Nintendo : Financial Results Explanatory Material (with Notes)（1.1MB）

Financial Results Explanatory Material

Fiscal Year Ended March 2024

Nintendo Co., Ltd.

May 7, 2024

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Nintendo Co., Ltd.

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1. Consolidated Financial Results and Outlook

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• We would like to talk about the consolidated financial results for the fiscal year ended March 2024, and the consolidated financial forecast for the fiscal year ending March 2025.

Nintendo Co., Ltd.

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Consolidated Financial Highlights

FY23 FY24 Comparison

Net sales	1,601.6	bn yen	1,671.8	bn yen	+4.4	%
Operating profit	504.3 bn yen	528.9	bn yen	+4.9 %
Operating profit ratio	31.5	%	31.6	%	+0.1 pt.
Ordinary profit	601.0	bn yen	680.4	bn yen	+13.2	%
Net profit	432.7	bn yen	490.6	bn yen	+13.4	%
Net profit ratio	27.0	%	29.3	%	+2.3	pt.

・Net profit: Profit attributable to owners of parent ・FY = Fiscal Year

FY24 indicates the period between April 1, 2023 and March 31, 2024.

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• Year-on-year,sales increased by 4.4% to 1,671.8 billion yen, operating profit rose by 4.9% to 528.9 billion yen, ordinary profit rose by 13.2% to 680.4 billion yen, and profit attributable to owners of parent rose by 13.4% to 490.6 billion yen.

Nintendo Co., Ltd.

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Consolidated Sales

	FY23	FY24	Comparison
Net sales	1,601.6 bn yen	1,671.8	bn yen	+4.4 %
Dedicated video game platform*1	1,544.9 bn yen	1,567.8	bn yen	+1.5 %
Mobile, IP related income, etc.*2	51.0 bn yen	92.7	bn yen	+81.6 %
Other*3	5.6 bn yen	11.2	bn yen	+98.5 %

*1 Includes hardware, software (including downloadable versions of packaged software, download-only software, add-on content, and Nintendo Switch Online) and accessories.

*2 Includes income from visual content, smart-device content and royalties. *3 Includes merchandise sales at official stores such as Nintendo TOKYO

as well as playing cards.

Effect of changes in foreign exchange rates on net sales: +94.4 billion yen

FY24 Regional Sales Ratio

9.7%
21.7%			Japan
24.3%			The Americas
			Europe
44.3%			Other

Proportion of sales outside of Japan: 78.3%

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• Next, we will give a breakdown of consolidated sales.
• Looking at sales in our dedicated video game platform business, unit sales of Nintendo Switch hardware and software both decreased year-on-year. However, net sales increased by 1.5% to 1,567.8 billion yen, due in part to the continued depreciation of the yen in foreign exchange markets, the increase in proportion of hardware sales accounted for by Nintendo Switch
  - OLED Model, which has a higher unit price, and the growth in sales of add-on content not counted in software unit sales.
• Also, overall sales in our mobile and IP related business increased by 81.6% year-on-year to 92.7 billion yen, bolstered by movie-related sales and an increase in royalty income.
• Changes in exchange rates over the last fiscal year resulted in a year-on- year increase in the overall sales amount of 94.4 billion yen.

Nintendo Co., Ltd.

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Gross Profit

		FY23	FY24	Comparison
Gross profit		885.4 bn yen	954.3	bn yen	+7.8 %
Gross profit ratio	55.3 %		57.1	%	+1.8 pt.
		Main Variable Factors
		FY23		FY24	Comparison
Proportion of hardware	45.6 %		43.6		-2.0pt.
sales*1			%
Proportion of first-party	79.1 %		81.2		+2.1 pt.
software sales*2		%
Proportion of digital	48.2 %		50.2		+2.0 pt.
sales*2			%
Average	1 USD	135.38 yen		144.52	yen	+9.14 yen
exchange rate	1 Euro	140.82 yen		156.73	yen	+15.91 yen
*1 Proportion of sales to total dedicated video game platform sales				5
*2 Proportion of sales to total dedicated video game platform software sales

• With the increase in sales, gross profit rose by 7.8% year-on-year to 954.3 billion yen.
• Our gross profit margin increased by 1.8 percentage points year-on-year to 57.1%. This was due to factors such as a proportional decrease in hardware sales and a proportional increase in first-party software sales and digital sales relative to overall sales.

Nintendo Co., Ltd.

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Selling, General and Administrative Expenses / Operating Profit

	FY23	FY24	Comparison
SG&A expenses	381.0 bn yen	425.3	bn yen	+11.6 %
SG&A expenses-to-sales ratio	23.8 %	25.4	%	+1.6 pt.
Operating profit	504.3 bn yen	528.9	bn yen	+4.9	%
Operating profit ratio	31.5 %	31.6	%	+0.1	pt.

・SG&A expenses: Selling, general and administrative expenses

Effect of changes in foreign exchange rates on operating profit: approx. +35.0 billion yen

	FY23	FY24	Comparison
Research and development	110.0 bn yen	137.7		+25.2 %
expenses	bn yen
Advertising expenses	94.9 bn yen	104.3	bn yen	+9.8 %

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• Selling, general, and administrative expenses (SG&A expenses) rose by 11.6% year-on-year to 425.3 billion yen, mainly due to an increase in foreign currency-denominated expenses caused by the depreciation of the yen, as well as a rise in advertising expenses and research and development expenses. In addition, the ratio of SG&A expenses to sales increased by 1.6 percentage points to 25.4%.
• Despite the rise in SG&A expenses, operating profit rose by 4.9% year-on- year to 528.9 billion yen and the operating profit margin rose by 0.1 percentage points to 31.6% due to increased gross profit.
• Changes in exchange rates over the last fiscal year resulted in a year-on- year increase in operating profit of approximately 35.0 billion yen.

Nintendo Co., Ltd.

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Ordinary Profit and Net Profit

		FY23	FY24	Comparison
Non-operating income	97.3 bn yen	152.0	bn yen	+56.2 %
	included foreign exchange gains	39.7 bn yen	61.5	bn yen	+55.1 %
Non-operating expenses	0.6 bn yen	0.4	bn yen	-22.2%
Ordinary profit	601.0 bn yen	680.4	bn yen	+13.2 %
Net profit	432.7 bn yen	490.6	bn yen	+13.4 %
Net profit ratio	27.0 %	29.3	%	+2.3 pt.
・Net profit: Profit attributable to owners of parent
	Exchange rate	FY23	FY24	Comparison
	(3/31/2023)	(3/31/2024)
	1 USD	133.00 yen	151.34	yen	+18.34 yen
	1 Euro	144.67 yen	163.31	yen	+18.64 yen
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• Ordinary profit increased by 13.2% year-on-year to 680.4 billion yen, lifted by the increase in operating profit and other factors such as foreign exchange gains resulting from the depreciation of the yen year-on-year and a significant increase in interest income due to the rise in interest rates outside of Japan.
• Year-on-year,profit attributable to owners of parent rose by 13.4% to 490.6 billion yen.

Nintendo Co., Ltd.

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Consolidated Financial Forecast

FY24
FY25
(Actual)	(Forecast)	Comparison

Net sales	1,671.8	bn yen	1,350.0	bn yen	-19.3	%
Operating profit	528.9	bn yen		400.0	bn yen		-24.4	%
Ordinary profit	680.4	bn yen		420.0	bn yen		-38.3	%
Net profit	490.6	bn yen		300.0	bn yen		-38.9	%
・Net profit: Profit attributable to owners of parent
・Assumed exchange rate for FY25: 1 USD = 140 yen, 1 Euro = 155 yen
	FY24
			FY25
Dividend	(Actual)			(Forecast)		Comparison
Annual	211	yen		129	yen		-82	yen
	FY24
			FY25
Nintendo Switch	(Actual)			(Forecast)		Comparison
Hardware	15.70	mil units		13.50	mil units		-14.0	%
Software	199.67	mil units		165.00	mil units		-17.4	%
・Software sales units for FY24 include the quantity bundled with hardware or other products (2.85 million units).		8

• Next, we would like to talk about the consolidated financial forecast for the fiscal year ending March 2025.
• We forecast net sales of 1,350.0 billion yen, operating profit of 400.0 billion yen, ordinary profit of 420.0 billion yen, and profit attributable to owners of parent of 300.0 billion yen. The assumed exchange rates are 140 yen per U.S. dollar and 155 yen per euro.
• If the financial results are as forecasted, the annual dividend will be 129 yen per share.
• Looking at unit sales for the full fiscal year, we forecast Nintendo Switch hardware sales of 13.50 million units and software sales of 165.00 million units.
• Nintendo Switch has entered its eighth year since launch, and while it will be challenging to sustain the same sales momentum as before, we will work to maintain high user engagement with the hardware and invigorate the platform so that more consumers continue to play Nintendo Switch for longer.

Nintendo Co., Ltd.

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2. Business Highlights

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• We would now like to turn to our business highlights.

Nintendo Co., Ltd.

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Sales Status of Nintendo Switch (Sell-In)

FY23 FY24 Comparison

Hardware	17.97		unitsmil	15.70	unitsmil	-12.6%
	Nintendo Switch		6.14		mil	3.86	mil	-37.1%
			Units	units
	Nintendo Switch -		9.22		mil	9.32	mil	+1.1 %
	OLED Model			Units	units
	Nintendo Switch Lite	2.62		mil	2.52	mil	-3.7%
		Units	units
Software			213.96		unitsmil	199.67	unitsmil	-6.7%
	(mil units)			Quarterly Unit Sales Trends			(mil units)
8														80
											66.87mil
6		41.85mil	52.21mil	44.87mil	3.48					60
									35.72mil
4												40
				1.53		2.83					1.27
2				1.86						20
	0.62		0.43		2.15	1.15
						0.47
				0.92				0.34
					0.64		0.60
0					0.46				0
				3.06 mil	3.91 mil	2.94 mil	6.90 mil	1.96 mil
				FY23/Q4	FY24/Q1	FY24/Q2	FY24/Q3	FY24/Q4
		Nintendo Switch		Nintendo Switch Lite			Nintendo Switch - OLED Model			Software

The Legend of Zelda:	Super Mario Bros. Wonder
Tears of the Kingdom
20.61 million units	13.44 million units

Mario Kart 8 Deluxe	Nintendo Switch Sports
8.18 million units	3.51 million units

Number of Million-Seller Titles (FY24)

31 titles

Including 20 Nintendo titles and

11 titles by other software publishers

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• To describe the sales status for Nintendo Switch, we use sell-in, which is unit sales by the Nintendo group to its business partners.
• Unit sales for the entire Nintendo Switch family of systems declined 12.6% year-on-year to 15.70 million units. This breaks down to 3.86 million units of Nintendo Switch, 9.32 million units of Nintendo Switch - OLED Model, and 2.52 million units of Nintendo Switch Lite. Although unit sales decreased year-on-year, sales were stable for a platform in its seventh year since launch.
• Unit sales of software declined 6.7% year-on-year to 199.67 million units. Sales increased for new titles released this fiscal year, with The Legend of Zelda: Tears of the Kingdom, Super Mario Bros. Wonder, and Pikmin 4 each seeing growth. In addition, The Super Mario Bros. Movie, released in April 2023, had a positive impact on sales of Mario related titles. As a result, there were 31 titles that sold over a million copies during the period, including titles from other software publishers.

Note: Sell-in refers to sales by the Nintendo group to outside entities. In addition to units sold to corporate business partners, this number also includes units sold to individual consumers through Nintendo's direct-sales sites or as downloadable software.

Nintendo Co., Ltd.

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