Kakao's Q3 Operating Profit Rises 7% Ahead of Planned Corporate Split... Advertising and Commerce Surge (Comprehensive)

Revenue up 6% to 2.0867 trillion won
Strong performance in platform business, including advertising and commerce
Mobility and payments also perform well... content revenue edges down
Kakao CEO Shina Chung: "We will expand AI services at a faster pace"

Kakao posted improved results in the third quarter of this year, supported by strong performance in its platform business, including advertising and commerce.

Kakao disclosed on November 5 that its consolidated operating profit for the third quarter of this year was provisionally estimated at 240.3 billion won, up 7% from the same period a year earlier. Revenue rose 6% to 2.0867 trillion won over the same period. The third-quarter operating margin was 12%, and operating expenses totaled 1.8464 trillion won, up 6% from the same period a year earlier.

Kakao Pangyo Agit in Seongnam, Gyeonggi. Photo by Kang Jinhyeong aymsdream@

By business segment, revenue from the platform division rose 17% to 1.235 trillion won. Within the division, revenue from Talk Biz, which includes KakaoTalk advertising and commerce, increased 13% to 632.9 billion won. Talk Biz revenue growth was 11% in advertising and subscriptions, and 16% in commerce, including Gift Giving and Talk Deal.

In particular, the number of customers making purchases for themselves (gifting themselves) and the transaction value of those purchases in the third quarter rose 23% and 33%, respectively, from the same period a year earlier. Self-purchases also accounted for about 30% of total commerce transaction value.

Revenue from other platform services, including mobility and payments, rose 21% to 602.1 billion won. Mobility continued to grow, supported by strong performance in new businesses alongside a stable revenue base from existing businesses. Payments revenue and operating profit increased as financial and payment services grew steadily. The payments business recorded a double-digit operating margin for the third consecutive quarter.

However, revenue from the content division fell 6% to 851.7 billion won in the third quarter. Music revenue dropped 10% to 508.3 billion won as major artists released fewer albums and held fewer large-scale concerts. Story revenue also declined 17% to 200.6 billion won. Media revenue increased 49% to 142.8 billion won.

Kakao plans to accelerate the expansion of its AI services, centered on Kanana Space, an AI assistant integrated into KakaoTalk. In December, it will begin a pilot service for Kanana Space for users who have signed up in advance. It also plans to officially launch AI for Everyone and Kanvas, an agent for PCs, within the year. Kakao said it expects its AI services that are already available to reach 10 million monthly active AI users.

Whether the planned corporate split into Kakao AI, the newly established entity, and Kakao X, the continuing entity, early next year will proceed smoothly remains to be seen. Kakao plans to complete the split on January 1, 2027, following an extraordinary shareholders' meeting on December 17, and to relist Kakao AI and change Kakao X's listing status on January 27 of the same year. Kakao AI will oversee AI, advertising, and commerce, with a focus on KakaoTalk, while Kakao X will support and manage the growth of subsidiaries.

Kakao CEO Shina Chung said, "I believe the most important thing is to focus all our resources on quickly introducing AI services that exceed market expectations." She added, "We will expand our AI services at an even faster pace and meet our shareholders' expectations by delivering tangible business results and increasing corporate value."

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