February 5, 2026 Q3 FY2025 Consolidated Financial Results (Three months ended December 31, 2025) Sony Group Corporation Changes in Disclosure Classification of Consolidated Results Changes in Disclosure Classification of Consolidated Results Previous Disclosure Classification Disclosure Classification Before the Execution of the Spin-off (1H FY25) Disclosure Classification After the Execution of the Spin-off (2H FY25) FY24*1 FY25 G&NS Music Pictures ET&S I&SS All other / Corporate and elimination*2 Financia ...

Group 1 - Sony raised its full-year outlook after reporting a record quarterly operating profit of 515 billion yen ($3.3 billion), a 22% increase, and 9% above LSEG consensus estimates [1] - The company increased its annual forecast by 8% to 1.54 trillion yen, driven by gains in its image sensor and music divisions, despite a decline in PlayStation 5 sales [1][2] - Sales of image sensors rose by 21%, while the music business experienced a 13% revenue increase from streaming services, live events, and merchandising [2] Group 2 - PlayStation 5 sales declined by 16% year-over-year, with 8 million units sold in the October-December quarter, but monthly users on the PlayStation Network increased, indicating greater engagement [3] - Profit from the gaming unit grew by 19% to 140.8 billion yen, supported by higher software sales and a weaker yen [4] - Concerns over rising memory chip prices affecting supply chains and consumer prices were noted, but Sony has secured the minimum quantity of memory needed for the upcoming year-end shopping season [5][6] Group 3 - The company announced an expansion of its share buyback scheme, which positively impacted its share price initially [3] - The introduction of AI in the video game industry has created uncertainty, with gaming stocks experiencing declines following the launch of an AI-powered game-making tool by Google [6] - Anticipation for the release of Take-Two Interactive's "Grand Theft Auto VI" in November is expected to boost Sony's console business [6]

Financial Data and Key Metrics Changes - Revenue for the third fiscal quarter was $45.6 million, a 5% year-over-year improvement on an organic basis and an 8% increase when including acquisitions [13][14] - Net income for the third fiscal quarter was approximately $2.2 million compared to net income of $5.3 million in the prior year, primarily driven by a loss on fair value of swaps and increased interest expense [15] - Earnings per share for the quarter were $0.03 compared to $0.08 in the year-ago quarter [15] Business Line Data and Key Metrics Changes - Music publishing revenue increased 12% year-over-year to $30.1 million, driven by strong performance revenue and digital revenue growth [16] - Recorded music revenue increased by 8% year-over-year to $12.9 million, benefiting from digital revenue growth and acquisitions [16] Market Data and Key Metrics Changes - The global value of music copyright reached an all-time high of $47.2 billion for the year prior, indicating sustained growth in the global music economy [11] - Streaming services continue to experience price increases, serving as additional tailwinds for industry growth [12] Company Strategy and Development Direction - The company is focused on deepening relationships with top-tier talent, investing in emerging markets, and expanding its portfolio through acquisitions [5][10] - The strategy includes acquiring catalogs in emerging markets where favorable multiples can be achieved, while also maintaining a strong presence in established markets [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued M&A activity and maintaining favorable acquisition multiples [22][23] - There are both tailwinds and headwinds anticipated in the music industry, with subscription increases and emerging market expansion being positive factors [33] Other Important Information - The company announced the acquisition of the publishing and recorded music rights of Bertie Higgins and the Miles Davis catalog, enhancing its portfolio [7][8] - New partnerships were formed with music icons Gladys Knight and T.I., further diversifying the company's offerings [9] Q&A Session Summary Question: Outlook for fourth quarter deal activity - Management expects continued M&A activity at the same elevated pace as the previous quarters [22] Question: Changes in acquisition multiples - Management confirmed that there has not been a material change in the weighted average multiples paid historically [23] Question: Comments on activist investors - Management did not provide additional information regarding discussions with activist investors, focusing instead on business growth [25] Question: Fourth quarter revenue expectations - Management indicated that there are no unusual one-time events expected in Q4, contrasting with prior year royalty recoveries [29] Question: Trends in G&A expenses - G&A expenses are influenced by revenue fluctuations in the management business, with normal inflationary pressures expected [30] Question: ROI differences between international and domestic deals - Management noted that more favorable multiples can be acquired in emerging markets, which may influence future deal strategies [31] Question: Macro-level price increases and royalty agreements - Management acknowledged both tailwinds and headwinds in the industry, with subscription increases and market expansion being positive factors [33]

Financial Data and Key Metrics Changes - Revenue for Q3 2026 was $45.6 million, reflecting a 5% year-over-year organic growth and an 8% increase including acquisitions [14] - OIBDA increased by 11% year-over-year to $18.1 million, while adjusted EBITDA also rose by 11% to $19.2 million [15] - Net income for the quarter was approximately $2.2 million, down from $5.3 million in the same quarter last year, primarily due to a loss on fair value of swaps and increased interest expenses [16] Business Line Data and Key Metrics Changes - Music publishing revenue grew by 12% year-over-year to $30.1 million, driven by strong performance revenue and digital revenue growth [17] - Recorded music revenue increased by 8% year-over-year to $12.9 million, benefiting from digital revenue growth and acquisitions, although partially offset by a decrease in synchronization revenue [17] Market Data and Key Metrics Changes - The global value of music copyright reached an all-time high of $47.2 billion for the previous year, indicating sustained growth in the global music economy [11] - Streaming services are experiencing regular price increases, which are expected to contribute positively to industry growth [12] Company Strategy and Development Direction - The company is focused on deepening relationships with top-tier talent, investing in emerging markets, and expanding its catalog through acquisitions [5] - The strategy includes a commitment to premium assets and long-term creator partnerships, positioning the company for growth and value creation [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued M&A activity and favorable acquisition multiples, indicating no material changes in historical weighted average multiples [23][24] - The company anticipates tailwinds from subscription increases and emerging market expansion, despite some uncertainties related to regulatory processes [35] Other Important Information - The company announced the acquisition of rights from notable artists, including Bertie Higgins and collaborations with Gladys Knight and T.I., enhancing its portfolio [7][9] - The company is actively investing in high-growth emerging markets, including a joint venture with Abood Music in Jamaica [10] Q&A Session Summary Question: Outlook for fourth quarter deal activity - Management confirmed that they are on track for continued M&A activity in the fourth quarter, maintaining the same pace as previous quarters [23] Question: Changes in acquisition multiples - Management stated that there have been no material changes to the weighted average multiples historically paid for acquisitions [24] Question: Comments on activist investors - Management did not provide additional information regarding discussions with activist investors, focusing instead on business growth [26] Question: Unusual one-time events impacting fourth quarter - Management noted that there are no unusual events expected in Q4, contrasting with previous year’s royalty recoveries from audits [31] Question: Trends in G&A expenses - Management explained that fluctuations in G&A expenses are influenced by revenue changes in their management business, with normal inflationary pressures expected [32] Question: Differences in ROIs between international and domestic deals - Management indicated that acquisitions in emerging markets tend to have more favorable multiples compared to domestic markets, which are more mature [33] Question: Tailwinds and headwinds for 2027 - Management identified both tailwinds from subscription growth and emerging market expansion, alongside uncertainties from regulatory processes [35]

Core Insights - U.S. equity markets reached new all-time highs in Q4 2025, with the S&P 500 Index increasing by 2.66% and the Bloomberg U.S. Aggregate Bond Index rising by 1.10% [1] - Value stocks outperformed growth stocks, and the U.S. economy demonstrated resilience, with artificial intelligence being a significant theme as over 300 S&P 500 companies mentioned "AI" in earnings calls [1] - The Composite returned 1.45% pure gross of fees (0.95% net of fees), underperforming the Russell 1000 Value Index's 3.8% gain and the S&P 500 Index's 2.66% gain [1] Company-Specific Insights: Sony Group Corporation - Sony Group Corporation was a primary detractor from the Strategy's performance in Q4 2025, with a stock price of $21.93 per share as of February 3, 2026, and a return of -12.70% in the past month [2] - The company recognized a one-time, non-cash charge of approximately ¥50 billion in the Game & Network Services segment due to an impairment and accounting correction, which did not indicate a decline in underlying operating performance [3] - Excluding the one-time charge, Sony's operating income would have increased by approximately 23% year-over-year, driven by strong gaming engagement, growth in network services and software sales, and robust results in the Music segment [3] - The company is well-positioned for long-term value creation due to its unique position as both a content creator and platform owner, with opportunities to leverage its IP across gaming, music, anime, and film [3] - The recent spinoff of Sony's Financial Services segment allows management to focus more on its core content, technology, and entertainment operations [3]

Core Insights - Reservoir Media, Inc. reported a revenue of $45.6 million for Q3 fiscal 2026, reflecting a 5% organic growth and an 8% increase when including acquisitions [1] - The company experienced a 12% year-over-year growth in Music Publishing Revenue and an 8% increase in Recorded Music Revenue [1] - Operating Income rose to $10.3 million, an 8% increase year-over-year, while OIBDA increased by 11% to $18.1 million [1] - Net Income was reported at $2.2 million, or $0.03 per share, down from $5.3 million, or $0.08 per share year-over-year [1] - Adjusted EBITDA reached $19.2 million, marking an 11% increase year-over-year [1] Business Developments - The company entered a joint venture with Abood Music, a Jamaican and dancehall music publisher, and genre star Cordell "Skatta" Burrell [1] - Reservoir acquired the catalog of yacht rock icon Bertie Higgins, which includes both publishing and recorded music rights [1] - New publishing deals were announced with female-led disco-soul group Say She She, 2x-Platinum selling songwriter Allison Veltz Cruz, and multi-genre songwriter-producer Britten Newbill [1] - The company extended its publishing agreement with multi-platinum Indian hip-hop artist DIVINE [1] Management Commentary - The CEO of Reservoir Media emphasized the company's focus and discipline in executing top-line objectives while maintaining strong cost and balance sheet control [1]

Core Insights - Sony Group Corporation is set to report its third-quarter fiscal 2025 earnings on February 5, 2026, with earnings estimated at 34 cents per share, reflecting a 17% decrease from the previous year, and revenues projected at $23.9 billion, indicating a 17.5% decline year-over-year [2]. Financial Performance - The company has consistently exceeded the Zacks Consensus Estimate in the last four quarters, with an average surprise of 36.9% [2][3]. - In the past year, Sony's stock has increased by 1.1%, while the Zacks Audio Video Production industry has seen a decline of 0.5% [3]. Key Segments to Watch - Strong performance is expected from the Game & Network Services (G&NS), Music, and Imaging & Sensing Solutions (I&SS) segments, despite a slowdown in Pictures and Entertainment, Technology & Services (ET&S) [4]. - The G&NS segment is benefiting from the growth of PlayStation 5, with monthly active users rising by 3% year-over-year to 119 million [4]. Revenue Drivers - Increased sales in game software and network services are anticipated due to more users upgrading to higher service tiers and successful first-party game releases [5]. - Sony aims to enhance revenues from PlayStation Plus and optimize earnings from the PlayStation Store through personalization and pricing strategies [5]. Music and Imaging Solutions - Sony Music is experiencing growth from streaming and a robust content library, while Sony Pictures' performance will depend on box office trends and licensing revenue [6]. - The I&SS segment is expected to see sales growth driven by higher image sensor sales for mobile devices and cameras [10]. Strategic Initiatives - Sony is pursuing growth through acquisitions and joint ventures, including the acquisition of STATSports to enhance its sports data platform [10]. - The company is also investing in music catalogs and partnerships to expand its Music business, particularly in emerging markets [9]. Market Challenges - An uncertain business environment is anticipated for the second half of the fiscal year, with potential impacts from tariffs and foreign exchange fluctuations [11][12]. - Demand in the imaging market has weakened significantly in China and the U.S. due to the end of subsidies and additional tariffs [11].

Core Insights - AI music is gaining popularity, with the AI virtual singer "Daitouzheng" achieving significant success on platforms like Kugou Music, producing over 1900 songs and attracting nearly 25.2 million monthly listeners, comparable to popular artists like Jay Chou [1][6] - The rise of AI in music creation is lowering barriers for ordinary people to produce music, with platforms like Muse AI amassing nearly 10 million users and drastically reducing song production time from over a week to mere minutes [1][2] - However, the proliferation of AI music has raised concerns about the quality of songs, with Spotify reporting the removal of over 75 million low-quality tracks in the past year [2][20] AI Music Consumption Trends - Young audiences aged 18 to 44 are the primary consumers of AI music, spending approximately 2.5 to 3 hours weekly listening to it, while older demographics show significantly lower engagement [2][3] - YouTube and TikTok are identified as the main platforms for listening to AI music in the U.S. [3] Industry Response and Adaptation - Domestic streaming platforms like NetEase Cloud Music and Kugou Music are actively embracing AI music, hosting competitions and providing creative tools, contrasting with the more cautious approach of overseas platforms like Spotify [20][22] - NetEase Cloud Music's recent initiatives include a "Million Prize AI Music Creation Competition," attracting over 20,000 participants and more than 50,000 submissions, indicating a robust interest in AI-assisted music creation [22][23] Quality Control and Challenges - To combat the influx of low-quality AI music, platforms are implementing quality checks during the upload process, ensuring only songs that meet certain standards are published [23] - The industry is also facing challenges regarding the transparency of AI-generated music, with a significant percentage of listeners unable to distinguish between AI and human-created songs [10][18] Future of AI in Music - The music industry is expected to evolve towards a model that includes pure human creation, human-AI collaboration, and pure AI creation, with the latter two likely dominating [24][25] - Major record labels are beginning to recognize the commercial potential of AI music, with partnerships being formed to explore new product models and distribution channels [24][25] Creative Dynamics - AI is seen as a tool to enhance creativity rather than replace human musicians, with many artists adopting a hybrid approach of using AI for initial creation followed by human refinement [27][28] - The emotional and narrative aspects of music creation remain a unique strength of human artists, suggesting that AI will complement rather than fully replace human creativity in the music industry [26][28]

近期，有一个"泡沫转场"玩法在社交平台走红，该玩法所使用的背景音乐是经过AI改编的、邓紫棋歌曲 《泡沫》，此AI改编曲引发争议。当前，该歌曲在平台已下架，发布"雷霆版《泡沫》"的一名博主发文 致歉。 AI碧昂斯唱《泡沫》粉丝不满 律师谈：AI改编歌曲存多重风险 AI+音乐当前的发展势头十分迅猛，AI技术在音乐领域的运用具有相当大的潜力，但不当使用带来的风 险和争议也接连不断。 从好的一方面来说，AI技术为音乐发展提供了新的机遇和可能，比如因为原始音源质量不佳、核心成 员去世等原因被搁置了三十年之久的披头士乐队歌曲《now and then》，就是因为AI技术的发展才得以 重新合成约翰·列侬的声音，从而使得这首歌曲得以发行，科技媒体 CNET将之评价为"这可能是 AI 在 音乐行业中争议最小的一次应用了。"AI技术让人们看到了弥补经典乐队遗憾的机会。AI+音乐也可能 诞生意想不到的网络热点，比如洗脑歌曲《技能五子棋》。 但从另一方面来说，AI音乐的发展也面临多重争议，"雷霆版《泡沫》"可以说是多种AI合成音乐争议的 集合体，一方面被质疑侵犯原词曲作者的版权权益，另一方面又克隆了歌手的声音存在人格权侵权可 能。在 ...

Core Insights - The article highlights the significant American companies that have shaped the nation's identity and economy as it approaches its 250th birthday, emphasizing their cultural and historical impact rather than just financial metrics [1][2]. Group 1: Visa - Visa was established in 1958 as BankAmericard, launching the first consumer credit card in the U.S. [3][6] - The company rebranded as Visa in 1976 and went public in 2008, currently holding a market cap of $632 billion [4][6]. - Visa operates in over 220 countries and territories, accepted at more than 175 million merchants [7]. Group 2: Meta (Facebook) - Facebook was founded in 2004 by Mark Zuckerberg and quickly grew to 1 billion users by 2012, later rebranding to Meta in 2021 [9][13][14]. - The platform has faced controversies regarding user data and misinformation but remains a dominant social media service with over 3 billion regular users [15]. Group 3: Boeing - Boeing, established in 1916, is a leading aerospace company known for producing commercial jets and military aircraft [15][16]. - The company has faced challenges in recent years, including safety allegations and COVID-19 impacts, but continues to be a major player in the industry with a market cap of $185 billion [20][21]. Group 4: Tesla - Tesla was founded in 2003, with Elon Musk joining in 2004, and has become synonymous with electric vehicles, launching the Model 3 in 2017 as the best-selling electric car [23][27]. - The company has a market cap of $1.4 trillion and is recognized for driving electric vehicles into the mainstream [28]. Group 5: Patagonia - Patagonia was founded in 1973 by Yvon Chouinard, known for its commitment to sustainability and donating 1% of sales to environmental causes [30][33]. - The company has expanded from climbing gear to a wide range of outdoor apparel and is estimated to have a market cap of $3 billion [33]. Group 6: Intel - Intel was founded in 1968 and became a leader in semiconductor technology, introducing the first programmable microprocessor in 1971 [34][35]. - The company has maintained a significant market presence, controlling approximately 75% of the CPU market as of 2025 [38]. Group 7: HP - HP was established in 1939, initially focusing on sound equipment and later becoming a leader in personal computers and printers [40][42]. - The company split into HP Inc. and Hewlett Packard Enterprises in 2015, with HP Inc. having a market cap of $18 billion [45]. Group 8: Nike - Nike was founded in 1964 as Blue Ribbon Sports and rebranded in 1971, becoming a dominant player in the sportswear market with a 14% share in 2024 [46][50]. - The company gained fame through its endorsement deal with Michael Jordan, significantly boosting its brand recognition [48]. Group 9: Kodak - Kodak was founded in 1888 and became a pioneer in photography, introducing innovations like roll film and the first digital camera [51][54]. - The company filed for bankruptcy in 2012 and now focuses primarily on commercial printing and imaging [56]. Group 10: IBM - IBM was established in 1911 and became synonymous with computing, initially focusing on tabulating machines and later dominating the PC market [59][62]. - The company has shifted its focus to consulting, software, and cloud computing, with a market cap of $291 billion [67]. Group 11: Paramount Pictures - Paramount Pictures, founded in 1912, is recognized as the longest-operating major studio in Hollywood, producing numerous iconic films [68][70]. - The studio has undergone various mergers and continues to be a significant player in the entertainment industry with a market cap of $12 billion [74]. Group 12: Netflix - Netflix was founded in 1997 as a DVD rental service and transitioned to streaming in 2007, becoming a leader in the industry [77][80]. - The company has a market cap of $351 billion and announced plans to acquire Warner Bros. Discovery in 2025 [81]. Group 13: FedEx - FedEx was founded in 1971, revolutionizing overnight delivery with a centralized hub model [83][84]. - The company has introduced several innovations in the shipping industry and has a market cap of $74 billion [88]. Group 14: Motown - Motown Records, established in 1959, played a crucial role in integrating Black artists into mainstream pop music [91][92]. - The label produced numerous hits and helped launch the careers of many iconic artists, although it faded in prominence during the 1970s [94][96]. Group 15: PepsiCo - PepsiCo was formed in 1965 through the merger of the Pepsi-Cola Company and Frito-Lay, becoming a leading global food and beverage brand [99][100]. - The company is known for its innovative marketing strategies and has a significant rivalry with Coca-Cola [101]. Group 16: Levi Strauss - Levi Strauss, founded in 1853, is known for creating the first riveted blue jeans, which have become a cultural staple [104][106]. - The company continues to sell a wide range of apparel and remains a significant player in the fashion industry [106]. Group 17: Microsoft - Microsoft was founded in 1975 and became a leader in software development, particularly with its Windows operating system [109][110]. - The company has expanded into gaming, cloud services, and AI, with a market cap of $7.8 billion [112]. Group 18: The Home Depot - The Home Depot was established in 1978, focusing on providing a wide range of building supplies and home improvement products [115][116]. - The company has a strong commitment to community initiatives, particularly supporting veterans, and has a market cap of $3.2 trillion [118]. Group 19: WK Kellogg Company - WK Kellogg Company was formed from the original Kellogg's brand, known for its iconic cereals and snacks [121][123]. - The company underwent a reorganization in 2023, with its cereal business spun off into a new entity [123].