november 8, 2018 rakuten, inc. - global.rakuten.com · ・1x point* for investments in rakuten...

November 8, 2018

Rakuten, Inc.

2

P.3 Consolidated Results

P.19 FinTech Segment

P.39 Internet Services Segment

P.46 Communications

P.54 Ad Business

P.59 Other Information

3

4

Consolidated revenue growth: +17.7% YoY

- Year-to-date revenue and OI achieved record highs

Global GTV: +19.0% YoY

Domestic E-Commerce GMS growth accelerated: +12.1% YoY

- Continuing focus on investments in logistics and marketing activities

Non-GAAP OI: -9.9% YoY

- Gains from investment business JPY 33.9bn, General Insurance JPY 5.1bn

loss due to unusual claims

FinTech: Revenue growth strong at +28.3% YoY, Non-GAAP OI -9.6% YoY

(FinTech Non-GAAP OI excluding General Insurance: +18.8% YoY)

Cooperating with KDDI to promote competition in payments, logistics and

telecommunications

5

(JPY bn)

Q3/17 Q3/18 YoYYoY　excl.

General Insurance

Revenue 236.4 278.2 +17.7% +12.5%

Non-GAAP Operating Income 57.8 52.1 -9.9% -1.2%

IFRS Operating Income 51.5 43.9 -14.9% -5.0%

Q3/18 revenue at a record high. Cumulative Q1/18 to Q3/18 revenue and operating income both at record

highs

FY2017

Q1 - Q3

FY2018

Q1 - Q3YoY

Revenue 676.5 790.3 +16.8%

Non-GAAP Operating Income 133.6 142.3 +6.5%

IFRS Operating Income 120.2 133.5 +11.1%

Cumulative Q1 to Q3 revenue and operating income at record highs

6

(JPY bn)

Q3/17 Q3/18 YoYYoY　excl.

General Insurance

Domestic E-Commerce

Revenue 100.6 105.9 +5.2% -Operating Income 19.3 16.2 -15.8% -

Communications & SportsRevenue 25.0 30.7 +22.6% -Operating Income -0.4 -3.4 -2.9 -

Other Internet ServicesRevenue 44.7 57.1 +27.6% -Operating Income 22.8 25.7 +12.7% -

Internet Services SegmentRevenue 170.4 193.7 +13.7% -Operaing Income 41.6 38.5 -7.5% -

FinTech SegmentRevenue 83.7 107.4 +28.3% +13.7%Operating Income 18.0 16.3 -9.6% +18.8%

AdjustmentsRevenue -17.7 -22.9 -5.2 -Operating Income -1.8 -2.7 -0.9 -

Consolidated

Revenue 236.4 278.2 +17.7% +12.5%Non-GAAP Operating Income 57.8 52.1 -9.9% -1.1%IFRS Operating Income 51.5 43.9 -14.9% -5.0%

7

One-off costs・Rakuten General Insurance

natural disaster claims

25.4

33.9

57.852.1

-0.9+3.4

-0.4 -2.1

-5.1

-9.032.4

Q3/17

Operating Income

(excl. gains from

investment business)

32.4

Q3/17

Gains from

Investment

business

Q3/18 Gains from

Investment business,

etc*2

FinTech

(excl. Rakuten

General Insurance)

Domestic

E-commerce

(excl. logistics related

investments, costs)

Communication

and Sports

(excl. MNO, MVNO)

Other Internet

Services

Upfront investments for future

growth・MVNO marketing costs

・MNO initial costs

・Logistics-related investments, costs

・NBA broadcasting rights*1

・Partnership costs

（JPY bn）

Q3/17

Operating Income

Q3/18

Operating Income

Excluding one-off factors and upfront

investments of existing business

*1: NBA broadcasting rights are included in Other Internet Services

*2: Including one-off costs due to reorganization of investment business

Q3/18

Operating Income

(excl. gains from

investment business, one-

off costs, and

upfront investments for

future growth)

8

Along with the company reorganization on July 1, 2018, established the system for policy decision to invest

in innovative start-ups, and for comprehensive fund management. Consequently, the Rakuten Group

recorded unrealized gains on stocks of affiliate companies held by Rakuten Capital, as a result of measuring

these investments at FVtPL*

Maintaining a structure that comprehensively promotes and manages Rakuten’s investment business, both

from personnel and organizational standpoints The measurement method for some affiliated company stocks that were formerly measured based on application of

the equity method, was changed to measurement at fair value through profit or loss according to the provisions

applied to an entity that is a venture capital organization, etc., in paragraph 18 of IAS 28.

FinTech Group CompanyCommerce Company

Communications &

Energy CompanyMedia & Sports Company

Investment & Incubation

Company

New Company Structure

* Fair Value Through Profit or Loss: Financial instruments measured at fair value through net profit or loss.

9

Rakuten, Inc.

Affiliated

companies

(20% - 50%)

Others (less than 20％)

Rakuten Capital

In principle accounted

for using FVtPL*1

Stocks of affiliate companies held by Rakuten Capital are basically measured at FVtPL*1

Accounted for by the

equity method

Rakuten, Inc.

Affiliated

companies

(20% - 50%)

Others (less than 20％)

Rakuten Capital

Accounted for using

FVtPL*1

Before company structure change (until July 1, 2018) After company structure change (from July 1, 2018)

*1: Fair Value Through Profit or Loss: Financial instruments measured at fair value through net profit or loss.

*2: Due to this change in accounting method, unrealized gains on stocks of the companies like Cabify, Carousell were recorded in Q3/18

Investments Investments

Cabify, Carousell*2, others Lyft, Careem, others

10

+19.0％ YoY

* Global Gross Transaction Value = Domestic E-Commerce GMS + Credit Card GTV + Edy GTV + Rakuten Point Card GTV + Overseas E-Commerce GMS +

Ebates GMS + Digital Contents GTV + Rakuten Marketing GTV

* Includes intercompany transactions for settlement and affiliate services

(JPY tn)

11

Utilizing each other’s assets to promote service competition and improve customer convenience

*

12

13

Q3/18

Membership Value

JPY

4 trillion

Membership Value Target

JPY 10 trillion

Steady growth of Membership Value in line with increase of registered members

14

Cross-use ratio* is steadily expanding

*Number of Rakuten Members have utilized two or more Rakuten services during the past 12 months of the listed month (as of end Sep 2018)

(Applicable services limited to those which can earn Rakuten Super Points.

15

①

Total

LTV

6.2x

Inflow

from

Rakuten

Ichiba

Rakuten

Travel

Rakuten

Books

Inflow from Rakuten Ichiba to Rakuten Travel and Rakuten Books due to SPU program

〈Expansion of LTV per user〉

（Ichiba）

16

②

Total

LTV

3.8x

Inflow

from

Rakuten

Point

Card

Rakuten

Ichiba

Sign up

for

Rakuten

Card

Inflow from Rakuten Point Card, which is one of the most frequent inflow services, to Rakuten Ichiba, and

then Rakuten Card due to SPU program

（Ichiba）

〈Expansion of LTV per user〉

LTV

10.6x

17

③

Total

LTV

12.7x

Inflow

from

Rakuten

Ichiba

Rakuten

Card

Rakuten

Bank

Inflow from Rakuten Ichiba to Rakuten Card and Rakuten Bank due to SPU program

（Ichiba）

〈Expansion of LTV per user〉

18

(Number of Unique Users)

YoY

Cross-use among FinTech services is steadily expanding

* As of Sep. 2018

19

20

(JPY bn)

Revenue YoYOperating

IncomeYoY

Card 47.5 +16.4% 8.7 +12.3%

Bank 20.9 +9.7% 6.6 +22.8%

Securities 14.6 +18.0% 5.2 +16.5%

Life Insurance 7.5 -6.7% 1.0 +98.9%

Others 4.6 +35.3% -0.1 -0.02

FinTech Total excl. General Insurance 95.2 +13.7% 21.3 +18.8%

General Insurance 12.3 - -5.1 -

FinTech Total 107.4 +28.3% 16.3 -9.6%

21

・・・

・1x point* if Rakuten Card payment is linked to Rakuten Bank

・1x point* for investments in Rakuten Securities using points

Accelerate

Cross-use

Expand

Asset Business

Attract customers via the Rakuten Ecosystem and accelerate cross-use with the Rakuten point program

acting as a catalyst

Furthermore, ID linkage creates a seamless UX, contributing to asset growth

ID Linkage

* When members shop on Rakuten Ichiba

Ichiba

Bank

Securities

22

2.6x

2.6x

New accounts opened via Rakuten Group

(Daily Average)

Number of new accounts opened through other Rakuten services grew dramatically after joining SPU Program

New accounts opened via Rakuten Group

(Daily Average)

Bank Securities

23

Lead the cashless society and overwhelm competitors with collective capabilities

(Source: Rakuten estimates based on Ministry of Economy, Trade and Industry “Cashless Vision”)

(Cashless Payment Ratio 20%) (Cashless Payment Ratio 40%)

24

① ② ③

× ×

Over 100 million*1

Registered members

*1 As of Sep 2018. Members who logged in one or more times after registration (domestic only, excluding membership withdrawals).

*2 As of Sep 2018.

*3 Locations with merchant contracts for Rakuten Card, Rakuten Edy, Rakuten Point Card, and/or Rakuten Pay

Stores using multiple service contracts are counted as one

Rakuten Pay, Rakuten Point Card, Rakuten Edy as of Jun/e 2018, Rakuten Card as of July 2018

Since 1997 Since 2002 Since 2005

Over 1.2 trillion*2

Total points issued

Over 1.2 million*3

Locations

25

26

（JPY mm）

Operating Income +12.3% YoY from growth in shopping transactions and revolving balances

Revenue

+16.4% YoY

Operating Income

+12.3% YoY

35,22337,718 37,099

39,824 40,78243,093 43,005

45,32347,480

7,724 7,177 7,832 7,389 7,725 8,149 8,332 8,580 8,679

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

27

*Calculated on a managerial accounting basis, using different definitions from data in the Appendix.

Detailed credit card data is shown in the Appendix. Revolving balance is calculated on a principal basis.

+22.8% YoY(JPY bn) +20.6% YoY(JPY bn)

Card Shopping Transaction Value Shopping Revolving Balance

28

Shopping Revolving and Cash Advances Balance

Cash Advances

+20.1% YoY

Shopping Revolving

+20.6% YoY

(JPY bn)

*Calculated on a managerial accounting basis, using different definitions from data in the Appendix.

Detailed credit card data is shown in the Appendix. Revolving balance is calculated on a principal basis.

29

16mm

10mm

7 Months

11mm

12mm

13mm

14mm

15mm

9 Months

8 Months

9 Months

8 Months

8 Months

Number of cardholders surpassed 16mm in August 2018, taking only 7 months to grow 1mm accounts

Jul/14 Mar/15 Nov/15 Aug/16 Apr/17 Jan/18 Aug/18

30

Rakuten Card

American Express ® Card

Rakuten Pink Card

American Express ® Card

Rakuten Premium Card

American Express ® Card

Rakuten Card American Express® Card started on September 25 in addition to JCB, VISA, and

Mastercard

Rakuten Black Card

American Express ® Card

31

（JPY mm）

Operating Income +22.8％ YoY due to increase in loan receivables balance

Revenue

+9.7% YoY

Operating Income

+22.8% YoY

32

*1: Based on IFRS which includes derivatives in structured term deposits.*2: Other deposits include deposits in foreign currencies and others.

1,169.6 1,267.6 1,330.6 1,387.4 1,512.9

594.3

670.2 611.9 650.8

645.5 60.2

62.7 67.7 67.0

69.4 1,824.1

2,000.5 2,010.2 2,105.2

2,227.8

17/9月 17/12月 18/3月 18/6月 18/9月

Other Deposits*2

+15.1% YoY

Time Deposits

+8.6% YoY

Ordinary Deposits

+29.4% YoY

Sep/17 Dec/17 Mar/18 Jun/18 Sep/18

（JPY bn）

33

Others

+44.7% YoY

Housing Loan

+40.0% YoY

Rakuten Bank

Super Loan

+0.3% YoY

（JPY bn）

Sep/17 Dec/17 Mar/18 Jun/18 Sep/18

34

Boost in both revenue and operating income resulting from strong growth in domestic stock

brokerage trading

Revenue

+18.0% YoY

Operating Income

+16.5% YoY

（JPY mm）

35

Promote cross-use between Rakuten services leveraging points and membership IDs

Use Rakuten Super Points to buy

investment trusts

Join SPU Program

Started from September 30, 2018

Started from September 1, 2018

Use Rakuten Card to buy investment trusts

Started from October 27, 2018

Investment experience using

Rakuten Super Points

Started from October 3, 2018

Save Points

Use Points

36

(JPY mm) -6.7% YoY

Revenue

+98.9% YoY

Operating Income

(JPY mm)

Termination of reinsurance policies caused a decline in revenue, however insurance premiums continue to show strong growth, resulting in OI +98.9％ YoY

37

1: Internet & mail-order*2: Annualized insurance premiums for new policies in Q3/18, excluding one-year cancer insurance for eligible Rakuten members which started from Q4/14.*3: Annualized insurance premiums for new policies through direct marketing channels in Q3/18, excluding one-year cancer insurance for eligible Rakuten

members which started from Q4/14.

+58.0%

YoY

New Business ANP: +58.0% YoY, driven by continuous and effective TV ads

New Business ANP in direct marketing channels*1: +64.1% YoY

Q3/18 Q3/18New Business

ANP Growth*2

Direct Marketing*1

New Business

ANP Growth*3

+64.1%

YoY

38

・Complementary Insurance

・Casualty insurance to members

・Golfer’s Insurance

・Travel Insurance

・Super Simple Insurance (e.g. Bicycles）

・Extended warranty for home appliances

・Group insurance for merchants

・Cross-sales within RakutenInsurance Holdings (e.g. Pet Insurance)

・Fire insurance for

homeowners

Promote and expand insurance products for Rakuten Group services

39

40

+12.1% YoY(JPY bn)

*Domestic E-Commerce GMS includes consumption tax. Consumption tax not included in GMS for businesses not required to pay consumption tax.

GMS comprises Ichiba, Travel GTV on checkout basis, Books, Golf, Ticket, Brand Avenue, Dream businesses, Rakoo, Beauty, Mart, Delivery,

Rakuten Direct, Car Life, Rakuten Pay, Coupon, Rakuma, Rakuten Delivery Premium, Rebates, Raxy, Rakuten Seiyu Netsuper, etc. *Definition of GMS for first party businesses was revised mainly upon the merger between Soukai Drug and Kenko.com. This has resulted in retroactive

adjustments to Domestic E-Commerce GMS

Successful marketing by Rakuten Ichiba accelerated GMS growth

41

（JPY mm）

* Domestic E-Commerce = Ichiba, Travel, Books, Golf, Ticket, Brand Avenue, Dream businesses, Rakoo, Beauty, Mart, Delivery, Rakuten Direct, Logistics

Car Life, Rakuten Pay, Coupon, Rakuma, Rakuten Delivery Premium, etc.

C2C commission starting in Jun 2018 contributed to QoQ growth of Operating Income

Revenue

+5.2% YoY

Operating Income

-15.8% YoY

42

In Fashion E-Commerce, Rakuten Brand Avenue, showed strong growth due to successful marketing

Continued proactive investments in marketing such as TV commercials

GMS YoY

+36.6％

+57.6％

+94.9％

43

Offers last one mile delivery

services

Offers a comprehensive logistics

service for Rakuten Ichiba

merchants

Expanding C2C platform through

flea market app

Logistics C2CNetsuper

Grand opening:

October 25, 2018

Continuing strategic investments for business growth, expanding the Rakuten Ecosystem

44

Rapid expansion of delivery areas for “Rakuten Express”,

an original delivery service operated by Rakuten. Population

coverage reached 15% as of Oct 2018 (2% as of Nov 2017)

Expansion of products eligible for unattended delivery services

like “Oki-hai”, which allows delivery staff to leave parcels at the

door when customers are not at home, reducing redeliveries

New distribution centers in

Nagareyama (Chiba Prefecture) and Hirakata (Osaka Prefecture)

Expansion of “Rakuten Super Logistics”, a comprehensive

logistics service for Rakuten Ichiba merchants

Expansion

of

“Last One Mile”

areas

Expansion

of

distribution

centers

45

Grand Opening: October 25, 2018

Jointly-operated online grocery delivery service that combines Rakuten’s roughly 100 million-

strong membership* base and proficiency in e-commerce, along with Seiyu’s extensive

experience in the sale of fresh food and other supermarket operational experience

* As of Sep 2018. Members who logged in one or more times after registration (domestic only, excluding membership withdrawals).

46

47

Utilizing each other’s assets to promote service competition and improve customer convenience

*

48

49

MNO 4G

Bandwidth

Allocation

Comprehensive

agreement with

KDDI

Service

Launch

Nov Oct

Vendor

Selection

2018 2019 2020

Apr

On track for service launch in October 2019

50* JPY 526.3bn capex for 10 years (2018 - 2028) + spectrum transfer cost

BackhaulRAN Core

network

BSS/

OSS

Hardware

Laboratories Plan as of

Feb 2018

Latest

forecast

JPY 600 billion*

Vendor Line-up 4G Capital Expenditure forecast

51

〈Number of Outdoor Base Stations〉

Accelerating base station deployment (Commitment to MIC: 27,397 sites by March 2026)

Accelerate deployment

Mar/20 Mar/21 Mar/22 Mar/23 Mar/24 Mar/25 Mar/26

52

Site acquisition activity

All Rakuten group companies to support base station development Accelerating the plan for early deployment of Rakuten’s own network

53

Opened 101 shops in Q3/18 (Jul 1 to Oct 18): 6 partner shops, 95 shop-in-shops

Total 358 shops (8 direct shops, 65 partner shops, 285 shop-in-shops ) as of Oct 18

Shop network expanded to all prefectures since Oct 18th

54

55

Strategy expanding to external advertisers (+22.7% YoY)

Rakuten Data Marketing (for external advertisers) has continued to receive strong orders

Average growth rate in ad revenue* is accelerating (+15.5% YoY)

[Advertiser]External（National Brands）

Internal（Ichiba Merchants, etc.）

External

＋22.7% YoY

2017

Advertising

Revenue

JPY 79bn*

+41.4% YoY

Q3/18 Order Amount

[Inventory]Internal

(Rakuten Site)

* Revenue includes internal transactions

(Joint Venture between Rakuten and Dentsu)

56

Awareness Interest Action RepeatBoost

Loyalty

Consumer behavior

Basic

Real

Digital

Pro

gra

mm

atic

RMP - Trading Desk

RMP – AdRoll :Performance Ad platform utilizing Rakuten data

RMP – Premium AD RMP – Affiliate

RMP – Tie up RMP – Direct Message

RMP – Scene Sampling

RMP – Direct Message (DM)

57

Awareness Interest Action RepeatBoost

Loyalty

Consumer behavior

Co

mp

osite

O2O

Ichiba

synergy

RMP – Brand Gateway

RMP – Showroom

RMP – Cross Media Reach

Deliver various products to meet the diverse

needs for marketing activities

Cross media

Lead

acquisitionRMP – Customer Expansion

RMP – Go! Spot

58

Provide a world-class performance advertising platform to clients in the Japanese market

Deliver “Rakuten AdRoll Product” combining Rakuten’s big data with AdRoll Group’s expertise

[Advertiser]External（National Brands）

[Inventory]

Internal（Rakuten Site）

External

Current

Advertising

Revenue

Internal（Ichiba Merchants, etc.）

59

60

+1,438

ROI

+78%IRR

+26%

Initial Investment(2012 to Date)

Fair Value(as of end of September 2018）

3,271

(USD mm)

1,833

61

Fair values of listed and unlisted shares are calculated in accordance with accounting standards

Listed

stocks

Unlisted

stocks

Calculated at the closing market price on the last day of the

accounting period

Calculated at the prices of recent arm’s-length transactions or equity

financing

Calculated using comparable companies, or by other appropriate evaluation

methods (in absence of above information)

62

(IFRS, JPY bn)

Q3/17 Q3/18 YoY

Non-GAAP Operating Income 57.8 52.1 -9.9%

Amortization of Intangible Assets (PPA) -2.1 -3.3 -1.3

Stock Based Compensation -1.8 -1.8 +0.1

One-off items -2.4 -3.1 -0.7

IFRS Operating Income 51.5 43.9 -14.9%

63

(JPY bn)

*1: Rakuten, Inc., Rakuten Bank, Ltd., Rakuten Card Co., Ltd., Rakuten Securities, Inc., Rakuten Life Insurance Co., Ltd., and Rakuten General Insurance Co., Ltd.

are based on IFRS non-consolidated balance sheets.

*2: Bonds and borrowings = Corporate bonds + CP + Borrowings.

64

Operating CF

(Excl. Tax)

Change in

assets &

liabilities

Increase in cash and

cash equivalents

+37.9

Increase in cash and

cash equivalents

+106.0

Tax

Profit (adjusted

Increase in cash and

cash equivalents

+2.8

Tax

700.9

847.6

Balance of cash

Dec 31, 2017

Balance of cash

Sep 30, 2018

(JPY bn)

Non-Financial Businesses Financial BusinessesM&A,

investments* Common

OperatingInvesting Financing Investing FinancingOperating

Change in

investment

securities

Other

investing CF

* “M&A and investments” includes “Increase and Decrease in restricted deposits”, “Purchase of investment securities” “Acquisition of investments in associates

and joint ventures” and “Proceeds from sales and redemption of investment securities” of Non-Financial activities in addition to “Acquisition of subsidiaries”

65

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 YoY

Rakuten Card 1,077,372 1,222,083 1,217,549 1,263,110 1,317,899 22.33%

Stage 1 (Normal) 1,011,882 1,151,449 1,148,457 1,196,212 1,248,131 23.35%

Stage 2 (1-2 months delinquent) 8,255 10,613 11,541 8,876 10,040 21.62%

Stage 3 (3 months-and-over-delinquent/Restructured Loans) 57,235 60,022 57,551 58,023 59,727 4.35%

380,470 379,549 388,818 387,696 387,662 1.89%

Stage 1 (Normal/Credit gurantees*2

) 347,481 346,454 352,702 350,442 349,683 0.63%

Stage 2 (30 days-and-over-delinquent/Credit gurantees*2

) 179 128 161 175 195 9.17%

Stage 3 (Foreclosed credit guarantees) 32,810 32,967 35,954 37,079 37,784 15.16%

Others 1,656 1,623 1,563 1,504 1,472 -11.10%

Total balance of loan receivables 1,459,498 1,603,255 1,607,929 1,652,310 1,707,032 16.96%

Allowance for doubtful accounts*3 35,667 34,955 86,560 86,412 88,519 148.18%

Write-off for bad debt*4 7,848 8,165 8,395 8,222 7,366 -6.14%

Rakuten Bank Super Loans

Q3/17 Q4/17 Q1/18 Q2/18 Q3/18 YoY

Expenses related to doubtful accounts 7,499 7,377 7,983 8,078 9,515 26.88%

Ratio of expenses related to doubtful accounts*1 2.08% 1.93% 1.99% 1.98% 2.27% －

(JPY mm)

*1: Ratio of expenses related to doubtful accounts= (Expenses related to doubtful accounts) / (average of total balance of loan receivables at beginning and end of the period) × 4

*2: Balance of Rakuten Bank Super Loans guaranteed by Rakuten Card*3: Including allowance for credit guarantees from Q1/18*4: Write-off for bad debt includes loss on transfer of loan receivables

66

69.3%Up 5.1 Points YoY

* Mobile GMS Ratio = Ichiba mobile GMS / Total Ichiba GMS (includes feature phones, smartphones, and tablets)

67

Rakuten Card share of Ichiba GMS is consistently growing

51.7%51.9%

54.3%

53.5%

54.5%

55.9%

54.2%54.8%

55.8%

54.9%

55.6%

56.7%

54.9%

55.2%

58.1%

Jul/17 Aug/17 Sep/17 Oct/17 Nov/17 Dec/17 Jan/18 Feb/18 Mar/18 Apr/18 May/18 Jun/18 Jul/18 Aug/18 Sep/18

68

* Includes Cartera acquired in Q1/17, ShopStyle acquired in Q2/17

(USD mm)+8.1%

YoY

1,352

2,564

1,887

2,191 2,177

3,682

2,3292,503

2,354

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

69

11.1

19.1

7.9

14.813.0

25.3

10.8

21.7

13.8

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

+6.0%

YoY

* Includes Cartera acquired in Q1/17, ShopStyle acquired in Q2/17, and Rebates

(USD mm)

70

Operating Income

USD -5.3mm YoY

(USD mm）

Revenue

-1.6% YoY60.7

79.7

59.0 59.8 60.4

81.0

59.7 60.9 59.4

4.8

21.3

1.2 3.6 2.4

20.9

1.3

-4.5 -2.9

Q3/16 Q4/16 Q1/17 Q2/17 Q3/17 Q4/17 Q1/18 Q2/18 Q3/18

71

920 950 980 1,007 1,030 1,052

Jun/17 Sep/17 Dec/17 Mar/18 Jun/18 Sep/18

（Million IDs）

* Unique IDs: Unique phone numbers excluding deactivations

72

Q3/17 Q3/18

Content

42%

Telco

58%

Content

54%

Telco

46%

Total revenue

+62.3% YoY

* Telco: Viber Out, In. Content: Service messages, ads, stickers and others

Monetization accelerating on strong growth in both Telco (Viber In/Out) and content revenues

73