Kakao Q3 Profit Jumps 113% Despite Revenue Dip; Platform Growth Strong.

Philip Lee -

SEOUL, South Korea - Kakao Corp (035720. KS) reported a 4.5% year-over-year decline in third-quarter revenue to KRW 1.92 trillion (US$1.38 billion), impacted by weakness in its content business amid challenging market conditions.

Key Financial Metrics for Q3 2024:

  • Operating profit increased 5.0% YoY to KRW 130.5 billion (US$94.0 million)
  • Operating profit margin improved to 6.8%, up from 6.2% a year earlier
  • Net profit rose 113% YoY to KRW 78.5 billion (US$56.5 million)
  • Platform revenue grew 7.2% YoY to KRW 943.5 billion (US$679.5 million)
  • Content revenue declined 13.6% YoY to KRW 977.9 billion (US$704.2 million)

Business Segment Performance:

Platform Business:

  • Talk Biz revenue is up 6% YoY, driven by 21% growth in Business Messaging
  • Portal Biz revenue declined 8% YoY due to decreased user activity
  • Platform-Others revenue grew 13% YoY, with Kakao Pay achieving positive EBITDA for two consecutive quarters

Content Business:

  • Games revenue: down 11% on the previous year due to the lack of new titles
  • Music sales: down 8% on the last year due to high base effects in album sales
  • Story revenue: Decline of 12% YoY due to the rebranding of Kakao Webtoon
  • Media revenue: Decrease of 49% YoY due to production delays

User Metrics:

  • Monthly active users (MAU) in South Korea: reached 48.93 million, up 60k YoY
  • Global MAU, including Korea, reached 54.20 million

Strategic initiatives:

  • Implemented cost control measures, reduced operating costs by 5.1% YoY
  • Maintained conservative hiring practices with total headcount down 67 YoY
  • Strengthened focus on core business by ending services in Taiwan and Indonesia

The company faces near-term challenges in its content business but maintains stable growth in its platform operations. 

The gaming division focuses on major title releases planned for 2025, while Kakao Pay achieved milestone profitability metrics.