Naver posts higher profit as AI ad growth offsets infrastructure costs

Naver said Thursday its consolidated operating profit rose 7.2 percent in the first quarter from a year earlier, reaching 542 billion won ($378 million) as gains in advertising and financial services offset surging infrastructure costs.

The company attributed the growth to a more than twofold increase in performance-based advertisers fueled by AI-driven ad efficiency, alongside accelerated transaction volumes on its Smart Store platform. Net income for the period stood at 291 billion won ($203 million).

Total revenue climbed 16.3 percent on-year to 3.24 trillion won ($2.26 billion). The Naver Platform segment generated 1.84 trillion won ($1.28 billion), up 14.7 percent, while financial platform sales grew 18.9 percent to 460 billion won ($321 million). The global challenge business contributed 942 billion won ($657 million), up 18.4 percent.

The consumer-to-consumer sector, which includes platforms such as Kream, Soda, Poshamark and Wallapop, saw the sharpest acceleration with a 57.7 percent jump to 351 billion won ($245 million).

Operating margins faced pressure from aggressive capital expenditure aimed at securing artificial intelligence competitiveness. Operating expenses rose 18.3 percent compared with the year-earlier period, driven largely by a 32.5 percent spike in infrastructure costs related to the acquisition of new computing assets including graphics processing units.

To support its AI ecosystem, the company launched a shopping AI agent in late February and introduced an AI tab on April 27 to provide conversational user experiences. In the payments sector, total transaction value for the first quarter reached 24.2 trillion won ($16.9 billion), a 23.4 percent increase on-year.

Naver stated it plans to further develop its payment business into an integrated platform that links online and offline data.