Naver Surpasses 8 Trillion Won in Revenue Last Year... Operating Profit Decreases by 1.6% (Update)

Annual Sales of 8.2 Trillion Last Year... 20% Increase from Previous Year
Operating Profit Down 1.6% to 1.3 Trillion... First Decline in 4 Years

[Asia Economy Reporter Yuri Choi] Naver surpassed 8 trillion KRW in sales last year, achieving its highest annual revenue ever, but its operating profit declined. This marks the first decrease in operating profit in four years since 2018.

On the 3rd, Naver announced that its sales for the fourth quarter of 2022 reached 2.2717 trillion KRW, with an operating profit of 336.5 billion KRW. While sales increased by 17.8% compared to the same period last year, operating profit decreased by 4.2%.

For the full year 2022, annual sales rose 20.6% year-on-year to 8.2201 trillion KRW. Operating profit was 1.3047 trillion KRW, down 1.6%. Net profit for the period recorded 664 billion KRW, a 96% decrease compared to the previous year. This was influenced by the accounting gain of 15 trillion KRW (after tax) in fair value of A Holdings and Line jointly held investment stocks, which did not involve cash inflow or outflow, following the management integration of Line and Z Holdings in the first quarter of 2021.

Sales by business segment in the fourth quarter were as follows: Search Platform 916.4 billion KRW, Commerce 486.8 billion KRW, Fintech 319.9 billion KRW, Content 437.5 billion KRW, and Cloud 111.1 billion KRW.

The Search Platform segment recorded 916.4 billion KRW, growing 2.3% year-on-year despite the tightening macroeconomic environment. On an annual basis for 2022, it grew 7.9% year-on-year to 3.568 trillion KRW. Naver plans to pursue revenue growth this year through the launch of new search and display products.

The Commerce segment grew 18.3% year-on-year to 486.8 billion KRW. This growth was driven by high growth in vertical services such as Brand Store, Travel & Reservations, and Cream, as well as the year-end peak season effect. For the full year 2022, the Commerce segment posted sales of 1.8011 trillion KRW, a 21.0% increase compared to the previous year. Meanwhile, total transaction volume in the Commerce segment for the fourth quarter grew 13.7% year-on-year to 11.2 trillion KRW.

The Fintech segment recorded 319.9 billion KRW, an 8.4% increase year-on-year, supported by new payment partner integrations and increased reservation payments. For the full year 2022, Fintech sales rose 21.2% year-on-year to 1.1866 trillion KRW. Naver Pay's payment volume in the fourth quarter increased 21.0% year-on-year to 13.2 trillion KRW.

The Content segment reached 437.5 billion KRW, a 100.1% increase year-on-year. This steady global growth was supported by a 25% increase in integrated paid users in Japan compared to the same period last year. For the full year 2022, the Content segment recorded sales of 1.2615 trillion KRW, up 91.3% year-on-year.

The Cloud and others segment recorded 111.1 billion KRW, a 3.9% increase year-on-year. On an annual basis for 2022, it grew 5.3% year-on-year to 402.9 billion KRW. Naver plans to integrate its artificial intelligence (AI) and business-to-business (B2B) organizations into Naver Cloud, aiming to secure a competitive edge based on hyperscale AI and expand its market into enterprise and finance sectors.

Choi Soo-yeon, CEO of Naver, said, "2022 was a year of solidifying internal capabilities for investment and growth to make a greater leap as a global company." She added, "We will maintain growth through stable expansion of existing businesses and pioneering new markets, striving to become the platform most preferred by users."