Naver Reports 1Q Operating Profit of 301.8 Billion KRW, Up 4.5% YoY...Below Forecast (Update)

[Asia Economy Reporter Kang Nahum] Naver announced on the 21st that it recorded sales of 1.8452 trillion KRW and an operating profit of 301.8 billion KRW in the first quarter of this year. This represents an increase of 23.1% and 4.5%, respectively, compared to the same period last year. Compared to the previous quarter, sales decreased by 4.3% and operating profit by 14.1%. These figures fell short of the market's initial expectations of 1.8789 trillion KRW in sales and 344.1 billion KRW in operating profit. It is interpreted that seasonal off-season factors influenced the results.

Sales by business segment were ▲ Search Platform 843.2 billion KRW ▲ Commerce 416.1 billion KRW ▲ Fintech 274.8 billion KRW ▲ Content 217.0 billion KRW ▲ Cloud 94.2 billion KRW.

The Search Platform grew 12% year-on-year due to improvements in search quality and the revamp of Smart Place, but decreased 4.9% quarter-on-quarter due to seasonal factors.

Commerce grew 28.3% year-on-year and 2.7% quarter-on-quarter. Commerce transaction volume increased 18.8% year-on-year, and transaction volume of new vertical services such as Brand Store, Shopping Live, Jangbogi, and Gift increased 78% year-on-year. Cream and Amuse also contributed to overall growth with their popularity.

Fintech rose 31.1% year-on-year but decreased 6.9% quarter-on-quarter due to the January fee reduction for Pay and the accounting treatment effect from the previous quarter. Naver Pay's total payment amount reached 11.2 trillion KRW, up 33.9% year-on-year and 3.0% quarter-on-quarter.

Content grew 65.9% year-on-year but decreased 7% quarter-on-quarter due to the exclusion of V LIVE, revenue reclassification of Cream and Amuse, and changes in webtoon accounting treatment. Webtoon sales increased 79.5% year-on-year, maintaining growth with 180 million global monthly active users and 15 million in the U.S.

Cloud increased 15.3% year-on-year but decreased 12.1% quarter-on-quarter due to the off-season effect in the public sector in the first quarter.

Naver CEO Choi Soo-yeon said, "The new management team will play a central role in strengthening the linkage and creating synergy among search, commerce, payment, and fintech businesses, continuously growing domestic business and improving profitability. Globally, we will actively seek partnership opportunities along with organic growth efforts such as webtoons to quickly realize visible results."

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