Naver Stock price
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = ₩28.80t | Revenue (TTM) = ₩12.96t
Market Cap = ₩28.80t | Estimated Revenue = ₩13.91t
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = ₩25.66t | Revenue (TTM) = ₩12.96t
Enterprise Value = ₩25.66t | Forward Revenue = ₩13.91t
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Dividend per Share (DPS)
📈 What is it?
Dividend per Share shows how much cash a company pays out to shareholders for each share they own – usually on an annual or quarterly basis.
🧮 How is it calculated?
🏛️ Why is it important?
DPS is the absolute value of the payout per share – crucial for income-focused investors and dividend strategies.
🧮 Calculation
🎯 What does this mean for investors?
- A stable or growing DPS often signals a strong, shareholder-friendly business.
- DPS alone doesn’t tell you how attractive the payout is – the stock price also matters (→ see Dividend Yield).
- Long-term dividend growth is often a hallmark of high-quality companies – like the dividend aristocrats.
📘 Dividend Yield
📈 What is it?
Dividend yield shows how large a company’s dividend is in relation to its current share price.
🧮 How is it calculated?
🏛️ Why is it important?
It allows investors to compare dividend payouts across stocks, regardless of price or payout size.
🧮 Calculation
🎯 What does this mean for investors?
- A stable yield can reflect reliable distributions.
- Comparing 1Y and 5Y yield shows whether dividend growth keeps pace with stock price appreciation.
- A low yield isn’t always negative – it can signal strong past performance or growth focus.
📘 Dividend Growth
📈 What is it?
Dividend growth shows how much a company has increased its dividend per share over time.
🧮 How is it calculated?
5Y: Compound Annual Growth Rate (CAGR)
🏛️ Why is it important?
Consistently rising dividends are often a sign of financial strength and shareholder orientation – especially relevant for long-term investors.
🧮 Calculation
🎯 What does this mean for investors?
- Stable dividend growth is a sign of sustainable earning power.
- High dividend growth can significantly boost your total return:
- If a company pays $1 in dividends and increases it by 15% annually over 5 years, you’ll receive $2 per share in year 5 – twice as much as at the start!
📘 Payout Ratio
📈 What is it?
The payout ratio shows what percentage of a company’s earnings (per share) is distributed to shareholders as dividends.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess whether the dividend is sustainable – especially in relation to the company’s profitability.
🧮 Calculation
🎯 What does this mean for investors?
- A low payout ratio means the company retains more earnings for reinvestment – typical for growth companies.
- A moderate payout (e.g. 25–50%) indicates a healthy balance between returns and reinvestment.
- High payout ratios may seem attractive but can carry risk if earnings decline.
📘 Consecutive Dividend Increases
📈 What is it?
This metric shows how many consecutive years a company has raised its dividend per share – without any cuts or pauses.
🧮 How is it calculated?
(Special dividends are not considered.)
🏛️ Why is it important?
A long track record of increases reflects financial strength, consistency, and shareholder commitment.
🎯 What does this mean for investors?
- A long dividend increase streak builds confidence – especially in volatile markets.
- Such companies are seen as reliable and income-friendly investments.
- The longer the streak, the stronger the company’s dividend discipline.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Naver Stock Analysis
Analyst Opinions
34 Analysts have issued a Naver forecast:
Analyst Opinions
34 Analysts have issued a Naver forecast:
Naver Events
Past Events
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APR
29
Q1 2026 Earnings Call
5 months ago
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FEB
5
Q4 2025 Earnings Call
8 months ago
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NOV
4
Q3 2025 Earnings Call
11 months ago
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StocksGuide Free
Naver — Q1 2026 Earnings Call
1. Management Discussion
Good morning. We will now begin NAVER's 2026 Q1 Earnings Conference Call. For the benefit of our investors joining from home and abroad, we will provide simultaneous interpretation for the presentation and switch to consecutive interpretation for the Q&A.
Analysts, investors, good morning. I am Paul Choi from the Capital Markets Office. I would like to thank the analysts and investors for joining NAVER's 2026 Q1 earnings presentation. On this call, we are joined by CEO, Soo-yeon Choi; and CFO Hee-Cheol Kim, then they will walk you through NAVER's business highlights and strategies and financial results, after which we'll entertain your questions. Please note that the earnings results are K-IFRS based provided for timely communications and have not been audited by an independent auditor and, hence, are subject to change after such review.
With that, I will turn it over to our CEO to present on the business highlights.
Good morning. I am Soo-yeon Choi, CEO. In 2026, NAVER plans to take actionable AI as core strategy with a focus on delivering seamless experience in the end-to-end user journey from discovery and exploration and search to actual purchases and reservations. Beginning with the launch of a shopping agent in February, NAVER introduced user-facing agents or the launch of AI tab in April. In the second half of the year, NAVER plans to launch a nation for advertisers and business owners, further enhancing the overall experience across the neighbor ecosystem.
To enable this, NAVER in Q1 secured a diverse range of content, including Olympic broadcasting rights that could be leveraged key services, including [indiscernible] shopping and clip. The company has also established a foundation to gather offline transaction data after NP connect devices complementing existing online data capabilities.
By integrating these data access with existing data sets across search, commerce, content and mats, NAVER collaboration integrated large-scale recommendation model to deliver optimized user experiences and content consumption and transactions further reinforcing its competitive edge.
Competition in the global AI market is rapidly shifting from conversational quality to the completeness of execution and conversion. In this environment, NAVER is uniquely positioned with an integrated stack, planning search, commerce and payments and is best positioned to deliver a seamless agent-driven experience for purchases and reservations.
AI briefly introduced early last year, continued its strong momentum into Q1. As of March, long-tail carries grew by more than 2.5x year-on-year, while clicks on follow-up questions increased more than tenfold compared to the initial launch period. In particular, this ETR of follow-up questions within AI briefing exceeded that a traditional search recommendation models by more than 2.5x indicating that users are actively engaging with AI generated insights and expanding the depth of their exploration.
Starting in Q2, NAVER will begin testing Gen AI advertising integrated with shopping and local services followed by full-scale monetization in Q3. This initiative is expected to establish a virtuous flywheel in which AI search seamlessly leads to purchases and reservations within the platform with the goal of building a meaningful new revenue stream by year-end.
Furthermore, on April 27, NAVER launched the AI Tab for NAVER Plus members. AI Tab delivers a conversational AI search experience that provides personalized responses based on user search and purchase history while seamlessly connecting neighbor services to drive transactions such as purchases and reservations. At launch, the service supports shopping and restaurant discovery with plans to expand services and thesis following a broader rollout.
Moving forward, NAVER will define conversion contribution more in the extent to which agent-driven recommendations lead to actual purchases and reservations as a key metric for actionable AI, while establishing a virtual flywheel to drive transaction growth in key verticals, including shopping and place. In this context, NAVER plans to focus its efforts on acquiring off-line data this year.
As Gen AI becomes more widespread, the differentiation of broadly available public data is gradually diminishing along the strategic value of proprietary data, which is difficult to collect and replicate this increasing rapidly. NAVER will integrate offline data capture through and take connect devices and play services, what is existing online data assets, further reinforcing a structurally differentiated data mode.
Further details on NAVER's offline strategy will be provided in the service section later in the call.
Next, I'll discuss our advertising business. In Q1, AI contributed more than 50% of of total ad revenue growth. In 2026, NAVER plans to drive structural advancements of this advertising business through 3 key growth drivers, with AI's revenue contribution expected to expand further over time. The first driver is enhanced targeting, AI-driven ad optimization and the impact of Advest are expected to continue scaling this year.
In addition, NAVER's refining and integrating data previously this first process services to train an integrated hyperscale recommendation foundation model. Based on this model, NAVER aims to improve the relevance of content and ad recommendations, while enhancing production accuracy at the industry and inventory level. ultimately driving higher advertising efficiency.
The second driver is the creation of new revenue streams from Gen AI services. AI briefing and are currently in testing and are expected to begin contributing to revenue following our official rollout in the second half of this year. The rollout will begin with informational queries to minimize cannibalization with existing such as while progressively improving monetization per traffic to better reflect this underlying value, taking conversion performance into accounts.
NAVER's competitive strength lies in its ownership of transaction data and integrated payment infrastructure, which are critical assets in the era of Agentic AI. The full realization of actionable AI depends on a seamless transaction flow from log into reservation, order and payment, which is also a decisive factor in advertising performance. In fact, NAVER's internal data shows that ad conversion rates can differ by nearly double depending on whether payment infrastructure is integrated. And this effectiveness has also been validated through case studies from leading global competitors.
Building on these strengths, NAVER plans to progressively introduce AI agents for advertisers, making NAVER's advertising solutions more accessible to small and medium-sized businesses, thereby broadening the overall advertiser base.
The third driver is expansion into off-platform media. Since last November, NAVER has been conducting test with Meta to enhance integration and will roll out sequential integrations with Criteo and Google in Q2. This expansion into external inventory is expected to strengthen advertiser retention while driving external traffic back into the neighbor ecosystem.
Through these initiatives, NAVER aims to firmly establish new growth drivers for its ad business in 2026.
Next, I'll discuss commerce, which has been a key driver of service growth. In Q1, Smart Storage GMV grew 14% year-on-year, marking a solid start towards the company's full year target of double-digit growth. This performance reflects both favorable market dynamics and the successful execution of NAVER's commerce strategy, where a NAVER Plus Store membership and logistics capabilities are reinforcing 1 another to form a virtuous ecosystem. The NAVER Plus Store App, which marked its first anniversary has now established itself as a core transaction channel driving growth.
In Q1, GMV drew the app grew 28% quarter-on-quarter, significantly outpacing overall GMV growth and has entered a self-sustaining growth as supported by continued organic installs. And more importantly, user behavior continues to evolve. App users show higher engagement than web users, both in time spent and visit frequency along with meaningfully higher purchase conversion rates. Time spent on the app has more than doubled since launch. The number of returning users increased 23% quarter-on-quarter, and purchase conversion rates are approximately 84% higher than on the web.
In addition, NAVER membership penetration among app purchasers has remained consistently above well certain level. Notably, this quarter's GMV growth was driven not only by new user acquisition, but also by increased purchase frequencies and spending from existing users, indicating that the NAVER Plus Store App has firmly established itself as a go-to shopping channel.
At the end of February, NAVER officially launched shopping AI agents, which brings together NAVER's unique data advantages. Hundreds of millions of product listings, extensive user-generated content such as reviews and user shopping histories or neighbor's proprietary data assets that are not accessible externally and are serving as the core competitive engine of the shopping AI agents.
Although still in the early stages, user adoption and the share of queries handled by the agent have increased significantly. There are also positive user signals, including higher conversion rates compared to traditional search and more than fourfold increase in returning users since launch.
Starting in May, NAVER plans to integrate key assets of NAVER commerce, including membership benefits and delivery and gifting with the agent. This will further enhance the agent into business season, which will go beyond a simple shopping guy to simultaneously improve user experience and monetization.
Looking ahead, the agents will move beyond context aware product recommendations to seamlessly incorporate membership benefits such as rewards and discounts into the decision-making process, enabling users to naturally select options that maximize tangible value.
Strengthening logistics competitiveness, this 1 of NAVER's strategic priorities for commerce in 2026. And then NAVER is actively expanding and delivery adoption for key products while increasing direct fulfillment partnerships. In the second half, the company also plans to introduce unlimited free shipping in line with our membership benefits.
The impact of and delivery is also evident in the data. sellers adopting and delivery have recorded GMV growth rates approximately 4 percentage points higher than those have not, while order frequency among NAVER membership users increased by more than 25% following the enhancement of shipping benefits. These results demonstrate that improvements in logistics are driving both transaction growth and stronger user retention, reinforcing a virtuous cycle within the ecosystem.
Currently in March, NAVER's fresh grocery service, where a fast delivery is essential has also shown rapid momentum, with GMV nearly tripling quarter-on-quarter. And looking ahead, NAVER plans to further strengthen its differentiated logistics ecosystem during the rollout of membership-based unlimited free shipping in the second half and continued expansion of direct fulfillment partnerships through year-end.
Q1 marked the initial phase where execution outcomes began to materialize on top of the commerce structure newly established in 2025. And going forward, NAVER will continue to organically integrate apps, AI, logistics and membership into unified growth engine, further solidifying position in the e-commerce market. And then as mentioned earlier, NAVER aims to extend its core strength built on online data and user scale into the offline domain.
In particular, the company will focus on strengthening AI competitiveness through the acquisition of offline transaction data while establishing an early leadership position in the offline e-commerce ecosystem. For the place business, NAVER will prioritize the acquisition of off-line restaurant data to drive reservation growth, NAVER is planning on multiple initiatives, including in past benefits into NAVER pay, integration and water and transaction data from external POS partners to advance search and CRM capabilities and the introduction of agent [indiscernible] reflects user context.
More specifically, NAVER will expand partnerships with high-demand restaurants and commercial districts as well as hotel buffets and Michelin boost establishments, significantly strengthening data integration, accelerating GMV growth in these segments.
Through these efforts, NAVER aims to extend the scope is place business while securing a strong leadership position in emerging offline categories.
At the center of this strategy is NPay Connect, and integrated offline device supporting payments, ordering, coupons, rewards and reviews. NAVER aims to establish a unified online to off-line data ecosystem by connecting online search and reservation data with offline orders payments and customer loyalty data.
Through NPay Biz, an integrated business management platform for business owners, NAVER will provide insights such as visitor trends commercial district analysis and customized CRM marketing while offering consumers a seamless experience that extends online benefits into offline environments. The offline GMV generated through this initiative is expected to serve as a new growth driver for NAVER Pay, while the accumulated gold offline data will become a critical foundation for NAVER's Agentic AI capabilities. And over time, the structure where levers online strengths naturally extend to offline will evolve into a differentiated ecosystem that is difficult to replicate.
NAVER's global C2C platforms are strengthening their core capabilities and reinforcing our positions in the global markets. [indiscernible] has been driving structural improvements to enhance search quality, UI/UX upgrades and improved marketing and operational efficiency since the second half of the last year. And as a result, both user traffic and conversion rates have steadily improved, leading to approximately 30% on year-on-year growth in both GMV and revenue in Q1.
As these initiatives remain in the early stages, NAVER expects the solid growth trajectory to continue.
In Q1, Soda delivered a strong performance with GMV more than doubling year-on-year, driven by robust demand in the Japanese trading card category and strong performance from offline stores. Cream continued its stable growth supported by ongoing category expansion and the addition of new brands, further strengthening its competitive positioning. Wallapop, newly consolidated in Q1 is a comprehensive C2C platform, by focusing on engagement within its core user base and accelerating activity in the used car category, the platform reached 23 million MAUs and continues to maintain its leading position in Spain.
As C2C emerges as another key growth pillar, NAVER will continue to strengthen the competitiveness of platforms while expanding collaboration across this ecosystem, including search, advertising and payments to unlock further synergy.
Finally, I'll discuss NAVER's Enterprise business performance. AI-related B2B revenue, including GPU as a service contract secured in the second half of last year continued to be recognized in Q1, driving growth in the enterprise segment. In addition, NAVER Works was selected in March as the official cooperation platform by the Ministry of the Interior Safety Ministry of Science and ICT and the Ministry of Food and Drug Safety in Korea. This proves the meaningful opportunity to further strengthen NAVER's leadership in the public sector AI transformation.
Globally, NAVER's sovereign AI initiatives are progressing as planned. In Q1, the company generated project-based revenue in Saudi Arabia related to the digital twin platform service expansion and Superapp development. NAVER also successfully transitioned the robotics deployment in New Maraba into the operational phase. In addition, NAVER recently signed a strategic MOU with Tata Consultancy Services, 1 of India's largest IT service providers to explore a range of business opportunities in the region. Discussions are also going with multiple partners across Europe on sovereign AI initiatives and labor plans to provide further updates as progress continues.
LINE Works continues to deliver steady revenue growth supported by strong adoption of SaaS offerings, such as AI note and Roger. The company plans to further expand its customer base through the introduction of additional AI-driven features. In Taiwan, where NAVER entered the market late last year, the company is steadily building partnerships by securing leading enterprises across multiple industries as customers.
And looking ahead, NAVER will continue to focus on enhancing its AI capabilities while actively pursuing sovereign AI opportunities across both domestic and global markets.
Moving forward, NAVER will continue to strengthen the competitiveness of its core business by building a virtuous flywheel in which actionable AI drives traffic growth and expand monetization. At the same time, the company will actively pursue opportunities and deliver results in global growth areas such as C2C, Sovereign AI and contents with the goal of accelerating overall revenue growth.
Now CFO, Hee-Cheol Kim will discuss the financial performance.
Good morning. This is Hee-Cheol Kim, the CFO. I will now walk you through Q1 financial performance. In Q1, revenue reached KRW 3.24 trillion, up 16.3% year-on-year, driven by accelerated growth in core businesses, including advertising and commerce as well as global C2C. Excluding the consolidation of Wallapop, total revenue increased by 15% year-on-year.
Operating profit rose 7.2% year-on-year to KRW 541.8 billion, supported by continued investment in AI infrastructure and strategic IP including media rights for the Winter Olympics and League of Legends Champions Korea, which are leveraged across NAVER's services. Operating margin came in at 16.7%.
As mentioned in the previous quarter, starting from Q1, NAVER will present the financial results under a revised revenue classification framework that categorizes revenue into core businesses and global growth areas to better reflect the business performance of mid- to long-term vision.
Compared to the previous classification, certain fintech revenues, such as credit card related ads generated on NAVER's platform, having reclassified under platform advertising, and the server segment now includes not only shopping and place related take rates on membership revenue, but also other revenues previously categorized under the search platforms such as [indiscernible].
In addition, the global growth segment includes C2C businesses, comprising Poshmark, Cream, Soda and Wallapop, which has been newly consolidated in Q1, marking the first time these business have been disclosed under a dedicated category. NAVER will continue to provide transparent and consistent updates to investors on the performance of the core business.
I will now discuss revenue by business segment. In Q1, NAVER platform revenue increased 14.7% year-on-year, supported by solid advertising performance and accelerated growth in commerce. Ad revenue grew 9.3% year-on-year to KRW 1.39 trillion with AI technologies increasingly embedded across NAVER's inventory and app products, serving as a key growth driver. In particular, [indiscernible] ad performance prediction models improved both efficiency and targeting, contributing positively to overall performance.
In 2026, NAVER plans to drive growth during his targeting powered by unified recommendation model the creation of new revenue streams from Gen AI services and expansion into off-platform media.
Building on last year's strong performance, NAVER expects to detain stable and resilient growth momentum this year. Q1 service revenue increased 35.6% year-on-year to KRW 445.3 billion, driven by strong growth in commerce. In particular, shopping delivered meaningful performance, supported by the successful establishment of the NAVER Plus Store App as well as enhanced logistics capabilities and strengthens membership benefits, which together accelerate smart store G&P growth. In addition, the impact of take rate structure changes in limited last year further contributed to the strong revenue growth. Membership revenue also recorded solid growth, supported by increased engagement on the NAVER Plus Store App, which has established itself as a key purchase channel for NAVER membership users.
Next, Q1 financial platform revenue increased 18.9% year-on-year to KRW 459.7 billion. Total payment volume grew 23.4% year-on-year, surpassing KRW 24 trillion driven by continued store growth and expansion of NAVER's external ecosystem. Of the total off-platform payment volume reached KRW 13.5 trillion, up 22.9% year-on-year, with a share expanding to 56% of total payment volume.
In Q1, revenue from global growth areas increased 18.4% year-on-year to KRW 941.6 billion.
The C2C segment delivered strong GMV growth across all platforms, including Poshmark and Soda. In particular, Poshmark has seen continued momentum, with platform enhancement initiatives implemented since the second half of last year, translating into higher user traffic and improved conversion rates. And then as a result, the GMV and revenue have accelerated with 3 consecutive quarters with revenue growing 34% year-on-year in Q1.
Cream continues to diversify its category while strong performance in off-line sales and trading card transactions in Japan by Soda contributed meaningfully to revenue growth.
Wallapop newly consolidated this quarter continues to demonstrate stable revenue growth in euro terms supported by its leading position as a B2C platform in Spain and stronger user transaction activity across multiple trend categories.
Content revenues decreased 1.4% year-on-year to KRW 440.1 billion in Q1. Within this segment, WEBTOON revenue declined 2.3% year-on-year on a KRW reported consolidated basis. For more details, please refer to WEBTOON Entertainment's earnings announcements.
In 2026, NAVER WEBTOON tin plans to focus on content diversification and strengthening personalized recommendations, while also expanding user base or new service initiatives. So we'll continue to expand AI-powered camera features and diversify its monetization models, including subscription offerings, while working to improve profitability.
Enterprise revenue increased 18.8% year-on-year to KRW 150.5 billion in Q1, supported by continued recognition of AI-related B2B revenue, including GPU as a service contracts secured in the second half of last year.
In Q1, NAVER's global sovereign and AI initiatives continue to progress steadily, including the expansion of digital swing platform services and supra projects in Saudi Arabia. LINE Works also maintained solid growth with both paid IDs and revenues increasing consistently supported by steady demand for SaaS offerings.
Looking ahead, the NAVER aims to further solidify its leadership position in Japan's rapidly evolving to this chat market, while continuing efforts to successfully establish is present in Taiwan written to late last year.
Next, I'll discuss detailed cost items. Development and operations expenses increased 11.6% year-on-year, primarily due to head count growth on prior year and the consolidation effect of wallet cost. Partner expenses rose 19.9% year-on-year driven by higher commission expenses in line with [indiscernible] Group, recognition of content rights cost, including the Winter Olympics as well as the expanded deployment and pay connect devices. For reference, logistics transportation costs related to C2C, which were previously included in development and operations expenses have now been reclassified in our partner expenses to better reflect the nature prior we set accordingly.
Infrastructure expenses increased 32.5% year-on-year, mainly due to the acquisition of new computing assets, including GPUs. This year, NAVER plans to make strategic investments to strengthen the competitiveness of its AI services, including the expansion of actionable AI experiences and the acquisition of LINE Data. As a result, infrastructure-related costs are expected to increase year-on-year. At the same time, NAVER continues to pursue infrastructure efficiency across service areas such as search for strategic GP allocation and the company-wide adoption of efficiency platforms. These efforts are already showing tangible results, including a 30% reduction in actually GPU usage versus initial expectations. NAVER will continue to carefully review the scale of investment, taking into account AI monetization contribution, market conditions and the company's business direction.
Marketing expenses increased 18.9% year-on-year driven by strategic marketing investments in e-commerce segment as well as higher promotional spending for Poshmark and WEBTOON Entertainment.
Amid a rapidly evolving market environment, NAVER expects to continue expanding strategic investments the near term to strengthen its competitive positioning. Ultimately, the company aims for these investments to support revenue growth in its core businesses and serve as a foundation for long-term growth drivers, while contributing to enhance shareholder value.
Next, I'll explain NAVER's operating profit by business segment. NAVER Platform segment saw a 5.4 percentage point year-on-year decline in operating margin despite solid revenue growth in advertising and commerce, primarily due to increased infrastructure investments, including GPUs, as well as higher costs related to security and content rights and strategic IP.
Financial Platform segment continued to deliver revenue growth. However, operating margin declined slightly year-on-year, reflecting the expanded deployment of Pacnet devices. And the global growth segment losses narrowed, supported by accelerated revenue growth in C2C business.
Q1 consolidated net income declined 31.3% year-on-year to KRW 291 billion, primarily due to higher foreign exchange losses and increased losses from equity method investments.
Q1 free cash flow decreased by KRW 152.1 billion year-on-year to KRW 39.8 billion. This was driven by increased CapEx reflecting continued investment in infrastructure despite solid operating cash flow generation.
And lastly, on April 14th, NAVER paid a year-end dividend of KRW 393.6 billion, equivalent to approximately 30% of the average consolidated free cash flow over the past 2 years.
As part of the company's efforts to enhance shareholder value, NAVER plans to consider additional retirement of treasury shares exceeding the level required for employee compensation. Any future decisions will be communicated to shareholders through appropriate disclosures.
This concludes the overview of our Q1 financial results. We will now move on to the Q&A session.
[Foreign Language] [Operator Instructions] The first question will be provided by Min-joo Kang from Bernstein.
2. Question Answer
[Interpreted] I am Kang Min-joo from Bernstein. I would like to ask you 2 questions. First, relating to the overall strategic direction of NAVER as a company?
The second question relates to the earnings figure that you have just mentioned. First, on commerce, you have previously mentioned that you will be expanding the portion of fast delivery under your logistics initiative to around 50%. Would like to understand as to the basis for that decision. What is the rationale behind setting that 50% is the end delivery scope. And also, can you give us an update as to your collaboration and partnership with some external partners? And from a mid- to longer-term perspective, what is your take and view on having to make a direct investment into the logistics network?
Second question, you've mentioned that the margin for the NAVER platform has, for the first time, hit a 20% level. We'd like to gain some more color on this aspect.
[Interpreted] Yes, this is the CEO responding to your first question. As you know, when it comes to the delivery and the logistics initiative, we have been expanding it on a phased manner, but we still admit that it does not yet satisfy fully the expectations that our user base has. And hence, we have for this year selected NAVER delivery as our key strategic direction for NAVER commerce business.
And the rationale behind why we are seeking to expand that scope to 50%, the end delivery scope to 50% in year 3 is because we wanted to first target highly sensitive categories that is sensitive to fast delivery. And also we wanted to scale up the level of experience of our users on par with what is being provided by our peers.
Though for this year, we've said 25% as the coverage target for delivery. And I can tell you that we are progressing in alignment with that objective.
In order to achieve this, yes, there is the direct contracting or first-party arrangement that is required. And also, we are actively collaborating in terms of setting a strategic fulfillment center NAVER's own products are stored and delivered on a first basis. We are at the same time also very actively reviewing potential for making a direct investment into logistics.
Now if we were to adopt that approach, we will be able to lower the cost per delivery, and also, we can acquire the logistics data directly and also, at the same time, have a light asset structure. So we are, at this point, reviewing the most optimal approach that will enable and that will help us achieve this. And once we make that determination and once we finalize on which partners to work with, we will come back to you and share more information.
[Interpreted] Responding to the second question as to the reason why the margin for NAVER platform has come down. Actually, there are 2 key factors that drove that. Firstly, as we've previously mentioned, there was an increase in CapEx and so in terms of that infrastructure that had been the infrastructure assets that we had invested into is being used in labor services, which created higher depreciation cost and telecommunications costs.
And the second driver is with regards to us investing into the broadcasting right, the IP for the Winter Olympics as well as for the League of Legends Champions League related broadcasting rights. And that whole impact of expense amounted to around KRW 18 billion that was booked in Q1.
[Foreign Language] The following question will be presented by Dong Hwan Oh from Samsung Securities.
[Interpreted] I have 2 questions that I would like to ask. It has to do with AI. You've I know that it's only been very recent that you rolled out AI Tab, but would like to gain some color as to what the initial performance is currently that you are seeing at this point? And also in terms of the expectation, what is the monetization model that you are envisioning for this product? And also, across the AI services, it seems to be that there's a discrepancy in the level of quality for verticals like real estate and comes, the quality does not seem to be on par, whereas for AI tab, the quality is quite good. So what explains the difference in that quality? And also then what are your plans to make improvements on the agents for commerce?
[Interpreted] Yes. Responding to your question on AI Tab. Yes, you are correct that it's only been recently introduced. So it's a bit too early for us to share with you any specific metrics.
Now having said that, we are seeing some initial positive user signals. We see high level of interest as well as return visits. So once we get more color on the metrics, we will come back to you with the specifics.
In terms of our monetization plans going forward for AI briefing after going through a testing phase in the second quarter, we will be able to introduce in the second half a generative AI ad products.
Coming back to AI Tab, yes, we will have to look at the trend of what the feedback and the responses are from the user base and also their return visits. But once we take a look at those trajectory, then we will reflect that in making a decision and rolling it out in Q4.
But will we consider most important and what we've determined as our key metric is to track against the conversion. We believe that is the most important indicator and also that connects with what you've mentioned on the -- with the shopping agents as well.
So in terms of user satisfaction, it does have some subjective element in it. So I will not be able to give you 1 definitive answer to that. But I believe that there are 2 aspects that may feel a bit different compared to the information that is provided by AI Tab.
So basically, on top of hyper clover X, we're also making use of other open source models, and we employ an overall broad orchestration strategy. So for the shopping agent, basically the models that are used are specialized or specific for such commerce verticals, whereas for the AI tab, it adopting users more large-scale general purpose model.
So currently under AI Tab, we support shopping and restaurant vertical as of this point. However, we were continuously going to expand into other vertical models such as beauty, travel, health and real estate property, for instance. So basically, we will continue to work on our vertical models to optimize them for specific purposes for specific verticals as well as in line with the intention for conversion as -- and also to align it with the database that is relevant.
So compared to the initial phase of the service, I can assure you that we are going through scaling up and upgrading process. So please, I ask you to bear with us until that time comes for where the service quality is really beefed up.
And when it comes to shopping agents, I think what the users are really seeking was very organic and seamless purchase conversion as well as for any repeated purchases, even automation.
So right now, it is currently serving as a simple shopping guide. But before the end of the year, we are planning on scaling it so that it becomes a business agent, whereby providing a very distinct user experience as well as the purchase conversion. And so users will then be able to experience something that is only uniquely possible within NAVER by using the shopping agents.
[Foreign Language] The following question will be presented by Junhyun Kim from HSBC.
[Interpreted] I have 2 questions. One relates to your global growth segments and the impact that we've seen on your P&L, the bottom line we've seen an increase in the bottom line? And is it because of the recognition of the wallet pop business? Or is it due to other reasons? Second is that for this earnings, we see that the expenses have gone up, but at the same time, the top line grow as well. I'm wondering whether there could be a leverage effect as we move into the future. You've also talked about your strategy, whereby you will be strengthening your competitiveness in logistics and delivery under commerce. And 1 of the key drivers behind that initiative is providing incentives to the sellers. Just wondering whether such investment into the expenses will have leverage effect going forward?
[Interpreted] Responding to the first question on our global endeavors growth segments and relating to the margin, yes, it's been about 2 months since we included the Wallapop numbers, and it turned into a profit. And yes, that would have had an impact.
But the bigger contribution actually came from Poshmark, who's top line revenue reported 30% growth and soda reported a 100% year-over-year growth. So the margin improvement was driven by the entire C2C segment as well as our global growth segments.
On the second question about the leverage effect. Q1 increases in expense was not necessarily driven by marketing spend, but more so by infrastructure and investment into content. Of course, having said that, it doesn't mean that we're not putting effort behind marketing.
Even excluding the impact from Wallapop, the growth rate in Q1 is actually above 15%. And as we move into the second quarter, we will continue to strengthen commerce and marketing efforts which we expect will be driving further GMV growth as well as additional growth for our top line revenue. So we have those expectations, and we plan to conduct our investments accordingly.
We move on to our next question.
[Foreign Language] Currently, there are no participants with questions. [Operator Instructions]
[Interpreted] With no more questions in the queue, we would now like to close NAVER's Q1 2026 Earnings Call. Thank you to our analysts and investors for joining us this morning.
[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]
Naver — Q1 2026 Earnings Call
Naver — Q4 2025 Earnings Call
1. Management Discussion
[Interpreted] Analysts, investors, good morning. I am Paul Choi from the Capital Markets Office. First of all, I would like to thank you for joining NAVER's 2025 Q4 Earnings Presentation.
On this call, we're joined by CEO, Soo-yeon Choi; and CFO, Hee-Cheol Kim, and they'll walk you through NAVER's business highlights and strategies and financial results, after which we'll entertain your questions.
Please note that the earnings results are K-IFRS based provided for timely communication and have not been audited by an independent auditor and hence, are subject to change after such review.
With that, I'll turn it over to our CEO to present on the business highlights.
[Interpreted] Good morning. I am Soo-yeon Choi, the CEO. In 2025, NAVER strengthened its technological competitiveness and personalized content recommendation by expanding its content supply and building an integrated foundation model while focusing on enhancing usability across services, including home feed and clip and introducing a new search experience through AI Briefing. As a result, user engagement metrics within the NAVER ecosystem showed improvement. And when combined with increased advertising efficiency driven by AI technologies, this enabled NAVER to deliver new value to users.
In 2026, NAVER will focus on delivering new experiences in which GenAI is seamlessly integrated across its core services, including search, discovery and exploration and commerce.
In the near term, NAVER will expand its AI Briefing coverage and within the first half of the year, launch its first shopping agent and AI Tab to provide more immersive user experience. In parallel, NAVER will continue to explore new monetization opportunities in line with these changes.
In commerce, where a structural shift from search toward discovery and exploration centered around NAVER Plus Store is gaining full momentum. NAVER aims to continue delivering double-digit year-on-year growth in Smart Store GMV this year by taking the lead in this market shift. With a clear objective of making 2026 a turning point that accelerates the next phase of growth in our commerce business, the company plans to further strengthen AI-driven personalization, expand and delivery infrastructure and continuously enhance the competitiveness of its membership offerings. Building on this increasingly solid competitive foundation, NAVER will move beyond short-term growth to establish enduring leadership in the e-commerce market.
In 2025, NAVER made meaningful progress by implementing and advancing AI technologies across the search and advertising services while validating the impact throughout the year. AI Briefing has expanded its coverage to 20% of integrated search queries, quickly establishing itself as a core search experience within NAVER and demonstrating strong user engagement metrics. Over 8 months since its launch, the service has gradually scaled up with clear shifts in user behavior being witnessed.
Moving away from the traditional way of entering 1-to-2-word queries, the volume of long-tail queries consisting of 15 characters or more has increased by more than 2x since the early post-launch period of AI Briefing in April, indicating the emergence of a new search experience. In addition, the time spent in the top section, where a summary of search results is presented, has remained stable.
Furthermore, clicks on the section suggesting follow-up questions related to the original query have increased by more than 6x compared to the early post-launch period. Notably, after the recent application of personalization technologies, the click-through rates for follow-up questions saw an additional increase of 20% or more, confirming that users are finding the AI-provided information useful.
These metrics indicate a structural improvement in the depth of user exploration and search quality driven by AI Briefing with the results reflecting the combined impact of expanding the collection of reliable proprietary data and continued efforts towards quality enhancement.
Based on the expertise and confidence accumulated through this process, NAVER aims to expand the AI Briefing coverage to approximately 2x its current level by the end of 2026. While the initial focus will remain on expansion within informational queries, this application will be extended to areas where NAVER has strong competitive advantages, including shopping and local services, and personalization will be further advanced to deliver more tailored experiences for users. At the same time, NAVER will carefully monitor factors such as contextual cannibalization of search and advertising to flexibly adjust the scope of deployment as needed.
These experiences are expected to be further expanded through the launch of AI Tab in the first half of this year. While it shares the same starting point as AI Briefing in organizing and presenting the answers that users are looking for in a clear and concise manner, it is differentiated as a conversational AI search that is connected to NAVER's broader ecosystem services, including shopping, place and maps, ultimately designed to drive actions such as purchases, reservations and orders.
Leveraging NAVER's unparalleled user data and increasingly advanced reasoning capabilities, this will deliver an entirely new search experience that accurately understands each user's search, discovery and exploration needs and in which AI proactively guides the entire search journey that leads up to execution, including purchases and reservations.
Starting this year, NAVER plans to further secure content and data across the platform to strengthen its competitiveness in AI-driven discovery and exploration. Content is an area where user touch points and data accumulated across search, community and commerce converge and plays a critical role in expanding user traffic engagement while increasing the overall density of the NAVER ecosystem.
The company is already seeing meaningful growth momentum across multiple areas, including CHZZK. In addition, securing premium content such as broadcast rights for League of Legends as well as the Olympic Games and the FIFA World Cup is expected to drive new user acquisition and further strengthen the company's content ecosystem by leveraging increased traffic and IP.
Looking ahead, NAVER will continue to enhance its user experience including deeper integration with membership offerings while developing new monetization models aligned with such improvements with the goal of translating stronger user engagement into sustained revenue growth.
Monetization of AI search is also planned as one of the key priorities. With a top priority on preserving the users' exploration flow, ways to embed advertising naturally with useful content are being reviewed, with a testing set to begin in the second half of the year.
While 2025 marked the year of laying the foundation for next-gen and validating its potential as a user experience, 2026 will be the year the company builds on the accumulated know-how and proven AI technologies to expand into an agent AI experience that only NAVER can deliver. Through this, NAVER aims to further strengthen user loyalty and search satisfaction while striving to ensure that these efforts translate into the creation of new revenue streams.
Building on the know-how accumulated over the past year through the deployment of AI Briefing, NAVER has also been making ongoing efforts to optimize the infrastructure costs that inevitably accompany the expansion of AI search. By consolidating GPUs that were previously managed separately at the individual service level into a unified operating platform and utilizing across both training and service, the overall GPU utilization has been improved.
In addition, by transitioning to lightweight models optimized specifically for AI search services, the company has strengthened its ability to handle the same workloads in a more cost-efficient manner. Through this multipronged infrastructure efficiency project aimed at addressing the high-cost structure, a reduction of more than 30% in the inference cost has been achieved. Building on this foundation, NAVER plans to extend these efficiencies beyond AI Briefing to AI Tab, further establishing a sustainable operating model for AI services.
Next, I'll discuss the performance of the advertising business. Of the 8.8% growth in total platform advertising revenue at NAVER in 2025, AI contributed 55%, enabling the company to outperform all overall market growth despite an unfavorable external environment. Looking ahead to 2026, AI's contribution is expected to expand further.
In the fourth quarter, growth moderated slightly as advertising spend declined in proportion to the concentration of travel and tourism demand during the extended Chuseok holidays, which lasted for 10 days. The impact of the extended holiday on total platform advertising revenue growth at NAVER in the fourth quarter is estimated at 2 to 3 percentage points. This quarter, AI-driven optimization of ad inventory and the impact of ADVoost continued to drive revenue growth.
Since the second half of last year, the integration of advertiser centers across search and display, together with the expansion of advertiser-friendly programs has significantly lowered barriers to entry for ad placement and led to a substantial increase in new advertiser acquisition.
As of the end of December, the number of performance advertisers increased by more than 2x year-on-year and the number of advertisers utilizing ADVoost Shopping is also growing rapidly. Given that advertisers who currently use ADVoost Shopping account for approximately 30% of advertisers running shopping search ads, there is significant room for further expansion.
In January, the company also introduced a simplified bid execution feature within the Smart Store Seller Center, enabling Smart Store sellers to experience NAVER advertising more easily and conveniently.
In 2026, the company plans to strengthen its advertising competitiveness and expand inventory within the NAVER ecosystem while also pursuing new opportunities in external media, off-site channels and the out-of-home advertising markets.
In the fourth quarter, NAVER successfully expanded its advertising inventory across existing internal media channels. In addition, since late November, the company has been testing enhancements to its off-site integration with Meta and plans to continue close collaboration with external partners in the first half of the year. Furthermore, a new advertising product that enables local advertisers within the NAVER ecosystem to run out-of-home advertising easily and at reasonable price points will be launched, and this offering will be scaled in earnest.
By expanding presence in external media, off-site channels and the out-of-home advertising market in 2026, NAVER aims to enable domestic advertisers to execute campaigns seamlessly across both online and offline channels while also building sustainable growth momentum for its ad business.
NAVER has continued to enhance the overall user experience through improvements in delivery, membership and a structural shift in shopping centered around NAVER Plus Store. As a result, Smart Store GMV accelerated to 10% year-on-year growth in 2025, which demonstrates that structural competitive advantages that NAVER has built are beginning to translate into tangible performance.
2025 was a turning point for commerce. NAVER made a bold decision to move beyond the limitations of search-centric shopping and pursue a new shopping structure built around NAVER Plus Store. While this was a challenging and risky decision, it was not merely the launch of a new service, but a core strategy to redefine the starting point of shopping around discovery and exploration. And this decisive move has delivered clear results within a short period of time.
NAVER's commerce business is now ready to move to its next phase. Over the coming years, strengthening the delivery competitiveness will be set as a top priority of NAVER's commerce strategy, and this will be pursued through active investment and execution. This is not about feature level improvements or incremental enhancements. Rather, NAVER is taking an open and a comprehensive approach across partnerships, infrastructures and operations to fundamentally elevate its delivery competitiveness and deliver a level of experience that can reshape market perception.
Through these efforts, end delivery coverage is targeted to expand to 25% this year and over 35% next year with a mid- to long-term target of reaching at least 50%, representing a minimum threefold increase from current levels within 3 years. Over time, the objective is to elevate delivery from a constraint on NAVER Shopping to a clear reason for choice.
Membership has also emerged as a key pillar of NAVER's commerce growth. Over time, NAVER has continuously strengthened its membership value through global content partnerships, including Netflix, Spotify and Microsoft Game Pass as well as core commerce benefits such as free shipping and free returns. And these efforts have supported the stable retention of recently acquired users within the platform.
This is functioning as a foundation for converting short-term users inflows into structural growth. And accordingly, a clear target has been set this year to increase active membership users by more than 20% year-on-year. Building on the competitive strengths established through these changes and investments, the goal is to achieve double-digit growth in Smart Store GMV in 2026.
Within the growth framework of NAVER Commerce, the C2C business is also establishing a clear role and momentum. Wallapop, for which the acquisition was completed at the end of January, delivered solid double-digit performance in the European C2C market in 2025. Poshmark also showed a clear rebound from the second half of the year, achieving growth exceeding 20% in both revenue and GMV in the fourth quarter, with a similar level of growth expected this year.
In addition, KREAM and SODA continued to strengthen competitiveness in their respective markets and maintain stable growth trajectories, positioning the C2C segment as another key growth pillar supporting NAVER Commerce performance.
Starting from the first quarter, Wallapop's results will be consolidated and revenue will be disclosed under a separate classification to provide investors with a clear visibility into C2C performance.
While 2025 was the year in which the structure of shopping was reshaped, the years from 2026 and onwards are expected to mark a phase in which meaningful change is delivered in earnest built on a stable foundation. With this foundation in place, NAVER Commerce is positioned to significantly accelerate the pace of execution.
Lastly, I will discuss the performance of the B2B business. Fourth quarter enterprise revenue grew 16.6% year-on-year after excluding the base effect from LY-related settlement adjustments. In parallel, NAVER's software and AI business continues to progress in line with plan.
Starting with Korea Hydro & Nuclear Power, customized software and AI projects are being rolled out across a wide range of sectors, including finance, economy and defense and the public sector based on detailed understanding of each customer's specific needs.
Following the announcement of a Korea-specific medical LLM jointly developed with Seoul National University Hospital in the fourth quarter, a financial and economic AI platform was completed in collaboration with the Bank of Korea in January, making the world's first employment of such a platform by a central bank.
Building on the successful use cases in Korea, multiple DX projects are currently underway in regions, including Saudi Arabia, Thailand and Japan. In particular, in Saudi Arabia, service revenue related to digital twin and super app initiatives has been generated since Q4 through a joint venture with the Saudi Ministry of Municipalities and Housing, establishing a monetization reference for sovereign AI.
NAVER will continue to focus on strengthening AI technology competitiveness while actively identifying additional sovereign AI business opportunities, both domestically and globally.
Going forward, NAVER will continue to focus on strengthening the competitiveness of core business, including search, advertising and commerce and through AI, while over the mid- to long term, expanding global growth initiatives by identifying additional opportunities in sovereign AI and incorporating future growth drivers such as Web3 upon completion of the Dunamu acquisition.
Now CFO, Hee-Cheol Kim, will discuss the financial performance.
[Interpreted] Good morning. This is Hee-Cheol Kim, the CFO. I will now walk you through Q4 and full year financial performance. Q4 revenue increased 10.7% year-on-year to KRW 3.2 trillion, supported by growth across core businesses, including advertising, commerce and fintech.
On a full year basis, growth accelerated with revenue rising 12.1% year-on-year to KRW 12 trillion.
Despite continued investments to strengthen AI commerce competitiveness and expand strategic initiatives in commerce, Q4 operating profit increased 12.7% year-on-year to KRW 610.6 billion with an operating margin of 19.1%.
For reference, excluding one-off effects such as the LY settlement impact recorded in the Q4 of 2024 and changes to the useful life of certain assets in the Q4 of 2025, fourth quarter operating profit grew 16.8% year-on-year. For the full year 2025, operating profit increased 11.6% year-on-year to KRW 2.2 trillion.
Q4 NAVER platform -- fourth quarter NAVER platform advertising revenue, reflecting on the underlying competitiveness of NAVER advertising business increased 6.7% year-on-year as continued improvements, AI-driven optimization and automation initiatives that led to advertising efficiency began scaling in earnest from the first half of 2025 and offset the impact of fewer business days resulting from the Chuseok holiday in October. On a full year basis, growth accelerated to 8.8% year-on-year in 2025 with continued efforts planned to achieve growth above the market level this year.
Q4 Search platform revenue recorded KRW 1.06 trillion, down 0.5% year-on-year. Excluding the impact of the LY settlement effect, revenue increased 1.8% year-on-year. For the full year 2025, Search platform revenue rose 5.6% year-on-year to KRW 4.17 trillion.
With the transition to the era of GenAI, both user behavior and ad market are being reshaped rapidly. Against this backdrop, NAVER will continue its efforts to focus on building an advertising ecosystem optimized for the AI search environment while also securing differentiated growth drivers through expansion beyond this platform.
Commerce revenue increased 36% year-on-year in the fourth quarter to KRW 1.05 trillion and rose 26.2% year-on-year for the full year to KRW 3.67 trillion.
As of the fourth quarter, cumulative downloads of NAVER Plus Store app surpassed 12.9 million, while both GMV and new membership sign-ups continued to grow significantly. Notably, new membership sign-ups increased 71% month-on-month in December with the upward trend continuing into January.
Commission and sales revenue grew 45.2% year-on-year in the fourth quarter, driven by the successful establishment of NAVER Plus Store, inflows of new users amid changes in the external environment, expanded year-end peak season promotions and the continued impact of the revised take-rate structure.
At Poshmark, improvements in the search algorithm and delivery experience amid a recovering macro environment significantly enhanced the user shopping experience, resulting in both GMV and revenue growing by more than 20% year-on-year in the fourth quarter.
Commerce advertising revenue grew 26.8% year-on-year in the fourth quarter, driven by continued improvements in ad placement optimization and the rapid increase in the number of advertisers experiencing its effectiveness.
Membership revenue increased 17.0% year-on-year in the fourth quarter, supported by the addition of new benefits, including partnerships with Spotify and N Mart delivery, resulting in concurrent growth in both loyal customers and new subscribers.
Fintech revenue increased 13% year-on-year in the fourth quarter to KRW 453.1 billion and rose 12.1% year-on-year for the full year to KRW 1.61 trillion. Fourth quarter total payment volume reached KRW 23 trillion, representing a 19% year-on-year growth, while continued expansion of the external ecosystem across both online and offline channels drove the proportion of off-platform payment volume to a record high of 56%.
In November, Npay Connect, an integrated terminal supporting payments, reviews, coupons, orderings and rewards was officially launched. Going forward, integration with Place data, including reservations and orders will enable CRM capabilities, positioning the platform as a comprehensive business management solution for smart place business owners with continued feature enhancements planned to help more businesses build and retain loyal customer bases.
Content revenue declined 2.3% year-on-year in the fourth quarter to KRW 456.7 billion, while on a full year basis, revenue increased 5.7% year-on-year to KRW 1.9 trillion. Within this segment, WEBTOON revenue based on NAVER's consolidated results in KRW terms declined 2.6% year-on-year in the fourth quarter. For more details, please refer to WEBTOON Entertainment's earnings announcement.
For reference, strategic partnership with the Walt Disney Company announced in the previous quarter has been further strengthened following the completion of Disney's 2% equity investment.
WEBTOON Entertainment Is currently accelerating development of an integrated platform targeted for launch within the year, enabling users to access Disney's flagship IP portfolio, including Marvel Universe and Star Wars alongside selective WEBTOON original titles in a single destination. This partnership is expected to serve as an important inflection point, extending beyond content distribution to accelerate the establishment of global IP hub and the expansion of presence within the North American content ecosystem.
SNOW revenue increased 8.5% year-on-year in Q4, driven by continued growth in paid subscribers to camera apps. Fourth quarter enterprise revenue recorded KRW 171.8 billion, down 3.2% year-on-year, reflecting the full quarter contribution of new GPU as a Service revenue streams that began the third quarter as well as newly generated revenue from global DX projects in Saudi Arabia, including super app and digital twin initiatives. Enterprise revenue grew 16.6% year-on-year when excluding the base effect related to LY settlement adjustments.
At LINE WORKS, double-digit revenue growth continued, supported by strengthened online direct sales and steady sales of SaaS products. In addition, expansion into the Taiwan market was completed during Q4, and efforts will continue to focus on accelerating the market penetration by leveraging the experience of maintaining the #1 position in Japan's business chat market for 8 consecutive years.
Starting in 2026, revenue classification will be revised to more clearly reflect the performance of core businesses and new growth opportunities.
Next, I'll discuss detailed cost items. Development and operation expenses increased 10.2% year-on-year in the Q4 and 8.7% for the full year, primarily reflecting head count growth associated with new hiring.
Partner expenses rose 9.1% year-on-year in Q4 and 10.8% for the full year, driven mainly by higher revenue-linked costs, including sales commissions and payment processing fees.
Infrastructure expenses increased 10.9% year-on-year in the Q4 and 15.1% for the full year, reflecting continued infrastructure investment as well as the impact of revisions to useful lives of certain assets, including infrastructure facilities.
To lead the era of GenAI-driven search and agency services, AI technologies continue to be integrated across all service domains alongside sustained strategic infrastructure investments. Strategic investments will be further expanded this year to strengthen service competitiveness in the AI era, including initiatives such as the launch of a shopping agent and AI Tab.
Marketing expenses increased 12.9% year-on-year in Q4 and 20.1% for the full year, driven by strength in strategic marketing initiatives in the Commerce segment as well as higher costs associated with revenue growth.
Looking ahead, investments across the NAVER ecosystem will continue to focus on enhancing user experience, particularly in content, AI infrastructure and commerce delivery capabilities, which is expected to result in higher associated costs. They are considered essential to strengthening the competitiveness of NAVER's core businesses and expected to support accelerated revenue growth over the mid- to long term.
Next, I'll explain NAVER's operating profit by business segment. First, the integrated Search platform and Commerce segment maintained a stable operating profit margin above 30% despite a slight year-on-year decline in profitability, driven by the accelerated adoption of AI across services, including the expansion of AI Briefing as well as year-end shopping promotions even amid continued solid revenue growth.
In the Fintech business, profitability improved modestly, supported by the continued expansion of Smart Store-related and off-platform payment revenues.
In Content, operating losses narrowed due to the dissipation of the base effect related to WEBTOON's IPO-related expenses in 2024, along with cost efficiency improvements at SNOW.
Losses in the Enterprise business also narrowed, reflecting the full quarter impact of GPU as a Service revenue in Q4. Q4 consolidated net income totaled KRW 164.6 billion, declining 68% year-on-year, primarily due to an increase in goodwill impairment losses recognized at period end. For the full year, net income reached KRW 1.8 trillion, down 5.8% year-on-year. Q4 free cash flow totaled KRW 185 billion, decreasing by KRW 252.8 billion year-on-year as increased CapEx associated with expanded infrastructure investments more than offset solid operating cash flow.
Finally, the new 3-year shareholder return program will be outlined. For each fiscal year from 2025 to 2027, shareholder returns are planned at 25% to 35% of the average consolidated free cash flow over the preceding 2 fiscal years to be delivered through share repurchases and retirements or cash dividends.
Under this new program, the 2025 fiscal year dividend is expected to total KRW 393.6 billion, equivalent to 30% of 2-year average consolidated free cash flow, subject to approval at the Annual General Meeting of Shareholders in March with payment scheduled for April. The dividend record date as previously disclosed is February 27. This concludes the overview of our Q4 financial results. We will now move on to the Q&A session.
[Interpreted] [Operator Instructions] The first question will be provided by Jae-min Ahn from NH Investment & Securities.
2. Question Answer
[Interpreted] I am Ahn Jae-min from NH Investment & Securities. I would first like to ask a question relating to the agentic AI. In the earnings release call by Alphabet, your competitor, they're also talking about agent-based AI. And in the DAN conference, you also at NAVER had talked about how you would prepare for the shopping agent. In this age of agent-based AI, how would the release of such shopping agent impact your upward trend in terms of the top line revenue for your advertisement and for your commerce business going forward?
Second question has to do with your recent setbacks that you experienced in the government-led sovereign AI projects. I would like to get some color as to what your future, I guess, approach and outlook is for your AI business particularly in the B2B space.
[Interpreted] Thank you for those questions. Relating to the update on our shopping agent rollout, we have actually completed the development up to a closed beta level, which means that starting next week, we can begin our in-house closed beta test, and we will be able to complete the product for a showcase to our customers by the end of February.
So we will start applying the AI agent to shopping first and then expand to other verticals such as restaurants, place and travel up to finance vertical. And in regards to the AI Tab, which we are currently preparing to release it and to roll it out within the first half of the year, where we really bring the generative AI capabilities to our search features, so we will be rolling out and introducing these different agents for each of the verticals as we go forward.
In regards to the AI strategy that NAVER employs in bringing its AI technology to the services that it provide from the time of building the service model up until the application of such models, we have a very close-knit connection to the data that NAVER has, search, shopping as well as other services that we provide. And hence, we expect going forward, there will be also continuous positive effect on the growth that we've seen in terms of AI having impact on advertisement as well as our Commerce business. If you look at the data for 2025, the amount -- the extent to which AI had contributed to our advertisement growth was 55%. And as such, especially for the shopping as well, we believe that there is still a lot of room for us to leverage that AI technology in driving further growth for shopping. So we do have expectation and high hopes for shopping as well.
Responding to your question about the independent foundation model and the government project, with regards to the outcome of the competition, we accept and respect the decision that the government has made. Having said that, that does not, in any way, reflect on the competitiveness of the technology that NAVER currently has. We will, going forward, exert our utmost endeavors in further focusing on our R&D and in building the technological leadership that NAVER has. With regards to the impact of this on the sovereign AI-related challenge impacting our strategy or the profitability or on our B2B business endeavors, there is not going to be any significant impact.
[Interpreted] The following question will be presented by Junhyun Kim from HSBC.
[Interpreted] I have 2 questions that I would like to ask. First, you did say that you are planning on expanding AI Briefing by twofold this year. So can you provide a little more color as to what your advertisement adoption plan is? And would there be any cannibalization with your current advertising model? Would there be any increase in the unit prices of the ad that is going to be run? So I would like to gain some understanding as to what the internal expectation is with regards to the expansion of AI Briefing.
Second question is, aside from the fact that you -- for your core services, you're incorporating and taking the strategy of on-service AI. So aside from that, do you have any external GPU-related additional monetization opportunities that you are looking forward to?
[Interpreted] In terms of AI Briefing in the second half of the year, we will be testing AI Briefing features in the domains of shopping and connecting that to the place feature as well.
As mentioned, for AI Briefing, we are seeing different behavior from the perspective of the users in terms of how they enter their queries. We're seeing it becoming more long tailed and also the way in which the response is given is also changing. So hence, with regards to AI Briefing and advertisement as well as those aspects, we will continue on considering those different aspects, including advertisement.
So that is why we're looking at different ways to add and expand on the inventory as well as the advertisement model. And as we have said last year, we are expanding the application of the AI Briefing, and we were able to do automatic matching on certain aspects that the users would be exposed to in terms of the search ad. So we were able to increase on the coverage of the search ad, which led to a higher level of satisfaction of the users on the search ad that has been provided.
And we also see metrics like the dwell time on the very top of the response page actually increase. And so we will be able to come up with an effective way in providing an efficient advertisement solution even with the increases in the unit cost of the ad.
Regarding the question on enterprise, we are seeing good acquisition of customers for our GPU as a Service business. And from Q4, we've been fully reflecting the full quarter record or the financials on our top line revenue. And we are continuously in talks, quite active communication, with potential prospects in order for us to gain additional reference sites.
Now NAVER has a distinct competitive position in the domestic market because we have a full stack capability starting from infrastructure, cloud business and also to build up of the models. So we are, at this point, closely working together with customers like Bank of Korea and also building up on our -- the portfolio of reference customers in areas such as Neurocloud as well as sovereign AI initiatives. So we look forward to additional added value projects, not just in the domains of GPU as a Service.
[Interpreted] The following question will be presented by [ Min-Joo Kim ] from Bernstein.
[Interpreted] Kim Min-Joo from Bernstein. I have a question relating to your Commerce business margin under the Search platform. I understand that with your cooperation with companies like Spotify and Netflix on the membership side, I see that as a NAVER user, I see a lot of such advertisement on your inventory on your ad slots. So I can understand that this partnership would have a good impact on your ad and commerce business, but does it have a negative impact on the margin, especially for the core business of search and commerce. Recently, we've seen quarter-over-quarter margin decline. So I would like to gain some understanding on this aspect.
[Interpreted] This is the CFO responding to your question. You are correct that we've been expanding our membership partnership, but that does not have any meaningful impact on NAVER's advertisement margin. I think it is an outcome of certain other independent factors. If you look at the recent movement in the margin for search and commerce, it is mostly attributable to the change in the mix of the portfolio that led to certain changes. Having said that, because we are maintaining our profit margin level above 30% at a quite steady level, we're not too concerned about this recent trend.
[Interpreted] We are also making investments into the infrastructure to further bolster our search-related capabilities and so -- and have been running higher level of promotions in regards to our shopping services. Our margin level will be hovering around 30% level. But rest assured, we will defend any additional decline by a close management of the P&L.
[Interpreted] The following question will be presented by [ Ahyung Cho ] from Merrill Lynch.
[Interpreted] I have 2 questions on Commerce. First, there has been certain change in the competitive landscape starting December. You've mentioned that your performance on the commerce side was quite strong. Would like to know as to how -- to what extent would it continue to improve going forward? And I understand that you've really had a strong marketing and promotion drive starting December. How does that impact your P&L? And especially if you look at the first quarter, I mean in Q4, you had that strong drive behind marketing from December, but for Q1, now that impact is going to be fully captured for the full quarter. So what implication would that have on your P&L?
And second question is, we recently saw a news actually yesterday that there will be some legislative effort to allow hypermarkets or discount stores to start early morning deliveries. How will that impact you, especially because of this partnership that you have with Kurly?
[Interpreted] As you have correctly mentioned, recently, we've seen heightened level of users' awareness when it comes to the greater e-commerce market in terms of the trust that they have on the platform as well as data-related security aspect as well as creating an ecosystem that is healthy.
And such change in the way -- such change in the users' awareness actually is in good alignment with NAVER as it was a company that has been making a significant investment in that regard.
And so in terms of the GMV of the commerce as well as the metrics that show the -- the new subscribers to our membership, we've seen some meaningful trends and changes there. And so with heightened level of understanding, we believe that this is not going to just translate into a short-term spillover effect, but that it will become a very important standard for users when they come and pick, which platform to use. So we want to be able to convert this trend into a long-term trajectory.
And what I have just said is also shown in the January data and metrics as well. And when we introduced NAVER Plus Store last year, we've mentioned that we have tried various different marketing approaches, which has led to some positive impact. And so in terms of marketing as well as investment, we will sustain that approach. And in terms of the delivery experience, we will make investments so that we can make that experience very distinct to NAVER.
Regarding government regulation, there is not much I can say at this point. However, already the large-scale market or groceries that are offline at this point who have competitiveness are NAVER's partner already. And we have the 3PL model as well as advertisement model, which is going to benefit once this ecosystem actually expands with more players equipped with competitiveness.
[Interpreted] Due to the time constraint, we will be taking the final question.
[Interpreted] The last question will be presented by Seokoh Kang from Shinhan Investment & Securities.
[Interpreted] I'm Kang Seokoh from Shinhan Securities. I would have a question on robotics because there was a news article recently that said that NVIDIA and NAVER is going to collaborate. I would like to gain some more color as to what that collaboration is. Now would it be such that NAVER will develop its robotics control software and in so doing, collaborate with NVIDIA in that process so that the third-party companies would use and depend on NAVER Cloud or will NAVER be making use of the Omniverse platform that currently NVIDIA offers? And once you develop and commercialize this robotics solution, what business model could NAVER benefit from?
[Interpreted] Regarding the collaboration with NVIDIA at this point, there is not much that I can disclose. However, in terms of how the software will be used, it will be a model where it will be used based on NVIDIA's Omniverse platform that is currently under discussion rather than not just on single -- solely on NAVER Cloud.
In the near future, we are clearly aware that this age of robotics and AI is coming. Our competitive edge is, of course, not in the hardware per se, the robots per se, but our capabilities and strength lie in that intersection between the human and robot interaction. So how will these robots collaborate with one another and how would it interface or interact with the humans in the process of transactions and from commerce, that will be an area where NAVER would be able to leverage its core capabilities.
Over the past several years, inside NAVER building, we had hundreds of robots that were used for indoor delivery. And last year, we were able to expand that experience into countries like Japan and Saudi Arabia. And for this year, we are planning on a POC project or POC test in the outdoors, bringing together the capabilities we have in commerce and robotics-based delivery. And I believe that this could very closely couple with the future business model that we can envision.
[Interpreted] This brings us to the end of the earnings presentation for fourth quarter of 2025. Thank you to all of the investors for joining us, and we look forward to your continued support.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
Naver — Q4 2025 Earnings Call
Naver — Q3 2025 Earnings Call
1. Management Discussion
[Interpreted] Good morning. We will now begin NAVER's 2025 Q3 Earnings Conference Call. For the benefit of our investors joining from home and abroad, we will provide simultaneous interpretation service for the presentation and switch to consecutive interpretation for the Q&A.
[Interpreted] Good morning. I am [indiscernible] from the Office of Capital Markets. I would like to thank the analysts and investors for joining NAVER's 2025 Q3 Earnings Presentation. On this call, we are joined by CEO, Soo-yeon Choi; and CFO, Hee-Cheol Kim, and they will walk you through NAVER's business highlights and strategies and financial results, after which, we will entertain your questions.
Please note that the earnings results are K-IFRS based provided for timely communications and have not yet been audited by an independent auditor and hence, are subject to change after such review.
With that, I will turn it over to our CEO to present on the business highlights.
[Interpreted] Good morning. I am Soo-yeon Choi, the CEO. In Q3, NAVER continued to strengthen its foundation for new growth by advancing its services and monetization through the integration of AI technology into content and data. In search, AI briefing has been expanded to 15% coverage, leading to a notable improvement in user satisfaction and delivery, delivering a positive user experience. At the same time, the revamped home screen, along with expanded content supply through Clip and Shopping Connect as well as personalized recommendations contributed to higher usability. As a result, the loyal user base strengthened both quantitatively and qualitatively during the quarter.
Supported by these initiatives, together with NAVER's solid media influence and strong monetization capability, overall advertising revenue on the NAVER platform grew by 10.5% Y-o-Y. In commerce, NAVER strengthened a personalized experience optimized for exploration and discovery-based shopping by enhancing user benefits through services such as end delivery and membership. As a result, user engagement within the NAVER Plus Store app increased, surpassing 10 million downloads. In Q3, Smart Store GMV recorded accelerated growth with the full quarter reflection of the revised commission structure, serving as a key driver of overall performance. Going forward, NAVER will continue to enhance the customer experience through closer collaboration with Kurly and expanded application of AI-driven personalization.
Let me begin with NAVER's differentiated AI-powered search services and the performance of the search platform. To strengthen competitiveness, informational search, AI briefing launched in March, expanded its coverage to 15% of integrated search queries as of September end. It continues to enhance our usability by providing information to reinforce with highly reliable sources and improving answer satisfaction for long-tail queries. AI briefing used by more than 30 million users offers a differentiated experience by enabling summarized information consumption as well as deeper exploration through research using related questions displayed at the bottom of the main text, thereby expanding content consumption. Since its launch, the number of clicks on related questions has increased by more than 5x compared to April, the early stage of the service. This allows users to explore more topics more deeply without entering new or complex queries by naturally engaging with a wider range of NAVER's UGC, creating a virtuous cycle of content consumption.
Starting in November, NAVER will gradually test personalization in both the answer text and related question areas. In particular, for shopping and local queries, the company plans to strengthen contextual connections of businesses and explore monetization opportunities. Ultimately, NAVER aims to provide a differentiated search experience in which advertising and content are seamlessly integrated with the answer text while also exploring revenue models for the emerging AI agent environment.
The home screen revamp in August, along with the expansion of high-quality content supply, including clip and the enhancement of personalized content recommendation logic led to higher feed engagement. As a result, in September, the average daily users of the home feed and clip stabilized at 10 million users each. With improvements in the usability and recommendation areas of the home feed, user activity indicators such as content impressions and clicks continue to increase. The resulting growth in feed consumption also translated into higher advertising revenue.
The number of loyal users visiting NAVER home feed more than 20 days per month increased by over 2x Y-o-Y, while the proportion of such loyal users rose by 5 percentage points compared to the beginning of the year. This indicates that inactive users have been converted into active users, leading to the stable growth of the home feed. Also, NAVER's high-quality UGC and advertising content, together with its more advanced recommendation technology, are being effectively exposed in the right placement, thereby strengthening user engagement and lock-in. It is also expected to lead to further monetization opportunities, including advertising revenue growth.
With a solid user base and stronger engagement, along with the expanded application of AI briefing, providing a differentiated search experience, NAVER achieved a 10.5% increase in total platform advertising revenue driven by improved AI-based advertising efficiency. In Q3, continued optimization of ad placements and services using NAVER's proprietary AI technology enabled more efficient ad exposure within the same inventory, resulting in higher advertising efficiency, steady growth across key metrics and an expanded advertiser base.
NAVER is also seeking ways to further strengthen its response to commercial queries, one of the key competitive areas of its search business by delivering more satisfying search results for users while capturing additional advertising revenue. To this end, the company plans to expand efforts to identify new advertising services and optimize ad placements across its platforms, including commerce areas such as Plus store, the entertainment section, which is gradually being transitioned into a feed format.
The automated advertising campaign at Boost has demonstrated proven advertising efficiency, contributing to both performance advertiser growth and overall advertising revenue expansion. Boost Shopping, which has successfully established itself recorded a conversion performance in September that was more than 100 percentage points higher than standard search ads. Supported by this momentum, the number of NAVER performance advertisers increased more than 2x Y-o-Y. Looking ahead, NAVER is building an environment that will allow Smart Store sellers to more easily experience ad Boost shopping within the seller center while continuing to incorporate advertiser feedback and expand exposure across various placements, including Plus Store.
Furthermore, NAVER has integrated advertiser billing accounts to enable advertisers to manage campaigns under a single account and has launched a customized consulting program for advertisers that operate their campaigns directly. Next year, NAVER plans to introduce a new business agent that will design and execute growth strategies together with advertisers and business partners and evolve it into an integrated solution that analyzes business performance and competitiveness based on NAVER's high-quality data to propose practical solutions.
Next, I will discuss the key achievements of the e-commerce business. In Q3, commerce focused on enhancing personalized experiences tailored for discovery and exploratory shopping, strengthening delivery competitiveness and expanding membership benefits. As a result of these efforts, Smart Store GMV grew by 12.3% Y-o-Y. NAVER Plus Store is rapidly evolving into a structure optimized for discovery and exploratory shopping through features such as Discovery Tab, AI shopping guide and content integration. By serving as a core channel that enables a brand experience-driven purchase journey supported by each brand's unique data and content assets, along with our proprietary promotions and campaigns, the platform has helped brands achieve 40% or higher growth for 5 consecutive quarters, firmly establishing itself as a key growth driver.
NAVER plans to further refine its personalized recommendations and ranking algorithms within search to ensure that brand and SME product databases unique to NAVER are more effectively surfaced. The company will also significantly expand the application of AI personalization on the NAVER Plus Store home screen from 31% to 80%. These efforts are expected to enhance the discovery and exploration experience by connecting users with popular products and UGC while maximizing user lock-in and improving both time spent on the platform and purchase conversion rates.
From a monetization perspective, GMV generated through AI recommendations within the Plus Store increased by 48% Q-o-Q, supported by enhanced personalization and service optimization. On some placements, conversion rates for personalized recommendations were more than 10x higher than those of standard formats. Going forward, NAVER plans to further expand the application and coverage of AI recommendations by accurately identifying user intent, thereby driving meaningful growth in both adoption and GMV. Thanks to these efforts, NAVER Plus store app surpassed 10 million downloads within 6 months of its launch. In-app activity also strengthened with page views increasing by 19.4% and average session duration rising by 9.7% Q-o-Q, reflecting higher user engagement.
Membership has become a core element that not only provides shopping benefits, but also connects NAVER's broader ecosystem and encourages users to stay longer on the platform. Following the partnership with Netflix, NAVER expanded membership benefits in Q3 to include Microsoft Game Pass, Uber membership and free delivery on purchases over KRW 20,000 at Kurly N Mart. As a result, the number of active membership users increased by more than 20% Y-o-Y. In particular, the partnership with Microsoft Game Pass resulted in a 23% increase in male users in their teens and 20s compared to before its introduction, broadening NAVER's overall customer base. And in addition, fresh food purchases have also risen significantly, positioning membership as a key driver of commerce growth and a catalyst for greater content engagement across platforms.
Following the partnership with Nexon in September, NAVER announced a new partnership with Spotify, global audio and subscription streaming platform, further expanding its content offerings. Through this partnership, NAVER plans to integrate Spotify's extensive library, including 100 million songs and more than 7 million podcasts across various NAVER services, enabling users to easily discover and enjoy audio content suited to their preferences and moods. NAVER will share more details on this collaboration in the near future.
NAVER also continued its efforts to enhance user experience by strengthening delivery competitiveness. With the rebranding of N Delivery and the enhancement of free delivery and free return benefits for members, the purchase frequency of membership users increased by 13% Y-o-Y, while the membership purchase ratio rose by 1.3 percentage points Y-o-Y. These results show that stronger delivery competitiveness is driving higher purchase activity among our customers.
Following the partnership with CJ Logistics in July, NAVER introduced an early morning delivery service with Kurly in September, resulting in a significant improvement in overall delivery lead time. In addition, the implementation of cold chain system has allowed NAVER to expand the share of low-temperature product listings, which were previously restricted, thereby strengthening its product assortment competitiveness.
N Delivery GMV continued its strong growth with sellers that adopted N Delivery in the previous quarter, recording over 19 percentage points higher Q-o-Q GMV growth compared to those that had not. This clearly demonstrates that enhanced delivery competitiveness is driving both a stronger user lock-in and increased purchase activity.
The C2C segment also delivered meaningful results. Cream and Soda achieved over 15% Y-o-Y GMV growth in Q3, driven by strong sales of exclusive brand products and growing demand for trading cards in Japan. In addition, both platforms are maximizing user experience and sales efficiency through content-driven planning and browsing enhancements aligned with evolving trends.
Poshmark is expanding its app entry points through integration with the NAVER search engine while enhancing user experience by improving auto complete and search result layouts to deliver more accurate and relevant search experiences. Through the introduction of a new ad format and enhancement of ranking logic, NAVER continued to achieve growth in first-party advertising revenue, while efficient marketing execution led to improvements in both platform profitability and traffic quality, resulting in double-digit growth in GMV and revenue.
Regarding Wallapop, whose acquisition was announced last quarter, the transaction process is proceeding as planned, and NAVER will provide a more detailed update on the global C2C business performance following the completion of the acquisition.
In Q3, the core pillars of discovery and exploration-based app experience, brand membership, delivery and advertising were organically connected, creating strong synergies that reinforce the virtuous cycle from traffic inflow to purchase conversion and monetization, thereby advancing the overall growth of the platform. Going forward, NAVER will continue to leverage those organic synergies across the platform to further strengthen its solid position in the commerce market.
Next, I will provide an update on the Fintech business. In Q3, NAVER Pay TPV reached KRW 22.7 trillion, representing a 21.7% Y-o-Y increase. Non-captive payments, which accounted for 55% of total TPV grew 31% Y-o-Y to reach KRW 13 trillion, driven by higher payment activity and continued merchant expansion. In addition, through the partnership with Nexon announced at the end of September, including account and payment integration, NAVER is continuing to expand its third-party ecosystem across both online and offline channels. In the platform business, NAVER completed the acquisition of Securities Plus Unlisted in September. In line with Korea's fintech policy direction, the company aims to evolve into an integrated platform that enhances accessibility and reliability for investors in the OTC market.
Next, I will discuss Webtoon's results. In September, Webtoon Entertainment signed a global content partnership with Disney through which more than 35,000 titles from Marvel, Star Wars, Disney, Pixar and 20th Century Studios will be introduced for the first time on a new digital platform. The development and operation of this platform will be led by Webtoon Entertainment, and it will feature not only iconic titles from Disney portfolio spanning several decades, but also a selection of Webtoon original series. The new platform represents the results of an unprecedented collaboration that combining Webtoon's product and technological expertise with Disney's unrivaled IP portfolio, allowing users to enjoy Disney's iconic content all in one place. This initiative is expected to broaden Webtoon's reach beyond its existing user base, expand engagement with new global audiences and serve as an important stepping stone for global growth while also laying the foundation for an even deeper partnership with Disney in the future.
Please note that Webtoon Entertainment is scheduled to announce its earnings on November 12, U.S. local time. For more detailed information, please refer to Webtoon's earnings release.
Lastly, I will discuss the performance of the enterprise business. The B2B business within enterprise achieved new revenue generation through the monetization of GPU as a service contracts secured in the first half of the year. For LINE WORKS, the number of paid IDs continue to record double-digit growth Y-o-Y despite the high base effect from the same period last year. Services integrated with LINE WORKS such as AI node and Roger are also growing steadily as planned. In October, LINE WORKS launched its service in Taiwan and is now seeking to expand into global markets by leveraging its experience as the leading business platform in Japan.
Leveraging its full stack AI capabilities, NAVER is building a stronger track record in Korea by providing AI transformation solutions and industry-specific products tailored to both the public sector and the private sector. The company's global sovereign AI initiatives are also progressing as planned.
At the end of October, NAVER signed an MOU with NVIDIA to capture physical AI opportunities, which operates in real industrial environments and systems. Also, we secured an additional 60,000 latest GPUs and strengthened its AI capabilities. NAVER has been building industry-specific references, including the financial and energy sectors by providing neuro cloud and customized AI services to clients such as the Bank of Korea and KHNP. In a similar vein, the company is engaging discussions with multiple partners across the manufacturing industry, including the semiconductor, shipbuilding and defense to explore further collaboration opportunities. NAVER also plans to develop specialized AI models tailored to major industries and seek diverse use cases and additional business opportunities within the private cloud market, ensuring that optimized AI technologies can be swiftly adopted across sector.
Following the launch of the new administration, large-scale national policy projects have been promoted to accelerate Korea's AI transformation, including initiatives for independent foundation model development, GPU leasing projects and the establishment of SPCs for AI data centers. And NAVER is actively participating in key projects under these initiatives.
In Saudi Arabia, NAVER is finalizing the establishment of a joint venture with the Ministry of Housing, aiming to expand into super app, [indiscernible], data center and cloud businesses with the goal of commencing operations next year. The company is also pursuing various global collaborations and opportunities, including the development of an AI agent for tourism and a sovereign LLM in Thailand, participation in GPU as a Service and AI data center projects for Europe based in Morocco and human rights research collaboration with MIT to secure future robotics platforms and any plans to share further updates as these initiatives begin to take shape.
Going forward, NAVER will continue to strengthen the competitiveness of its core businesses through AI, while also adding new growth drivers for mid- to long-term expansion and laying the groundwork for global growth.
Now CFO, Hee-Cheol Kim, will discuss the financial performance.
[Interpreted] Good morning. This is CFO, Hee-Cheol Kim. I will now walk you through Q3 financial performance. Revenue in Q3 increased 15.6% Y-o-Y to KRW 3.1381 trillion, driven by solid growth across NAVER's core businesses, including advertising, commerce and fintech. Building on the previous quarter, AI-driven enhancement of advertising efficiency continued, resulting in advertising revenue growth outpacing the market rate. The full quarter impact of the revised commission structure in the commerce business further accelerated overall revenue growth, while seasonal effects from the triple holiday peak period also contributed to the increase.
Operating profit increased 8.6% Y-o-Y to KRW 570.6 billion, maintaining a solid growth trend despite higher expenses related to mid- to long-term business expansion and competitiveness enhancement supported by accelerated top line growth. The operating profit margin reached 18.2%, a slight increase from the previous quarter.
Next, I will explain the revenue by business segment. In Q3, search platform revenue increased 6.3% Y-o-Y to KRW 1.0602 trillion. Total NAVER platform advertising revenue, which includes search, display commerce, fintech and Webtoon ads grew 10.5% Y-o-Y. This reflects the combined impact of AI-based ad and service optimization, advancements in personalized ad recommendations and the continued expansion of the advertiser base.
In Q4, along with along the -- although the long holidays in October may have some impact due to fewer business days, NAVER will continue to enhance advertising efficiency through AI, expand monetization of noncommercial queries and broaden ad inventory, thereby strengthening its competitive edge in the advertising market.
Commerce revenue increased 35.9% Y-o-Y to KRW 985.5 billion. The enhanced discovery and exploration experience within the NAVER Plus Store app, expanded membership benefits and the revised commission structure all contributed positively, driving balanced Y-o-Y growth across all segments.
Commission and sales revenue grew 39.7% Y-o-Y as the enhanced discovery and exploration experience within the NAVER Plus Store app led to brand purchase growth, driving an increase in Smart Store GMV. The full quarter impact of the revised commission structure also contributed with Smart Store revenue increasing 102% Y-o-Y.
Commerce advertising revenue grew 31.2% Y-o-Y, driven by advancement in AI-based recommendation ads and the full rollout of ad boost shopping in Q3. Membership revenue increased 30.5% Y-o-Y, supported by a broader user base and higher active user numbers following the addition of new benefits such as partnerships with Microsoft Game Pass and Uber and free delivery at Kurly N Mart.
Fintech revenue increased 12.5% Y-o-Y to KRW 433.1 billion. At the end of September, NAVER launched the beta service of the Connect terminal, which seamlessly links online and offline merchants. This enables NAVER to provide not only payment services within its ecosystem, but also data-driven customer management functions. Going forward, the company will focus on building an integrated online/offline ecosystem and creating new value for both users and merchants.
Content revenue increased 10% Y-o-Y to KRW 509.3 billion. Within this, Webtoon revenue based on NAVER's consolidated results in Korean won terms grew 11.3% Y-o-Y. For more details, please refer to Webtoon Entertainment's earnings announcement scheduled for November 12 local time.
SNOW Revenue increased 24.3% Y-o-Y, driven by the continued growth in paid subscribers of its camera app integrated with AI content features. Enterprise revenue increased 3.8% Y-o-Y to KRW 150 billion. The number of paid LINE WORKS IDs continued to record double-digit growth in Q3. And GPU as a Service contracts secured in the first half have begun generating revenue. The year-over-year comparison reflects the base effect from one-off revenue related to well-booked deliveries to the Jeonbuk Office of Education in the same period last year.
Next, I will discuss the detailed cost items. Development and operations expenses increased 14.2% Y-o-Y, mainly due to higher headcount from new hires, increased stock-based compensation following the rise in share price and onetime severance payments related to Poshmark's workforce optimization initiatives. Partner expenses increased 17% Y-o-Y, while infrastructure costs rose 22.7% Y-o-Y, driven by higher depreciation expenses from the acquisition of new assets such as GPUs.
Considering model training and inference for AI integration across all businesses as well as the expansion of new initiatives, including government projects, NAVER expects large-scale infrastructure investments to continue.
Marketing expenses increased 20.3% Y-o-Y, driven by promotional activities in the commerce, fintech and Webtoon businesses. Through the end of the year, NAVER plans to efficiently execute various marketing initiatives aimed at enhancing competitiveness across business units and strengthening the foundation for top line growth, including content expansion to boost engagement with the NAVER app ecosystem and promotions for Kurly N Mart launched in September.
Next, I will explain NAVER's operating profit by business segment. First, the Integrated Search Platform and Commerce segment maintained a stable profit margin of over 30% despite a slight year-over-year decline due to AI integration within services and shopping promotions while continuing to deliver solid top line growth.
In the Fintech business, despite continued growth in payment revenue, profitability declined slightly Y-o-Y due to delayed purchase confirmations caused by summer vacation seasonality and expanded promotional activities.
In content, operating losses widened due to increased production costs related to Webtoon IP business development and higher marketing expenses to strengthen global competitiveness.
In the Enterprise business, losses also expanded, driven by increased infrastructure investments for AI model training and inference. Going forward, NAVER plans to continue investing to secure future growth drivers, including investments in global platform development for Webtoon, expanded infrastructure investment in the enterprise business to support project acquisition. In the mid- to long term, however, the company will work to narrow operating losses.
Q3 consolidated net income increased 38.6% Y-o-Y to KRW 734.7 billion, driven by higher -- the overall increase in investment gains of affiliated companies, including higher equity method gains from A Holdings following the consolidation of LINE Man into LYC.
Operating cash flow remained on a stable growth trend, while Q3 free cash flow decreased by KRW 185.2 billion Y-o-Y to KRW 201.9 billion due to increased infrastructure investments. Going forward, we will continue to make capital expenditures to strengthen the competitiveness of each business unit while maintaining financial soundness through stable operating cash flow driven by top line growth and disciplined debt management.
This concludes the overview of our Q3 financial results. We will now move on to the Q&A session.
Before we begin the Q&A session, let me make a brief announcement. Tomorrow, NAVER will unveil its detailed strategic direction at DAN25 Integrated Conference through both on-site participation and live online streaming. We invite everyone to join and tune in.
[Foreign Language] [Operator Instructions] [Foreign Language] The first question will be provided by Stanley Yang from JPMorgan.
2. Question Answer
[Interpreted] I have two questions. Number one is related mostly to CapEx. So I understand that GPU CapEx will be increasing this year. And so I'm curious about any guidance on GPU CapEx for this year and next year and also a guidance on the total CapEx that you forecast. And also, I'm curious whether the 60,000 GPUs in the partnership with NVIDIA is included in this GPU CapEx. And along these lines also, I'm curious about management's thoughts on the potential pressure on margin that the increased depreciation expenses can bring about.
My number two question is largely about the vertical AI. I'm sure that you are engaging in a myriad of different strategies in terms of your AI verticals, especially on the B2C side in ads and shopping. I'm curious about how the extent to which AI is integrated into your services? And also along that lines, the revenue contribution. I know it's early days right now, but what do you expect for this year and in the future?
[Interpreted] To answer your first question, our AI integration efforts have resulted in very fruitful and meaningful outcomes in terms of boosting our revenue and monetization strategies with our AI briefing and also ad boost amongst other commitments and efforts. We have also communicated to investors and markets our commitment to keep on investing in the infrastructure and therefore, CapEx in terms of increasing the competitiveness of our services.
And although I can't speak to the exact figures right now, as of this year, we expect our GPU CapEx to -- including GPU CapEx, our entire CapEx to stand around the KRW 1 trillion range. And from 2026 and onwards, considering our new business expansion strategies and plans, we expect about KRW 1 trillion in CapEx to go into GPU investments alone.
And in terms of our GPU investments, although it is, of course, a proactive move on our part, this also includes our endeavors into increasing profitability as well as it includes GPU as a Service provided to the government and also public sectors as well. So with the review that we have, we will continue to actively invest in GPU with our CapEx. And also this figure will include the 50,000 NVIDIA GPUs that you mentioned.
[Interpreted] And to address your second question, when we first released the AI briefing service earlier this year, our initial goal for coverage was in the 10% range within the year closing out. However, as the business has progressed, we've come to realize that this has actually been very effective in boosting not only our loyal user base, but also our existing search business as well. And therefore, we'll be accelerating our efforts to bring this figure up to the 20% range.
And you'll know if you compare with our global platform competitors that we at NAVER have all around a comprehensive understanding of our users, which we will lean into in terms of providing numerous vertical services, including payment services, reservations, shopping, so on and so forth, which will make sure that we can be a lot more flexible in terms of the AI services that we provide.
You'll be able to hear more announcements about the exact timing and features at tomorrow's DAN event. However, by spring of next year, we plan on rolling out our AI shopping agent as well as the AI tab and integrated AI services that will be providing a lot more integrated approach to what we provide in terms of our services.
The integrated AI agent is part of our omni service strategies, and we've begun to come to the realization that this has been a significant boost in our revenue with search ads, commerce and also the local business side as well. And so as you've mentioned, it is still early days in terms of revenue contribution, but we expect strong contributions to monetization and revenue moving forward.
[Interpreted] The following question will be presented by Junhyun Kim from HSBC.
[Interpreted] I have two questions for you. Number one is about the enterprise side. I know that there has been some variability until now with WORKS and so on and so forth. However, it seems that you are really doubling down on your commercialization efforts with the commercial divisions for GPU as a Service, AI and also Digital Twins on the move. So I'm curious about how you expect revenue to pan out moving forward. It seems that physical AI and robots are one of your focus areas. What will be some of the major key monetization pillars moving forward?
And number two, speaking to the commerce marketing expense, when can we expect these expenses to start going down until when do you think we will expect these expenses to be executed? And also on the GPU side, we talked about the GPU CapEx investments that will be going into infrastructure. When do you think that the GPU business will begin to turn a plus margin?
[Interpreted] I'll answer your first question first and speak a little bit more about the color on the R&D that we have for Digital Twins and robots. You know that in 2017, which was quite a while before the terminology or concept of physical AI really began to come to the fore, we established NAVER Labs to that end.
And our core competitive, of course, we assess lies in not hardware, but on the software side. So our focus has really been on developing our software, ARC and ALIKE. ARC will be providing management services in an integrated and comprehensive manner that can bring together robots that are from various different manufacturers, playing a role like Windows or Android sorts. And ALIKE will be able to provide accurate location and delivery services.
And we have continued to make endeavors to make sure that if you look at our technology through our efforts in R&D, our technology competitiveness and capabilities, competencies are truly global #1 and at the top. And 3 or 4 years ago, when we began the test bed at the 174 headquarters of NAVER, we were able to make sure that we can go ahead with more speed and also make sure that we can use and accelerate, compile more global references with those efforts.
Although it is still early days to really speak to the entire global market size that we can forecast, as per our expectations, we expect that our market share in terms of global robots will stand at about at least 30% in the international arena. And we are making sure that this can serve as our next growth driver moving forward.
And we are continuously working to make sure that we can create these technologies in-house and internalize these core competencies in terms of the technology that we have. And especially given that we are a full stack AI service provider based on our cloud competencies, we are working to make sure that the potential that we see in opening up new markets in Korea for tailored and customized cloud to manufacturers can really serve as a growth driver moving forward, and we will continue to focus our efforts in this area.
With the Bank of Korea and also Korea Hydro KHNP, we are continuously in negotiations about these types of customized private cloud services that we can provide, and we will be coming to you with more details and color once we can provide them to you.
[Interpreted] And speaking to your second question on commerce, you'll know that we've revamped our commission structure, and we are planning on fully leaning into the changes that we have made.
However, our focus on marketing in this arena is not just as a one-off initiative in order to boost GMV. It will be an all-around comprehensive strategy that focuses on increasing loyalty as well as other aspects, and management will continue to focus on this aspect.
And we did touch upon this topic when we were talking about GPU CapEx guidances, but we will continue to make sure that our investments are very active and aggressive on the GPU side, and this will also lead into revenue contributions and growth as well. So we will be taking into consideration the growth in revenue as well as we decide upon our investment plans in GPU.
And as is with all infrastructure investments, the direct revenue contribution in the early stages, especially is quite minimal. So this really is in the term of a long-term view with a long-term lens. And so maybe in the temporary time, there might be a slight dip in revenue because of this. However, in the mid- to long term, we are more than certain that this will be able to turn a plus.
Sorry, just a revision about one of the interpretation that was provided. The market share of 39% when we're speaking about NAVER's robot initiative wasn't NAVER's market share. It is the OS control platform market within the robot market that is expected to account for about 39% of the global market moving forward.
[Interpreted] The following question will be presented by Eric Cha from Goldman Sachs.
[Interpreted] So I have two questions for you. Number one is about AI briefing. I know that you aren't into really pushing full monetization strategies yet with AI briefing, but I'm curious about the user behavior or pattern changes that you've seen after the release. And also any updates on the performance or results in a more detailed manner would be very much appreciated.
And question number 2 is about the commerce side. I know that the uptick in take rate has really pushed up revenue this year. What do you expect for take rate next year and moving forward? Will there be some meaningful growth in take rate continuing on moving forward? And also, if you can provide us a little bit more update about any recent changes or any results regarding the Kurly partnership.
[Interpreted] First of all, to answer your question about AI briefing, when we launched AI briefing service, it really wasn't geared towards monetization side. It was more towards really ramping up our weaker side comparatively compared to our competitors that was pointed out in terms of the information-seeking queries in order to increase the quality.
And in the initial stages, we were able to find that with the coverage on information-seeking queries as well as long-tail queries, which comprise of 15 words or more that the user satisfaction was very high, and we found that the duration time spent was going up as well as Y-o-Y increase in [indiscernible].
And the search result satisfaction is, of course, important, but also tying that in with the relevant information or relevant questions is extremely important. That's something that we continue to monitor. And if you compare the relevant questions that people click on at the bottom of the AI briefing service, compared to the initial launch days, it has expanded to about fivefold. So that is one of the changes that we have seen. And the fact that it's creating a virtuous cycle where it really is encouraging users and to use the search results, but also explore upon their search results and to build upon that and also to consume content as well.
And with the increase in query coverage, I also mentioned about how we will be integrating more and more AI into the business queries as well as the commercial queries, and we're continuing to monitor very closely how this impacts our monetization strategies and also how this will impact the merchants and businesses as well.
And at NAVER Place, which comprises of restaurants and other places to go out, we've integrated AI services. And as a result, we've seen our GPR go up 2.3 fold and conversion rates increased 15%. So these are some of the positives that we've seen throughout the release that has made us really have a much more stronger confidence in expanding these services moving forward, and these will be really panning out in our AI agent services that we will be rolling out such as AI tab and so on and so forth next year.
And in terms of the shopping side, as you will know, the big boost to our revenue in terms of the shopping side has really been twofold. Number one is the increased shopping revenue that came after the release of Plus Shop and also the increase after we've integrated our services with AI.
And with the change in our commission structure as well, that has been a big boost to our revenue. We can look on the GMV side where it's been a big boost for brand stores on shopping as well, as well as in delivery. And we will be leaning into these AI verticals and looking at the commission structure revamp, we are very certain that this will be a boost in terms of increasing take rate moving forward as well.
And since the launch of the NAVER Plus Store app, we've been in talks with manufacturers about the ad inventory and placements of our stores that we have, and this will also be a meaningful contribution to revenue monetization as well.
And next, speaking to the Kurly side, our shopping strategy has really been in leveraging the lead and edge we have in AI technology and also the shopping product listings that we have in order to provide more personalized recommendations, boosting this side as well as making sure that we make improvements on to the logistics side, which has been played out as one of our weaknesses. And in this area, Kurly will be able to provide more [indiscernible]
It is still early days, so we can't talk to the exact figures. However, it is on par and progressing well as we have initially planned.
[Interpreted] The last question will be presented by [indiscernible] from Bernstein.
[Interpreted] My question is related to the commerce side, especially the marketing expense. I am curious about the incremental increase on commerce that accounts for in the Y-o-Y increase in marketing expense.
[Interpreted] On a Y-o-Y basis as of Q3, our marketing expense has increased KRW 85 billion, and about half of that is commerce.
And from that commerce marketing expense, which is half of KRW 85 billion, half of that, again, is from the increase in the provisions that came from the increase in GMV as on the backdrop of the increase in commissions as per the structure revamp. And another half will go to the strategic promotions that we provided.
[Interpreted] Thank you very much for joining us, and we look forward to your continued...
[Statements in English on this transcript were spoken by an interpreter present on the live call.]
Naver — Q3 2025 Earnings Call
Financial data from Naver
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 12,962,955 12,962,955 |
15%
15%
100%
|
|
| - Direct Costs | - - |
-
-
|
|
| Gross Profit | - - |
-
-
|
|
| - Selling and Administrative Expenses | - - |
-
-
|
|
| - Research and Development Expense | - - |
-
-
|
|
| EBITDA | - - |
-
-
|
|
| - Depreciation and Amortization | - - |
-
-
|
|
| EBIT (Operating Income) EBIT | 1,777,311 1,777,311 |
15%
15%
14%
|
|
| Net Profit | 2,013,201 2,013,201 |
2%
2%
16%
|
|
In millions KRW.
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Naver Stock News
Company Profile
NAVER Corp. engages in the provision of internet advertisement and searches portal business. It offers services through the internet portals such as Naver, Junior Naver, and Happybean. The Naver provides community services including blogs and cafes, other convenient services such as news, knowledge shopping, maps, books, e-mail, and naver toolbar. The Junior Naver offers educational content for children including the homework helper and preschool; children and parents such as children's song world, fairy tale travel, and parents room; and entertainment services such as animal farm and game land. The Happybean is an online donation portal that bridges internet users to participate in donation activities and organizations. The company was founded on June 2, 1999 and is headquartered in Seongnam-si, South Korea.
StocksGuide Premium
| Head office | South Korea |
| CEO | Ms. Choi |
| Employees | 4,315 |
| Founded | 1999 |
| Website | www.navercorp.com |
