Kakao Corp. ($A035720)

[Interpreted] Good morning, and good evening. Thank you all for joining today. We will now begin Kakao's 2026 First Quarter Earnings Conference Call. This conference will start with a presentation followed by a divisional Q&A session. [Operator Instructions] I will now turn it over to Kakao.

[Interpreted] Hello. I'm Jeffrey from Kakao IR. We'll now begin Kakao's 2026 First Quarter Earnings Conference Call. Today, I am joined by Shina Chung, the CEO; and Jayden Shin, the CFO. Please be reminded that the earnings results are consolidated estimates under the K-IFRS basis and are subject to change upon the auditor's review. Also, forward-looking estimates are based on assumptions, so actual results may differ from figures included in today's presentation. Now we will have a presentation from CEO, Shina Chung.

[Interpreted] Good morning. This is Shina, CEO of Kakao. Across the broader AI industry, we are seeing the rapid expansion of execution-oriented environments where agents can be built, connected to external services and ultimately perform real actions. At the same time, expectations and interest around personalized AI agents also appear to be rising. I've also spent extensive time using some of the AI agent services that are currently gaining attention. And what I found was that due to clear limitations such as excessive token consumptions and privacy risk, there are still many challenges to overcome before these services can scale into products used by the broader population. In fact, I believe these limitations will create a clear opportunity for Kakao in the coming era of agentic AI. But I would like to emphasize that this is, Kakao is already ahead of others in securing the necessary technologies and building the core elements of the ecosystem required to capture this new opportunity. The web-based agents widely used in the market today are structured in a way where one large agent handles all domains and tools. As a result, they inevitably need to maintain a high degree of flexibility. This means that when they adopt screenshot-based CLMs or CUA computer use agent approaches, token consumptions can become excessive. It can also take a significant amount of time before the user receives the desired results from a request. By contrast, Kakao's agentic AI platform is designed around a distributed collaboration structure. Instead of relying on a single large agent, it consists of a lightweight orchestrator at the top layer and specialized agents for each domain of the lower layers. The top layer orchestrator analyzes the user's intent and routes the task to the appropriate domain. Then the specialized agents carry out the task organically through an agent-to-agent protocol. With this structure, Kakao's agentic AI platform is designed to significantly reduce both token usage and the time required to process user request. In addition, following the release of Kanana-2 late last year, we're preparing to unveil Kanana-2.5, a 150 billion parameter model. Like Kanana-2, Kanana-2.5 was developed from scratch and optimized for our agentic AI platform. In comparing base model performance, we have confirmed that it delivers the strongest performance among domestic and global LLMs with similar parameter sizes. Also, while its parameter size is less than 10% of global SOTA models, it shows significantly better performance in execution-oriented areas that are essential for the services Kakao needs to operate, such as planning and function calling. In addition, we completed the development of our proprietary tokenizer last year, which led to a significant improvement in both training cost efficiency and inference speed. The Kanana tokenizer maintained strong English processing performance while offering the most efficient Korean compression capabilities among publicly available models in Korea and globally. When using a general purpose tokenizer, Korean can require roughly 1.5 to 3x more tokens than English to express the same meaning. Through the Kanana tokenizer, we have confirmed up to a 40% reduction in training costs compared to the existing tokenizers as well as up to a 60% improvement in inference speed. With these capabilities, Kakao is completing the technical preparations needed to scale up its agentic AI platform for the entire population, not just a small group of users much faster than the market expects. At the same time, this year, we are focusing on [ securing ] user touch points, one of the key components of the agentic AI ecosystem where users and agents can meet. Kakao aims to onboard all 50 million users to AI services. We plan to launch services in various forms and address user needs in a more segmented way. ChatGPT for Kakao is designed to target users who are familiar with AI, actively use it and are willing to pay for AI services. Kanana and KakaoTalk, on the other hand, is designed so that anyone can naturally use AI in their daily lives, even if they have limited understanding of AI or are not willing to pay for their services. In the third quarter, we plan to significantly expand the user base for the AI services already launched within KakaoTalk while continuing our efforts to improve user activity. First, Kanana and KakaoTalk and Kanana Search are services that leverage the strength of messaging to proactively identify users' needs within the context of conversation. They go beyond simply suggesting relevant information or actions and provide an experience where reservations and payments can be connected into a single flow. Kanana and KakaoTalk completed its CBT on iOS devices in March and has been launched on Android devices. Even after the launch, user activity has continued to improve at a healthy pace. The share of daily active users who respond proactive messages from the agents as well as the number of actions per user have both improved meaningfully compared to the CBT period. User retention also remains at around 70%, similar to the levels seen during the CBT. We believe this is a positive result that reflects the strength of an on-device AI service that only Kakao can deliver. However, given that the service is still in its early stages, there is still work to be done to further improve the accuracy and the quality of responses as well as the accuracy of proactive messages in the intervening at the right moment. We will continue to enhance the model and improve the service in a way that increases user activity and satisfaction. Alongside Kanana and KakaoTalk, last month, we also began the phased rollout of Kanana Search, which extends conversation context-based AI experiences to the exploration area. The biggest differentiator of Kanana Search is that it identifies users search needs in real time within conversations and allow them to check the information they need directly inside the KakaoTalk chat room. Users can now explore and share search results for places or product mentioned in the conversation as well as trending topics that people are most curious about at that moment. And all of these actions can be done without leaving the KakaoTalk chat room. Kanana Search is currently being tested in beta with a small group of users. Although Kanana Search is still in its early stage, only 3 weeks after launch, we have already seen positive initial results with query-based activities among target users increasing meaningfully compared to the existing keyword input-based Sharp search. In addition to Kanana and KakaoTalk and Kanana Search, we provide natural AI experiences based on conversational text. ChatGPT for Kakao is expanding the scope of AI usage within KakaoTalk by also covering explicit exploration needs. ChatGPT for Kakao has now surpassed 11 million cumulative registered users, securing a meaningful user base. At the same time, MAU has already doubled -- nearly doubled quarter-over-quarter, while monthly messages sent per user have more than doubled. As a result, both the user base and the user activities are showing clear improvement. Internally, we see this as a sign that users are moving beyond simply visiting the service and entering a stage of repeated usage. Kakao's mid- to long-term AI vision is for all 50 million KakaoTalk users to have their personalized AI agent. Accordingly, we are preparing across both services and models based on the assumption of a future where all 50 million users are onboarded. On the service side, by leveraging on-device AI models and partnership, costs do not increase linearly simply because the number of users grow and activity metrics increase. On the model side as well, we have implemented an architecture that can support an agentic AI ecosystem used daily by a large-scale user base in the most cost-efficient way. Rather than focusing on concerns around cost increases, Kakao will focus on the new growth opportunities that are opening up and move forward in earnest with scaling up its agentic AI platform. Following the AI business, I will now discuss the advertising business, another key growth pillar for Kakao. KakaoTalk has recently seen rapid growth in video and feed type content consumption. As a result, it is evolving beyond a simple messenger into a platform where users explore and discover content and where relationship and interest are connected. In particular, for our short-form services, the expansion of creators and the advancement of personalized recommendations are working together to broaden the range of content available. As of April, average daily valid views have more than doubled compared to the period immediately after the service launch and overall activity metrics are all showing meaningful upward trend. From an overall service perspective, it is still in the early phase with further improvements needed in the content competitiveness and the ease of use. But as the user base continues to expand and usage frequency rising at the same time, we believe the pace of growth will gradually enter the acceleration phase going forward. The changes in user experiments are also translating into visible reserve for the advertising business. As user content consumption expands, video and feed type ad inventory has increased, both improving both ad delivery and efficiency. As a result, we are seeing a rapid inflow of demand from SME advertisers and video-oriented campaigns. At the same time, within this expanded inventory, Kakao is automatically optimizing the most efficient combination of ad placements and creatives based on advertisers' objective, user context and real-time performance data, thereby strengthening its competitiveness as an ad tech platform. As a result, the revenue share of display ad other than Bizboard, which accounted for only around 10% of total Talk Biz display ad in the first quarter of last year, expanded to around 30% as of the first quarter this year. Accordingly, the advertising revenue structure also shifted from one centered on specific products or a limited number of large advertisers to a more diverse structure, leading to the highest first quarter revenue on record. In the first quarter, supported by solid growth in the platform business, consolidated revenue grew 11% year-over-year, returning to a double-digit growth for the first time in 8 quarters. What is particularly encouraging is that unlike the past expansion of scale driven mainly by inorganic growth, this quarter delivered qualitative growth through the strengthening of our core competitiveness. In terms of profitability, structural improvement also continued as operating leverage began to work in earnest across the high-margin platform business, led by Talk Biz, our core business. As a result, both consolidated revenue and operating profit reached record high for the first quarter, while operating margin came in at 11%. Building on the structural growth trajectory that our existing businesses, Kakao is now beginning its transition beyond the simple messenger to an agentic AI platform used by 50 million users. Going forward, we expect interactions between users and agents to increase significantly across various touch points within KakaoTalk, while the pace at which key players across different verticals joined Kakao agentic AI platform is also expected to accelerate. For agentic AI to spread within the mainstream, it will need to go through multiple stages in sequence. But we believe we have taken a strong first step in the first half of this year. And from the second half, as users will be able to experience agents that starts from conversation inside KakaoTalk and complete the flow all the way to payment, we expect to reach an important inflection point. KakaoTalk has long connected communications between people in the most complete way. This technical capability will also become Kakao's strongest competitive advantage in implementing the A2A protocol, which supports communication and decision-making between agents. In the near future, we will show through KakaoTalk a future where all 50 million users interact with their own personalized AI agents every day as part of their daily lives. Next, Jayden, our CFO, will present the 2026 first quarter financial results.

[Interpreted] Hello. This is Jayden, Kakao's CFO. I will present the consolidated financial results for the first quarter. Consolidated revenue for the first quarter recorded KRW 1,942.1 billion, up 11% Y-o-Y, but down 5% Q-o-Q. Platform segment revenue reached KRW 1,182.7 billion, growing 16% Y-o-Y and decreasing 4% Q-o-Q. First, revenue for Talk Biz, Kakao's core business was KRW 608.6 billion, up 9% Y-o-Y, but down 3% Q-o-Q. First quarter Talk Biz advertising revenue recorded KRW 338 billion, underpinned by the solid growth of business message and Talk display ads, it increased 16% Y-o-Y, though it declined 10% Q-o-Q due to seasonality. Business message revenue showed even stronger growth, rising 27% Y-o-Y despite the high base effect from last year's consistent double-digit growth across the whole year. Growing demand from financial advertisers to deliver information safely and effectively led to higher total message volume. Furthermore, the diversification of message products expanded the scope of use for advertisers, driving revenue growth. Talk display ads recorded 10% Y-o-Y growth as advertiser demand continued to rise structurally following the expansion of feed-based ad inventory. Growth was driven by the increased use of short-form video and image-centric creatives, along with new demand from small to medium commerce advertisers active in live commerce. First quarter combined commerce GMV reached KRW 2.9 trillion, up 10% Y-o-Y, but down 3% Q-o-Q. By strengthening our product lineup in high-demand categories like fresh food and home appliances ahead of the Lunar New Year and refining personalized benefits, we maintained Y-o-Y growth through combined holiday demand and promotional effects. Notably, through Kakao Shopping Festa, our largest promotion of the first half held in March, Talk Store GMV, which had been stabilizing downward, successfully rebounded with 18% Y-o-Y growth. Additionally, self-purchased GMV within Talk Gift grew 53% Y-o-Y with the portion of self-purchase expanding to 20% of total gift GMV. Moving forward, we aim to unlock further growth potential by turning the user experience into a habit, not just for gifting, but for personal product discovery and consumption. For reference, commerce revenue was KRW 270 billion, up 1% Y-o-Y and 7% Q-o-Q. Platform others revenue recorded KRW 507 billion, up 30% Y-o-Y and down 4% Q-o-Q. In mobility, we achieved double-digit Y-o-Y growth for the third consecutive quarter, supported by steady performance across the taxi business, parking, last mile logistics and advertising. Kakao Pay's quarterly revenue surpassed KRW 300 billion for the first time, fueled by balanced growth across payment, finance and platform services. Specifically, the expanding share of financial services driven by the strong performance of the securities business has led to record-breaking operating profits every quarter since its turnaround in the first quarter of last year. First quarter revenue for content was KRW 759 billion, up 5% Y-o-Y but down 7% Q-o-Q. Story business revenue recorded KRW 182 billion, down 14% Y-o-Y and 5% Q-o-Q. E-commerce first quarter revenue in yen decreased 9% Y-o-Y due to the market slowdown in the Japanese manga sector, remaining flat Q-o-Q. However, by optimizing marketing to increase user retention, the operating margin exceeded 20%, proving its robust profitability once again. Following the launch of Piccoma Kuji last year-end, we plan to introduce new short-form animated video content within the platform, utilizing popular IPs starting in late May. Piccoma plans to further enhance user traffic and immersion by providing diverse entertainment opportunities based on its rich archive and solid fan base. Piccoma will continue to build a firm foundation for mid- to long-term growth, leveraging the healthy profit structure of its existing webtoon platform. Meanwhile, Kakao Entertainment Story business saw a decline in GMV across both platforms and distribution, resulting from the overall market slowdown. Music revenue recorded KRW 485 billion, up 11% Y-o-Y, but down 8% Q-o-Q. Y-o-Y growth was driven by strong album sales from anchor IPs, including IVE and EXO and the expanded global tour of major artists. Conversely, revenue declined Q-o-Q due to the high base effect of MD and licensing revenue last quarter. Finally, media revenue recorded KRW 92 billion, up 23% Y-o-Y and down 3% Q-o-Q, reflecting changes in recognized titles and production progress this quarter. Next, regarding operating expenses. First quarter operating expenses recorded KRW 1,731 billion, up 7% Y-o-Y and down 5% Q-o-Q. Labor costs increased 5% Y-o-Y due to salary hikes at subsidiaries, but decreased 2% Q-o-Q to KRW 445 billion following the base effect of year-end bonuses. Marketing expenses recorded KRW 73 billion, down 3% Y-o-Y and 34% Q-o-Q as marketing by Piccoma and Pay were concentrated in the fourth quarter. The ratio of marketing expenses to consolidated revenue was 4% Revenue-linked costs increased 6% Y-o-Y due to expanded music IP activities and media production costs, but decreased 5% Q-o-Q to KRW 701 billion, reflecting the base effect of subsidiary service costs in the fourth quarter. Outsourced infrastructure costs increased 9% Y-o-Y due to rising demand in the Platform segment. However, they decreased 12% Q-o-Q to KRW 208 billion, reflecting a decrease in production-related outsourcing and the base effect of one-off costs from the AXZ spin-off. Amortization expenses recorded KRW 197 billion, up 2% both Y-o-Y and Q-o-Q, impacted by one-off bad debt expenses and intangible asset amortization related to the consolidation of DearU. Consequently, first quarter consolidated operating profit reached KRW 211 billion, a 66% increase Y-o-Y, showing a significant improvement in profitability. The operating margin improved by approximately 4 percentage points to 11%. Historically, the first quarter has shown lower profitability due to seasonal factors. This quarter, however, efficiency measures in core businesses was reflected in our results, confirming that structural profitability improvement, transcending seasonal patterns is now in full swing. For reference, stand-alone operating profit for the first quarter was KRW 119 billion, up 15% Y-o-Y with the operating margin improving to 17%. Moving on to nonoperating items. First quarter nonoperating income recorded KRW 121 billion, an increase of KRW 14 billion Y-o-Y and KRW 263 billion Q-o-Q. This represents a sharp improvement compared to the previous quarter, which saw impairment losses on goodwill and intangible assets during the year-end audit. Income tax expense for the first quarter was KRW 46 billion, and consolidated net income recorded KRW 227 billion. Lastly, total CapEx for the first quarter was KRW 118 billion, consisting of KRW 92 billion in tangible assets investments and KRW 26 billion in intangible asset investments. CapEx decreased by KRW 21 billion Y-o-Y as AI-related investments were concentrated in the first quarter last year and decreased by KRW 75 billion Q-o-Q due to the base effect of tangible asset acquisitions by subsidiaries. This concludes the presentation on the first quarter earnings for 2026. We will now proceed to the Q&A session. [Operator Instructions]

[Interpreted] [Operator Instructions] The first question will be provided by Minuh Cha from Goldman Sachs Securities.

[Interpreted] I have 2 questions. First question relates to your various AI service products. You have rolled out Kanana in KakaoTalk, Kanana Search and ChatGPT for Kakao. I would like to understand about this because I see that despite such rollout, we haven't seen any massive promotion that was done by the company nor was there any significant buzz or expansion of your user base. And I think hence, the speed of the diffusion of such AI services was less than expected. Can you explain as to the reason why? And also, what are your plans going forward to expand on your user base in the future? Second question, as Shina has also mentioned during the opening presentation, the company has been highlighting the importance of agentic AI platform I would like to understand as to the update of the onboarding of and your collaboration with your external partners from different verticals. And also, can we look forward to the agentic commerce being implemented before the end of the year?

[Interpreted] This is Shina. First, responding to your question on our AI service rollout and how it's creating less buzz than what the market has expected and the speed may be a bit slow compared to market expectation. Now I can tell you that Kakao is strategically modulating the speed of diffusion of the AI services rollout. We have been adopting a phased approach. Speed may, therefore, seem a bit slow versus market expectation. But I can tell you that it is an intended strategy of the company because we wanted to secure user retention and provide more complete experience to our user base rather than focusing on short-term traffic gains. Now Kanana and KakaoTalk and Kanana Search, I can tell you are new service types and not many global references currently exist, and it is a key entry point to expanding the agentic AI. We're focusing on enabling user experience by bringing these 2 services seamlessly into the messaging scene and continuously improve the degree of completeness based on the feedback and user activity and engagement metrics. So we will fully verify the utility of these services and then push towards diffusion underpinned by KakaoTalk traffic and the network. Kanana and KakaoTalk is actually showing a quite meaningful improvement in terms of user satisfaction. April's user feedback monitoring showed that 70% responded positively to messages that was initiated by the Kanana agent and 80% provided positive responses to quality of such responses. Now by the end of the year, we expect around 31 million prospective users who will be able to download the model, and we will continue to scale up the model and drive quality so more users can enjoy using AI services. Kanana Search is in beta service against a very small group of people at this point. And once the service development reaches a certain level, we expect network effects to kick in and user diffusion will take place quite quickly. We will use various different business models that best fit AI search in the mid- to longer-term horizon. For ChatGPT for Kakao, our focus will be on driving repeat visits and stronger user engagement beyond simply expanding the user base. We will launch new features that will trigger sharing and lead to participation by the users and provide more touch points for them to use ChatGPT with greater ease. We will introduce ChatGPT's Go plan, which is a more reasonably priced plan to lower the entry barrier in terms of pricing and expand subscriber base gradually. Now moving on to your second question about the agentic AI ecosystem and a partnership update. Now although the market is moving quite fast in terms of the agent technology development, in terms of the service level, we're still at a simple information delivery and exploration stage. And due to different interest among the platform operators, there are a lot of hurdles to achieving a seamlessness and to complete the flow all the way up to the final step of payment. To overcome this limitation, starting April, we connected Kanana and KakaoTalk and our internal services KakaoTalk Gift, testing the early version of this agentic commerce. We have implemented an architecture where user stays within the context of the dialogue from understanding of the intent to product recommendation up to payment, the flow and action is completed without the user having to leave the chat room. This month, we will test connection to our external partner and validate scalability of agentic commerce going beyond the boundaries of Kakao ecosystem. We expect with AI agent diffusion, we'll move from app-centric service and evolve into a headless architecture where function and interface is separated with a downsized front end. But when we talk to key players from different verticals, there is still fear and strategic resistance to moving over to the headless ecosystem, especially for partners who generate their ad revenue based on their own traffic, they're worried about losing their control over the existing traffic, and that is why they're taking on a prudent stance. Despite that, we've had meaningful progress with highly influential players in several of the verticals during the first quarter. In working with big partners, we will do more than a simple API and functional integration. We use Kakao's agent builders to implement end-to-end architecture to support search based on A2A protocol going through the entire flow up to payment where there isn't yet a global reference of commercial use. In other words, agents will identify user intent in the context of the conversation, initiate exploration and make recommendations upon which actual transaction for service and product would take place without the user having to leave KakaoTalk. This is a proactive agent service, which we are currently working on. So before the -- before next earnings call, all of you will be able to experience the initial version of agentic commerce that only Kakao can provide in connection with many of the partners that we are working on -- working with across many different verticals. With this, the users will be able to make a very rapid decision. And also from the partner company's perspective, they will be able to secure new traffic with high level of intent by using this new funnel. And this would create higher conversion rate as well as drive up GMV. And we expect that with this synergistic structure in place, we will be able to accelerate our partnership expansion.

[Interpreted] The following question will be presented by Seokoh Kang from Shinhan Investment & Securities.

[Interpreted] My question relates to your financials. Can you give us a bit more color on what your outlook is for second quarter performance? And also despite the fact that there is negative seasonality usually in the first quarter, you have already achieved your guidance of OP margin of 10% would like to understand, would this lead to any changes in the annual guidance that you had previously communicated? Second question is on advertisement. Can we continue to expect a solid growth and uptrend for your Talk Biz? And also, what will be the key product or strategy that would be the key lever behind growth going forward? And also usually in the second half of the year, due to the high base effect for your Talk Biz, I would like to understand what -- I guess, what impact that will have on your second half advertisement -- excuse me, second quarter advertisement outlook?

[Interpreted] Let me first respond to the question on our second quarter performance outlook. We expect that following the trend that we've seen in Q1 in Q2 as well, the platform growth will be quite solid, and it will be a key lever behind the growth of the consolidated revenue for the company. Especially if you look at platform business, the core businesses of Talk Biz ad and commerce is continuing on its growth uptrend. And also thanks to the tailwinds that we are seeing from Kakao Pay's payment business and its securities business, we expect the profitability uptrend will also continue for the time being. Now having said that, there was a ban on the imposition of franchise fees on the roaming taxis, which came into effect -- which will come into effect from May, and we expect there will be some top line impact from that factor. For our content business, we're expecting growth in terms of the artist tours and appearances for the music business. And so we do expect growth coming from the music business. But because of the limited growth potential growth coming from our story business and also with higher level of marketing spend, we are currently taking a conservative approach when we are making projections for its profit contribution. Especially for Piccoma, they are planning on a more broader user engagement campaign in line with their 10-year anniversary event as well as promotion for the Golden Week. We believe that coming out of that, there will be an increase in marketing expense. So all in all, if you look at the second quarter, we do expect a solid revenue trend. However, because of the temporary expansion in the marketing spend, the improvement in the profit is going to be limited. Now having said that, from an annual perspective, because of the high-margin Talk Biz business as well as a solid growth coming from our overall platform business, we believe that we will sufficiently be able to achieve the financial guidance that we communicated at the beginning of the year. Also, higher marketing spend by Piccoma in the second quarter is going to be a one-off factor, and it will be underpinned by higher level of user engagement that will be led by such marketing spend in the second half of the year. And so we expect a recovery in terms of top line revenue and profit.

[Interpreted] This is Shina again. I will respond to your second question about our KakaoTalk ad business. Q2, the Talk Biz ad, we expect to when we project that there will be a solid double-digit growth. Now the results that we are currently enjoying from our advertisement business is not a one-off impact from a mere expansion of the ad inventory, but we believe that this is an outcome of a structural enhancement in terms of advertiser diversification as well as changes of our users within -- behavioral changes of the KakaoTalk users. Underpinned by these drivers, we believe that growth will also continue onwards even when we enter the phase where the base effect weighs down on the results. Now firstly, for Talk Biz display ads based upon user activity and engagement, we think that there will continue to be structural growth continuing into the second quarter. And also, there is solid demand from our advertisers and finance and commerce segment for business messaging. And by providing wide-ranging and diversified message product offering, we will be able to further improve and increase and strengthen the CRM features. And so despite the high base effect, we are looking forward to a high rate of growth. Also for KakaoTalk ad pivoting on display ad and business messaging, the ad product spectrum has been widening. And so we have a very strong structure under which the advertisers can effectively in alignment with their purpose and the user context can really reach the customer that they are intending to reach. As a result, we're not simply seeing improvement in a simple impression, but also it is connected to converting or the conversion or the repeat visit. And as such, the marketing approach and marketing spend has been continuously being scaled up, and we are seeing quite meaningful results from ROAS perspective as well. In the second half of the year, we will go beyond our business messaging and display ad and we'll expand our commerce ad portfolio as well so that we can gain additional growth engine going forward. Now within Kakao's platform, we have more than 40,000 commerce seller pool. However, due to limited inventory and sales structures, their use of our marketing has been quite limited. So going forward, by making use of the commerce advertisement inventory and by transitioning to a moment-based open structure, we want to speed up and accelerate these commerce sellers to become the advertisers. So our objective is to actually increase by fourfold the share of advertisement against the monthly basis commerce GMV or GPV to be about 4x higher compared to the beginning of the year.

[Interpreted] So due to the time constraint, we will now take the final question. The last question will be presented by [ Joon Ho Lee ] from Hana Securities.

[Interpreted] I just have one question. With your recent decision to sell your stake in Kakao Healthcare and Kakao Games, I would like to know what impact it has on your consolidated P&L? And what would be your plan in terms of realigning your portfolio going forward?

[Interpreted] Starting last year, Kakao has been focusing on streamlining its governance so that it can really focus on its core businesses. So as a result, right now, our number of subsidiaries that are consolidated have come down to 95. And once we complete the deconsolidation process for Kakao Games, it will come further down to 87 entities. Following the sale of the holdings that we had in Kakao Healthcare that was conducted end of last year, we are also going through the process, similar process for Kakao Games. And basically, the intent is to grow together -- have them grow together with partners who have greater level of expertise and execution capabilities in each of those industries and sectors. Kakao is no longer going to be the majority shareholder, but we still hold on to minority share and equity. And so going forward, we will try to build a structure whereby we can share the growth of such businesses and the increases in the value of such businesses. So the revamping of our business portfolio is allowing Kakao to spend and input more resources into its core businesses. As mentioned during the opening presentation, our platform business growth is very solid with Talk Biz as the flagship service and product. So compared to the first quarter of 2024, where there was an impact from the acquisition of subsidiary entities for the first time, we were for this quarter able to record a double-digit consolidated top line growth. At the same time, we're seeing meaningful improvements on consolidated P&L as well as the companies whose OP contribution was low have now been deconsolidated, we are now seeing a more clear structure whereby an earnings growth of our core businesses really make contribution to consolidated profitability. So as of 2025 numbers, if you were to look at the combined operating loss coming from Healthcare and Games, the size will be in the range of around KRW 100 billion. So if such operating loss is excluded, 2025 annual operating profit margin actually is uplifted by about 2 percentage points. So with the full impact of the portfolio enhancement work coming in and also being reflected in 2026, we believe that as we continue on with strengthening KakaoTalk and the competitiveness of its AI services, we will be able to speed up qualitative growth in terms of our top line and also enhance profitability.

[Interpreted] This brings us to the end of the earnings conference call for the first quarter of 2026. Thank you, everyone, for joining us. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]