Naver posts $1.1 billion in annual profit as major units deliver

Naver reported its highest annual operating profit and revenue during 2023 thanks to the all-around performance from its major businesses in search engines, commerce, fintech and content.

Naver's Seongnam headquarters in Gyeonggi [NEWS1]

Naver reported its highest annual operating profit and revenue during 2023 thanks to the all-around performance from its major businesses in search engines, commerce, fintech and content.

Annual operating profit jumped 14.1 percent on year to 1.49 trillion won ($1.1 billion), slightly higher than the market expectation of 1.48 trillion won compiled by market tracker FnGuide.

Revenue surged 17.6 percent on year to 9.67 trillion won, around the market consensus of 9.7 trillion won.

Net profit skyrocketed 46.8 percent on year to 988.4 billion won, below the market expectation of 1.02 trillion won.

For the fourth quarter, Naver logged an operating profit of 405.5 billion won, up 17.6 percent on year. The figure was higher than analysts’ projection of 396.3 billion won.

Quarterly revenue rose 11.7 percent to 2.54 trillion won, lower than market expectations of 2.57 trillion won.

Net profit skyrocketed 129.1 percent to post 301.8 billion won, missing the market consensus of 334 billion won.

Its major businesses in search engines, commerce, fintech, content and cloud in the September-December period all saw growth, but brisk sales from commerce and content sectors contributed to record-breaking figures, Naver said.

Naver’s commerce sector grew 35.7 percent on year to 660.5 billion won, citing profit from its social commerce platforms Poshmark and Kream, as well as growth from the transaction volume of its Naver Smart Store, an online shopping platform for small- and mid-sized businesses.

Its content sector jumped 6.6 percent to 466.3 billion won due to growing revenue from its intellectual property (IP) business, webtoon and the popularity of Snow’s AI-powered photo editing service. Snow, Naver’s subsidiary, runs the camera editing app Snow which has been a global hit this year with its AI photo service that generates photos of users under a variety of themes from their daily pictures.

Its transaction volume from the global webtoon business surged 9.3 percent on year to 444 billion won.

The search engine sector inched up 1.3 percent on year to 928.3 billion won. Naver plans to expand its generative AI service Cue: from PC to mobile devices this year.

The fintech sector jumped 11.3 percent to log 356 billion won.

Cloud business increased 13.3 percent to 125.9 billion won.

Naver CEO Choi Soo-yeon said in a statement: “2023 was a year where Naver worked to grow its profitability and prudently managed costs despite difficult global and domestic market conditions.”

“This year, the company will continue to strengthen its competitiveness in key sectors in search engines and commerce based on our resources on AI and data.”

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]