Kakao (035720) investor relations material

Executive summary

• Q1 2026 consolidated revenue reached KRW 1,942.1 billion, up 11% year-over-year, with platform contributing 61% and content 39% of total revenue, returning to double-digit growth after eight quarters.

• Operating profit rose 66% year-over-year to KRW 211 billion, with margin improving to 11%.

• Net profit surged 13% year-over-year to KRW 227 billion, rebounding from a loss in the previous quarter.

• Growth was driven by the platform business, especially TalkBiz, and qualitative improvements in core competitiveness.

• AI initiatives advanced with the rollout of Kanana in KakaoTalk, Kanana Search, and ChatGPT for Kakao, aiming to onboard all 50 million users.

Financial highlights

• Platform segment revenue grew 16% year-over-year to KRW 1,182.7 billion; TalkBiz revenue up 9% year-over-year to KRW 608.6 billion.

• TalkBiz advertising revenue increased 16% year-over-year to KRW 338 billion, though down 10% quarter-over-quarter due to seasonality.

• Commerce GMV reached KRW 2.9 trillion, up 10% year-over-year; commerce revenue was KRW 270 billion, up 1% year-over-year.

• Kakao Pay revenue surpassed KRW 300 billion for the first time, with record operating profits.

• Content revenue was KRW 759 billion, up 5% year-over-year; music revenue up 11% year-over-year to KRW 485 billion.

• Net income for the quarter was KRW 227 billion.

Outlook and guidance

• Platform growth expected to remain solid in Q2, led by TalkBiz ads, commerce, and Kakao Pay.

• Temporary increase in marketing spend, especially for Piccoma, will limit profit improvement in Q2, but annual guidance remains achievable.

• Double-digit growth projected for TalkBiz ads in Q2, with structural enhancements supporting continued expansion.

• Ongoing investment in AI talent and regional industry-academic partnerships.

• Expansion of commerce ad portfolio and transition to a moment-based open structure planned for H2 to accelerate growth.