NAVER (035420) Q3 2024 earnings summary

Executive summary

• Q3 revenue rose 11.1% YoY and 4% QoQ to KRW 2.72 trillion, driven by accelerated growth in search, commerce, and fintech, with operating profit hitting an all-time high of KRW 525.3 billion, up 38.2% YoY and 11.1% QoQ.

• Net profit grew 48.8% YoY and 59.6% QoQ to KRW 530.1 billion, aided by bond translation gains.

• Adjusted EBITDA increased for the eighth consecutive quarter.

• Free cash flow increased to KRW 387.1 billion, and the company moved from net debt to net cash.

Financial highlights

• Adjusted EBITDA rose 27% YoY and 9.5% QoQ to KRW 699.1 billion; EBITDA margin improved to 25.7%.

• Search platform revenue grew 11% YoY to KRW 997.7 billion, returning to double-digit growth after 10 quarters.

• Commerce revenue increased 12% YoY to KRW 725.4 billion; fintech revenue up 13% YoY to KRW 385.1 billion.

• Content revenue up 6.4% YoY to KRW 462.8 billion, with Webtoon revenue up 11.6% YoY.

• Cloud revenue rose 17% YoY to KRW 144.6 billion, supported by Neurocloud and Line Works growth.

Outlook and guidance

• Management expects continued acceleration in search platform growth into next year, leveraging AI and feed expansion.

• Commerce GMV growth to be driven by logistics, membership benefits, and personalized experiences.

• Margin improvement is expected to continue, supported by structural changes and profitable growth focus.

• Continued focus on expanding platform businesses, including digital finance, AI-driven content, and cloud services.

• Ongoing investments in technology and marketing to support growth across segments.