Kakao’s first quarter profit increases by more than 80% from last year

Photo from Kakao.

Kakao announced early this year in January that it recorded KRW 443.8 billion in revenue. Consolidated revenues from the first quarter increased 83 percent as compared to that of last year.

The company earned KRW 38.3 billion in operating profit for the first quarter of 2017 based on K-IFRS (International Financial Reporting Standards). Net income totaled KRW 54.5 billion.

In terms of sales, it marked KRW 228.8 billion, which is a 142 percent increase from the same quarter last year. In particular, music content sales surged to KRW 110.3 billion thanks to the increase in revenue from LOEN Entertainment, which started to be reflected in Kakao’s financials from Q2 last year.

Game content sales declined 14 percent as compared to the last quarter due to lack of new game launches and intensive competition in the domestic mobile game market, but still marked KRW 80.3 billion which is 14 percent higher than the same period last year thanks to the increased proportion of publishing game sales and growth in PC game sales.

Other content sales, which reflected steady growth of the Kakao page and KakaoTalk emoji business, marked KRW 31.2 billion which is a 46 percent increase from the last quarter and 74 percent increase from last year.

Advertising platform sales was KRW 133.3 billion which is 6 percent lower compared to the last quarter due to weak seasonality, but is still 3 percent higher than last. Mobile advertising accounted for 53 percent of the total.

Other sales are KRW 88.7 billion. Despite a 2 percent decline from last quarter due to weak seasonality, the result was a 312 percent year-on-year increase, driven by the growth in KakaoTalk gift and Kakao Friends flagship store.

The company’s first quarter operating expenses totaled KRW 405.5 billion which included advertising costs. Content related marketing activities included Kakao page and major mobile games, and the acquisition of LOEN Entertainment.

Kakao is committed to evolving KakaoTalk and making its leap into a technology company based on artificial intelligence. KakaoTalk’s new features of ordering franchise food, and grocery shopping are getting positive feedback from the market. By the end of the year, you will be able to purchase, book, and reserve through KakaoTalk Plus.

Research into artificial intelligence technology is underway. The Kakao Brain, which was founded in February, has begun research and development to create an artificial intelligence ecosystem. In the AI ​​division of Kakao, the company is preparing to release its own artificial intelligence platform and its own Kakao smart device.

It is also expected that Kakao’s other service platforms will go through a great deal of growth. In the games division, mobile games Yin Yang and Kakao Friends IP will be released during the second half of the year. Yin Yang has now 200 million downloads and is at the top of the ranks in terms of revenue among games in China, Taiwan, and Hong Kong. The Kakao Page, which recorded KRW 30.5 billion in sales in the first quarter, will put in effort to add high quality video content and introducing cash rewards in the first half of the year for higher profitability.

This article, entitled “Kakao’s first quarter profit increases by more than 80% from last year”, was written in Korean by Platum, edited by AllTechAsia editors.

(Top photo from 58pic.com)

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