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Masayoshi Son’s SoftBank Group recorded a surprise $3.5bn profit in its latest quarter, driven by gains in its telecommunications holdings and improved valuations for other key investments.
The Japanese tech conglomerate said on Tuesday it made a net profit of ¥517.2bn ($3.5bn) in its fiscal fourth quarter, well up on the ¥231bn in the same period last year.
It also beat analyst expectations of a small ¥26.9bn loss, according to LSEG data, underlining the volatility in the business. The quarterly performance drove a full-year gain of ¥1.2tn, the group’s first annual profit in four years.
“It’s a surprise . . . but in the bigger scheme of things what really matters is their plans for Stargate and OpenAI,” said Kirk Boodry, a SoftBank analyst at Astris Advisory.
Boodry attributed the unexpected profit to gains in telecom holdings, including T-Mobile and Deutsche Telekom, as well as in Alibaba shares and its portfolio of private companies.
The results come at a critical point for SoftBank, which is investing heavily in artificial intelligence, including $30bn in OpenAI, and preparing to deploy an initial $100bn in its joint Stargate AI infrastructure project.
Stargate involves a massive build-out of data centres, primarily in the US, funded through project financing and in a partnership with OpenAI, as well as other groups including Oracle, Microsoft and Nvidia.
The moves are all part of Son’s grand strategy for AI, which he believes is about to usher in a new economic and social revolution.
The group recorded an investment gain of ¥177bn in its tech-heavy Vision Funds, with South Korean ecommerce group Coupang and TikTok owner ByteDance helping to lift performance. Last quarter, the Vision Funds fell to a ¥352bn loss.
SoftBank also said on Tuesday it would centralise its robotics-related companies under one entity.
This is a developing story.
