SoftBank Group Corp. Q4 FY2025 earnings call

Strategic Vision & Core Pillars

• SoftBank aims to become the world's number one Artificial Super Intelligence (ASI) platform provider, focused on four core pillars: AI model, AI chip, physical AI, and AI infrastructure. Fiscal 2026 marked the starting year of this strategic journey.
• Management views the ongoing AI revolution as a multi-decade growth opportunity, with rapidly increasing demand for AI-related infrastructure and services creating long-term value.

Strategic Developments by Pillar

• AI Model: SoftBank has built a deep strategic partnership and collaboration with OpenAI, its core AI model investment, which has delivered far faster growth than initially expected. OpenAI's rapid user growth and expansion into enterprise AI confirms its market leading position.
• AI Chip (ARM): ARM, SoftBank's core AI chip asset, officially announced its first in-house ARM AGI CPU developed with Meta, with launch support from major partners including OpenAI. ARM's existing IP business already dominates the global semiconductor IP market, with over 350 billion cumulative chips shipped, 22 million global developers using its technology, and 70% of the global population using products that rely on ARM technology. Adding in-house CPU chips will open a new high-growth revenue stream for ARM.
• Physical AI: SoftBank consolidated ~20 of its robotic portfolio companies under Robo Holdings to streamline its physical AI strategy, and agreed to acquire ABB Robotics to add scale, established operations, and end-to-end capabilities. The acquisition is expected to close within the next few months.
• AI Infrastructure: SB Energy is leading development of large-scale combined power and data center projects to support growing AI compute demand, highlighted by the groundbreaking of the 10 gigawatt Ports Technology Campus in Ohio, a public-private partnership with the U.S. government that is the largest integrated AI infrastructure project in history.

Financial Policy

• SoftBank maintains a strict disciplined financial policy: it keeps loan-to-value below 25% and holds enough cash to cover at least two years of bond redemptions. This policy has not changed, and supports a safe and sound balance sheet while enabling continued strategic AI investment. As of the call date, the balance sheet is healthier than it has ever been, with net asset value at a record high. Management prefers debt financing over selling high-upside assets to fund new investments when loan-to-value and financing costs are favorable.

1. ARM: Recorded $4.9 billion in revenue, up 23% year over year, achieved record high EPS, and reached a market cap close to $221 billion (more than 4x growth since its $52 billion listing less than 3 years prior. It has gained increased cloud market share with customers including AWS, Microsoft, and Google, secured 23 new contracts in the high-margin CSS segment, and holds 50% current share in the hyperscaler server CPU market. ARM contributes ~30% of the group's pro forma net asset value growth. 2. OpenAI: Valued at $730 billion as of February 2026, up from $260 billion in March 2025 and $150 billion at the initial September 2024 investment. SoftBank has invested $32.4 billion as of March 2026, with a total committed investment of $64.6 billion by October 2026 that will give SoftBank a ~13% ownership stake. OpenAI has over 900 million weekly active users, more than 50 million paid subscribers, over 9 million enterprise users, and enterprise revenue currently makes up 40% of total revenue (targeting 50% by end of 2026). OpenAI is the largest contributor to Vision Fund 2's positive performance. 3. Vision Fund Segment: Achieved cumulative investment gain of $45.7 billion, with an incremental year-over-year gain of $46.2 billion, pushing cumulative returns into positive territory. Vision Fund 1 delivered $24.2 billion in incremental gains; Vision Fund 2 delivered $21.8 billion in incremental gains (driven largely by OpenAI). As of the reporting period, Vision Fund 1 has $72 billion in cumulative exited returns, and Vision Fund 2 has $119 billion in cumulative returns. Seven portfolio companies held IPOs in fiscal 2025 including PayPay, bringing total cumulative listings to 62 since inception; PayPay debuted on Nasdaq with a $12 billion market cap, and now has over 73 million registered users in Japan with a 12% share of Japan's cashless payment market (gross transaction value of 19 trillion yen). 4. AI Infrastructure (SB Energy): Is developing the 10 gigawatt Ports Technology Campus in Ohio (US public-private partnership) and a 1.5 gigawatt data center in Milam County, Texas with a 15+ year lease to OpenAI. Additional projects are underway in Hokkaido and Osaka, Japan. 5. Physical AI / Robo Holdings: SoftBank owns 58.7% of Robo Holdings (Vision Fund 2 owns 41.3%), which consolidates ~20 robotic portfolio companies including Agile Robots, AutoStore, Wave, and Zipline, multiple of which have reached unicorn valuations. The acquisition of ABB Robotics is expected to close by the end of 2026 for $5.4 billion; ABB Robotics has 7,000 employees across 50 countries, annual production capacity of 100,000 units, and end-to-end R&D, manufacturing, sales, and service capabilities. Consolidated Group Results: Net income hit 5 trillion yen, which the company states is the highest net income for any Japanese corporate in history, exceeding the 2020 record of 4.9 trillion yen. Net asset value as of March 31, 2026 was 40.1 trillion yen, with a pro forma estimated net asset value of 47.7 trillion yen as of the earnings call date. Loan-to-value was 17.0% as of March end (improved year-over-year), with a pro forma estimate of ~15% as of the call date. Cash position was 3.5 trillion yen as of March end, exceeding the requirement to cover two years of bond redemptions. Total committed investment for fiscal 2026 is $38.5 billion to date, including OpenAI follow-on investment, ABB Robotics acquisition, and the Digital Bridge acquisition closing in 2026.

• ARM guides that it will achieve 5x higher revenue and 5x higher EPS by 2030 compared to fiscal 2026 levels; ARM expects to capture at least 15% of the projected $100 billion+ 2030 server CPU TAM (with upside potential to higher shares, as it already holds 75% server IP share and 50% current hyperscaler CPU share).
• OpenAI guides that enterprise revenue will reach 50% of total OpenAI revenue by the end of 2026, up from 40% currently.
• SoftBank maintains its long-standing financial policy targets (loan-to-value < 25%, cash covering 2+ years of bond redemptions), reaffirming these rules will govern future investment activity.
• The ABB Robotics acquisition is guided to close by the end of calendar 2026.

• Short-term volatility in asset valuations, particularly for high-growth AI assets like OpenAI, creates near-term balance sheet uncertainty, though management states it takes a long-term view and is not focused on short-term price swings.
• Growing technological competition in the AI sector from multiple large players creates competitive risk for OpenAI and ARM, though management notes that competition expands the overall AI market and that multiple leading technology companies have validated OpenAI's technology via large recent investments.
• Large-scale AI infrastructure projects have long lead times and face long-term technological and cost risks; for example, future reductions in data center construction costs or changes in power generation costs could impact project profitability, though management states these risks have been accounted for in project structuring.
• AI development carries non-financial risks related to potential misuse of the technology, which requires ongoing collaboration with governments and global stakeholders to address proactively.

Q: Do you plan to make additional investments in OpenAI beyond the current committed $30 billion follow-on, and will you focus only on OpenAI or invest in other similar large AI model players? / A: Management is open to any future investment possibilities. SoftBank has a strong strategic relationship with OpenAI and is confident in its growth trajectory. Management notes there are many strong competitors in the generative AI space, and that competition benefits the entire industry by expanding the total market and incentivizing better service for customers, so it welcomes other strong players.

Q: What is the latest update on the Stargate data center project and expansion to new locations? / A: Construction of the Milam County, Texas data center (part of the Stargate project) is progressing well on schedule, and it already has OpenAI secured as a long-term tenant. The Stargate project definition remains flexible, and SoftBank, OpenAI, and Oracle are actively evaluating and preparing additional potential locations; more details will be announced when plans are finalized.

Q: Has OpenAI discussed its IPO timeline with SoftBank as a major shareholder? / A: Management stated that an IPO is a decision for OpenAI's leadership to make, and SoftBank will not comment on OpenAI's internal plans.

Q: Would SoftBank consider using margin loans against its OpenAI stake to fund new investments, and how is SoftBank addressing concentration/volatility risk from the large OpenAI investment? / A: Margin loans against OpenAI assets are a possible financing option and will be considered as part of the permanent take-out financing for the new committed investments, with the final choice depending on market conditions and timing. SoftBank's ownership stake in OpenAI is only 13% after all committed investments, with many other large leading technology investors (Amazon, Nvidia, etc.) also participating, so SoftBank is not overexposed despite the large absolute investment size. Management also takes a long-term view of AI investments and does not react to short-term volatility.

Q: Will ARM invest in its own semiconductor fabrication facilities to support its new in-house CPU business? / A: ARM has no plans to invest in or operate its own fabrication facilities. The new in-house AGI CPU will rely on committed volume from existing manufacturing partner TSMC for initial production, and may add additional partners like Samsung or Intel Foundry Services over time, but ARM will not invest in fabrication capacity itself.