Kakao's First Quarter 2025 Results Announced
Platform Revenue Rises, Content Segment Declines
AI-Based Services to Launch in the Second Half of the Year
Kakao announced on May 8 that its consolidated revenue for the first quarter of this year was KRW 1.8637 trillion, a 6% decrease compared to the same period last year. Operating profit was KRW 105.4 billion, down 12%.
The business is largely divided into two segments: platform and content. Revenue from the platform segment was approximately KRW 993 billion, a 4% increase year-on-year, while revenue from the content segment was KRW 870.7 billion, a 16% decrease.
Within the platform segment, Talk Biz revenue reached KRW 553.3 billion, a 7% increase compared to the same period last year. Of this, Talk Biz advertising revenue in the first quarter was KRW 286.1 billion, up 3% year-on-year.
Notably, business message revenue increased by 11%. The 'Brand Message' product, which is sent based on customer consent to receive marketing communications, is also scheduled to launch this month.
Talk Biz commerce revenue, including services such as Gift and Talk Deal, was KRW 267.2 billion, a 12% increase year-on-year. This was attributed to direct purchase operations for popular Lunar New Year products and the expanded share of the highly profitable Kakao Shopping Live.
Other platform revenues, including mobility and Kakao Pay, totaled KRW 365.6 billion, a 3% increase from the same period last year.
The content segment consists of games, music, story, and media, but all areas showed weak performance. In particular, game revenue (KRW 145 billion) fell by 40% year-on-year, leading to a slowdown in overall results. Kakao also stated, "Due to a base effect caused by concentrated artist activities, music revenue was KRW 437.9 billion, a 6% decrease from the same period last year."
Story revenue, including webtoons and web novels, was KRW 212.6 billion, a 6% decrease year-on-year. Media revenue, such as video production, fell by 21% to KRW 75.1 billion, impacted by a slowdown in the broadcasting advertising market and reduced content investment.
First-quarter operating profit was KRW 105.4 billion, a 12% decrease compared to the same period last year, with an operating margin of 5.7%.
Starting in the second half of this year, Kakao will officially introduce services utilizing artificial intelligence (AI) technology.
Beginning with the closed beta test (CBT) of the new AI service 'Kanana', Kakao plans to sequentially unveil vertical AI recommendation and generative search services in specific areas such as AI Mate Shopping and Local, as well as jointly developed products with OpenAI.
Kakao also plans to strengthen content services and social features in KakaoTalk to evolve into a 'super application' by increasing user engagement time. To achieve this, the company will launch a 'Discovery Area' in the third tab of KakaoTalk in the second half of the year.
CEO Chung Shina said, "This year, we will sequentially showcase the results of various experiments and initiatives Kakao is preparing. Through these efforts, we will lay the foundation for AI to become a new growth engine for Kakao."
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