Rakuten shares fell sharply Friday after the Japanese conglomerate reported mixed fourth-quarter results, with strong non-GAAP profitability offset by a steep decline in operating profit. The stock dropped 10.55% following the earnings release, as investors weighed the company's improved mobile unit performance against broader financial challenges.

Q4 sales rose 7.2% year-on-year to 708.9 billion yen, beating analyst estimates, but IFRS operating profit plunged 87.5% to 13.04 billion yen, missing consensus forecasts. The company's non-GAAP EBITDA increased 17.4% to 134.2 billion yen, ahead of expectations. Rakuten Mobile achieved its first full-year EBITDA profitability, generating 12.9 billion yen for the fiscal year, while the FinTech segment continued to drive earnings with a 48.7% year-on-year increase in Q4 operating profit to 57.5 billion yen.

The company's capital expenditure in fiscal 2025 totaled 63 billion yen, significantly below the 150 billion yen budget due to construction constraints. For fiscal 2026, Rakuten has set a 200 billion yen capex target, including unspent portions carried over, with additional base station deployment seen as critical for network quality improvements.