Naver posts record profit in Q3 on content, commerce businesses

Headquarters of Naver in Seongnam, Gyeonggi [YONHAP]

Naver, Korea's largest internet company, reported record-high third-quarter results on Friday on the back of robust growth in commerce and content businesses.

The Seongnam, Gyeonggi-based company posted its third-quarter net income of 356.2 billion won ($265.2 million), up 53.8 percent from a year earlier.

The company said in a regulatory filing that it posted 380.2 billion won in operating profit for the quarter, compared with 330.2 billion won a year ago. Revenue rose 18.9 percent to 2.44 trillion won.

The earnings beat market expectations. The average estimate of net profit by analysts stood at 286.2 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

The company attributed the strong earnings to the growth of its commerce, content and cloud units.

Sales of Naver's commerce unit soared 41.3 percent on-year to 647.4 billion won thanks to its subsidiaries, including Poshmark and Kream.

Content sales advanced 39.5 percent on-year to 434.9 billion won, driven by the growth of its global webtoon business, increased sales on Snow, a popular camera application that offers photo filters, and Zepeto, its metaverse platform.

Naver's cloud unit saw its sales grow 30.3 percent to 123.6 billion won on increased demand for Whalebook, a cloud-optimized laptop for educational use and stronger business-to-business performance.

Naver's flagship search platform saw its sales inch up 0.3 percent to 898.5 billion won in the third quarter from a year ago, and its fintech sales went up 15.1 percent on-year to 340.8 billion won.

"In the third quarter, we have presented our artificial intelligence business direction by unveiling the generative AI service line-up and the profitization road map," Naver's CEO Choi Soo-yeon said.

"Also, Naver will accelerate its global expansion using its service and accumulated technological capacity," Choi said, noting its digital twin city project for Saudi Arabia.

Last month, Naver announced it has struck a deal with the Saudi Arabian government to create a digital twin platform for the country's capital Riyadh and four other cities.

Kim Nam-sun, Naver's chief financial officer, said that the company will buy back and cancel 305.3 billion won of its shares, or equivalent to 1 percent of the stock outstanding, to boost the stock price. The buyback and cancellation will be held next Tuesday.

"Our capacity to secure stable liquidity for mid-to-long-term growth has become much stronger," Kim added, referring to the issuance of a combined 20 billion yen worth of Japanese Samurai bonds.

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