Kakao, one of South Korea’s leading IT companies, experienced a significant surge in its operating profit during the final quarter of 2023, with over a 100% increase compared to the same timeframe in the previous year, surpassing market expectations. This notable growth was primarily fueled by a rise in advertising revenue, a result of enhancements made to the KakaoTalk service.
Kakao reported consolidated revenue of 2.17 trillion won ($1.67 billion) for the fourth quarter of 2023 on Feb. 15. This figure represents a 1% increase from the preceding quarter and a 23% uplift from the corresponding period in 2022.
The company’s operating income for Q4 2023 witnessed a 42% rise from the third quarter and a substantial 109% jump from the same quarter in 2022, reaching approximately $145.54 million. Consequently, the operating profit margin improved to 8.7%, continuing the firm’s upward growth trajectory.
Market analysts had initially projected Kakao’s revenue for the last quarter of 2023 to be around $1.72 billion, with an operating income expectation of about $116.08 million.
For the year 2023, Kakao achieved a 14% increase in annual revenue, totaling up to approximately $6.24 billion, marking the first instance the company’s yearly revenue crossed the $6 billion threshold. However, the annual operating income saw an 11% decline from 2022, amounting to $386.08 million, with the operating profit margin recorded at 6.2%.
Kakao’s yearly revenue for 2023 stood at $2.02 billion, showing a 7% increase from the prior year. The annual operating income also saw a 5% increase from the previous year, reaching $436.46 million, with an operating profit margin of 21.6%.
In the last quarter of 2023, revenue from Kakao’s platform sector amounted to $862.85 million, indicating a 10% increase from the third quarter and a 17% rise from the same quarter in 2022.
The TalkBiz segment, including advertising services such as KakaoTalk Channel and emoticons, reported a revenue of $447.31 million in the final quarter, marking a 14% increase from both the previous quarter and the same period the previous year.
A Kakao official highlighted that the enhanced profitability in the advertising and commerce sectors, driven by the improvements to KakaoTalk, has positioned TalkBiz revenue as a pivotal contributor to Kakao’s overall growth. The advertising revenue within the TalkBiz segment for the last quarter of 2023, featuring BizBoard and KakaoTalk channels, saw a 9% increase from the third quarter and an 11% rise from the same quarter in 2022.
This growth is attributed to the continuous expansion of services like BizBoard, message ads, emoticons, among others. The transaction-based TalkBiz revenue, including services such as Gift and TalkStore, experienced a 20% growth from the previous quarter and a 16% increase from the corresponding quarter in 2022, bolstered by the expansion of the premium gift lineup and enhanced personalized marketing efforts.
