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Kakao sets a new record in quarterly sale

  • Operating profits also best ever since 1Q 2015
  • KRW 515.4bn in revenue and KRW 47.4bn in operating profits in 3Q17
  • Even growth in all segments including advertising, content and commerce
  • Gearing up to build the AI ecosystem
  • Kakao to open the platform available to everyone

[2017.11.9] Kakao announced today that it recorded KRW 515.4bn in consolidated sales and KRW 47.4bn in operating profit in the third quarter of 2017 based on K-IFRS.

In 3Q, consolidated sales grew steadily in all business segments including advertising, content, and commerce. It was up 32% YoY and 10% QoQ, setting a new record in quarterly sales.

Ad platform sales amounted to KRW 151.5bn. The figure rose slightly compared to 2Q and 19% YoY despite the off-peak season, backed by the sustained growth of KakaoTalk-based advertising products such as Plus Friends, Info Talk, and brand emoticons.

Content platform sales climbed 12% QoQ and 32% YoY to KRW 261.5bn. Game content sales increased 19% QoQ and 20% YoY to KRW 93.9bn on the back of the steady popularity of the online game “Black Desert” in overseas market and the launch of “Onmyoji”. As for the music platform, Kakao’s subsidiary, LOEN Entertainment, posted the best-ever sales. Its 3Q sales tallied at RKW 122.1bn, up 4% QoQ and 28% YoY. Other content sales also rose by 18% QoQ and 87% YoY to KRW 45.5bn on the back of continuous growth in recent years, such as daily average transactions in KakaoPage exceeding KRW 500mn in Korea and 100mn won in Japan.

Other platforms grew 24% QoQ and 55% YoY to KRW 102.4bn thanks to solid growth in the Commerce segment, of which sales increased 22% QoQ and 43% YoY.

3Q consolidated operating expenses including commissions linked to various content sales and marketing promotion expenses for major services amounted to KRW 468bn.

As a result, 3Q operating profit grew 6% QoQ and 57% YoY to W47.4bn, with an OP margin of 9.2%. Consolidated net income was KRW 27.4bn, an increase of KRW 26.2bn from the same period of last year, to KRW 39.9bn, recording a net profit of 7.7%.

Kakao is working with partners in various industries to create artificial intelligence ecosystems. It is adopting the Kakao I platform in various areas such as automobiles, apartments, offline shops, home appliances, and home services. From next year, it will open the platform up to large enterprises as well as small business owners to help them use artificial intelligence technology. AI technology is also applied to content and commerce services including Daum News, and Kakao is also focusing on business innovation by upgrading existing services, developing new services, and collaborating with partners.

In addition, efforts that have been undertaken by the company over the past two years have been steadily achieving results. The new Kakao advertising platform will start an open beta test (OBT) from Nov 20th, and the PC online game ‘”Battle Ground”, which continues to be a global hit, will start its service from Nov 14th. As for KakaoPage, the view MAU jumped by more than 50% QoQ and 75% YoY, and the number of daily viewers of Piccoma serviced in Japan increased from 800 thousand in 2Q to one million in 3Q.

 

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