Kakao Opens Era of 4 Trillion Won Annual Revenue... Accelerates ESG Management (Comprehensive)

Annual Sales of 4.1567 Trillion KRW, Operating Profit of 456 Billion KRW

[Asia Economy Reporter Kang Nahum] Kakao has entered the era of annual sales exceeding 4 trillion won. High growth in key business sectors such as KakaoTalk, content, mobility, and simple payment drove the record-breaking performance.

Kakao announced on the 9th that its consolidated revenue last year reached 4.1567 trillion won, a 35% increase compared to the previous year. Operating profit was 456 billion won, up 121% year-on-year.

In the fourth quarter of last year, consolidated revenue was 1.2351 trillion won, up 12% from the previous quarter and 46% from the same period last year, while operating profit was 149.8 billion won, up 25% quarter-on-quarter and 88% year-on-year.

Kakao's platform segment revenue in Q4 2020 was 657 billion won, up 19% from the previous quarter and 48% year-on-year. Talk Biz revenue increased 63% year-on-year to 360.3 billion won. Portal Biz revenue decreased 9% year-on-year to 122.7 billion won due to a decline in search advertising revenue caused by COVID-19.

Jaehyun Bae, Senior Vice President of Kakao, explained during the conference call that "Kakao Commerce transaction volume grew 64% last year, with Gift and Talk Store achieving the highest growth." He added, "The encouraging results were due to strengthening the product lineup, establishing the Talk Store market, and expanding user engagement through differentiated commerce. Looking at the monthly active users (MAU) by platform, Gift recorded 21 million users, and the rapidly growing Talk Store grew 72% year-on-year."

Revenue from new business sectors increased 97% year-on-year to 174 billion won, driven by the expansion of Kakao Mobility's taxi platform business and growth in Kakao Pay's payment transaction volume and financial services.

Co-CEO Youngmin Yeo stated, "Mobility cumulative subscribers reached 28 million," and "KakaoT Blue increased to 16,000 vehicles by the end of the year."

Content segment revenue rose 43% year-on-year to 578.1 billion won. Paid content revenue grew 233% year-on-year to 163.6 billion won due to the base effect from the application of K-IFRS by Kakao Japan.

Game content revenue achieved 140.8 billion won, a 33% increase year-on-year. Music content revenue remained similar to the previous quarter at 155.1 billion won. Other IP business revenue increased 25% year-on-year to 118.6 billion won, driven by increased video content sales such as dramas and original content from Kakao M and strong music distribution.

Annual operating expenses in 2020 increased 29% year-on-year to 3.7007 trillion won. Consolidated operating expenses in Q4 rose 11% quarter-on-quarter and 41% year-on-year to 1.0852 trillion won. The increase was influenced by higher labor costs due to the inclusion of consolidated subsidiaries and hiring of new developers, as well as increased marketing expenses.

Following its record-breaking performance, Kakao will strengthen ESG management in earnest starting this year. Co-CEO Yeo said, "We define Kakao's ESG as 'Kakao's promise and responsibility to create a better world' and have selected four key focus areas."

Kakao's announced ESG management includes ▲solving social issues in the Kakao way ▲growing together with people sharing the IT ecosystem ▲fulfilling corporate responsibility in the digital society ▲creating a sustainable global environment. To concretize ESG management, Kakao is internally carrying out 80 tasks across 12 major practice areas.

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