Quarterly Record-Breaking Performance Expected for Naver, Second Half to Be Even Hotter

Q2 Earnings Announcement Today, April 4
Expected Record Quarterly Performance
Second Half Service Launch Based on 'HyperCLOVA X'

Naver is expected to achieve its highest performance in the second quarter of this year. In the second half of the year, it is anticipated to continue its growth through the release of a hyper-large artificial intelligence (AI) model and services based on it.

Record High Performance Expected in Q2

Financial information firm FnGuide forecasted that Naver will record sales of 2.4306 trillion KRW and an operating profit of 368.4 billion KRW in the second quarter. These figures represent increases of 18.8% and 9.5%, respectively, compared to the same period last year. If the forecast holds true, it will be the highest quarterly performance to date. Naver's Q2 earnings announcement is scheduled for the 4th of this month.

The Q2 performance is analyzed to have been driven by balanced growth across multiple business areas. The commerce sector is expected to see a significant increase in sales due to the acquisition of Poshmark, North America's largest fashion consumer-to-consumer (C2C) platform, and expansion of market share. The growth in travel and reservation services, directly linked to increased outdoor activities following the COVID-19 endemic phase, is also seen as contributing to commerce sales performance.

Additionally, securities analysts expect display advertising revenue to decline, but search platform revenue, including search ads, to increase. The content sector appears to have increased sales by expanding paid users through profitability-focused management.

HyperCLOVA X-Based Service Lineup.

A More Aggressive Naver in the Second Half

Naver's growth momentum is expected to become more pronounced in the second half of the year. Naver will unveil its hyper-large AI model, 'HyperCLOVA X,' on August 24. The amount of Korean language training data for HyperCLOVA X is 6,500 times that of OpenAI's GPT-3, giving it a specialized advantage in Korean.

Naver plans to enhance existing services using HyperCLOVA X and accelerate its penetration into the B2B (business-to-business) market.

First, in September, it will launch a beta version of 'Cue:', a generative AI-based search service. This generative AI service specialized in search will provide a new search experience. The search advertising market accounts for a significant portion of Naver's revenue. 'Cue:' is expected to contribute to expanding market share in search advertising.

HyperCLOVA X will also be used to strengthen commerce capabilities. Naver is considering developing AI solutions to improve the productivity of SMEs (small and medium-sized enterprises).

Naver is already utilizing the previous model of HyperCLOVA X, HyperCLOVA, to build hyper-personalized commerce. This service analyzes users' shopping activity history and shows the reasons for product recommendations together. As of June, the transaction amount of AI-recommended products increased by 30% compared to the same period last year, indicating high user satisfaction. The application of the next-generation model is expected to enable the creation of a more advanced commerce environment.

Starting in October, Naver will actively expand into the B2B market. A version of the HyperCLOVA X model will be pre-released in August to some companies on Clova Studio, a hyperscale AI tool service available through the Naver Cloud Platform, with an official launch in October. Corporate clients will be able to combine their own data with HyperCLOVA X to build their own productivity enhancement tools or create customized AI services.