South Korea’s Naver Corp has announced record-breaking financial results for the October-December 2023 period, showcasing substantial growth in its e-commerce and content businesses. The company’s operating profit soared by 20.5% to a quarterly record of 405.5 billion won ($306.9 million), with sales climbing 11.7% to an unprecedented 2.5 trillion won. Additionally, net profit more than doubled to 314.1 billion won during the same timeframe.
For the entire year of 2023, Naver achieved an operating profit of 1.5 trillion won, up 14.1%, and revenue reached a record 9.7 trillion won, marking a 17.6% increase. Naver CEO Choi Soo-yeon attributed this success to healthy sales growth amidst challenging conditions and a focus on improving profitability through careful expenditure.
Following the announcement, Naver’s share price jumped 9.4% to 221,500 won, achieving its highest close since January 16 and significantly outperforming the Kospi’s 2.9% gain.
The company’s e-commerce unit reported a 35.7% increase in sales to 660.5 billion won in the fourth quarter, fueled by the acquisition of Poshmark Inc., a US-based social e-commerce marketplace, and increased commissions from Kream Corp., Naver’s resale platform. Poshmark’s earnings before interest, taxes, depreciation, and amortization (EBITDA) turned positive, reflecting higher sales, transactions, and market share.
Despite the growing presence of Chinese e-commerce platforms in South Korea, CEO Choi downplayed their impact on Naver shopping, highlighting strategic partnerships and advertising collaborations with these platforms.
Naver’s content business, boosted by webtoons and intellectual property, reported a 6.6% increase in quarterly sales to 466.3 billion won. The search platform, Naver’s largest business segment, saw a 1.3% rise in sales to 928.3 billion won, driven by growth in paid search advertising.
The company has also made strides in fintech, with an 11.3% sales increase to 356 billion won, thanks to Naver Pay. Its cloud business revenue grew by 13.3% to 125.9 billion won.
Looking ahead, Naver plans to leverage its generative AI technology to enhance business-to-business sectors, particularly through personalized ads and product recommendations for e-commerce partners. The introduction of CLOVA for AD, an advertising business based on its HyperCLOVA X large language model, marks a significant step in this direction, with global brands like Nike Inc. already launching campaigns on the platform.
