SoftBank Group Corp Earnings - Q3 2025 Analysis & Highlights
Key Takeaways
Byline: The SoftBank Group's Q2 2025 earnings call highlighted record net income driven by OpenAI's fair value growth, strategic investments in Physical AI through the acquisition of ABB Robotics, and a commitment to maintaining financial soundness. The call also addressed the potential of AI and the company's financial strategy.
Key Financial Results
Record high net income of ¥2.9 trillion for the first half.
Net asset value reached ¥33.3 trillion at the end of September.
Loan to value at 16.5%, with ¥4.2 trillion in cash position.
Fair value of investment in OpenAI increased by ¥14.6 billion (approximately ¥2.2 trillion).
Income before income tax hit a record high of ¥3.6 trillion for the first half.
SoftBank Vision Fund recorded $19 billion, driven by OpenAI's fair value gain.
Arm hit a record high of revenue, license, and royalty revenues in the first half of the year.
Business Segment Results
SoftBank Vision Fund 1 showed $5.7 billion growth.
SoftBank Vision Fund 2 is the vehicle to invest in OpenAI.
PayPay's GMV grew 25% year-on-year to ¥9.2 trillion, and EBITDA doubled year-on-year to ¥48 billion.
Arm's non-GAAP operating income was up by 14% year-on-year.
Capital Allocation
Investment commitment in OpenAI totals $40 billion, with $10 billion syndicated out to other investors.
SoftBank Group's investment in OpenAI is $30 billion.
Q3 2025 estimated investment of about $30.5 billion, including $22.5 billion in OpenAI.
Share split ratio of 1:4 to make shares more accessible to retail investors.
Considering utilizing assets held, debt market, and hybrid funding for investment funding.
Industry Trends and Dynamics
Physical AI is the current keyword, combining AI and mobility.
AI and robotics may solve societal issues.
Autonomous driving technology is facing and addressing interesting challenges.
Weekly active users of OpenAI exceeded 800 million as of October.
Competitive Landscape
ABB Robotics is the second largest in the industry.
FANUC's market cap is large.
ChatGPT outpaces competitors in app downloads.
OpenAI is leading in Gen AI product.
Macroeconomic Environment
Japan and US signed a Memorandum of Understanding on Strategic Investments, with Japan committing up to $550 billion in the US.
SoftBank Group is one of the members to support critical power infrastructure in the US.
Growth Opportunities and Strategies
Aiming to achieve co-existing with robots that have heart or feelings.
Acquisition of ABB Robotics to achieve goals and vision.
Arm expanding business domains for the chip area.
Pursuing commercial opportunities and synergies with diversified robotics investments.
SoftBank wants to be the number one ASI platform provider after 10 years.
SB OAI Japan aiming to start launching services in 2026.
Financial Guidance and Outlook
Maintaining LTV below 25% in normal times and an upper threshold of 35% even in times of emergency.
Maintaining at least two years' worth of bond redemption in cash.
Arm revenue is expected to grow 25% year-on-year.
Next round of investment in OpenAI is planned to be executed at $22.5 billion.
