SoftBank posts surprise loss of $2.4 billion in third quarter as Vision Fund investments go into red

SoftBank Group posted a surprise quarterly loss Wednesday as investments under its Vision Funds fell into red. The Japanese company’s revenue also missed analysts’ estimates.

Here are Softbank’s results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who have been more consistently accurate:

• Revenue: 1.83 trillion yen vs. 1.84 trillion yen
• Net loss of 369.17 billion yen ($2.4 billion) vs. a profit of 298.53 billion yen

The company’s Vision Fund investments clocked a loss of 352.75 billion yen for the quarter ended Dec. 31. The Vision Funds investments had posted a gain for the preceding two quarters.

The broader Vision Fund segment — which factors in administrative costs, fluctuations in currency, among other things — reported a loss of 309.93 billion yen during the quarter.

SoftBank reported a 2.1% quarter-on-quarter drop in its Vision Fund 1 public portfolio companies, primarily due to a decline in the share price of e-commerce company Coupang, while the value of its investments in private companies dropped 3.3%. Overall, the fair value of SoftBank’s Vision Fund 1 portfolio companies declined by 2.8% from the previous quarter-end.

Vision Fund 2 fair value fell by 3.7% from the prior quarter-end.

In recent years, SoftBank has made a number of controversial high-value investments in companies that have struggled or marked down their valuations. 

It is now repositioning itself to take advantage of the artificial intelligence boom, where players such as Nvidia have benefited from meteoric demand for chips and data center GPUs.

SoftBank is close to finalizing a $40 billion primary investment in OpenAI at a $260 billion pre-money valuation, sources recently told CNBC’s David Faber.

The new funding would see SoftBank surpass Microsoft as the artificial intelligence startup’s top backer, with OpenAI last valued at $157 billion by private investors in October.

SoftBank has already committed to spending $3 billion per year on OpenAI’s tech. The two companies also have announced a new joint venture called “SB OpenAI Japan,” which will market OpenAI’s enterprise tech exclusively to major companies in Japan.

SoftBank reported its quarterly earnings after trading closed at the Tokyo stock exchange. It’s shares gained 45% last year.

— CNBC’s Hayden Field contributed to this report.