Kakao Pay Q4 Operating Loss of 33 Billion Won... "9 Billion Won Deficit Excluding 'Timap' Refund"

"Excluding the 31.5 Billion KRW TMEF Loss, Annual Results Turned Profitable"
Annual Transaction Volume Up 19%... Financial Services Surpass 10 Trillion KRW
First Quarterly Profit for Securities... Non-Life Insurance Sales Increase Fivefold

Kakao Pay posted an operating loss of 33 billion KRW in the fourth quarter of last year. The annual net loss was 21.5 billion KRW. Excluding losses from the TMEF (Timon·Wemakeprice) unsettled payment crisis, the company managed to break even in the fourth quarter and turned a profit for the year, emphasizing that the company’s fundamentals are solid.

Kakao Pay announced on the 4th that it had preliminarily recorded an operating loss of 33 billion KRW on a consolidated basis in the fourth quarter of last year. The deficit increased by 53.8% compared to the same period last year. Revenue rose 31.3% to 218.2 billion KRW, and net profit turned positive at 5.2 billion KRW. The company explained that a one-time loss due to refund measures related to the TMEF unsettled payment crisis was reflected. Excluding this cost, the operating loss in the fourth quarter was about 900 million KRW, approaching the break-even point (BEP).

Transaction volume in the fourth quarter of last year reached 43.1 trillion KRW, up 13% from the same period last year. Payment and remittance services increased by 16% and 14%, respectively. In particular, offline payments grew by 138% year-on-year, driven by convenience store payments and tax/public utility bill payments. The remittance service benefited from the effect of the remittance envelope redesign.

Kakao Pay stated that the total net loss for last year was 21.5 billion KRW. Earnings before interest, taxes, depreciation, and amortization (EBITDA) showed a loss of 20.6 billion KRW. However, excluding the 31.5 billion KRW refund cost related to TMEF, the company recorded an annual net profit of 15.9 billion KRW and EBITDA of 20.9 billion KRW, turning profitable. This indicates no major issues with the fundamentals.

Transaction volume (TPV) and revenue increased last year. TPV rose 19% year-on-year to 167.3 trillion KRW, and consolidated revenue increased 25% to 766.2 billion KRW. Annual revenue-contributing transaction volume (Revenue TPV) grew 20% to 48.8 trillion KRW.

The company emphasized the remarkable growth in the financial services sector. Annual transaction volume in financial services surpassed 10 trillion KRW, and revenue increased 71% compared to the previous year. Business performance indicators such as users and merchants also showed growth. The monthly active users (MAU) last year were 24.02 million. The number of transactions per user across all services was 99. Domestic merchants increased 14% year-on-year to 1.13 million, with many new merchants joining, mainly in the food and beverage sector.

Offline payments, remittance, the Kakao Pay app, and subsidiaries (securities and non-life insurance) showed steady growth. The prepaid recharge fund, Kakao Pay Money, expanded its scale by surpassing 31 million users by the end of the year. The app’s MAU increased 58% compared to the same period last year.

Subsidiary Kakao Pay Securities recorded its first quarterly profit since its launch by increasing revenue by 171% year-on-year in the fourth quarter. This was due to increased commission income from expanded stock trading. The stock trading volume in the fourth quarter rose 81% year-on-year to a record high of 17.3 trillion KRW. As of December last year, the stock balance increased 120% year-on-year to about 2.3 trillion KRW. Kakao Pay Non-Life Insurance increased sales fivefold compared to the previous year by attracting about 3 million overseas travel insurance subscribers.

Kakao Pay announced plans to overcome the TMEF crisis risk and improve profitability. The strategy is to enhance profitability through vertical expansion, nurturing traffic-based businesses, and data monetization strategies.

To broaden the value chain, the company plans to expand the simple payment business into a business that combines value-added services for merchants. It is considering introducing a business model that supports IT and credit evaluation capabilities to loan partner financial institutions to increase added value. The company plans to increase traffic in non-financial sectors through content services and app activation programs, expanding into telecommunications product brokerage and advertising fields.

Based on one of the industry’s largest MyData and proprietary data, the company aims to enhance services and improve profitability. Kakao Pay plans to personalize its services, content, and advertising and further increase suitability and personalization levels for each user through artificial intelligence (AI) learning.

A Kakao Pay official said, "In the long term, we will evolve into a financial platform combined with generative AI," adding, "We plan to strengthen technological collaboration within the group to establish ourselves as the most suitable financial advisor for users."

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