[Park Yong-hoo / Perspective Designer] The way we view Kakao(035720)needs to change. While in the past, “how much revenue has grown” was the key metric, today we must look at “which business segments are generating revenue and how much profit that revenue yields.”

Recent earnings show that Kakao is transitioning from a company that relied on content and the expansion of its affiliates to a platform company generating stable revenue centered on KakaoTalk, advertising, payments, and mobility. Not only is the volume of revenue changing, but so is its quality.

Revenue rose 9%, but operating profit increased by 36%

Kakao’s consolidated revenue for the second quarter of 2026 was 2.0985 trillion won, up 9% from the same period last year. Operating profit rose 36% to 277 billion won. Both revenue and operating profit reached all-time highs on a quarterly basis.

The key metric to watch is the operating profit margin. The operating profit margin for the second quarter of 2026 was approximately 13.2%. Compared to the period when Kakao recorded single-digit profit margins in the 6% range, its ability to generate profits has nearly doubled. For the first half of 2026, revenue totaled 4.0405 trillion won, and operating profit reached 488.4 billion won, bringing the operating profit margin for the first half to approximately 12.1%.

However, it is difficult to immediately conclude that this profit increase is solely due to “operating leverage from the core business.” The recent improvement in profits is driven by a combination of three factors: (1) a reduction in non-operating personnel expenses and SG&A expenses resulting from the restructuring of affiliates, (2) the base effect from one-time costs incurred in the same period of the previous year, and (3) fixed-cost leverage driven by platform revenue growth. Only by analyzing these three factors separately can we assess the company’s sustainable profit-generating capacity.

Nevertheless, the fact that operating profit rose by 36% despite a 6% year-over-year increase in operating expenses in the second quarter of 2026 signals that an improvement in revenue mix—which cannot be explained by cost reductions alone—is occurring in parallel.

The platform segment grew by 17%, while the content segment grew by 1%.

This qualitative shift in revenue is clearly evident in the performance by business segment.

In the second quarter of 2026, revenue from the Platform segment reached 1.2303 trillion won, a 17% increase from the same period last year. In contrast, revenue from the Content segment rose by only 1% to 868.2 billion won.

The platform segment accounts for approximately 58.6% of total revenue, while content accounts for 41.4%. The platform’s share has risen by about 3–4 percentage points compared to the same period last year, representing a gradual but clearly directed realignment rather than a “sudden shift.” What is important is the gap in absolute growth rates. If the difference in growth rates between the platform and content segments widens by as much as 16 percentage points, the revenue structure itself will effectively change even if this trend continues for just two or three quarters.

This shift is significant because the nature of the two businesses differs.

Content businesses—such as music, video, and webtoons—experience high revenue volatility depending on the success of individual works. They also face significant burdens from production costs, talent fees, and marketing expenses. In contrast, platform businesses—such as advertising, corporate messaging, payments, and taxi hailing—generate recurring revenue as long as users continue to use the service. Revenue generated from daily, routine activities is more predictable than revenue that relies on a single hit.

KakaoTalk is evolving into a stable source of cash flow

. KakaoTalk is the driving force behind the platform’s growth.

In the second quarter of 2026, TalkBiz revenue reached 643.2 billion won, a 12% increase from the same period last year. Within this, revenue from business messaging grew by 20%, while KakaoTalk display advertising revenue grew by 28%.

Business messaging, in particular, deserves attention. Information that companies must convey to customers—such as credit card approvals, package delivery notifications, hospital appointments, insurance premium payments, and shopping order confirmations—is sent via KakaoTalk.

This revenue stream is less sensitive to the popularity of specific content or temporary trends. As long as financial institutions, retailers, hospitals, and public agencies continue to communicate with their customers, these messages will keep being sent. This is because KakaoTalk has evolved beyond a tool for personal messaging to become a daily-life infrastructure connecting businesses and customers.

Revenue from commerce services, such as “Gift” and “TalkDeal,” also increased by 10% to 243.2 billion won. During the same period, total transaction volume rose by 9% to 2.7 trillion won, and the transaction volume for “self-purchases”—where users buy products for themselves within the “Gift” service—increased by 39%. This is evidence that “Gift” is expanding from a service used only on special occasions into an everyday shopping service.

Pay and Mobility Have Become the Second Growth Engine

Revenue from “Other Platform Services”—which includes kakaopay and Kakao Mobility—reached 587 billion won in the second quarter of 2026, a 22% increase from the same period last year.

Kakao Mobility is expanding its business beyond taxi hailing to include designated driver services, parking, courier services, last-mile logistics, and advertising. Kakaopay is also broadening its revenue streams beyond payments to include securities, insurance, loan comparisons, and financial advertising.

While TalkBiz serves as a stable source of cash flow, Pay and Mobility are the second engine driving Kakao’s growth.

Above all, these services are not isolated from one another. Users can discover products on KakaoTalk, purchase them via the “Gift” feature, pay with kakaopay, and travel using KakaoT—all seamlessly connected. It is this interconnected structure, rather than the individual services themselves, that constitutes Kakao’s true platform competitiveness.

Content hasn’t disappeared; its role is being redefined

. The shift toward a platform-centric model does not mean the content business has lost its importance.

In the second quarter of 2026, Music revenue rose 8% to 558.4 billion won, driven by expanded performances of major intellectual property, while Media revenue also increased by 5% to 99.1 billion won. However, the overall growth rate for the content division, including Story, remained at just 1%.

The key here is to avoid falling into a circular logic that reinterprets stagnant performance as a “strategic shift.” The fact that the content sector’s growth rate was limited to 1% is still a lackluster result, and there is no reason to gloss over it.

However, there is indeed a real possibility that the role of content in the future will shift from driving revenue growth to serving as a source of intellectual property that attracts users to KakaoTalk and commerce platforms. For this hypothesis to be proven true, metrics such as the transaction volume of webtoon IP-based gifting, the share of IP performances and merchandise distributed through Talk Store, and the conversion rate of Talk ads utilizing drama and music IP must all rise in tandem. Unless this data is confirmed, the “shift to an IP source” remains an unproven outlook.

While the earnings weren’t driven solely by cost reductions, these cost savings cannot be ignored

. As noted earlier, the recent increase in operating profit is largely attributable to the restructuring of affiliates and cost efficiency measures. Over the past few years, Kakao has been streamlining non-core affiliates and reorganizing its workforce, and the resulting reduction in selling, general, and administrative expenses (SG&A) has contributed to improved profit margins.

At the same time, operating expenses in the second quarter of 2026 increased by 6% year-over-year. The fact that operating profit rose by 36% even as costs increased indicates that operating leverage driven by expanding platform revenue is also at work. Businesses such as KakaoTalk advertising and Business Messages do not see production costs rise at the same rate as revenue. On an already established platform, as the volume of messages sent and advertising transactions increases, a larger portion of the additional revenue is converted into profit.

In summary, Kakao’s profit improvement is currently driven by a combination of one-time factors resulting from restructuring and structural factors stemming from growing platform revenue. The real test will be whether the company can maintain a double-digit operating profit margin even after the effects of restructuring wear off over the next few quarters.

The next step is not “monetizing conversations” but “completing actions”—though this is still just a hypothesis

If Kakao focuses solely on expanding ad space, it may see short-term revenue growth but could foster user fatigue in the long run. This is because KakaoTalk is not a service people access to read news or watch videos; it is a private space used to communicate with others. To determine whether this concern is materializing, metrics such as KakaoTalk’s DAU, average time spent per user, and bounce rate relative to ad impressions would need to be disclosed—but currently, sufficient relevant data has not been made public.

So where does Kakao’s future value lie? The company’s stated direction is that it lies not in showing more ads, but in connecting users’ intentions expressed in conversations to actions such as ordering, booking, payment, and transportation.

For example, if users chat in KakaoTalk saying, “Let’s have dinner for four in Gangnam on Friday night,” AI can identify the date, location, number of people, and preferences to recommend a restaurant, make a reservation, pay the deposit via kakaopay, and even connect users to a KakaoT ride on the day of the event.

If this scenario becomes a reality, Kakao could generate revenue not only from advertising but also from commissions on reservations, payments, commerce, and transportation. However, at this point, this is not a fact proven by actual results but rather a strategic direction and hypothesis presented by the company. The conversion rate from conversations to actual transactions, the GMV generated by AI agents, and separate AI-related revenue have not yet been confirmed by publicly disclosed financial metrics. The previous financial figures and this scenario should not be interpreted on the same level. Financial results represent “events that have already occurred,” whereas this scenario is a “proposition that remains to be verified.”

Kakao’s future depends on the nature of its revenue rather than its scale

. It is too early to conclude that Kakao has fully returned to being a high-growth company. Its content business is stagnating, and it remains to be seen whether AI will actually generate transactions and revenue. Reliance on the domestic market, regulatory challenges, and a complex affiliate structure also remain risk factors. It is also important to note that the restructuring effects included in the recent profit improvement are one-time in nature and are unlikely to be repeated in the future.

However, the direction of its performance is clear. The platform business is growing faster than the content business, and within the platform, revenue from areas with high repeatability and scalability—such as corporate messaging, advertising, payments, and mobility—is increasing. As a result, the operating profit growth rate has surpassed the revenue growth rate, and the operating profit margin has risen to double digits.

In the past, Kakao was a company that expanded its revenue scale by diversifying into various businesses. Today, Kakao is evolving into a company that connects its scattered services around KakaoTalk and generates greater profits from those connections.

Kakao’s transformation can be summed up in one sentence.

“We are transitioning from a company that sells a lot to a platform company that generates recurring revenue and retains more profit.”

Going forward, there are three key indicators that will determine Kakao’s enterprise value. First, will the share of platform revenue continue to expand? Second, will the double-digit operating profit margin be maintained even after the effects of restructuring have run their course? Third, will the rate at which KakaoTalk conversations lead to actual transactions—that is, will the new revenue generated by AI agents appear on the actual financial statements?

Only when these three factors are confirmed will the “transition from a high-volume sales company to a profitable platform company” become a reality.