SoftBank Corp. Posts 9% Revenue Growth as Cloud, AI Business Surges 31%
The Japanese telecom posted first-quarter revenue growth across all segments, while announcing major investments in AI infrastructure and strategic partnerships with Seven&i Holdings.
Strong Start to New Midterm Plan
SoftBank Corp. delivered revenue of ¥1,814.7 billion in the first quarter of fiscal year 2027, up 9% year-on-year, as the Japanese telecommunications giant positions itself as a "provider of next-generation social infrastructure," according to President and CEO Junichi Miyakawa (earnings call, 2026-08-04).
Operating income reached ¥302.3 billion, up 4% despite a difficult comparison against prior-year one-time gains. The company overcame these headwinds through "company-wide cost improvement initiatives," Miyakawa said, achieving 27% progress toward full-year targets.
Cloud and AI Business Drives Enterprise Growth
The enterprise segment posted particularly strong results, with revenue climbing 11% to ¥260.4 billion and operating income surging 28% to ¥62.2 billion. The cloud and AI segment within enterprise delivered 31% year-on-year revenue growth, driven by AI computing infrastructure and related services.
SoftBank expects this business to "continue growing at an annual rate of approximately 30% through FY 2027," as the company enters "the monetization phase" of years of AI investment, Miyakawa said (earnings call, 2026-08-04).
The company officially launched "patching as a service" in July, providing end-to-end support for vulnerability assessment and remediation. Together with SoftBank AI Japan, SoftBank has built a team of approximately 1,000 professionals to serve around 3,000 enterprise customers.
Financial Business Accelerates
The financial segment posted 27% revenue growth to ¥115.9 billion, with operating income jumping 76% to ¥31.8 billion, primarily driven by PayPay. The company announced two major acquisitions to strengthen its financial infrastructure.
SB Payment Service will invest approximately ¥72.7 billion to acquire SP Links (formerly Sony Payment Service), combining online payment transaction volumes of roughly ¥13 trillion and positioning SoftBank "among Japan's largest online payment service providers," according to Miyakawa. Including PayPay's volume, the combined total reaches approximately ¥34 trillion.
The acquisition provides access to SP Links' credit card payment network, connected to 16 major Japanese credit card companies—a capability only three companies in Japan offer externally. SoftBank expects annual synergies of approximately ¥10 billion over the medium to long term.
Seven&i Alliance Targets Retail Transformation
On July 31, SoftBank announced a capital and business alliance with Seven&i Holdings, with SoftBank, PayPay, and Sumitomo Mitsui Card each investing ¥100 billion for a total of ¥300 billion. The alliance aims to transform Seven&i's approximately 22,000 Japanese convenience stores (and 87,000 globally) into "next-generation social infrastructure" using AI-powered humanoid robots, intelligent devices, and energy management systems.
U.S. Expansion and Capital Recycling
SoftBank established SB Neo, a 51%-owned subsidiary, to expand its cloud business in the United States starting in fiscal 2027. The company plans to leverage 10 gigawatts of power generation capacity from SB Energy to provide AI cloud services to hyperscalers.
After investing $1 billion in SB Energy during the quarter, SoftBank subsequently agreed to sell its stake for approximately $1.5 billion in July, expecting to record a gain. The company indicated it may revise full-year forecasts upward when announcing second-quarter results.
Adjusted free cash flow was negative ¥128.5 billion in the quarter, primarily due to the SB Energy investment.
This article was generated by MarginX from the earnings call on 2026-08-04. It is not investment advice.