In a remarkable recovery from a tumultuous year, South Korean internet behemoth Kakao reported a doubling of its operating profit in the fourth quarter of 2023. The company announced an impressive 108.6% year-over-year profit increase to 189 billion won ($142 million) for the quarter ending December, with revenues up by 23% reaching 2.2 trillion won. This performance exceeded market expectations, with shares jumping 9.3% in morning trading following the announcement.
The financial uplift comes as Kakao embarks on a significant leadership transformation initiated by its founder, Kim Beom-su, aiming to navigate the company through the aftermath of a corruption scandal. Despite the surge in quarterly profits, Kakao faced a net loss of 1.7 trillion won for the quarter due to setbacks in its online comic and music streaming ventures.
For the entire year of 2023, Kakao saw a 10.9% dip in operating profit to 502 billion won, even as annual revenue climbed by 14.2% to 8.1 trillion won. The earnings report arrives amidst ongoing investigations into allegations of stock price manipulation related to its acquisition of K-pop agency SM Entertainment.
In a strategic move to strengthen its leadership, Kakao appointed Chung Shin-Ah as its new CEO, a veteran with a rich background in consulting and tech, signaling a fresh direction for the company. Additionally, Kakao is advancing its technological capabilities, developing an artificial intelligence model, KoGPT 2.0, aimed at enhancing its diverse service offerings, from messaging to mobility and gaming.
