Rakuten loses 62.7bn yen in Q3 even as ad sales climb 11%

Rakuten Group on November 13, 2026 reported a net loss attributable to owners of 62.7 billion yen for the third quarter, more than double the 26.9 billion yen loss of a year earlier, even as consolidated revenue rose 10.9% to a third-quarter record of 697.1 billion yen and its domestic advertising business grew 11.1% to 67.1 billion yen.

In Short

Rakuten made more money from its businesses than at any quarter since it launched its mobile network, but taxes tied to an internal reorganisation and losses on currency swaps turned a small pre-tax profit into a large net loss. Advertisers and merchants on Rakuten Ichiba are affected because advertising revenue, which grew 11.1%, depends on Ichiba's traffic and search, and its growth slowed from 15.6% in the previous quarter. The company still aims for a full-year net profit, which it has not reported at the level attributable to owners since 2018, while betting that AI search and recommendations lift conversion enough to support further ad growth.

A record quarter that ended in the red

The gap between the operating story and the bottom line was wide. Non-GAAP operating income, the measure Rakuten's management uses to run the business, rose 25.9% year on year to 48.6 billion yen, the highest quarterly figure since the company started its own mobile network operator service. EBITDA reached 123.5 billion yen, up 4.0% and a record for a third quarter. IFRS operating income climbed 396.3% to 39.5 billion yen, which Rakuten attributes to growth across all segments and the absence of the impairment losses tied to the online grocery business that weighed on the third quarter of 2025.

Below the operating line, the picture changed. Rakuten recorded a 16.7 billion yen loss on the valuation of derivatives, according to the company's results summary, tied to currency swaps on its foreign currency perpetual subordinated bonds. Under IFRS, those perpetual bonds are treated as equity and are not eligible for hedge accounting, so swings in the swaps hit profit and loss while the bonds themselves are not remeasured. Net financial income and expenses moved from a gain of 3.1 billion yen to a loss of 37.6 billion yen. Income before income tax fell 85.0% to 1.3 billion yen.

Then came tax. Income tax expenses rose to 48.8 billion yen from 20.2 billion yen, and Rakuten's presentation states this figure included 23.0 billion yen of income tax on the gain from the transfer of Rakuten Payment shares, which formed part of the FinTech reorganisation completed on October 1. That left a net loss of 47.5 billion yen, of which 62.7 billion yen was attributable to owners of the company and a profit of 15.2 billion yen to non-controlling interests. Basic loss per share came to 28.72 yen.

Revenue came in above market expectations. According to Investing.com, analysts had forecast third-quarter revenue of 680.16 billion yen, and the reported figure exceeded that by about 2.5%.

All figures are Rakuten's. The churn and capex changes are PPC Land's calculations.

Nine months and a full-year promise

For the nine months to September 30, 2026, revenue rose 12.2% to 2,006.1 billion yen, and Non-GAAP operating income more than doubled, up 117.5% to 126.9 billion yen. IFRS operating income reached 89.9 billion yen against 1.3 billion yen a year earlier. Income before income tax was 19.2 billion yen, compared with a loss of 57.5 billion yen. The net loss narrowed to 22.1 billion yen from 113.4 billion yen, and the loss attributable to owners of the company was 73.6 billion yen, compared with 151.3 billion yen.

Rakuten did not change its full-year guidance. The earnings report states: "we aim for high single-digit growth in consolidated revenue compared to the fiscal year ended December 31, 2025. Regarding Non-GAAP operating income, we aim to achieve profitability again this fiscal year, and we also aim to achieve profitability in both income before income tax and net income." It adds: "There are no changes to the previously disclosed consolidated earnings forecasts for the year ending December 31, 2026." Revenue in 2025 was 2,496.6 billion yen. Rakuten has not reported an annual profit attributable to owners since 2018, when it earned 141.9 billion yen, according to the company's financial highlights data. Losses followed every year from 2019 to 2025, the largest being 380.2 billion yen in 2022.

PPC Land's calculation from those figures: to finish 2026 with positive net income on the consolidated basis, the fourth quarter would need net income above 22.1 billion yen. At the level attributable to owners, the hurdle is 73.6 billion yen.

"The entire Group will continue working together toward achieving positive income before income tax and positive net income on a full-year basis," Vice Group CFO Eiichi Kaga said in the presentation.

An accounting change worth 26 billion yen

One line in the earnings report deserves attention. Rakuten re-evaluated "the actual utilization of certain network equipment" and lengthened the useful lives of those assets during the current fiscal year. According to the report, this change increased operating income and income before income tax by 26,049 million yen each for the nine months, compared with the amounts under the previous method.

PPC Land's calculation: without the useful-life change, nine-month income before income tax of 19.2 billion yen would have been a loss of about 6.9 billion yen. The change also helps explain why EBITDA, which excludes depreciation, rose only 4.0% in the third quarter while Non-GAAP operating income rose 25.9%. Rakuten Mobile's depreciation, excluding lease-related depreciation under IFRS 16, fell to 24.5 billion yen in the third quarter from 32.5 billion yen a year earlier, according to the company's data sheet. The report's wording is that Rakuten "changed the useful lives of these assets based on more reasonable estimates of their economic useful lives to better reflect actual usage."

Definitions and classifications that changed this year

Several of the year-on-year comparisons rest on definitions Rakuten revised during 2026. The footnotes to the presentation state, verbatim:

• "From Q1/26, part of the points-related business was transferred from Group Headquarters (Adjustments) to the Internet Services Segment. No retroactive adjustments were made."
• "From Q1/26, some AI-related development costs were allocated to each business. Segment results from Q1/25 onward have been retroactively revised."
• "From Q2/26, the definition of Domestic EC GMS was partially revised. Past figures have also been retroactively revised."
• "In Q3/26, the classification of cost of sales and operating expenses in the Mobile business was partially revised, and retroactive adjustments were made to Q2/26 results."

The first item matters most for reading the commerce numbers: the points-related transfer was not applied to 2025 figures, so Internet Services results for 2026 and 2025 are not fully like for like. Rakuten also notes on its Non-GAAP measures that it "refers to the rules specified by the U.S. Securities and Exchange Commission but does not fully comply with such rules." On dividends, the report states: "Dividend per share for the fiscal year ending December 31, 2026 has not been decided yet, and there are no changes to the previously disclosed dividend forecast."

Advertising grows by double digits, but more slowly

Advertising revenue reached 67.1 billion yen, up 11.1% year on year. Rakuten's definition is "Total domestic advertising revenue recorded in each segment (Internet Services, FinTech, Mobile), including intra-group transactions." The figure therefore covers ads sold on Rakuten Ichiba, Rakuten Travel, the Rakuten Pay app and other domestic properties rather than any single platform. It does not include overseas advertising, which sits in the international business unit.

Rakuten Ichiba is, in effect, a large retail media network: merchants buy placements inside the marketplace where shoppers search and buy. That structure ties the ad business to the health of Ichiba's merchant base and shopper traffic.

"Advertising business revenue increased 11.1% year-on-year to 67.1 billion yen, continuing double-digit growth since the first quarter of this fiscal year," said Ryo Matsumura, president of the Commerce and Marketing Company, who presented the Internet Services segment.

The quarterly series in Rakuten's data sheet shows where the business stands:

The year-on-year changes for the first and second quarters of 2026 are PPC Land's calculations from the data sheet. Growth slowed from 15.6% in the second quarter to 11.1% in the third, and the third quarter came in slightly below the 67.3 billion yen recorded in the fourth quarter of 2025, the highest figure in the series. Rakuten attributes part of the slowdown to a tough comparison: the third quarter of 2025 grew 13.5%, helped by rush demand ahead of the October 2025 change to hometown tax point rules. The company also says strong advertising revenue from the travel business supported growth.

PPC Land's calculation for the nine months: advertising revenue totalled 194.6 billion yen, up 13.2% from 171.9 billion yen in the same period of 2025. Over a longer span, the third-quarter figure is 2.16 times the 31.0 billion yen Rakuten recorded in the third quarter of 2020, and full-year advertising revenue rose from 129.4 billion yen in 2020 to 239.2 billion yen in 2025.

Three levers for further growth

Rakuten's presentation lists three initiatives for the advertising business. The first is AI-enhanced ad operations, expanding automation "beyond ad delivery to merchants' keyword settings and adjustments." The second is expanding external distribution channels, meaning more off-site ad inventory that advertisers can buy directly, which Rakuten says increases "advertiser-user touchpoints." The third is broader creative formats, including video.

"Our Advertising business also continues to deliver double-digit growth, and going forward, we would like to pursue further expansion while making greater use of AI," Matsumura said.

Take rate stays flat

The appendix to the presentation adds a useful detail for merchants. Domestic e-commerce take rate, which Rakuten calculates as revenue against gross merchandise sales, was 15.8% in the third quarter, unchanged from a year earlier and down from 16.4% in the third quarter of 2024. According to Rakuten, "advertising revenue expanded at Rakuten Ichiba and Travel, but take rate was flat YoY due to portfolio restructuring of Growth Investment Businesses." In other words, higher ad income from core marketplaces was offset by shrinking revenue in businesses such as the online supermarket, which withdrew from the Kansai area.

Rakuten as an advertiser

Rakuten is also a large buyer of advertising and promotion. Its advertising and promotion expenditures, which include promotional costs, totalled 273.4 billion yen in the first nine months of 2026, up 9.7% from 249.2 billion yen, according to the earnings report. In the third quarter alone, the figure was 89.3 billion yen, down 1.3% from 90.5 billion yen. PPC Land's comparison: nine-month advertising and promotion spending exceeded the 194.6 billion yen of advertising revenue the group earned over the same period, though the two measures are not like for like.

Ad money beyond Ichiba

Advertising shows up in several other parts of the results. Rakuten Payment, which runs the Rakuten Pay app, Rakuten Edy and Rakuten Point Card, grew revenue 12.9% to 29.9 billion yen and Non-GAAP operating income 30.0% to 3.2 billion yen. "At Rakuten Payment, in addition to expanded use of the payment app, monetization of advertising within the Rakuten Pay app is also progressing," said Seiichiro Sonoda, president of the FinTech Group Company.

Overseas, Rakuten Viber "boosted growth through customer base expansion and contributions from improved ad revenue," according to the company's highlights. Viber's registered users reached 1.67 billion at the end of September, up 3.0%.

Rakuten Rewards, the cashback business in the US, Europe and Canada, went the other way on revenue. Its revenue fell 13.9% to 27.6 billion yen, or 190.2 million dollars, while operating income rose 57.3% to 2.3 billion yen. Rakuten attributes the revenue decline to exits from unprofitable businesses and "a pull-forward of major promotional events by key advertisers in Rewards into Q2." Rakuten Rewards gross merchandise sales grew 7.5% to 2.85 billion dollars. The affiliate side has drawn attention this year: Rakuten ended Honey's access to its network in January 2026, then published an open-source SDK in May as Honey returned, and announced an alliance with impact.com on April 28, 2026.

Rakuten TV, which sells connected TV inventory in Europe, reported 214.9 million total users, a figure that combines registered users with non-registered AVOD users, up 34.6%. Monthly active users were 8.8 million at the end of September, up from 8.0 million a year earlier but down from 14.2 million at the end of June, according to the data sheet. A Rakuten TV executive said in an October industry interview that global streamers are pushing European broadcasters into consolidation.

How the number compares

Rakuten's 11.1% growth rate matched the pace at Amazon, whose advertising revenue rose 11% to $19.64 billion in the third quarter, a slowdown Amazon attributed to Prime Day moving into June. YouTube's ad revenue grew 9% to $11.21 billion in the same period. Walmart, by contrast, reported global advertising revenue of nearly $6.4 billion for fiscal 2026, up 46%. The broader shift is well documented: WPP Media's December 2025 forecast had commerce advertising overtaking television globally. PPC Land's calculation, at the 145 yen per dollar rate Rakuten uses for its 2026 figures: Rakuten's quarterly advertising revenue equals about $463 million, roughly 2.4% of Amazon's.

Rakuten Ichiba and the hometown tax hangover

The Internet Services segment, home to Rakuten Ichiba, posted revenue of 347.3 billion yen, down 0.7%. Non-GAAP operating income fell 31.3% to 16.4 billion yen, dragged down by a 17.5 billion yen loss in the minority investment business after Rakuten reassessed the fair value of certain holdings. Excluding minority investments, segment profit rose 20.1% to 33.9 billion yen.

The comparison is distorted by Furusato Nozei, Japan's hometown tax donation programme. Japanese residents can direct part of their tax payments to municipalities in exchange for local products, and many do so through e-commerce portals including Rakuten. A revision of the rules on points for such donations took effect on October 1, 2025, which pulled demand into September 2025 and inflated last year's third quarter.

Domestic e-commerce gross merchandise sales came in at 1,687.3 billion yen, up 0.6%. Excluding hometown tax, Rakuten says the figure grew 9.0%. That rate has accelerated through 2026, from 5.5% in the first quarter to 6.6% in the second and 9.0% in the third, according to the presentation. On a two-year compound basis, which smooths out the hometown tax effect, gross merchandise sales grew 6.9%, revenue 5.3% and Non-GAAP operating income 21.0%.

"Excluding hometown tax, however, GMS grew 9.0% year-on-year, a very high rate of growth," Matsumura said.

Rakuten credits genre-specific promotions. In targeted genres such as appliances, daily goods and food, gross merchandise sales rose 10.0%, against 6.0% in non-targeted genres. "There are various factors, but one is that we have significantly strengthened our genre-specific initiatives, and in the genres where we concentrated our efforts, we were able to achieve double-digit growth," Matsumura said.

Domestic e-commerce revenue rose 0.7% to 267.3 billion yen, and Non-GAAP operating income rose 10.9% to 37.2 billion yen. Core businesses, which include Ichiba, Travel, Rakuten Rebates, Rakuten GORA and the ad-related business, grew revenue 2.7% to 194.3 billion yen and profit 4.6% to 44.3 billion yen. Growth investment businesses, which include Rakuten Mart, Rakuten Books, Rakuten24 and Rakuten Fashion, saw revenue fall 4.4% to 73.0 billion yen while their loss narrowed to 7.1 billion yen from 8.9 billion yen.

The number of Rakuten Ichiba merchants stood at 55,423 at the end of September, against 55,111 a year earlier. Monthly active users in Japan across Rakuten services reached 46.74 million, up 4.9%, while the share of users using two or more services slipped 0.2 points to 76.7%. Rakuten IDs totalled 155.5 million, and cumulative Rakuten Points issued reached 5.6 trillion. Membership value, an internal metric Rakuten calculates from active users, cross-use, lifetime value and customer acquisition cost, rose 14.7% to 11.0 trillion yen.

Rakuten's main domestic rival is under fresh scrutiny. Japan's Fair Trade Commission on November 11 approved commitments from Amazon Japan that place its Featured Offer practices under a five-year monitor, after finding an algorithm withheld the offer from sellers priced above rival sites.

Logistics and Europe write-downs

Two one-off items in the nine-month figures relate to commerce infrastructure. Rakuten recognised 17.0 billion yen of impairment losses and related items on fixed assets in its logistics business, after deciding to use warehouse space internally rather than continue leasing it to third parties "amid uncertainty over future parcel volume growth," according to the earnings report. In Europe, the closure of Rakuten France's marketplace business cost 4.2 billion yen over nine months, including 3.2 billion yen in the third quarter. Rakuten says only post-closure operating costs are expected next fiscal year.

Travel and the Bonus Program

Rakuten Travel was the strongest part of the commerce business. Travel gross transaction value rose 18.9%, with the global business up 94.2% and the domestic business up 12.0%. Rakuten attributes the global surge to expanding networks of hotels and sales partners, and domestic growth to securing accommodation inventory and stronger marketing.

The Bonus Program, which raises benefits the more often a customer books through Rakuten Travel, appears in the numbers. The repeat rate among domestic accommodation users rose to 61.6% in September 2026 from 59.4% a year earlier and 59.1% in September 2024. Rakuten defines the rate as re-use over the following 12 months among users who stayed in the previous year. In a September 2026 survey of 645 users aware of the programme, 68% said it influenced their choice of Rakuten Travel. The survey covered only users who already knew about the programme.

AI in search, feeds and customer service

Ting Cai, Rakuten's Chief AI and Data Officer, presented a series of AI metrics, several of which bear directly on commerce and advertising. Rakuten now has 20 consumer-facing services live with an AI agent, not counting customer support and business-to-business agents.

The decision model on Ichiba search

The most consequential figure for merchants concerns search. Rakuten described what it calls a decision model: a specialised model built on a large language model that, instead of generating text, returns a 1 or 0 with a probability to indicate whether a product matches a shopper's query. The steps Rakuten gives for its use on Ichiba are set out in the next section.

"So, we get the understanding of an LLM at the cost and speed of traditional search," Cai said.

Together with a next-generation search engine, the decision model increased conversion rate by 32.3% in an A/B test against the production baseline in October 2026, with a significance level of p < 0.01, according to Rakuten's slide. The footnote matters: the figure is the "combined effect" of the decision model and the new search engine, and "the test does not isolate the Decision Model contribution."

For advertisers on Ichiba, search relevance determines which products surface organically next to paid placements. A model that changes how products are ranked against queries can shift the balance between organic and sponsored visibility.

Discovery feed

The second metric concerns the discovery feed in the Rakuten Ichiba app, which Rakuten personalises with images and video. Gross merchandise sales through AI discovery recommendations grew 163 times in about nine months. The conversion rate rose from 3.44% in January 2026 to 6.38% in September 2026, an increase of 2.94 percentage points.

Cai described the result as conversion rates improving "nearly 3%" over the period. The slide makes clear the change is measured in percentage points, which in relative terms is close to a doubling. The attribution rules are broad: a sale counts if a shopper clicks from the discovery feed to an item or shop page and buys any item at that shop within 30 days. These recommender system figures therefore measure growth in a feed Rakuten has been expanding, not incremental sales.

"We continue to believe that shopping is entertainment which is why we're investing in making the discovery feed in the Ichiba app more enjoyable through images and videos," Cai said.

Travel agent and customer service

Rakuten AI for Travel was upgraded in April 2026 to handle bookings end to end inside a conversation. Domestic hotel gross transaction value from customers who used the agent rose 165% compared with the first quarter. Rakuten's footnote describes this as an internal estimate that includes bookings completed in the agent and bookings made through standard flows by customers who used the agent earlier in the same calendar month. It is "not a measure of incremental bookings" and covers domestic hotels only.

Raptor, Rakuten's generative AI customer service platform, has cut costs by 3.5 billion yen in the first three quarters of 2026 and is live on nine services. Rakuten AI Workforce, an internal platform for building always-on agents, had more than 7,100 monthly active users. Rakuten AI Code, its in-house coding platform running on Rakuten-managed GPU clusters, rose from 0.7% of the group's coding tokens in April to 15.4% in October, a 22-fold increase. Rakuten says, by its own calculation comparing the platform with leading premium frontier APIs in July 2026, that it is three times more cost-efficient.

"While many companies are seeing sky rocketing token cost, we can choose to run models on our Rakuten-managed GPU clusters versus relying solely on hosted frontier models," Cai said. "Efficiency is how we turn AI into ROI."

Agents connected by protocols

Cai also described a direction that matters for anyone building commerce integrations. Rakuten plans to connect its agents "through protocols or APIs that enable users to transact across the ecosystem," rather than relying on agents that simulate how humans navigate websites. He said customer service would evolve from complaint handling into a channel that generates revenue through personalised offers, and that generative AI would be applied to search, recommendations and ads.

The approach contrasts with what others have experienced. Walmart said in March 2026 that purchases inside ChatGPT converted three times lower than click-out links. Shopify, on the other hand, reported AI-referred orders up 3.3 times in the third quarter. Rakuten's agents operate within its own properties, where it controls both the data and the checkout.

How the processes work, according to Rakuten

Rakuten's materials describe two mechanisms in enough detail to record step by step. Both are written here as Rakuten documents them.

The Ichiba search decision model

According to the presentation slide "Rakuten AI for Ichiba: Decision Model," which states that the system "uses product photos, description, and full context to assess matches and optimize result order":

1. Search for candidates. The search system "Retrieves up to 50 candidates."
2. Input. The decision model receives a prompt plus context, the same input format as a general LLM.
3. Decision model. It will "Match candidate products against shopper requirements."
4. Output. In place of generated text, it returns "1 or 0 with probability," described as "Output a decision: Match or not with a probability to simplify the ranking."
5. Ranking. Result order is then optimised from those match decisions.

The tested version paired this model with a next-generation search engine, and Rakuten states the 32.3% conversion result "does not isolate the Decision Model contribution."

The Mobile Ecosystem Contribution

According to the earnings report, the contribution is calculated as follows:

1. Formula. "Mobile Ecosystem Contribution = i) Gross profit uplift effect of Rakuten Mobile MNO subscribers - ii) Customer referral effect from group companies to the mobile business."
2. Uplift, method (a). For some businesses: "The difference in the monthly average revenue per user over the past year between Rakuten Mobile MNO individual subscribers and non-subscribers in each business of the Rakuten Group × The gross profit margin of each business for each month × The number of Rakuten Mobile MNO individual subscribers at the end of each month."
3. Uplift, method (b). For others: "The difference in annual usage rates in each business of the Rakuten Group between Rakuten Mobile MNO individual subscribers and non-subscribers × Monthly average revenue per user over the past year for each business × The gross profit margin of each business for each month × The number of Rakuten Mobile MNO individual subscribers at the end of each month."
4. Referral effect. "Number of Rakuten Mobile MNO individual subscribers each month who signed up through group company sites × Referral cost."
5. Scope. The uplift covers 18 businesses: Rakuten Ichiba, Rakuten Books, Rakuten 24, Rakuten Bic, Rakuten Kobo, Rakuten Fashion, Rakuten Travel, Rakuten Mart, Rakuten Beauty, Rakuten Pay app payments, Rakuten Pay online payments, Rakuten Edy, Rakuten Point Card, Rakuten Card, Rakuten Bank, Rakuten Securities, Rakuten Life Insurance and Rakuten General Insurance.
6. Booking. The result is "reflected in the segment profit and loss," which moves profit out of Internet Services and FinTech and into Mobile.

The mobile ledger and the ecosystem accounting

The Mobile segment remains the largest drag on profit, though it is shrinking. Segment revenue rose 18.3% to 140.4 billion yen, and the Non-GAAP operating loss narrowed by 10.0 billion yen to 28.7 billion yen. EBITDA rose 9.4% to 12.1 billion yen, and pre-marketing cash flow, which adds back customer acquisition costs and property tax, rose 22.2% to 33.7 billion yen.

Rakuten Mobile itself grew revenue 17.1% to 111.4 billion yen. MNO revenue rose 20.9% to 65.2 billion yen and device and accessory sales 16.9% to 19.9 billion yen. Its Non-GAAP operating loss narrowed by 7.0 billion yen to 30.3 billion yen, and its EBITDA reached 8.7 billion yen. Rakuten Symphony, the network software unit, grew revenue 25.2% to 25.1 billion yen and swung to an operating profit of 1.7 billion yen.

How ecosystem contribution moves profit between segments

How Rakuten measures mobile matters for anyone reading the ad and commerce figures. Since the third quarter of 2024, the company has applied a "Mobile Ecosystem Contribution" that moves profit from Internet Services and FinTech into Mobile. It rests on the tendency of Rakuten Mobile MNO subscribers to use other Rakuten services more than non-subscribers, using the calculation set out in the previous section.

In the third quarter, the adjustment moved 11.96 billion yen to Mobile, with 4.76 billion yen coming out of Internet Services and 7.20 billion yen out of FinTech. Over the last twelve months, the contribution reached 42.4 billion yen, up 35.4%.

PPC Land's calculation from the earnings report: before the ecosystem contribution, the Mobile segment's loss narrowed from 47.0 billion yen to 40.6 billion yen, an improvement of 6.4 billion yen. The contribution itself grew by 3.6 billion yen year on year. Put differently, more than a third of the headline 10.0 billion yen improvement in the Mobile loss came from a larger internal allocation rather than from the mobile business's own revenue and costs. Internet Services' reported profit, meanwhile, is lower than it would be without the adjustment.

The same logic runs through average revenue per user. Rakuten reported MNO ARPU of 2,938 yen, up 65 yen. Of that, 788 yen is "Ecosystem ARPU," calculated from the uplift on group revenue from MNO subscribers. PPC Land's calculation: ecosystem ARPU makes up 26.8% of the headline figure. After deducting the associated cost of sales and referral effects, Rakuten's net ARPU was 2,545 yen, up 74 yen.

Hiroshi Mikitani, Rakuten's chairman and CEO, framed the effect in commercial terms. "As we have said before, once customers join Rakuten Mobile, they buy 50% more on Rakuten Ichiba (compared with non-subscribers), or use Rakuten Card 30% more, and this value continues to grow," he said in the presentation. "There is a term in the world called 'conglomerate discount,' but we would be grateful if you would evaluate Rakuten Group, with its uniquely strong Ecosystem, as an 'Ecosystem Premium.'"

He described "four pillars of Ecosystem growth that we originally envisioned: commerce, finance and fintech, advertising, and communications."

Subscribers, churn and the roaming cut

Total Rakuten Mobile subscribers passed 11 million in September, reaching 11.05 million, up 1.72 million year on year. MNO subscribers, excluding business continuity plans and wholesale MVNE lines, stood at 10.22 million. Third-quarter MNO net additions were 297,000, the lowest of the last five quarters, down from 405,000 a year earlier and 382,000 in the second quarter. October net additions were about 85,000 based on preliminary figures.

Rakuten attributes the slowdown to concerns over a reduction in roaming on KDDI's network, which started in phases at the beginning of October and was largely completed early in the month. Based on daily average traffic, the volume carried on Rakuten's own network rose from 94.57 to 96.64 on an index where total traffic before the reduction equals 100, while roaming traffic fell from 5.43 to 3.53. Total traffic edged up to 100.17. Rakuten says further phased reductions in roaming are planned as its own network expands, and the appendix states that "Future roaming provision will be decided upon consultation between the two companies." The gross MNO churn rate was 1.58% in the third quarter and adjusted churn was 1.47%, up from 1.33% a year earlier and 1.38% in the second quarter. October churn improved by 5 basis points against the third quarter, on preliminary figures.

"We had prepared thoroughly for this, and as a result I believe the impact was very limited," Mikitani said in the media question session. "At the same time, with the media coverage playing up the issue, I imagine some users felt somewhat uneasy."

Asked about the path to mobile profitability, Mikitani declined to give targets. "Regarding earnings forecasts, given the various competitive factors, I believe it would be inappropriate to say anything irresponsible, so we do not disclose them," he said, adding that Rakuten intends "to significantly accelerate growth in our user base from here, centered on our stores."

ARPU growth now leans on shops. Option ARPU among business-to-consumer customers who applied for options in shops during the quarter was 793 yen, against an overall option ARPU of 223 yen. The SAIKYO Protection security service accounted for about 53% of the year-on-year increase in option ARPU, and 15-minute unlimited calls for about 24%. Shop attachment rates rose 36.3 points and 11.9 points respectively between September 2025 and September 2026. Average daily data usage among consumer subscribers reached a record 1.3 GB.

Capex and satellites

Network-related capital expenditure was 40.3 billion yen in the third quarter, and Rakuten kept its full-year plan of 200.0 billion yen. Construction starts doubled from the second quarter. PPC Land's calculation: capex for the first three quarters totalled 105.8 billion yen, so meeting the plan implies about 94.2 billion yen in the fourth quarter, more than twice the third-quarter figure. Rakuten also plans to use shared infrastructure through JTOWER at more than 1,000 indoor and outdoor properties by the end of March 2027.

On November 6, Rakuten and AST SpaceMobile agreed to set up a joint venture, Rakuten AST, to build a low Earth orbit satellite constellation that Japan can operate autonomously, with domestic operations targeted by the end of March 2029. The project has been approved for a grant of up to 148.0 billion yen under the Ministry of Internal Affairs and Communications' J-LEO programme. Separately, Rakuten plans to begin commercial network testing of its SAIKYO Satellite service, which uses AST SpaceMobile satellites, by the end of 2026.

FinTech after the reorganisation

The FinTech segment remained the profit engine. Revenue rose 22.1% to 306.0 billion yen, and Non-GAAP operating income rose 23.7% to 68.0 billion yen, helped by higher interest rates and active markets.

Rakuten Card's shopping gross transaction volume rose 7.0% to 7.2 trillion yen, and revenue rose 12.2% to 111.3 billion yen, but operating income fell 9.3% to 17.3 billion yen as higher interest expenses cost 4.9 billion yen. Group-wide, interest expenses for the finance businesses nearly doubled to 78.8 billion yen in the first nine months from 40.4 billion yen. Rakuten Bank grew revenue 43.6% to 79.2 billion yen and profit 33.0% to 33.2 billion yen, with 18.81 million accounts and 13.6 trillion yen in deposits. Rakuten Securities grew revenue 37.6% and profit 45.5%, reaching 14.83 million accounts at the end of September and passing 15 million in November.

The reorganisation that took effect on October 1 made Rakuten Bank the parent of Rakuten Card and Rakuten Securities Holdings. Rakuten Group holds a 72.35% shareholding in the new Rakuten Bank Group and 49.95% of voting rights. For marketers, the relevant commitments are on data and campaigns. The presentation lists "Maintain existing data collaboration framework for continued use in driving mutual business growth and enhancing customer value" and "Continue joint loyalty programs, campaigns, etc."

Mikitani described two goals: lower funding costs and cross-selling. "If I remember correctly, there are approximately 35 million Rakuten Card members, 15 million Rakuten Securities customers, and 18 million Rakuten Bank customers, and I believe the number of users who do not overlap is very large," he said. "By cross-selling and encouraging them to use all three services, we will create real benefits."

Partnerships extend the points currency beyond Rakuten's own properties. Rakuten Points can be earned and, since July 1, used on Uber Eats, with more than 2 million Rakuten ID links by the end of September. A tie-up with FamilyMart, which has about 16,000 stores in Japan, connects in-store use with Rakuten Ichiba's SPU points programme. Rakuten Pay introduced offline code payments in August.

Bonds, leverage and the security question

In October, Rakuten issued 400.0 billion yen of domestic senior bonds: 360.0 billion yen of retail bonds and 40.0 billion yen of wholesale bonds, both at 4.37% and maturing in April 2032. Rakuten calls it its largest ever domestic and retail bond issuance. The spread narrowed by 32.5 basis points compared with bonds issued in July 2025. Refinancing US dollar senior bonds due February 2027, which carry a 7.22% coupon, will cut annual interest payments by about 7.6 billion yen, according to the company. Rakuten also plans to issue perpetual subordinated bonds to cover about 150.0 billion yen of subordinated bonds with first call dates in 2027.

Buyers of the retail bonds receive a Rakuten Mobile SIM free for one year. "Through funding via corporate bonds, and retail bonds in particular, we also intend to broaden our touchpoints with individual customers and contribute to the further expansion of the Rakuten Ecosystem," Kaga said.

Leverage moved the wrong way. The ratio of non-FinTech net interest-bearing debt to non-FinTech EBITDA rose to 7.7 times on a trailing twelve-month basis at the end of September, from 6.5 times at the end of 2025, against a target the appendix words as "aiming for a non-FinTech net interest-bearing debt/non-FinTech EBITDA ratio of 5x or less within 2027." Rakuten attributes the deterioration to lower valuations of listed securities, investment business losses and funds provided for the FinTech reorganisation. The consolidated equity ratio fell to 4.1% from 4.7% at the end of 2025.

Asked by a BofA Securities analyst whether he would prioritise growth or financial soundness, Mikitani said: "Basically, it is a matter of balance; that is really the essence of it." He added: "We have no intention of doing anything unreasonable." Rakuten has not decided on a dividend for 2026. "We have not yet decided on dividends," Mikitani said.

Security came up in the media session. Asked by NHK whether Rakuten's common ID, a strength for cross-selling, could spread damage if one ID leaked, Mikitani described a three-layer defence: preventing outside intrusion, preventing intrusion from within, and encrypting data "as far as possible" so that stolen data would not harm users. "As for the technical details of this three-layer defense, I am very sorry, but they are confidential, so I am unable to share them," he said.

Why this matters for advertisers and merchants

Rakuten's net result swings on taxes, derivatives and accounting choices that have little to do with how shoppers behave, but the commerce and advertising engine underneath is still growing. Three points stand out for the marketing community.

The advertising business grew at the same rate as Amazon's in the quarter, yet it decelerated by four and a half points from the second quarter.

Ichiba's ranking is being rebuilt with language models, and Rakuten is extending automation to merchants' keyword settings. Any change to organic ranking alters the value of the paid placements beside it, so for merchants and agencies on Rakuten Ichiba, the relationship between organic and sponsored visibility has become a moving target.

Much of the ecosystem value Rakuten presents, from the Mobile Ecosystem Contribution to ecosystem ARPU, membership value and the 50% Ichiba uplift among mobile subscribers, rests on the company's own calculations of cross-service behaviour. Those figures show how tightly the group is binding its businesses together. They are not independently audited measures of incremental sales.

Several figures were not disclosed: the split of advertising revenue by format, by property or between merchants and brands; the duration, traffic share and ad-click effect of the October search test, and whether the decision model ranks ads; the starting base for the 163-fold discovery feed figure; and a reason for the fall in Rakuten TV monthly active users from 14.2 million in June to 8.8 million in September.

Key facts

• Company: Rakuten Group, Inc., listed on the Tokyo Stock Exchange, code 4755. Representative Director, Chairman, President and CEO: Hiroshi Mikitani.
• Period: third quarter of fiscal 2026, July 1 to September 30, 2026; nine months January 1 to September 30, 2026. Accounting standard: IFRS.
• Release date: November 13, 2026.
• Earnings report: "Consolidated Financial Reports (IFRS) for the nine months ended September 30, 2026," Rakuten Group, Inc., November 13, 2026. English summary translation of the Japanese original filed with the Tokyo Stock Exchange.
• Presentation: "FY2026 Third Quarter Consolidated Financial Results," November 13, 2026, with "FY2026 Third Quarter Consolidated Financial Results Appendix," November 13, 2026.
• Press release: "Rakuten Group Q3 FY2026 Financial Results Highlights," Rakuten Group, Inc., November 13, 2026.
• Q&A: "FY2026 Q3 Financial Results Briefing," media Q&A session and analyst Q&A session.
• Data sheet: https://global.rakuten.com/corp/investors/assets/doc/documents/26Q3Datasheet.xlsx
• Review: the Japanese-language quarterly statements were reviewed voluntarily by Ernst & Young ShinNihon LLC; interim review report dated November 13, 2026.
• Full-year guidance: unchanged; high single-digit revenue growth against 2025 and profitability in Non-GAAP operating income, income before income tax and net income.
• Accounting estimate change: longer useful lives for certain network equipment; plus 26,049 million yen to operating income and income before income tax for the nine months.
• FinTech reorganisation: effective October 1, 2026, under the Integrated Agreement of May 20, 2026; Rakuten Bank, Ltd. is parent of Rakuten Card Co., Ltd. and Rakuten Securities Holdings, Inc.; Rakuten Group shareholding 72.35%, voting rights 49.95%.
• Bonds: Rakuten Group, Inc. 27th unsecured bond, 40 billion yen, 4.370%, issued October 22, 2026, maturing April 22, 2032; 26th unsecured bond (retail), 360 billion yen, 4.370%, issued October 29, 2026, maturing April 28, 2032.
• Satellite: Rakuten AST joint venture agreed with AST SpaceMobile on November 6, 2026 (JST); J-LEO grant of up to 148.0 billion yen; domestic operations targeted by end of March 2029.
• Hometown tax: revision of Furusato Nozei point rules effective October 1, 2025.
• Exchange rate used by Rakuten for 2026 dollar figures: 145 yen per dollar.
• Shares issued: 2,185,311,600 as of September 30, 2026.

Timeline

• 2018 - Rakuten reports its last annual profit attributable to owners, 141.9 billion yen
• 2019 to 2025 - Rakuten reports annual losses attributable to owners every year
• June 3, 2021 - Magnite starts monetising Rakuten TV inventory in seven European markets
• Third quarter 2024 - Rakuten begins reflecting the Mobile Ecosystem Contribution in segment results
• October 1, 2025 - Revision of hometown tax point rules takes effect, after rush demand in September 2025
• December 2025 - WPP Media forecasts commerce advertising overtaking television globally
• January 12, 2026 - Rakuten Advertising removes Honey from its affiliate network
• February 19, 2026 - Walmart reports nearly $6.4 billion in fiscal 2026 advertising revenue, up 46%
• March 18, 2026 - Walmart says purchases inside ChatGPT converted three times lower than click-out links
• April 2026 - Rakuten AI for Travel gains end-to-end booking
• April 2026 - Rakuten AI Code accounts for 0.7% of group coding tokens
• April 28, 2026 - Rakuten International and impact.com announce an affiliate alliance
• May 6, 2026 - Rakuten Rewards releases an open-source stand-down SDK as Honey returns to its network
• May 20, 2026 - Rakuten signs the integrated agreement for the FinTech reorganisation
• June 2026 - Rakuten Card changes fee rates for post-purchase installment payments
• July 1, 2026 - Rakuten Points become usable for payment on Uber Eats
• August 2026 - Rakuten Pay introduces offline code payments
• September 2026 - Rakuten Mobile subscribers pass 11 million; Rakuten Travel surveys 645 Bonus Program users
• October 1, 2026 - FinTech reorganisation takes effect, with Rakuten Bank as parent of Rakuten Card and Rakuten Securities Holdings
• Early October 2026 - Rakuten Mobile completes most of a phased roaming reduction
• October 2026 - Ichiba decision model and next-generation search engine raise conversion 32.3% in an A/B test; Rakuten AI Code reaches 15.4% of group coding tokens
• October 18, 2026 - Rakuten TV's Stuart Keith says global streamers are pushing European broadcasters into consolidation
• October 22, 2026 - Rakuten issues 40.0 billion yen of wholesale senior bonds at 4.37%
• October 28, 2026 - Alphabet reports YouTube ad revenue up 9% to $11.21 billion
• October 29, 2026 - Amazon reports third-quarter advertising revenue up 11% to $19.64 billion
• October 29, 2026 - Rakuten issues 360.0 billion yen of retail senior bonds at 4.37%
• November 3, 2026 - Shopify reports AI-referred orders up 3.3 times
• November 6, 2026 - Rakuten and AST SpaceMobile agree to form Rakuten AST
• November 11, 2026 - Japan's Fair Trade Commission approves Amazon Japan's commitments under a five-year monitor
• November 2026 - Rakuten Securities passes 15 million accounts
• November 13, 2026 - Rakuten reports third-quarter revenue of 697.1 billion yen, advertising revenue of 67.1 billion yen and a net loss attributable to owners of 62.7 billion yen
• December 2026 - Rakuten plans to redeem 45.0 billion yen of yen senior bonds with cash on hand
• End of 2026 - Planned start of commercial network testing for the SAIKYO Satellite service
• End of March 2027 - Target for JTOWER infrastructure sharing at more than 1,000 properties
• 2027 - Target to bring non-FinTech net debt to EBITDA to 5 times or less
• End of March 2029 - Target start of domestic operations for the Rakuten AST satellite constellation

Related PPC Land coverage

• Amazon ad revenue growth drops to 11% after Prime Day moves to June - Amazon's third-quarter 2026 results, with advertising revenue of $19.64 billion growing at the same rate as Rakuten's.
• YouTube ad revenue gains 9% to $11.2bn, its slowest growth of 2026 - Alphabet's third-quarter 2026 video advertising figures.
• Walmart Connect hits 41% growth as ad business nears $6.4B - Walmart's fiscal 2026 advertising results, a fast-growing retail media comparison.
• Global ad spending hits $1.14 trillion as commerce overtakes TV - WPP Media's December 2025 forecast in which commerce advertising passed television.
• Amazon Japan faces 5-year monitor over rule pegging sellers to rival prices - The Japan Fair Trade Commission's commitment decision on Rakuten's largest domestic marketplace rival.
• Rakuten and impact.com unite affiliate tech, data, and services in new deal - The April 2026 alliance combining Rakuten Advertising services and Rakuten Rewards data with impact.com's platform.
• Rakuten launches open-source SDK as Honey returns to its network - Rakuten Rewards' stand-down SDK for browser extensions and Honey's reinstatement.
• Honey loses access to 2,000 clients after Rakuten network termination - Rakuten Advertising's January 2026 removal of Honey from its affiliate network.
• Global streamers push TV into M&A from Sky-ITV to RTL, Rakuten TV exec says - Rakuten TV's advertising lead on consolidation in European television.
• Magnite starts monetizing Rakuten TV inventory in Europe - The 2021 programmatic arrangement for Rakuten TV's European inventory.
• Walmart's ChatGPT checkout flopped. Here's what comes next. - Walmart's finding that in-chat checkout converted three times lower than click-out links.
• Shopify revenue gains 32% to $3.7bn as AI-referred orders rise 3.3x - Shopify's third-quarter 2026 results and AI-referred order growth.

Summary

Who: Rakuten Group, the Japanese e-commerce, fintech and mobile company led by chairman and CEO Hiroshi Mikitani, with segment heads Ryo Matsumura (Internet Services), Seiichiro Sonoda (FinTech) and Kentaro Hyakuno (Mobile), Vice Group CFO Eiichi Kaga and Chief AI and Data Officer Ting Cai.

What: Rakuten reported third-quarter 2026 revenue of 697.1 billion yen, up 10.9%, Non-GAAP operating income of 48.6 billion yen, up 25.9%, and a net loss attributable to owners of 62.7 billion yen after 48.8 billion yen of income tax, including 23.0 billion yen tied to its FinTech reorganisation, and a 16.7 billion yen derivative loss. Domestic advertising revenue rose 11.1% to 67.1 billion yen, slower than the 15.6% of the second quarter. An AI decision model combined with a new search engine raised Ichiba conversion 32.3% in an October test.

When: The results were released on November 13, 2026, covering July 1 to September 30, 2026.

Where: Tokyo-listed Rakuten Group operates mainly in Japan, where Rakuten Ichiba, Rakuten Travel, Rakuten Mobile and its financial businesses are based, with international operations including Rakuten Rewards in the US, Rakuten Viber and Rakuten TV in Europe.

Why: The results matter for advertisers and merchants because Rakuten's advertising business depends on Ichiba's traffic and ranking systems, which Rakuten is rebuilding with AI, while the group's 2026 net profit target, a result it has not reported at the level attributable to owners since 2018, depends on tax, derivative and accounting items as much as on commerce.