Rakuten Group (4755) Q2 2024 earnings summary

Executive summary

• Consolidated revenue reached a record JPY 537.3 billion for Q2, up 8.1% year-over-year, with strong growth in internet, fintech, and mobile segments.

• EBITDA nearly doubled year-over-year to JPY 66.8 billion, reflecting strong cash flow generation and improved profitability.

• Group-level cash flow turned positive, with Rakuten Mobile achieving pre-marketing cash flow profitability on a non-consolidated basis.

• Non-GAAP operating loss improved by JPY 27.6 billion YoY to JPY 11.8 billion, driven by higher profitability in Domestic EC, FinTech, and reduced Mobile losses.

• Liquidity gap through end-2025 eliminated via foreign bond issuance and lease financing for Mobile.

Financial highlights

• Internet segment revenue was JPY 303.9 billion (+3.1% YoY), with operating income up 30.3% YoY to JPY 18.9 billion.

• Fintech segment revenue was JPY 202.7 billion (+12% YoY), operating income JPY 42.3 billion (+28.1% YoY).

• Mobile segment revenue increased by JPY 15.6 billion YoY, with a dramatic EBITDA improvement of JPY 225.3 billion YoY.

• Cash and equivalents rose 10.7% QoQ to JPY 5,942.2 billion; total assets up 4.1% QoQ to JPY 24,828.3 billion.

• Non-Fintech EBITDA profit reached JPY 9.9 billion.

Outlook and guidance

• Double-digit consolidated revenue growth is targeted for FY2024, excluding the securities business, with continued focus on customer acquisition, cross-usage, and technology-driven service expansion.

• Aggressive rollout of Platinum Band and 5G infrastructure to enhance network quality and coverage.

• Continued investment in AI to drive operational and marketing efficiency by 20%.

• Mobile segment aims for early profitability through network expansion, Platinum Band deployment, and cost optimization.

• FinTech segment expects further growth in transaction value and profit margin, leveraging group synergies and new product offerings.