NAVER (035420) Q4 2025 earnings summary

Executive summary

• Achieved strong revenue growth in Q4 2025, up 10.7% year-on-year to KRW 3.2 trillion, and full-year revenue up 12.1% to KRW 12 trillion, driven by advertising, commerce, and fintech.

• Operating profit rose 12.7% year-on-year in Q4 2025, with operating margin improving to 19.1%.

• Net profit declined 68% year-on-year in Q4 2025 due to increased goodwill impairment; full-year net income down 5.8% to KRW 1.82 trillion.

• Focused on expanding AI-driven services and shifting commerce from search-centric to discovery/exploration, with Smart Store GMV up 10% year-on-year and membership revenue up 17%.

• C2C segment strengthened with Wallapop acquisition and Poshmark's rebound, both contributing double-digit growth.

Financial highlights

• Q4 operating profit was KRW 610.6 billion, up 12.7% year-on-year; full-year operating profit up 11.6% to KRW 2.2 trillion.

• Q4 net income declined 68% year-on-year to KRW 164.6 billion due to goodwill impairment; full-year net income down 5.8% to KRW 1.82 trillion.

• Q4 free cash flow was KRW 185 billion, down KRW 252.8 billion year-on-year, mainly due to higher CapEx.

• Commerce revenue up 36% year-on-year in Q4 to KRW 1.05 trillion; full-year commerce revenue up 26.2% to KRW 3.67 trillion.

• Fintech revenue up 13% year-on-year in Q4 to KRW 453.1 billion; full-year up 12.1% to KRW 1.61 trillion.

Outlook and guidance

• Plans to double AI Briefing coverage by end of 2026 and expand AI Tab and Shopping Agent in 2026.

• Targets double-digit Smart Store GMV growth in 2026 and 20%+ increase in active membership users.

• Continued investment in AI, content, and delivery infrastructure expected to drive mid- to long-term revenue growth.

• New three-year shareholder return program: 25%-35% of average consolidated free cash flow to be returned via buybacks or dividends.

• Focus areas for 2026 include enhancing delivery experience and scaling membership subscriptions.