Summary of Earnings
Results Briefing
for Q3 FY2023

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Date Wednesday, February 7, 2024 4:00 pm - 5:10 pm
Speakers SoftBank Corp.
Junichi Miyakawa (President & CEO)
Kazuhiko Fujihara (Board Director, Executive Vice President & CFO)

Summary

At the earnings results briefing, Mr. Junichi Miyakawa, President & CEO of SoftBank Corp., discussed the consolidated results for Q3 FY2023.

Consolidated Results
for Q3 FY2023

Company-wide results

  • Revenue for Q1-Q3 FY2023 was ¥4,511.6 billion, up 4% year on year. Revenue increased in 4 segments (Enterprise, Distribution, Media & EC, and Financial).
  • Operating income was ¥731.9 billion, up 7% year on year*1. 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 ¥406.7 billion, up 30% year on year*1.
  • The progress rate for Q1-Q3 marked steady progress towards full-year forecasts, with a progress rate of 75% for revenue, 94% for operating income, and 97% for net income attributable to owners of SoftBank Corp.

Upward Revision
of Full-year Forecast

  • SoftBank Corp. has revised upward its full-year forecasts for FY2023, which were announced in May 2023. The revised forecasts are as shown in the table below.
Initial forecast
(Announced in May 2023)		 Revised forecast
(Announced this time)		 Increase
Revenue ¥6,000 billion ¥6,060 billion +¥60 billion
Operating income ¥780 billion ¥840 billion +¥60 billion
Net income attributable to owners of SoftBank Corp. ¥420 billion ¥462 billion +¥42 billion
  • The revised forecast of operating income by segment is as shown in the table below.
Initial forecast
(Announced in May 2023)		 Revised forecast
(Announced this time)		 Increase Driver
Consumer ¥470 billion ¥490 billion +¥20 billion Strong net additions and improved ARPU forecast
Enterprise ¥152.5 billion ¥152.5 billion -
Distribution ¥26.7 billion ¥26.7 billion -
Media & EC ¥176.0 billion ¥195.0 billion +¥19 billion Cost optimization and selective focus
Financial ¥-20.0 billion ¥-10.0 billion +¥10 billion Efficient use of promotion cost
Other ¥-25.2 billion ¥-14.2 billion +¥11 billion Sale of a subsidiary and others
Total ¥780 billion ¥840 billion +¥60 billion

Results by Segment

(1) Consumer segment

  • Revenue decreased by 0.3% year on year, and segment income decreased by 2% year on year.
  • Mobile service revenue returned to growth in Q3. When the medium-term management plan was announced in May 2023, mobile service revenue was expected to begin increasing on a full-year basis in FY2024. However, we now expect to achieve a full-year revenue increase in FY2023, one year earlier than planned.
  • Net additions of smartphone and main subscribers continued to show good performance, following the trend since the previous year.
  • Cumulative smartphone subscribers increased by 5% from the end of the same period in the previous fiscal year.

(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.

(3) Media & EC segment

  • Revenue increased by 3% year on year, and segment income increased by 29% year on year, contributed mainly by cost optimization and a recovery of media business.

(4) Financial segment

  • Revenue increased by 95% year on year. This increase was mainly due to the consolidation of PayPay Corporation. The segment loss in Q1-Q3 FY2023 was ¥3.5 billion. Assuming that PayPay Corporation had been consolidated from the beginning of FY2022, the profitability improved substantially from the segment loss of ¥11.8 billion in Q1-Q3 FY2022.
    1. PayPay consolidated*2
      • Consolidated revenue*3 in Q1-Q3 was ¥155.2 billion. Consolidated EBITDA*4 was ¥7.4 billion. PayPay Corporation achieved positive consolidated EBITDA for three consecutive quarters.
    2. SB Payment Service Corp.
      • Gross merchandise value (GMV) in Q1-Q3 was ¥5.8 trillion, up 20% year on year. Notably, GMV has been driven by the non-telecommunications area, which includes transactions outside our Group that increased by 27% year on year.
      • Operating income increased by 10% year on year.
    3. PayPay Securities Corporation
      • The cumulative number of PayPay point investment users surpassed 13.60 million.

WeWork Japan

  • We announced that SoftBank's wholly-owned subsidiary will take over the business of WeWork Japan GK, our affiliated company (with a 25% voting rights ownership ratio), through an absorption-type demerge. This move is aimed at rapidly executing our growth strategies.

Progress Toward Building
Next-generation
Social Infrastructure

  • In October 2023, we completed the expansion of an all optical network in core areas in Japan, resulting in low power-consumption and efficient transmission of communication traffic among data centers spread out nationwide.
  • We achieved steady progress toward the development of a 390 billion parameter homegrown LLM (Large Language Model). We aim to complete multimodal LLM*5 in FY2024.
  • We will further expand the computing platform, aiming for 1 trillion parameters.

Beyond Japan

  • In December 2023, we announced an investment (of approximately ¥75.0 billion*6) in Cubic Telecom Ltd., which primarily provides a global IoT platform for connected cars. We plan to acquire 51% of its equity stake and make Cubic Telecom Ltd. a consolidated subsidiary.

ESG

  • SoftBank Corp. was selected as a component of the Dow Jones Sustainability World Index (DJSI World) for the second consecutive year. SoftBank Corp. achieved the highest score among the companies selected from Japan. In addition, it was the only Japan-based company selected for the “Telecommunications” industry.
  • SoftBank Corp. received the Grand Prize at the NIKKEI SDGs Management Awards.
[Notes]
  1. *1
    Excluding the re-measurement gain associated with making PayPay Corporation a consolidated subsidiary, which was recognized in Q3 FY2022.
  2. *2
    PayPay Corporation and PayPay Card Corporation
  3. *3
    For PayPay on a consolidated basis (with each fiscal year including figures for nine months). The figure is based on IFRS and is non-audited.
  4. *4
    For PayPay on a consolidated basis. EBITDA is calculated by adding depreciation and loss on disposal to operating income (with each fiscal year including figures for nine months). The figure is based on IFRS and is non-audited.
  5. *5
    Refers to two or more different types of data, including text, audio, images, videos, sensor information, etc.
  6. *6
    Converted at 1 EUR = ¥158.0