Seoul, South Korea - Naver (KRX: 035420) reported strong financial results for the third quarter of 2023, driven by robust growth in its commerce and financial technology businesses.
Why It Matters:
As Naver is the dominant player over Google in the South Korean market, the earnings results reflect the atmosphere and landscape of the South Korean tech ecosystem. It makes sense to focus on the results.
The Key Points
Financial Summary:
- Total revenue: KRW 2.45 trillion, +18.9% YoY.
- Net income: KRW 356.2 billion, +53.8% YoY.
- Operating income: KRW 302.2 billion, +15.1% YoY.
Segment Performance:
Search Platform: 3Q23 YoY 0.3%↑ / QoQ % 1.3%↓
- Search YoY 3.5% / QoQ -0.1%
- Display YoY -9.5% / QoQ -4.9%
Commerce Platform: 3Q23 YoY 41.3%↑/ QoQ 2.3%↑
- Commerce Ads YoY 5.5% / QoQ 0.7%
- Commission & Sales YoY 105.0% / QoQ 3.5%
- Membership YoY 29.7% / QoQ 4.3%
Fintech Payments, Digital Finance, etc. - 3Q23 YoY 15.1%↑/ QoQ 0.3%↑
Content: 3Q23 YoY 39.5%↑/ QoQ 3.5%↑
- Webtoon YoY 41.5% / QoQ 2.8%
- SNOW YoY 36.1% / QoQ 10.3%
- Others YoY 8.5% / QoQ 4.2%
Cloud & B2B: 3Q23 YoY 30.3% ↑ / QoQ 18.3% ↑
- B2B YoY 19.9% / QoQ 11.4%
- Others YoY 389.0% / QoQ 148.9%
Profitability Metrics:
- Net profit growth: +53.8% YoY.
- Net margin: 14.6%, a 3.3% YoY increase.
What They Say:
"In the third quarter, we unveiled a series of generative AI services and a monetization roadmap to guide our future AI business, laying the foundation for continued growth in each area. In addition, with the launch of our digital twin technology in Saudi Arabia, NAVER will continue to accelerate global challenges by leveraging not only our services but also our accumulated technology."
Choi Soo-yeon, CEO of Naver
What comes next?
In addition to its core search function, Naver is venturing into entertainment.
The global sales volume of its webtoons segment increased by 5% to KRW 479.4 billion, driven by intellectual property adaptations.
A novel digital twin platform project cooperating with Saudi Arabia's Ministry of Housing underscores Naver's international ambitions.
Naver's research and development in artificial intelligence, coupled with global ventures such as the Saudi digital twin platform, demonstrate its intention to expand its technological footprint beyond its borders.
The overarching goal remains to diversify revenue streams beyond pure search and digital advertising, with AI and international projects outlining future strategic paths.
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