Kakao's Mobility and Pay New Businesses Take Off... Record-Breaking Performance (Comprehensive)

-1Q Sales 1.258 Trillion KRW, Operating Profit 157.5 Billion KRW
-Taxi Service Records Highest Ever Average Daily Ride Requests
-KakaoPay Surpasses 20 Trillion KRW in Quarterly Transaction Volume

[Asia Economy Reporter Kang Nahum] Kakao recorded its highest-ever performance in the first quarter of this year, driven by balanced growth across its major business sectors including platform, mobility, and payment services. Kakao plans to publish an ESG (Environmental, Social, and Governance) report within this month to present a blueprint for sustainable management going forward.

On the 6th, Kakao announced that it posted sales of 1.258 trillion KRW and an operating profit of 157.5 billion KRW in the first quarter. Sales increased by 45% and operating profit by 79% compared to the same period last year. The operating profit margin rose to 12.5%.

◆ New Business Wings such as Mobility and Payment = By business segment, platform division sales were recorded at 668.8 billion KRW, up 3% from the previous quarter and 51% from the same period last year. Talk Biz sales increased by 2% quarter-on-quarter and 61% year-on-year to 361.5 billion KRW. Continuous growth in message advertising products partially offset the seasonal advertising off-season impact.

Portal Biz sales decreased by 4% from the previous quarter due to seasonal off-season effects but increased by 1% year-on-year to 117.5 billion KRW. New business segment sales achieved 189.8 billion KRW, up 9% quarter-on-quarter and 89% year-on-year, led by expanded taxi sales from Kakao Mobility and increased payment transaction volume and financial services from Kakao Pay, showing the highest growth among all business sectors.

The Kakao Mobility taxi service segment recorded the highest-ever average daily ride requests in the first quarter due to recovery in mobility demand. Kakao co-CEO Yeo Minsu stated, "KakaoT Blue improved operational efficiency, and the service expanded to about 21,000 vehicles including Jeju Island." He added, "Demand for Black and premium taxis also increased overall." Kakao Pay’s transaction volume in the first quarter reached 22.8 trillion KRW, a 58% increase year-on-year, surpassing 20 trillion KRW in quarterly transaction volume for the first time.

◆ Stable Sales in the Content Division = Content division sales reached 589.2 billion KRW, up 1% quarter-on-quarter and 38% year-on-year. Paid content sales grew by 7% quarter-on-quarter and 80% year-on-year to 174.7 billion KRW, driven by increased global transaction volume. Game content sales decreased by 7% quarter-on-quarter but increased by 35% year-on-year to 130.3 billion KRW.

Music content sales fell 3% quarter-on-quarter but rose 4% year-on-year to 156.8 billion KRW. Other IP (Intellectual Property) business sales increased by 7% quarter-on-quarter and 55% year-on-year to 127.4 billion KRW, supported by growth in Kakao Entertainment’s video content sales and strong music distribution.

Kakao plans to launch a KakaoTalk channel content subscription service within the year. This will create a space connecting creators and subscribers via KakaoTalk, allowing creators to publish content through KakaoTalk channels and users to follow creator channels as friends to view content. CEO Yeo explained, "Subscriptions and wallets will strengthen the mid-to-long-term growth engine of Talk Biz," adding, "We will create visible business results by connecting users and business partners in various ways."

Kakao’s operating expenses rose by 1% quarter-on-quarter and 41% year-on-year to 1.1004 trillion KRW, influenced by increased labor costs due to steady new hiring and higher marketing expenses.

Meanwhile, Kakao reaffirmed its commitment to strengthening ESG management this year. CEO Yeo said, "We define this as Kakao’s promise and responsibility to create a better world and have been actively promoting related activities," adding, "We plan to publish an ESG report within May detailing Kakao’s sustainable management efforts and future plans."