SoftBank Group swung to a 1.12 trillion yen ($7.09 billion) net loss attributable to shareholders for the July-September quarter, the company reported on Tuesday, reversing a 2.50 trillion yen profit a year earlier. The result missed a Bloomberg consensus estimate that called for a 129.32 billion yen profit, as a slide in AI-linked stocks, higher financing costs and a charge tied to U.S. data center power equipment weighed on the Tokyo-based investor.
Forecasts had been scattered. Three analysts polled by LSEG ranged from a 233 billion yen profit to a 113 billion yen loss. Revenue came in at 2.22 trillion yen, ahead of the LSEG estimate of 2.02 trillion yen.
The swing came from the investment side of the business. SoftBank booked a 133.59 billion yen investment loss for the quarter, while its Vision Fund posted a 245.6 billion yen gain on investments, down from a 2.755 trillion yen gain a year ago. Last year's quarterly profit had been driven by a jump in the value of SoftBank's OpenAI stake.
Key facts
- 01SoftBank posted a 1.12 trillion yen ($7.09B) net loss for July-September, versus a 2.50 trillion yen profit a year earlier.
- 02Bloomberg consensus called for a 129.32 billion yen profit; revenue of 2.22 trillion yen beat LSEG's 2.02 trillion yen estimate.
- 03The OpenAI stake's fair value held at $99.6B, unchanged from March; SoftBank has invested $64.6B for about 13%.
- 04Finance costs rose to 461.9 billion yen, and a 597.25 billion yen six-month charge hit U.S. data center power equipment plans.
- 05SoftBank shares closed 13.9% higher on Tuesday on a rebound in Asian technology stocks.
That lift was absent this time. SoftBank said the fair value of its OpenAI holding stayed at $99.6 billion, unchanged from March, so the stake produced no gain for the period. SoftBank has now invested $64.6 billion in OpenAI for a stake of about 13%, after completing a follow-on investment in October.
Financing costs rose to 461.9 billion yen in the quarter. SoftBank tied the increase to a margin loan backed by its Arm holdings, large bond issuances and generally higher funding rates. Consolidated interest-bearing debt rose by 7.91 trillion yen from the end of March to 32.59 trillion yen at Sept. 30, as SoftBank paid for follow-on OpenAI investments and U.S. power generation and AI data center assets.
The data center buildout also produced a direct charge. SoftBank booked a 597.25 billion yen loss in the six months to Sept. 30 from realigning its procurement plans for power generation equipment for U.S. AI data center projects. The loss covered non-refundable advance payments along with contract modifications and settlements.
Investors looked past the miss. SoftBank shares closed 13.9% higher on Tuesday, lifted by a broader rebound in Asian technology stocks after Wall Street recovered overnight. The stock had lost more than a quarter of its value over the past month and had nearly halved since the start of June.
That selloff has tracked wider pressure on AI-linked shares. The Democratic Party's gains in the U.S. midterm elections have raised expectations of regulatory scrutiny of the sector, and SoftBank has separately seen China block its $5.4 billion takeover of ABB's robotics division.
SoftBank is still committing capital to AI infrastructure. A day before the results, it joined Grab and PETROS in a $1.85 billion initial commitment for AI infrastructure in Malaysia, targeting at least five gigawatts of computing capacity over time.
Working on something we should cover, or seeing a story we missed? Send leads, documents, or feedback to hello@aichatdaily.com. For sensitive tips, see our secure tips page for Signal and PGP options.
Spotted an error? Email hello@aichatdaily.com with the URL and the issue, or read our full corrections policy.
