Naver and Kakao face divergent Q3 earnings outlooks

South Korean tech giants Naver and Kakao are preparing to release third-quarter earnings with contrasting financial trajectories. Naver is expected to achieve record revenue, with a consensus estimate of 3.51 trillion won, representing a 12 percent increase year-on-year. However, operating profit is projected to decline by approximately 13 percent to 497.6 billion won due to increased costs related to AI infrastructure, marketing, and sports content.

In contrast, Kakao is anticipated to see a slight revenue decrease of about 2 percent, totaling 2.04 trillion won, but is expected to achieve a 19 percent increase in operating profit through improved cost management and efficiency. Investors remain focused on whether both companies can successfully monetize their artificial intelligence investments.

Looking ahead, Naver is navigating the delayed merger between Naver Financial and Dunamu, while Kakao is pursuing a corporate split to separate its AI platform business from its investment and subsidiary management arms. The success of these structural reorganizations and the ability to demonstrate tangible AI revenue will be critical for future stock performance.