Kakao Pay Reports Q3 Consolidated Operating Loss of 1 Billion KRW with 48% Revenue Growth

[Asia Economy Reporter Kiho Sung] Kakao Pay announced on the 10th that its cumulative transaction volume for the third quarter of this year reached 72.5 trillion KRW, a 54% increase compared to the same period last year. The cumulative consolidated revenue for the third quarter increased by 73% year-on-year to 331.2 billion KRW, with both transaction volume and revenue surpassing the previous year's annual levels within just three quarters. However, the consolidated operating profit for the third quarter recorded a loss of 1.017 billion KRW, turning to a deficit compared to the same period last year.

Through a disclosure on the same day, Kakao Pay stated that the transaction volume for the third quarter reached 25.2 trillion KRW, a 41% increase year-on-year. On a cumulative basis, the transaction volume reached 72.5 trillion KRW, surpassing last year's annual transaction volume of 67 trillion KRW. The payment segment showed a 67% growth compared to the same period last year, driven by securing over 1.3 million domestic and international merchants, and balanced growth across all areas including online and offline payments, cross-border payments, and billing. The financial segment also achieved significant results with a 112% increase in transaction volume and a 230% increase in transaction count year-on-year, as usage of loan, investment, and insurance services linked with a total of 133 financial institutions increased by the third quarter.

Revenue also increased significantly in line with the growth in transaction volume. Kakao Pay's consolidated revenue (operating income) for the third quarter recorded 114.9 billion KRW, a 48% increase compared to the same period last year. The cumulative consolidated revenue reached 331.2 billion KRW, surpassing last year's annual revenue of 284.4 billion KRW. Payment segment revenue increased by 45% year-on-year, and the financial segment by 59%. The revenue composition for the third quarter was 70% from the payment segment, 25% from the financial segment, and 5% from other remittance and electronic document segments. Although revenue from the financial segment decreased compared to the previous quarter due to external environmental changes such as loan volume caps, the overall growth trend led the cumulative financial segment revenue for the third quarter to reach 98.3 billion KRW, exceeding 1.5 times last year's annual revenue.

The consolidated operating expenses for the third quarter increased by 56% year-on-year to 115.9 billion KRW, due to strengthened merchant promotions for payment infrastructure expansion, increased operating expenses for the launch of the MTS by subsidiary Kakao Pay Securities, and system construction costs for establishing a digital non-life insurance company. The consolidated operating profit (loss) was -1 billion KRW, with an operating profit margin of -1%. EBITDA was 2.1 billion KRW, recording an EBITDA margin of 2%. The cumulative operating profit on a consolidated basis for the third quarter turned positive to 1.6 billion KRW this year from a 6.3 billion KRW deficit in the same period last year, and the cumulative operating profit on a separate basis was 18.1 billion KRW, with an operating profit margin of 6.2%.

Continuous growth is also evident in user numbers and transaction indicators. As of the third quarter, Kakao Pay's cumulative number of subscribers exceeded 37 million. The monthly active users (MAU) at the end of the third quarter recorded 20.44 million, a 23% increase compared to the same period last year. Additionally, as of the end of the third quarter, the user age distribution of Kakao Pay showed an even split of 50:50 between the youth group aged 10 to 30 and the middle-aged group aged 40 and above. Notably, the 20 to 40 age group, considered the main economically active population, accounted for 70% of the total, indicating long-term growth potential.

Meanwhile, Kakao Pay's subsidiary Kakao Pay Securities plans to launch an MTS service that allows simultaneous investment in domestic stocks, overseas stocks, and ETFs as early as the end of this year or by early next year at the latest.

Ryu Young-jun, CEO of Kakao Pay, stated, “Although the obligation for regular reporting on Kakao Pay’s performance begins from the fourth quarter, Kakao Pay, as a listed company, has prepared the third-quarter earnings announcement to communicate actively with the capital market and transparently disclose company information to investors without omission.” He added, “Currently, this is a period of active pre-investment to increase traffic and activity within the platform, so there will be more value in the innovations we will show in the future than the results we have shown so far. To this end, we are steadily realizing planned business projects such as the launch of the MTS, establishment of a digital non-life insurance company, and MyData services together with our subsidiaries.”

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