SoftBank Group booked its first profit in five quarters in fiscal Q3 2023 (the period to 31 December), supported by Vision Fund investment gains and a jump in its net asset value driven by its chip design unit Arm, which revised its full-year forecast. 

On an earnings call, CFO Yoshimitsu Goto (pictured) highlighted the company shifted its portfolio away from Alibaba to AI with Arm at the core.

“We expect more growth from Arm,” which Goto claimed is the biggest contributor to the global AI evolution.

He noted Arm accounted for 32 per cent of SoftBank’s asset holdings at end-2023, up from 9 per cent at end-2019. 

The company owns 90 per cent of Arm. In recent years, SoftBank sold the vast majority of its shares in Alibaba.

Revenue from the unit improved 15 per cent to JPY105.2 billion ($704.3 million), driven mainly by growth in its licensing business.

Rising demand for AI chips prompted Arm to boost its full-year revenue forecast by 5 per cent to about $3.2 billion.

Richard Windsor, founder of blog Radio Free Mobile, does not expect AI to be a big royalty driver for Arm over the next year or so, adding it looks like the main story will be about licence revenue.

But he sees big potential for the Windows ecosystem to migrate to Arm on laptops.

“AI will allow Arm to earn more revenue from higher prices and an increased core count, which is good, but not as good as laptops where it currently has very little.”

SoftBank’s profit hit JPY950 billion compared with a JPY783.4 billion loss in fiscal Q3 2022. Its bottom-line also was aided by a $7.7 billion gain from the acquisition of T-Mobile US shares.

Its Vision Funds recorded a profit of JPY442.7 billion, reversing a loss of JPY660.1 billion.

Net sales increased 2.6 per cent to JPY1.6 trillion.