IT company Kakao recorded its all-time high in quarterly sales and operating profits. Its commerce, fintech, content, and mobility business units all grew and drove the company’s outstanding performance.
Kakao announced on Thursday that its sales for the first quarter of this year increased by 45 percent year-on-year to 1,258 billion won. The company’s operating profits rose by 79 percent to 157.5 billion won, and current net income increased by 200 percent to 239.9 billion won during the same period. However, its operating expenses also rose 41 percent compared to the last year due to increased labor costs from new hires and marketing expenses.
By business unit, the sales of the platform sector encompassing KakaoTalk messenger, online portal service Daum, mobility, commerce, and finance increased 51 percent year on year to 668.8 billion won. In particular, the talk biz sales, which are composed of KakaoTalk advertisements and gifts, rose by 61 percent from the sale period last year to 361.5 billion won. The new business also observed an 89 percent rise in sales to 189.8 billion won thanks to the increased sales of Kakao Mobility’s taxi service and the expanded transaction amount and financial services of KaKaoPay.
The sales of the content business unit, including game, music, and webtoons, grew by 38 percent to 589.2 billion won. Transaction amount in paid content and game saw an overall increase.
While the company reached its all-time high performance, its growth has slowed down compared to the fourth quarter last year. Since then, its sales has only grown by two percent and operating profits by five percent. Some say that the rapid growth trend of Kakao driven by the soaring demand for non-face-to-face services due to COVID-19 may have slowed down.
Kakao will focus on global business expansion to further accelerate its growth. In addition, the company announced that it will launch a subscription service connecting creators and subscribers via KakaoTalk channels.
“We will publish an environmental, social, and corporate governance (ESG) report containing our efforts and future plans for sustainable business,” said a member of Kakao. “The listing of selected subsidiaries, such as Kakao M and Kakao Japan, is under review.”
Seong-Mo Kim email@example.com