|By Business Wire||
|November 6, 2012 01:30 AM EST||
Rakuten, Inc. (JASDAQ:4755) today announced consolidated financial reports for the nine months ended September 30, 2012. The Rakuten Group for the first three quarters achieved solid growth with consolidated net sales of ¥309,625 million (up 14.5% year on year), operating profit of ¥53,819 million (up 11.4% year on year), and ordinary profit of ¥53,200 million (up 13.4% year on year). All three results are record highs for the first three quarters of a fiscal year. Net income for the period was ¥28,994 million, on the other hand the ¥19,201 million net loss from the same period of the previous fiscal year was recorded.
Qualitative Information, Financial Statements, etc.
1. Qualitative Information Concerning Consolidated Business Results
(1) Business Results for the Third Quarter of the Fiscal Year Ending December 31, 2012
In the world economy during the first three quarters of the current fiscal year (January 1, 2012 – September 30, 2012), the European debt crisis was prolonged and growth in newly developing regions tapered off, which have brought about a rise in uncertainty for the world outlook. In Japan, domestic demand showed resilience, driven by such forces as earthquake restoration demands, but a slowdown of the international economy loomed in the background, so conditions continue to deserve close watch.
Meanwhile, the worldwide spread of the Internet and the developing shift in social foundations across the world means that the Internet continues to be a major engine for worldwide economic growth, as documented in a recent white paper on information and communications.* In particular, the rapid diffusion of smartphones is contributing to the structural expansion of the Internet market. Boosted by the strong trends of these environmental changes, the Internet shopping market continues its steady growth in the future, both in Japan and overseas.
At Rakuten, we seek to leverage the growth potential of the Internet as a driving force for raising corporate value. We are doing this through vigorous steps to take Rakuten Ichiba's BtoBtoC marketplace model to the world and service enhancements for smartphone and tablet devices to spur further growth. We also aim to strengthen our competitiveness by improving delivery quality, from measures such as reinforcing our logistics infrastructure. In the Internet Finance business segment, we are aggressively promoting the business centering on Rakuten Card, which has notable synergies with Internet Services.
(2) Segment Information
Business results for each segment are as follows.
< Internet Services >
In the Internet Services segment during the first three quarters of the fiscal year, the customer shift to e-commerce for daily consumption continued to move forward owing to an enhanced product lineup, promotion of mobile Internet usage, expanded next-day deliveries, and other initiatives in our core Rakuten Ichiba service. Efforts to elevate Rakuten Ichiba's usability for both users and merchants contributed to firm growth in unique buyers and number of orders to sustain the segment's high performance with a 15.2% year-on-year rise in domestic e-commerce gross merchandise sales. In Travel services, we added a 13.5% year-on-year increase to gross transaction volume. Dynamic Package had solid sales and upgraded its single payment service for corporate hotel reservations in pursuit of a more diversified earnings base.
In its overseas ventures, the segment aided Rakuten's business expansion by focusing on marketplace-model businesses and rolling out initiatives including points programs that have proven successful in Japan. During the first quarter, we made Canadian-based Kobo Inc., a worldwide e-book operator, into a consolidated subsidiary. Kobo is spreading its e-book service throughout the world and opened its Japan service in July of this year.
As a result, net sales for the segment rose to ¥192,196 million, a 24.9% year-on-year increase, while segment operating income was down 0.8% year on year to ¥44,813 million due to our continued advance investments, mainly in overseas businesses.
< Internet Finance >
In credit card and related services, the Internet Finance segment increased its credit card membership during the first three quarters, which led to increased shopping transaction value and prompted a healthy rise in revolving shopping balances, resulting in higher commission income and a pronounced growth in its profit. Banking services benefited from its effective marketing programs to Rakuten members and solid growth in loan balances to achieve increased interest income from loans. In securities services, although stock trading volume decreased by the ongoing global depressed stock market, the number of new comprehensive accounts increased. In our aim to enrich our financial service offerings, we announced an agreement in the third quarter to include AIRIO Life Insurance Co., Ltd. ("AIRIO Life") as a consolidated subsidiary.
As a result of the above, the Internet Finance segment had ¥110,328 million in net sales, a 3.1% increase from the previous fiscal year. Segment operating profit was ¥15,546 million; a 94.2% year-on-year increase due in part to last year's recording of a ¥4,264 million allowance for loss on interest repayment taken in advance of the re-organization of the credit card business.
< Others >
During the first three quarters, operating profit in the Others segment firmed up, despite lower telecommunications sales stemming from the shift to a new business model emphasizing new, high-growth ventures such as cloud services while moving away from a traditional landline operator providing bypass services. The professional sports division lifted net sales through year-on-year revenue increases in both advertising and tickets.
As a result of the above, net sales for the segment were ¥25,817 million, a 3.0% year-on-year decrease, while segment operating profit grew 29.5% year on year to ¥1,787 million.
|* Source:||Heisei 24 Nen Joho Tsushin ni Kansuru Genjo Hokoku [Fiscal 2012 Information and Communications Status Report] (published by the Ministry of Internal Affairs and Communications, July 17, 2012)|
(3) Qualitative Information about Consolidated Business Forecasts
In the year ending December 31, 2012, we anticipate further expansion in the use of our services in Japan including e-commerce and travel, resulting in continued high growth. In financial services, we expect unsettled market conditions to persist, but nevertheless anticipate sustained earnings growth created from synergies within the Rakuten Group. We will also continue to make strategic allocations of corporate resources and active investments in high-growth areas such as e-books in order to open up more mid- and long-term income opportunities. While making these advance investments, Rakuten intends to surpass its current financial results in the fiscal year ending December 31, 2012.
In addition to our activities in the rapidly changing environment of Internet-related business in Japan and overseas, Rakuten, Inc. and its group companies are also involved in the securities business and other finance-related business activities, with the result that our business performance is affected by financial market trends and other factors. For these reasons, it is impossible to predict financial results, and no forecasts are included in this report.
(4) Other Information
(a) Changes in Recognition Timing of the Reserve for Points
The former accounting procedure for the Rakuten Super Points program treated regular points by recognizing a reserve for points at an amount corresponding to the balance of points available for customer use at the end of the period and treated limited-time points as an expense in the period used. Under the new policy, the projected value of points granted for both regular and limited-time points will be recognized in the reserve for points at the time of transaction.
Points granted and used have both grown recently as point programs play an increasingly important role each year as marketing tools. In response to these conditions, the Rakuten Group has constructed a point campaign management system and developed an internal management structure in order to gain timely understanding of campaign effects. In the first quarter accounting period, we have been able to promptly calculate the estimated value of granted points from campaigns at the time of generation for both regular and limited-time points. We are thus able to gauge and to manage the point balances in the important Rakuten Super Points marketing tool. At the same time, we have adopted a uniform accounting procedure for the Rakuten Super Points program. This method accounts for points in the reserve for points by using the projected value of point grants, and recognition timing will be based on the transaction that caused the points to be generated.
The change in accounting policy is applied retroactively, and quarterly and annual financial statements for the previous year are presented after retrospective application.
As a result, the amounts for operating profit and ordinary profit for the first three quarters of the previous fiscal year are each ¥130 million higher and loss before income taxes and minority interests for it is ¥130 million smaller than before retrospective application, and the reserve for points at the end of the previous fiscal year is ¥5,290 million higher. In addition, reflecting the cumulative effect in net assets at the beginning of the previous fiscal year reduces retained earnings at that time by ¥2,812 million.
(b) Application of the Accounting Standard for Net Income per Share
Starting in the first quarter of the current fiscal year, we are applying the Accounting Standard for Earnings per Share (Accounting Standards Board of Japan [ASBJ], Statement No. 2, revised June 30, 2010) and the Guidance on Accounting Standard for Earnings per Share (ASBJ Guidance No. 4, revised June 30, 2010).
According to this change, the calculation of diluted net income per share for stock options whose right to exercise is established after a fixed period of work service sets the value of receipts on the assumption that funds are paid in when rights are exercised and has changed to a method that includes the future service-related portion furnished by the company.
For the stock split conducted during the three months ended September 30, 2012, net income per share and net income per diluted share were calculated under the assumption that the stock split took effect at the start of the previous fiscal year.
(c) Application of the Accounting Standards for Accounting Changes and Error Corrections
As a result of accounting changes and corrections to prior period errors after the beginning of the first quarter financial reporting period, we have applied the Accounting Standards for Accounting Changes and Error Corrections (ASBJ Statement No. 24, December 4, 2009) and the Guidance on Accounting Standards for Accounting Changes and Error Corrections (ASBJ Guidance No. 24, December 4, 2009).
|(1) Significant changes in the scope of consolidation: Yes|
|Increase: Kobo Inc.|
|(2) Adoption of simplified or specific accounting treatments: No|
|(3) Changes in accounting policies and presentation of the financial statements|
|(major items that provide the basis for preparing financial statements)|
|Changes due to amendment of accounting standards: Yes|
|Other changes: Yes|
|Changes in the accounting estimate: No|
|Modified re-disclosure: No|
|(4) Number of shares issued (Common stock)|
|1.Common stock (including treasury stock)|
|1,320,332,500 shares (As of September 30, 2012)|
|1,319,457,800 shares (As of December 31, 2011)|
|6,007,996 shares (As of September 30, 2012)|
|6,007,900 shares (As of December 31, 2011)|
|3.Average number of shares issued for the nine months ended September 30|
|1,313,854,321 shares (January 1 – September 30, 2012)|
|1,312,691,247 shares (January 1 – September 30, 2011)|
|(Note)||Rakuten, Inc. made a 100-for-1 stock split regarding shares of its common stock on July 1, 2012. Total shares issued and treasury stock as of December 31, 2011 and September 30, 2012, and average number of shares during the nine months ended September 30, 2011 and 2012 are calculated under the assumption that the stock split took effect at the start of the previous fiscal year.|
The above information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Osaka Securities Exchange. This English summary translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version. The following financial information was prepared in accordance with generally accepted accounting principles in Japan.
*The full report is available at:
Rakuten, Inc. (JASDAQ:4755), is one of the world's leading Internet service companies, providing a variety of consumer- and business-focused services including e-commerce, e-reading, travel, banking, securities, credit card, e-money, portal and media, online marketing and professional sports. Selected by Forbes as the World's 7th Most Innovative Companies of 2012, Rakuten is expanding globally and currently has operations throughout the Americas, Europe, Asia and Oceania. Founded in 1997, Rakuten is headquartered in Tokyo, with over 10,000 staff worldwide. For more information, visit http://global.rakuten.com/group.
SYS-CON Events announced today that Twistlock, the leading provider of cloud container security solutions, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Twistlock is the industry's first enterprise security suite for container security. Twistlock's technology addresses risks on the host and within the application of the container, enabling enterprises to consistently enforce security policies, monitor...
Apr. 23, 2017 03:30 PM EDT Reads: 3,227
Automation is enabling enterprises to design, deploy, and manage more complex, hybrid cloud environments. Yet the people who manage these environments must be trained in and understanding these environments better than ever before. A new era of analytics and cognitive computing is adding intelligence, but also more complexity, to these cloud environments. How smart is your cloud? How smart should it be? In this power panel at 20th Cloud Expo, moderated by Conference Chair Roger Strukhoff, pane...
Apr. 23, 2017 03:15 PM EDT Reads: 1,787
Blockchain is a shared, secure record of exchange that establishes trust, accountability and transparency across supply chain networks. Supported by the Linux Foundation's open source, open-standards based Hyperledger Project, Blockchain has the potential to improve regulatory compliance, reduce cost and time for product recall as well as advance trade. Are you curious about Blockchain and how it can provide you with new opportunities for innovation and growth? In her session at 20th Cloud Exp...
Apr. 23, 2017 02:45 PM EDT Reads: 1,332
@ThingsExpo has been named the Most Influential ‘Smart Cities - IIoT' Account and @BigDataExpo has been named fourteenth by Right Relevance (RR), which provides curated information and intelligence on approximately 50,000 topics. In addition, Right Relevance provides an Insights offering that combines the above Topics and Influencers information with real time conversations to provide actionable intelligence with visualizations to enable decision making. The Insights service is applicable to eve...
Apr. 23, 2017 02:15 PM EDT Reads: 2,291
SYS-CON Events announced today that Grape Up will exhibit at SYS-CON's 21st International Cloud Expo®, which will take place on Oct. 31 – Nov 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. Grape Up is a software company specializing in cloud native application development and professional services related to Cloud Foundry PaaS. With five expert teams that operate in various sectors of the market across the U.S. and Europe, Grape Up works with a variety of customers from emergi...
Apr. 23, 2017 02:00 PM EDT Reads: 1,540
SYS-CON Events announced today that Hitachi, the leading provider the Internet of Things and Digital Transformation, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Hitachi Data Systems, a wholly owned subsidiary of Hitachi, Ltd., offers an integrated portfolio of services and solutions that enable digital transformation through enhanced data management, governance, mobility and analytics. We help globa...
Apr. 23, 2017 01:45 PM EDT Reads: 1,749
SYS-CON Events announced today that Juniper Networks (NYSE: JNPR), an industry leader in automated, scalable and secure networks, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Juniper Networks challenges the status quo with products, solutions and services that transform the economics of networking. The company co-innovates with customers and partners to deliver automated, scalable and secure network...
Apr. 23, 2017 01:15 PM EDT Reads: 4,653
SYS-CON Events announced today that CA Technologies has been named "Platinum Sponsor" of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and 21st International Cloud Expo, which will take place in November in Silicon Valley, California.
Apr. 23, 2017 01:00 PM EDT Reads: 1,899
Developers want to create better apps faster. Static clouds are giving way to scalable systems, with dynamic resource allocation and application monitoring. You won't hear that chant from users on any picket line, but helping developers to create better apps faster is the mission of Lee Atchison, principal cloud architect and advocate at New Relic Inc., based in San Francisco. His singular job is to understand and drive the industry in the areas of cloud architecture, microservices, scalability ...
Apr. 23, 2017 01:00 PM EDT Reads: 3,150
Back in February of 2017, Andrew Clay Schafer of Pivotal tweeted the following: “seriously tho, the whole software industry is stuck on deployment when we desperately need architecture and telemetry.” Intrigue in a 140 characters. For me, I hear Andrew saying, “we’re jumping to step 5 before we’ve successfully completed steps 1-4.”
Apr. 23, 2017 12:45 PM EDT Reads: 1,263
@DevOpsSummit has been named the ‘Top DevOps Influencer' by iTrend. iTred processes millions of conversations, tweets, interactions, news articles, press releases, blog posts - and extract meaning form them and analyzes mobile and desktop software platforms used to communicate, various metadata (such as geo location), and automation tools. In overall placement, @DevOpsSummit ranked as the number one ‘DevOps Influencer' followed by @CloudExpo at third, and @MicroservicesE at 24th.
Apr. 23, 2017 11:30 AM EDT Reads: 2,414
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
Apr. 23, 2017 11:15 AM EDT Reads: 674
SYS-CON Events announced today that SoftLayer, an IBM Company, has been named “Gold Sponsor” of SYS-CON's 18th Cloud Expo, which will take place on June 7-9, 2016, at the Javits Center in New York, New York. SoftLayer, an IBM Company, provides cloud infrastructure as a service from a growing number of data centers and network points of presence around the world. SoftLayer’s customers range from Web startups to global enterprises.
Apr. 23, 2017 09:45 AM EDT Reads: 1,810
As pervasive as cloud technology is -- and as persuasive as the arguments are for using it -- the cloud has its limits. Some companies will always have security concerns about storing data in the cloud and certain high-transaction applications will always be better suited for on-premises storage. Those statements were among the bottom-line takeaways delivered at Cloud Expo this week, a three day, bi-annual event focused on cloud technologies, adoption and associated challenges.
Apr. 23, 2017 08:15 AM EDT Reads: 3,690
Multiple data types are pouring into IoT deployments. Data is coming in small packages as well as enormous files and data streams of many sizes. Widespread use of mobile devices adds to the total. In this power panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists will look at the tools and environments that are being put to use in IoT deployments, as well as the team skills a modern enterprise IT shop needs to keep things running, get a handle on all this data, and deli...
Apr. 23, 2017 07:45 AM EDT Reads: 1,846
Quickly find the root cause of complex database problems slowing down your applications. Up to 88% of all application performance issues are related to the database. DPA’s unique response time analysis shows you exactly what needs fixing - in four clicks or less. Optimize performance anywhere. Database Performance Analyzer monitors on-premises, on VMware®, and in the Cloud, including Amazon® AWS and Azure™ virtual machines.
Apr. 23, 2017 07:15 AM EDT Reads: 1,482
20th Cloud Expo, taking place June 6-8, 2017, at the Javits Center in New York City, NY, will feature technical sessions from a rock star conference faculty and the leading industry players in the world. Cloud computing is now being embraced by a majority of enterprises of all sizes. Yesterday's debate about public vs. private has transformed into the reality of hybrid cloud: a recent survey shows that 74% of enterprises have a hybrid cloud strategy.
Apr. 23, 2017 04:45 AM EDT Reads: 2,773
SYS-CON Events announced today that Super Micro Computer, Inc., a global leader in compute, storage and networking technologies, will exhibit at SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Supermicro (NASDAQ: SMCI), the leading innovator in high-performance, high-efficiency server technology, is a premier provider of advanced server Building Block Solutions® for Data Center, Cloud Computing, Enterprise IT, Hadoop/...
Apr. 23, 2017 04:00 AM EDT Reads: 1,722
Amazon has gradually rolled out parts of its IoT offerings in the last year, but these are just the tip of the iceberg. In addition to optimizing their back-end AWS offerings, Amazon is laying the ground work to be a major force in IoT – especially in the connected home and office. Amazon is extending its reach by building on its dominant Cloud IoT platform, its Dash Button strategy, recently announced Replenishment Services, the Echo/Alexa voice recognition control platform, the 6-7 strategic...
Apr. 23, 2017 03:45 AM EDT Reads: 4,652
Bert Loomis was a visionary. This general session will highlight how Bert Loomis and people like him inspire us to build great things with small inventions. In their general session at 19th Cloud Expo, Harold Hannon, Architect at IBM Bluemix, and Michael O'Neill, Strategic Business Development at Nvidia, discussed the accelerating pace of AI development and how IBM Cloud and NVIDIA are partnering to bring AI capabilities to "every day," on-demand. They also reviewed two "free infrastructure" pr...
Apr. 23, 2017 03:30 AM EDT Reads: 487