Q3 2025 Kakao Corp Earnings Call Transcript
Key Points
- Kakao Corp (XKRX:035720) recorded its highest ever quarterly revenue for two consecutive quarters, driven by solid growth in the Platform segment and better-than-expected performance in the Content segment.
- Operating profit surpassed KRW200 billion for the first time, with an operating margin of 10%, the highest level in four years.
- The introduction of ChatGPT for Kakao and Kanana in Talk has shown strong initial momentum, with over 2 million users engaging with ChatGPT for Kakao within 10 days of launch.
- Kakao's advertising business achieved a record high quarterly revenue, with business messaging revenue growing 22% YoY, indicating a sustainable high growth trajectory.
- Kakao Pay achieved its highest ever quarterly operating profit, driven by accelerated revenue growth from financial subsidiaries and strong performance from data-driven platform services.
- Portal revenue decreased by 5% YoY and 7% QoQ, indicating challenges in this segment.
- The overall story business revenue of Kakao Entertainment and Piccoma declined by 3% both YoY and QoQ, reflecting intensified competition in Japan's comic market.
- Commerce revenue remained similar YoY but decreased 6% QoQ, affected by seasonal shifts and deferred transactions.
- Operating expenses increased by 5% YoY and 2% QoQ, with significant rises in outsourcing and infrastructure costs due to AI service launches.
- In the Content segment, a quarter-over-quarter revenue decline is expected in the fourth quarter, particularly in Games and Music, due to seasonal softness and stabilization at lower levels.
(interpreted) Good morning and good evening. Thank you all for joining today. We will now begin Kakao's Q3 2025 earnings conference call. This conference will start with the presentation followed by a divisional Q&A session. (Operator Instructions)
I will now turn it over to Kakao.
(interpreted) Hello. I'm Jeffrey from Kakao IR. Let's begin with the third-quarter 2025 earnings conference call. Today, I am joined by Sin Ah Jung, the CEO; and Jayden Shin, the CFO. Please be reminded that the earnings results are consolidated estimates under the K-IFRS basis and are subject to change upon the auditor's review.
Also, forward-looking estimates are based on assumptions, so actual results may differ from figures included in today's presentation.
Now we will have a presentation from CEO, Sin Ah Jung.
(interpreted) Good morning. This is Sin Ah, CEO of Kakao. Before going into the details
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