SoftBank profits beat forecast by wide margin as tech investments pay off

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Japan’s SoftBank Group smashed through analyst expectations and reported a quarterly profit for the first time in more than a year, providing a badly needed boost for the volatile tech conglomerate and its founder Masayoshi Son.

SoftBank said on Thursday it made a net profit of ¥950bn ($6.4bn) in its third quarter to the end of December, well ahead of analyst consensus forecasts of ¥373bn from Bloomberg and ¥196.5bn from data provider LSEG. A year ago, it recorded a ¥783bn loss.

SoftBank last posted a profit in its fiscal second quarter of 2022, after selling a stake in Chinese ecommerce group Alibaba.

The group’s tech-heavy Vision funds made an overall investment gain of ¥600.7bn in the third quarter, helped by gains from companies such as TikTok owner ByteDance, food delivery app DoorDash and a “recovery in public assets”. In the same quarter last year, the Vision funds recorded a ¥730bn loss.

However, despite what SoftBank chief financial officer Yoshimitsu Goto saw as “a steady improvement” in performance in the Vision funds, they are still running at a cumulative loss of just under ¥3tn, or close to $20bn.

“We are . . . so very close to being above the water now,” said Goto, referring to the Vision funds’ performance.

Strong results on Wednesday from UK chip designer Arm, which is 90 per cent owned by the Japanese group, had already pushed Softbank’s shares up 11 per cent on Thursday, for a year-to-date gain of more than 20 per cent.

In its second earnings report since going public in September, Arm said it was seeing higher royalty and licensing revenues amid strong artificial intelligence demand. That endorsed Son’s vision for SoftBank, which has focused on AI deals.

The SoftBank chief executive has been exploring a range of opportunities, including a potential investment in OpenAI and advanced…