|Date||Wednesday, November 8, 2023 4:00 pm - 5:25 pm|
Junichi Miyakawa (President & CEO)
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)
At the earnings results briefing, Mr. Junichi Miyakawa, President & CEO of SoftBank Corp., discussed the consolidated results for Q2 FY2023.
for Q2 FY2023
- Revenue for Q1-Q2 FY2023 was ¥2,933.8 billion, up 4% year on year. Revenue increased in 4 segments (Enterprise, Distribution, Media & EC, and Financial).
- Operating income was ¥514.4 billion, up 6% year on year. Progress was in line with the full-year forecast for actual profit growth in all segments.
- Net income attributable to owners of SoftBank Corp. was ¥302.1 billion, up 29% year on year.
- The progress rate for Q1-Q2 marked steady progress against full-year forecasts, with a progress rate of 49% for revenue, 66% for operating income, and 72% for net income attributable to owners of SoftBank Corp.
Results by Segment
(1) Consumer segment
- Revenue decreased by 0.4% year on year, while segment income decreased by 2% year on year.
- The decrease in mobile service revenue improved significantly. We are making steady progress toward our mobile service revenue growth target for FY2024 on a full-year basis.
- Operating income progressed steadily toward growth on a full-year basis, with a progress rate for Q1-Q2 of 66% against the full-year forecast.
- Net additions of smartphone and main subscribers continued to show good performance, following the trend since the previous year.
- Cumulative smartphone subscribers increased by 6% from the end of the same period in the previous fiscal year. The number of subscribers surpassed 30 million on November 6, 2023, achieving our target (announced in August 2020).
- In October 2023, we began providing new price plans for both “SoftBank” and “Y!mobile” brands.
(2) Enterprise segment
- Revenue increased by 5% year on year, and segment income increased by 15% year on year.
- Business solution and others revenue continued to perform firmly, increasing 15% year on year.
- Recurring revenue, which makes up more than 70% of business solution and others revenue, increased by 18% year on year.
- Progress was made on generating new businesses leading to solutions of social issues, which is the growth strategy for the Enterprise segment laid out in the medium-term management plan (presentation of initiatives in the healthcare and autonomous building fields).
(3) Media & EC segment
- Revenue increased by 2% year on year, and segment income increased by 28% year on year. Cost optimization and one-time gain was recorded.
- On October 1, 2023, Z Holdings Corporation completed an intra-group reorganization involving mainly Z Holdings Corporation, LINE Corporation, and Yahoo Japan Corporation, and in which Z Holdings Corporation will be the surviving company. The trade name of Z Holdings Corporation was changed to LY Corporation.
- Through this intra-group reorganization, Z Holdings Corporation pursue improvement of business efficiency and renewed growth of media, search and commerce businesses.
(4) Financial segment
- Revenue increased 190% year on year. This increase was mainly due to the consolidation of PayPay Corporation. The segment loss in Q1-Q2 FY2023 was ¥2.0 billion. Assuming that PayPay Corporation had been consolidated from the beginning of FY2022, the profitability improved substantially from the segment loss of ¥9.2 billion in Q1-Q2 FY2022.
- PayPay consolidated*1
- Consolidated revenue*2 in Q1-Q2 was ¥99.5 billion. Consolidated EBITDA*3 was ¥4.1 billion. PayPay Corporation achieved positive consolidated EBITDA for two consecutive quarters.
- SB Payment Service Corp.
- Gross merchandise value (GMV) in Q1-Q2 was ¥3.8 trillion, up 21% year on year. Notably, GMV has been driven by the non-telecommunications area, which includes transactions outside our Group that increased by 29% year on year.
- Operating income increased by 14% year on year.
- PayPay Securities Corporation
- The cumulative number of PayPay point investment users surpassed 12 million.
- PayPay consolidated*1
Progress on Non-Terrestrial
- We aim to realize a world that eliminates out-of-coverage areas by integrating satellites and HAPS (High Altitude Platform Stations) with existing terrestrial mobile networks.
- In September 2023, we signed a distribution partnership agreement with OneWeb. In addition, in September of the same year, we began providing “Starlink Business” to companies and local governments in Japan.
- In the HAPS business, we received contract from NICT (National Institute of Information and Communications Technology), which is under the jurisdiction of the Ministry of Internal Affairs and Communications, to conduct two commissioned research projects. We are accelerating research and development for HAPS commercialization.
Progress Toward Building
- We plan to build “Core Brain,” a data center that composed of major AI infrastructures and quantum computers, in Hokkaido. We aim to open the data center by completing first phase construction in FY2026.
- A computing platform for in-house development of homegrown generative AI has started operations. By the end of 2024, we aim to build a homegrown Japanese LLM (Large Language Model) with 350.0 billion parameters.
- SoftBank Corp. was selected as a contractor for the “Development of Technology for Integrated Use of Quantum Computers and Supercomputers” by the Ministry of Economy, Trade and Industry. In cooperation with RIKEN, SoftBank Corp. plans to promote research and development of a platform that will link supercomputers and quantum computers. We aim for the early commercialization of quantum computers.
- In November 2023, SoftBank Corp. issued the Series 1 Bond-Type Class Shares (total issue amount: ¥120.0 billion, fixed dividend annual rate: 2.5%) to finance growth investments. SoftBank Corp. intends to use the proceeds mainly for growth investments related to next-generation social infrastructure.
- *1PayPay Corporation and PayPay Card Corporation
- *2For PayPay on a consolidated basis (with each fiscal year including figures for six months). The figure is based on IFRS and is non-audited.
- *3For PayPay on a consolidated basis. EBITDA is calculated by adding depreciation to operating income (with each fiscal year including figures for six months). The figure is based on IFRS and is non-audited.
This presentation does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States. The Bond-Type Class Shares (the “Securities”) referred to herein have not been, and will not be, registered under the United States Securities Act of 1933, as amended (hereinafter the “Securities Act”). Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act. The Securities referred to above will not be publicly offered or sold in the United States.