South Korean internet giant Naver posted mixed first-quarter results on April 29, 2026. While revenue and operating profit grew, net profit declined sharply due to rising costs from aggressive AI expansion.
Financial Highlights
- Net profit fell 31% year-over-year to 291 billion won ($195.5 million), missing analyst consensus estimates of 512.81 billion won.
- Revenue rose 16% to 3.241 trillion won.
- Operating profit increased 7.2% to 541.8 billion won.
- Naver’s core platform business (advertising and online shopping) remained strong, with operating profit in the segment up 15%.
The weaker bottom line reflects higher operating expenses as the company ramps up AI initiatives. Naver plans to purchase 60,000 graphics processing units (GPUs) from Nvidia, which analysts expect will pressure margins in 2026 and beyond. Nomura forecasts capital expenditure could reach 1.6 trillion won this year and 1.9 trillion won in 2027.
Despite the earnings miss, Naver shares have already underperformed the broader market, falling about 9% year-to-date while the Kospi index has risen nearly 60%.
Aggressive AI Push to Drive Future Growth
Naver is doubling down on artificial intelligence to strengthen its search and platform ecosystem in a competitive market. CEO Choi Soo-yeon emphasized continued AI investment to create new opportunities across advertising, shopping, payments, and content.
Key AI Service Launches in Early 2026
These features build on Naver’s earlier “AI Briefing” service launched in March and aim to deliver faster, richer, and more actionable search experiences.
AI Tab (Beta launched late April 2026)
A conversational “agent” search service designed for natural, context-aware dialogue. Users can ask complex questions incorporating intent, situation, and preferences. It excels at summarizing rich user-generated content (UGC) from cafes and blogs — delivering vivid details like restaurant ambiance, food taste, travel tips, or product insights. It also provides personalized recommendations for products and places based on Naver’s vast databases. Initially available to Naver Plus membership users, with full rollout planned for the first half of 2026.
AI Briefing Enhancements
- Multi-source Instant Answers: Aggregates key facts from multiple sources into concise, top-of-page summaries.
- Accommodation Expansion: Now covers hotels and lodging with categorized details on facilities, rooms, activities, and dining.
- Image-type AI Briefing: Uses relevant images alongside text summaries to explain complex topics (e.g., math formulas, scientific structures, or comparisons) more intuitively.
AI Source Information (Rolling out May 14, 2026)
Provides AI-generated context for official blogs from public institutions, educational bodies, and hospitals to help users assess credibility.
Outlook
Naver is evolving from a traditional search engine into an AI-powered digital ecosystem. While heavy capex raises short-term margin concerns, successful AI integration could open significant new revenue streams and help the company defend its dominant position in South Korea’s online market.
The coming quarters will be critical as investors watch whether Naver’s substantial AI bet translates into sustained earnings growth.
- https://www.wsj.com/business/earnings/naver-posts-weaker-first-quarter-earnings-1a3511ec
- https://blog.naver.com/naver_search/224182669683
- https://blog.naver.com/naver_search/224182685903
- https://blog.naver.com/naver_search/224231476666
- https://blog.naver.com/naver_search/224267082002
- https://blog.naver.com/naver_search/224277842919
