SoftBank's latest earnings reveal a stark contrast between its domestic telecom and technology services arm and the parent group's aggressive AI-led investment strategy. SoftBank Corp (9434) posted record first-half operating income and raised its full-year forecasts, while SoftBank Group swung to a ¥1.1 trillion ($7 billion) quarterly loss, reversing a ¥2.5 trillion profit a year earlier.
For the six months ended September 30, SoftBank Corp reported revenue of ¥3.80 trillion, up 11.7% year-on-year, with operating income rising 2.1% to a record ¥642.1 billion. Net income attributable to owners reached a record ¥364.5 billion, while adjusted EBITDA gained 10.3% to ¥1.07 trillion. Growth was broad-based: enterprise revenue rose 11.8% to ¥538.9 billion, including a 36.7% jump in cloud and AI revenue to ¥163.8 billion; financial segment revenue increased 27.5% to ¥241.9 billion as segment income surged 73.9% to ¥67 billion thanks to higher QR-code payment and credit card transaction values; and distribution revenue grew 19.1% to ¥602.5 billion. The company now expects full-year revenue of ¥7.9 trillion, operating income of ¥1.16 trillion and net income attributable of ¥610 billion, while keeping its annual dividend forecast at ¥8.80 per share.
At the parent level, however, the picture is far more strained. The July–September loss missed even the most pessimistic analyst estimate in an LSEG poll, which ranged from a ¥233 billion profit to a ¥113 billion loss. The largest disclosed setback was a ¥597.2 billion ($3.73 billion) charge tied to changes in electricity-generation equipment orders for US AI data centres, including a project in Ohio. SoftBank said a subsidiary revised procurement plans as project requirements evolved, with the charge comprising ¥457 billion in non-refundable advance payments and ¥140.2 billion related to contract changes and settlements. The group may eventually receive up to $2.1 billion in rebates on future purchases, but it recognised no asset for those contingent benefits.
Financing costs also climbed sharply, reaching ¥790.7 billion for the six-month period, up from ¥340 billion a year earlier. Derivatives produced a ¥433.3 billion loss compared with a ¥208.1 billion gain previously, while investment gains fell 56% to ¥1.73 trillion. Net interest-bearing debt stood at ¥10.8 trillion at the end of June, up from ¥6.6 trillion a year earlier. SoftBank has invested $64.6 billion for an approximately 13% stake in OpenAI, with $54.6 billion invested by the end of September and valued at $99.6 billion, plus another $10 billion invested on October 1. SoftBank issued dollar bonds in September paying up to 9.75%, and falling values for holdings such as Arm could further constrain borrowing against assets.
SoftBank Group shares fell nearly 11% on Friday and another 4.2% on Monday, leaving the stock down about 23% for the year. The cost of insuring the group's debt against default hit a four-year high. Potential US restrictions on new data centres add uncertainty around infrastructure timelines, while China has blocked the group's proposed $5.4 billion purchase of ABB's robotics business in its existing form. Analysts warned that worsening credit conditions could disrupt planned fundraising, with Futurum Group's Rolf Bulk noting SoftBank may eventually face pressure to reduce debt or sell holdings rather than continue investing at the current pace.
