Rakuten Group(US:RKUNY)2024-02-15 01:29Financial 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]