| Metric | Current Period | Prior Year Comparable | YoY |
|---|---|---|---|
| Revenue | ¥77986.5B | ¥72437.5B | +7.7% |
| Operating Income | ¥19529.6B | ¥3047.2B | +540.9% |
| Profit Before Tax | ¥61349.1B | ¥17047.2B | +259.9% |
| Net Income | ¥56319.8B | ¥16031.1B | +251.3% |
| ROE | 27.5% | 11.5% | - |
For the full year ended March 2026 (IFRS, consolidated), Revenue was ¥77,986.5B (YoY +¥5,549.0B +7.7%), Operating Income was ¥19,529.6B (YoY +¥16,482.4B +540.9%), Ordinary Income was ¥10,099.5B (YoY +¥14,915.2B +309.7%), and Net income attributable to owners of the parent was ¥50,022.7B (YoY +¥38,489.4B +333.7%), representing substantial profit growth. The primary driver was a sharp expansion in investment gains from the SoftBank Vision Fund (SVF) business to ¥6,638.6B (prior year ¥387.6B), with valuation gains on technology investments materially changing the earnings mix. Core SoftBank Business revenue remained resilient at ¥7,033.97B (+7.5%), and the surge in operating margin to 25.0% (prior year 4.2%) reflects improvement led by investment gains. Conversely, Operating Cash Flow turned negative at ▲¥4,288.3B, highlighting that expanded investment gains did not accompany cash generation.
[Revenue] Revenue of ¥77,986.5B (+7.7%) was driven primarily by the SoftBank Business at ¥73,339.7B (YoY +7.5%, 90.2% of total), supported by stable growth in domestic mobile, broadband, media & advertising, and payments/financial services. AI Computing Business revenue continued to expand to ¥6,403.1B (+8.5%), with IP licensing and semiconductor sales from Arm and Ampere increasing. Other was ¥1,243.7B (+11.0%), including energy and sports-related activities. The revenue mix is highly concentrated in the SoftBank Business, with AI Computing contributing a limited 8.2%.
[Profitability] Gross profit was ¥41,614.0B (gross margin 51.5%), an increase of ¥407.0B YoY, but SG&A exploded to ¥42,093.0B (+32.9%, SG&A ratio 51.6%), nearly offsetting gross profit. The sharp rise in Operating Income to ¥19,529.6B was driven by a large improvement in investment gains of ¥72,864.9B (prior year ¥37,011.1B), comprised of SVF valuation gains of ¥66,386.1B and holding company investment business gains of ¥2,181.1B. Non-operating items included a positive turn in derivatives-related gains of +¥2,043.3B (prior year ▲¥2,034.0B), while finance costs were ▲¥7,717.9B (prior year ▲¥5,815.6B, +32.7%) and foreign exchange losses were ▲¥2,710.1B (prior year +¥270.6B), acting as headwinds. As a result, Ordinary Income was ¥10,099.5B (+309.7%), Profit Before Tax was ¥61,349.1B (+259.9%), and Net income attributable to owners of the parent was ¥50,022.7B (+333.7%), with investment valuation gains driving revenue and profit growth. No exceptional items were noted; the divergence between Ordinary Income and Net income is primarily due to income taxes of ¥5,029.3B and non-controlling interests of ¥6,297.0B. By segment, SVF segment profit of ¥64,446.0B propelled consolidated profits, while the SoftBank Business earned ¥9,650.0B and AI Computing Business incurred a loss of ▲¥1,372.7B.
The Holding Company Investment Business deteriorated sharply to a segment loss of ▲¥4,720.8B (prior year ¥7,942.5B), hit by revaluation of held investments and foreign exchange/derivative effects. The SVF business reversed to a segment profit of ¥64,446.0B (prior year ▲¥1,150.2B), driven by increases in fair value of portfolio investments. The SoftBank Business secured stable earnings at ¥9,650.0B (prior year ¥9,063.1B, +6.5%), maintaining margins despite a mature domestic telecom market. AI Computing Business widened its loss to ▲¥1,372.7B (prior year ▲¥108.9B), mainly due to upfront investments and integration costs associated with the Ampere acquisition. Other recorded a loss of ▲¥3,283.2B (prior year ¥895.6B), reflecting restructuring impacts in energy and robotics-related areas. Adjustments of ▲¥3,370.3B (prior year ¥405.1B) relate to elimination of intersegment transactions and consolidation eliminations of investee gains/losses.
[Profitability] ROE of 34.3% improved from 10.2% a year earlier (+24.1pt), primarily driven by a surge in Net income from investment valuation gains. Operating margin of 25.0% (prior year 4.2%) is elevated due to special items including investment gains, and Ordinary Income margin turned positive to 12.9% (prior year ▲6.6%). Net margin of 72.2% is heavily influenced by investment valuation gains and is not readily interpreted for core operations. In a five-factor ROE decomposition, the tax burden coefficient is 0.815 and the interest burden coefficient (EBT/EBIT) is 3.14, indicating investment gains far exceed financial costs.
[Cash Quality] Operating Cash Flow/Net Income is ▲0.09x (warning threshold <0.8), and Operating Cash Flow/EBITDA is ▲0.15x, indicating weak cash conversion of profits. DSO of 155 days signals collection delays and scope for improvement in credit and collection processes. Free Cash Flow (FCF) of ▲¥4.94T worsened due to significant investing outflows, raising concerns about sustainable cash generation.
[Investment Efficiency] Total asset turnover is 0.128x, low and suppressed by asset base expansion (increased investments and goodwill). ROIC calculations are distorted by investment valuation gains; therefore, measurement on core operations alone is preferable.
[Financial Soundness] Equity Ratio is 29.0% (prior year 25.7%), improved but interest-bearing debt expanded sharply to ¥24.7T (prior year ¥18.0T, +37.1%), resulting in Debt/EBITDA of approximately 8.6x and a high leverage profile. Current ratio is 0.80x (current assets ¥11.8T / current liabilities ¥14.8T), suggesting short-term liquidity caution. Interest coverage (EBIT / finance costs) is about 2.5x, a concerning range that warrants monitoring of refinancing costs in a rising rate environment. Goodwill is ¥731.45B (35.7% of equity, goodwill/EBITDA 2.55x), within tolerable range but requiring monitoring for future impairment risk.
Operating Cash Flow turned negative to ▲¥4,288.3B (prior year +¥2,035.8B), with operating cash subtotal of ¥1,192.6B (prior year ¥6,011.4B, +69.5%) hit by corporate tax payments of ¥8,216.2B and interest payments of ¥8,392.3B. Working capital movements included accounts receivable increase ▲¥7,973.2B and inventory increase ▲¥423.0B as headwinds, partially offset by accounts payable increase +¥5,509.4B. Investing Cash Flow was ▲¥45,071.7B (prior year ▲¥16,315.4B) driven by SVF investment acquisitions ▲¥50,612.2B, subsidiary acquisitions ▲¥9,731.0B, and capital expenditures ▲¥17,338.3B, partially offset by SVF investment disposals proceeds ¥11,258.9B and proceeds from sale of investment securities ¥38,072.7B. Financing Cash Flow was +¥63,773.1B (prior year ▲¥11,163.8B) with gross inflows of interest-bearing debt ¥11,948.2B less outflows ▲¥5,426.9B for net increase ¥10,431.0B, short-term borrowings net +¥1,043.09B, distributions to external SVF investors ▲¥6,960.5B, dividend payments ▲¥629.1B, and share buybacks ▲¥932.4B. FX effects added +¥2,078.2B, increasing cash to ¥53,621.5B (prior year ¥37,130.3B, +44.4%). Depreciation & amortization of ¥9,187.5B (prior year ¥8,668.2B, +6.0%) remained stable. FCF of ▲¥4.94T (Operating CF + Investing CF) is substantially negative, making investment funding clearly dependent on external financing.
Investment gains of ¥72,864.9B (93.4% of Revenue) are a large, non-operating, largely one-off driver of Net income, consisting of SVF fair value gains of ¥66,386.1B and gains/valuation gains from the holding company investment business. Non-operating income benefited from a positive turn in derivatives-related gains of +¥2,043.3B, while FX losses ▲¥2,710.1B and finance costs ▲¥7,717.9B were headwinds. The divergence between Ordinary Income of ¥10,099.5B and Net income of ¥50,022.7B is approximately +395%, dominated by investment valuation gains and equity-method/valuation items. The accrual ratio is elevated: Operating Cash Flow ▲¥4,288.3B against Net income ¥56,319.8B implies about 8.9%, indicating a large gap between profits and cash generation. Comprehensive income of ¥67,672.5B exceeded Net income by ¥11,352.8B, primarily due to improvement in foreign currency translation differences of ¥11,144.6B from overseas operating entities, and other OCI increases through asset valuation changes. Non-operating income relative to Revenue is roughly 93%, far exceeding core operating earnings and indicating high sensitivity to investment market fluctuations in subsequent periods.
Annual dividend consists of interim ¥22 and year-end ¥5.5 (post stock split), which equates to ¥44 on a pre-split basis. Payout Ratio on a Net income basis is approximately 3.1%, very low, retaining most investment gains internally. Share buybacks totaled ¥93.24B, making total shareholder returns ¥156.15B, with Total Return Ratio around 3.1%, still low. Given FCF of ▲¥4.94T, FCF coverage is ▲31.4x, raising sustainability concerns. Dividend sources include retained earnings of ¥7,323.79B (prior year ¥2,701.79B, +168.4%), and ample cash balances of ¥5,362.15B, but returns amid negative FCF depend on financing and realization of investments. While the dividend policy indicates a stable dividend, short-term liquidity and rising refinancing costs could prompt agile revisions.
High dependence on investment gains: SVF valuation gains of ¥66,386.1B account for the majority of Net income. A correction in technology equities, a contraction of IPO windows, or rising discount rates due to higher interest rates could severely compress valuation gains. Fair value volatility of the SVF investment balance of ¥2.35T increases earnings volatility structurally.
Short-term liquidity and high leverage: Current ratio 0.80x and short-term interest-bearing debt of ¥7,251.63B are not fully covered by cash of ¥5.36T. With Debt/EBITDA ~8.6x and interest coverage 2.5x, a rising rate or higher refinancing costs could squeeze cash flows. Attention is required on commitment line availability and rollover assumptions for funding sustainability.
Cash flow quality and collection delays: OCF/Net Income ▲0.09x, OCF/EBITDA ▲0.15x, and DSO 155 days all indicate deteriorating quality. Accounts receivable increase ▲¥7,973.2B and tax/interest outflows of ¥16,608.5B pushed Operating CF into negative territory; an earnings structure driven by valuation gains without cash realization poses sustainability risk.
Profitability & Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| ROE | 34.3% | 10.1% (2.2%–17.8%) | +24.2pt |
| Operating Margin | 25.0% | 8.1% (3.6%–16.0%) | +16.9pt |
| Net Margin | 72.2% | 5.8% (1.2%–11.6%) | +66.4pt |
ROE, Operating Margin, and Net Margin all substantially exceed industry medians, delivering top returns within the IT & Telecommunications sector. However, the uplift in Net Margin due to investment valuation gains warrants caution regarding core operating profitability divergence.
Growth & Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth (YoY) | 7.7% | 10.1% (1.7%–20.2%) | -2.4pt |
Revenue growth trails the industry median by 2.4pt, placing the company in the mid-range within the sector. Core business maintains stable growth but lags emerging IT peers on growth metrics.
※ Source: Company aggregation
Sustainability of investment valuation gains and progress in converting valuation gains to realized gains will determine future earnings. Monitor fair value changes on SVF investment balance of ¥2.35T, exit activity via IPOs/M&A, and realized-gain conversion rates to assess the timing of any shift from valuation-driven to realization-driven earnings.
Short-term liquidity (current ratio 0.80x) and refinancing management (Debt/EBITDA 8.6x, short-term liabilities ¥7.25T) will be critical for financial stability in a rising-rate environment. Watch commitment line balances, average funding costs, and maturity profile diversification to evaluate capital market access under stress.
Improvement in AI Computing Business segment profitability (Revenue ¥6,403B, loss ▲¥1,372B) and containment of SG&A in the SoftBank Business (+32.9% YoY) are essential to enhance the quality of core earnings. For AI, track timing to breakeven, pace of gross margin improvement post-integration, and narrowing of SG&A-to-revenue divergence for future assessment.
This report is an earnings analysis document automatically generated by AI analyzing XBRL financial statement data. It does not constitute a recommendation to invest in any specific security. Industry benchmarks are reference information compiled by the firm based on public financial statements. Investment decisions should be made at your own discretion; consult a professional advisor as needed.