Hello, everyone. The effect of the 2026, those families and individuals that has been affected, we would like to offer our heartfelt support.

Two weeks before the earthquake, in fact, I was in Kumamoto. I visited Aso as well, who had been severely struck by the earthquake.

Those people who have difficulties and deceased, Rakuten Group, we would like to do everything that we can. We'd like to offer heartfelt support and also condolences to that.

In terms of the topic today, this will be the summary. Number one being summary and fintech business reorganization and segment results.

In finance, CFO Kaga-san will be presenting. Chief AI Officer, Data Officer Ting Cai will be presenting these section.

Without further ado, the summary. Rakuten Group, this second quarter, in terms of the net income, we were able to achieve positive by amount of 27.2 billion yen.

Mobile business is a big challenge that we have executed, and that is a growth driver for us. In between the meantime, since Q2 of 2020, we have been able to enjoy the positive results.

Reflective of that, in eight or six years, since in eight years, six years it says, but this is not only a one-off, but this need to be a perpetuating result that we would like to achieve on the coming years. In the consolidated revenue, the record high of 665.5 billion yen.

With the size of our business, year on year, 11.6% growth, we have been able to grow our business quite steadily. Each segment, all of them are on a growth trajectory.

Also in consolidated EBITDA is a record high for second quarter, 115.3 billion yen. Year on year, it's a growth by 11.7% in terms of the growth rate.

Non-GAAP operating income is, again, MNO service, this is a record high, 42 billion yen. Again, year on year, it's 109.6%, roughly 110% increase over this year.

With that being said, this is regarding the fintech business. Rakuten's fintech business, bank, securities, and card, and although this was not included this time, insurance and Rakuten Point Card or Rakuten Payment, we do have these entities, and respectively, they're top leaders within each industry, we believe.

Regarding card, shopping GTV, a 27.7 trillion yen, that's a second-quarter result, amazing result. For digital bank, Rakuten Bank, the number of accounts, 18.46 million accounts.

Very soon we will be achieving 20 million mark. For Rakuten Securities, general accounts, 14.39 million accounts.

We're number one in the industry. This has industry-leading growth and overwhelming customer base.

These three companies basically will be under the umbrella of Rakuten Bank. For the details, we would like to talk about this later, but we do believe there are two major synergies: straightforward financial synergies, that's one, and from marketing perspective, maximizing individual customer base.

Cross-use of customers or acquire new customers. We do believe that there will be significant synergies that could be generated.

The total impact, 2029 2028. Actually In October, we will integrate, which means that full year will be fiscal year ending March '28.

That's 25 billion yen approximately in financial impact, and 8 billion in terms of the marketing impact. Furthermore, with this growth, for March 2030, 85 billion yen of synergy effect presumably can be gained.

Going forward, Rakuten Bank, the synergy with Rakuten Securities, we will be able to leverage their capabilities. Like I said, the number of accounts, Rakuten Bank, 18.46 million, and for Rakuten Card, overwhelmingly the number of cards is extremely high, we will be able to refer customers, and Rakuten Card and Rakuten Securities with NISA, it is leading the young customer base, there, once again, will be synergy.

What kind of synergies? Rakuten Card, non-transfer of bank and those people with bank transfer at Rakuten Bank, the direct debit, the deposit amount is 4.3 times.

With and without Money Bridge, that's 4.4 times difference. As we move into the world with interest rates, how can we go about opening more accounts and have our customers deposit their balance in those accounts?

These will challenges. We believe that there'll be a lot of benefits that we can gain from consolidating integration.

Card, bank, securities will be integrated. We want to increase the deposit and also diversify the portfolio.

Not just these three entities, but synergy with Rakuten Group can be generated. Through Rakuten Payment, this fintech ecosystem and Rakuten Group e-commerce, we will be connecting the two ecosystems.

Moving on to by-segment results. The Internet Services segment, in terms of the business result for the second quarter, revenue is 338.1 billion, and year on year it's plus by 4.2%.

With AI utilization and other levers, non-GAAP operating income year on year is 68.6% increase, 23.1 billion yen. Looking into the breakdown and content, the domestic EC GMS, year on year it's 5.3% increase, thereby 1.5 trillion yen.

Rakuten Travel GTV, it's 17.2% increase. The investment again plus by 17.6% for realizing IRR.

International is also very robust business growth. Especially it could be highlighted to the sense that advertising revenue year on year is 65.6 billion yen.

Data and AI, Rakuten Mobile DPI data inclusive, we are able to enjoy a great amount of momentum in growth. If I may reiterate, GMS, as you can see, is increasing, and at the same time the revenue is plus by 5.3%.

Non-GAAP operating profit is 30.8% positive. The AI, how this could be well leveraged and utilized, without AI, we will not be able to grow our business.

With that being said, AI, we are putting a lot of emphasis on AI. One of the examples I'd like to share with you is that what we are promoting and developing, AI Shop Manager.

Allow me to introduce the AI Shop Manager. With Rakuten and Amazon, the biggest difference is that for Rakuten, it's based on brick-and-mortar stores, and the store is the basis.

In other words, there are human touch shopping experience that we'll be able to offer. At the same time, in terms of hospitality, we like to offer the sense of omotenashi and hospitality from Japan.

The true, real store managers, 24/7 or serving few tens of thousands of customers at the same time is not feasible. The Shop Manager, the personality or the store characteristics or the product characteristic, having deep understanding of that, AI Shop Manager will be able to provide service 24/7.

I think you're running a video of this AI Shop Manager.

Welcome. This is your AI Shop Manager.

May I help you? Do you have any concerns about your skin?

I don't like oily product. I like something that feels light and refreshing.

Then I recommend a water-based gel formula, or one with menthol if you prefer a cooling sensation. Those are the two popular products.

First item is standard facial toner that emphasize a refreshing sensation. The second is moisturizing, balance all-in-one gel.

The right one looks good. What about the reviews?

The review is 4.6, very highly evaluated. In the summer, it's light on your skin, and the next morning you don't feel your skin is shiny.

Sounds good. I will go with that.

Thank you very much. Please confirm your order once again.

Is it okay to process your order with these details? Yes, it's okay.

Thank you. Thank you very much for your purchase.

We'll be looking forward to seeing you again.

Within this year, we're going to launch this service, and we're now extending our effort for the further development. Next, I would like to highlight about the Rakuten Travel business.

Again, it's a robust growth that we are enjoying. In terms of year on year, it's 17.2% in terms of GTV.

The domestic is 10% growth year on year. Again, a very robust growth.

On top of that, the global-related, we have 78.5% year on year. Especially in terms of Rakuten Travel Exchange, we have been holding the wholesalers distribution in terms of the room accommodation inventory, the various countries.

The effective, of course, travel services, we're going to connect them all. We have 1,295 companies, the service companies are connected to Rakuten Travel Exchange.

The sales of that is increasing, and the transaction value is increasing. That is the reason for the growth of the gross transaction value.

Outside of that, the investment that are being made, we are working hard in order to improve the profitability of the business. Last year, the second quarter compared to that is a growth by 3.3 billion yen, the improvement of the losses.

The International Department, well, Rakuten France marketing plus, they have worked hard, but they have not been able to achieve the ambitious goal, we're unfortunately closing down this operation, and that is something that we decided. The growth is still 3.9% growth, non-GAAP operating increase.

It's slight decline, but it's showing a very robust foundation of growth. Viber, Viki, Rakuten Kobo, and also US Rakuten Rewards, these are increasing their profitability steadily.

Already mentioned earlier, the ad business, this is, in fact, showing a very healthy, strong growth. This quarter year on year is 15.6% positive year on year.

So 65.6 billion yen basis, we're now being able to seek 300 billion. AI utilization, for instance, in terms of contents creative, the creation of that, in terms of banner, static image, and the video ad, we are going to offer that.

At the same time, massive amount of, of course transactions inspection, performance, and bidding, everything is going to be leveraging AI capability. At the same time, based on Rakuten's customer base database, we're going to effectively use the targeting ad.

Moving on to the Fintech segment, revenue and income, revenue 295.4 billion yen, very robust, year-on-year 27% increase. Non-GAAP operating income, 69.2 billion, year on year 60.1% increase.

Rakuten Card, GTV plus 9.4%, so that's 7.1 trillion yen. Rakuten Bank account, 18.46 million, and bank deposits, 13.3 trillion yen.

Deposit, of course, it's very competitive to gain deposits, but it grew by 13.9% year on year. Securities general account, 14.39 million, 14.5% growth.

Especially young people are opening accounts and NISA accounts. In July, we surpassed 8 million, growing by more than 20% year on year, and assets under custody plus 48.3% year-on-year basis, a total of 58.7 trillion yen.

For Rakuten Card, the number of cards growing nicely. Shopping GTV and financial expense is going up, but with reorganization of our financial businesses, we will be able to minimize the downside expense.

Operating income, since we're controlling, non-GAAP operating income is plus 16.2%, 17.4 was the result for Q2. For Rakuten Bank, we made financial result announcements already.

Interest rate is going up, and given this backdrop, we are growing nicely. Ordinary revenue, 78.4 billion; ordinary profit, 30.2 billion, 26.1% year on year; and capital adequacy ratio, 11.4%; ROE, 22%; accounts, 18.4 million.

Main accounts, the ratio, well, the main accounts increased by 7.7%, it's now 6 million. Main account ratio is improving, and deposits grew by 13.9%, and expense ratio coming down.

Our activities are materializing. For Rakuten Securities, especially with the new NISA, we are gaining new accounts.

It is growing, the number of accounts. It is growing and surpassing 15 million.

Operating revenue as well as operating income very robust. Especially operating income under Japanese GAAP grew by 2.4 times or more.

What's more is assets under custody has exceeded 60 trillion. Very steady, very stable performance is being achieved.

Stock flow revenue, you can see the ratio here, the stock ratio is going up over the past quarters. Now, insurance business is not included in this reorg, but very steady.

We are honestly seeing revamping this business. Revenue and income, revenue is 20.7 and operating income 1.5 billion, we are generating profits.

Going forward, we believe that we will be able to generate more profit. For Rakuten Payment, 29.1 billion yen of revenue, plus 12.2% year on year, and non-GAAP operating income 3.2 billion, and year on year it is close to 80% plus.

We have been working with different partners. As the other day we announced with FamilyMart, we've started SPU-eligible services.

If you spend more than 3,000 yen or more per month, then you can earn points plus 0.5% times. Now with Mobile segment.

In terms of revenue is 121.4 billion, year on year it's positive by 8.3%. Non-GAAP operating income is a improvement by 4.1 billion yen, but EBITDA, well, year on year is a minus 28.4%, but in segment, for one thing, is the home straight, the energy crisis, the Rakuten Electricity, the energy price has gone up.

That is the main reason for that. Also, pre-marketing cash flow, in other words, the new acquisition, what would happen without the new acquisition is a scenario already 28 billion profit is being generated.

Year on year, this is positive by 11.8%. Mobile, of course, account, it is going to achieve 10.8 million, and of course the churn rate is going down.

ARPU is also gradually going up steadily. Rakuten Symphony, the number of customers and the number of partners are also on the growth trajectory.

Mobile in the business specifically, if I can allude on that, 11.9% revenue. Non-GAAP operating income is improvement by 6.7 billion yen, it's right in red with 32.3 billion.

As I said, the pre-marketing cash flow, it is 27.1 billion. In terms of the number of outlets is increasing, the marketing is quite active.

With that, excluding all that, there is a major contribution in terms of the profitability of our business. Also, in term March and April, the peak competitive season, after that gradually we are still on a rise and on an increase.

The churn rate, again, the hopping, the targeting, the point accumulation, those customers, we have been able to contain that. Therefore, the churn rate it was 1.38% for the second quarter, we have seen improvement in this area.

Data usage has been growing nicely as well, ARPU as well. Going forward, the options is an area that we also want to grow.

Data usage, like I said, is growing, 20 GB plus users ratio share expanded plus 3.6 points, percentage points. Network needs to be put in place.

As we initially planned, we will make investment of 200 billion. And 5G construction has been more or less completed in this area, and also for Tokyo Metro, we only had 5 MHz, but will be growing to 20 MHz bandwidth expansion.

As you may know, with Ministry of Internal Affairs and Communications creating Japan Low Earth Orbit satellite communication, so as indirect subsidy operator, we have been selected. Our investment is 248 billion.

We will be receiving. We would like to contribute toward resilience that maintains domestic communications infrastructure.

Now, regarding the finance, last week there was a comment from KDDI, I would like to comment regarding roaming. First and foremost, Rakuten Mobile business, we have had roaming contract with KDDI, and we started the whole business with that, and the main goal was NTT's dominance.

We wanted to shift from that situation so that we can democratize telecommunication. KDDI had supported our goal, and we were very grateful for that.

Based on the contract with KDDI, we have come thus far. For where we have the coverage based on the contract, we will continue on from October and onwards.

Where Rakuten does not have a coverage, the roaming will be reduced gradually. That will be the approach we will be taking.

I will stop here. Thank you.

Thank you for your kind participation. I would like to report on the finance.

In terms of the summary of the second quarter, non-GAAP operating income was 42 billion yen. IFRS operating income was 20 billion yen after recording one-off item, including impairment losses on fixed assets in the logistics business.

This represents more than double the figure of the same period last year. Since the one-off items are non-cash accounting item, we believe the group's underlying capacity to generate cash is steadily increasing.

In addition to that, income before tax was positive, mentioned by Mr. Mikitani, the fourth consecutive quarter since the third quarter last year we have been able to achieve positive.

Furthermore, I would like to explain later, but the reversal of tax expenses arose in connection with the sales of shares we held. As a result, quarterly net income attributable to owners of the parent returned to profit for the first time in six years, since the second quarter of 2020.

Regarding the one-off item I just mentioned, in this second quarter, we recorded 17 billion yen of impairment losses on fixed assets and related items in the logistics business. The impairment resulted from the decision following discussion with the counterparty of our warehouse leasing service to terminate that service and convert the warehouse to our own use.

Together with impairment recorded in fiscal 2025 on warehouse held on in the online supermarket logistics business, we have now impaired the entire book value of our own warehouses, which means that from a financial perspective, the associated balance sheet risk has been eliminated on going forward. On the other hand, this is an accounting treatment reflecting the pass-through asset and shift to more efficient management structure.

At the same time, we intend to improve supply chain management in order to maximize the potential of our logistics facility, reduce operating costs, and create competitive advantage in e-commerce. In terms of the second quarter accounting treatment across tax expense in connection with the sales of share we held, especially as a result of the sales of fair value OCI shares held by a group company, the gain on sales was not recognized through a P&L, but transferred directly to retained earning.

On the other hand, an unrecognized tax effect recorded on OCI relation to this transaction were transferred thereby the recorded on the tax benefit, that is a negative tax expense on the P&L. The actual negative tax expense reflecting the fact that substantially no tax payment arises, so that is the cause.

In addition to that, this accounting treatment suggests that as a result of a strategic investment to date, we have more than 1 trillion yen of net operating loss. This would offset a certain portion of a future tax expense.

As earning improve further, that effect will materialize and contribute to maximizing cash flow. Next, I would like to explain, once again, the significance of the reorganization of our fintech business scheduled to take effect on October the 1st, including the financial perspective.

The purpose of this reorganization is to operate one financial business in a more integrated manner, thereby accelerating growth and improving operation efficiencies. As Mikitani explained earlier, we expect to generate more than 85 billion yen in synergies by the fiscal year ending March 2030.

This reorganization is not intended as a means of fundraising for the company. Also May 20th, we disclosed that while the transaction does require a certain capital contribution in order to carry out the reorganization, I would like to reiterate that we currently have no intention of selling shares of the bank.

We recognize that the market assessment of our financial position continues to improve. The chart on the left shows the spread calculated from the yields on our corporate bond and the yields on the JGB government bond of corresponding maturity.

The blue line shows the credit spread one year ago, and the red line shows the most recent level. Across the maturities, spread are steadily tightening on the trend.

On the chart on the right, CDS spread also show a relative improvement compared to the market index. To further enhance the market assessment of the company, we will continue working to strengthen our financial soundness.

Lastly, our financial policy remain unchanged. Self-funding, meeting the funding needs of the mobile business without relying on external financing.

As I mentioned earlier, in the second quarter, we raised approximately 200 billion yen through the sales of share that we have held. Going forward, we will continue to use such asset finance while securing the funds we need through the cash flow of each business and improvement in the cash conversion cycle.

Also, the bond redemptions are also proceeding smoothly in line with our policy. In addition to redeeming our perpetual subordinated bonds in full the first call date on April, and in June, we redeemed 20 billion yen of senior bond entirely with cash on hand without issuing refinancing bond.

Also in terms of the December, we'll be able to redeem in full with the cash on hand as well. In 2027 onward, the bond redemption, we like to take a proactive approach in this range, and the business cash flow maximizing them.

The gross debt we've been contained, of course, but refinance if it's being required. In terms of the closely monitoring the market trends such as foreign exchange and interest rate, we would like to select our optimal means for our company.

That's all for the finance section. I'd like to invite about initiative of AI.

Chief AI and Data Officer Ting will be taking this part.

Thank you, Kaga-san. Hello, everyone.

I will share an update on the Rakuten AI vision and our execution momentum in Q2 2026. As we discussed last quarter, the strength of the Rakuten ecosystem lies in the synergy among its services.

Now AI presents a unique opportunity to amplify that synergy by attracting new users at lower cost, increasing cross-use, and bringing more value to our users and the businesses. We are doing that in three ways: engage, expand, and differentiate.

Engage means making every touch point more relevant and useful. Expand means increasing the usage scenario and surface area where we can be helpful to our customers, guiding them from vague idea to concrete actions.

Differentiate means guiding a customer all the way to task completion, from online discovery to offline delivery, an end-to-end experience that general-purpose agent cannot match. Together, these three areas add up to a durable competitive advantage, build not only just on data, but also accumulate intelligence within the Rakuten ecosystem.

Today, we will share examples in each of the three areas. First, engage.

The application of large language models goes beyond chat. Language models can understand the user intent, identify patterns, match, and translate better than any previous technology.

This is why we use large language models to enrich our item data, improve our ranking signal, and in this case, improve our understanding of user queries. Through LLM, we can better understand whether user have made up their mind or not.

Take two customer on Ichiba as an example. One customer search for specific model number, and in this case, he knows exactly what he wants, and we only return product that matches that exact model number.

With a set of limited choices, we accelerate his decision to checkout. Another customer search for gifts for summer holidays, and she does not have any specific product in mind.

In this case, we guide users through explorations, present a broader set of suggestions, expanded option, and increasing the bucket size. The impact is evident as indicated by our recent A/B experiment.

The test shows that attributed orders grew by 0.52%, and attributed GMS grew by 0.87%. At Ichiba scale, this is quite remarkable.

On annualized basis, this is equivalent to 12.8 billion yen GMS uplift. The second area is expand.

How Rakuten AI can expand in where, when, and how we serve our customer needs. This includes engage them earlier in the purchase funnel, and also recommend relevant product and services across businesses to dramatically increase cross-use.

Specifically, we are embedding Rakuten AI into almost every business applications, not only increasing their capability, but also connect them with the rest of ecosystem. In addition, we are expanding our touch point through Rakuten AI apps across the first surface area, whether it's a mobile apps, on the web, or on the desktop.

As web traffic shifts from search to agent, we are very well positioned to take advantage of this agentic shift to attract new users and increase usage of existing users. Finally, we're also expanding our distribution by bringing Rakuten AI to our partners.

As announced in July, Rakuten AI for desktop is now pre-bundled on Rakuten on HP PCs. This will help millions of user easily access Rakuten ecosystem, leverage the computing power on their AI PC to reduce token cost, and also in understand the local context to provide more relevant results.

As of today, 17 of all of our services are live with an AI agent, and seven more are in the near-term deployment, and more than 50 are on the way. Each agent strengthen its own business and connect with the Rakuten ecosystem, expanding the potential of cross-use across Rakuten.

Lastly, the last area is differentiate. As Rakuten AI deeply embeds into each business applications, it can accomplish what other external agent cannot, from first chat to a complete transaction all the way to delivery in the real world, even providing customer service after purchase.

For example, on Ichiba, AI cannot help customer to make decisions faster. The time to purchase is reduced by 41%, and average order amount up 17%.

Customer can understand the decision that they have to make faster and buy with greater confidence. Similarly, on Rakuten Travel, takes customer from discovery to booking in one flow.

This is growing rapidly. Rakuten AI for Travel launched at the end of April.

Now average order is 13% higher for AI-assisted booking versus those not going through AI. Family and group trip booking are also up 29%.

Such family and group tracking is often very complex in nature, and this is exactly where AI can help to ease the decision-making. Just last week, we announced Rakuten AI Super Agent at Rakuten AI Optimism conference.

This means three things. First, we double down on cross-use.

Rakuten AI Super Agent is about connecting the customer experience across all of our product and services. Agent in one part of ecosystem can hand off to another agent and complete another transaction.

Second, we are expanding what agent can do: handling complex tasks, achieving goals, guiding user on the full journey from discover to purchase across many services. Third, we are connecting Super Agent to third-party services like Maps, Calendar, email, messengers, it's easier for customer to track, communicate, and plan using their favorite tools and improve their productivity.

Lastly, the Super Agent will interact with other external agent on the internet, which is critical to attract more agent traffic for our merchants, hotel, and business partners in the Rakuten ecosystem. I like to show you what a Super Agent can do.

Please play the video.

This video is about the transformation of Rakuten AI from an AI agent to a Super Agent. Using travel as an example, the Super Agent will find the perfect travel plan and items based on your preferences, complete transactions, and connect with applications outside the Rakuten ecosystem to provide cross-service total solutions.

To close, is that during this last slide? Okay.

To close together preview of the Super Agent, you can download Rakuten AI today. It is available on the web, iOS, Android, and on Windows, and very soon, it will come to Mac as well.

I like to close by saying this in Japanese: AI de atarashii Let's create new values, expand possibilities with AI, and together, build a better future. Thank you very much.