Rakuten Group(US:RKUNY)2024-08-10 00:43Financial 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]