Q4 2025 Rakuten Group Inc Earnings Call

February 12, 2026

Speaker #1: Hello everyone, thank you very much for taking the time out of your busy schedules to join us today. I will be explaining the results of Rakuten Group for the 4th quarter and fiscal year of 2025.

Hiroshi Mikitani: Hello, everyone. Thank you very much for taking the time out of your busy schedules to join us today. I will be explaining the results of Rakuten Group for the Q4 and fiscal year 2025. Here is today's agenda. First, I will explain the business performance. Then, our CFO, Hirose, will explain the financial results, followed by our Chief AI and Data Officer, Ting, who will provide an update regarding our AI initiatives. First, I will provide a summary of the performance and KPIs of fiscal year 2025. First of all, as we announced at the end of last year, Rakuten Mobile's total number of subscribers surpassed our target of 10 million subscribers. I would like to once again express my gratitude to not only our users, but also our partner companies and everyone who has supported us.

Speaker #1: Here is today's agenda. First, I will explain the business performance. Then, our CFO, Hirose, will explain the financial results, followed by our Chief AI and Data Officer, Ting, who will provide an update regarding our AI initiatives.

Speaker #1: First, I will provide a summary of the performance and KPIs of fiscal year 2025. First of all, as we announced at the end of last year, Rakuten Mobile's total number of subscribers surpassed our target of 10 million subscribers.

Speaker #1: I would like to once again express my gratitude to not only our users, but also our partner companies, and everyone who has supported us.

Speaker #1: At the same time, Rakuten Mobile also achieved full-year profitability at the EBITDA level of ¥12.9 billion, a significant year-on-year improvement of ¥66.7 billion.

Hiroshi Mikitani: At the same time, Rakuten Mobile also achieved full-year profitability at the EBITDA level of JPY 12.9 billion, a significant year-on-year improvement of JPY 66.7 billion. Next, I would like to report on our consolidated financial results for fiscal year 2025. Consolidated revenue increased 9.5% year-on-year to JPY 2.5 trillion, marking the 29th consecutive year of revenue growth. In particular, the Fintech segment contributed significantly to this growth, which was up 19% year-on-year. Consolidated non-GAAP operating income increased significantly by JPY 99.2 billion year-on-year to JPY 106.3 billion, thanks to the significant contributions of the Fintech segment and improved losses in the Mobile segment. Consolidated EBITDA grew 33.7% year-on-year to JPY 435.9 billion, a new record high.

Speaker #1: Next, I would like to report on our consolidated financial results for fiscal year 2025. Consolidated revenue increased 9.5% year-on-year to ¥2.5 trillion, marking the 29th consecutive year of revenue growth.

Speaker #1: In particular, the fintech segment contributed significantly to this growth, which was up 19% year-on-year. Consolidated non-GAAP operating income increased significantly by ¥99.2 billion year-on-year to ¥106.3 billion, thanks to the significant contributions of the fintech segment and improved losses in the mobile segment.

Speaker #1: Consolidated EBITDA grew 33.7% year-on-year to ¥435.9 billion, a new record high. To reiterate, we achieved two earnings targets we set at the beginning of 2025, demonstrating strong growth and solid profit improvement.

Hiroshi Mikitani: To reiterate, we achieved two earnings targets we set at the beginning of 2025, demonstrating strong growth and solid profit improvement. In fiscal year 2025, Non-GAAP operating income and IFRS operating income were both positive. For fiscal year 2026, we aim to achieve significant growth in both profit metrics. With this in mind, Rakuten Group will focus on three areas. The first is expanding synergies with Rakuten Mobile and the ecosystem. We have previously stated that customers who sign up with Rakuten Mobile contribute to increased usage of group services, and we will continue to improve and expand the benefits of cross-usage to make them even more appealing. We will also promote group services and provide new value by leveraging Rakuten Mobile's unique assets, such as data and shops. The second is accelerating the use of AI.

Speaker #1: In fiscal year 2025, non-GAAP operating income and IFRS operating income were both positive. For fiscal year 2026, we aim to achieve significant growth in both profit metrics.

Speaker #1: With this in mind, Rakuten Group will focus on three areas: The first is expanding synergies with Rakuten Mobile and the ecosystem. We have previously stated that customers who sign up with Rakuten Mobile contribute to increased usage of group services.

Speaker #1: And we will continue to improve and expand the benefits of cross-usage to make them even more appealing. We will also promote group services and provide new value by leveraging Rakuten Mobile's unique assets, such as data and shops.

Speaker #1: The second is accelerating the use of AI. In fiscal 2025, we continue to introduce AI in various areas both inside and outside the company.

Hiroshi Mikitani: In fiscal 2025, we continued to introduce AI in various areas, both inside and outside the company. From fiscal 2026, we are appointing chief AI officers to all businesses and divisions to quickly promote the wider and more specialized uses of AI. Finally, we will strengthen human resource development. We strongly recognize that people are the most important driving force behind the company's growth. In fiscal 2026, we will review our recruitment and training strategies, foster entrepreneurship and improve skills, and focus on building an organization that will enable us to make sustainable strides towards becoming a company that will last for 100 years. Next, I will explain the business performance by segment. First, a review of the Internet Services segment.

Speaker #1: And from fiscal 2026, we are appointing Chief AI Officers to all businesses and divisions to quickly promote the wider and more specialized uses of AI.

Speaker #1: Finally, we will strengthen human resource development. We strongly recognize that people are the most important driving force behind the company's growth. In fiscal 2026, we will review our recruitment and training strategies, foster entrepreneurship and improve skills, and focus on building an organization that will enable us to make sustainable strides towards becoming a company that will last for 100 years.

Speaker #1: Next, I will explain the business performance by segment. First, a review of the Internet Services segment. In the Internet Services segment, fiscal 2025 revenue increased 6.8% year-on-year to ¥1.4 trillion, and non-GAAP operating income increased 4.5% year-on-year to ¥88.9 billion.

Hiroshi Mikitani: In the Internet Services segment, fiscal 2025 revenue increased 6.8% year-on-year to JPY 1.4 trillion, and non-GAAP operating income increased 4.5% year-on-year to JPY 88.9 billion. However, excluding the valuation gains and losses of minority investments, operating income increased 15.2% year-on-year to JPY 100.3 billion. Within the segment, Rakuten Ichiba and Rakuten Travel drove revenue growth in the domestic EC business.... In addition, progress was made in reducing losses in growth investment businesses such as the logistics business, contributing to the profit increase. In the international business unit, Rakuten Kobo and Rakuten Viber were the main drivers of the increased revenue and profit. Next, let's look at our main KPIs. Domestic EC GMS was JPY 6.3 trillion, up 3.9% year-on-year.

Speaker #1: However, excluding the valuation gains and losses of minority investments, operating income increased 15.2% year-on-year to ¥100.3 billion. Within the segment, Rakuten Ichiba and travel drove revenue growth in the domestic EC business.

Speaker #1: In addition, progress was made in reducing losses in growth investment businesses such as the logistics business, contributing to the profit increase. In the International Business Unit, Rakuten Kobo and Rakuten Viber were the main drivers of the increased revenue and profit.

Speaker #1: Next, let's look at our main KPIs. Domestic EC GMS was ¥6.3 trillion, up 3.9% year-on-year. However, taking into account the impact of 2024 being a leap year, the increase was 4.2% year-on-year.

Hiroshi Mikitani: However, taking into account the impact of 2024 being a leap year, the increase was 4.2% year-over-year. Travel business GTV increased 7.6% year-over-year, driven by inbound and other global GTV. In addition, advertising revenue for the entire group increased 8.3% year-over-year to JPY 239.2 billion, achieving solid growth. I would like to explain the fiscal year 2025 results for domestic EC once again. On the back of GMS growth explained on the previous slide, revenue increased 5.8% year-over-year to surpass the JPY 1 trillion mark, and non-GAAP operating income also increased 12.6% year-over-year to JPY 122.4 billion. Solid revenue growth in core businesses, and improved losses in growth investment businesses contributed to the increase in profits.

Speaker #1: Travel business GTV increased 7.6% year-on-year, driven by inbound and other global GTV. In addition, advertising revenue for the entire group increased 8.3% year-on-year to ¥239.2 billion, achieving solid growth.

Speaker #1: I would like to explain the fiscal year 2025 results for domestic EC once again. On the back of GMS growth explained on the previous slide, revenue increased 5.8% year-on-year to surpass the ¥1 trillion mark, and non-GAAP operating income also increased 12.6% year-on-year to ¥122.4 billion.

Speaker #1: Solid revenue growth in core businesses and improved losses in growth investment businesses contributed to the increase in profits. Going forward, we aim to achieve sustained revenue growth in core businesses by expanding synergies with mobile and utilizing AI, and to quickly achieve profitability in each of the growth investment businesses.

Hiroshi Mikitani: Going forward, we aim to achieve sustained revenue growth in core businesses by expanding synergies with mobile and utilizing AI, and to quickly achieve profitability in each of growth investment businesses. Rakuten Ichiba continues to reform its website, functions, logistics, and other areas. It is also promoting growth through the use of mobile and AI, expanding its customer base, and improving the loyalty of existing users by enhancing its services, including new services. Rakuten Mobile subscribers accounted for 16.4% of Rakuten Ichiba's monthly active users, up 1.4 points from the same period last year. Going forward, we will drive this rate up by increasing awareness of and enhancing the benefits for mobile subscribers. Regarding the use of AI in fiscal 2025, we promoted the introduction of AI in various areas, including search, recommendations, and ads.

Speaker #1: Rakuten Ichiba continues to reform its website and functions, logistics, and other areas. It is also promoting growth through the use of mobile and AI, expanding its customer base, and improving the loyalty of existing users by enhancing its services, including new services.

Speaker #1: Rakuten Mobile subscribers accounted for 16.4% of Rakuten Ichiba's monthly active users, up 1.4 points from the same period last year. Going forward, we will drive this rate up by increasing awareness of and enhancing the benefits for mobile subscribers.

Speaker #1: Regarding the use of AI in fiscal 2025, we promoted the introduction of AI in various areas, including search, recommendations, and ads. In fiscal 2026, we will aim to maximize the effects of these efforts.

Hiroshi Mikitani: In fiscal 2026, we will aim to maximize the effects of these efforts. In terms of enhancing services, in December 2025, we launched Rakuten Ichiba's first private brand, Rakuten Original, and Rakuten twenty-four Express, which offers same-day delivery of daily necessities and small appliances. We plan to launch several additional new services this year. In the travel business, global travel GTV achieved a high growth rate of 58% year-on-year on successful measures aimed at capturing inbound demand. Domestic travel GTV also increased 1.8% year-on-year. Furthermore, although the Chinese government's call for people to refrain from traveling to Japan in November last year resulted in a decrease in the number of visitors to Japan, domestic demand expanded, resulting in positive growth in GTV. Next, I'd like to talk about growth investment businesses.

Speaker #1: In terms of enhancing services, in December 2025 we launched Rakuten Ichiba's first private brand, Rakuten Original, and Rakuten 24 Express, which offers same-day delivery of daily necessities and small appliances.

Speaker #1: We plan to launch several additional new services this year. In the travel business, global travel GTV achieved a high growth rate of 58% year-on-year on successful measures aimed at capturing inbound demand.

Speaker #1: Domestic travel GTV also increased 1.8% year-on-year. Furthermore, although the Chinese government's call for people to refrain from traveling to Japan in November last year resulted in a decrease in the number of visitors to Japan, domestic demand expanded, resulting in positive growth in GTV.

Speaker #1: Next, I'd like to talk about growth investment businesses. Various initiatives aimed at reducing losses have been successful, resulting in continuous reductions in losses across multiple businesses.

Hiroshi Mikitani: Various initiatives aimed at reducing losses have been successful, resulting in continuous reductions in losses across multiple businesses. Specifically, in the logistics business, we revised prices and promoted operational efficiency, resulting in a JPY 7 billion year-on-year improvement in fiscal 2025. In the online grocery business, we decided to withdraw from Kansai area in Q3 and reviewed our asset size, resulting in a JPY 730 million quarter-on-quarter improvement in losses. The NBA streaming business also saw a JPY 1.46 billion year-on-year improvement in losses in fiscal 2025 due to the termination of the service in July last year. Lastly, turning to the international business unit, revenue increased 2.4% year-on-year to $2.1 billion, and non-GAAP operating income increased 35.3% year-on-year to $51.8 million.

Speaker #1: Specifically, in the logistics business, we revised prices and promoted operational efficiency, resulting in a ¥7.0 billion year-on-year improvement in fiscal 2025. In the online grocery business, we decided to withdraw from the Kansai area in the third quarter and reviewed our asset size, resulting in a ¥730 million quarter-on-quarter improvement in losses.

Speaker #1: The NBA streaming business also saw a ¥1.46 billion year-on-year improvement in losses in fiscal 2025 due to the termination of the service in July last year.

Speaker #1: Lastly, turning to the international business unit, revenue increased 2.4% year-on-year to $2.1 billion, and non-GAAP operating income increased 35.3% year-on-year to $51.8 million.

Speaker #1: Within this, open commerce, centered on Rakuten Rewards, faced headwinds due to the impact of the U.S. macroenvironment. On the other hand, in other categories, strong device and content sales at Rakuten Kobo and solid growth in communications and marketing services at Rakuten Viber contributed significantly to the division's overall revenue and profit growth.

Hiroshi Mikitani: Within this, open commerce, centered on Rakuten Rewards, faced headwinds due to the impact of the US macro environment. On the other hand, in other categories, strong device and content sales at Rakuten Kobo and solid growth in communications and marketing services at Rakuten Viber contributed significantly to the division's overall revenue and profit growth. Next, I will explain the Fintech segment. Segment revenue increased by 19.0% year-on-year to JPY 975.9 billion, and non-GAAP operating income increased by 30.3% to JPY 199.9 billion as a result of the customer base expanding across all services throughout the year. Next, regarding the key KPIs for each business, Rakuten Card's shopping GTV increased by 10.3% year-on-year to JPY 26.5 trillion.

Speaker #1: Next, I will explain the fintech segment. Segment revenue increased by 19.0% year-on-year to ¥975.9 billion, and non-GAAP operating income increased by 30.3% to ¥199.9 billion, as a result of the customer base expanding across all services throughout the year.

Speaker #1: Next, regarding the key KPIs for each business. Rakuten Card’s shopping GTV increased by 10.3% year-on-year to ¥26.5 trillion. Rakuten Bank’s accounts increased by 7% year-on-year to 17.63 million accounts, and deposits increased by 10% to ¥13.2 trillion.

Hiroshi Mikitani: Rakuten Bank's accounts increased by 7% year-on-year to 17.63 million accounts, and deposits increased by 10% to JPY 13.2 trillion. Furthermore, Rakuten Securities' general accounts increased by 11.1% year-on-year to 13.26 million accounts, and NISA accounts surpassed 7 million in January, maintaining its industry-leading position. Deposit assets also significantly increased, reaching JPY 48.7 trillion. Let me dive into each business performance. Rakuten Card saw an increase in GTV due to an expanding customer base and higher average spending per customer. Additionally, the revision of revolving payment fees in August led to a significant increase in revenue, and despite a substantial rise in interest expenses, the company achieved increased profits....

Speaker #1: Furthermore, Rakuten Securities general accounts increased by 11.1% year-on-year to 13.26 million accounts, and NISA accounts surpassed 7 million in January, maintaining its industry-leading position.

Speaker #1: Deposit assets also significantly increased, reaching ¥48.7 trillion. Let me dive into each business performance. Rakuten Card saw an increase in GTV due to an expanding customer base and higher average spending per customer.

Speaker #1: Additionally, the revision of revolving payment fees in August led to a significant increase in revenue, and despite a substantial rise in interest expenses, the company achieved increased profits.

Speaker #1: Rakuten Payment achieved increased revenue and continued operating income for fiscal year 2025, driven by GTV expansion due to the continuous growth in Rakuten Pay app users, as well as an increase in advertising revenue.

Hiroshi Mikitani: Rakuten Payment achieved increased revenue and continued operating income for fiscal year 2025, driven by GTV expansion due to the continuous growth in Rakuten Pay App users, as well as an increase in advertising revenue. In December, we launched Rakuten ID integration with Uber, enabling users to earn Rakuten points based on their spending with Uber and Uber Eats, regardless of payment method. Combined with points previously awarded for Rakuten Pay transactions, this offers a maximum points accrual rate of 2%. Moving forward, we will strengthen our integration with Rakuten AI and Gurunavi to realize a smarter, more convenient future. Rakuten Bank has already released its financial results, but the bank continued to see an increase in the number of accounts and the trend toward them becoming main accounts, resulting in an expansion in deposit balances and an increase in assets under management.

Speaker #1: In December, we launched Rakuten ID integration with Uber, enabling users to earn Rakuten points based on their spending with Uber and Uber Eats, regardless of payment method.

Speaker #1: Combined with points previously awarded for Rakuten Pay transactions, this offers a maximum points accrual rate of 2%. Moving forward, we will strengthen our integration with Rakuten AI and Rakuten Gurunavi to realize a smarter, more convenient future.

Speaker #1: Rakuten Bank has already released its financial results, but the bank continued to see an increase in the number of accounts and the trend toward them becoming main accounts, resulting in an expansion in deposit balances and an increase in assets under management.

Speaker #1: Coupled with the Bank of Japan's hike in policy interest rates, interest income increased significantly. Ordinary income increased 39.1% year-on-year to ¥183.2 billion, operating profit increased 51.7% year-on-year to ¥75.1 billion, and ROE was 21.5%.

Hiroshi Mikitani: Coupled with the Bank of Japan's hike in policy interest rates, interest income increased significantly, with ordinary income increasing 39.1% year-on-year to JPY 183.2 billion, operating profit increasing 51.7% year-on-year to JPY 75.1 billion, and ROE of 21.5%. Rakuten Securities achieved record-high revenue, thanks to steady customer acquisition via new NISA, as well as increased trading activities, and a growing investment trust balance amid a favorable market environment and expansion in financial income. Going forward, Rakuten Securities will continue to work to acquire new accounts and promote various types of transactions. Regarding the insurance business, both life and general insurance saw revenue growth, with strong sales continuing, particularly in medical insurance for life insurance and internet automobile insurance for general insurance. Moreover, profitability for both services is steadily improving.

Speaker #1: Rakuten Securities achieved record-high revenue thanks to steady customer acquisition via new NISA, as well as increased trading activities and a growing investment trust balance amid a favorable market environment and an expansion in financial income.

Speaker #1: Going forward, Rakuten Securities will continue to work to acquire new accounts and promote various types of transactions. Regarding the insurance business, both Life and General Insurance saw revenue growth, with strong sales continuing particularly in medical insurance for Life Insurance and Internet Automobile Insurance for General Insurance.

Speaker #1: Moreover, profitability for both services is steadily improving. Going forward, we will continue to select and concentrate our product lineup and work towards further business efficiency.

Hiroshi Mikitani: Going forward, we will continue to select and concentrate our product lineup and work towards further business efficiency. Rakuten General Insurance has been working to improve its product portfolio through 2025. It has focused on selling profitable online automobile insurance and home contents insurance for rental properties, while gradually discontinuing sales of less profitable products. As a result, premium income from its focused products has grown to account for 77% of total income. Insurance income, particularly from online automobile insurance and home contents insurance for rental properties, grew by more than 50% year-on-year in 2025. It plans to expand further and to continue improving the profitability in 2026. Finally, I will explain the mobile segment. Revenue increased 9.6% year-on-year to JPY 482.8 billion, and non-GAAP operating loss improved by JPY 47.1 billion year-on-year.

Speaker #1: Rakuten General Insurance has been working to improve its product portfolio through 2025. It has focused on selling profitable online automobile insurance and home contents insurance for rental properties, while gradually discontinuing sales of less profitable products.

Speaker #1: As a result, premium income from its focused products has grown to account for 77% of total income. Insurance income—particularly from online automobile insurance and home contents insurance for rental properties—grew by more than 50% year-on-year in 2025.

Speaker #1: It plans to expand further and to continue improving profitability in 2026. Finally, I will explain the mobile segment. Revenue increased 9.6% year-on-year to ¥482.8 billion, and non-GAAP operating loss improved by ¥47.1 billion year-on-year.

Speaker #1: In addition to revenue growth in the mobile business, improved profitability at Rakuten Symphony helped the mobile segment achieve its first-ever full-year EBITDA profit. Next, let's look at the main KPIs.

Hiroshi Mikitani: In addition to revenue growth in the mobile business, improved profitability at Rakuten Symphony helped the mobile segment achieve its first-ever full-year EBITDA profit. Next, let's look at the main KPIs. As of the end of December, Rakuten Mobile had a total of 10.01 million subscribers, an adjusted MNO churn rate that excludes contracts canceled in the same month of signing was 1.46%, and an ARPU JPY 2,860. Rakuten Symphony, as of the end of December, had 74 customers and 17 sales partners for RAN, as well as others. I will now explain the business performance of Rakuten Mobile. Q4 revenue increased 24.9% year-on-year to JPY 101.8 billion, driven by higher service revenue on the back of growth in subscribers, ARPU, and increased device sales.

Speaker #1: As of the end of December, Rakuten Mobile had a total of 10.01 million subscribers. An adjusted M&O churn rate, that excludes contracts canceled in the same month of signing, was 1.46%, and OPU was ¥2,860.

Speaker #1: Rakuten Symphony, as of the end of December, had 74 customers and 17 sales partners for RAN as well as others. I will now explain the business performance of Rakuten Mobile.

Speaker #1: Fourth-quarter revenue increased 24.9% year-on-year to ¥101.8 billion, driven by higher service revenue on the back of growth in subscribers, OPU, and increased device sales.

Speaker #1: While the non-GAAP operating loss improved by ¥5.4 billion year-on-year, it widened quarter-on-quarter to ¥40.8 billion due to upfront investments to strengthen revenue going forward.

Hiroshi Mikitani: While the non-GAAP operating loss improved by JPY 5.4 billion year-on-year, it widened quarter-on-quarter to JPY 40.8 billion due to upfront investments to strengthen revenue going forward. We expect the loss will resume its improving trend from Q1 2026 onwards. As I mentioned at the beginning, Rakuten Mobile achieved full-year EBITDA profit in fiscal year 2025. Like operating income, Q4 EBITDA decreased quarter-on-quarter to JPY 5.9 billion due to the recording of upfront investments to strengthen our future revenue. But on a year-on-year basis, EBITDA improved from loss to profit. On the other hand, pre-marketing cash flow, excluding these customer acquisition-related expenses, amounted to JPY 26 billion, demonstrating solid growth.

Speaker #1: We expect the loss will resume its improving trend from the first quarter of 2026 onwards. As I mentioned at the beginning, Rakuten Mobile achieved full-year EBITDA profit in fiscal year 2025.

Speaker #1: Like operating income, fourth-quarter EBITDA decreased quarter-on-quarter to ¥5.9 billion, due to the recording of upfront investments to strengthen our future revenue. But on a year-on-year basis, EBITDA improved from loss to profit.

Speaker #1: On the other hand, pre-marketing cash flow, excluding these customer acquisition-related expenses, amounted to ¥26 billion, demonstrating solid growth. The number of M&O subscribers in the fourth quarter increased by a net 594,000, due to strong B2C acquisitions resulting from growing awareness of various synergies with the Rakuten ecosystem, as well as progress in turning the B2B pipeline into contracts by the end of 2025.

Hiroshi Mikitani: The number of MNO subscribers in Q4 increased by a net 594,000 due to strong B2C acquisitions, resulting from growing awareness of various synergies with Rakuten Ecosystem, as well as progress in turning the B2B pipeline into contracts by the end of 2025. As for B2C subscribers, when comparing population penetration in each demographic at the end of 2024 and 2025, we saw strong acquisition of users with high data usage, particularly among young people, thanks to strong acquisition from Rakuten Ecosystem, growth in device sales, and promotion of content such as Rakuten Saikyo UN-NEXT Plan. Adjusted MNO churn rate for Q4 was 1.46%, excluding cancellations in the same month the contract was made. This was an increase of 13 basis points quarter-over-quarter, partly due to seasonal factors.

Speaker #1: As for B2C subscribers, when comparing population penetration in each demographic at the end of 2024 and 2025, we saw strong acquisition of users with high data usage, particularly among young people, thanks to strong acquisition from the Rakuten ecosystem, growth in device sales, and promotion of content such as the Rakuten Seikyo U-Next Plan.

Speaker #1: Adjusted M&O churn rate for the fourth quarter was 1.46%, excluding cancellations in the same month the contract was made. This was an increase of 13 basis points quarter-on-quarter, partly due to seasonal factors.

Speaker #1: However, as a measure to curb short-term users with no intention of using from the start, we introduced a contract administration fee from November 2025 for contracts with a total of five or more lines.

Hiroshi Mikitani: However, as a measure to curb short-term users with no intention of using from the start, we introduced a contract administration fee from November 2025 for contracts with a total of 5 or more lines. As a result, the churn rate for the month of December 2025 improved compared to October and November. While closely monitoring market conditions, we will continue to strive to improve network quality and aim to reduce the churn rate. ARPU increased JPY 3 year-on-year to JPY 2,860. During Q4, we made progress in acquiring B2B subscribers, raising its mix and lowering ARPU, as its ARPU is lower than that of B2C. However, year-on-year, we saw higher ARPU, primarily in data ARPU and option ARPU, and we believe this upward trend will continue going forward.

Speaker #1: As a result, the churn rate for the month of December 2025 improved compared to October and November. While closely monitoring market conditions, we will continue to strive to improve network quality and aim to reduce the churn rate.

Speaker #1: OPU increased 3 yen year-on-year to 2,860 yen. During the fourth quarter, we made progress in acquiring B2B subscribers, raising its mix and lowering OPU as its OPU is lower than that of B2C.

Speaker #1: However, year-on-year, we saw higher OPU, primarily in data OPU and option OPU, and we believe this upward trend will continue going forward. Regarding OPU, we will continue to implement various measures to improve it in multiple areas, including data, options, and advertising.

Hiroshi Mikitani: Regarding ARPU, we will continue to implement various measures to improve it in multiple areas, including data, options, and advertising. Starting from March, we will be running a campaign that will allow users to take advantage of Rakuten Saikyo UN-NEXT at a great price to coincide with the start of a new school year. Additionally, starting this month, Rakuten Mobile subscribers can get a bonus interest rate on top of their Rakuten Bank deposits. An even higher interest rate will be offered to Rakuten Saikyo UN-NEXT subscribers. This way, we will strive to increase ARPU by leveraging the synergies between content and group services. Next, I would like to talk about network quality. As a mobile network operator, we naturally believe that providing a stable, high-quality network is essential.

Speaker #1: Starting from March, we will be running a campaign that will allow users to take advantage of Rakuten Seikyo U Next at a great price, to coincide with the start of a new school year.

Speaker #1: Additionally, starting this month, Rakuten Mobile subscribers can get a bonus interest rate on top of their Rakuten Bank deposits. An even higher interest rate will be offered to Rakuten Seikyo U-NEXT subscribers.

Speaker #1: This way, we will strive to increase OPU by leveraging the synergies between content and group services. Next, I would like to talk about network quality.

Speaker #1: As a mobile network operator, we naturally believe that providing a stable, high-quality network is essential. As I mentioned earlier, the number of young users who use a lot of data is increasing significantly, so we would like to once again focus on measures to strengthen our network in 2026.

Hiroshi Mikitani: As I mentioned earlier, the number of young users who use a lot of data is increasing significantly, so we would like to once again focus on measures to strengthen our network in 2026. Improving network quality naturally leads directly to an increase in the number of subscribers. Until now, we have built our own network nationwide at an unprecedented speed and have also been operating it while using KDDI's network. However, since we are experiencing a rapid increase in subscribers, particularly in urban areas, we would like to further strengthen our infrastructure so that our own network can fully handle the resulting increase in traffic. Therefore, we are planning CapEx of over JPY 200 billion in fiscal year 2026.

Speaker #1: Improving network quality naturally leads directly to an increase in the number of subscribers. Until now, we have built our own network nationwide at an unprecedented speed and have also been operating it while using KDDI's network.

Speaker #1: However, since we are experiencing a rapid increase in subscribers, particularly in urban areas, we would like to further strengthen our infrastructure so that our own network can fully handle the resulting increase in traffic.

Speaker #1: Therefore, we are planning CAPEX of over ¥200 billion in fiscal year 2026. Last year, we fell short of the initially planned investment of ¥150 billion, but in 2026 we are not only building closer cooperation with construction companies, but also concentrating on our in-house human resources to accelerate base station construction.

Hiroshi Mikitani: Last year, we fell short of the initially planned investment of JPY 150 billion, but in 2026, we are not only building closer cooperation with construction companies, but also concentrating on our in-house human resources to accelerate base station construction. Specifically, we will focus on measures for downtown areas and subways, where we have received many requests from customers to make improvements. In downtown areas, we are installing 5G base stations to distribute traffic, and in subways, we are continuing to expand bandwidth. Regarding the development of 5G base stations, new base stations are being constructed in Tokyo, as shown in the image. We are also working to strengthen our 5G network at stations on the Yamanote Line.

Speaker #1: Specifically, we will focus on measures for downtown areas and subways, where we have received many requests from customers to make improvements. In downtown areas, we are installing 5G base stations to distribute traffic, and in subways, we are continuing to expand bandwidth.

Speaker #1: Regarding the development of 5G base stations, new base stations are being constructed in Tokyo, as shown in the image. We are also working to strengthen our 5G network at stations on the Yamanote Line.

Speaker #1: As of December 2025, 5G was available at the 18 major stations listed on this slide, and we expect to complete the remaining stations in the first half of this year.

Hiroshi Mikitani: As of December 2025, 5G was available at the 18 major stations listed on this slide, and we expect to complete the remaining stations in the first half of this year. For subways, we are continuing to work on expanding bandwidth from 5 megahertz to 20 megahertz and are prioritizing measures using 5G sub-6 and MIMO. This slide shows the status of Tokyo Metro's network as of January 2026. As you can see here, we plan to complete significant network enhancements at most subway stations and transit sections by July 2026. We are also promoting similar initiatives on Toei Subway. We also plan to complete significant network enhancements at all stations and transit sections by July 2026, making it even easier to use Rakuten Mobile.

Speaker #1: For subways, we are continuing to work on expanding bandwidth from 5 MHz to 20 MHz, and are prioritizing measures using 5G sub-6 and MIMO.

Speaker #1: This slide shows the status of Tokyo Metro's network as of January 2026. As you can see here, we plan to complete significant network enhancements at most subway stations and transit sections by July 2026.

Speaker #1: We are also promoting similar initiatives on TOE Subway. We also plan to complete significant network enhancements at all stations and transit sections by July 2026, making it even easier to use Rakuten Mobile.

Speaker #1: In addition to these efforts, Rakuten Mobile has been continuously promoting initiatives to improve network quality based on reports received from customers. Our surveys of Rakuten Mobile customers found that over 80% of users have experienced noticeable improvements in network quality.

Hiroshi Mikitani: In addition to these efforts, Rakuten Mobile has been continuously promoting initiatives to improve network quality based on reports received from customers. Our surveys of Rakuten Mobile customers found that over 80% of users have experienced noticeable improvements in network quality. In 2026, we will undertake company-wide efforts to strengthen our network, enabling even more customers to experience improved network quality. Simultaneously, we plan to accelerate the pace of subscriber growth by rolling out various initiatives that allow mobile subscribers to enjoy greater value from our group services. Lastly, on Rakuten Symphony. Rakuten Symphony achieved profitability at the Non-GAAP operating income level for fiscal year 2025. In RAN, we have steadily shifted our revenue structure from delivery of low-margin hardware to a major customer to high-margin software and its customization and maintenance.

Speaker #1: In 2026, we will undertake company-wide efforts to strengthen our network, enabling even more customers to experience improved network quality. Simultaneously, we plan to accelerate the pace of subscriber growth by rolling out various initiatives that allow mobile subscribers to enjoy greater value from services.

Speaker #1: Lastly, on Rakuten Symphony, Rakuten Symphony achieved profitability at the non-GAAP operating income level for fiscal year 2025. In RAN, we have steadily shifted our revenue structure from delivery of low-margin hardware to a major customer, to high-margin software and its customization and maintenance.

Hiroshi Mikitani: Rakuten Symphony achieved profitability at the Non-GAAP operating income level for fiscal year 2025. In RAN, we have steadily shifted our revenue structure from delivery of low-margin hardware to a major customer to high-margin software and its customization and maintenance. In the cloud segment, we are expanding our sales channels through Google Cloud Marketplace and will continue to expand our revenue base for various services. That's all from me. Next, Hirose will explain our financial situation. Thank you very much.

Speaker #1: In the cloud segment, we are expanding our sales channels through Google Cloud Marketplace and will continue to expand our revenue base for various services.

Hiroshi Mikitani: In the cloud segment, we are expanding our sales channels through Google Cloud Marketplace and will continue to expand our revenue base for various services. That's all from me. Next, Hirose will explain our financial situation. Thank you very much.

Speaker #1: That's all from me. Next, Hirosei will explain our financial situation. Thank you very much.

Speaker #2: This is Hirose, and I will explain our financial strategy. Non-GAAP operating income for fiscal year 2025 rose significantly by ¥99.2 billion year-on-year to ¥106.3 billion, thanks to improved profitability in each business.

Kenji Hirose: This is Hirose, and I will explain our financial strategy. Non-GAAP operating income for fiscal year 2025 rose significantly by JPY 99.2 billion year-over-year to JPY 106.3 billion, thanks to improved profitability in each business. IFRS operating income also recorded a profit of JPY 14.4 billion, marking the second consecutive year of profitability, despite the absence of the JPY 106.9 billion unrealized gain on AST shares recorded in fiscal year 2024. For one-off items, we recorded impairment losses on fixed assets in the online grocery business in Q3 and in Rakuten Symphony, and logistics businesses in Q4. Going forward, we will continue to optimize our business portfolio to mitigate the impact of these one-off items on our net profit and loss.

Speaker #2: IFAS operating income also recorded a profit of ¥14.4 billion, marking the second consecutive year of profitability despite the absence of the ¥106.9 billion unrealized gain on AST shares recorded in fiscal year 2024.

Speaker #2: For one-off items, we recorded impairment losses on fixed assets in the online grocery business in the third quarter, and in Rakuten Symphony and Logistics businesses in the fourth quarter. Going forward, we will continue to optimize our business portfolio to mitigate the impact of these one-off items on our net profit and loss.

Speaker #2: Financial income and expenses increased by ¥3.4 billion year-on-year to a loss of ¥36.0 billion, due in part to a year-on-year decrease in hedge valuation gains from currency swaps related to foreign currency denominated perpetual subordinated bonds. Having said that, this valuation gain or loss is due to the impact of exchange rate fluctuations and other factors, and it does not have an impact on cash flow.

Kenji Hirose: Financial income and expenses increased by JPY 3.4 billion year-on-year to a loss of JPY 36.0 billion, due in part to a year-on-year decrease in hedge valuation gains from currency swaps related to foreign currency-denominated perpetual subordinated bonds. Having said that, this valuation gain or loss is due to impact of exchange rate fluctuations and other factors, and it does not have an impact on cash flow. Therefore, it has no effective impact on our financials. As a result, pre-tax profit or loss decreased by JPY 45.8 billion year-on-year to a loss of JPY 29.5 billion. However, excluding the one-off gain in fiscal year 2024 that I mentioned earlier, this represents a significant reduction in losses, and we believe we have been able to demonstrate a strong improvement in our business performance.

Speaker #2: Therefore, it has no effective impact on our financials. As a result, pre-tax profit or loss decreased by ¥45.8 billion year-on-year to a loss of ¥29.5 billion.

Speaker #2: However, excluding the one-off gain in fiscal year 2024 that I mentioned earlier, this represents a significant reduction in losses, and we believe we have been able to demonstrate a strong improvement in our business performance.

Speaker #2: In the fourth quarter, we recorded impairment losses of ¥20.5 billion for Rakuten Symphony and ¥10 billion for the Logistics business. As a result of these impairment losses, along with the impairment loss for the online grocery business recorded in the third quarter, we believe that the risk of future impairment losses across the group has been reduced.

Kenji Hirose: In Q4, we recorded impairment losses of JPY 20.5 billion for Rakuten Symphony and JPY 10 billion for the logistics business. As a result of these impairment losses, along with the impairment loss for the online grocery business recorded in Q3, we believe that the risk of future impairment losses across the group has been reduced. Allow me to explain the reasons why tax expense in fiscal year 2025 was significant, similar to fiscal year 2024. When we transferred a portion of our shares in Rakuten Card, the corresponding tax expense was eliminated because the gain on transfer was not recognized on a consolidated basis. This lowered the tax level in 2024. However, a one-off tax expense was incurred due to a reversal of deferred tax assets.

Speaker #2: Allow me to explain the reasons why tax expense in fiscal year 2025 was significant, similar to fiscal year 2024. When we transferred a portion of our shares in Rakuten Card, the corresponding tax expense was eliminated because the gain on transfer was not recognized on a consolidated basis.

Speaker #2: This lowered the tax level in 2024. However, a one-off tax expense was incurred due to a reversal of deferred tax assets. In fiscal year 2025, while there was no such one-off impact, corporate income tax increased due to the high growth of fintech companies that are not subject to the group tax consolidation system.

Kenji Hirose: In fiscal year 2025, while there was no such one-off impact, corporate income tax increased due to high growth of fintech companies that are not subject to the group tax consolidation system. We believe that the amount of tax expenses for fiscal year 2025 represents a somewhat normalized level. In 2025, we further diversified our fundraising methods. In July, we issued our first sustainability bonds, and in August, we accessed the domestic retail bond market for the first time since 2023. In October, we issued perpetual subordinated bond domestically. We believe that being the first non-financial company domestically to issue yen-denominated perpetual subordinated bond of size with capital recognition from rating agencies, was not only significant for the diversification of our fundraising methods, but also important for the domestic bond issuance market.

Speaker #2: We believe that the amount of tax expenses for fiscal year 2025 represents a somewhat normalized level. In 2025, we further diversified our fundraising methods.

Speaker #2: In July, we issued our first sustainability bonds, and in August, we accessed the domestic retail bond market for the first time since 2023. In October, we issued a perpetual subordinated bond domestically.

Speaker #2: We believe that being the first non-financial company domestically to issue a yen-denominated perpetual subordinated bond of this size, with capital recognition from rating agencies, was not only significant for the diversification of our fundraising methods but also important for the domestic bond issuance market.

Speaker #2: In addition, we continued to make progress in our cash conversion cycle, achieving significant improvement year-on-year. We believe that these consistent, proactive initiatives are continually being recognized by the market. The prices of our bonds issued in previous years and five-year CDS spreads both reflect an improvement in our credit standing.

Kenji Hirose: In addition, we continued to make progress in our cash conversion cycle, achieving significant improvement year-on-year. We believe that these consistent, proactive initiatives are continually being recognized by the market. The prices of our bonds issued in previous years and 5-year CDS spreads both reflect an improvement in our credit standing. We will continue to work consistently to improve our financial position. From 2026 onwards, we will continue to aim for self-funding to meet capital needs of the mobile business. In addition, we have diverse funding options available for capital needs related to corporate bond redemptions, including domestic and overseas markets, wholesale, and retail bonds. We will closely monitor trends in exchange rates, interest rates, and other factors, and consider the most appropriate option depending on timing. Finally, I would like to explain our financial targets for fiscal year 2026.

Speaker #2: We will continue to work consistently to improve our financial position. From 2026 onwards, we will continue to aim for self-funding to meet the capital needs of the mobile business.

Speaker #2: In addition, we have diverse funding options available for capital needs related to corporate bond redemptions, including domestic and overseas markets, wholesale, and retail bonds.

Speaker #2: We will closely monitor trends in exchange rates, interest rates, and other factors, and consider the most appropriate option depending on timing. Finally, I would like to explain our financial targets for fiscal year 2026.

Speaker #2: As Mikitani mentioned at the beginning, we are aiming for significant increases in both non-GAAP operating income and IFAS operating income. We have long set a goal of achieving the ratio of non-fintech net interest-bearing debt to EBITDA to less than five times, and by the end of fiscal year 2025, we had reached 6.5 times, making steady progress toward that goal.

Kenji Hirose: As Mikitani mentioned at the beginning, we are aiming for significant increases in both non-GAAP operating income and IFRS operating income. We have long set a goal of achieving the ratio of non-fintech net interest-bearing debt to EBITDA to less than 5 times, and by the end of fiscal year 2025, we had reached 6.5 times, making a steady progress toward that goal. In fiscal year 2026, we aim to achieve a ratio of around 6 times and will work to reduce interest-bearing debt, increase profitability in each business, and further improve our ability to generate cash flow. That concludes my presentation on finance. Next, Ting Cai, Chief AI and Data Officer, will explain our AI initiatives.

Speaker #2: In fiscal year 2026, we aim to achieve a ratio of around six times, and will work to reduce interest-bearing debt, increase profitability in each business, and further improve our ability to generate cash flow.

Speaker #2: That concludes my presentation on finance. Next, Ting Cai, Chief AI and Data Officer, will explain our AI.

Speaker #3: Hello everyone. I'm Ting Cai, the Chief AI and Data Officer for Rakuten Group. Today, I would like to use my AI voice to speak to you in your local language, to better connect with you all.

Hiroshi Mikitani: Hello, everyone. I'm Ting Cai, the Chief AI and Data Officer for Rakuten Group. Today, I would like to use my AI voice to speak to you in your local language to better connect with you all. At Rakuten, we drive AI transformation through an initiative called AI-nization, where we systematically infuse AI into everything we do. Our vision is to augment human creativity with the power of AI. With our growth flywheel and real user feedback, we are building the durable power of differentiation by accumulating our unique data assets. In 2025, we demonstrated continued strong momentum towards this vision, delivering tangible and measurable results across the organization. I'd like to share some highlights with you today. Our strategy and strong commitment to execution is paying off.

Ting Cai: Hello, everyone. I'm Ting Cai, the Chief AI and Data Officer for Rakuten Group. Today, I would like to use my AI voice to speak to you in your local language to better connect with you all. At Rakuten, we drive AI transformation through an initiative called AI-nization, where we systematically infuse AI into everything we do. Our vision is to augment human creativity with the power of AI. With our growth flywheel and real user feedback, we are building the durable power of differentiation by accumulating our unique data assets. In 2025, we demonstrated continued strong momentum towards this vision, delivering tangible and measurable results across the organization. I'd like to share some highlights with you today. Our strategy and strong commitment to execution is paying off.

Speaker #3: At Rakuten, we drive AI transformation through an initiative called AI-ization, where we systematically infuse AI into everything we do. Our vision is to augment human creativity with the power of AI.

Speaker #3: With our gross flywheel and real user feedback, we are building the durable power of differentiation by accumulating our unique data assets. In 2025, we demonstrated continued strong momentum towards this vision, delivering tangible and measurable results across the organization.

Speaker #3: I'd like to share some highlights with you today. Our strategy and strong commitment to execution is paying off. In 2025, AI contributed an impressive ¥25.5 billion in profit to the group, beating our fiscal year target of ¥21 billion and more than doubling our 2024 impact.

Hiroshi Mikitani: In 2025, AI contributed an impressive JPY 25.5 billion in profit to the group, beating our fiscal year target of JPY 21 billion and more than doubling our 2024 impact. This strong result was driven by increased sales through better user experiences, as well as cost reductions through increased operational efficiency. For example, Rakuten Ichiba increased the sales growth by running ads automatically selected by AI, while Rakuten General Insurance implemented AI analysis tools to quickly provide insurance quotes, improving customer satisfaction and boosting sales. 2026 is looking to be even stronger. We're aiming for 3 times the impact we delivered in 2024. These results were made possible by our relentless focus on execution, shipping products, and services that solve real user problems.

Ting Cai: In 2025, AI contributed an impressive JPY 25.5 billion in profit to the group, beating our fiscal year target of JPY 21 billion and more than doubling our 2024 impact. This strong result was driven by increased sales through better user experiences, as well as cost reductions through increased operational efficiency. For example, Rakuten Ichiba increased the sales growth by running ads automatically selected by AI, while Rakuten General Insurance implemented AI analysis tools to quickly provide insurance quotes, improving customer satisfaction and boosting sales. 2026 is looking to be even stronger. We're aiming for 3 times the impact we delivered in 2024. These results were made possible by our relentless focus on execution, shipping products, and services that solve real user problems.

Speaker #3: This strong result was driven by increased sales, through better user experiences, as well as cost reductions through increased operational efficiency. For example, Rakuten Ichiba increased sales growth by running ads automatically selected by AI, while Rakuten General Insurance implemented AI analysis tools to quickly provide insurance quotes, improving customer satisfaction and boosting sales.

Speaker #3: 2026 is looking to be even stronger. We're aiming for three times the impact we delivered in 2024. These results were made possible by our relentless focus on execution, shipping products, and services that solve real user problems.

Speaker #3: Deep learning, large language, and visual models are far better at capturing user intent and understanding the context than traditional machine learning methods. They provide more relevant results that users want to engage with and spend more time on.

Hiroshi Mikitani: Deep learning, large language, and visual models are far better at capturing user intent and understanding the context than traditional machine learning methods. They provide more relevant results that users want to engage and spend more time with. For example, in 2025, we launched the personalized search and popularity search. They remember user preferences such as brand affinity and capture trending products that are relevant to the individual. We estimate these new features will contribute to an additional JPY 25.5 billion.

Ting Cai: Deep learning, large language, and visual models are far better at capturing user intent and understanding the context than traditional machine learning methods. They provide more relevant results that users want to engage and spend more time with. For example, in 2025, we launched the personalized search and popularity search. They remember user preferences such as brand affinity and capture trending products that are relevant to the individual. We estimate these new features will contribute to an additional JPY 25.5 billion.

Speaker #3: For example, in 2025, we launched the personalized search and popularity search. They remember user preferences, such as brand affinity, and capture trending products that are relevant to the individual.

Q4 2025 Rakuten Group Inc Earnings Call

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