Kakao posted strong results in the fourth quarter last year. Due to the base effect from a one-off bad debt expense (uncollectible receivables) stemming from the "T-MEP incident" the previous year, operating profit recorded a growth rate of more than 100%. In addition, the combined growth of Talk Biz and commerce revenue also drove the results. Kakao also surpassed 8 trillion won in annual revenue for the first time last year, setting an all-time record.
Kakao announced on the 12th that on a consolidation basis, it posted revenue of 2.1332 trillion won and operating profit of 203.4 billion won in the fourth quarter of 2025. Compared with a year earlier, revenue rose 9% and operating profit increased 136%.
The surge in operating profit is seen as the result of the base effect from a one-off bad debt expense related to the "T-MEP incident" recognized at Kakao Pay in the fourth quarter of the previous year, which cut operating profit by more than 30%, combined with the concurrent growth in core businesses such as Talk Biz ads, commerce, and Pay in the fourth quarter this year. Kakao's operating profit in the fourth quarter of 2024 was 106.7 billion won, down 33.7% from a year earlier. An industry official said, "In the fourth quarter of 2025, with the burden of such one-off expense eased, the growth of the core business lifted results."
Kakao's platform revenue in the fourth quarter was 1.2226 trillion won, up 17% from a year earlier. Of that, Talk Biz revenue was 627.1 billion won, up 13% on-year, and advertising revenue grew 16% to 373.4 billion won. Business messages and display ads also rose 19% and 18%, respectively, from a year earlier, maintaining double-digit growth.
The commerce business also continued to expand in scale. Talk Biz commerce revenue, which includes Gift and Talk Deal, was 253.4 billion won, up 8% from a year earlier, and the total transaction volume reached 3 trillion won for the first time in a quarter, growing 12%. Gift transaction volume increased 14% from a year earlier thanks to the Chuseok effect and expanded year-end promotions.
Other platform revenue, including mobility and Pay, was 523.9 billion won, up 30% from a year earlier. Content institutional sector revenue was 910.6 billion won, similar to the previous year, but music and media rose 12% and 30%, respectively, to 525.1 billion won and 95.8 billion won.
On an annual basis, Kakao set an all-time earnings record. Kakao's revenue last year was 8.0991 trillion won, up 3% from a year earlier. Annual operating profit last year was 732 billion won, up 48% from the previous year.
Kakao plans to officially launch the On-device AI service "Kanana in KakaoTalk" on Android and iOS in the first quarter of this year, while simultaneously advancing its proprietary language model.
Chung Shin-a, CEO of Kakao, said, "The results of structural improvements have appeared in financial indicators," and noted, "We will turn mid- to long-term growth expectations into tangible outcomes."
Meanwhile, Kakao disclosed that its board of directors met on the afternoon of the 11th and approved the agenda to reappoint CEO Chung Shin-a to a two-year term. The industry views Chung Shin-a's reappointment at Kakao as effectively assured thanks to the company's record-high results. The agenda is expected to be finalized at the regular shareholders meeting on Mar. 26. Chung Shin-a, who took office in March last year, serves until the end of next month.