In the fiscal second quarter, SoftBank reported a surge in net sales, surpassing LSEG estimates at 1.67 trillion Japanese yen ($11 billion) against an expected 1.6 trillion yen. However, the company also disclosed a significant net loss of 931.1 billion yen ($6.2 billion), far exceeding the anticipated loss of 114.1 billion yen. For the first half of the fiscal year, SoftBank faced a substantial loss of 1.41 trillion yen ($9.3 billion), a notable downturn from the 3 trillion yen profit recorded in the same period last year. The weakened yen played a role in this decline due to the company’s substantial U.S. dollar-denominated liabilities.
SoftBank’s Vision Fund, on the other hand, experienced a second consecutive quarter of gains totaling 21.3 billion yen. This positive outcome resulted from the sale of shares in chip designer Arm to a SoftBank subsidiary, compensating for a decrease in the value of other investments, including Chinese AI firm SenseTime. Despite challenges, SoftBank CFO Yoshimitsu Goto expressed optimism, stating, “The environment is still tough, but we believe we have hit a bottom and are making good moves towards positive figures.”
However, the SoftBank Vision Fund segment posted a pre-tax loss of 258.86 billion yen. The company recorded a loss of 234.4 billion yen related to its investment in WeWork, which recently filed for Chapter 11 bankruptcy protection in the U.S. SoftBank, a major backer of WeWork, faced criticism for its investment strategy, with WeWork serving as an example of a lack of discipline within the Vision Fund.
Goto acknowledged the WeWork situation, stating, “As a company, we need to accept this reality and also need to learn the lesson from this for our future investment activity.”
SoftBank’s focus on artificial intelligence (AI) remains steadfast, with Goto emphasizing their commitment to being a front-runner in the AI revolution. The company’s flagship tech investment arm showed signs of recovery in June, posting its first investment gain in five consecutive quarters, aligning with the rebound in technology stock prices.
While SoftBank’s founder, Masayoshi Son, has not been present at recent earnings presentations, Goto noted that Son is actively involved in discussions regarding the changes brought about by the AI revolution. Despite challenges, SoftBank aims to navigate the evolving tech landscape with a strategic shift towards AI investments.
