On November 8, 2023, SoftBank Corp. (TOKYO: 9434) President & CEO Junichi Miyakawa presented earnings results for the second quarter (April - September, 2023, Q2) and six months ended September 30, 2023 (H1) of the fiscal year ending March 31, 2024 (FY2023). At the press conference held in Tokyo, Miyakawa began his presentation with a review of SoftBank’s consolidated results.
In FY2023 H1, revenue (2,933.8 billion JPY), operating income (514.4 billion JPY), and net income (302.1 billion JPY) increased year-on-year (YoY) by 4%, 6% and 29%, respectively.
Making progress toward full-year forecast and mid-term targets
Miyakawa compared SoftBank’s H1 performance against the full-year forecast for FY2023, noting that good progress is being made, with 49% of revenue, 66% of operating income and 72% of net income already achieved. SoftBank’s H1 FY2023 results also indicated that steady progress is being made toward achieving its Mid-term Management Plan targets.
Consumer segment launched new mobile service price plans
Miyakawa then reviewed each of SoftBank’s financial segments. For the Consumer segment, Miyakawa noted that while FY2023 H1 revenue and operating income were down 0.4% and 2% YoY, respectively, the YoY decrease in mobile revenue is narrowing, and steady progress is being made toward the goal of full-year growth in operating income, with 66% of the target already achieved in H1.
Noting a continued strong performance in mobile subscriber net additions in FY2023 H1, Miyakawa also revealed that SoftBank achieved its long-standing goal of reaching 30 million smartphone subscribers on November 6, 2023.
Miyakawa noted that two revised price plans are positioned to contribute to the Consumer segment’s growth. For the ‘SoftBank’ brand, the new “Pay-toku” plans utilize PayPay’s services to give customers added point rewards when they buy goods and services in stores and online. Miyakawa commented that synergies such as these are contributing to customer retention. Furthermore, the newly revised “Simple2” price plans for the ‘Y!mobile’ brand is responding to customer needs for data usage at lower GB unit prices.
In FY2023 H1, the Enterprise segment saw a 5% increase in revenue and a 15% increase in operating income YoY thanks in part to growth in recurring revenue. The Media & EC segment, which reflects the results of group company LY Corporation, also saw growth in revenue and operating income, with YoY increases of 2% and 28%, respectively.
PayPay registers positive EBITDA for two consecutive quarters
In the Financial Business segment, FY2023 H1 revenue increased 2.9 times YoY mainly due to the consolidation of PayPay in Q3 of the previous fiscal year. Miyakawa stressed that when looking at PayPay on a standalone basis, the company has been profitable for two consecutive quarters, with 1.7 billion JPY of consolidated EBITDA recorded in Q1, and 2.4 billion JPY recorded in Q2, for a combined EBITDA of 4.1 billion JPY in H1.
Making progress on next-generation social infrastructure initiatives
After presenting financial results for FY2023 H1, Miyakawa gave an update on SoftBank’s next-generation social infrastructure initiatives, which are key to its Long-term Vision. A fundamental issue facing Japan’s digital infrastructure is the heavy concentration of data processing and power consumption in urban areas. To address this issue, SoftBank is working to build super-distributed computing infrastructure composed of “Core Brains” and “Regional Brains” evenly across Japan’s regions.
As progress for Core Brain infrastructure, Miyakawa said that SoftBank is building a data center in Tomakomai City in Hokkaido that utilizes renewable energy. The first phase of construction has already been completed and the data center is on track to start operating in FY2026 with up to 300 MW of electrical power capacity. SoftBank was also selected as an operator for the Ministry of Economy, Trade and Industry (METI)’s Data Center Regional Hub Development Project and is scheduled to receive a subsidy of 30 billion JPY for building its Hokkaido Data Center.
As progress in building a foundation for high-performance computing (HPC) and AI, Miyakawa noted that generative AI infrastructure is now operational and efforts to build homegrown Japanese large language models (LLMs) with 350 billion parameters by 2024 are underway.
Quantum computers are expected to be an important component of Core Brain infrastructure, and Miyakawa noted progress in research efforts for their practical use. Miyakawa highlighted joint research efforts with RIKEN, Japan's largest comprehensive research institution, and that both are working on a quantum and supercomputer collaborative platform in a project commissioned by METI.
In closing, Miyakawa highlighted the listing of SoftBank’s Series 1 Bond-Type Class Shares on the Tokyo Stock Exchange on November 2, 2023, noting that the funds will mainly be used for next-generation social infrastructure.
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More info |
Presentation material (PDF: 11.2MB/64 pages) Supplementary materials: Overview of SoftBank (PDF: 1.90MB/21 pages) |
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(Posted on November 8, 2023)
by SoftBank News Editors
