Kakao (035720) investor relations material

Executive summary

• Kakao is shifting from an attention economy to an intention economy, embedding agentic AI into KakaoTalk and daily user habits, with initial focus on food delivery via Coupang Eats and plans to expand into commerce, reservations, travel, and payments.

• Q2 2026 consolidated revenue reached KRW 2,099 trillion, up 9% year-over-year and 8% quarter-over-quarter, with platform segments accounting for 59% of total revenue and strong growth in Talk Biz and Platform Others.

• Operating profit for Q2 2026 was KRW 277 billion, up 36% year-over-year and 31% quarter-over-quarter, while net profit dropped sharply by over 90% year-over-year due to losses from discontinued operations and subsidiary stake disposals.

• The company completed major M&A and divestitures, including the sale of Kakao Games and Kakao Healthcare, and executed share buybacks and retirements.

• Kakao expects mass adoption of AI by year-end, meaningful monetization in 2027, and continued expansion of AI-driven services and global reach.

Financial highlights

• Q2 2026 consolidated revenue was KRW 2,099 trillion, up 9% year-over-year and 8% quarter-over-quarter; platform revenue reached KRW 1.23 trillion, up 17% year-over-year.

• Talk Biz revenue was KRW 643 billion, up 12% year-over-year; Talk Biz advertising and subscription revenue hit a record KRW 400 billion.

• Content revenue was KRW 868 billion, up 1% year-over-year; music revenue rose 8% year-over-year, media revenue up 5%.

• Operating profit was KRW 277 billion, up 36% year-over-year and 31% quarter-over-quarter; operating margin improved to 13.2%.

• Net profit margin declined to 0.9% due to one-off losses from discontinued operations and tax expenses.

Outlook and guidance

• Kakao targets annual top-line growth above 10% and an operating profit margin of at least 10%, expecting to outperform these targets.

• AI-related revenue is projected to reach double-digit share of Talk Biz revenue by 2028, with AI as a major growth engine.

• Continued investment in AI, digital infrastructure, and workforce optimization is expected to support long-term growth and operational efficiency.

• The company maintains a mid-term shareholder return policy, targeting 20–35% of adjusted FCF for dividends and share buybacks.

• Double-digit growth in Talk Biz ad revenue is expected to continue, driven by feed-based and commerce ads.