After a six-year hiatus, Rakuten, a well-known e-commerce platform in Japan, has made a successful return to profitability. This significant achievement is attributed to the consistent growth seen across all primary business sectors and an all-time high revenue figure reported in the third quarter.
During this year’s third quarter, Rakuten’s consolidated revenue saw an increase of 10.9% compared to the previous year, hitting a milestone of US$4 billion. This marks the highest level of Q3 revenue ever reported by the company.
In terms of EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation), Rakuten reported a record-breaking figure of $767 million. The company also managed to generate $8 million in operating profits throughout the first nine months of this fiscal year.
Rakuten’s domestic e-commerce wing recorded a 14.5% increase in gross merchandise sales, amounting to $11 billion. This increase was primarily fuelled by a sustained demand for services.
The company’s International business unit also reported favourable figures. Its revenue increased by 5.4% year on year, reaching $486.9 million, and its operating income rose sharply by 78.8% to $4.2 million.
Several factors contributed to this growth, including increased sales of devices and content through Rakuten Kobo, a spike in communications and advertising revenue from Rakuten Viber, and a decrease in losses in the international advertising business.
Rakuten’s improved financial stability and better credit metrics have positively impacted its rating outlook. The firm’s objective is to further improve its credit while maintaining medium-term financial stability. As explained by the company, its strategy involves building a stable financial base and enhancing its corporate value through cautious capital allocation.
What led to Rakuten’s return to operating profit after six years?
Rakuten’s return to profitability can be attributed to the consistent growth across all major business sectors and record-breaking revenue in the third quarter of this fiscal year.
What factors contributed to the company’s growth?
The growth was due to increased sales of devices and content through Rakuten Kobo, higher communications and advertising revenue from Rakuten Viber, and a decrease in losses in the international advertising business.
What is Rakuten’s strategy for maintaining its financial stability?
Rakuten plans to maintain its financial stability by enhancing its credit further, constructing a stable financial base, and increasing corporate value through judicious capital allocation.
