Kakao (035720) investor relations material

Executive summary

• Q1 2026 consolidated revenue was KRW 1,942.1 billion, up 11% YoY, with platform contributing 61% and content 39% of total revenue.

• Operating profit reached KRW 211 billion, up 66% YoY, with margin improving to 10.9%.

• Net profit surged 13% YoY to KRW 227 billion, rebounding from a loss in the previous quarter.

• Growth was driven by the platform business, especially TalkBiz, and qualitative improvements in core competitiveness.

• AI initiatives advanced with the rollout of Kanana in KakaoTalk, Kanana Search, and ChatGPT for Kakao, aiming to onboard all 50 million users.

Financial highlights

• Platform segment revenue was KRW 1,182.7 billion, up 16% YoY; TalkBiz revenue was KRW 608.6 billion, up 9% YoY.

• TalkBiz advertising revenue grew 16% YoY to KRW 338 billion; business message revenue rose 27% YoY.

• Commerce GMV reached KRW 2.9 trillion, up 10% YoY; commerce revenue was KRW 270 billion, up 1% YoY.

• Content revenue was KRW 759 billion, up 5% YoY; music revenue grew 11% YoY to KRW 485 billion.

• Operating expenses were KRW 1,731 billion, up 7% YoY; CapEx was reduced significantly YoY and QoQ.

Outlook and guidance

• Platform growth expected to remain solid in Q2, led by TalkBiz ads, commerce, and Kakao Pay.

• Temporary increase in marketing spend will limit profit improvement in Q2, but annual guidance remains achievable.

• Anticipated recovery in top-line revenue and profit in the second half as marketing spend normalizes.

• Double-digit growth projected for TalkBiz ads in Q2, with structural enhancements supporting sustained growth.

• Continued focus on operational efficiency and ongoing investment in AI talent and partnerships.