SoftBank Aktie

Thank you very much for waiting. We will now begin SoftBank Corporation's Investor Briefing for the fiscal year ended March 31, 2026.

First, I would like to introduce today's participants. Mr. Akiyama, Senior Vice President and CFO, Head of Finance Unit; Mr. Yuki, Head of Corporate Planning; Mr. Sasaki, Head of FP&A, Corporate Planning; Mr. Onoguchi, Head of Accounting and Finance; Mr. Kawamura, Head of Financial Strategy. Today's session is also being broadcast live via the Internet.

Now I would like to invite Mr. Akiyama to present SoftBank's consolidated financial results.

Thank you very much for your coming today. From this time, I will be the main speaker. And some participants on the stage also have changed from the previous session. I would like to introduce myself since this is my very first time.

In 1995, I joined Japan Telecom, was responsible for launching new businesses and related initiatives. And when the SoftBank purchased to Nippon Telecom, and I've been working since 2004. So I've been in this industry for 30 years and for SoftBank, almost 20 years. As you can see, it's my career. My major area is in finance, and since 2023, I've been in the Strategic Finance division. So as my life work, moving forward, I would like to pursue this career. Thank you.

Now I would like to explain. So there are 4 points as executive summaries. First, FY 2025 consolidated results. We were able to achieve full year forecast by balancing growth investments in the AI areas with revenue and profit growth. Second, we announced medium-term management plan. Driven by AI businesses, we aim record profits and continuous dividend increases.

Third, capital allocation policy. We would like to strengthen operating cash flow generation while maintaining disciplined growth investments and strengthening shareholder returns. The fourth, consolidated forecast for FY 2026. So we would like to target profit growth across all segments with Enterprise and Financial segments as core drivers.

So first topic, FY 2025 consolidated results. This is the overall view. Revenue and profit increased, exceeded all forecasts. I will explain the breakdown after this first revenue. We increased in all segments, hitting a record high of JPY 7 trillion. Especially Financial and Distribution recorded 2-digit result growth. In the Media & EC, due to the ASKUL incident, even though excluding this revenue decreased, adjusted EBITDA achieved a full year forecast with record high.

By segment, I will touch upon when I talk about operating income. So here is the operating income. As you can see, Media & EC segment other than these, 4 segments increased and achieved full year forecast. Financial segment doubled. Media & EC decreased, excluding ASKUL. So we maintained the profit.

So now I would like to touch upon by segment. First, revenue. Mobile revenue, which is our core, continued to grow and sales of goods and others recorded double-digit increase.

Next is the Consumer segment mobile revenue trend. As you can see, since FY 2023 third quarter, mobile revenue continued to grow year-on-year on an underlying basis. So there are 2 main factors. One is that customer acquisition measures were taken due to that impact. And next is the access charge was implemented. So JPY 5.7 billion was excluded. So with excluding these 2 factors, so as you can see here on the right side, in the colored chart, over the past 2.5 years, maintained year-on-year growth.

Next, the segment income for Consumer segment. We had profit increase, achieving full year forecast, especially mobile revenue increase contributed to its growth. So sales of goods and others, so JPY 47.7 billion was recorded due to the unit price improvement and electricity decrease in sales, improvement in procurement cost, profit declined due to onetime downturn in Q4.

So due to this onetime factor, so full year, it's about -- so we achieved the gross profit. So sales commissions and sales promotion expenses increased mainly due to expenses for device purchase support program and amortization expenses to capitalize sales commissions. Others due to the inflation increase and network maintenance costs. So this is a onetime factor.

We had this impact in the segment income. In the presentation by President earlier, so the forecast, so the top line will increase due to the price increase. But due to this -- as for the segment forecast, so we would like to -- we expect the stable growth.

Next is Enterprise segment. Revenue and profit both increased and achieved the full year forecast. Revenue exceeded JPY 1 trillion, especially business solutions and others revenue rose 13.2% year-on-year. Here is the business solution and others revenue, especially recurring revenue is where we focus on, and this achieved double-digit growth, rose by 10% year-on-year.

Next, Media & EC segment. Due to the ransomware attack on ASKUL, so we overcame this and all segment revenue increased. On the right side shows segment income. So this time, we have 2 factors. One is the onetime factors. The second left, so some remeasurement gain on step acquisition. The other one is impacted by ransom attack on ASKUL. These 2 factors are very unique. Therefore, we highlighted and also, we can see other business income.

Next, Financial segment. Revenue expanded steadily and segment income doubled, driven by contribution from PayPay consolidated. As you know, PayPay was listed on NASDAQ, March 2026. PayPay continues to be a consolidated subsidiary of the company after the IPO.

On Distribution segment and Others. Distribution revenue and profit increased and revenue exceeded JPY 1 trillion with a steady growth in ICT products and enterprises. And others on the right-hand side show impact from R&D investment.

Now net income. We hit record high achieved full year forecast and grew by 4.7% year-on-year and operating income growth drives this net income, and tax effect of PayPay was reflected here. And capital expenditure, what we'd like you to pay attention to is Consumer and Enterprise, which is at the bottom of the bar.

The full year forecast was JPY 340 billion and we hit in line with the forecast. And others in the bar, most of them is investment in AI. So let me touch upon that more in detail on the next slide.

Status of investment in AI computing infrastructure and AI data centers. For the last 3 years, we invested about JPY 200 billion investment. After FY '26 and onwards, we continue that investment. But also we want to enter into monetization of AI.

This slide shows primary free cash flow. We steadily generated a high level of primary free cash flow. Since we announced end-of-the-year result, we created this waterfall chart. Even after paying dividend, we generated JPY 98.1 billion of free cash flow. Using this capacity, we will invest for financial improvement and the future growth.

And net interest-bearing debt and net leverage ratio is here. Net interest-bearing debt decreased by JPY 60 billion year-on-year. Net leverage ratio declined to 2.2%. That means we have more capacity to finance.

Then balance sheet. Total assets grew by JPY 2.4 trillion, JPY 18.5 trillion of total equity. And we accumulated JPY 214 billion of total equity, and equity ratio was 16% or 1% lower than the previous year, not only having a total equity increase, we have a bigger pie, if you will, to calculate the balance sheet.

So Financial has more impact on balance sheet. So we created a balance sheet, excluding financial business, as you can see on the right-hand side. Excluding Financial domain, shareholder equity ratio was 19.0%. We will continue disclosing this balance sheet, excluding Financial domain as well.

And let me move on to operating data or KPI. The smartphone mobile subscribers grew year-on-year, hitting 32 million at the end of this fiscal year. Short-term churn, we feel impact from that. So smartphone churn rate increased by 0.16% year-on-year, reflecting continued impact of higher early churn, and we are looking at the churn rate around 1.70% or 1.71%.

Next, I want to talk about net additions. So it declined year-on-year following a shift in our acquisition strategy towards focusing on long-term users. So we would like to focus on smartphone churn rate reduction and control over acquisition costs.

Next, I want to talk about ARPU. So excluding retrospective adjustment of access charges, ARPU increased by JPY 20 (sic) [ JPY 30 ]. So consumer ARPU continued to increase. So we recently announced the price -- new price plan as for ARPU for 2026. So we expect that it will increase by [ JPY 30 ].

And next is broadband and electricity and both subscribers continue to increase.

Next, Media & EC, both EC transaction value and group total advertising revenue expanded. So since fourth quarter ASKUL also recovered. So therefore, EC transaction value increased to -- returned to positive.

Next is PayPay. PayPay standalone users increased steadily. So number of payments significantly outpaced the user growth. So it rose in payments per person.

So this is also PayPay. PayPay consolidated, the left side, as you can see, its GMV continued to outpace 20% growth. On the right side, PayPay banks deposits and loan balance sheet showed a steady growth. This is SB Payment Service. So payment service exceeded previous midterm plans business target of JPY 10 trillion in GMV, and it continued as you can see on the right side, especially driven by non-telecom double-digit growth was achieved.

This is ESG-related topics I would like to take some time later on to go through. So in fiscal year 2025, the previous midterm management plans continued are completed. So here is the review. So we revised upward twice and ultimately exceeded.

Here is the business target and its results, especially in blue, we were able to achieve 1 year ahead of schedule. So as you can see, number one, in the consumer, revenue increased for 3 consecutive years as primary cash flow, we were able to have good control over it and we achieved midterm plan targets and delivered high level of dividends for 3 years.

So this is the TSR for the past 3 years. So 50 -- nearly 55% increase during the midterm plan period.

Now let me talk about new midterm management plan. We continue to focus on both mid-term to long-term growth and shareholder returns. This shows financial targets. We aim to achieve record high operating income and net income continuously. For operating income, we want to hit JPY 1.7 trillion. And for net income, we want to hit JPY 700 billion in the 5 years' time.

With regards to shareholder returns, we aim for continuous dividend increases in line with profit growth. For the fiscal year, we want to provide JPY 8.8 per share dividend.

And going forward, as you can see on the right-hand side, in line with the profit growth, we want to return back to shareholders accordingly.

In summary, our financial targets, revenue, operating income, net income, we want to hit record high in all areas. And new midterm management plan, Enterprise segment should be a leader, a growth driver, and AI is entering into monetization phase. Enterprise segment is going to include AI.

And in the Enterprise segment, we restructured sub-segments, especially cloud and AI is the growth driver, and we want to make sure that you can pay more close attention to cloud and AI.

Midterm plan business targets are shown here. For Enterprise, we want to double cloud and AI revenue by FY '30 versus FY '25. And also, we want to double segment income by FY '30 versus FY '25 and other business targets for respective segments are shown on this slide.

Now let me talk about the capital allocation policy. Again, we want to deliver both growth and returns, and we disclosed this capital allocation idea to let you know how we want to achieve both.

First, we want to generate operating cash flow exceeding telecom-related CapEx and enhanced shareholder returns. And also, we want to execute strategic investments while balancing financial soundness and capital efficiency.

Net leverage ratio is one of the index to see the financial soundness and mid-2x range of net leverage ratio is assumption here. With that, we have a capacity of about JPY 1 trillion for investment. With this investment, we want to achieve further growth.

Let me talk more about assumptions of capital allocation. About operating income and dividend, as you can see on the left hand of the slide, we want to achieve record high performance to return back to shareholders and also maintain adjusted net leverage ratio in the mid-2x range is for our financial soundness. And also, we want to maintain consolidated adjusted ROE at around 20%.

Average ROE of Japanese companies are lower in general. But again, we want to deliver a high equity spread as much as possible. You can see comparison between FY '23 to '25 total and FY '26 to '28 total. By monetizing AI, we want to invest more, and we should be able to invest more, and we should be able to return back to shareholders.

And last but not the least, consolidated forecast for FY '26. We want to aim to achieve record high earnings and increase dividends in line with earnings growth. We want to balance growth in existing businesses and monetization of AI with businesses with the continued growth investment in new businesses, including AI, aiming to achieve revenue and profit growth. Our dividend per share is JPY 8.8, like I said earlier.

By segment, we forecast operating income like this. Consumer, while we see increase of sales related cost, but we can expect increase of income by revised price. In the Enterprise segment, again, AI and cloud should be a driver for growth.

In Financial segment, we want to expand payment function. So again, Enterprise and Financial should be a growth driver. But other segments, we also want to increase growth and income. Like Miyakawa-san explained earlier today, for the first half of this fiscal year, we expect growth in revenue, but loss of or decline of profit. But for the last part of this year, we should expect both revenue and profit growth.

Again, in the first half, absence of one-time gains and increase of sales commissions have an impact on profit in the first half, but for the last half of the year, price revisions effect should be stronger, and there should be no onetime factors and impact of sales commission and sales promotion expenses. Those are the key factors for profit growth that we expect in latter half of FY '26.

Again, in the first half of FY '26, we may be a little bit worried about performance. But for the full year, we should be able to hit both revenue and profit growth. That's all myself. And I'd like to take your questions going forward.

[Operator Instructions] Tokunaga from Daiwa Securities.

Mr. Akiyama, thank you so much for your presentation and also continued increased profit and dividend. First question, So JPY 1.7 trillion and increased by JPY 600 billion in profit. So Enterprise doubled, so JPY 200 billion. So the remaining will be covered by Consumer, Financial and Others.

So the Consumer, due to the price increase, will also contribute and the Media & EC if they achieve JPY 100 billion, it should be able to achieve that profit target though. So would you be able to explain your plan for other segments?

So as for the midterm management plan, the breakdown of the segment. So as for the Enterprise segment will be our main driver and profit margin would be higher due to the AI-related businesses.

As for the Consumer segment, due to the new price plan and ARPU also will increase, as I explained earlier, due to the cost increase, so there will be some impact on the cost increase. So consumers growth will be a bit stable.

And Media & EC will continue stable growth and the Financial segment, the payment is doing well. And finance area is highly expected for further growth. The PayPay and LY, they are both listed companies. Therefore, I cannot make solid comments here.

Appreciate your understanding. So per fiscal year, so this fiscal year, so a 6% increase, it could be a little bit lower. What is the reason for this rather lower increase? So the guidance is just conservative, you think?

As for the Enterprise segment, especially AI-related business would be the major driver for growth. So this will actually reflect on the actual profit in the next couple of years. That's why.

The second question is about the Enterprise business. One, so the 20% increase in income. So I think this guidance is very aggressive, I think. What is the reason for that? Second is about the GPU pricing. GPU price change is fluctuating.

So due to the AI-related business. So now AI is under the Enterprise segment. So that would lead to the positive impact to the profit.

So is it going to account for like 50% of the entire Enterprise business?

So I cannot give you the detailed breakdown.

So what about FY 2027 onwards? Is it because of the Crystal intelligence or what is other factors?

Well, GPUs actual operation will start and also Crystal Intelligence will be also more actively sold. So that would be the major factors as well.

Any other question from the venue? If not, let me take questions from Kikuchi-san, SMBC Nikko Securities on the Zoom.

I have 2 questions. First, growth rate of operating income and net income, difference between them. In midterm management plan, operating income increased by JPY 660 billion or so, but net income increased only by JPY 150 billion. For the fiscal year FY '26, do you expect increase of operating income or net income growth rate is smaller than operating income? Miyakawa-san earlier said that you took a conservative view, but I wonder something like increase of financial costs or maybe off balance in midterm, I wonder if you expect more income attributable to third parties as opposed to operating a parent company. So I wonder if there are any other reasons why you are very conservative and cautious about net income.

You questioned about the difference between operating income growth and net income growth. So I believe that you understand some factor is related to our structure like PayPay, which is listed, and we don't expect a huge contribution from them in terms of a consolidated bottom line.

SB OAI, for example, we don't own 100%. So income from SB OAI should be attributable to third parties and also impact from our interest rate can be expected as well. And for FY '25 and FY '26. In FY '25, we had some positive impact from tax effects, which is not there in FY '26.

So there are some uncertainties, but if you hit operating income, you usually expect a substantial net income as well. Don't you think so?

Well, we have set some assumption for calculation. And obviously, increase in bottom line is very important. So we try to increase that income as well as operating income as well.

And next question is about first half of this year and second half of this year. So one-time profit that took place last year is not going to be there, you said, and also increase of sales and general expenses like DOCOMO and KDDI, they did impairment loss of JPY 50 billion of acquisition cost. I think we already did our impairment loss in last year or some years ago. So how much impairment loss you expected to recognize if you do?

Talking about onetime impact, the revaluation gain of LY was onetime factor. If you take a look at Slide 13, we disclosed that on that slide.

LY alone?

Yes. So revaluation of LY was in the last year, but not expected this year. And talking about sales and general expenses, acquisition cost -- capitalized acquisition cost that is, has to be amortized and also support program, provision for support program of device purchase support program is also the impact.

Talking about amortization of the capitalized acquisition cost. Since last half of last year, we revised or changed our acquisition policy or acquisition strategy. So we need to recognize amortization in the last year, but going forward, we should expect lower amortization cost. So in the last -- excuse me, first half, we may need to suffer from amortization cost impairment.

But last half, we should expect lower amortization cost of acquisition costs last -- in the last years. So device purchase support program you mentioned, in the first half year, bigger than last year and smaller than last year in the last half of this fiscal year. And going forward, FY '27 and further away, of course, it depending on upgrade of users.

So should we expect lower cost to support device purchase? Is it going to be ahead this year, but next year and onwards, it's going to go down?

Yes, you're correct. We should expect some improvement next year and onwards.

And the impact from the acquisition cost. So rather than impairment loss recognition like competitors did, is it an issue of balance between impairment loss which we didn't do? Every year we perform impairment test. And for this fiscal year, we didn't see any reason why we needed to do impairment loss. So impact that I'm talking about is amortization. So how much will it be?

In terms of acquisition cost and support program, we refrain from disclosing concrete numbers. I think maybe JPY 20 billion, JPY 30 billion. Well, JPY 20 billion, JPY 30 billion, respectively, for our support program and acquisition cost.

Next, we would like to take a question also from Zoom. Masuno-san from Nomura Securities.

I have asked two questions. One is about the consumer business. ARPU will be up by JPY 160, which is the same as I expected for over 12 months, [ 41 million times ], then the major line will be about JPY 80 billion increase in revenue, then the JPY 9 billion up in profit. So are you going to spend JPY 70 billion? So just before you mentioned like JPY 20 billion to JPY 30 billion for each. So what you are planning to spend the remaining of the JPY 70 billion?

And so I believe that each will increase by JPY 12 billion -- JPY 10 billion, sorry. So next fiscal year. And there will be some impact of the price increases. So I -- if my understanding correct, that the next fiscal year, so the consumer income will increase. As for the incentives, so in FY '24 and '25, when the acquisition measurements were focused on. So therefore, that impact will be reflected and also stable in fiscal year '27 onwards.

And as for Tokusapo, so the impact by Tokusapo will be also stable in '27 and onwards. So there are some factors due to the cost increase. As for the overall segment, we can still expect to have steady growth. So as you said, it will be stable. It means that in the next fiscal year onwards. Now, it's a little too high. Therefore, it will be a little bit lower, the provision of the cost and so on.

You're talking about the fiscal '27?

Yes, slightly decreased.

The second question, the Others segment. So the recent fiscal year was in negative figure, but -- so why the negative figure expand even further? Is that because of AI-related businesses? But -- so I don't see any other businesses which will face bigger negative figures than the AI businesses. So I think AI business is the one to offset the negative figure business areas. So even you have some buffer -- so you always mention like JPY 100 billion. Last year, you also mentioned JPY 100 billion as buffer.

So regarding the others until last fiscal year, so some areas that we invested for development will shift to monetization phase. So other than AI, such as HAPS-related research and development cost is also included here. Having said that, it's not all ready for commercialization.

So even though we still have some buffer as we move forward with our businesses, there may be some we will be using, but some will not be used. So about JPY 100 billion buffer is something that we can use for the future. So we would like to maintain this much as buffer for the future development.

So regarding the storage battery, so you are collaborating with others. That's why this business is not going to face the big negative figure. Is that correct?

Yes.

Next question is Mr. Okumura from Okasan Securities.

A question -- or two questions about the midterm management plan. First, enterprise and revenue of the cloud AI should be doubled, you said. And as a service, AI data center, sovereign cloud and in Crystal Intelligence, I think depending on the services, when you can expect our revenue or profit is different. So again, which of the sub-segments that you expect revenue earlier than others, for example, to hit JPY 200 billion?

I think your question about the growth and -- or growth speed of cloud AI. As you said, we want to leverage GPUs that we have been building up, and Crystal Intelligence are expected the growth driver. And FY '27, somebody asked about the gap of income between FY '26 and '27. We will begin monetization phase in FY '26, but it will be up and running in full scale in FY '27. So that's our assumption.

Crystal Intelligence, for example, I think usage fee is JPY 30 billion or something. So I wonder if that's an assumption or, again, how much contribution expect from different subsegments?

Well, for Crystal Intelligence, in midterm management plan, we see crystal intelligence conservatively. So you don't expect a huge contribution from Crystal Intelligence in the midterm business plan.

And next is about the dividend. So it's great that you increase -- you plan to increase dividend in the long run. But EPS, how did you calculate EPS in terms of relation to net income?

Dividend ratio is -- it looks downward trend, but I don't know how you calculated earnings per share.

As you can see, payout ratio is a little bit going down, but as we mentioned in the capital allocation section, we want to achieve both growth and return. So that's the balance that we look at in calculating and expecting earnings per share.

Payout ratio. What would be the ideal payout ratio is something that we still have discussion internally. But in FY '30, I think this kind of balance should be good as you see on the slide.

So balance between EPS and net income, depending on cash flow, is it possible that you paid dividend more than shown here?

So your question is if we have more cash, are we prepared to pay more dividend?

Yes. For example, even though net income was JPY 700 billion, you may pay dividend as much as JPY 10, or those numbers you've shown on the slide are fixed?

Well, in theory, if there's nothing to invest, we should return to shareholders. But as you can see, we continue -- we want to continue investment for future growth. So I don't think that we have a huge bandwidth to increase our dividend if we don't have enough net income.

Thank you very much. [Operator Instructions] This concludes the Q&A session. That concludes today's investor briefing for the fiscal year ended March 31, 2026. A recording of today's session will be made available on demand on our website at a later time. Thank you very much for joining us today for the fiscal year ended March 31, 2026 Investor Briefing.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you very much for your patience. We will now begin SoftBank Corp's earnings results presentation for the fiscal year ended March 31, 2026. First, I'd like to introduce today's participants. Mr. Shimba, Chairman of the Board; Mr. Miyakawa, President and CEO; Mr. Takashima, Senior Executive Vice President and COO, Consumer Business Head; Mr. Sakurai, Senior Executive Vice President and COO, Enterprise Business Head; Mr. Akiyama, Senior Vice President and CFO.

Today's presentation is being broadcast live via the Internet. Now I'd like to invite Mr. Miyakawa to present the overview of SoftBank's consolidated results and business operations.

My name is Miyakawa. Thank you very much for joining us today. Today, I'd like to cover not only our FY '25 financial results, but also a review of our previous midterm management plan and an explanation of our new medium-term management plan. So the presentation will be slightly longer than usual, but I would appreciate your attention through to the end. First, I will explain our FY '25 consolidated results. Revenue increased 8% year-on-year to JPY 7,038.7 billion, reaching a record high. We thought that exceeding JPY 7 trillion might be pushed back to next fiscal year, but we were able to achieve to reach JPY 7 trillion.

Revenue increased in all segments. Both Enterprise segment and Distribution segment exceeded JPY 1 trillion for the first time. This means we now have 4 businesses within the group with revenue on the scale of JPY 1 trillion. Operating income increased 5% year-on-year to JPY 1,042.6 billion. Looking at operating income by segment, Media & EC recorded a decline due to the impact of the ransomware attack at ASCO, which had an impact of more than JPY 30 billion. However, all other segments posted a profit growth. Enterprise and Distribution achieved double-digit growth, while Financial more than doubled. Net income increased 5% year-on-year to JPY 550.8 billion, reaching a record high. Primary free cash flow reached a record high of JPY 633.6 billion. We continued to generate a high level of primary free cash flow.

This is a summary of our consolidated results. As you can see, we achieved both revenue and profit growth. Regarding dividends, we plan to pay JPY 8.6 per share, in line with our forecast at the beginning of the fiscal year.

Next, let me look back, our previous medium-term management plan, which we announced in May 2023. First, operating income during the previous medium-term management plan. As you can see, we exceeded our initial forecast for 3 consecutive fiscal years. The same was true for net income. We exceeded our initial forecast for 3 consecutive fiscal years. FY '25 was the target year to hit the financial goals under the previous medium-term management plan, and we were able to exceed those targets. As shown here, we also achieved all our business targets by segments.

CapEx was affected by the weaker yen and inflation. Even so, on a 3-year average basis, we were able to keep CapEx below JPY 330 billion per year level. For primary free cash flow as well, we consistently generated more than JPY 600 billion annually. Regarding dividends, we maintained JPY 8.6 per share and continued to provide a high level of shareholder returns. For our nonfinancial target, the effective renewable energy ratio, we achieved our FY '25 target 1 year ahead of schedule. The FY 2030 target will be replaced with the nonfinancial targets under the new medium-term management plan. I will explain this later.

To summarize the previous medium-term management plan, we achieved all our financial and nonfinancial targets. During this plan, the business environment changed dramatically, including price reductions, war, weaker yen and inflation. However, we managed to overcome these challenges and deliver results. Looking at this from a 10-year cycle perspective, because this 3-year period included price reductions, we honestly expected management conditions to be extremely difficult. However, we were able to avoid any deterioration, achieve a V-shaped recovery and deliver record high profit. This has given us great confidence. In the second half of the cycle, we intend to take a more proactive approach and move forward aggressively.

From here, I will explain our next medium-term management plan. First, let me start with changes in the business environment. Looking back over the past 5 years with the emergence of ChatGPT and Gemini, it has been a period of training where AI models. In other words, AI brains were developed around the world. We expect this development competition to continue going forward. At the same time, over the next 5 years, we believe the key will be how to implement AI in society and actually make use of it. In other words, inference will become increasingly important.

If we look ahead in the future, autonomous vehicles and humanoid robots will become widely adopted as services. These systems will operate by making real-time inferences such as avoiding obstacles, predicting risks and understanding their surroundings and making decisions accordingly. We also expect that when these robots are not in use, such as during charging, they will be connected to AI data centers and will continue to learn and improve automatically on a daily basis. In other words, AI will be used everywhere in daily life, and we are entering an era in which inference becomes central to AI.

With this future in mind, over the past 5 years we have been building next-generation social infrastructure from both hardware and software perspectives. Under the next medium-term management plan, we will move into the phase of implementing AI in society on top of this infrastructure. Until now, we have been making upfront investments in the AI domain, and we are now entering the phase of monetization.

From here, I will explain the specific details of the medium-term management plan. This is the 10-year plan we presented 5 years ago. The current medium-term management plan represents Phase 3 of the road map toward realizing our long-term vision. We have been promoting our Beyond Carrier strategy as our growth strategy. With the announcement of the new medium-term management plan, we've revised this framework.

Telecommunications will continue to serve as the foundational infrastructure. On top of that, AI infrastructure and AI services will be added. Furthermore, the Financial and Media & EC layers will be built on top of this structure. In addition to these existing businesses, we will also challenge new business areas under the keywords, AX and GX. Going forward, we will provide detailed explanations of each business as preparations are completed. On this structure, all businesses will evolve through integration with AI.

We will activate the potential of AI across all businesses and promote its implementation in society. We call this strategy Activate AI for Society, and we will drive it forward. The positioning of this medium-term management plan is to realize our long-term vision through the promotion of Activate AI and to enhance corporate value. In addition, we've revised our materiality to enhance corporate value and contribute to the realization of a sustainable society. Under this new medium-term management plan, we aim to achieve consolidated operating income of JPY 1.7 trillion in FY 2030. We'll target a compound annual growth rate of 10% and continue to aim for record high profits.

Our target for net income is JPY 700 billion in FY 2030. We'll also aim to continuously achieve record high net income. It could be a little bit lower in gross worth, but this is related to dividend. So we make it as a conservative target. We will aim to continuously achieve record high net income.

Regarding dividends, over the past 5 years we prioritized investment for growth and therefore kept dividends flat. Starting in FY 2026, we plan to increase the dividend to JPY 8.8 per share and aim to continue increasing dividends over the following 5 years. As a reference, we are considering JPY 9 per share when net income reaches JPY 600 billion and JPY 10 per share when net income reaches JPY 700 billion. If profits exceed expectations, we'll also consider additional shareholder returns.

The key driver of performance under this medium-term management plan will be the Enterprise segment. So I will begin by explaining our strategy for this segment. To make our Enterprise growth strategy easier for investors to understand, we have decided to revise our segment structure. Previously, the following businesses were included in others as they were in the investment phase, AI-related software development in cloud, AI computing infrastructure and AI data centers. Now that these businesses are entering into the commercialization phase, we have integrated them into the Enterprise segment. We have also revised our subsegment disclosure.

We will newly disclose the cloud and AI domain, which we would like investors to focus on going forward. This includes key growth areas such as AI computing infrastructure, AI data centers, sovereign cloud and Cristal intelligence and security. We aim to significantly expand enterprise revenue with cloud and AI as the main growth driver. Currently, revenue stands at approximately JPY 245.5 billion, mainly from cloud services provided by Microsoft and Google. We plan to double this driven by AI data centers and our own cloud business.

As for operating income, we have achieved a compound annual growth rate of around 10% over the past 5 years. Going forward, we plan to increase this to 15% and aim to double operating income compared to FY '25. As shown here, our enterprise growth strategy is to expand solutions business while maintaining stable growth in telecommunications and significantly grow cloud and AI.

From here, I will explain how we plan to expand this cloud and AI business. First, the AI computing infrastructure we have been investing in with more than 10,000 GPUs will enter into monetization phase starting this fiscal year. Next, the Tomakomai AI data center is scheduled to begin operations in FY '26. It will adopt a modular container-based structure, allowing us to expand capacity in line with demand. We will start with a scale of 50 megawatts and aim to expand to 300 megawatts. The Sakai AI data center is scheduled to begin operations in FY '27. Due to its larger scale, the time line has been slightly extended and it will start at approximately 140 megawatts.

By combining these AI data centers with our cloud services, including Infrinia, we will provide AI services to approximately 3,000 enterprise customers with whom we already have relationships across 15 critical infrastructure sectors. In addition, we will drive monetization by leveraging our in-house LLM Sarashina, training it with industry-specific and company-specific data and providing tailored models. In addition, Cristal intelligence is now ready to launch. As previously announced, preparations for the service rollout are progressing steadily.

Finally, let me clarify the positioning of our cloud AI services. This chart shows company size on the vertical axis and the data sensitivity on the horizontal axis. For customers handling highly sensitive data, we will propose sovereign cloud solutions regardless of company size, providing a secure environment for data utilization. For larger enterprises, we will offer Cristal intelligence to support their business transformation. In addition, under our multi-AI, multi-cloud approach, we will provide a wide range of cloud and AI services tailored to customer needs. We will deliver these services in an end-to-end manner based on company size and data sensitivity to meet all customer requirements.

Next, I will explain the Consumer segment. The business target for the Consumer segment in FY 2030 is to achieve continued growth in telecommunication service revenue. We also aim to achieve steady growth in operating income. To support this continued growth, we will focus on expanding adoption of the new pricing plans announced last month, leveraging our group ecosystems and strengthening engagement with long-term users. Looking ahead to 2030, we will further evolve our consumer services. Currently, our services are centered on smartphone apps. Going forward, however, AI with lifelong memory will stay close to users and support all aspects of their daily lives.

Customer touch point will also evolve. Today, customer interactions mainly focus on smartphones, broadband, electricity services and the group ecosystem. By utilizing AI to improve efficiency, we will create more time to propose new AI-driven lifestyles to our customers. Our network will also continue to evolve towards 2030. Originally, networks were designed to connect voice communications. With the spread of the Internet, they evolved into infrastructure for transporting data, in other words, bits.

In the coming era of coexistence with AI, infrastructure capable of transporting tokens will become essential. Over the next 5 years, we will complete the evolution toward a next-generation infrastructure. Specifically, as shown on the left, we will build an end-to-end network from the brain data center to devices where AI autonomously optimizes the entire system, enabling us to provide the optimal service to all user segments.

This is a summary slide. The Consumer segment will further evolve beyond its traditional smartphone-centric model. Building on the business foundations we have established, we will transform into an AI platform that supports every aspect of people's daily lives and aim for further growth.

Next, I will explain the financial segment. The goal of the Financial segment is to achieve continued growth in both the payments domain and financial services. We were listed on the NASDAQ market on March 12. Taking this as an opportunity, we'll pursue global business expansion. At the same time, we'll continue to launch new services in Japan. As part of our initiatives for further growth in the payments domain, we aim to strengthen online payments and expand credit-based payments to grow interest income.

In financial services, we'll focus on growing interest income, particularly through lending to small- and medium-sized enterprises. In addition, we'll further enhance collaboration within the group, including initiatives such as Pay-toku and the joint rollout of payment terminals. In February, we entered into a strategic partnership agreement with Visa centered on the payments business. Through this partnership, we will strengthen collaboration in Japan and also take on the challenge of expanding globally.

Next, I'll explain the Media & EC segment. In the Media & EC segment, there was an impact of JPY 32.6 billion from the ransomware incident at ASCO, resulting in a 7% decline in profit. However, excluding this impact, profit increased by 6%. As this impact will no longer continue into this fiscal year, we expect profit growth of around 10%. Going forward, our business objective is to drive both enhancement of customer experience and business growth through AI agents. So last Friday, Idezawa, CEO of LY Corporation explained, "We expect to leverage our advantageous position of having over 100 million users in Japan to drive further growth."

From here, I will discuss our initiatives for the mid- to long-term growth. We are building AI infrastructure that will be essential in a society where humans and AI coexist. To achieve this, we are working backward from the components required. At the core of this initiative is the AI data center in Sakai, Osaka. This slide shows the overall concept on a site of approximately 450,000 square meters equivalent to about 10 Tokyo domes. We plan to build an AX factory and the GX factory centered around an AI data center.

First, the AX factory will promote projects as shown here. Investment in the 4-story AI data center is already included in the medium-term management plan. This AI data center is planned to have a computing capacity of 110 exaflops, equivalent to approximately 100,000 H200 GPUs of NVIDIA with a receiving power capacity of around 140 megawatts. We are proceeding with the construction, targeting completion in FY '27.

As for the GX factory, in addition to manufacturing next generation batteries, we also plan to manufacture next generation solar cells. First, I will explain the innovative batteries, which are already included in the medium-term management plan. We issued a press release earlier today. The technology we are developing is the zinc-halogen battery, which integrates advanced technologies derived from both liquid and solid battery systems. This is the first technology of its kind in the world to reach a commercial level. This zinc-halogen battery uses pure water as its electrolyte, making it a nonflammable structure.

Compared with lithium batteries, it offers significantly higher safety. In addition, its energy efficiency is more than 10% higher than that of the latest lithium batteries projected for 2027, making it a highly performing product. We will not only develop and manufacture battery cells, but also handle packaging it energy storage systems and domestic production. Furthermore, we will provide an energy management system to control these storage systems. This system visualizes power supply and demand and uses AI developed in-house based on approximately 10 years of experience in the power business to perform highly accurate demand forecasting. We will promote the entire value chain of the domestic battery business on an end-to-end basis from development to domestic manufacturing.

In terms of product lineup, in addition to residential use to the left, we are preparing products for commercial and grid scale applications. Regarding our production schedule, we will begin construction of a mega factory for battery cell production this fiscal year and start production of 100-megawatt hour in FY '27. We will also begin construction of a gigafactory in FY '27 with plans to expand capacity to 1 gigawatt hour in FY '28 and 2 gigawatt hour in FY '29. The batteries we manufacture will be deployed sequentially at our own AI data centers and mobile base stations to address our internal demand before expanding to customers.

We will also expand into the grid scale market where demand is strong. In addition, leveraging our own sales channels, we will provide these solutions to both residential and corporate customers. Over the long term, we aim to monetize this business globally, targeting revenue on the scale of several hundred billion yen. Until now, our growth has been primarily driven by domestic demand. But going forward, we aim to become a company that generates foreign currency earnings and evolve into an indispensable company for Japan.

Next, I'll explain our ESG management. In addition to the business growth driven by AI that I have described so far, we'll continue to promote initiatives that contribute to the realization of a sustainable society. In this midterm management plan, even as we expand AI data centers and related businesses, we are committed to maintaining our target of achieving carbon neutrality by FY 2030. Since May 2021, we've set a target of achieving carbon neutrality by FY 2030 and have been working to reduce greenhouse gas emissions. However, as I mentioned earlier, with the full-scale expansion of AI data centers going forward, greenhouse gas emissions will inevitably increase as we aim to achieve both enhancement of corporate value and sustainable society. We will combine initiatives such as our next-generation batteries and our in-house energy management system to offset this increase and continue to uphold our carbon neutrality target.

Next, I'll explain our approach to capital allocation. With the announcement of this new midterm management plan, we have clarified our approach to capital allocation. This chart shows the cumulative figures for the 3 years from FY 2026 to FY 2028. First, operating cash flow generated from the Consumer and Enterprise segments, operating cash flow, I mean, is expected, supported by stable revenue from telecommunications as well as monetization of AI data centers. That is expected to total of JPY 3.4 trillion. Using this cash as a source, we will invest approximately JPY 500 billion annually in capital expenditures while also continuing to increase dividends.

To further enhance corporate value, we'll pursue both financial soundness and capital efficiency while executing JPY 1 trillion in strategic investments. At this stage, JPY 0.3 trillion has already been committed, including, as you can see on the right top, the Sakai data center and the initial 50-megawatt phase of the Tomakomai data center and innovative battery production lines. For the remaining JPY 0.7 trillion, we will make investment decisions carefully based on returns.

Even after executing these investments, we expect to maintain our financial discipline, keeping our leverage ratio in the mid-2x range. In addition, from a capital efficiency perspective, we will manage the business with an awareness of achieving an ROE of around 20%. We will continue to focus on both growth and shareholder returns as we aim to maximize corporate value.

Next, I will explain our forecast for FY 2026. Our FY 2026 forecast is as shown here. We are planning for both revenue and profit growth again this fiscal year. Operating income by segment is as shown here. The Enterprise and Financial segments are expected to grow by around 20% and will drive overall performance. We've also allocated approximately JPY 100 billion for others and growth investments, which we will utilize effectively to enhance corporate value.

Let me briefly comment on our quarterly outlook for consolidated operating income. In the previous fiscal year on LINE Yahoo!, there was gains from revaluation associated with the consolidation of LINE MAN and Bank Taiwan. These gains will not recur this fiscal year. In addition, in the Consumer segment, there will be an impact from deferred acquisition costs, which is noncash, but will act as a downward pressure on profit. As a result, we expect a year-on-year decline in profit in the first half. From the second half however, as these factors subside, we expect steady profit growth, leading to full year profit growth overall.

Finally, let me summarize today's presentation. We will promote our growth strategy, Activate AI for Society, and aim to maximize corporate value. Our financial targets for FY 2030 are operating income of JPY 1.7 trillion and net income of JPY 700 billion, and we will continue striving to achieve record high results. As for nonfinancial targets, we will maintain our commitment to achieving carbon neutrality by FY 2030. Regarding shareholder returns, over the next 5 years we aim to continue increasing dividends.

This concludes my presentation. Thank you very much for your attention.

[Operator Instructions]

[ Yamamoto ] from [ Nikkei Paper ]. I have 2 questions. First, about the new midterm management plan, top line of Consumer business and the target of acquisition are not presented. I wonder why. And still, how much growth you can expect in the Consumer business, which is currently facing challenge? And I think for the next 5 years will be the term of active investment. So how do you maintain financial discipline while making the proactive investment in the next 5 years or so?

Thank you for your question. About Consumer business, showing the top line you said, in the past we talked about the net additions and the revenue, those were the way we presented for the top line of the Consumer business. But as you said, Consumer business is facing challenges while we are looking at the reduction of population and so-called hopping users. So looking ahead 5 years, it's very difficult to predict what will happen in the Consumer business market. But we have a pride to continuously grow revenue and profit, which is true to all segments. So all we need to do is to deliver results every year.

Along with the line we presented today to talk about our thoughts we have Mr. Takashima, Head of Consumer Business. So let me introduce a new COO and Head of Consumer Business.

Thank you, Miyakawa-san, for the introduction. My name is Takashima, very nice to meet you. Like Mr. Miyakawa said, again, we are facing a very challenging market, but I believe that we are taking a proactive approach to deal with so-called hopping users. But we make sure that we will hit both revenue and profit growth. So that's for Consumer business question. And next, investment in AI and going forward and financial discipline. There is a strong demand for data centers. And I mentioned that we invested in over 100,000 GPUs, and these capacities have been already sold out. About 100,000 in Sakai and more capacity in Tomakomai will be available.

From global standard, it's not huge in terms of capacity. But since the can is slow, we have been carefully thinking when we will start taking acceleration. Now we are looking at offtakers. So we are now planning the next investment plan. So we are currently looking at so-called neoCloud. There are a lot of companies doing neoCloud. Some buy land and build data centers and others offer just hardware or buildings, so hyperscalers can bring in their computing infrastructure in there. But the margin is very small in those businesses. So chip and system is going to be built in our own data centers and to be offered as a cloud service. That's something that we are beginning to roll out. So that approach, we will continue to look ahead.

In terms of 1 gig, if you invest in chip and system, it will cost JPY 6 trillion, JPY 7 trillion of capital expenditure. If it's 3 gig, it will cost us about JPY 20 trillion in terms of investment. We know that it's going to be necessary in Japan, but doing by own ourselves will be very challenging. So we are open to either on balance or off balance. As our financial strategy, again, regardless of on balance or off balance, we will build whatever is needed. So I hope that I answered your question.

Next question.

I'm [ Rai ] from [ Diamond ]. Two questions. First, about AI-related investment. In the presentation, [ just before 26 to 30 ], you will be investing [ JPY 1 trillion ] and then JPY 300 billion will be invested for Tomakomai and Sakai. What about the remaining of the investment? Can you break down a bit? Would you add investment in Sakai more? Would you be able to share more information on that?

And so JPY 1 trillion for AI-related investment, I personally feel it's a little too small. So you -- it will be around JPY 6 trillion to JPY 7 trillion fully invested in the data centers you mentioned, but you will be watching off balance and on balance, so which I understand, but how much do you really think that will be actually needed will be JPY 6 trillion or JPY 7 trillion, but you are planning to invest around JPY 1 trillion. What is the scale of the investment related to AI? That's my first question.

So let me explain slowly. So JPY 700 billion at Sakai, AX factory and GX factory will be constructed, as I mentioned. The technologies are in line. So next is the production level. We are now doing some verification. When it is feasible in the business-wise, then we will be discussing in the executive level, but there will be a couple of hundred billion or so. So so far, we were spending JPY 300 billion or so for the telecommunications operations areas. And so I recently calculate and realize that so this is more efficient.

So looking at Sakai, the maximum CapEx investment, we expect another JPY 100 billion or so would be sufficient to cover. But the data center is the largest one. So in Osaka case, even though we prepared the structure, I mentioned that we'll be using 100,000 GPUs in Sakai, so the bottleneck is the power supply. So therefore, considering the limitation of the power supply, and so we need to invest in the power supply related for another JPY 200 billion or JPY 300 billion or so. And after 2030, extra power supply will not be provided.

So another breakdown is that we are also thinking about M&A in the future. Therefore, we expect some buffer in our investment budget as well. So regarding on balance and off balance, so when there is land and structure, that is a conventional data center, which is not a big business to do. So for 1 gigawatt, I said JPY 6 trillion to JPY 7 trillion of investment may need it. And under that JPY 2 trillion will be for land and structure. The remaining -- the biggest one is for the chips. And recently, the price of memories is getting higher and now tripled recently. So this price would go increase further. So just to procure chips and memories, we may face the shortage of the budget.

But these things will be most likely to be prepared by customers. And we are not going to have the exclusivity with a certain customer for our data centers. So when we -- so we also provide cloud services. And also Infrinia that we developed. So probably among JPY 700 billion, what we have to bear will be a couple of JPY 10 billion or so. So we also include some buffer in this figure. We may do some M&A in the future, but we are now -- we can now say that we have like JPY 300 billion or so.

Just to confirm what you said, GPUs and memory I had thought that you would be investing in those areas as well. So you are not going after the [ Gaffer ] model. Is that correct?

Two ways to think about that. One is that in order for us to realize next-generation infrastructure, so the features needed will be covered under our investment. So that's why we had invested in those. But moving forward for cloud business, even though we deal with the customers directly, GPUs will be owned by our customers themselves. Then we were just providing space for them to set their GPUs. So there are many different ways. So among JPY 500 billion of CapEx annually, we will be doing investment as needed. But as for cloud business, we believe there will be case by case. So I think there will be more cases for off balance.

That being said, so JPY 1.5 trillion, as you mentioned in the bottom, so this -- under this memory and chips are included?

So this is just a case by case. It could be included in case.

And the second question is that the participating in the business in the cells manufacturing. So Japanese companies are less investing in the lithium batteries these days. So what is the reason why you made a decision to manufacture the cells? I think it's better off to procure from others. It could be a risk, I believe. So what is the reason for participating in the cell industry?

So what we would like to do is to visualize power demand and supply in Japan. To realize this, we have been making software and then started operating with AI. So now we have foundation. So in the Tomakomai data center, and so the first generation of the system is going to be implemented. So whether we could control to visualize power supply and demand, we would like to conduct testing. So we would like to make the power -- domestic power supply and demand visualize.

So looking at the cost of the cells because Japan is mostly relying on importing. So globally, not many countries have realized the importance of this. So we would like to take initiative to verify this. And when we look at -- looking at the lithium batteries, the most raw materials are imported from China. If something happens to this international relationship or environment, we will not be able to achieve our aim. So we are able to procure all the necessary materials for this new innovative battery. So in the next 10 or 20 years ahead, the domestic batteries made from domestic materials and domestically manufactured batteries will be one of the models for the future in Japan.

So this is what I want to achieve ultimately, if we can improve our capacity where we can even export those overseas. So for now, our company is relying on our domestic demand. So such company, if we try to keep growing further, it will be much burden on our customers. So it will be a new challenge for us. So within our capacity, we would like to keep challenging.

Going back to my previous question about AI server manufacturing, are you considering that as well?

Well, it's been announced, but we have been thinking about that. However, nothing has been materialized yet. Therefore, I want to refrain from making any solid comment here. Our group company, Arm is challenging chips manufacturing, also Rapidus, where we invest in, also trying to manufacture chips. So only manufacturing chips doesn't call any demand. So someone has to play a role to roll out those products to the market. So we have relationships with those partner companies. We may have opportunities. Therefore, we have started considering that as well, but nothing has been decided.

Any other questions from the audience in the venue?

[ Onno ] from [ Yomiri Newspaper ]. I also have a question about battery. What's the significant of doing in Sakai? You mentioned that you wanted AI factory in Sakai. Are you building a manufacturing line based on assumption that AI factory will be the facility over there? In the context of manufacturing sector in Japan, are you going to create a manufacturing business based on an assumption that AI factory is going to be used?

I mentioned before that industrial complex, that's the concept I mentioned. And industries benefit from AI can grow in the next generation. That's the concept that I mentioned before and that's the concept that I want to materialize in Sakai. On the whole floor, we want to build GPUs to build an AI brain, if you will. That's something that we are working on. But Sakai is huge. Then I think 7 out of 8 can be empty because it's too huge. That's something that we were afraid of. Battery will be the beginning of Sakai's launch. But by end of this fiscal year, I think that we can talk about more different industries. We are looking at getting it into good shape.

But in the future, like industry factories in Japan over the coastal line. And if we have AI brain in those previous industrial complex and the new industries are reborn by taking advantage of AI is something that we can build as a business model for the future Japan. So taking Sakai as a trigger or beginning, we want to try a lot of new things.

Talking about the battery, so the expertise that you have built in creating batteries, are you going to offer or sell to other companies?

Well, in terms of building cells, we want to build expertise in materials and also chemical reaction or chemicals. We don't expect them to evolve significantly, but robots can be utilized to build a lot of things by using AI brain. So this can be a potential business model going forward. So I wonder if manufacturing is good, agriculture is good or fishery is good. Whenever industries are close to AI, I believe that they will grow further.

Next question.

[ Jaima ] from [ Toyo Keizai ]. Two questions about cloud AI. So your strategy against the hyperscalers the other day, so you also announced with the Microsoft the other day. And your source will be linked to Microsoft. And how -- what is the background of reaching this agreement with Microsoft or announcement partnership with the Microsoft? Also the sovereign cloud collaboration with Oracle announced recently. And so what is your thought of the strategy of collaboration with those hyperscalers.

And the next question is about in the AI infrastructure area. So NTT KDDI also announced about the distributed AI data centers recently. So what is your thought on the midterm perspective? Where will be the competitive area? So what is the uniqueness of your offering?

To answer your first question, the collaboration with hyperscalers. Now B2B is mainly used for -- used by AI. And Japanese companies are to use AI more and more in the future. So there are many different areas of AI, but -- so there has been various discussions about data sovereignty. So I have been also emphasizing on the data sovereignty. So now I see some needs or demand coming. So since we do -- since there is an environment that we have, that's why they have been contacting us. But in the future, they will be having their own environment. In the near future, there will be also a competition as well.

Regarding the Oracle, same as I just explained. However, the contract type is very different from with Microsoft. Therefore, with Oracle, like so the environment is different from Microsoft or Google. But sovereign data center or sovereign AI is major keywords. This has been penetrated up to now.

To answer your second question about competition in Japan. So distributed AI data centers have been discussed over past 5 years and it has been quite active. And I am not talking about something special. So other carriers also being building AI data centers. Even so, AI data centers, the number of AI data centers is not enough in Japan. So it's even less than half of what's available in the U.S. So there will be more companies doing this. So that will also improve the competition among us in Japan. So I think that will boost our entire environment. So I think it's a good thing.

So what is the uniqueness advantages of SoftBank?

So the data center are providing with bare metal and the neoCloud is different. So like the neoCloud, like CoreWeave is doing. So it's very rare in the world. So our software called Infrinia, this is OS, and we have invested and then developed ahead of the others.

In the interest of time, we're going to take one last question from the venue.

[ Chikiguchi ] from [ Ketai Watch ]. First question is about the CapEx. You talked a lot about investment in AI, but telecom and Enterprise, you mentioned that over JPY 330 billion level of CapEx for the last few years, and it will go up to JPY 440 billion level something. So in what areas you plan to invest in whether it be 6G or AI-RAN?

First, submarine cables. I think JPY 40 billion every year is what we are anticipating because there's a huge demand for submarine cables. So we want to invest proactively. And also, we need to build a very robust network that distributed base stations and cell sites, and we want to enhance existing network, which requires investment as well.

And talking about AI-RAN, I think we want to roll out a little bit further ahead. We are preparing for that. But in our concept of capital allocation, we don't have a huge investment in AI-RAN in our capital allocation concept. Investment AI-RAN is something is to be used for us to use on our own as opposed to source from external vendors.

Next question is about LINEMO started when you became CEO, it's been 5 years. So may I ask you about LINEMO, including customer base, customer numbers, price plans, et cetera. So going forward, what's your plan for LINEMO? Just like a SoftBank brand, are you thinking about increasing the price for LINEMO? Do you have any plans or ideas?

Well, the most important point from you is whether we have plan to increase the price? No. Because this is an online dedicated brand. So if we only focus on our profit, then we would like to be a little bit more patient in terms of increasing the price for LINEMO. The future of LINEMO. Well, since Chairman, Mr. Shimba is here. He has been in the consumer business for so long.

Well, thank you. This is Shimba. Well, nothing has been fixed for now as a strategy for -- so our mobile business has been 20 years, and it's been 5 years since we launched LINEMO. So in the AI era, new -- as a new life producer, we would like to reflect the voice of our customers. And then with the new COOs, we would like to -- what is the best -- what the best for us. We would like to make the solid plan. But as of today, as CEO Miyakawa mentioned that there is nothing fixed as of today.

So in April, the new price plan was announced. So the network system will have some -- need some cost as well. And even though you said that you're not going to increase the price for LINEMO in the meantime, but to increase the revenue and profit, do you have any other plans? And what is your thought on increasing the price this time?

LINEMO is the brand that we do not see a big increase in the number of subscribers yet. Our 2 big brands, SoftBank and Yahoo! are our major brands. So we have been discussing what would be the best way to do, and we need -- we are considering that as well. And as for price increase, we tried not to increase the price to the very last minute, but also looking at other carriers' actions. But due to the inflation, we came to the point where we had to give up on not increasing the price ultimately. So of course, we had to do our best, but it was our very last throw to increase the price.

But are we going to do the same with LINEMO? That has -- nothing has been decided with LINEMO yet. But we may be discussing increasing the price of LINEMO in the future or not, it could be sometime far future.

That was the last question from the venue. Next, we'd like to take questions from participants via the Zoom. In the interest of time, we want to take only one person from Zoom. Masuno-san from Nomura Securities.

First, for the FY '26 and next midterm management plan. First, in the next year, I think JPY 100 billion can be expected in terms of revenue growth and JPY 100 billion of loss in other segment. But Enterprise is in good shape. So what do you think about JPY 100 billion loss in others?

For next fiscal year, I'm going to ask CFO, new CFO, Akiyama, to talk about the numbers in next fiscal year. For this fiscal year, because of the financial treatment of acquisition cost, we may have to do or go slowly in the first half of this fiscal year, but we expect numbers coming up next year. About JPY 100 billion of R&D, for example, we expect to use some of them, but we are not going to probably use up JPY 100 billion, but you never know until you close the books. So we want to run the business conservatively. That's why we budget JPY 100 billion of -- Akiyama-san, you may want to add color.

Impact from revised price plan. So maybe we are looking at about JPY 100 billion in this fiscal year. But next year, I think we can deliver the numbers that you mentioned. The latter half of FY '26, we expect incurring less cost. So I think we can deliver more numbers in next fiscal year. About the loss in other sector, JPY 100 billion of loss. Since we want to have a buffer for proactive investment, we expect JPY 100 billion of loss in other sector.

Next question is about next midterm management plan. I think JPY 1.5 trillion of pretax and Finance, Media EC, JPY 600 billion. The remaining JPY 900 billion will be your own. So I think pretax profit will be JPY 600 billion. But I wonder the relationship between net income and dividend, JPY 600 billion for JPY 9 per share or JPY 700 billion for JPY 10 per share you mentioned.

So we want to increase -- excuse me, dividend continuously for the next 5 years. So again, like I said, net income is directly connected to dividend. We didn't want to say too huge numbers. JPY 800 billion you mentioned, JPY 800 billion, we want to consider JPY 11 per share if we hit net income of JPY 800 billion. Of course, we want to achieve higher than JPY 800 billion as net income.

In the past, SoftBank has not ended the year underperforming against the beginning of the year target. So I don't think that we should disclose numbers that we are not confident with achieving for medium-term management plan. So whether JPY 800 billion, JPY 900 billion, you never know until you try. But again, we want to hit definitely JPY 700 billion of net income to deliver 20 dividend to shareholders.

Thank you so much. This concludes Q&A session. We would like to conclude today's earnings results presentation for the fiscal year ended March 31, 2026. A recording of today's session will be available on demand on our website at a later time today. Thank you once again for joining us today. We kindly ask for your cooperation.

Thank you for waiting. We will now begin the investor meeting for the third quarter of the fiscal year 2026 (sic) [ 2025 ] hosted by SoftBank Corp. Let me start by introducing today's speakers. Mr. Fujihara, Director, Executive Vice President and CFO, SoftBank Corp. Mr. Akiyama, Vice President, Head of Finance Unit. Mr. Onoguchi, Head of the Finance and Accounting Division, Finance Unit. Mr. Sasaki, Senior Director, Financial AI Promotion Office, Finance Unit. Today's meeting is also being streamed live online. Thank you for tuning in.

Now Mr. Fujihara will provide an overview of SoftBank's consolidated financial results.

We announced the financial results earlier today, and I'd like to share with you more in detail about our financial performance. Once again, thank you very much for coming despite busy schedule. This is executive summary. Revenue increased in all segments and hit record high. Revenue and profit increased. Accordingly, we revised full year forecast for fiscal year 2025. We want to give an update, especially because of the impact from ASKUL. Operating income in Financial segment doubled, and we received high external ESG ratings.

Okay. Let me go deep into this. Result for the third quarter, revenue and profit increased. Steady progress toward full year forecast for all segments, especially operating income, 88.4% and net income, 89.9%. We see high progress rate toward the full year forecast. Let me give you a breakdown. Revenue increased by 8% or JPY 383 billion. Progress toward full year forecast of JPY 6.7 trillion was 77.5%. Financial and distribution achieved more than 20% increase. For Media, excluding ASKUL's third quarter revenue decline of JPY 63 billion, Media and EC represented an increase of 6.7%. So modest contribution was there.

Now EBITDA. Again, we see steady growth, and we hit the record high. Compared to last year, we saw increase of JPY 52 billion or plus 3.8%. Progress toward full year forecast is over 80%. Excluding Media and EC, four segments contributed a lot. Due to ASKUL's impact, Media EC presents those numbers in terms of ASKUL. Next, operating income. We increased JPY 62.3 billion or 7.6%. Progress toward the full year forecast was 88.4%, again, steady growth. Especially in finance sector, we saw double growth. Each segment gave us a contribution, but Media and EC declined by 2.5% or JPY 5 billion because of the negative impact of ASKUL, which was JPY 19.9 billion. But excluding that, however, we would have been seeing an increase of 7%.

Now by the segment, Consumer. Mobile revenue continued to grow and the revenue increased by JPY 72.2 billion or 3.3%. Sales of goods and others increased significantly by JPY 73.2 billion or 14.2%. Unit price of mobile device increased significantly and number of mobile devices also increased, resulting in substantial revenue growth. Electricity because of diminished trading transactions saw revenue decrease. Broadband saw continuous increase in subscribers. Mobile recorded JPY 26 billion, thanks to subscriber growth and improvement of ARPU. And mobile revenue, since third quarter FY 2023, we posted a continuous revenue growth. We had a lot of questions about acquisition and others earlier today, but we want to grow both in revenue and profit. So we continuously want to focus on increasing the top line.

The Consumer segment waterfall chart. Excluding cost of goods and service, gross profit was JPY 37 billion and expenses or promotion expenses increased by JPY 36 billion and acquisition cost increased by JPY 13.6 billion because of increase of amortization. And promotion expenses increased mainly due to the more cost to support device purchase program. As for electricity, revenue down, but cost of electricity services improved by JPY 35 billion. Broadband saw JPY 7.4 billion increase and depreciation and others, net-net, JPY 3.2 billion. The mobile increased by JPY 26 billion. So that's how it constitutes of 6% of profit.

And next, Enterprise segment. Revenue and profit increased steady growth. Revenue grew by 8.8% or JPY 59 billion. Especially Solution was good, which posted a 13.1% growth. And we continue focusing on double-digit growth in this area. As for segment income, we saw increase of JPY 17.7 billion or 12.6%. Again, double-digit growth is our commitment. And progress to the full year forecast is 84.1%. So Enterprise continues to be driving force for future growth. Business Solutions and other revenue, especially recurring revenue, posted 11% increase.

Media and EC segment. System outage by ransomware attack at ASKUL posted a negative impact. In Commerce, we saw a loss of JPY 9.6 billion, which mainly due to ASKUL's third quarter impact. But excluding that, we saw a modest growth. Media posted a slight growth in revenue and strategy, thanks to M&A, we saw a steady growth. And segment income is shown on the right-hand side. Overall, we saw a decline by JPY 5 billion or 2.5% year-on-year. There were some valuation gain from restructuring, which was a onetime impact and ASKUL negative impact was JPY 19 billion. And details were already disclosed by LINE and Yahoo!, so I'm not going to go into detail here.

Next, Finance segment. Revenue expanded steadily, increased JPY 56.9 billion or 23.9%. And PayPay posted double-digit growth and income contributed JPY 32 billion, and that resulted in JPY 66 billion of segment income. Distribution segment and others. Again, we see a steady growth and increased JPY 157 billion or 25.6% year-on-year. Income increased by JPY 7 billion or 29.2% and progress toward full year forecast was 96.3%. Others operating income up to third quarter, we increased R&D investment by JPY 19 billion. Subsidiaries costed promotion expenses in the third quarter, but it's been recovering. And for the full year, we should be able to show you a positive number.

And net income, thanks to increase in operating income, overall, we saw increase of JPY 48.9 billion or 11.2% year-on-year. Progress toward full year forecast was 89.9%. Other than operating income, financial income and loss, thanks to LY was JPY 15.7 billion. Absence of valuation loss of put options for equity method associated in the previous year, profit from sales of shares in Remember & Company and company that was last year's onetime event. And tax effect relating to PayPay was also there.

And SoftBank, absence of deferred tax impact from business restructuring in the previous year, we saw improvement in income taxes. CapEx, almost on plan. Consumer and Enterprise, this year's guidance was JPY 34 billion and -- excuse me, JPY 340 billion and progress towards that full year forecast is 67.3%. And AI saw a decrease by JPY 10 billion and IFRS 16 impact increased due to the signing of lease contract for data centers. AI computing will be described later in the slides.

Since purchasing Sakai, including Tomakomai partly, also AI computing infrastructure. And you can see as of now at the right bottom, total is JPY 257 billion, and we are going to do the acceptance of the JPY 200 billion and the payment is JPY 190 billion. So this is funded by bond type class shares. For the next mid- and long-term business management plan and how we are going to manage is we are now in the discussion. We would like to announce in the next presentation.

Regarding primary free cash flow -- so as for the cash flow generation is our big target. So it has a steady progress. And operating cash flow increased in EBITDA and investment cash flow also increased. As for the long-term growth investments are funded by the different things. So we have continued with the same reconciliation. So free cash flow and net leverage ratio are our focus.

So let me explain about the net leverage ratio. First, left side, interest-bearing debt is 3.07 compared to previous year. It's 0.12 increase year-on-year. And this is increased by JPY 120 billion year-on-year. And as you can see for the net leverage ratio, it's almost flattish. And here's the balance sheet. So our balance sheet, please pay attention to this JPY 18.2 trillion compared to the last fiscal year-end, it is increased by JPY 1.9 trillion. So this is due to the financial business expansion, including M&A. And as you can see, the equity attributable to owners of the company and equity -- this one is showed JPY 211.6 billion year-on-year. And -- so over 7 years, it has grown greatly. So when you look at equity and since we do have dividend payout compared -- so it is good to see year-on-year compared to previous year. So it has increased by almost JPY 200 billion.

From here, I would like to explain about KPI. First, telecom. Mobile subscribers grew by 0.69 million by 2.2%. Just before listing, it was it was 2.46 million. So it has increased by 15 million or so. So looking at the right side churn rate due to the electricity churn rate, so it has increased to 1.45%, 0.15% year-on-year. So we hope that we can announce improvement of the result in the next quarter.

So next one is the net additions and Mr. Miyakawa mentioned in the previous presentation, so net losses were recorded. And this corporate change would also lead as we focus on the increased revenue and income. So next, ARPU. Year-on-year, it's minus JPY 10. So on the right side shows it was minus JPY 30. Now it's minus JPY 10. When we look at Consumer, so it's turning to positive. So including Enterprise, it still shows minus. However, our forecast was minus JPY 30 full year. And at the end of the -- so full year forecast of minus JPY 30, we would like to maintain this.

And next to electricity broadband. Compared to last year, so it's increased by 0.1 million and electricity shifting the acquisition effort. So it is improving gradually. And media and EC, so both EC transaction value and group total advertising revenue expanded. Next, PayPay users increased steadily. And so the number of users exceeded 70,000 and the MTU also exceeded 40 million. And the number of payments increased by 18.5%. So number of payments significantly outpaced the user growth. So it means that the rise in payments per person.

So next, GMV, this also growing steadily and increased at 23.7%. So since the number of payments was 18.5% increase. So all the businesses is increasing in every manner. And next is -- the PayPay Bank's deposit and loan balances also showed steady growth. So as for PayPay revenue increased by 26.3%. Right side shows EBITDA shows great increase. So we are looking forward to its further growth. SB Payment Service. So this business is growing steadily and the non-telecom area is growing as we make strategy.

And the next is about ESG topics. So we were recognized as a prime Seat company this year as well. Also in other areas, we have received a very high rating. Please take a look at this slide for the details. Next, I would like to explain about our upward revision of full year forecast. This is the summary from revenue to net income, all of them we revised upwardly. Revenue, all segments contributed, excluding impact from system outage at ASKUL. So we were at the pace of exceeding the JPY 7 trillion due to the system outage at ASKUL. So we revised the variance by JPY 250 billion for revenue. As for EBITDA, mainly due to distribution and improvement in R&D and other costs. Operating income, I will explain detail later. And net income mainly due to upward revision of operating income and so on. And this is the details of the operating income. Upfront investment and R&D expenses were the major reason. This concludes my presentation. Now we would like to move on to the Q&A session. Thank you.

[Operator Instructions] Tokunaga from Daiwa Securities.

Today is the last investor briefing for Fujihara-san. I just want to say thank you, Fujihara-san. With that, I have two questions. I want to hear from Fujihara-san and the new CFO, Akiyama-san. Fujihara-san, what's your expectation for next-generation SoftBank? And second, Akiyama-san, do you have any resolution that you want to share with us?

So I'm going to ask Akiyama-san to give you a few words lastly. From myself, Fujihara, I said goodbye at the end of earnings result announcement earlier. And SoftBank increased both in revenue and profit, and we hit the milestone of JPY 10 trillion. We are ready for our next leap. Talking about AI in the last 10, 20 years, we have been transforming ourselves and AI will bring us more even greater changes. And I think AI will determine the next 10 years of SoftBank. So again, I have high expectation from the new leadership team and whatever I can help, I will do my best.

Second question, more in short term, looking at the plan for operating income, fourth quarter, Consumer expected a little bit of loss and other segment also a loss. So I think others is expected to lose money in the fourth quarter. So Consumer would lose profit a little bit. And also you expect others to suffer from revenue loss.

Well, Consumer, we are working on restructuring and whatever we can do by the end of this fiscal year, we will try to implement. And JPY 150 billion by this year is definitely possible. And other segment, there are a lot of uncertainties, including ASKUL's potential lingering impact. So others and investment may seem big numbers, but we have some buffer included to get ready for next year.

The Consumer's preparation in terms of preparation, Consumer, in which area you prepare for network, marketing expenses or what?

There's not things specific. But in general, we want to get ready. When it comes to acquisition cost, for example, if we can spend the cost efficiently, we wouldn't mind spending acquisition cost. But we just want to make sure that our plan is doable.

Next, Masuno-san from Nomura Securities.

First of all, Mr. Fujihara, thank you so much for all your contribution. And even after your retirement, you will be staying in a certain position. So I'm looking forward to communicating with you. So my question at the earnings results of the midterm, last September, already, you -- so after September to December, over that 3 months, how did you change the direction since the churn rate increased, you drastically changed the direction. So you made a quite drastic change. So what made you do so?

Since September, we have started looking ahead. And in the third quarter, we started shifting our direction. Acquisition cost and lifetime value, the balance between these two, actually, it does not really make sense. So we objectively reviewed the situation and to shift our direction. So as for the Consumer segment, it's been stable, the business. Therefore, our approach -- so we changed our approach, including the acquisition as well. So we need to continue brushing up towards the next fiscal year as well.

So the churn rate, 1.38 -- the churn rate in the third quarter, it could have exceeded even 1.4%. And so just by looking at the churn rate, the figure itself, it could have even exceeded further. So what happened within SoftBank is SIM users canceled in a very short term. Is there anything unique? And what was the -- what is the countermeasure that you have?

Going back to the last -- second half of the last year, our acquisition was doing well with the good net additions. And those users cancellation actually appeared more clearly in this quarter. So far, our acquisition was doing really well. Therefore, it showed quite a big negative figure. So our intention is to take actions when we see the challenges. So that's why we decided to shift our direction to this.

So those who purchased a number of lines and those who has a very short-term contract, so was the bottleneck. So what did actually change?

So we made it more strict for those potential users. And so we reviewed our policies.

Next, Kikuchi-san SMBC Nikko Securities.

You confidently explained the reasons behind net loss. From my perspective, it was amazing. Like Masuno-san earlier asked you ARPU is not really going steadily, and you see increase in churn. And in the fourth quarter, well, even though you revised your forecast a little bit, still very small upgrade. So again, in the fourth quarter, are there any reasons why you have to cost or you just operate the business in a very healthy manner or there are any things that you may have to cost a lot in the fourth quarter? So again, to me, your upward revision was still very small.

Yes, a slight increase, that's for sure. So maybe it is too small to call it upward revision. But on the other hand, ASKUL's impact needs to be absorbed to share with you updated forecast. So that's how it happened. And upward revision is rather conservative. In other words, we are having our business under control.

And Fujihara-san, I have trusted you a lot. So I always wonder how you operate as CFO while looking at potential dividend and looking at investment. But in the next mid to long-term plan, you may want to aggressively invest and you may want to aggressively return to shareholders. So it sounds like very stretchy. Stretchy financial operation you may have to do going forward. So Fujihara-san, what's your view while you are retiring? I don't expect you to say anything at this moment. But I wonder if you have any concerns before you retire.

We have had very healthy productive discussions internally with the senior management team, including CEO, shareholder return and growth, we want to achieve both. And this remains the same. As for shareholder return, dividend ratio may look a little bit high. But in the inflationary environment, we have kept the dividend ratio same. So we want to be comfortable and confident before sharing our view with you. Net leverage ratio and free cash flows are very important from CFO perspective. And in fact, my successor, Akiyama-san has been looking at them for a long time in finance team. So he has a good knowledge, cash flow and net leverage ratio. The growth strategy and investment, we have been again discussing internally to make sure that we can present a very responsible performance.

[Operator Instructions] Masuno-san from Nomura Securities.

I would like to take this opportunity to ask you one more question about investment for the next fiscal year. So you mentioned that you did not include the investment for Sakai data center as well as for the GPUs. How -- so the depreciation for data center is quite long. But for GPUs, it's usually 5-year depreciation. So it would impact. So with the sovereign cloud, together with Oracle, you're going to prepare a large cloud. And I believe that you need to have your own GPU as an asset. So for -- especially for sovereign cloud, the cash out plan for AI, particularly for next fiscal year, what is your view?

Overall, primary cash flow and the upfront investment for midterm plan. For free cash flow -- primary free cash flow, including dividend, and for the rate, we will make sure to handle properly. And for the investment for mid to long term, so what is the return? So we need to also show that clearly. So how we are going to get -- take it back, then we need to also make a proper decision. So for the next mid to long-term business management plan, so what kind of business we would like to plan and establish needs to be well considered. So that will be our core discussion moving forward. As President -- CEO, Miyakawa also mentioned in the presentation, so he mentioned that for you to kindly wait until our next midterm and long-term management plan presentation.

So just for a follow-up, in the 4 to 6 years, there will be more and more return for the investment. But looking at the 4 to 6 years, normally, first year or second year, it will be the upfront investment and 5th or your final year will be the one that you get a return. So -- that's how it normally works for the upfront investment and return.

So the details is still in consideration. We would like to give you a more clear answer to that question in our next presentation or briefing. So we have accumulated our plan and also the funding is quite stable compared to before. So therefore, we should be able to -- once we can establish the good return base, so we have more and more options for our business strategies. So therefore, how we would like to draw a map for the mid- and long-term management plan. And we do also understand your concern. So we would like to also take into concern. Thank you.

That concludes SoftBank Corp's Investor Meeting for the fiscal year 2026 (sic) [ 2025 ] third quarter. Last but not the least, we're going to introduce a successor of Fujihara, Mr. Akiyama.

First of all, thank you very much for your continued support for a long time and really appreciate that. My successor is sitting next to me, Mr. Akiyama. As the Head of Finance Unit, I think he is ready for taking over my role. So I'm going to ask Akiyama-san to give you a few words.

Good evening. My name is Akiyama, SoftBank Corp. I am going to take over Fujihara-san's role as CFO. Let me briefly introduce myself. I joined Nippon -- SoftBank from Japan Telecom. And most of my career was spent in finance. And in 2018, when we listed and since then, I have been engaged in fundraising and making plans of capital and finance to make sure that we can achieve both growth and shareholder return. For the last 12 months under Fujihara-san's leadership, I have been looking over what Fujihara-san do or does. And I'm going to take much more bigger responsibility going forward. But again, I want to still make sure that we can both achieve growth and return. And through that, we -- I would like to help growing corporate value.

As Miyakawa-san indicated earlier today, the senior management team will be much younger. And then in May, we're going to announce the latter half of the mid to long-term plan, and I hope that you will expect a lot from that. And Fujihara-san has given me a very warm words, and I myself want to meet his expectations and your expectations. Once again, thank you very much for joining us today and appreciate your continued support.

Thank you. This concludes investor meeting for the third quarter of fiscal year 2026 (sic) [ 2025 ]. A recorded version of today's presentation will be made available on demand on our corporate website. Please feel free to view it at your convenience. Once again, thank you very much for coming to our investor meeting despite your very busy schedule.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

We would like to begin the SoftBank Corporation Earnings Results Presentation for the 6 months ended September 30, 2025.

We'd like to introduce today's attendees. SoftBank Corporation, President and CEO, Miyakawa; Board Director, Executive Vice President and CFO, Fujihara. Today's presentation will be broadcast over the Internet.

Now President and CEO, Miyakawa, will give an overview of SoftBank consolidated financial results and business overview.

I'm Miyakawa. Thank you so much for your attending. Now I'd like to present our financial results for the first half of fiscal year 2025. Revenue reached a record high of [ JPY 3,400.8 billion ] representing an 8% year-on-year increase. Thanks to this strong momentum, we are now in a position to aim for JPY 7 trillion in full year revenue. Here is the breakdown. All segments reported revenue growth continuing the positive trend from Q1. Our distribution and financial businesses, in particular, performed strongly. Operating income also reached a new high record of JPY 628.9 billion, up 7% from the previous year with a progress rate of 63%. We are steadily on track toward our full year goal of JPY 1 trillion.

By segment, all segments delivered profit growth. In the first quarter, the consumer business saw a 2% decline in profit. But looking at both the first half and the second quarter on a stand-alone basis, profit increased. The financial business has more -- was more than doubled driven by PayPay's strong performance. Net income also reached a record high of JPY 348.8 billion, up 8% year-on-year. The progress rate for net income 65%, which also indicates solid progress.

To summarize progress against our full year forecast. Revenue stands at 51%, operating income at 63%, and net income at 65%, indicating a strong first half.

As shown each segment, as you can see, exceeded the 50% progress mark with all segments contributing to our performance not just one of the -- one of them, but everyone contributed to our performance. So far, we focused on growing non-telecom areas such as DX, FinTech and AI. As a result, the share of non-telecom revenue, as you can see, expanded from 47% to 63% ever since I took my presidency.

As our business has diversified, the total revenue increased by about JPY 1 trillion in the first half alone.

From here onwards, let me explain performance by business segments. First, the consumer business. Revenue was JPY 1,475.7 billion, a 3% increase. Mobile revenue also increased by JPY 9.6 billion, continuing the positive trend. Operating income was JPY 330.9 billion, a 3% increase. And in second quarter alone, it rose 7%. So we had a very robust second quarter.

Smartphone subscribers expanded steadily and increased by 3%, with both SoftBank and Y!mobile brands growing steadily. The increase in short-term cancellations was inefficient from an acquisition efficiency perspective, that's through bundled packages such as broadband, electricity and credit cards. We intend to focus on customers who use our services for longer periods and proceed with the second half of the year.

Now I would like to explain Enterprise business revenue rose to JPY 482 billion, an 8% increase. Solutions continued to perform well, contributing to 12% revenue growth. Operating income was JPY 104.1 billion, up 10%, exceeding JPY 100 billion for the first time in the first half, a new record high.

Now the Distribution business. Revenue reached a record high of JPY 505.8 billion, up 17%. Operating income also hit a record JPY 22.0 billion, up 36%. There are 2 factors behind: one is the growth in AI-related products, the market for AI servers and IoT products equipped with AI continues to expand. We expect this trend to continue for the foreseeable future. So further growth is anticipated. The other factor is the steady growth in recurring revenue which is one of SoftBank's legacy core business. So the segment has transitioned from a onetime software wholesale model to a subscription-based business model. The Distribution business is now on track to surpass JPY 1 trillion in revenue this fiscal year. Although we expected the Enterprise business to reach that milestone first, Distribution may actually overtake it. Both businesses are growing through mutual competition and learning, creating a very exciting climate.

In the Enterprise market segment due to their different profitability profiles, so we disclosed the results for 2 segments: Enterprise and Distribution. Together, these 2 businesses are on the verge of surpassing JPY 2 trillion in revenue this fiscal year. So the Consumer business generates around JPY 3 trillion in revenue. So in our next midterm plan, we aim to grow the Enterprise segment to a similar scale.

Now for the Media and E-commerce business. Revenue was JPY 822.8 billion, a 4% increase driven by the commerce domain. Operating income came in at JPY 167.5 billion, a record high. And net income increased by 13%.

Next, Finance business. Revenue rose to JPY 189.7 billion, a 24% increase. Operating income was JPY 38.5 billion, showing a steady progress.

Turning to PayPay. GMV continues to grow strongly and reached JPY 9.2 trillion, up 25%. EBITDA was JPY 48.3 billion, more than doubling from the previous year.

Now let me explain our next-generation infrastructure initiatives. In our full year results announcement in May, this year, we explained the direction of our cloud business using this slide. Today, I'd like to share updates on those 3 key areas. First, our cloud software. Last month, we announced a new sovereign cloud service in collaboration with Oracle. The service will be offered sharing -- starting next April from our East and West Japan data centers connected via OnePort and SmartVPN.

Next, our homegrown LLM or Sarashina mini. Starting late November or 28th of November to be specific, we will begin offering APIs to corporate customers to accelerate Gen AI adoption within enterprise systems. Third, our AI compute infrastructure. Until now, this was mainly used internally for training Sarashina models, but as of October, we began offering it externally. In addition to support AI startups, we launched a GPU platform program free of charge. And the plan consists of 3 support tiers tailored to different phases of growth: First, start-ups building or testing prototype receive up to 60 days of free access; second, those entering the validation or proof-of-concept fees are offered discounted pricing and development collaboration; and third, companies moving toward commercialization, receive financial support as well as introductions to potential customers and sales channels.

Last but not the least, let me update you on Cristal Intelligence, which we made a press release earlier today about. SB OpenAI Japan is officially launched today, and it will offer exclusively Cristal Intelligence to corporate clients in Japan. As explained before, SoftBank and SBG established C Holdings and together with OpenAI formed SB OAI Japan as a 50-50 joint venture. We are working toward a service launch next year and development is progressing smoothly. This is one of the seeds of future growth that we are excited about in the next fiscal year and beyond.

In closing, let me summarize today's presentation. First, in the first half, we achieved record highs in revenue operating income and net income, with all segments seeing year-on-year growth. Second, we made excellent progress against our full year targets across all 3 indicators: Revenue; operating income; and net income. Finance segment more than doubled, and we shared progress on strategic growth initiatives for our next midterm plan, including the Sovereign Cloud, Sarashina and Cristal Intelligence.

That concludes my presentation. Thank you very much for your attention.

[Operator Instructions] Please raise your hand.

My name is [ Mario from Diamond Company ]. I have 2 questions. One, so the established today, the joint venture between SB and OpenAI, SB OAI Japan. I would like to hear the target and the goal of this joint venture. And I understand that first, this service will be used internally of your company and then to the external sales. So I would like to hear what's your plan onwards. And also the offering to other enterprises, you said in next year, exactly when next year? And how many companies you're targeting? And what is the sales target?

So related to this topic, but the AI agent services for enterprise. So like NTT data like a vendor company like that, so the ChatGPT enterprise reseller agents or NEC or Hitachi, those IT vendors. So they are in -- establishing the environment for AI agents. So how you're going to differentiate from them?

So our target onwards. So the joint venture was established today and the servicing will be next year. So since we first announced in this spring, so Cristal Intelligence -- fees of Cristal Intelligence was created by openAI. So the alpha version we received and we just started internal verification. So from our engineers the feedback from them, this is something in a totally different world comparing to ChatGPT or enterprise, it's unlikely new. So I only glanced and I haven't used yet. However, what I was expecting to do has been in shape. Of course, we need to do the fine-tuning onwards. But once this is ready and the way to work and also the speed of manufacturing products and everything will be completely different. So with high anticipation, we are now internally coming up with and working on the details. So what we are doing is that we are putting together some systems and also -- we also feel the risk to directly connect to the company's system. So we are now internally working on establishing a certain environment be able to connect to the system. So once we are ready for verification of the -- our test bed and then we would like to start promoting to other companies in Japan. So as you mentioned, differentiation from the others. But this product itself is compete on a different concept. So once the similar ones come up, then I also believe that others might follow once our product comes in the market, but then the cost competition will be something that we need to look at. So I hope I've answered to your first question.

So for Enterprise, what is your target?

well, we can't tell right now. But within our company, the number of resources who is working on the data. So initially, certain efforts required at the beginning. So tens of hundreds of companies cannot be our target from the beginning. So we would like to target one by one thoroughly. So that's how I imagine for now.

So my next question is about computing infrastructure. So recently, NVIDIA announced that they also participated in the APAC kind of a conference in South Korea and announced that they would be providing 260,000 units, and that will be the third largest units to provide. So SoftBank is the most advanced utilizing GPU of 10,000 units GPU. So comparing the volume was 10,000 and 260,000 that NVIDIA has decided to offer. It's a quite big gap. So considering your initiative, and I believe that Japan is way behind. So which you also had a concern on. So some -- the government support for GPU implementation. So I would like to hear your opinion on that. And also do you have any plans to implement more than 10,000 GPUs, for South Korea, 260,000 units?

So I heard that it will be distributed to some companies in South Korea. So rather than operating individually, but by clustering to be more efficient. So 10,000 -- so the 4,000 clusters -- 4,000 GPUs is clusterized. So compared to the large data centers, of course, still in Japan, it's much weaker. So less advantages. That's why we are also working on Sakai data center and Tomakomai data center. We would like to start the operation of Sakai data center first. With that considering GPU volume for Blackwell of 150,000, and we would like to implement Rubin, the next version. So there will be like -- 30,000 or 40,000 would be the maximum capacity for that scale of data center. So with Blackwell, 150,000. And so I think the computing performance capacity will be the same. So now this scale is being combined and accumulated to make a bigger -- so what's coming next is that AI infrastructure scale and as we call it next-generation social infrastructure, which we started 5 years ago or so. So the key is that computing power, computing power would be the power of each mission. So I also believe that the government has made a reasonable comment on that. And now South Korea owns the 260,000 GPUs, which is quite aggressive one. So we think about so -- whether South Korea or Japan would be the center of this AI business. So computing power is the key. So I would like to bring the schedule forward to try and so if I can contribute to our new Prime Minister, Takaichi, if I could provide some input, I'll be grateful.

So what about the government aid? Do you have any opinions on how government should be supporting?

I heard that South Korea is providing JPY 1 trillion or so of subsidies. So I would say that Japan should provide double of that. However, we need to keep a balance and what the government has to do also what the private companies like these corporates have to do or can do and we need to keep balance and to establish a recent infrastructure.

Thank you. Any other question?

Suzuki, freelance journalist. About PayPay's IPO and U.S. government institutes are not working at the moment. So I wonder if you have any comment on that, the process of PayPay IPO?

Now that U.S. government institutions are not operating, and especially [indiscernible] reviewing process is being on hold. We can't say anything unless or until the process restarts.

Any other question?

Hosoda from Nikkei. First question is about consumer mobile. In the second quarter, I wonder how much confidence you have for the whole second quarter. [indiscernible] mentioned that competitive environment is very harsh and they are looking at reducing operating income or margin. So how do you analyze the market.

In terms of number portability or MMP as far as SoftBank goes, we are performing good. However, we saw more short-term churn users than we thought. So we need to come up with an idea to acquire customers more efficiently. That's the lesson learned. But in general, we are in good progress.

Next question is about Enterprise business and Solution business. You mentioned before that those 2 business, you want them to exceed the Consumer in the next midterm plan. I understand you don't disclose respectively, but what's your confidence level?

Well, Consumer, people often ask me whether SoftBank is ready for raising prices, unless ARPU goes up, we don't expect high liquidity of users. We are looking at a small net increase or net adds, but we don't expect 4 million, 5 million users switching from one operator to the other, like we saw before. So 1 million net adds times ARPU would be a growth of Consumer business. We want to make sure that we keep a slight increase trend -- increasing trend. And we want to utilize AI agent to make our business more efficient. And if consumer business grows gradually on the upward trend, Enterprise business and Solution businesses can follow the trend. So I think at some point, Enterprise and Solution business will catch up with Consumer business in terms of volume and JPY 3 trillion will be the substantial size. And then they will get more momentum in the market. So JPY 3 trillion for consumer, JPY 3 trillion for enterprise, that's something that we want to look at in the next midterm plan. And our employees are watching this earning results. So I want to sort of woke our employees to stimulate them.

[ MJ ] from Bloomberg. I have 2 questions. First is about Cristal Intelligence. So you just mentioned earlier that it's not comparable to ChatGPT in terms of speed? And can you give us some examples of what is so different? As for the concept, it's closer to agentic AI? Would you please give us some examples?

I would like to give you some examples, but I cannot answer. So the OpenAI told us not to disclose. So I cannot give you details. However, just to give you an image or -- so you don't have to manually input. You can just speak to it. As for -- because this is for Enterprise. So when you do some tests, you need to establish workflow. The workflow can be generated automatically, that is the future, it has. So the ChatGPT or Enterprise features are just like rather Q&A features so -- but exceeds that level of feature. So once the product is ready, then we will hold an orientation session. And so I would like to refrain from answering by ourselves.

The second is about PayPay that you mentioned that right now, SEC's assessment is in suspension. So once it resumes, the valuation I've heard, it's the JPY 2 trillion, JPY 3 trillion. What is your expected valuation of PayPay?

Well, I don't want to really mention the actual figure, but I would like to expect higher. Why? Because looking at the speed of the business growth, I believe that it will remain and even I feel that it's too early to go to the public. So with the power of business growth of PayPay and the profitability, looking at those 2 factors together and also as for the potential, the bank main. So I see some future. So in Japan, it's a lower country risk. So we do have some unique features to look at. So I also expect that the higher valuation, it will be valued when it goes to the public or it might take a little more time, but in general, overall, I believe that PayPay is the company which has the highly valued. So more and more means it's more than JPY 2 trillion, JPY 3 trillion. When I say more is -- a little more is not too big but I believe that this company is worth being assessed.

And next question, please.

[ Uno ] from Yomiuri newspaper. I have a question about the Consumer business. Maybe somebody asked before, so Mobile business was good in the first half? Or what do you think is the reason exactly Miyakawa-san? And as of end of September, in Y!mobile increased price so what's the reaction in the market since then? And what kind of impact that could have on the first half result or bottom line?

Related to that, Rakuten Mobile said they would not increase price. What -- to your view on Rakuten Mobile from a market competition perspective?

For the first half, yes, we are good. But the question is to we are better than what? All segments are growing steadily, and most of our businesses show 2-digit growth. And to be very honest with you, we -- I wanted them to go more. But in the first half, we achieved net adds and increased revenue. So in terms of on track to the plan, yes, we were on track, and we achieved a good performance. And whether or not increasing price contributed from mid- to long-term prospective, since in general, prices are going up. So at some point, we may need to consider our pricing. I don't know whether it's tomorrow or 1 year ahead. But at some point, we would take an action. We are still studying. I don't know how long we can say that we are only the one in the market that is progressing well.

About Y!mobile price increase, I was impressed. They did a great job. Reaction from users is pretty good. And we don't see any huge difference in trend. So Y!mobile companies continues performing well, it's difficult to answer to your last question, however, which is Rakuten Mobile. Rakuten Mobile said they would not increase price because their structure was different from companies like SoftBank. What costs to carriers? Well, in urban areas, you can make money easily, to be honest, because of huge population and users are concentrated. People are using mobiles a lot. And so as long as you offer services, making sure that connectivity is maintained then urban areas are very good markets in terms of making profits and making business. But especially the last 5% geographical area of Japan, when I was CTO, we had a huge challenge because we need -- we may need to build a huge high power, which cost a lot and optical fiber cables length would be very long, which cost a lot. And the cell site that you build would be used only less than 1% of urban cell site in terms of usage. So we need to continue fine-tuning even after we built our cell site. So it costs a lot to build a network in rural areas in Japan. So if they would do the same and if they could say the same thing, I would say that's unfair.

I think before spectrum was allocated across Japan, and that was the rule. And we did go outside and build cell sites. So again, the last 5%, 10% of area coverage is very, very challenging. And if Rakuten would do that, and they would stand on the same stage with us. And if they could say the same thing, I would say it's reasonable, but it's still unfair now because they were given the spectrum without competition. So I don't want to say more because otherwise, I would start getting excited.

My name is [ Sam ] from Toyo Keizai. Two questions. One about GPU, not only your internal use for Sarashina learning, but external cells to start. So the GPU resource, what is the demand do you have from other companies externally? And what kind of resource you are expecting? And you also talked about South Korea and in GPU to be procured more. And when you look at the current the resource and availability and also the demand by the other companies, if you could share, it would be great.

And about -- the second one is about Sarashina mini, JPY 70 billion parameters and NEC and also other smaller parameters, this is -- Sarashina mini is closer to the others so? But what is the differentiation from the others?

So to your first question about GPU supply and demand. There are large scale of business sentiments and was not suitable for what we could offer so far. So the major -- from the major companies and a lot of big volume of allocation was demanded. But we do also have different purposes for use, and we cannot just provide it to one company. Therefore, we prioritize the use internally. Now we are to start external sales. Some Japanese companies create their own AI and also to create services on outside AI and also for their own systems, some companies want to implement AI. So we would like to also start recovering the cost that's spent. So we are also thinking in a fair way that we are also reusing one for the next version of Sarashina. So we are going to start releasing more and more, and -- which we do not expect a big return, if we could cover the cost to be good enough. So the current phase is seeding and we've just the field so far. And now we are ready to -- for seeding. And moving forward, when you look at globally, the supplies in short, so GPU changes [ labor days ]. So it's not worth holding the older version and of course, modification is required, but we need to focus on newer version as well.

To your second question about Sarashina, our competitors is the differentiation with OpenAI model, we are looking at it every day. So it requires a lot of time and money, and we believe that technology is not inferior at all, but time and so the efforts are the key. So a lot of engineers are needed for that. And there is an area which requires some academic level, then we would like to utilize OpenAI. But the call center level, we do not require and -- that high level of engineers. So when we also look at the cost, and we can also create a decent cost structure. So differentiation and -- is the key and we would like to also catch up at the end. So the data for learning may be in short in the future. So then there will be an opportunity for any AI to catch up, but we need to keep moving and so that we do not have to give in or give up. So we need to stay on the race tracks so that we do not lose an opportunity.

Next question.

Yamamoto from Nikkei. I have 2 questions. First about Mobile business. You are getting customers, but ARPU looked on the declining trend since last year. In the second half, you may want to focus on high-value customers. But in order for you to stay on the upward trend, what kind of initiatives you may have?

ARPU looks decreasing, which is true. While Consumer business positive, Enterprise negative and all in all, negative. I'm not going to go into details in numbers, but consumers are looking at the steady growth of ARPU. So in general, I'm not too much worried about. And Enterprise business, which a very competitive market, but our Solution business is growing. So you may get an idea, our strategy, if you look at our Solution business. So we offer a bundled products, Solution and Mobiles. So strategy-wise, our is the right strategy.

But the second half, I think that you mentioned that you want to focus on high-value customers. What's the reason behind? What's your intention behind? By that, what I meant was to address a worsening churns. Customers would churn in a very, very short term, or those users are hopping around carriers and users contract, they realized later, the contract did not meet their expectations. So they may leave us very quickly, but we want to keep or retain users as long as possible. That's why we want to offer different products like PayPay or electricity. And if our users can enjoy other products, not just on mobile, then they would stay with us. So that's something that we discuss internally pretty recently.

Next question is about Cristal Intelligence. In the mid-term plan, consumer and enterprise business, you may want to have the same level. So I wonder to what extent, AI agent contributes to such a growth strategy? And I have an impression that monetization may take time because it costs at the initial phase.

Yes, our joint venture, SB OAI Japan, I don't think it will expect losing money even in the first year because structurally the joint venture can offer consulting services while getting a return from customers. Resource-wise, we have about 100 employees now, but the mid -- by mid-next year, we want to increase headcount to 1,000, for example. And the resource should meet demand. And if product doesn't sell, then those employees could come back to SoftBank.

About JPY 3 trillion, I mentioned before does not include potential AI agent services. even without AI agent, we want to hit JPY 3 trillion, and upside is AI agent or Cristal Intelligence. That's something that we can expect as an upside on top of JPY 3 trillion that we want to achieve. So our upside is actually growing, what would be the profit structure of the Enterprise business. Well, for example, Distribution business, even though they increased revenue by JPY 1 trillion, profitability-wise, it's small. And if Solution goes pretty well, it has a high margin business, not only revenue, but also profit should grow both. We are calculating assuming that the profit margins stay the same, but if we restructure our businesses in a better way, maybe we could expect better performance than we planned in the midterm plan.

We would like to take the next question as the last one from

the venue.

I'm Ishikawa, freelancer. About network, at this timing, the REDCap and Expedia started things, so what is your new network strategy? And about the -- how do you receive the result of Opensignal?

Right now, our network is a step behind of KDDI. When you look at the result from different sources, but we do not think that we are in inferior to others, but the network design is superior to them, I believe. But other than communications, we are expanding to noncommunications area and when the population is declining and when we concentrate on telecommunications business alone, then we have to consider getting more from the users, and we need to add more products or services on top. So new technology as the is for -- is the seed for a new product. So at this timing, now AI emerged. That's why we are slowing down or we are shifting the priority from telecommunications to non-telecommunications area, but we are now going to slow down that.

And about the Opensignal that standard of the assessment does not make sense. That's the feedback we -- I hear from the people from -- on the field. So having said that, there -- it is true that there is -- are some areas that we are still behind the others. So we don't want to make excuses. Of course, it's not only debt but what's most important is that the customer satisfaction indication, it's called SBF, and we are also calculating that and we are still seeking for higher level to achieve and gain customer satisfaction. So we are not going to compromise and then I'm also discussing with the on the field. So I would like to make this company so that everyone says that we are the #1.

So where do you think it's a bit different from what the actual...

so what I heard from the field is that some items that the staff of field, the higher score is different from what they believe. So which does not contribute to customer experience so it does not really refer to or reflect to the actual customer experience. So I am not criticizing the result but to motivate, the ones on the field and to achieve the higher customer satisfaction. And so some areas should be fairly assessed.

Now we'd like to take questions from participants on Zoom. First, Kikuchi-san SMBC Nikko Securities.

I have 2 questions. First, about Cristal Intelligence. I heard that OpenAI owns copyright. I wonder if it stays the same or IP? So royalty is not that big. And SoftBank's gain is bigger. So loyalty, OpenAI gets more or SoftBank gets more? And SBG pays $3 billion a year, and you are the biggest operator. So I think -- most of that will be paid by SoftBank, I have that impression. But Miyakawa-san says that pay for use. So you don't want to pay that much or you don't intend to pay that much. So the usage fee, how that would impact on your bottom line?

Thank you for your question. I said pay for use, that's our intention. And in fact, we started paying just a little bit. We just started paying just a little bit. But for the -- this fiscal year, we already take into account of the pay. We -- sorry, fee that we pay.

About IP, original one was created by OpenAI. So OpenAI definitely holds the IP. But when it comes to joint venture, whatever created in the joint venture and what's generated in the process of consulting then the joint venture own that IP. We are expecting major Enterprise customers. Whatever Enterprise customer would create with our capability, then the ownership would belong to that Enterprise customer. So it's case by case. The payment we have made so far was pretty small. Again, that's pay-for-use.

Okay. That's the current status. But would you expect or should we expect that would remain the same. For example, would that have any impact on next year's financial results?

I would say we could expect positive but negative. We outsource a small task and that's something that we could replace quickly with OpenAI or SB OAI's capability. And if outsourced cost JPY 1 billion a year, then we don't have to spend that much if we replace such outsourced resources with AI or OAI's product. In other words, we don't start anything that could cost more than we pay for existing operations. So again, we don't expect anything negative from that pay-for-use scheme.

And second question is about the Mobile business. Yesterday, some carriers made an earning results announcement and they -- you said that they criticize others or use excuses for their poor performance. And Miyakawa, you don't want to spend money on short-term churners. So my question is going forward, quality matters than quantity. So instead of spending a lot of money to acquire consumer customers, you may want to focus more on Enterprise or Solutions so the carriers don't have to compete each other saying that they are losing their customers to others or vice versa. Compared to last year or looking back 6 months ago, what's your position in terms of market competition? Sorry, it's very a big question though.

Thank you. Our carriers, if they feel that they were attacked by others, I think they indicated SoftBank but my people said the other way around, but SoftBank is aggressive. And I think SoftBank is actually aggressive and may be considered as an attacker. And if we put the brake, put a foot on the pedal, they might stop and then we would stop. But again, if you stick too much on quantity, but you don't see any business growth. I would rather shift the focus to AI than just getting more numbers of users. And our royalty users would pay more than others and that means we expect a higher ARPU and they are very important users. And we should spend money for those loyal customers and the customers who stay with us along. And our people understand that direction, and we are on the same page. Internally, so even though we see a small decline in numbers, we don't want to be too concerned.

Masuno-san from Nomura Securities.

Regarding the next mid- to long-term business plan. I have 2 questions, how you can make profit? And as far as Japan, so what is the demand of AI? So in January -- so the Japan entire GPU supply and demand balance has lost its balance due to this initiative by the company. And when we look at this climate, when you look at the U.S., the super companies like in the U.S., making AI or data centers and in Japan, many companies are utilizing U.S. foreign AIs. So when there is not enough demand and where is the demand for the data centers? What is your thought on the demand of the GPU demand in Japan?

So 6,000 GPUs are now operating Sarashina. That is possible, that is feasible. But right now, JPY 460 billion parameter, that is the Sarashina's, which I would like to bring it up to 1 trillion parameter. But to do so, if we just utilize the current infrastructure, then it will take years and that is the disadvantage that we hold. We want to do, but we cannot do so because of the -- due to the shortage of power and also the GPU supplies in short. And we, as a public company, and we need to also consider our earnings. So compares to GAFA, we haven't been able to make enough investment in this particular field. So Japan as one of the economic powers, then -- to remain in this position, then we need to face this and tackle with this situation and what we are -- what we think now and a year later will be very different. So we need to have more GPUs and considering that, and we have presented our earnings results today, and this is being monetized gradually and next fiscal year onwards. And we have no plan to present our result, that dragging the result due to the data centers and GPUs. So only SoftBank is taking initiatives in this, but not other companies are taking the similar initiative, which I feel sad about or disappointing about. So SoftBank is taking initiatives in AI and also like coming up with the Intelligence and even just building a data center that the structure is not enough.

So as you mentioned, compared to 2 or 3 years, 3 years ago, GPUs not sufficient right now. So what do you think about the business model of data centers?

I also explained in the Board meeting and what I would like to do and internally so that the cloud business. So right now, the cloud in Japan, even they try to catch up with the overseas cloud, it's too late to catch up. So when we look at the Sovereign, even though we call that Sovereign and this is only within the contract. And then that's how I explained to the Japanese government, and we would like to also hold the technology verification capacity. But when we look at GPU-as-a-Service and the GPU cloud is going to be made completely differently. So when we start from scratch, we can accumulate knowledge. And once it comes -- the time comes, and we would like to become a cloud company. So that's how our commitment is. So we do not have any intention to just build a data center structure. So it's not the -- profitable. Because of our business scale, what we can do is that we can this related business horizontally, comprehensively. And that's why we started from zero. So it has taken a little time, but we have natured engineers, and we have nurtured some resources. So we would like to materialize this.

So it means that in Japan, domestically, your business model is this scale, you don't see any competitors right now. Of course, like how much GAFA can do in Japan market, but including Japanese companies, you do -- how do you see the competition?

It depends where you look at. Of course, there is a compete anywhere you go. So AI on GPU. So I believe, therefore, the platform has to be a versatile platform, I mean, the companies will be creating its own platform. And telecommunications company like us, will be the one to establish the environment for them to be able to easily use or make a platform. So we all have to compete and learn each other. There will be a one like openAI GPT or like Gemeni.

For us, we would like to make sure that we are the one to offer.

And we'd like to take the last question. Tokunaga-san from Daiwa Securities.

I have 2 questions. First, about the shareholder return, you want to return to shareholders, maybe more than before because of the inflationary environment. And I think that's good from minor shareholders' perspective and your group perspective. So any update on your view about the shareholder return?

We shared with you the first half results. And usually, second half, we could achieve better. And since first half was good, are we going to quickly increase return to shareholders? Well, while at the moment, may be easier decision to make is share buyback as opposed to more dividend. But the midterm plan that will start next year will be even more important. And we want to grow further in the next phase. So as long as we achieved the target that we have envisioned, I think we can definitely aggressive about shareholder return. So I think it just depends on how it goes in terms of our business performance against the target. So we will make a decision accordingly. Current level of dividend plus something is, I think, something that we could afford. So I would just say today that please expect more for next term.

Next question is about retention of customers, maybe stop excessive cash back to acquisition or maybe you may want to preferentially treat long time customers, you may want to combine a lot of initiative to keep customers. So are you looking at only acquisition plan or you may also consider price plan?

We look at both short-term plan and we may make an announcement of price -- new price plan or change price plan at some appropriate time.

Thank you very much, that concludes the Q&A. That was all for the earnings results announcement for FY 2025 Q2.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

Thank you very much for waiting. We would like to begin SoftBank Corporation Earnings Results Presentation for the 3 months ended June 30, 2025. We would like to introduce today's attendees. SoftBank Corporation President and CEO, Miyakawa; Board of Director, Executive Vice President and CFO, Fujihara.

Today's presentation will be broadcast over the Internet. Now President and CEO, Miyakawa, will give an overview of SoftBank consolidated financial results and business overview. Miyakawa from SoftBank.

Thank you so much for your attendance today. I would like to begin by presenting our consolidated financial results for the first quarter of fiscal year 2025. Since we've already shared our strategic vision at the shareholders' meeting and SoftBank World, today, I'll focus primarily on our financial performance. First, revenue came in at JPY 1,658.6 billion, an 8% year-on-year increase with 25% progress toward our full year forecast. And given that our earnings typically rise in the second half, we believe this represents a strong start to the year.

Looking at the breakdown, all segments saw revenue growth. Notably, our distribution and financial businesses each grew by more than 20%. Operating income was more than JPY 40 billion due to the gain on loss of control of LINE [indiscernible]. Excluding that, we still achieved a 6% increase in operating income. Our progress on operating income has reached 29% of the full year forecast, showing steady advancement.

As you can see, all business segments performed solidly. Only the consumer business posted a slight 2% dip in profit due to provisions, but we expect a rebound from the second quarter and maintain our outlook for full year growth. And net income, excluding onetime factors, also showed a modest 1% increase. We are progressing well with 27%. To summarize our progress so far, we are off to a good start toward achieving JPY 1 trillion in operating income. Here is how each business segment is tracking. As you can see, progress in all segments is above 25%.

Now I would like to take a closer look at performance by business. We'll start with the Consumer business. Revenue reached JPY 717.8 billion, up 5% from the previous year. Mobile services, in particular, continued to grow, adding another JPY 5.2 billion in revenue. Operating income in the Consumer business reached 28% of the full year forecast, putting us on a solid path toward our growth target. Smartphone subscribers rose to 31.95 million, a 3% increase with net additions continuing to exceed 1,050,000 year-on-year.

Next, the Enterprise business. Revenue came to JPY 233.8 billion, a solid 8% increase, driven by strong solution sales, which grew 13%. Operating income grew to JPY 48.8 billion, up 18% year-on-year. In May, we announced a business partnership with Sumitomo Mitsui Card, through which we will provide digital services to their Olive members. We are working closely with PayPay to build what we call a grand coalition of payments, leveraging each of our ecosystems. We are moving forward with plans to implement this solution in Sumitomo Mitsui Card's contact centers. We also expect this to be the first real-world application of our AI contact center call center solutions.

Next, Media & e-commerce business. Revenue was JPY 406.9 billion, up 2%, with growth across all areas of the segment. Excluding onetime factors I mentioned earlier, operating income grew by 6%. Next, Finance business. Revenue was JPY 91.3 billion, showing 23% growth. Operating income reached JPY 18.1 billion, achieving more than double the result of the prior year. PayPay's gross merchandise value rose 24% year-on-year to JPY 4.5 trillion. And PayPay's EBITDA increased to JPY 21.9 billion, up 87%. As for PayPay Bank, which is performing well, we are also expanding collaboration with PayPay Bank, encouraging account openings through integration with PayPay accounts.

For SoftBank's smartphone users, we've introduced preferential mortgage rate plans, supporting the growth of outstanding loan balances. In July, we issued our first-ever foreign bond, raising USD 1 billion. Thanks to strong investor interest and with an access to foreign markets, we were able to diversify our funding options. And thanks to strong investor interest, we were able to fund at rates comparable to domestic funds. In summary, excluding one-off factors, we achieved both revenue and profit growth. For the first quarter of fiscal year 2025, progress to the full year forecast for operating income and net income were 29% and 27%, respectively. Backed by the strong performance of PayPay, operating income in the finance business more than doubled. With the issuance of foreign bonds, we've successfully diversified our funding sources.

That was a quick presentation today, and thank you very much for your kind attention, and we'd like to take your questions from now on.

We will now open it up to a Q&A session. Questions will be taken first from the audience from the floor, then from the Zoom press, followed by Zoom analysts, institutional investors. [Operator Instructions].

ITmedia Mobile, my name is Kaneko. It's not related to the earnings presentation, though. I have a question about admin fees. NTT Docomo, in August, they announced that they would amend the admin fees. And SoftBank has also announced, after announcement by Docomo, it says on the website, it says free of charge. But on web, SoftBank charges the admin fees. So charging fees even on web for ordinary consumers or those who are in the process of the contract. So how would you like to explain to them?

Thank you for your question regarding the admin fees. As for the web admin fees, there is a cost for security measurement and also the self-identification confirmation and also the management fees for a payment transaction. So even though we have been doing the free of charge on that, but now we have decided to start charging. In order for us to improve our services even further, this was a must for us. I hope you could understand. So regarding the announcement, we are going to announce in many different tools and channels, so that we can penetrate this information to as many people as possible. Thank you.

Any other questions from the floor?

[ Ono ] from Yomiuri Newspaper. I have a question about admin fee or cost in general. Due to increasing cost, Miyakawa-san has mentioned that you consider raising prices. At the moment you decided to raise admin fee, but tariff remains the same. So I wonder why you raised admin fee first before raising tariff. That's the first question. And second, looking at competitors, Docomo raised tariff, whereas KDDI raised communication fee. So competitors are taking different approaches. So how do you see the market dynamics and competitors move? And going forward, other than admin fee, is there any possibility that you transfer the raising cost to something to be charged?

Yes, because of increasing costs in general, we decided to raise admin fee. And of course, we want to raise salaries for the staff at retail shops. And we made a decision finally to raise admin fee. The purpose of raising admin fee was the previous question and I'll try to address the question as much as possible, as open as possible. For the industry to grow in a healthy manner, I think revising a lot of fees are possible options. And of those options, you may wonder why only admin fee that you raised. We are trying to figure out the best way.

And we had news that minimum income would raise by 6% across Japan. And looking at maintenance cost and our labor cost, there are reasons why we may need to raise compensations and eventually raise some prices. But again, we try to figure out the best timing, at the best rate when we decide to raise prices.

We are struggling currently. Now is the good time or not? That's the question we are asking to ourselves. But I don't think that it's a good idea to have all competitors -- all mobile carriers are doing the same. So we try to find a way whereby customers would prefer us to other carriers. So once we reach a conclusion in our discussion internally, we will try to communicate with you.

About competitors taking different approaches. The question about will we raise prices -- are we going to raise prices? Or are we going to launch new services and products? We are discussing and considering, but it's too early to say anything concrete at the moment.

Next question.

Hokkaido Newspaper, my name is Takahashi. This is not directly related to the earnings results, but the other day, SoftBank announced about the GPU configuration utilizing NVIDIA's GPU. And so what kind of services you are thinking about providing? And widely, what is your AI strategy, of which the Rapidus, one of your AI strategies? And what is your thoughts on the direction of the Rapidus?

Regarding GPU utilization, so now we have prepared 10,000 GPUs, and we are also building data centers as well, which is in progress. Under our plans, the service deployment and the computing infrastructure, which is demanded by the society. And considering those, we are planning to increase. And in the meantime, there are cases where GPUs are used mostly on AI related. For us, Sarashina mini, our homegrown LLM, has been established. So this is to be rolled out. We have secured enough GPUs for that. So in the second half of this fiscal year, we are going to install AI on to it. Also, Cristal orchestration of Agentic AI will be ready. So considering its operation, the current GPUs is not enough. So considering the infrastructure, so we'll be utilizing GPUs as service.

Also, you mentioned about Rapidus. The other day, I also visited Hokkaido and joined the inauguration ceremony of Rapidus. It's a huge factory with great equipment and advanced technologies are embedded -- equipped. So this is the Japan thing, very unique. So they have a solid strategy. So I'm very much looking forward to their future. And our positioning to Rapidus is that in Tomakomai City, we are constructing the data center. And now the foundation of the first structure construction has just begun, so which will be used for data center. So the NVIDIA GPU chips will be used for now. But in the future, once Rapidus could make high-performance chips, then we would like them to deliver right next to their factory at Tomakomai, so that we can build our Japan's ecosystem. That's my dream. And so therefore, we also have invested in Rapidus as well.

Next question on the venue.

[ Sano ], a freelance reporter. I have 2 questions about the Consumer business. You talked about tariff earlier, like Docomo and KDDI. Due to a strong churn of low rate plan, they decided to cancel low rate. So for your case, do you see increasing churn for the low-price plan with low volume of data?

Yes. Like our competitors, we have low-price brands, LINEMO and Y!MO, especially SIM stand-alone plan is something that value-focused customer would pick, but we are looking at a similar situation as other competitors are seeing.

With that, what's the positioning in the future for your low price plan?

Like I mentioned before, we want to start from products that are affordable to users and get customers as many as possible. And once they get used to using data, they might upgrade the plan to a higher plan. And we are looking at a steady brand migration from low to high. So entry point should be something that is easier for users or customers would pick. So that kind of positioning is remaining the same for us.

Then the second question, looking at Opensignal report, 5G SA network quality. There is a comparison between KDDI and SoftBank and the rating was higher for KDDI than SoftBank. So what's your view on that? And especially what's your view on 5G standalone since you have limited bandwidth compared to other competitors. So again, going forward, could you let us know your strategy with 5G SA?

So Opensignal's comparison is looking at only mobile operators in Japan for some reason. So some other carriers may be unhappy with that. So I don't know whether Opensignal's comparison is fair or not. But regardless of that, SoftBank does not allow losing to competitors. So we take the results seriously. And we've got a lot of excuses from my people, but I reject any excuses from our people. So I think it's good for us, mobile operators to compete each other for better quality.

As far as SoftBank is concerned, reliability is one of the things that we focus on. But the report evaluated our reliability highly, which we are happy with. We have a corporate policy around reliability. Sometimes we build network focusing on speed. Sometimes you may want to build a network to have a better capacity. So again, our rate in terms of reliability was high, and I'm happy with that.

Talking about 5G standalone, that's not something special. We'd like to migrate to standalone as soon as possible and low latency and slicing technology can be fully leveraged with a standalone basis. So we try to migrate our network to standalone as soon as possible, but it is still taking time.

Next.

Tiffany [indiscernible], Yamamoto. I have 2 questions related to communications. So Docomo and KDDI renewed their pricing. So what about SoftBank? Is there any change in the customers' acquisition? The second regarding the carrier shops. So you also mentioned the increase of the wage and the number of shops. And what do you think about the role of the physical shops?

So looking at other carriers. MNP, we also can get their data. So based on that data, NTT is doing well. However, what is the major cause or the factor of the increase of acquisition? The price should be the main factor. So the answer should be that is pricing. But for us, we have a strong wish to increase price. But if that can be accepted by our customers or not, that is everything that we are concerned about. So we have been considering thoroughly, but we haven't taken any actual action towards that yet.

So your second question about carrier shops. For us, it's been the number of the carrier shops being flattish for us. We are not thinking about reducing the number of carrier shops, because we highly place their roles as an important contact point to the consumers. we hold smartphone classes for the elderly, so that we do not have to put anyone behind. So now regarding this how to use smartphones right now, but it will be advanced to how to use AI. And even further, it could be selling robots or autonomous vehicles. That would be possible. So at the time of implementation of AI, there will be another wave coming. So including the education to our crews, we would like to put our efforts on.

Next question.

[indiscernible], a freelance writer. A follow-up question on that. Impact from competitors' price change. KDDI slashed the lowest price plan and also Docomo canceled the low price plan as well. Then from your perspective, Y!mobile might be able to have a chance to get customers from them. So I wonder would that be the positive impact on your MNP?

Well, we have been performing well in terms of MNP. So that was not particularly the reason why we had a net gain in terms of MNP. But Y!mobile is performing well in general, but the low data volume plan or low price plan, the stronger competitor would be Rakuten. So in that sense, we are competing against Rakuten in the area of low price plan.

Any other questions?

Bloomberg, MJ. Two questions. It's not directly related to the results, but regarding Rapidus, so right now, are you thinking about any additional investment on Rapidus or not?

So today, questions are either telecommunications or this kind of thing, not related to our business results. Well, regarding Rapidus, we've invested JPY 1 billion in the first round. The second round, yes, we have been requested. I'm thinking about doing our best. That's because, in Japan -- so they have come together to rebuild the semiconductor industry once again in Japan. So within our limits though, so I would like to do our best.

So it means that there is a possibility for additional investment?

Yes, but I cannot just decide by myself because it has to go through our Board members.

The second question is about PayPay IPO timing. So what's your thought on that?

So about this, as of now, I cannot talk about it. So when the right timing comes, I would like to give you an update. Thank you.

Next question.

Ishikawa, freelance journalist. A question about price, again. I hear that Miyakawa-san turned out to be a winner because competitors raised the price and that may have given you a strong flowing wind. Have you changed your mind to raise price like other companies did? And we are looking at the right timing?

Next question is about HAPS. You had worked so long on aircraft type, but you changed the balloon type because of you don't want to lose against the competitor?

We were looking at both options, balloon and aircraft types. And Google used to have a balloon project, and we worked with them before. And we found pros and cons in either hardware or aircraft or balloon. We changed the plan from aircraft to balloon because we found that we could get the regulatory permission to fly balloon. We thought it will be very, very hard to get regulatory approval to fly balloon.

And the first-come-first basis was, in general, when it comes to aircraft or regulatory permission in the airspace. And it has been taking so long to get regulatory approval to fly aircraft. It may take as long as 2029. But we found that there was a maker in the state to get a regulatory approval to fly balloon soon. So we applied ourselves, and we got a positive response. So we decided to start with balloon. But the fundamental technology can be applied to both types, aircraft and balloon. So motors, batteries and solar panels, those 3 important tools can be usable in either case. So that was the background behind our decision.

Any other questions? Well, today, no questions about the figure number. I thought we did really well, though. Well, the questions. We would like to take questions from the Zoom press. [Operator Instructions] Freelancer, Suzuki-san, please unmute and ask your question.

This is Suzuki, freelancer. Two questions. So PayPay, 70 million users been acquired. And the PayPay Group has been structured. So since before, you said that PayPay can do even better. So now looking at IPO in the near future. So what is your thought on PayPay?

Well, Nakayama-san of PayPay, we have discussions very closely. And now it's the very, very critical phase. So it's not the right timing for us to talk about. So the positive factor of PayPay's growth is the expansion of GMV, which followed by the increase of revenue. And that's why their performance is well and the growth speed has been accelerated.

Also, within the support we can do, the other financial services to be grown, if there is area we can support, then we would like to provide support for them.

So for now, you mentioned that support, you mentioned for PayPay. What kind of support you are thinking about?

Well, it's actually related to a strategy. So I just want to be brief on this because I'm concerned about PayPay's IPO.

So the second question, if you could answer to, SoftBank's AI solution and the insurance, health care as well. So in 2025 was the time line for that. So what is the status of that? Do you have any vision on that?

Regarding the contact center, it will be implemented by the end of the year. And other services, once a system is made, then the service will be provided. So the earliest will be within this year or early next year. It's not really far. Thank you.

Next, we'd like to start taking questions from analysts and institutional investors. The first, Masuno-san from Nomura Securities.

My name is Masuno from Nomura Securities. I have 2 questions. First, about earnings results. The Other segment, the loss of JPY 12.4 billion, which was smaller than I thought actually. I believe that you're going to invest more and more and you may need to expect more red numbers for the full year and also GPU. You mentioned that you use whole GPU resources for internal purposes. But at the AGM, you mentioned that you would launch GPU as a service next year as a commercial offering, and you may need to expect some net loss in the segment once you start offering commercial GPU as a service.

Thank you for your question about usage of GPU. We have a subsidiary called Intuit, and they are working on Sarashina, and they are working on that and upgrading Sarashina. And based on Sarashina, we have built Sarashina mini, which is 70 billion parameters, and we plan to launch Sarashina mini sometime autumn this year. We are currently utilizing the LLM as many as possible to improve and grow the LLM. We cannot sell with free of charge or with a charge. We launched Sarashina mini and the use for that will be the most. So starting from autumn this year, again, our plan is to launch commercial GPU as a service.

And talking about the Other segment, we budgeted JPY 10 billion -- sorry, JPY 100 billion for R&D, but we have used only 10% of R&D budget for this year. But again, we are talking about R&D budget. Less use of the budget will be better. And we said that we have a budget, but if you want to use the budget, you need to deliver a final product. So again, budget is there. And we just let the researchers use on condition that they deliver something. And if R&D budget has not been used fully, then we could expect some upside in terms of income. And extra income -- we would like to consider the use of extra income for shareholder returns, for example.

The next question is about Media & EC business and finance business. And today, LINE Yahoo! share price down by 11%. And in your segment, Media & EC and finance, how do you see those segments?

I believe it was 12% or more down, Rakuten share price. And I was a little bit surprised because Rakuten's financial result was not that bad. But finance segment, e-commerce segment losing money, which is not good for us, but we can take it back, and we are confident. Going forward, we will have agentic AI available more, and that could change the positioning of search engine and where people want to post advertisement. And LINE Yahoo!, for example, has been studying a lot, anticipating such transformation.

I have heard a lot of ideas from LINE Yahoo!, and I am impressed with their ideas. So I will wait and see how they perform. And if they keep struggling, maybe SoftBank may extend our supporting hands. So parent company, us and subsidiaries like LINE Yahoo! want to work together to bring it forward. Yes, Rakuten share price dropped by 12%. Excluding 1 quarter last year, LINE Yahoo! posted net positive. Yes, definitely effectively net positive. So Rakuten suffered only onetime factor, and they posted a positive result, which is impressive, but I believe that there is still room for opportunity going forward in those areas.

Next, SMBC Nikko Securities, Kikuchi-san.

Two questions. Maybe it's too early to ask, but this fiscal year, as you expect, and if you were to increase pricing, then you will win. And even though there may be some swings in the EC and Media segment, but in the previous earnings results presentation, I also asked about AI, computing infrastructure and so in the next 10 years or 20 years. So that will be your core business base or -- but to do so, money and the resources need to be sufficient. Now in the next 3 fiscal years, I think there is a limit that you can achieve. But towards the next mid- to long-term business plan, so what is your thought on that?

It's not going to be an easy win. So we would like to carefully work on further cost reduction as well. And this year's JPY 1 trillion, we are sure to achieve. So in the next fiscal year, so this is my 5th year as CEO. And from the next fiscal year, it will be the second cycle of the mid- to long-term. So I took over from Mr. Miyauchi, and I made the 5- and 10-year plan. And so this fiscal year, I set my goal to complete some targets that I achieved. So that includes for HAPS and other. So I have taken some actions around those targets. But now without AI-related initiatives, we cannot make a thorough business plan for the next mid- and long-term.

So regarding AI data centers, our existing data centers, its power is about 50 megawatts. And Sakai as a center, we would like to increase up to 300 megawatts. So we have secured power. But if we do it all at once, it will cost like JPY 1 trillion level. So we would like to see the balance between supply and demand. And the same as we did for the base stations investment, we would like to set small goals towards our final goal.

Regarding AI-RAN, we have been developing together with NVIDIA now at Keio University campus. The performance has also been tested. And so we would like to challenge ourselves to become -- want to make -- since we do have Sakai factory, so we would like to also challenge using some equipment and make something, but in what stage. And to do so, we would like to see how it goes and different areas from the telecommunications area. So I expect there will be some figures from the different areas other than telecommunications area. So we would like to challenge to the next phase of the next mid- to long-term business plan. So we believe that we have set some foundation so far.

The second question, excuse to ask this again, but price plan. What are you so concerned about, if you could share with us? For example, the Docomo's price hike, Docomo Max, that unique plan was introduced, and KDDI increased pricing. And then they're doing bundles, but bundles is really needed or not. That is a question as well. So each carrier price hike is not straightforward. It's a bit tricky, I think. So when SoftBank was to increase price, how it can be done? You may not be able to share that, but what makes you concerned so much? And what are you really concerned about.

I'm a person to answer any questions, but it's very close to our strategy-related matters. Well, one thing I could say here is that whether that can be accepted by consumers -- our customers or not. So I carefully check on the net, but I don't really see any positive feedback. So I don't want to make an industry that customers are to leave. So that's one concern, I would say. The second, to put in one word, Docomo and au are strong competitors, but we cannot forget Rakuten. So 3 carriers, including us, are to go to the same direction. Then Rakuten may just get all good things. So we need to consider that point as well.

Thank you very much. Next, Tokunaga-san from Daiwa Securities.

I have 2 questions. First, to summarize this quarter, ARPU down, improvement of the gross margin, and you got a lot of Consumer customers. And then you may not need to raise prices. But again, in the Consumer business for the quarter, what's your view in summary? And ARPU, how much decrease of ARPU is acceptable to you?

Yes, I agree. Consumer business performed well. Actually, ARPU, consumer ARPU didn't go down. Enterprise went down. So in total, we saw decrease of ARPU. So Consumer grew good and Enterprise did not perform well. So I'm not worried about Consumer business at all.

And second question is about the GPU as a service. Looking at the Sakura Internet financial results, they downgraded the forecast because of decreasing demand. But for SoftBank case, only for the internal use, you need more GPU capacity. So maybe you don't have to worry about the demand when it comes to commercial service. So what will be the prospect customers for the GPU as a service, and also internal uses versus commercial offering, which is higher in priority for the use of GPU capacity.

At the moment, we don't really release GPU on its own. Rather, what we do is not lending hardware, but lending GPU as a capacity. So our data center can offer GPU as a capacity, not as hardware. And the next big wave will be Cristal. And Cristal is for Enterprise customers. And Enterprise customers want to put their data in data centers in Japan, not outside Japan. And currently, we are using OpenAI's GPU. OpenAI, obviously, is an American company.

And when it comes to commercial offering, however, maybe we should look at Azure -- sorry, enterprises are looking at Azure for better protection of the data. That's an approach that we need to think about. So depending on how Cristal goes, the GPU capacity that we have at the moment is not enough at all. So we will see how the demand of Cristal goes.

So going forward, the biggest demand comes from Cristal?

Well, at the moment, Cristal and call center agentic AI for enterprise customers, which is ready for commercial product. So once we see a trend in demand, we may need to raise GPU capacity going forward.

[Operator Instructions] Today, after a long time, there is this presentation, the one that there is a need for CFO. Well, this concludes Q&A session. We conclude SoftBank Corporation earnings results presentation for the 3 months ended June 30, 2025. Today's presentation will be available on demand on our website later today. Once again, thank you very much for your time today to attend SoftBank Corporation earnings results presentation for 3 months ended June 30, 2025.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]

It is now the scheduled time. Mr. Miyakawa, please proceed to the Chairman's seat.

Good morning. I am Junichi Miyakawa, President and CEO of SoftBank Corp. Thank you very much for taking time out of your busy schedules to attend. In accordance with Article 21 of the Articles of Incorporation and the decision of the Board of Directors, I will serve as the Chairperson of this meeting. I hereby declare the opening of the 39th Annual General Meeting of Shareholders. Please note that Director Atsushi Horiba is absent today due to unavoidable circumstances.

The matters to be discussed at this meeting are as listed on Page 3 of the convocation notice posted on our company's website. However, as also announced online, proposal #2, election of 1 audit and supervisory board member has been withdrawn due to the sudden passing of the nominee, Mr. Timothy Maki. We are deeply saddened by this sudden loss. We would like to take this moment to respectively express our heartfelt condolences. We confirm that a number of voting rights held by shareholders present today satisfies the quorum required to deliberate the proposals.

Now the moderator will explain the proceedings of today's meeting.

We will now explain how today's meeting will proceed. After reporting items, we will provide an explanation of the proposals and our growth strategy. Following that, we will proceed to the Q&A session for both reporting and resolution matters. After the Q&A session, we will move directly to voting on the resolutions. Please note that methods of Q&A and voting defer between in-person and online participants. The instructions for each will now be explained. We will first respond to questions submitted in advance via the dedicated website. To allow as many participants as possible to ask questions, each shareholder might ask only 1 question. Motions to amend proposals may be submitted during the Q&A session. If any amendments are proposed, they will be deliberated together with the company's original proposal and original proposal will be voted on first.

As for voting, voting by in-person shareholders will be confirmed by applause. For online shareholders, questions are already being accepted via the dedicated website. The deadline is 5 minutes after the Q&A session begins. Each shareholder may submit only 1 question limited to 200 characters. Please note that procedural motions or amendment motions must be made from the venue only. Online shareholders may vote through the dedicated website. Voting is already open, but once submitted, votes cannot be changed. Please select your votes for all proposals and then click the Vote button. All votes must be submitted together in one submission. As mentioned earlier, proposal #2 has been withdrawn, and therefore, no vote button is displayed for this matter. That concludes the explanation of how the meeting will proceed.

Now we will conduct a vote to confirm whether this method proceeding is acceptable. Online shareholders who agree, please click applause button. While we collect the votes from online participants, we will also confirm agreement from in-person shareholders. If you agree with the procedure, please indicate by applause. Thank you very much. We will now begin tallying the votes. Please wait a moment.

We are currently confirming the results. As the majority have voted in favor, we will proceed according to this method.

Now moving to report on reporting items. About the reporting items, they are displayed on screen. Details are as stated on Pages 30 to 69 of the convocation notice and in the supplementary documents. Today, we have prepared a video to explain the contents. Regarding the audit results of the consolidated financial statement, these are described on Pages 69 from 67 of the convocation notice. We will, therefore, omit the detailed explanation here. Now please watch the video.

[Presentation]

That concludes the report on the reporting items through the video presentation. I wonder if you have noticed, but the voiceover was AI. As you can see, AI speaks very naturally as we humans do. We hope to utilize AI in many other use cases. Let us now proceed to the resolution items for today and provide an explanation for each.

First, proposal #1, election of 11 directors. The details of this proposal are provided on Pages 8 to 15 of the convocation notice. Next is proposal #3, election of one alternate Audit and Supervisory Board member. The details of this proposal are on Page 17 of the convocation notice. This proposal has received the consent of the Audit and Supervisory Board. Finally, proposal #4, determination of compensation for directors. This proposal is detailed on Pages 20 to 27 of the convocation notice.

As I said at the beginning of the meeting, proposal #2, election of one Audit and Supervisory Board member has been withdrawn due to the sudden passing of Mr. Timothy Maki. In light of this, Ms. Kazuko Kimiwada has expressed her intention to withdraw her resignation, and she will continue serving as an Audit and Supervisory Board member after this meeting. That concludes the explanation of all proposals.

Two years ago, we announced our medium-term management plan, which set a goal of recovering to a profit level of JPY 970 billion, the level before our price reduction initiatives by fiscal year 2025. Since then, our business has progressed smoothly, and while continuing to actively invest in AI growth, we achieved that target 1 year ahead of schedule. This fiscal year, we intend to further accelerate our AI investment. Alongside that, we have revised our financial targets upward, aiming to achieve profits exceeding JPY 1 trillion. We have also raised our net income target and are on track to deliver record high earnings this year.

Looking at our total shareholder return, or TSR, since the beginning of the midterm plan in FY 2023, we can see that it has significantly outperformed our competitors. We believe this reflects confidence in both our ability to execute our strategy and our commitment to returning value to shareholders. We will continue to focus on both long-term growth and proactive shareholder returns. Having gained confidence in our ability to meet our midterm goals, I'd like to shift to a long-term perspective and talk about our initiatives for future growth. Our growth vision is built upon the foundation of next-generation social infrastructure, which supports sovereign cloud, sovereign AI and ultimately, the delivery of AI agents as services.

Let me begin with AI agents. Traditional AI-generated text or images based on previously learned knowledge. But today, AI has evolved to reason, make decisions like humans, and even respond empathically. Most recently, AI has started to think and act independently, taking over tasks that used to require human intervention. These are known as AI agents, and they are expected to significantly enhance business operations by working 24/7.

Today, I'd like to show you a working example, an AI agent designed to operate in call centers. We shared a demo video last year. But since then, development has progressed significantly. It is now a functional reality. Please take a look at this video.

[Presentation]

It was a conversation between AI and human. Human conversation is made possible by instantaneous decision-making in the brain. Now AI has evolved to the point where it can maintain a natural conversation even when interrupted with sentence. This AI call center agent will soon be delivered to our clients. Unlike traditional IT solutions, this AI continues to evolve even after deployment. We have already received many inquiries. Monetization of our AI investment is now underway.

Next, I will introduce Cristal intelligence. At our company, various departments such as HR, general affairs, sales and technology, they have already developed their own AI agents. We believe that by enabling these agents to collaborate autonomously, we will enter a new era of business management on an entirely different level. In February this year, we agreed to jointly develop Cristal intelligence with OpenAI. We prepared a video to show you what kind of product we are building. Please take a look.

Until now, AI has been used in specific roles. For example, the legal department used it to detect risks and contracts, and R&D team used it to translate and summarize overseas research papers. In other words, AI was deployed in silos. If we use a music analogy, it was like playing each instrument independently. Cristal intelligence aims to orchestrate these individual AIs to act as a conductor of an AI orchestra, harmonizing the entire company. This means that AI will drive company-wide optimization and enable next-generation management. We plan to scale this initiative during the next midterm management plan.

Let me now explain sovereign cloud and sovereign AI. Sovereign cloud and sovereign AI. What is this? It refers to infrastructure in which Japan maintains sovereignty over data, technology and operations. In short, it means operating cloud and AI services entirely within Japan, free from dependence on foreign laws or infrastructure. The goal is to securely manage sensitive data held by governments and corporations and to fully utilize that data in conjunction with AI.

However, currently, the domestic cloud market is almost entirely dominated by American providers. Similarly, global AI leadership is concentrated in the U.S. and China. As you can see, our generative AI is the only one among the top players not from those countries. As a provider of Japan's next-generation social infrastructure, we are steadily preparing for sovereign cloud and AI. We are also preparing to launch GPU as a Service, a platform that rents AI semiconductors via the cloud. The software development is already complete, and we are preparing for commercial launch next fiscal year. We plan to grow this into a major business driver in our next medium-term management plan.

Next, let me talk about AI-RAN. As AI becomes embedded in every aspect of society, it will become essential for AIs to collaborate. Currently, data processing is done on large centralized AI compute platforms, which pose risks such as latency, large-scale outages and energy limitations. Our solution is to place AI compute infrastructure close to where it's needed, enabling low latency, resilient AI networks. We are installing these platforms at mobile base stations throughout Japan, transforming our mobile network into an AI network. This is what we call AI-RAN, and we are developing it in collaboration with NVIDIA.

Finally, let me talk about HAPS. HAPS stands for high altitude platform station, flying base stations that operate from the stratosphere about 20 kilometers above ground to provide communication services. The stratosphere is a harsh environment with low temperatures, thin air and strong UV radiation. We have spent years developing the necessary technologies to withstand these conditions. We originally planned to use a fixed-wing aircraft. However, we now plan to launch service earlier than expected using a new type of craft called LTA, lighter than air, which uses helium gas to float. We have already received flight permission over Japan. And the final test will take place in the U.S. next month before we begin service preparation.

For those unfamiliar with the concept, please take a look at this video of the LTA craft.

[Presentation]

We began HAPS development in 2017. Today, we hold more HAPS-related patents than any other company and are leading the industry. Through the HAPS alliance, global collaboration has advanced and the key technologies are now in place. While we initially targeted commercial launch in 2029, we are now able to begin pre-commercial operations in 2026. Our HAPS project will be realized within 10 years of conception, whereas satellite communications took about 20 years from concept to commercialization since 1945. This demonstrates our technological and operational excellence. HAPS will be able to provide coverage over a 200-kilometer radius, making it ideal for disaster preparedness.

Traditional telecommunications were designed for 2D connections between phones, cars and so on. But the future will require a 3D communication for drones and flying vehicles. This is already a topic in 6G standardization discussions. We believe HAPS will become a core component of the next-generation infrastructure and are taking the lead in making it a reality.

Today, I've focused on our AI-centered initiatives. Going forward, AI is expected to evolve into artificial general intelligence, AGI, reaching levels of capability equivalent to human wisdom. Eventually, AGI is set to evolve into artificial super intelligence, ASI, with intelligence surpassing humanity by a factor of 10,000. In the midst of this transformation, we are determined to play a leading role in implementing AI and society, building the next generation of infrastructure and achieving sustainable growth. We always set high goals and work backward from there steadily and strategically. We remain committed to our corporate philosophy, information revolution, happiness for everyone.

This concludes my presentation. Thank you very much for your attention. We will now move on to the Q&A session. The moderator will once again explain how the Q&A will be conducted.

We will now explain how the Q&A session will proceed. First, we will respond to questions submitted in advance via the dedicated website, followed by questions from in-person shareholders. If you have a question, please raise your colored board. A staff member will bring a microphone to you once you are called on. Finally, we will address questions from shareholders attending online submitted via the dedicated site. Questions submitted online will be read aloud by the moderator. The deadline for online submissions is 5 minutes from now. Please note that in all formats, each shareholder is limited to one question. That concludes the explanation of the Q&A procedure.

Thank you. We will begin by answering questions submitted in advance by the dedicated site. The moderator will read the questions aloud.

We have received 3 questions about special benefits. I wonder about the timing of granting shareholder benefits 1 year later. I would like you to consider shareholder benefits other than PayPay. My child does not have a smartphone, so he cannot receive benefits. What should I do? Please provide your answer.

PayPay Money Lite special benefit will be delivered in May 2026, as previously announced in the announcement of the shareholder special benefit. We hope you will understand that the timing is a little more than a year away until the shareholders' special benefit is delivered. We are planning various campaigns, including a drawing for tickets to the [ Hoag ] and B.League and so on. Please kindly wait for the information to be sent to your registered address.

The reason why we have chosen to offer only PayPay as a special benefit is that PayPay is at the heart of our group's economic sphere, and we hope that our customers will use PayPay. We hope that it will deepen their understanding of our group services and promote cashless payment, which is promoted by the Japanese government. If you have not yet used PayPay, we hope you will take this opportunity to try it.

Lastly, I understand your point about children under the age of 18, who do not yet have smartphones, not being able to receive shareholder benefits. We will make arrangements immediately to present the PayPay Money Lite to the parents as a proxy until they bring their own phones in the future. Thank you for your question.

Next question. Profits are on the road to recovery. So why not increase the dividend?

As you have pointed out, over the past 4 years, since the beginning of mobile price reduction, the scope of business has expanded considerably and the landscape has changed. We are grateful that we have been able to overcome the difficult times together with our shareholders. Today is the fifth time that I have presided over a General Meeting of Shareholders and the fifth time that the dividend forecast has been left unchanged. Japan's rapid inflation has become a social challenge, and maintaining dividends in this inflationary environment is close to a substantial dividend cut.

On the other hand, however, I'm also looking for opportunities to invest in AI, which continues to grow at a rapid pace. We have been blessed with many opportunities. Now is a good time to take an aggressive investment stance and rather aggressively invest in AI. We believe that this will lead to an increase in corporate value in the future. While making this upfront investment, we will consider strengthening shareholder returns in the event of further earnings growth.

It took a considerable amount of time to build AI infrastructure, but it has gradually borne fruit in the form of commercialization. The next medium-term management plan will incorporate these factors, and we will lead the company to become strong enough to meet expectations for increased dividends. That was my answer to that question.

DOCOMO and KDDI have announced price increases. What is SoftBank's approach?

We believe that a review of prices is necessary for the healthy development of the telecommunications industry. To account for inflation, include raises not only for employees of our own company, but also for those of our suppliers and distributors. We must also consider the people who are involved in this industry. However, since there is harsh competition, we will make a careful decision by carefully observing the trends of other companies. Through competition and service, we would like to help develop the industry. Thank you for your question.

Next question. SoftBank KK is a subsidiary of the SoftBank Group. And currently, both companies are listed. We believe this is a situation where the interests of the parent company are given priority and the interests of minority stakeholders of the subsidiary can be undermined. And what are your specific measures to address the situation?

The parent company, the SoftBank Group is engaged in investment activities centered on AI globally. On the other hand, we are a provider of telecommunication infrastructure and online services, primarily in Japan. We are an operating company. Since the nature of the business is different between the 2 companies, conflict of interests are unlikely to arise.

Do you have a concrete plan? To answer that question, by having a majority of directors be outside directors, the system is designed to prevent decisions that are disadvantageous to minority shareholders. In transactions involving the SoftBank Group that exceed certain standards, the company will not make decisions that are disadvantageous to minority shareholders. We have a system in place for thorough discussions at meetings attended exclusively by outside directors prior to the Board of Directors' meetings. So we hope you will be reassured.

Mr. Son wants to speak something.

Yes, parent subsidiary companies are both listed. It's been subject to criticism like shareholders asked the question. Subsidiary has minority shareholders like you, and interest of minority shareholders could be damaged if parent companies ask some request to a subsidiary. I believe that some of you have your own children and grandchildren. I have children and grandchildren. Once you become a parent, you will realize how grateful it is. I had my father die last year. And as time goes on, I feel even more grateful how I was lucky to have a parent.

If you're a parent, you don't want to take food away from your children. You don't want to see your children having a hard time. Once you become a parent, the only hope that you'd have is that your children grow healthy and even grow a better person than yourself as parents. You don't want to do anything to hurt children's growth. You'll never dream that. At least I believe that.

Even though there is a criticism about both parent and subsidiary listing, we have a lot of subsidiaries in our group. And the parent company has super control over all subsidiaries, which is practically difficult. So rather if each and every subsidiary grows and becomes successful, that will be even better for a parent company. So it's good to have an openness by getting listed on the stock market, and that could drive growth of subsidiaries being transparent as listed public companies.

So me, as a leader of the parent company, I want to really encourage subsidiaries to grow further. As time goes, this kind of philosophy will turn out to be most effective in operating group companies and subsidiaries. I believe most people would agree with me. Again, definitely drive both listed parent and subsidiary listing structure rather than criticizing the double -- dual listing.

Next question. I saw a news report that there was a possibility of personal information leakage by a company to which you outsource your business. What measures will be taken in the future?

First of all, we would like to express our deepest apologies for any inconvenience and concern this may pose to our customers. We take the inadequate management of contractors very seriously and will work to prevent recurrence. We'll review all outsourcing of business operations that handle personal information and operate them under the direct control of the company. Thank you for your question.

The next question will be the last of the preliminary questions. This is a question for President Miyakawa. I have been a shareholder of your company since last year. I'd like to ask you about the values and the management philosophy that you hold dear in your corporate management. Please tell me about your past experiences, events that influenced you in your childhood, and any beliefs that have shaped throughout your career. As a shareholder, if we can gain a deep understanding of the thoughts and the personality of the management, it will greatly encourage us to support your company from a long-term perspective.

Thank you very much for becoming a shareholder of our company. Well, this may not be so much as my management philosophy, but my goal is to create a company that is indispensable and meaningful for the future society. With an eye on the future coexisting with AI, I want to make SoftBank a company that provides next-generation social infrastructure. I'm working on various initiatives while working backward.

I believe that the origin of this thinking lies in my upbringing. My family's zen temple has been in existence for more than 1,200 years. And this is because it has continued to stand by the people for each era and demonstrate its significance to the society, and that has been well received. I believe this is the reason why the company has lasted this long, and the company must not only continue, but also continue to grow within the society of the future. It is essential that we continue to demonstrate our firm purpose.

Well, I am ashamed to say that I did not want to follow in the footsteps of zen temples. That's why I started my own business when I was 26 years old, and have been running a start-up for 10 years. After that, I joined SoftBank, where I spent 20 years, mainly in the field of technology and gained various experiences as a member of the management team while being trained by Mr. Son. Five years ago, I was appointed CEO, and I am determined to make this the culmination of my life's work to ensure the continued growth of SoftBank and meet the expectations of our shareholders. That was my answer to the question. Thank you very much.

We will now take questions from shareholders attending in person.

Thank you very, very much for your questions and straight to the point. You've mentioned the companies though that our company is growing more and more. And then our external directors are excellent. I'm proud of them. So regarding the directors' remuneration is one of the proposals today. And we are attempting to ask external directors to also hold our shares. So that is our new initiative. So that makes that the company and the value and the dividend are equal to what they are [indiscernible]. So by holding shares -- and this is also included in the remuneration of directors as well. And those who are resigning as of today and also have joined as new members as of today, so we would like to refresh the members, so that the same members remain a longer period or tenure, so that we can also have the always fresh and objective perspectives. And we would like to also demonstrate how we are going to work with these new directors moving forward. Thank you for your question.

In the presentation I did earlier, I talked about the last year of the 3-year midterm plan we announced 2 years ago, and I demonstrated my confidence. Next year at AGM or earning results, next 3 or 5 years' business plan we want to present to you. In fact, we have already started preparing for the future, and we have high goal to drive my people in the company. So we are trying to get a stretch goal. Just achieving the goal is not enough. We always should shoot for higher levels. And we should have a lot of discussions in the company. And once time is right, we want to make it available to the public. Again, if you could give us some more time before announcement next year about next midterm plan, we want to obviously grow further. Thank you for your question once again.

Thank you. That's a very interesting. Thank you for your interesting suggestion. We will take it into consideration.

Regarding the photo session, let me ask Mr. Son. He's laughing though. He's shy. Well, let us take it into consideration and we would like to announce on the website. We will take it into our consideration in a positive manner. Thank you for your question.

So may I ask Mr. Son, how he thinks about Mr. Trump?

I don't know how relevant it is to this AGM. But again, thank you for your question anyway. I met him both in his first administration days and the second administration days. As the President, without doubt, he is committed to make America great. I'm sure there are people who support him, people who criticize him, but he is serious in thinking about what will be the best for America. To make America good, to make America better. On top of that, even though sometimes he is very controversial, but again, he hopes for peace. I strongly feel that. He is the President of the biggest country in the world. There are people's lives at stake and other things at stake. And I hope sincerely that his legacy will remain remembered in the future.

Thank you, Mr. Son. Well, thank you for your questions and suggestions. All the questions provided will be answered. So due to the interest of time, at this value, we are very sorry, but we cannot answer to all the questions during the meeting, but we would like to take into consideration how we can manage ourselves to accept all the questions, as many questions as possible. Thank you so much.

Thank you for your question. And we apologize for any inconvenience we may have caused you. Not only our retail stores and call centers are a very important customer touch point. So we will make sure that we will make an improvement in communicating with our users. Thank you.

Mr. Imai, he said that you are the specialist.

Well, about the growth of SoftBank, and thank you very much for your comment. And since 2000, I've been with SoftBank. So it's been 25 years now. The direction of SoftBank Corporation. Well, the leaders, Mr. Son and now Mr. Miyakawa give the directions. And then towards that direction, how to proceed to that target? We actually go backward from that target. So we have a schedule towards that goal and how to achieve that goal, and we share among our members. And this is how we look at our target, and we also review how it goes and if it's on track or not. So this corporate culture, I would like to keep it.

So CFO, Fujihara.

Yes, I joined SoftBank in 2001, almost same as Mr. Imai. So 10 years ago, Beyond Carrier strategy that we had raised, we did not have PayPay. So we challenged to something new, and that has bore fruit like this. And the word from Darwin, those who can survive is not the wise one, but to be able to adjust to change. And Mr. Son likes this word, too. So this past year is the time that we have learned a lot. And we played as one team, and then we also had a target and then we took actions backward against the target.

Ms. Sakamoto, please.

It's been a year since I took this position. And I'm in the AI field as a specialist and this SoftBank is a big company. And so I was wondering that such a big company requires some time to take actions, but this company is very agile. And of course, the researchers have ideas, but even the leaders, Mr. Son and the leaders come up with great ideas and then those ideas are realized in such a short period of time. And I am very grateful to be a part of this company.

Thank you for your comment.

Thank you for your question. So it's been a year since I joined as an external director. So what's unique about this company is that what this company is aiming as a whole, as a company is crystal clear. And the vision is so vivid. Therefore, not only the management people, but all the employees are understood with this policy. So therefore, it makes the company agile and then quick execution is possible. So as an external director what we are doing is that, so we also provide opinions objectively. And even our opinions are heard by the management people carefully. And I also feel very unique about SoftBank that they are very focused on their growth. Thank you. That concludes my answers.

Now I'd like to take the last question from the venue. Thank you for your question. You are right, product name is very important. When launching some product, we discuss on several candidate names, and we do market research behind the scene to decide the best product name. But [ Chubby ], I never heard of that. And I think that our employees would start using [ Chubby ] pretty soon. So thank you very much for your very valuable suggestion and input. Thank you.

We would like to answer questions from the Internet and the moderator will explain.

So I feel that the arrival of the communication was quite late. I apologize for that. I heard that there was a myriad of reasons that the communication was delivered late. We would like to reflect this to our next year's operations. Thank you for your question.

Next question. I hear that PayPay is preparing for listing. And at the time of IPO, do you have a plan to sell some of the shares that you have at the moment?

Well, there are a lot of limitations when a company starts preparing for IPO. At the moment, I refrain from commenting on PayPay or potential IPO. But I would just say PayPay is a very, very important subsidiary, and we expect a lot of synergies from business perspective. So that's only so much I can say for now.

The next question, I would like to know what term the candidate is serving on the notice of convocation?

Absolutely. Thank you for your valuable input. We will include it in next year's convocation notice. Thank you very much for your valuable opinion.

About Cristal Intelligence. How are you going to promote Cristal Intelligence?

At the beginning of the current fiscal year, we established a team, a dedicated team called SB OpenAI Preparation Office, and also planning to establish a joint venture with OpenAI. How and what should we do about our product, we are discussing with OpenAI. Earlier, we showed a video about a concept of Cristal Intelligence. Once Cristal Intelligence is ready, first, we're going to have our employees to utilize Cristal intelligence internally before deploying to outside the company. So please give us a moment, please.

I'm concerned about the lack of female internal directors. What are your thoughts on this?

As for female directors, internal directors, the number of potential female managers must first be increased. The Women's Activity Promotion Committee, of which I'm the Chairperson is taking the lead and a dedicated team has been assigned to implement specific initiatives. The current ratio of female managers is around 10%. By 2030, we continue to work toward our goal of 15% by the end of 2030 fiscal year and 20% by the end of fiscal year 2035. Through this initiative, we aim to create a new female director within the company. Thank you for your question.

I hear a lot about advanced technologies like AI, but more of your traditional business like JR-related business, what do you think about the future of such traditional business?

That business was one of the beginning of our business, and we have a commitment to support public infrastructures. In fact, digital transformation is a lot of topics that we discuss with customers. In fact, that business is growing. relationship with JR, I believe, will be deepened even further. And from any different angles, we want to cooperate together with JR to grow together. That I hope answered that question.

How exactly do you plan to use the net income from the current fiscal year? Also, how much do you intend to increase capital and retained earnings? And how do you intend to utilize them?

Net income and retained earnings are used to pay a high level of dividends to meet shareholders' expectations. Of the net income for fiscal 2024, 78% was returned to shareholders as dividends. We will also strive to strengthen our equity capital while making investments for medium- and long-term growth. Thank you for your question.

As AI evolves from a copyright perspective, how are you going to protect the interest of creators?

Yes, images, voice of voice actors and actresses. If we use such materials, we definitely don't want to damage creators' interest. We comply with copyright rules and regulations in training Gen AI. Going forward, while we're adhering to AI ethic policy, we will make sure that we would not violate creators' interests.

The press reports that some merchants have left the QR payment system because of the fees that are being charged to them. What are your thoughts on this?

I believe that the high commission rate of PayPay is a bit of a misleading report. Credit card fees generally range from 3% to 5%, but PayPay's fees are about half of that. Some customers use those stores because they have PayPay. So we receive a commission. So we receive a commission in return for attracting those customers. In fact, the number of merchants is still growing steadily. So we are focusing on further expanding our services for merchants. So we are committed to the development of both PayPay and our merchants. Thank you for your question.

Thank you very much for your many questions. We take them as a sign of your expectations and interest. While we'd like to answer all of them, in the interest of time, the next will be our final question. Questions that we are not able to answer today will be posted on our company website at a later date. Thank you for your understanding.

Now the last question was, in order to foster compliance of your employees, what kind of measures are you taking? What kind of initiatives are you taking?

Earnest of the compliance. Every year, we assign a certain month as a compliance month. And in that month, we conduct a test for employees to check their awareness level. And also, we ask employees to submit a compliance questionnaire and the response rate is always 100%. So our employees are highly mindful of compliance.

Thank you once again for all your questions. We will now close the Q&A session and proceed to voting. Shareholders attending online who are in favor, please click the applause button. And shareholders attending in person, please express your approval with applause. Thank you.

We will now move forward with the voting process. The moderator will explain key points about exercising voting rights. Online shareholders, after making selections on all proposals shown on the site, please click the Vote button. All votes must be submitted at once in a single submission. While votes from online participants are being counted, we will collect votes from shareholders in attendance. This concludes the instructions regarding voting procedures.

Online shareholders, please select your votes for each proposal and click the Vote button.

We will now begin the voting process for in-person shareholders.

Proposal #1, election of 11 directors. If you support the original proposal, please show your approval with applause. Thank you.

Proposal #3, election of 1 alternate auditor. If you support the original proposal, please show your approval with applause. Thank you.

Proposal #4, determination of compensation for directors. If you support the original proposal, please show your approval with applause. Thank you.

We will now confirm the voting results. Please wait a moment.

We have now confirmed the results, including those from online voting. Proposal #1, #3 and #4 have all received majority approval, including advance votes. Accordingly, all proposals have been approved as originally proposed. Thank you very much.

That concludes all items on the agenda for today's General Meeting of Shareholders. I hereby declare the 39th Annual General Meeting of Shareholders of SoftBank Corp closed.

At this moment, I'd like to introduce the newly appointed directors. Mr. Karaki, could you please say a few words?

Thank you very much. My name is Hideaki Karaki. I have been a certified accountant for a long time. And looking at the last 10 years, especially, I was a member of FSAs, Certified Accounting Board, and other organizations. And from a corporate business perspective, I have been doing my business. And this time, I have an opportunity to join the Board. With my expertise and experiences, I hope that I can contribute to Miyakawa-san and the management and pass my messages to the management team to help the company to grow for a long term, and look forward to working with you all. Thank you.

Next, Ms. Akiko Nakajo, please give us a few words.

Thank you very much. My name is Akiko Nakajo. Not only in Japan, but also globally, there are a lot of excellent companies and SoftBank is not afraid of failure, always pursues growing and evolving. And also, SoftBank is committed to the people and the society, and they are working in full speed. And I am proud that I become the member of this company and have been executive of a globally operated company. Again, with my expertise, I hope to contribute to help the company enhance the corporate value further. Thank you very much.

Next, I'd like to ask for parting remarks from Mr. Takehiro Kamigama and Kazuaki Oki, who are retiring at the conclusion of today's meeting.

I've been a Board member for the last 7 years. Going forward, I will be a shareholder of the SoftBank, and I'll be a cheerleader of SoftBank as a shareholder. And I hope shareholders like you will keep having SoftBank shares for long term. Thank you.

Thank you, Kamigama-san. And next, Oki-san, could you give us a few words?

Thank you. Like Kamigama-san, since delisting of the SoftBank in the market, I've been an external Board member. To be very honest with you, there have been a lot of changes, and as an external director, I learned a lot in my experience as external Board member of SoftBank. For me, again, it's a very, very learning experience for me, and thank you for having given me such an opportunity.

That concludes the remarks from our newly appointed and retiring directors. This concludes today's meeting. Thank you very much for your attendance today. This concludes the 39th Annual General Meeting of Shareholders of SoftBank Corp. Thank you once again for your participation.

[Statements in English on this transcript were spoken by an interpreter present on the live call.]