SoftBank Group swung to a net loss of ¥1.12tn, or $7.1bn, in the July to September quarter, driven largely by a $3.7bn writedown on power gear intended for US AI data centres. The Next Web reports that the company had paid for the supplies in advance before changing its strategy.
Key takeaways
- SoftBank recorded its first net loss in almost two years, dropping from a ¥2.5tn profit a year earlier.
- Chief accounting officer Kazuko Kimiwada stated that the firm could not recover fees for cancelled orders.
- Chief financial officer Yoshimitsu Goto rejected claims by Elon Musk that the firm defaulted on contracts.
- Interest expenses for the six-month period more than doubled to reach ¥676bn.
What caused the massive SoftBank loss?
SoftBank made advance payments totaling $9.5bn by the end of September to lock in power generation equipment due to expected shortages. According to The Wall Street Journal, the firm had reserved over 13 gigawatts of gas turbines, primarily from GE Vernova, between late 2025 and early 2026. After altering its plans, the company cancelled the orders it could not use and failed to get those fees back.
Elon Musk claimed on X that SoftBank defaulted on these orders, but Yoshimitsu Goto firmly rejected that accusation. Goto noted that the organization is conducting a thorough reassessment of how it purchases equipment to balance its spending approach. Meanwhile, GE Vernova indicated that the cancellations had no positive or negative impact on its own business.
How do borrowing costs affect the firm?
Financial costs emerged as another major concern for analysts. Kazuki Sawamura of Shinkin Asset Management told Bloomberg that the sharp rise in financial expenses is the more worrying factor. SoftBank raised $56.5bn during the quarter through a term loan and a dollar bond, pushing its annual interest bill toward ¥1tn.
Despite the financial pressure, Goto maintained that the company's finances remain within self-imposed limits. The loan-to-value ratio sat at 15.9% at the close of September, staying well beneath the 25% ceiling set by the corporation. OpenAI also continues to stand as its largest bet, with cumulative investments reaching $54.6bn.
What happens next?
Investors and analysts are watching how SoftBank funds its ongoing ambitions. The business continues to deploy capital, having recently committed $1.85bn alongside Grab for data centres in Malaysia and leading a $500M funding round for Agile Robots. Bloomberg Intelligence expects the firm to raise additional funds in 2027 as its debt servicing costs climb.
Frequently asked questions
SoftBank reported a net loss of ¥1.12tn, which is approximately $7.1bn, for the July to September quarter.
The writedown came from advance payments made for power generation equipment for US data centres after the company changed its plans and could not recover the fees.
Reports indicate that SoftBank reserved more than 13 gigawatts of gas turbines, mostly from GE Vernova, between late 2025 and early 2026.
No. Chief financial officer Yoshimitsu Goto explicitly rejected claims made by Elon Musk that SoftBank had defaulted on the equipment orders.
OpenAI remains SoftBank's largest bet, with a cumulative investment standing at $54.6bn at the end of September and a fair value of $99.6bn.
Based on reporting by The Next Web. Read the original article
