Rakuten Group FY2021 and Q4 FY2021 financial results highlights

Overall Performance ・In FY2021, the Rakuten Group recorded revenue growth in all three segments: Internet Services, FinTech and Mobile. Consolidated revenue achieved double-digit growth, up +15.5% year-on-year (YoY), totaling 1.68 trillion yen. In addition, global gross transaction value (GTV) was 26.9 trillion yen, up +20.5% YoY.

・In Q4 FY2021, the average number of monthly active users across the Rakuten Group in Japan grew +12.2% YoY, and the percentage of users who use more than one service reached a record high of 74.7%*1. In addition, 35% of Rakuten Mobile subscribers who had not previously used a Rakuten service began using Rakuten Ichiba within one year of signing up for the mobile service. As cross-use between Rakuten Mobile and other Rakuten services continues to grow, the Rakuten Ecosystem as a whole is expected to deliver further growth.

・Due to strategic investment in future growth including the buildout of the Rakuten Mobile service area ahead of plan in the Mobile segment, the Rakuten Group recorded Non-GAAP operating losses of 225.0 billion yen. Excluding non-recurring operational items such as investment in the Mobile and Logistics businesses and profit fluctuations in the Investment business driven by large market fluctuations, Non-GAAP operating income was 184.6 billion yen, an increase of +23.8% YoY. With the expansion of the Rakuten Mobile service area, Mobile segment profitability is expected to improve from the second quarter of FY2022.

・As it works toward carbon neutrality, Rakuten Group, Inc. succeeded in adopting 100% utilization of renewable energy in FY2021 (Based on preliminary figures; target achieved four years ahead of the original FY2025 target). The Rakuten Group as a whole, including main consolidated subsidiaries, will now aim to adopt 100% renewable energy utilization by FY2023.

Internet Services segment

・The Internet Services segment achieved significant growth in both revenue and profitability in FY2021: Revenue was 1.003 trillion yen, up +14.7% YoY, exceeding one trillion yen for the first time in the company’s history. Segment income was 107.5 billion yen, 2.7 times higher than FY2020.

・Domestic e-commerce gross merchandise sales (GMS)2 for FY2021 exceeded five trillion yen, up +10.4% YoY. The GMS speed of growth is accelerating every year, reaching five trillion yen in record time, just one year after reaching four trillion yen. In Q4, shopping e-commerce GMS3 grew +11.7% YoY, achieving additional growth even after the impact of increased demand due to stay-at-home trends in FY2020 that led to significant growth of +45.2% compared to Q4 FY2019.

・Expanded cross-use between Rakuten Ichiba and other e-commerce services such as Rakuten Seiyu Netsuper, Rakuten Beauty and Rakuten GORA have contributed to the increase in total GMS.

・For Rakuten Travel, the total number of guest nights*4 in Q4 FY2021 showed positive growth of +5.1% on FY2019. Travel coupons became available in September 2021 as thank-you gifts through Japan’s Hometown Tax program. These coupons are available for use in more than 200 municipalities, and the number of users is expanding. This initiative is expected to drive growth as travel demand recovers in the future.

・Ad revenue in FY2021 increased significantly to 157.9 billion yen, up +22.0% YoY, driven by increased sales of online ad placements.

・In Other Internet Services, revenue was 291.5 billion yen, up +7.2% YoY, and operating income was 33.3 billion yen in FY2021, improving upon the 13.5 billion yen loss of FY2020. Increased revenue from Rakuten Kobo, Rakuten Viber and Rakuten Viki contributed to growth. The improved profitability of Rakuten Rewards, which was significantly impacted by the pandemic, contributed to growth in operating profit.

FinTech

・In FY2021, the FinTech segment recorded revenue of 619 billion yen, up +7.4% YoY, and segment profit of 89.1 billion yen, up +9.6% YoY, achieving both increased revenue and profit. The steady expansion of the customer base and the increasing adoption of each service as a “main service” by customers have contributed to this success. The combined customer base of Rakuten Card, Rakuten Bank and Rakuten Securities grew +89.4% YoY, and cross-use between fintech services continues to increase.

・In December 2021, Rakuten Card surpassed 25 million cards issued*5. In addition to this, a recovery in offline consumption led to shopping gross transaction value (GTV) of 14.5 trillion yen in FY2021, up +25.3% YoY. Rakuten Card outperformed the industry, maintaining a high growth rate while total industry GTV growth was sluggish due to the pandemic.

・In January 2022, Rakuten Bank surpassed 12 million customer accounts, the largest number among online banks in Japan*6, and its total balance of deposits (non-consolidated) surpassed seven trillion yen as of the end of December 2021. In Q4 FY2021, the number of payroll accounts increased +55.4% YoY, the number of transactions increased +17.4% YoY, and more customers are using Rakuten Bank as their main bank account for daily life.

・Rakuten Securities surpassed seven million general securities customer accounts in December 2021, an increase of two million accounts over the last year, when the number of accounts surpassed five million. Since 2018, Rakuten Securities has held the record for the highest number of new account openings in the industry*7 for three consecutive years. Money Bridge, the service linking Rakuten Securities and Rakuten Bank accounts, surpassed three million accounts and four trillion yen in total balance of deposits in December 2021.

・In the Insurance business, annualized insurance premiums of new policies increased steadily in FY2021, with new sales of life insurance increasing +15.8% YoY8 and new sales of general insurance increasing +26.8% YoY9. Online sales in particular drove growth, as online applications for Rakuten General Insurance’s automobile insurance increased 2.4 times YoY.

・In the Payment business, which includes Rakuten Pay, revenue increased +19.8% YoY. Operating losses improved by 2.6 billion yen on the previous year at the same time as rollout of proactive marketing activities, including campaign support for new merchant signups for small and medium-size businesses impacted by the pandemic that made payment fees effectively free for one year.

Mobile segment

・In February 2022, Rakuten Mobile reached 96% population coverage ratio for the Rakuten 4G network area*10. Relative to the end of March 2026 (FY2025) target for “96% 4G population coverage” outlined in the fourth generation mobile communications system (4G) special base station deployment plan (1.7 GHz) approved in April 2018 by the Japanese Ministry of Internal Affairs and Communications (MIC), Rakuten Mobile achieved this target approximately four years ahead of schedule.

・The Mobile segment recorded revenue of 227.5 billion yen in FY2021, a significant increase of +31.9% YoY. Revenue from users completing the one-year free campaign is steadily adding more to revenue, and sales from devices are increasing. Revenue recorded from telco platform business Rakuten Symphony also contributed to this result. Due to the buildout of the Rakuten Mobile service area accelerating ahead of plan, the Mobile segment recorded losses of 421.2 billion yen. As the number of users completing the one-year free campaign continues to increase and roaming area costs decrease, earnings are expected to improve from Q2 FY2022 onwards.

・The total number of subscriptions for the MNO service and MVNO service surpassed 5.5 million*11 as of February 2022, demonstrating steady progress in customer acquisition. Among the total number of MNO subscribers, the ratio of new subscribers switching over from other mobile carriers (MNP) is increasing.

*1 Percentage of users of two or more services in the past 12 months divided by the number of users of all services in the past 12 months (as of the end of December 2021). *2 Domestic e-commerce GMS = Combined transaction amount for 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 Delivery, Rakuten 24 and other first-party daily necessities shops, auto business, Rakuma, Rakuten Rebates, Rakuten Seiyu Netsuper, cross border trading, etc. Excludes some tax-exempt businesses, includes consumption tax. *3 Shopping e-commerce GMS = Total GMS of Rakuten Ichiba + First Party (Rakuten Fashion, Rakuten Books, Rakuten 24 and other first-party daily necessities shops, Rakuten Seiyu Netsuper) + Open EC (Rakuten Rebates, Rakuten Pay online payments) + Rakuma. *4 Number of overnight guests multiplied by number of nights stayed. *5 Includes the number of second Rakuten Cards issued to Rakuten cardholders, which began full scale in June 2021. *6 As of February 14, 2022. Research by Rakuten Bank. *7 Comparison of number of new account openings from 2018 to 2020 for major online brokers in Japan. Top five companies by number of accounts (in alphabetical order): au Kabucom Securities, Matsui Securities, Monex Securities, Rakuten Securities and SBI Securities. SBI Securities no longer discloses account numbers as of 2021. As of February 1, 2022. Source: Rakuten Securities research. *8 Excludes mortgage loan group credit life insurance. *9 Personal products only. *10 Night-time population coverage by outdoor base stations. The population coverage ratio is calculated based on the number of the approximately 500 meter zones used in the national census which have area coverage of more than 50%. Please check the coverage map for current coverage. In certain limited areas, as measures are still underway to close public service radio stations, only 5 MHz of bandwidth are available for the service. Once these closures are completed, 20 MHz of bandwidth will become available for service in these areas. *11 Number of subscribers are preliminary figures.