KaKao

Daum Kakao Reports First Quarter 2015 Results

Revenue Totaled KRW 234.4 Billion, with 55% Derived from Mobile  

[Seoul, South Korea - May 14, 2015] Daum Kakao Corp., a leading mobile lifestyle platform provider in Korea, today reported financial results based on consolidated K-IFRS for the quarter ended March 31, 2015. Daum Kakao’s combined revenue for the quarter (consolidated) was KRW 234.4 billion, with mobile revenue accounting for 55% of total revenue. The results confirm Daum Kakao’s status as an emerging mobile lifestyle platform company.

* Daum Kakao’s combined revenue for the quarter (consolidated) increased 19% YoY to KRW 234.4 billion, backed by robust growth in multiple areas including ads, games and the commerce.

* Revenue from advertising for the quarter was KRW 141.8 billion, an increase of 10% YoY, and revenue from games was KRW 70 billion, an increase of 18% YoY. The commerce sector grew 167% to KRW 15.5 billion. Revenue from Others increased 99% YoY to KRW 7.1 billion.

* 34% of the KRW 141.8 billion ad platform revenue came from mobile, including ads from the Kakao platform, mobile search ads, Ad@m and Shopping How Mobile.

* KakaoTalk’s commerce platform Gift Shop showed continued revenue growth, driven by substantial increase in product offerings as well as seasonal factors such as Lunar New Year and Valentine’s Day. The nationwide expansion of Kakao Friends brand stores also contributed to the revenue growth.

* Increase in Kakao Game ARPU (average revenue per user), resulting from the release of high quality action and RPG games, and the steady growth of sales from KakaoTalk Item Store, KakaoMusic, and KakaoPage also factored into the overall YoY growth.

* Combined operating profit for the quarter (consolidated) was KRW 40.4 billion with a net profit of KRW 30.8 billion.

Daum Kakao will continue to focus on core business sectors to ensure future growth. Its recent achievement in the O2O area, starting with the launch of KakaoTaxi, has shown to be exceptionally successful. The taxi service is showing rapid growth only a month after launch and has received positive response from both drivers and users. It has already attracted more than 70,000 drivers, surpassed 1 million passenger app downloads, and has received more than 1 million taxi requests. KakaoTaxi plans to strengthen its position as Korea’s premier O2O life platform service by quickly implementing user feedback to further improve service quality while also actively pursuing various marketing opportunities.

KakaoPay, already with 4 million users, plans to widen its availability to services such as KakaoMusic, search ad platform, and Sell It--a service recently acquired venture by K Venture Group--in addition to KakaoTalk Gift Shop and KakaoPage where it is already in place, while expanding key partnerships.

In the game sector, Daum Kakao will continue to work with local game developers to maximize business opportunities, exemplified by the scheduled publishing of SuperStar SMTOWN in partnership with Chukong in China.

In addition, Daum Kakao will be launching a new mobile search service within the KakaoTalk named #Search (Sharp Search), that allows users to search for content and information in context of their conversation. Other O2O services that are aimed to connect online and offline businesses are currently in development for the second half of 2015.

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[Appendix 1] Daum Kakao Combined Earnings for 1Q 2015 (in millions, KRW)

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