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]
Rakuten Group(RKUNY) - 2024 Q1 - Earnings Call Transcript