Operating Profit Up 15% Year-on-Year
Sales Increased 19% to 2.4453 Trillion KRW
Notable Growth in Commerce and Content Sectors
Cloud Also Shows Sharp Growth... Business Expansion with Saudi Arabia
Naver's operating profit in the third quarter increased by 15.1% year-on-year, driven by growth in its commerce and content sectors.
On the 3rd, Naver announced that in the third quarter, it recorded sales of KRW 2.4453 trillion, operating profit of KRW 380.2 billion, and net profit of KRW 356.2 billion. Sales increased by 18.9%, operating profit by 15.1%, and net profit by 53.8% compared to the same period last year.
The third quarter saw notable growth in the commerce and content sectors. Sales by business segment were ▲Search Platform KRW 898.5 billion ▲Commerce KRW 647.4 billion ▲Fintech KRW 340.8 billion ▲Content KRW 434.9 billion ▲Cloud KRW 123.6 billion.
The Search Platform recorded KRW 898.5 billion, up 0.3% year-on-year but down 1.3% quarter-on-quarter. Search advertising grew 3.5% year-on-year due to ongoing platform enhancement efforts.
Naver stated, "Even amid the endemic phase, we were the only major global advertising platform to maintain steady growth every quarter, and we continue our efforts in the fourth quarter with platform enhancements such as the Naver app revamp and expansion of premium products."
Commerce recorded KRW 647.4 billion, up 41.3% year-on-year and 2.3% quarter-on-quarter. Excluding the effect of incorporating the North American secondhand trading platform Poshmark, it still grew 14.7% year-on-year, outperforming the average growth of the domestic commerce market. Brokerage and sales revenue more than doubled year-on-year due to growth in transaction volumes from Brand Store, travel, Cream, and the inclusion of Poshmark.
Fintech recorded KRW 340.8 billion, up 15.1% year-on-year and 0.3% quarter-on-quarter. In the third quarter, Naver Pay's payment amount was KRW 15.2 trillion, up 22.5% year-on-year and 4.4% quarter-on-quarter. Among this, external payments grew 45.8% year-on-year, and offline payments also reached KRW 1.7 trillion, doubling year-on-year due to the addition of Samsung Pay MST payment functionality and growth in reservation and order payments.
Content recorded KRW 434.9 billion, up 39.5% year-on-year and 3.5% quarter-on-quarter. The global webtoon integrated transaction amount increased 5% year-on-year and 9% quarter-on-quarter to KRW 479.4 billion. The success of webtoon IP video adaptations and platform enhancements such as strengthened AI recommendations improved user engagement. Naver explained that Japanese webtoons maintained steady growth in transaction volume due to an increased share of original and serialized works.
Cloud recorded KRW 123.6 billion, up 30.3% year-on-year and 18.3% quarter-on-quarter. Changes in revenue recognition for NCP and an increase in paid IDs for Line Works led to B2B sales growing 19.9% year-on-year and 11.4% quarter-on-quarter. Naver is currently pursuing a digital twin platform construction project for the Saudi Arabian Ministry of Municipal and Rural Affairs and Housing.
Choi Soo-yeon, CEO of Naver, said, "In the third quarter, we unveiled our generative AI service lineup and monetization roadmap, outlining the future direction of our AI business and laying the foundation to sustain growth across each sector. Additionally, including the Saudi Arabia digital twin technology project, Naver will accelerate its global challenges by leveraging not only its services but also its accumulated technological capabilities."
Meanwhile, Naver became the first global IT company to issue Samurai bonds in Japan, marking the first debut bond issued without guarantees by a domestic non-financial private company in over seven years. Following the shareholder return plan announced earlier this year, a total cash dividend of KRW 62.4 billion was paid on August 22. Separately, on November 7, Naver plans to specially cancel approximately KRW 305.3 billion worth of treasury shares, equivalent to 1% of issued shares, based on the closing price on October 30.
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