Rakuten : Earnings Release for Q1 of FY2026 Financial Results

About this update from Rakuten Group, Inc.

The following information was originally prepared and published by the Company in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock 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 based on International Financial Reporting Standards ("IFRS"). Consolidated Financial Reports (IFRS) for the three months ended March 31, 2026 Rakuten Group, Inc. May 14, 2026 Company name Rakuten Group, Inc. Listed Tokyo Stock Exchange Code No 4755 URL https://global.rakuten.com/corp/ Representative (Title) Chairman and CEO (Name) Hiroshi Mikitani Contact person (Title) Director and Group Managing Executive Officer (Name) Eiichi Kaga Scheduled Start Date of Dividend Payment - (TEL) 050-5581-6910 Supplementary materials for financial results: Yes Financial results information meeting held: Yes (For institutional investors and analysts) Consolidated Results for the three months ended March 31, 2026 (January 1 - March 31, 2026) Consolidated Operating Results (Yen amounts are rounded to the nearest million) (%, YoY) Revenue Operating income Income before income tax Net income Millions of Yen % Millions of Yen % Millions of Yen % Millions of Yen % Three months ended March 31, 2026 643,583 14.4 30,394 - 17,375 - (1,758) - Three months ended March 31, 2025 562,704 9.6 (15,444) - (45,839) - (61,883) - Net income attributable to owners of the Company Comprehensive income Basic earnings per share attributable to owners of the Company Diluted earnings per share attributable to owners of the Company Millions of Yen % Millions of Yen % Yen Yen Three months ended March 31, 2026 (18,648) - 39,577 - (8.59) (8.60) Three months ended March 31, 2025 (73,471) - (106,788) - (34.08) (34.09) (Reference) Other important management indicators EBITDA * Three months ended March 31, 2026 Millions of Yen % 108,791 36.2 Three months ended March 31, 2025 79,889 51.4 * Calculated by adding depreciation and amortization expenses, etc. to Non-GAAP operating income. We believe that EBITDA is a useful indicator for evaluating the cash flow generation ability of the Rakuten Group's business activities. For more information on Non-GAAP operating income, please see page 4, "1. Qualitative Information Concerning Quarterly Financial Results (1) Qualitative Information Concerning Consolidated Operating Results". Consolidated Financial Position Total assets Total equity Total equity attributable to owners of the Company Consolidated equity ratio * Ratio of total equity attributable to owners of the Company to total assets Millions of Yen Millions of Yen Millions of Yen % % As of March 31, 2026 29,314,001 1,276,629 901,135 4.4 3.1 As of December 31, 2025 28,804,400 1,354,232 992,402 4.7 3.4 * Calculated by dividing total equity by total assets. As the card business, banking business and securities business account for a large proportion of the Rakuten Group's total assets, we believe that using total capital that incorporates non-controlling interests in these businesses is useful in understanding the Rakuten Group's financial position. Dividends Dividend per Share 1Q 2Q 3Q 4Q Year FY2025 FY2026 Yen - - Yen 0.00 Yen - Yen 0.00 Yen 0.00 FY2026 (Forecast) - - - - Note: 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. Estimate of Consolidated Operating Results for the fiscal year 2026 (January 1 to December 31, 2026) For the estimate of consolidated operating results for the fiscal year 2026, we aim for high single-digit growth in consolidated revenue compared to the fiscal year 2025, excluding the securities business whose results are heavily impacted by stock market conditions. (For details, please see page 9, "1. Qualitative Information Concerning Quarterly Financial Results (3) Qualitative Information Concerning Estimate of Consolidated Operating Results".) Note: There are no changes to the previously disclosed consolidated forecasts for the year ending December 31, 2026. Notes Significant Change in Scope of Consolidation for the Current Period : No New: － (Company name) － Excluded: － (Company name) － Changes in Accounting Policies and Changes in Accounting Estimates Changes in accounting policies required by IFRS: No Changes in accounting policies due to other reasons: No Changes in accounting estimates: Yes Note: For details, please see page 16, "2. Condensed Quarterly Consolidated Financial Statements and Notes, (6) Notes to the Condensed Quarterly Consolidated Financial Statements (Significant Accounting Estimates and Judgments)". Number of Shares Issued (Common Stock) Total number of shares issued at the end of the period (including treasury stocks) 2,173,696,300 shares (As of March 31, 2026) 2,169,972,100 shares (As of December 31, 2025) Number of treasury stocks at the end of the period 6,149 shares (As of March 31, 2026) 5,878 shares (As of December 31, 2025) Average number of shares for the period (cumulative from the beginning of the year) 2,171,733,956 shares (January 1 - March 31, 2026) 2,155,896,409 shares (January 1 - March 31, 2025) Review of the Japanese-language originals of the attached consolidated quarterly financial statements by certified public accountants or an audit firm: Yes (voluntary) Explanation about the Appropriate Use of Earnings Forecasts, and Other Special Matters Consolidated earnings forecasts for the year ending December 31, 2026 are based on information that is available at the time of writing and involve uncertainties. Therefore, due to various changing factors, the actual performance may differ from these projections. Qualitative Information Concerning Quarterly Financial Results Qualitative Information Concerning Consolidated Operating Results The Rakuten Group discloses consolidated operating results in terms of both its internal measures which management relies upon in making decisions (hereinafter the "Non-GAAP financial measures") and those under IFRS Accounting Standards. Non-GAAP operating income is operating income under IFRS Accounting Standards (hereinafter "IFRS operating income") after deducting unusual items and other adjustments as prescribed by the Rakuten Group. Management believes that the disclosure of Non-GAAP financial measures facilitates comparison between the Rakuten Group and peer companies in the same industry or comparison of its business results with those of prior fiscal years by stakeholders, and can provide useful information in understanding the underlying business results of the Rakuten Group and its future outlook. Unusual items refer to one-off items that the Rakuten Group believes should be excluded for the purposes of preparing a future outlook based on certain rules. Other adjustment items are those that tend to differ depending on the standards applied, and are therefore less comparable between companies, such as share based compensation expenses and amortization of acquisition-related intangible assets. Note: For disclosure of Non-GAAP financial measures, the Rakuten Group refers to the rules specified by the U.S. Securities and Exchange Commission but does not fully comply with such rules. Operating Results for the three months ended March 31, 2026 (Non-GAAP basis) For the three months ended March 31, 2026, the global economy showed signs of a gradual recovery, although some regions experienced a slowdown. Looking ahead, it is necessary to pay attention to Middle East affairs, the impact of fluctuations in financial markets and future U.S. policy trends, among other factors. In the Japanese economy, there have been signs of recovery in personal consumption, and looking ahead, improvements in employment and income conditions, and the effects of various policies are expected to support a moderate recovery. According to the "White Paper on Information and Communications in Japan" (Note), in Japan, which is experiencing population decline and increasingly diverse and complex regional and social challenges, it is necessary to thoroughly utilize digital technologies, including generative AI, to maintain growth potential and accelerate digital transformation (DX). The importance of digital infrastructure, which is indispensable for achieving this is increasing. In response to this situation, the Ministry of Internal Affairs and Communications formulated the "Digital Infrastructure Development Plan 2030" in June 2025, aiming to promote the expansion of high-quality communication services, as well as research, development, and social implementation of Beyond 5G, thereby advancing the establishment of a digital foundation to support an AI society. Under such an environment, the Rakuten Group is actively developing and deploying services utilizing advanced technologies such as AI, leveraging the overwhelming amount and quality of data accumulated through membership and various online and offline services, improving network quality in mobile services, and acquiring users. Furthermore, by further evolving and expanding the Rakuten Ecosystem, we aim to enhance our competitiveness and provide solution services that are uniquely possible due to the accumulation of unique data assets through various services such as Internet Services, FinTech, and Mobile, thereby evolving into an "AI Empowerment Company" and aiming to make people's lives more convenient and prosperous. In addition, amid uncertainties about the future of the economy, such as continued inflation, and exchange rate movements etc., the Rakuten Group, with its diverse business portfolio, will maximize the synergies it can achieve as a strength, accurately grasp consumer trends and needs, and seize further growth opportunities. As a group, while working to increase revenue and reduce costs through the utilization of AI, in the Internet Services segment, we focused on acquiring new customers, nurturing loyal users, promoting cross-use primarily among mobile users, and developing services through deepened collaboration with local governments and regional businesses, all aimed at further growth in transaction value and revenue. As a result, the Rakuten Group achieved increased revenue and profit year-on-year. In the FinTech segment, efforts to expand the customer base and transaction value in each service and promote cross-usage between services resulted in further growth in sales and increase in segment profit. In the Mobile segment, as a result of continuous improvement of network quality, promoting awareness of this improvement, and combined with various marketing activities, the number of subscribers increased, and segment revenue expanded. In terms of costs, while marketing expenses increased to strengthen sales promotion efforts, other costs remained at previous levels, resulting in a continued reduction in segment losses. As a result, the Rakuten Group recorded revenue of ¥643,583 million, a 14.4% year-on-year increase for the three months ended March 31, 2026, and a Non-GAAP operating income of ¥36,299 million, compared to a Non-GAAP operating loss of ¥305 million in the three months ended March 31, 2025. Note: Source: "2025 White Paper on Information and Communications in Japan" (Ministry of Internal Affairs and Communications). (Non-GAAP) (Millions of Yen) Three months ended March 31, 2025 Three months ended March 31, 2026 Amount Change YoY % Change YoY Revenue 562,704 643,583 80,879 14.4 % Non-GAAP Operating Income (Loss) (305) 36,299 36,604 - % Reconciliation of Non-GAAP Operating Income to IFRS Operating Income For the three months ended March 31, 2026, amortization of intangible assets of ¥412 million and share based compensation expenses of ¥4,474 million were excluded from Non-GAAP operating income. One-off items listed for the three months ended March 31, 2025 include a mid-term cancellation fee of ¥2,459 million, which was incurred in the domestic sports business due to the termination of a consulting agreement that had a significant impact on team operations, and a provision for liabilities related to a lawsuit concerning payment claims for debts of a previously sold subsidiary, etc. One-off items listed for the three months ended March 31, 2026 include an impairment loss on fixed assets of ¥1,019 million, resulting from a partial withdrawal from the marketplace business in Europe. Moreover, these expenses are mainly recorded in other expenses of the Condensed Quarterly Consolidated Statement of Income. (Millions of Yen) Three months ended March 31, 2025 Three months ended March 31, 2026 Amount Change YoY Non-GAAP Operating Income (Loss) (305) 36,299 36,604 Amortization of Intangible Assets (1,365) (412) 953 Share Based Compensation Expenses (4,382) (4,474) (92) One-off Items (9,392) (1,019) 8,373 IFRS Operating Income (Loss) (15,444) 30,394 45,838 Operating Results for the three months ended March 31, 2026 (IFRS Accounting Standards basis) For the three months ended March 31, 2026, the Rakuten Group recorded revenue of ¥643,583 million, up 14.4% year-on-year, and an IFRS operating income of ¥30,394 million, compared with an IFRS operating loss of ¥15,444 million in the three months ended March 31, 2025, and a net loss attributable to owners of the Company of ¥18,648 million, compared with a net loss of ¥73,471 million in the three months ended March 31, 2025. (IFRS Accounting Standards) (Millions of Yen) Three months ended March 31, 2025 Three months ended March 31, 2026 Amount Change YoY % Change YoY Revenue 562,704 643,583 80,879 14.4 % IFRS Operating Income (Loss) (15,444) 30,394 45,838 - % Net Loss Attributable to Owners of the Company (73,471) (18,648) 54,823 - % Segment Information Business results for each segment are as follows. In terms of the IFRS Accounting Standards management approach, segment profit or loss is presented on a Non-GAAP operating income basis. Effective from the three months ended March 31, 2026, some AI-related development costs, which were not previously allocated to individual segments, have been reflected in the segment profit or loss based on the scope of responsibility and actual usage to optimize the management and performance evaluation of each segment. Accordingly, the segment information for the three months ended March 31, 2025 has been restated to reflect this change. As a result of this change, segment profit or loss for the three months ended March 31, 2025 decreased by ¥396 million in "Internet Services", ¥145 million in "Fintech", and ¥69 million in "Mobile", while "Intercompany Transactions, etc." increased by the total amount of these decreases. This change has no impact on the consolidated revenue or operating income or loss. Internet Services In domestic e-commerce, which is a core service, we focused on acquiring new customers, nurturing loyal users, and promoting cross-use primarily among mobile users. In the internet shopping mall "Rakuten Ichiba", we implemented various initiatives to improve customer convenience and satisfaction. As a result, GMS and revenue grew, and coupled with improved marketing efficiency, this led to an increase in profit. In the internet travel reservation service "Rakuten Travel", transaction value recovered due to robust inbound demand and a recovery in domestic travel demand. Furthermore, in growth investment businesses, such as the logistics and net supermarket businesses, initiatives to improve profitability in each business proved successful, achieving a steady reduction in losses. In the international business unit, which operates overseas internet services, Open Commerce, including the U.S. online cashback service "Rakuten Rewards", experienced sluggish revenue growth due to the impact of partial service closures. However, it achieved profit growth, partly due to the absence of business restructuring expenses recorded in the same period of the previous fiscal year. For the video streaming service "Rakuten Viki," profit growth was achieved through measures such as price plan revisions and various cost-reduction efforts. These steady contributions from each business in the International segment drove the expansion of segment profit. As a result, revenue for the Internet Services segment rose to ¥317,645 million, a 4.0% year-on-year increase, while segment profit stood at ¥21,170 million, a 65.6% year-on-year increase. (Millions of Yen) Three months ended March 31, 2025 Three months ended March 31, 2026 Amount Change YoY % Change YoY Segment Revenue 305,478 317,645 12,167 4.0 % Segment Profit (Loss) Before Considering 16,481 25,102 8,621 52.3 % Mobile Ecosystem Contribution (3,698) (3,932) (234) - % After Considering 12,783 21,170 8,387 65.6 % FinTech In FinTech, revenue increased in credit card-related services, banking services, securities services, and payment services. In credit card-related services, both the customer base for "Rakuten Card" and shopping transaction value continued to grow. In banking services, the increase in managed assets due to an expanding customer base, as well as improved investment yields driven by the Bank of Japan's policy rate hikes, led to a significant expansion in interest income. In securities services, revenue and profit grew significantly, supported by the continuous expansion of our customer base and a robust stock market. In insurance services, profit increased due to improved profitability resulting from the strategic selection and concentration of our product portfolio. In payment services, the increase in users of "Rakuten Pay" drove growth in transaction value, and efficient marketing initiatives contributed to significant revenue and profit growth. As a result, the FinTech segment recorded ¥275,324 million in revenue, a 23.1% year-on-year increase, while segment profit stood at ¥58,532 million, a 33.8% year-on-year increase. (Millions of Yen) Three months ended March 31, 2025 Three months ended March 31, 2026 Amount Change YoY % Change YoY Segment Revenue 223,579 275,324 51,745 23.1 % Segment Profit (Loss) Before Considering 48,094 64,771 16,677 34.7 % Mobile Ecosystem Contribution (4,351) (6,239) (1,888) - % After Considering 43,743 58,532 14,789 33.8 % Mobile In Mobile, revenues centered around "Rakuten Mobile" increased and losses were reduced. "Rakuten Mobile" focused on improving network quality and raising awareness, while also implementing marketing initiatives leveraging various services within the Rakuten Ecosystem, such as "Rakuten Ichiba" and "Rakuten Card". As a result, the number of mobile subscriptions continued to grow, leading to revenue expansion. Regarding costs, while marketing expenses increased due to our focus on strengthening sales promotion, our efforts to control other costs contributed to the improvement in segment losses. As a result, the Mobile segment recorded ¥131,157 million in revenue, an 18.5% year-on-year increase, while segment losses stood at ¥38,026 million compared to a loss of ¥51,345 million in the three months ended March 31, 2025. Going forward, the company will continue to focus on capital investments to further improve network quality, as well as expanding its device lineup and corporate solution services, aiming to increase the number of subscribers and further enhance customer satisfaction. (Millions of Yen) Three months ended March 31, 2025 Three months ended March 31, 2026 Amount Change YoY % Change YoY Segment Revenue 110,705 131,157 20,452 18.5 % Segment Profit (Loss) Before Considering (59,394) (48,197) 11,197 - % Mobile Ecosystem Contribution 8,049 10,171 2,122 26.4 % After Considering (51,345) (38,026) 13,319 - % Qualitative Information Concerning Financial Position Assets, Liabilities, and Equity Assets Total assets as of March 31, 2026 amounted to ¥29,314,001 million, an increase of ¥509,601 million from ¥28,804,400 million at the end of the previous fiscal year. The primary factors were a decrease of ¥795,300 million in cash and cash equivalents, a decrease of ¥153,028 million in loans for credit card business, offset by an increase of ¥744,318 million in financial assets for securities business, an increase of ¥381,760 million in loans for banking business, and an increase of ¥244,081 million in investment securities for banking business. Liabilities Total liabilities as of March 31, 2026 amounted to ¥28,037,372 million, an increase of ¥587,204 million from ¥27,450,168 million at the end of the previous fiscal year. The primary factors were a decrease of ¥162,715 million in deposits for banking business, a decrease of ¥51,055 million in borrowings for banking business, and a decrease of ¥48,161 million in accounts payable - trade, offset by an increase of ¥713,486 million in financial liabilities for securities business. Equity Total equity as of March 31, 2026 was ¥1,276,629 million, a decrease of ¥77,603 million from ¥1,354,232 million at the end of the previous fiscal year. The primary factors were an increase of ¥42,506 million in other components of equity due mainly to an increase in the fair value of equity instruments measured at fair value through other comprehensive income, offset by a decrease of ¥82,311 million in other equity instruments and a decrease of ¥33,531 million in capital surplus both due to the transfer from other equity instruments to bonds and other factors. Cash Flows Cash and cash equivalents as of March 31, 2026 stood at ¥5,042,266 million, a decrease of ¥795,300 million from the end of the previous fiscal year. Cash flow conditions and their main factors for the three months ended March 31, 2026 are as follows. Cash Flows from Operating Activities Cash flows from operating activities for the three months ended March 31, 2026 resulted in a cash outflow of ¥487,063 million (compared with a cash outflow of ¥737,720 million for the same period of the previous fiscal year). Main factors included a cash inflow of ¥713,438 million due to an increase in financial liabilities for securities business, offset by a cash outflow of ¥744,281 million due to an increase in financial assets for securities business, and a cash outflow of ¥382,523 million due to an increase in loans for banking business. Cash Flows from Investing Activities Cash flows from investing activities for the three months ended March 31, 2026 resulted in a cash outflow of ¥223,615 million (compared with a cash outflow of ¥283,210 million for the same period of the previous fiscal year). Main factors included a net cash outflow of ¥166,188 million due to purchases and sales, etc. of investment securities for banking business (a cash outflow of ¥575,306 million due to purchases and a cash inflow of ¥409,118 million from sales and redemption), and a cash outflow of ¥44,226 million due to purchases of intangible assets. Cash Flows from Financing Activities Cash flows from financing activities for the three months ended March 31, 2026 resulted in a cash outflow of ¥84,737 million (compared with a cash outflow of ¥223,851 million for the same period of the previous fiscal year). Main factors included a cash inflow of ¥222,800 million due to proceeds from long-term borrowings for banking business, offset by a cash outflow of ¥216,600 million due to repayments of long-term borrowings for banking business, a cash outflow of ¥57,078 million due to a decrease in short-term borrowings for banking business, and a cash outflow of ¥40,044 million due to repayments of long-term borrowings for credit card business. Qualitative Information Concerning Estimate of Consolidated Operating Results Currently, for the forecast of consolidated operating results for the fiscal year ending December 31, 2026, we aim for high single-digit growth in consolidated revenue compared to the fiscal year ended December 31, 2025, excluding the securities business whose results are heavily impacted by stock market conditions. Additionally, we aim to increase Non-GAAP operating income and IFRS operating income. The outlook for each segment is as follows: (Internet Services) In domestic internet services, including e-commerce platforms such as "Rakuten Ichiba", we will continue to focus on acquiring new customers and promoting cross-usage. Furthermore, we aim to drive growth in GMS and revenue by creating new markets through the utilization of data, agentic AI tools like AI concierge and others, and by further increasing the purchase amount of existing users. In "Rakuten Travel", we will continue to capture the expanding inbound demand and strengthen marketing initiatives to achieve high growth in transaction value. In overseas internet services, we aim to achieve sustained profitability in this segment by expanding operations and revenue in services such as "Rakuten Rewards" and "Rakuten Viber", as well as by accelerating improvements in businesses currently operating at a loss. (FinTech) In credit card-related services, we aim for further growth in shopping transaction value and pursue business expansion and enhanced profit margins through strengthened group synergies and marketing initiatives. In banking services, we aim for further growth by diversifying personal loan products, promoting securitization businesses involving monetary claims and real estate held by corporations, and expanding interest income. Additionally, we aim to increase non-interest income by acquiring salary deposits and direct debit payment accounts, thereby promoting the use of accounts as everyday banking tools. In insurance services, we aim for further improvements in profitability by strengthening face-to-face channels for life insurance services and enhancing the product portfolio for general insurance services. In securities services, while forecasts are challenging due to the significant impact of stock market conditions, we aim for further expansion of our customer base through new account acquisitions and continued growth in diversified revenue sources such as margin trading. In payment services, we aim to expand operations and profits by growing its customer base and continuing efficient marketing initiatives. (Mobile) In "Rakuten Mobile", while continuing efforts to improve network quality and raise awareness, we will implement attractive marketing initiatives leveraging the Rakuten Ecosystem to strengthen our customer base. Additionally, we will work to acquire more subscribers by making proposals to corporate clients and local governments nationwide that have business relationships with the Rakuten Group. Furthermore, we will expand the installation of new 4G and 5G base stations and aim to build a network that can be used in emergencies, such as during disasters, even in areas previously outside communication range, through direct communication between smartphones and low-earth orbit satellites. Through these initiatives we aim to provide a higher-quality network environment, accelerate the pace of subscriber acquisition, and improve the profitability of the mobile business. Meanwhile, as global efforts to revolutionize the network equipment configuration for telecommunication carriers and to promote the openness of base stations advance, Rakuten Symphony, which provides communication platforms and other solutions using innovative mobile network technologies, will advance its global expansion by increasing revenue from existing customers and approaching new customers, thereby seizing business opportunities accurately. Condensed Quarterly Consolidated Financial Statements and Notes Condensed Quarterly Consolidated Statement of Financial Position As of December 31, 2025 (Millions of Yen) As of March 31, 2026 Assets Cash and cash equivalents 5,837,566 5,042,266 Accounts receivable - trade 443,557 412,075 Financial assets for securities business 6,035,176 6,779,494 Loans for credit card business 3,662,676 3,509,648 Investment securities for banking business 2,567,328 2,811,409 Loans for banking business 5,440,459 5,822,219 Investment securities for insurance business 202,745 192,822 Derivative assets 276,706 307,596 Investment securities 491,145 546,562 Other financial assets 1,115,534 1,138,908 Investments in associates and joint ventures 27,104 26,398 Property, plant and equipment 1,068,509 1,074,951 Intangible assets 1,079,201 1,111,378 Deferred tax assets 71,912 72,415 Other assets 484,782 465,860 Total assets 28,804,400 29,314,001 Liabilities Accounts payable - trade 553,582 505,421 Deposits for banking business 12,741,293 12,578,578 Financial liabilities for securities business 6,028,009 6,741,495 Derivative liabilities 77,087 79,794 Bonds and borrowings 1,598,052 1,754,905 Borrowings for securities business 269,228 269,250 Bonds and borrowings for credit card business 810,559 789,414 Borrowings for banking business 2,891,783 2,840,728 Other financial liabilities 1,551,575 1,542,385 Income taxes payable 43,687 42,403 Provisions 390,956 398,602 Insurance contract liabilities 136,350 133,337 Employee retirement benefit liabilities 48,958 49,031 Deferred tax liabilities 79,765 95,008 Other liabilities 229,284 217,021 Total liabilities 27,450,168 28,037,372 Equity Equity attributable to owners of the Company Common stock 459,508 461,066 Capital surplus 658,458 624,927 Other equity instruments 479,661 397,350 Retained earnings (1,036,141) (1,055,630) Treasury stock (5) (5) Other components of equity 430,921 473,427 Total equity attributable to owners of the Company 992,402 901,135 Non-controlling interests 361,830 375,494 Total equity 1,354,232 1,276,629 Total liabilities and equity 28,804,400 29,314,001 Condensed Quarterly Consolidated Statement of Income and Comprehensive Income Condensed Quarterly Consolidated Statement of Income (For the three months ended March 31, 2025 and 2026) (Millions of Yen) Three months ended Three months ended March 31, 2025 March 31, 2026 (January 1 to March 31, 2025) (January 1 to March 31, 2026) Continuing Operations Revenue 562,704 643,583 Operating expenses 566,418 607,930 Other income 2,640 1,455 Other expenses 14,370 6,714 Operating income (loss) (15,444) 30,394 Financial income 4,346 11,713 Financial expenses 35,148 23,796 Share of income (losses) of investments in associates and joint ventures 407 (936) Income (loss) before income tax (45,839) 17,375 Income tax expenses 16,044 19,133 Net loss (61,883) (1,758) Net Income (loss) attributable to: Owners of the Company (73,471) (18,648) Non-controlling interests 11,588 16,890 Net loss (61,883) (1,758) Loss per share attributable to owners of the Company (Yen) Basic (34.08) (8.59) Diluted (34.09) (8.60) Condensed Quarterly Consolidated Statement of Comprehensive Income (For the three months ended March 31, 2025 and 2026) Three months ended March 31, 2025 (Millions of Yen) Three months ended March 31, 2026 (January 1 to March 31, 2025) (January 1 to March 31, 2026) Net loss (61,883) (1,758) Other comprehensive income Items that will not be reclassified to net income Changes in equity instruments measured at fair value through other comprehensive income (452) 33,933 Other comprehensive income of investments in associates and joint ventures 5 (19) Total items that will not be reclassified to net income (786) 34,128 Items that may be reclassified to net income Foreign currency translation adjustments (40,126) 7,151 Remeasurement of defined benefit plans (339) 214 Changes in debt instruments measured at fair value through other comprehensive income (3,776) (2,879) Cash flow hedges 2,106 3,436 Changes on insurance contracts due to changes in interest rates not recognized in profit or loss Changes on reinsurance contracts due to changes in interest rates not recognized in profit or loss 98 (441) (547) (228) Other comprehensive income of investments in associates and joint ventures (1,874) 168 Total items that may be reclassified to net income (44,119) 7,207 Total other comprehensive income, net of tax (44,905) 41,335 Comprehensive income (106,788) 39,577 Comprehensive income attributable to: Owners of the Company (114,297) 23,788 Non-controlling interests 7,509 15,789 Comprehensive income (106,788) 39,577 Condensed Quarterly Consolidated Statement of Changes in Equity (For the three months ended March 31, 2025) Equity attributable to Owners of the Company Total Equity (Millions of Yen) Non- Common Capital Other Equity Retained Treasury Other attributable to controlling Total Equity Stock Surplus Instruments Earnings Stock Components Owners of the Interests As of January 1, 2025 Comprehensive income Net loss Other comprehensive income, net of tax Total comprehensive income Transactions with owners etc. Transfer from other equity instruments to bonds Reclassified from other components of equity to retained earnings Acquisition of treasury stock Exercise of share acquisition rights Share based compensation expenses Equity transactions with non-controlling interests Others Total transactions with owners etc. As of March 31, 2025 of Equity Company 452,647 649,389 398,717 (824,700) (4) 251,819 927,868 310,646 1,238,514 - - - (73,471) - - (73,471) 11,588 (61,883) - - - - - (40,826) (40,826) (4,079) (44,905) - - - (73,471) - (40,826) (114,297) 7,509 (106,788) - - - - - - - - - - - - (2,459) - 2,459 - - - - - - - (0) - (0) - (0) 1,327 (1,327) - - - - 0 - 0 - 4,466 - 90 - - 4,556 - 4,556 - 5 - - - - 5 115 120 - - - 21 - - 21 (242) (221) 1,327 3,144 - (2,348) (0) 2,459 4,582 (127) 4,455 453,974 652,533 398,717 (900,519) (4) 213,452 818,153 318,028 1,136,181 (For the three months ended March 31, 2026) Equity attributable to Owners of the Company Total Equity (Millions of Yen) Non- Common Capital Other Equity Retained Treasury Other attributable to controlling Total Equity Stock Surplus Instruments Earnings Stock Components Owners of the Interests 459,508 658,458 479,661 (1,036,141) (5) 430,921 992,402 361,830 1,354,232 - - - (18,648) - - (18,648) 16,890 (1,758) - - - - - 42,436 42,436 (1,101) 41,335 - - - (18,648) - 42,436 23,788 15,789 39,577 - (36,099) (80,811) (1,116) - - (118,026) - (118,026) - - - (70) - 70 - - - - - - - (0) - (0) - (0) 1,558 (1,558) - - - - 0 - 0 - 4,156 - 372 - - 4,528 - 4,528 - - - - - 0 0 (2,125) (2,125) - (30) (1,500) (27) - - (1,557) (0) (1,557) 1,558 (33,531) (82,311) (841) (0) 70 (115,055) (2,125) (117,180) 461,066 624,927 397,350 (1,055,630) (5) 473,427 901,135 375,494 1,276,629 As of January 1, 2026 Comprehensive income Net loss Other comprehensive income, net of tax Total comprehensive income Transactions with owners etc. Transfer from other equity instruments to bonds Reclassified from other components of equity to retained earnings Acquisition of treasury stock Exercise of share acquisition rights Share based compensation expenses Equity transactions with non-controlling interests Others Total transactions with owners etc. As of March 31, 2026 of Equity Company Condensed Quarterly Consolidated Statement of Cash Flows Three months ended March 31, 2025 (Millions of Yen) Three months ended March 31, 2026 (January 1 to March 31, (January 1 to March 31, 2025) 2026) Cash flows from operating activities Income (Loss) before income tax (45,839) 17,375 Depreciation and amortization 79,070 70,555 Other loss (income) 45,562 20,118 Decrease (Increase) in operating receivables 55,017 33,101 Decrease (Increase) in loans for credit card business 261,142 152,947 Increase (Decrease) in deposits for banking business (296,252) (161,318) Net decrease (increase) in call loans for banking business 651 (142,000) Decrease (Increase) in loans for banking business (322,407) (382,523) Net decrease (increase) in receivables under securities borrowing transactions 16,171 58,323 Increase (Decrease) in operating payables (49,562) (49,733) Decrease (Increase) in financial assets for securities business 232,050 (744,281) Increase (Decrease) in financial liabilities for securities business (539,030) 713,438 Increase and decrease in derivative assets and liabilities (1,809) (12,202) Others (137,731) (37,416) Income tax paid (34,753) (23,447) Net cash flows from operating activities (737,720) (487,063) Cash flows from investing activities Payments in time deposits (17,164) (1,691) Proceeds from time deposits 11,993 17,159 Purchases of property, plant and equipment (21,500) (26,923) Purchases of intangible assets (33,362) (44,226) Purchases of investment securities for banking business (535,540) (575,306) Proceeds from sales and redemption of investment securities for banking business 295,981 409,118 Purchases of investment securities for insurance business (48,517) (28,247) Proceeds from sales and redemption of investment securities for insurance business 64,792 28,683 Purchases of investment securities (1,406) (2,681) Proceeds from sales and redemption of investment securities 4,772 403 Other payments (5,429) (2,624) Other proceeds 2,170 2,720 Net cash flows from investing activities (283,210) (223,615) Condensed Quarterly Consolidated Statement of Cash Flows (Continued) Three months ended March 31, 2025 (Millions of Yen) Three months ended March 31, 2026 (January 1 to March 31, (January 1 to March 31, 2025) 2026) Cash flows from financing activities Net increase (decrease) in short-term borrowings (570) - Net increase (decrease) in commercial papers (8,300) 39,800 Proceeds from long-term borrowings 14,504 27,613 Repayments of long-term borrowings (40,503) (38,635) Redemption of bonds (290,248) - Net increase (decrease) in short-term borrowings for securities business Net increase (decrease) in short-term borrowings for credit card business 73,500 － 13,253 27,144 Net increase (decrease) in commercial papers for credit card business 2,700 (33,600) Proceeds from long-term borrowings for credit card business 25,746 25,059 Repayments of long-term borrowings for credit card business (39,815) (40,044) Net increase (decrease) in short-term borrowings for banking business 64,218 (57,078) Proceeds from long-term borrowings for banking business - 222,800 Repayments of long-term borrowings for banking business - (216,600) Repayments of lease liabilities (16,678) (18,168) Interest paid (21,248) (18,753) Others (410) (4,275) Net cash flows from financing activities (223,851) (84,737) Effect of change in exchange rates on cash and cash equivalents (7,638) 115 Net increase (decrease) in cash and cash equivalents (1,252,419) (795,300) Cash and cash equivalents at the beginning of the period 6,170,888 5,837,566 Cash and cash equivalents at the end of the quarterly period 4,918,469 5,042,266 Assumptions for Going Concern For the three months ended March 31, 2026 (January 1 to March 31, 2026) No items to report. Notes to the Condensed Quarterly Consolidated Financial Statements (Basis of Preparation) The Rakuten Group's Condensed Quarterly Consolidated Financial Statements have been prepared in accordance with Article 5, Paragraph 2 of the Standards for the Preparation of Quarterly Financial Statements of the Tokyo Stock Exchange, Inc. (with the use of the omitted disclosures as specified in Article 5, paragraph 5 of the same standards). The Condensed Quarterly Consolidated Financial Statements are prepared in accordance with IAS 34 'Interim Financial Reporting', but some of the disclosure items and notes required by IAS 34 have been omitted. Therefore, the Condensed Quarterly Consolidated Financial Statements do not conform to a set of Condensed Financial Statements in accordance with IAS 34. As this summary does not contain all the information required in annual consolidated statements, it is advised to be used in combination with the consolidated financial statements for the fiscal year ended December 31, 2025. (Significant Changes in the Scope of Consolidation and the Scope of Equity Method Application) For the three months ended March 31, 2026 (January 1 to March 31, 2026) There were no significant changes either in the scope of consolidation or in the scope of equity method with respect to the condensed quarterly consolidated financial statements for the three months ended March 31, 2026, as compared with the consolidated financial statements for the fiscal year ended December 31, 2025. (Material Accounting Policies) Material accounting policies adopted by the Rakuten Group in the Condensed Quarterly Consolidated Financial Statements for the three months ended March 31, 2026 remain the same as those adopted in the consolidated financial statements for the previous fiscal year. In addition, income tax expenses for the three months ended March 31, 2026 are calculated based upon an estimated annual effective tax rate. (Significant Accounting Estimates and Judgments) In preparing the Condensed Quarterly Consolidated Financial Statements under IFRS Accounting Standards for the three months ended March 31, 2026, the Rakuten Group uses judgments, accounting estimates, and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. These estimates and assumptions are based on the best judgment of management, made by gathering past experience and available information and in consideration of various factors that are considered reasonable as of the closing date. However, the figures based on these estimates and assumptions by their nature may differ from actual results. Estimates and underlying assumptions are subject to continuous review. The effect of these revised estimates is recognized in the period in which the estimates are revised as well as future periods. Estimates and judgments that have a significant impact on the amounts in the Condensed Quarterly Consolidated Financial Statements for the three months ended March 31, 2026 remain the same as those for the previous fiscal year, except for the following. Changes in Accounting Estimates After a certain period of time has elapsed since the commencement of business operations, and a review of part of our capital expenditure plan, we re-evaluated the actual utilization of certain network equipment included in the Rakuten Group's machinery and equipment, etc. As a result, in the current consolidated fiscal year, we have changed the useful lives of these assets based on more reasonable estimates of their economic useful lives to better reflect actual usage. As a result of this change, Operating income and Income before income taxes for the three months ended March 31, 2026 each increased by ¥8,609 million, compared with the amounts that would have been reported under the previous method. (Segment Information) General Information As a global innovation company engaged in the three main activities of Internet Services, FinTech, and Mobile, the Rakuten Group is organized into three reportable segments: "Internet Services", "FinTech", and "Mobile". Operating segments are not aggregated in determining reportable segments. For the reportable segments, separate financial information on the operational units of the Rakuten Group is available, and such financial information is subject to periodic review for the Board of Directors to decide on the distribution of management resources and evaluate performance. The "Internet Services" segment comprises businesses providing various e-commerce sites including internet shopping mall "Rakuten Ichiba", online cash-back sites, travel booking sites, portal sites, and digital content sites, along with provision of messaging services, sales of advertising, etc. on these sites, and management of professional sports teams, etc. The "FinTech" segment comprises businesses providing services related to credit cards, banking and securities over the Internet, crypto asset (virtual currency) spot transactions, life insurance, general insurance, and payment services, etc. The "Mobile" segment comprises businesses providing communication services and technologies, operating electricity supply services, and making investments related to the Mobile segment, etc. Measurement of Segment Revenue and Segment Profit (Loss) by Operating Segments The accounting treatment of the reported operating segment is based on IFRS Accounting Standards, and operating segment revenue and segment profit (loss) are those before intercompany eliminations without consideration of consolidation adjustments, except for certain subsidiaries. Transactions between operating segments are based on prevailing market price. Non-GAAP operating income, the internal measures management uses in making decisions, is calculated by adjusting the nonrecurring items and other adjustment items prescribed by the Rakuten Group from the operating income recorded in accordance with IFRS. Management believes that the disclosure of Non-GAAP financial measures facilitates comparison between the Rakuten Group and peer companies in the same industry or comparison of their business results with those of prior fiscal years by stakeholders, and can provide useful information in understanding the underlying business results of the Rakuten Group and their future outlook. Nonrecurring items refer to one-off items that the Rakuten Group believes should be excluded in preparing a future outlook based on certain rules. Other adjustment items are those that tend to differ depending on the standards applied, and are therefore less comparable between companies, such as share-based compensation expenses and amortization of acquisition-related intangible assets. The Rakuten Group does not allocate assets and liabilities to the operating segment information used by the chief operating decision maker. Considering the expanding mutual contribution effects between segments within the Rakuten Ecosystem, mutual contribution effects and mutual customer referral effects (hereinafter "Mobile Ecosystem Contribution") have been reflected in the segment profit and loss to allow for a more precise performance evaluation. Mobile Ecosystem Contribution The Mobile Ecosystem Contribution is calculated based on the contribution effect derived from the tendency of Rakuten Mobile MNO subscribers to use various services of the Rakuten Group more than non-subscribers, minus the customer referral effect received from each segment. This calculation has been reflected in the segment information. Mobile Ecosystem Contribution = i) Gross profit uplift effect of Rakuten Mobile MNO subscribers - ii) Customer referral effect from group companies to the mobile business Calculation Method of Uplift Effect and Customer Referral Effect between Segments Gross profit uplift effect of Rakuten Mobile MNO subscribers Depending on the characteristics of each business of the Rakuten Group, the monthly amount is calculated using one of the following methods. 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 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 Referral effect from group companies to the mobile business Number of Rakuten Mobile MNO individual subscribers each month who signed up through group company sites × Referral cost * Target businesses for uplift effect calculation The calculation targets 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. Changes in Measurement Methods of Segment Revenue and Segment Profit (Loss) by Operating Segments Effective from the three months ended March 31, 2026, some AI-related development costs, which were not previously allocated to individual segments, have been reflected in the segment profit or loss based on the scope of responsibility and actual usage to optimize the management and performance evaluation of each segment. Accordingly, the segment information for the three months ended March 31, 2025 has been restated to reflect this change. This change has no impact on the consolidated revenue or operating income or loss. For the three months ended March 31, 2025 (January 1 to March 31, 2025) (Millions of Yen) Internet Services FinTech Mobile Total Segment Revenue 305,478 223,579 110,705 639,762 Segment Profit (Loss) Before Considering 16,481 48,094 (59,394) 5,181 Mobile Ecosystem Contribution (3,698) (4,351) 8,049 - After Considering 12,783 43,743 (51,345) 5,181 For the three months ended March 31, 2026 (January 1 to March 31, 2026) (Millions of Yen) Internet Services FinTech Mobile Total Segment Revenue 317,645 275,324 131,157 724,126 Segment Profit (Loss) Before Considering 25,102 64,771 (48,197) 41,676 Mobile Ecosystem Contribution (3,932) (6,239) 10,171 - After Considering 21,170 58,532 (38,026) 41,676 Note: Effective from the three months ended March 31, 2026, some AI-related development costs, which were not previously allocated to individual segments, have been reflected in the segment profit or loss based on the scope of responsibility and actual usage to optimize the management and performance evaluation of each segment. Accordingly, the segment information for the three months ended March 31, 2025 has been restated to reflect this change. As a result of this change, segment profit or loss for the three months ended March 31, 2025 decreased by ¥396 million in "Internet Services", ¥145 million in "Fintech", and ¥69 million in "Mobile", while "Intercompany Transactions, etc." increased by the total amount of these decreases. This change has no impact on the consolidated revenue or operating income or loss. The reconciliation from segment revenue to consolidated revenue is as follows: (Millions of Yen) Three months ended March 31, 2025 (January 1 to March 31, 2025) Three months ended March 31, 2026 (January 1 to March 31, 2026) Segment Revenue 639,762 724,126 Intercompany Transactions, etc. (77,058) (80,543) Consolidated Revenue 562,704 643,583 The reconciliation from segment profit (loss) to income (loss) before income tax is as follows: (Millions of Yen) Three months ended March 31, 2025 (January 1 to March 31, 2025) Three months ended March 31, 2026 (January 1 to March 31, 2026) Segment Profit (Loss) 5,181 41,676 Intercompany Transactions, etc. (5,486) (5,377) Non-GAAP Operating Income (Loss) (305) 36,299 Amortization of Intangible Assets (1,365) (412) Share-Based Compensation Expenses (4,382) (4,474) One-off Items (Note) (9,392) (1,019) Operating Income (Loss) (15,444) 30,394 Financial Income and Expenses (30,802) (12,083) Share of Income (Losses) of Investments in Associates and Joint Ventures 407 (936) Income (Loss) before Income tax (45,839) 17,375 Note: One-off items listed for the three months ended March 31, 2025 include a mid-term cancellation fee of ¥2,459 million, which was incurred in the domestic sports business due to the termination of a consulting agreement that had a significant impact on team operations, and a provision for liabilities related to a lawsuit concerning payment claims for debts of a previously sold subsidiary, etc. One-off items listed for the three months ended March 31, 2026 include an impairment loss on fixed assets of ¥1,019 million, resulting from a partial withdrawal from the marketplace business in Europe. Moreover, these expenses are mainly recorded in other expenses of the Condensed Quarterly Consolidated Statement of Income. (Breakdown of Operating Expenses) (Millions of Yen) Three months ended March 31, 2025 (January 1 to March 31, 2025) Three months ended March 31, 2026 (January 1 to March 31, 2026) Advertising and promotion expenditures 77,635 84,401 Employee benefits expenses 93,728 100,341 Depreciation and amortization 82,906 74,256 Communication and maintenance expenses 15,635 15,523 Consignment and subcontract expenses 33,644 36,151 Allowance for doubtful accounts charged to expenses 9,869 12,447 Cost of sales of merchandise and services rendered 159,766 171,042 Interest expenses for finance business 11,408 23,226 Commission fee expenses for finance business 7,314 8,264 Insurance service expenses 12,285 11,644 Others 62,228 70,635 Total 566,418 607,930 (Other Income and Other Expenses) (Millions of Yen) Three months ended March 31, 2025 (January 1 to March 31, 2025) Three months ended March 31, 2026 (January 1 to March 31, 2026) Foreign exchange gains 1,070 - Others 1,570 1,455 Total other income 2,640 1,455 Foreign exchange losses - 551 Losses on disposal of property, plant and equipment and intangible assets 1,123 711 Losses on valuation of investment securities 1,138 584 Impairment losses (Note 1) 1,367 2,656 Others (Note 2, 3) 10,742 2,212 Total other expenses 14,370 6,714 Note 1: An impairment loss on fixed assets of ¥1,019 million, resulting from a partial withdrawal from the marketplace business in Europe, was included for the three months ended March 31, 2026. Note 2: A mid-term cancellation fee of ¥2,459 million, which was incurred in the domestic sports business due to the termination of a consulting agreement that had a significant impact on team operations, was included for the three months ended March 31, 2025. Note 3: A provision for liabilities related to a lawsuit concerning payment claims for debts of a previously sold subsidiary was included for the three months ended March 31, 2025. (Financial Income and Financial Expenses) (Millions of Yen) Three months ended March 31, 2025 (January 1 to March 31, 2025) Three months ended March 31, 2026 (January 1 to March 31, 2026) Interest income 1,038 1,205 Gains on valuation of investment securities 255 5 Gains on valuation of derivatives (Note 1, 2) 244 10,326 Foreign exchange gains (Note 3) 2,804 - Others 5 177 Total financial income 4,346 11,713 Interest expenses (Note 4) 21,831 21,432 Losses on valuation of investment securities (Note 5) 2,751 15 Losses on valuation of derivatives (Note 1) 9,895 - Foreign exchange losses (Note 6) - 2,130 Others 671 219 Total financial expenses 35,148 23,796 Note 1: Losses on valuation of derivatives from currency swaps related to foreign currency denominated permanent subordinated bonds of ¥9,895 million were recorded for the three months ended March 31, 2025. Gains on valuation of derivatives from currency swaps related to foreign currency denominated permanent subordinated bonds of ¥10,326 million were recorded for the three months ended March 31, 2026. Note 2: Gains on valuation of derivatives from the collar contract for the prepaid variable share forward transactions of shares of Lyft, Inc. of ¥222 million were recorded for the three months ended March 31, 2025. Note 3: Foreign exchange gains of ¥2,804 million arising from liabilities relating to funds raised from the utilization of shares of Lyft, Inc. were recorded for the three months ended March 31, 2025. Note 4: Interest expenses incurred from financial liabilities measured at amortized cost relating to financing under the prepaid variable share forward transactions of shares of Lyft, Inc. of ¥110 million were recorded for the three months ended March 31, 2025. Note 5: Losses on valuation of investment securities related to an investment in Lyft, Inc. of ¥2,724 million were recorded for the three months ended March 31, 2025. Note 6: Foreign exchange losses of ¥2,130 million arising from bonds transferred from other equity instruments were recorded for the three months ended March 31, 2026. (Notes on Significant Subsequent Events) No items to report. (For Translation Purposes Only) Independent Auditor's Interim Review Report May 14, 2026 The Board of Directors Rakuten Group, Inc. Ernst & Young ShinNihon LLC Tokyo, Japan Tomoko Tanabe Designated Engagement Partner Certified Public Accountant Mitsutaka Kumagai Designated Engagement Partner Certified Public Accountant Masayuki Tada Designated Engagement Partner Certified Public Accountant Kentaro Koyama Designated Engagement Partner Certified Public Accountant Auditor's Conclusion We have reviewed the accompanying Condensed Quarterly Consolidated Financial Statements of Rakuten Group, Inc. and its subsidiaries (the Group), which comprise the Condensed Quarterly Consolidated Statement of Financial Position as of March 31, 2026, and the Condensed Quarterly Consolidated Statements of Income and Comprehensive Income for the three-month and three-month periods ended March 31, 2026, and the Condensed Quarterly Consolidated Statements of Changes in Equity and Cash Flows for the three-month period ended March 31, 2026, and notes to the Condensed Quarterly Consolidated Financial Statements included in the "attachment" of Consolidated Financial Reports. Based on our review, nothing has come to our attention that causes us to believe that the accompanying Condensed Quarterly Consolidated Financial Statements are not prepared, in all material respects, in accordance with Article 5, Paragraph 2 of the Tokyo Stock Exchange, Inc.'s Standards for the Preparation of Quarterly Financial Statements (the Standards), applying the provisions for reduced disclosures as set forth in Article 5, Paragraph 5 of the Standards. Basis for Auditor's Conclusion We conducted our review in accordance with review standards for interim financial statements generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Review of the Condensed Quarterly Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our review of the Condensed Quarterly Consolidated Financial Statements in Japan (Including regulations applicable to the audit of financial statements of Public Interest Entities.), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained provides a basis for our conclusion. Responsibilities of Management, the Audit & Supervisory Board Members and the Audit & Supervisory Board for the Condensed Quarterly Consolidated Financial Statements Management is responsible for the preparation of these Condensed Quarterly Consolidated Financial Statements in accordance with Article 5, Paragraph 2 of the Standards, applying the provisions for reduced disclosures as set forth in Article 5, Paragraph 5 of the Standards and for the internal controls as management determines are necessary to enable the preparation of Condensed Quarterly Consolidated Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the Condensed Quarterly Consolidated Financial Statements, management is responsible for assessing the Group's ability to continue as a going concern, including the disclosures related to matters of going concern, as required by Article 5, Paragraph 2 of the Standards, applying the provisions for reduced disclosures as set forth in Article 5, Paragraph 5 of the Standards. The Audit & Supervisory Board Members and the Audit & Supervisory Board are responsible for overseeing the Group's financial reporting process. Auditor's Responsibilities for the Review of the Condensed Quarterly Consolidated Financial Statements Our responsibility is to express a conclusion on these Condensed Quarterly Consolidated Financial Statements based on our review. As part of a review in accordance with review standards for interim financial statements generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the review. We also: Make inquiries, primarily of management and persons responsible for financial and accounting matters and apply analytical and other interim review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in Japan. Conclude based on the evidence obtained whether anything has come to our attention that causes us to believe that the Condensed Quarterly Consolidated Financial Statements are not prepared in accordance with Article 5, Paragraph 2 of the Standards, applying the provisions for reduced disclosures as set forth in Article 5, Paragraph 5 of the Standards, should we determine that a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. Additionally, if we conclude that a material uncertainty exists, we are required to draw attention in our auditor's interim review report to the related disclosures in the Condensed Quarterly Consolidated Financial Statements or, if such disclosures are inadequate, to modify our conclusion. Our conclusions are based on the evidence obtained up to the date of our auditor's interim review report. However, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate whether anything has come to our attention that causes us to believe that the overall presentation and disclosure of the Condensed Quarterly Consolidated Financial Statements are not prepared in accordance with Article 5, Paragraph 2 of the Standards, applying the provisions for reduced disclosures as set forth in Article 5, Paragraph 5 of the Standards. Obtain evidence regarding the financial information of the entities or business activities within the Group as a basis for expressing a conclusion on the Condensed Quarterly Consolidated Financial Statements. We are responsible for the direction, supervision and review of the documentation of the interim review. We remain solely responsible for our conclusion. We communicate with the Audit & Supervisory Board Members and the Audit & Supervisory Board regarding the planned scope and timing of the review and significant review findings. We also provide the Audit & Supervisory Board Members and the Audit & Supervisory Board with a statement that we have complied with the ethical requirements regarding independence that are relevant to our review of the Condensed Quarterly Consolidated Financial Statements in Japan, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied to reduce threats to an acceptable level. Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan. (Notes) The Company (a company disclosing the quarterly consolidated financial reports) separately holds the original of the above interim review report. XBRL data and HTML data are not included in the scope of the interim review. Note: The English version of the financial statements consists of an English translation of the reviewed Japanese financial statements. For the Independent Auditor's Interim Review Report of the English financial statements, the Japanese original is the official text, and the English version is a translation of that text. Should there be any inconsistency between the translation and the official Japanese text, the latter shall prevail. ―

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