Kakao profit up 180 percent as advertising starts to pay off

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Kakao profit up 180 percent as advertising starts to pay off

Published: 05 Nov. 2020, 16:35 Updated: 05 Nov. 2020, 17:29

Kakao saw its third-quarter net profit nearly triple from a year earlier on the back of robust growth across a wide range of business sectors including commerce, advertising, webtoons and ride-hailing services.

Net profit reached a quarterly high of 143.7 billion won ($127.4 million) in the July-September period, up 179.3 percent from 51.1 billion won a year earlier, the company announced Thursday.

Revenue hit an all-time high of 1.14 trillion won during the three months, up 41 percent compared to the same period last year.

Operating profit rose 103 percent on-year to a quarterly high of 120.2 billion won over the cited period, it said.

It marks the first time that the company has exceeded 1 trillion won in sales and 100 billion won in operating income. The company also logged a quarterly high net income for seven consecutive quarters.

One of the biggest contributors to the revenue bump was its advertising and e-commerce businesses based on the KakaoTalk messaging app, the company said, as people spend more time being connected during the pandemic.

Revenue from KakaoTalk and portal site Daum surged by 58 percent on-year to 554.4 billion won over the cited period thanks to the steady growth of new advertising platforms Biz Message and Talk Biz, which place ads at the top of KakaoTalk’s main page to increase exposure.

Kakao CEO Yeo Min-soo said during a conference call that the number of clients for the new advertising tool topped 10,000 in the third quarter.

Revenue from KakaoTalk surged 75 percent on year to 284.4 billion won, while that of Daum edged up 4 percent to 121.2 billion won.

The content business covering music, webtoons and gaming also enjoyed steady growth of 26 percent on year to 546 billion won.

Revenue from paid content, such as webtoons, shot up 61 percent on year to 148.4 billion won during the third quarter on the back of increased popularity in Japan, the company said.

Revenue from game content also increased 51 percent on year to 155.7 billion won due to the popularity of Guardian Tales, it said. New mobility and payment services revenue also jumped up 139 percent on year to 148.8 billion won.

The CEO said that transactions made through Kakao Pay totaled 17.9 trillion won in the third quarter, up 38 percent from a year earlier.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]