We would like to begin the SoftBank Corp investor briefing for the earnings results for the three months ended June 30, 2024. We would like to introduce today's attendees. SoftBank Corp Board Director, Executive Vice President, and CFO, Fujihara. Strategic Finance Division Vice President Head, Akiyama. Finance and Accounting Division Vice President Head, Onoguchi. Corporate Planning Division Vice President, Sasaki. Today's briefing will be broadcast via the internet. CFO Fujihara will give an overview of SoftBank's consolidated financial results.
I am Fujihara, CFO. Thank you so much for taking time out of your busy schedule to attend the briefing. We've just ended the earnings results presentation, so I would like to give you the overview of the financial results, and we would like to take questions. Here is the executive summary. As you can see, revenues and profits both increased in all segments.
We are making steady progress towards full-year forecasts. Two, the mobile revenue consistently shows good performance with continued year-on-year growth. The third, financial business turned profitable as PayPay consolidated achieved a positive operating income for the first time on a quarterly basis. Let me touch upon in details by the figure. Revenue and profits increased. Good progress towards the full-year forecast. As you can see, year-on-year progress, operating income is 33.8% and net income 32.5% with two-digit growth. The progress rates for operating income and net income, as you can see, toward full-year focus, both exceeded 30%. Revenue and operating income hit record highs for the first quarter. We would like to explain on the retrospective adjustments for fiscal year 2023 results. We transferred SB Technology Corp and its subsidiaries to enterprise segment.
From this fiscal year, SB Technology Corp is under enterprise business segment. There are two detailed adjustments you can see at the bottom. I will explain later. The revenue. The revenues increased in all segments. All the segments achieved the three digits, and in the full-year forecast, JPY 6.2 trillion. Against this, the progress rate is 24.8%. We started with a good start, 7.4% up. This is the record high for first quarter. I will explain adjusted EBITDA. Profits increased in all segments, JPY 29.7 billion, up by 6.9%. Progress toward full-year forecast is 27.4%. We are growing steadily. I would like to explain the operating income. As you can see, profits increased in all segments. As shown in the figure, financial segment turned profitable, and Media & EC contributed greatly.
Full-year forecast, we hit record high for the first quarter. We are going to touch upon on the Media & EC. This revenue includes one-time factors of JPY 32.7 billion. Excluding even this, we still achieved two-digit growth. I will touch upon by segment. First, consumer segment. The actual result is JPY 681.7 billion, up JPY 13.1 billion by 2.0%. The mobile revenue continued to increase year-on-year. Sales of goods and others improved by JPY 8.4 billion. As for the mobile revenue, mobile revenue trend is shown here by quarter. This is the actual basis. The right one shows the year-on-year, compared to the previous fiscal year, we've been growing steadily. After the COVID and last June, and in the first quarter, one time factor was included.
We expect that we would start with a positive figure, and we are expecting to increase this. As for consumer income, it increased by JPY 8.4 billion, up 5.6%. Progress toward full year forecast of JPY 530 billion is 29.5%, which is better than the last fiscal year. I want to touch upon a few points here. The left side, service revenue, mobile increased by JPY 7.6 billion, which contributed largely. In electricity, JPY -3.9 billion, the revenue decreased. However, when you look at the cost of goods, it includes, so which is contributed positively. The middle sales of goods and others. The gross profit margin has increased. These three are the major contribution to the earnings. As for the cost, sales commissions and sales promotion expenses. The cost has increased slightly. However, the depreciation, and others are almost flattish.
Therefore, as a total, profit increased. Next, the enterprise segment. Overall, JPY 20.5 billion up, which achieved a double-digit increase. For the business solutions, JPY 20.5 billion increase. We have a new consolidation. WeWork and Cubic Telecom, so with new consolidations. Excluding the impact of new consolidations, organically, the growth was up by 13.6%. On the right side shows segment income. Among the expenses, cost of goods service sold, and mainly impact of new consolidations, but as a whole, it is a positive landing. As for progress rate, 24.4%, which is a little slower than the last fiscal year. But the full year forecast of JPY 170 billion, we should be able to achieve that. We are on track. As for the business solution and the other revenues, you can see the non-recurring revenue and recurring revenue.
As I explained, WeWork Japan and Cubic Telecom are under recurring revenue, which contributes to this increase in the SoftBank technologies. This figure is also included this fiscal year and the last fiscal year as well. Therefore, this also has contributed. IoT products and others were transferred from mobile fixed line. It was accounted under solutions, but we made a retrospective adjustment, as you can see at the right bottom. Next is Media & EC segment. This was already announced by LY Corporation. Segment revenue up 6.0% and increased by JPY 23.1 billion. Media is up by 4.5%. Segment income, one-time factors, JPY 32.7 billion. LY Corporation focused on this fresh, and there was a big event this year, which has the impact on this increase of JPY 32.7 billion. As a whole, JPY 41.9 billion increase, up by 74.5%.
20% increase by JPY 9.1 billion. Next is financial segment. Sales expanded steadily and income turned profitable. Segment income started from JPY -1.8 billion to JPY +5.7 billion. The year-on-year up by JPY 7.5 billion, which was largely contributed by PayPay consolidation. Next, distribution segment and others. Revenue grew largely, which also includes internal transactions of SoftBank. There are some products which were impacted by the weak yen. As for others, R&D and pre-investment, the first quarter is still slow, but we are going to expand R&D and pre-investment area. Next is net income. Overall, JPY 15.8 billion up, and we achieved double-digit growth by 10.8%. The progress rate exceeded 30%. The financial income loss, as you can see, for SoftBank of operating income, the financial income and loss, which does not have big impact.
However, LY Corporation Group, due to the absence of gain on the change in equity interest and Webtoon recorded in the previous year, it has a larger impact than SoftBank. Next is CapEx. Consumer enterprise. The full-year forecast was JPY 330 billion. Progress toward full-year forecast for CapEx is 20.2%. Last fiscal year was 18%, so we are on track. Other increase due to investments in AI computing platform. In the earnings results presentation, there was a question raised, so let me add. The generative AI investment, excluding subsidiaries, JPY 13 billion or so.
Last year, we also counted JPY 10 billion or so. Part of it will be counted next year. The investment related to generative AI would be below JPY 100 billion. We are considering right now to bring it ahead, including the investment for Sakai Data Center related. CEO Miyakawa commented related to that, but we are thinking about JPY 10 billion or so.
Next, let me talk about the cash flow. For mid long-term strategic investment. To understand that more, we introduced a concept called primary free cash flow, such as ongoing cash-generating ability, such as for debt repayment and dividends in existing businesses. It was JPY 60 billion last year and the year before generated. That is the number we are looking at in handling primary free cash flow. Rent to base stations and dividends paid, then the free cash flow after dividend is on the far right.
Again, for mid long term investment, it may take time for recoup and we need to invest in research and development initially, so it is more like advanced investment. For that, we want to utilize long-term investments, including capital financing and government subsidies. JPY 120 billion that was decided was backed by, or about the same amount as the bond-type class share. Now we are planning a second bond-type class share, again, for a long-term strategic investment. Now, about the primary free cash flow, first quarter, JPY 96.6 billion, or increased JPY 48.3 billion year on year, mainly due to improvement of working capital. Also, we see improvement with regards to the payment. We are looking at JPY 43.9 billion of investment in AI computing platform, net interest bearing debt and a net leverage ratio. JPY 3.34 trillion, excluding PayPay and LY Corporation.
Compared to last year, increased by JPY 110 billion, mainly due to WeWork Japan. WeWork Japan had about 40 offices, and the future rent needs to be recognized as liabilities. It was about JPY 110 billion. That was the net interest bearing debt up. Leverage ratio, even though EBITDA went up, but net leverage ratio remained at the same level. In other words, debt up by WeWork Japan succession was absorbed or almost offset by EBITDA. Balance sheet. As you can see, the assets up by JPY 254.9 billion, mainly due to write off used assets, securities in banking business, property, plant, and equipment. This quarter is the quarter for paying dividend. On top of that, WeWork Japan. That is how it moved in terms of net interest bearing debt. Now talking about KPIs. On telecom side, mobile subscribers grew steadily with the rise in overall market liquidity.
Smartphone churn rate increased by 0.18% year-on-year. Smartphone increased by 4.5% and the churn partly due to SIM-only subscription or churn. We saw increase of the churn rate by 0.18% year-on-year. Main subscriber net adds went down. But excluding the impact of 3G shutdown, we saw a positive number, and smartphone users continued to add new users. ARPU JPY 3,730 or JPY 10 up year-on-year. On quarterly basis, almost flat. Y!mobile, SoftBank brand, both introduced new price plans last fall, and that contributed to higher unit price. But Y!mobile's percentage is getting bigger and the trend should continue. As a company, we are looking at JPY 0 for the full year. Telecom and electricity, or broadband and electricity.
For broadband, ADSL was closed, then the number of broadband overall went down slightly, but users of SoftBank Hikari or fiber to the home continue to grow. Electricity, customer acquisition activity should resume later this year, but we are currently suffering from some negative numbers. Media and E-Commerce. LY Corporation made an earning announcement recently, but for the first quarter, EC transaction value increased by JPY 46 billion. So it's been improving since last year.
On the right-hand side, advertisement increased by JPY 7.6 billion, and last year was decreased by JPY 5 billion. For PayPay, which is growing well, the number of users increased by 6 million or 10%. Number of payments, which is on the right-hand side, went up by 19.6%. In fact, number of payment outpaces user growth. In other words, there is a rise in payments per person. For GMV of the PayPay standalone increased by 21%.
Number of payment increased by 19%, like I mentioned earlier, and the GMV also increased by 21%. With the PayPay Card included, from consolidated perspective, PayPay GMV increased by 19.4%. Again, PayPay revenue increased by 19.2% or equivalent level of GMV. EBITDA for the first quarter posted JPY 9.38 billion. SoftBank payment service, GMV has been growing. Non-telecom portion is especially growing, like Beyond Carrier, SoftBank. Last but not the least, ESG topic. First, board composition. To enhance dependency and diversity, we added two independent external directors. External directors now comprise a majority or 54.5% of the board, strengthening its independence, especially from the perspective of parent subsidy, both listed. Net zero, we announced the progress around that in June. So that's all for my presentation. Thank you for your kind attention.
Now, we will open it up to a Q&A session. We would like to take questions from the floor first and followed by Zoom. Those who would like to ask questions via Zoom, please access the Zoom. Previously announced the access procedure. Once you have accessed Zoom, please turn off the live webcast to prevent howling. We would like to take questions, as many people as possible. So please limit your questions to two. Please raise your hands first from the floor.
I am Tokunaga from Daiwa Securities. I have two questions. One is about free cash flow. LY announced to be able to acquire the dividends from the A Holdings. This is going to be used for the longer-term purpose. On page 19, it shows the investment related to AI. Is this going to be, if not bring it forward, it is going to be like JPY 100 billion or so?
Thank you for your questions. The first question is about primary free cash flow. Regarding LY and PayPay, we treat them as external. Since our listing, we have been treating like that, so the portion from LY Corporation will be under free cash flow. As for growth investment, these are not connected directly. Of course, we might use it for the other way around. As regarding the CapEx, acceptance and inspections and cash are related, so it will be under the JPY 100.7 billion or so. JPY 120 billion, that is actually under the JPY 120 billion range.
The second question is about net additions. In this quarter, smartphone net additions is a little bit slow. Under this competitive environment, do you think that the decrease in the advertisement and these things would be, this decrease trend, do you think would continue?
Due to the 3G discontinuation, this has the impact to March or so. Now we see a little bit of recovery in June and July. Of course, we need to pay attention to the competitive environment situation. But full year, we are going to achieve the full year forecast. As for, we are taking a good balance. As for the acquisition cost is about JPY 1.8 billion, but it is going to turn positive. The expenses are now going to drag the entire growth. As for the deferred payment, we are going to see the cost effectiveness. If we can, we would like to secure some room to be able to put more for advertisement as well.
Any other question from the venue? If not, we would like to take questions from Zoom participants. If you have a question, please press Raise a Hand button. First, Satoru from SMBC Nikko Securities, please unmute and speak.
I have two questions. First, LY Corporation, there was a one-time effect, and you made a good profit, good income in Media & EC. For the second quarter and onwards, how are you going to utilize the income that was much better than probably expected, thanks to the one-time factor?
Thank you. For the first question, if I may answer, Media & EC, we saw a strong result, and operating income is very, we have a bullish view on operating income. But LY Corporation has limited contribution of net income.
So we need to look at the net income as well. We are still in the first quarter, and it is early to say how it goes the next quarter and onwards. But again, I think we are beginning to have more options with some optimism in that business segment.
Thank you. I understand that you are committed to a net income, which is great. Series 2 of the bond-type class shares you plan to issue, and last year, you mentioned that you would consider the next round after the call, but it has been less than 12 months since you mentioned. So the dividend at the end of the fiscal year can be payable, thanks to that instrument, which is good. But I do not know if it is sustainable to keep depending on that instrument, because compared to last year, the volume or scale is bigger in the Series 2. So going forward, how are you going to control such a financial instrument? Thank you.
First of all, the dividend, three things. First, delivering consolidated net income should be something that we can really deliver. Also, resource for dividend as a standalone is also needed, which we are comfortable with at the moment. We do not depend on bond-type class shares. It should be included in the surplus capital. So first, we want to pay dividend using the source of surplus earning. Also, we do not need to depend on corporate bond-type class shares. Again, issuance of a corporate bond-type class share is not directly linked to payability of the dividend. We want to issue that class share for the future investment.
I think that is the best way of financing for long- and mid-term growth. Thank you.
I understand that you do not have a policy going forward, but when we changed articles of incorporation, we have not decided a timing, but we just decided to issue five times, and we changed or amended articles of incorporation. So we have a tool, and I believe that this should contribute to our future growth. We will make a best judgment at the right time. But, the first series of class share was very welcomed in the market. We have high demands from the investment company, so we want to take advantage of such instrument as needed.
Thank you. Next, Daisaku-san from Nomura Securities, please unmute and ask your questions.
I have two questions. The first question is the mobile business, the actual business performance. So the net additions. Now, considering the discontinuation of 3G service, I believe that SoftBank should be able to acquire more. Is there any impact of the Rakuten initiative? ARPU increased by JPY 10. This ARPU also includes the additional value as well. So what do you see that this current situation and the sales promotion, net additions and ARPU, and how do you evaluate the result of these three things?
As for net additions compared to the past, you may see it is down a bit. However, the same contract and the Rakuten impact, well, of course, there is some competition. I would not say there is no impact. However, in terms of ARPU, I would not say that there will be any big damage to our business as a whole, as CEO Miyakawa has mentioned earlier. As for additional value, telecommunications value or additional values, we consider them as one thing. I think we have a good flow in depth. There is a little bit more positive result due to the additional services or values, but we would like to accumulate the result of the business. We need to also have the certain growth of the number of users. I see that we are getting stronger in terms of the business foundation.
Regarding the new investment, JPY 43.9 billion of the advanced investment, we would like to see more a breakdown of this. I believe that you have applied to METI for JPY 156 billion of investment.
JPY 150 billion is for CapEx, and which is reflected to the investment. JPY 42 billion is from the subsidies. As for CapEx, you can say that it should have a negative impact, but as for the net, JPY 100.8 billion, there is some figure that we are going to add at the time of receiving the subsidy. Therefore, you may see that now the bigger figure for the advanced investment. However, as for the net, JPY 13 billion, as a total, it is equivalent to the total amount of the bond-type class shares issued amount.
Just to confirm, as you mentioned, JPY 100 billion, is something that you would say as the maximum of the advanced investment? Among JPY 120 billion, below JPY 100 billion is something that we have accounted as the advanced investment. The actual figure of JPY 43.9 billion, can you give me the breakdown?
JPY 18 billion is for a JPY 100 billion, and a majority of this is for what we have decided for advanced investment for AI related.
Deliveries of those NVIDIA GPU, there was an announcement that shipping has been delayed and only the major customers are able to receive the shipment. Is it going to affect your business?
We expect that we should be able to get it delivered as early as possible.
Thank you very much. Next, Tetsuro San from Morgan Stanley MUFG Securities. Please unmute and speak.
Our first question, similar to Masuno San's question. Smartphone and net adds, what is your view? 170,000, which is similar to KDDI Corporation, and you are aiming at 1 million or 1.5 million for the full year. The progress is low, I think. In the range of 1 million- 1.5 million for the full year, how many is more likely?
I cannot say exact number, but again, we were impacted by the shutdown of 3G, and impact had been felt until mid-May. From mid-May to July, we have seen improvement. Next quarter, compared to last quarter, should be better. 1 million for the full year is not enough. That is the rough number that I can tell you.
Second question. Whether you want to have net adds or ARPU or net income, of course you want to strike a best balance. When the market condition changes, which would be the highest priority when you run the business?
Well, one of them, it should not be only one of them. For now, for example, smartphones and net adds, you may find it very challenging or tough. The SoftBank brand and Y!mobile brand, like Miyakawa San mentioned earlier, currently, the ratio is about 50/50, which is better than before, and that should contribute to ARPU. At the end of the day, revenue should be most important from a perspective of running a business. Smartphones should be the entry point for all brands and all businesses that we have. Smartphone net adds is remaining important. We need to, again, strike balances, and we should prioritize one higher than others depending on the market conditions.
Those who are participating on Zoom, if you have any questions, please click the Raise Your Hand button and let us know. We would like to conclude the Q&A session. We would like to end the investor briefing for the earnings results for SoftBank Corp operation for the three months ended June 30, 2024. Please refer to our website for today's briefing, which will be available on-demand on our website later today. Once again, thank you very much for taking time out of your busy schedule, to participate in SoftBank Corp o perations investor briefing for the three months ended June 30, 2024.