Japanese investment conglomerate and owner of British semiconductor giant Arm Holdings PLC (NASDAQ:ARM) posted its second sequential quarterly profit, but remained a loss-maker on a yearly basis.
Accounting policies mean SoftBank’s profit and loss account did not see the benefit of the supersized Arm initial public offering conducted in the period.
SoftBank floated 10% of Arm shares in the IPO, meaning Arm remains a subsidiary of SoftBank following the float.
However, the $5.12 billion of proceeds from the partial sale were recorded under cash flows from financing activities, while $4.65 billion was recorded as “capital surplus” in the consolidated statement of SoftBank’s financial position.
SoftBank Vision Fund, the group’s flagship investment subsidiary, reported an investment loss of more than $1 billion due to full exits of seven portfolio companies and partial exits from other investments.
Additionally, the fund recorded net unrealised valuation losses totalling $1.8 billion, largely due to writing down the value of WeWork to zero yen following its filing for Chapter 11 bankruptcy protection in November 2023.
The fund also faced markdowns on private portfolio companies due to weaker performance, although these were partially offset by gains in select companies such as ByteDance and DoorDash.