KaKao

[Seoul, South Korea – February 5, 2016] Kakao Corp. (KOSDAQ 035720, CEO Ji-Hoon Rim) today reported fourth quarter and fiscal year 2015 financial results under Korean-IFRS. Kakao’s consolidated revenue for FY 2015 was KRW 932.2 billion, with KRW 88.4 billion in operating income and KRW 77.2 billion in net income. Continued effort to drive growth in mobile helped bring a 6% increase in mobile revenue, resulting in mobile business making up 55% of overall revenue.

Fourth quarter results showed KRW 241.7 billion in revenue, a 5.3% increase QoQ, with revenue from mobile business making up 57% of total quarter revenue. Operating income for the same period was KRW 20.4 billion, a 26% increase QoQ, and net income was KRW 10.2 billion

Kakao showed uniform growth across all sectors in the fourth quarter of 2015.

·       Revenue from Ads increased 3.8% QoQ to KRW 148.4 billion, reflecting stable growth in the mobile sector. Mobile ads recorded a new high, with 38% of total ads revenue coming from mobile.

·       Revenue from Games increased 11% QoQ to KRW 57 billion, thanks to strong performance from new for Kakao games including Friends Pop, 100 Shot 100 Hit, and The King of Fighters ’98 UM Online.

·       Commerce sector also saw significant growth, benefiting from Kakao Talk Gift Store’s year-end high season, alongside increase in popularity and sales of Kakao Friends merchandise. Revenue from Commerce was KRW 22.7 billion, a 48% increase QoQ.

·       Due to the elimination of one-time revenue following the change in revenue recognition method and period for Kakao Page and Kakao Music, respectively, revenue from Others decreased 31.8% QoQ to KRW 13.6 billion, but maintained a 122.4% increase YoY.

Kakao’s continued investment and added development in various mobile sectors as part of its business expansion efforts lead to increased expense in labor costs, advertising, and content fees, resulting in KRW 221.3 billion in operation cost.

In 2016, Kakao will continue to invest in core business sectors. Kakao will secure new growth engines by expanding business in ads, games, O2O, commerce, fintech and content sectors under the concept of ‘user focused on-demand’ approach. The game platform, in particular, is preparing significant changes and projects that will create new revenue sources. A new advertisement model will be available within the game platform to supplement the existing in-app purchase models. Kakao Game will also enter the publishing business to proactively attract competitive games and will launch new Kakao Friends IP games with the goal of creating more success stories like Friends Pop. In the O2O business sector, Kakao will expand the availability of its premium taxi service both in terms of location and number of vehicles, and is expected to launch Kakao Driver, a designated driver service, within the first half of the year.

Overall, Kakao will embrace innovative attempts and challenges to strengthen its position as a mobile lifestyle platform company.