Record Q2 revenue, double-digit growth for Ad business, Fintech segment and Rakuten Mobile: Q2 FY2023 results
On August 10, Rakuten presented its financial results for the second quarter of 2023 from its headquarters in Tokyo. Chairman and CEO Mickey Mikitani and leaders from across the Rakuten Group offered updates from the company’s portfolio of 70+ services.
Consumers continue to shop and consume content in the post-COVID era
This quarter, Rakuten Group realized double-digit revenue growth in its Internet Services and Fintech business segments.
Revenue for Rakuten’s Internet Services segment, which includes e-commerce marketplace Rakuten Ichiba, Rakuten Travel, Rakuten Advertising, Rakuten Rewards and more, reached 294.7 billion yen, up 11.7% year-on-year in the second quarter of 2023. Domestic e-commerce revenue was 216.7 billion yen, representing double-digit growth of 13.5% YoY, and domestic e-commerce gross merchandise sales (GMS)* reached approximately 1.5 trillion yen for the quarter.
The total number of Rakuten TV users and registered Rakuten Viki users reached 77.7 million, up 42.1% YoY, and 74.6 million, up 25.2% YoY, respectively, reflecting steady growth in Rakuten’s overseas businesses.
“OpenAI and Rakuten will explore mutually beneficial economic opportunities and advance the frontier of AI technology. Together, we hope to create more value for our customers, merchants and business partners.”
Ting Cai, Chief Data Officer, Rakuten Group
Consumer spending drives Rakuten Fintech revenue growth and profits
Rakuten Group’s Fintech segment reported significant growth in both revenue and profit for the quarter, with revenue of 181.0 billion yen, up 13.3% YoY, and Non-GAAP operating income of 33.0 billion yen, an increase of 31.2% YoY.
The number of credit cards issued by Rakuten Card reached 29.24 million as of the end of June 2023, up 9.5% YoY. Shoppers are spending more with Rakuten Card, as gross transaction value (GTV) for the quarter grew to 5.2 trillion yen, up 16.3% YoY, and its GTV market share reached 23.6% as of May 2023.
Rakuten Securities reached a new milestone, recording 9.24 million customer accounts as of the end of June 2023, an increase of 14.8% YoY. Rakuten Securities Holdings applied for listing on the Tokyo Stock Exchange Prime Market on July 4, 2023. In addition, the number of Rakuten Bank customer accounts (non-consolidated) totaled 14.05 million as of the end of June 2023, up 10.8% YoY as customers continue to apply for accounts.
Rakuten Payment revenue jumped to 17.0 billion yen for the quarter, an impressive increase of 47.1% YoY. Growing user numbers for Rakuten Pay and Rakuten Edy and an expanding merchant partner network contributed to the significant increase in sales.
Rakuten Mobile revenues grow while losses dwindle
Rakuten Mobile as an individual business noted double-digit revenue growth of 13.3% YoY for the quarter, taking in 52.2 billion yen. Operating losses continued to contract from their peak in the first quarter of 2022, the result of rising ARPU (average revenue per user) due to increased subscriber numbers and data usage following the launch of the Rakuten SAIKYO Plan in June of this year and revised marketing initiatives. MNO ARPU (individual and business) increased to 2,010 yen in the quarter compared to 1,274 yen in the same quarter of 2022.
“Rakuten Symphony is currently the greatest provider of Open RAN solutions, and it is our intention to scale our global Open RAN footprint by strategically targeting brownfield networks.”
Sharad Sriwastawa, Rakuten Mobile Co-CEO and Rakuten Symphony Acting President
Rakuten Symphony recorded revenue of approximately $72 million for the quarter. The company delivered RAN features to satisfy more than 1,000 customer requirements, expanded the user base for its Site Management Suite in the U.S. to more than 3,000 active users, and is nearing finalization of key contracts with resellers in Japan and South Korea for Rakuten Drive. Rakuten Symphony’s Cloud business secured deals with a leading digital media company and a private 5G channel partner.
On Rakuten Symphony’s current developments and outlook, Rakuten Mobile Co-CEO and Rakuten Symphony Acting President Sharad Sriwastawa stated, “Rakuten Symphony is currently the greatest provider of Open RAN solutions, and it is our intention to scale our global Open RAN footprint by strategically targeting brownfield networks.”
Additional deliveries from projects are expected to be reflected in earnings in the second half of this year.
Rakuten leadership highlights AI’s role in future business strategy
Rakuten leaders also took this quarter’s financial results presentation as an opportunity to emphasize the importance of leveraging AI for Rakuten’s businesses moving ahead.
“When it comes to AI collaborations, our goal is to achieve empowerment through the utilization of AI,” noted Mikitani.
“OpenAI and Rakuten will explore mutually beneficial economic opportunities and advance the frontier of AI technology. Together, we hope to create more value for our customers, merchants and business partners,” added Rakuten Group Chief Data Officer Ting Cai.
Rakuten recently announced a collaboration with OpenAI to deliver state-of-the-art conversational AI experiences to consumers and businesses in Japan and worldwide.
For more from Mikitani and Rakuten’s leadership team, as well as further performance details on individual businesses, see the materials for investors in full here.
*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.
