KakaoPay Q2 Operating Loss of 12.5 Billion KRW... Deficit Size Expands 53% YoY

Increase in Various Costs Expands Deficit Scale
Turned to Profit on Separate Basis
"Subsidiaries' Profitability Improvement to Accelerate in Second Half"

[Asia Economy Reporter Minwoo Lee] Kakao Pay recorded an operating loss of 12.5 billion KRW on a consolidated basis in the second quarter of this year. The deficit widened compared to both the previous quarter and the same period last year. However, on a separate basis, it posted a profit for the second consecutive quarter, suggesting potential profitability improvement in the future.

Widening Deficit Due to Various Costs... Profit on Separate Basis

Source=KakaoPay Homepage

According to the Financial Supervisory Service's electronic disclosure system on the 2nd, Kakao Pay posted consolidated sales of 134.1 billion KRW and an operating loss of 12.5 billion KRW in the second quarter of this year. Sales increased by 22.8% year-on-year, but the deficit grew by 53.1%. Compared to the operating loss of 1.1 billion KRW in the previous quarter, the loss expanded more than sevenfold.

This is attributed to increased various costs. Kakao Pay's consolidated operating expenses in the second quarter of this year rose 24.9% year-on-year and 17.8% quarter-on-quarter to 146.6 billion KRW. Advertising expenses increased by 69.6% compared to the previous quarter due to the official launch of Kakao Pay Securities' Mobile Trading System (MTS) and promotional events for key online and offline merchant payments. At the same time, payment fees increased by 28.4% year-on-year due to higher direct costs from increased payment sales, server operation costs related to the MTS service, and system construction costs for the insurance underwriting company.

A Kakao Pay official explained, "The increase in various expenses is due to system construction and workforce reinforcement in preparation for new service launches by subsidiaries Kakao Pay Securities, Kakao Pay Insurance, and KP Insurance Services." He added, "These subsidiaries are also expected to follow Kakao Pay's growth trajectory as their scale expands and profitability improves." Currently, Kakao Pay Securities is preparing credit trading and KakaoTalk stock trading services, while Kakao Pay Insurance is about to launch its first product since its official launch in the second quarter.

In fact, Kakao Pay has entered a stage of profitability improvement on a separate basis. It recorded an operating profit of 8.8 billion KRW, successfully turning profitable compared to the same period last year. Sales also increased by 24% year-on-year and 4% quarter-on-quarter to 122.1 billion KRW. A Kakao Pay official said, "We have officially entered the monetization stage by achieving an operating profit margin of 10% in the first half of this year, compared to an operating loss of 400 million KRW on a separate basis last year," adding, "Despite macroeconomic difficulties, separate sales in the second quarter increased by 24% year-on-year."

MAU 21.95 Million... Transaction Volume Continues to Rise

Meanwhile, as of the second quarter of this year, Kakao Pay's cumulative number of subscribers reached 38.15 million, and monthly active users (MAU) stood at 21.95 million. The annualized transaction count per user increased by 25% year-on-year to 100.3 transactions.

The transaction volume (TPV) was about 29.1 trillion KRW, up 19.1% year-on-year. Specifically, payment transaction volumes for both online and offline grew by 35% each compared to the same period last year, while financial service transaction volume increased by 5% during the same period. It was explained that the expansion of loan brokerage service transactions was a key factor in the growth of financial service transaction volume.

Additionally, starting from this quarter's earnings announcement, Kakao Pay disclosed the scale of revenue-contributing transaction volume (Revenue TPV). As of the second quarter of this year, it stood at 8.4 trillion KRW, growing 27% year-on-year. This growth rate was steeper than that of the total transaction volume.

Kakao Pay plans to focus on diversifying its revenue sources in the second half of this year. A Kakao Pay official stated, "In the loan sector, we will firmly establish our position as a loan platform through various user-centered services such as Korea's first government fund-backed Jeonse loan and general monthly rent loan simultaneous comparison service, the Saetdol loan service launch, and a debt service ratio (DSR) calculator." He added, "Through the insurance comparison service launched by our subsidiary KP Insurance Services, we aim to increase insurance consumer satisfaction and continue steady growth by providing offline payment convenience."

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