Rakuten Mobile & Subscribers - Rakuten Mobile achieved its first quarterly profit since the start of full-scale MNO investment, with JPY 12.3 billion in operating income for Q3/24 [9, 10] - Total Rakuten Mobile subscribers reached 8.12 million lines as of November 10, 2024 [5] - Rakuten Mobile subscribers use +2.45 more services than non-subscribers [24, 26] - Rakuten Mobile's MNO service revenue increased +42.2% YoY in Q3/24 [100] - Rakuten Mobile's adjusted MNO churn rate was 1.09% as of Q3/24 [100] Financial Performance - Q3/24 consolidated revenue reached JPY 566.7 billion, a +9.3% YoY increase [40] - FinTech segment revenue increased +12.8% YoY, reaching JPY 208.2 billion [41, 72] - Q3/24 consolidated Non-GAAP operating income increased by JPY 26.5 billion YoY, a +57.2% increase [49] - Q3/24 consolidated EBITDA achieved profitability at JPY 92.2 billion, a +159.1% YoY increase [53, 54] FinTech Segment - Rakuten Card shopping GTV increased +12.7% YoY to JPY 6.0 trillion [75] - Rakuten Securities general accounts increased +20.3% YoY to 11.65 million [75] - Rakuten Bank accounts increased +12.6% YoY to 16.19 million [75] AI Initiatives - AI implementation led to a 31% reduction in customer support costs at Rakuten Mobile [36] - Rakuten is driving groupwide productivity enhancement through the "Triple 20" project, aiming for a 20% improvement in operational, marketing, and client productivity [35]

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]

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Financial Data and Key Metrics Changes - Consolidated revenue reached JPY 537.3 billion, an increase of 8.1% year-on-year, marking a record high [5] - Operating income improved by JPY 27.6 billion year-on-year, moving from a loss of JPY 11.8 billion to a positive EBITDA of JPY 66.8 billion [5][6] - Rakuten Mobile achieved non-consolidated pre-marketing cash flow profit for the first time [3] Business Segment Data and Key Metrics Changes - Internet Services segment revenue was JPY 303.9 billion, up 3.1% year-on-year, with operating income increasing by 30.3% to JPY 18.9 billion [7] - FinTech segment revenue grew by 12% year-on-year to JPY 202.7 billion, with operating income at JPY 42.3 billion, a 28.1% increase [12] - Rakuten Mobile subscriber count reached 7.7 million, with an adjusted MNO churn rate of 1.04% [16][17] Market Data and Key Metrics Changes - Rakuten Travel and Domestic Hotel Checkout GTV increased by 34% compared to FY 2019 [8] - Overseas businesses, including Rakuten TV and Viber, showed significant growth, with Rakuten TV users increasing by 44.2% year-on-year to 112.1 million [9] - Rakuten Card Shopping GTV rose to JPY 5.9 trillion, reflecting a nearly 14% increase [12] Company Strategy and Development Direction - The company aims to enhance its mobile services and expand its ecosystem, focusing on improving network quality and coverage [43] - Plans to leverage AI technology to improve operational efficiency and customer engagement across various services [31][34] - The company is committed to maintaining financial soundness and addressing refinancing risks through disciplined financial policies [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth of Rakuten Mobile, attributing subscriber growth to improved network quality and competitive pricing [43] - The company is optimistic about the impact of AI on its services and overall business performance [31][34] - Management acknowledged potential challenges from competitors but emphasized the unique value proposition of their pricing strategy [54] Other Important Information - The company is actively preparing for potential natural disasters, such as the Nankai Trough earthquake, by enhancing its infrastructure and response capabilities [55] - The upcoming reorganization of the FinTech segment is expected to enhance business efficiency and profitability [62] Q&A Session All Questions and Answers Question: What factors contribute to the steady growth of mobile subscribers compared to competitors? - Management highlighted improved network quality, a simple pricing plan, and the benefits of the Rakuten ecosystem as key factors driving subscriber growth [43] Question: How will the recent interest rate increase impact financing? - Management noted that over 90% of their debt is fixed-rate, minimizing direct impacts from interest rate increases, and emphasized that refinancing needs for 2025 have been addressed [45][46] Question: What is the impact of the Platinum Band on internet marketing and customer acquisition? - Management indicated that both digital marketing and traditional media are being utilized to promote the Platinum Band, aiming to reach a broader audience [50] Question: How does the company view the potential impact of competitors' pricing strategies? - Management believes that their unique pricing plan and the added value from the Rakuten ecosystem will mitigate competitive impacts [54] Question: Can you provide an update on the FinTech reorganization? - Management confirmed a three-month postponement for the reorganization to ensure thorough consideration of all factors, with a target completion date set for January 2025 [62]

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]

Financial Data and Key Metrics Changes - The consolidated revenue for the fourth quarter increased by 3.3%, achieving JPY 2.07 trillion, marking 27 consecutive months of positive growth [15][17] - Non-GAAP EBITDA for the fourth quarter was JPY 74.5 billion, showing significant improvement year-on-year [16][17] - Non-GAAP operating profit for the fourth quarter was reported at minus JPY 3.6 billion, an improvement of JPY 69 billion compared to the same quarter last year [16][20] Business Line Data and Key Metrics Changes - Internet services segment revenue increased by 5.9% year-on-year, while FinTech grew by 10.4%, and Rakuten Mobile saw a 12.6% increase [15] - Non-GAAP operating income for the Internet services segment grew by 18.9% year-on-year, reaching JPY 76.8 billion [25] - Rakuten Mobile's revenue was JPY 364.6 billion, a 3.9% increase year-on-year, but the non-GAAP operating income was still negative at JPY 337.5 billion for the year [43] Market Data and Key Metrics Changes - The domestic e-commerce market showed a three-year CAGR improvement of 10%, with Rakuten Ichiba outperforming the industry average by achieving an 8.1% CAGR [24] - Rakuten Bank reported a year-on-year revenue growth of 9.8%, reaching JPY 1.2 trillion [25] - The ad business revenue grew at 17%, significantly higher than the industry average of 2% [32] Company Strategy and Development Direction - The company aims to leverage AI to enhance productivity, targeting a 20% increase in marketing and operational productivity [22] - The introduction of the SAIKYO Family program is expected to enhance user acquisition and retention, despite potential short-term impacts on ARPU [4][49] - The company is focusing on capitalizing on its ecosystem, integrating various services to drive growth [27][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about achieving profitability in the mobile segment throughout the year, emphasizing cash management and operational efficiency [21][68] - The company acknowledged challenges in revenue growth but highlighted ongoing improvements in service quality and marketing strategies [90] - Management is cautious about regulatory changes affecting the telecommunications industry, particularly concerning the NTT law [65] Other Important Information - The company has successfully reduced monthly operational costs by JPY 16 billion, with plans for further reductions [61][107] - The introduction of new financial products in conjunction with mobile services is being considered to enhance customer offerings [110] Q&A Session Summary Question: What is the roadmap to increase mobile ARPU to JPY 2,500 - JPY 3,000? - Management indicated that additional services will be offered to enhance ARPU, with expectations for ad revenue growth contributing to this target [88][89] Question: What is the impact of the family program on ARPU and user growth? - Management noted that while the family program may initially lower ARPU, it is expected to drive user acquisition and retention, ultimately benefiting overall revenue [93][94] Question: Will the company continue to pursue cost reductions? - Management confirmed that the current cost reduction standard will be maintained, with further initiatives underway to achieve additional savings [107]

Financial Performance & Targets - Rakuten Group achieved 27 consecutive years of revenue growth, surpassing JPY 2 trillion in consolidated revenue for FY23[78] - The company aims for annual consolidated Non-GAAP Operating Income profitability in FY2024[90] - Rakuten Mobile is targeting monthly Non-GAAP EBITDA profitability by December 2024[91] and annual EBITDA breakeven for FY2025[165] - Rakuten Mobile aims to grow MNO Service Revenue to cover EBITDA cost[212] Rakuten Mobile Strategy - Rakuten Mobile is targeting 8 to 10 million subscribers[195] - Rakuten Mobile is aiming for an ARPU (Average Revenue Per User) between JPY 2,500 and JPY 3,000[195] - Rakuten Mobile's network quality has shown consistent improvement, reducing churn rate[70] - Rakuten Mobile is introducing the SAIKYO Family Program, offering competitive pricing for families, with data plans starting at JPY 980 (JPY1,078, incl tax) for up to 3GB when family discounts are applied[57, 230] AI Initiatives - Rakuten is implementing an "AI-nization" plan to enhance operating productivity and uplift clients' productivity[37, 92] - Semantic search for Rakuten Fashion reduced zero hit rate by 93.5% and increased searches per session by 3%[24] - Semantic Search for Rakuten Ichiba reduced zero hit rate by 98.5%[315] Financial Strategy - Rakuten raised USD 1.8 billion of USD Denominated Senior Notes in February 2024[14] - The company plans to significantly reduce Capex from FY2024[19], anticipating it to be slightly under JPY 100 billion[266] - Platinum Band-related 10-year expected cumulative capital expenditure of JPY 54.4 billion[266]

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 [ ...

FY2023 Second Quarter Consolidated Financial Results August 10, 2023 Rakuten Group, Inc. Topics | --- | --- | |-------|-------| | | | | 1 | | | 2 | | ◆ Mobile ◆ Internet Services ◆ FinTech 3 Financial Strategy 4 AI Strategy R 2 | --- | --- | --- | |-------------------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1. CEO Summary | | | | | | | | | | | | | | | | | | | | | | | | | | | | R | | 3 | Annual Revenue Growth for 26 Consecutive Years Since the Founding 1997 2005 201 ...