Naver's Quarterly Profit Drops 45% on AI Infrastructure Costs

what happened

Naver's third-quarter net profit fell 45% year on year to 402.50 billion won ($300.6 million), according to Update, landing below the 476.19 billion won consensus compiled by FactSet. Revenue rose 11% to 3.472 trillion won, but operating profit dropped 21% to 451.30 billion won as spending on AI infrastructure and an 18% jump in operating costs squeezed margins.

Growth in the platform business, which covers advertising and online shopping, slowed to 7.3% from 12% in the previous quarter. Management highlighted a deal worth roughly $1.5 billion with a US company that runs AI inference, with computing services due to launch in the first half of next year, and said talks with dozens of North American AI firms are ongoing. Shares slid about 6% and are down roughly 25% this year, while the Kospi has gained nearly 30%.

why it matters

For investors, the quarter shows AI build-out costs arriving before the revenue they are meant to generate. CFO Kim Hee-cheol expects AI-related expenses to grow more slowly in 2027 after this year's peak, while Nomura cut its earnings-per-share forecasts by 8% for this year and next. Mirae Asset expects capacity to start at 55 megawatts in the first half of 2027, reach 100 megawatts by year-end and hit 1 gigawatt by 2032.

market impact

Naver shares: weak profit and rising AI costs pressure the stock and its margins

• ▼Naver shares pressure down — profit below expectations and margin pressure from AI spending

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