SoftBank Reports Strong Quarterly Profit

Investing.com— Japanese technology conglomerate SoftBank Group Corp. (TYO:9984) reported a stronger-than-expected quarterly profit on Tuesday, boosted by successful portfolio stock listings and a resilient yen.

Financial Performance

• Net Profit: 1.18 trillion yen for the three months ending September 30, significantly above Reuters' estimate of 287 billion yen.
• Comparison: This marked a turnaround from a loss of 931 billion yen during the same period last year.

Market Influence

SoftBank, a major investor in the tech sector, benefited from rising valuations fueled by excitement over artificial intelligence. Successful listings of its portfolio firms played a crucial role in enhancing its revenue.

Vision Fund Gains

• SoftBank's Vision Fund unit reported a gain of 608.48 billion yen on its investments in the September quarter.
• Over the six months leading to September 30, it realized an investment gain of 1.28 trillion yen from its holdings in Alibaba Group Holdings Ltd (NYSE:BABA) (HK:9988), primarily due to China's stimulus measures announced in September.

IPO Activity

The firm also saw benefits from increased initial public offering activity in its portfolio, with Indian companies Brainbees Solutions Ltd (NS:BRAE) and Ola Electric Mobility Ltd (NS:OLAE) both achieving strong IPOs, contributing positively to the Vision Fund.

Arm Holdings Windfall

SoftBank is also preparing to gain from its 90% stake in chip designer Arm Holdings (NASDAQ:ARM), which is set to list on Nasdaq in late-2023.

Currency Influence

Throughout the quarter, SoftBank benefited from a strengthening yen due to hawkish moves by the Bank of Japan and interest rate cuts by the Federal Reserve. However, the yen has since lost its third-quarter gains, creating pressure on SoftBank's earnings for the current quarter.