Record first-quarter revenue, monthly active user milestone and mobile updates: Q1 FY2023 results
On May 12, Rakuten announced its financial results for the first quarter of 2023 in Tokyo. Chairman and CEO Mickey Mikitani and business leaders from across the Rakuten Group took to the stage to share data and highlights from the company’s global portfolio of 70+ services – as well as their vision for the future of the company.
Monthly active users surpass 40M; Use of multiple services on the increase.
“Rakuten Mobile is aspiring to be the number one carrier in Japan by lowering the high price of telecommunications services. We want our customers to spend their money in the most effective way possible.”Mickey Mikitani, Rakuten Group Chairman & CEO
Q1 saw Rakuten Group achieve revenue growth in all three of its segments: Internet Services, Fintech and Mobile. During this time, the company recorded 475.6 billion yen in consolidated revenue (an increase of 9.3% year-on-year), marking its highest revenue ever recorded in the first quarter of a fiscal year.
The customer base for Rakuten’s Ecosystem continued to expand in Q1 2023, with the percentage of all users using two or more services over the past 12 months steadily increasing to 76.1%. Average monthly active users in Japan also surpassed 40 million*1, an increase of 10.3% YoY.
Rakuten’s advertising business revenue grew significantly to 48.3 billion yen, achieving double-digit growth of 15.8% YoY in Q1 2023 – and the business aims for 200 billion yen in revenue for 2023.
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 company expects to be EBITDA positive on a consolidated basis for 2023.
Rakuten Bank IPO headlines Fintech segment highlights
Overall, the Fintech segment delivered growth in both revenue and profit for Q1 2023, 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.
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*2. As of the end of March 2023, Rakuten Bank reached 13.74 million individual customer accounts (+ 11.6% YoY), while its total balance of deposits (non-consolidated) grew to 9.13 trillion yen (+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.
The number of credit cards issued by Rakuten Card also saw double-digit growth, reaching 28.63 million (up 10.2% YoY) as of the end of March 2023. Annual shopping GTV (gross transaction value) for Q1 2023 jumped to 4.9 trillion yen, achieving 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 Mobile sees increased ARPU, announces new roaming agreement
The Mobile segment recorded revenue of 96.3 billion yen across the quarter, a significant increase of 25.7% YoY, with non-GAAP operating losses of 102.7 billion yen.
“Rakuten Mobile has enabled Rakuten Symphony to be what it is today – through the many trials and testing – it has enabled Rakuten to lead on Open RAN technology all over the world.”Tareq Amin, Rakuten Mobile Co-CEO and Rakuten Symphony CEO
Rakuten Mobile and KDDI concluded a new roaming agreement*3 which will allow 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*4.
“Rakuten Mobile is aspiring to be the number one carrier in Japan by lowering the high price of telecommunications services. We want our customers to spend their money in the most effective way possible,” noted Rakuten Group Chairman and CEO Mickey Mikitani in regard to Rakuten Mobile’s outlook for the future.
Driven by continued growth with anchor customers, Rakuten Symphony revenue increased to 76 million USD in Q1 2023, achieving double-digit growth of 14.6% YoY.
Additionally, Rakuten Mobile Co-CEO and Rakuten Symphony CEO Tareq Amin stated his pride for Rakuten Symphony’s achievements in leading industry transformation with Open RAN. “Rakuten Mobile has enabled Rakuten Symphony to be what it is today – through the many trials and testing – it has enabled Rakuten to lead on Open RAN technology all over the world.”
Rakuten Ichiba, Rakuten Travel record strong post-pandemic growth
Revenue for Rakuten’s Internet Services segment was 271.1 billion yen, up 8.7% YoY, in Q1 2023. In this segment, domestic e-commerce*5 gross merchandise sales (GMS) reached more than 1.4 trillion yen this quarter, up 12.2%.
Revenue for domestic e-commerce was 205 billion yen (+12.1% YoY) this quarter. 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.
Outside of Japan, U.S.-based e-commerce business Rakuten Rewards recorded revenue of 186 million USD, up 1.4% YoY, on a GMS of 2.6 billion USD, up 5.5% YoY. Additionally, Rakuten TV’s total user numbers 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.
For more from Mikitani and Rakuten’s leadership team, as well as business-by-business breakdowns of Rakuten’s Q1 FY2023 performance, see here.
*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 Calculated based on the closing share price of 1,960 yen on May 11, 2023.
*3 KDDI and Rakuten Mobile Reach New Roaming Agreement
*4 Rakuten Mobile Announces New “Rakuten SAIKYO Plan” with Unlimited High-speed Data Usage in Network Areas Nationwide
*5 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.