Naver Aiming for Annual Sales Over 10 Trillion Won, Records Highest Q3 Revenue and Operating Profit (Comprehensive)

Q3 Revenue 2.4453 Trillion KRW, Operating Profit 380.2 Billion KRW
High Growth in Commerce and Content, Defense Against Advertising Market Slowdown

Naver achieved its highest-ever sales and operating profit in the third quarter. This was thanks to high growth rates in the commerce and content sectors. If this trend continues, annual sales are expected to approach 10 trillion KRW.

Naver Headquarters in Seongnam, Gyeonggi. Photo by Jinhyung Kang aymsdream@

On the 3rd, Naver announced that in the third quarter, it recorded sales of 2.4453 trillion KRW, operating profit of 380.2 billion KRW, and net profit of 356.2 billion KRW. Sales increased by 18.9%, operating profit by 15.1%, and net profit by 53.8% compared to the same period last year.

High Growth in Commerce and Content

Despite a slowdown in the advertising market due to the economic downturn, Naver recorded its highest quarterly performance ever by achieving high growth rates in the commerce and content sectors. Looking at sales by business segment: ▲ Search Platform 898.5 billion KRW ▲ Commerce 647.4 billion KRW ▲ Fintech 340.8 billion KRW ▲ Content 434.9 billion KRW ▲ Cloud 123.6 billion KRW.

The Search Platform recorded 898.5 billion KRW, a 0.3% increase compared to the same period last year. Search advertising grew by 3.5% year-on-year due to continuous platform enhancement efforts. Naver explained, "Even amid the endemic, we have been the only leading global advertising platform to maintain steady growth every quarter, and in the fourth quarter, we will continue efforts such as Naver app revamp, platform enhancement, and expansion of premium products."

Commerce recorded 647.4 billion KRW, a 41.3% increase year-on-year. Even excluding the effect of incorporating the North American secondhand trading platform Poshmark, it grew 14.7% year-on-year, surpassing the average growth of the domestic commerce market. Brokerage and sales revenue more than doubled year-on-year due to growth in transaction volume from Brand Store, travel, Cream, and the effect of Poshmark incorporation.

Fintech recorded 340.8 billion KRW, a 15.1% increase year-on-year. In the third quarter, Naver Pay's payment volume was 15.2 trillion KRW, up 22.5% from the same period last year. Among this, external payment volume grew 45.8% year-on-year, and offline payment volume also reached 1.7 trillion KRW, doubling year-on-year due to the addition of Samsung Pay MST payment function and growth in reservation and order payments.

Content recorded 434.9 billion KRW, a 39.5% increase year-on-year. The global webtoon integrated transaction volume increased 5% year-on-year to 479.4 billion KRW. The success of webtoon IP video adaptations and platform enhancements such as AI recommendation improvements boosted user engagement. Naver explained that Japanese webtoons maintained steady growth in transaction volume due to an increased proportion of original and serialized works.

Cloud recorded 123.6 billion KRW, a 30.3% increase year-on-year. Changes in revenue recognition for NCP and an increase in paid IDs for Line Works led to a 19.9% year-on-year increase in B2B sales. Naver is currently promoting a digital twin platform construction project for the Saudi Arabia Ministry of Municipal and Rural Affairs and Housing.

Will Naver Join the '10 Trillion KRW Sales Club'?

This year, Naver has been breaking its record for the highest quarterly performance every quarter. If this trend continues, annual sales are expected to approach 10 trillion KRW. The cumulative sales up to the third quarter were 7.132 trillion KRW, and if sales at the third-quarter level continue, annual sales are projected to reach 9.6 trillion KRW.

There is also analysis that annual sales could exceed 10 trillion KRW. Naver's sales last year were 8.2201 trillion KRW. To surpass 10 trillion KRW in sales, a growth rate of about 22% is required this year. Having recorded about 20% growth up to the third quarter, achieving 10 trillion KRW in sales this year is possible depending on fourth-quarter results.

In particular, since October, Naver raised commission fees for Brand Store and monetized the previously temporarily free delivery guarantee service, so higher performance is expected in the fourth quarter. Additionally, the recovery of the advertising market is also expected to drive performance growth.

Regarding this, Naver CEO Choi Soo-yeon said during a conference call after the earnings announcement, "The commission charging is being applied smoothly, and although it is still early to mention its contribution to sales, it will significantly contribute to sales growth next year." She added, "The fourth quarter seems to show a recovery in the advertising market compared to the third quarter, and commerce is expected to grow more in the fourth quarter than in the third."

CEO Choi said, "In the third quarter, we unveiled the lineup of generative AI services and the monetization roadmap, presenting the future direction of AI business, and laid the foundation to continue growth in each area. Also, including the digital twin technology project in Saudi Arabia, Naver will accelerate its global challenges by leveraging accumulated technology not only in services but also in technology."

Meanwhile, Naver became the first global IT company to issue Samurai bonds in Japan, marking the first debut bond issued solely by a domestic non-financial private company without guarantees in about seven years. According to the newly announced shareholder return plan earlier this year, a total cash dividend of 62.4 billion KRW was paid on August 22. Separately, on November 7, Naver plans to specially cancel about 30.53 billion KRW worth of treasury shares, equivalent to 1% of issued shares, based on the closing price on October 30.

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