SoftBank Group Achieves $7.4 Billion Net Profit in FY25

SoftBank Group has achieved a remarkable turnaround with a net profit of $7.4 billion in FY25, contrasting starkly with a loss of $1.4 billion from the prior year. This positive shift is attributed to a solid recovery in investments and strong commitments to artificial intelligence and semiconductor ventures.

Revenue and Earnings Overview

The Japanese conglomerate’s revenue increased by 7.2% year-on-year, reaching $45.97 billion. Income before tax soared to $10.8 billion, a sizeable rise from just $367.5 million the previous year. The company credited this improvement to a significant $23.5 billion profit from investments in Alibaba, T-Mobile, and Deutsche Telekom.

Investment Business Performance

The investment division, driven by founder Masayoshi Son, reported gains of ¥3.41 trillion ($21.7 billion). This included impressive earnings of ¥1.88 trillion ($11.94 billion) from Alibaba and ¥1.35 trillion ($8.58 billion) from T-Mobile. However, these profits were somewhat countered by a derivative loss of ¥2.03 trillion, primarily stemming from prepaid forward contracts linked to Alibaba shares.

Vision Fund Analysis

The results for the Vision Fund segment presented a mixed picture. Vision Fund 1 recorded a gain of ¥940 billion ($5.97 billion), while Vision Fund 2 faced a loss of ¥526 billion ($3.34 billion). The group also experienced a charge of ¥491.8 billion ($3.17 billion) related to third-party investor interests in the Vision Funds.

Factors Impacting Vision Fund 2

The losses in Vision Fund 2 were notably influenced by declines in the valuations of firms such as Ola and Swiggy, whose stock prices fell significantly. SoftBank indicated that the value of its publicly listed investments under Vision Fund 2 dropped by 21.7% in the last quarter.

Future Investments in AI

Looking forward, SoftBank is intensifying its investments in AI infrastructure. The company has pledged up to $30 billion to OpenAI Global and is in the process of acquiring the US-based chip manufacturer Ampere for $6.5 billion. Additionally, the group has initiated the “Stargate” project, a massive $500 billion effort aimed at constructing expansive AI data centres.

Challenges Ahead

Despite the return to a profitable position, SoftBank has flagged various macroeconomic uncertainties, including foreign exchange volatility, regulatory challenges, and performance discrepancies in its private market investments. The company plans to propose a year-end dividend of ¥22 ($0.14) per share, maintaining the full-year payout at ¥44 ($0.28), consistent with the previous year.