SoftBank Posts a 7 Billion Dollar Quarterly Loss After Writing Off AI Power Equipment

SoftBank Group reported a net loss of 1.1 trillion yen, or about $7 billion, for the quarter ended September 30, a reversal from a 2.5 trillion yen profit a year earlier, the company said in earnings released Tuesday, according to a review of the filing by MLQ.ai.

The loss was driven largely by a ¥597.2 billion ($3.73 billion) write-off at SB7, a SoftBank subsidiary set up to buy power-generation equipment for U.S. AI data center projects, after the unit scrapped plans to use some of the gear it had already paid for. The charge consisted of ¥457.0 billion in non-refundable advance payments and ¥140.2 billion tied to contract changes and settlements, according to SoftBank's earnings materials.

SB7 had made $9.48 billion in advances and capacity reservations for power equipment through September 30, of which $6.6 billion remains tied to active projects, including the PORTS-Pike Technology Campus in Pike County, Ohio, an 8-gigawatt site linked to a 20-year lease SoftBank signed with OpenAI in August. SoftBank said it could still claim up to $2.1 billion in rebates over the next decade on the equipment it no longer plans to use, but has not booked that amount as an asset.

The data center write-off was not the only hit. SoftBank also recorded a combined ¥592 billion loss tied to prepaid forward contracts and share positions on Intel, after raising $7.4 billion through those contracts and then watching Intel's stock price rise past the levels at which the deals were struck, Analytics Insight reported. Quarterly financing costs more than doubled to ¥461.9 billion from ¥174.7 billion a year earlier, as SoftBank borrowed $11.87 billion through a term loan and another $10 billion through corporate bonds to fund its commitments.

"These data center projects have only just begun, and we expect that over the next five or 10 years, they will grow further and become much larger in scale." – Yoshimitsu Goto, SoftBank CFO

SoftBank's net asset value fell to ¥59.8 trillion ($380 billion) from ¥72.3 trillion in June, and its loan-to-value ratio rose to 15.9% from 13.0%, still within the company's self-imposed 25% ceiling. Revenue for the quarter rose 15.6% to ¥2,215.4 billion, and the company reported a cash position of ¥5.0 trillion ($32 billion).

Despite the loss, SoftBank shares closed about 14% higher on November 11, extending a volatile run for the stock, which has nearly halved since June as investors weigh the scale of Masayoshi Son's AI infrastructure bets against the company's balance sheet.

SoftBank is one of several major investors piling into power equipment to feed data center growth. Anthropic said last week it would spend $3.4 billion on gas turbines rather than wait for utility-grade power. SoftBank did not say whether the SB7 write-off would change its broader data center expansion plans, and it did not disclose whether further equipment write-offs are likely in coming quarters.