SoftBank(US:SOBKY)2024-02-07 16:26Financial Data and Key Metrics - Revenue for the nine months ended December 31, 2023, was ¥4.5116 trillion, up 4% year-on-year [8] - Operating income was ¥731.9 billion, with a 7% growth excluding the remeasurement gain from PayPay consolidation [8] - Net income increased by 30% to ¥406.7 billion [10] - Full-year forecasts were revised upward: net sales by ¥60 billion, operating income by ¥60 billion, and net income by ¥42 billion [11] Business Segment Performance - Consumer Business: Revenue declined by 0.3%, but mobile sales turned around in Q3, with a full-year revenue increase expected [14] - Enterprise Business: Revenue grew 5% to ¥576 billion, with a 15% increase in operating income to ¥124 billion [16] - Media & EC Business: Revenue increased 3% to ¥1.199 trillion, with operating income up 29% [17] - Financial Business: Revenue surged 95% due to PayPay consolidation, with operating income improving significantly [18] Market Performance - PayPay's consolidated revenue grew 28% to ¥155 billion, with consolidated EBITDA reaching ¥7.4 billion [18] - GMV of SB Payment Service increased 20% year-on-year to ¥5.8 trillion, with non-telecom sectors growing 27% [19] Strategic Direction and Industry Competition - The company is focusing on building next-generation social infrastructure, including AI data centers and low-latency, high-capacity networks [21][22] - Investments in generative AI are progressing, with a goal to reach 390 billion parameters by the end of the next fiscal year [25][26] - The company is expanding globally, with a recent investment in Cubic Telecom, a global IoT platform for connected vehicles [29][30] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year revenue growth one year ahead of schedule, particularly in mobile revenue [14][33] - The company is optimistic about the growth of AI-related products and services, which are driving steady growth in the Enterprise business [16] - Management highlighted the importance of ESG efforts, with the company being selected for the DJSI World index for two consecutive years [32] Other Important Information - The company is taking over WeWork Japan's business, assuming all liabilities to ensure business continuity [20] - The Noto Peninsula earthquake caused approximately ¥2 billion in damages, which has been factored into the revised forecasts [47] Q&A Session Summary Question: Impact of the Noto Peninsula earthquake on business performance - The earthquake caused around ¥2 billion in damages, which has been accounted for in the revised forecasts [47] - Restoration efforts are ongoing, but the timeline for full network restoration is uncertain due to road conditions and power restoration challenges [48] Question: Plans for PayPay's IPO - PayPay is expected to achieve full-year profitability, but no decision has been made regarding an IPO in 2024 [70][71] Question: Wage increase plans - The company is considering a 5.5% wage increase for approximately 24,000 employees, in line with government requests and rising goods prices [43][44] Question: Vision Pro and AR/VR strategy - Management believes Apple's Vision Pro could accelerate the VR/XR trend but is cautious about its high price point and consumer focus [41] Question: Expansion in the connected car sector - The company is investing in Cubic Telecom and other connected vehicle businesses, aiming to leverage global opportunities in next-generation traffic infrastructure [72][73] Question: Satellite and HAPS technology - The company is exploring both low-orbit satellite and HAPS technologies for mobile direct connections, with a focus on disaster recovery applications [75][76] Question: Standalone net income growth - The company expects a ¥100 billion increase in standalone net income, driven by contributions from subsidiaries and the utilization of loss carry-forwards [80][82]