Company Reports

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, financial technology, and mobile network services. Over the years, Rakuten has accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors to user stickiness.

Rakuten's June-quarter revenue grew 11.6% year over year, and operating income more than doubled, excluding a JPY 17 billion impairment, driven by financial technology growth and narrower noncore losses in internet services. Rakuten now also targets positive aftertax income for 2026.

Rakuten reported 14% year-over-year revenue growth in the March quarter, while operating income improved to JPY 30 billion from an operating loss of JPY 15 billion a year ago, mainly driven by narrowing losses in Mobile and continued strong profit growth in financial technology.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, financial technology, and mobile network services. Over the years, Rakuten has accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors to user stickiness.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

Rakuten reported 7.2% and 273% year-over-year growth in December-quarter revenue and operating income, excluding one-off items. Mobile subscriptions reached 10 million in December 2025. Rakuten aims to achieve significant increases in operating income and a debt/EBITDA ratio of 6 times in 2026.

Despite a one-time impairment loss of JPY 28 billion on the online supermarket business in the third quarter, Rakuten's operating profit surged to JPY 8 billion from JPY 500 million last year, on strong growth in financial technology revenue and improvement in mobile losses.

Rakuten's June-quarter revenue grew by 11% from last year, and operating profit recovered to JPY 8.8 billion from last year's JPY 18 billion loss, mainly attributable to improvement in mobile losses.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

Rakuten's operating loss for the first quarter has improved to JPY 15 billion from JPY 33 billion last year, mainly due to growth in mobile revenues and the sustained growth momentum in fintech revenue and margins. Rakuten aims to achieve EBITDA breakeven for mobile in 2025.

After reevaluating our moat ratings for our Japanese e-commerce coverage, we upgrade our moat ratings for both LY and Zozo to wide from narrow and maintain our narrow moat rating for Mercari and no-moat rating for Rakuten. Out of the four companies, we believe LY shares have the greatest upside potential as we believe the market is underappreciating the value of future synergies between Line, Yahoo, and PayPay, which are leaders in their respective markets.

After reevaluating our moat ratings for our Japanese e-commerce coverage, we upgrade our moat ratings for both LY and Zozo to wide from narrow and maintain our narrow moat rating for Mercari and no moat rating for Rakuten. Out of the four companies, we believe LY shares have the greatest upside potential as we believe the market is underappreciating the value of future synergies between Line, Yahoo, and PayPay, which are leaders in their respective markets.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

Rakuten recorded a full-year operating profit for the first time in five years for fiscal 2024, which was ahead of our expectations for 2025. The improvements across all segments were within our expectations, excluding a one-time gain of JPY 107 billion. For 2025, Rakuten aims to achieve full-year non-GAAP EBITDA profitability for Rakuten Mobile and maintain full-year consolidated operating profit, which was in line with our previous estimates. We broadly maintain our forecasts for the medium term as we anticipate Rakuten’s cost discipline and steady growth in mobile subscribers to drive profit growth in the coming years. We keep our fair value estimate at JPY 990 and believe shares are currently fairly valued.

While Rakuten is most notable for its e-commerce platform, Rakuten Ichiba, we believe the company’s success in Japan lies in its first-mover advantage in establishing a comprehensive ecosystem composed of e-commerce, fintech, and mobile network services. Over the years, Rakuten accumulated over 40 million monthly active users, and close to 80% of users use more than two Rakuten services. We identify the convenience of accessing multiple services with one Rakuten ID and Rakuten’s point reward system as the main contributors for user stickiness.

Rakuten achieved quarterly profit for the first time in five years in the third quarter, mainly due to robust growth in fintech businesses, particularly in Rakuten Card and Rakuten Bank. This came as a surprise for us as we had previously expected the company to turn profitable in the fourth quarter. We are encouraged that the fintech segment continuously outperformed our expectations, and, therefore, slightly bump our near-term top line and operating margin for the segment. However, we are concerned that Rakuten Mobile’s monthly active users and average revenue per user growth have not improved much from the last quarter and Rakutens Ichiba's gross merchandise value actual growth has slowed down more than we had expected over the past few quarters, which brings higher uncertainty for the longer-term growth of Rakuten group. Hence, despite raising fintech projections, we maintain our fair value estimate of JPY 990 and believe shares are currently fairly valued.

We are raising our fair value estimate for Rakuten to JPY 990 from JPY 780, as we raise our fiscal-year 2024 and medium-term outlooks for the fintech segment, based on its robust top-line and profitability growth that has continuously exceeded our estimates in the past few quarters. Rakuten’s June-quarter revenue growth of 8.1% was higher than our expected 6.4%, mainly driven by the fintech business. Operating loss of JPY 18 billion was much better than our expected JPY 29 billion, attributable to higher fintech profit contribution and a smaller-than-expected mobile segment loss. We think that the stock is currently undervalued, as we believe that Rakuten’s strong ecosystem could withstand competition over the longer term, and its financial stability is improving as mobile losses shrink over time.