Internet Platforms FY2025 Full Year: Profit gaps reveal four distinct strengths

The companies have different fiscal year-ends: Rakuten's year ended in December 2025, while the other three report for fiscal years ending in March or June 2026. The figures below compare each company's reported results.

• Revenue growth was highest at Kakaku.com, at 20%, followed by Mercari at 19%. More Tabelog bookings and cross-border transactions supported growth.
• Payments and financial services are playing a bigger role. LY Corp's strategic businesses, including PayPay, expanded, while fintech supported Rakuten's earnings.
• Growth investment produced divergent profit results. Kakaku.com posted lower operating profit as it invested in recruitment, while Mercari's operating profit rose 57.7% alongside 19% revenue growth.
• Scale and profitability are separate strengths. Rakuten ranked first in revenue but had a 0.6% operating margin. Kakaku.com ranked fourth in revenue but posted a 28.9% margin.

The strongest performer was Mercari, which combined growth with rising earnings. Revenue increased 19% to ¥229.3 billion. Operating profit climbed 57.7% to ¥43.9 billion, the fastest growth among the four companies. Its 19.2% operating margin also exceeded LY Corp's 16.8%.

Rakuten faced the greatest challenges. Revenue rose 9.5% to ¥2.4966 trillion, the highest among the four, but operating profit fell 72.9% to ¥14.4 billion. Its operating margin was just 0.6%, far below LY Corp's 16.8%. Its net loss widened to ¥177.9 billion from ¥162.4 billion a year earlier.

Still, Rakuten's operational progress should not be overlooked. Non-GAAP operating profit increased to ¥106.2 billion from ¥7 billion a year earlier. Its mobile business exceeded 10 million lines and posted full-year positive EBITDA. There is a gap between operating profit under accounting standards and improvements in business operations. Leading in sales is a different contest from leading in profit.

• Rakuten relied on fintech earnings as it expanded mobile subscriptions and cut costs. Turning EBITDA positive for the full year was progress, but eliminating its ¥177.9 billion net loss remains a challenge.
• Mercari grew domestic and international transactions, as well as cross-border commerce and fintech. Operating profit rose 57.7% to ¥43.9 billion, showing the company is converting growth investment into earnings.
• LY Corp was led by growth in strategic businesses, including PayPay. The acquisition of a controlling stake in Thailand's LINE MAN subsidiary also boosted earnings, lifting operating profit 8.3% to ¥341.3 billion.
• Kakaku.com benefited from more Tabelog bookings and strengthened its human resources business, including Kyujin Box. Revenue rose 20% to ¥94.1 billion, but operating profit fell 7% to ¥27.2 billion as upfront investment weighed.

Kakaku.com had the highest operating margin, at 28.9%, ahead of Mercari at 19.2% and LY Corp at 16.8%. Rakuten's 0.6% margin underscores how greater scale does not automatically translate into stronger profitability.

• Competition for customers can drive up advertising and promotional spending, including points and rewards. As Kakaku.com's HR investment shows, growth initiatives can also weigh on profit.
• Tighter rules on personal information and platforms could change how companies use advertising and data. Each must balance convenience with safety.
• A slowdown in consumer spending or business activity would affect demand for advertising, restaurant bookings, recruitment and online shopping. Companies with multiple revenue streams are not immune to weaker demand.
• Delays in recouping major investments are another concern. Rakuten's mobile business and Kakaku.com's HR operations must turn user and customer growth into profit.
• Competition and regulatory changes in payments and financial services also pose risks. These businesses are growth pillars for PayPay and Rakuten, but intensifying competition and compliance requirements could affect earnings.

Rakuten ranked first in revenue, ahead of second-place LY Corp. LY Corp, however, led in operating profit. Kakaku.com recorded both the fastest revenue growth and the highest operating margin.

The rankings for company scale, growth and profitability do not align. Rakuten's strength is scale, LY Corp's is operating profit, Kakaku.com's is margin, and Mercari's is profit growth. The four companies represent four distinct paths to success, reflecting the industry's current shape.

Net profit rose 35.6% at Mercari and 26.2% at LY Corp. Kakaku.com's net profit fell 6.1%, while Rakuten's loss makes a direct growth-rate comparison unsuitable.

When choosing an employer, look beyond brand recognition and revenue scale to see which businesses are growing. Mercari is expanding cross-border commerce and fintech, LY Corp is growing payments and overseas operations, and Kakaku.com is building its HR business.

Growth areas can offer opportunities to attract new customers and improve services. But goals and organizational structures may change before investments pay off. At a company pursuing a business transformation like Rakuten, improving mobile profitability is likely to remain a key focus.