| Metric | Current Period | Same Period of Previous Year | YoY |
|---|---|---|---|
| Revenue | ¥20195.9B | ¥18203.4B | +10.9% |
| Operating Income | - | - | - |
| Profit Before Tax | ¥5891.5B | ¥6899.4B | -14.6% |
| Net Income | ¥5189.9B | ¥5641.4B | -8.0% |
| ROE | 2.4% | 2.8% | - |
While revenue increased, the profit or loss calculated by deducting selling, general and administrative expenses from gross profit turned from a profit in the same period of the previous year to a loss, highlighting a business structure in which profit before tax and net income are heavily dependent on investment gains and losses. Revenue was ¥2兆195.9億円 (¥1兆8,203.4億円 in the previous year, YoY+10.9%), while the profit or loss after deducting selling, general and administrative expenses from gross profit was calculated at △2,332.9億円 (previous year +1,964.6億円). Profit before tax was 5,891.5億円 (previous year 6,899.4億円, YoY-14.6%), consolidated net income, including non-controlling interests, was 5,189.9億円 (previous year 5,641.4億円, YoY-8.0%), and net income attributable to owners of the parent was 3,473.3億円 (previous year 4,218.2億円, YoY-17.7%). The primary drivers of the revenue increase were the dual growth engines of the SoftBank Business and AI Computing Business, while the primary factors affecting earnings were the sharp increase in SG&A expenses and the expansion of valuation gains in the holding company investment business.
【Revenue】Revenue was 2兆195.9億円 (up +10.9% year on year). By segment, the SoftBank Business accounted for the core of revenue at 1兆8,106.7億円 (89.6% of total, +9.3%), while the AI Computing Business achieved high growth at 1,752.5億円 (8.7% of total, +30.2%), and Other Businesses generated 336.7億円 (+16.8%). The result reflects the addition of the expansion of the AI Computing Business to the stable growth of the SoftBank Business.
【Profit and Loss】Gross profit was 1兆536.3億円, with a gross margin of 52.2% (52.4% in the previous year), remaining almost flat. SG&A expenses surged to 1兆2,869.2億円 (7,582.0億円 in the previous year, +69.7%), causing the profit or loss after deducting SG&A expenses from gross profit to turn into a loss of △2,332.9億円 (previous year +1,964.6億円). On a segment profit basis calculated using profit before tax, the SoftBank Business remained solid at 2,925.4億円 (previous year 2,785.4億円, +5.0%), while the AI Computing Business recorded an expanded loss of △2,008.4億円 (previous year △324.1億円). Final earnings were supported by total investment gains and losses of 1兆8,593.8億円, including 1兆3,822.1億円 from the holding company investment business, which improved sharply from △2,565.5億円 in the previous year. As a result, profit before tax was 5,891.5億円 (-14.6%), consolidated net income was 5,189.9億円 (-8.0%), and net income attributable to owners of the parent was 3,473.3億円 (-17.7%). Despite higher revenue, operating earnings on a core business basis turned negative, indicating a pattern of higher revenue but lower profit driven by dependence on investment gains and losses.
The reportable segments comprise the Holding Company Investment Business, SoftBank Vision Fund (SVF) Business, SoftBank Business, and AI Computing Business. Segment profit is calculated on a profit-before-tax basis. The Holding Company Investment Business improved substantially to 1兆516.2億円 (previous year △209.4億円), driven by the sharp expansion of investment gains and losses (1兆3,822.1億円). The SVF Business declined significantly to 54.3億円 (previous year 4,513.9億円), primarily due to the contraction of investment gains and losses to 2,557.8億円 (previous year 7,268.4億円). The SoftBank Business remained stable at 2,925.4億円 (previous year 2,785.4億円, +5.0%). The AI Computing Business recorded an expanded loss of △2,008.4億円 (previous year △324.1億円), with profitability continuing to deteriorate despite a 30.2% increase in revenue. Other Businesses swung significantly to △7,651.9億円 (previous year 724.3億円), partially offset by adjustments of 2,056.0億円.
【Profitability】Against revenue of 2兆195.9億円 (up +10.9% year on year), the gross margin was 52.2% (52.4% in the previous year, -0.2pt), remaining almost flat. The profit or loss after deducting SG&A expenses from gross profit turned negative at △2,332.9億円 (previous year +1,964.6億円), resulting in profit before tax of 5,891.5億円 (-14.6%), consolidated net income of 5,189.9億円 (-8.0%), and a consolidated net profit margin of 25.7% (31.0% in the previous year). Net income attributable to owners of the parent was 3,473.3億円 (-17.7%), while basic EPS was ¥60.08 (¥72.93 in the previous year, -17.6%).【Cash Flow Quality】Operating cash flow was △4,398.6億円 (previous year △2,705.9億円), substantially below consolidated net income of 5,189.9億円, indicating a significant divergence between earnings and cash flow.【Investment Efficiency】ROE (consolidated net income / period-end net assets) was 2.4% on a quarterly basis. Total assets increased to 65兆1,351.5億円 (from 60兆7,495.5億円 at the end of the previous period).【Financial Soundness】The equity ratio was 28.3% (29.0% at the end of the previous period, -0.7pt). Total interest-bearing debt was 26兆6,448.6億円, resulting in an estimated D/E ratio of 1.25x against equity (total net assets) of 21兆3,528.5億円. Current assets of 10兆6,921.9億円 versus current liabilities of 15兆6,701.0億円 resulted in a current ratio of approximately 68.2%. Goodwill was 7兆3,846.6億円, representing a high 34.6% of net assets.
Operating cash flow was △4,398.6億円 (previous year △2,705.9億円), remaining negative for the second consecutive period, with the extent of deterioration increasing. Contributing factors included the increase in interest paid to 3,389.8億円 (previous year 1,731.5億円, +95.8%) and deterioration in working capital (trade payables △828.8億円, inventories △208.3億円). Investing cash flow was △2兆5,421.9億円 (previous year △6,415.6億円), as capital expenditures of 1兆2,086.7億円 (previous year 2,172.2億円, +456%) and acquisition expenditures related to SVF investments of 1兆6,268.2億円 increased cash outflows. Financing cash flow represented net funding of 1兆5,159.3億円 (previous year 1兆4,097.2億円), as proceeds from interest-bearing debt of 5兆5,596.9億円 exceeded repayments of 3兆9,350.8億円. Free cash flow, calculated as the sum of operating and investing cash flow, was substantially negative at △2兆9,820.5億円, indicating a funding structure dependent on external financing. Cash and cash equivalents decreased by △1兆4,350.8億円 from the beginning of the period, leaving an ending balance of 3兆9,270.7億円.
Profit before tax of 5,891.5億円 for the period was generated through a structure in which total investment gains and losses of 1兆8,593.8億円 more than offset the loss of △2,332.9億円 after deducting SG&A expenses from gross profit. By component, the holding company investment business was the largest positive contributor at 1兆3,822.1億円, a sharp turnaround from △2,565.5億円 in the previous year. Meanwhile, derivative-related gains and losses were △3,915.9億円 (previous year +2,288.2億円), and foreign exchange gains and losses were △1,460.7億円 (previous year +1,432.7億円), both moving in a negative direction. These results demonstrate that valuation-based and market-dependent items have a significant impact on earnings. Against consolidated net income of 5,189.9億円, net income attributable to owners of the parent was 3,473.3億円, with the difference of 1,716.6億円 representing non-controlling interests (up from 1,423.3億円 in the previous year). Total comprehensive income was 9,884.6億円 (previous year △967.2億円), exceeding net income of 5,189.9億円. The primary factor behind the 4,694.7億円 divergence was foreign currency translation adjustments for foreign operations of 4,342.3億円. Given the operating loss and the significant fluctuations in investment gains and losses and other comprehensive income, the recurring and sustainable nature of period profit is limited and earnings quality should be assessed cautiously, including the divergence from cash flow.
The full-year dividend forecast is ¥11.00 per share (after taking into account the stock split), with no revision as of the current quarter. A note states that, because of the stock split (effective January 1, 2026, 4 shares for each share), the interim dividend amount is based on the pre-split amount and therefore cannot simply be added to the full-year amount. Dividend payments for the current quarter attributable to owners of the parent were 313.4億円 (previous year 316.3億円), resulting in a payout ratio of approximately 9.0% against net income attributable to owners of the parent of 3,473.3億円. Treasury share purchases were 0.02億円 (previous year 932.2億円), meaning that virtually no buybacks were conducted. Accordingly, the total return ratio, including share repurchases, remained at a level consisting solely of dividends. Free cash flow for the period was substantially negative, and it should be noted that the source of dividend funding depends more on financing activities than on operating cash flow.
Dependence on investment gains and losses and valuation-based assets: Total investment gains and losses were 1兆8,593.8億円, substantially exceeding profit before tax of 5,891.5億円. As indicated by derivative-related gains and losses of △3,915.9億円 and foreign exchange gains and losses of △1,460.7億円, the earnings structure is highly exposed to market fluctuations.
Cash flow and liquidity: Operating cash flow was △4,398.6億円 and free cash flow was △2兆9,820.5億円, indicating continued cash outflows. Current assets of 10兆6,921.9億円 versus current liabilities of 15兆6,701.0億円 resulted in a current ratio of approximately 68.2%. The rollover trend of short-term interest-bearing debt of 7兆5,591.7億円 will be a key monitoring point.
Profitability of the AI Computing Business: Segment profit and loss was △2,008.4億円 (previous year △324.1億円), with the loss expanding. Although revenue grew by +30.2%, this growth was not accompanied by improved profitability.
Profitability and Returns
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Net Profit Margin | 25.7% | 5.9% (1.6%–10.7%) | +19.8pt |
The net profit margin substantially exceeds the industry median, but this is primarily attributable to the boost from investment gains and losses and does not indicate superior profitability in the core business.
Growth and Capital Efficiency
| Metric | Company | Median (IQR) | Delta |
|---|---|---|---|
| Revenue Growth Rate (Year on Year) | 10.9% | 9.3% (0.4%–16.9%) | +1.6pt |
The revenue growth rate is slightly above the industry median.
Source: Compiled by the Company
The calculated profit or loss after deducting SG&A expenses from gross profit was △2,332.9億円, turning negative from +1,964.6億円 in the same period of the previous year. The primary factor was the 69.7% year-on-year increase in SG&A expenses, which substantially exceeded the 10.9% growth in revenue. This development warrants attention as a change in core business profitability.
Profit before tax and net income were supported by investment gains and losses, particularly the expansion of valuation gains in the holding company investment business. Net income attributable to owners of the parent declined by -17.7% year on year. The earnings structure remains heavily affected by fluctuations in investment gains and losses, derivatives, and foreign exchange.
Cash and cash equivalents decreased by △1兆4,350.8億円 from the beginning of the period to 3兆9,270.7億円. Capital expenditures surged from 217.2億円 in the previous year to 1,208.7億円, confirming the impact of excess investment on funding and liquidity.
This report is an earnings analysis document automatically generated by AI based on XBRL earnings summary data. It does not recommend investment in any specific security. Industry benchmarks are reference information compiled by the Company based on publicly available earnings data. Investment decisions should be made at your own responsibility, after consulting with a professional as necessary.
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