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| --- | --- | |---------------------------------------------|-------| | | | | | | | | | | FY2024 Third Quarter Consolidated Financial | | | | | | Results | | | November 13, 2024 | | Agenda 1 Group Strategy 2 Q3/24 Highlights 3 Segment Results ・Internet Services Segment ・FinTech Segment ・Mobile Segment 4 Finance 5 AI R 2 1. Group Strategy R 3 Rakuten Group's Current Status and Going Forward R 4 Total Rakuten Mobile Subscribers: 8.12 Million Lines*1 Total no. of subscribers *1 8.12 mm ■ MNO ■ MVNO*4 ■ BCP *3 ...

Financial Data and Key Metrics - Consolidated revenue reached a record high of JPY566.7 billion, a 9.3% increase YoY [17] - Non-GAAP operating income improved by JPY53.4 billion YoY, recording a profit of JPY12.3 billion [18] - IFRS operating income recorded a profit of JPY538 million [18] - Consolidated EBITDA increased by 159.1% YoY to JPY92.2 billion [18] Business Segment Performance Internet Services - Revenue increased by 4.4% YoY to JPY314.6 billion [19] - Non-GAAP operating income rose by 54.2% YoY to JPY21.2 billion [20] - Rakuten Travel grew by 43.1% compared to pre-pandemic levels [21] - Advertising revenue increased by 4.3% YoY [21] - International business unit revenue grew by 9.4% YoY [22] Fintech - Revenue increased by 12.8% YoY to JPY208.2 billion [26] - Operating income rose by 57.2% YoY to JPY40 billion [26] - Rakuten Card Shopping GTV reached JPY6 trillion, a 12.7% increase YoY [27] - Rakuten Securities general account increased by 20.3% YoY to JPY11.65 million [27] - Rakuten Bank deposit balance grew by 16.4% YoY to JPY11.1 trillion [28] Mobile - Revenue increased by 19.5% YoY, surpassing JPY100 billion [33] - Non-GAAP operating income improved by JPY26.5 billion YoY [33] - EBITDA reached JPY30.5 billion, showing positive growth [33] - Total subscribers reached 8.12 million, with MNO service revenue growing by 42.2% [35] - ARPU stood at JPY2,801, approaching the target of JPY3,000 [35] Market and Strategic Insights - Rakuten Mobile is positioned as a key pillar of the ecosystem, driving usage of other Rakuten services [11][13] - Subscribers use 3.25 services on average, compared to 1.25 for non-subscribers [12] - AI-driven cost reductions in customer support saved 31%, reducing costs from JPY195 to JPY37 per user [15] - The company aims for a 20% improvement in marketing, operational, and client efficiency through AI [16] - Rakuten Mobile plans to expand 5G coverage, targeting 100% coverage in Tokyo Metro by March 2026 [41][42] Management Commentary - The company achieved self-funding for Rakuten Mobile, with no reliance on external loans [5] - Rakuten Mobile's growth is supported by its cost advantage and rich data assets [6] - The company is leveraging AI to enhance customer experience and operational efficiency [15][16] - Rakuten Symphony is driving technological advancements, with 45 global customers and a target of 100+ by next year [57] - The company is focused on improving profitability, with Rakuten Mobile expected to achieve monthly EBITDA profitability by 2024 and annual profitability by 2025 [63] Other Key Information - Rakuten Mobile's ecosystem contribution is reflected in its financials, with adjusted MNO churn at 1.09% [35] - The company is integrating generative AI into Rakuten Link, enabling advanced communication features like simultaneous interpretation [50] - Rakuten Symphony is expanding its cloud services, focusing on private cloud solutions for businesses [55] - The company is targeting energy savings of 20% through AI-driven base station operations [44] Q&A Session - No specific questions or answers were provided in the document [84]

Core Insights - The research service "Asia Value & Moat Stocks" targets value investors looking for Asia-listed stocks with significant discrepancies between market price and intrinsic value, focusing on deep value balance sheet bargains and wide moat stocks [1] Group 1 - The service emphasizes investment opportunities in the Hong Kong market, particularly in deep value balance sheet bargains such as net cash stocks and low price-to-book (P/B) stocks [1] - It also highlights wide moat stocks, which are characterized by strong earnings power and include high-quality businesses and hidden champions [1] - The author provides a range of watch lists with monthly updates to assist investors in identifying potential investment opportunities [1]

Rakuten Group, Inc. (OTCPK:RKUNY) Q2 2024 Earnings Conference Call August 9, 2024 2:15 AM ET Company Participants Hiroshi Mikitani - Chairman, President & Chief Executive Officer Kenji Hirose - Chief Financial Officer Ting Cai - Group Senior Managing Executive Officer, Chief Data Officer, Group Senior Managing Executive Naho Kono - Managing Executive Officer and CMO, Rakuten Mobile, Inc. Conference Call Participants Hideo Fujimoto - JPMorgan Yusuke Okumura - Okasan Securities Neale Anderson - HSBC Securitie ...

Financial Data and Key Metrics - Revenue increased by 8% year-on-year to ¥513.6 billion, a record high for the first quarter [92] - Consolidated EBITDA reached ¥52.8 billion, with significant improvements in cash flow [93] - Non-GAAP operating income for the Internet segment increased by 14.8% to ¥13.6 billion [94] - Rakuten Mobile's EBITDA improved dramatically, with a reduction in losses compared to the previous year [102] Business Line Data and Key Metrics - Rakuten Ichiba and Travel showed steady growth in the domestic market, while overseas business also progressed [92] - Rakuten Mobile's subscriber base grew, with M&O service revenue increasing by ¥9.6 billion year-on-year [117] - Rakuten Card profitability improved, and Rakuten Payment turned profitable [117] - Rakuten Symphony's Open RAN strategy gained strong attention globally, with plans to open-source software [31][32] Market Data and Key Metrics - Domestic EC GMS growth rate improved by 1.5 percentage points quarter-on-quarter [95] - Rakuten Travel inbound GTV increased by 243% year-on-year [95] - Rakuten TV overseas saw a 43.8% year-on-year growth in user numbers [95] - Rakuten Mobile achieved 99.9% population coverage, with plans to expand 5G coverage further [130][131] Company Strategy and Industry Competition - The company is focusing on Open RAN and virtualization, aiming to disrupt the mobile industry with its software strategy [31][32] - Rakuten Mobile's success is seen as a test case for its software technology, with plans to showcase its effectiveness globally [52] - The company is leveraging AI to improve operational efficiency and customer support, with a 70% reduction in support fees achieved through AI implementation [111] - Rakuten is integrating its fintech services, including Rakuten Card, Rakuten Pay, and Rakuten Edy, to create synergistic effects [101][126] Management Commentary on Operating Environment and Future Outlook - Management emphasized the importance of quality over volume, particularly in the Domestic EC segment [119] - The company is confident in its ability to compete in the e-commerce market, with a focus on healthy user growth and optimized marketing expenses [28] - Rakuten Mobile is expected to achieve profitability on an annual consolidated non-GAAP OI basis in fiscal 2024 [138] - The company is proactively managing debt maturity and improving its credit rating to ensure financial soundness [139] Other Important Information - Rakuten launched a special "Welcome Home" campaign in May to attract returning customers, which has been well-received [5][6] - The company is reorganizing its fintech businesses to improve governance and synergy effects [71][126] - Rakuten AI 7 billion, a cost-effective open model for the Japanese language, has been launched and is performing comparably to other large language models [64] Q&A Session Summary Question: E-commerce market growth and GMV outlook - The company observed a strengthened customer base but noted a decline in GMV due to price hikes in home appliances [23] - Daily necessities, including food, showed positive growth, with expectations for further growth in Q3 and Q4 [24][26] Question: Rakuten Symphony's revenue growth and Open RAN adoption - Rakuten Symphony's Open RAN strategy is gaining traction globally, with plans to open-source its software to accelerate adoption [31][32] - The company expects significant revenue growth from its software business, particularly in Open RAN and cloud services [37] Question: Mobile business subscriber trends and profitability - Rakuten Mobile's subscriber growth is steady, with improvements in both new subscriptions and churn rates [66] - The company aims to increase ARPU to ¥2,500 and is focusing on high-quality services to enhance customer experience [41][67] Question: AI utilization and service offerings - Rakuten is leveraging AI to improve operational efficiency, customer support, and marketing productivity [111][136] - The company has launched AI-powered tools for merchants and plans to scale its AI applications across multiple services [142][143] Question: Financial restructuring and alliances - The company is reorganizing its fintech businesses to improve governance and synergy effects [71][126] - Rakuten is open to alliances with other entities to enhance its non-financial fintech offerings [72]

has been achieved. So therefore we have been able to far expand the revenue. By doing so, we are going to utilize virtual technology. Many of the mobile phone telecommunication companies are now looking to ORAN and this is going to be the de facto standard by utilizing virtual technology. So Rakuten Symphony, Rakuten Mobile had been spearheading this whole effort altogether and we have been the frontrunner. no signal availability competitiveness. So, the latency, this is literally latency, like when you're ...

* In the case of applying only family discounts and excluding other discounts, as of February 2024. According to our internal research. 48 2 � ARPU Growth ￥3,000 R Q2/23 Q3/23 Q4/23 R Achieved Cost Optimization Target in December 2023 Mar-23 Jun-23 54 Capital Expenditure FY2024 Plan*1*2 FY2023 FY2024 Abolition of NTT Law ＜Concerns regarding the abolition of the NTT Law＞ 1. Monopolistic use and unfair provision of facilities (such as buildings, utility poles, and pipelines) that were constructed using public ...

NurPhoto/NurPhoto via Getty Images Operating the third biggest ecommerce marketplace in the world with 1.7b members, Rakuten Group (OTCPK:RKUNY) (TSE:4755) is a quiet giant. Practically everyone in Japan, the third most populous country in Asia Pacific with 128m people, is a Rakuten customer. And not just in ecommerce. Its fintech offerings are immensely popular; advertising and digital content also do well for themselves. The biggest reason for the Group's successful expansion has been its membership and l ...

Rakuten Group, Inc. (OTCPK:RKUNY) Q3 2023 Results Conference Call November 9, 2023 1:00 AM ET Company Participants Hiroshi Mikitani - Chairman, President and Chief Executive Officer Ting Cai - Group Senior Managing Executive Officer, CDO, Group Senior Managing Executive Kenji Hirose - Chief Financial Officer & Executive Vice President Takaharu Ando - Director Conference Call Participants Yoshitaka Nagao - BofA Securities Hideo Fujimoto - JPMorgan Securities Mitsunobu Tsuruo - Citigroup Securities Operator [ ...