Naver posts record 3Q sales boosted by content and commerce

South Korea's leading web portal Naver reported record-high sales in the third quarter thanks to surging growth in its content sector, including the increasingly popular webtoons.

The online search giant said on Monday that sales from July to September reached 2.5 trillion won ($1.7 billion), up 19.1% from 1.7 trillion won during the same period last year and a slight 0.6% rise from the second quarter of this year.

This marks the first time for Naver to break two trillion won in sales in the third quarter since last year's merger of the search engine's messenger app Line with Z Holdings, an affiliate of Japan's Softbank Group.

Continued sales growth in the third quarter saw Naver's quarterly sales also exceed 2 trillion won in consecutive quarters for the first time since the integration of Line management.

Operating profit in the third quarter fell 5.6% to 330.2 billion won quarter-on-quarter and dipped 1.8% from the second quarter this year, while net profit dropped 28.3% to 231.6 billion won over the same period.

By business, Naver's search platform raked in 896.2 billion won, commerce took in 458.3 billion won, fintech reaped 296.2 billion won, content 311.9 billion won, and cloud and others 94.8 billion won. Sales from search advertising grew 10% compared with the same quarter last year.

Sales, led by commerce advertising and brand stores, and an increase in membership allowed Naver's commerce to grow 19.4% over the same quarter last year and 4.3% over the second quarter this year to 458.3 billion won. Sales from content surged 77.3% from last year and rose 3.9% from the second quarter this year to post 311.9 billion won.

"The third quarter saw stable performance based on the diversified portfolio we've established thus far," Naver CEO Choi Soo-yeon said.

"We will uncover a wider variety of new growth engines through such means as our recent acquisition of Poshmark, new advertising products, the arrival guarantee solution for purchased items, and Open Talk and Issue Talk. We'll also maintain growth by continually exploring new markets based on expanded inter-sectoral synergy and employing more streamlined organizational operations such as integration of B2B business entities."

Write to Seung-Woo Lee at leeswoo@hankyung.com