---
title: "Naver’s operating profit fell 21% as infrastructure and marketing costs rose about 30%"
summary: "Naver’s results for July to September: why operating profit fell 20.9% to ₩451.3bn on 10.7% more revenue, which costs rose, and what its AI Factory with Nvidia and Brookfield has signed."
url: https://www.thetechbag.com/blog/naver-operating-profit-falls-21-percent-infrastructure-costs
format: Analysis
desk: "Markets & the AI economy"
region: Global
published: 2026-11-12
facts_checked: 2026-11-12
author: TechBag (The TechBag Journal)
tags: ["Naver results","Naver Q3 earnings","Naver stock","Naver AI spending","Naver operating profit","Naver","NAVER Corp","AI Factory","Nvidia","Brookfield","infrastructure costs","depreciation","GPU useful life","marketing costs","Naver Pay","Npay Connect","Naver Webtoon","Wallapop","Poshmark","Naver Cloud","KOSPI","South Korea","earnings"]
cover: https://www.thetechbag.com/blog/covers/naver-operating-profit-falls-21-percent-infrastructure-costs.png
---

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

*Naver’s results for July to September: why operating profit fell 20.9% to ₩451.3bn on 10.7% more revenue, which costs rose, and what its AI Factory with Nvidia and Brookfield has signed.*

Analysis · Markets & the AI economy · By TechBag · Published 2026-11-12 · Facts checked 2026-11-12 · Canonical: https://www.thetechbag.com/blog/naver-operating-profit-falls-21-percent-infrastructure-costs

The short version

1. Naver’s operating profit fell 20.9% to ₩451.3bn in July–September, its third fall in a row, while revenue rose 10.7% to ₩3,472.4bn. The operating margin dropped to 13.0% from 18.2% a year earlier.[1]
2. Costs rose by ₩453.7bn, revenue by ₩334.3bn. Marketing grew 32.3%, infrastructure 29.1% to ₩282.3bn and partner costs 18.8%. Naver ties the infrastructure rise to computing equipment for its own use, which it has written off over six years since April rather than five.[1][3]
3. Naver says it has signed about ₩2tn of computing contracts for its AI Factory, built with Nvidia and Brookfield, with revenue from the first half of 2027. Its shares fell 6.90% to ₩180,900 on the day; the KOSPI fell 0.61%.[2][7][8]

Naver runs South Korea’s Naver search portal and the businesses around it: online shopping, Naver Pay, webtoons, resale marketplaces abroad and a cloud and enterprise arm. It reported its third quarter on 12 November. We read the results presentation, the release and the four earlier presentations they build on, in Korean, to answer three questions: why profit fell while revenue grew, which costs did it, and what Naver is buying with them.[1][2]

## Profit 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.[1][4][5] 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]

**Figure: Naver's operating profit has fallen three quarters running, to its lowest since early 2024**

*Consolidated operating profit, ₩bn, July to September 2023 to July to September 2026*

|  | Operating profit |
| --- | --- |
| Q3 23 | 380.2 |
| Q4 23 | 405.5 |
| Q1 24 | 439.3 |
| Q2 24 | 472.7 |
| Q3 24 | 525.3 |
| Q4 24 | 542 |
| Q1 25 | 505.3 |
| Q2 25 | 521.6 |
| Q3 25 | 570.6 |
| Q4 25 | 610.6 |
| Q1 26 | 541.8 |
| Q2 26 | 520.3 |
| Q3 26 | 451.3 |

Source: Naver earnings presentations, Q3 2024, Q3 2025 and Q3 2026 · as of 12 November 2026

13.0%

operating margin, July to September

From 18.2% a year earlier and 19.1% at the peak; the lowest of the 13 quarters back to July–September 2023.

ReportedBelow what analysts expected

The Korea Times reported on 21 October that the consensus of brokerage forecasts compiled by FnGuide was ₩500bn of operating profit on ₩3.51tn of revenue. The result was about 10% below that profit figure and slightly short on revenue.[9]

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.[7][8]

## What 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%.[1][2]

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.[1][2]

**Figure: Advertising is still 42% of Naver's revenue; payments and resale grew faster**

*Revenue by business line, ₩bn, July to September 2025 to July to September 2026*

Jul–Sep 2025

1,398.1

894.1

3,138.1

Oct–Dec 2025

1,415.3

896.2

3,195

Jan–Mar 2026

1,394.5

941.6

3,241.1

Apr–Jun 2026

1,447.2

1,015.9

3,388.8

Jul–Sep 2026

1,474.8

487.7

1,036.4

3,472.5

|  | Advertising | Platform services | Naver Pay | Global Challenge |
| --- | --- | --- | --- | --- |
| Jul–Sep 2025 | 1,398.1 | 418.6 | 427.3 | 894.1 |
| Oct–Dec 2025 | 1,415.3 | 434.9 | 448.6 | 896.2 |
| Jan–Mar 2026 | 1,394.5 | 445.3 | 459.7 | 941.6 |
| Apr–Jun 2026 | 1,447.2 | 455 | 470.7 | 1,015.9 |
| Jul–Sep 2026 | 1,474.8 | 473.6 | 487.7 | 1,036.4 |

Source: Naver earnings presentation, Q3 2026 · as of 12 November 2026 · Platform services: shopping commissions, membership and delivery. Global Challenge: resale, webtoons and enterprise

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]

TechBag countThe fall, segment by segment

Applying each segment’s margin to its revenue, the Naver Platform made about ₩468bn, against about ₩610bn a year earlier: a fall of about ₩143bn. Naver Pay’s profit fell by about ₩17bn, and Global Challenge’s smaller loss added back about ₩42bn. The three add up to within ₩1bn of the reported ₩451.3bn and ₩570.6bn; the margins are rounded to one decimal.[1]

## Costs 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]

**Figure: Costs rose 17.7% against revenue's 10.7%; marketing and infrastructure rose fastest**

*Growth on the same quarter a year earlier, %, July to September 2026*

Marketing

₩663.9bn

32.3%

Infrastructure

₩282.3bn

29.1%

Partner costs

₩1,324.0bn

18.8%

Development and operations

₩750.9bn

2.5%

All operating costs

₩3,021.1bn

17.7%

Revenue

₩3,472.4bn

10.7%

|  | Value (%) |
| --- | --- |
| Marketing | 32.3 |
| Infrastructure | 29.1 |
| Partner costs | 18.8 |
| Development and operations | 2.5 |
| All operating costs | 17.7 |
| Revenue | 10.7 |

Source: Naver earnings presentation, Q3 2026 · as of 12 November 2026

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.[1][3] 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.[1][2]

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]

## The 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]

**Figure: Naver's infrastructure bill is up 79% in three years, and jumped 28% in the last quarter**

*Infrastructure costs, ₩bn a quarter, July to September 2023 to July to September 2026*

|  | Infrastructure costs |
| --- | --- |
| Q3 23 | 157.3 |
| Q4 23 | 163.7 |
| Q1 24 | 169.9 |
| Q2 24 | 171.7 |
| Q3 24 | 178.1 |
| Q4 24 | 185.1 |
| Q1 25 | 189.3 |
| Q2 25 | 197.7 |
| Q3 25 | 218.6 |
| Q4 25 | 205.2 |
| Q1 26 | 250.8 |
| Q2 26 | 219.8 |
| Q3 26 | 282.3 |

Source: Naver earnings presentations, Q3 2024, Q3 2025, Q2 2026 and Q3 2026 · as of 12 November 2026 · Depreciation of GPUs and CPUs over six years instead of five from April to June 2026

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]

TechBag countWhat one more year does to the bill

An illustration, not Naver’s numbers: ₩600bn of servers written off evenly over five years costs ₩120bn a year; over six, ₩100bn. The total is the same, spread thinner. So July–September’s ₩282.3bn is already the lower, six-year figure, and it is still 29.1% above a year earlier.[1][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](https://www.thetechbag.com/blog/coreweave-revenue-168-percent-interest-four-times-profit).[12] Kyobo Securities, quoted by the Korea Times, expects Naver’s depreciation to rise from ₩824bn in 2026 to ₩1.041tn in 2028.[9]

## What 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]

**Figure: Brookfield funds the build, Nvidia buys in, and Naver runs it for customers**

*How the AI Factory is split between Naver and its partners, as Naver described it in July and November 2026*

1. 01NvidiaAgreed on 24 July to buy about US$1bn of newly issued Naver shares; supplies its DSX design and Blackwell, then Vera Rubin, GPUs.
2. 02BrookfieldPreliminary agreement on 22 July; once the main contract is signed, raises up to US$9bn through a special-purpose vehicle.
3. 03NaverRuns the platform, operations and customer service, starting at Gak Sejong: 55 MW in the first half of 2027, 200 MW in 2028.
4. 04CustomersAbout ₩2tn of computing-supply contracts signed with first customers; revenue from the first half of 2027.

Source: Naver post on the Nvidia and Brookfield agreements (24 Jul 2026); Q3 2026 release · as of 12 November 2026

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.[1][2] 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](https://www.thetechbag.com/blog/big-tech-ai-capex-quarterly-line).

Our viewWhat to watch

Three lines in Naver’s next presentations: whether infrastructure keeps rising now that the six-year life is in the base; when enterprise revenue first carries AI Factory income, which Naver puts in the first half of 2027; and whether marketing and partner costs fall back once the Npay Connect roll-out and the World Cup rights are behind it.

India: no Naver figure here, but the same three lines to read

Naver’s presentation and release give no figure for India: no Indian revenue, customer or data centre.[1][2] What carries over is how to read a company building AI capacity, Indian ones included. Find the years over which it writes off its GPUs, and whether that changed (Naver went from five to six this year). Find who pays for the build: Naver’s plan puts most of the money in a Brookfield vehicle. And find how far signed contracts run ahead of revenue: ₩2tn signed, revenue from 2027.

The Indian example of a different route is a lease. ESDS Software Solution, a Nashik data-centre company, has agreed to pay Sharon AI about US$1.25bn over five years for a cluster of about 8,200 Nvidia B300 GPUs, which it resells to one overseas customer.[10][11] We worked through what that does to its accounts in [ESDS’s GPU lease, 4.5 times its revenue](https://www.thetechbag.com/blog/esds-gpu-lease-4-5-times-revenue).

How we did this

Figures as of 12 November 2026, 8:30pm IST

Every Naver figure is from its own presentations and release, read in Korean; translations are ours. Figures are consolidated, under Korean IFRS, and provisional: Naver says the external auditor’s review is not complete and some may change. The quarterly series join three presentations (Q3 2024 for July 2023 to June 2024, Q3 2025 for July 2024 to June 2025, Q3 2026 for the rest); where they overlap, operating profit, infrastructure and marketing match. Naver restated 2025’s development and partner costs in its 2026 presentations, so cost growth is from the Q3 2026 presentation only.

TechBag arithmetic: the won increases in revenue and costs, revenue shares, marketing as a share of revenue, segment profit (segment margin times segment revenue, so within about ₩1bn), the gap to consensus, the 79% three-year rise in infrastructure, and the depreciation illustration. The share price, market value and KOSPI close are from Naver Pay Securities, Naver’s own market-data service, read after the close; the 6.90% fall is against its reference close of ₩194,300 for 11 November. The FnGuide consensus is the Korea Times’ report of 21 October; we did not read FnGuide itself. No earnings-call remarks are used, and no won figure is converted.

Spotted an error? Write to us; corrections are published at the foot of the piece.

Sources

1. [Naver: Q3 2026 earnings presentation (Korean)](https://www.navercorp.com/api/article/download/5424bdee-8b0f-4f03-b38f-a308a9381eb9) — 12 November 2026
2. [Naver: Q3 2026 results press release, revenue ₩3.4724tn, operating profit ₩451.3bn (Korean)](https://www.navercorp.com/media/pressReleasesDetail?seq=10034879) — 12 November 2026
3. [Naver: Q2 2026 earnings presentation, costs page and depreciation footnote (Korean)](https://www.navercorp.com/api/article/download/a769655e-43a9-4be8-8e78-d091981b1803) — 7 August 2026
4. [Naver: Q3 2025 earnings presentation (Korean)](https://www.navercorp.com/api/article/download/8f146078-3fcc-42a3-9112-d3bc7ee161ba) — 5 November 2025
5. [Naver: Q3 2024 earnings presentation (Korean)](https://www.navercorp.com/api/article/download/1da99ebf-f235-4a99-95ad-b04dec686751) — 8 November 2024
6. [Naver: Chairman Lee Hae-jin announces the AI Factory partnership with Nvidia and Brookfield (Korean)](https://www.navercorp.com/story/storyDetail?seq=10034596) — 24 July 2026
7. [Naver Pay Securities: NAVER (035420), daily price and market value](https://m.stock.naver.com/domestic/stock/035420/total) — 12 November 2026 Close; Naver's own market-data service.
8. [Naver Pay Securities: KOSPI index](https://m.stock.naver.com/domestic/index/KOSPI/total) — 12 November 2026 Close.
9. [The Korea Times: Is AI investment slowing Naver's profits?](https://www.koreatimes.co.kr/business/companies/20261021/is-ai-investment-slowing-navers-profits) — 21 October 2026
10. [ESDS Software Solution, Investor Presentation Q2FY27 (filed with NSE and BSE)](https://nsearchives.nseindia.com/corporate/ESDS_02112026174915_ESDS_Presentation_BSE_NSE.pdf) — 2 November 2026
11. [SharonAI Holdings, Form 8-K, Item 1.01: master services agreement and service order with ESDS](https://www.sec.gov/Archives/edgar/data/2068385/000149315226014475/form8-k.htm) — 1 April 2026
12. [CoreWeave: Form 10-K for the year ended 31 December 2025 (useful lives, critical accounting estimates)](https://www.sec.gov/Archives/edgar/data/1769628/000176962826000104/crwv-20251231.htm) — 2 March 2026

**Disclosure.** TechBag is a software reseller: it earns when companies buy through it, including from vendors named here. The analysis is TechBag’s own; no vendor paid for or saw this piece before publication. Facts are labelled reported, TechBag count or our view.

**Read this next:** [Big Tech's quarterly capex hit US$202bn, more than its operations brought in](https://www.thetechbag.com/blog/big-tech-ai-capex-quarterly-line) — The same build-out at the largest scale: Big Tech’s quarterly capex hit US$202bn, more than its operations brought in.

Go deeper on TechBag

- [CoreWeave’s revenue rose 168%; its interest bill was four times its operating profit](https://www.thetechbag.com/blog/coreweave-revenue-168-percent-interest-four-times-profit) — another AI infrastructure business that writes its GPUs off over six years
- [ESDS’s GPU lease averages US$250m a year, 4.5 times its revenue](https://www.thetechbag.com/blog/esds-gpu-lease-4-5-times-revenue) — the lease route to AI capacity, read from an Indian company’s filings
- [Taiwan’s TAIEX fell 12.2% in a week; Korea halted KOSPI trading](https://www.thetechbag.com/blog/taiex-down-12-percent-week-kospi-halt) — the Korean market Naver’s shares trade in, the week before