SoftBank reports its Q4 and full year earnings for FY 2023

SoftBank’s Vision Fund, the brainchild of the company’s founder Masayoshi Son, has faced a number of headwinds including a slump in technology stocks as a result of rising interest rates, a tough China market, and geopolitics. Despite these challenges, SoftBank managed to post a 724.3 billion Japanese yen ($4.6 billion) gain on its Vision Fund in the fiscal year ended March, marking the first time the flagship tech investment arm has been in the black since 2021. This turnaround was driven by a profit of 128.2 billion yen in the full fiscal year, a significant swing from the 4.3 trillion yen loss the year before.

The recovery in the Vision Fund played a key role in SoftBank Group swinging back to profit in the fiscal fourth quarter that ended in March. The gain was attributed to the increase in the value of high-profile investments like TikTok owner ByteDance and U.S. food delivery firm DoorDash. However, SoftBank did incur losses on some investments such as Chinese ride-hailing firm DiDi and office-sharing company WeWork, which filed for bankruptcy protection last year.

The successful IPO of chip designer Arm contributed significantly to the gain in the Vision Fund. It’s worth noting that gains associated with the Arm IPO are not reported in SoftBank’s consolidated statement of profit or loss. Excluding these gains, the tech investment arm still posted a loss of 167.3 billion yen.

Despite the setbacks, signs of a recovery are evident for SoftBank. The company exceeded LSEG estimates in the March quarter in terms of net sales and net profit. While SoftBank posted an overall loss of 227.6 billion yen for the full year, it was narrower than the 970.1 billion yen loss from the previous fiscal year.

Looking ahead, SoftBank is strategically focusing on shifting from a defensive approach to making more investments. Founder Masayoshi Son has indicated a move towards an “offensive” mode, with a particular emphasis on artificial intelligence technology. SoftBank’s Chief Financial Officer Yoshimitsu Goto highlighted that the company has transitioned to an “AI-centric portfolio” and views Arm as essential to this shift. In fact, Arm accounted for 47% of SoftBank’s assets as of March, showcasing its importance in the company’s strategy.

As SoftBank navigates through challenges and explores new opportunities, the company’s emphasis on AI and its strategic investments will be key factors in its future growth and success.

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