Kakao has designated this year as the first year of AI monetisation. Its core strategy is to shift its growth gear toward AI and KakaoTalk.

Kakao CEO Shina Chung (정신아) said on Feb. 12 on a conference call for its fourth-quarter earnings that the company is shifting its strategic gear toward growth in AI and KakaoTalk, which it considers its core. She said it is targeting more than 10 percent growth in annual consolidated revenue and a 10 percent operating profit margin this year.

STRATEGIC PARTNERSHIP WITH GOOGLE; ADVANCING ON-DEVICE AI

Chung disclosed for the first time on the call a strategic partnership between Kakao and Google. The partnership includes Android cooperation to advance on-device AI services, discussions on TPU cloud operations and cooperation on Google AI glasses to be launched in the future.

Chung said direct collaboration with Android developers could help identify possibilities in on-device AI services that maximise the value of data assets within the Kakao ecosystem. She said Kakao is also holding discussions with Google Cloud on operating a meaningful scale of TPU cloud.

Kakao has built a strategy of working with Google on device experience and with OpenAI on AI business-to-consumer services. Chung said the company aims to cover all layers of AI efficiently and optimise direct investment by partnering with leading global players in each field rather than doing everything itself.

CHATGPT FOR KAKAO HAS 8 MILLION USERS; TIME SPENT UP 4 MINUTES

Kakao's AI services are delivering visible results. ChatGPT for Kakao, launched last year, has expanded to 8 million users. Chung said it is creating a new traffic pattern in which users search for and generate content within KakaoTalk.

She said the AI services have significantly increased time spent on KakaoTalk. Chung said an analysis of changes in time spent over two months before and after use among user groups of ChatGPT for Kakao and Kanana in KakaoTalk showed KakaoTalk's average daily time spent rose by about 4 minutes. She said time spent, which had been stabilising lower, rebounded meaningfully and held steady in the 25-minute range in December.

Chung said results from the closed beta test of Kanana in KakaoTalk were positive. She said more than 80 percent of invited users completed the model download and began using it. She said about 70 percent of CBT users continue to use the service, keeping retention overwhelmingly high for a new service.

Chung said the key driver of the high retention was a "first talk" feature in which the AI initiates conversation. She said more than 60 percent of key usage patterns for Kanana in KakaoTalk begin with the AI's first talk. She said it confirmed that the AI's ability to understand user intent and initiate first talk based on deep user understanding is a strength of Kakao's on-device AI strategy and a strong moat that only Kakao can implement.

Kanana in KakaoTalk is scheduled for an official launch on both Android and iOS during the first quarter. Chung said the goal after the launch is to advance core functions that raise user value, expand access paths and attract a meaningful level of users.

BUILDING AN AGENT AI ECOSYSTEM; POTENTIAL CONFIRMED IN COMMERCE DOMAIN

Kakao will move in earnest this year to build an agent AI ecosystem. Chung said this year is the year Kakao will build its agent AI ecosystem in earnest, and it is the key task she is driving most importantly as CEO.

In the closed beta test of Kanana in KakaoTalk, a clear business opportunity was spotted in the commerce domain. Chung said the most frequently used functions were schedule reminders and briefings linked to the AI's first talk, and the next most significant user scenario was commerce. She said in the first half, the company is more actively setting as a goal the context in which transactions can occur.

Chung said various partners are expected to connect to Kakao's AI platform by the end of this year through Play MCP and an agent builder. She said she expects at least 3 players that can play a key role in building the agent AI ecosystem to join within the first half of this year.

Kakao is continuing talks with major domestic vertical commerce players and global operators. Chung said this year, as AI services spread and the use of agents increases, the value and usability of AI services will be further strengthened.

TOKBIZ ADVERTISING TARGETS DOUBLE-DIGIT GROWTH; EXPANDING COMMERCE AND SEARCH ADS

Tokbiz advertising is expected to continue strong growth this year. Tokbiz advertising grew 16 percent in the fourth quarter from a year earlier. Display ads rose 18 percent, ending five straight quarters of contraction and showing a clear turnaround.

Chung said the acceleration in Tokbiz advertising growth shown in the second half of last year is based on structural changes. She said the strong growth will continue throughout this year and contribute to improvements in overall consolidated operating profit.

Business messages are targeting double-digit growth this year. Chung said after the launch of brand messages, messages have begun to establish themselves as an effective tool beyond simple advertising, helping customer relationship management and repeat purchases. She said the business still has sufficient growth potential internally, with revenue capable of expanding by more than double.

Chung said display advertising has also secured growth drivers. She said the company will shift commerce placements, previously sold only as guaranteed products, to an open sales structure based on the KakaoTalk advertising platform starting in the second half. She said that would enable full-scale monetisation of commerce placements within KakaoTalk and lift the share of ad revenue, currently at a negligible level compared with transaction volume, to a meaningful level.

Chung said the company is also pushing a mid- to long-term expansion into search advertising. She said if user behaviour of searching within Talk becomes established as a result of AI service launches, expanding into search ads also offers ample opportunity over the mid to long term.

FIRST YEAR OF AI MONETISATION; MEANINGFUL REVENUE FROM 2027

Kakao has designated this year as the first year of AI monetisation. Chung said the company plans to build a business foundation this year as the first year of AI monetisation by focusing on expanding AI service users and implementing agent AI, and to generate meaningful revenue from next year.

AI investment will be carried out efficiently within a range that does not undermine existing profitability. CFO Jong-hwan Shin (신종환) said he expects the healthy trend of profit growth to continue this year. He said the AI segment will lay the groundwork for monetisation and then gradually reduce the scale of losses from next year.

Kakao reduced the number of affiliates last year to 94 from 150 as part of a restructuring. As a result, its 2025 annual consolidated revenue was 8.1 trillion won, up 3 percent from a year earlier, and operating profit was 732.0 billion won, up 48 percent, achieving record results.

Shin said this year will be the year Kakao re-enters a phase of full-scale growth and a starting point where both revenue and profitability begin to improve at the same time. He said the company aims to create a structure in which growth in net profit attributable to controlling shareholders and capital efficiency work simultaneously and to set as a mid-term target a return on equity similar to domestic industry peers, while showing step-by-step improvement.

Chung said Kakao will prove performance through visible near-term results improvement and at the same time show expectations for Kakao's mid- to long-term growth through tangible outcomes.