Rakuten Reports Record Third-Quarter Revenues, up 17.7% YoY

Operating income was weighed down by the company’s insurance business following numerous natural disasters in Japan.

Rakuten Inc., a Japanese e-commerce giant, has reported its consolidated financial report for the third quarter and nine months ended September 30, 2019. The firm, which is the parent company of Rakuten Securities, reported a solid quarter, with third-quarter revenue at a record high.

For the third quarter of 2018, the company achieved record revenue of ¥278.2 billion ($2.45 billion). This is an increase of 17.7 percent when compared to the same period last year, which recorded revenue of ¥236.4 billion.

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For the first nine months of 2018, Rakuten also reported strong revenue of ¥790.3 billion. This is up 16.8 percent year-on-year, as the same time period in 2017 had a revenue of ¥676.5 billion.

Non-GAAP operating income, on the other hand, fell year-on-year by 9.9 percent in the third quarter to ¥52.1 billion. This is because the firm reported an operating income of ¥57.8 billion in the same quarter of 2017.

Operating income for the nine-month period in 2018, however, was actually up, increasing by 11.1 percent from ¥120.2 billion in the same period of 2017, to reach ¥133.5 in the nine months ended September 30, 2018.

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For the nine months ended September 30, 2018, net income also reported an impressive increase of 48.5 percent year-on-year, coming in at ¥107.7 billion. In the prior year period, net income was ¥72.6 billion, which in turn was 63.3 percent up year-on-year.

Rakuten Fintech Segment Reports Steady Growth

Taking a look at the fintech segment, which includes Rakuten Securities – the Japanese brokerage operations of Rakuten Inc., the firm reported steady growth in both revenue and operating income.

According to the report, this is due to an increase in commission income which is the result of the further expansion of Rakuten Card’s membership base. In addition, the results are buoyed by the positive contribution from the firm’s securities services which were backed by favorable conditions on the domestic stock market.

Specifically, for the third quarter, revenue for the fintech segment was ¥107.4 billion, an increase of 28.3 percent from Q3 of 2017, which had a revenue of ¥83.7 billion. Operating income for the sector was down on an annual basis, falling by 9.6 percent to reach ¥16.3 billion.

Operating income during this period was weighed down by the insurance services. This is because a number of large-scale natural disasters, such as typhoons and heavy rains in western Japan, occurred during the third quarter. This meant the firm had to pay a large volume of insurance claims.

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