kakaopay Stock

Good afternoon. Thank you for joining Kakao Pay's Q3 2026 Earnings Release Conference Call. [Operator Instructions] Now let's begin with the presentation.

Good afternoon. This is Allen, CEO of Kakao Pay. Thank you all for joining our conference call for the third quarter of 2026. I will begin with key metrics, including TPV, consolidated operating revenue and expense, P&L followed by key business highlights for Q3 2026.

First, on key metrics for the quarter. Q3 '26 TPV was up 14% Y-o-Y, reporting KRW 53.7 trillion. Supported by payment and digital finance-led growth, revenue TPV expanded 22% Y-o-Y to KRW 16.5 trillion, further solidifying the transaction base anchored by profit. Q3 consolidated revenue rose 27% Y-o-Y to KRW 302.1 billion. Investment business underwent correction Q-o-Q due to external volatilities in the market, but digital finance and payment overall sustained a robust double-digit growth trend.

In particular, payment revenue mix expanded to 51%, demonstrating a solid profit stream. Q3 operating profit increased 105% Y-o-Y to KRW 32.5 billion with OP margin at 10.7%. EBITDA was KRW 41.6 billion and net profit KRW 32.9 billion with net profit margin posting 10.9% as we continued to demonstrate stable earnings capacity supported by broad-based double-digit margin.

Next is on the business performance metrics. Daily active user of Kakao Pay grew 7% Y-o-Y, breaking the 7 million mark for the first time. The share against MAU was also up 1.1 percentage points Y-o-Y to 29%. With broad-based expansion of core services such as on/off-line payment and asset management, we continued to see strong quality-driven growth in the user traffic.

Average transactions per user in Q3 increased 15% Y-o-Y to 87 transactions. With cross usage across brokerage, payment and benefits gaining traction, transaction density in everyday scene became stronger. Q3 ARPU recorded KRW 12,388, up 23% Y-o-Y, driven by double-digit top line growth of the core businesses, including payment and digital finance.

Next, CFO, [ Aidan ], will brief you on Q3 TPV and the financials.

Hi. This is Aidan, the CFO. Q3 total TPV increased 14% Y-o-Y, reporting KRW 53.7 trillion. Revenue TPV grew 22% Y-o-Y to KRW 16.5 trillion with its share expanding above 30% against the total TPV as we solidified and stabilized revenue generation anchoring on payment services.

We saw strong double-digit Y-o-Y growth across all of the service domains, including payment, financial services and money transfer, which in turn drove total TPV expansion. In terms of breakdown, payment service grew 25% Y-o-Y, driven by growth seen across all segments. There was seasonal demand during the Chuseok holidays and synergies with the group and on marketing impact from key merchant partners, both captive and non-captive performances were good, driving online payment growth of 18% Y-o-Y.

Offline payment was up 44% Y-o-Y on a diversified and bespoke portfolio of benefit offerings and stronger user loyalty. Cross-border payment also grew 28% Y-o-Y, thanks to capturing of payment demand from inbound tourists and expanded promotions at strategic global partners. Digital finance and money transfer also sustained solid growth. Loan business achieved a double-digit growth turnaround Y-o-Y on strong and nimble product lineup aligned with changing financial environment and high engagement user targeting.

Money transfer grew 11% Y-o-Y on the back of higher usage of transfer to my own account connected to stock trading. Stock trading volume grew 139% Y-o-Y, reaching KRW 81.6 trillion. Kakao Pay Money continued its uptrend with the end of Q3 balance at KRW 2,807.7 billion, proving strong user lock-in and stable fundamentals even amid external uncertainty.

Next is operating revenue. Q3 revenue was up 27% Y-o-Y, reaching KRW 302.1 billion, driven by solid growth from the core businesses. Amid widening volatilities in the financial market, there was a Q-o-Q decline, but the share of payment service and the revenue mix increased to 51%, attesting to solid and stable earnings capacity.

By segment, payment service was up 19% Y-o-Y to KRW 154.7 billion, sustaining a well-balanced top line expansion across online, off-line and cross-border payments. In particular, Q2 holiday seasonality, synergies with Kakao Group affiliates and alliance marketing drove growth in both captive and non-captive on a Q-o-Q and Y-o-Y basis.

Digital finance revenue was up 41% Y-o-Y, reaching KRW 133.4 billion. With revenue declining from stock market uncertainty, Q-o-Q revenue fell 24%, but strong growth from insurance and loan business supported the [ floor ].

Under digital finance, investment revenue declined Q-o-Q on the back of subdued global stock market performance and FX fluctuations, but grew 32% Y-o-Y on higher trading volume. Insurance posted strong 80% Y-o-Y growth on the back of robust sales of overseas travel insurance, mobile phone insurance for new smartphones rollout and DB sales expansion.

Loan business turned to 18% Y-o-Y growth on a rise in credit loans from targeted marketing and diversification of product offerings aligned with changing market environment, marking 4 consecutive quarters of growth. Platform services revenue was flat Y-o-Y at KRW 13.9 billion. As it was the slow season for advertisement, we carried out optimization work to enhance user experience, making stricter criteria for ad loading, which drove a 25% decline Q-o-Q.

Moving on to operating expense. Q3 operating expense was KRW 269.6 billion, up 21% Y-o-Y and down 2% Q-o-Q. With a personalized life cycle campaign used as a lever for securing mid- to long-term growth of the investment business and expanded strategic marketing targeted for user acquisition, marketing expense was up 55% Y-o-Y, but its share of the cumulative revenue in Q3 was kept around 10% as we continue to adhere to an efficient spending stance.

We are continuing to invest into key talent and due to annual bonus pay and wage increases, labor cost was up 8% Y-o-Y and 4% Q-o-Q. Commissions paid increased 16% Y-o-Y on higher payment linked commissions such as PP fees and expanded infrastructure costs. Other operating expense rose 56% Y-o-Y, but due to a stabilized exchange rate, derivatives and FX-related losses narrowed, driving expense down by 41% Q-o-Q.

Next, on consolidated P&L. Operating profit in Q3 was up 105% Y-o-Y to KRW 32.5 billion with OP margin at 10.7%. EBITDA expanded 73% Y-o-Y to KRW 41.6 billion with margin at 13.8% and net income was KRW 32.9 billion with net income margin at 10.9%. During Q3, because of a sudden shift in global stock market movements, investment revenue came under correction, slowing the Q-o-Q profit trend, but underpinned by solid earnings anchored on payment, all the metrics sustained an uptrend on a Y-o-Y basis.

All in all, the company has shown steady double-digit margins across operating profit, EBITDA and net income, demonstrating robust earnings capacity unhindered by external volatilities.

Now briefly on Q3 stand-alone results. Separate basis revenue rose 20% Y-o-Y to KRW 204.9 billion, breaking the KRW 200 billion mark for the first time. Stand-alone operating profit was up 160% Y-o-Y to KRW 24.9 billion with OP margin at 12.2%, sustaining firm double-digit profitability. Net income was KRW 26.1 billion with net income margin at 12.7%, yet again proving solid profit capacity anchored on core businesses.

Next, I will hand over to Jaesun for Q3 performance highlights.

Hello. This is Jaesun, the business lead. I'll begin with payment. Q3 online payment has grown in both scale and quality, powered by the combination of strong synergies with captive commerce and robust growth driven by strong quasi-captive strategies deployed in the non-captive segment.

In captive, we are strengthening cohesiveness as we expand Kakao Pay's payment synergies within the commerce ecosystem of freighter Kakao. Coupled with strong collaborations in Kakao Pay centered promotions for key categories during the peak season, including the Chuseok holidays, we optimized payment UI and UX so the users can easily identify offered benefits, which resulted in 3 percentage points Y-o-Y rise in Kakao Pay's share within the Kakao commerce scene.

Through such co-marketing expansion and optimization of payment experience, we demonstrated stronger lock-in effect of commerce users to payment offered by Kakao Pay, and we expect such uptrend to continue in Q4 as well. On the non-captive side, supported by strategic partnership with top merchants of high-growth categories and precision-based targeted marketing, we are rewriting both TPV and revenue record every quarter. As such, Q3 non-captive TPV grew 26% Y-o-Y, sustaining a steep up trend.

By leveraging distinctive analytics capabilities of MyData and combining massive payment data held by the company, we were able to precisely match personalized benefits to users, which in turn drove conversion, leading to growth in payment frequency and TPV per user.

On the flip side, this highly efficient data-centric marketing capabilities have the effect of pulling the customer segment that partners wish to engage as their touch point. This sets us apart from our peers as we deliver differentiated collaborative value. This form of collaboration strengthens key merchants as a quasi-captive segment while growing Kakao Pay's share in such strategic merchant base, thereby building a virtuous cycle.

Next, Jeff, who heads our services division, will run through AI service.

Hello. This is Jeff, Head of Services. I'll begin with how AI technology is scaling up the financial experience. With the adoption of generative AI into users' everyday financial scene, we are offering an ultra-personalized experience as we make breakthrough movements and efficiency for on-platform services discovery.

First, AI codes as a financial agent that analyzes user spending to help set and reach spending goals. August to October-end cumulative visitors surpassed 450,000, displaying a steep uptrend in user flow. Expanded use of MyData and improved AI model performance now deliver a much better experience in goal setting and voice input than before.

We'll expand use cases across asset management, keep enhancing model performance and develop a highly sophisticated financial agent. Also for the new AI search service introduced mid-September, by implementing a conversational interface and an AI snippet, which captures the search intent with precision, we were able to maximize efficiency of information discovery by seamlessly making the connection to conversion aligned with user financial needs. Even though we've only started it, we saw the share of financial service conversion via the AI search feature quickly expand to 8%, which is a noteworthy result.

Going beyond simple information delivery, we will expand the agent experience that supports connection of tactical services underpinned by user context.

I will now walk through our major subsidiary, Kakao Pay Securities' earnings. Notwithstanding external volatilities, Kakao Pay Securities broadened its solid customer base and diversified its lineup of services as we continue to build up the fundamentals. We saw stabilized customer lock-in as seen from actual demand such as monthly user count and reached 600,000 pension savings accounts, driving sustained growth of mid- to long-term products while improving the business fundamentals, particularly in overseas and implement products.

As of end September, assets under management was up 167% Y-o-Y to KRW 19 trillion and cumulative net inflow increased 320% Y-o-Y to KRW 10 trillion, confirming that we have the fundamentals to leverage a future stock market rebound. In Q3, revenue reported KRW 74.6 billion, and operating profit was KRW 15.7 billion. Although there was a Q-o-Q decline due to a subdued domestic and overseas trading and FX volatilities, we drove stronger new customer onboarding through diversified entry points, financial products and services.

Moving forward, we will be enhancing the product lineup around instrument and long-term investment to ensure a stable trading foundation that can withstand market headwinds.

Kakao Pay Securities platform capabilities are also becoming stronger. On the community side, we have solidified on-platform user lock-in by scaling up the flow that connects information usage, participation and relationship building. Through this community, we established a business flywheel between convenience and transaction and activation of repeat visits. As a result, in just 1 year since adoption of enhanced features and a follow feature, community MAU surfaced 1.9 million as of end September, up 171% with more than 3 million followers.

We also ran a community promotion for domestic fractional trades, facilitating user conversion while strengthening the growth funnel. Also, since August, we opened fractional trades for domestic stocks introducing a system where orders for both whole and fractional shares can be placed, thereby significantly improving accessibility to investments and widening the user pool. We also opened an in-app stock service on the Kakao Bank app, driving synergies across Kakao Group's financial subsidiaries being the basis for partner channel expansion. We're also building upon the product lineup to provide discipline to users' investment behavior anchored on stable asset accumulation.

Next, moving on to Kakao Pay Insurance. Supported by channel-based acquisition expansion and product competitive edge, the company rewrote its quarterly revenue record once again. Q3 revenue was up 93% Y-o-Y and 26% Q-o-Q to KRW 32.2 billion, breaking the KRW 30 billion quarterly mark for the first time. Thanks to the B2C product revamp tailored to user needs, stepped up marketing and robust performance from B2B2C embedded partners, we drove balanced growth across both channels.

We continue to expand the share of long-term regular premium products, riding the strong growth of new and core products and the health insurance revamped. Pet insurance launched in March, received the Brand of the Year award for providing customer-centric coverage and convenience, ranking first place in the pet insurance segment.

Mobile phone insurance achieved record high growth of 127% Y-o-Y in new acquisitions on the back of market share expansion and new flagship model releases. Health insurance saw its new policyholder acquisition grew 160% Q-o-Q following the upgrade made on personalization using MyData analytics on insurance coverage, which drove quality enhancements of long-term regular premium products. We will continue to offer innovative products benefiting everyday life while expanding our long-term protection product line to drive both top line and bottom line improvements.

Now I will invite back Allen to run through the update on the stablecoin business, ESG and future plans.

Let me now provide an update on next-generation digital asset business and stablecoin ecosystem. To proactively respond to the future of payments, we laid the foundation for a next-generation digital asset payment architecture anchoring on Kakao Super Wallet. For this digital asset payment network to take root, not only easy wallet usability, but also globally standardized IT network and security infrastructure are essential. To that end, we formed a strategic alliance with leading global companies such as Circle, Fireblocks and Grab to secure core infrastructure for global settlement, security validation and cross-border distribution.

Also, during the recent NEXT Finance Korea event, we presented a detailed road map on next-generation digital asset ecosystem. We shared the future direction of the KRW-based stablecoin business, which can immediately be brought into the payments and money transfer domain and presented concrete plans on building the infrastructure, supporting issuance and distribution through a settlement. We proposed open standard in which companies across financial and nonfinance sectors would participate.

We also ran a tech demo showing overseas wallets being used at local merchants and autonomous payment by the AI agent validating commercial capability. Based on proven technology and global partnerships, Kakao Group will take the lead in standardization and infrastructure in the next-generation digital finance and the payment market.

Let me next turn to ESG performance. Thanks to our continuing efforts towards sustainable growth, we had noteworthy ESG results. First, on ESG ratings and environmental performance. Kakao Pay scored 6.3 on the Bloomberg ESG Score, earning recognition as a leading company in the software and tech services industry.

Kakao Pay was recognized for its higher ESG disclosure across all 3 pillars, environmental, social and governance compared to its peers. On the environmental side, following renewable energy purchases in 2024 and '25, we completed an additional purchase of 3,000 megawatt hour of renewable energy in Q3, expanding the share of renewable energy from 12% to 21%. In line with our renewable energy transition road map, we aim to achieve 100% by 2040.

On shared growth, we opened our 2026 small business campaign Oraeorae Together Store in Seongsu-dong. We selected 100 small business brands and ran the campaign for 2 months, providing a sales channel and promotional support. We also stepped up our efforts to nurture 100 young digital finance leaders through our Blind Spot Supporters program. It supports digital finance education, holds hackathons and runs digital transformation campaigns. Also through an MOU with the Seoul Family Center, we distributed guides in 4 different languages to support foreign residents and multicultural families.

We also expanded the reach of our Blind Spot Pay School program to include seniors and young people in remote areas. We provided AI and digital financial literacy training and financial fraud prevention education to 1,000 senior citizens across 50 institutions as well as TechFin career education camps for youth living in remote areas.

Kakao Pay will continue to fulfill its responsibility by creating social value in the digital finance sector with a particular focus on supporting socially underserved groups.

This wraps up the key highlights for Q3 2026. Despite market volatility, solid payment growth and improved fundamentals across overall finance business proved our earnings capacity this quarter. For the payment business, we further strengthened market dominance through data-driven alliances and Kakao ecosystem synergy. Broadening of the core businesses was an essential pillar behind overall revenue stability.

On this basis, stand-alone quarterly revenue for the first time reached the KRW 200 billion mark with double-digit OP margin strengthening structural stability in earnings. For our subsidiaries, securities is broadening the asset base around real demand and insurance is expanding its portfolio of regular premium products as we build a framework capable of withstanding external headwinds. Through AI services that benefit our daily financial needs and next-generation digital asset infrastructure built on global standards, we are making strides in securing competitiveness for the next leap forward.

We will continue to bring quality platform growth through synergies with the Kakao Group and deliver results that live up to the trust of the market and our shareholders. Thank you.

[Interpreted] The first question will be provided by Sinyoung Park from Goldman Sachs.

[Interpreted] I'm Park Sinyoung from Goldman Sachs. I would like to ask you 2 questions. First question relates to stablecoin. I understand that FSC has recently announced that they will soon be tabling the Framework Act on digital assets in November. So I would like to understand what impact this will have us going forward. Considering the fact that this will be an initiative that will be led by Bank of Korea with bank at the very helm, I would like to know what is the realistic time line for the stablecoin to -- the legislation to actually take place?

And also from your perspective, the whole opportunity regarding stablecoin is that beneficial in the aspect of actually reducing the payment-related fees and commissions? Or should we consider stablecoin as a new revenue source?

And also, you've mentioned in the presentation that during the third quarter, you've entered into various partnerships with global companies like Circle, Grab and Fireblocks. I would like to know what the developments are as of today. And also, if you could share some specific plans, that would be helpful as well.

Second question relates to your securities business. I would like to understand the quality of the AUM of the customer assets. I asked the question because in the second quarter, the AUM has actually tripled, reaching KRW 21 trillion. But in the third quarter, that trend has quite slowed because of the overall market backdrop. I would like to understand as to what the net new money inflow is and how much of it is attributable to the changes in the asset price and the asset value. So when the market momentum actually [ shallows ], what impact would it have on the retention of the customer AUM?

[Interpreted] This is Allen responding to your question about stablecoin. Now there are many factors in play. So it is quite difficult to pinpoint the exact timing. But if the bill is tabled in the month of November and typically considering the typical duration that legislation takes, commercialization is highly likely in 2028. But internally, we can't also -- we cannot also rule out the possibility of a delay in the legislative process due to the overall backdrop.

So rather than just wait and do nothing, we're making preparations like partnering up with companies and developing the technology required so that we can move fast when the timing for commercialization actually comes. So stablecoin is an essential future infrastructure for the next-generation payment provider. In the early stages, lower payment and money transfer fees for the users and the merchants will be the major tangible effect that we can experience. But from mid- to longer term, our plan is to explore new frontier, including expanding the wallet infrastructure, enabling B2B settlement and cross-border payment and transfer an AI agent-based payment.

In terms of the preparation, the stablecoin business has 2 different pillars. One is validating the distribution infrastructure and the other is creating an ecosystem that makes use of that infrastructure.

Regarding distribution infrastructure, we executed a partnership in July with Circle to cooperate in blockchain-based payment infrastructure and digital asset technology. And in early September, we completed proof of concept for digital asset wallet build-out. And we also did PoC testing for agentic payment from the buyer and the seller side and verified the connection and operation of the entire payment flow from the payment delegation by the users up to sellers' receipt of that payment.

Also in September, we held private event between Kakao Group and KB Financial Group, called the Next Finance Korea. There were many well-regarded companies from finance, retail, entertainment and travel industry who have interest in stablecoin issuance and its infrastructure, and there were global partners as well. During the event, Kakao Group unveiled use cases of won-based stablecoin issuance and redemption, wallet-based transfer and payment, inbound cross-border payment and settlement, and agentic payment. We also proposed open roundtable where various businesses can participate in connecting issuance, distribution and the capital market so as to design the ecosystem together.

Our plan moving ahead will be to turn this roundtable into a framework of real cooperation. Just because one company issues a stablecoin doesn't mean it's going to be used. There needs to be ample number of participants and use cases for it to be meaningful. Thus, we're going to create this ecosystem and focus on making the distribution infrastructure, user channel and real-world use cases.

[Interpreted] This is [ Aidan ], and I will respond to your questions relating to the quality of the growth that we've seen on the customers' AUM. So just to put it simply, net increase in AUM year-to-date as of Q3 of KRW 10 trillion was mostly driven by net new money flow of KRW 10.4 trillion. So we believe there was no sudden asset outflow in light of the retention of the outstanding balance.

Q3-end deposit asset was KRW 19.3 trillion, which was up 167% year-over-year but down 9% from KRW 21.1 trillion that was recorded in the second quarter. The breakdown consists of KRW 16.3 trillion of stock, deposit of KRW 2.2 trillion and funds, KRW 0.8 trillion.

So in terms of the stock balances compared to the second quarter, we've seen a decline of 10% due to the changes in the market price, and for the fund, about 7% decline. And if you look at the deposit balance, which is equated with the net inflow, it was flat compared to the end of the second quarter. Looking at the Q3 net inflow, it amounted to KRW 1.8 trillion, which is about KRW 3 trillion less compared to the second quarter when there was a significant surge in the stock trading. And we believe that this is due to the short-term corrections the market went through. On a cumulative basis, we are seeing a sustained uptrend in terms of the net asset inflow, as well as customers' deposit assets.

So when we enter into a downturn in the stock market today, it could generate losses for some aspect of the assets. However, even when the momentum actually [ slows ], we were able to see that the deposit balance is kept intact with limited outflow of funds. AUM balance may fluctuate with the changes in the market, in the asset price, but we believe that the quality of the growth can be maintained in a sound manner.

[Interpreted] The following question will be presented by Jin-Gu Kim from Kiwoom Securities.

[Interpreted] I have one question that I would like to ask regarding your payment segment business. Compared to your peers in the industry, what do you believe is your competitive edge? And how much of that would you be able to leverage in order to further expand your market share? It would be helpful if you could also talk about total addressable market in your reply as well.

[Interpreted] This is Jaesun. I will take your question. Kakao Pay is maintaining its leading position in the payment segment based on wide-ranging competitive edges. First factor is our cost competitiveness with the strong underpinning of Kakao Pay Money ecosystem. As of the end of the third quarter, Kakao Pay Money balance reported KRW 2.8 trillion, with approximately 60% of our total payment volume generated through Kakao Pay Money-based transactions. This is significantly higher than the competing platforms where card-based payment accounts for the vast majority of transactions. Our Money ecosystem is not only a stable earnings source for our payment business, but it also serves as a critical infrastructure that enables integration with other digital payment services and local currency programs such as Samsung Pay, Zero Pay and Seoul Pay. And it enables efficient customer conversion, as well as expanding our business against the smaller merchants.

The second factor is our industry-leading ability to drive merchant revenue growth through MyData analytics. By combining extensive user base of more than 40 million payment users with our sophisticated MyData platform, which has over 23 million registered users, we provide merchants with valuable customer insights that address their most important business needs. In the future, we also plan to make these insights available through dashboard-based solutions. We leverage industry-specific data to forecast seasonality and market trends, while further segmenting customers based on their payment behavior, which help deliver personalized rewards to customer segments with higher conversion rates. Through these capabilities, Kakao Pay serves as a true business partner, helping merchants drive tangible revenue growth.

The third differentiating factor is our strategic and deep integration with leading quasi-captive partners. We pursue deeper strategic integration with leading merchants across key verticals, including food delivery, shopping, fashion and airlines. Going beyond simple payment integration, we maximize synergies through marketing initiatives and data-driven operational efficiencies. By supporting both customer acquisition and retention for our merchant partners, we are continuously increasing Kakao Pay's share of wallet.

The fourth factor is the expansion of our overseas payment business through strong global alliances. Through overseas alliance that differentiate us from our competitors, we are expanding our cross-border payment business and maintaining high-double-digit annual growth. We're increasing our share of business within global key accounts such as Google, Apple, Agoda, Trip.com, Netflix, while running targeted promotions to drive structural uptrend in cross-border volume. For cross-border off-line payment, we leverage Android-based NFC contactless technology, which is connected to Mastercard's network of 150 million merchants, driving payment growth in Western markets, including Europe and North America, while providing a seamless cross-border payment experience.

The fifth factor is our expansion into general PG, payment gateway, business. We launched our PG service at the end of August, initially serving Kakao Gift and Kakao Shopping. By the end of this year, we plan to roll out the service to a number of external merchants, including companies within the broader Kakao Group. We have also secured agreements with new external merchants with contractual and development work currently underway. We aim to strengthen our presence across the overall online payment market by leveraging our expertise in delivering seamless payment experience through simple payment, together with the competitive advantage of expanding our payment offerings to include prepaid payment methods. We also expect these capabilities to drive further growth in newly entered markets.

Lastly, we are proactively building the technological foundation needed to support agentic AI payment. In order to nimbly respond to developments within both our internal and external ecosystem, we are preparing our technology infrastructure to support a wide range of AI payment and integration protocols without becoming dependent on any single integration method. Our plan is to first validate these technologies through our internal services and then gradually expand integration with our external partners. And based on the results of this validation, we will demonstrate to our partners concrete transaction and conversion value that payment completion can deliver. By further enhancing the ability to complete payments seamlessly through Kakao Pay, we aim to stay ahead in the transition towards agentic AI payment and proactively respond to this emerging trend.

[Interpreted] The following question will be presented by Dong Woo Kim from Kyobo Securities.

[Interpreted] I have 2 questions relating to next year's performance. We expect that the high securities-related performance you gained in the first half of the year can weigh down on next year's performance as the base effect. So where do you foresee that the growth levers will come for next year? And do you still believe that you'll be able to sustain high level of growth going forward? And also even after the equities market returns back to the normalized level in 2027 versus the first half of '26, do you still believe that you'll be able to defend a double-digit OP margin?

[Interpreted] This is [ Aidan ], and I will take both of those questions. So structurally, at Kakao Pay, we have core business of platform, finance and -- core business of payment, platform and finance, and we have levers for new growth in the expanded adjacent domains. So we believe that we can scale these businesses both horizontally and vertically, while gradually expanding our operational leverage come next year. On the online payment side, we will continue to collaborate strategically with strongly coupled merchants and use the flywheel of expanding into other strategic merchants based on the market reference that we build, as well as expand into data analytics business, PG industry and the agentic payment business. While it is true that the competition is fierce in the offline payment, through the offline channel, we will expand point of acceptance and focus on user acquisition by using this offline channel.

There are also a lot of market factors in play for our loan-related businesses. Our aim, however, is to sustain the growth trend since we have competitive edge in the second-tier nonbanking segment, underpinned by highly sophisticated targeting of loan applicants. We especially expect [ Kakao Pay's core ] to be the lever for growth based on MyData. Insurance also has strong revenue pipeline in place with solid growth from handset insurance, and we will expand into adjacent products to drive new growth by offering differentiated customer experience, coupled with expanded offerings of, for instance, regular premium products. Platform business has many levers -- growth levers, that is -- to drive further growth since intermediation for credit cards and telecom services have all just started. If we can make good synergies as a financial platform, we expect to be able to make another leap forward.

And I think this next part will be answering to your second question is that based on the stable financial base that we were able to establish over the years and by implementing growth strategies for each of the services, we expect to be able to defend a double-digit margin in 2027.

[Interpreted] The following question will be presented by Yu-jin Sun from LS Securities.

[Interpreted] I have 2 regarding your AI services, first being, in August, you rolled out an open beta version of finance AI code. I would like to understand when you expect the official launching date will be? And I know that you have plans to expand this into other domains. And if you could share an update on that, that will be grateful.

And the second aspect of this question is, in regards to the greater Kakao ecosystem, how is the integration with the overall Kakao ecosystem ongoing at this point? I know that aside from the MCP integration with Kakao Tools, there is also A2A, agent-to-agent, integration with Kakao, I would like to -- Kanana, excuse me. I would like to understand how that is being developed at this point. And Kakao has recently also unveiled Kanana Space. What are the enabled services at Kakao Pay that could be supported through Kanana Space?

[Interpreted] This is Jeff. I will take both of those questions. In the third quarter, AI Coach had its open beta launch as per the plan, and the whole concept of the agent is to help users save up their money. Most noteworthy change is that users are interacting and engaging in real conversation with the AI Coach as an agent and not as a simple chatbot. If you look at the actual input data by the users, most of them type in sentences themselves, asking the AI coach for counseling and sharing their concerns. And even though we did not provide any separate entry point, user count actually tripled in September compared to the first month of beta release in August. It's quite meaningful because even without providing the entry point, AI Coach is able to cater to asset management needs that was voluntarily brought on by the users.

Official launch will be decided after fully validating stability and quality of the response that we get based on the real data usage during the open beta. As part of the future plan, we plan to connect AI Coach to various services within Kakao Pay in order to position it as a specialized personal financial assistant. It will handle simple executions like money transfers and making payments and also run complex calculations and keep users informed of financial information that usually are overlooked. We will gradually expand the domain under the architecture where the master agent orchestrates a domain-specific specialized agent.

In terms of how we are envisioning to interconnect with the Kakao ecosystem, we completed the integration of Kakao Tools last March, which allows external agents like ChatGPT for Kakao to call on Kakao Pay functions, and we are continuing to scale as we speak. And through NCP, Kakao Pay functions are made available for external agents to retrieve such features, and we are in the process of expanding the functionality scope of the integrated data set. We also reached agreement on the method of agent-to-agent integration with Kanana and the relevant domain -- in the relevant domain, and we will first release agents that connect Kakao Pay's internal reward benefit information. With this as the first case, we will expand A2A implementation in phased 8 stages.

The important thing here is R&R. Kanana is the general purpose agent that interacts with the users, while Pay will be in charge of the domain of financial data, which is in the realm of financial regulation, which means Kanana will not fetch the data from Pay. It would be that the request will be sent to the agent in the Pay domain. And after the request is processed inside the regulated domain, only the result will be sent back. So user will only interact within Kanana, does not need to open the Pay app, but the request will still be handled. So the value that we get out of this is that Pay is connected at the very moment when the intent of the user is most clear rather than it being a simply an added entry point.

We are also talking to Kakao regarding the expansion of Kanana Space as well introduced during the [ if(kakao) ] event, which Kakao has introduced as a personal assistant that can handle wide-ranging tasks, including ordering, gifting, making reservations and making money transfers. We're working to define how Pay's internal functionalities such as money transfers and payments can be made available to Kanana agent through the MCP protocol. For scenarios such as "Order me on bottled water," delivering a seamless end-to-end experience from product selection to payment and to getting out of coupons requires Kakao Pay to play an essential role in ensuring that payment transactions and financial data are handled in compliance with the relevant regulation. Hence, our role will be to work with Kakao to prepare for the financial and payment agentic-based experience inside the Kanana Space.

[Interpreted] Due to the time constraints, we will be taking the final question. The last question will be presented by Jisun Lee from Bank of America.

[Interpreted] I would also like to ask a few questions on Kakao Pay Securities. I would like to know that because in the first half, there was a significant improvement in the performance supported by the brokerage revenue, but in the second half of the year, because the market now is in the downcycle, I would expect that the volatility is somewhat inevitable at this point. So I would like to know as to what your priorities are in terms of which revenue source you want to further develop. If you could provide more specific detail like whether you're going to focus on the retail business or the IB business, that would be helpful.

[Interpreted] This is Allen. In terms of the revenue stream for our Securities business, it is, you are correct, currently anchored on our brokerage services. But going forward, through new product and service lineup expansion, channel diversification and enhanced accessibility achieved through the use of the AI agent and the IB business, especially tapping into the IPO market, we will ease the bottom line volatilities that we experience across different market cycles. Majority of the revenue from Kakao Pay Securities, as mentioned, currently comes from brokerage, and revenue from other services like investment funds are small in size. And as per your comment, this structure will expose us to volatilities when market cycle is in decline. So we are at a timing where we do need to have the revenue stream that can contain this impact.

The first way to deal with this will be through launching financial products on top of the pension and like advisory, discretionary investment and RFPs as well. By diversifying business portfolio, we can lower the dependency on the brokerage business. And so, we recently onboarded security services in the form of an app-in-app on Kakao Bank platform. As such, we can embed paid security services into other channels, thereby broadening our customer touch point and find ways to connect with third-party AI agents so that people can use help of the AI when making their investment decisions.

Lastly, on the investment banking business, using the license that we got in July, we plan to start with the IPO business in order to generate additional revenue. We will be participating initially in the IPOs underwriting syndicates and the offering process. Going forward, we will aim to expand this business by actively supporting IPOs of technology companies, leveraging our investment network, our understanding of technology and our user base, having strong -- supported by strong technological capabilities. Through these initiatives, we will build additional revenue streams beyond brokerage that can help mitigate earnings volatility.

[Interpreted] Thank you. This brings us to the end of the earnings conference call for the third quarter of 2026 by Kakao Pay. If you have any unanswered questions, please feel free to call us at the Kakao Pay's IR team. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning, and good evening. Thank you all for joining the conference call for the Kakao Pay earnings results. This conference will start with a presentation followed by a Q&A session. [Operator Instructions] Now we will begin the presentation on Kakao Pay's First Quarter of Fiscal Year 2026 Earnings Results.

[Interpreted] Good afternoon. This is Allen, CEO of Kakao Pay. Thank you all for joining our company's first quarter 2026 earnings call. I will begin with key metrics, including TPV, consolidated operating revenue and expense, P&L followed by key business highlights for Q1 of 2026. First, on key metrics for the first quarter of '26.

Q1 '26 TPV was up 15% year-over-year, reaching beyond KRW 50 trillion for the first time in a quarter, reporting KRW 50.9 trillion. Revenue TPV was also up 15% year-on-year to KRW 14.6 trillion, achieving growth in both in terms of volume and quality. Underpinned by TPV growth, Q1 consolidated revenue increased 42% year-on-year to KRW 300.3 billion, while Payment, Financial Services and Platform reported more than a double-digit growth across the board. We saw steep growth of 82% year-on-year from financial services in particular, which now accounts for 49% of total revenue.

Operating profit in Q1 was KRW 32.2 billion, yet again rewriting quarterly record. EBITDA was KRW 40.8 billion and net profit came in at KRW 34.7 billion, driving OP margin of 10.7% and net income margin of 11.6% both posting a double-digit profit rate at the same time, which is a noteworthy result.

Next is on business performance metrics. Daily active user of Kakao Pay increased 8% year-on-year to 6.69 million users, sustaining a robust uptrend. Share against monthly active user was 27.8%, 1.2 percentage points higher versus last year on the back of expanded off-line payment and My-Data-based asset management services, attesting to a more diversified user facing and stronger stickiness.

Average transaction per user in Q1 increased 35% year-over-year to 80 transactions with activated brokerage services and wider acceptance and stronger user benefit, frequency of use across all service domains increased sharply, widening the user base across the board. Q1 ARPU thus increased 37% year-over-year to KRW 12,464 on the back of expanded contribution per user following evenly spread growth across all businesses.

Next, CFO, [ Ivan ] will brief you on TPV and financial performance.

[Interpreted] This is Ivan on the financials. Q1 TPV increased 15% year-over-year, reporting KRW 50.7 trillion. Revenue TPV also increased 15% year-over-year to KRW 14.6 trillion, taking 29% share against the total TPV as we build on economy of scale and profitability at the same time. Payment and money transfer continued to drive double-digit growth underpinning the total TPV growth.

In terms of the breakdown, payment service growth was 21% year-over-year, supported by evenly spread growth across all segments. Online payment was powered by data-driven merchant joint marketing and seasonal promotions for New Year holidays, back-to-school season and vacation period, which drove non-captive TPV accompanying 13% year-over-year growth.

Offline payments saw 50% year-on-year growth through overwhelming user benefit offerings and Samsung Wallet integration leading to coverage expansion. Cross-border payments saw 20% year-on-year growth on stronger demand for domestic travel and targeted promotions against strategic merchants. Loan service TPV sustained 2 consecutive quarters of Q-over-Q growth on a product lineup expansion and execution improvement through web-in-app integration despite stringent lending regulations by the government. Stock trading volume was up 4.4x year-over-year, surpassing KRW 79 trillion. Such activation in trading led to a rise in money transfer to my own account, thus driving money transfer TPV by 15% versus last year. Kakao Pay Money balance reported KRW 2.51 trillion as of end of Q1.

Next, on operating revenue. Q1 revenue was up 42% year-over-year, recording KRW 300.3 billion, breaking the KRW 300 billion mark for the first time on a quarterly basis. All of the business lines, including payments, financial services and platforms saw steep double-digit growth year-over-year, sustaining a robust scale expansion. In terms of the breakdown, firstly, digital payment was up 13% year-on-year to KRW 138.4 billion, fueled by online non-captive growth. Digital finance revenue was up 82% year-over-year, reaching KRW 145.9 billion, thanks to salient growth from investment and insurance and now taking up 49% of total revenue.

Investment service revenue reported 137% year-over-year growth against the surge in domestic trading volume, coupled with weak won impact and excluding rising FX rate impact, the growth rate will adjust to 95%. Insurance service revenue saw 78% year-over-year growth on the back of solid demand for core products, including overseas travel insurance and handset breakage insurance as well as the insurance DB sales. Loan service saw year-over-year decline following stronger regulation, but through product diversification and web integration, we were able to sustain 2 consecutive quarters of Q-over-Q revenue uptrend, cementing the recovery trajectory. Platform Service reported 67% year-over-year growth driven by activation of DA advertisement and comparison service for telecom rate plans.

Operating expense in Q1 increased 29% on year and 8% on quarter, recording KRW 268 billion. Marketing expense was up 24% year-over-year, impacted by off-line expansion in payment coverage and stronger affinity marketing. But due to year-end promotional base effect and strategic controls over cost, it fell 29% versus last quarter, coming in at KRW 22.4 billion. We are maintaining the marketing spend at reasonable levels of 7% against our total revenue. Labor cost was up 21% year-on-year on business expansion and hiring of key talent, while due to operational efficiency gains from AI usage, labor costs fell slightly Q-over-Q, displayed a stable and controlled trend.

Commissions paid increased 14% year-over-year due to operating expense incurred from MyData and growing infrastructure spend. However, it is significantly lower than the overall revenue growth, which is a testament to tangible results coming out of margin-focused cost base enhancements. Other operating expense increased 119% year-over-year on recognition of derivatives and foreign currency-related expenses from financial subsidiaries.

Next is on P&L. Q1 consolidated operating profit came in at KRW 32.2 billion, reaching new highs for the quarter. OP margin was 10.7%, continuing on a robust stepwise growth since the turnaround in Q1 of last year. EBITDA reported KRW 40.8 billion with margin at 13.6% and net income was KRW 34.7 billion with net income margin of 11.6%. As you can see, all our profit margin metrics have recorded a double-digit figure. And this actually is a reflection of greater contribution made by our financial entities and stronger earnings capacity of our core businesses. Kakao Pay will continue to optimize its operation to enhance profitability and ramp up its capacity in generating earnings.

Now briefly on Q1 standalone results. Standalone revenue was up 15% on year to KRW 185.1 billion. Separate basis operating profit was up 37% year-over-year to KRW 18.6 billion with OP margin at 10%, maintaining a double digit following last quarter. Net income margin was 12.4%, showing a robust result of double-digit performance for OPM and net income margin, both on a consolidated and standalone basis.

Next, I will turn it over to Jaesun for major first quarter performance highlights.

[Interpreted] Hello. This is Jaesun. Allow me to walk through our digital payment performance. Underpinned by competitiveness in data, we've upgraded our merchant strategy to speed up growth in scale. Firstly, online payment revenue saw 12% year-over-year growth with non-captive segment recording high growth of 24%, expanding online payment mix to 63%. Through solutions that combine Paydata with MyData, partner companies drove real revenue expansion. Moving forward, based on proven data capabilities, we will expand non-captive partnerships domestically and globally to solidify our market dominance.

In terms of specific use cases, we used Kakao Pay's proprietary data together with MyData in order to analyze user's complex payment and behavioral patterns and make precise predictions on churn risk for each of the merchants. We built automation system sending instructions for reward payment in a timely manner when user inactivation is most expected. And as a result, target group's retention meaningfully increased versus organically returning users, contributing to user lock-in and higher TPV.

We also built a framework based on high-quality customer data and through automatic matching of optimal look-alike modeling for each merchant, enabled identification of prospects and personalized benefit offerings. We are matching against the lookalikes in the peer group of a specific vertical or reverse tracking lookalikes of highly loyal vertical customers. Through such sophisticated efforts, in case of specialized models for subscription services, we saw 36% payment conversion from top-tier prospects. Our lookalike modeling is serving as a growth engine across the entire domain, including both on and off-line.

Next, on AI services, I will hand it over to Jeff, Head of Services.

[Interpreted] This is Jeff. Let me talk about AI business, which is Kakao Pay's future growth engine. By scaling up our proprietary AI services and connecting with the external agents, we are solidifying the agentic AI ecosystem. First, we drove expansion of PayI, which is Pay's own AI services. While we made enhancements to health and benefit AI agents, Financial Assistant version 1.0 offering coaching for healthy habits and finance powered by MyData is currently in the workflow pipeline. All of this was implemented as part of our master agent framework, having integrated control across wide-ranging subagents, and we're targeting public beta by end of Q2 this year.

Also within the Kakao ecosystem, we're carrying out agent-to-agent integration. We recently completed MCP integration with ChatGPT for Kakao, now enabling inquiry for payments and money transfer details inside the chat room. We are also preparing for agent-to-agent and MCP integration with Kanana, which is Kakao's own model and will introduce extended services such as agent for integrated statements in the second half of the year.

Externally, we're working towards setting global standards for AI payment as well. As Korea's sole founding member of x402 Foundation, we're leading the effort on establishing a global AI payment protocol. This is a standard for machine payment designed for autonomous payment by the AI agent without human intervention and will be an opportunity for the company to fortify its tech leadership within the global AI financial ecosystem. By moving ahead of others in such standardization efforts, we will provide frictionless payment environment while broadening our global market influence.

Next, I will invite Eddie, who's in charge of operations, to present on the performances of securities and insurance business.

[Interpreted] This is Eddie. In terms of quarterly performance and future strategies for our insurance services, to begin with, we've been able to boost the insurance revenue stream by driving both database volume growth and quality enhancements. There was growth from both DB volume and pricing. Database generation volume posted 61% year-over-year growth in the first quarter, displaying a robust growth potential in terms of supply. We also expanded the share of high-intent prospects in the database, leveraging MyData for insurance coverage analysis, which drove higher partner satisfaction upon which we were able to increase the unit price by 21%. As a result, revenue increased 76% year-on-year with the positive feedback effect of rise in both DB distribution volume and the unit price.

For the sub-agency model, after the adoption of standard sales practice, SA's conversion rate was up 2.1x versus previous quarter, clearly a display of its effectiveness. We plan to advance in phases support system for agents, including expanding the consultation team by the first half of the year and data visualization and eventually introducing AI-powered operating system to maintain sales efficiency improvements.

Next on brokerage services. Kakao Pay Securities posted a record high growth in AUM and earnings on the back of strong domestic and overseas equities market. As of Q1 end, AUM was up 208% year-on-year to KRW 13 trillion, and this growth was fueled by actual net inflow of funds, not merely by higher valuation from uptrending stock prices. Net inflow in Q1 was KRW 3.7 trillion, which is quite remarkable as it is equivalent to 76% of last year's annual inflow. Kakao Pay Securities Q1 revenue thus was up 124% year-over-year, breaking the KRW 100 billion quarterly mark for the first time, while operating profit recorded KRW 23.6 billion, which is 55% of last year's annual figure.

Quarterly trading volume surged 339% year-on-year, reaching KRW 79 trillion on strong market, expanded product lineup and the FX impact. Number of transactions also increased 206% to 221 million transactions and active user on a monthly basis was up 143% year-over-year, reaching 1.4 million users.

Now on Kakao Pay Insurance, there is clear uptrend in performance powered by solid top line growth. As such, Q1 revenue was up 85% year-over-year to KRW 24.3 billion. And coupled with solid performance from overseas travel insurance, which is our core product, we started seeing revenue contributions from regular premium products driving growth such as from phone and student insurances. We expect higher share of regular premium products and profitability-focused portfolio will further support sustainable business.

Gross premium written hence for the first quarter was up 66% year-over-year with regular premium recording a sharp growth of 157% year-over-year, attesting to a stable earnings base. Kakao Pay Insurance also continues to widen its customer base by introducing new and distinctive product offerings. Pet insurance is a recent launch, offering industry's lowest premium but maximum coverage. Coupled with strong competitiveness and social feature, the product is winning positive market feedback. Kakao Pay Insurance will continue to roll out innovative user-centric products to enhance accessibility to insurance services and also to further fortify sustainable growth levers.

Moving on to ESG and upcoming plans, I will invite back Allen for closing.

[Interpreted] It's Allen again. Kakao Pay has demonstrated its sustainable management capabilities, both domestically and on a global stage. For 3 consecutive years, we made S&P Global Korea Index while being selected as the Yearbook member for 3 years in a row as the only fintech company within the financial services sector recognized for its outstanding ESG performance in human capital, ethical management and sustainable financing, among others. We were also awarded prime status in ESG evaluation by the biggest global proxy advisory, ISS, and was recognized as the industry leader, winning high ratings across all ESG pillars.

Moving on to environmental and social contribution efforts. We at Kakao Pay practice inclusive finance through Blind Spot Pay School, helping those with limited access to digital finance. We recruited 50 partner institutions in 2026 to create practical educational opportunities for seniors and ran awareness programs showcasing a documentary titled, My Exploration of Blind Spot, featuring digital financial exclusion experience by senior citizens.

Also for shared growth with small vendors, we significantly increased support to Oraeorae Together Store this year. New store onboarding was up 67% year-over-year, reaching 100 new stores and extending support to brands that mainly operate offline as well. On top of the sales channel, we also extended tailored packages for growth, which includes PR services, training for capacity building and digital transformation solutions, thus supporting small merchants to gain self-sustaining capacity across on and offline businesses.

Lastly, we renewed ISO 14001 certificate, an international standard on environmental management, enhancing relevant processes and under which we are building sustainable office environment as we respond to challenges of climate change. Kakao Pay moving ahead will engage in ESG activities that have organic relevance to our core businesses to fulfill our social responsibilities in our effort towards making our future sustainable.

We've so far walked through key performance highlights for the quarter. In Q1, we surpassed KRW 300 billion in quarterly revenue, recording a double-digit OP margin, both on a consolidated and separate basis, which is a testament to Kakao Pay's solid earnings capacity. What's more encouraging is on top of the leaps that we've made by our financial entities, we can say we've entered the growth trajectory in full swing where data-driven business models, which we've explored and validated last year as well as new growth levers are translating into real numbers. It goes to show that Kakao Pay is now more than a platform, having evolved into a strong financial ecosystem equipped with profitability and scalability.

We will maintain this overwhelming growth momentum solid during the year using innovation and technology beyond improving user convenience, but also for lifting corporate value. The entire Kakao Pay crew, myself included, will be relentless in creating an environment where users can feel at ease when engaging in daily financial activities, and we'll turn this mission into tangible results. Thank you.

[Interpreted] [Operator Instructions] The first question will be provided by Sinyoung Park from Goldman Sachs.

[Interpreted] This is Park Sinyoung from Goldman Sachs. I would like to ask you 2 questions. First one relates to your stablecoin initiative. In Korea, the legislative process for stablecoin is being somewhat delayed, but I'm sure that this will be a great opportunity for Kakao Pay to further strengthen your market share within the financial services market. You've also talked about your activities and participation into the global protocol initiative of x402 Foundation. And so I would like to understand as to the update as to how your stablecoin business is currently ongoing? And what will be your key focus area? And how will it connect to the overall wallet ecosystem?

Second question relates to basically, we've seen a significant contribution from financial services to your topline revenue. It's actually reached around 40% fueled by a very steep growth of Kakao Pay Securities. You were able to prove that there was a structural and also qualitative change in the overall revenue structure. I would like to understand as to what you feel is the most optimal mix from a mid- to longer-term perspective, looking at different businesses such as payments, digital finance and platform. And when do you think that you will be able to achieve that most optimal level?

[Interpreted] This is Allen. I will respond to the first question that you asked relating to the stablecoin. Now we're making preparations with -- jointly together with other Kakao Group companies to develop our stablecoin business. Kakao Pay is deeply involved in the design of the infrastructure and issuance aspect as well to be led by the consortium as well as designing the business structure to support the distribution of stablecoin as a discrete distributor and building the technical foundation that is required. Reason why we're involved on the both sides of designing the infrastructure for issuance as well as for the distribution is to win an overwhelming positioning in the stablecoin market. We're leading the design efforts so that the infrastructure to be developed by our consortium can really support wide-ranging versatile use cases. This will eventually help companies, including us to adopt our stablecoin and will help expand issuance and distribution as well as usage scope of stablecoin.

So what I've just explained was from a point of view of how we can actually enlarge the pie basically through this effort led by the consortium with regard to the issuance of the stablecoin. From now on, I'm going to talk about the big piece that Kakao Pay will take out of that pie. So that's the perspective that I will be highlighting from now on. So under this optimal infrastructure, we're currently building services to empower users to have stablecoin in Kakao Pay's wallet, meaning in the wallets of 40 million users, have them freely send and receive, make payment and invest in stablecoin with no constraint. So we want to be able to bring convenient use of stablecoin to be part of Kakao Pay services, which already enjoys top-tier positioning in the financial sector in terms of number of transactions for payment as well as for money transfer. And we hope to expand user acceptance while lowering our own cost base and eventually identifying new business opportunities such as stablecoin wallet as a service and creating feasible business case.

In the opening, I briefly mentioned that we're participating in the x402 global open protocol initiative. This is one of the ways in which we are trying to naturally bridge the payment demand with our stablecoin ecosystem against the AI backdrop. We're going to make it so that Kakao Pay and our stablecoin become the most critical payment method in the AI ecosystem. And through these efforts, Kakao Pay will not only bring success to the stablecoin consortium, but also will create new growth engine for Kakao Pay itself.

[Interpreted] This is Ivan. Responding to your question about our revenue structure. Now we've been working on our platform strength as a financial platform and have diversified business towards personalized financial service offerings, which drove higher revenue share of digital finance and the platform revenue. Our corporate strategy and direction is now translating into such results, and our thinking is that optimal revenue generation comes from following the business direction rather than fixing a certain revenue mix target in advance.

Now also, our service portfolio is highly exposed to market movements or volatilities and regulation, which are quite hard to predict. In payments, digital finance and platform, we're doing our best to drive growth from each business domain and maximize growth potential based on their business fundamentals. We believe it's important to fend against risk from outside while driving growth of the company at the same time. And from a mid- to longer-term perspective, we want to be able to expand our services and nimbly navigate a fast-changing industry environment with regards to the various different needs of the users, the adoption of AI and stablecoin.

So in summary, based on our strategic direction for non-payment business going forward, we do expect our non-payment business, including the digital finance business to actually account for more than the majority of our top line revenue. But rather than being fixated on this number as being optimal, we want to be able to respond to the market in an agile and nimble manner and solidify our revenue stream where everyone shares growth across payments, digital finance and platform as we continue to invest in creating our future businesses.

[Interpreted] The following question will be presented by Jin-Gu Kim from Kiwoom Securities.

[Interpreted] I would like to ask you 2 questions. First, relating to your overall AI service plan. Last year, with PayI, which is your own AI services, you introduced insurance diagnostics, AI as well as card and payment benefit-related AI agents. And you've mentioned that you're preparing at this point in the pipeline an asset management and payment-related AI agents in 2026. So can you provide some color as to the update of what is taking place at this point? And also what are the specifics of the action plan with regards to the test bed for such agents? And also if there's anything else that's included in this overall AI plan, please do share that with us.

Second question is on your payment business. We've seen very clear performance improvement on the non-captive side, the online non-captive segment. In Q1, despite a somewhat of a depressed commerce market, we see a very steep growth rate. What do you feel is the key driver behind the continuation of such strong growth from the non-captive segment? It will be helpful if you could also mention the scaling up or the upgrade of the database or data-driven analytics using MyData and Paydata as well.

[Interpreted] This is Jeff. Responding to your first question on AI. Now in AI agent for asset management, we're focusing on building Financial Assistant version 1.0. It actually goes beyond mere information search. It also provides proactive asset management by monitoring and optimizing financial status of a user in a real-time basis. And the key to this has to do with data and the method of implementation. In terms of data, insight is offered based on the user's MyData, which is, in fact, financial and payment data of the user. And in terms of the implementation method, we're using integrated master agent approach under which there are subagents for insurance, investment and for instance, combined statement, which are all connected, enabling both cost efficiency gains and higher service quality. AI from global big techs have only limited access to financial data of their user base, so we think AI Financial Assistant of Kakao Pay has a unique edge and our target date for initial public beta release is end of Q2 of '26.

Also, payment AI agent is at the core of agentic payment responsible for the last mile of money movement in the world of AI agents. Let's say, a user after exploring a certain product decides to make a purchase inside the commerce domain run by the Kanana agent. At that time, payment AI comes into play, offering the most optimal scenario for user benefit and completes the payment immediately. So even if search is made within Kanana, transaction is closed by Kakao Pay. To this end, we are, at this point, working towards securing a real-world use case before the end of the year in fiat-based payment by working with key strategic domestic merchants. Also to incorporate next-generation payment methods, including stablecoin, we've joined the x402 project so as to gain technological and regulatory readiness and are planning on introducing highly well-made services in step with the legislative timeline.

[Interpreted] This is Jaesun. Responding to your question on our online non-captive performance. Yes, you are correct. Our non-captive online growth was 21% year-over-year Q4 of last year. And in Q1, it was actually higher at 24%. And non-captive mix out of online payment revenue increased meaningfully from 50% to 63%. Despite contractions in the commerce market, growth driver, in my opinion, was strategy behind strengthening the semi-captive market. By selecting key sectors such as delivery, shopping, fashion, air travel, accommodation, we strategically focused on strong coupling -- strong strategic coupling that is with key merchants who are building their category competitiveness, running marketing, targeting their specific needs as we refined our user engagement.

So we have a basic set of seasonal campaigns and promotions catering to each merchant. And on top, we are bringing our own data capabilities using MyData and data analytics, we analyze 61 complex payment behavioral patterns, select target segments using prediction model, provide optimal benefit to users at the right timing. All of this is based on automated process, which helped build retention. Let's say, we have a strategic merchant A, we can detect early on that a heavy user of the app is about to move to a competitor by analyzing Kakao Pay data and offer personalized reward at the right timing based on payment habits and patterns, which will help increase user retention for the merchant.

We're also using payment and behavioral data analytics to acquire prospects as well as retaining high-quality customers. By identifying new customers and delivering personalized benefits, we were able to drive higher payment conversion. Based on all-around data analytics, leaning towards activation strategies, we're strengthening collaboration to attain win-win for both the merchant and for Kakao Pay. Through Kakao Pay, merchants can retain and expand their customers efficiently, which led to higher TPV and our market share for Kakao Pay against the merchants. We will continue to broaden this collaborative structure and virtuous flywheel.

[Interpreted] Due to the time constraints, we will be taking the final question now. The last question will be presented by Yu-dong Yoon from NH Investment & Securities.

[Interpreted] My question relates to your business, your securities business. We've seen a continuous profit growth for your securities entity on a quarter-over-quarter basis. And because of the market tailwind, we think that this will be a good opportunity for you to narrow the gap that you have with your peers or competitors or to jump up in the ranking. I would like to know as to what strategies you're currently envisioning? And do you also have plans for additional capital raising in order to expand your credit provision business?

[Interpreted] This is Eddie responding to your question. Kakao Pay Securities is considered as a top 6 player in terms of user volume based on the MAU metrics based upon our own criteria. And we believe it's important to actively expand user acquisition going forward. And our goal is to narrow the gap with our competitors in terms of the MAU so that we can reach above 2 million and be top 2 by the end of the year. To that end, we're working on a variety of marketing and branding activities and improving our user interface as well as UX. Also to drive synergies across the group, basically for Kakao Pay Securities, we're providing stock trading inside the Kakao Bank app channel. So we do look forward to additional user inflow through this channel. On top of such efforts by delivering tailored trading experience across user segments from light users to heavy traders and by using AI to deliver investment-related information and by growing the community itself, we're looking to narrow the trading volume gap with top-tier securities companies.

Kakao Pay Security's vision is to give people the experience of making money the right way, the genuine way. And under the goal of lowering the hurdle for everyone, solving information asymmetry, empowering people to invest with comfort and safety, we are focusing on innovating the overall user experience. Focusing our UX capabilities, we are bringing and focusing our UX capabilities into consumer research and design as well. And under the culture of fostering data-driven experiments, we are optimizing usability of products aligned with needs of different customer segments. So in the second half, on top of chart-based ordering, quick ordering and pro mode revamp, we will bring AI analytics across the entire app. And in terms of the business of extending credit, on rise in the domestic stock trading volume, provision of margin loan is, yes, also growing. Although it is not easy to predict market volatilities, we plan to monitor market trend closely and decide on the need of capital injection if need be.

[Interpreted] Thank you. This brings us to the end of the first quarter earnings conference call of Kakao Pay. If there are any unanswered questions, please do not hesitate to contact us at the IR team. Thank you very much.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

[Interpreted] Good morning and good evening. Thank you all for joining the conference call for the Kakao Pay earnings results. This conference will start with a presentation followed by a Q&A session. [Operator Instructions] Now we will begin the presentation on Kakao Pay's Fourth Quarter of Fiscal Year 2025 earnings results.

[Interpreted] Good afternoon. This is Allen, CEO of Kakao Pay. Thank you for joining the fourth quarter 2025 earnings conference call. I will begin with key metrics for FY '25 Q4 TPV, consolidated basis operating revenue and expense, P&L, followed by key business highlights for Q4 of '25 and end with 2026 strategies. First, on the key metrics.

FY '25 TPV increased 11% year-over-year to KRW 185.6 trillion. Revenue TPV was KRW 53.6 trillion, up 10% year-on-year, attesting to quality-driven growth. Driven by balanced growth across the entire business domain, FY '25 revenue grew 25% year-on-year, reporting KRW 958.4 billion. What's noteworthy is revenue from financial services reporting a sharp growth of 59% with revenue mix of 40%, becoming a strong pillar supporting diversified revenue stream.

Platform revenue also increased 63% year-on-year, meaningfully expanding business foundation. FY '25 operating profit reported KRW 50.4 billion, successfully achieving its first annual turnaround, while net income recorded KRW 55.7 billion and EBITDA came in at KRW 83.3 billion.

Next is on business performance highlights. DAU as of end of FY '25 increased 5% year-over-year to 6.68 million, which is 27.6% of MAU, monthly active user, going up 1.8 percentage points versus 25.7% of Q4 of last year. This goes to show stronger user stickiness driven by cross usage of wide-ranging services on Kakao Pay platform and rise in frequency of visits.

Average number of transactions per user across all of Kakao Pay Services in FY '25 was 209, up 44% year-on-year from 145 transactions. Added expansion in user activity across all business segments, an outstanding surge in financial services transaction spearheaded the overall upward trajectory. On the back of balanced growth across all business domains and notable growth from financial services, ARPU increased 31% year-over-year, reporting KRW 29,524.

Next, I will invite [ Aidan ] to walk through the financials and Q4 TPV.

[Interpreted] Hello. This is [ Aidan ] on the financials. Q4 TPV increased 14% year-over-year, reaching KRW 49.3 trillion. Out of this, revenue TPV was KRW 14.2 trillion, up 15% year-on-year, accounting for 29% of total TPV. We've seen payment and money transfer show double-digit growth year-over-year, driving the total TPV uptrend.

Payment service TPV sustained robust double-digit growth trends across all segments with a notable 18% year-over-year growth. For online payments, strategic marketing promotion in line with the year-end peak seasonality drove TPV growth of 11% year-over-year.

Offline saw stronger user benefits and aggressive expansion of good deal brands and integration of Kakao Pay Money into Samsung Wallet, which helped to enhance convenience, leading to user lock-in effect, in turn driving sharp increase in TPV of 43% year-over-year.

Cross-border payments successfully captured year-end peak seasonal demand against which we strategically ran promotions at major global merchant outlets. With the added impact of adoption of NFC payment infrastructure off-line, TPV went up 21% year-over-year.

Loan service TPV dropped year-over-year on the back of stringent government regulation on household loans, but on diversified brokerage service for alternative financial products and web in-app implementation, we saw a rebound in TPV Q-on-Q, reclaiming the quarterly growth trajectory.

Stock trading volume increased 159% year-on-year, reaching KRW 45 trillion, driving a record high quarterly results. On rise in stock trades, money transferred to my own accounts increased with money transfer TPV growth of 14% year-over-year. Kakao Pay money balance stood at KRW 2.2859 trillion as of end of Q4.

Next on revenue. Q4 revenue was up 24% versus last year, reporting KRW 269.8 billion. Growth was even across all service segments with a double-digit growth as payment increased 12%, Financial services, 34% and Platform [ business ] 87% year-over-year. Digital payments saw growth across all its domains year-on-year as well with online cross-border leading that top line growth by actively leveraging high seasonal demand.

Digital Finance increased 34% year-over-year, reaching KRW 112.8 billion with revenue mix of 42% on steep growth from investment and insurance services despite loan service revenue decline following loan regulations. Investment service revenue was up 39% against the backdrop of 2.5x year-over-year growth of domestic and overseas trading volume and growth in ISA and sales of pension savings.

Supported by robust demand for core insurance products, thanks to diversified product portfolio and sales channel as well as the insurance database sales, all working together, creating synergy, insurance service recorded high growth of 80% year-on-year.

Loan service dipped marginally year-over-year following the regulatory impact, which is an external factor. But through web in-app implementation, which improved convenience and execution of lending, we were able to capture demand for credit loans, thereby driving Q-over-Q rebound.

Platform service continued an uptrend, expanding 87% year-on-year, driven by display ad revenue growth on the back of hyper-personalized ads targeting with the underpinning of MyData.

Q4 operating expense was down 1% year-over-year, but up 12% Q-over-Q to KRW 249 billion. Marketing expense increased 70% year-on-year due to co-marketing with strategic partners and stronger reward programs targeted at expanding the payment coverage. But looking at FY '25 expense, it was kept at a reasonable level of below 10% against revenue. Labor cost also was up 29% year-on-year on business domain expansion, including from financial subsidiaries and due to talent acquisition.

Commissions paid, on the other hand, had remained stable, thanks to efficient cost management and it declined Q-on-Q, supporting profitability enhancement, notwithstanding the top line growth.

Lastly, other operating expense fell 47% year-on-year with the fading of the base effect from one-off expense arising from TMON and WeMakePrice in Q4 of last year. However, operating expense went up 75% Q-over-Q, in line with higher revenue from the financial subsidiaries and on higher policy reserve requirement at Pay Insurance and derivatives and recognition of FX-related expense at Pay Securities.

Next is on P&L. Q4 consolidated operating profit reported KRW 20.8 billion, going above the KRW 20 billion mark and recorded a record high quarterly figure. This is 32% Q-on-Q rise. And since the turnaround in the first quarter, we've been gradually improving margin every quarter with the OP margin coming in at 7.7%.

Net income was KRW 8.1 billion and EBITDA reported KRW 29.3 billion. In Q4, we were able to fortify the basis for a company-wide turnaround by striking a balance between growth and fundamental resilience. Payment proved its earnings capacity. And with this as the engine, we drove volume expansion across all our business domains, including that of the financial subsidiaries. Added to this growth, cost optimization has taken a solid footing, driving tangible profitability improvement while cementing the basis for sustainable growth.

Q4 stand-alone revenue was up 16% year-on-year and 9% Q-on-Q, reporting KRW 186.1 billion, and we are sustaining the uptrend. Stand-alone operating profit was KRW 19.1 billion, hitting a record in terms of both consolidated and separate basis. OP margin was 10.3%, a strong double digit, while net income came in at KRW 8.5 billion.

Next, I will invite [ Jason ], who will walk through key Q4 business highlights.

[Interpreted] This is Jason. Let me first begin with the outcome of vertical expansion, which was our first strategic focus in 2025. Main thrust of vertical expansion was to maximize profitability, leveraging data capabilities and value chain internalization going beyond a mere service expansion.

For payments, we will continue to build out a system to facilitate efficient Pay Money conversion, driving maximum synergy between digital payment and vertical expansion of general payment as we push forward with a virtual cycle underpinned by expanded value chain.

By displaying Kakao Pay at the top of PG, the payment gateway window, we can drive activation, which will create a revenue stream that can help us gain competitive edge in commissions, fulfilling the flywheel strategy. Establishing a sustainable business framework will be our core focus.

We are gaining market differentiation from our alternative credit scoring model, which is unmatched by others. We internalized this scoring model in the underwriting process of financial institutions going beyond simply brokering the loan products. On top of traditional scoring method, we use financial -- MyData, KakaoTalk-based [ digital ] network and Kakao Pay data, combining them into a sophisticated scoring system through the use of which financial institutions can better differentiate customers by uncovering hidden assets while offering specialized products with optimal interest rate and credit limits tailored to each customer. Such differentiation, which is data-driven, creates a virtual cycle leading to strong product competitiveness and customer lock-in.

For insurance, we're focused on securing new revenue stream through a sub-agency model by innovating the consultation process. By collaborating with professional SAs, we can lower operational risk of running an agent organization while enhancing efficiency. And by expanding data-driven consultation, we will deliver consistent user experience from acquisitions to execution of insurance policies.

We've gone through a standardization phase, moving to system internalization and adoption of AI-powered consultation advisers under the aim of achieving sector-leading productivity by 2027.

Next, Jeff, who heads the Services, will present on the second and the third key strategic direction.

[Interpreted] Hello. This is Jeff. Let me brief you on Kakao Pay's second strategic direction, which is data-driven performance. We established highly sophisticated data business that turns vast amount of company data into revenue stream. As of end of '25, we have 22.11 million MyData users, 42.06 million paid data users, making up an unmatched data ecosystem. which is used for precise targeting of customer needs and recommending next best action at the most appropriate timing, all of which are leading to notable conversion growth. And by analyzing such integrated set of data, we are able to unlock new segments, developing services and products that are different and new to the current market.

Moreover, we are strengthening core competitiveness of service offerings via data-driven USP. Total history, for instance, integrates fragmented payment data on a real-time basis, which leads to higher user visit frequency and lengthens the dwell time. We also have auto alert feature, notifying the user of main financial events such as paying up interest on loans and paying credit card bills, which are effective in locking in customers as they help users to better manage their finances.

Lastly, security guide and asset and credit protect messaging help activate users who are not yet linked up while strengthening the current active user base. Through such hyper-personalization strategies, we plan on expanding high-margin revenue and drive quality growth in which data directly translates into tangible operational leverage.

Next, on the performance of Platform Play, which is the third strategic direction, we are going beyond our previous core user base, expanding into active seniors, young segments and foreigners as we build upon the user base and forming a virtual cycle where new acquisition and retention feeds into one another.

We are securing growth engine by offering financial services optimized for the lifestyle of each segment with a full spread display of such features. For instance, for seniors, home screen with bigger fonts and phishing prevention features are used. And for teens, we've upgraded specific content catering to teens such as Teen's Number, driving distinctive user experience.

Also in Q4, we rolled out Global Home, making a big improvement on access and convenience for foreign users across key financial services such as money transfer, payment and card issuance. Based on refined data analysis and personalized and targeted content, we will strengthen retention across all age groups, and we continue to fortify fundamentals of the platform services.

Next, Eddie, Head of Operations, will run through Kakao Pay Securities and Pay Issuance. Hello.

[Interpreted] This is Eddie. Q4, Kakao Pay Securities' stock trading volume was up 159% year-on-year, reaching KRW 45 trillion with number of customers going up 170% to 1.35 million as growth sustained. Q4 revenue thus was up 37% year-on-year to KRW 72.8 billion, with operating profit at KRW 18.4 billion, hitting a historical record.

Revenue for the full year was KRW 242 billion, growing 77% versus last year, while operating profit came in at KRW 42.7 billion, writing a meaningful milestone of annual turnaround. This achievement was driven by strategic product lineup expansion in step with strong stock market trend and offering of unmatched convenience from users' perspective and innovative features. Upon competitive new acquisition cost and high operating leverage, stable profit-making streak was established as 2025 was a year where we achieved a leap in profitability growth.

Total deposit assets increased 139% year-on-year, reaching KRW 9.3 trillion, with stocks up 197% year-on-year to KRW 7 trillion on rapid expansion of overseas stock trading. Growth in deposit asset for '25 was encouraging because key lever was net inflow from users fund rather than a simple rise in stock prices. All in all, Q4 net inflow was KRW 2.7 trillion, up 76% Q-over-Q.

In Q4, notable performance came from ISA account and pension savings as we tapped into year-end demand for tax saving solutions. Over 100,000 brokerage ISA accounts were opened in just 2 months since its rollout, attesting to strong product competitiveness. And by enabling account setup with a single tap and semi-automating account transfer process from other institutions, we lower the entry barrier and also used dashboard to display amount of tax money saved so users can intuitively see the benefit, making the environment conducive to investing.

Pension savings also showed record performance of landing at top 5 ranking with number of accounts surpassing 380,000 in just 1 year since its rollout. We introduced pension-specific features such as automated transfer exceptions in Q4, gaining a competitive positioning in mobile optimized user experience. We will evolve into a comprehensive asset management platform, helping customers grow their assets, riding on the popularity of such tax-efficient products.

Moving on to Kakao Pay Insurance. In Q4, the company sustained top line uptrend supported by diversified sales strategies. Q4 gross premium written increased 87% year-on-year and 19% Q-on-Q, reporting KRW 19.6 billion. This is an outcome of successful business model expansion based on the 3-engine system, cutting across B2C, B2B2C as well as B2B and also due to portfolio construction around regular premium products with a clear focus on profitability.

With a focus on key categories such as children's insurance and mobile phone insurance, regular premium revenue continued an uptrend, while children's insurance saw strong Q4 sales from maximized marketing efficiency at each of our customer touch points as we focused on seasonal coverage such as flu protection. Regular premium forming the foundation of top line growth grew 260% year-on-year, reporting KRW 5.6 billion, while its share out of total premium written increased 13.3 percentage points, recording 27.7%.

Next, I will invite Allen back for ESG and 2026 strategic direction before we end the presentation.

[Interpreted] This is Allen again. Kakao Pay's sustained ESG endeavors are being recognized by Korea's major institutions, and we were given combined ESG A ratings from KCGS. In terms of environment, we set long-term goals and detailed strategies against climate change and achieved 11.9% renewable energy transition rate by sourcing renewables -- which drove improvement in environmental performance, supporting the maintenance of ratings.

In terms of the social pillar, where we had biggest outcome, we were given A+ ratings, 2 notches up versus last year, in recognition of safety and health, human rights centered management, information security and community engagement, which was a testament to our industry-leading capabilities.

In terms of governance, by evaluating the BOD and respective committees, we strengthened transparency going over ESG issues at the Board level, which earned us A ratings, moving 1 notch higher versus last year.

Next is shared growth achievements. We hosted 2025 LONG RUN event with record high turnout in the history of running event in Korea with 265,000 people participating and raising KRW 2 billion in funds for donation. By completing the mission of achieving KRW 20 billion cumulative steps taken, we made the donation to Working Together Foundation and small vendors.

Orae Orae campaign for shared growth was also awarded a [ pop ] from Small Enterprise and Market Service for supporting 264 brands to make market inroads over the past 3 years. We estimate that the pop-up store support helped small merchants to save around KRW 6.4 billion in operating expense and 150,000 work hours.

We also received commendation from Credit Counseling & Recovery Service for preventing credit risk for youngsters and for spreading healthy credit culture through the credit education for soldiers. In commemoration of 2025 OECD Global Money Week, we ran a successful training catering to the needs of the military personnel. Kakao Pay will continue to strengthen its ESG activities aligned with our business to fulfill social responsibility and to open up a sustainable future.

Last but not least is the company's 2026 growth strategy. In order to sustain business and financial outcome achieved in 2025, we've set our direction forward for 2026. We will continue with the 3-core direction of vertical expansion, data-driven monetization and platform play supported by the traffic, riding on the performance of last year. To this end, we will add 2 more engines, one of which is to prepare for new domains. Stablecoin with legislation underway and blockchain and opportunities connected to STO will become important new business domains for Kakao Pay, and we will be making thorough preparations.

Next, together with the Kakao Group and its affiliates, we will actively explore opportunities to drive synergies in which Kakao Group's strong pivot can have meaningful impact. We are reviewing multiple opportunities for collaboration and synergies around AI-powered services. And I believe this will lead to additional engine for growth, not only for Kakao Pay, but also for the group affiliates. In 2026, Kakao Pay will continue to drive growth and innovation, providing better and improved financial experience while living up to its social responsibilities. Thank you.

[Interpreted] [Operator Instructions] The first question will be provided by Sinyoung Park from Goldman Sachs.

[Interpreted] I am Park Sinyoung from Goldman Sachs. I would like to ask you 2 questions. I'd like to first gain some color as to what your views are in terms of the revenue growth outlook for 2026. And in 2025, we've seen gradual improvement in the profit on a quarterly basis. What would be your take for 2026? Just a rough color would be appreciated.

And in terms of your 3 key business areas, which are the payment, finance and platform, I would think that the way that the top line growth as well as the profit improvement will actually play out and pan out will be quite different. So, it'd be helpful if you could just give us more detail on that aspect.

Second question has to do with your Securities business. In Q4, there was a significant contribution to your performance made by Kakao Pay Securities. And I'm sure that, that improvement was driven also in some part by the bullish stock market. But with regards to certain limitations and constraints that are currently being put on, particularly for the overseas stock trading with the subdued amount of marketing activities that is recommended. I'm just wondering whether that will have an impact on your expansion of the business going forward. So, just give us some color on what your -- how your Securities business will play out going forward.

[Interpreted] This is CFO, Aidan, responding to your question about the guidance. Basically, for 2026, we are looking towards a top line revenue growth and a guidance of around 15% to 25%. We actually achieved a very successful turnaround back in 2025, and we now have quite stable financials. And upon such fundamentals, we will further drive top line growth, and that growth will drive profit enhancements as well, leading to gradual increases in operating profit. So, this actually is a virtual cycle that we will continue to strengthen.

Now going on to each of the business line. First is Payment, and if you look at our online commerce market, the overall backdrop has been very competitive. But in Q4, we proved our competitiveness in payment through efficient marketing and stronger collaboration with key strategic merchants and semi-captive market. So, in 2026 as well, basically, we expect there to be high growth of cross-border and off-line and robust online performance as well based on Pay Money. We believe that this will continue to form a strong pillar behind the top line growth of the company.

Second is on the Financial Service business. Now, due to the household loan regulation, loan business is quite challenging, but through refined targeting and improved efficiency in user matching, we will look for growth opportunities despite such headwinds. In terms of the insurance services, in line with the growth of the existing products such as the traveler's insurance, mobile phone insurance, supported by MyData, we are seeing a continuous uptrend in insurance DB sales.

We also expect that our top line growth will be driven by the sub-agency business as we move -- as we go forward. And so for the Kakao Pay Securities business as well in 2026, I believe that there is going to be a meaningful top line growth. And also, we believe that this year, we will be able to achieve a good result in terms of turning the new customers into active customers. Our successful formula will enable that. And also, by constructing the investment portfolio with various different components such as domestic and overseas stocks and pension and ISA and fund, we will continue to strengthen cross-selling opportunities.

Now, so in terms of the platform business, the way we see the platform business is that they are high-value businesses, including advertisement, card and brokerage for telecom services. And our drive will be towards improving and enhancing on its profitability. So, all in all, in summary, 2026 will be a year in which we achieve both top line growth and improved profitability, building on the stable foundation of our payment business while adding qualitative growth in our financial and platform services.

[Interpreted] This is Eddie responding to your question about Kakao Pay Securities. In Q4, as you've correctly mentioned, stock trade volume was KRW 44.9 trillion, up 32% Q-over-Q and 159% year-on-year. Domestic market has been bullish recently with domestic volume growing 51% Q-over-Q and 279% year-on-year with its share expanding from 43% to 50% in the fourth quarter.

So as a result, domestic and global trading volume split is now 50-50. And also, domestic credit transaction performance is also growing quickly, doubling year-over-year as of the fourth quarter and growing 1.3x Q-over-Q. And we expect such trend will continue in the first quarter of 2026.

And it's also true that we are shying away from excessive marketing for overseas stock trades, changing the pivot to domestic trade in terms of marketing and providing rewards to our customers. And I'm sure you would also, in that flight, have certain curiosities and questions regarding the margin structure in light of the current bullish stock market domestically. If you look at the take rate, it's true that overseas stock trading has 6x higher take rate versus domestic, but market size for domestic stock trade is 5x bigger with bigger ticket sizes. And credit transaction performance is also rising very quickly, making up for the downside factors. So, we don't believe this to be of a big risk to our bottom line.

Now for the 2026 strategies, I will talk about retail and the IB business separately. First, if you look at retail, there are 3 strategies from user engagement perspective: one, number of new account openings; two, up-trending active user conversion; and three, actively incorporating customer VOC in order to deliver convenience and functionality while building on the community feature and servicing on AI theme to scale up the customer funnel.

Converting new customers to active customer, which is our formula for success, will continue to work in '26 as well. We will broaden the pool of active customers through highly refined customer engagement strategies. And also, to leverage growth momentum that we are seeing in the market in '26, we will beef up domestic trade and margin business, applying success formula we acquired from overseas businesses. We will also be utilizing pension accounts, ISA fund and other financial products for cross-selling purposes so that customers can better construct their portfolio and for us to fortify the basis for robust and healthy growth.

In IB business, we are hiring top talent as we speak and expect to diversify into wide-ranging revenue stream in '26 as we move the dependency away from real estate brokerage. Regarding the token Securities-related bill and the amendment to the Capital Markets Act, Kakao Pay Securities is participating in the KDX consortium, and we will be able to contribute in making securities products that can appeal, better appeal to users.

Kakao Pay Securities achieved a turnaround in 2025, entering into a secular upcycle with all metrics such as stock trading volume, number of transactions, customers, deposit and net inflow all showing an uptrend. In '26, upon this robust trajectory, we will do cross-selling, revamp services in order to target more than 50% year-on-year revenue growth and to achieve additional operating profit growth.

[Interpreted] Next question please.

[Interpreted] The following question will be presented by Dong Woo Kim from Kyobo Securities.

[Interpreted] My question relates to your AI strategy. I believe that Kanana and KakaoTalk is going to be rolled out in the first quarter. I'm wondering what role will Kakao Pay play under this initiative? And what is the timing for us to see an impact on your TPV? I would like to gain some color there.

[Interpreted] This is Jeff. Responding to your question on the AI strategy. First, on the role of Kakao Pay in the early version of Kanana and KakaoTalk is as a key partner that provides optimal finance and spending solution to users inside the Kanana services, meaning we will first connect to key features of finding personalized benefits powered by AI, which has already been tested and validated inside the application.

Basically, within the context of dialogue happening inside KakaoTalk, where the user needs to have information on payment benefits, the response will be served immediately. Later, we will be expanding this connection to AI-driven health management based on users' health data and users will experience Pay Services seamlessly on the KakaoTalk platform.

In terms of the timing of the upturn in TPV, as Pay Service discovery is expanded through Kakao's AI agent from this early version of connection, it will, of course, drive inward traffic. In terms of, however, real upturn in TPV, it will come when Kakao's agentic commerce comes under full swing. To this end, we want to create agentic payment experience going beyond a simple offering of point solution and payment, but creating a bridge between agents' product or benefit recommendation and the act of making a purchase. This is what we're currently designing together with Kakao.

Now lastly, on the plan to connect [ Pay AI ] and Kakao's agentic AI platform. In Kakao Pay, we are building specialized agents by different -- for different finance domains and organically linking it to Kakao's AI platform. So once the structure and framework is complete, whenever a new finance agent is developed, we can very quickly and easily scale to Kanana without having to go through complex steps.

In 2026, you will be able to see how Pay AI actually makes the lives of financial services more seamless, not just in the Pay app, but also inside the KakaoTalk channel.

[Interpreted] Next question, please.

[Interpreted] The following question will be presented by Yu-dong Yoon from NH Investment & Securities.

[Interpreted] I'm Yoon Yu-dong from NH Securities. I would like to ask you a question about your payment business. The e-commerce growth recently is slowing down. And despite that, I understand that your business -- payment business performance is better than what we had expected. So, what is your take on the outlook for the payment business in terms of growth for 2026?

And you also mentioned that you are planning to start the general payment business as well. What strategies would you be employing? If you could shed light for the online, off-line and cross-border business, that would be helpful. And also, for the online, if you could split that answer into captive versus non-captive, that would be appreciated.

[Interpreted] This is Jason, taking your question. We cautiously project slightly higher growth versus mid-single-digit growth that we've seen in 2025. Economy will continue to be sluggish with slowing consumption in '26, but we expect Kakao Pay will achieve higher growth driven by strategies that are unique to Kakao Pay.

In online captive payment, we will focus on scaling up synergies with our key affiliates. Working together with Kakao Commerce, we will actively expand market share of Pay through exclusive seasonal promotion and general payment service expansion. Especially with Kakao Mobility, Pay Money will be added to the payment method starting the first quarter. We expect this will drive high-frequency traffic from Kakao Driver and bike into the Pay Money ecosystem, triggering concurrent growth in sales volume and mainstreaming of our products as well. And afterwards, we will be expanding it into Kakao Taxi as well.

In online non-captive segment, by diversifying the portfolio, we will drive stable growth and expand the TPV basis. For instance, going beyond the shopping domain, we plan to add OTA, the airplane ticket purchases, rental fee, long-term insurance premium, which are so-called everyday finance relevant domains, which are less sensitive to economic cycles. We will also expand acceptance points at large merchants like hyundai.com and Hi-Mart while also expanding into semi-captive merchants such as Olive Young and Shinsegae Duty Free.

We will also identify new revenue stream based on collaboration with hosting providers like Cafe24 and through AI commerce cooperation. Through efficient marketing spend, we will achieve both the top line growth and bottom line improvement.

For cross-border online payment, growth will be led by partnership with global big tech companies. We plan on expanding share in key merchants like Google, Apple and [ c-commerce ] providers with a targeted discount promotion. We're also going to onboard new key accounts such as Disney+ and Apple online store in order to drive structural growth of cross-border TPV.

For cross-border off-line, we're expecting notable double-digit growth versus last year. I say this because of; number one, scalability in the outbound market; top-of-mind awareness gained through integrated travel platform called Voyager; and number three, stronger market position in both inbound and outbound market.

In the second half of FY '25, by enabling Android-based NFC, Kakao Pay was integrated with 150 million Mastercard merchants, which is driving TPV in Western markets of Europe and North America. We are making technical and strategic preparations to support iOS-based NFC payment and plan on service rollout in the first half of this year.

With this, users of Kakao Pay can benefit from seamless cross-border payment experience free from the constraint of device or payment method. Now Voyager, which is an integrated platform for traveling, is scheduled for Q1 '26 release. It's more than a simple payment method. Travelers' entire journey is vertically integrated, leveraging data generated from the pre-trip stage upon which optimized payment-related benefit is pushed out to the user when he or she is at the local destination. This is part of an end-to-end travel lock-in strategy, keeping the user to stay on the Kakao Pay platform.

Recently, we are also seeing K-Culture gaining more prominence and foreigners have shown growing interest in taking a trip to Korea, which is translating into a positive inbound performance. As of 2026, number of wallets supported when foreign visitors come to Korea have increased to 31 wallets, including China's Alipay and Japan's PayPay.

Now for general payment, we plan to focus on development and system build-out during the first half of the year, and we'll be able to update you on the concrete rollout plan once it is ready in the second half of the year.

[Interpreted] And we will take the final question.

[Interpreted] The last question will be presented by Jin-Gu Kim from Kiwoom Securities.

[Interpreted] I have a question on the -- an overarching issue, which is recently, we've seen the legislation process for Stablecoin is being delayed. I would like to understand as to how the Stablecoin business is undertaken within Kakao Pay as well as the overarching Kakao Group. From 2 perspective, if you could explain as to respond to the question because you previously mentioned that there is a joint council where Kakao, Kakao Bank and other group affiliates are participating. I would like to know as to whether you're also considering collaboration with third-party partners.

And also, you've mentioned that you are looking at the technical feasibility from a POC perspective across different service domains such as payment, money transfer, et cetera. What would be some concrete and practical use cases that you are currently envisioning? And also, what is the role of Kakao Pay in this greater scheme of things, and what is your differentiating opportunity?

[Interpreted] This is Allen. I would like to respond to your question. And I would like to say that, yes, we are fully aware of the uncertainties regarding Stablecoin-related legislation, regulation and the timeline of such. And we need to make preparation in line with what's happening in Korea as well as globally. So, we are fully mindful of all of these comprehensive factors.

At the group level, together with Kakao, Kakao Bank, we have a council where we talk about digital assets, which also includes Stablecoin. We're not just having internal discussions. We're engaging with third-party partners, Korean and global, in meetings and discussions, talking about multiparty collaboration arrangements, technical connections and division of R&R.

Although I cannot disclose what's under discussion due to reasons of confidentiality and market impact, I can say that such discussions involve partners who can bring synergies to payment, transfers, settlement, which are practical domains.

In terms of use cases, rather than thinking of Stablecoin as new investment product or a stand-alone service, we consider it as a technology that will drive efficiency from the existing payment, money transfer and settlement infrastructure. Internally, scenarios we're looking at includes making cross-border transfer and settlement more efficient, streamlining payment flow on platform and for commerce and enabling what was difficult to implement under the legacy infrastructure such as repetitive or conditional payment.

For these scenarios, rather than showcasing it on the customer-facing interface, Stablecoin will make the internal structure more efficient while user experience and payment and money transfer are left unchanged. The opportunity that we're seeking is not a onetime coin issuance or short-term business case, but one that seamlessly connects to large-scale payment and transfer traffic, which is already used on a daily basis. More concrete plans on business structure and timeline is upcoming once the regulations are set. We will make an update when that time comes.

[Interpreted] This brings us to the end of the fourth quarter 2025 earnings presentation by Kakao Pay. Thank you, everyone, for joining us today. For more questions, feel free to contact us at the IR team. Thank you very much.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning, and good evening. Thank you all for joining the conference call for the Kakao Pay Earnings Results. This conference will start with a presentation followed by a Q&A session. [Operator Instructions] Now we will begin the presentation on Kakao Pay's Third Quarter of Fiscal Year 2025 Earnings Results.

[Interpreted] Good afternoon. This is Allen, CEO at Kakao Pay. Thank you all for joining our earnings call for the third quarter of 2025.

Let me begin with key metrics for the third quarter '25 and talk about TPV, consolidated operating revenue and expense and P&L, then move on to business highlights for the quarter. First, on key metrics for the third quarter.

Q3 '25 TPV increased 12% year-on-year, reaching KRW 47 trillion. Revenue TPV was KRW 13.4 trillion, up 8% year-over-year. Q3 revenue was up 28% versus Q3 last year, reporting KRW 238.4 billion. Financial service accounted for 40% share of total revenue this quarter, sustaining a salient uptrend. Operating profit in Q3 came in at KRW 15.8 billion, recording a triple-digit figure for the first time. Q3 net profit was KRW 19.1 billion, EBITDA KRW 24.1 billion and financial revenue reported KRW 11.8 billion.

Next on business metrics. Kakao Pay's daily active user count was up 6% year-on-year, reaching 6.56 million, accounting for 27.8% of MAU, which is 2.5 percentage points higher versus last year's third quarter figure of 25.3%. We see cross usage of wide-ranging services offered on platform and higher user visits leading to stronger user stickiness.

Average transaction per user in Q3 was 75, increasing 43% year-on-year. We are seeing balanced growth across payment, MTA, insurance and financial referral services. Q3 ARPU surpassed KRW 10,000 mark following last quarter, reaching KRW 10,103 on the back of top line growth from financial and platform services.

Next, CFO, Aidan, will discuss Q3 TPV and other financials.

[Interpreted] Hello. This is Aidan, the CFO. Q3 TPV was up 12% year-on-year, reaching KRW 47 trillion. Revenue TPV was up 8% year-over-year to KRW 13.4 trillion, and payments and money transfer TPV posted a double-digit growth year-over-year, supporting total TPV growth. Payment service TPV increased 14% year-on-year. And against the holiday season, we ran travel-related promotions on hotels and duty-free shopping, which drove online payment TPV up 6% year-over-year.

And as good deal service, which we launched early this year, took its footing in the market and an expanded coverage for digital payments and the use of government's cash coupons, offline payment TPV increased 46% year-on-year. During summer high season, demand for cross-border payment by outbound tourists increased, driving cross-border TPV up 16% year-on-year.

Revenue from loan service fell year-over-year and Q-on-Q due to stronger government regulation on household loans, but we've been able to minimize the decline through alternative financial product referrals and higher user conversion. Stock trading TPV reached KRW 3.4 trillion, up 2.7x year-over-year. With the boost in stock trading, money transferred to my own account increased with TPV for money transfer going up 13% year-on-year. Outstanding balance for Kakao Pay money account was KRW 2,096.1 billion as of end of Q3, breaking the KRW 2 trillion mark for the first time.

Next is operating revenue. Q3 revenue was up 28% year-on-year to KRW 238.4 billion. Financial service posted 72% year-on-year growth and platform service 69%, which drove top line growth, while payment service grew 6%, underpinning total revenue basis. Financial service revenue posted 72% year-on-year growth, reaching KRW 94.7 billion on the back of steep growth from investment and insurance services despite lower loan brokerage revenue following the impact of government's household loan regulation.

Payment service saw revenue growth across online, offline and cross-border with total revenue up 6% year-on-year to KRW 129.7 billion. What's noteworthy is offline and cross-border payments, which have greater upside potential, sustaining a double-digit growth trend driving the top line for payment services. We also saw top line uptrends continue for investment and insurance services under our digital finance business.

With domestic and overseas stock trading volume growing by more than twofold, investment service revenue increased 155% year-on-year, while insurance service recorded 72% year-over-year growth on the back of stable growth from our core offerings and revenue growth from mid- to longer-term products and increase in insurance DB sales. Platform service saw 69% year-over-year growth, mainly due to top line growth from advertisement and card recommendation services.

Q3 operating expense was down 14.9% year-on-year and 2.8% Q-on-Q, reaching KRW 222.5 billion. Marketing expense for the quarter increased 44.6% year-on-year because of reward programs used to expand our offline payment coverage, but nonetheless, is still kept at 10% of revenue. Commissions saw an increase on the back of increase in agency fees following revenue growth from our major services, therefore, rising 9.1% year-on-year.

Next is P&L. Q3 consolidated operating profit was KRW 15.8 billion, posting 69% increase Q-on-Q after the turnaround made in the first quarter. Net profit and EBITDA recorded KRW 19.1 billion and KRW 24.1 billion, respectively, recording a double-digit. With the focus on top line growth accompanied with margin improvements, Kakao Pay's profit structure is becoming positively stronger. Underpinned by solid revenue base, we will drive profit-centric growth and continue to expand on the top line of financial subsidiaries and platform so as to strengthen monetization across the company.

Q3 separate basis revenue was up 9.6% year-on-year and 2.3% Q-on-Q, reporting KRW 171 billion, sustaining an uptrend. Quarterly operating profit was KRW 9.6 billion with OP margin at 5.6%. Net profit came in at KRW 15.6 billion.

Next, we will have Jason run through key highlights of our business for the third quarter.

[Interpreted] Hello. This is Jason. First, on the payment business. Kakao Pay adopted NFC solution to cross-border payments for the first time amongst Korea's digital pay service providers. We've expanded the scope to 150 million Mastercard merchants across the Americas, Europe and Oceania, driving global usage. And based on strategic alliance with Alipay+, we will offer unmatched convenience and benefits to Kakao Pay user base in the overseas markets and solidify our positioning as #1 cross-border payment platform.

We will also be offering mini programs to build on a wider range of benefit offerings overseas. Mini program allows for discovery of promotions such as discounts and free gifts at global merchants inside the Kakao Pay app without needing to download locally based applications. We are currently getting things ready for services across more than 20 global markets, including China, Japan, Europe and France and plan to add mini programs across various verticals like hotels, air flights, taxis and trains.

Next is on platform services. Based on our quality MyData and payment data, Kakao Pay's platform revenue posted 69% year-on-year growth, becoming a new growth engine for the company. With targeted ads supported by data entering into the growth trajectory, ad service revenue sustained steep growth trend of 88% year-on-year, similar to that of last quarter. Based on MyData analytics, we were able to precisely capture financial needs and preferences of users, driving the evolution of ad services to a higher level of efficiencies.

We also cemented our #1 market share status in card recommendation services, reporting high rate of revenue growth of 148% year-over-year. In particular, there was more than 340,000 travel log card issuance on a cumulative basis as Q3 was holiday season with many taking travels overseas.

Next, Jeff, who is in charge of services, will discuss AI-related development.

[Interpreted] Hello. This is Jeff. Last October, we opened our second AI service, AI for card and payment benefits in its beta version. It is a service helping individuals spend more wisely, leveraging MyData payment track record on users' preferred brands and buying patterns, recommending the most optimal payment method and payment benefits, both on and offline as well as recommending credit cards that best fit pattern of use, all powered by AI. In the upcoming main version, advice given will be more thorough based on deep dive analysis on spending and card usage habits specific to each user.

Second, now let me update you on the work being done to connect with Kakao's Agentic AI platform. Agentic AI platform for Kakao allows for easy connection to wide-ranging new AI services of Kakao without the need for additional resource input. The configuration is agent to agent, ensuring secure privacy and service usage. Right now, Kakao Pay is making preparations to specifically connect with ChatGPT for Kakao and Kanana in KakaoTalk.

So in steps or in phases, if you first look at Phase 1, we will be embedding Kakao Pay features in ChatGPT for Kakao. And in Phase 2, we will leverage A2A configuration to connect AI and Kanana. In Phase 3, we developed an architecture using Play MCP to allow Kakao AI service to use data from Kakao Pay. And in Phase 4, we will set up standard payment protocols to build payment agent, thereby completing a closed-loop payment circle housed inside Kakao's agent. It's too early to specify the timing of the launch, but we are carrying forward expeditiously to drive meaningful service outcome by next year.

Next, Eddie will walk you through the business performances of Kakao Pay Securities and Insurance.

[Interpreted] Hello. This is Eddie leading our operations. Stock trading volume at Kakao Pay Securities posted explosive growth, driving Q3 operating profit up 3x versus last quarter, coming in at KRW 15.6 billion. Q3 stock trading TPV was up 173% year-on-year to KRW 34 trillion with number of trading growing 337% year-on-year, reaching 140 million transactions. Monthly user count also went up 214% year-on-year, surpassing 1.03 million customers. Not only overseas trading, but domestic TPV also recorded 3-digit growth, sustaining an uptrend in overall performance metrics. Total asset under deposit increased 127% to KRW 7.3 trillion for the same period on the back of rise in stock balance following the uptrend in trading volume.

In the third quarter, Pay Security focused on scaling up community-related features, which drove MAU up 2.8x year-on-year and 2x Q-over-Q, reaching 710,000 users. We have also topic-based chat rooms where investment relevant point of interests are offered on top of information on individual stock names, and we have adopted stronger gamification features with profit verify and leaderboards supporting our community users. Having a stronger community-based feature is considered our key growth pillar for security services, and we plan to continue to focus on further upgrades.

Next is on Pay Insurance. On the back of top line growth, we've been able to sustain a performance uptrend. And during 2025, we continue to launch new products distinctive to KakaoPay Insurance as we broadened our portfolio and with the growth in the number of new insured users and rise in the share of regular premium income, we were able to grow the size of our business. As such, gross premium written for Q3 was up 38% year-on-year, reporting KRW 16.4 billion. Regular premium products such as mobile phone insurance, driver insurance and insurance for toddlers, children and students have been uptrending with a number of new insured users rising by 20% year-over-year to reach 830,000. Recurring premium, which formed the basis of revenue growth, increased by 5x versus last year, increasing its share by 18.9 percentage points to 26.1% against total premium written.

I will now have Allen back to discuss ESG and plans going forward, and then we will wrap up the presentation.

[Interpreted] This is Allen again. Kakao Pay has earned great recognition of its ESG management from global assessment. Kakao Pay is maintaining A rating from MSCI ESG ratings since its first upgrade back in April of '25. We were recognized for expanding financial accessibility to small business operators and for those who are financially vulnerable and for having an excellent human resources development program. Also, Sustainalytics, which is a subsidiary of global investment research firm Morningstar, assessed the company as having low ESG risk in its review, recognizing Kakao Pay's good risk management practices.

In terms of shared growth initiatives, in collaboration with Social Solidarity Bank, we raised funds to support digital infrastructure for business owners and small merchants across the nation and ran digital infrastructure campaigns based on the alliance with VAN and POS partners. We also held financial classes and career camp for young adolescents. We hosted Blind Spot Pay School Junior Camp, inviting students from schools in remote areas to close down the regional gap in financial education. We invited 130 students from 4 different schools, and the camp and experience lasted for 3 days covering various topics across finance, jobs, careers and culture.

And together with Pay Insurance, we began console and build her project in order to help young adult victims of jeonse housing scam. We ran fundraising to help these victims in their recovery process and supported them with repairs of their homes. Kakao Pay will continue to engage in ESG activities aligned with our business direction to live up to our corporate responsibilities and to open up a sustainable future.

I've so far walked through key highlights for Q3 of 2025. Since making a turnaround in consolidated operating profit in the first quarter, Q3 operating profit increased 69.4% Q-on-Q and OP margin for the first time recorded a high single-digit. Kakao Pay has steadily proven its earnings growth capacity and potential, while new growth levers, which we planned for at the beginning of the year, have now taken firm positioning, serving as robust new engine for growth. Despite a big impact from regulation during the third quarter, Financial Service posted 72% growth, underpinned by stepwise growth from investment and insurance businesses, while payment service grew its top line to KRW 130 billion, thanks to a solid uptrend. Platform Service, which is our new business, also posted a year-over-year growth of 69%.

In particular, 2025 was a year during which our core strategies of data-powered business development and platform business expansion, which are based on massive user pool and quality traffic have been tested and their potentials have translated into tangible results. I believe this creates a strong basis for us to design next year's plan as well. We will fine-tune innovative ideas in the making as we look forward to 2026, and we'll have an opportunity to share greater detail in our next earnings call.

All of the crew at Kakao Pay, myself included, will endeavor to create a better tomorrow and better future using our unrivaled technology, making Kakao Pay a platform where all of the users' daily financial needs are met. Thank you.

[Interpreted] [Operator Instructions] The first question will be provided by Sinyoung Park from Goldman Sachs.

[Interpreted] I am Park Sinyoung from Goldman Sachs. I would like to ask you 2 questions. The first question relates to your platform business. We see that the numbers in terms of the revenue growth has been quite steep. I would like to understand, going forward, what will be the share of this business against your total revenue base? And with the growth in platform revenue, would it also accompany the same amount of increase in marketing spend? Or with the increase in the top line revenue, would there be a margin improvement, hence, less extent of marketing spend is required. So I would like to gain some color there.

Second question has to do with your competitors and peers in the market are quite proactively supplying devices the terminal devices for the payment terminals that is in the offline market. I'm just wondering if -- whether you're not joining in on that competition. And if that is the case, what is your outlook in terms of how this market will go going forward? So basically, my question is, what is your strategy and approach to gain an upper hand in the offline segment of the market?

[Interpreted] Yes. This is Jason. Responding to your first question, as you've mentioned, we've seen across advertisement, card and telecom plan referrals all expand very quickly, driving total platform revenue up by 69% year-over-year. To give you the breakdown, ad revenue was up 88% year-on-year, whilst card referral service was up by 148%. Now platform accounts for about 6% of revenue, which is a rise of 2 percentage points from last year's 4%. It's still a small size, but rate of growth is relatively high. And so its share of total revenue currently is single-digit.

We think growth will continue to be quite steep going forward. And Kakao Pay's strength as MyData provider will obviously underpin the model buildup for card and advertisement business, which are efficient and reasonable, and we will be continuously upgrading our business strategy, and we'll be able to sustain a double-digit growth next year.

Now we believe that Kakao Pay has a lot of potential in ad business as we are the everyday financial life platform for our users. MyData and payment data is Kakao Pay's competitive edge and priority is to differentiate ourselves by upgrading targeted ads based on these capabilities. In terms of the ad product, we will directly provide user benefits, so users and advertisers can grow together hand-in-hand. And through adtech-linked ads, which is a segment of the ad market that's really growing, we want to strengthen the touch point between users and advertisers through the offering of such benefits. Last but not least, in 2026, by connecting up with various ads network, we will diversify our ad product to adopt new formats and ad creative.

Our approach to ad business will be to maximize efficiency based on the traffic and convert growth in [ PV, ] which is fundamental to Kakao Pay as a whole in order to place momentum behind our top line growth. And if we can upgrade personalization and make the link between the users' point of interest and the ad product, we believe we can reduce customer fatigue toward ad impressions while enhancing efficiencies. But marketing spend, obviously, will be required to increase advertisement efficiency for the advertisers and for the user benefit as we leverage adtech linked ads and DA, the display ads. We're also planning on using MyData and AI to personalize recommendations for card and telecom service referrals and expand customers' touch points using AI agents and through the web channels. So we're planning on profit-driven expansion by focusing on the issuances of telecom cards. This approach will ensure growth and keep marketing costs predictable and under control.

[Interpreted] Hello. This is Jeff. Taking your second question, Kakao Pay is #1 offline payment service provider with more than 600,000 merchants and highest PU and TRX metrics among the digital pay operators. Competitor strategy of deploying offline devices is asset heavy, entailing big amount of CapEx, and it has 2 issues. Because its focus is on long-tail merchants, there is limitation on targeting large franchises and not enough revenue can be gained through simply payment fees. Second, there's a risk of triggering competition with legacy infrastructure players like the VANs and the POS companies.

On the other hand, Kakao Pay adopts an asset-light strategy, maximizing revenues for merchants and value for users with a focus on digital channel and not the hardware. To users, we deliver ongoing benefits, coupons, good deal offerings, hyper-personalized benefits. And by incorporating table order QR code, ZeroPay and Samsung Pay, we will be driving growth in both number of users and transactions. And to the merchant operators, we will soon deliver marketing tools for them to drive their actual sales growth on top of simple payment tools. We finished our first phase usability enhancement and will speed up release and verification of winning marketing tools in collaboration with Kakao and its affiliates. As such, under a stretch goal, we will continue to expand on PU, TRX transaction status and active merchant base next year as well.

[Interpreted] Next question, please.

[Interpreted] The following question will be presented by Jin-Gu Kim from Kiwoom Securities.

[Interpreted] I have 2 questions I would like to ask. First is, I would like to gain an update on what your approach is regarding the stablecoin initiative. We are expecting to see the legislation be complete before the end of the year. I would like to understand what Kakao Pay is doing in regards to the stablecoin initiative. And also, one of your competitors have announced that they will enter into a stock swap with a key virtual asset exchange. I would like to know what your strategy is? Do you believe or do you have a -- I believe that you would have a certain advantage considering the fact that you have quite a bit of touch point with your user base. I would like to know as to what your differentiating factor could be in line of the developments that we are seeing in the market.

Second question is on your securities business. We see the asset market, the capital markets of Korea and U.S. all kind of showing an upward trajectory. If we look at your Q3 numbers in terms of TPV number of transactions as well as number of customers, we see a continuing uptrend. Can you give us a split between domestic versus overseas? And in terms of your quarterly profit improvement, what is the key driver behind this? And what is your strategy for 2026?

[Interpreted] So this is Allen, CEO. Responding to your first question. Yes, discussions are ongoing around stablecoin, around national assembly, the regulator and the industry. And we consider this provides an opportunity in the process of digital financial infrastructure transition. So we're working together within the group to develop plans and make those plans more concrete while closely following the policy direction. And now that, fortunately, the uncertainties around the Kakao Group have somewhat been mitigated, although we're still a bit cautious, I can say with some comfort that we will tap into these opportunities more proactively from now on.

Now we've been preparing various practical use cases headed by Kakao Group's joint task force team. We're designing it so that the solution can be used across group -- across the group for different applications and not just for Kakao Pay, spanning platform and content business as well, which are close to the daily lives of people. And taking a step further, we're also closely discussing with global players to create use cases for both domestic and for global applications.

Now on the tech and compliance side, we are running checks and implementations. We have gained prior experience in implementing the service and digital wallet-based infrastructure gained from early participation in the CBDC simulation project by Bank of Korea. And just like U.S., Singapore, Japan, we're referencing models that have KYC, know your customer and AML and travel rules embedded to develop on that best fits the Korean requirement.

Setting aside whether the role of cryptocurrency exchange is helpful or otherwise, it's difficult to say things definitively because of too much uncertainties. But for create stablecoin business, there will be many options to choose from, depending on the scenario of how the discipline of separation of financial and virtual assets evolve and depending on the role of the cryptocurrency exchange going forward. So we will respond and design our approach accordingly.

[Interpreted] This is Eddie. Responding to your second question on our securities business. First, stock trading volume moved from KRW 23.5 trillion in the second quarter to KRW 34.1 trillion in Q3, going up 45% Q-on-Q and 173% year-over-year, sustaining high quarterly uptrend. Domestic volume increased 41% Q-on-Q and 151% Y-o-Y, while overseas volume growth was higher at 49% Q-on-Q and 192% Y-o-Y. Overseas versus domestic trading split was 57% to 43%. And number of stock trading moved from 91 million in Q2 to 141 million in Q3, going up 55% Q-o-Q and 337% Y-o-Y. Higher growth was seen in overseas trading and the split between overseas versus domestic was 86% versus 14% on a number of trade basis.

Pay Securities seems to have now entered its secular growth cycle. So not only in terms of volume and transaction count, overall business metrics from number of customers, accounts, deposit assets and margin loans are all up trending, and we expect such trend to continue. MTS user count surpassed 1 million. And on that basis, we are now top 5 securities firm. And in terms of new account openings of 80,000 to 100,000 and new customer count, we ranked #1 in Q3, displaying fastest growth rate. Operating profit in Q3 went up 3x Q-on-Q to KRW 15.6 billion and driven by high-margin businesses of overseas stock trade and IB revenue, Q3 OP margin recorded 27%, which is up 19 percentage points Q-o-Q.

In 2026, we will work under 3 strategies, which we'll be able to share with you in more detail in our next call. But the first driver is new account openings; second, uptrending active customer conversion; and third, unparalleled feature and convenience built up based upon customers' VOC. We will scale up customer funnel through distinctive community feature, which is highly correlated with conversion and through AI-powered investment insight. We expect our formula for success in active customer conversion will run seamlessly next year as well, thereby expanding the active customer pool through such high engagement strategy.

[Interpreted] Due to the time constraint, we will take the final question.

[Interpreted] The last question will be presented by Dong Woo Kim from Kyobo Securities.

[Interpreted] I have 2 questions, I would like to ask. Recently, global AI service providers, including OpenAI, have opened up their payment-related protocols, agent to agent and really building upon the alliance. I would like to understand, since you're also making preparations to couple with the KakaoTalk agent, I would like to know how you're going to interact with the off-platform ecosystem? What are the preparations that's currently taking place?

Second question has to do with your insurance business. We see that your DB sales has been uptrending and your insurance sales was also quite good. Do you expect to be able to achieve that growth rate next year as well? And what are some of the additional strategies that you are envisioning for your insurance business next year?

[Interpreted] Hello. This is Jeff. Responding to your first question on AI. I see that ACP, Agentic Commerce Protocol announced by OpenAI is really a signal that agentic commerce market is now starting to take off. And this really is an opportunity for us and not a threat. Our strategy is quite clear. As OpenAI's ACP cannot yet come to Korea, we want to present Korean-style ACP model, one that is optimal for Kakao AI agent ecosystem rather than simply waiting. There are 3 rationales to support this approach.

First, we already have internalized core technology stack to implement ACP, and we are making preparations for its application in the AI agent environment. Core technology for ACP is security protocol using one-time secure payment token. We can use payment tokenization, FIDO-based simple authentication and AI-powered [ SVS, ] which Kakao Pay has been operating stably over many years. In a nutshell, we are already equipped with best technology and operational capacity that can immediately implement ACP-grade safe and scalable payment protocol, which is essential for AI agent.

And second is our unparalleled positioning in the Kakao ecosystem. Success of AI agent payment will be dictated by who can offer the most seamless and perfect payment experience in the agent chat on KakaoTalk. Based on stable and deep coupling with Kakao's AI agent, Kakao Pay is the only partner that can deliver reliable and easy-to-use payment experience to 40 million KakaoTalk users. No other global player can take that edge away from us.

Based on such unchallenged market positioning and confidence in our technology, we are working on developing an official proposal for tech and business collaboration with Kakao and affiliate partners. Once the discussion ends, we will go right into prototype development and testing. It's hard to specify the launching time line yet, but we are moving ahead with speed under the goal of bringing tangible results by next year. In short, if OpenAI is presenting global standards, Kakao Pay would make and lead standards for Korea's AI payment market.

[Interpreted] This is Eddie again. Responding to your question on insurance. We sell insurance products through our subsidiary, Pay Insurance, while winning prospects from Kakao Pay's insurance platform and triggering needs so as to lead to the signing of insurance contracts. KakaoPay Insurance is targeting higher growth next year and will support that with new and differentiated product releases. But existing product lineup is also as important. So we will enhance product competitiveness, reposition products and services if need arises, drive up awareness for paying insurance products and grow the share of regular premium products.

Now for instance, as initiatives, we can develop products and services to target age groups where penetration is still low and seasonal coverage for products could be offered that show strong seasonality or we could also do cross-selling and expand on the embedded channel. And in terms of insurance platform business, we could expand on the pool of prospective using MyData insight, upgrade targeted marketing based on user status and segmentation, which will drive more than 200% top line growth versus 2025. Next year, we're expecting MyData user growth and through activities focused on lead creation, we expect to be able to sustain the growth trajectory.

In addition, we are seeking additional revenue stream from acquisition commissions from direct counseling to overcome the constraints of database sales, which create friction in delivering consistent customer experience and complaints arising from margin-driven sales practice rather than placing customers at the center. So last September, we started sub-agency-based channel for selling and providing consultations on insurance products going through our subsidiary, KP Insurance Service. We're leveraging our know-how and capabilities of the agent organization and offering comparisons powered by data and AI-driven system as well as providing analysis on coverage and supporting counseling to drive up conversion above market average so that we may attain the upside.

[Interpreted] Thank you. This brings us to the end of the earnings presentation of Kakao Pay for the third quarter of 2025. Thank you very much for your time. And if you still have unanswered questions, feel free to contact us at the IR team. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]