[Edaily Reporter Lee So-Hyun ] Naver (NAVER(035420)) set a new quarterly revenue record for the sixth consecutive quarter, but its operating profit fell by more than 20%. This was the result of profitability being squeezed by investment costs in artificial intelligence (AI) infrastructure, offline payments, and content, even as its advertising, e-commerce, and global consumer-to-consumer (C2C) businesses expanded.

Naver plans to develop its “AI Factory”—which secured its first supply contract worth 2 trillion won with a U.S. AI company—into a new profit driver starting next year, while also transforming the growth model of its existing platforms through logistics, advertising, and AI agents.

On the 12th, Naver announced that it recorded consolidated third-quarter revenue of 3.4724 trillion won and operating profit of 451.3 billion won. Revenue rose 10.7% year-over-year, setting a new record for the sixth consecutive quarter since the second quarter of last year. In contrast, operating profit fell 20.9%, and the operating profit margin dropped from 18.2% to 13.0%.

Revenue by business segment was as follows: Naver Platform at 1.9484 trillion won (up 7.3%), Financial Platform at 487.7 billion won (up 14.1%), and Global Initiatives at 1.0364 trillion won (up 15.9%). Naver Pay transaction volume rose 15.6% to 26.2 trillion won, while revenue from the global C2C segment—including Poshmark, Soda, and WallaPop—increased 47.8% to 103.6 billion won. Overseas operations are emerging as another key revenue pillar supporting domestic advertising and commerce.

Record Revenue but Declining Profitability… “Target Profit Margin of 25%”

Revenue growth and profitability moved in opposite directions. Infrastructure costs rose 29.1% year-over-year due to depreciation expenses for new computing assets and data center costs, while marketing expenses increased by 32.3% driven by shopping promotions and the expansion of offline businesses. Partner fees, which include N Pay Connect terminals and sports broadcasting rights fees, also rose by 18.8%. The profit margin for Naver’s Platform division fell by 9.7 percentage points.

Kim Hee-cheol, Naver’s Chief Financial Officer (CFO), stated during a conference call, “Given the competition and maturity of the advertising and commerce markets, it will not be easy for us to recover a 30% profit margin in the short term.” Instead, he set a goal of maintaining the platform business’s profit margin at a stable level of around 25%. He predicted that infrastructure investment in existing businesses would effectively peak this year and could decrease somewhat starting next year.

Attention is now focused on new revenue streams to offset the investment burden. Naver has signed a 2 trillion won contract to supply approximately 20 megawatts (MW) of computing services to a U.S.-based AI inference company. The contract amount represents the total value over approximately five years, rather than annual revenue, and includes NVIDIA B300 and next-generation Vera Rubin GPUs.

Commercial services are scheduled to begin in the first half of next year, with revenue to be recognized sequentially. The company stated, “Starting in 2027, the AI Factory is expected to generate operating profit after deducting all costs and related expenses,” and projected that it will also contribute to net income attributable to controlling shareholders.

Naver has finalized contracts to secure data center capacity exceeding its 2028 target of 200 MW and is currently in discussions with more than 10 companies regarding the supply of approximately 180 MW, excluding the portion covered by the first customer contract. The company plans to consolidate the asset management company funded by Brookfield into Naver’s consolidated financial statements to reflect business profits and losses, while managing its financial burden by executing investments in line with actual customer demand.

Shifting the Platform’s Growth Model Toward Logistics and AI Agents

The investment strategy for existing platforms is also shifting. To strengthen its e-commerce business, Naver is establishing a logistics subsidiary and will invest approximately 1 trillion won by 2030 to expand its network of leased logistics centers. Under this structure, while center operations and delivery will be handled in collaboration with existing partners, Naver will directly manage demand forecasting, inventory allocation, and data and system design.

In the third quarter, transaction volume for N Delivery increased by 38% year-over-year, and the number of early-morning delivery centers expanded from three in the first half of the year to nine. The Naver Plus Store app’s share of Smart Store transaction volume also surpassed 20%. The strategy is to create a virtuous cycle where competitive delivery services drive repeat purchases, and increased transaction volume, in turn, boosts logistics efficiency.

Efforts to transform AI into a revenue model for advertising and transactions are also gaining momentum. A personalized AI agent, set to launch within the year, is being developed to handle not only shopping, reservations, and payments but also tasks on external websites. The advertising model is expanding to a system where charges are based on actual transaction results rather than just the number of clicks. A pilot program is planned for the first half of next year, starting with the finance, insurance, and automotive sectors.

Choi Soo-yeon, CEO of Naver, emphasized, “Moving forward, Naver will continue to create meaningful growth opportunities for users, partners, and shareholders alike by enhancing competitiveness across core industries that span the entire Naver ecosystem—both online and offline—in addition to developing new businesses through AI Factory.”