SoftBank Group Corp. Earnings - Q4 2025 Analysis & Highlights
SoftBank Group Corp. reported strong Q3 2025 results driven by significant gains from its OpenAI investment and strategic acquisitions in AI infrastructure, robotics, and digital infrastructure, while maintaining disciplined financial policies despite over $40 billion in investments over the nine-month period.
Key Financial Results
Net income for the first nine months of fiscal 2025 reached ¥3.17 trillion, an increase of ¥2.54 trillion year-over-year.
Net sales, gain on investment, and income before income tax all increased during the period.
In the third quarter alone, the company posted approximately ¥300 billion in gain on investment.
Over the last seven quarters, the company posted gains in six quarters and losses in only one quarter.
Net asset value (NAV) as of December 31st was approximately ¥31 trillion, with recent figures recovering to ¥33 trillion.
Loan-to-value ratio stood at 20.6% as of December-end, with current levels at approximately 19%.
Cash position was ¥3.8 trillion as of December-end.
Business Segment Results
OpenAI Investment Performance
Cumulative investment in OpenAI reached $34.6 billion (approximately ¥5.4 trillion) for approximately 11% ownership.
A $22.5 billion follow-on investment was completed in December 2025.
OpenAI's valuation increased from ¥150 billion at initial investment to ¥500 billion as of October 2025.
Investment gains from OpenAI totaled ¥54 billion cumulatively through the third quarter of 2025.
OpenAI's weekly active users exceeded 800 million and continue growing.
Annual recurring revenue exceeded $20 billion in December 2025, representing a 10-fold increase in two years.
ChatGPT for work accounts exceeded 7 million.
Global cumulative app downloads reached approximately 1.52 billion.
Arm Holdings Performance
Revenue reached a historic high, up 26% year-over-year.
Both license and royalty revenue grew steadily.
Non-GAAP operating income on a quarterly basis showed increases compared to the same quarter in prior years.
Arm provided guidance for Q4 with revenue of $1.4 billion (18% year-over-year growth) and non-GAAP fully diluted earnings per share of $0.58.
Vision Fund Performance
Vision Fund 1 recorded negative numbers of approximately $3,800 million, primarily due to Coupang's share price decline following a data leakage incident.
Vision Fund 2 showed large positive numbers with significant contributions from OpenAI and other new investments that have been growing.
Vision Fund 2 valuation has been growing quarter-by-quarter.
Recent Portfolio Listings
Two companies listed in the third quarter: Lenskart (eyewear company with 4.8x MOIC in gross) and Meesho (Indian e-commerce marketplace).
PayPay Performance
PayPay exceeded 72 million users.
PayPay is used by more than one in two people in Japan and two out of three smartphone users in Japan.
Gross merchandise value (GMV) for the nine-month period reached ¥14 trillion.
EBITDA showed 83% year-over-year increase.
Portfolio Composition Shift
Approximately three years ago, ASI-related investments represented about 18% of total net asset value.
Currently, more than 60% of assets are ASI-oriented investments amongst net asset value.
Capital Allocation
Total investments made over the nine-month period exceeded $40 billion (approximately ¥6 trillion).
Quarterly investment breakdown: $8.3 billion in Q1, $3.2 billion in Q2, and $32.3 billion in Q3.
$22.5 billion follow-on investment in OpenAI was completed in December.
$5.4 billion acquisition of ABB (robotics) was announced.
$6.5 billion acquisition in chip sector was completed.
$3.1 billion acquisition of DigitalBridge (digital infrastructure investment company) was announced in December.
Asset sales included $21.3 billion from selling T-Mobile shares, Deutsche Telekom shares, and NVIDIA shares.
Asset-backed financing totaled $15.9 billion using Arm shares, SoftBank shares, and SoftBank Vision Fund value.
¥1.7 trillion in senior bonds were issued, with ¥800 billion to be redeemed within one year.
¥0.6 trillion in hybrid bonds were issued.
Industry Trends and Dynamics
The company is positioning itself as an ASI (Artificial Super Intelligence) platform provider.
Armv9 chip technology is penetrating across multiple sectors including Edge AI, Physical AI, and Cloud AI.
Armv9's royalty unit price is twice as much as Armv8, with CSS-based chips commanding even higher royalties.
Data center capacity is currently insufficient to support growing AI computing needs, with hyperscalers in great need of data centers.
The shortage of data center supply is real, making data center business investment valued and fair.
Competitive Landscape
OpenAI faces competitive threats from other AI companies, with internal messaging about competitive landscape.
OpenAI's technical capability and vision position it as a leader in the AI industry.
The company assumes OpenAI will be able to lead the industry in this era.
Macroeconomic Environment
Japanese and US equity markets show steady growth with no immediate concerns that would ruin current situations.
If recession occurs in the United States and that possibility becomes more clear, there may be some revisiting of investment strategy.
The company does not see any negative macroeconomic events happening soon.
Growth Opportunities and Strategies
SoftBank aims to become the number one ASI platform provider.
The company is laying groundwork for ASI platform development through strategic investments and partnerships.
Stargate strategic partnership was formed with OpenAI and SB Energy to advance data center infrastructure, with a 1.2 gigawatt data center in Milam County, Texas, and a 15-year data center lease agreement signed with OpenAI.
OpenAI is launching new products including ChatGPT for Healthcare, Prism (specialized for scientific writing), Codex (agent coding model), and Frontier (enterprise AI platform).
OpenAI is testing an advertising model in ChatGPT for free and low-priced subscription plans in the United States.
DigitalBridge acquisition will provide access to $108 billion in assets under management and 45 portfolio companies with over 100 digital infrastructure investment professionals.
DigitalBridge's portfolio includes companies like Vantage (data center deployment), Switch (data center company), and JTOWER (Japanese tower company).
Arm's technology is expanding into diverse sectors including smartphones, IoT devices, autonomous driving, and cloud computing.
Financial Guidance and Outlook
Arm provided Q4 2025 guidance with revenue of $1.4 billion (18% year-over-year growth), non-GAAP operating expense of $745 million, and non-GAAP fully diluted earnings per share of $0.58.
Management believes Arm will definitely deliver those forecasted numbers.
The company maintains a financial policy of keeping loan-to-value below 25% and maintaining at least two years' worth of bond redemption in cash.
The company will continue making large investments while maintaining disciplined financial policy.
Investment Strategy and Philosophy
The company utilizes its balance sheet proactively as a listed investment company in a unique global position.
Capital raising strategies include utilizing assets held (approximately ¥40 trillion in equity value holdings), margin loans, collar transactions, and portfolio recapitalization.
Leverage is used to fill the gap between recouping previous investments and making new investments, allowing the company to maintain safe investment while expanding investment.
The company communicates well with both equity investors and credit investors through appropriate leverage.
Management emphasizes that financial policy is not a covenant but rather a measure to maintain company soundness and healthiness.
Investment decisions are based on founder leadership and capability, as exemplified by the company's historical investment in Alibaba based on founder Jack Ma's vision.
