Q1 2026 SoftBank Corp Earnings Call

August 4, 2026

Speaker #1: This is my second.

Speaker #2: Thank you very much for your patience. We will now begin the SoftBank Q1 investor briefing for the first quarter of the fiscal year ending March 31, 2027.

[Company Representative] (SoftBank): Thank you very much for your patience. We will now begin SoftBank Corp's investor briefing for the first quarter of fiscal year ending 31 March 2027. I would like to introduce today's speakers. Senior Vice President and CFO, Akiyama. Head of Corporate Planning, Yuki. Head of FP&A Corporate Planning, Sasaki. Head of Accounting and Finance, Onoguchi. General Manager, Strategic Finance, and IR, Kawamura. Today's briefing is also being streamed live over the internet. CFO Akiyama will present an overview of SoftBank Corp's consolidated financial results. Good evening, everyone. Thank you so much for joining us today. I would like to brief on our results, and we would like to take questions from you later on. First, there are four points as summary. Revenue and profit increased, building strong momentum toward the full-year forecasts at the beginning of fiscal year.

Operator: Thank you very much for your patience. We will now begin SoftBank Corp's investor briefing for the first quarter of fiscal year ending 31 March 2027. I would like to introduce today's speakers. Senior Vice President and CFO, Akiyama. Head of Corporate Planning, Yuki. Head of FP&A Corporate Planning, Sasaki. Head of Accounting and Finance, Onoguchi. General Manager, Strategic Finance, and IR, Kawamura. Today's briefing is also being streamed live over the internet. CFO Akiyama will present an overview of SoftBank Corp's consolidated financial results.

Speaker #2: I would like to introduce today's speakers: Senior Vice President and CFO, Akiyama; Head of Corporate Planning, Yuki; Head of FP&A Corporate Planning, Sasaki; and Head of Accounting and Finance, Onoguchi.

Speaker #2: General Manager of Strategic Finance and IR, Kawamura. Today's briefing is also being streamed live over the internet. Now, CFO Akiyama will present an overview of SoftBank Q1 consolidated financial results.

Speaker #2: Good evening, everyone. Thank you so much for joining us today. I would like to brief you on our results, and we would like to take questions from you later on.

Osamu Akiyama: Good evening, everyone. Thank you so much for joining us today. I would like to brief on our results, and we would like to take questions from you later on. First, there are four points as summary. Revenue and profit increased, building strong momentum toward the full-year forecasts at the beginning of fiscal year.

Speaker #2: First, there are four points as summary: revenue and profit increased, building strong momentum toward full-year forecasts. At the beginning of the fiscal year, the first quarter and the second quarter were expected to be under the target.

[Company Representative] (SoftBank): Q1 and Q2 were expected to be under the targets. As a result, Q1, we landed, and both revenue and profit increased. We are now in a position to be able to exceed our full-year forecast as well. The second is about cloud and AI. This business drove revenue growth in Enterprise. Enterprise operating income grew by 28%. The third, as CEO Miyakawa presented earlier, we actively executed strategic growth investments under the financial disciplines, and we would like to continue our strategic growth investments. The fourth, for our first time, we issued euro-denominated senior unsecured notes to diversify our funding base. This slide shows the results for Q1 of FY 2026, building a strong momentum toward full-year forecasts, and we have 27.5% of operating income increase. This is by segment.

Osamu Akiyama: Q1 and Q2 were expected to be under the targets. As a result, Q1, we landed, and both revenue and profit increased. We are now in a position to be able to exceed our full-year forecast as well. The second is about cloud and AI. This business drove revenue growth in Enterprise. Enterprise operating income grew by 28%. The third, as CEO Miyakawa presented earlier, we actively executed strategic growth investments under the financial disciplines, and we would like to continue our strategic growth investments. The fourth, for our first time, we issued euro-denominated senior unsecured notes to diversify our funding base. This slide shows the results for Q1 of FY 2026, building a strong momentum toward full-year forecasts, and we have 27.5% of operating income increase. This is by segment.

Speaker #2: However, as a result, in the first quarter, we landed on both revenue and profit increases. And we are now in a position to be able to exceed our full-year forecast as well.

Speaker #2: The second is about cloud and AI. This business drove revenue growth in enterprise, and enterprise operating income grew by 28%. The third, as CEO Miyakawa presented earlier, we actively executed a strategic growth investment under financial disciplines, and we would like to continue our strategic growth investments.

Speaker #2: Fourth, for the first time, we issued Euro-denominated senior and secured notes to diversify our funding base. This slide shows the results for the first quarter of FY2026, building strong momentum toward our full-year forecasts.

Speaker #2: And we have a 27.5% increase in operating income. This is the Spice segment. I would like to briefly explain the changes in segments. As the AI business has started the monetization phase, until FY25, the AI business was under "Other"; however, going forward, this has been moved under the Enterprise business.

[Company Representative] (SoftBank): The changes in segments, I would like to brief on this. AI businesses started in the monetization phase, until FY25, AI business was under other. This has been under Enterprise Business from this fiscal year. I would like to go to the revenue. Increased in all segments and hitting a record high. Enterprise, Distribution, and Financial. These three segments reached the double-digit revenue growth. Next. Adjusted EBITDA increased in all segments, hitting a record high. Next, operating income. Steady progress toward full-year forecast in all segments. Last year, Media and EC segment experienced a one-time factor, so excluding this, we have 18.7% increase. Media and EC segment has JPY 4 billion revenue with one-time factor. Excluding this, we have the operating income in Media and EC increased 18.7%. This excludes one-time factors. Please refer to the right bottom of chart as the forecast by segment.

Osamu Akiyama: The changes in segments, I would like to brief on this. AI businesses started in the monetization phase, until FY25, AI business was under other. This has been under Enterprise Business from this fiscal year. I would like to go to the revenue. Increased in all segments and hitting a record high. Enterprise, Distribution, and Financial. These three segments reached the double-digit revenue growth. Next. Adjusted EBITDA increased in all segments, hitting a record high. Next, operating income. Steady progress toward full-year forecast in all segments. Last year, Media and EC segment experienced a one-time factor, so excluding this, we have 18.7% increase. Media and EC segment has JPY 4 billion revenue with one-time factor. Excluding this, we have the operating income in Media and EC increased 18.7%. This excludes one-time factors. Please refer to the right bottom of chart as the forecast by segment.

Speaker #2: From this fiscal year, I would like to go to the revenue, so increased in all segments—and hitting a record high. Enterprise, Distribution, Financial—these three segments reached two-digit, the double-digit, revenue growth.

Speaker #2: Next. Adjusted EBITDA increased in all segments hitting a record high. Next, operating income steady progress toward full-year forecast in all segments. Last year, media and EC segment experienced one-time factor, so excluding this, we have 18.7% increase.

Speaker #2: The media EC segment has $4 billion in revenue. Excluding one-time factors, operating income in media and EC increased 18.7%. This excludes one-time factors.

Speaker #2: Please refer to the bottom right of the chart as the forecast by segment. Next, net income increased due to an increase in operating income, progressing steadily toward the full-year forecast—up ¥4.8 billion, a 3.3% increase.

[Company Representative] (SoftBank): Next, net income. Net income increased due to increase in operating income progressing steadily toward full-year forecast, JPY 4.8 billion up at 3.3% increase. Net income increased 6.6%, excluding one-time factors. No major changes, but according to financial income and loss, there was the increase in interest expense and so on in SB. We would like to place an importance in increasing net income in all business segments. From here, I would like to explain the results by segment. First, Enterprise Business. As I touched upon earlier, AI business is now under the Enterprise Business segment, we changed sub-segment. The right side is the present Enterprise sub-segments. There are three sub-segments. The revenue of Enterprise segment. The revenue from AI computing infrastructure and related businesses drove growth in cloud and AI.

Osamu Akiyama: Next, net income. Net income increased due to increase in operating income progressing steadily toward full-year forecast, JPY 4.8 billion up at 3.3% increase. Net income increased 6.6%, excluding one-time factors. No major changes, but according to financial income and loss, there was the increase in interest expense and so on in SB. We would like to place an importance in increasing net income in all business segments. From here, I would like to explain the results by segment. First, Enterprise Business. As I touched upon earlier, AI business is now under the Enterprise Business segment, we changed sub-segment. The right side is the present Enterprise sub-segments. There are three sub-segments. The revenue of Enterprise segment. The revenue from AI computing infrastructure and related businesses drove growth in cloud and AI.

Speaker #2: Net income increased 6.6%, excluding one-time factors. No major changes. But, according to financial income and loss, there was an increase in interest expense and so on.

Speaker #2: And SB, so as for the business, we would like to place importance on increasing net income in all business segments. From here, I would like to explain the results by segment.

Speaker #2: First, enterprise business. As I touched upon earlier, the AI business is now under the enterprise business segment, so we changed the subsegment. The right side shows the current enterprise subsegment.

Speaker #2: There are three subsegments: the revenue of the enterprise segment, and the revenue from AI computing infrastructure and related businesses drove growth in cloud and AI.

Speaker #2: Cloud and AI revenue is expected to grow at a CAGR of 30% in FY26 to FY27. At the time of announcing our midterm business management plan, a CAGR of 15% was announced.

[Company Representative] (SoftBank): Cloud and AI revenue is expected to grow at CAGR of 30% in FY26 to FY27. At the time of announcing our midterm business management plan, CAGR of 15% was announced. However, right now we can see that we can exceed that target, so now we expect to grow at CAGR of 30%. On top of cloud and AI, also security grew, and cloud services, also solutions. As for telecommunications, increased in mobile revenue driven by subscriber growth. Segment income of Enterprise segment. The segment income, we would like to explain in details to make you understand better. I would like to explain from the left side of this chart. The graph and telecommunications and solutions, cloud and AI had a positive growth in revenue. Telecommunications and solutions, cloud and AI, we separated into these two.

Osamu Akiyama: Cloud and AI revenue is expected to grow at CAGR of 30% in FY26 to FY27. At the time of announcing our midterm business management plan, CAGR of 15% was announced. However, right now we can see that we can exceed that target, so now we expect to grow at CAGR of 30%. On top of cloud and AI, also security grew, and cloud services, also solutions. As for telecommunications, increased in mobile revenue driven by subscriber growth. Segment income of Enterprise segment. The segment income, we would like to explain in details to make you understand better. I would like to explain from the left side of this chart. The graph and telecommunications and solutions, cloud and AI had a positive growth in revenue. Telecommunications and solutions, cloud and AI, we separated into these two.

Speaker #2: However, right now, we can see that we can exceed that target. So, now we expect to grow at a CAGR of 30%. On top of cloud and AI, security also grew.

Speaker #2: And cloud services also contributed to solutions. As for telecommunications, there was an increase in mobile revenue driven by subscriber growth. Regarding segment income of the enterprise segment, we would like to explain the details.

Speaker #2: To help you understand better, I would like to explain from the left side of this chart. So, the graph shows that telecommunications and solutions, cloud, and AI had positive growth in revenue.

Speaker #2: And telecommunications and solutions, cloud, and AI — we separate these two. So, as for the cost of telecommunications, it has decreased slightly. As for solutions and cloud and AI cost, it increased because of the increase in revenue, and there is some impact in the cost of solutions, cloud, and AI as well.

[Company Representative] (SoftBank): As for the cost of telecommunications, has decreased slightly. As for solutions and cloud and AI cost, increased because of the increase in revenue, and there is some impact in the cost of solutions, cloud and AI as well. Depreciation and disposals. This is mainly due to depreciation of AI infrastructure. This was accounted in the other, and now it's under Enterprise. Other expenses, the major one is the increase due to personal expenses. Enterprise business segment is expanding now, therefore, we are also enhancing the personnel as well. Next, Consumer segment revenue. Both service revenue, including mobile and sales of goods and others, increased. Looking at the graph from the top item.

Osamu Akiyama: As for the cost of telecommunications, has decreased slightly. As for solutions and cloud and AI cost, increased because of the increase in revenue, and there is some impact in the cost of solutions, cloud and AI as well. Depreciation and disposals. This is mainly due to depreciation of AI infrastructure. This was accounted in the other, and now it's under Enterprise. Other expenses, the major one is the increase due to personal expenses. Enterprise business segment is expanding now, therefore, we are also enhancing the personnel as well. Next, Consumer segment revenue. Both service revenue, including mobile and sales of goods and others, increased. Looking at the graph from the top item.

Speaker #2: And depreciation and disposals—this is mainly due to depreciation of AI infrastructure. This was previously accounted for in 'the other,' and now it's under 'enterprise other expenses.'

Speaker #2: The main reason is the increase due to personal expenses. The enterprise business segment is expanding now, so we are also enhancing the personal segment as well.

Speaker #2: Next, consumer segment revenue: both service revenue, including mobile, and sales of goods and others increased. So, looking at the graph from the top item.

Speaker #2: First, as for the sales of goods and others, the volume increased, but revenue growth was due to an increase in unit price of mobile devices and electricity revenue growth due to an increase in trading transactions.

[Company Representative] (SoftBank): First, as for the sales of goods and others, the volume increased, but revenue growth due to increase in unit price of mobile devices, electricity revenue growth due to increase in trading transactions. The third one is the broadband. Revenue growth mainly due to Open Fiber Japan Corp commencing operations in June. Open Fiber Japan Corp is a joint venture between SoftBank Corp and Sony Network Communications Inc. This is under our consolidated, and it will be accounted under our business segment. The fourth one is the mobile. Revenue increased by JPY 3 billion, driven by improvements in ARPU. Now, mobile revenue. We focus on increasing the revenue of mobile. Here is the Consumer segment income. Not only mobile revenue, but improvement gross profit from sales of goods was offset, and also some incentives, and amortization exists.

Osamu Akiyama: First, as for the sales of goods and others, the volume increased, but revenue growth due to increase in unit price of mobile devices, electricity revenue growth due to increase in trading transactions. The third one is the broadband. Revenue growth mainly due to Open Fiber Japan Corp commencing operations in June. Open Fiber Japan Corp is a joint venture between SoftBank Corp and Sony Network Communications Inc. This is under our consolidated, and it will be accounted under our business segment. The fourth one is the mobile. Revenue increased by JPY 3 billion, driven by improvements in ARPU. Now, mobile revenue. We focus on increasing the revenue of mobile. Here is the Consumer segment income. Not only mobile revenue, but improvement gross profit from sales of goods was offset, and also some incentives, and amortization exists.

Speaker #2: The third one is the broadband revenue growth, mainly due to Open Fiber Japan Corp. commencing operations in June. Open Fiber Japan Corp. is a joint venture between SoftBank Corp. and Sony Network Communications Inc. So this is under our consolidated.

Speaker #2: And it will be accounted for under our business segment. The fourth one is mobile. Revenue increased by ¥3 billion, driven by improvements in APU.

Speaker #2: Now, mobile revenue. We focus on increasing the revenue from mobile. Here is the consumer segment income. So, not only mobile revenue but improvement in gross profit from sales of goods were offset.

Speaker #2: And also, some incentives and that amortization exists. Therefore, due to the impact of that, as a total, it shows minus $0.9 billion. However, this has improved from what we had expected at the beginning of the fiscal year.

[Company Representative] (SoftBank): Therefore, due to the impact of that, as a total, it shows JPY -0.9 billion. However, this has improved from what we had expected at the beginning of the fiscal year. Right side shows some comments for each one. The gross margin from sales of goods and others is JPY 5.5 billion increase, and electricity income increased due to improved procurement costs. Please also pay attention to the notes within the chart. Sales commissions and sales promotion expenses, this increased mainly due to amortization of capitalized sales commissions and expenses for device purchase support program. A total JPY -0.9 billion. This is the result of Consumer segment. To here was about Enterprise and Consumer segment. From here, using three slides, I would like to talk about KPI. First, ARPU. ARPU increased by JPY 60 billion, driven by penetration of PayToku.

Osamu Akiyama: Therefore, due to the impact of that, as a total, it shows JPY -0.9 billion. However, this has improved from what we had expected at the beginning of the fiscal year. Right side shows some comments for each one. The gross margin from sales of goods and others is JPY 5.5 billion increase, and electricity income increased due to improved procurement costs. Please also pay attention to the notes within the chart. Sales commissions and sales promotion expenses, this increased mainly due to amortization of capitalized sales commissions and expenses for device purchase support program. A total JPY -0.9 billion. This is the result of Consumer segment. To here was about Enterprise and Consumer segment. From here, using three slides, I would like to talk about KPI. First, ARPU. ARPU increased by JPY 60 billion, driven by penetration of PayToku.

Speaker #2: And the right side shows some comments for each one. And so, the gross margin from sales of goods and others shows a ¥5.5 billion increase.

Speaker #2: Electricity income increased due to improved procurement costs. Please also pay attention to the notes within the chart. Sales commissions and sales promotion expenses increased mainly due to the amortization of capitalized sales commissions and expenses for the device purchase support program.

Speaker #2: So a total minus ¥0.9 billion. This is the result of the consumer segment. So here was about enterprise and consumer segments. From here, using three slides, I would like to talk about KPI—first, APU.

Speaker #2: So, APU increased by ¥60 billion, driven by the penetration of PayTaco. This is as we expected at the beginning of the fiscal year.

[Company Representative] (SoftBank): This is as we expected at the beginning of the fiscal year. We expect that will be increased by JPY 200. Full year, it will be JPY 160, which is the same line as the beginning of the fiscal year. Smartphone cumulative subscribers and net additions. Smartphone cumulative subscribers declined year on year following a shift in acquisition strategy to focus on longer-term users. Churn rate reduction and acquisition cost reductions are something that we want to do to make sure that we turn around smartphone subscriber numbers. In churn, as for Q1, due to impact of early churn, we saw a slight increase, however, broadly flat.

Osamu Akiyama: This is as we expected at the beginning of the fiscal year. We expect that will be increased by JPY 200. Full year, it will be JPY 160, which is the same line as the beginning of the fiscal year. Smartphone cumulative subscribers and net additions. Smartphone cumulative subscribers declined year on year following a shift in acquisition strategy to focus on longer-term users. Churn rate reduction and acquisition cost reductions are something that we want to do to make sure that we turn around smartphone subscriber numbers. In churn, as for Q1, due to impact of early churn, we saw a slight increase, however, broadly flat.

Speaker #2: So, we expect that it will be increased by 200 yen. So, for the full year, it will be 160 yen, which is in line with the beginning of the fiscal year.

Speaker #1: Smartphone cumulative subscribers and net additions: Smartphone cumulative subscribers declined year on year following a shift in acquisition strategy to focus on longer-term users.

Speaker #1: And churn rate reduction and acquisition cost reductions are something that we want to do to make sure that we turn around smartphone subscriber numbers.

Speaker #1: And churn for the first quarter, due to the impact of early churn, we saw a slight increase; however, it was broadly flat. In fact, in June, we saw improvement compared to the same month last year.

Osamu Akiyama: In fact, in June, we saw improvement compared to the same month last year. We are beginning to see the good trend. For Q2 and Q3, we want to accelerate as such improvement. By the segment, MediaEC. LY, LINE Yahoo announced the financial result yesterday. They are progressing well, and the commerce media both saw a growth in the revenue. Excluding one-time factors, profit increased due to growth of account advertising led by media, steady growth toward full year forecast. Again, we are in good shape. Now, financial segment. PayPay announced earning results last week. In financial segment, they are progressing well, and this segment saw huge growth, thanks to PayPay's growth. Distribution segment and other. Distribution revenue and profit increased with steady growth in ICT products for enterprise customers.

Speaker #1: So we are beginning to see a good trend. For the second quarter and third quarter, we want to accelerate this improvement. By segment: Media EC.

Speaker #1: LINE, who announced their financial results yesterday, are progressing well. The commerce and media businesses both saw growth in revenue. Excluding one-time factors, profit increased due to growth of account advertising led by media. There is steady growth toward the full-year forecast.

Speaker #1: So again, we are in good shape. Now, financial segment. PayPay announced earning results last week. And in the financial segment, they are progressing well. And this segment saw huge growth thanks to PayPay's growth.

Speaker #1: Distribution segment and others. Distribution revenue and profit increased, with steady growth in ICT products for enterprise customers. On the right-hand side, other segment.

Osamu Akiyama: On the right-hand side, other segment, R&D and upfront investment expanded, but that includes something one time. Going forward, such one-time investment should not continue. In the meantime, we continue to invest in R&D, so long as we believe that should contribute to future business. Whenever we see an opportunity, we want to be open to investment. Next, investment and our financial position. First, CapEx. Telecommunications CapEx are progressing in line with full year plan, which is at the bottom of the graph. IFRS 16 impact increased due to the commencement of operations by Open Fiber Japan, which I touched upon earlier in consumer segment. This joint venture leased dark fibers. As a non-cash transaction, it was recorded, and it has IFRS 16 impact. For AI-related CapEx, in Q1, our numbers were small. For the full year, we want to execute as planned.

Speaker #1: R&D and upfront investments expanded. But that includes some one-time items, so going forward, such one-time investments should not continue. In the meantime, we will continue to invest in R&D as long as we believe that it will contribute to future business.

Speaker #1: So whenever we see an opportunity, we want to be open to investment. Next, investment and our financial position. First, CapEx. Telecommunications CapEx is progressing in line with the full-year plan, which is shown at the bottom of the graph.

Speaker #1: The I416 impact increased due to the commencement of operations by Open Fiber Japan, which I touched upon earlier in the consumer segment. This joint venture leased dark fibers, and as a known cash transaction, it was recorded, resulting in the I416 impact.

Speaker #1: And for AI-related CapEx, in the first quarter, the numbers were small, but for the full year, we want to execute as planned. So we are on track in terms of AI-related capital expenditures.

Osamu Akiyama: We are on track in terms of AI-related capital expenditures. Free cash flow. Since we are actively invest strategically, we saw a negative cash flow compared to last year. More in detail, operating cash flow, JPY 65 billion decrease year on year due to impact from the working capital. Adjusted EBITDA is shown at the top of the graph, EBITDA show steady growth. Temporary working capital impact was reflected in operating cash flow, but again, it was one time. Investment cash flow include investment in telecom equipment, which is in line with last year. As Miyakosa mentioned earlier, in Q1, in order to launch the Neo Cloud business, we invested in SB Energy of $1 billion or about JPY 160 billion. We established SB Neo, we have a new framework in place.

Speaker #1: Free cash flow. Since we are actively investing strategically, we saw a negative cash flow compared to last year. More in detail, operating cash flow.

Speaker #1: There was a ¥65 billion decrease year-on-year, due to the impact from working capital. Adjusted EBITDA is shown at the top of the graph, and EBITDA shows steady growth.

Speaker #1: So, the temporary working capital impact was reflected in operating cash flow, but again, it was one-time. Investment cash flow includes investment in telecom equipment, which is in line with last year.

Speaker #1: And as Miyakasa mentioned earlier, in the first quarter, in order to launch a new cloud business, we invested in SB Energy of 1 billion dollars or about 160 billion Japanese yen.

Speaker #1: Then we established SB Neo, and we have a new framework in place, so we decided to sell the investment, and the purchase price is $1.5 billion.

Osamu Akiyama: We decided to sell the investment. The purchase price is $1.5 billion, so the gain on sale should be expected in the next quarter. Net interest-bearing debt. Compared to same term last year, we saw increase by about JPY 290 million, sorry, JPY 0.2 billion. In June, there was a timing to pay dividend. At one time, net reverse ratio increased. We do exit investment in SB Energy, and we expect increasing free cash flow. This net reverse ratio should be improved going forward. The topics of our financial activity or financing activity. We issued USD-denominated notes in July 2025, and now we issued euro-denominated senior unsecured notes. Coupon rate in Japanese yen after currency swap were equivalent to domestic notes. Going forward, we want to diversify our financing instruments to support our business activities.

Speaker #1: So, the gain on sale should be expected in the next quarter. Net interest-bearing debt, compared to the same term last year, increased by about ¥290 million.

Speaker #1: Sorry, ¥0.2 billion. In June, there was a timing to pay dividends, so at one time, net interest—sorry, net leverage ratio—increased. But we did exit investment in SB Energy, and we expect increasing free cash flow.

Speaker #1: So this net reverse ratio should be improved. Going forward. And the topics of our financial activity or financing activity. We issued US dollar denominated notes in July 2025 and now we issued euro denominated senior and secured notes.

Speaker #1: Coupon rate in Japanese yen after currency swap were equivalent to domestic notes. Going forward, we want to diversify financing instruments to support our business activities.

Speaker #1: So again, we want to continue working to strengthen our financial position. This slide shows the balance sheet. Total assets increased due to financial business expansion.

Osamu Akiyama: Again, we want to continue working to strengthen our financial position. This slide shows the balance sheet. Total assets increased due to financial business expansion, and shareholders' equity increased year-on-year. As of end of June last year, shareholders' equity ratio was 18%, excluding financial businesses. Last but not least, to summarize, we recorded growth both in revenue and profit. Our growth driver, Cloud AI, delivered good results as expected, and Enterprise increased in operating profit by 28%. We executed strategic growth investment and we issued euro-denominated foreign bonds. That's all for myself, and we'd like to start taking questions if you have. Thank you very much.

Speaker #1: And shareholders' equity increased year on year. As of the end of June last year, the shareholders' equity ratio was 18%, excluding financial businesses. Last but not least, to summarize, we recorded growth in both revenue and profit.

Speaker #1: And our growth driver, cloud AI, delivered good results as expected, and enterprise increased in operating profit by 28%. We executed strategic growth investment, and we issued euro-denominated foreign bonds.

Speaker #1: That's all from myself, and we'd like to start taking questions if you have any. Thank you very much.

Speaker #2: We will now move on to the Q&A session. If you wish to ask a question via Zoom, please join the meeting using the instructions provided in advance, and click the "Raise Hand" button.

[Company Representative] (SoftBank): We will now move on to the Q&A session. If you wish to ask a question via Zoom, please join the meeting using the instructions provided in advance and click the Raise Hand button. Once you have joined Zoom, we kindly ask that you turn off the live webcast from our website to prevent audio feedback. To give us as many participants as possible the opportunity to ask questions, each participant may ask up to two questions. I'm Tokunaga from Daiwa Securities. I have two questions. One is about the progress of Q1. This quarter is very strong, and you said that it could be upward, even other upward in H1. How much is that? How is the distribution? Is it all segments or Enterprise? What about LY contribution and so on?

Operator: We will now move on to the Q&A session. If you wish to ask a question via Zoom, please join the meeting using the instructions provided in advance and click the Raise Hand button. Once you have joined Zoom, we kindly ask that you turn off the live webcast from our website to prevent audio feedback. To give us as many participants as possible the opportunity to ask questions, each participant may ask up to two questions.

Speaker #2: Once you have joined Zoom, we kindly ask that you turn off the live webcast from our website to prevent audio feedback. To give as many participants as possible the opportunity to ask questions, each participant may ask up to two questions. I'm Tokunaga from Diverse Securities.

Kazuki Tokunaga: I'm Tokunaga from Daiwa Securities. I have two questions. One is about the progress of Q1. This quarter is very strong, and you said that it could be upward, even other upward in H1. How much is that? How is the distribution? Is it all segments or Enterprise? What about LY contribution and so on?

Speaker #2: I have two questions. One is about the progress of the first quarter. This quarter is very strong, and you said that there could be further upward movement, even more upward, in the first half.

Speaker #2: And how much is that? So how is the distribution? Is it all segments or enterprise? And what about last year’s contribution, and so on?

Speaker #2: So, our view—actually, this is the same as what we disclosed at the beginning of the fiscal year. So, it will be an improvement in the mid-hundreds of tens of billion yen improvement.

Osamu Akiyama: Our view, actually this is the same as what we disclosed at the beginning of the fiscal year. It'll be the improvement in JPY tens of billion. LY PayPay already had earnings results presentations, and they also announced the positive results. As for the consumer business, the second-hand handset sales was stronger than we had expected. The second-hand handset are mainly sold overseas, even though there was the impact by the war in Ukraine. Considering such circumstance, we were able to sell well in terms of our second-hand device handset. Our efforts in the cost improvement and the cost reduction, I mean, contributed to these positive results. Looking at the segment, basically all segments had better results than what we had expected in the beginning of the first fiscal year.

Speaker #2: And so LY PayPay already had earnings results presentations and they also announced the positive results. So as for the consumer business, so the second had the handset sales was stronger than we had expected.

Speaker #2: So the secondhand handset are mainly sold overseas even though there was the impact by the war in Iran considering such circumstance we were able to sell well in terms of this our secondhand device handset and also our efforts in the cost improvement and the cost reduction I mean and contributed to this positive results.

Kazuki Tokunaga: Our efforts in the cost improvement and the cost reduction, I mean, contributed to these positive results. Looking at the segment, basically all segments had better results than what we had expected in the beginning of the first fiscal year. Even though you said that secondhand handset sales did well, do you think it's a temporary impact? Regarding the secondhand handset sales, your understanding is correct. The price of handsets will increase onwards, depending on how it goes, and we will also have to adjust ourselves how to deal with that, the price increase, and other factors. There is a one-time impact of the advanced investment in our R&D, which is about JPY 10 billion or so. Thank you. The second question is about the enterprise business. I was looking at the data sheet on page five.

Speaker #2: Looking at the segment basically all segments had better result than the that what we had expected in the beginning of the first fiscal year.

Speaker #2: Even though you said that secondhand handset sales did well, do you think it's a temporary impact? So, regarding the secondhand handset sales, your understanding is correct. The price of handsets will increase or worsen, so depending on how it goes, we will also have to adjust ourselves on how to deal with that.

Kazuki Tokunaga: Even though you said that secondhand handset sales did well, do you think it's a temporary impact?

Osamu Akiyama: Regarding the secondhand handset sales, your understanding is correct. The price of handsets will increase onwards, depending on how it goes, and we will also have to adjust ourselves how to deal with that, the price increase, and other factors. There is a one-time impact of the advanced investment in our R&D, which is about JPY 10 billion or so.

Speaker #2: The price increase and other factors, so there is a one-time impact of the advanced investment in our R&D, which is about ¥10 billion or so.

Speaker #2: Thank you. The second question is about the enterprise business. I was looking at the data sheet the page five so shows cloud and AI is increasing in revenue but depreciation the first quarter decreased that's where we are where you are and so what about the margin and is it going to go down and also the depreciation is getting lighter because the some investments that you made has almost ended so what about the next and fiscal years and onwards please make comments on the margin.

Kazuki Tokunaga: Thank you. The second question is about the enterprise business. I was looking at the data sheet on page five. It shows cloud and AI is increasing in revenue. Depreciation, the first quarter decreased. That's where we are. What about the margin, and is it going to go down? The depreciation is getting wider because some investments that you made have almost ended. What about the next fiscal years and onwards? Please make comments on the margin.

Kazuki Tokunaga: It shows cloud and AI is increasing in revenue. Depreciation, the first quarter decreased. That's where we are. What about the margin, and is it going to go down? The depreciation is getting wider because some investments that you made have almost ended. What about the next fiscal years and onwards? Please make comments on the margin. As for cloud and AI, the revenue increase is due to the government-related project has started. That's one factor. The profit margin of cloud and AI, as CEO Miyakawa explained earlier, minimum 30% or even more. As for the finance perspective, we also have the same view, 30% or 40% margin is what we are targeting. Declining and depreciation. This is Sasaki.

Speaker #2: As for cloud and AI the revenue increase is due to the government project government related project has started so that's one factor and so this the profit margin of cloud and AI as CEO Miyakawa explained earlier minimum 30% or even more so as for the finance perspective we also have the same view 30% or 40% margin is what we are targeting and declining and depreciation this is Sasaki compared to the previous fourth quarter and this first quarter the you mentioned that the depreciation got worse but this is going to improve onwards so the government led projects without government led projects do not even without that I think it would get better so well the government led projects will be reflected in the second quarter onwards so in the first quarter providing the revenue from the and the income from the AI computing infrastructure is the major factor.

Osamu Akiyama: As for cloud and AI, the revenue increase is due to the government-related project has started. That's one factor. The profit margin of cloud and AI, as CEO Miyakawa explained earlier, minimum 30% or even more. As for the finance perspective, we also have the same view, 30% or 40% margin is what we are targeting. Declining and depreciation.

Yudai Sasaki: This is Sasaki. Compared to the previous Q4 and this Q1, you mentioned that the depreciation got worse, this is going to improve onwards. The government-led projects, even without that, I think it would get better. While the government-led projects will be reflected in Q2 onwards, in Q1, providing the revenue and the income from the AI computing infrastructure is the major factor. Thank you.

[Company Representative] (SoftBank): Compared to the previous Q4 and this Q1, you mentioned that the depreciation got worse, this is going to improve onwards. The government-led projects, even without that, I think it would get better. While the government-led projects will be reflected in Q2 onwards, in Q1, providing the revenue and the income from the AI computing infrastructure is the major factor. Thank you. Any other questions from the venue? Take questions on Zoom. Kikuchi-san from SMBC Nikko Securities.

Speaker #2: Thank you.

Speaker #1: Any other questions from the venue? If not, let's take questions on Zoom. Kikuchi-san from SMBC Nikko Securities. You have two questions. First, about sales and marketing expenses at the previous earnings announcement.

Operator: Any other questions from the venue? Take questions on Zoom. Kikuchi-san from SMBC Nikko Securities.

[Analyst] (SMBC Nikko Securities): I have two questions. First, about sales and marketing expenses. At the previous earning announcement, increased amortization of customer acquisition cost you mentioned, and also purchasing on devices. I think each JPY 20 billion, JPY 30 billion should be increased in recorded in H1 of this year, I think you mentioned. You didn't clarify how much, but that level. Was that changed since? You talked about increased price of secondhand devices, which was around JPY 16 billion or JPY 15 billion or something. In Q1, expected numbers recorded and the sales are from secondhand devices offset, what would happen in Q2? That's the first question. Sales and marketing expenses or incentive, Tokusuru Support, I think you are talking about that. Amortization of our sales incentive or marketing sales are expenses.

Satoru Kikuchi: I have two questions. First, about sales and marketing expenses. At the previous earning announcement, increased amortization of customer acquisition cost you mentioned, and also purchasing on devices. I think each JPY 20 billion, JPY 30 billion should be increased in recorded in H1 of this year, I think you mentioned. You didn't clarify how much, but that level. Was that changed since? You talked about increased price of secondhand devices, which was around JPY 16 billion or JPY 15 billion or something. In Q1, expected numbers recorded and the sales are from secondhand devices offset, what would happen in Q2? That's the first question.

Speaker #1: Increased amortization of customer acquisition cost you mentioned and also purchasing on devices I think each 20 30 billion should be increased in recorded and first half of this year I think you mentioned you didn't clarify how much but that level was that change since and also you talked about increased price of secondhand devices which was around 16 or 15 billion yen or something.

Speaker #1: So, in the first quarter, the expected numbers recorded and the sales are from secondhand devices offset. What would happen in the second quarter? That's the first question.

Speaker #1: Sales and marketing in expenses or incentives and Tokusuru support—I think you are talking about that. As for amortization of our sales incentives or marketing sales expenses, schedule-wise, we did execute amortization as scheduled, so nothing was changed since the beginning of the year about expenses or cost. For Tokusuru support, that reflected the impact from the sales of secondhand devices, so in the first quarter, it was better than what we expected at the beginning of the year.

Osamu Akiyama: Sales and marketing expenses or incentive, Tokusuru Support, I think you are talking about that. Amortization of our sales incentive or marketing sales are expenses. Schedule-wise, we did execute amortization as scheduled. Nothing was changed since the beginning of the year. About expenses or cost for Tokusuru Support, that reflected impact from the sales of secondhand devices. In the first quarter, better than what we expected at the beginning of the year. Going forward, about amortization of sales incentives, as I mentioned earlier, we already had a schedule. No change is expected. For Tokusuru Support, we need to see how the global market goes in terms of secondhand device sales. Also, our competitive landscape is something that we need to keep watching on. At the moment, we have not changed any expectation in the second quarter, but we will keep watching how it goes.

Osamu Akiyama: Schedule-wise, we did execute amortization as scheduled. Nothing was changed since the beginning of the year. About expenses or cost for Tokusuru Support, that reflected impact from the sales of secondhand devices. In the first quarter, better than what we expected at the beginning of the year. Going forward, about amortization of sales incentives, as I mentioned earlier, we already had a schedule. No change is expected. For Tokusuru Support, we need to see how the global market goes in terms of secondhand device sales. Also, our competitive landscape is something that we need to keep watching on. At the moment, we have not changed any expectation in the second quarter, but we will keep watching how it goes. About the secondhand devices and sales of secondhand devices, I'm not familiar with.

Speaker #1: Going forward, regarding amortization of sales incentives, as I mentioned earlier, we already have a schedule, so no change is expected. For Tokusuru support, we need to see how the global market goes in terms of secondhand device sales, and also the competitive landscape is something that we need to keep watching. At the moment, we have not changed any expectations for the second quarter, but we will keep watching how it goes.

Speaker #1: About the secondhand devices and sales of secondhand devices I'm not familiar with so for my understanding I think if you have not sold devices as much as you expected maybe because of Forex impact and also price of secondhand devices go up as new devices price go up.

Osamu Akiyama: About the secondhand devices and sales of secondhand devices, I'm not familiar with. For my understanding, I think if you have not sold devices as much as you expected, maybe because of Forex impact, and also price of secondhand devices go up as new devices price go up. If that's the case, the sales price of secondhand devices is something equivalent to new devices. Well, of course, Forex should have an impact on the sales of secondhand devices. How the market goes is something also we need to keep watching on. It's hard to predict how the market goes due to some geopolitical dynamics. We expect improvement, but again, it's too early for us to be too optimistic. If I may clarify, in May, when we announced the previous quarter's earnings, the volume of sales was very small, but it's been improving.

Osamu Akiyama: For my understanding, I think if you have not sold devices as much as you expected, maybe because of Forex impact, and also price of secondhand devices go up as new devices price go up. If that's the case, the sales price of secondhand devices is something equivalent to new devices. Well, of course, Forex should have an impact on the sales of secondhand devices. How the market goes is something also we need to keep watching on. It's hard to predict how the market goes due to some geopolitical dynamics. We expect improvement, but again, it's too early for us to be too optimistic. If I may clarify, in May, when we announced the previous quarter's earnings, the volume of sales was very small, but it's been improving. Compared to last year, we see improvement in terms of volume of sales of secondhand devices.

Speaker #1: If that's the case the sales price of secondhand devices is something equivalent to a new devices well of course Forex should have an impact on the sales of secondhand devices and how the market goes is something also we need to keep watching on it's hard to predict how the market goes due to some geopolitical dynamics we expect improvement but again it's too early for us to be too optimistic if I may clarify in May when we announced the previous quarter's earnings the volume of sales was very small but it's been improving so compared to last year we see improvement in terms of volume of sales of secondhand devices the next question is SB Energy's sale on sorry gain on sales should be expected in the second quarter is my understanding correct you invested in July sorry in the first quarter and you decided to sell SB Energy in July it's very short term of holding do you still expect gain on sales and the gain will be booked on your balance sheet well gain on sale is expected and we consider a revising the forecast in the second quarter upwards it's something to be considered so whenever we have a gain on sales it should be incorporated in our consolidated financial results thank you thank you next Tanaka-san an from BOA Securities two questions one is related to what Kikujisan asked earlier so as of now so 160 billion yen or 1.5 billion US dollars is the purchase price so I believe there will be some coordination hours but should we understand that there'll be a big upward how much impact this sale would would be so initially we invested 1 billion US dollars so basically it will be purchased by 1.5 US dollars so that means that we will have the income of 0.5 billion US dollars so this purchase price we are still assessing and we are still under the process of assessing the purchase price to finalize that would make a difference in terms of capital gain the second question is about 180,000 decrease in subscribers and so I believe that you had mentioned in the previous briefing that series switches measurement was a bit severe and how is the impact after taking the measurements against serious switches and so how about the churn after you have taken.

Osamu Akiyama: Compared to last year, we see improvement in terms of volume of sales of secondhand devices.

[Analyst] (SMBC Nikko Securities): Next question is, SB Energy's gain on sales should be expected in the second quarter. Is my understanding correct? You invested in the first quarter. You decided to sell SB Energy in July. It's very short term of holding. Do you still expect gain on sales and the gain will be booked on your balance sheet? Well, gain on sale is expected. We consider revising the forecast in the second quarter upwards. It's something to be considered. Whenever we have a gain on sales, it should be incorporated in our consolidated financial results. Thank you.

Satoru Kikuchi: Next question is, SB Energy's gain on sales should be expected in the second quarter. Is my understanding correct? You invested in the first quarter. You decided to sell SB Energy in July. It's very short term of holding. Do you still expect gain on sales and the gain will be booked on your balance sheet?

Osamu Akiyama: Well, gain on sale is expected. We consider revising the forecast in the second quarter upwards. It's something to be considered. Whenever we have a gain on sales, it should be incorporated in our consolidated financial results. Thank you.

[Company Representative] (SoftBank): Thank you. Next, Hideaki from BofA Securities. Two questions. One is related to what Kikuji asked earlier. As of now, JPY 160 billion or $1.5 billion is the purchase price. I believe there will be some coordination hours, but should we understand that there'll be a big upward?

Operator: Thank you. Next, Hideaki from BofA Securities.

[Analyst] (BofA Securities): Two questions. One is related to what Kikuji asked earlier. As of now, JPY 160 billion or $1.5 billion is the purchase price. I believe there will be some coordination hours, but should we understand that there'll be a big upward? How much impact this sale would be?

Hideaki Tanaka: How much impact this sale would be?

Osamu Akiyama: Initially, we invested $1 billion. Basically, it will be purchased by $1.5 billion. That means that we will have the income of $0.5 billion. This purchase price, we are still assessing, and we are still under the process of assessing the purchase price to finalize. That would make a difference in terms of a capital gain.

Hideaki Tanaka: The second question is about 180,000 decrease in your subscribers. I believe that you had mentioned in the previous briefing that serious switchers measurement was a bit severe, and how was the impact after taking the measurements against the serious switchers? How about the churn, after you have taken the measurement against the serious switchers?

[Analyst] (BofA Securities): The second question is about 180,000 decrease in your subscribers. I believe that you had mentioned in the previous briefing that serious switchers measurement was a bit severe, and how was the impact after taking the measurements against the serious switchers? How about the churn, after you have taken the measurement against the serious switchers?

Osamu Akiyama: This net decrease in the subscribers will be improved. We don't say that there is zero impact, but basically, we were able to make our customers well understood of the price increase. I could say that there is no major impact.

[Company Representative] (SoftBank): Thank you. Next, Amasa Nozan from Nomura Securities. First, on page 15, consumer expenses. Compared to Q1 last year, for acquisition, JPY 9 billion increase compared to last year. Advertisement, JPY 7.5 billion increase, total JPY 50 billion. Cost of goods and gross margin of devices grew. You talked about amortization of sales incentives and the Tokusapu provisioning increase. Compared to last year, where are they included?

[Analyst] (BofA Securities): Thank you.

Operator: Next, Amasa Nozan from Nomura Securities.

Daisaku Masuno: First, on page 15, consumer expenses. Compared to Q1 last year, for acquisition, JPY 9 billion increase compared to last year. Advertisement, JPY 7.5 billion increase, total JPY 50 billion. Cost of goods and gross margin of devices grew. You talked about amortization of sales incentives and the Tokusapu provisioning increase. Compared to last year, where are they included?

Osamu Akiyama: Compared to last year?

[Analyst] (Nomura Securities): Compared to Q1 last year, if I want to see which is up, which is down. Amortization of Tokusapu or sales of second-hand devices and amortization of sales incentives, where were they and how much would it be?

Daisaku Masuno: Compared to Q1 last year, if I want to see which is up, which is down. Amortization of Tokusapu or sales of second-hand devices and amortization of sales incentives, where were they and how much would it be?

Osamu Akiyama: This slide shows, compared to Q1 last year, that's exactly what you're talking about. Of sales-related expenses, JPY -89 mostly sales incentives or customer acquisition cost. For Tokusapu Support, is included in JPY -69. I think over half of JPY 69 is Tokusapu-related expenses. Second-hand device prices were better. That's why the JPY 69 was there. You thought it'd be bigger, but it ended at JPY 69.

[Analyst] (Nomura Securities): In Q2 last year. Oh, sorry. In Q2 compared to last year, should we expect more expenses?

Daisaku Masuno: In Q2 last year. Oh, sorry. In Q2 compared to last year, should we expect more expenses?

Osamu Akiyama: Well, Q2, both should increase. Compared to the same term last year, for sales incentive, I think the same level as Q1, and Tokusapu

Osamu Akiyama: Well, Q2, both should increase. Compared to the same term last year, for sales incentive, I think the same level as Q1, and Tokusapu Since one time factor was last year, maybe the variance might be bigger than the variance in Q1.

Osamu Akiyama: Since one time factor was last year, maybe the variance might be bigger than the variance in Q1. When should we expect those will stop increasing? For sales incentives, I think they should keep increasing compared to last year until the end of this fiscal year or maybe beyond that. The Tokusapu thing should stop increasing by the end of this fiscal year. In June and July, Y!mobile and SoftBank price increased? The impact was included in June as a Q1. How much impact should we expect in Q2, impact from the price hike of SoftBank and Y!mobile? For the new price plan, impact from the new price plan was not that big in Q1. In Q2 and onwards, new price plans impact should be visible.

Daisaku Masuno: When should we expect those will stop increasing?

Osamu Akiyama: For sales incentives, I think they should keep increasing compared to last year until the end of this fiscal year or maybe beyond that. The Tokusapu thing should stop increasing by the end of this fiscal year.

Daisaku Masuno: In June and July, Y!mobile and SoftBank price increased? The impact was included in June as a Q1. How much impact should we expect in Q2, impact from the price hike of SoftBank and Y!mobile?

Osamu Akiyama: For the new price plan, impact from the new price plan was not that big in Q1. In Q2 and onwards, new price plans impact should be visible. In terms of ARPU, we expect JPY +200 in Q2 onwards. Q3, Q4, JPY 200 should be expected, the ARPU rise. Well, we changed the price plan, including existing subscribers. ARPU would go up quickly and then flat. JPY +200 in Q3 and Q4, if you compare to the same term last year.

Osamu Akiyama: In terms of ARPU, we expect JPY +200 in Q2 onwards. Q3, Q4, JPY 200 should be expected, the ARPU rise. Well, we changed the price plan, including existing subscribers. ARPU would go up quickly and then flat. JPY +200 in Q3 and Q4, if you compare to the same term last year. Yes. On page 23, IFRS impact. What's the size of Open Fiber Japan's business in terms of the customer numbers or areas? Currently, our primary market is the city centers. It depends on how long the lease term should be, and the lease term is relatively long. That's why the numbers on the balance sheet is rather big. Did I answer to your question?

Daisaku Masuno: Yes. On page 23, IFRS impact. What's the size of Open Fiber Japan's business in terms of the customer numbers or areas?

Osamu Akiyama: Currently, our primary market is the city centers. It depends on how long the lease term should be, and the lease term is relatively long. That's why the numbers on the balance sheet is rather big. Did I answer to your question?

[Analyst] (Nomura Securities): Well, commencement of Open Fiber Japan is the impact of IFRS 16, mainly because you make a long-term commitment, because you want a long-term lease term. If it is a dark fiber, maybe 15 years of lease contract. Yes, I think your assumption is fair. My last question is, AI data center, 140MW of Sakai or lease to Neutra. Shouldn't you expect income? You also mentioned that 30% minimum margin. Again, 140MW Sakai. Do you expect 30% profit margin? Yes. We cannot disclose each and every transaction or customer. We want to contribute to the project overall, and we expect profit margin from cloud business. But the selling of GPU computing, if the sales is JPY 10 billion, and the profit should be 100%, margin is 100%. So GPU's profit margin is higher, but the Sakai profit margin is lower.

Daisaku Masuno: Well, commencement of Open Fiber Japan is the impact of IFRS 16, mainly because you make a long-term commitment, because you want a long-term lease term. If it is a dark fiber, maybe 15 years of lease contract.

Osamu Akiyama: Yes, I think your assumption is fair.

Daisaku Masuno: My last question is, AI data center, 140MW of Sakai or lease to Neutra. Shouldn't you expect income? You also mentioned that 30% minimum margin. Again, 140MW Sakai. Do you expect 30% profit margin?

Osamu Akiyama: Yes. We cannot disclose each and every transaction or customer. We want to contribute to the project overall, and we expect profit margin from cloud business. But the selling of GPU computing, if the sales is JPY 10 billion, and the profit should be 100%, margin is 100%. So GPU's profit margin is higher, but the Sakai profit margin is lower. Offset each other, you could still expect 30%-ish profit margin. Yes, in general, profit margin from a GPU delivery is much higher, whereas just the leasing data centers profit margin is lower.

Osamu Akiyama: Offset each other, you could still expect 30%-ish profit margin. Yes, in general, profit margin from a GPU delivery is much higher, whereas just the leasing data centers profit margin is lower. About Neo Cloud in the States, why SoftBank KK has a majority stake? In the States, SVT is a bigger presence. So why SoftBank has a majority of stake? What do you think about the presence in the States? We took a lead because we, as an operating company, want to launch a Neo Cloud business. That is why we have a majority stake. As you know, we have been working on Beyond Japan initiative, and this was a great opportunity to go beyond Japan, literally. As you rightly mentioned, in the States, our presence is still small. We do not have expertise, we do not have much assets in the States yet.

Daisaku Masuno: About Neo Cloud in the States, why SoftBank KK has a majority stake? In the States, SVT is a bigger presence. So why SoftBank has a majority of stake? What do you think about the presence in the States?

Osamu Akiyama: We took a lead because we, as an operating company, want to launch a Neo Cloud business. That is why we have a majority stake. As you know, we have been working on Beyond Japan initiative, and this was a great opportunity to go beyond Japan, literally. As you rightly mentioned, in the States, our presence is still small. We do not have expertise, we do not have much assets in the States yet. SoftBank Group has an asset which we can leverage. We could, again, take advantage of SoftBank Group presence and especially assets to expand Neo Cloud business in the States.

[Company Representative] (SoftBank): SoftBank Group has an asset which we can leverage. We could, again, take advantage of SoftBank Group presence and especially assets to expand Neo Cloud business in the States. That is all from myself. Thank you. We would like to take questions from Zoom in English. Explaining how to use simultaneous interpretation device for those at the venue. Please wait. Gibson-san from MST Financial, please unmute and ask your question.

Working on the Beyond Japan initiative, and this was a great opportunity to go beyond Japan, literally. And as you rightly mentioned, in the States, uh, our presence is still small. We don't have expertise, we don't have many assets in the States yet. Then, uh, SoftBank Group.

Uh, has an asset which we can leverage.

so,

we could, um,

Again.

Osamu Akiyama: That is all from myself. Thank you.

Operator: We would like to take questions from Zoom in English. Explaining how to use simultaneous interpretation device for those at the venue. Please wait. Gibson-san from MST Financial, please unmute and ask your question.

Take advantage of SoftBank Group's presence, and especially its assets, to expand the new cloud business in the States. That's all from me. Thank you.

We would like to take questions from Zoom in English.

Explaining how to use the simultaneous interpretation device for those at the venue.

Please wait.

David Gibson: Thank you very much for your time. It is David Gibson from MST Financial. I have two questions. The first one is, could you explain what sort of consumer buying data can be shared between the 7-Eleven Group, PayPay, and SoftBank as part of this new investment agreement and the collaboration agreement, given the privacy laws in Japan? The second question is on regarding Kakaku.com and LYCorp. LINE synergies post-acquisition took longer and were less than planned. Why will the acquisition of Kakaku.com by LYCorp, do you think, be more successful in this regard? Thank you.

Gibson, son from MST Financial, please unmute and ask your question.

Thank you very much for your time. It's David Gibson from MST Financial. I have two questions.

The first one is: could you explain what sort of consumer buying data can be shared between the 7-Eleven Group, PayPay, and SoftBank as part of this new investment agreement and the collaboration agreement, given the privacy laws in Japan?

The second question is regarding Kakaku.com and LINE synergies. Post-acquisition took longer and was less than planned.

Thank you.

Osamu Akiyama: The first question is about the investments in 7&i Holdings and its business overview. CEO Miyakawa explained in the larger presentation earlier. The retail industry as a whole, including 7&i Holdings, to enhance in the AI transformation and digital transformation further in Japan. We came to an agreement that we would like to also participate in that enhancement related to those transformation. For convenience stores, AX and DX are to enhance, there will be some return to us in the future. We have decided to invest in 7&i Holdings. 7&i Holdings customer points and our customer points, if we can integrate, it should be a great contribution to our consumer business segment as well. This is our expectation as well. The second question regarding Kakaku.com, acquired by LY.

So the first question is about the investments in the 7 & I Holdings and its business overview. So,

SEO mikawa.

Uh explained.

In the larger, uh, presentation earlier.

so,

Retail industry as a whole including 7 and I Holdings uh to enhance and uh AI um transformation and the digital transformation further in Japan. And we um we came to uh an agreement that we would like to also participate in that enhancement related to those transformation and

also, um,

For, for uh, convenience stores, um, AX and DX are to, uh, enhance...

then there will be, um,

Some, uh, return, um, to us in the future. So therefore, uh, we have decided to invest.

In, um, 7&i Holdings.

and uh,

Osamu Akiyama: That circumstance or the status is still ongoing situation, we are not in the position to make any comments. I appreciate your understanding. Thank you.

So 7 and a, i Holdings customer points and our, uh, customer points if we can integrate. Uh, then it will be, uh, it should be, uh, a great contribution to our consumer, uh, business segments as well, this is our expectation as well. The second question, uh, regarding the kakaku.com, um, acquired by lie. So that is uh, circumstance or the status is still ongoing uh, situation. So we are not in the position to make any comments. I appreciate your understanding. Thank you.

David Gibson: That's the question. Thank you.

[Company Representative] (SoftBank): Thank you, Gibson. We want to take the last question before closing. Fujihiro from Mizuho Securities, please. I have two questions. First, about R&D expenses. Miyakoshi mentioned he wanted to deploy the team of Sarashina to NeutraDC. Once NeutraDC is up and running, the R&D expenses should be smaller than before? Well, the team developing Sarashina and expertise developing Sarashina will be involved in NeutraDC to work on physical AI. That's actually one of the keys of that initiative. On the other hand, Sarashina is our unique model, we want to continue developing Sarashina further. For that end, development cost of such effort should be reflected in other segment. Okay. Thank you. The second question is about the dividend outlook. You mentioned that you can expect gain on sales in Q2, like JPY 500 million, which should be a one-time gain.

Operator: Thank you, Gibson. We want to take the last question before closing. Fujihiro from Mizuho Securities, please.

Thank you. Please give us one moment.

Uh, we want to take the last question before closing.

Uh, Fujihara, here are some from Securities, please.

[Analyst] (Mizuho Securities): I have two questions. First, about R&D expenses. Miyakoshi mentioned he wanted to deploy the team of Sarashina to NeutraDC. Once NeutraDC is up and running, the R&D expenses should be smaller than before?

I have 2 questions first.

About R&D.

Expenses.

Mentioned.

Uh, he wanted to deploy a team of Sarashina to New Draw, then.

Neutral once Neora is up and running.

uh, the RNG

Expenses should be.

Osamu Akiyama: Well, the team developing Sarashina and expertise developing Sarashina will be involved in NeutraDC to work on physical AI. That's actually one of the keys of that initiative. On the other hand, Sarashina is our unique model, we want to continue developing Sarashina further. For that end, development cost of such effort should be reflected in other segment.

Smaller than before.

Well.

The teams developing sarashina.

And expertise developing sarashina.

Will be involved in your Torah.

To work on physical AI.

That's actually one of the keys of the initiative.

on the other hand, sarashina,

It is our unique model, and we want to continue.

Developing Sasha further.

so in for that end,

Development, the cost of such.

[Analyst] (Mizuho Securities): Okay. Thank you. The second question is about the dividend outlook. You mentioned that you can expect gain on sales in Q2, like JPY 500 million, which should be a one-time gain. If you can reach JPY 600 billion of income in the quarter, how would it have an impact on dividend payout?

Effort should be reflected in other segments. Okay, thank you.

and the second question,

Is.

About the dividend.

Outlook.

You mentioned that, uh, you can expect to gain on sales in the second quarter, like $500 million, which should be a one-time gain.

Osamu Akiyama: If you can reach JPY 600 billion of income in the quarter, how would it have an impact on dividend payout? Well, dividend and dividend policy are something that we need to discuss further internally. Gain on sale, if or when it's expected, of course, this should have a contribution to the bottom line. We have a lot of growth opportunities in general, and such gain on sale is a one-time. While we are looking at financial discipline, we will make a final decision about the dividend. Okay. Thank you very much.

if you can, uh, reach

A quarter.

Uh, how

Osamu Akiyama: Well, dividend and dividend policy are something that we need to discuss further internally. Gain on sale, if or when it's expected, of course, this should have a contribution to the bottom line. We have a lot of growth opportunities in general, and such gain on sale is a one-time. While we are looking at financial discipline, we will make a final decision about the dividend.

Would it have an impact on dividend payout?

Or, dividend and the dividend policy.

Or something that we need to discuss further internally.

Gain on sale.

If or when it's expected, of course. Additionally, we have a contribution to the bottom line. We have a lot of growth opportunities in general, and

[Analyst] (Mizuho Securities): Okay. Thank you very much.

Such, uh, gain on sale is a one-time event. So while we are looking at financial discipline, we will make a final decision about the dividend.

Okay, thank you very much.

[Company Representative] (SoftBank): This concludes the Q&A session. We would like to conclude SoftBank Corp's investor briefing for the Q1 of fiscal year ending March 31, 2027. A recording of today's briefing will be available on demand on our corporate website at a later time. Thank you very much once again for taking the time to attend SoftBank Corp's investor briefing for the Q1 of fiscal year ending March 31, 2027.

Operator: This concludes the Q&A session. We would like to conclude SoftBank Corp's investor briefing for the Q1 of fiscal year ending March 31, 2027. A recording of today's briefing will be available on demand on our corporate website at a later time. Thank you very much once again for taking the time to attend SoftBank Corp's investor briefing for the Q1 of fiscal year ending March 31, 2027.

This concludes Q&A session.

We would like to conclude SoftBank Corp's investor briefing for the first quarter of the fiscal year ending March 31, 2027.

A recording of today's briefing will be available on demand on our corporate website at a later time.

Thank you very much once again for taking the time to attend the SoftBank Corp. investor briefing for the first quarter of the fiscal year ending March 31, 2027.

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Q1 2026 SoftBank Corp Earnings Call

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