Naver Posts Weaker First-Quarter Earnings
By Kwanwoo Jun
South Korean internet giant Naver posted weaker first-quarter earnings due to higher operating costs, despite steady growth in its core search-platform and e-commerce businesses.
The below-consensus quarterly results come as the company is ramping up efforts to integrate artificial-intelligence tools across its businesses to drive revenue and earnings growth.
The company is also planning to purchase 60,000 graphics processing units from Nvidia, which analysts say could begin to weigh on margins this year.
Net profit for the January-March period fell 31% from a year earlier, to 291 billion won, equivalent to $195.5 million, the company said Thursday.
That missed a FactSet-compiled consensus estimate of 512.81 billion won.
Revenue rose 16%, to 3.241 trillion won, and operating profit increased 7.2%, to 541.8 billion won.
Naver's flagship platform business, which includes advertising and online shopping services, maintained strong growth, with operating profit for the segment rising 15%.
Like other global tech companies, Naver is racing to roll out AI-backed services as it seeks to retain customers in an increasingly competitive online market.
Earlier this week, the company unveiled a test version of its new "AI Tab" agent service ahead of rolling it out to all users in the first half of the year.
Chief Executive Choi Soo-yeon said Naver will also continue its AI push. She earlier said the company is also seeking to broaden its "AI Briefing" search service launched in March.
Analysts have mixed views on Naver's aggressive AI push: Increased AI investment could create new business opportunities but also risks pressuring profit margins. Yet that same drive helped the company evolve from a search engine into a digital powerhouse spanning advertising, shopping, payments and paid content in South Korea.
Nomura estimates that Naver's capital expenditure could increase to 1.6 trillion won this year and 1.9 trillion won in 2027.
Shares in the company have significantly underperformed the broader market this year. The stock has fallen about 9% year to date, compared with the benchmark Kospi's nearly 60% rise.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
(END) Dow Jones Newswires
April 29, 2026 19:53 ET (23:53 GMT)
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