Japan's SoftBank Group returned to profit for the first time in five quarters on Thursday, as the Japanese tech investment firm was buoyed by an upturn in portfolio companies, sparking hope it was emerging from a period of retrenchment.
Net profit totalled 985.5 billion yen ($6.6 billion) in the three months to December, versus a 744.7 billion yen loss in the same period a year earlier.
Founded by Chief Executive Masayoshi Son, SoftBank and its Vision Fund investment arm have gone through a difficult period of slashing investment activity and selling assets. Stakes in high-growth startups were particularly hit as risk appetite waned during the pandemic and its aftermath.
While SoftBank's results are often volatile, Thursday's numbers could give investors some relief: quarterly net income surpassed market expectations and the closely-watched Vision Fund arm booked an investment profit of 600.73 billion yen.
SoftBank was again on a "growth trajectory," Chief Financial Officer Yoshimitsu Goto told a briefing, adding that market conditions and the outlook were both "very positive".
The Vision Fund business - which includes two funds by that name - was helped as valuations increased for holdings such as ride-hailing company Didi Global, TikTok owner ByteDance and robotics firm AutoStore Holdings. Meanwhile, its investment in office-sharing company WeWork was written down to zero in the quarter.
"There have been higher valuations in recent funding rounds for Vision Fund companies. It looks like the environment for tech startups is taking a positive turn," said Rolf Bulk, an analyst at New Street Research.
While new investment activity in the quarter was minimal, Goto said this was simply a matter of timing and that the investment pipeline was building up.
He added that SoftBank's first priority was to use its ample liquidity - including 4.4 trillion yen in cash, cash equivalents and liquid bond holdings - to make new investments.
Some investors had been looking to see whether SoftBank would return some money to shareholders via share buybacks, but Goto said that right now growth investment came first.
SoftBank shares jumped 11% on Thursday to their highest since September 2021, helped by an upbeat revenue forecast from chip design unit Arm on Wednesday.
Son is known for having made canny bets on emerging technology such as mobile internet and today's big names such as e-commerce platform Alibaba, helping transform SoftBank into a tech investment powerhouse.
However, some of his more recent wagers have turned sour, most notably WeWork that was once privately valued at $47 billion but filed for bankruptcy in November.