Kakao posted its highest-ever quarterly revenue in the third quarter, driven by a rebound in its advertising business and increased user engagement following a controversial redesign of KakaoTalk.

The company reported 2.09 trillion won ($1.43 billion) in revenue for the July-September period, up 8.6 percent from a year earlier, according to a regulatory filing Friday. Operating profit surged 59 percent on year to 208 billion won.

The results mark the company’s best quarterly revenue on record.

The turnaround was led by a strong performance in KakaoTalk’s advertising business, which posted 325.4 billion won in sales — an 11 percent increase from the same period last year.

“KakaoTalk’s advertising revenue rebounded this quarter after five consecutive quarters of decline, thanks to improved ad offerings within the app,” CFO Shin Jong-hwan said during a conference call. “We also observed a shift in ad budgets from competing platforms to Kakao.”

Kakao also addressed the impact of a major overhaul to KakaoTalk, which included a revamp of its friends tab into a social media-style feed in the first overhaul in 15 years. Although the update initially sparked backlash among users, the changes led to longer in-app engagement.

“Since the KakaoTalk revamp in September, daily average user time increased from around 24 minutes to nearly 26 minutes,” said CEO Chung Shin-a on Friday. “Considering that even during the Covid-19 pandemic, time spent on the app increased by just 10 seconds, this is a meaningful result.”


The increase in user time was largely driven by two newly introduced features — the redesigned “Friends” tab and a new “Now” tab. The Friends tab displays user updates in a social feed format, while the Now tab aggregates short-form content and open chat features. Analysts say the revamp has helped KakaoTalk evolve from a simple messaging app into a broader content discovery platform.

“The Friends and Now tabs both saw over 10 percent more user engagement than the quarterly average,” Chung said. “As traffic shifts from chatrooms to other functions, we’re seeing not just more traffic but higher-quality interactions across the app.”

Kakao’s AI initiatives also began to show traction. Its “ChatGPT for Kakao” feature, launched on Oct. 28, quickly gained popularity, surpassing 2 million subscribers within 10 days.

“The daily average time spent by active users rose by four minutes,” Chung said, “and KakaoTalk is now increasingly used as a search tool.”

Looking ahead, Kakao plans to fully integrate AI agents into KakaoTalk starting in 2026. Through its Model Context Protocol function and Agent Builder, external developers will be able to create and link AI-powered assistants within KakaoTalk.

“Our strategy is to expand the AI ecosystem externally, based on Kakao’s robust business-to-consumer service portfolio,” Chung said. “We’re currently in talks with Korean financial institutions, travel companies and e-commerce platforms to collaborate on this initiative.”

This article was originally written in Korean and translated by a bilingual reporter with the help of generative AI tools. It was then edited by a native English-speaking editor. All AI-assisted translations are reviewed and refined by our newsroom.