SoftBank Group (OTC:SFTBY) held its fourth-quarter earnings conference call on Wednesday. Below is the complete transcript from the call.
This content is powered by Benzinga APIs. For comprehensive financial data and transcripts, visit https://www.benzinga.com/apis/.
Access the full call at https://group.softbank/en/event/earnings_2025q4#1
Summary
SoftBank Group reported a record net income of 5 trillion yen, marking the highest EBITDA profit in Japanese corporate history.
The company has made significant investments in AI infrastructure, including AI models and AI chips, with a major focus on strategic collaborations with OpenAI and ARM.
SoftBank Group’s Vision Fund reported a cumulative investment gain of 45.7 billion, driven by significant recovery and growth in portfolio companies, particularly OpenAI.
The company’s investment strategy includes a commitment of 38.5 billion in areas like AI and robotics, with a strong focus on maintaining a healthy financial position.
Management remains optimistic about the future, focusing on becoming a leader in AI and maintaining a disciplined financial policy to support strategic initiatives.
Full Transcript
OPERATOR
Thank you very much for waiting everyone. Now we would like to start the Softbank Group Corp. Earnings result announcement for fiscal year ended March 31, 2026. First of all I would like to introduce today’s participant. From left we have Yoshimi Tsugoto, Board Director and CFO Kazuko Kimiwada, corporate officer senior vice president and CEO. Navneet Govil, executive partner and cfo SB investment advisors and SB global advisors. Jason Child, executive vice president and cfo. Today’s announcement is live broadcast over Internet. Now I’d like to invite Yoshimi Tsugoto to present you the earnings results and business overview. Thank you very much for joining our earnings announcement today during your busy schedule. So I would like to update you with our one full year results when we announced the third quarter announcement. I remain seated and make a presentation. I still have some in the recovery process for my knee so let me stay seated for the presentation. Thank you very much for your understanding for this year. Masa and together with us actually made every effort and I believe we were able to make quite a good results and outcome market and environment which you all know that AI became even bigger buzzword making our influence to the variety of places and segments and industry, this influence becoming bigger and stronger and that is actually creating the good expectation as well as risk consideration as well. So I understand there are many discussions taking place here and there. From the Softbank’s group point of view. We made quite a good capital intensive investments in the big AI infrastructure and now we start seeing the physical AI actually utilized in practice and at the same time AI agent, real full fledged execution is now discussed at the same time. Also sometimes this AI service can be replacing existing or traditional business in some extent and at the same time it may create the materializing the risk which has not been seen in the past. In our vision based on all those circumstances we aim to become the number one ASI platform provider and now that we are continuing our journey and this was a kind of a starting year for this fiscal year. We have shared this slide in many occasions by me, myself and Masa himself and there are four major pillars when it comes to ASI AI Model, AI Chip, physical AI and AI Infrastructure. And here I would like to share that how we’ve been developing in these areas especially I would like to highlight those two which is AI model and AI chip. For AI model we have invested in OpenAI and at the same time they’ve been making a good growth as we expect and we’ve been having a Good discussion. When it comes to strategic collaboration that is another good benefit in terms of increasing our knowledge in AI and for AI chip of course this is the main focus by arm. And recently we saw market cap very near to the record level $221 billion. For AI model. Let me deep dive here. So in October this year, once we finish all those investment that we committed, that gonna lead us to 64 point which will be nearly 10 trillion yen under the current forex. And at the same time we’ve been expanding strategic collaboration with OpenAI for AI chip which led by ARM. Of course Ampere is going to be in this section. And the biggest move that ARM made was to announce first in house CPU chip. Recently also we have completed the acquisition of Ampere which I would like to touch is on data pages. And also we have Jason CFO ARM. So if you have any question, please do not hesitate to ask any questions to him. Physical AI this is actually a long history in US Pepper. You may recall the humanoid robots that we started with. So Physical AI section. Has several good portfolio companies of which about 20 of those portfolios has been covered together under Robo Holdings. And in addition as we announced, We have announced the acquisition the major robotics company ABB Robotics business. So in coming few months we expect that we will be able to close this acquisition transaction. And that can be another good strength for our physical AI segment. And that can be a great value added to our group. Last but not least, AI infrastructure which is led by SB Energy in United States. This entity is leading a main role. And also we announced the major Japan US public private project which is the Ports Technology Campus which is a symbolic project for this AI infrastructure segment. Not only this project, but we also looking at the development of further data center sites led by mainly by SB Energy. And we are. We are looking forward to have further development and the progress of such projects. And with these efforts, how does has that been contributed to our numbers here? Profit actually highest ever 5 trillion yen level in net income. And this net income as far as we understand, we believe this is highest EBA profit in Japanese corporate history. From the net income highest eba back in 2020 we achieved 4.9 trillion yen. That was the highest in this time we were able to exceed that number. In addition, when you see to enterprise value, actually this is even more important indicator than P L which is net asset. So from the our assets held this net debt. And here we looking at 40.1 trillion yen for the net asset value for this quarter latest number Pro forma basis actually as of this morning on an estimated basis 47.7 trillion yen. That’s a net number. So this is this after this net interest bearing debt. Consolidated results, Net sales gain, loss on investments, income before income tax and net income in our segments we were able to made a significant growth across all profit measures As a key performance indicator, net asset value as of the end of March this year 40.1 trillion yen and the latest number pro forma basis above 48 trillion and the loan-to-value which is net debt divided by Equity value of holdings 17.0% as of the end of March. Again when you look at the previous year and actually making an even improvement even after the bigger investments that we have made and the pro forma base latest number I would say 1515 ish percent but the balance sheet moves around so this is just a four year reference. So as of March end I can say we’ve been improving actually since then in terms of loan-to-value and cash position. As on financial policy we always like to maintain our cash position to cover two year equivalent of the bond redemption and actually this covers even more than that and as a result it comes to 3.5 trillion yen for the cash position as of the end of March. Now. Let me touch upon our major contributors to the financial result. First ARM again they announced first in house chip There were some rumor in the past but officially announced in March this first in house chip and also they had the record high market cap. Since listing their market value was 52 billion. It’s been growing for over four times over the last less than three years. In terms of revenue they have been increasing revenue year on year and FY2025 in Japan calendar they recorded 4.9 billion or up 23% year on year. So they have been growing very steadily. As you can see on the slide left hand side in a cloud market they have gained more shares AWS, Microsoft, Google they used ARM’s CPU and on the right hand side in the area of Compute Subsystem (CSS) or COMPUTE subsystem which has a very high margin since they have capability to deliver combined technology which allows customers to develop on their own very easily. So again in the Compute Subsystem (CSS) area they have been growing and they have acquired up to 23 contracts including Microsoft and Samsung. In terms of EPS again they had the record high EPS. They have spent a lot in R&D for their future growth. However the revenue offset such R&D expenses and they are able to hit the record high EPS. And let me remind you why ARM is strong as you can see ARM. Provides IP license to semiconductor makers. So they have a business model to deliver source of the semiconductor industry. Without ARM the industry wouldn’t stand and they have a compute platform most popular in the world. And total chips ever shipped is over 350 billion. And global population using products or services percentage wise 70% of the people in the world use ARM in any way. And there is a huge developer community based upon ARM’s technology to develop varieties of semiconductors. In fact 22 million developers are making use of ARM technology. So ARM is leading the whole industry. Like I said, they announced the first in house CPU chip. So they provide licenses and royalty to customers traditionally. So on top of that with the in house CPU chip they are going to deliver more. So let me show you a short video clip Rene talking about the background why they decided to build their CPU chip in the last number of months has been this explosion of agents. As we move to agenta query the number of tokens per human go up by 15x if not greater the data center is choking these accelerators which are very expensive that generate the tokens now need to send those tokens back through the cloud. So what you see is a huge bottleneck now. So what does that mean? You need more and more CPUs. That’s why they decided to offer most efficient Agentix CPU in the world or ARM AGI cpu. They developed ARM AGICPU with Meta and there are launch partners supporting them including OpenAI. Those major brands are supporting them and they have been communicating each other based upon the new business model how ARM’s financial performance is going to look like. Announcement was made in March and like I said their revenue in FY25 was 4.9 billion. But in 2030 or in the five years they are expecting to hit five times bigger revenue and also EPS. They expect five times bigger EPS over the next five years. So ARM is ready to hit those numbers and from profitability perspective they have already have an IP business which has high margin and and with this chip manufacturing ARM I think it’s going to draw a new growth story going forward. Now let us go into the OpenAI slides. There are three highlights for OpenAI I believe. First valuation compared to a year before which was 260 billion in March 2025 and that became $730 billion and investment amount in fiscal 2025. As of the end of March, $32.4 billion has been made in OpenAI and from April to October over three times that in total we will be making follow on investments of 30 billion. And that has already been agreed. The first tranche in April, 10 billion has been already paid. And this is the OpenAI by the Asian movement at initial investment in OpenAI back in September 2024. Back then OpenAI valuation was $150 billion. Last year we had additional investments of 30 billion. At that time when we made a commitment of 30 billion, additional investment valuation was $260 billion in March 2025. And after then they had financial round, another financial round. And this February in 2026 we made a follow on investment commitment and that moment valuation was $730 billion. So since the initial investment it took about two years and a half and actually made about five times of devaluation. I assume you are also a good user of ChatGPT and the service that provided by OpenAI that you’ve been experiencing. And I think that you can understand why they are making such a great growth in variation. And also this is the investment amount in OpenAI 2.2 billion in fiscal 2024 last year, $32.4 billion and additional follow on additional 30 billion. So total investment in October this year reaching to $64.6 billion. In that moment, ownership will be somewhere around 13% once again out of 30 billion. 10 billion has already been funded in April this year as a first tranche. And this is a growth of the ChatGPT service. And then these are the data that are shared by and disclosed by OpenAI and weekly active user here 900 million plus number of users are actually counted for February 2026, which is accounted for 15% of global Internet users and also paid subscribers. It’s over 50 million subscribers. Now. ChatGPT initially focused on the retail or the consumer market. So you been seeing these numbers, but actually Open Air has been also putting an effort in enterprise business and they are accelerating this business as well. Right now it’s about 40% enterprise share of the total revenue and that is expected to be 50% by the end of 2026. So as a result, consumer business and enterprise business will be about the same size. That’s how we see around the end of this year. And also paying E Business users as of this April that they have already reached and exceed 9 million users. …
This post was originally published here
