SoftBank Group Corp SFTBY has seen a significant turnaround in its earnings, with its flagship Vision Fund posting its highest earnings in nearly three years. The recovery is attributed to the recovery in the valuation of technology companies.
What happened: In the December quarter of fiscal 2023, the Vision Fund, SoftBank’s main technology investment arm, reported an investment gain of 600.7 billion yen ($4.35 billion). This marks a substantial recovery after record losses in the previous fiscal year, CNBC reported.
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SoftBank’s net profit also rebounded, marking its first quarterly profit after four consecutive losses. This turnaround comes after a difficult fiscal year ending in March 2023, during which the Vision Fund suffered a record loss of about $32 billion due to plummeting technology stock prices and the underperformance of some Chinese business ventures.
The Vision Fund has posted earnings for three consecutive quarters. In the December quarter, SoftBank reported an investment gain of $5.5 billion, largely due to the sale of shares in the chip design company where it is a majority shareholder, Arm holds. The sale took place to one of SoftBank’s 100% subsidiaries. Arm, acquired by SoftBank in 2016 for about $32 billion, went public in the United States last year, valuing the company at more than $50 billion.
Because matter: This turnaround is significant, given SoftBank’s recent challenges. In May, the company reported a loss of 5.32 trillion yen for the Vision Fund in the previous fiscal year. This was followed by an ambitious move in September 2023, when Arm Holdings revealed its IPO ambitions at a valuation close to $54 billion.
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