the other way. Sony plans ¥240 billion of fixed-asset additions in the sensor unit, below last year's ¥265 billion, so the plan adds no capacity into a weaker phone market.
❓ Key Questions
How much profit came from tariff refunds?
Finance chief Lin Tao credited the electronics unit's profit rise to U.S. tariff refunds and said some first-half group profit came from refunds and demand pulled forward, without giving a figure. The size decides how much of the first half repeats.
Why does cash flow fall while profit rises 29%?
The plan has operating cash flow 19% below last year. Sony has not said how much comes from film receivables, the music catalog purchase, higher tax payments or content spending, and each has a different meaning for next year.
Has Sony fixed the price of next year's console memory?
Tao said Sony aligned with suppliers on the quantity of memory for next year's console sales. Tao did not mention price, and memory prices are the reason the phone market shrank this quarter.
How many paid subscribers does Crunchyroll have now?
The anime service last reported more than 21 million paying subscribers at March 31, 2026, and Sony says it may not update the figure. The anime push, including a Crunchyroll hub on the PS5 home screen, needs a number to measure it by.
What does the God of War delay cost this year's plan?
Sony moved God of War Laufey into next fiscal year and said first-party software sales will fall as a result, but it did not size the effect on the ¥700 billion games profit plan or on next year's release schedule.