Naver posts record Q2 operating profit on e-commerce, content

South Korea’s top online portal Naver Corp. on Friday posted record operating profit in the second quarter, driven by robust sales growth in its commerce and content businesses.

The country’s top search engine operator said its operating profit in the April-June period reached an all-time high of 372.7 billion won ($287 million), up 10.9% from a year earlier.

Sales rose 17.7% year on year to 2.41 trillion won while net profit increased 80.9% to 286.7 billion won.

The results came above market expectations. In early Seoul trade, shares of Naver advanced 0.7% to 224,500 won, outperforming the benchmark Kospi’s 0.1% fall.

The lion’s share of its sales revenue came from the search platform business, which posted 910.4 billion won, but the revenue grew a mere 0.5% from the second quarter of last year.

Strong sales growth came from its commerce business, which increased 44% to 632.9 billion won, and its content business, which saw a 40.1% gain to 420.4 billion won.

Sales from its fintech business rose 14.9% to 339.7 billion won, boosted by Naver Pay, its online payment service, which saw transactions rise 21.2% to 14.6 trillion won in the second quarter.

Its Cloud business sales, however, fell 0.4% to 104.5 billion won.

NEW GENERATIVE-AI DUE ON AUG. 24

“In the second quarter, we posted steady growth in most of our businesses. In the future, based on our long-accumulated AI technology and platform competitiveness, Naver will continue to provide its own generative AI experiences to achieve sustainable growth,” said Naver Chief Executive Choi Soo-yeon.

Naver Cloud, the artificial intelligence unit of Naver Corp., said it will unveil a new hyper-scale AI platform, HyperCLOVA X, an upgrade to its earlier version of HyperCLOV, on Aug. 24.

The company said HyperCLOVA X, which learned 6,500 times more Korean words than ChatGPT, developed by Microsoft-backed OpenAI, will better understand and more accurately respond to prompts in Korean than English-based tools.

The launch of HyperCLOVA X will be followed by other generative AI services, including the launch in September of a beta version of Cue:, a generative AI search service similar to Microsoft's GPT-4-using web search engine Bing.

To better compete with global Big Tech firms’ AI chatbot-equipped search engine services, Naver said it is joining hands with Samsung Electronics Co. to jointly develop a generative AI platform for corporate users.

Write to Ju-Hyun Lee at deep@hankyung.com

In-Soo Nam edited this article.