Rakuten on Tuesday logged its fifteenth consecutive quarter in the red as losses at its mobile service network unit outweighed a record performance from its financial unit.
The internet conglomerate logged an operating loss of ¥33.3 billion ($213 million) in January-March, in line with estimates. The result was around half its loss in the same quarter a year earlier but little changed from the previous quarter.
Its financial unit which offers online banking, brokerage, credit card and insurance services, logged an operating profit of ¥39.3 billion, up 47% from a year earlier, as its customer base grew.
But the mobile business, which has struggled with huge build-out costs and lackluster subscriber growth since its launch in 2020, recorded an operating loss of ¥71.9 billion.
While its number of mobile subscribers rose to 6.48 million at the end of March — increasing by around 1.5 million since the end of August last year — average revenue per user (ARPU) increased only fractionally.
Rakuten has offered generous joining bonuses for new customers, who gain further discounts and perks across the other services in Rakuten's ecosystem, helping generate subscriber growth but limiting the unit's profits.
The building out of the mobile network has resulted in massive debt and Rakuten has ¥627 billion ($4 billion) of outstanding bonds to be redeemed by the end of 2025, according to LSEG data.
Chief Financial Officer Kenji Hirose, however, told a briefing that he was confident in Rakuten's capacity to refinance its upcoming debt redemptions.
In January, Rakuten refinanced around $1.75 billion of its U.S. dollar-denominated debt at an interest rate of 11.25%, to be paid off in 2027. The new fundraising helped Rakuten redeem two tranches of bonds which had interest rates of 10.25% and 3.546% respectively.
FAQs
The company is weighed down by immense infrastructure costs as it builds out a network for its mobile platform. At the same time, the market is shrinking and the competition is offering cheap mobile subscription plans.
Is Rakuten mobile profitable? ›
Rakuten Mobile's profitability has been improving in accord with a steady increase of its subscriber base and capex reduction. Furthermore, Rakuten Group's free cash flow in the Internet Services segment and dividends received from the Fintech segment continue to increase.
What is the latest revenue of Rakuten? ›
According to Rakuten's latest financial reports the company's current revenue (TTM ) is $14.31 B. In 2023 the company made a revenue of $14.58 B an increase over the revenue in the year 2022 that were of $14.44 B. The revenue is the total amount of income that a company generates by the sale of goods or services.
Is Rakuten closing down? ›
On August 12, 2020, Rakuten.com sent an email to its customers stating that it would be closing its US operations as of September 15, 2020: "Rakuten's United States marketplace service located at Rakuten.com/shop will stop taking orders from September 15, 2020".
What is happening with Rakuten? ›
Rakuten Group Inc. said Monday it plans to reorganize its financial units by consolidating its banking, brokerage, credit card and insurance operations as it grapples with mounting losses in its mobile business.
Is there a downside to Rakuten? ›
Rakuten partners with many stores but doesn't have deals with every retailer. You may find you can't earn cash back at some of your regular stores.
What country owns Rakuten? ›
Rakuten Group, Inc.
'Optimism') is a Japanese technology conglomerate based in Tokyo, founded by Hiroshi Mikitani in 1997.
Who is the owner of Rakuten Mobile? ›
Rakuten Mobile, Inc. Wholly owned by Rakuten Group, Inc.
What is the turnover of Rakuten mobile? ›
Rakuten Mobile on the track to profitability
Rakuten Mobile as an individual business noted double-digit revenue growth of 17.7% YoY, bringing in 224.9 billion yen in FY2023.
Is Rakuten doing well? ›
Overall Performance. ・The Rakuten Group recorded year-on-year (YoY) revenue growth in all three segments in Q1 FY2024: Internet Services, FinTech and Mobile. Consolidated revenue reached 513.6 billion yen, a record high for the first quarter, up 8.0% YoY.
We've changed our name from Ebates to Rakuten. Aside from the new name and logo, our member experience is virtually unchanged. Here are some common questions and answers related to this change.
What's the deal with Rakuten? ›
How does Rakuten work? Rakuten saves you money by using a simple business model: Stores pay Rakuten a commission for sending our members to shop at their websites. Rakuten then splits that commission with you, in the form of Cash Back.
Is Rakuten making money? ›
And this is how much money Rakuten makes
Rakuten's parent company, the Rakuten Group, reported a revenue of $13 billion in 2021.
Why is Rakuten Global market closing? ›
Rakuten reportedly chose to shut down Rakuten Global Market, so they could refocus and strengthen their local position here in Japan. With ever-rising competition from their local competitor Amazon.jp, they made the decision to priorities improving their domestic services they offer.
