Q3 Revenue 1.9214 Trillion KRW, Operating Profit 130.5 Billion KRW
Content Sales Up 14%, Platform Sales Down 7%
Operating Expenses Reduced by 5% Through Efficiency Improvements
Kakao succeeded in holding its ground in third-quarter earnings this year, thanks to growth in platform businesses such as advertising and commerce, despite sluggishness in its content business.
On the 7th, Kakao announced that its consolidated sales for the third quarter of this year reached 1.9214 trillion KRW, down 4% from the same period last year. Operating profit increased by 5% to 130.5 billion KRW, with an operating margin of 6.8%.
By business segment, third-quarter platform segment sales were recorded at 943.5 billion KRW, up 7% from the same period last year.
Among the platform segments, Talk Biz sales increased by 6% to 507.3 billion KRW. Advertising-type sales within Talk Biz, including Biz Board and Business Message, rose 4% to 292.2 billion KRW. In particular, as more advertisers adopt Talk Channel as a core communication tool, Business Message sales increased by 21%.
Transactional sales such as Gift and Talk Store grew 8% to 215.1 billion KRW. The integrated commerce transaction amount for the third quarter increased by 5% to 2.5 trillion KRW. This was the result of diversifying the gift lineup during the Chuseok holiday and providing differentiated gift experiences centered on LuxTab, which sells luxury goods.
Sales in the platform others category, which includes Mobility and Pay, increased 13% year-on-year to 359.8 billion KRW. Mobility services saw increased users during Chuseok and the rainy season, and Pay services experienced growth in transaction volume. On the other hand, portal business sales such as Daum decreased by 8% to 76.4 billion KRW.
The content segment, another pillar of Kakao’s business, recorded third-quarter sales of 977.9 billion KRW, down 14% year-on-year.
Music sales within the content segment decreased by 8% to 470.9 billion KRW. Game sales, affected by the absence of new releases, fell 11% to 234 billion KRW. Story sales, including webtoons, declined 12% to 218.7 billion KRW. This was influenced by the effects of webtoon rebranding and delays in intellectual property (IP) releases. Kakao is continuing to streamline non-core businesses in the content segment, including terminating webtoon services in Taiwan and Indonesia.
Operating expenses in the third quarter decreased by 5% to 1.7909 trillion KRW. Kakao explained that it proactively implemented rigorous operating cost efficiencies in response to the economic and business environment outlook for the second half of the year.
Kakao plans to officially launch not only its new artificial intelligence (AI) service “Kanana” next year but also various other AI-integrated services and functions. The company aims to provide innovative value to users and partners.
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