SoftBank Group swung to a net loss of ¥1.12tn ($7.1bn) in the July to September quarter. The biggest single hit was a $3.7bn writedown on power equipment for US AI data centres. SoftBank had paid for it in advance, then changed its plans.
The SoftBank loss compares with a ¥2.5tn profit a year earlier. Analysts had expected a profit of ¥129bn this time, Bloomberg reported, and it is SoftBank’s first net loss in almost two years. Revenue came in at ¥2.22tn, above analysts’ estimates, according to CNBC.
The turbine orders
SoftBank said it had made advance payments to secure power generation equipment for US data centre projects “in anticipation of shortages”. Those payments reached $9.5bn by the end of September, and plans then changed. SoftBank could not get the fees back when it cancelled orders, chief accounting officer Kazuko Kimiwada said, as Reuters reported. SoftBank can claim rebates of up to $2.1bn on future purchases over the next ten years.
The company gave no detail on the equipment. The Wall Street Journal, citing people familiar with the orders, reported that SoftBank had reserved more than 13 gigawatts of gas turbines, mostly from GE Vernova, between late 2025 and early 2026. That is more than six Hoover Dams’ worth of capacity, the WSJ said. SoftBank then cancelled the reservations it could not use, according to the report.
GE Vernova told the WSJ the moves had “no negative or positive impact” on the company. Its shares still fell after the results, along with those of Bloom Energy, Bloomberg reported.
Elon Musk had claimed on X the week before that SoftBank defaulted on the orders. Chief financial officer Yoshimitsu Goto rejected that.
“This is simply not correct at all. There is no such default,” Goto said, according to the WSJ.
Goto said SoftBank is carrying out “a thorough reassessment” that includes how it buys equipment.
“We need to balance between gas and brake,” he said.
Borrowing costs double
Some analysts see the interest bill as the bigger problem. Interest expenses for the six months to September more than doubled from a year earlier to ¥676bn, Bloomberg reported. SoftBank raised $56.5bn in the quarter, its highest ever, Reuters reported, including an $11.87bn term loan and a $10bn dollar bond.
“The more worrying factor is the increase in financial costs,” Kazuki Sawamura, a strategist at Shinkin Asset Management, told Bloomberg.
SoftBank says its finances are within its own limits. Its loan-to-value ratio was 15.9% at the end of September, below the 25% ceiling it sets for itself, Goto said.
OpenAI and the portfolio
OpenAI remains SoftBank’s largest bet. Its cumulative investment stood at $54.6bn at the end of September, with a fair value of $99.6bn, the company said. OpenAI’s latest funding round, which people familiar with it have valued at $1.25tn, is not yet in the figures. Goto said an announcement was highly likely in the current quarter.
The Vision Fund segment lost ¥81.6bn. A $1.3bn gain on ByteDance did not cover falls in listed holdings such as Coupang and Grab. Lower share prices at Arm and Intel also weighed on results.
Shares swing, spending goes on
SoftBank’s shares rose about 14% on Tuesday, before the results, then fell more than 10% on Wednesday morning in Tokyo. They have lost more than half their value since their record in June. On 9 November we wrote that investors were questioning its AI strategy after a selloff and China’s block on its ABB robotics deal.
SoftBank is still spending. The day before the results, SoftBank and Grab committed $1.85bn in seed capital for AI data centres in Malaysia, building on Son’s plans for the country. On Thursday it led Agile Robots’ $500M round.
Bloomberg Intelligence expects SoftBank to raise more money in 2027. Its annual interest bill is heading above ¥1tn.