Rakuten Group FY2023 and Q4 FY2023 financial results highlights

Overall Performance

• The Rakuten Group recorded year-on-year (YoY) revenue growth in all three segments in FY2023: Internet Services, FinTech and Mobile. Consolidated revenue reached a record high of 2.1 trillion yen, up 7.8% YoY, achieving 27 consecutive years of growth.
• As a result of significantly decreased operating losses in the Mobile business and strong growth in the FinTech segment, the Rakuten Group recorded Non-GAAP operating losses in FY2023 of 153 billion yen, an improvement of 182.2 billion yen YoY. The Rakuten Group recorded consolidated Non-GAAP operating income of 21.2 billion yen in December 2023, achieving profitability on a monthly basis as planned.
• The Rakuten Group’s consolidated Non-GAAP EBITDA was 148.2 billion yen in FY2023, an improvement of 218.1 billion yen YoY, achieving profitability for the fiscal year for the first time in three years. In addition, the non-FinTech businesses (Internet Services and Mobile segments) were also Non-GAAP EBITDA profitable in Q4 FY2023.
• Revenue in the advertising business in FY2023 grew to 206.5 billion yen, achieving double-digit growth of 12.9% YoY*1, as well as reaching the full-year sales revenue target of 200 billion yen.
• In February 2024, the Rakuten Group addressed 2024 refinancing risks by issuing US dollar-denominated senior notes. Furthermore, starting from FY2024, the company aims to achieve self-funding at the Group level by improving the mobile business’s financial performance along with free cash flow generated from the Internet Services segment and cash flow generated from the FinTech segment. The company will continue to maintain its financial stability through a disciplined financial policy. 

Internet Services segment

• The Internet Services segment in FY2023 achieved growth in both revenue and profit, with revenue of 1.21 trillion yen, up 9.8% YoY, and Non-GAAP operating income of 76.8 billion yen, up 18.9% YoY.
• In this segment, FY2023 domestic e-commerce gross merchandise sales (GMS)*2 grew by 6.9% YoY, reaching 6.0 trillion yen. Additionally, Rakuten Travel’s gross transaction value (GTV)*3 for domestic accommodations grew significantly by 42.7% compared to 2019 pre-pandemic levels.
• Rakuten’s overseas businesses continued to steadily expand their customer bases, especially the digital content businesses, with the total number of Rakuten TV users and registered Rakuten Viki users reaching 93.9 million, up 42.8% YoY, and 82.5 million, up 23.4% YoY, respectively. 

FinTech segment

• The FinTech segment delivered growth in both revenue and profit for FY2023, with revenue of 725.2 billion yen, up 11.2% YoY, and Non-GAAP operating income of 122.9 billion yen, up 36.8% YoY.
• The number of Rakuten Cards issued reached 30.07 million in December 2023, an increase of 7.1% YoY, marking the achievement of one of the company’s “Triple Three” mid-term targets. This was due to the ongoing shift towards cashless payments, as well as successful marketing measures promoting the use of a second Rakuten Card and the unveiling of new card designs. Rakuten Card’s annual shopping gross transaction value (GTV) grew to 21.1 trillion yen, up 16.4% YoY, making steady progress on the remaining mid-term targets of 30 trillion yen shopping GTV and 30% GTV market share.  
• As of the end of December 2023, Rakuten Securities reached 10.2 million customer accounts, up 18.1% YoY, and the number of Rakuten Bank customer accounts (non-consolidated) reached 15 million as of February 11, 2024, as the customer bases of these services continue to steadily expand.
• Rakuten Payment revenue jumped to 75.0 billion yen in FY2023, up 35.7% YoY. This was the result of an increase in the number of Rakuten Pay and Rakuten Cash users, as well as an increase in transaction volume due to the expansion in the number of locations accepting these services. 
•  

Mobile segment

• In FY2023, the Mobile segment recorded revenue of 364.6 billion yen, up 3.9% YoY. Driven by a review of cost structures and increased subscriber numbers, Non-GAAP operating losses were 337.5 billion yen, a significant improvement of 141.7 billion yen YoY, while Non-GAAP EBITDA was a loss of 179.1 billion yen, a significant improvement of 159.9 billion yen YoY.
• Led by an increase in average sales per user (ARPU) due to increasing data usage following the introduction of the Rakuten SAIKYO Plan and the growing number of subscribers following the launch of the Rakuten Mobile Business Plan, Rakuten Mobile as an individual business recorded revenue of 224.9 billion yen in FY2023, an increase of 17.7% YoY. The company’s Non-GAAP operating losses were 322.5 billion yen, a significant improvement of 136.8 billion yen YoY. The company will implement various initiatives to achieve monthly profitability for Non-GAAP EBITDA within 2024. 
• The total number of MNO subscriptions (both individual and business) reached 6.09 million  as of the end of December 2023 (5.96 million excluding BCP*4 through the Rakuten Mobile Business Plan) as net growth in subscribers saw acceleration.
• Rakuten Group, in collaboration with German operator 1&1 Mobilfunk, launched mobile services for Europe’s first fully virtualized 5G mobile network based on Open RAN standards built by Rakuten Symphony.

Notes
^*1 Total sum of advertising sales in Japan recorded in each segment (Internet Services, FinTech and Mobile). Includes internal Group transactions.
^*2 Domestic 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.
^*3 Excludes business customers.
^*4 BCP is the pricing plan for Business Continuity Plan purposes.