NAVER (035420) Q4 2024 earnings summary

Executive summary

• Q4 revenue grew 13.7% YOY and 6.3% QOQ to KRW 2,885.6 billion, with annual revenue up 11% YOY to KRW 10,737.7 billion, driven by core business and a one-off settlement related to LY Corp.

• Operating profit rose 33.7% YOY and 3.2% QOQ to KRW 542 billion; annual operating profit up 32.9% YOY to KRW 1,979 billion, with margin up 2.8pp YOY to 18.8%.

• Adjusted EBITDA for Q4 increased 28.6% YOY to KRW 745.9 billion, with margin at 25.8%, rising for the ninth consecutive quarter.

• Net profit for Q4 was KRW 444.1 billion, up 48.8% YOY but down 16.2% QOQ; annual net profit up 89% YOY to KRW 1,862.1 billion.

• AI integration, platform enhancements, and Netflix partnership drove growth in search, commerce, and fintech segments.

Financial highlights

• Search platform revenue up 14.7% YOY and 6.7% QOQ to KRW 1,064.7 billion; first time quarterly revenue surpassed KRW 1 trillion.

• Commerce revenue up 17.4% YOY and 6.9% QOQ to KRW 775.1 billion; annual commerce revenue up 14.8% YOY, with on-platform GMV up 11% YOY.

• Fintech revenue up 12.6% YOY and 4.1% QOQ to KRW 400.9 billion; annual fintech revenue up 11.3% YOY, with TPV up 18.3% YOY.

• Cloud revenue up 41.1% YOY and 22.8% QOQ to KRW 177.6 billion; annual cloud revenue up 26.1% YOY, with B2B revenue up 11.2%.

• Membership revenue grew 15.9% YOY and 16% QOQ, driven by Netflix partnership.

Outlook and guidance

• Plans to launch a standalone Plus Store app, expand AI-driven personalization, and strengthen ad competitiveness through tool upgrades and external platform expansion.

• Smart Store GMV target is double-digit growth, outperforming market growth.

• Continued investment in AI, cloud, and global expansion, including Middle East initiatives and Saudi digital twin project.

• Margin expected to remain stable despite increased marketing and user benefit investments.

• Platform business to grow with further expansion of loan, insurance, and real estate marketplace services.