NHN posted a slight year-on-year decline in first-quarter operating profit after reflecting costs for upfront investment in artificial intelligence (AI) infrastructure.

NHN said on May 12 that consolidated first-quarter revenue rose 11.9 percent from a year earlier to 671.4 billion won. Operating profit fell 5 percent to 26.3 billion won, as it included costs such as building AI graphics processing unit (GPU) infrastructure.

Revenue by segment showed steady growth across payments, games and technology. The payments segment posted 354.6 billion won in revenue, up 22.1 percent from a year earlier, driven by rising transaction volume at NHN KCP and strong performance by PAYCO's corporate welfare solution.

The games segment generated 127.8 billion won in revenue, up 6.8 percent. Revenue from web board games rose 11 percent on the effect of regulatory easing, while Japanese mobile games including 'LINE: Disney Tsum Tsum' and '#Compass' delivered results.

The technology segment also rose 19 percent to 125.7 billion won, supported by growth at NHN Cloud and NHN Techorus. Other segments posted 84.7 billion won.

NHN will focus on creating new results based on its technological edge. NHN Cloud, which leads the technology business, began operating water-cooled GPU B200 systems built in its Seoul Yangpyeong region and will build high-specification GPU B300 systems at the Gwangju National AI Data Center. It plans to further expand market dominance as a leading domestic AI cloud service provider (AI CSP) by responding to surging demand, including by signing a GPU supply contract with AI infrastructure specialist VesselAI that it expects will generate more than 20.0 billion won in sales.

In the payments business, it aims to pre-empt the next-generation payments market centred on stablecoins, based on NHN KCP's proprietary mainnet. Its flagship web board games will offer differentiated experiences through initiatives such as an offline tournament for its mobile poker game (HPT).

NHN will also begin buying back its own shares worth a total of 16.7 billion won from May 12 and plans to cancel all of them immediately after acquisition is completed. The size corresponds to the full amount of funding planned this year for share buybacks.

NHN CEO Woojin Jeong (정우진) said its key core businesses continued to expand in scale as they showed even growth in the first quarter. He said upfront infrastructure investment to ramp up its AI GPU business acted as a temporary burden on profitability, but he expects meaningful performance improvement this year as large-scale orders continue to come in based on its technological advantage.