Naver records highest-ever sales, operating profit in 2023

[Photo by Lee Chung-woo]

South Korean platform giant Naver Corp. said in a regulatory filing on Friday that the preliminary estimates of its operating profit for 2023 stood at 1.49 trillion won ($1.12 billion) on a consolidated basis, up 14.1 percent from the previous year.

Sales were 9.67 trillion won and net profit 988.4 billion won, up 17.6 percent and 46.8 percent respectively from the same period in 2022 and were the highest figures in Naver’s history. Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization), an indicator of actual cash generating capability, increased by 18.4 percent to hit an all-time annual high of 2.13 trillion won.

By business segment, the company’s sales were 2.54 trillion won for commerce, up 41.4 percent, 1.73 trillion won for content, up 37.4 percent, 1.35 trillion won for fintech, up 14.2 percent, and 447.2 billion won for cloud, up 11 percent. But sales from its search platform and advertising only grew by 0.6 percent to 3.59 trillion won.

“2023 was a year in which we generated solid revenue growth despite a challenging internal and external environment and strived to enhance profitability through prudent cost execution,” Naver Chief Executive Officer Choi Soo-yeon said. “We will continue to focus on strengthening the competitiveness of our core businesses, such as search and commerce based on artificial intelligence (AI) and data, in 2024.”

Naver also saw its highest-ever sales, operating profit, and adjusted EBITDA in the fourth quarter of 2023, with sales increasing by 11.7 percent to 2.53 trillion won from a year ago while operating profit and adjusted EBITDA rose by 20.5 percent and 19.2 percent to 405.5 billion won and 580 billion won respectively.

By segment, the company’s fourth-quarter sales were 928.3 billion won for search platform, 660.5 billion won for commerce, 356 billion won for fintech, 466.3 billion won for content, and 125.9 billion won for cloud.

Search platform saw a modest sales increase of 1.3 percent compared to the fourth quarter of 2022 due to the downturn in the global economy and advertising market.

Content grew by 6.6 percent during the same period, with increases in webtoon and intellectual property (IP) sales and Snow AI product sales, but the growth was limited due to the increase in offline activities following the end of the Covid-19 pandemic.

On the other hand, commerce (35.7 percent), cloud (13.3 percent), and fintech (11.3 percent) segments saw double-digit sales growth.

Net profit was 301.8 billion won in the October to December period of 2023, up 129.1 percent on year, driven by the underlying effect of the performance in the fourth quarter of 2022 as well as the impact of equity method valuation gains and losses.