SoftBank(SFTBY) - 2022 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The company reported a significant loss of approximately ¥1 trillion in net asset value (NAV) over the last three months, indicating a downward trend in performance [21][24][22] - The NAV is considered more important than traditional accounting metrics like sales and income, emphasizing the company's focus on investment value [21][25] - The company aims to maintain a loan-to-value (LTV) ratio below 25%, currently managing to stay below this threshold [28][27] Business Line Data and Key Metrics Changes - The mobile segment revenues grew by 29% year-on-year in FY '21, driven by the rollout of the new version 9 architecture and the migration to 5G [75] - The automotive segment experienced remarkable growth of 139% year-on-year, reflecting the increasing demand for computing power in smarter and electric vehicles [76] - The infrastructure segment revenues grew by 65% year-to-date, showcasing strong momentum in this area [77] Market Data and Key Metrics Changes - The company has seen a significant shift in its portfolio, with Alibaba's share price decline impacting NAV, now accounting for only 24% of the NAV compared to 60% at its peak [23][24] - The U.S. and other markets are performing well, while the Chinese market has seen substantial losses, particularly through investments in companies like DiDi [24][32] Company Strategy and Development Direction - The company plans to prepare for the most significant IPO in the semiconductor industry, with a focus on Arm's growth and market position [19][57] - The strategy includes expanding into data centers and automotive markets, leveraging Arm's strong software ecosystem and energy efficiency [66][69] - The management emphasizes a bold strategy moving forward, aiming to establish a strong business model as they prepare for the IPO [80] Management's Comments on Operating Environment and Future Outlook - The management described the current environment as a "winter storm," with challenges from rising interest rates and stock price declines for growth companies [20][38] - Despite these challenges, the management believes in an eventual recovery and growth, particularly in the smartphone, cloud, and automotive sectors [38][57] - The management expressed confidence in Arm's potential to address future computing power demands across various industries, including electric vehicles and cloud computing [55][56] Other Important Information - The company has terminated the sale of Arm to NVIDIA due to regulatory challenges, returning to the original plan of taking Arm public [13][15] - The leadership transition at Arm is aimed at accelerating growth, with new management expected to drive the company forward [60][80] Q&A Session Summary Question: What is the outlook for Arm's growth and IPO? - The management highlighted that Arm is preparing for a significant IPO, with expectations of entering a growth stage and capitalizing on market opportunities [19][57] Question: How is the company addressing the challenges in the current market? - The management acknowledged the ongoing challenges but expressed confidence in the company's strategy and the potential for recovery in the coming years [20][38] Question: What are the key growth areas for Arm moving forward? - The focus will be on expanding in the automotive and data center markets, leveraging Arm's energy-efficient architecture and strong software ecosystem [66][69]