FinTech growth, mobile momentum headline Rakuten Q1 FY2025 financial results
On May 14, Rakuten Group announced its financial results for the first quarter of 2025 in an AI-powered presentation from its Crimson House headquarters in Tokyo.
AI avatars of Rakuten Group Chairman and CEO Mickey Mikitani, Group CFO Kenji Hirose and Group Chief AI & Data Officer Ting Cai shared Q1 2025 highlights from the company’s diverse portfolio of 70+ services, while highlighting bold advancements in the firm’s AI-nization initiatives.
Steady growth across segments
In Q1, Rakuten recorded year-on-year (YoY) revenue growth in each of its three segments: Internet Services, FinTech and Mobile.
Consolidated revenue reached 562.7 billion yen, up 9.6% YoY, marking a record high for the first quarter.
Rakuten Card’s increased shopping GTV, or shopping transaction value, and higher revenues for Rakuten Bank driven by rising interest rates, resulted in strong FinTech performance. In addition to robust growth in both domestic e-commerce and overseas businesses within the Internet Services segment, rising Rakuten Mobile subscription numbers also contributed significantly to revenue growth.
Overall, the company recorded quarterly Non-GAAP operating losses of 300 million yen, an improvement of 25.1 billion yen YoY. This was driven by increased Rakuten Mobile revenue and profit growth in both Rakuten Bank and Rakuten Payment. Consolidated EBITDA*1, was profitable for the quarter, recording a surplus of 79.9 billion yen, a substantial increase of 51.4% YoY.
FinTech delivers double digit revenue, profit growth
The FinTech segment achieved both revenue and profit growth for the quarter, bringing in 223.6 billion yen in revenue, an increase of 15.6% YoY, and Non-GAAP operating income of 43.9 billion yen, up 21.7% YoY.
At Rakuten Payment, increased transaction volume contributed to revenue growth. Notably, Non-GAAP operating income for the quarter was 1.9 billion yen, up 133.2% YoY, resulting in a substantial expansion of operating profit. Rakuten Payment continues to strengthen its position as the gateway to the Group’s payment services and accelerate its integration with other FinTech services.
Rakuten Securities’ total number of general securities accounts exceeded 12.34 million as of the end of March 2025, while achieving record-high revenue of 35.0 billion yen, an increase of 12.3% YoY.
Internet Services segment steady
The company’s Internet Services segment recorded revenue of 305.5 billion yen, up 6.9% YoY, and Non-GAAP operating income of 13.2 billion yen, up 25.8％ YoY for the first quarter of 2025.
“2025 is the year we will accelerate Group synergies to drive domestic EC growth.”
Rakuten Group Chairman and CEO Mickey Mikitani
Contributing to this growth, domestic e-commerce gross merchandise sales (GMS)*2 hit 1.4 trillion yen for the quarter, up 3.0% YoY. The steady growth was driven by an expanding user base and an increase in GMS from EC shopping platforms, including Rakuten Ichiba and the Rakuten Rebates point reward service. Mikitani noted, “2025 is the year we will accelerate Group synergies to drive domestic EC growth. A key strategy is our strengthened partnership with Rakuten Mobile, which is already paying dividends with a 47% spending increase on Ichiba from Rakuten Mobile users.”
Outside of Japan, the Rakuten International business unit achieved revenue of USD 429.5 million, an increase of 2.7% YoY. This growth was driven by strong sales of new Rakuten Kobo eReader devices as the company continues to expand globally, and steady growth in advertising from Rakuten Viber, who are evolving into a comprehensive super app designed to meet the diverse needs of customers.
Rakuten Mobile marks positive start towards goal of FY2025 EBITDA profitability
The Mobile segment recorded revenues of 110.7 billion yen, up 10.9% YoY in the quarter. As a result of increasing Rakuten Mobile subscriber numbers and rising ARPU, Non-GAAP operating losses decreased to 51.3 billion yen, an improvement of 14.3 billion yen YoY.
As an individual business, Rakuten Mobile – which reached 8.63 million subscriptions in the quarter – recorded revenue of 87.2 billion yen, up 40.7% YoY. Meanwhile, Non-GAAP operating losses dropped to 49.1 billion yen, an improvement of 17.5 billion yen YoY. Excluding annual property taxes, EBITDA reached over 100 million yen, an impressive improvement of 20.2 billion yen YoY, with Rakuten Mobile achieving its first-ever profitable quarter since entering the mobile industry.
Last month at a special press conference with AST SpaceMobile, Rakuten Mobile also announced ambitious plans to commercialize satellite-to-mobile broadband services in Japan starting from the fourth quarter of 2026.
AI-powered initiatives boost efficiency, drive revenue
Rakuten Group Chief AI & Data Officer Ting Cai presented updates on Rakuten’s AI-nization efforts, the company’s effort to infuse AI into everything it does for customers, partners and employees. He outlined the many new AI features, innovations and products being deployed across the Rakuten Ecosystem.
Among several highlights, Cai outlined how semantic search improvements drove a 10.7% YoY increase in search attribution GMS on Rakuten Ichiba for the quarter. “This quarter’s double-digit growth YoY is a testament to the power of AI search. When customers can find what they want more quickly, they are simply more likely to buy,” Cai stated.
Another area where AI is making an impact for the company is in ads. In Q1 2025, Rakuten updated the algorithm for keyword and bidding recommendation, making it easier to onboard advertisers, while also improving the search ads relevance algorithm by including additional signals. The result was a 13.7% increase YoY in Search Ads Clickthrough Rate and a 5.9% increase YoY in Ad Revenue Per Request.
Cai covered how the company’s internal Rakuten AI for Rakutenians GenAI tool has empowered employees to be more productive and creative. So far, employees have created over 16,000 custom AI tools and templates across a range of tasks, from drafting more compelling marketing content to administrative tasks like drafting emails and creating meeting minutes, to accelerating software development cycles and more.
Cai also offered updates on Rakuten’s next generation of language models – Rakuten AI 2.0, the company’s first mixture-of-experts large language model, and Rakuten AI 2.0 mini, which was built from scratch – and discussed advancements in Rakuten AI Assistant, which empowers customers to engage with the Rakuten Ecosystem in a highly personalized, multi-modal way, and more.
For more business-by-business breakdowns of Rakuten’s FY2025 Q1 performance, see the full announcement here.
*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 Domestic e-commerce GMS = Rakuten Ichiba, Rakuten Travel (GTV on checkout basis), Rakuten Books, Rakuten Books Network, 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 Mart, Rakuten Ticket, cross border trading, etc. Excludes some tax-exempt businesses and includes consumption tax. From Q1/25, figures have been retroactively revised due to a review of the classification of the businesses within the Internet Services segment.
