SoftBank Posts $7.1 Billion Quarterly Loss on $3.7 Billion U.S. Data-Center Writedown

What happened

The results show a net loss of ¥1.12 trillion for the July–September quarter, against a ¥2.5 trillion profit a year earlier; analysts had on average expected a profit of ¥129 billion. The Vision Fund segment lost ¥81.6 billion in the same quarter, missing expectations for a profit.

The writedown centers on advance payments for power equipment at U.S. data centers: SoftBank prepaid about $9.5 billion to secure equipment and manufacturing capacity for its 8-gigawatt campus in Pike County, Ohio and other U.S. data centers; about $2.9 billion of that covers equipment it no longer needs and cannot be refunded, and about $0.88 billion covers contract modifications and settlements. Future purchases may bring conditional rebates of up to $2.1 billion.

Chief Financial Officer Yoshimitsu Goto told the earnings call that fierce competition for energy supply had pushed the company to order before long-term specifications were set; the company does not plan to downsize the Ohio project but is conducting a thorough reassessment of its procurement strategy. Before the results, SoftBank shares closed up 13.9% in Tokyo, still more than 50% below their June record high.

Key facts

1. Quarterly loss: Net loss of ¥1.12 trillion, about $7.1 billion, against a ¥2.5 trillion profit a year earlier; the first quarterly loss in almost two years
2. Writedown: $3.7 billion, about ¥597.2 billion; about $2.9 billion for equipment prepayments no longer needed and about $0.88 billion for contract modifications and settlements
3. Prepayments: About $9.5 billion paid upfront; conditional rebates of up to $2.1 billion on future purchases
4. Vision Fund: The segment lost ¥81.6 billion as falling tech stocks dragged down portfolio valuations
5. OpenAI exposure: SoftBank has committed about $65 billion to OpenAI and is expected to join its new round at a $1.25 trillion valuation; Goto said any revaluation waits until that round closes
6. Shares: Closed up 13.9% in Tokyo before the results, at ¥3,872, still more than 50% below the June record high