Kakao Excels Across All Businesses... Delivers Another Record-Breaking Performance (Comprehensive)

[Asia Economy Reporter Bae Ari] Kakao once again delivered a "surprise performance" in the second quarter of this year, achieving record-high revenue and operating profit. Both figures set new all-time highs. The expansion of the non-face-to-face (untact) culture led to significant growth in KakaoTalk-based shopping and advertising, while Kakao Pay and the webtoon segment also contributed to improved results.

◆ Record-Breaking Results = On August 6, Kakao announced that it posted revenue of 952.9 billion won and operating profit of 97.8 billion won in the second quarter of this year. These figures represent increases of 30% and 142%, respectively, compared to the same period last year, marking the highest quarterly results in the company’s history. Yeo Minsoo, co-CEO of Kakao, stated during the earnings conference call that "the second quarter was a period of intense competition and constant vigilance across all business sectors," adding, "Thanks to these efforts, we were able to achieve record profits for the sixth consecutive quarter."

Kakao’s strong performance was driven by the expansion of its advertising and commerce businesses based on KakaoTalk, as well as new business segments and its global paid content business. Kakao’s revenue is divided into two segments: the "platform segment" and the "content segment." Revenue from the platform segment, which includes Talk Biz, portal, and new businesses, reached 492.7 billion won, up 51% year-on-year. Revenue from the content segment rose 13% to 460.2 billion won compared to a year earlier.

In particular, the growth of the KakaoTalk-based online commerce business stood out. Talk Biz revenue, which includes commerce features such as "Biz Board" (advertising within KakaoTalk), "Gift," and "Talk Store," reached 248.4 billion won, up 79% from the same period last year. On the other hand, Portal Biz revenue, which includes businesses utilizing the Daum portal for advertising and other purposes, fell 14% to 117.5 billion won. Revenue from new businesses (126.8 billion won) grew by 149%, driven by the expansion of Kakao Mobility’s affiliated taxi service "Kakao T Blue" and increased transaction volume on Kakao Pay.

The growth of content businesses such as webtoons and games also contributed to improved results. Paid content revenue rose 46% year-on-year to 119.0 billion won, thanks to increased global transaction volume at Kakao Japan and the expanded value of intellectual property (IP) business at Kakao Page. Notably, transaction volume on "Piccoma," Kakao Japan’s webtoon platform, grew 2.5 times compared to the previous year. Game content revenue reached 107.5 billion won, supported by the steady growth of mobile games such as "Moonlight Sculptor." Music content revenue increased by 4% year-on-year to 151.0 billion won.

◆ Consolidating 'Commerce' and Targeting 'B2B' = While maintaining the growth of its existing businesses, Kakao is also seeking new growth engines, such as expanding into the B2B (business-to-business) sector. The company plans to further strengthen its commerce segment, which has been a key driver of its strong results. To this end, Kakao restructured its business units by splitting and merging its subsidiary Kakao IX, which handles the distribution of Kakao Friends character merchandise and IP (intellectual property) licensing.

The retail business of Kakao IX will now be operated by Kakao Commerce, while the licensing business will be managed by Kakao headquarters. Kakao Commerce aims to expand its business further by combining its character merchandise development capabilities with offline channels. The company also plans to increase new business models such as D2C (Direct to Consumer), collaborating with promising domestic companies to plan, produce, and distribute products from start to finish.

Going forward, Kakao will also target the B2B market by introducing a comprehensive business platform for enterprises. Kakao’s subsidiary, Kakao Enterprise, plans to launch "Kakao Work" within this year. In addition, the company will introduce its cloud solution platform, "Kakao i Cloud." To support these initiatives, Kakao is considering building its own data center. CEO Yeo emphasized, "Our goal is not just platform growth, but to achieve greater leaps forward through co-growth with users and partners, leveraging Kakao’s technology and influence."