Naver Q2 net profit jumps 41.6% as AI boosts core businesses

Naver Corp. reported Q2 net profit of 704.3 billion won ($494.8 million), up 41.6% from a year earlier, as AI-powered commerce and advertising lifted its core businesses.

"We plan to create new growth momentum in the AI computing market by securing customers through Nvidia's ecosystem and Naver's existing corporate and public clients," Choi Soo-yeon, chief executive officer at Naver, said.

Revenue rose 16.2% to 3.38 trillion won, while operating profit slipped 0.2% to 520.3 billion won, missing market expectations as the company accelerated AI infrastructure investment. Consensus estimates were not disclosed. Search platform sales grew 12.3% to 1.9 trillion won, and global commerce platforms including Poshmark and Wallapop rose 24.4% to 1.16 trillion won.

The results sent Naver shares down 4.42% to 216,000 won in early Seoul trading, while rival Kakao rose 2.48% after posting record quarterly results. Naver expects its AI factory with Nvidia to start generating revenue in the early half of next year.

By segment, financial platform sales rose 16% to 470.7 billion won, driven by Naver Smart Store expansion. Npay payment volume reached 25.2 trillion won, up 21%. Service sales grew 31.3% on Naver Plus Store, membership, and N Delivery growth. Enterprise business sales rose 21.3%, while contents division sales inched up 0.5%.

Advertising grew 7.5% year over year, with AI driving over 60% of ad sales growth through AI-based layout optimization and advanced targeting. Operating expenses climbed nearly 20% as Naver invested in AI infrastructure, content, and data competitiveness, the company said.

The AI factory, jointly established with Nvidia and backed by Brookfield Asset Management, represents a strategic bet on sovereign AI infrastructure. Naver received a $10 billion investment from Nvidia and Brookfield in July, with Nvidia taking a 4.5% stake. The facility is expected to reach 200 MW capacity by 2028.

The divergence between Naver and Kakao's stock reactions highlights investor scrutiny of AI spending. Kakao reported record quarterly sales of 2.1 trillion won and operating profit of 277 billion won, up 35.9%, driven by platform growth. Mirae Asset Securities lowered Kakao's target price to 52,000 won from 58,000 won, citing slowed content growth and AI business uncertainty.

The flat operating profit signals near-term margin pressure from AI capex, but the 41.6% net income surge shows the company's core platform businesses remain profitable. Investors will watch for AI factory revenue contributions in the first half of 2027 and whether advertising growth can sustain its AI-driven momentum.

This article is for informational purposes only and does not constitute investment advice.