SoftBank reported a fiscal second-quarter net loss of 1.12 trillion yen ($7 billion) on Tuesday, as investment losses and higher financing costs weighed on earnings, even as its shares closed 13.9% higher as Asian technology stocks rose following an overnight rebound on Wall Street.
The loss reverses a net profit of 2.5 trillion yen a year earlier. Quarterly revenue of 2.22 trillion yen came in above LSEG estimates of 2.02 trillion yen.
Revenue rose 13.3% in the six months ended September 30, supported by growth in telecommunications and AI computing businesses. The company said its SoftBank segment recorded higher sales across all businesses, and revenue at its AI computing segment increased.
SoftBank also recorded a 597.2 billion yen loss in the six-month period due to changes in procurement plans for power generation equipment for AI data centre projects in the United States.
The Vision Fund segment swung to a loss of 81.58 billion yen in the fiscal second quarter, compared with a profit of 2.38 trillion yen a year earlier. Its investment gains fell to 85.45 billion yen from 2.81 trillion yen in the year-earlier period. Vision Fund 2 posted investment gains of 89.26 billion yen, while Vision Fund 1 recorded a loss of 3.86 billion yen on its investments.
Vision Fund 1 recorded an investment loss of $20 million in the quarter, despite a $1.3 billion gain on ByteDance, as shares of publicly traded portfolio companies including Coupang and Grab declined.
SoftBank's cumulative investment in OpenAI stood at $54.6 billion as of the end of September, with a fair value of $99.6 billion and a cumulative investment gain of $45 billion, according to the company.
Ahead of its earnings release, SoftBank announced on Monday plans with Grab and Malaysia's PETROS to commit a combined $1.85 billion in initial capital to develop AI infrastructure in Malaysia, with a long-term target of at least five gigawatts of AI computing capacity.
Analysis
Why This Matters
- SoftBank's swing from a 2.5 trillion yen profit a year earlier to a 1.12 trillion yen loss shows how sharply the technology selloff has hit the value of its portfolio companies.
- Its bet on AI, including a $45 billion cumulative gain on OpenAI, remains central to its fortunes, with fresh capital now committed to data centre infrastructure such as the Malaysia project.
- The 13.9% share jump suggests investors are looking past the loss to the growth in AI computing revenue.
Background
SoftBank Group is a Japanese investment holding company known for the Vision Funds, which have poured billions into technology startups and public tech companies around the world. The latest quarterly results come amid a wider selloff in technology stocks, which has weighed on the value of its listed investments.
What to Watch
- Whether the fair value of SoftBank's OpenAI stake, $99.6 billion at the end of September, rises or falls with AI market sentiment.
- Progress on the Malaysia AI infrastructure project, which targets at least five gigawatts of computing capacity.
- How Vision Fund performance tracks the recovery in Asian tech stocks that lifted SoftBank's shares on Tuesday.
Checked
11 claims in this story checked against 1 source: 11 supported.
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- SupportedInvestment losses and higher financing costs weighed on SoftBank’s results.Tech: “as investment losses and higher financing costs weighed on earnings.”
- SupportedSoftBank reported a fiscal second-quarter net loss of 1.12 trillion yen ($7 billion) on Tuesday.Tech: “SoftBank reported a fiscal second-quarter net loss of 1.12 trillion yen ($7 billion) on Tuesday”
- SupportedSoftBank shares closed 13.9% higher on Tuesday.Tech: “Shares of the Japanese investment giant closed 13.9% higher on Tuesday.”
- SupportedAsian technology stocks rose following an overnight rebound on Wall Street.Tech: “The gains came as Asian technology stocks, including Samsung Electronics and SK Hynix, rose following an overnight rebound on Wall Street.”
- SupportedThe quarterly loss reversed a net profit of 2.5 trillion yen a year earlier.Tech: “Net loss of 1.12 trillion yen in the quarter compared with a net profit of 2.5 trillion yen a year earlier .”
- SupportedQuarterly revenue was 2.22 trillion yen, above LSEG estimates of 2.02 trillion yen.Tech: “Revenue stood at 2.22 trillion yen in the quarter, compared with LSEG estimates of 2.02 trillion yen.”
- SupportedRevenue rose 13.3% in the six months ended September 30, supported by growth in telecommunications and AI computing businesses.Tech: “Revenue rose 13.3% in the six months ended Sept. 30, supported by growth in telecommunications and AI computing businesses.”
- SupportedSoftBank recorded a 597.2 billion yen loss in the six-month period due to changed procurement plans for power generation equipment for US AI data centre projects.Tech: “SoftBank also recorded a 597.2 billion yen loss in the six-month period due to changes in procurement plans for power generation equipment for AI data center projects in the U.S.”
- SupportedThe Vision Fund segment recorded a second-quarter loss of 81.58 billion yen, compared with a profit of 2.38 trillion yen a year earlier.Tech: “The company's Vision Fund segment swung to a loss of 81.58 billion yen in the fiscal second quarter, compared with a profit of 2.38 trillion yen a year earlier.”
- SupportedSoftBank’s cumulative OpenAI investment was $54.6 billion at the end of September, with a fair value of $99.6 billion and a cumulative gain of $45 billion, according to the company.Tech: “As of the end of September, SoftBank's cumulative investment in OpenAI stood at $54.6 billion, with a fair value of $99.6 billion and a cumulative investment gain of $45 billion, according to the company.”
- SupportedOn Monday, SoftBank announced plans with Grab and Malaysia’s PETROS to commit $1.85 billion in initial capital for AI infrastructure in Malaysia, with a long-term target of at least five gigawatts of AI computing capacity.Tech: “Ahead of its earnings release, SoftBank Group announced on Monday plans with Grab and Malaysia's PETROS to commit a combined $1.85 billion in initial capital to develop AI infrastructure in Malaysia, with a long-term target of at least five gigawatts of AI computing capacity.”
