Rakuten Q1 Swings to ¥30.4bn Operating Profit as Revenue Climbs 14% and Mobile Losses Narrow

Rakuten Group, Inc. (TSE: 4755), the Japanese internet conglomerate spanning e-commerce, fintech, and the Rakuten Mobile telecom carrier, reported a markedly improved first quarter for FY2026 (January–March 2026) on May 14, 2026. Consolidated revenue rose 14.4% year-on-year to ¥643,583 million, from ¥562,704 million a year earlier, and the group swung to an operating profit of ¥30,394 million — a sharp reversal from the prior-year operating loss of ¥15,444 million. EBITDA climbed 36.2% to ¥108,791 million, underscoring the scale of the underlying turnaround.

The swing to operating profit marks one of the clearest signs yet that Rakuten's multi-year, multi-billion-yen bet on its mobile network is approaching an inflection point. Profit before tax recovered to ¥17,375 million from a loss of ¥45,839 million a year earlier, and comprehensive income for the quarter turned strongly positive at +¥39,577 million, against negative ¥106,788 million in the prior-year period.

E-commerce and fintech drive the top line

The group's established profit engines — domestic e-commerce, anchored by the Rakuten Ichiba marketplace, and the sprawling fintech arm spanning Rakuten Bank, Rakuten Card, and Rakuten Securities — continued to provide steady, profitable growth and remain the bedrock of the consolidated result. The fintech businesses in particular scale on the back of Japan's largest membership ecosystem, with credit-card transaction volumes, banking deposits, and securities account growth all feeding recurring, high-margin revenue. These segments cushioned the group through the heavy Mobile investment years and now amplify the recovery as the telecom drag eases.

Rakuten Mobile turnaround narrows the drag

Rakuten Mobile — the fourth Japanese mobile network operator whose enormous build-out costs and subscriber-acquisition losses have been the group's defining swing factor for years — delivered the decisive improvement in this quarter. Narrowing Mobile losses, driven by a growing subscriber base, improving network economics, and rising average revenue per user, were the single largest contributor to the operating-profit reversal. As the carrier moves toward sustainable profitability, the gap between Rakuten's profitable internet/fintech core and its loss-making telecom is closing, which is precisely what management has positioned as the path back to consolidated profitability.

Bottom line still negative — but the loss is shrinking fast

Despite the operating turnaround, the group remained in the red at the net level. Quarterly profit (total) was -¥1,758 million, narrowed dramatically from a loss of ¥61,883 million a year earlier, while profit attributable to owners of the parent was -¥18,648 million, a sharp improvement from the prior-year loss of ¥73,471 million. Basic EPS was -¥8.59, versus -¥34.08 a year ago. The residual loss largely reflects continued financing costs and the lingering, though shrinking, burden of the Mobile segment, as well as the gap between profit before tax and after-tax results. The balance sheet remains dominated by the banking, securities, and card businesses: total assets stood at ¥29,314,001 million, with total equity of ¥1,276,629 million and equity attributable to owners of the parent of ¥901,135 million. The equity-to-assets ratio was 4.4% (3.1% on an own-funds basis), a level typical of a group whose balance sheet is anchored by deposit-taking and brokerage operations rather than an indicator of capital weakness.

Outlook and dividend

Rakuten did not provide specific full-year profit guidance figures for FY2026, instead reiterating a target of high-single-digit percentage growth in consolidated revenue excluding the market-sensitive securities business. The per-share dividend for FY2026 remains undecided. With the operating swing now achieved and Mobile losses narrowing, the central question for investors shifts from whether Rakuten can reach consolidated profitability to how quickly the still-negative bottom line can be closed.

JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.