Kakao Pay (377300) Q3 2024 earnings summary

Executive summary

• Q3 2024 TPV rose 17% year-over-year to KRW 42.2 trillion, with revenue up 17% to KRW 186.2 billion and a net loss of KRW 27.5 billion due to a KRW 31.2 billion bad debt expense from TMON and WeMakePrice defaults.

• MAU reached 23.96 million, with a 10% year-over-year increase in transactions per user for core services, and a 15% increase in merchant base to 1.1 million.

• EBITDA was KRW 1.7 billion, marking two consecutive quarters of positive EBITDA.

• Operating loss was KRW 7.5 billion, with operating expenses at KRW 193.7 billion, up 15% year-over-year.

• Net loss was driven by a one-off cost of KRW 31.2 billion related to TMON-WeMakePrice.

Financial highlights

• Revenue TPV increased 18% year-over-year to KRW 12.4 trillion, accounting for 30% of total TPV.

• Q3 2024 revenue was KRW 186.2 billion, up 17.2% year-over-year.

• Standalone revenue was KRW 156.1 billion, up 9.9% year-over-year; standalone operating profit was KRW 9.4 billion.

• Marketing expenses were 8.6% of revenue as of Q3, kept under 10%.

• Financial services contributed 30% of total revenue for two consecutive quarters.

Outlook and guidance

• Q4 expected to see quarter-over-quarter growth, driven by seasonal consumer sentiment and new product launches in insurance.

• Double-digit growth in payment business projected for 2025, though online payment growth rate may slow slightly.

• Non-payment financial services expected to reach 50% of revenue mix in the mid-to-long term.

• Forecasting 5 million offline payment users by November, ahead of schedule.

• Online payment transactions expected to reach 400 million by Q2 2025.