Naver Corp. achieved quarterly revenue of over 2 trillion won ($1.5 billion) in the second quarter even without Japanese flagship chat app Line as thriving overseas demand for digital contents, mostly e-comics, added to digital commerce and payment strength at home.

The South Korean internet giant on Friday reported its consolidated operating income gained 11.4 percent on quarter and 0.2 percent on year to 336.2 billion won in the April-June period. Revenue totaled at 2.05 trillion won, up 10.9 percent from the previous quarter and 23.0 percent from the same period last year.

It is the first time for consolidated revenue to exceed 2 trillion won in a three-month period since Line was removed from Naver’s financial statement in the third quarter of 2021 following the Japanese unit’s business integration with Japan’s SoftBank.

Revenue beat the market consensus of 1.99 trillion won compiled by Seoul-based financial market tracker FnGuide. But its income missed 345.4 billion won estimate.

Shares of Naver, however, fell 2.4 percent to trade at 267,000 won on Friday afternoon in Seoul.

Platform businesses remained intact across the board.

Search Platform business delivered revenue of 905.5 billion won, up 6.5 percent on quarter and 9.3 percent on year, after improving search quality and advertisement efficiency.

Commerce business raked in 439.5 billion won in revenue, up 5.5 percent on quarter and 19.7 percent on year. Its gross merchandise value (GMV), showing the total value of goods sold via e-commerce platforms, jumped 20.8 percent on year to amount to 10.3 trillion won. Brandstore GMV surged 86.2 percent on year to 730 billion won after successfully improving product exposure and adding new brands in trending categories, such as golf, explained Naver CEO Choi Soo-yeon at the earning conference call.

KREAM, a sneaker and fashion reseller platform, is growing rapidly with GMV hitting 350 billion won in the second quarter. Its annual GMV is estimated at 1 trillion won. The second-quarter GMV is 2.4 times greater than that of the first quarter.

Fintech business recorded 295.7 billion won in revenue, up 7.6 percent on quarter and 27.1 percent on year. Total payment value of digital wallet Naver Pay rose 32.2 percent on year to 12 trillion won. Naver Pay payment amount through external outlets, including IKEA, Zara, and other large retailers, jumped 60 percent on year to 4.6 trillion won, according to Choi.

Naver plans to expand its fintech business in Japan through its strategic partner SoftBank in Japan. The company plans to attract Japan’s No. 1 payment app PayPay users to its SmartStore, Naver’s e-commerce platform where retailers open and run online stores, in Japan. PayPay is owned by Z Holdings, which was set up by a merger between Naver’s chat platform company Line and SoftBank’s Yahoo Japan.

Contents business generated 300.2 billion in revenue in the quarter, up 41.6 percent on quarter and 113.8 percent on year, boosted by additional incomes from newly added web cartoon units. Total global GMV rose 19.6 percent on year to 406.5 billion won. It has over 180 million Naver Webtoon users worldwide and the monthly subscription is growing steadily.

Contents business still remains in the red due to big spending for expansion. Choi said the losses are “strategically intended” to beef up e-comics and other content businesses nurtured as new growth engines.

Cloud and other data-based businesses delivered 104.9 billion won in revenue, up 13.9 percent on quarter and 10.5 percent on year, upon steadily attracting new clients.

By Cho Jeehyun

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