Naver Earnings Slow... Choi Soo-yeon: "15 Trillion KRW Revenue in 5 Years, Increasing Global Share" (Comprehensive)

[Asia Economy Reporters Kang Nahum and Lee Seungjin] Naver has announced its first earnings under CEO Choi Soo-yeon’s leadership. The results were somewhat shaky, falling short of initial market expectations. CEO Choi expressed confidence in her goal of achieving "KRW 15 trillion in revenue within five years," stating, "Naver has historically doubled its revenue every 3 to 5 years. We believe that is possible again."

On the 21st, Naver reported Q1 revenue of KRW 1.8452 trillion and operating profit of KRW 301.8 billion. Compared to the previous quarter, revenue decreased by 4.3% and operating profit by 14.1%, but both increased by 23.1% and 4.5%, respectively, compared to the same period last year. The results slightly missed securities market forecasts.

◆ Webtoon Popularity Drives 66% Growth in Content Segment = By segment, the results were ▲ Search Platform KRW 843.2 billion ▲ Commerce KRW 416.1 billion ▲ Fintech KRW 274.8 billion ▲ Content KRW 217 billion ▲ Cloud KRW 94.2 billion. The Search Platform segment grew 12% year-over-year due to improvements in search quality and the revamp of Smart Place, but declined 4.9% quarter-over-quarter due to seasonal factors.

Commerce grew 28.3% year-over-year and 2.7% quarter-over-quarter. Commerce transaction volume increased 18.8% year-over-year. Transactions in new vertical services such as Brand Store, Shopping Live, Grocery Shopping, and Gift Giving rose 78% year-over-year, while Cream and Amuse also contributed to overall growth with their popularity.

Fintech rose 31.1% year-over-year. Naver Pay’s total payment volume reached KRW 11.2 trillion, up 33.9% year-over-year and 3.0% quarter-over-quarter.

The highly anticipated Content segment grew 65.9% year-over-year. Webtoon revenue surged 79.5% year-over-year, maintaining growth momentum with 180 million global monthly active users and 15 million in the U.S. Cloud grew 15.3% year-over-year but declined 12.1% quarter-over-quarter due to the off-season in the public sector during Q1.

◆ "Increase Global Revenue Share by 20%" = CEO Choi revealed plans for the overseas revenue share as part of the KRW 15 trillion revenue target this year. During the earnings conference call, she said, "Currently, excluding Line, the global revenue share is around 10%. We aim to more than double that to over 20%."

CEO Choi explained, "We plan to generate new revenue streams from various global businesses, including Japan’s search market and commerce, U.S. webtoons, and global enterprise business (B2B). In the metaverse market, we will improve the quality of Zepeto, internalize technology foundations, and increase related investments." She added, "It is difficult to specify exact investment plans, but we will continue efforts to secure technological capabilities."

CEO Choi also expressed her commitment to fostering a healthy organizational culture. She said, "Since last August, we have regularized organizational culture diagnostics to quickly identify any abnormalities. Measures and projects to prevent workplace harassment have already been designed."

She continued, "We have diversified counseling and reporting channels and established a dedicated investigation team under the board of directors staffed with experts. In the long term, we will expand this role to include human rights management. We will protect the human rights of Naver employees, partners, and users alike."

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