Main Q&A at Earnings Investor Briefing
for Q2 FY2024

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Date	Friday, November 8, 2024 6:00 pm - 6:50 pm
Speakers	SoftBank Corp.: Kazuhiko Fujihara (Board Director, Executive Vice President & CFO) Osamu Akiyama (Vice President, Head of Strategic Finance Division) Wataru Onoguchi (Head of Finance and Accounting Division) Yudai Sasaki (Deputy Head of Corporate Planning Division)

It was mentioned that you will focus not only on net additions but also on ARPU moving forward. What is your outlook for ARPU? Is there a risk that focusing too much on ARPU might lead to a decrease in mobile revenue?

Our top priority is the growth of mobile revenue, and to achieve this, we believe it is important to focus on both net additions and ARPU. Our services start with smartphones, so we will continue to prioritize net additions. We aim to expand mobile revenue in a disciplined manner, rather than excessively investing in low-profit areas just to increase net additions.
Regarding the net additions of smartphones, the initial forecast seemed to be 1 to 1.5 million per year, but this forecast seems to be gradually decreasing. What has changed from the initial forecast? Is the target of over 1 million net additions per year sustainable?

In the Medium-term Management Plan announced in May 2023, we announced a target of 1 million net additions per year for smartphones. The net additions for FY2023 significantly exceeded 1 million, leading to feedback suggesting that the target might be too low. Since net additions increase significantly in the fourth quarter every year, we consider the 1 million target for this fiscal year to be reasonable. For the following fiscal years, while balancing profitability, we aim to maintain a certain level of net additions.
The price plans of “Y!mobile” seem less competitive compared to those of other companies. What is your view on this?

We continuously review our pricing plans while monitoring the business environment and progress. We have also revised the price plans of “LINEMO” and we believe we can compete by leveraging both brands. We will make future decisions based on the results.
The Enterprise segment showed a significant year-on-year increase in segment income. Is this due to one-time factors or organic growth?

The increase was mainly due to organic growth in business solutions and others. In addition, in mobile device rental services, we reflected improved profitability of mobile devices in the secondary market. This includes a one-time factor where the impact of Q1 was retrospectively applied to Q2.
What specific items are included in the “Other” segment besides adjustment items? What will be the future reporting segment for generative AI-related items?

The “Other” segment includes R&D expenses and generative AI-related items, such as depreciation of AI computing infrastructure and development costs for AI call center solutions. Currently, generative AI-related items are recognized in the “Other” segment as they are in the R&D stage. We are exploring various options for the next Medium-term Management Plan.
Could you explain the factors behind the upward revision of the earnings forecast, excluding LY Group (LY Corporation and its subsidiaries)? Also, why was the full-year forecast of segment income for the Consumer segment at ¥530 billion left unchanged, despite a high progress rate of 60.8%?

Excluding LY Group, the revisions mainly involved SoftBank. A key factor was the reduction of downside risks, such as valuation losses and other potential losses that could occur during the current fiscal year, in the “Other” segment. While the full-year forecast of segment income for the Consumer segment at ¥530 billion is well within reach, we decided to maintain the forecast considering the overall business environment.
It was mentioned that there is a possibility of achieving ¥1 trillion in operating profit in the next fiscal year. What areas would present risks to achieving this goal?

Next fiscal year, we expect further progress in R&D and generative AI-related initiatives, leading to increased expenses compared to this fiscal year. It is crucial to absorb these costs effectively and secure profits.
In relation to LY Corporation's announcement that it will use the remaining funds out of ¥365 billion, after deducting the amount allocated to M&A, for share buybacks by the end of the next fiscal year. Could you provide your assessment of A Holdings Corporation's participation in LY Corporation's recent public tender offer for its own shares, and their future participation intentions?

LY Corporation's recent public tender offer was conducted with the specific objective of meeting the listing maintenance criteria for the Tokyo Stock Exchange Prime Market, which is why we accepted the offer at the price of ¥380. Stock price is also important, and when LY Corporation conducts share buybacks in the future, it will be necessary to have discussions with LY Corporation and A Holdings Corporation to find a direction regarding the stock price and ownership considerations. We understand LY Corporation's intentions and believe that various discussions will be required.