– First time to reach 1T won in quarterly sales and 100B in operating profit
Kakao (Co-CEOs Yeo Min-su and Cho Soo-yong) achieved record-high performance as it surpassed one trillion won in quarterly sales and 100 billion won in operating profit.
Kakao announced that 3Q 2020 sales based on K-IFRS (Korean International Financial Reporting Standards) recorded 1.1 trillion won, up 15% QoQ and up 41% YoY. The operating profit increased to 120.2 billion, up 23% QoQ and up 103% YoY, with an operating margin of 10.9%. Strong growth in KakaoTalk-based advertising, commerce business, and global paid content business and performance improvement of new business divisions including Kakao Mobility and Kakao Pay led to such record-high performance.
Kakao’s 3Q platform sales totaled 554.4 billion won, up 13% QoQ and up 58% YoY. Sales from Talkbiz increased to 284.4 billion won, up 14% QoQ and up 75% YoY. Sales from Portal Biz increased to KRW 121.2 billion won, up 3% QoQ and down 4% YoY.
By expanding the sales of the Kakao Mobility Taxi Platform business and Kakao Pay’s payment transaction amount and financial services, sales from new business division increased to 148.8 billion won, up 17% QoQ and up 139% YoY.
Sales from content division increased to 546 billion won, up 19% QoQ and up 26% YoY. As the growth of global transaction accelerated mainly in Japan, sales from paid content sales recorded 148.4 billion won, up 25% QoQ and up 61% YoY. Since July, Kakao Japan’s Piccoma took the first place in monthly sales in Japanese manga app category with the number of monthly active users and daily transaction beating its own record every day. Thanks to the success of the new mobile game Guardian Tales, sales from game contents recorded 150.4 billion won, up 40% QoQ and up 52% YoY. Sales from music contents recorded 155.7 billion won, up 3% QoQ and up 3% YoY. Other IP business sales recorded 91.5 billion won, up 11% QoQ and up 2% YoY.
Operating expenses in 3Q recorded 980.2 billion, up 15% QoQ and up 35% YoY. The increase in labor costs due to the incorporation of consolidated subsidiaries and recruitment of new employees, active paid content business development, and increased marketing costs due to new game promotion activities contributed to the performance.
Kakao is based in Pangyo, Pangyo Technovalley is the Asia Tech Hub where more than 1,200 companies in IT, CT, and BT sectors with innovative products and technologies are gathered. Located just south of the Seoul metropolitan area, easy transportation access and infrastructure provides the best environment for Korean companies to conduct businesses.
Various high-tech companies are located here, with more than 64 thousand full-time workers with a vast majority in their 20s and 30s. By industries, companies in the high-tech industry are made up of IT companies, content technology companies, biotechnology companies, and nanotechnology companies.
With the support from innovative companies with global capabilities like Kakao, NHN Entertainment, AhnLab, Krafton, NCSOFT, Nexon, and Hancom at hand, companies in Pangyo Technovalley made over 100 trillion in revenue this year. A 20% increase from last year, it is expected to become one of the best IT clusters in Korea in near future, along with advanced technology research institutes like Advanced Institute of Convergence Technology, KAIST, ETRI, and KETI working together to develop the relevant technologies further.