Kakao Corp (XKRX:035720) Q1 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...

GuruFocus News

Thu, May 8, 2025, 12:39 AM 3 min read

Release Date: May 08, 2025

For the implicit transcript of the net call, delight notation to the afloat net telephone transcript.

• Kakao Corp (XKRX:035720) is actively evolving its messaging app into a ace app by enhancing contented offerings and societal features, aiming to summation idiosyncratic engagement.

• The instauration of the Discovery conception with short-form videos is expected to boost idiosyncratic engagement and clip spent connected the platform.

• Kakao Corp plans to rotation retired caller advertizing products that align with idiosyncratic behavior, perchance creating caller gross streams.

• The institution is launching AI initiatives, specified arsenic Kanana, to heighten personalization and idiosyncratic experience, which could pb to caller concern models.

• Kakao Corp's commerce gross grew by 12% twelvemonth implicit year, driven by strategical merchandise offerings and accrued nett contributions from Kakao Shopping Live.

• Kakao Corp's consolidated gross decreased by 6% twelvemonth implicit twelvemonth and 5% 4th implicit quarter, indicating fiscal challenges.

• The advertizing marketplace remains sluggish, with nary wide signs of improvement, impacting gross growth.

• Display advertisement gross declined by 4% twelvemonth implicit twelvemonth owed to reduced budgets from large advertisers.

• Content concern gross fell by 16% twelvemonth implicit year, with contention intensifying successful cardinal markets similar Japan.

• The institution faces uncertainties successful businesses reliant connected commercialized success, affecting wide maturation prospects.

• Warning! GuruFocus has detected 5 Warning Signs with XKRX:035720.

Q: Can you supply insights into the advertisement marketplace outlook for the 2nd 4th and the interaction of Kakao Talk's renewal and AI initiatives connected aboriginal growth? A: The advertisement marketplace showed nary wide betterment successful Q1, with sluggish commerce and manner segments. We are preparing caller advertisement products for H1 to trigger maturation successful H2. We program to grow feed-type advertisement products and present video ads to seizure much advertisement budgets. We expect caller services to summation marketplace traction, with advertisement gross regaining double-digit maturation by Q4. Regarding Kakao Talk gift, GMV maturation continues, and we are enhancing commerce experiences wrong the platform. The upcoming Kakao Talk revamp volition further fortify interactions and commerce opportunities.

Q: What is the fiscal outlook for the 2nd quarter, and however bash you program to code the challenges faced successful Q1? A: In Q1, results were muted owed to seasonality and a deficiency of contented pipeline. However, we expect a rebound successful Q2 with top-line maturation and outgo ratio gains. The level concern remains strong, and favorable seasonality volition payment advertisement and mobility sectors. We expect stronger maturation successful H2 with the renewal of the speech level and caller concern models. Content concern challenges persist, but improvements are expected successful H2 with a affirmative IP lineup.