Naver Corp Q3 operating profit falls 20.9% on AI spending

Naver's third-quarter results show a company spending aggressively to stake out a position in AI while its core business still grows. Revenue rose 10.7% year-on-year to 3.472 trillion won, which the company attributed to resilience in search and advertising, with both online and offline revenue advancing in the quarter. That top-line strength did not carry through to profit: operating profit fell 20.9% to 451.3 billion won and net profit dropped 45.2% to 402.5 billion won.

The gap traces to spending. Naver said profitability was impacted chiefly by higher investments in AI infrastructure, and it is in the process of building a large AI factory in collaboration with Nvidia and Brookfield. Marketing expenses also rose 32.3% in the quarter, with shopping promotions on Naver's ecommerce platforms as the main driver.

The takeaway is a timing mismatch rather than a demand problem: the AI buildout and promotional spending are landing on the income statement before any payoff is visible, so investors are left watching whether the core operations can keep growing fast enough to absorb the costs.