NAVER (035420) Q1 2025 earnings summary

Executive summary

• Achieved solid Q1 2025 results with 10.3% year-over-year revenue growth, led by search, commerce, and fintech, and continued platform innovation, especially in AI and personalization.

• Operating profit increased 15% year-over-year to KRW 505.3 billion, with an 18.1% margin, and adjusted EBITDA margin rose to 25.2%.

• Net income declined 23.8% year-over-year to KRW 423.7 billion due to one-off gains from subsidiary disposals in the prior year.

• Launched new services and apps, including AI Briefing and NAVER+ Store, and expanded global presence in webtoon and commerce.

• Maintains high credit ratings and robust capital structure, with 83 consolidated subsidiaries as of March 2025.

Financial highlights

• Q1 2025 consolidated revenue: KRW 2,786.8 billion, up 10.3% year-over-year, but down 3.4% sequentially.

• Operating profit: KRW 505.3 billion, up 15% year-over-year.

• Adjusted EBITDA: KRW 701 billion, up 20.7% year-over-year, with a 25.2% margin.

• Net income: KRW 423.7 billion, down 23.8% year-over-year.

• Cash and equivalents: KRW 7,490.2 billion at quarter-end.

Outlook and guidance

• Plans to expand AI Briefing coverage to double-digit percentage of queries by year-end.

• Focus on enhancing AI-powered service platforms and business capabilities to outperform market growth despite weak advertising and commerce markets.

• Committed to double-digit GMV growth in commerce through app enhancements and partnerships.

• New three-year shareholder return policy to be announced, considering investment plans and liquidity.

• Expects continued growth in online advertising, commerce, and fintech, with AI-driven product enhancements.