1. Naver Q1 2025 Earnings: What Happened?
Naver reported revenue of KRW 2.915 trillion, operating profit of KRW 521.6 billion, and net profit of KRW 488.8 billion for Q1 2025. While revenue met expectations, operating profit missed the mark. Conversely, net profit significantly exceeded expectations.
2. Why the Operating Profit Miss?
The primary drivers for the operating profit miss are increased investments in future technologies like AI and robotics, coupled with global economic uncertainty and foreign exchange volatility. Increased facility investment likely played a significant role. The higher net profit is attributed to non-operating gains or one-time gains.
3. Business Segment Performance and Core Competencies
- Search Platform: Continued growth in search and display advertising, contributing 36.3% of total revenue.
- Commerce: Strong performance in advertising, brokerage, sales, and membership services, accounting for 28.3% of revenue.
- Fintech: Expansion of digital financial services centered around Naver Pay, achieving a 14.1% revenue share.
- Content: Global expansion of webtoon and web novel businesses, securing a 16.5% revenue share.
- Cloud: Expanding influence in the B2B market with AI-powered Naver Cloud Platform, contributing 4.8% of revenue.
4. Action Plan for Investors: Opportunities and Risks
Naver maintains growth momentum with a robust business foundation and investments in future technologies. While there are short-term concerns about the operating profit miss, the long-term growth potential remains intact. Investors should monitor AI commercialization, global expansion, and competitive strategies when making investment decisions.