[Edaily Reporter Lee So-Hyun ] Kakao(035720)increased both its third-quarter revenue and operating profit thanks to the growth of its platform business, driven by advertising and e-commerce. Despite sluggish content performance and the burden of artificial intelligence (AI) investments, the company maintained profitability in its core business and is now set to begin full-scale expansion of “action-oriented AI,” which performs actual tasks on behalf of users, starting at the end of the year. As its stock price continued to decline following the announcement of a spin-off, the company also unveiled a shareholder return plan to repurchase 150 billion won worth of treasury stock and cancel the entire amount.

Kakao’s third-quarter consolidated revenue was 2.0867 trillion won, and operating profit was 240.3 billion won, representing year-over-year increases of 6.3% and 7.4%, respectively. Kakao’s quarterly operating profit marked its highest-ever third-quarter result and has exceeded 200 billion won for six consecutive quarters. The operating profit margin stood at 11.5%.

The platform segment drove these results. Platform revenue rose 17% to 1.235 trillion won. Talk Biz revenue increased 13% to 632.9 billion won, while “Other Platform” revenue—which includes mobility and payment services—rose 21% to 602.1 billion won. Talk display advertising grew by 35%.

In the commerce sector, the “Gift” service notably expanded its scope from “gifts for others” to everyday shopping. Customers making purchases for themselves increased by 23%, transaction volume rose by 33%, and the share of self-purchases in total commerce transaction volume climbed to 30%. In contrast, content revenue fell 6% to 851.7 billion won, with “Story” and “Music” declining by 17% and 10%, respectively.

Full-Scale Rollout of Actionable AI Starting in December

During this earnings announcement, Kakao placed the greatest emphasis on changes to its AI strategy. CEO Jeong Shin-ah stated, “As CEO, I humbly accept the painful assessment that the pace of AI service expansion this year fell short of capital market expectations,” and emphasized that the company would accelerate service expansion and the generation of business results.

In December, Kakao will launch a pilot program for “Kanana Space,” an AI hub based on KakaoTalk, for pre-registered users. The system allows users to access it from anywhere within KakaoTalk and make requests via voice or text; the AI then adjusts settings—such as font size—and performs actual tasks like sending gifts or transferring money. The goal is to utilize contextual information—such as schedules and interests from conversations—with the user’s consent, enabling the AI to take the necessary actions without requiring the user to explain the situation each time.

The company will also officially launch “Kanvas,” a productivity AI that handles PC tasks, by the end of the year. It directly controls the browser on the user’s PC to perform multi-step tasks, such as searching for and compiling data, and then drafting reports. Kakao aims to secure 10 million monthly active users (MAU) for its AI services this year.

For external services, Kakao will directly integrate via A2A (Agent AI-to-Agent) communication between Agent AI agents and the Model Context Protocol (MCP), which connects the functions of external services, while also utilizing the CUA (Computer-Usage Agent) method, where AI directly manipulates the browser. The plan is to quickly test various services and then directly connect core services with verified demand to improve cost efficiency. This decision stems from the assessment that relying solely on direct integration would limit the speed of expansion due to the need to coordinate partner companies’ development schedules, resources, and interests.

AI will also be deployed for ad monetization. In December, the company will begin a closed beta test of “AI Crew,” a service where advertisers input their business goals and the AI proposes suitable ad products and operational strategies, assisting with everything from setup to performance analysis. In the first quarter of next year, the company will launch an advertising model that utilizes a “shared memory infrastructure” enabling AI to understand user behavior, preferences, and experiences, thereby identifying purchase intent and recommending products and services without the need for direct searches.

The burden of AI investment will continue for the time being. The operating loss in the AI services segment for the third quarter widened to 64 billion won from 57 billion won in the second quarter. Kakao plans to reduce the investment burden initially by utilizing the cloud rather than making large-scale direct purchases of GPUs, and will begin validating new AI revenue models starting next year. The company aims to increase new AI revenue to a double-digit percentage of TalkBiz revenue by 2028 and bring the AI business to the break-even point.

Boosting Stock Price Alongside AI Performance

Kakao has also begun to actively respond to market sentiment. At a board meeting held today, the company decided to purchase 150 billion won worth of treasury stock on the open market and cancel the entire amount. This move brings forward half of the 300 billion won treasury stock buyback and cancellation program that Kakao X had originally planned to carry out following the spin-off. The company will begin the buyback on the 6th, using cash dividends received from Kakao Investment as funding.

CEO Jeong stated, “The gap between the market’s current valuation of Kakao and its future growth potential—as viewed from within the company based on its fundamentals—has widened more than ever before.” Kakao’s stock price fell by approximately 24.8%, from 38,700 won on August 20—just before the announcement of the corporate spin-off—to 29,100 won on the 4th. However, on the 5th, buoyed by strong earnings and the announcement of a 150 billion won share buyback and cancellation, the stock closed at 31,900 won, up 9.62% from the previous trading day.

The schedule for the spin-off has also been postponed by about a month. The spin-off date for Kakao AI and Kakao X has been adjusted from January 1 to February 1 of next year, and the scheduled dates for the change of listing and relisting have been adjusted from January 27 to February 25. The date for the merger of Kakao Investment into Kakao X has also been changed from January 1 to February 1. The company explained that this adjustment was made because the preliminary review for Kakao AI’s relisting required additional time.

Kakao also maintained its targets set at the beginning of the year—consolidated revenue growth of at least 10% and an operating profit margin of 10%—based on improvements in the profitability of its platform business and core operations. CEO Jeong stated, “We will focus all our resources on quickly launching AI services that exceed market expectations,” adding, “We will meet shareholder expectations through tangible business results and enhanced corporate value.”