Kakao posts nearly 20% climb in Q2 operating profit to $97M

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Kakao posts nearly 20% climb in Q2 operating profit to $97M

Published: 08 Aug. 2024, 15:26 Updated: 08 Aug. 2024, 18:57

LEE JAE-LIM
lee.jaelim@joongang.co.kr

Kakao's Pangyo headquarters in Gyeonggi [NEWS1]

Messenger giant Kakao’s operating profit for the April-June period swung up 18.5 percent on year to 134 billion won ($97.3 million) thanks to the robust performance of its platform business.

The tech company also forecast the release of an AI chatbot app this year, separate from its dominant messenger service.

The operating profit exceeded market expectations of 133.2 billion won compiled by market tracker FnGuide.

Quarterly revenue jumped 4.2 percent on year to 2 trillion won, in line with the market consensus, while net profit surged 59.1 percent to 87.1 billion won, below the analyst forecast of 109 billion won.

Monthly active users of its messenger platform, KakaoTalk, remained strong at 48.93 million, up 1.5 percent on year.

Kakao consists of two key business divisions — platform and content. For the former, revenue surged 10 percent to 955.3 billion won, with revenue generated from its advertising platform, TalkBiz, increasing 9 percent to 307.3 billion won.

In the content business, quarterly revenue dipped 0.4 percent to 1.05 trillion won. Revenue for the music unit increased 6 percent to 510.9 billion won. The performance of its story unit encompassing webtoons, dramas and films slumped 7 percent to 215.7 billion won due to an increase in marketing costs for webtoon subsidiary Kakao Piccoma to respond to intensifying competition in Japan.

Kakao CEO Chung Shin-a indicated that a business-to-consumer AI chatbot service will be released in the latter half of this year in an online conference call on Thursday.

“The service that we’re preparing now will minimize hallucination concerns and will be released as a separate app from KakaoTalk,” Chung said.

Responding to speculation that Kakao is deliberating a sell-off of affiliates, Chung said that the company’s primary goal is now focused on AI, and that “any business that is evaluated to lack consistency with the KakaoTalk app or AI will be categorized as a non-core asset” for management restructuring within this year.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]