Interim report
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This translation of the financial report was prepared for reference purposes only. Should there be any inconsistency between the translation and the original Japanese document, the latter shall prevail. Consolidated Financial Report For the Nine Months Ended December 31, 2024 (IFRS) February 10, 2025 (Amounts are rounded to the nearest million yen) 1. Consolidated Financial Results for the Nine Months Ended December 31, 2024 (1) Consolidated operating results (Percentages are shown as year-on-year changes) Revenue Operating income Profit before income taxes Net income Net income attributable to owners of the Company Total comprehensive income Millions of yen % Millions of yen % Millions of yen % Millions of yen % Millions of yen % Millions of yen % Nine Months Ended December 31, 2024 4,811,463 6.6 821,861 12.3 743,751 7.7 544,677 8.4 436,610 7.4 544,856 5.3 Nine Months Ended December 31, 2023 4,511,564 3.8 731,933 (25.5) 690,461 (16.2) 502,671 (20.4) 406,682 (20.0) 517,292 (37.3) Basic earnings per share Diluted earnings per share Yen Yen Nine Months Ended December 31, 2024 9.16 9.02 Nine Months Ended December 31, 2023 8.58 8.43 Notes: 1. The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. “Basic earnings per share” and “Diluted earnings per share” are calculated assuming tha t the stock split had been carried out at the beginning of the previous fiscal year. 2. The dividends related to Bond-Type Class Shares are deducted in the calculation of earnings per share. (2) Consolidated financial position Total assets Total equity Equity attributable to owners of the Company Ratio of equity attributable to owners of the Company to total assets Millions of yen Millions of yen Millions of yen % As of December 31, 2024 16,304,840 4,163,960 2,645,254 16.2 As of March 31, 2024 15,521,906 3,935,647 2,377,074 15.3
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2. Dividends Dividends per share First quarter Second quarter Third quarter Fourth quarter Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2024 - 43.00 - 43.00 86.00 Fiscal year ending March 31, 2025 - 43.00 - Fiscal year ending March 31, 2025 (Forecast) 4.30 - Notes: 1. Revision to the forecast on dividends: No 2. The abovementioned “Dividends” pertain to the dividends related to common shares. Please see the following “Dividends of Bond- Type Class Shares” for information on the dividends related to Bond-Type Class Shares. 3. The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. Regarding the abovementioned amount for the fiscal year ending March 31, 2025, the second- quarter dividend per share is before the stock split while the fourth-quarter dividend per share takes the stock split into account. The annual dividends per share forecast is not stated because the amounts cannot be simply combined due to the implementation of the stock split. If the stock split was not conducted, the annual dividends per share would be 86 yen. 3. Consolidated Financial Result Forecasts for the Fiscal Year Ending March 31, 2025 (Percentages are shown as year-on-year changes) Revenue Operating income Net income attributable to owners of the Company Basic earnings per share Millions of yen % Millions of yen % Millions of yen % Yen Fiscal year ending March 31, 2025 6,350,000 4.4 950,000 8.4 510,000 4.3 10.66 Notes: 1. Revision to the forecast on financial results: No 2. The dividends related to Series 1 Bond-Type Class Shares and Series 2 Bond-Type Class Shares are deducted in the calculation of earnings per share. 3. The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. The basic earnings per share takes the stock split into account. If the stock split was not conducted, the basic earnings per share would be 106.56 yen. * Notes (1) Significant changes in scope of consolidation (changes in scope of consolidation of specified subsidiaries): None Newly consolidated: None Excluded from consolidation: None (2) Changes in accounting policies and accounting estimates [1] Changes in accounting policies required by IFRS: No [2] Changes in accounting policies other than those in [1]: No [3] Changes in accounting estimates: No (3) Number of issued shares (common stock) [1] Number of shares issued (including treasury stock) As of December 31, 2024 47,702,192,700 shares As of March 31, 2024 47,562,007,700 shares [2] Number of shares of treasury stock As of December 31, 2024 279,869,350 shares As of March 31, 2024 478,051,530 shares [3] Average number of shares outstanding during the period Nine months ended December 31, 2024 47,263,966,428 shares Nine months ended December 31, 2023 47,340,394,292 shares Note: The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. “Number of shares issued,” “Number of shares of treasury stock” and “Average number of shares outstanding” are calculated assuming that the stock split had been carried out at the beginning of the previous fiscal year.
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* Review of the Japanese -language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: Y es (voluntary). * Explanation on the proper use of the forecast on financial results and other notes This document is based on the information available to SoftBank Corp. as of the time hereof and assumptions which it believes are reasonable. Statements contained herein that are not historical facts, including, without limitation, our plans, forecasts, s trategies and beliefs about our business and financial prospects, are forward-looking statements. Forward-looking statements often include words such as “targets,” “plans,” “believes,” “hopes,” “continues,” “expects,” “aims,” “intends,” “will,” “may,” “shou ld,” “would,” “could,” “anticipates,” “estimates,” “projects” or words or terms of similar substance or the negative thereof. These forward -looking statements do not represent any guarantee by us or our management of future performance or of any specific o utcome and are subject to various risks and uncertainties, including, without limitation, general economic conditions, conditions in the Japanese telecommunica tions market, our ability to adopt new technologies and business models, competition against competitors, our ability to improve and maintain our telecommunications network, our reliance on third parties in conducting our business, including SoftBank Group Corp. and its other subsidiaries and associates, our major vendors and suppliers, and other third parties, risks relating to M&A and other strategic transactions, risks relating to information security and handling of personally identifiable information, changes in the substance and interpretation of other laws and regulations and other important fac tors, which may cause actual results to differ materially from those expressed or implied in any forward-looking statement. SoftBank Corp. expressly disclaims any obligation or responsibility to update, revise or supplement any forward-looking statement in any document or generally to the extent allowed by law or stock exchange rules. Use of or reliance on the information in this material is at your own risk. For assumptions underlying forecasts, notes on the use of forecasts and related matters, please see “(5) Forecasts” under “1. Results of Operations” on page 18 of the appendix to this consolidated financial report. (How to obtain supplementary financial materials and information on the earnings results briefing) On Monday, February 10, 2025 (JST), the Company will hold an earnings results briefing online for the media, institutional investors, and financial institutions. This earnings results briefing is scheduled to be broadcast on the Company’s website in both J apanese and English at https://www.softbank.jp/en/corp/ir/documents/presentations/. The Data Sheet is also scheduled to be posted on the Company’s website concurrently with the earnings report, and the materials and videos to be used at the earnings result s briefing, along with a summary of the main questions and answers, are scheduled to be posted on the Company’s website promptly after the earnings re sults briefing.
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Dividends of Bond-Type Class Shares The breakdown of dividends per share related to Bond-Type Class Shares, which have different rights and relationships compared to common shares, is as follows: Series 1 Bond-Type Class Shares Annual dividends First quarter Second quarter Third quarter Fourth quarter Total Yen Yen Yen Yen Yen Fiscal year ended March 31, 2024 - - - 41.53 41.53 Fiscal year ending March 31, 2025 - 50.00 - Fiscal year ending March 31, 2025 (Forecast) 50.00 100.00 Series 2 Bond-Type Class Shares Annual dividends First quarter Second quarter Third quarter Fourth quarter Total Yen Yen Yen Yen Yen Fiscal year ending March 31, 2025 - - - Fiscal year ending March 31, 2025 (Forecast) 126.24 126.24 Policy on acquisition of Series 1 Bond-Type Class Shares and Series 2 Bond-Type Class Shares Based on the clause for acquisition by the Company (call option), the Company may acquire the Series 1 Bond-Type Class Shares and the Series 2 Bond -Type Class Shares in exchange for cash after the elapse of five years from the issuance of each series, etc. We will determine whether to acquire (call) these Bond -Type Class Shares in exchange for cash, taking into consideration our business and financial strategy, market conditions and other factors at the time. We fully understand that, as is customary in the market for hybrid financing, many investors expect to be called by the time the dividend rate is stepped up.
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―1― (Appendix) Contents 1. Results of Operations ............................................................................................................................................................. p. 5 (1) Overview of Consolidated Results of Operations ............................................................................................................. p. 5 a. Management Environment and the Group’s Initiatives .................................................................................................. p. 5 b. Consolidated Results of Operations ............................................................................................................................... p. 7 c. Results by Segment ......................................................................................................................................................... p. 8 (2) Overview of Consolidated Financial Position .................................................................................................................. p. 14 (3) Overview of Consolidated Cash Flows ............................................................................................................................. p. 15 (4) Non-IFRS Financial Measures .......................................................................................................................................... p. 16 (5) Forecasts ........................................................................................................................................................................... p. 18 2. Notes to Summary Information .............................................................................................................................................. p. 18 (1) Significant Changes in Scope of Consolidation for the Six Months Ended September 30, 2024 .................................... p. 18 (2) Changes in Accounting Policies and Accounting Estimates ............................................................................................. p. 18 3. Condensed Interim Consolidated Financial Statements and Primary Notes ......................................................................... p. 19 (1) Condensed Interim Consolidated Statement of Financial Position ................................................................................... p. 19 (2) Condensed Interim Consolidated Statement of Income and Consolidated Statement of Comprehensive Income .......... p. 21 (3) Condensed Interim Consolidated Statement of Changes in Equity .................................................................................. p. 23 (4) Condensed Interim Consolidated Statement of Cash Flows ............................................................................................. p. 25 (5) Notes on Going Concern Assumption ............................................................................................................................... p. 27 (6) Notes to Condensed Interim Consolidated Financial Statements ..................................................................................... p. 27
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―2― Definition of Company Names and Abbreviations Used in this Appendix Company names and abbreviations used in this appendix, except as otherwise stated or interpreted differently in the context, are as follows: Company names / Abbreviations Definition The Company SoftBank Corp. (standalone basis) The Group SoftBank Corp. and its subsidiaries SoftBank Group Corp. SoftBank Group Corp. (standalone basis) SoftBank Group SoftBank Group Corp. and its subsidiaries LY Corporation LY Corporation (standalone basis) LY Group LY Corporation and its subsidiaries The diagram below indicates ratio of voting rights as of December 31, 2024.
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―3― Reportable Segments The Group has five reportable segments: the Consumer segment, the Enterprise segment, the Distribution segment, the Media & E C segment, and the Financial segment. The main businesses and core companies of each reportable segment are as follows: Segments Main business Core companies Reportable segments Consumer segment ・Provision of mobile services to individual customers ・Provision of broadband services ・Sale of mobile devices ・Trading and supply of electric power and provision of electric power trading agency services The Company Wireless City Planning Inc. SB Mobile Service Corp. SB Power Corp. Enterprise segment ・Provision of mobile services to enterprise customers ・Provision of fixed-line communications services, such as data communications and fixed-line telephone services ・Provision of cloud, global, AI2/IoT,3 and other solution services ・Provision of software-defined connected vehicles4 solutions ・Provision of cloud services, security operation monitoring services, and IoT solutions ・Provision of IoT, Linux/OSS, and authentication and security services The Company Wireless City Planning Inc. SB Engineering Corp. IDC Frontier Inc. eMnet Japan. co. ltd. Cubic Telecom Ltd. SB Technology Corp. 5 Cybertrust Japan Co., Ltd.5 Distribution segment ・Provision of products and services addressing ICT6, cloud services, IoT solutions, and other areas for enterprise customers ・Provision of mobile and PC peripherals, including accessories, as well as software, IoT products, and other items for individual customers SB C&S Corp. Media & EC segment7 ・Provision of media-related services, such as media and advertising, search, marketing solutions, vertical, content, and stamps ・Provision of commerce-related services such as shopping services, including Yahoo! JAP AN Shopping and ZOZOTOWN; reuse services including Yahoo! JAP AN Auction; and O2O services. ・Provision of AI, healthcare, and other services centered on FinTech8 LY Corporation ASKUL Corporation ZOZO, Inc. Ikyu Corporation PayPay Bank Corporation LINE Pay Corporation LINE Pay Taiwan Limited9 LINE Financial Corporation LINE Plus Corporation LINE SOUTHEAST ASIA CORP .PTE.LTD. dely inc.10 Financial segment ・Development and provision of mobile payments and other electronic payment services ・Provision of credit card business ・Provision of payment processing services ・Provision of online security trading service for smartphones PayPay Corporation PayPay Card Corporation SB Payment Service Corp. PayPay Securities Corporation Other5 ・Planning and production of digital media and digital content ・Others The Company ITmedia Inc.
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―4― Notes: 1. Segment income for reportable segments is calculated as follows: Segment income = (revenue – operating expenses (cost of sales + selling, general and administrative expenses) ± other operating income and loss) in each segment 2. AI stands for artificial intelligence. 3. IoT stands for Internet of Things, a technology that will enable communications between all manner of things via the Internet. 4. Software-defined connected vehicle is a term that describes a vehicle whose features and functions are primarily enabled through softw are connected to the Internet. Cubic Telecom Ltd.'s connectivity platform is embedded in vehicles at the point of manuf acturing, enabling OEMs to leverage software -defined technologies. 5. From the fiscal year ending March 31, 2025, SB Technology Corp. and Cybertrust Japan Co., Ltd., which were previously clas sified under Other, have been transferred to the Enterprise segment. 6. ICT stands for Information Communication Technology. 7. Z Intermediate Holdings Corporation, a subsidiary of the Company, applied for a tender offer undertaken by V alueCommerce Co., Ltd., which aimed to repurchase its own shares through the tender offer. As a result, on May 2, 2024, V alueCommerce Co., Ltd. ceased to be a subsidiary of the Company and newly became its equity method affiliate. 8. FinTech is a term coined from the combination of finance and technology and refers to a variety of innovative services tha t combine financial services with information and communication technology. 9. LINE Pay Taiwan Limited was listed on the Taiwan Stock Exchange on December 5, 2024. 10. dely inc. was listed on the Tokyo Stock Exchange Growth Market on December 19, 2024.
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―5― 1. Results of Operations (1) Overview of Consolidated Results of Operations a. Management Environment and the Group’s Initiatives Guided by its corporate philosophy of “Information Revolution—Happiness for everyone,” the Group has been undertaking a wide range of businesses in the information and technology fields. The Group has embraced the vision of becoming “a corporate group needed most by people around the world” and has been working to maximize its corporate value. Moreover, the Group has identified six material issues1 to be addressed and contributes to solving various social issues through its businesses. In the nine months ended December 31, 2024, despite a continued uncertain outlook due to geopolitical risks and inflation, Ja pan’s economy followed a modest recovery trend driven by, among other factors, robust capital expenditure demand from large corporations. Meanwhile, changes in people’s lifestyles, such as telework, online shopping, and growing use of contactless payment, which w ere driven by the COVID-19 pandemic, as well as the worsening labor shortage have made the digitalization of companies and government essential. Digitalization will become a driving force that will transform Japan’s society in the future, by facilitating impr ovement in productivity and the creation of innovation. Furthermore, the emergence of generative AI, which can generate a variety of content such as text, images, and programming code, will accelerate the speed of this transformation. In this environment, the roles that the Group must fulfill as an operator of a wide range of businesses in the information and technology fields are growing increasingly important. In May 2023, the Company announced that it will aim to be “a company that provides Next-generation Social Infrastructure essential for development of a digital society” over the long term along with its three-year Medium-term Management Plan. With this vision, the Group’s intention is to build infrastructure designed to meet the projected rapid increase in demand for data processing and electricity brought on by the accelerated evolution of AI, and to become an indispensable company that will support the future’s vast array of digital services. Under the Medium-term Management Plan, the Group’s goal is to steadily rebuild its business foundations to realize this long- term vision. By promoting the Beyond Carrier growth strategy, we are working to recover from the impact of mobile service price reduction and pursue record-high profit of ¥535.0 billion in terms of net income attributable to owners of the Company in the fiscal year ending March 31, 2026, which is th e final year of the Plan. The Beyond Carrier growth strategy seeks to maximize corporate value by driving sustainable growth in the telecommunications business, the Group’s core business, while going beyond the boundaries o f a telecommunications carrier to actively expand the Group’s businesses in a wid e range of fields within the information and technology sectors. Furthermore, the Group will strengthen the competitiveness of the telecommunications business by enhancing collabora tion between the telecommunications business and those Group businesses, while promoting the generation of synergies through such means as increasing the number of service users and enhancing user engagement in those Group businesses.
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―6― Awareness of Business Environment The main external environmental factors identified by the Group and its measures to address those factors are as follows: Rising interest rates The Company borrows approximately 90% of its long -term interest-bearing debt at fixed interest rates, so rising interest rates will have no immediate material effect2. Currency movements Although its currency risk exposure is limited, the Company utilizes forward foreign exchange contracts to reduce its exposure to currency risk as necessary. Major Initiatives - In November 2024, the Company announced “AITRAS”, a solution integrating AI and RAN 3. “AITRAS” not only provides a high - capacity, high-performance, and high-quality RAN on the NVIDIA AI computing infrastructure but also enables the simultaneous and efficient operation of various AI applications, including generative AI. Moving forward, th e Company aims not only to introduce “AITRAS” into its own commercial network, but also to expand it to domestic and international telecommunications operators. - To accommodate even faster mobile broadband speeds and the increased demand for traffic, the Company submitted its establishment plan for specified base stations using the 4.9 GHz band to the Ministry of Internal Affairs and Communications and received approval for the plan from the Minister of Internal Affairs and Communications in December 2024. The Company aims to establish specifi ed base stations in all prefectures in Japan by the end of the fiscal year ending March 31, 2031, and begin service by the end of the fiscal year ending March 31, 2032. - In November 2024, the Company received the Grand Prize for the second consecutive year, a first in history, in the Sixth Nikkei SDGs Management Grand Prix, which selects companies that contribute to the United Nations’ Sustainable Development Goals (SDGs). Additionally, we were selected as a “Prime Seat Company,” which is a separate designation that recognizes companies that consistently achieve high evaluations. Furthermore, in December 2024, we were selected f or the third consecutive year as a constituent of the World Index of the Dow Jones Sustainability Index (DJSI), one of the world’s leading ESG indices. Notes: 1. For details on the material issues, please see the Company’s website: https://www.softbank.jp/en/corp/sustainability/materiality/ 2. Long-term interest-bearing debt refers to interest -bearing debt (bank loans, bonds, lease obligations, and securitization of receivables) excluding short -term borrowings and the impact of adopting IFRS 16 “Leases.” Borrowings at fixed interest rates include certain borrowings with floating interest rates for which a fixed interest expense is obtained through interest rate swap transactions and others. 3. RAN (Radio Access Network) refers to a wireless access network.
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―7― b. Consolidated Results of Operations (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Revenue 4,511.6 4,811.5 299.9 6.6% Operating income 731.9 821.9 89.9 12.3% Profit before income taxes 690.5 743.8 53.3 7.7% Income taxes (187.8) (199.1) (11.3) 6.0% Net income 502.7 544.7 42.0 8.4% Net income attributable to: Owners of the Company 406.7 436.6 29.9 7.4% Non-controlling interests 96.0 108.1 12.1 12.6% Adjusted EBITDA1 1,309.1 1,371.8 62.7 4.8% Note: 1. Adjusted EBITDA = operating income + depreciation and amortization (including loss on disposal of non-current assets) + stock compensation expenses ± other adjustments. For details, refer to “(4) Non-IFRS Financial Measures.” An overview of the consolidated results of operations for the nine months ended December 31, 2024 is as follows: (a) Revenue For the nine months ended December 31, 2024, revenue increased by ¥299.9 billion (6.6%) year on year to ¥4,811.5 billion, increasing across all reportable segments. Revenue increased by ¥160.4 billion2 in the Distribution segment mainly due to solid increase in revenue from ICT related products for enterprise customers and recurring revenue products, by ¥63.7 billion in the Enterprise segment mainly due to an increase in demand for solutions associated with digitalization, by ¥60.1 billion in the Consumer s egment mainly due to increases in revenues from sales of goods and others and mobile revenue, by ¥52.8 billion in the Media & EC segment mainly du e to increased media revenue and commerce revenue, and by ¥32.7 billion in the Financial segment mainly due to an increase in gross merchandise value of QR code payments and credit card services conducted by PayPay Corporation. Note: 2. Excluding the effect of inter-segment transactions related to AI computing infrastructure, the revenue increase was ¥120.3 billion. (b) Operating income For the nine months ended December 31, 2024, operating income increased by ¥89.9 billion (12.3% ) year on year to ¥821.9 billion, increasing across all reportable segments. The Media & EC segment saw an increase of ¥54.5 billion in operating income mainly due to the recording of profits associated with the loss of control of subsidiaries in the LY Gr oup and increase in media income. Furthermore, operating income increased by ¥29.5 billion in the Financial segment, by ¥17.7 billion in the Consumer segment, by ¥12.2 billion in the Enterprise segment, and by ¥3.6 billion in the Distribution segment. Nota bly, with an increase in gross merchandise value of QR code payments and credit card services conducted by PayPay Corporation., the Financial segment has turned profitable in terms of s egment income since the three months ended June 30, 2024. (c) Net income For the nine months ended December 31, 2024, net income increased by ¥42.0 billion (8.4%) year on year to ¥544.7 billion. Thi s is mainly due to the aforementioned significant increase in operating income, while the increase was partly offset by the absenc e of the gain on changes in equity interest associated with the change in the LY Group’s equity interest in Webtoon Entertainment Inc. , which had been recorded in the same period of the previous year, as well as the recording of loss on valuation of put options for equity method affiliates. (d) Net income attributable to owners of the Company For the nine months ended December 31, 2024, net income attributable to owners of the Company increased by ¥29.9 billion (7.4 %) year on year to ¥436.6 billion. Net income attributable to non -controlling interests increased by ¥12.1 billion (12.6%) year on year to ¥108.1 billion, mainly due to an increase in net income at the LY Group. (e) Adjusted EBITDA For the nine months ended December 31, 2024, adjusted EBITDA increased by ¥62.7 billion (4.8%) year on year to ¥1,371.8 billion, mainly due to an increase in operating income.
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―8― c. Results by Segment (a) Consumer Segment OVERVIEW In the Consumer segment, the Group provides services, such as mobile services, broadband services, and electricity services, including the Ouchi Denki (Home Electricity) service, to individual customers in Japan. The Company procures mobile devices from mobile device manufacturers and sells the mobile devices to distributors operating SoftBank shops, etc. and individual customers. FINANCIAL RESULTS (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Revenue 2,120.9 2,181.0 60.1 2.8% Operating expenses1 1,698.0 1,740.5 42.5 2.5% Of which, depreciation and amortization 297.1 279.7 (17.4) (5.9)% Segment income 422.9 440.5 17.7 4.2% Note: * From the three months ended June 30, 2024, certain subsidiaries that were previously classified under the “Consumer segment” has been transferred to “Other.” As a result, the figures for the nine months ended December 31, 2023 have been retrospectively adjusted. 1. Operating expenses include cost of sales, selling, general and administrative expenses, other operating income, and other operating expenses. Breakdown of Revenue (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Service revenues 1,644.8 1,666.5 21.7 1.3% Mobile 1,151.4 1,177.0 25.6 2.2% Broadband 301.8 305.4 3.6 1.2% Electricity 191.6 184.2 (7.4) (3.9)% Revenues from sales of goods and others 476.1 514.5 38.4 8.1% Total revenue 2,120.9 2,181.0 60.1 2.8% Note: * From the three months ended June 30, 2024, certain subsidiaries that were previously classified under the “Consumer segment” has been transferred to “Other.” As a result, the figures for Broadband, which included the subsidiaries, for the nine months ended December 31, 2023 have been retrospectively adjusted. Consumer segment revenue increased by ¥60.1 billion (2.8%) year on year to ¥2,181.0 billion. Within Consumer segment revenue, service revenues increased by ¥21.7 billion (1.3%) year on year to ¥1,666.5 billion, and revenues from sales of goods and others increased by ¥38.4 billion (8.1%) year on year to ¥514.5 billion. Within service revenues, mobile revenue increased by ¥25.6 billion (2.2%) year on year. The increase mainly reflected the growth in smartphone subscribers, led primarily by the Y!mobile brand, and an improvement in mobile ARPU compared to the same period of the previous year. While the number of users of the low-priced Y!mobile brand has increased, ARPU showed an improvement trend mainly due to contributions from the introduction of new price plans in October 2023. In the three months ended December 31, 202 4, ARPU saw a slight increase year on year. In addition, mobile revenue (excluding the impact of customer acquisition measures) has transitioned to year-on-year growth since the three months ended December 31, 2023. (Billions of yen) Fiscal Year Ended March 31, 2024 Fiscal Year Ending March 31, 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Mobile revenue 384.6 392.0 374.8 370.4 392.3 396.5 388.2 Of which, the impact of customer acquisition measures1 – – (18.3) (22.7) – – (11.2) Mobile revenue (excluding the impact of customer acquisition measures) 384.6 392.0 393.0 393.1 392.3 396.5 399.4 YoY change (5.8) (0.5) 4.9 6.4 7.6 4.5 6.3 Note: 1. Based on IFRS 15 “Revenue from Contracts with Customers”, certain customer acquisition measures are deducted from mobile revenue.
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―9― Broadband revenue increased by ¥3.6 billion (1.2%) year on year. This increase was mainly due to an increase in subscribers of the SoftBank Hikari fiber-optic service1. Electricity revenue decreased by ¥7.4 billion (3.9%) year on year. This decrease was mainly due to decreases in subscribers o f the Ouchi Denki (Home Electricity) service. The increase in revenues from sales of goods and others was mainly due to an increase in unit prices of smartphones. Operating expenses were ¥1,740.5 billion, an increase of ¥42.5 billion (2.5%) year on year. This increase was mainly due to increases in the cost of goods of smartphones, etc., and promotion expenses. As a result, segment income increased by ¥17.7 billion (4.2%) year on year to ¥440.5 billion. Note: 1. Includes subscribers of SoftBank Air
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―10― (b) Enterprise Segment OVERVIEW In the Enterprise segment, the Group provides a wide range of services for enterprise customers. These include mobile services such as mobile lines and mobile device rental, fixed-line communications services such as fixed-line telephones and data communications, as well as various solution services for enterprises such as data center, cloud, security, global, AI, IoT, and digital marketing services. FINANCIAL RESULTS (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Revenue 610.0 673.6 63.7 10.4% Operating expenses1 481.7 533.2 51.5 10.7% Of which, depreciation and amortization 117.4 123.5 6.1 5.2% Segment income 128.3 140.4 12.2 9.5% Note: * From the three months ended June 30, 2024, SB Technology Corp. and Cybertrust Japan Co., Ltd., etc., which were previously classified under “Other”, have been transferred to the “Enterprise segment.” As a result, the figures for the nine months ended December 31, 2023 have been retrospectively adjusted. 1. Operating expenses include cost of sales, selling, general and administrative expenses, other operating income, and other operating expenses. Breakdown of Revenue (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Mobile 233.9 235.9 2.0 0.8% Fixed-line 131.0 127.0 (3.9) (3.0)% Business solution and others 245.1 310.7 65.6 26.8% Total revenue 610.0 673.6 63.7 10.4% Note: * From the three months ended June 30, 2024, the revenues of SB Technology Corp. and Cybertrust Japan Co., Ltd., etc., which have been transferred to the “Enterprise segment,” have been included in “Business solution and others.” Also, in the three months ended June 30, 2024, th e Company has revised its business management categories and transferred certain products from “Mobile” and “Fix ed-line” to “Business solution and others.” Accordingly, the breakdown of all service categories in the “Enterprise segment” revenue for the nine months ended December 31, 2023 has been retrospectively adjusted. Enterprise segment revenue increased by ¥63.7 billion (10.4%) year on year to ¥673.6 billion. Within Enterprise segment revenue, mobile revenue increased by ¥2.0 billion (0.8%) to ¥235.9 billion, fixed-line revenue decreased by ¥3.9 billion (3.0%) to ¥127.0 billion, and business solution and others revenue increased by ¥65.6 billion (26.8%) to ¥310.7 billion. The increase in mobile revenue was mainly due to an increase in telecommunications revenue. The decrease in fixed-line revenue was mainly due to a decrease in the number of subscribers to telephone services. The increase in business solution and others revenue was mainly due to taking over the business of WeWork Japan GK, increased revenue mainly from cloud services, security solutions and IoT solutions as a result of capturing enterprise customers’ deman d for digitalization, and the effect of the consolidation of Cubic Telecom Ltd. Operating expenses were ¥533.2 billion, an increase of ¥51.5 billion (10.7%) year on year. This increase was mainly due to the effect of the aforementioned business succession of WeWork Japan GK and the consolidation of Cubic Telecom Ltd., an increase in c osts following the abovementioned increase in business solution and others revenue, and an increase in personnel expenses. As a result, segment income increased by ¥12.2 billion (9.5%) year on year to ¥140.4 billion.
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―11― (c) Distribution Segment OVERVIEW In the Distribution segment, the Group provides cutting -edge products and services that quickly capture the ever -changing market environment. For enterprise customers, the Group offers products and services primarily addressing cloud services and advanced technologies including AI. For individual customers, the Group undertakes the planning and provision of products and services across a wide range of areas such as software, mobile accessories, and IoT products, as a manufacturer and a distributor. FINANCIAL RESULTS (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Revenue 455.6 616.0 160.4 35.2% Operating expenses1 435.3 592.2 156.9 36.0% Of which, depreciation and amortization 3.3 3.3 0.0 0.2% Segment income 20.3 23.8 3.6 17.5% Note: 1. Operating expenses include cost of sales, selling, general and administrative expenses, other operating income, and other operating expenses. Distribution segment revenue increased by ¥160.4 billion (35.2%) year on year to ¥616.0 billion. This increase was mainly due to solid growth in ICT related products for enterprise customers and recurring revenue products such as cloud and SaaS, which ha ve been strategic areas of focus, and the effect of inter-segment transactions related to AI computing infrastructure2, as well as increased sales of PCs due to migration from Windows 10, which is reaching the end of its support. Operating expenses were ¥592.2 billion, an increase of ¥156.9 billion (36.0%) year on year. This increase was mainly due to a n increase in cost of sales associated with the increase in revenue. As a result, segment income increased by ¥3.6 billion (17.5%) year on year to ¥23.8 billion. Note: 2. These transactions refer to revenue to Other, resulting from SB C&S Corp.'s sale of AI computing infrastructure, which was purchased from NVIDIA, to SoftBank Corp.
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―12― (d) Media & EC Segment OVERVIEW In the Media & EC segment, the Group offers services that center on media and commerce, covering online to offline services i n a comprehensive manner. In the media field, the Group provides advertising-related services on its comprehensive Internet service, Yahoo! JAP AN, and communication app, LINE. In the commerce field, the Group provides online shopping services such as Yahoo! JAP AN Shopping and ZOZOTOWN, and reuse services such as Yahoo! JAP AN Auction. In the strategy field, the Group provides services centered on FinTech, which the Group is working to develop into new drivers of earnings alongside media and commerce. FINANCIAL RESULTS (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Revenue 1,199.5 1,252.3 52.8 4.4% Operating expenses1 1,036.0 1,034.2 (1.8) (0.2)% Of which, depreciation and amortization 123.4 122.3 (1.2) (0.9)% Segment income 163.5 218.1 54.5 33.3% Note: 1. Operating expenses include cost of sales, selling, general and administrative expenses, other operating income, and other operating expenses. Breakdown of Revenue (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Media 517.1 538.0 20.9 4.0% Commerce 614.4 634.6 20.2 3.3% Strategy 62.9 73.9 11.0 17.5% Other 5.1 5.7 0.7 13.6% Total revenue 1,199.5 1,252.3 52.8 4.4% Note: * In the three months ended December 31, 2024, the LY Group revised its management categories and transferred certain service s previously categorized under “Media” to “Commerce.” Accordingly, the breakdown of “Media” and “Commerce” in the “Media & EC segment” revenue for the nine months ended December 31, 2023 has been restated to reflect these changes. Media & EC segment revenue increased by ¥52.8 billion (4.4%) year on year to ¥1,252.3 billion. Within Media & EC segment revenue, media revenue increased by ¥20.9 billion (4.0%) to ¥538.0 billion, commerce revenue increased by ¥20.2 billion (3.3%) to ¥634.6 billion, strategy revenue increased by ¥11.0 billion (17.5%) to ¥73.9 billion, and other revenue increased by ¥0.7 billion (13.6%) to ¥5.7 billion. The increase in media revenue mainly reflected an increase in revenue from account advertising. The increase in commerce revenue was mainly due to an increase in transaction value of the ZOZO Group (ZOZO, Inc. and its subsidiaries) and the ASKUL Group (ASKUL Corporation and its subsidiaries), as well as a strong performance by service e-commerce, which handles travel and restaurant booking. The increase in strategy revenue mainly reflected an increase in revenue in the FinTech field. Operating expenses were ¥1,034.2 billion, a decrease of ¥1.8 billion (0.2%) year on year. This decrease mainly reflected the recording of gain on loss of control over subsidiaries for IPX Corporation, LINE NEXT Corporation, and ValueCommerce Co., Ltd., whi le there were increases in expenses for security measures, cost of sales associated with the increase in revenue, expenses for sales p romotion, and others. As a result, segment income increased by ¥54.5 billion (33.3%) year on year to ¥218.1 billion.
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―13― (e) Financial Segment OVERVIEW In the Financial segment, the Group provides cashless payment services such as QR code payments and credit card services, development and provision of marketing solutions for merchants, financial services such as asset management, and provision of payment processing services offering one-stop payment solutions for diversified payment methods including credit cards, electronic money, and QR codes. FINANCIAL RESULTS (Billions of yen) Nine Months Ended December 31 2023 2024 Change Change % Revenue 170.9 203.6 32.7 19.2% Operating expenses1 174.4 177.6 3.2 1.8% Of which, depreciation and amortization 15.5 17.0 1.5 9.7% Segment income (3.5) 26.0 29.5 – Note: 1. Operating expenses include cost of sales, selling, general and administrative expenses, other operating income, and other operating expenses. Financial segment revenue increased by ¥32.7 billion (19.2%) year on year to ¥203.6 billion. This increase was mainly due to an increase in gross merchandise value of QR code payments and credit card services conducted by PayPay Corporation. Operating expenses were ¥177.6 billion, an increase of ¥3.2 billion (1.8%) year on year. This increase was mainly due to an increase in sales promotion expenses related to point rewards, etc., due to the aforementioned increase in gross merchandise value o f QR code payments and credit card services conducted by PayPay Corporation. As a result, segment income increased by ¥29.5 billion year on year to ¥26.0 billion, transitioning this segment to profitability.
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―14― (2) Overview of Consolidated Financial Position (Billions of yen) March 31, 2024 December 31, 2024 Change Change % Current assets 5,268.0 5,423.4 155.4 2.9% Non-current assets 10,253.9 10,881.5 627.6 6.1% Total assets 15,521.9 16,304.8 782.9 5.0% Current liabilities 7,085.3 7,199.2 114.0 1.6% Non-current liabilities 4,501.0 4,941.6 440.7 9.8% Total liabilities 11,586.3 12,140.9 554.6 4.8% Total equity 3,935.6 4,164.0 228.3 5.8% (Billions of yen) Nine Months Ended December 31 2023 2024 Change Capital expenditures1 463.5 587.6 124.1 Of which, capital expenditures in the Consumer segment and Enterprise segment2 219.3 216.0 (3.2) Notes: 1. Acceptance basis. 2. Capital expenditures in the Consumer segment and the Enterprise segment exclude investments in devices for rental services, s hared equipment (contributions by other operators), establishment license fee for specified base stations using the 4.9GHz band, and the impact of adopting IFRS 16 “Leases.” ASSETS Total assets amounted to ¥16,304.8 billion as of December 31, 2024, an increase of ¥782.9 billion (5.0%) from the previous fi scal year-end. This was mainly due to an increase of ¥238.8 billion in trade and other receivables, an increase of ¥234.6 billion i n other financial assets, an increase of ¥165.6 billion in investment securities in banking business, an increase of ¥82.8 billion in right-of-use assets, and an increase of ¥56.4 billion in property, plant and equipment, while there was a decrease of ¥102 .0 billion in cash and cash equivalents. The increase in right -of-use assets was due to the effect of the business succession of WeWork Japan GK, as the future facility usage rights specified in the succeeded real estate lease contracts was recognized as assets. LIABILITIES Total liabilities amounted to ¥12,140.9 billion as of December 31, 2024, an increase of ¥554.6 billion (4.8%) from the previous fiscal year-end. This mainly reflected an increase of ¥382.6 billion in trade and other payables and an increase of ¥214.0 billion in deposits for banking business, while there was a decrease of ¥105.1 billion in interest -bearing debt. Interest-bearing debt decreased mainly due to the contractual repayment of various loans, while there was the recording of lease liabilities due to the effect of the business succession of WeWork Japan GK. EQUITY Total equity amounted to ¥4,164.0 billion as of December 31, 2024, an increase of ¥228.3 billion (5.8%) from the previous fiscal year- end. Equity attributable to owners of the Company increased by ¥268.2 billion. This mainly reflected an increase of ¥436.6 billion due to the recording of net income for the nine months ended December 31, 2024 and an increase of ¥216.6 billion due to the issua nce of new shares including Series 2 Bond-Type Class Shares, while there was a decrease of ¥408.9 billion due to payment of cash dividends. CAPITAL EXPENDITURES In the nine months ended December 31, capital expenditures were ¥587.6 billion, an increase of ¥124.1 billion year on year. T his increase was mainly due to increased investments in AI computing infrastructure and increased capital expenditures by the LY Group. Additionally, during the three months ended December 31, 2024, an establishment plan for specified base stations using the 4. 9 GHz band was approved by the Minister of Internal Affairs and Communications. Accordingly, an establishment license fee for specified base stations of ¥66.5 billion (calculated at present value, considering that it is a long -term payment over the certification period 3) was recorded under intangible asset. Note: 3.The payment period for the establishment license fee for specified base stations is 16 years.
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―15― (3) Overview of Consolidated Cash Flows (Billions of yen) Nine Months Ended December 31 2023 2024 Change Cash flows from operating activities 989.4 1,212.6 223.2 Cash flows from investing activities (695.8) (706.5) (10.7) Cash flows from financing activities (164.2) (643.0) (478.8) Cash and cash equivalents at the end of the period 2,194.9 1,890.8 (304.1) Free cash flow1 293.6 506.1 212.5 Adjusted free cash flow (excluding LY Group and PayPay, etc.)1,2 435.4 501.9 66.5 Primary free cash flow1,3 443.9 540.9 97.0 Notes: 1. Refer to “(4) Non-IFRS Financial Measures” for calculation methods of free cash flow, adjusted free cash flow (excluding LY Group and PayPay, etc.) and primary free cash flow. 2. Adjusted free cash flow (excluding LY Group and PayPay, etc.) = free cash flow + (proceeds from the securitization of installment sales receivables – repayments thereof) - free cash flow of the LY Group and PayPay, etc. + other items such as dividends rece ived from A Holdings Corporation and investment in PayPay Securities Corporation. "L Y Group and PayPay, etc." refers to A Holdings Corporation, LY Corporation and its subsidiaries (LY Group), B Holdings Corporation, PayPay Corporation, PayPay Card Corporation, PayPay Securities Corporation, etc. 3. Primary free cash flow is a measure calculated by adding back the amounts spent as long -term growth investments to adjusted free cash flow (excluding LY Group and PayPay, etc.). Long-term growth investments include investments in AI computing infrastructure. a. Cash flows from operating activities In the nine months ended December 31, 2024, net cash inflow from operating activities was ¥1,212.6 billion, an increase of ¥2 23.2 billion in cash inflow year on year. This increase mainly reflected an increase in EBITDA, a decrease in income taxes paid, a nd an increase in income taxes refunded. b. Cash flows from investing activities In the nine months ended December 31, 2024, net cash outflow from investing activities was ¥706.5 billion, an increase of ¥10 .7 billion in cash outflow year on year. This increase mainly reflected an increase in purchases of property, plant and equipmen t and intangible assets and the net cash balance of purchase and sales/redemption of investment securities in the banking business. Cash flows from investing activities include an expenditure of ¥39.0 billion related to long-term growth investments. c. Cash flows from financing activities In the nine months ended December 31, 2024, net cash outflow from financing activities was ¥643.0 billion. While there were c ash inflows of ¥1,506.7 billion from fund procurement, including bank loans, leases, corporate bonds, the securitization of recei vables, and issuance of Series 2 Bond-Type Class Shares, there were cash outflows of ¥2,149.7 billion for factors including the contractual repayment of loans, payment of cash dividends, and acquisition of shares in subsidiaries. d. Cash and cash equivalents at the end of the period As a result of (a) through (c) above and others, cash and cash equivalents as of December 31, 2024 were ¥1,890.8 billion, a d ecrease of ¥304.1 billion year on year. e. Primary free cash flow In the nine months ended December 31, 2024, primary free cash flow was positive ¥540.9 billion, an increase of ¥97.0 billion year on year. This increase mainly reflected the dividends received by the Company from A Holdings Corporation in connection with p roceeds from its sale of LY Corporation shares during the three months ended September 30, 2024.
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―16― (4) Non-IFRS Financial Measures The Group uses financial indicators that are not defined or recognized by IFRS. The indicators are used by management to enha nce understanding of the Group's performance and to serve as important measures for evaluating current performance. Since these measures are not defined by IFRS, they may be calculated differently or used for different purposes by other companies, which restrict s their usefulness in terms of comparability. a. Adjusted EBITDA Adjusted EBITDA is calculated by adding and subtracting “Depreciation and amortization (including loss on disposal of non- current assets)”, “Stock compensation expenses” and “Other adjustments” that do not occur in normal business activities, to operating income. “Other adjustments” include “Other operating income” and “Other operating expenses” presented in the Condensed Interim Consolidated Statement of Income. The Groups uses adjusted EBITDA as a measure for evaluating performance excluding the impact of non-cash transactions. The Group believes that adjusted EBITDA is a useful and necessary indicator to appropriately evaluate performance. Operating income is reconciled to adjusted EBITDA as follows. (Billions of yen) Nine Months Ended December 31, 2023 Nine Months Ended December 31, 2024 Operating income 731.9 821.9 (Add) Depreciation and amortization1 574.9 566.2 (Add) Stock compensation expenses 16.0 15.6 (Add (subtract)) Other adjustments: Gain on loss of control over subsidiaries (4.9) (39.0) (Add (subtract)) Other adjustments: Impairment loss 1.6 7.2 (Add (subtract)) Other adjustments: Gain on sale of businesses (10.5) － (Add (subtract)) Other adjustments: Other 0.1 － Adjusted EBITDA 1,309.1 1,371.8 Note: 1. “Depreciation and amortization” in the table above includes Depreciation and amortization (¥560.7 billion for the nine months ended December 31, 2023 and ¥553.5 billion for the nine months ended December 31, 2024) and Loss on disposal of property, plant and equipment and intangible assets (¥14.1 billion for the nine months ended December 31, 2023 and ¥12.6 billion for the nine months ended December 31, 2024) stated in “3. Condense d Interim Consolidated Financial Statements and Primary Notes, (4) Condensed Interim Consolidated Statement of Cash Flows.”
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―17― b. Free Cash Flow, Adjusted Free Cash Flow (excluding LY Group and PayPay, etc.), and Primary Free Cash Flow Free cash flow is a measure calculated by adding cash flows from operating activities and cash flows from investing activities. Adjusted free cash flow (excluding LY Group and PayPay, etc.) is calculated by adding the proceeds from the securitization of installment sales receivables for devices, subtracting the repayments thereof, as well as adding the dividend payments receiv ed from A Holdings Corporation, and excluding the free cash flow of LY Group and PayPay, etc. Primary free cash flow is a measure that excludes strategic investments which contribute to mid- to long-term growth, such as the construction of AI computing infrastructure, from adjusted free cash flow (excluding LY Group and PayPay, etc.). The Group believes this is a useful indicator for evaluating ongoing cash generating ability i.e., debt repayment ability and dividend paying ability, mainly in existing businesses of the Company and its wholly owned subsidiaries. On the consolidated statement of cash flows, the proceeds and repayments from the securitization of installment sales receivables are included in the cash flows from financing activities. Given that said receivables arise in the course of oper ating activities, the Group believes that an indicator that would more appropriately represent the Group's ordinary cash generating capacity would add or subtract the cash flow from the securitization of said receivables to or from the cash flows from operating activities. Therefore, in the process of calculating adjusted free cash flow (excluding LY Group and PayPay, etc.) and primary free cash flow, we add and subtract the proceeds and repayments from the securitization of installment sales receivables as adjustments to free cash flow. Adjustment items and adjustment amounts for free cash flow, adjusted free cash flow (excluding LY Group and PayPay, etc.), and primary free cash flow are as follows. (Billions of yen) Nine Months Ended December 31, 2023 Nine Months Ended December 31, 2024 Cash flows from operating activities 989.4 1,212.6 Cash flows from investing activities (capital expenditures)1 (452.1) (475.7) Cash flows from investing activities (others)2 (243.7) (230.8) Free cash flow 293.6 506.1 Effect of securitization of installment sales receivables 63.1 62.1 Securitization of installment sales receivables: Proceeds3 350.0 338.6 Securitization of installment sales receivables: Repayments3 (286.9) (276.6) Free cash flow from LY Group and PayPay, etc.4 66.7 (153.9) Others5 12.0 87.7 Adjusted free cash flow (excluding LY Group and PayPay, etc.) 435.4 501.9 Long-term growth investments6 (8.5) (39.0) Primary free cash flow 443.9 540.9 Notes: 1. Cash flows from investing activities (capital expenditures) is the net amount of “Purchases of property, plant and equipment and intangible assets” and “Proceeds from sales of property, plant and equipment and intangible assets” included in Cash flows from investing activities on the Condensed Interim Consolidated Statement of Cash Flows. 2. Cash flows from investing activities (others) is the net amount of “Payments for acquisition of investments,” “Proceeds from sales/redemption of investments,” “Purchase of investment securities in banking business,” “Proceeds from sales/redemption of in vestment securities in banking business,” “Proceeds from (payments for) obtaining control of subsidiaries,” “Proceeds from (payments for) loss of control over subsidiaries,” and “Other” included in Cash flows from investing activities on the Condensed Interim Consolidated Statement of Cash Flows. 3. Securitization of installment sales receivables: Proceeds and Securitization of installment sales receivables: Repayments are mainly included in “Increase (decrease) in short-term interest-bearing debt, net,” “Proceeds from interest-bearing debt” and “Repayment of interest-bearing debt” included in Cash flows from financing activities on the Condensed Interim Consolidated Statement of Cash Flows. Proceeds and repayments of short-term installment sales receivables transactions are netted. 4. “LY Group and PayPay, etc.” refers to A Holdings Corporation, LY Corporation and its subsidiaries (LY Group), B Holdings Corporation, PayPay Corporation, PayPay Card Corporation, PayPay Securities Corporation, etc. 5. Includes items such as dividends received from A Holdings Corporation (including the dividends received from A Holdings Co rporation in connection with proceeds from its sale of LY Corporation shares during the three months ended September 30, 2024) and investment in PayPay Securities Corporation. 6. Includes investments in AI computing infrastructure.
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―18― (5) Forecasts For the fiscal year ending March 31, 2025, the Company is forecasting revenue of ¥6,350.0 billion, operating income of ¥950.0 billion, and net income attributable to owners of the Company of ¥510.0 billion. There have been no changes to the consolidated financial result forecasts announced on November 8, 2024 in the Consolidated Financial Report for the Six Months Ended September 30, 2024. 2. Notes to Summary Information (1) Significant Changes in Scope of Consolidation for the Nine Months Ended December 31, 2024 There are no significant changes in the scope of consolidation to be disclosed. (2) Changes in Accounting Policies and Accounting Estimates There are no changes in accounting policies and accounting estimates to be disclosed.
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―19― 3. Condensed Interim Consolidated Financial Statements and Primary Notes (1) Condensed Interim Consolidated Statement of Financial Position (Millions of yen) As of March 31, 2024 As of December 31, 2024 ASSETS Current assets Cash and cash equivalents 1,992,873 1,890,824 Trade and other receivables 2,660,995 2,899,760 Other financial assets 229,715 276,485 Inventories 155,059 201,369 Other current assets 186,810 154,951 Subtotal 5,225,452 5,423,389 Assets classified as held for sale 42,577 - Total current assets 5,268,029 5,423,389 Non-current assets Property, plant and equipment 1,768,812 1,825,168 Right-of-use assets 662,183 744,965 Goodwill 2,049,404 2,064,259 Intangible assets 2,505,511 2,536,261 Contract costs 319,140 343,989 Investments accounted for using the equity method 251,488 293,432 Investment securities 272,788 284,273 Investment securities in banking business 522,232 687,785 Other financial assets 1,755,627 1,943,488 Deferred tax assets 46,529 56,888 Other non-current assets 100,163 100,943 Total non-current assets 10,253,877 10,881,451 Total assets 15,521,906 16,304,840
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―20― (Millions of yen) As of March 31, 2024 As of December 31, 2024 LIABILITIES AND EQUITY Current liabilities Interest-bearing debt 2,381,632 1,953,385 Trade and other payables 2,535,072 2,917,676 Contract liabilities 128,307 139,712 Deposits for banking business 1,643,155 1,857,203 Other financial liabilities 1,722 2,783 Income taxes payable 125,933 80,352 Provisions 33,287 41,957 Other current liabilities 226,596 206,181 Subtotal 7,075,704 7,199,249 Liabilities directly associated with assets classified as held for sale 9,582 - Total current liabilities 7,085,286 7,199,249 Non-current liabilities Interest-bearing debt 3,939,255 4,262,423 Other financial liabilities 45,312 108,446 Provisions 99,491 119,753 Deferred tax liabilities 301,852 331,508 Other non-current liabilities 115,063 119,501 Total non-current liabilities 4,500,973 4,941,631 Total liabilities 11,586,259 12,140,880 Equity Equity attributable to owners of the Company Common stock 214,394 224,582 Capital surplus 736,052 930,669 Retained earnings 1,475,775 1,503,803 Treasury stock (75,822) (44,389) Accumulated other comprehensive income (loss) 26,675 30,589 Total equity attributable to owners of the Company 2,377,074 2,645,254 Non-controlling interests 1,558,573 1,518,706 Total equity 3,935,647 4,163,960 Total liabilities and equity 15,521,906 16,304,840
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―21― (2) Condensed Interim Consolidated Statement of Income and Condensed Interim Consolidated Statement of Comprehensive Income Condensed Interim Consolidated Statement of Income (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Revenue 4,511,564 4,811,463 Cost of sales (2,292,632) (2,440,200) Gross profit 2,218,932 2,371,263 Selling, general and administrative expenses (1,506,280) (1,585,442) Other operating income 20,832 43,195 Other operating expenses (1,551) (7,155) Operating income 731,933 821,861 Gain on changes in equity interest 20,435 3,277 Share of losses of associates accounted for using the equity method (17,629) (6,084) Financing income 7,248 9,930 Financing costs (56,753) (89,540) Gain on sales of equity method investments 5,227 4,307 Profit before income taxes 690,461 743,751 Income taxes (187,790) (199,074) Net income1 502,671 544,677 Net income attributable to Owners of the Company 406,682 436,610 Non-controlling interests 95,989 108,067 502,671 544,677 Earnings per share attributable to owners of the Company2 Basic earnings per share (Yen) 8.58 9.16 Diluted earnings per share (Yen) 8.43 9.02 Notes: 1.All net income of SoftBank Corp. and its subsidiaries for the nine months ended December 31, 2023 and 2024 were generated f rom continuing operations. 2. The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. “Basic earnings per share” and “Diluted earnings per share” are calculated assuming tha t the stock split had been carried out at the beginning of the previous fiscal year.
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―22― Condensed Interim Consolidated Statement of Comprehensive Income (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Net income 502,671 544,677 Other comprehensive income (loss), net of tax Items that will not be reclassified to profit or loss Remeasurements of defined benefit plan (114) 21 Changes in the fair value of equity instruments at FVTOCI 1,753 (902) Share of other comprehensive income (loss) of associates accounted for using the equity method 389 (79) Total items that will not be reclassified to profit or loss 2,028 (960) Items that may be reclassified subsequently to profit or loss Changes in the fair value of debt instruments at FVTOCI (634) (2,148) Cash flow hedges (3,129) 3,930 Exchange differences on translation of foreign operations 10,930 1,174 Share of other comprehensive income (loss) of associates accounted for using the equity method 5,426 (1,817) Total items that may be reclassified subsequently to profit or loss 12,593 1,139 Total other comprehensive income (loss), net of tax 14,621 179 Total comprehensive income 517,292 544,856 Total comprehensive income attributable to Owners of the Company 408,957 440,941 Non-controlling interests 108,335 103,915 517,292 544,856
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―23― (3) Condensed Interim Consolidated Statement of Changes in Equity For the nine months ended December 31, 2023 (Millions of yen) Equity attributable to owners of the Company Common stock Capital surplus Retained earnings Treasury stock Accumulated other comprehen- sive income (loss) Total Non- controlling interests Total equity As of April 1, 2023 204,309 685,066 1,392,043 (74,131) 17,658 2,224,945 1,458,122 3,683,067 Comprehensive income Net income - - 406,682 - - 406,682 95,989 502,671 Other comprehensive income (loss) - - - - 2,275 2,275 12,346 14,621 Total comprehensive income - - 406,682 - 2,275 408,957 108,335 517,292 Transactions with owners and other transactions Cash dividends - - (406,935) - - (406,935) (45,058) (451,993) Issuance of new shares 66,214 63,309 - - - 129,523 - 129,523 Transfer from common stock to capital surplus (60,000) 60,000 - - - - - - Purchase of treasury stock - - - (58,214) - (58,214) - (58,214) Disposal of treasury stock - (8,736) - 20,272 - 11,536 - 11,536 Changes from loss of control - - - - - - (6,322) (6,322) Changes in interests in existing subsidiaries - 3,566 - - - 3,566 18,429 21,995 Share-based payment transactions - (692) - - - (692) - (692) Transfer from accumulated other comprehensive income (loss) to retained earnings - - 2,643 - (2,643) - - - Other - (81) (302) - - (383) (713) (1,096) Total transactions with owners and other transactions 6,214 117,366 (404,594) (37,942) (2,643) (321,599) (33,664) (355,263) As of December 31, 2023 210,523 802,432 1,394,131 (112,073) 17,290 2,312,303 1,532,793 3,845,096
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―24― For the nine months ended December 31, 2024 (Millions of yen) Equity attributable to owners of the Company Common stock Capital surplus Retained earnings Treasury stock Accumulated other comprehen- sive income (loss) Total Non- controlling interests Total equity As of April 1, 2024 214,394 736,052 1,475,775 (75,822) 26,675 2,377,074 1,558,573 3,935,647 Comprehensive income Net income - - 436,610 - - 436,610 108,067 544,677 Other comprehensive income (loss) - - - - 4,331 4,331 (4,152) 179 Total comprehensive income - - 436,610 - 4,331 440,941 103,915 544,856 Transactions with owners and other transactions Cash dividends - - (408,894) - - (408,894) (124,604) (533,498) Issuance of new shares 110,188 106,404 - - - 216,592 - 216,592 Transfer from common stock to capital surplus (100,000) 100,000 - - - - - - Purchase of treasury stock - - - (0) - (0) - (0) Disposal of treasury stock - (14,244) - 31,433 - 17,189 - 17,189 Changes from loss of control - 4,831 - - - 4,831 (12,034) (7,203) Changes in interests in existing subsidiaries - (1,338) - - - (1,338) (7,058) (8,396) Share-based payment transactions - (894) - - - (894) - (894) Transfer from accumulated other comprehensive income (loss) to retained earnings - - 417 - (417) - - - Other - (142) (105) - - (247) (86) (333) Total transactions with owners and other transactions 10,188 194,617 (408,582) 31,433 (417) (172,761) (143,782) (316,543) As of December 31, 2024 224,582 930,669 1,503,803 (44,389) 30,589 2,645,254 1,518,706 4,163,960
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―25― (4) Condensed Interim Consolidated Statement of Cash Flows (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Cash flows from operating activities Net income 502,671 544,677 Depreciation and amortization 560,744 553,519 Loss on disposal of property, plant and equipment and intangible assets 14,117 12,634 Gain relating to loss of control over subsidiaries (10,373) (43,195) Financing income (7,248) (9,930) Financing costs 56,753 89,540 Share of losses of associates accounted for using the equity method 17,629 6,084 Gain on sales of equity method investments (5,227) (4,307) Gain on changes in equity interest (20,435) (3,277) Income taxes 187,790 199,074 (Increase) decrease in trade and other receivables (224,152) (370,894) (Increase) decrease in inventories (15,225) (49,280) Purchases of mobile devices leased to enterprise customers (35,050) (34,288) Increase (decrease) in trade and other payables 256,038 417,031 Increase (decrease) in consumption taxes payable 12,917 13,168 Increase (decrease) in deposits in banking business 153,270 214,048 (Increase) decrease in loans in banking business (85,277) (129,105) Other (52,816) 36,182 Subtotal 1,306,126 1,441,681 Interest and dividends received 5,048 8,220 Interest paid (43,770) (57,824) Income taxes paid (317,112) (234,694) Income taxes refunded 39,095 55,169 Net cash inflow from operating activities 989,387 1,212,552 Cash flows from investing activities Purchases of property, plant and equipment and intangible assets (452,544) (478,323) Proceeds from sales of property, plant and equipment and intangible assets 489 2,606 Payments for acquisition of investments (63,122) (72,243) Proceeds from sales/redemption of investments 19,161 33,020 Purchase of investment securities in banking business (286,656) (247,902) Proceeds from sales/redemption of investment securities in banking business 110,435 83,835 Proceeds from (payments for) obtaining control of subsidiaries - (350) Proceeds from (payments for) loss of control over subsidiaries (6,073) (22,078) Other (17,478) (5,045) Net cash outflow from investing activities (695,788) (706,480)
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―26― (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Cash flows from financing activities Increase (decrease) in short-term interest-bearing debt, net 146,349 (100,894) Proceeds from interest-bearing debt 1,550,809 1,268,872 Repayment of interest-bearing debt (1,500,227) (1,490,242) Proceeds from issuance of shares 130,999 215,573 Proceeds from stock issuance to non-controlling interests 19,340 22,207 Payments for purchase of treasury stock (58,214) (0) Cash dividends paid (405,722) (407,788) Cash dividends paid to non-controlling interests (44,154) (123,784) Other (3,365) (26,955) Net cash inflow (outflow) from financing activities (164,185) (643,011) Effect of exchange rate changes on cash and cash equivalents 6,301 1,879 Increase (decrease) in cash and cash equivalents relating to transfer of assets classified as held for sale - 33,011 Increase (decrease) in cash and cash equivalents 135,715 (102,049) Cash and cash equivalents at the beginning of the period 2,059,167 1,992,873 Cash and cash equivalents at the end of the period 2,194,882 1,890,824
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―27― (5) Notes on Going Concern Assumption There are no applicable items. (6) Notes to Condensed Interim Consolidated Financial Statements 1. Reporting entity SoftBank Corp. (the “Company”) is a corporation (kabushiki kaisha) under the Companies Act of Japan and is domiciled in Japan. The registered address of its head office is 7 -1 Kaigan 1 -chome, Minato-ku, Tokyo, Japan. These condensed interim consolidated financial statements are comprised of the Company and its subsidiaries (the “Group”). The parent of the Company is SoftBank Group Japan Corporation. The ultimate parent company of the Company is SoftBank Group Corp. The Group is engaged in a variety of businesses in the information and technology fields centering on its Consumer, Enterpris e, Distribution, Media & EC and Financial businesses. For details, refer to “(1) Summary of reportable segments” under “Note 6. Segment information.” 2. Basis of preparation of condensed interim consolidated financial statements (1) Compliance with standards The condensed interim consolidated financial statements of the Group have been prepared in accordance with Article 5, Paragraph 2 of the standards for preparation of quarterly financial statements, etc. of Tokyo Stock Exchange, Inc. A part of the disclo sures required under International Accounting Standard 34, “Interim Financial Reporting” of IFRS Accounting Standards (“I FRS”) is omitted under Article 5, Paragraph 5 of the said preparation standards. (2) Changes in Presentation (Condensed Interim Consolidated Statement of Cash Flows) a. “Proceeds from (payments for) loss of control over subsidiaries,” which was included in “Other” under cash flows from investing activities for the nine months ended December 31, 2023, has been presented as a separate item for the nine months ended Decem ber 31, 2024 as the amount became material. In order to reflect this change, reclassification has been made in the condensed inte rim consolidated financial statements for the nine months ended December 31, 2023. As a result, in the condensed interim consolidated statement of cash flows for the nine months ended December 31, 2023, “Other” of ¥(23,551) million under cash flows from investing activities has been reclassified as “Proceeds from (payments for) loss of control over subsidiaries” of ¥(6,073) million and “Other” of ¥(17,478) million under cash flows from investing activities. b. For the nine months ended December 31, 2023, proceeds from and repayments of borrowings in certain subsidiary have been presented on a gross basis in “Proceeds from interest-bearing debt” and “Repayment of interest-bearing debt” under cash flows from financing activities. For the nine months ended December 31, 2024, proceeds from and repayments of borrowings have been presented on a net basis in “Increase (decrease) in short-term interest-bearing debt, net” under cash flows from financing activities. This change is due to a change in the cash management policy, which centers on the continuous refinancing of short-term borrowings, in response to the subsidiary’s business expansion. From the perspective of clarity, cash transactions, which were previously presented on a gross basis, have been reclassified to a net basis. As a result, in the condensed interim consolidated statement of cash flows for the nine months ended December 31, 2023, “Proceeds from interest-bearing debt” of ¥530,000 million and “Repayment of interest -bearing debt” of ¥(514,000) million under cash flow s from financing activities has been reclassified as “Increase (decrease) in short -term interest-bearing debt, net” of ¥16,000 million under cash flows from financing activities. 3. Material accounting policies The material accounting policies applied in the condensed interim consolidated financial statements are consistent with those of the consolidated financial statements as of and for the fiscal year ended March 31, 2024. “Income tax expenses” for the nine months ended December 31, 2024 are calculated based on the estimated annual effective income tax rate.
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―28― 4. Significant judgments and estimates In preparing the condensed interim consolidated financial statements, management makes judgments, estimates, and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, revenue, and expenses. These estimates and underlying assumptions are based on management’s best judgments, through their evaluation of various factors that were considered reasonable as of the respective period-end, based on historical experience and by collecting available information. By the nature of its estimates or assumptions, however, actual results in the future may differ from those projected estimate s or assumptions. Estimates and underlying assumptions are continuously reviewed. Revisions to accounting estimates have been recognized in the period in which the estimate is revised as well as in future periods. The judgments, estimates and assumptions that have significant impact on the amounts in the condensed interim consolidated financial statements of the Group are consistent with those described in the consolidated financial statements for the fiscal year ended March 31, 2024. 5. Business combinations Nine months ended December 31, 2023 There are no significant business combinations to be disclosed. Nine months ended December 31, 2024 Acquisition of Cubic Telecom Ltd. (Finalization of the provisional accounting treatment for the business combination) For the fiscal year ended March 31, 2024, provisional accounting was applied to the business combination with Cubic Telecom Ltd. that took place on March 6, 2024. The allocation of the consideration transferred was completed during the three months ended June 30, 2024. There are no significant changes between the initial provisional and final amounts. 6. Segment information (1) Summary of reportable segments The reportable segments of the Group are based on operating segments for which separate financial information is available, and which the Board of Directors (the Group’s chief operating decision maker) regularly reviews to determine the allocation of management resources and evaluate their performance. Th e Group has “Consumer,” “Enterprise,” “Distribution,” “Media & EC” and “Financial” as its reportable segments. No operating segments have been aggregated in arriving at the reportable segments of the Group. In the “Consumer” segment, the Group provides services, such as mobile services, broadband services and electricity services, including the Ouchi Denki service, mainly to individual customers in Japan. The Company procures mobile devices from mobile device manufacturers and sells the mobile devices to distributors operating SoftBank shops, etc. and individual customers. In the “Enterprise” segment, the Group provides a wide range of services for enterprise customers. These include mobile services such as mobile lines and mobile device rental, fixed -line communications services such as fixed -line telephones and data communications, as well as various solutions for enterprises such as data center, cloud, security, global, AI, IoT, and digital marketing services. In the “Distribution” segment, the Group offers products and services primarily addressing cloud services and advanced technologies including AI for enterprise customers and products and services such as software, mobile accessories, and IoT products for individual customers. In the “Media & EC” segment, the Group offers services that center on media and commerce, covering online to offline services in a comprehensive manner. In the “media” field, the Group provides advertising -related services on its comprehensive Internet service, Yahoo! JAP AN, and communication app, LINE. In the “commerce” field, the Group provides online shopping services such as Yahoo! JAP AN Shopping and ZOZOTOWN, and reuse services such as Yahoo! JAP AN Auction. In the “strategy” field, the Group provides services centered on FinTech, which the Group is working to develop into new drivers of earnings alongside media and commerce. In the “Financial” segment, the Group provides cashless payment services such as QR code payment and credit card services,
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―29― development and provision of marketing solutions for merchants, financial services such as asset management, as well as payment agency services that provide a comprehensive range of diversified payments such as credit cards, electronic money and QR codes. Information not included in the preceding reportable segments is summarized in “Other.” “Adjustments” includes eliminations of intersegment transactions and expenses not allocated to any reportable segment. In addition, the Group reevaluated the management business categories to reinforce group synergy. As a result, from the three months ended June 30, 2024, the reportable segments of SB Technology Corp., Cybertrust Japan Co., Ltd., and others, which were included in the “Other” segment, have been changed to the “Enterprise” segment. In addition, the reportable segment of certain subsidiaries, which were included in the “Consumer” segment, has been changed to the “Other” segment. As a result, the figure s for the nine months ended December 31, 2023, have been retrospectively adjusted. (2) Segment revenue, income, and other information of reportable segments Income of reportable segments is defined as “Operating income.” Intersegment transaction prices are determined by taking into consideration the equivalent prices for an arm’s length transaction or gross costs after price negotiation. Income and loss which are not attributable to operating income and loss, such as “financing income”, “financing costs”, and “income and loss on equity method investments”, are not managed by each reportable segment and therefore these income and losses are excluded from segment income. Assets and liabilities are not allocated to reportable segments and are not monitored by the Board of Directors. Nine months ended December 31, 2023 Reportable segments (Millions of yen) Consumer Enterprise Distribution Media & EC Financial Total Other Adjustments Consolidated Revenue Sales to external customers 2,109,439 587,885 404,063 1,178,467 158,392 4,438,246 73,318 - 4,511,564 Intersegment revenue or transferred revenue 11,453 22,073 51,538 21,063 12,494 118,621 8,898 (127,519) - Total 2,120,892 609,958 455,601 1,199,530 170,886 4,556,867 82,216 (127,519) 4,511,564 Segment income 422,884 128,286 20,288 163,535 (3,526) 731,467 (5,125) 5,591 731,933 Depreciation and amortization1 297,063 117,414 3,271 123,420 15,493 556,661 6,784 (2,701) 560,744 Nine months ended December 31, 2024 Reportable segments (Millions of yen) Consumer Enterprise Distribution Media & EC Financial Total Other Adjustments Consolidated Revenue Sales to external customers 2,167,006 648,673 503,160 1,230,958 187,645 4,737,442 74,021 - 4,811,463 Intersegment revenue or transferred revenue 14,000 24,952 112,884 21,335 15,968 189,139 8,974 (198,113) - Total 2,181,006 673,625 616,044 1,252,293 203,613 4,926,581 82,995 (198,113) 4,811,463 Segment income 440,539 140,438 23,848 218,052 25,989 848,866 (22,299) (4,706) 821,861 Depreciation and amortization1 279,673 123,495 3,277 122,256 16,993 545,694 9,976 (2,151) 553,519 Note: 1. “Depreciation and amortization” includes amortization of long-term prepaid expenses which are presented as “Other non-current assets” in the condensed interim consolidated statement of financial position.
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―30― Reconciliations of “segment income” to “consolidated profit before income taxes” is as follows: (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Segment income 731,933 821,861 Gain on changes in equity interest 20,435 3,277 Share of losses of associates accounted for using the equity method (17,629) (6,084) Financing income 7,248 9,930 Financing costs (56,753) (89,540) Gain on sales of equity method investments 5,227 4,307 Profit before income taxes 690,461 743,751 7. Disposal group classified as held for sale The disposal group classified as held for sale as of March 31, 2024 consists primarily of the assets and liabilities of Value Commerce Co., Ltd. (hereinafter “ValueCommerce”), a subsidiary of the Company, and ValueCommerce’s subsidiary. At its Board of Directors meeting held on March 11, 2024, ValueCommerce passed a resolution to repurchase its own shares and implement a tender offer (hereinafter the “Tender Offer”) as the specific method for this repurchase. In addition, Z Intermediate Holdings Corporation (hereinafter “ZHD Intermediate”), a subsidiary of the Company and owner of ValueCommerce’s shares, concluded a tender offer agreement on the same date with ValueCommerce to tender a partial number of its ValueCommerce common shares in the Tender Offer. After the conclusion of the Tender Offer, ValueCommerce will cease to be a subsidiary of the Company, and accordingly the assets and liabilities of ValueCommerce and its subsidiary have been classified as a disposal group classified as hel d for sale as of March 31, 2024. The disposal group classified as held for sale is measured at its carrying amount because its fair value less costs to sell (estimated sales price) exceeds its carrying amount. The carrying amounts of assets and liabilities in ValueCommerce and its subsidiary as of March 31, 2024 were ¥25,636 million and ¥4,985 million, respectively. On May 2, 2024, the Tender Offer was settled, and ValueCommerce ceased to be a subsidiary of the Company and newly became its equity method associate. 8. Interest-bearing debt The components of “interest-bearing debt” are as follows: (Millions of yen) As of March 31, 2024 As of December 31, 2024 Current Short-term borrowings 767,265 638,786 Commercial paper 187,001 140,000 Current portion of long-term borrowings 1,202,649 794,164 Current portion of lease liabilities 139,657 150,377 Current portion of corporate bonds 84,991 229,980 Current portion of installment payables 69 78 Total 2,381,632 1,953,385 Non-current Long-term borrowings 2,167,081 2,501,056 Lease liabilities 560,046 639,122 Corporate bonds 1,212,060 1,122,212 Installment payables 68 33 Total 3,939,255 4,262,423
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―31― 9. Equity (1) Common stock and capital surplus a. Common shares Nine months ended December 31, 2023 Due to the issuance of new shares upon exercise of stock acquisition rights, the number of shares issued increased by 8,606 thousand shares. As a result of the issuance of the shares, “Common stock” and “Capital surplus” increased by ¥6,214 million each under the Companies Act of Japan. Nine months ended December 31, 2024 For the six months ended September 30, 2024, due to the issuance of new shares upon exercise of stock acquisition rights, the number of shares issued increased by 11,737 thousand shares. In addition, based on the resolution of the Board of Directors meeting held on April 25, 2024, the Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. As a result of the stock split, the number of shares issued increased by 42,911,435 thousand shares. Furthermore, after the stock split, due to the issuance of new shares upon exercise of stock acquisition rights, the number of shares issued increased by 22,820 thousand shares for the three months ended December 31, 2024. As a result of these issuances of the shares, “Common stock” and “Capital surplus” increased by ¥10,188 million each under th e Companies Act of Japan. b. Class shares Nine months ended December 31, 2023 The Company issued 30 million shares of Series 1 Bond-Type Class Shares on the payment date of November 1, 2023. Although dividends whose record date falls in fiscal year ending on or before March 31, 2029 are fixed dividends (floating dividends thereafter) and any unpaid dividends shall be carried over to subsequent fiscal years, the Series 1 Bond-Type Class Shares are classified as equity instruments because the Company has the option to defer dividend payments, has no obligation to repurchase the Seri es 1 Bond-Type Class Shares and has unconditional right to avoid delivering cash or another financial asset except f or the distribution of residual assets on liquidation. As a result of the issuance of the Series 1 Bond -Type Class Shares, “Common stock” and “Capital surplus” increased by ¥60,000 million each under the Companies Act of Japan. On the same day, the amount of ‟Common stock” was decreased by the same amount and transferred to ‟Capital surplus.” In addition, direct issuance costs of ¥2,905 million relating to the issuance of the Series 1 Bond -Type Class Shares were deducted from “Capital surplus.” Nine months ended December 31, 2024 The Company issued 25 million shares of Series 2 Bond-Type Class Shares on the payment date of October 3, 2024. Although dividends whose record date falls in fiscal year ending on or before March 31, 2030 are fixed dividends (floating dividends thereafter) and any unpaid dividends shall be carried over to subsequent fiscal years, the Series 2 Bond-Type Class Shares are classified as equity instruments because the Company has the option to defer dividend payments, has no obligation to repurchase the Seri es 2 Bond-Type Class Shares and has unconditional right to avoid delivering cash or another financial asset except f or the distribution of residual assets on liquidation. As a result of the issuance of the Series 2 Bond-Type Class Shares, “Common stock” and “Capital surplus” increased by ¥100,000 million each under the Companies Act of Japan. On the same day, the amount of “Common stock” was decreased by the same amount and transferred to “Capital surplus.” In addition, direct issuance costs of ¥3,784 million relating to the issuance of the Series 2 Bond -Type Class Shares were deducted from “Capital surplus.”
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―32― (2) Treasury stock Changes in “treasury stock” are as follows: (Thousands of shares) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Balance at the beginning of the period 55,596 47,805 Increase during the period1 34,579 279,316 Decrease during the period2 (14,736) (47,252) Balance at the end of the period 75,439 279,869 Notes: 1. For the nine months ended December 31, 2023, due to the purchase of treasury stock under the resolution passed at the Board of Directors meeting held on May 10, 2023, the number of “treasury stock” increased by 34,579 thousand shares (amount purchased ¥58,214 million). In addition, for the nine months ended December 31, 2024, based on the resolution of the Board of Directors meeting held on April 25, 2024, the Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. As a result of this stock split, the number of “treasury stock” increased by 279,316 thousand shares. 2. For the nine months ended December 31, 2023, due to the exercise of stock acquisition rights and others, the number of “treasury stock” decreased by 14,736 thousand shares. As a result, “Treasury stock” decreased by ¥20,272 million and a loss on disposal of treasury stock of ¥8,736 million was recognized as a decrease in “Capital surplus.” In addition, for the nine months ended December 31, 2024, due to the exercise of stock acquisition rights and others, the number of “treasury stock” decreased by 47,252 thousand shares. As a result, “Treasury stock” decreased by ¥31,433 million and a loss on disposal of treasury stock of ¥14,244 million was recognized as a decrease in “Capital surplus.” 10. Dividends Dividends paid are as follows: Nine months ended December 31, 2023 Resolution Class of shares Dividends per share (Yen) Total dividends (Millions of yen) Record date Effective date Board of Directors meeting held on May 24, 2023 Common stock 43.00 203,457 March 31, 2023 June 6, 2023 Board of Directors meeting held on October 23, 2023 Common stock 43.00 203,478 September 30, 2023 December 6, 2023 Nine months ended December 31, 2024 Resolution Class of shares Dividends per share (Yen) Total dividends (Millions of yen) Record date Effective date Board of Directors meeting held on May 17, 2024 Common stock 43.00 202,461 March 31, 2024 June 6, 2024 Board of Directors meeting held on May 17, 2024 Series 1 Bond-Type Class Shares 41.53 1,246 March 31, 2024 June 6, 2024 Board of Directors meeting held on October 21, 2024 Common stock 43.00 203,687 September 30, 2024 December 6, 2024 Board of Directors meeting held on October 21, 2024 Series 1 Bond-Type Class Shares 50.00 1,500 September 30, 2024 December 6, 2024 Notes: 1. The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. Dividends per share reflects the actual dividend amount before this stock split. 2. If the record date falls in a fiscal year ending on or before March 31, 2029, the annual dividend rate for Series 1 Bond -Type
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―33― Class Shares is 2.500% per annum. If the record date falls in a fiscal year ending on or after April 1, 2029, the annual divi dend rate is the interest rate of One -Year Japanese government bonds (JGBs) as of the date two business days before the last day of the fiscal year before the fiscal year in which the record date falls plus 3.182%. 3. The amount of the preferred dividend to Series 1 Bond-Type Class Shares with a record date of March 31, 2024 was calculated based on actual day counts on a 366-day year basis. 11. Revenue The components of revenue are as follows: (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Consumer4 Service revenues Mobile 1,142,402 1,163,437 Broadband 299,163 304,957 Electricity 191,760 184,106 Revenues from sales of goods and others 476,114 514,506 Subtotal 2,109,439 2,167,006 Enterprise5 Mobile3 228,132 223,096 Fixed-line 122,819 121,935 Business solution and others3 236,934 303,642 Subtotal 587,885 648,673 Distribution 404,063 503,160 Media & EC Media6 501,866 522,758 Commerce6 611,999 633,081 Strategy 60,572 71,888 Other 4,030 3,231 Subtotal 1,178,467 1,230,958 Financial 158,392 187,645 Other4,5 73,318 74,021 Total 4,511,564 4,811,463 Notes: 1. The components of revenue represent sales to external customers. 2. The components of revenue include revenues from other sources, excluding those arising from IFRS 15 “Revenue from Contract s with Customers” (mainly from PayPay Card Corporation’s financial business included in “Financial” and lease transactions included in “Enterprise”). Revenues from other sources for the nine months ended December 31, 2023 and 2024 were ¥144,698 million and ¥148,692 million, respectively. 3. “Mobile” and “Business solution and others” under “Enterprise” include service revenues and revenues from sales of goods a nd others. Service revenues for the nine months ended December 31, 2023 and 2024 were ¥361,406 million and ¥408,283 million, respectively. Revenues from sales of goods and others for the nine months ended December 31, 2023 and 2024 were ¥103,660 million and ¥118,455 million, respectively. 4. Effective for the three months ended June 30, 2024, certain subsidiaries categorized as “Consumer” were transferred to “Other.” As a result, all components of revenue under “Consumer” and “Other” for the nine months ended December 31, 2023, have been retrospectively adjusted. 5. Effective for the three months ended June 30, 2024, the business categories of “Enterprise” have been reevaluated and some services included in “Enterprise” were transferred between the business categories. In addition, SB Technology Corp., Cybertrust Japan Co., Ltd., and others were transferred from “Other” to “Enterprise” in order to reinforce group synergy. As a result, all componen ts of
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―34― revenue under “Enterprise” and “Other” for the nine months ended December 31, 2023, have been retrospectively adjusted. 6. Effective for the three months ended December 31, 2024, the business categories of “Media & EC” have been reevaluated and some services categorized as “Media” were transferred to “Commerce.” As a result, all components of revenue under “Media” and “Commerce” for the nine months ended December 31, 2023, have been retrospectively adjusted. 12. Earnings per share “Basic earnings per share” and “diluted earnings per share” are as follows: (1) Basic earnings per share Nine months ended December 31, 2023 Nine months ended December 31, 2024 Net income used in the calculation of basic earnings per share (Millions of yen) Net income attributable to owners of the Company 406,682 436,610 Net income not-attributable to ordinary shareholders of the Company2 (500) (3,827) Net income used in the calculation of basic earnings per share 406,182 432,783 Weighted-average number of shares of common stock outstanding (Thousands of shares)1 47,340,394 47,263,966 Basic earnings per share (Yen) 8.58 9.16 (2) Diluted earnings per share Nine months ended December 31, 2023 Nine months ended December 31, 2024 Net income used in the calculation of diluted earnings per share (Millions of yen) Net income from continuing operations used in the calculation of basic earnings per share 406,182 432,783 Effect of dilutive securities issued by subsidiaries and associates (3,513) (3,446) Total 402,669 429,337 Weighted-average number of shares of common stock used in the calculation of diluted earnings per share (Thousands of shares)1 Weighted-average number of shares of common stock outstanding 47,340,394 47,263,966 Increase in the number of shares of common stock due to stock acquisition rights 406,332 360,022 Total 47,746,726 47,623,988 Diluted earnings per share (Yen) 8.43 9.02 Notes: 1. The Company conducted a stock split whereby each share of the Company’s common shares was split into 10 shares, with the effective date being October 1, 2024. “Basic earnings per share” and “Diluted earnings per share” are calculated assuming tha t the stock split had been carried out at the beginning of the previous fiscal year. 2. The amount represents dividends to be paid to class shareholders in connection with the Bond-Type Class Shares.
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―35― 13. Other operating income and other operating expenses The components of “other operating income” and “other operating expenses” are as follows: (Millions of yen) Nine months ended December 31, 2023 Nine months ended December 31, 2024 Other operating income Gain on loss of control over subsidiaries 10,373 43,195 Gain on sale of businesses 10,459 - Total 20,832 43,195 Other operating expenses Impairment loss (1,551) (7,155) 14. Supplemental information to the condensed interim consolidated statement of cash flows Significant non-cash transactions Significant non -cash transactions (investing and financing activities that do not require the use of “Cash and cash equivalents”) are as follows: (1) Lease transactions The increases in “Right-of-use assets” on the lease transactions (excluding lease payments and initial direct costs paid before the lease commencement date) for the nine months ended December 31, 2023 and 2024, were ¥151,700 million and ¥132,150 million, respectively, and are non-cash transactions. (2) Other non-cash transactions The total amount of increase in “Trade and other payables” and “Other financial liabilities” related to the acquisition of “Intangible assets” for the 4.9GHz specified base station establishment for the nine months ended December 31, 2024 was ¥66,481 million and is non-cash transaction. 15. Related party transactions Nine months ended December 31, 2023 Related party transactions of the Group are as follows: (Millions of yen) Nine months ended December 31, 2023 As of December 31, 2023 Name of the company or individual Nature of relationship Nature of transaction Amount of transaction Balance at period-end Yasuyuki Imai Director of the Company Lending of loans1,2,3 - 860 Receipt of interest on loans receivable 7 2 Junichi Miyakawa Director of the Company Lending of loans1,2,3,4 - 19,930 Receipt of interest on loans receivable 165 55 Kazuhiko Fujihara Director of the Company Lending of loans1,2,3 - 640 Receipt of interest on loans receivable 5 2 Receipt of deposits 210 Refund of deposits 190 210 Payment of interest on deposits 1 0
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―36― The terms and conditions of transactions and policy on how to determine those terms and conditions: 1. The lending rate was set from 1.03% to 1.10% (fixed rate) as reasonably determined in consideration of the borrowing rate actually borne by the Company, which is on a level similar to market rates on similar terms, with both interest and principal repayable in one lump-sum at the end of the fiscal year five years after the loan date, allowing a five-year extension of the repayment periods subject to mutual agreement, or optional prepayment at borrower’s discretion. Borrowers are entitled to deposit the funds not exceeding the balance of this loan to the Company, in which case the interest rate applicable to such borrowings is the same as the abovementioned lending rate. 2. In this transaction, the Company’s shares purchased by the borrower using the loan have been provided as security. 3. In the event that the fair value of the security falls below a certain percentage of the loan balance prior to the due date, the Company shall be entitled to request a pledge of additional security from the borrowers. In such case, the Company shall be entitled to reserve part of the remuneration, etc. the Group will pay to the borrowers within certain limitation, and to use it for the repayment of the loan (hereinafter the “Additional Entitlement”). 4. Of the total amount due, the remaining shortfall, if any, after the enforcement of security and execution of the Additional Entitlement shall be fully guaranteed by Board Director, Mr. Masayoshi Son. Nine months ended December 31, 2024 Related party transactions of the Group are as follows: (Millions of yen) Nine months ended December 31, 2024 As of December 31, 2024 Name of the company or individual Nature of relationship Nature of transaction Amount of transaction Balance at period-end Yasuyuki Imai Director of the Company Lending of loans1,2,3 - 860 Receipt of interest on loans receivable 7 2 Junichi Miyakawa Director of the Company Lending of loans1,2,3,4 - 19,930 Receipt of interest on loans receivable 165 55 Kazuhiko Fujihara Director of the Company Lending of loans1,2,3 - 640 Receipt of interest on loans receivable 5 2 Receipt of deposits 200 Refund of deposits 207 200 Payment of interest on deposits 0 0 The terms and conditions of transactions and policy on how to determine those terms and conditions: 1. The lending rate was set from 1.03% to 1.10% (fixed rate) as reasonably determined in consideration of the borrowing rate actually borne by the Company, which is on a level similar to market rates on similar terms, with both interest and principal repayable in one lump-sum at the end of the fiscal year five years after the loan date, allowing a five-year extension of the repayment period subject to mutual agreement, or optional prepayment at borrower’s discretion. Borrowers are entitled to deposit the funds not exceeding the balance of this loan to the Company, in which case the interest rate applicable to such borrowings is the same as the abovementioned lending rate. 2. In this transaction, the Company’s shares purchased by the borrower using the loan have been provided as security. 3. In the event that the fair value of the security falls below a certain percentage of the loan balance prior to the due date, the Company shall be entitled to request a pledge of additional security from the borrowers. In such case, the Company shall be entitled to reserve part of the remuneration, etc. the Group will pay to the borrowers within certain limitation, and to use it for the repayment of the loan (hereinafter the “Additional Entitlement”). 4. Of the total amount due, the remaining shortfall, if any, after the enforcement of security and execution of the Additional Entitlement shall be fully guaranteed by Board Director, Mr. Masayoshi Son.
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―37― 16. Subsequent events There are no significant subsequent events to be disclosed.