Hello everyone, thank you very much for taking the time out of your busy schedules to join us today. I will be explaining the results of Rakuten Group for the third quarter of 2025. Here is today's agenda. First, I will explain the business performance. Then, our CFO, Hirose, will explain the financial results, followed by our Chief AI and Data Officer, Ting, who will provide an update regarding our AI initiatives. To begin, I will report on our Consolidated Results. Consolidated revenue for the third quarter of 2025 increased 10.9% year-on-year to JPY 628.6 billion. With solid performance in core businesses across segments, we achieved double-digit revenue growth in all segments. The Internet Services Segment rose 11.1% year-on-year, the FinTech Segment 20.3%, and the Mobile Segment 12%. Consolidated non-GAAP operating income was JPY 38.6 billion, up 212.8% year-on-year.
In Internet Services, there was a rush of demand before the rule changes for hometown tax donations were implemented in October, but even excluding the profit increase attributable to this surge, we achieved steady growth. For this fiscal year, as with last year, we aim to achieve full-year profitability for both non-GAAP operating income and IFRS Operating Income. Consolidated EBITDA was JPY 118.7 billion, up 28.8% year-on-year, a record high for a third quarter. For the full year, we expect to generate over JPY 400 billion of EBITDA. Regarding the number of subscribers of Rakuten Mobile, we surpassed 9.5 million the other day. As I will explain later, we continue to build strong momentum in B2C acquisitions, and we will continue to accelerate this while converting our growing B2B pipeline, aiming to reach a total of 10 million subscribers by the end of 2025.
Next, I will explain the business performance by segment. First, a review of the Internet Services Segment. In the third quarter, the Internet Services Segment achieved solid growth, delivering revenue of JPY 349.6 billion, up 11.1% year-on-year, and non-GAAP Operating Income of JPY 24.2 billion, up 14.5% year-on-year. In the Domestic EC Business, in addition to strong performance in Core Businesses, loss improvement in the Logistics business contributed to higher profits. In the International Business Unit, revenue grew primarily at Rakuten Kobo and Rakuten Viber, while an improvement in losses at the overseas Advertising Business also contributed, leading to an expansion in segment profits. Here are the main KPIs for the Internet Services Segment. Domestic EC GMS increased 14.5% year-on-year to JPY 1.7 trillion. The travel business grew 7.6% year-on-year, led by inbound and other global GDV. The IRR of our investment business was + 17.8%.
Revenue in the International Business Unit increased 5.4% year-on-year to $487 million, and revenue in the Advertising Business rose 13.5% year-on-year to JPY 60.4 billion, each achieving solid growth. Regarding the Domestic EC business, GMS grew 14.5%, as noted on the previous page. Due to the rush demand ahead of a change to hometown tax point allocation rule from October, we expect a reactionary year-on-year decline in the fourth quarter. Revenue increased 10.0% year-on-year to JPY 265.5 billion, and non-GAAP Operating Income rose 33.6% to JPY 33.9 billion. Operating income also benefited from the pricing revisions implemented in the Logistics business in June. Going forward, Rakuten Mobile and AI will continue to be the keys to our growth strategy. First, let me talk about the synergy between Rakuten Ichiba and Rakuten Mobile.
For Rakuten Mobile subscribers, we have been offering benefits that make Rakuten Ichiba more attractive, such as 5x SPU campaign points and early access sales for Super Sale campaigns. We are also rolling out acquisition initiatives targeting those who do not currently use either Rakuten Mobile or Rakuten Ichiba, and the results of these efforts are beginning to show in our numbers. Currently, Rakuten Mobile subscribers account for 16.2% of Rakuten Ichiba's monthly active users. Moreover, the GMS per Rakuten Mobile subscriber is 48.5% higher than that of non-subscribers. We will continue to raise mobile penetration on Rakuten Ichiba to further drive usage. The graph on the right shows the proportion of Rakuten Mobile subscribers among new Rakuten Ichiba users. This also continues to expand, demonstrating Rakuten Mobile's contribution to acquiring new users for Rakuten Ichiba. Next, I would like to talk about the use of AI in Rakuten Ichiba.
In September, we made an agent-type AI tool available to users within the Rakuten Ichiba app. While this is a soft launch and not yet available to all, we plan to roll it out to all users as we continue to make improvements to provide a better shopping experience. We also provide AI tools to merchants on Rakuten Ichiba. Since launching in March last year, we have added and improved various functions, and the number of merchants using the tools on a daily basis has been increasing. Currently, 23,000 merchants use them at least once a month. We will continue to expand usage based on feedback, contributing to improved operational efficiency at our merchants. As I mentioned earlier, the Travel Business is also achieving continuous growth, led by inbound and other Global Travel GTV. Rakuten Travel is also promoting the use of AI.
In September, we introduced an AI hotel search function on the smartphone browser version of Rakuten Travel. Up to now, users narrowed down conditions from preset options to search for hotels, but with this feature, users can tell the AI their preferences as if speaking to a travel agent at a counter, enabling us to propose accommodations that better match customer needs. Turning to the International Business Unit, revenue grew 5.4% year-on-year to $487 million, and non-GAAP operating income increased 78.8% year-on-year to $4.2 million, achieving a significant increase in profit. In the Open Commerce Business centered on Rakuten Rewards, revenue was flat due to a cautious stance among U.S. retailers. However, by optimizing the cost structure in our overseas Advertising Business, we improved losses, allowing overall profit to grow.
In other businesses, we achieved revenue and profit growth backed by Rakuten Kobo and solid communications and Advertising Revenue at Rakuten Viber. Let me also touch on the drivers of Rakuten Kobo's strong performance. Rakuten Kobo is an e-book company that we acquired in 2012. It not only provides content but also develops and sells its own devices. As you can see, the e-book market is continuously expanding. Within this expanding market, Kobo's total registered users have been steadily increasing. In particular, the color devices launched in April last year have been a long-running hit, driving growth in content sales and the number of subscribers. Going forward, Kobo will continue to differentiate through the development of attractive devices, aiming for further business expansion. Next, I will explain the FinTech Segment.
Segment revenue increased 20.3% year-on-year to JPY 250.5 billion as the customer base continued to expand across services, and non-GAAP Operating Income rose 37.9% to JPY 55.2 billion. Turning to key KPIs for each business, Rakuten Card Shopping GTV increased 11.7% year-on-year to JPY 6.7 trillion. At Rakuten Bank, number of accounts rose 6.9% year-on-year to 17.32 million, and deposit balances grew 10.1% to JPY 12.2 trillion. Rakuten Securities total accounts rose 10.4% year-on-year to 12.86 million, and NISA accounts increased 15.5% to 6.72 million, maintaining our industry-leading position. Let me dive into each business performance. Rakuten Card increased GTV driven by an expansion of its customer base and higher spend per customer, and it also benefited from last-minute demand ahead of the hometown tax rule revision. Combined with the revision to the revolving payment fee rate from August, Rakuten Card achieved revenue and profit growth.
Although interest expenses are increasing, we expect positive growth in Operating Income for the full fiscal year. Rakuten Payment increased revenue by 14.4% year-on-year, driven by GTV expansion, in line with the continued increase in the number of users of the Rakuten Pay App. Operating Income also increased 78.8% year-on-year, outpacing revenue growth, as a low-cost base was maintained. As with last year, we expect to achieve Operating Income for the full fiscal year. Rakuten Bank has already released its financial results. Deposit balances continue to expand, driven by a steady increase in new accounts and steady progress in customers using their accounts as their main account. For the April to September period, Ordinary Income increased by 41.4% to JPY 118.3 billion, while Ordinary Profit increased 55.3% to JPY 48.2 billion. ROE stood at a healthy 21.2%.
A significant factor in these strong results was the substantial growth in interest income, propelled by both an expansion in its middle-risk asset portfolio and Bank of Japan's policy interest rate hike. Rakuten Securities achieved double-digit revenue and profit growth, supported by customer base expansion and an improving market environment. Both revenue and profit reached record quarterly highs. We will continue to acquire new accounts while expanding assets under management per customer and improving utilization rates. In the Insurance Business, life insurance achieved strong sales of medical insurance, and general insurance continued strong sales led by online automobile insurance, contributing to revenue expansion.
Although general insurance experienced a temporary loss due to a conservative adjustment to the projected income and expenses of existing contracts and increased insurance payments resulting from the Kyushu heavy rains, we aim to accelerate recovery and profit through selection and concentration of product offerings by sequentially discontinuing low-profit products and optimizing the portfolio. Finally, I will explain the Mobile Segment. Revenue increased 12% year-on-year to JPY 118.7 billion, with both Rakuten Mobile and Rakuten Symphony continuing to grow steadily. Operating loss improved by JPY 10.1 billion year-on-year, and EBITDA improved by JPY 16.4 billion year-on-year to a + JPY 11.2 billion. I will now explain the business performance of Rakuten Mobile on a standalone basis. Revenue increased 31.2% year-on-year to JPY 95.2 billion, driven by higher service revenue from growth in subscribers and net APU.
Operating loss continued to improve, narrowing by JPY 13.4 billion year-on-year to a loss of JPY 37.2 billion. EBITDA improved by JPY 17.5 billion year-on-year to a + JPY 7.8 billion. PMCF pre-marketing cash flow, which excludes customer acquisition-related costs that are upfront investments for future subscriber growth, was JPY 24.3 billion, also expanding steadily. We are steadily progressing toward our initial target of achieving full-year + EBITDA. Next, let's look at the main KPIs. At the end of September, Total subscribers reached 9.33 million. The adjusted MNO churn rate, excluding cancellations within the same month of contract, was 1.33%, and APU was JPY 2,873. MNO service revenue generated from the MNO network increased 24.7% year-on-year to JPY 53.9 billion. The net increase in MNO subscribers during Q3 was 405,000.
Although July to September is typically a soft season, acquisition initiatives in collaboration with Rakuten Card continued to perform well, boosting activations. While churn increased slightly, the underlying trend continues to decline if we exclude the increase in same-month cancellations. For same-month cancellations, we have taken measures such as introducing a cancellation fee in April for contracts being canceled within one year. Starting this month, we introduced a contract administration fee for contracts with five or more lines. In any event, we will accelerate the pace of B2C acquisitions heading into the fourth quarter while swiftly promoting early execution of our B2B contract pipeline, working toward achieving 10 million subscribers by the end of 2025. Here is the trend in MNP net adds. While some carriers have been revising their plans, our MNP net adds continues to trend upwards, with Q3 MNP net adds rising 71.4% quarter-on-quarter to 95,000 MNP subscribers.
As MNP subscribers mainly use it as their main line, we expect them to contribute to further declines in churn going forward. As I mentioned earlier, this quarter's MNO churn rate, on an adjusted basis excluding cancellations within the same month of contract, was 1.33%. As I explained on the previous page, in a macroeconomic environment of persistent inflation, we believe the relative attractiveness of our plan has improved. Let me also touch on our Corporate Business. We now have over 23,000 corporate customers. Recently, by offering industry-specific DX solutions packaged together with our network, we have received strong feedback, translating into new customer acquisitions. Of course, we will not limit ourselves to packaged offerings. By accelerating the execution of our contract pipeline, our Corporate Business will also work vigorously toward achieving 10 million subscribers within this year. We continue to push initiatives to improve network quality.
As of September, installation of 4,611 Base Stations has been completed. We will continue deploying new Base Stations to eliminate coverage holes and add capacity, implementing measures with an eye on next fiscal year's spring sales season. APU increased JPY 72 year-on-year to JPY 2,873. The third quarter typically sees seasonality with higher data usage starting with the summer break, and this year was no exception. B2C data APU was the main driver of APU growth. Ecosystem APU at the top, in pink, was flat due to dilution from an increase in new contracts by light users. However, if we calculate ecosystem APU solely for users who have been contracted for more than a year, it was JPY 865, indicating steady growth in loyalty over time. Lastly, net APU has temporarily declined QoQ due to higher SBU costs associated with front-loaded demand for the hometown tax rule change.
This chart shows the trend in average data usage for B2C users. As I mentioned earlier, the third quarter has seasonality. As you can see, average usage rose 3 GB- 33.5 GB. We also aim to raise APU by expanding new services. From October, we launched the Rakuten SAIKYO U-NEXT package. While it is offered at a promotional price through January 2026, we expect it to contribute to higher data APU. We have also launched new security-related optional services, which have been very well received. Meanwhile, our original Rakuten SAIKYO Plan will continue to be offered without any price change. As announced recently, Rakuten Mobile is advancing the introduction of a function called RIC that manages and controls RAN with AI. By automating everything from traffic pattern analysis and demand forecasting to base station utilization adjustment, AI optimizes the network, enabling low-cost operations, including reduced power consumption.
We intend to pass these benefits back to customers through our monthly rate plans. Lastly, for Rakuten Symphony, we successfully secured six new customers across North America, Africa, and Asia. Also, regarding our sales partners, we have announced a strategic alliance with Polystack Technologies to provide locally developed, advanced cloud solutions for the public and private sectors of India. We will continue to expand our revenue base in various services. That concludes my presentation. Thank you very much.
This is Hirose, and I will explain our Financial Strategy. Revenue increased 10.9% year-on-year to JPY 628.6 billion, and non-GAAP operating income rose by JPY 26.3 billion year-on-year to JPY 38.6 billion, achieving positive growths in revenue and profit for the 12th consecutive quarter. Below non-GAAP operating income, we recorded non-recurring items, including JPY 27.9 billion of impairment losses in the Online Supermarket Business.
IFRS operating income turned more positive, increasing by JPY 7.4 billion year-on-year to JPY 8 billion. In Financial Income and Expenses, derivative valuation Gains and Losses arising from currency swaps on foreign currency-denominated perpetual subordinated notes, which were a significant negative last fiscal year, swung to a large positive this fiscal year, contributing to a JPY 55.1 billion improvement. Perpetual subordinated notes are accounted for in equity, and hedge accounting cannot be applied. Therefore, Gains and Losses related to currency swaps are recognized in the income statement due to exchange rate fluctuations, et cetera, but there is no substantive impact on our financial position. As a result, we recorded quarterly profit before tax of JPY 8.7 billion. Quarterly profit was - JPY 11.5 billion. However, this represents a significant year-on-year improvement, and we believe we have continued to demonstrate a strong recovery in performance.
In September 2024, we changed the Online Grocery Service name from "Rakuten Seiyu Nets uper" to "Rakuten Mart." In the third quarter, we decided to exit the Ibaraki warehouse by year-end and suspend service in the Kansai area due to low awareness of the Online Grocery Business under the Rakuten brand in that region and slower than expected customer acquisition, as well as longer than expected time to build the product procurement process. In light of these business conditions, an impairment test on fixed assets led us to record a non-recurring loss of JPY 27.9 billion, including impairment of fixed assets. Going forward, we will improve profitability by strengthening and streamlining our procurement structure, enhancing collaboration with the Rakuten Ecosystem and expanding our customer base, and rebuilding and optimizing our logistics network. Next, I will explain our Financial Strategy.
Our Financial Policy is to enhance corporate value through building a stable financial base and appropriate capital allocation, and we are advancing various initiatives on both the business and financial fronts. As a specific financial target, we aim for a Consolidated equity ratio of 10% in the long term, but given the solid asset growth in our FinTech businesses recently, we have set a medium-term target of achieving a level of 5%. In addition, we position ourselves as our leverage discipline, keeping the ratio of net interest-bearing debt of non-FinTech businesses to non-GAAP EBITDA of non-FinTech businesses within 5x . We will promote this in tandem with proactive management of maturity schedule while driving company-wide efficiency, reducing working capital, and reviewing our Business Portfolio. Allow me to explain the background on setting the medium-term target for the Consolidated equity ratio.
Our Consolidated total assets expanded significantly from JPY 7 trillion at the end of 2018 to JPY 26 trillion at the end of 2024. The main driver of the JPY 19 trillion increase in total assets was the expansion of total assets in our FinTech Businesses against a backdrop of solid growth in their customer base. In our FinTech Businesses, while we maintain ample capital as a risk buffer, the accounting-based equity ratio is generally low. For example, as of the end of 2024, Rakuten Bank's equity ratio was around 2% on an accounting basis, whereas its capital adequacy ratio under the Banking Act stands at a sufficient 11%.
Considering this change in the composition of total assets due to asset expansion accompanying the high growth of FinTech businesses, we judged it reasonable to set a medium-term target of 5% while maintaining the long-term equity ratio target of 10%, taking into account the balance between capital efficiency and growth in both FinTech and non-FinTech Segments. We believe the market has recognized our consistent execution of financial strategies aimed at strengthening our financial structure. In October, we issued our first JPY-denominated perpetual subordinated bond in Japan and received strong demand totaling over JPY 500 billion from domestic and overseas investors against the JPY 82 billion offering size. The coupon was 4.691%, approximately 50 basis points lower than the post-currency swap rate on the USD-denominated perpetual subordinated bond we issued in December last year.
As this perpetual subordinated bond is treated as equity for accounting purposes, they also contribute to strengthening our balance sheet. Our credit outlooks from domestic rating agencies were also revised upward to stable. Prices of corporate bonds issued in past years and our five-year CDS spreads also reflect improvements in our credit profile. With steady improvements in business earning power, we recognize that the market's assessment is improving thanks to our consistent execution of Financial Strategy. We will continue to work diligently on financial improvement and deepen dialogue with the market to further enhance our evaluation. Finally, with respect to our financial target of keeping the ratio of net interest-bearing debt of non-FinTech businesses to non-GAAP EBITDA of non-FinTech businesses within 5x , this declined to 8.3x due to an expansion in EBITDA. We are progressing as planned toward the year-end target of around 8.5x .
We will continue to reduce interest-bearing debt and enhance cash flow generation across each business. Next, Ting, our Chief AI and Data Officer, will present our AI initiatives. Thank you.
Hello everyone, I'm Ting Cai, Chief AI and Data Officer for Rakuten Group. Today, I will let my avatar share our latest updates with you as part of our initiative to leverage AI for better efficiency. I'm excited to share the progress we're making on AI-nization, our effort to infuse AI into everything we do for customers, partners, and Rakuten team members around the world. Our vision is to augment human creativity with the power of AI. We continue to build a sustainable competitive advantage through our unique data, ubiquitous channels, and growth flywheel. Today, we'll be highlighting recent AI-powered product launches. Rakuten has a golden opportunity to become the world's leading AI empowerment company.
By infusing AI into existing apps and reinventing experiences, we're growing the Rakuten Ecosystem with new uses and increased engagement. The rise of mobile technology gave users the ability to access information in real time on the go. It unleashed a new wave of applications and market leaders. AI is now enabling users to access intelligence with much less effort. With its diverse portfolio of services, Rakuten is uniquely positioned to take advantage of this opportunity and empower more people with AI. Our deep learning investments—search, ads, recommendations, and more—have generated material impact across the Rakuten Ecosystem. Today, we are seizing the opportunity of AI agents that can better understand user intent, capture context, plan execution, iterate, and improve on their own. Tomorrow, we're looking to deliver better economics by leveraging a variety of tools, including further development of large and small language models.
The goal, above all else, is to meet user needs with the most effective, cost-efficient solution. For example, while language models are powerful, they are way more expensive than traditional machine learning or deep learning tools for search. We know that not every user query needs a large language model. By building the right suite of tools and leveraging our ability to better understand user intent and orchestrate the execution plan, we can intelligently match our customers' needs with the tool that will give them the best outcome and the best return on investment for Rakuten. In July, we proudly announced the general availability of Rakuten AI, our Agentic AI platform. Since then, we have been sustaining momentum by shipping more AI agents for Rakuten Mobile, Rakuten Ichiba, and Rakuten Travel.
Rakuten AI is now the everyday assistant for Rakuten Mobile users, accelerating decision-making in Ichiba and offering personalized experiences in Travel. Our momentum continues as we expand AI-powered services across the Rakuten Ecosystem. For example, Rakuten AI in Rakuten Ichiba enables users to make faster shopping decisions by helping them advance quickly from vague ideas to concrete actions. Leveraging our vast amount of shopping data, Rakuten AI can better understand user intent, provide relevant research, identify key factors to consider, help users to compare, and encourage them to make faster decisions. This is a win-win. Customers get useful, personalized guidance that helps them make a decision. Merchants sell more, and Rakuten drives more revenue. Rakuten Securities is leveraging AI analysis to create value for customers and contribute to Rakuten Group growth.
It offers AI-powered services in high-impact investment-related areas such as overall rating, target stock price, industry financial assessment, and performance analysis. By leveraging AI to do research and resolve bottlenecks, investors are more confident to make investment decisions and complete more transactions. Following our announcement about the Rakuten Promotion Platform (RPP) in the last earning announcement, we are pleased to announce that RPP has been rolled out to all Ichiba stores. RPP leverages AI to optimize the timing, channel, and pricing of ads to deliver better ad content to customers, higher return for advertisers, and more profitability for the Rakuten Group.
As a testament to this pervasive integration and expanding impact, and as a direct result of both diverse AI-powered service offerings and aggressive internal AI adoption, token usage on our AI platform has increased by 17 compared to one year ago, driven by concrete applications in coding, business productivity, and the release of multiple agents to production services. Finally, I'm excited to share a new development just announced on Tuesday. Rakuten and HP Japan are joining forces to bring the power of Rakuten AI to HP PCs. This partnership enables Agentic AI with on-device LLM capabilities for both offline and online use. By integrating Rakuten AI and HP PCs, we empower users with better economics, performance, and reliability on the go, in the office, and at home. This partnership is a key first milestone towards making powerful Agentic AI accessible to everyone.
Looking forward, we envision a future where agents are everywhere throughout the Rakuten Ecosystem, not only helping users make their days more productive and make it easier to access Rakuten Group services, but also serving as proactive assistants that improve every aspect of their life. Thank you.