Naver’s operating profit fell 21% as infrastructure and marketing costs rose about 30%

01Profit fell for a third quarter running

Operating profit was ₩451.3bn, against ₩570.6bn a year earlier and ₩520.3bn in April–June. It peaked at ₩610.6bn in October–December 2025 and has fallen in each quarter since; this one is the lowest since January–March 2024, when it was ₩439.3bn.¹⁴⁵ Revenue grew 10.7% on a year earlier, or 9.0% without Wallapop, the Spanish resale marketplace Naver paid for in January–March. Naver says the quarter also carried the Chuseok holiday and the fading effect of its earlier changes to shopping fees.¹

Net profit fell further, 45.2% to ₩402.5bn. Below the operating line, Naver’s share of profits at associates dropped to ₩39.8bn from ₩276.2bn, and financial items swung to a loss of ₩227.0bn from a gain of ₩65.7bn; Naver puts the fall down to those valuation changes. Free cash flow, which Naver defines as operating profit plus non-cash costs, less capital spending and tax paid, was negative ₩151bn, against ₩202bn a year earlier.¹ Naver’s shares closed at ₩180,900, down 6.90%, after opening at the day’s high of ₩197,000, while the KOSPI fell 0.61% to 5,342.73. That left the company valued at about ₩27.5tn, 41% below the 52-week high, by Naver Pay Securities’ data, which is Naver’s own market service.⁷⁸

02What Naver sells, and where the profit is made

Naver reports three segments. The Naver Platform holds advertising (₩1,474.8bn, up 5.5%) and what it calls services (₩473.6bn, up 13.1%), the commerce side, which Naver says grew on its Naver Plus Store shopping app, its paid membership and its N delivery service. Sales through Smartstore, the merchant storefronts on Naver, grew 6.4%. The Financial Platform, Naver Pay, earned ₩487.7bn, up 14.1%, on ₩26.2tn of payments, up 15.6%.¹²

The third, Global Challenge, made ₩1,036.4bn, up 15.9%. Inside it, resale marketplaces (C2C: Poshmark, Wallapop and Soda, whose trading-card trades Naver says are selling well) grew 47.8% to ₩370.4bn; content fell 5.1% to ₩472.6bn, which Naver puts down to a difficult Japanese market for its webtoons; and enterprise, home of the AI Factory business, grew 33.0% to ₩193.3bn, helped by a digital-twin project in Saudi Arabia.¹²

The profit sits almost entirely in the first segment, and that is where it fell. The Naver Platform’s segment margin was 24.0%, against 33.6% a year earlier; Naver Pay’s was 2.2%, against 6.6%. Global Challenge still lost money, ₩26.1bn, but much less than the ₩68.1bn of a year earlier.¹

03Costs grew faster than revenue

Operating costs were ₩3,021.1bn, up 17.7%. In won, they rose by ₩453.7bn while revenue rose by ₩334.3bn, and the ₩119bn difference is the fall in profit. Naver groups its costs into four lines, and three of them account for almost all of the rise.¹

Partner costs, the largest line, rose by ₩209.9bn, which Naver ties to more spending on Npay Connect, the in-store payment terminals it is placing with merchants, and to broadcast-rights costs; its April–June presentation named the World Cup rights.¹³ Marketing rose by ₩161.9bn, on bigger promotions and the same terminal roll-out; it took 19.1% of revenue, against 16.0% a year earlier. Naver says it wants Npay Connect to be the country’s largest offline payment terminal by active devices by the first half of next year.¹²

Infrastructure rose by ₩63.7bn, the smallest of the three in won, but Naver’s summary names it first among the investments in “AI competitiveness” that cut profit, ahead of content and offline data. Development and operations, mostly staff pay, grew just 2.5%: the extra spending went on equipment, promotions and partners, not people.¹

04The infrastructure bill, and the year Naver added to its GPUs

The infrastructure line is where Naver reports the cost of its computing, including depreciation: the price of servers and GPUs spread over the years they are expected to work. The Korea Times describes the line as including the depreciation of GPUs and other computing resources used for AI.⁹ For July–September Naver gives two reasons for the 29.1% rise: computing equipment for its own use was delivered, and new floor space opened in its data centres.¹

The dip in April–June was an accounting change, not a pause. From that quarter Naver depreciates its GPUs, CPUs and other computing equipment over six years instead of five, which it said reflects how long they are actually used and defers about ₩100bn of cost a year. Infrastructure that quarter rose only 11.2% on a year earlier, “despite expanded investment in computing assets”, in Naver’s words.³

CoreWeave, the US GPU cloud, uses the same six-year life, and lists it among the estimates that could significantly affect its results, as we explained in our reading of its quarter.¹² Kyobo Securities, quoted by the Korea Times, expects Naver’s depreciation to rise from ₩824bn in 2026 to ₩1.041tn in 2028.⁹

05What the AI Factory is, and what Naver has signed

Naver defines an AI factory as GPU computing, networking, storage, power and cooling and a software platform sold as one service. It already runs two data centres it designed itself, Gak Chuncheon (2013) and Gak Sejong (2023), and says it is the only Korean company offering GPUs as a service at scale.⁶ In July it signed a preliminary agreement with Brookfield, the investment firm, for US$9bn of infrastructure, and an agreement for Nvidia to invest US$1bn in new Naver shares: together, a US$10bn AI Factory.⁶

Naver says the split lets it grow “while minimising the initial capital burden”: the partners put up most of the money, and Naver supplies the platform and the customers.⁶ Chief executive Choi Soo-yeon said the ₩2tn of contracts secure the first customers, and that Naver will seek multi-year contracts with large customers and widen the base to global AI companies. The presentation calls them contracts for initial volumes in 2027.¹² Before the results, the Korea Times quoted a Korea Investment & Securities analyst who attributed the shares’ fall since June to the time the data-centre business needs to earn and to delays in announcing contracts with large tenants.⁹

Naver also plans an AI agent app before the end of the year, after the AI Briefing summaries and AI tab it has added to search, and a logistics subsidiary to run leased warehouses for faster delivery.² The scale of the build-out it is joining is in our quarterly line of Big Tech’s capital spending.