SoftBank Corp. (9434) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you very much for waiting. We would like to start the briefing for earnings results for the 6 months ended September 30, 2021, for the investors. First of all, we would like to introduce to you the presenters. From SoftBank Corporation, Board Director, Executive Vice President and CFO, Fujihara; Vice President, Head of Finance and Accounting division, Naito; Vice President, Head of Strategic Finance Division of the Finance unit, Akiyama. Today's investor briefing is streamed live on the Internet. Without further ado, I would like to invite Mr. Fujihara to about the earnings results for SoftBank Corporation.

This is Fujihara, in charge of finance. Thank you very much for coming to this briefing. We had the earnings briefing earlier by our President, but I would like to provide detailed explanation. And I would like to begin. This is the executive summary. Revenue was up 12%. Adjusted EBITDA was plus 1%. On the other hand, operating income was negative 3%. And net income was negative 2% year-on-year. The revenue increased, but the profit decreased. The profits declined because of the mobile service price reduction, but Enterprise and Yahoo! Japan and LINE grew steadily. This fiscal year, following the past 3 years, we would like to continue to have the record high income. In terms of the operating income, the progress rate to the overall forecast is 59%. We would be able to -- we believe that we would be able to achieve our target. PayPay continues to grow, and we would like to make PayPay as our core business, and I would like to talk about that later. First, I would like to give you the summary of the numbers. Please take a look at the progress rate, in terms of the revenue, 49.5%. This revenue, we believe that we can go beyond the JPY 5.500 trillion. And as for the adjusted EBITDA, it's 54.7%. And we would like to continue this progress. As Mr. Miyakawa has mentioned, in the last fourth quarter, we had been aggressively conducting the sales promotion. And there was LINE consolidation. There were some impairments that we booked. So we -- so there was the JPY 50 billion onetime expenses in the last fourth quarter. Last fiscal year, in the second quarter, we had the record-high operating profit. And this fiscal year in the second quarter, it was second highest. Now I would like to show you the breakdown of the revenue by segment. As you can see, we were able to increase JPY 300 billion. And all of the segments saw revenue increase. We have been continuously been able to increase in the past 3 years after IPO. And we were able to increase again. Yahoo! and LINE have contributed greatly at JPY 190 billion. Out of that JPY 140 billion was from the growth of LINE. In terms of the Consumer, it is quite big, but there was a recovery of the handsets that contributed significantly. Now I would like to talk about the EBITDA. It's plus JPY 6.1 billion, one of the characteristics is that Yahoo! Japan, LINE as well as Enterprise was able to contribute by more than JPY 10 billion. On the other hand, in the Consumer, due to the mobile service price reduction, there was negative JPY 39.6 billion. I would like to talk about that later. Next is the operating income. So from [ 6.1 ] to it's [ 8.5 ] so this is down [ JPY 18.8 billion ] year-on-year. In terms of contribution, Yahoo and Enterprise an increase, and then Consumer is actually minus 10%. So the composition between EBITDA really hasn't changed. But if you look at any difference between the 2, Yahoo is a decline of JPY 17.9 billion. And the reason for that is, as you can see on the right-hand side. So with the integration of Yahoo and LINE, we have PPA and depreciation of customer assets and also stock options. And that altogether is JPY 12.2 billion. And with the addition of LINE, we have just an increase of depreciation -- amortization of intangible assets as well. So this is the reason why it looks quite different this year. So let me explain by segment and by business. So first of all Consumer segment. This is probably of your greatest interest. So first of all, segment revenue overall is plus 6%, 77.2 but JPY 85.2 billion in sales of goods and others. This is mostly mobile handset. So this is a recovery from sales constraints last year. In Q2 last year, we were selling primarily iPhone SE. And this year, unit price is higher. So together, we have seen a substantial increase in revenue. In terms of services, we have electricity and broadband, which is quite steady. But mobile is minus JPY 34.6 billion. Among which, 11 -- it was explained earlier in the briefings, we have half-price support program, and we have made some accounting changes, it's the estimate changes and that was positive last year. So this is a rebound from last year, which is minus JPY 11 billion this year. Also, we have first year half year discounts, which was implemented last year. And because of accounting changes, there was impact. So this was actually negative last year, but this is plus JPY 13.3 billion, but this is offsetting each other. And you have new price impact and others, which is minus JPY 36.9 billion. And among the JPY 36.9 billion, JPY 26 billion is the impact on the new prices. And the rest is -- ARPU is actually declining. And these are from other reasons as well, and I will explain more in the ARPU section. But there's an impact from there. And also because of the decrease in fees, this is impacting our overall revenue here. And on the right-hand side, you see income. So you can see services revenue. You have mentioned the 3 -- the total was minus JPY 8.1 billion. And in terms of handset sales, this is increase. But of course, there's cost of goods. So cost of goods was 65.3 and expenses was 53.6 Now you have cost of services, primarily electricity. This is minus 20. And you have sales commissions and sales promotion expenses, minus 14.1 In Q1, we had about 12.3 or so in Q1. And this is because of increased sales activity. So the Q2 impact was JPY 2.8 billion. And in terms of telecom network charges, minus 4.9. This is Hikari business. It just comes along with the increase of Hikari service. And in terms of others, we are now enhancing base stations, an increasing number of base stations. But last year, we had about JPY 2 billion in the allowance for debt. So -- and there was a double rent we paid during this time. So at 12.4 this is expected to decrease in the second half. As a result, we have minus JPY 41.7 million decrease in income on a year-on-year basis. Now next is Enterprise segment. This is plus JPY 16.3 billion year-on-year. Solutions is where we have greatest increase. This is nearly plus 10% increase. To be honest, towards the second half, we're now building up on pipeline, so we should be able to increase this. In terms of income, if you look at on the right-hand side, against the 60 -- 4.6 -- excuse me, JPY 16.3 billion revenue, the expense is JPY 6.8 billion. And the cost of goods is minus JPY 7.9 billion and others is plus JPY 1.1 billion. So actually, this is an improvement. In Q1, I made a comment that nearly JPY 3 billion, this is a reversal of the expenses of the past. So if you subtract that JPY 3 billion, you would say this is the actual real state. So in any case, this is a steady progress. So we would like to continue to grow this Enterprise segment. Now this is -- business solutions is where our attention is received. This is -- overall increase is 9.9%. This is about 13.2%. Recurring revenue is about 75% or so. And the nonrecurring is 21.2%. And overall is 21 -- I'm sorry, the year-on-year increase is 21.2%. So we want to continue to increase. And we have some temporary increase in the nonrecurring revenue in the same period last year due to some telework contraction. Now let's look at Yahoo and LINE segment. Z Holdings has already disclosed, I would just highlight. So the increase in revenue is plus 30.8%. This is mostly from media. Commerce is also growing steadily. On the right-hand side, you see income. In the middle, you see sales of YJFX, which is plus JPY 15.1 billion, this is just one time, but increase. But if you exclude that, the business growth is plus JPY 14.4 billion. Now in business, we subtract PPA and stock option, which is minus 12.2. This is expenses that's occurring as a result of M&A. It's actually offsetting that. In particular LINE, when we decided to integrate, it was November 2019. And at that point, LINE was loss-making. But during the integration, they have implemented different measures. So they have made a progress towards improvement. And of course, after the integration, LINE actually is contributing to our company. And you had Distribution segment and others. With regards to Distribution, we have been able to increase revenue and income. Last year, we had GIGA School. This was a special demand which we were able to grow. But about this business reflects some impact on chip shortage. But we have been able to overcome those challenges and we have been able to increase both in revenue and income. And now on the right-hand side, you see others. These are different subsidiaries. SB Payment Service is growing steadily. We're now close to JPY 10 billion in profit. And in terms of SB Players, last year, we had nesting demand. So there was an increase in this year because we have more sales promotions, so it's slightly negative. But hopefully, this will increase again. And SB Media is also growing steadily as well. So let's look at net income. This is minus 2.5%. It's JPY 307.3 billion. The 61.5% in progress is steady. Operating income fell, but financial income and losses and the impairment losses last year, so this is a cycling effect of that. And SoftBank and Z Holding, we have the valuation gains on [ FATPL ]. So that's positive. And on the right-hand side, you see net income attributable to noncontrolling interests. We have 44.6% in the Z Holding stake. Now this is down to 32.6%. Now this is a decrease in net income taking in from Z Holdings. So this is also affecting this. Next is CapEx. CapEx is progressing as planned. We have rolling out of 5G. And the progress rate is 43%. And last year, the CapEx was about JPY 420 billion, and around 30%. So the pitch is very good. Last year, there was a significant impact of IFRS. With the headquarter move, there was an impact from the IFRS 16. Next is free cash flow. It's JPY 250.9 billion. In the first quarter, there was a significant reduction. As we disclosed in the first quarter, this is due to response to COVID and also because of the equity ratio. And in addition to that, there was income tax payment increase. And in the second quarter, the difference is negative JPY 1.3 billion. So the impact is quite small. Next is the balance sheet. So overall it is JPY 12.200 trillion. So there has only been variance of JPY 30 billion. And the capital has increased by JPY 120 billion. So equity ratio has increased by 0.9%. So the improvement was seen. And in terms of the topics, in A Holdings, the cash, which was held there, there was a decrease by JPY 110 billion. This was because of the purchase of LINE shares less than one unit. As for the net interest-bearing debt, I will be explaining around that on the next page. So this is the net interest-bearing event. The characteristic of this quarter is that in Yahoo, we were able to buy in the amount of JPY 178.5 billion. And so there was a increase in the interest-bearing debt. There was an improvement on the SoftBank side, so the net leverage ratio and net debt is either flat or a slight increase. From here, I would like to talk about the KPIs. First is telecommunications. I think that you are very much interested in this. So there was a net increase by 1.5 million in the smartphone. Compared to the last quarter, there is a deceleration. This quarter, there was a increase of 330,000. In March and April, especially around April, the situation was quite severe. And we disclosed in June last year but there is a trend of recovery, and we believe that we are still on the recovery trend. In terms of the iPhone, it is going well. And in October, we are seeing some recovery. So in the second half, we would like to increase in that. In terms of the churn, as it was mentioned, the mobility of the subscribers is increasing. And smartphone is 0.91%, and main subscriber 1.04%. And compared to last year, there has been a slight increase in terms of the churn rate. So the acquisition is increasing, but at the same time, churn rate is going up. That's the current market situation. So we are assuming that this environment will continue. Next is ARPU. Overall, there was a reduction of JPY 210. JPY 330 before the discount, and the overall ARPU was minus JPY 210. 100 -- out of that, JPY 140 is coming from the reduction in the mobile service fee. In addition to the direct reduction of the prices, there is an acceleration of the downgrade in addition to that, the change in the brand, migration between the brands, and that has impacted the reduction. So LINE MOBILE has been increasing in terms of the subscribers and also there is a increase in the usage of Smartphone Debut Plan. We started this plan last year, and that has given a full impact to the ARPU reduction. On a yearly basis, there was an impact of JPY 200. And now we are on the completion of the second quarter. And on an annual basis, the impact is probably going to be around JPY 210. I'm sure that there will be a lot of questions about this. But this is the summary of the current situation. Moving on, broadband. In terms of the broadband, there was an increase by 0.38 million. And in terms of electricity, there has been a significant growth, 500,000 increase in terms of subscription. And this plays an important role in the retention of the customers. Next is Yahoo and LINE. As already announced, we see growth in e-commerce and media. In particular, media is really growing steadily. Next is PayPay. The PayPay users, year-on-year, this is plus 30%. Number of merchants have also increased by 34%. So it is growing with great strength. In terms of number of payments, it's 16.6 -- excuse me, 1.6 billion times. On a monthly basis, this is plus 300 million. So in the future, this will become a super app. And in order to be a super app, the frequency of use is critical. So this is one of the most in KPIs for PayPay. And as a result, GMV is JPY 2.4 trillion. And we're now seeing -- exceeding JPY 5 trillion in terms of run rate, so we will continue to record in second half. Now PayPay system fee, this is a thing that we have really worked on. And on the left-hand side, this is a new plan we have launched out. So in terms of GMV, it's 0.1%. So the amount of 400 per month, the impact is only 0.4, that's the merchants discontinued. In terms of payment service, again, this is continuing on. With the disclosure, we can see steady growth. Q2 has actually experienced a nice strong growth. And this is a plus 30% in growth rate in the first half and it's also now using the service. And in terms of synergy effect, I think there's much more potential for growth. So those were the businesses. So this is my last slide on ESG-related topics. And this is something we also want to update you every time. In this quarter, we have acquired high ESG ratings. These are all published. So I just want to show you the main points. And then in terms of Next-generation Maritime High-speed Satellite Communications, we will do a joint study with Mitsui O.S.K. Lines. This again is already announced, but I just wanted to highlight this point on the slide. And this year we will also issue SoftBank integrated report. So that is all from me. So let me now take questions. So thank you very much for your kind attention.

[Operator Instructions] Now I would like to ask Ando-san from Daiwa Securities.

My name is Ando from Daiwa Securities. Can you hear me?

Yes, we can hear you.

I have 2 questions. The first question is related to ARPU. In the second quarter, it was negative JPY 60 and this JPY 210, as a trend line, would there not be so much fluctuation. That's what I would like to ask. And the after third quarter on, what kind of factors will be there? You talked about the ARPU will be decreasing by JPY 210. But what is the breakdown of the factors contributing to JPY 210? And what are the factors which has changed the trend in this area?

Thank you very much for your question. In terms of the first quarter, I think that there was a decrease by JPY 130. So in that sense, the delta seems to be quite big. So what will happen in the third and fourth quarters? In terms of the price, so out of the JPY 70 billion, there would be a JPY 26 billion, and the remaining is JPY 44 billion. We believe that in the second half there will be a pressure from that. I talked about Smartphone Debut Plan. And the Smartphone Debut Plan had significantly increased up to the second quarter. From the third quarter, the Smartphone Debut Plan had been implemented already. So the impact will not be as big, starting from the third quarter in terms of the ARPU. As for the first and half year support, the third quarter impact was the biggest. And from third quarter of this year on, we believe that there would be a positive impact compared to the last year. So compared to the positive impact in the first and second quarters, the third quarter positive impact will be bigger, and that would contribute positively. There was a mention about iPad stocks. And the ARPU is quite small in terms of these products. And in that sense, it will positively impact the ARPU. So we would like to offset the pressures through various areas. And the reduction amount from third quarter on will be smaller than that of the first and second quarters. It, of course, depends on what will happen to the trend going forward. But overall, we still believe that the ARPU reduction amount annually will be around JPY 210. Compared to what we had been considering at the beginning of the year, the brand migration tended to concentrate in the early timing. So the impact was bigger in the first and second quarter. So there is no significant difference between JPY 200 million and JPY 210. And what we believe is that it's a bit on the weaker side. And so the current view is that JPY 210.

So thank you very much for explaining about the significance of the JPY 210 decrease. The second question is about net add. Internally, in the -- what is the assessment of the second quarter performance? I think that at the beginning, you were saying that we should have high expectations. But going forward, how do you view the implementation of the strategy that you have in place?

Compared to the first quarter, the second quarter was on a recovery trend. On the other hand, the second quarter had faced the state of emergency, and there were not many fully implemented events. So our strength could not be exercised in the market. So when the customers come to the mass out retailers where we are and also when we are able to conduct various events together with our customers, we are able to do better. And in October, because the state of emergency has been lifted, the people in the field are more energetic about holding events. So I think that we would be able to capitalize on the situation and be stronger.

Next, we have Mr. Kikuchi from SMBC Nikko Securities.

This is Kikuchi speaking. Two questions, please. You have been talking about mobile price reductions impact. So in terms of definition, does this include deterioration in mix? Which is it, is it included or excluded?

In the earlier explanation, the deterioration in mix is included. Just in terms of tone, it was there. But we have the plus alpha, which is the mobile price reduction impact, the negative impact. So when you say the tone, so in other words, the pace, so the low price plan is increasing. The pace is accelerating. That's the impact from the price reductions. And then the deterioration in mix, which has actually started last year is not impacted from the price reductions. That's right. That's how we assess it internally. And I was thinking about how we should be communicating with the investors today, but I think it's the best to speak what the company's analysis. So in terms of trade balance, this is like mobile, this is increasing. And so this tone, this pace is at the basis. And then if there's a portion of acceleration, and that will be the impact from the profile price reductions.

I see. Which means that -- so just in terms of tone, you have the mix change deterioration. How substantial is it? What's like the value?

Well, it's difficult to quantify it specifically, but how should I say this, maybe in the lower range of thousands of yen every month.

I see. So in terms of our policy, do you go with this current pace Just in terms of trends, this is cruise speed mix deterioration is something that will continue for some time, maybe several years, so we should be prepared for that?

Well, the upgrade is usually the cycle is about 3 years. And most customers, when they upgrade, they go and switch to new price plans. So next 2 or 3 years, maybe that trend is stronger. Of course, as we deploy 5G with different efforts, we would like to open up pioneer new opportunities, and we want to look for opportunities to upsell. But in terms of base tone, there's that pressure. And that's I think you need to see the speed of the business.

I see. And last question. So the carriers who have already announced their financial results. Their voice -- because of vaccination application, their voice ARPU has increased. So there was an explanation that there was a temporary increase in voice ARPU. It's a phenomenon that you have been able to confirm in your company?

No, not really, nothing -- it doesn't really stand out. We have a flat price and semi-flat price. And I think we were very early on to endeavor on that. So there was maybe impact, but maybe it will be very limited, I think.

Understood. My second question, about your group and other than C holdings. So you have, first of all, PayPay. So consolidation of PayPay and IPO, any progress, any changes in your thinking, any involvement? And one of our other group companies in your equity methods, any changes, any outstanding contributions?

With regards to PayPay, to be honest, so this payment system fee is actually substantial for us to be -- to breakeven or to actually reach a primary balance. This payment system fee is important. And so the fact that we have been able to overcome this challenge, I think breaking even is in the scope of achieving the target.

Now so what about marketing fee? So how much do we want to spend until how long? And I think that really will affect the actual breakeven.

Now this is also in line with the growth. So I think, hopefully, we will come to a point where we can quantify in the near future. So we were thinking by 2022, we were thinking maybe breakeven in horizon. But if it was going to grow, we don't want to be just #1 in general, but we want to be an absolute #1. And so in different discussions we've had, depending on how we think about marketing going forward, how we build the business will be different. So in that sense, we have become more confident about its growth. So now we want to operate with a more focused emphasis on growth. With regards to IPO, we don't have anything specific. But PayPay, people say that PayPay would have a great enterprise value. So -- and I'm hearing more and more people say that. So I think there's more options for the future.

I see. So consolidation and improvement in financial results, is that correlated? So in other words, if profitability or breakeven becomes more clear, you will consolidate? Or even if it doesn't clear, you will consolidate in the near future? What is your policy?

That's not just a single element, one or the other. But I think there are different elements in terms of consolidation. But what I can say is that such option will become of a reality after April next year. So at this point in time, we don't have anything we have decided on.

I see. What about conversion of preferred shares? That will -- is coming in April, but you'll be able to do that in April, but you're not sure if you're going to do that.

Nothing firm yet.

From Citigroup, Mr. Tsuruo.

I hope that you can hear me. So related to Ando-san's question about net adds. In the last quarter, you talked about what happened in the last month of June. So what is the trend month-by-month. There was iPhone launch. Well, it would be in the third quarter, but the net add trends for October, that is what I would like to ask.

Last time, it was April, May, June. And April was extreme. And because of that, we had to provide the supplementary comments. But for July to September, not so extreme. And in October, we believe that we are doing better. So at the end of the quarter, we would like to talk about that. SoftBank is really concentrated on net adds. As Mr. Miyakawa mentioned earlier, so there is a lot of discussion about net adds within the company.

I would like to ask a follow-up question. In terms of the pricing, you're happy with it? And do you think that you would be able to maintain the net adds and accelerate it?

So it's very difficult to say what our satisfactory level is, but there are some givens and we have to live with it. So we need to deliberate on it and consider under the current environment what we can do to increase the users. Because if the user increases, that would expand the potential of the future business.

Understood. My second question, I would like to ask about the 5G situation. On the contract basis, it's more than 10 million. So what is the handset sales situation? And if you could give me an idea of how you're doing. You have updated it at the beginning of September. But if you could talk about the coverage as well as the base station construction status, I would like to know.

I think there would be a lot of confusion if we talk too much about the 5G, and I talked about 2 million, 3 million. But we are adding around 1 million in terms of the users. And we would like to increase the numbers in millions. And in terms of the base stations, we said that it is around 80%. And the coverage now is around 80%. Because of the elections, there were some tests which were suspended because of the general elections. But the plan -- we are going according to the plan. And next year, we would like to get to 90%, and that remains unchanged.

Mr. Moriyuki from SBI Securities.

This is Moriyuki from SBI. Can you hear me?

Yes, we can hear you.

I have one question about PayPay. My first question, you said that you may want to extend the timing for breaking even and you want to focus on growth. What is the most important KPI for you, the number of payments? I'm thinking maybe number of payments from what I heard earlier. So what would be the image number of payments which where you think will be breaking even? And also, with regards to losses, so maybe it will take a few years for breakeven, but the margin of losses is getting smaller? Or is this something you will not mention?

So with regards to PayPay, I think it's important whether it's growing or not. And if we're confident that it can continue to grow, then we will discuss with the 3 parties. And maybe we will focus on more marketing. That could be a possibility. And in fact, FY '21, we were saying initially between 2020 to 2022, we will improve the profitability with the view for breakeven in horizon. And this was a scenario that also included payment system fees as well. But we have clearly changed our policy. So this year, we will focus on marketing and accelerate growth. So we have shifted gears in that direction. For next year, we don't have anything definitive. I think it's too early to speak of anything definitive. But with PayPay, more than short term, we focus on what we want to do on an overall basis. So that's how we handle this business. So if there's an opportunity for growth, we may continue to spend on marketing. And then maybe if we decide to -- I think there's a possible that we may choose to monetize it. So please continue to watch and see. But in any case, it's something -- I think we're delighted that we have the option, the choice. Now when you asked whether the number of payments is one of the most important KPI and do we watch that. The answer is yes. But in order to look at the number of payments increase that we need to have a number of use -- greater number of users, registered users. So we monitor that on a day-to-day basis. It also needs to be supported by the new customers. And it needs to be used by many merchants as well. So number of payments and number of registered users and number of merchants, these are the 3 important KPIs, which is really looked at in an integrated manner. So we're not focusing on just one. And if you ask me if it's the only one, the number of payments, it's a combination of the 3.

So in that sense, if other business segment allows you to increase the losses, you would do that?

Yes. Well, there will be an option, assuming that there's room for growth.

Yes. Now I have another question about iPad. In the CEO's presentation, you said that there's -- you were not able to sell iPads. Is this a ripple effect on this? So for example, because you were not able to sell IP, was there a ripple effect on the solutions business? Or was this just about device sales so it didn't really impact you that much?

There's no direct impact so far yet, but it is starting to take time in some cases. Now in terms of Enterprise, mobile, it seems as though there's a slight slowdown in growth. But half of the slowdown in the mobile, the delta is in the sales of goods. And that is also included in there from the enterprises. So there's some impact on device sales. So I would say, yes, there's some impact.

Next is Nomura Securities, Mr. Masuno.

This is Masuno from Nomura Securities. I have 2 questions. One question is related to sales promotion. In the first half, there was an increase in the sales promotion cost. Last year, in the fourth quarter, the sales promotion cost was JPY 155.1 billion. So compared to that, it may have been reduced. But in the full year, would the sales promotion cost decrease? I think that first -- fourth quarter is where you would be investing heavily in. So what is the level of the sales promotion costs that you are considering? I would like to hear from you about that.

In the first quarter last year, we were not able to conduct sales activities. And there was negative JPY 12.8 billion, and so there was a significant decrease. And in the second quarter, it was JPY 2.8 billion. And in the third and fourth quarters -- well, in the fourth quarter, we significantly invested in the sales promotion. So if it goes as planned, I think that there would be a decrease from that. But -- so overall, because we are posting the reduction in the profit, we need to be conscious of the cost.

My second question, in terms of the investing in the cost and also the net adds is just the other side of the coin. In the third and fourth quarters, there would be an increase. And considering the quarterly trends, how would you be able to maintain the efficiency and economic value and acquire new subscribers? So what is the level that we are considering in smartphone, how many subscribers, et cetera?

In the first half, compared to the prior year, there was a decrease. What was 1.9 million became 1.5 million. So there was a decline. And somewhere, we need to get to be on the positive year-on-year. We are very conscious of that.

What you have said is the net adds on a quarterly basis should go above the previous year in terms of the operation.

That's correct. So where that would happen is the key point. So we need to be very conscious of that.

Understood. If that's the case, you need to go beyond the net adds level on a quarter basis compared to last year?

It is not that we are clearly committing to it. And we are having various discussions about the recovery of the net adds. So we're conscious of it. The third quarter was a little over 100,000. So we think that you can get to that level.

Next is Tanaka-san from Mitsubishi UFJ Morgan Stanley Securities.

This is Tanaka speaking. Can you hear me?

Yes, we can hear you.

So my first question, first half in mobile, so you have communication charges and you have value added. I think you used to disclose in order to be more visible. I wasn't able to find it. But what was the mobile communication charges or revenue this time?

I don't have the number with me, so let me discuss with the IR team on how we can disclose this.

I appreciate that. And the second point, in Enterprise business, so revenue is steady. But if you look at profit in Q2, if you look at margin, so the growth rate is 6.7%. So compared to my expectation, it seems as though the growth rate in profit was slightly weak. Can you give me the reasons? I was expecting maybe double digit because you were quite consistent on that. So can you explain your policy going forward?

Well, with regards to -- we were hoping we'd get more in mobile. So this is one -- we want to recover mobile, that's one thing. But we have a strong pipeline. And in addition to that, we have solutions as well. But even then, there's a slight shortfall. So in second half, we need to really revamp our sales in revenue. Meanwhile, Enterprise, there's just shortfall or shortage of labor, people. We have many projects, programs. So we're very, very busy. So in Q2, we will not -- any break on cost. We will continue. So it's not that we need to increase the profit by 10% in Q2, sacrificing everything else. It's not -- I think really need to spend for the growth in the future as well. So that's the, I guess, trend how I think for Q2.

So just in ways of thinking, top line of Enterprise business, if it's a single-digit growth, then profit will also become profit growth? So in principle, it should be -- it's organic, right?

Well, largely speaking, these are products we do on a cross-sell basis. So it's -- that's how account the system is. So if revenue increases, margin improves, so it works on both sides. So of course, we want to increase on efficiency here. But I'm not able to say how many percentage increase because it's really different elements included in there, and it differs from product to product. But there are many areas where we can increase. So for example, digital money. We have made quite a bit of preparations and investments for this. I think we have great expectations for this business to flourish.

The next question is the last question. From Okasan Securities, Mr. Okumura.

My name is Okumura from Okasan Securities. Can you hear me?

Yes, we can hear you.

I have one big question. In terms of the operating income, you have shown us the quarterly plan in the second half. So if you could give me the balance of segment by segment, I would appreciate it. First, I would like to know about the structure of the third quarter. The drop in the Consumer will be offset by Yahoo and LINE, is that what you're considering? And that's why it will remain flat? And also, in the fourth quarter will let -- be increasing because of the Consumer segment, the Z Holdings. I think there was a JPY 10 billion impairment last year. And also there was the -- a lot of promotion cost. And also, there was -- there is LINE consolidation. So if you could give me the breakdown of the third and fourth quarter, I would appreciate it.

So I want to explain, of course, but if I say too much, Z Holdings information will be brought up. And Z Holdings is not disclosing those matters, so I would not be able to say much. So in terms of the price support, we had -- that would be gone. So the reduction in the profit, it will be smaller in the third quarter than the second quarter. And also in the fourth quarter, Consumer segment will be the central player in driving the growth. And last year, there was impairment losses in the amount of more than -- around JPY 13 billion. So we are expecting that there would be a rebound. And also, there was a reduction in the payment of the license fee of the brand. So we would be more competitive. But there are a lot of things that they would like to do. So in terms of Z Holdings, what they would like to do is not my place to talk about it, so I would avoid saying that. And as for Enterprise of JPY 128 billion is something that we would like to achieve. And we hope to recover. And we're hoping that we will be able to get on the positive side. So that's the overall view of how we see the third and fourth quarters. Thank you very much for your explanation. That's all from my side.

Thank you. This will conclude the Q&A session. This concludes the investor briefing for earnings results for the 6 months ended September 30, 2021. Today's briefing will be streamed on-demand on our website. Thank you very much for coming to SoftBank Corporation's Investor Briefing for Earnings Results for the 6 Months ended September 30, 2021. [Statements in English on this transcript were spoken by an interpreter present on the live call.]