SoftBank Vision Fund posts first annual gain in 3 years, up $4.6 billion

SoftBank’s Vision Fund earned 724.3 billion Japanese yen ($4.6 billion) in the fiscal year ending March, marking the first time the digital investment arm has been profitable since 2021.

SoftBank’s Vision Fund business had a profit of 128.2 billion yen for the fiscal year, up from a deficit of 4.3 trillion yen the previous year.

A comeback in the Vision Fund helped SoftBank Group turn a profit in the fiscal fourth quarter, which ended in March.

SoftBank’s high-profile investments, such as TikTok owner ByteDance and US food delivery startup DoorDash, contributed to the Vision Fund’s valuation increase. SoftBank’s other assets, including Chinese ride-hailing business DiDi and office sharing company WeWork, both filed for Chapter 11 bankruptcy last year.

The Vision Fund’s gains were mostly attributable to Arm’s initial public offering last year.

The Japanese corporation stated that gains from the IPO of Arm, a subsidiary of Softbank, are not included in its “consolidated statement of profit or loss.” Excluding gains from Vision Fund’s investments in its subsidiaries, the technology investment arm lost 167.3 billion yen.

Still, there are hints of a revival for SoftBank, which has been hampered by disastrous bets on some tech firms and unpredictable markets.

Here’s how SoftBank performed in the March quarter versus LSEG estimates:

Net sales: 1.75 trillion yen ($11.3 billion), compared to 1.84 trillion yen projected.
Net profit of 231.1 billion yen, while a loss of 71.64 billion yen was projected.
Still, SoftBank lost 227.6 billion yen for the year, which is less than the previous fiscal year’s loss of 970.1 billion yen.

Arm’s ‘core’ to AI transition
SoftBank’s flagship tech investment arm, the Vision Fund, struggled in the fiscal year that ended in March 2023, incurring a record loss of about $32 billion due to a drop in tech stock prices and the deterioration of some of the company’s China bets.

However, in the June quarter of last year, the Vision Fund achieved its first investment gain in five consecutive quarters, indicating the beginnings of a comeback.

SoftBank founder Masayoshi Son announced in 2023 that the company would transition into “offense” mode, rather than defensive mode, and abandon its cautious stance to begin making more investments.

SoftBank’s Chief Financial Officer, Yoshimitsu Goto, stated in the prior quarter that the company has transitioned from a “Alibaba to AI-centric portfolio.”

Son’s early bet on Chinese e-commerce behemoth Alibaba in 2000 helped the digital conglomerate grow into one of Japan’s largest corporations, and the company has thrived in the years since.

The company has been reducing its stock in Alibaba, and senior officials, including Son and Goto, have expressed their enthusiasm for artificial intelligence technology and SoftBank’s potential to invest in firms in the industry.

Arm has become a key component of SoftBank’s portfolio. Arm accounted for 47% of SoftBank’s assets at the end of March, up from 10% in March 2020, according to Goto on Monday. Alibaba accounted for 0% of assets, compared to 48% in the same period.

“Arm is core to our AI shift,” Goto stated.

Correction: An earlier version of this article said that SoftBank’s Vision Fund had a full-year gain.