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Naver Q2 2023: Financial Highlights & Business Breakdown

Philip Lee profile image
by Philip Lee
Naver Q2 2023: Financial Highlights & Business Breakdown
Source: Naver Corp

Naver (KRX: 035420) has announced its Q2 results.

Why it matters:

NAVER is the largest technology company in South Korea.

It is a barometer of AI trends in the South Korean market and a de facto reflection of the South Korean economic downturn, so analyzing its earnings announcement is essential.

The Key Points

1. Financial Highlights

  • Consolidated revenues: KRW 2.407 trillion (US$1.85 billion), up 17.7% YoY and 5.6% QoQ.
  • EBITDA: KRW 515.1 billion (US$397 million), up 19.1% YoY and 5.5% QoQ. Webtoon's EBITDA turnaround and Poshmark's increasing profitability were vital drivers.
  • Operating profit: KRW 372.7 billion (US$287 million), up 10.9% YoY and 12.8% QoQ.

2. Business Highlights

  • Search Platform (Advertising): Revenues were KRW 904.4 billion (US$697 million), up 0.5% YoY and 6.9% QoQ. The 4.3% YoY growth in search advertising was notable.
  • Commerce: Revenues stood at KRW 632.9 billion (US$487 million). Naver's total commerce GMV (gross merchandise value) for the quarter was KRW 11.9 trillion (US$9.17 billion), up 14.8% YoY.
  • FinTech: Revenues were KRW 339.7 billion (US$261 million). Naver Pay's payment volume was KRW 14.6 trillion (US$11.25 billion), up 21.2% YoY and 9.2% QoQ. Moreover, the integration with Samsung Pay resulted in an offline payment volume of KRW 1.4 trillion (US$1.08 billion) year-on-year.
  • Content: Revenue totaled KRW 4,204 billion (US$3.24 billion). Notably, global webtoon consolidated transactions reached KRW 444.8 billion (US$343 million), with a significant YoY growth in Japan.
  • Cloud & Future R&D: Revenue was KRW 104.5 billion (US$80.5 million). B2B revenue increased by 8.2% YoY and 8.7% QoQ, predominantly from public sector sales.

The Big Picture: Regarding the AI business

Looking ahead, Naver plans to release its next-generation super-scale AI, HyperCLOVA X, on August 24.

Naver also wants to expand its conversational AI service, CLOVA X, and cloud-centric B2B offerings.

Sooyeon Choi, CEO of Naver, concluded in its press release,

"Naver is an integrated platform that covers the entire consumer journey. We want to leverage the huge investment in AI, more than a trillion dollars, in a way that's uniquely Naver to enhance each of our businesses and drive revenue for our partners."

US$1=KRW 1,297.52.

Philip Lee profile image
by Philip Lee

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