On August 4, 2023, SoftBank Corp. (TOKYO: 9434) President & CEO Junichi Miyakawa presented earnings results for the first quarter (April - June, 2023, Q1) of the fiscal year ending March 31, 2024 (FY2023). At the press conference held in Tokyo, Miyakawa started his presentation with a review of SoftBank’s consolidated results.
In Q1 FY2023, revenue (1,429.7 billion JPY), operating income (246.3 billion JPY), and net income (146.7 billion JPY) increased year-on-year (YoY) by 5%, 2% and 15%, respectively. Q1 revenue was also SoftBank’s highest since it listed on the Tokyo Stock Exchange in 2018.
On track to achieve full-year forecast and mid-term targets
Miyakawa compared SoftBank’s Q1 performance against the full-year forecast for FY2023, noting that good progress toward the targets is being made, with 24% of revenue, 32% of operating income and 35% of net income already achieved. SoftBank’s Q1 FY2023 results also indicated that steady progress toward achieving the Mid-term Management Plan is being made.
Consumer segment narrows mobile revenue decrease
Reviewing SoftBank’s financial segments in detail, Miyakawa noted that all segments saw increased revenues. While Q1 operating income in the Consumer segment was down by 4% YoY, the decrease in mobile revenue is narrowing, and that steady progress is being made toward growth on a full-year basis. “We’re seeing the light at the end of the tunnel for a V-shaped recovery,” Miyakawa said.
Mobile subscriber net additions were also strong in Q1 FY2023, and with 29.58 million smartphone subscribers at the end of Q1, SoftBank is now close to its goal of 30 million subscribers, Miyakawa said.
The Enterprise segment saw a 4% increase in revenue and an 8% increase in operating income YoY thanks in part to growth in recurring revenue. The renamed Media & EC segment, which was previously called the Yahoo! JAPAN/LINE segment, also saw growth in revenue and operating income, with YoY increases of 2% and 31%, respectively.
PayPay achieves first positive EBITDA in standalone quarter
In the Financial Business segment, Q1 FY2023 revenue increased 2.8 times YoY mainly due to the consolidation of PayPay in Q3 of the previous fiscal year. Looking at PayPay’s consolidated revenue, Q1 revenue increased by 41% YoY to 48.0 billion JPY, and it recorded its first profitable quarter with 1.7 billion JPY of consolidated EBITDA.
Accelerating generative AI initiatives
Stressing that SoftBank views generative AI as the most important technology for the future, Miyakawa gave an update on the company’s generative AI initiatives. He said that SoftBank is in an excellent position to develop generative AI given its abundance of engineers, an overwhelming number of customer touchpoints–including subscribers to SoftBank’s mobile services, as well as LINE, Yahoo! JAPAN and PayPay users–and the largest computing platform in Japan.
To build homegrown generative AI in Japan, SoftBank is investing approximately 20 billion JPY in its generative AI computing platform, which is scheduled to start operating in the fall of 2023. The computing platform, which will utilize NVIDIA’s DGX SuperPOD™ AI data center infrastructure, also received approval from Japan’s Ministry of Economy, Trade and Industry (METI), and is expected to receive JPY 5.3 billion in subsidies.
Miyakawa next unveiled a new wholly-owned subsidiary called SB Intuitions that will utilize this computing platform to research and develop Large Language Models (LLM) specialized for the Japanese language. The homegrown LLM will enable SB Intuitions to develop generative AI services tailored to Japan’s unique business and administrative practices.
A strategic alliance with Microsoft in the generative AI domain was also highlighted. Leveraging its telecommunication networks and operational expertise, SoftBank is collaborating with Microsoft to provide solutions based on Microsoft 365, Microsoft Azure and Microsoft 365 Copilot, which utilizes OpenAi’s GPT-4, to enterprise customers.
Miyakawa explained that SoftBank’s generative AI strategy will utilize multiple types of generative AI–including its own homegrown generative AI developed in-house and those of other companies–to develop and provide solutions that are tailored to the unique needs of enterprise customers in different industry sectors, including real estate, health care, retail, finance, logistics and manufacturing.
“We want to provide optimal solutions for our customers, and we’ll utilize generative AI to boost Japan’s productivity,” Miyakawa said.
(Posted on August 4, 2023)
by SoftBank News Editors