Rakuten Group (4755) Q3 2024 earnings summary

Executive summary

• Consolidated revenue reached a record JPY 566.7 billion in Q3/24, up 9.3% year-over-year, with strong growth in FinTech and Mobile segments and 40% of growth driven by mobile.

• Achieved first quarterly Non-GAAP operating profit since MNO investment, with Non-GAAP operating income at JPY 12.3 billion and IFRS operating income at JPY 538 million.

• Mobile subscribers totaled 8.12 million as of November 2024, with ARPU rising to JPY 2,801 and the segment achieving its first quarterly non-GAAP operating profit.

• AI initiatives and ecosystem integration are driving operational efficiencies, cross-segment synergies, and productivity improvements.

• Mobile Ecosystem Contribution now reflected in segment results, highlighting cross-segment synergies.

Financial highlights

• Internet Services segment revenue rose 4.4% year-over-year to JPY 314.6 billion; non-GAAP operating income up 54.2%.

• FinTech segment revenue increased 12.8% to JPY 208.2 billion; operating income up 57.2% to JPY 40 billion.

• Rakuten Card shopping GTV reached JPY 6.0 trillion, up 12.7% year-over-year.

• Mobile segment revenue up 19.5% to JPY 106.0 billion; non-GAAP operating income improved by JPY 26.5 billion year-over-year.

• Consolidated EBITDA surged 159.1% year-over-year to JPY 92.2 billion.

Outlook and guidance

• Targeting monthly EBITDA profitability for mobile segment in 2024 and full-year profitability in 2025.

• ARPU for mobile segment is JPY 2,801, with a target of JPY 3,000.

• Aims for double-digit consolidated revenue growth for FY2024 compared to FY2023, excluding the securities business.

• Ongoing cost reduction and efficiency improvements, leveraging AI across operations.

• Focus on disciplined financial policy and further productivity improvements.