Naver's operating profit for the second quarter saw a slight decline due to increased investments in artificial intelligence (AI) infrastructure. The company anticipates revenue from its AI factory project, developed in collaboration with Nvidia, to begin in the first half of next year.
Naver reported a consolidated revenue of 3.39 trillion won and an operating profit of 520.3 billion won for the second quarter, as announced on August 7. While revenue increased by 12.3% compared to the same period last year, operating profit fell by 0.2%.
By business segment, revenue from the Naver platform rose to 1.90 trillion won, marking a 12.3% increase year-on-year. The financial platform generated 470.7 billion won, up 16.0%, while the global challenge segment saw revenue of 1.01 trillion won, a 24.4% increase.
Within the Naver platform, advertising revenue grew by 7.5% year-on-year, driven by AI-based optimization and advanced targeting. The company noted that AI contributed to over 60% of the growth in advertising revenue.
Notably, the 'AI Briefing Ads,' officially launched at the end of July, demonstrated a click conversion rate more than 30% higher than traditional search ads, with purchase conversion rates exceeding three times, showcasing the potential of generative AI services as a new revenue source.
Service revenue surged by 31.3% year-on-year, fueled by growth in the commerce ecosystem, including Naver Plus Store and enhanced membership and delivery services.
The financial platform's revenue reached 470.7 billion won, reflecting a 16.0% increase year-on-year and a 2.4% increase from the previous quarter. Naver Pay's transaction volume for the second quarter totaled 25.2 trillion won, a 21.0% increase compared to the same period last year, supported by the growth of smart stores and expansion into external ecosystems.
Naver plans to rapidly expand its offline integrated terminal, 'N Pay Connect,' to enter the AI platform market for businesses, aiming to uncover new monetization opportunities.
The global challenge segment was driven by growth in the C2C business, with revenue reaching 1.01 trillion won, a 24.4% increase year-on-year and a 7.9% increase from the previous quarter. C2C revenue surged by 74.9% year-on-year and 13.3% quarter-on-quarter, bolstered by increased transaction volumes on platforms like Wallapop, Poshmark, and Soda. Content revenue rose by 0.5% year-on-year and 5.5% quarter-on-quarter, while enterprise revenue grew by 21.3% year-on-year and 2.2% quarter-on-quarter, driven by B2B business growth related to AI and digital twins.
* This article has been translated by AI.
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