Naver Posts Record Q1 Operating Profit... "Line Yahoo Sale Decided from Mid- to Long-Term Perspective" (Comprehensive)

Q1 Sales 2.5261 Trillion KRW, Operating Profit 439.3 Billion KRW
Balanced Growth Across All Businesses Including Search Ads and Commerce
"Line Yahoo Position Not Finalized Yet... Close Consultation with Government"

Naver achieved its highest-ever performance this year in the first quarter, driven by balanced growth across key business sectors such as search advertising and commerce. Regarding the issue of selling shares in its Japanese affiliate Line Yahoo, the company stated it will make a cautious decision from a mid- to long-term growth perspective.

On the 3rd, Naver announced that its first-quarter revenue reached 2.5261 trillion KRW, a 10.8% increase compared to the same period last year. Operating profit rose 32.9% to 439.3 billion KRW. The revenue is the highest ever recorded for a first quarter, and the operating profit is a record high.

This performance exceeded market expectations. Financial information provider FnGuide had forecasted Naver’s first-quarter revenue and operating profit at 2.4955 trillion KRW and 389.5 billion KRW, respectively.

Revenue by business segment was ▲Search Platform 905.4 billion KRW ▲Commerce 703.4 billion KRW ▲Fintech 353.9 billion KRW ▲Content 446.3 billion KRW ▲Cloud 117.0 billion KRW.

Search Platform revenue, composed of search advertising and display advertising, increased 6.3% year-on-year to 905.4 billion KRW. Performance-based advertising, including expanded Home Feed ad revenue, showed strong results, supported by an increase in new advertisers.

Commerce revenue grew 16.1% year-on-year to 703.4 billion KRW. This was influenced by new revenue generated from logistics solutions such as the on-time delivery guarantee service "Arrival Guarantee" and "Brand Solution," as well as the inclusion of the Japanese peer-to-peer trading platform "SODA."

Fintech recorded 353.9 billion KRW, up 11.2% year-on-year. Naver Pay’s payment volume in the first quarter expanded its external ecosystem, increasing 24.8% year-on-year to 16.7 trillion KRW. Offline payment volume surged 174% year-on-year, supported by the expansion of QR and Magnetic Secure Transmission (MST) payments.

Content revenue rose 8.5% year-on-year to 446.3 billion KRW. The global webtoon integrated transaction volume grew 9.1% year-on-year to 458.7 billion KRW. In particular, in Japan, both users and paid subscribers increased due to the expansion of original content. As a result, transaction volume in Japanese yen grew 24% year-on-year. Webtoons strengthened both growth and profitability by expanding quarterly EBITDA and achieving operating profit in the black.

Cloud revenue grew 25.5% year-on-year to 117.0 billion KRW, driven by the full-scale realization of sales from generative AI solutions such as HyperCLOVA X.

Meanwhile, regarding the recent administrative guidance from Japan’s Ministry of Internal Affairs and Communications to review shareholding relationships with Line Yahoo, Naver has not yet finalized its position. Naver CEO Choi Soo-yeon said, "Although the ministry’s administrative guidance is unusual, the decision will not be simply whether to comply or not, but will be made from a mid- to long-term growth perspective. We will closely consult with the government during this process." She added, "Due to the administrative guidance, Naver has decided to build the infrastructure it previously provided on its own, so there will be changes in related revenue, but it is too early to comment further."

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