Naver's Q4 net income up 48.8% on robust sales

Naver, Korea's leading internet portal operator, said Friday its fourth-quarter net profit jumped nearly 50 percent from a year earlier thanks to robust sales from its search and e-commerce business.

Net profit for the three months ending in December totaled 444.1 billion won ($306.6 million), up 48.8 percent from 298.4 billion won a year earlier, the company said in a regulatory filing.

Its operating profit for the period rose 33.7 percent on-year to 542 billion won. Sales increased 13.7 percent to 2.88 trillion won.

The earnings exceeded market expectations. The average estimate of net profit by analysts stood at 415.6 billion won, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

Naver attributed the strong performance to improved sales of its businesses.

Its mainstay search platform unit saw its sales grow 14.7 percent on-year to 1.06 trillion won amid efforts to strengthen the competitiveness of its platform.

Sales from the commerce unit rose 17.4 percent on-year to 775.1 billion won, and revenue from the financial technology unit improved 12.6 percent to 400.9 billion won.

The content unit saw its revenue inch up 0.2 percent to 467.3 billion won and sales from the cloud business jump 41.1 percent to 177.6 billion won.

For all of 2024, Naver's net income soared 89 percent on-year to 1.86 trillion won, and operating profit surged 32.9 percent to 1.97 trillion won.

Annual sales increased 11 percent to 10.73 trillion won in 2024.

It marks the first time in South Korea for a platform company to post more than 10 trillion won in annual sales.

"This year is an important time for us to fully implement our on-service artificial intelligence (AI) strategy across Naver's services," Naver CEO Choi Soo-yeon said in a statement. "We will continue to advance our platforms based on AI technology to create new value and business opportunities, and ultimately strengthen our differentiated competitiveness."

Meanwhile, Naver announced plans to hold a general shareholders meeting on March 26 to discuss a proposal to appoint its founder, Lee Hae-jin, as chairman of the board.

Once approved, Lee will return to the post seven years after he resigned in 2017 to focus on the company's overseas expansion.

He is expected to lead the company's AI technology development, as Naver plans to roll out AI services based on its generative AI model, HyperClova X, introduced in 2023.

His comeback signals Naver's commitment to regaining momentum in the intensifying competition for AI leadership, recently exacerbated by the emergence of AI models by China's DeepSeek.

Naver said it will speed up the development of AI strategies to keep up with the rapidly changing industrial landscape and seek collaborations with large language models (LLMs) from global big tech companies.

"We believe that (the emergence of DeepSeek) has accelerated the pace of strategic change," CEO Choi said during an earnings call. "We are open to collaborating with LLMs from global big tech companies, as well as various other LLMs, and are in talks with them." (Yonhap)