Kakao (035720) investor relations material

Executive summary

• Streamlined organizational structure, reducing subsidiaries from 150 to 94, and focused on core businesses for sustainable growth.

• Q4 2025 revenue grew 9% YoY and 3% QoQ, with platform revenue up 17% YoY and 16% QoQ, while content revenue was flat YoY and down 11% QoQ.

• Full-year 2025 revenue increased 3% YoY, driven by 11% growth in platform revenue, while content revenue declined 5% YoY.

• Shifted strategic focus to AI and KakaoTalk, launching new AI features, expanding user engagement, and announcing partnerships with Google and OpenAI.

• Operating profit for Q4 2025 rose 136% YoY but fell 7% QoQ; full-year operating profit increased 48% YoY.

Financial highlights

• Achieved record high quarterly revenue in Q4 2025: KRW 2,133 billion (+9% YoY, +3% QoQ); annual revenue reached KRW 8,099 billion (+3% YoY).

• Q4 2025 operating profit: KRW 203 billion (+136% YoY, -7% QoQ); annual operating profit: KRW 732 billion (+48% YoY).

• Q4 2025 net profit: -KRW 39 billion (impacted by impairment losses); annual net profit: KRW 526 billion.

• Q4 2025 operating margin: 9.5% (+5.1ppt YoY); annual margin: 9% (+2.7ppt YoY).

• ROE improved by 3.9 percentage points YoY to 4.4%.

Outlook and guidance

• Targeting above 10% growth in annual consolidated revenue and 10% operating profit margin in 2026.

• Q1 2026 expected to show double-digit top-line growth in platform businesses, with margin improvement.

• AI monetization foundation to be built in 2025, with meaningful revenue expected from 2026.

• Continued investment in AI within profitability limits, aiming for structural growth in advertising and improved profitability.

• Continued focus on platform growth, operational efficiency, and profitability.