Ambitious full-year targets fulfilled: Rakuten presents FY2024 and Q4 financial results
Rakuten successfully achieved all three of the key financial targets set at the start of 2024: Full-year consolidated Non-GAAP operating income profitability, monthly EBITDA profitability for Rakuten Mobile, and self-funding at the Group level.
These were all major takeaways from the company’s 2024 full year and Q4 financial results presentation, held at Rakuten’s global headquarters in Tokyo on February 14, 2024.
Chairman and CEO Mickey Mikitani, as well as leaders from across the Rakuten Group, shared full year highlights from the company’s diverse portfolio of 70+ services and offered exciting updates on a number of AI-powered initiatives.
Rakuten records full-year consolidated profitability for first time since 2019
Rakuten’s consolidated revenue soared to a record-high of 2.3 trillion yen in FY2024, a double-digit increase of 10% year-on-year (YoY), marking 28 consecutive years of revenue growth.
In addition to revenue growth, significant improvements in Rakuten Mobile’s profitability and cost optimization successes at the Group level contributed to consolidated Non-GAAP operating income of 7.0 billion yen for FY2024, up 160.1 billion yen YoY, with IFRS operating income notching 53.0 billion yen, an increase of 265.8 billion yen YoY. Full-year consolidated profitability was achieved for the first time since FY2019. Consolidated EBITDA*1 for FY2024 was 326.0 billion yen, up 120.0% YoY.
Milestone met: Rakuten Mobile reaches monthly EBITDA profitability for first time
In December 2024, Rakuten Mobile realized monthly EBITDA profitability for the first time since the company entered the Mobile Network Operator (MNO) industry, recording 2.3 billion yen.
The increase in EBITDA profitability was driven by strong subscriber growth and increased ARPU due to improved network quality, continued cost control measures, and higher advertising revenue from the Saikyo Thanks Festival, a marketing campaign launched in December 2024. Rakuten Mobile aims to continue its impressive growth on the way to accomplishing full-year EBITDA profitability in FY2025.
Rakuten Group self-funding achieved in FY2024
Notably, Rakuten Group achieved self-funding in FY2024 through a mix of strong cash flow generated by the FinTech segment, EBITDA in the Internet Services segment, working capital improvements, and independent financing initiatives at Rakuten Mobile such as lease financing. The result: The Group’s funding needs this year for the Mobile business and interest payments were accomplished without relying on additional interest-bearing debt from Rakuten Group.
Mobile momentum continues
Rakuten’s Mobile segment achieved revenue of 440.7 billion yen in FY2024, an increase of 20.9% YoY, while non-GAAP operating losses*2 improved by 105.6 billion yen YoY to 208.9 billion yen.
“As one of the first investors in AST SpaceMobile, we are excited to bring satellite-to-mobile connectivity closer to reality.”
Mickey Mikitani, Chairman and CEO, Rakuten Group
Driven by subscriber growth and higher data ARPU, Rakuten Mobile, as an individual business, recorded revenue of 283.9 billion yen, an improvement of 26.2% YoY. Combined with the effects of ongoing cost reductions, Non-GAAP operating losses*2 improved by 85.0 billion yen YoY to 216.3 billion yen.
As of the end of December 2024, Rakuten Mobile’s total number of subscribers*3 reached 8.3 million, a net increase of 1.77 million over the year. ARPU for Q4 FY2024 increased by 55 yen quarter-on-quarter to 2,856 yen, driven by continued growth in data ARPU, an increase in ARPU from higher advertising revenue and the introduction of fees for certain optional services.
Looking ahead to Rakuten Mobile’s longer-term plans, Mikitani shared an update on the company’s project with AST SpaceMobile. “As one of the first investors in AST SpaceMobile, we are excited to bring satellite-to-mobile connectivity closer to reality,” he told the audience. “Testing is scheduled to begin this spring in Japan, with the goal of starting service by 2026. This technology will deliver essential services for disaster response and connect people in remote areas across the country.”
A year of AI empowerment
2024 marked a strong year of execution in AI at Rakuten.
Speaking from Rakuten Crimson House in Tokyo, Chief AI and Data Officer Ting Cai noted the delivery of more than 35 new AI-powered tools, services, features and products across the Rakuten Ecosystem over the year – each one focused on delivering real results for customers and partners.
Turning to Rakuten AI for Business, the company’s latest AI service launched in January, Cai explained, “With privacy and security as core priorities, we leveraged expertise across operations, sales, marketing and engineering to develop AI-powered templates and tools that businesses of all sizes can integrate into their daily workflows.”
Internet Services segment sees revenue, profit growth
The company’s Internet Services segment saw 1.28 trillion yen in revenue for the year, up 5.8% YoY. The segment also achieved Non-GAAP operating income*2 of 85.1 billion yen, a 29.8% increase YoY, achieving both revenue and profit growth.
“Rakuten Ichiba is using AI to transform online shopping – helping merchants to summarize product reviews and delivering highly personalized product recommendations based on customer behavior,” explained Mikitani. “By offering tailored search results, we’re enhancing the shopping experience, driving customer satisfaction and boosting sales.”
Fintech at a glance
The FinTech segment recorded revenue of 820.4 billion yen in FY2024, up 13.1% YoY, and Non-GAAP operating income*2 of 153.4 billion yen, up 37.9% YoY, while customer bases and transaction volumes expanded across all businesses throughout the calendar year.
For more business-by-business breakdowns of Rakuten’s 2024 FY and Q4 performance, see the full announcement here.
Notes:
*1 EBITDA is an indicator the Rakuten Group uses to assess the ability for business activities to generate cash flow. It is calculated by adding Non-GAAP operating income to depreciation costs, etc.
*2 From Q3 FY2024, in light of expanding mutual synergies between segments within the Rakuten Ecosystem, the effect of these contributions are reflected in segment P&L, in order to refine and enable performance evaluation KPIs that include mutual contribution and customer referral (Mobile Ecosystem Contribution). Non-GAAP operating income and EBITDA in each segment have been retroactively revised starting from Q1 FY2023. This has been reflected in the P&L for each segment as follows: “other internet services” for Internet Services, “other services” for FinTech, and “Rakuten Mobile” for Mobile. Additionally, starting from the third quarter of 2024, due to the transfer of investment income/loss related to the Mobile segment from the Internet Services segment’s investment business to the Mobile segment, retrospective adjustments have been implemented. There is no impact on consolidated Non-GAAP operating income, IFRS operating income, or EBITDA. For more information on Mobile Ecosystem Contribution calculations, please see the Consolidated Financial Reports.
*3 Total of MNO, MVNO, and MVNE subscribers, including Business Continuity Plan (BCP) subscriptions.
