Sony Raises Profit Forecast on Strong Earnings, Driven by Music and Imaging

Sony Group on Tuesday reported a robust rise in second-quarter operating profit, exceeding analyst expectations. The company also announced a share buyback program of up to 100 billion Japanese yen ($648 million), signaling confidence in its future performance.

Sony’s second-quarter results stacked up as follows, compared to LSEG SmartEstimates:

• Revenue: 3.108 trillion Japanese yen vs. 2.985 trillion yen expected
• Operating profit: 429 billion yen vs. 398.44 billion yen expected

Operating profit surged by 10% year-over-year, while revenues increased by 5%. The market reacted positively, with Sony shares jumping more than 6% following the earnings release.

The Japanese technology conglomerate has revised its full-year outlook upwards, projecting an operating profit increase of 100 billion yen, or 8% from its previous guidance. This revision is largely attributed to strong performance in its imaging and sensing solutions, as well as its music segments. Sony also raised its annual revenue forecast by 300 billion yen, or 3%. The company has also revised down its estimated losses from U.S. tariffs to 50 billion yen from 70 billion yen, reflecting improvements in the trade environment.

While earlier impacted by the Trump administration’s global tariff regime initialed in April 2025, the impact has been partially mitigated by the US-Japan trade deal, allowing Sony to improve some of its operating results.

Sony’s music business delivered a standout performance, with profits increasing by 27.65% year-over-year to 115.4 billion yen. The imaging business also shone, with its operating profit jumping nearly 50% to 138.3 billion yen, making it the company’s most profitable segment for the quarter. Within the imaging and sensing solutions segment, Sony has steadily grown to capture more market share in advanced semiconductor products that can be used in smartphones, automotive and industrial systems.

The company also reported solid sales in its game and network services division, driven by the popular PlayStation console. However, profitability in this segment saw a slight decrease, falling 13.26% to 120.4 billion yen, but still represents a major segment for the firm.

While hardware shipments have been robust, Sony’s strategy in the gaming space is increasingly focused on digital distribution and subscription services. The PlayStation Plus subscription service continues to be a major growth driver, generating recurring revenue and enhancing user engagement, but does impact profitability.

Despite the overall strong earnings, Sony’s picture business experienced a profit contraction of nearly 25% year-over-year, a rather significant miss for the firm. This decline came despite the global success of Sony Pictures Animation’s “KPop Demon Hunters,” which premiered in June of 2025 and quickly claimed the top watched film ever on Netflix.

“KPop Demon Hunters” saw widespread success on the streaming platform, even generating its own original soundtrack. However, Sony relinquished much of the upside by licensing the film’s exclusive streaming rights to Netflix.

While the specifics of the deal remain undisclosed, Sony reportedly garnered an initial $25 million profit from producing the film for Netflix. Some analysts suggest that if they would have retained those rights, their profits could have been even bigger.

While Netflix saw “K-pop Demon Hunters” drive significant viewership – the film is said to have contributed to the 17% revenue jump in the company’s September quarter – some analysts are calling it a missed opportunity for Sony.

In positive news, a sequel to “KPop Demon Hunters” is confirmed, with Netflix reportedly providing Sony a $15 million cash bonus reflecting the success of the first film. This has led some investors to wonder if Sony can manage its resources better to increase profits in the long run by retaining some ownership over its projects.