SoftBank Group Corp. achieved a historic net profit of ¥5,002.3 billion ($31.0 billion) for the fiscal year ended March 2026, marking the first time a Japanese company has surpassed ¥5 trillion in a single period. This 333.7% increase from the previous year was predominantly due to "valuation gains" from its investment portfolio, rather than operational revenue. For instance, the SoftBank Vision Fund (SVF) business generated approximately ¥6.44 trillion ($40.0 billion) in profit, with a significant portion attributed to the increased valuation of unlisted companies like OpenAI.
Despite this record profitability, SoftBank's stock continues to trade at a substantial discount to its Net Asset Value (NAV). As of March 31, 2026, its holdings were valued at ¥48.26 trillion ($302 billion) with net debt of ¥8.21 trillion ($51 billion), resulting in an NAV of ¥40.06 trillion ($251 billion), or ¥7,029 per share. However, the share price on that day was ¥3,555, representing a nearly 49% discount to its NAV. This persistent undervaluation has led to renewed discussions among executives about taking the company private.
The company's business model has evolved into something akin to a private equity fund, where founder Masayoshi Son acts as a fund manager investing in cutting-edge technology. While SoftBank benefits from its involvement in operating businesses and strategic use of leverage, its profit is largely a mark-to-market reflection of its holdings' value, not cash flow. For FY2025, operating cash flow was negative ¥428.8 billion, a structural gap due to IFRS accounting for fair-value changes. Analysts note that this profit structure makes SoftBank's financial performance heavily reliant on the performance of key holdings, such as Arm and OpenAI.
SoftBank maintains strict risk management with a Loan to Value (LTV) ratio of 17.0% as of March 2026, well within its 25% ceiling, even with substantial debt. This strategy aims to amplify returns while controlling risk. The company's significant stake in Arm Holdings, approximately 90% post-IPO, accounts for a substantial portion of its gross asset value. The company's strategy involves being an investor and asset manager rather than a direct operator, a shift that has intensified discussions about its public listing status, given the ongoing frustration over its market valuation disconnect.
