Analysis of Operating Results (Full Year)

Consumer segment revenue increased by ¥130.3 billion (4.6%) year on year to ¥2,952.9 billion. Mobile revenue increased by ¥52.6 billion (3.5%) year on year. The increase mainly reflected the decrease of customer acquisition measures which are deducted from revenue and the growth in smartphone subscribers, led primarily by the Y!mobile brand. Annual average revenue per user, which had decreased ¥120 in the previous fiscal year, was flat year on year in the current fiscal year. This was due to the downward pressure from the growing number of users on the low-priced Y!mobile brand being absorbed by the increased penetration of the new price plans introduced in October 2023. Broadband revenue increased by ¥4.9 billion (1.2%) year on year. This increase was mainly due to an increase in subscribers of the SoftBank Hikari fiber-optic service^*5. Electricity revenue decreased by ¥5.7 billion (2.2%) year on year. This decrease was mainly due to decreases in subscribers of 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^*6 were ¥2,422.4 billion, an increase of ¥95.0 billion (4.1%) year on year. This increase was mainly due to increases in the cost of goods of smartphones, etc., and sales promotion expenses.

As a result, segment income increased by ¥35.2 billion (7.1%) year on year to ¥530.4 billion.

[Notes]

1. *4
   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 “Consumer segment” and “Broadband,” which included the subsidiaries, for the fiscal year ended March 31, 2024 have been retrospectively adjusted.
2. *5
   Includes subscribers of SoftBank Air
3. *6
   Operating expenses include cost of sales, selling, general and administrative expenses, and other operating income and other operating expenses.

Enterprise segment revenue increased by ¥88.5 billion (10.6%) year on year to ¥922.4 billion. Within Enterprise segment revenue, mobile revenue increased by ¥1.3 billion (0.4%) to ¥315.9 billion, fixed-line revenue decreased by ¥4.4 billion (2.6%) to ¥169.3 billion, and business solution and others revenue increased by ¥91.6 billion (26.5%) to ¥437.2 billion. The increase in mobile revenue was mainly due to an increase in telecommunications revenue from a growth in the number of subscribers to mobile services. 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' demand for digitalization, and the effect of the consolidation of Cubic Telecom Ltd.

Operating expenses were ¥752.1 billion, an increase of ¥85.0 billion (12.7%) 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 costs following the abovementioned increase in business solution and others revenue, and the absence of reversal of provisions for litigation recorded in the previous fiscal year.

As a result, segment income increased by ¥3.4 billion (2.1%) year on year to ¥170.3 billion.

[Note]

1. *7
   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.” Also, in the three months ended June 30, 2024, the Company has revised its business management categories and transferred certain products from “Mobile” and “Fixed-line” to “Business solution and others.” As a result, the figures for the “Enterprise segment” and the breakdown of all service categories in the segment revenue for the fiscal year ended March 31, 2024 have been retrospectively adjusted.

Distribution segment revenue increased by ¥242.9 billion (37.6%) year on year to ¥889.5 billion. This increase was mainly due to solid growth in ICT related products and recurring revenue products for enterprise customers such as cloud and SaaS, which have been strategic areas of focus, the effect of inter-segment transactions related to AI computing infrastructure^*8, and increased sales of PCs due to migration from Windows 10, which is reaching the end of its support.

Operating expenses were ¥859.1 billion, an increase of ¥238.7 billion (38.5%) year on year. This increase was mainly due to an increase in cost of sales associated with the increase in revenue.

As a result, segment income increased by ¥4.2 billion (16.0%) year on year to ¥30.4 billion.

[Note]

1. *8
   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.

Media & EC segment revenue increased by ¥64.0 billion (4.0%) year on year to ¥1,678.1 billion. Within Media & EC segment revenue, media revenue increased by ¥29.5 billion (4.2%) to ¥723.9 billion, commerce revenue increased by ¥20.9 billion (2.5%) to ¥846.1 billion, strategy revenue increased by ¥12.7 billion (14.5%) to ¥100.3 billion, and other revenue increased by ¥0.8 billion (12.1%) to ¥7.7 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 such as PayPay Bank Corporation.

Operating expenses were ¥1,410.8 billion, a decrease of ¥5.4 billion (0.4%) 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. and decrease in impairment losses in companies such as LY Corporation, while there were increases in sales promotion expenses, expenses for security measures, and cost of sales associated with the increase in revenue.

As a result, segment income increased by ¥69.3 billion (35.0%) year on year to ¥267.3 billion.

[Note]

1. *9
   In the three months ended December 31, 2024, the LY Group revised its management categories and transferred certain services previously categorized under “Media” to “Commerce.” Accordingly, the breakdown of “Media” and “Commerce” in the “Media & EC segment” revenue for the fiscal year ended March 31, 2024 has been restated to reflect these changes.

Financial segment revenue increased by ¥44.5 billion (19.1%) year on year to ¥277.3 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 and PayPay Card Corporation.

Operating expenses were ¥244.1 billion, an increase of ¥6.3 billion (2.7%) 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 of QR code payments and credit card services conducted by PayPay Corporation and PayPay Card Corporation, while there were cost reductions associated with optimizing fixed costs.

As a result, segment income increased by ¥38.2 billion year on year to ¥33.2 billion, transitioning this segment to profitability.