Seoul: South Korean tech giant Kakao Corp. reported a significant increase in its net profit for the third quarter, driven by strong growth in its core platform businesses. The company's net income reached 192.9 billion won (US$133.2 million) for the period ending in September, marking a 145.6 percent rise from the 78.5 billion won recorded a year earlier, as indicated in a regulatory filing.
According to Yonhap News Agency, Kakao's earnings surpassed market expectations, with analysts predicting an average net profit of 117.5 billion won, based on a survey conducted by Yonhap Infomax, the financial data branch of Yonhap News Agency. The company's operating profit also saw a considerable increase of 59.4 percent year-on-year, amounting to 208 billion won for the quarter, compared to 130.5 billion won the previous year. Sales rose by 8.6 percent, reaching 2.08 trillion won, achieving new quarterly record highs for both operating profit and sales.
Kakao attributed this impressive rise in net profit to the robust sales from its core platform and content businesses, as well as increased equity gains from its subsidiaries. Sales from platform businesses, including the widely-used mobile messenger KakaoTalk, grew by 12 percent year-on-year to 1.06 trillion won, driven by a rise in advertisement and transaction-based revenue. Meanwhile, the content division's sales increased by 5 percent to 1.03 trillion won, fueled by strong demand for music and media content.
Looking forward, Kakao plans to enhance its services by integrating artificial intelligence (AI) in the coming quarters, following the recent introduction of ChatGPT for its KakaoTalk service. In response to user complaints concerning the user interface (UI) redesign of KakaoTalk, Kakao stated that it will revise the app's front tab to align with user feedback. In September, the company implemented significant UI changes for KakaoTalk, marking the biggest overhaul in 15 years, to transition the messenger service into a broader social media platform. However, this comprehensive update has sparked backlash, with users criticizing the changes for its Instagram-like feed and the increase in advertisements.