SoftBank’s Vision Fund, the brainchild of company founder Masayoshi Son, has faced a number of headwinds, including a slide in tech stocks on rising interest rates, a difficult Chinese market and geopolitics.

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SoftBank reported a profit of 724.3 billion Japanese yen ($4.6 billion) on its Vision Fund in the fiscal year ended in March, the first time the leading technology investment arm has turned a profit since 2021.

For the full fiscal year, SoftBank’s Vision Fund segment posted a profit of 128.2 billion yen, turning a profit after a loss of 4.3 trillion yen the previous year.

The Vision Fund recovery helped SoftBank Group turn a profit in the fiscal fourth quarter that ended in March.

The Vision fund has been helped by a rise in the value of some of SoftBank’s best-known investments, including TikTok owner ByteDance and the US food delivery firm DoorDash. However, SoftBank hit some of its other investments, such as Chinese ride-hailing firm DiDi, as well as office-sharing company We are workingwhich filed for Chapter 11 bankruptcy protection last year.

The gain in the Vision Fund was largely due to chip designer Arm’s initial public offering last year.

The Japanese firm said earnings related to the IPO of Arm, which is a subsidiary of Softbank, were not accounted for in its “consolidated statement of profit or loss.” Excluding gains related to the Vision Fund’s investments in its subsidiaries, the technology investment arm posted a loss of 167.3 billion yen.

Still, there are signs that a recovery is underway for SoftBank, which has been hit by bad bets on some technology firms as well as volatile markets.

Here’s how SoftBank fared in the March quarter versus LSEG’s estimates:

  • Net sales: ¥1.75 trillion ($11.3 billion), versus an estimate of ¥1.84 trillion.
  • Net profit: ¥231.1 billion versus an expected loss of ¥71.64 billion.

However, for the full year, SoftBank reported a total loss of 227.6 billion yen, but that was less than the loss of 970.1 billion yen in the previous fiscal year.

SoftBank’s flagship technology investment arm, the Vision Fund, had a tough time in the fiscal year that ended in March 2023, posting a record loss of about $32 billion amid falling tech stock prices and a deterioration in some of the business’s bets in China.

However, in the June quarter last year, the Vision Fund reported its first investment in five consecutive quarters, signaling the early stages of a recovery.

SoftBank founder Masayoshi Son noted in 2023 that the firm will shift into “offensive” mode, from defensive mode, and shift away from its cautious approach to start making more investments.

SoftBank Chief Financial Officer Yoshimitsu Goto said last quarter that SoftBank had shifted from “Alibaba to an AI-oriented portfolio.”

The technology conglomerate became one of Japan’s biggest companies thanks to Son’s early bet on Chinese e-commerce giant Alibaba in 2000, which has flourished in the years since.

The firm has been reducing its stake in Alibaba, and senior executives including Son and Goto have highlighted their excitement about artificial intelligence technology and SoftBank’s potential to invest in companies in the sector.