Softbank Group Corp

Welcome to the SoftBank Group Corp Earnings Results Announcement for the nine-month period ended December 31st, 2025. Now we would like to start and also like to introduce today's participants. From left, we have Yoshimitsu Goto, Board Director and CFO. Kazuko Kimiwada, Corporate Officer, Senior Vice President and CAO. Navneet Govel, Executive Partner and CFO, SB Investor Advisors and SB Global Advisors. Jason Child, Executive Vice President and CFO, Today's announcement is live broadcast over the internet. Now I would like to invite Yoshimitsu Goto to present you the earnings results and business overview. Good afternoon, everyone. Thank you very much for your time today. This is Goto speaking. This January, I had knee surgery, and currently I have a bit difficulty keep standing. But for the next turning, I believe that I can recover well so that I'll be able to explain to you and present while I'm standing. I had a bit bad knees. and made me difficult to walk straight and try to fix that whenever younger. So that's why that I come to this. So I appreciate my parents who born me in healthy manner, but this was my first ever surgery and being admitted in a hospital in my life. And when I am on the wheelchair, I will realize many things which I never experienced, which I never imagined over six years in my life. So it's quite a lesson that I've been learning. And I've been admitted in the hospital for two weeks and alcohol-free for two weeks. That was also another first time in life. And I lost eight kilograms in weight, which is good news also. But that's it. That's only for my things. But I would like to come into the earnings results announcements, and I will present while I remain seated. Very much sorry about that, and I hope you understand. So this time, agenda for the earnings to be the number one ASI platform provider. So what is platformer? I believe it's always a question for you and for us, too. At the general shareholders' new meetings last year, Masa presented that we would like to be a platform provider. And Masa was also asked, and he answered, we could say a core pillar of the industry that platform is. This can be also a base for the many things And we can build those bases so that many things which we do not have can be on top of that so that we'll be able to grow together. That's something that we have as a mission for SoftBank Group. When the company founded the business, it started with a wholesale of software. And recently, I was talking to Masa. He said that he never thought that his original business is a wholesaler business. Back then, software was very new. and just wanted to create a system to distribute such software to people. And he started such a system, which was the wholesale. And then people will be able to recognize what is the software, and they will be able to learn more. So that Masa started publishing business, also started the broad media. And many things were put onto the platform since then. So that's a similar thing that we are doing. After year 2000, internet era dawned and idea platformer or platform provider became more important, even more important. And now we are entering into AI and headed towards ASI. Platform provider is the one that we would like to be. And we are steadily laying the groundwork right now. I don't play a game of Go, but we are laying the ground. In the past three months, this quarter, we made quite a large amount of investments in OpenAI and completed 22.5 billion follow-on investment back in December. As a result, 34.6 billion, which is about 5.4 trillion yen, invested in total for about 11 percent ownership. And to advance Stargate, We have also a strategic partnership formed. Other than OpenAI, we do have several progress in robotics. ABB, which is well known around the world, we announced the acquisition with $5.4 billion for chip. We completed the acquisition of $6.5 billion completed. These are the events that happened in the third quarter. And Digital Bridge, which is the digital infrastructure investment company, and we announced this company's acquisition with $3.1 billion in December. So each respective events are our And I believe this make us progress in the big picture for the framework. And when you look at our portfolio, this has also been changing, and this is something that we should also highlight. About three years ago, if you see by business segment, portfolio for ASI was about limited to pretty much ARM and some robots in portfolio companies. So about 18% out of the total net asset value was our ASI investments. But now ARM is growing even further. On top of that, we have decided investments in others, including open AI robots and so on. So now that the more than 60% Assets are ASI-oriented investments amongst our net asset value. And highlights for third quarter 2025. First was the completed follow-on investment in OpenAI, increasing ownership to about 11%. And net income, first quarter to third quarter, 3.17 trillion yen, which was increased by 2.54 trillion yen over year, so which was a very good number. Third, net asset value. So gross less net interest-bearing debt. was 30.9 trillion yen at the end of December. So if you only look at this compared to September end, which was even a quarter before, this is minus 2.4 trillion yen. But the latest figure is recovering, and as of today, 33 trillion yen as of today. So it's about the same level as September and large investments made with financial policy maintained. So open AI for loan investment were also made, and that actually giving us about 6 trillion yen level of the investment so far. but at the same time, while we make a decision on investment, we also very much focus on the financial policy of loan-to-value. And so with those investments, loan-to-value at 20.6%, cash position 3.8 trillion yen. Loan-to-value, as of today, this morning, less than 20%, it's about 19-ish percent. Thank you.

Now, let me walk you through the consolidated results. First, you can see net sales gained on investment, income before income tax, all increased. FY25 is a good year in terms of performance. By the quarter, in terms of gross loss on investment and net income, in the third quarter, about 300 billion yen of gain on investment. You may think it goes up and down, but if you look at the last four quarter, we posted gain even in the range of seven quarters, we posted a loss only the first quarter. one quarter, but remaining six quarter, we posted a gain. So all in all, we are seeing growing gain. So our investment strategy is bearing fruit and represented in this way. So if you go deeper into gain or loss on investment, In the third quarter and the second quarter, both the huge increase of open air's fair value contributed a lot. That means our decision on investment was successful. Looking at the second quarter, for example, fair value of OpenAI is represented in the lighter blue, which is big, but also other investment posted about 1.3 trillion yen of gain. In the third quarter, however, we lost other investment by 346 billion or so, but It included temporary loss of listed companies, but all in all, we recorded a positive number. And like I said, huge contribution to our bottom line is open AI. If you look at the valuation for the last 12 months or so, When we started investment, valuation was about $150 billion. In March 2025, or this fiscal year, we decided to invest as much as $30 billion. Back then, the valuation was $260 billion. On that valuation, we made investment at $30 billion. And as of October, or just three months ago, the valuation increased to 500 billion. It's not only we are seeing this is open as valuation, but from the third evaluator's perspective, also open as valuation is around 500 billion. And OpenAI's leadership in AI sector and offering a lot of service offerings are showing this kind of a high valuation. And talking about investment gain on OpenAI, the green bar is investment cost. at the end of the second quarter of 2025, cumulative investment gain was 19.8 billion. And in the third quarter, we added 23 billion from the prospect of investment. So as of December end, the black portion is investment cost, which is about 34.6 billion. And on top of that, the gain in FY2024 and recorded in second quarter and the third in 2025. Total, we are looking at investment gain of 54 billion. So since inception or since the start of investment, the investment gain for FY2025 is 4.2 billion. Now, key indicators. Net asset value, or NAV, which is the most important indicator as an investment company, as of December 31st, NAV was about 31 billion. But recently, it went up to 33 billion. Loan-to-value? As of December end, 20%, but now, or recently, 19%-ish. In cash position, back then, 3.8 trillion, and now we have a little bit more than 3.8 trillion recently. We keep this level of... indicators while maintaining discipline in making investment. And if you look back the history of NAV, as you can see, our asset value is and has been stable and a loan-to value is shown on this slide, recently less than 20%. So as you can see, for the last four or five years, we have been maintaining the safe LTV level, which means even though we have made a huge investment in the last nine months or so, Yet, we maintained financial policy in a very disciplined manner. That's the core message I want to deliver to you. Cash position. Our policy is to make sure that we have cash position well over the worth limit. a bond redemption for two years. Again, as you can see, we have been maintaining about 3 trillion to 4 trillion yen level.

So vision fund. So when you look at the vision fund gain or loss on investments, roughly speaking, SoftBank overall gain and loss investments movement is about in line with this movement. And when you look at the breakdown of the gain or loss, Vision Fund 1 for this quarter, we had the negative numbers here, mainly from the public portfolio companies. So it's about $3,800 million primarily due to Coupa. Azumay also aware that due to the data leakage, the share price has gone down. But at the same time, for this company, Coupang, we are convinced with their business fundamentals, also doing pretty well in their operations. So very much expect their further recovery of their business and the share price. On your right-hand side, Bijon Fund 2 and LATAM and others, we have a large positive number here. Big contribution from OpenAI. and other new investments in a couple of years before that their mark has already been growing as well. So now you see the Vision Fund 2 valuation has been growing quarter by quarter. On total, we maintain our positive numbers So I said that seven wins over one lose, I mentioned earlier, and actually the cumulative gain has been increasing. So we've been having a little bit of a difficult time. But at the same time, now that we've been able to show the good recovery in total, and after this, we are looking at the very exciting late-stage portfolio companies. And that is something that we believe is going to be another good contributor for our gain on investments. And these are those exciting late-stage portfolio companies that I mentioned earlier. So, on your left-hand side, we do have a public listing track record. So, in total, 60 listings since inception. And in this third quarter, Lenskart, Misho, those two made newly listed listings. On your right-hand side are the exciting late-stage portfolio of companies. And so December 8th and last year, total fair value was at $90 billion. And you can see the logos below. There are companies which already made the filings for IPO, which includes PayPay in Japan. Also, Klook has already made the filing for IPO. On your right-hand side, there are other late-stage companies which we can expect the good exit or the good IPOs. So, that includes OpenAI, ByteDance, Fanatics, Revolut, Oyo, Yanolja. So, those are the exciting other late-stage portfolio companies. So, we are closely looking at those and monitoring those companies so that we'll be able to improve our investment performance of Vision Fund. As I mentioned earlier, there are two listings in the third quarter, which include lens card. So eyewear, glasses. So from the design to manufacturing and sales is done by this company. And the performance is doing pretty well. MOIC 4.8 times in gross and also share price since its IPO is making a good increase. Another one was Misho. This is an e-commerce marketplace in India to democratize commerce by connecting consumers with small and micro sellers. There are some ups down in share price, but in total, they are showing a good increase in share price since the IPO and investment return. Two of them, coincidentally, are both Indian company, and they are doing pretty good progress. And I'd also like to touch on Pepe a little bit. They are making quite a smooth and a great progress, so far exceeding 72 million users already. And I would say PayPay is used by more than one in two people in Japan, and two out of three smartphone users in Japan. So as a payment platformer that the PayPay is playing in Japan, KPIs are also showing pretty good. GMB on your left-hand side, in nine months period, 14 trillion yen. So if you annualize, I believe that the number can be expected close to 20 and also 24% year-on-year increase. And EBITDA, 83% increase year-on-year. So financials are also showing a great progress so far. So sometime in the future that we believe we'll be able to show you the good valuations when they go public.