South Korea's national messaging app Kakao's first quarter profit grew 166%

Kakao, which launched South Korea's national communication software Kakao Talk, released its first quarter financial report on the 9th, with revenue of 706.3 billion won and operating profit of 27.7 billion won. Compared with the same period last year, revenue increased by 27% and operating profit increased by a significant 166%. Korean media pointed out that this was thanks to Kakao's virtual character "Ryan".

South Korean media "JoongAng Ilbo" pointed out that since Iwilab changed its name to "Kakao" in 2010, it has gradually gotten rid of the shadow of poor profitability. In fact, many South Korean media believe that Kakao's profitability is due to "Ryan". Ryan's friendly setting has caused a new craze not only in the online world, but also in the real world. The report also mentioned that Kakao is now officially starting to pursue profitability and reverse revenue.

According to the Korean media MoneyS, Kakao has reorganized its revenue categories into platform and content departments in order to strengthen its effective business strategy. The platform department includes communication software services (communication software, emoticons), portal business, and emerging businesses (including online financial flows), etc. The content department includes games, music, paid comics, etc.

The platform division's revenue grew 35% year-on-year to 313.1 billion won. In particular, services in communication software such as emoticons, online gifts, and corporate accounts grew significantly, up 43% year-on-year to 126.9 billion won. The portal business segment grew 4% year-on-year to 126.4 billion won. Emerging businesses benefited from diversified operations, growing 172% year-on-year to 59.8 billion won.

The content division's revenue grew 22% year-on-year to 393.2 billion won. Due to the increase in paid music service users, revenue increased 9% year-on-year to 137.2 billion won. Meanwhile, other paid content services also grew significantly, increasing 71% year-on-year to 74.6 billion won.

Kakao aggressively recruited talent in the first quarter and increased content fees. South Korean media MoneyS pointed out that despite the sharp increase in operating expenses, the first quarter's operating profit still grew by 166% compared with the same period last year, reaching 27.7 billion won.

Kakao said: "In order to make Kakao Talk's business platform generate meaningful profits, we will plan to improve the completion of the business platform in the future. On the other hand, we will focus on consolidating the growth of games, content and IP Business (intellectual property business) in the content department and expand internationally."