Naver is projected to achieve Q2 revenue growth of approximately 15% driven by advertising, commerce, and fintech segments, according to a consensus forecast from 13 domestic securities firms. However, operating profit growth is expected to lag behind revenue expansion at 8.43% due to rapidly increasing costs related to AI infrastructure investment and commerce competition. The forecast anticipates Q2 consolidated revenue of 3.3692 trillion won and operating profit of 565.5 billion won, with the operating margin declining to 16.8% from 17.9% in the same period last year.
Securities Firms Forecast Q2 Revenue at 3.3692 Trillion Won
Yonhap Infomax surveyed 13 major domestic securities firms that provided earnings forecasts within the past month. The consensus projects Naver's Q2 consolidated revenue at 3.3692 trillion won, representing a 15.58% increase from the same period last year. Operating profit is expected to reach 565.5 billion won, up 8.43% year-over-year. The projected operating margin of 16.8% marks a decline from the 17.9% recorded in the prior-year period.
Advertising and Commerce Drive Double-Digit Revenue Growth
Search advertising and commerce are expected to lead revenue expansion in Q2. The seasonal peak in the advertising market combined with economic recovery has boosted demand, while increased shopping transactions are translating into higher search and display ad revenue. Naver Plus membership expansion and large-scale discount events such as Naver Day Sale are evaluated as factors driving not only shopping transaction volume but also seller advertising and commission revenue. Commerce advertising elevates search platform revenue, while membership and promotions create a virtuous cycle by increasing service revenue.
Oh Dong-hwan, a researcher at Samsung Securities, projected advertising revenue to increase supported by strong commerce advertising, with service revenue including commerce expected to grow over 30% due to membership expansion and promotional effects. While the webtoon market faces challenges, overall revenue growth will be driven by expansion across financial services, enterprise solutions, and C2C commerce.
Kang Seok-oh, a researcher at Shinhan Investment & Securities, anticipated the platform segment to grow through expanded marketing and new feature introductions, with C2C business increasing its revenue share supported by Wallapop consolidation effects. However, content businesses including webtoons are expected to continue facing market downturn impacts.
GPU Depreciation and Marketing Costs Pressure Operating Margins
Cost pressures are mounting from multiple sources. Depreciation expenses are increasing due to expanded GPU and CPU purchases, while commerce promotions such as Naver Day Sale, membership benefits, and World Cup broadcasting rights are being reflected simultaneously. Costs necessary for expanding the commerce ecosystem, including free shipping, returns, and payment terminal distribution, are structurally increasing. Even with solid advertising and commerce revenue growth, short-term margin decline is inevitable if cost increases outpace revenue expansion.
Oh Dong-hwan noted that operating profit could fall short of market expectations due to increases in GPU depreciation, World Cup broadcasting fees, and commerce marketing expenses. He assessed that the timing of profitability recovery will be determined by how quickly advertising and commerce revenue can offset investment costs.
AI Search Ad Monetization Planned for Q4
AI search monetization is projected to become a key variable for second-half performance. Naver plans to introduce advertising in AI briefings and pursue monetization in a separate AI tab in Q4. While AI search may potentially reduce click counts compared to traditional search, analysis suggests higher advertising rates are achievable due to users' specific question intent and elevated purchase conversion rates. Naver's strengths in local information, shopping, and reservation data combined with AI responses could provide differentiation from overseas operators including Google.
Kang Seok-oh stated that displaying ads in AI responses represents an early-stage market within the industry, making not only targeting efficiency but also consumer experience and trust important. He added that short-term stock price recovery will be determined by AI monetization performance.
1GW Data Center Investment Targets 20 Trillion Won Annual Revenue
The 1-gigawatt data center investment that contributed to recent stock price declines is projected to become a new growth pillar long-term. Ahn Jae-min, a researcher at NH Investment & Securities, analyzed that while a 1GW data center requires 60-70 trillion won in funding, the business value could be assessed at approximately 13 trillion won if annual revenue reaches 20 trillion won post-completion.
Instead of bearing all investment costs directly, Naver can reduce financial burden by procuring GPU and data center assets through a special purpose vehicle (SPV) and establishing long-term contracts with client companies. If the NeoCloud model of adding margins to data center and GPU rental costs takes hold, large-scale investment can transform from simple costs into recurring B2B revenue.
Lee Jun-ho, a researcher at Hana Securities, projected Naver to commence services starting with 55 megawatts in the first half of 2027, gradually expanding to 1GW. He anticipated that once initial client companies and long-term supply contracts are disclosed, market evaluation of the data center business will shift as domestic AI region demand from global companies is confirmed.
Q2 results are expected to show advertising and commerce leading topline growth while AI and commerce investment costs constrain profit expansion. Future stock price direction will likely be determined through the process of confirming whether current cost increases convert into actual revenue and cash flow through AI advertising monetization and data center customer acquisition.
Securities firms' average target price for Naver stands at 317,153 won, representing a 70.60% premium to the current stock price of 185,900 won. The highest target price is 400,000 won, with the lowest at 240,000 won.
FAQ
What is Naver's projected Q2 operating margin?
Naver's Q2 operating margin is forecast at 16.8%, down from 17.9% in the same period last year, according to the consensus of 13 securities firms surveyed by Yonhap Infomax.
What revenue is expected from Naver's 1GW data center investment?
NH Investment & Securities projects the 1GW data center could generate approximately 20 trillion won in annual revenue post-completion, with an estimated business value of around 13 trillion won, though the investment requires 60-70 trillion won in total funding.
