The company’s achievement of a profitable quarter was driven by strong operating income growth in Internet Services and FinTech as well as a reduction of losses in the Mobile segment, according to the release.
Rakuten also secured record-high second-quarter consolidated revenue of 665.5 billion yen (about $4.2 billion) and year-over-year revenue growth of 11.6%, with growth in all three segments, per the release.
In the Internet Services segment, Rakuten saw domestic eCommerce gross merchandise sales driven by steady growth in its Rakuten Ichiba internet shopping model and Rakuten Travel reservation service businesses, international business unit profit improved by Rakuten Rewards’ discontinuation of a low-margin service, and advertising business growth driven by artificial intelligence-powered search and targeted banner advertising on Rakuten Ichiba and Rakuten Travel, according to the release.
Within this segment, Rakuten Travel “successfully captured demand from leisure-seeking customers,” the company said.
PYMNTS reported in March that the Rakuten Rewards program’s use of artificial intelligence is enabling the analysis of large volumes of transaction data and behavioral signals to determine which merchants, discounts or promotions are most relevant to each cardholder.
Rakuten’s FinTech segment’s gains were driven by customer base expansion, expanded gross transaction value (GTV) and effective cost control across its businesses. Rakuten Card shopping GTV was up 9.4% year over year, Rakuten Bank’s total deposits were up 13.9% year over year, Rakuten Securities’ new account acquisitions were up 14.5% year over year, the Insurance business leveraged marketing through the Rakuten ecosystem and Rakuten Payment increased its transaction volume, the release said.
Within the FinTech segment, Rakuten Bank’s growth was “supported by progress in becoming customers’ primary bank for everyday life,” the company said.
The Mobile segment increased its revenue by 8.3% year over year and narrowed its non-GAAP operating losses by 4.1 billion yen year over year to 33.1 billion yen, per the release.
Within this segment, Rakuten Mobile “has established a sustainable growth structure centered on loyal customers by curbing short-term subscriptions,” the company said.
