SoftBank Posts $7 Billion Loss on US Data Centre Charge

Updated 02:35 UTC, November 11

SoftBank shares fell sharply in Tokyo on Wednesday, the first trading session after the results. The stock dropped to 3,465 yen in morning trade, down 10.5 percent from Tuesday's close of 3,872 yen, before recovering part of the loss to trade at 3,750 yen late in the morning, still down 3.2 percent. Bloomberg reported the shares fell as much as 11 percent after the loss. The results had been released after Tuesday's close, a session the shares had ended up 13.9 percent.

Reuters reported one offset in the filing that the earliest reports had not stressed: the pain from the advance payments could be softened by rebates of up to $2.1 billion on future purchases.

SoftBank Group reported a net loss of 1.115 trillion yen, about $7 billion, for the three months ended September 30, reversing a profit of 2.502 trillion yen a year earlier. The result, released on Tuesday in Tokyo, missed what analysts had expected. Polls reported by Dow Jones and Bloomberg both had the company returning a profit for the quarter.

Sales rose even as the bottom line swung. Net sales reached 2.215 trillion yen, up 15.6 percent from 1.917 trillion yen a year earlier, the Seoul Economic Daily reported from the company's filing.

Where the loss came from

The largest single item was a loss of 597.2 billion yen, about $3.7 billion, tied to changes in procurement plans for power generation equipment for artificial intelligence data centre projects in the United States, including a large project in Ohio. SoftBank had paid advances on equipment orders, and part of that money is not refundable after the plans changed.

Financing costs added pressure. Second-quarter financing costs reached 461.9 billion yen, about 2.6 times the 174.7 billion yen of a year earlier, as borrowing increased to fund the AI build-out. It is the group's first net loss in two years, the Seoul Economic Daily reported.

The funding machine behind the expansion is large. Financial Times reporting carried by Dealroom put the group's fundraising in the quarter at a record $56.5 billion, raised as SoftBank pushed ahead with its data centre and OpenAI commitments.

What to watch next is whether the Ohio equipment charge stays a one-off or spreads to other projects in the programme, and whether financing costs keep rising at the current pace when the group reports again. Both answers sit in filings still to come, not in Tuesday's headline number.

Why this print matters for the AI trade

SoftBank is one of the biggest financial backers of the AI data centre expansion, with large commitments tied to OpenAI and a portfolio built around Arm and the Vision Funds. Its results land in the same week that investors are questioning how much of the AI building boom is funded by debt, a question that also hangs over CoreWeave, which reports after the US close on Tuesday, and over Nvidia, which reports on November 17. One quarter of charges at one investor does not settle that argument. It does show, in audited figures, what changing a data centre plan mid-order costs.

This is not financial advice. Do your own due diligence.