Softbank Group Corp

We would like to begin SoftBank Corporation earnings results presentation for the six-month ended September 30th, 2025. We'd like to introduce today's attendees. SoftBank Corporation President and CEO, Miyakawa. Board Director, Executive Vice President and CFO, Fujihara. Today's presentation will be broadcast over the internet. Now, First Standard CEO, Miyakawa, will give an overview of SoftBank consolidated financial results and business overview. And Miyakawa, thank you so much for your attending. Now I'd like to present our financial results for the first half of fiscal year 2025. Revenue reached a record high of 3 trillion 400.8 billion yen, representing an 8% year-on-year increase. Thanks to this strong momentum, we are now in a position to aim for 7 trillion yen in full-year revenue. Here is the breakdown. All segments reported revenue growth, continuing the positive trend from Q1. Our distribution and financial businesses in particular performed strongly. Operating income also reached a new high record of 628.9 billion yen, up 7% from the previous year. With a progress rate of 63%, we are steadily on track toward our full-year goal of 1 trillion yen. By segment, all segments delivered profit growth. In the first quarter, the consumer business saw a 2% decline in profit. But looking at both the first half and the second quarter on a stand-alone basis, profit increased. The financial business was more than double driven by PayPal's strong performance. Net income also reached a record high of 348.8 billion yen, up 88% year-on-year. The progress rate for net income is 65%, which also indicates solid progress. To summarize progress against our full-year forecast, revenue stands at... 51% operating income at 63% and net income at 65%, indicating a strong first half. As shown, each segment, as you can see, exceeded the 50% progress mark, with all segments contributing to our performance. Not just one of them, but everyone contributed to our performance. So far, we've focused on growing non-Telecom areas such as DX, FinTech, and AI. As a result, the share of non-Telecom revenue, as you can see, expanded. from 47% to 63% ever since I took my presidency. As our business has diversified, the total revenue increased by about 1 trillion yen in the first half alone. From here onwards, let me explain performance by business segment. First, the consumer business. Revenue was 1 trillion 475.7 billion yen, 3% increase. Mobile revenue also increased by 9.6 billion yen, continuing the positive trend. Operating income was 330.9 billion yen, a 3% increase. And in second quarter alone, it rose 7%. So we had a very robust second quarter. Smartphone subscribers expanded steadily and increased by 3%, with both SoftBank and Huawei mobile brands growing steadily. The increase in short-term cancellation was inefficient from an acquisition efficiency perspective. Through bundled packages such as broadband, electricity, and credit cards, we intend to focus on customers who use our services for longer periods and proceed with the second half of the year. Now, I would like to explain enterprise business. Revenue rose to 482 billion yen, an 8% increase. Solutions continued to perform well, contributing to 12% revenue growth. Operating income was 104.1 billion yen, up 10%. Exceeding 100 billion yen for the first time in the first half, a new record high. Now the distribution business. Revenue reached a record high of 505.8 billion yen, up 17%. operating income also hit a record 22.0 billion yen, up 36%. There are two factors behind. One is the growth in AI-related products. The market for AI servers and IoT products equipped with AI continues to expand. We expect this trend to continue for the foreseeable future, so further growth is anticipated. The other factor is the steady growth in recurring revenue, which is one of Sotbank's legacy core business. So the segment has transitioned from a one-time software wholesale model to a subscription-based business model. The distribution business is now on track to surpass one trillion yen in revenue this fiscal year. Although we expected the enterprise business to reach that milestone first, distribution may actually overtake it. Both businesses are growing through mutual competition and learning, creating a very exciting climate. And the enterprise market segment, due to their differing profitability profiles, So we disclose results for two segments, enterprise and distribution. Together, these two businesses are on the verge of surpassing 2 trillion yen in revenue this fiscal year. So the consumer business generates around 3 trillion yen in revenue. So in our next mid-term plan, we aim to grow the enterprise segment to a similar scale. Now for the media and e-commerce business. Revenue was 822.8 billion yen, the 4% increase driven by the commerce domain. Operating income came in at 167.5 billion yen, record high. And net income increased up by 13%.

Next, finance business. Revenue rose to 189.7 billion yen, a 24% increase. Operating income was 38.5 billion yen, showing steady progress. Turning to PayPay. GMV continues to grow strongly and reached 9.2 trillion yen up 25%. EBITDA was 48.3 billion yen, more than doubling from the previous year. Now, let me explain our next generation infrastructure initiatives. In our full year results announcement in May this year, we explained the direction of our cloud business using this slide. Today, I'd like to share updates on those three key areas. First, our cloud software. Last month, we announced a new sovereign cloud service in collaboration with Oracle. This service will be offered starting next April from our East and West Japan data centers connected via one port and smart VPN. Next, our homegrown LLM or Sarashina Mini. Starting late November or 28th of November to be specific, we will begin offering APIs to corporate customers to accelerate gen AI adoption within enterprise systems. Third, our AI compute infrastructure. Until now, this was mainly used internally for training Sarashina models, but as of October, we began offering it externally. In addition, to support AI startups, we launched a GPU platform program free of charge, and the plan consists of three support tiers tailored to different phases of growth. First, startups building or testing prototype receive up to 60 days of free access. Second, Those entering the validation or proof-of-concept phase are offered discounted pricing and development collaboration. And third, companies moving toward commercialization receive financial support as well as introductions to potential customers and sales channels. Last but not least, let me update you on Crystal Intelligence, which we made a press release earlier today about. OpenAI Japan is officially launched. today and it will offer exclusively Crystal Intelligence to corporate clients in Japan. As explained before, SoftBank and SBG established C Holdings and together with OpenAI formed SBOAI Japan as a 50-50 joint venture. We are working toward a service launch next year and development is progressing smoothly. This is one of the seas of future growth that we are excited about in the next fiscal year and beyond. In closing, let me summarize today's presentation. First, in the first half, we achieved record highs in revenue, operating income, and net income, with all segments seeing year-on-year growth. Second, we made excellent progress against our full-year targets across all three indicators, revenue, operating income, and net income. finance segment more than doubled, and we shared progress on strategic growth initiatives for our next midterm plan, including the Sovereign Cloud, Sarashina, and Crystal Intelligence. That concludes my presentation. Thank you very much for your attention.

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