[Concall] Kakao "Strong Performance as KakaoTalk Usage Surges Due to COVID-19 Impact" (Comprehensive)

Launch of Comprehensive Business Platform 'Kakao Work' in Second Half
Kakao T Blue to Expand Service Areas by Year-End

[Asia Economy Reporter Jin-gyu Lee] Despite the impact of the novel coronavirus disease (COVID-19) in the first quarter, Kakao achieved both external growth and profitability improvement due to a surge in KakaoTalk (KakaoTalk) usage. Kakao plans to expand new businesses such as a comprehensive work platform and mobility along with the growth of its KakaoTalk business model 'TalkBiz' in the second half of the year.

On the 7th, during a conference call held after announcing the first quarter 2020 earnings, Kakao co-CEO Yeo Min-soo stated, "With the pandemic making direct face-to-face communication difficult in the first quarter, communication among users through KakaoTalk became even more active."

Co-CEO Yeo explained, "Especially at the end of February, when COVID-19 peaked, the usage time of the KakaoTalk chat tab set a weekly record high, and the volume of sent and received messages also expanded." He added, "In particular, the usage of Voice Talk and Face Talk increased significantly," and "the call time for group calls more than doubled compared to the previous quarter, playing a considerable role in social distancing."

He also said, "As the frequency of KakaoTalk usage increased, the page views and content consumption on the Shop tab reached record highs, and shop searches within chat windows also increased," adding, "This trend has continued into the second quarter." He further noted, "In the post-COVID era, the importance of real-time communication and accurate information delivery will remain unchanged."

Regarding the increase in KakaoTalk usage, he expressed confidence in the growth of TalkBiz. Co-CEO Yeo said, "The annual 50% growth guidance for TalkBiz is fully achievable," and predicted, "As the real economy recovery becomes visible, advertising revenue will also rebound, leading to gradual recovery."

With the spread of untact culture due to COVID-19, online payments have also increased significantly. Co-CEO Yeo explained, "KakaoPay's transaction volume in the first quarter was 14.3 trillion won, a 39% increase compared to the previous year," and "One million users flocked to the securities account upgrade that began at the end of February."

Kakao plans to accelerate the expansion of new businesses such as mobility and the launch of the comprehensive work platform 'KakaoWork' based on TalkBiz growth in the second half of the year. Co-CEO Yeo said, "When KakaoWork, a comprehensive work platform expected to have more than 10 million actual users, establishes itself as a core enterprise solution in the enterprise market, the opportunity for new businesses will be significant," and added, "We are discussing collaborations with numerous partners and plan to launch KakaoWork in the second half of the year."

He also stated, "KakaoT Blue will expand its operating areas by the end of the year to meet premium needs," and "Starting with landmarks such as COEX and Everland, parking services will also be expanded."

Meanwhile, Kakao's first-quarter sales recorded 868.4 billion won, and operating profit was 88.2 billion won, increasing by 23% and 219%, respectively, compared to the same period last year.

This content was produced with the assistance of AI translation services.