Company DigestAILast updated: 8 November 2024

Naver Q3 2024: Operating Profit Hits All-Time Record of 525.3 Billion Won, Net Profit Jumps 48.8% on Strong Search and Ads

Naver Corp. closed the third quarter of 2024 with an all-time record quarterly operating profit of 525.3 billion won, up 38.2 percent year on year, while net profit jumped 48.8 percent to 530.1 billion won (US$383 million), comfortably above the analyst consensus. Revenue grew 11.1 percent year on year and 4.0 percent quarter on quarter to 2.71 trillion won, and adjusted EBITDA rose 27.0 percent to 699.1 billion won, marking an eighth consecutive quarter of growth. The company attributed the momentum to strong performance in its search and advertising businesses.

Q3 2024: a record quarter on every profit line

SEOUL, November 8, 2024 — Naver Corp. has reported its results for the third quarter of 2024, and the published set stands out for its breadth: the operating line reached a level never recorded before in a single quarter, the net line grew by almost half against the same period a year earlier, and the top line advanced at a double-digit pace. As Yonhap News Agency reported on November 8, 2024, the headline of the quarter was the 48.8 percent jump in net profit on the back of strong search and advertising businesses. All amounts below are stated in won, the national currency of South Korea.

The key reported figures for the third quarter of 2024 are as follows:

• net profit — 530.1 billion won (US$383 million), up 48.8 percent year on year;
• operating profit — 525.3 billion won, up 38.2 percent year on year, an all-time quarterly record;
• revenue — 2.71 trillion won, up 11.1 percent year on year and 4.0 percent quarter on quarter;
• adjusted EBITDA — 699.1 billion won, up 27.0 percent year on year, the eighth consecutive quarter of growth.

The reported set also carried a clear message on expectations: net profit of 530.1 billion won exceeded the analyst consensus of 406.6 billion won compiled by Yonhap Infomax, so the bottom line landed well above the figure the market had pencilled in before the release. Corporate announcements and investor materials of the company are published on its website at https://www.navercorp.com/.

Search and advertising behind the acceleration

The company attributed the growth of the quarter to strong performance in its search and advertising businesses. These two lines form the commercial core of the platform: search connects users' queries with results and services, while advertising monetises the attention those queries generate. When both lines perform strongly in the same quarter, the effect compounds on the operating line, because the incremental revenue arrives on an infrastructure base that is already in place.

That compounding is visible in the operating margin of the quarter. At 19.3 percent, the margin improved by 3.8 percentage points year on year, which means that revenue growth of 11.1 percent was accompanied by a slower rise in costs, allowing a larger share of every additional won of revenue to reach the operating result.

Margins and EBITDA: eighth consecutive quarter of growth

Two measures frame the quality of the quarter beyond the headline numbers. The first is the operating margin of 19.3 percent, up 3.8 percentage points against the third quarter of 2023: a margin of this level on revenue of 2.71 trillion won is what turned the operating profit of 525.3 billion won into an all-time quarterly record. The second is adjusted EBITDA of 699.1 billion won, up 27.0 percent year on year, which extended the growth streak of this measure to eight consecutive quarters.

The eight-quarter run of adjusted EBITDA growth matters for the reading of the quarter: it shows that the third quarter of 2024 is not an isolated spike but the latest step of a longer sequence in which the earnings base of the company has kept expanding. The record operating profit sits on top of that sequence rather than apart from it, and the margin expansion of 3.8 percentage points indicates that the expansion has been profitable, not merely voluminous.

Revenue and consensus: growth on both comparisons

Revenue of 2.71 trillion won — 2.7156 trillion won in the company's own release — grew 11.1 percent year on year and 4.0 percent quarter on quarter, so the top line advanced on both comparisons at once. The year-on-year pace reflects the twelve-month build of the search and advertising businesses, while the quarter-on-quarter pace of 4.0 percent shows that the momentum carried through the summer months of 2024 without a seasonal pause.

On the expectation side, the gap between the reported net profit of 530.1 billion won and the consensus of 406.6 billion won compiled by Yonhap Infomax amounts to roughly 30 percent, a margin of surprise that is unusual for a company of this reporting profile. Together with the record operating profit and the eighth consecutive quarter of adjusted EBITDA growth, the beat completes a quarter in which the reported figures led the market's expectations on every published line.

Company information

Company: Naver Corp. (Naver)

Contacts: Naver Corporate Communications; media enquiries via https://www.navercorp.com/

Company website: https://www.navercorp.com/