NAVER Corp (XKRX:035420) Q3 2024 Earnings Call Highlights: Record Profits and Strategic Growth ...

GuruFocus News
4 min read

In This Article:

  • Revenue: KRW2,715 billion, up 11.1% YoY and 4% QoQ.

  • Operating Profit: KRW525.3 billion, up 38.2% YoY and 11.1% QoQ.

  • Operating Margin: 19.3%, increased by 3.8% YoY.

  • Adjusted EBITDA: KRW699.1 billion, up 27% YoY and 9.5% QoQ.

  • EBITDA Margin: 25.7%, improved by 3.2% points YoY.

  • Search Platform Revenue: KRW997.7 billion, up 11% YoY and 2% QoQ.

  • Commerce Revenue: KRW725.4 billion, up 12% YoY and 0.9% QoQ.

  • Fintech Revenue: KRW385.1 billion, up 13% YoY and 4.5% QoQ.

  • Content Revenue: KRW462.8 billion, up 6.4% YoY and 10.2% QoQ.

  • Cloud Revenue: KRW144.6 billion, up 17% YoY and 16.1% QoQ.

  • Consolidated Net Profit: KRW530.1 billion, up 19.5% YoY and 59.6% QoQ.

  • Free Cash Flow: KRW387.1 billion, increased by KRW223.7 billion YoY and KRW141.9 billion QoQ.

  • Total Commerce GMV: KRW12.5 trillion, up 4.3% YoY.

  • Naver Pay TPV: KRW18.6 trillion, up 22.1% YoY and 6.2% QoQ.

  • Webtoon Revenue: KRW424 billion, up 11.6% YoY and 10.7% QoQ.

Release Date: November 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • NAVER Corp (XKRX:035420) reported a significant increase in operating profit, achieving an all-time high of KRW525.3 billion, up 38.2% YoY and 11.1% QoQ.

  • The company's search platform experienced double-digit growth for the first time in 10 quarters, driven by enhanced AI capabilities and expanded content offerings.

  • Naver Pay's total payment volume (TPV) increased by 22.1% YoY, with non-captive TPV growing by 38% YoY, indicating strong performance in the fintech segment.

  • Webtoon revenue grew by 11.6% YoY and 10.7% QoQ, with paid content revenue and advertising revenue both showing significant increases.

  • Naver Cloud's B2B business is expanding, with revenue from the digital twin project in Saudi Arabia contributing to growth for the first time.

Negative Points

  • Poshmark's growth has slowed due to a sluggish North American C2C market, impacting overall commerce performance.

  • Despite improvements, the company's commerce advertisement revenue remains relatively low, indicating room for growth.

  • The macroeconomic environment remains uncertain, which could impact future growth projections for the search platform.

  • The introduction of Naver Plus Store as a standalone application may pose challenges in migrating users from the search platform.

  • There are concerns about the decline in price comparison traffic, which has been a key capability for NAVER Corp (XKRX:035420).

Q & A Highlights

Q: Can you discuss the sustainability of the growth in your search platform and projections for the fourth quarter? Also, how will the Naver Plus Store impact user behavior and your search business? A: The growth in our search platform is driven by our internal competitiveness and AI technology integration. We believe there's potential for further growth. For the Naver Plus Store, it's too early to provide specific metrics, but initial feedback is positive. We plan to make it a standalone app and will strategize on migrating users from our search platform.

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