New Business Growth Drives NAVER’s 2021 First Quarter Earnings
New Business Growth Drives NAVER’s 2021 First Quarter Earnings
New Business Growth Drives NAVER’s 2021 First Quarter Earnings
- New business revenue from commerce, fintech, content and cloud grew 46.3% YoY, while operating income increased 29.8% YoY, providing healthy improvement in NAVER’s future growth engine
- EBITDA rose 23.7% YoY and 5.1% QoQ to KRW 440.6 billion, recording all-time high
- NAVER to strengthen talent acquisition and compensation system in a bid to consolidate its global competitiveness in new business segments
2021. 04. 29
NAVER Corporation (KRX: 035420) announced financial results today for the first quarter of 2021. The company reported revenue of KRW 1.499 trillion, operating income of KRW 288.8 billion and adjusted EBITDA of KRW 440.6 billion in the first three months.
“All new NAVER business segments demonstrated great growth while our search platform business showed steady improvement in the first quarter. We also saw meaningful results from investments and collaborations, such as the Wattpad acquisition, share exchange with Shinsegae Group representing Emart and management integration of LINE and Z Holdings,” said Seong-sook Han, CEO of NAVER. “We aim to improve employee compensation to attract the best talents as we accelerate our global business plans.”
NAVER reported net income of KRW 15.3 trillion this quarter, reflecting profits from LINE and Z Holdings business integrations on March 1. It does not reflect cash inflows or outflows, including profits and losses from the accounting dispositions of LINE.
Consolidated operating profit rose 29.8% YoY, down 0.9% QoQ, to KRW 1.499 trillion thanks to the recovery of search platforms and continued growth of commerce and fintech. Consolidated operating profit fell 1.0% YoY and 10.8% QoQ to KRW 288.8 billion due to strengthened employee compensation and benefits. Adjusted EBITDA, a better proxy for the company’s cash generation capability, following the Korean version of International Financial Reporting Standards (IFRS), rose 23.7% YoY and 5.1% QoQ, reaching a record high of KRW 440.6 billion.
By business segment, operating revenue from the search platform is KRW 752.7 billion, commerce is KRW 324.4 billion, fintech is KRW 209.5 billion, content is KRW 130.8 billion and cloud is KRW 81.8 billion.
The search platform business revenue rose 16.8% YoY to KRW 752.7 billion, down 2.3% QoQ, due to the influx of new advertisers, expansion of advertising inventory and improved matching technology. Display advertising revenue increased 46.4% YoY on the back of continued growth of performance-based advertising.
The commerce business revenue rose 40.3% YoY to LRW 324.4 billion, up 2.4% QoQ, driven by online conversion and growth of small to medium-sized enterprises (SMEs). Thanks to SME support, the number of Smart Stores and Brand Stores exceeded 450K and 320, respectively. Shopping Live gross merchandise value (GMV) more than doubled in just six months.
The fintech business reported revenue of KRW 209.5 billion, up 52.5% YoY and 4.2% QoQ, from the accelerated growth of GMV with successful partnership expansion. NAVER Pay GMV grew 56% YoY to KRW 8.4 trillion in the first quarter. NAVER Financial continues to expand its product portfolio for thin filers and SMEs with the beta launch of Buy Now Pay Later.
The content business revenue rose 40% YoY to KRW 130.8 billion, down 5.09% QoQ, with evenly improved GMV from WEBTOON, SNOW and V LIVE. In particular, WEBTOON revenue rose 43% YoY on the back of improved user loyalty, which led to more paid users. With the expected completion of the Wattpad acquisition in the first half of 2021, NAVER will keep the positive momentum going on its global challenges. The company will focus on creating a global IP creative ecosystem, leveraging advanced technology and diversity.
The cloud business revenue increased 71.1% YoY, down 4.5% QoQ, to KRW 81.7 billion on the rising demand of cloud migration. The cloud platform revenue grew 168% YoY thanks to the skyrocketing demand from the public sector, which increased nearly ten-fold YoY.
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