Notice of Extraordinary Loss and Business Performance Variance

Overview of Business Performance

Sega Sammy Holdings recorded an impairment loss of approximately 18.7 billion yen for the fiscal year ending March 2026. This was due to worsening business conditions for the acquired Stakelogic business, including a reduction in operations in the Netherlands which resulted in an impairment loss of about 700 million yen. Revenue was 487,542 million yen, a 0.5% decrease from the previous year, but operating profit increased to 47,128 million yen. Net loss was reduced to 5,756 million yen, indicating an improvement in profitability driven by forex gains and cost reductions.

Reasons for Variance and Future Outlook

The difference between actual results and forecasts primarily stems from the fact that while revenue was in line with expectations, operating profit exceeded forecasts due to reductions in operating expenses and stock-based compensation expenses. The impairment loss related to Stakelogic exceeded initial estimates, but the recognition of adjustment for corporate taxes contributed to the reduction in net loss. Going forward, the company plans to respond to changing business environments while continuing to manage costs and scale down operations.