Unknown Attendee: 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.
Junichi Miyakawa: 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.
Unknown Attendee: [Operator Instructions]
Unknown Analyst: [ 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?
Junichi Miyakawa: 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.
Kenichi Takashima: 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.
Unknown Attendee: Next question.
Unknown Analyst: 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.
Junichi Miyakawa: 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.
Unknown Analyst: 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?
Junichi Miyakawa: 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.
Unknown Analyst: That being said, so JPY 1.5 trillion, as you mentioned in the bottom, so this -- under this memory and chips are included?
Junichi Miyakawa: So this is just a case by case. It could be included in case.
Unknown Analyst: 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?
Junichi Miyakawa: 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.
Unknown Analyst: Going back to my previous question about AI server manufacturing, are you considering that as well?
Junichi Miyakawa: 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.
Unknown Attendee: Any other questions from the audience in the venue?
Unknown Analyst: [ 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?
Junichi Miyakawa: 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.
Unknown Analyst: Talking about the battery, so the expertise that you have built in creating batteries, are you going to offer or sell to other companies?
Junichi Miyakawa: 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.
Unknown Attendee: Next question.
Unknown Analyst: [ 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?
Junichi Miyakawa: 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.
Unknown Analyst: So what is the uniqueness advantages of SoftBank?
Junichi Miyakawa: 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.
Unknown Attendee: In the interest of time, we're going to take one last question from the venue.
Unknown Analyst: [ 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?
Junichi Miyakawa: 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.
Unknown Analyst: 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?
Junichi Miyakawa: 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.
Jun Shimba: 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.
Unknown Analyst: 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?
Junichi Miyakawa: 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.
Unknown Attendee: 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.
Daisaku Masuno: 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?
Junichi Miyakawa: 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.
Osamu Akiyama: 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.
Daisaku Masuno: 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.
Junichi Miyakawa: 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.
Unknown Attendee: 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.
