May 12, 2023
  • Rakuten Group, Inc.

Rakuten Group Q1 FY2023 Financial Results Highlights

Overall Performance

The Rakuten Group recorded revenue growth in all three segments in Q1 FY2023: Internet Services, FinTech and Mobile. Consolidated revenue was 475.6 billion yen, an increase of 9.3% year-on-year (YoY), marking the highest revenue ever recorded by the Rakuten Group in the first quarter of a fiscal year.

・The average number of monthly active users across the Rakuten Group in Japan surpassed 40 million*1, up 10.3% YoY, in Q1 FY2023. The Rakuten Ecosystem customer base continues to expand, with the percentage of all users using two or more services over the past 12 months steadily increasing to 76.1%.

Advertising business revenue grew significantly to 48.3 billion yen, achieving double-digit growth of 15.8% YoY in Q1 FY2023*2. The business aims for 200 billion yen in revenue for FY2023.

・Due to ongoing strategic investment in future growth for the Mobile segment, including the installation of Rakuten Mobile's own base stations, the Rakuten Group recorded Non-GAAP operating losses of 69.0 billion yen in Q1 FY2023. Following on from the previous quarter, Rakuten Group’s consolidated EBITDA was again profitable, achieving 7.4 billion yen, an increase of 42.9 billion yen YoY. The Rakuten Group expects to be EBITDA positive on a consolidated basis for FY2023.

Internet Services segment

Revenue for the Internet Services segment was 271.1 billion yen, up 8.7% YoY, in Q1 FY2023. In this segment, domestic e-commerce*3 gross merchandise sales (GMS) reached more than 1.4 trillion yen this quarter, achieving double-digit growth of 12.2%.

・Revenue for domestic e-commerce was 205.0 billion yen in Q1 FY2023, achieving double-digit revenue growth of 12.1% YoY. Notably, Rakuten Ichiba is also achieving significant continued growth post-pandemic, with the number of purchasers increasing 29.1% and purchase prices increasing 16.6% this quarter, in comparison to pre-pandemic Q1 FY2020. Rakuten Travel is also experiencing strong growth due to the partial easing of pandemic-related restrictions.

・U.S.-based e-commerce business Rakuten Rewards recorded revenue of 186 million USD, up 1.4% YoY, on GMS of 2.6 billion USD, up 5.5% YoY. Additionally, the total number of Rakuten TV users increased by 44.8% YoY and the total number of registered Rakuten Viki users increased by 25.7% YoY, reflecting steady growth in Rakuten's overseas businesses.

FinTech segment

The FinTech segment delivered growth in both revenue and profit for Q1 FY2023, with revenue of 168.0 billion yen, up 7.6% YoY, and Non-GAAP operating income of 26.6 billion yen, up 20.4% YoY.

The number of credit cards issued by Rakuten Card reached 28.63 million as of the end of March 2023, up 10.2% YoY, and shopping GTV for Q1 FY2023 jumped to 4.9 trillion yen, growth of 22.2% YoY. Rakuten Card continues to make steady progress towards achieving its “Triple Three” mid-term goals of 30 million cards issued, 30 trillion yen in shopping GTV and 30% GTV market share.

Rakuten Bank made its initial public offering on the Tokyo Stock Exchange Prime Market on April 21, 2023, with a market value of 322.2 billion yen as of May 11*4. As of the end of March 2023, Rakuten Bank reached 13.74 million individual customer accounts, up 11.6% YoY, and its total balance of deposits (non-consolidated) grew to 9.13 trillion yen, up 17.6% YoY. In addition, Rakuten Securities has more than 9 million general securities accounts as of May 12, 2023, also demonstrating steady growth in their customer base.

Mobile segment

In Q1 FY2023, the Mobile segment recorded revenue of 96.3 billion yen, a significant increase of 25.7% YoY. Non-GAAP operating losses of 102.7 billion yen were recorded. After peaking in Q1 FY2022, operating losses continue to contract due to ARPU (average revenue per user) growth as subscribers transitioned to the current Rakuten UN-LIMIT VII service plan, reduced roaming costs as the Rakuten network coverage area has expanded and other factors.

The total number of MNO subscriptions*5 (both individual and business) was 4.65 million as of May 10, 2023 (preliminary figures). Churn continues to decrease, and new MNO subscribers have shown a net increase since December 2022. MNO ARPU (individual) in Q1 FY2023 increased to 1,959 yen from 836 yen in Q1 FY2022*6.

Rakuten Mobile and KDDI concluded a new roaming agreement*7. This allows Rakuten Mobile to improve network connectivity rapidly and efficiently, while at the same time limiting its financial burden, as the company aims to further increase subscriber numbers with the launch of its new plan in June 2023*8.

Driven by continued growth with anchor customers, Rakuten Symphony revenue increased to 76 million USD in Q1 FY2023, up 14.6% YoY.

*1 Number of active users in March 2023. Figures are for Rakuten members who earned at least 1 Rakuten Point in the relevant month.
*2 Total sum of advertising sales in Japan recorded in each segment (Internet Services, FinTech and Mobile). Includes internal Group transactions.
*3 Domestic e-commerce GMS = Rakuten Ichiba, Rakuten Travel (GTV on checkout basis), Rakuten Books, Rakuten Books Network, Rakuten Kobo (domestic), golf business, Rakuten Fashion, Rakuten Dream businesses, Rakuten Beauty, Rakuten 24 and other first-party daily necessities shops, Rakuten Car, Rakuten Rakuma, Rakuten Rebates, Rakuten Seiyu Netsuper, Rakuten Ticket, cross border trading, etc. Excludes some tax-exempt businesses and includes consumption tax.
*4 Calculated based on the closing share price of 1,960 yen on May 11, 2023.
*5 Definition revised as of Q1 2023. Past figures have also been adjusted to align with the newly revised definition.
*6 Sales of each service divided by the average of the number of subscribers at the end of the most recent quarter and the number of subscribers at the end of the previous quarter. Q1 FY2023 are preliminary figures. Definition of subscriptions revised as of Q1 2023. Past figures have also been adjusted to align with the newly revised definition.
*7 KDDI and Rakuten Mobile Reach New Roaming Agreement
*8 Rakuten Mobile Announces New "Rakuten SAIKYO Plan" with Unlimited High-speed Data Usage in Network Areas Nationwide

*Please note that the information contained in press releases is current as of the date of release.

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