KaKao

- Q1 revenue down 6% YoY, while core business “Talk Biz” revenue up 7% YoY

- Focus on enhancing KakaoTalk content and social features to boost user engagement

- New AI services including Kanana, AI Mate Shopping & Local, generative search in KakaoTalk, and co-developed products with OpenAI to launch sequentially

 

[May 8, 2025] Kakao Corporation (CEO Shina Chung) announced on May 8 that it recorded consolidated revenue of ₩1,863.7 billion in the first quarter of 2025 (-6% YoY) according to its financial reporting according to the Korean International Financial Reporting Standards (K-IFRS).

 

By business segment, platform segment revenue in the first quarter rose to ₩993.0 billion (+4% YoY).

 

Within this, Talk Biz revenue rose to ₩553.3 billion (+7% YoY) and Talk Biz advertising revenue to ₩286.1 billion (+3% YoY). Notably, business messaging revenue grew 11%. Kakao’s new “Brand Message” product—which sends messages to users with marketing consent—is set to launch in May, and is expected to drive faster growth from the second quarter.

 

Talk Biz commerce revenue, including KakaoTalk Gift and Talk Deal, reached ₩267.2 billion (+12% YoY), boosted by direct purchases of popular Lunar New Year items and increased contribution from the highly profitable Kakao Shopping Live. Total commerce gross merchandise volume for the first quarter was ₩2.6 trillion (+3% YoY), and the gross merchandise volume for KakaoTalk Gift and Talk Deal increased by 4% and 5%, respectively.

 

Other platform revenue, including Kakao Mobility and Kakao Pay, grew to ₩365.6 billion (+3% YoY). Kakao Mobility’s parking and quick delivery services continued to grow, while Kakao Pay achieved strong double-digit growth across all business areas.

 

In the content segment, revenue in the first quarter of 2025 recorded ₩870.7 billion (-16% YoY). Due to a high base effect from concentrated artist activities last year and in the previous quarter, music revenue dropped to ₩437.9 billion (-6% YoY). Story’s revenue fell to ₩212.6 billion (-6% YoY), and media’s revenue fell to ₩75.1 billion (-21% YoY), impacted by a sluggish ad market and reduced content investment.

 

First quarter operating expenses were ₩1,758.3 billion (-6% YoY). As a result, operating profit stood at ₩105.4 billion (-12% YoY) with an operating margin of 5.7%.

 

Kakao plans to transform KakaoTalk into a “super app” by strengthening its content services and social features to increase user time spent on the platform. As part of this effort, a new “Discover” tab will be introduced in the third tab of KakaoTalk in the second half of this year.

 

In AI, the company’s other core pillar, Kakao is rolling out a series of new services, starting with Kanana’s CBT, followed by AI Mate Shopping, AI Mate Local, generative AI search in KakaoTalk, and jointly developed products with OpenAI. These new AI offerings are expected to either enhance synergy with Kakao’s existing businesses, or create new use cases within the Kakao platform, increasing user engagement.

 

Kakao CEO Shina Chung stated, “As we unveil the outcomes of Kakao’s various experiments and initiatives throughout the year, we aim to establish AI as a new growth engine for the company.” (E.O.D.)