Kakao set record quarterly operating profit and revenue in the second quarter this year, as growth in commerce platforms such as ads, Gift and Talk Deal was bolstered by affiliates including Kakao Mobility and Kakao Pay.
Kakao said on Aug. 6 that on a consolidation basis its second-quarter revenue came to 2.098456 trillion won and operating profit to 277.016 billion won, up 9% and 36%, respectively, from a year earlier. Both revenue and operating profit were the highest ever for a quarter. Net profit for the second quarter was 17.98 billion won, down 90% from a year earlier.
The second-quarter operating margin improved by about 3 percentage points (P) to 13%. Operating expenses rose 6% from a year earlier to 1.8214 trillion won.
Kakao said it classified the profit and loss related to the sale of the game business institutional sector, which consists of Kakao Games and subsidiaries, as discontinued operations. On the steep drop in net profit, the company said, "As Kakao Games and AXZ were excluded from the consolidated companies, discontinued operations and corporate tax were temporarily reflected."
Revenue in the platform institutional sector that includes KakaoTalk, Gift, and Kakao Pay was 1.2303 trillion won in the second quarter this year, up 17% from a year earlier.
Within the platform institutional sector, Talk Biz (KakaoTalk) revenue rose 12% in the second quarter from a year earlier to 643.2 billion won. Of that, ad and subscription revenue increased 14% to 399.9 billion won. Business message revenue grew 20% in the second quarter from a year earlier, and display ads using KakaoTalk inventory grew 28% on stronger user activity and the performance of new ad products.
Talk Biz commerce, including Gift and Talk Deal, also continued to grow. The second-quarter total transaction value was 2.7 trillion won, up 9% from a year earlier. In particular, self-purchase transaction value within Gift rose 39% from a year earlier, driving the growth of Gift. As a result, second-quarter Talk Biz commerce revenue increased 10% from a year earlier to 243.2 billion won.
Platform other revenue, which includes mobility and Pay, totaled 587 billion won in the second quarter, up 22% from a year earlier. Mobility performed well in both its existing business and last-mile logistics. Pay posted a sharp increase in financial revenue, while payments and platform services also maintained double-digit growth, achieving record quarterly revenue and operating profit.
Second-quarter revenue in the content institutional sector was 868.2 billion won, up 1% from a year earlier. Second-quarter music revenue rose 8% to 558.4 billion won on the back of expanded performances of major IP, and media revenue increased 5% to 99.1 billion won as the number of productions in progress grew. Story revenue was 210.7 billion won.
Kakao said it will sequentially roll out an agentic AI experience on KakaoTalk that completes everyday actions such as ordering, booking, and payment, and will make this a new pillar for growth and monetization to lead to sustainable growth and higher corporate value, adding that it will work with partners in high-frequency areas such as commerce, reservations, travel, and payments to that end.
Chung Shin-a, Kakao's CEO, said, "Competitiveness in the agentic AI era is not just about building an excellent model; it lies in understanding users' context and intent and connecting it to real actions," adding, "Kakao will accelerate the era in which everyone in Korea naturally uses their own AI agent, based on KakaoTalk's everyday user touchpoints and the technology and service ecosystem we have built up."