SoftBank Corp.

Thank you very much for your coming today. From this time, I will be the main speaker.

And some participants on the stage also have changed from the previous session. I would like to introduce myself since this is my very first time.

In 1995, I joined Japan Telecom, was responsible for launching new businesses and related initiatives. And when the SoftBank purchased to Nippon Telecom, and I've been working since 2004.

So I've been in this industry for 30 years and for SoftBank, almost 20 years. As you can see, it's my career.

My major area is in finance, and since 2023, I've been in the Strategic Finance division. So as my life work, moving forward, I would like to pursue this career.

Thank you. Now I would like to explain.

So there are 4 points as executive summaries. First, FY 2025 consolidated results.

We were able to achieve full year forecast by balancing growth investments in the AI areas with revenue and profit growth. Second, we announced medium-term management plan.

Driven by AI businesses, we aim record profits and continuous dividend increases. Third, capital allocation policy.

We would like to strengthen operating cash flow generation while maintaining disciplined growth investments and strengthening shareholder returns. The fourth, consolidated forecast for FY 2026.

So we would like to target profit growth across all segments with Enterprise and Financial segments as core drivers. So first topic, FY 2025 consolidated results.

This is the overall view. Revenue and profit increased, exceeded all forecasts.

I will explain the breakdown after this first revenue. We increased in all segments, hitting a record high of JPY 7 trillion.

Especially Financial and Distribution recorded 2-digit result growth. In the Media & EC, due to the ASKUL incident, even though excluding this revenue decreased, adjusted EBITDA achieved a full year forecast with record high.

By segment, I will touch upon when I talk about operating income. So here is the operating income.

As you can see, Media & EC segment other than these, 4 segments increased and achieved full year forecast. Financial segment doubled.

Media & EC decreased, excluding ASKUL. So we maintained the profit.

So now I would like to touch upon by segment. First, revenue.

Mobile revenue, which is our core, continued to grow and sales of goods and others recorded double-digit increase. Next is the Consumer segment mobile revenue trend.

As you can see, since FY 2023 third quarter, mobile revenue continued to grow year-on-year on an underlying basis. So there are 2 main factors.

One is that customer acquisition measures were taken due to that impact. And next is the access charge was implemented.

So JPY 5.7 billion was excluded. So with excluding these 2 factors, so as you can see here on the right side, in the colored chart, over the past 2.5 years, maintained year-on-year growth.

Next, the segment income for Consumer segment. We had profit increase, achieving full year forecast, especially mobile revenue increase contributed to its growth.

So sales of goods and others, so JPY 47.7 billion was recorded due to the unit price improvement and electricity decrease in sales, improvement in procurement cost, profit declined due to onetime downturn in Q4. So due to this onetime factor, so full year, it's about -- so we achieved the gross profit.

So sales commissions and sales promotion expenses increased mainly due to expenses for device purchase support program and amortization expenses to capitalize sales commissions. Others due to the inflation increase and network maintenance costs.

So this is a onetime factor. We had this impact in the segment income.

In the presentation by President earlier, so the forecast, so the top line will increase due to the price increase. But due to this -- as for the segment forecast, so we would like to -- we expect the stable growth.

Next is Enterprise segment. Revenue and profit both increased and achieved the full year forecast.

Revenue exceeded JPY 1 trillion, especially business solutions and others revenue rose 13.2% year-on-year. Here is the business solution and others revenue, especially recurring revenue is where we focus on, and this achieved double-digit growth, rose by 10% year-on-year.

Next, Media & EC segment. Due to the ransomware attack on ASKUL, so we overcame this and all segment revenue increased.

On the right side shows segment income. So this time, we have 2 factors.

One is the onetime factors. The second left, so some remeasurement gain on step acquisition.

The other one is impacted by ransom attack on ASKUL. These 2 factors are very unique.

Therefore, we highlighted and also, we can see other business income. Next, Financial segment.

Revenue expanded steadily and segment income doubled, driven by contribution from PayPay consolidated. As you know, PayPay was listed on NASDAQ, March 2026.

PayPay continues to be a consolidated subsidiary of the company after the IPO. On Distribution segment and Others.

Distribution revenue and profit increased and revenue exceeded JPY 1 trillion with a steady growth in ICT products and enterprises. And others on the right-hand side show impact from R&D investment.

Now net income. We hit record high achieved full year forecast and grew by 4.7% year-on-year and operating income growth drives this net income, and tax effect of PayPay was reflected here.

And capital expenditure, what we'd like you to pay attention to is Consumer and Enterprise, which is at the bottom of the bar. The full year forecast was JPY 340 billion and we hit in line with the forecast.

And others in the bar, most of them is investment in AI. So let me touch upon that more in detail on the next slide.

Status of investment in AI computing infrastructure and AI data centers. For the last 3 years, we invested about JPY 200 billion investment.

After FY '26 and onwards, we continue that investment. But also we want to enter into monetization of AI.

This slide shows primary free cash flow. We steadily generated a high level of primary free cash flow.

Since we announced end-of-the-year result, we created this waterfall chart. Even after paying dividend, we generated JPY 98.1 billion of free cash flow.

Using this capacity, we will invest for financial improvement and the future growth. And net interest-bearing debt and net leverage ratio is here.

Net interest-bearing debt decreased by JPY 60 billion year-on-year. Net leverage ratio declined to 2.2%.

That means we have more capacity to finance. Then balance sheet.

Total assets grew by JPY 2.4 trillion, JPY 18.5 trillion of total equity. And we accumulated JPY 214 billion of total equity, and equity ratio was 16% or 1% lower than the previous year, not only having a total equity increase, we have a bigger pie, if you will, to calculate the balance sheet.

So Financial has more impact on balance sheet. So we created a balance sheet, excluding financial business, as you can see on the right-hand side.

Excluding Financial domain, shareholder equity ratio was 19.0%. We will continue disclosing this balance sheet, excluding Financial domain as well.

And let me move on to operating data or KPI. The smartphone mobile subscribers grew year-on-year, hitting 32 million at the end of this fiscal year.

Short-term churn, we feel impact from that. So smartphone churn rate increased by 0.16% year-on-year, reflecting continued impact of higher early churn, and we are looking at the churn rate around 1.70% or 1.71%.

Next, I want to talk about net additions. So it declined year-on-year following a shift in our acquisition strategy towards focusing on long-term users.

So we would like to focus on smartphone churn rate reduction and control over acquisition costs. Next, I want to talk about ARPU.

So excluding retrospective adjustment of access charges, ARPU increased by JPY 20 (sic) [ JPY 30 ]. So consumer ARPU continued to increase.

So we recently announced the price -- new price plan as for ARPU for 2026. So we expect that it will increase by [ JPY 30 ].

And next is broadband and electricity and both subscribers continue to increase. Next, Media & EC, both EC transaction value and group total advertising revenue expanded.

So since fourth quarter ASKUL also recovered. So therefore, EC transaction value increased to -- returned to positive.

Next is PayPay. PayPay standalone users increased steadily.

So number of payments significantly outpaced the user growth. So it rose in payments per person.

So this is also PayPay. PayPay consolidated, the left side, as you can see, its GMV continued to outpace 20% growth.

On the right side, PayPay banks deposits and loan balance sheet showed a steady growth. This is SB Payment Service.

So payment service exceeded previous midterm plans business target of JPY 10 trillion in GMV, and it continued as you can see on the right side, especially driven by non-telecom double-digit growth was achieved. This is ESG-related topics I would like to take some time later on to go through.

So in fiscal year 2025, the previous midterm management plans continued are completed. So here is the review.

So we revised upward twice and ultimately exceeded. Here is the business target and its results, especially in blue, we were able to achieve 1 year ahead of schedule.

So as you can see, number one, in the consumer, revenue increased for 3 consecutive years as primary cash flow, we were able to have good control over it and we achieved midterm plan targets and delivered high level of dividends for 3 years. So this is the TSR for the past 3 years.

So 50 -- nearly 55% increase during the midterm plan period. Now let me talk about new midterm management plan.

We continue to focus on both mid-term to long-term growth and shareholder returns. This shows financial targets.

We aim to achieve record high operating income and net income continuously. For operating income, we want to hit JPY 1.7 trillion.

And for net income, we want to hit JPY 700 billion in the 5 years' time. With regards to shareholder returns, we aim for continuous dividend increases in line with profit growth.

For the fiscal year, we want to provide JPY 8.8 per share dividend. And going forward, as you can see on the right-hand side, in line with the profit growth, we want to return back to shareholders accordingly.

In summary, our financial targets, revenue, operating income, net income, we want to hit record high in all areas. And new midterm management plan, Enterprise segment should be a leader, a growth driver, and AI is entering into monetization phase.

Enterprise segment is going to include AI. And in the Enterprise segment, we restructured sub-segments, especially cloud and AI is the growth driver, and we want to make sure that you can pay more close attention to cloud and AI.

Midterm plan business targets are shown here. For Enterprise, we want to double cloud and AI revenue by FY '30 versus FY '25.

And also, we want to double segment income by FY '30 versus FY '25 and other business targets for respective segments are shown on this slide. Now let me talk about the capital allocation policy.

Again, we want to deliver both growth and returns, and we disclosed this capital allocation idea to let you know how we want to achieve both. First, we want to generate operating cash flow exceeding telecom-related CapEx and enhanced shareholder returns.

And also, we want to execute strategic investments while balancing financial soundness and capital efficiency. Net leverage ratio is one of the index to see the financial soundness and mid-2x range of net leverage ratio is assumption here.

With that, we have a capacity of about JPY 1 trillion for investment. With this investment, we want to achieve further growth.

Let me talk more about assumptions of capital allocation. About operating income and dividend, as you can see on the left hand of the slide, we want to achieve record high performance to return back to shareholders and also maintain adjusted net leverage ratio in the mid-2x range is for our financial soundness.

And also, we want to maintain consolidated adjusted ROE at around 20%. Average ROE of Japanese companies are lower in general.

But again, we want to deliver a high equity spread as much as possible. You can see comparison between FY '23 to '25 total and FY '26 to '28 total.

By monetizing AI, we want to invest more, and we should be able to invest more, and we should be able to return back to shareholders. And last but not the least, consolidated forecast for FY '26.

We want to aim to achieve record high earnings and increase dividends in line with earnings growth. We want to balance growth in existing businesses and monetization of AI with businesses with the continued growth investment in new businesses, including AI, aiming to achieve revenue and profit growth.

Our dividend per share is JPY 8.8, like I said earlier. By segment, we forecast operating income like this.

Consumer, while we see increase of sales related cost, but we can expect increase of income by revised price. In the Enterprise segment, again, AI and cloud should be a driver for growth.

In Financial segment, we want to expand payment function. So again, Enterprise and Financial should be a growth driver.

But other segments, we also want to increase growth and income. Like Miyakawa-san explained earlier today, for the first half of this fiscal year, we expect growth in revenue, but loss of or decline of profit.

But for the last part of this year, we should expect both revenue and profit growth. Again, in the first half, absence of one-time gains and increase of sales commissions have an impact on profit in the first half, but for the last half of the year, price revisions effect should be stronger, and there should be no onetime factors and impact of sales commission and sales promotion expenses.

Those are the key factors for profit growth that we expect in latter half of FY '26. Again, in the first half of FY '26, we may be a little bit worried about performance.

But for the full year, we should be able to hit both revenue and profit growth. That's all myself.

And I'd like to take your questions going forward.

Mr. Akiyama, thank you so much for your presentation and also continued increased profit and dividend.

First question, So JPY 1.7 trillion and increased by JPY 600 billion in profit. So Enterprise doubled, so JPY 200 billion.

So the remaining will be covered by Consumer, Financial and Others. So the Consumer, due to the price increase, will also contribute and the Media & EC if they achieve JPY 100 billion, it should be able to achieve that profit target though.

So would you be able to explain your plan for other segments?

So as for the midterm management plan, the breakdown of the segment. So as for the Enterprise segment will be our main driver and profit margin would be higher due to the AI-related businesses.

As for the Consumer segment, due to the new price plan and ARPU also will increase, as I explained earlier, due to the cost increase, so there will be some impact on the cost increase. So consumers growth will be a bit stable.

And Media & EC will continue stable growth and the Financial segment, the payment is doing well. And finance area is highly expected for further growth.

The PayPay and LY, they are both listed companies. Therefore, I cannot make solid comments here.

Appreciate your understanding. So per fiscal year, so this fiscal year, so a 6% increase, it could be a little bit lower.

What is the reason for this rather lower increase? So the guidance is just conservative, you think?

As for the Enterprise segment, especially AI-related business would be the major driver for growth. So this will actually reflect on the actual profit in the next couple of years.

That's why.

The second question is about the Enterprise business. One, so the 20% increase in income.

So I think this guidance is very aggressive, I think. What is the reason for that?

Second is about the GPU pricing. GPU price change is fluctuating.

So due to the AI-related business. So now AI is under the Enterprise segment.

So that would lead to the positive impact to the profit.

So is it going to account for like 50% of the entire Enterprise business?

So I cannot give you the detailed breakdown.

So what about FY 2027 onwards? Is it because of the Crystal intelligence or what is other factors?

Well, GPUs actual operation will start and also Crystal Intelligence will be also more actively sold. So that would be the major factors as well.

I have 2 questions. First, growth rate of operating income and net income, difference between them.

In midterm management plan, operating income increased by JPY 660 billion or so, but net income increased only by JPY 150 billion. For the fiscal year FY '26, do you expect increase of operating income or net income growth rate is smaller than operating income?

Miyakawa-san earlier said that you took a conservative view, but I wonder something like increase of financial costs or maybe off balance in midterm, I wonder if you expect more income attributable to third parties as opposed to operating a parent company. So I wonder if there are any other reasons why you are very conservative and cautious about net income.

You questioned about the difference between operating income growth and net income growth. So I believe that you understand some factor is related to our structure like PayPay, which is listed, and we don't expect a huge contribution from them in terms of a consolidated bottom line.

SB OAI, for example, we don't own 100%. So income from SB OAI should be attributable to third parties and also impact from our interest rate can be expected as well.

And for FY '25 and FY '26. In FY '25, we had some positive impact from tax effects, which is not there in FY '26.

So there are some uncertainties, but if you hit operating income, you usually expect a substantial net income as well. Don't you think so?

Well, we have set some assumption for calculation. And obviously, increase in bottom line is very important.

So we try to increase that income as well as operating income as well.

And next question is about first half of this year and second half of this year. So one-time profit that took place last year is not going to be there, you said, and also increase of sales and general expenses like DOCOMO and KDDI, they did impairment loss of JPY 50 billion of acquisition cost.

I think we already did our impairment loss in last year or some years ago. So how much impairment loss you expected to recognize if you do?

Talking about onetime impact, the revaluation gain of LY was onetime factor. If you take a look at Slide 13, we disclosed that on that slide.

LY alone?

Yes. So revaluation of LY was in the last year, but not expected this year.

And talking about sales and general expenses, acquisition cost -- capitalized acquisition cost that is, has to be amortized and also support program, provision for support program of device purchase support program is also the impact. Talking about amortization of the capitalized acquisition cost.

Since last half of last year, we revised or changed our acquisition policy or acquisition strategy. So we need to recognize amortization in the last year, but going forward, we should expect lower amortization cost.

So in the last -- excuse me, first half, we may need to suffer from amortization cost impairment. But last half, we should expect lower amortization cost of acquisition costs last -- in the last years.

So device purchase support program you mentioned, in the first half year, bigger than last year and smaller than last year in the last half of this fiscal year. And going forward, FY '27 and further away, of course, it depending on upgrade of users.

So should we expect lower cost to support device purchase? Is it going to be ahead this year, but next year and onwards, it's going to go down?

Yes, you're correct. We should expect some improvement next year and onwards.

And the impact from the acquisition cost. So rather than impairment loss recognition like competitors did, is it an issue of balance between impairment loss which we didn't do?

Every year we perform impairment test. And for this fiscal year, we didn't see any reason why we needed to do impairment loss.

So impact that I'm talking about is amortization. So how much will it be?

In terms of acquisition cost and support program, we refrain from disclosing concrete numbers. I think maybe JPY 20 billion, JPY 30 billion.

Well, JPY 20 billion, JPY 30 billion, respectively, for our support program and acquisition cost.

I have asked two questions. One is about the consumer business.

ARPU will be up by JPY 160, which is the same as I expected for over 12 months, [ 41 million times ], then the major line will be about JPY 80 billion increase in revenue, then the JPY 9 billion up in profit. So are you going to spend JPY 70 billion?

So just before you mentioned like JPY 20 billion to JPY 30 billion for each. So what you are planning to spend the remaining of the JPY 70 billion?

And so I believe that each will increase by JPY 12 billion -- JPY 10 billion, sorry. So next fiscal year.

And there will be some impact of the price increases. So I -- if my understanding correct, that the next fiscal year, so the consumer income will increase.

As for the incentives, so in FY '24 and '25, when the acquisition measurements were focused on. So therefore, that impact will be reflected and also stable in fiscal year '27 onwards.

And as for Tokusapo, so the impact by Tokusapo will be also stable in '27 and onwards. So there are some factors due to the cost increase.

As for the overall segment, we can still expect to have steady growth. So as you said, it will be stable.

It means that in the next fiscal year onwards. Now, it's a little too high.

Therefore, it will be a little bit lower, the provision of the cost and so on.

You're talking about the fiscal '27?

Yes, slightly decreased.

The second question, the Others segment. So the recent fiscal year was in negative figure, but -- so why the negative figure expand even further?

Is that because of AI-related businesses? But -- so I don't see any other businesses which will face bigger negative figures than the AI businesses.

So I think AI business is the one to offset the negative figure business areas. So even you have some buffer -- so you always mention like JPY 100 billion.

Last year, you also mentioned JPY 100 billion as buffer.

So regarding the others until last fiscal year, so some areas that we invested for development will shift to monetization phase. So other than AI, such as HAPS-related research and development cost is also included here.

Having said that, it's not all ready for commercialization. So even though we still have some buffer as we move forward with our businesses, there may be some we will be using, but some will not be used.

So about JPY 100 billion buffer is something that we can use for the future. So we would like to maintain this much as buffer for the future development.

So regarding the storage battery, so you are collaborating with others. That's why this business is not going to face the big negative figure.

Is that correct?

Yes.

A question -- or two questions about the midterm management plan. First, enterprise and revenue of the cloud AI should be doubled, you said.

And as a service, AI data center, sovereign cloud and in Crystal Intelligence, I think depending on the services, when you can expect our revenue or profit is different. So again, which of the sub-segments that you expect revenue earlier than others, for example, to hit JPY 200 billion?

I think your question about the growth and -- or growth speed of cloud AI. As you said, we want to leverage GPUs that we have been building up, and Crystal Intelligence are expected the growth driver.

And FY '27, somebody asked about the gap of income between FY '26 and '27. We will begin monetization phase in FY '26, but it will be up and running in full scale in FY '27.

So that's our assumption.

Crystal Intelligence, for example, I think usage fee is JPY 30 billion or something. So I wonder if that's an assumption or, again, how much contribution expect from different subsegments?

Well, for Crystal Intelligence, in midterm management plan, we see crystal intelligence conservatively. So you don't expect a huge contribution from Crystal Intelligence in the midterm business plan.

And next is about the dividend. So it's great that you increase -- you plan to increase dividend in the long run.

But EPS, how did you calculate EPS in terms of relation to net income?

Dividend ratio is -- it looks downward trend, but I don't know how you calculated earnings per share. As you can see, payout ratio is a little bit going down, but as we mentioned in the capital allocation section, we want to achieve both growth and return.

So that's the balance that we look at in calculating and expecting earnings per share. Payout ratio.

What would be the ideal payout ratio is something that we still have discussion internally. But in FY '30, I think this kind of balance should be good as you see on the slide.

So balance between EPS and net income, depending on cash flow, is it possible that you paid dividend more than shown here?

So your question is if we have more cash, are we prepared to pay more dividend?

Yes. For example, even though net income was JPY 700 billion, you may pay dividend as much as JPY 10, or those numbers you've shown on the slide are fixed?

Well, in theory, if there's nothing to invest, we should return to shareholders. But as you can see, we continue -- we want to continue investment for future growth.

So I don't think that we have a huge bandwidth to increase our dividend if we don't have enough net income.