Kakao posts record-breaking and expectation-busting profit
Kakao’s net profit rose 117.5 percent on year to 315.9 billion won ($276.4 million) in the second quarter, far above the market expectations.
Analysts were anticipating 199.8-billion-won in net profit, according to FnGuide.
Revenue hit a record of 1.35 trillion won, up 41.9 percent, though this figure was in line with market expectations. Second-quarter operating profit jumped 66.3 percent on year to 162.6 billion won, a quarterly record.
The strong performances were largely led by the IT company's content business and the new business segment, which includes Kakao Mobility and Kakao Pay.
Kakao’s business is essentially divided into two: the platform business, which includes advertising sales from mobile services like KakaoTalk; and content, which includes revenue from games, webtoons and the Melon music streaming service.
Kakao’s platform business revenue increased 47 percent on year to 761.8 billion won. Its messenger business reported record-high quarterly revenue, at 390.5 billion won, up 52 percent on year on robust advertising sales.
The revenue of other segments in the platform business, which include Kakao Mobility and Kakao Pay, rose 73 percent to 246.2 billion won. The number of Kakao Blue taxies reached 26,000, while transaction volume of Kakao Pay totaled 24.5 trillion won in the second quarter alone.
“Kakao Mobility recently launched new services related to parking, shuttle buses and airlines,” Kakao CEO Yeo Min-soo said during a conference call Friday morning. “We plan to introduce new services such as rental car and shared electric scooter services in the second half.”
Kakao’s content business revenue rose 35 percent on year to 590.4 billion won in the second quarter. The content business has four major parts: games, music, stories and media, which includes the management and sales of original contents.
Revenue in the story business sector, which includes webtoons, was 186.4 billion won, up 57 percent on year, backed by sales of Kakao Japan’s Piccoma webtoon platform and intellectual property revenue.
“The market share of Piccoma grew to 65 percent in the Japanese comic app market in terms of sales as of June,” said Bae Jae-hyun, an executive vice president at Kakao.
The company’s music business posted 188.1 billion won in revenue, an 11 percent increase compared to same quarter a year ago. Revenue in the game business rose 20 percent on year to 128.6 billion won.
Kakao closed at 145,500 won per share Friday, down 2.35 percent from the previous session's close. The combined market cap of Kakao, KakaoBank and Kakao Games in the local stock market is now over 100 trillion won as of Friday.
BY SARAH CHEA [email@example.com]