Kakao has declared 2027 as the inaugural year for full-scale monetization of its artificial intelligence (AI) business, presenting a concrete roadmap to elevate AI-related revenue within its core profit engine, Talk Biz, to a double-digit share by 2028.
During the company’s second-quarter 2026 earnings conference call on the 6th, Kakao CEO Chung Shin-a stated, “Considering the current direction and execution speed of Kakao’s AI strategy, we expect the foundation for AI popularization to be in place by the end of this year, with full-scale monetization beginning next year.” The second-quarter results announced that day, which saw both revenue and operating profit reach all-time quarterly highs, are seen as providing the financial ammunition needed to expand AI investments.
Kakao’s envisioned AI revenue model has three main pillars. First, the company plans to secure transaction fee revenue from “agent commerce,” which analyzes users’ conversation context and preferences within KakaoTalk to recommend products or services and connect them to actual transactions. Second, a subscription model offering advanced, hyper-personalized AI features will serve as a major revenue source. In the mid-to-long term, Kakao intends to introduce AI advertising in a format entirely distinct from existing KakaoTalk ads. This new advertising frontier, which Kakao has never attempted before, will suggest products or services based on users’ questions, intent, and behavioral context.
CEO Chung emphasized, “Not only transaction fees from agent commerce and subscription revenue from AI services, but also a new form of AI advertising revenue that Kakao has never had before will begin to materialize in earnest,” adding that AI will “become the core catalyst for reigniting Talk Biz growth and establish itself as a major revenue source.”
Kakao has set an initial goal to sequentially unveil agentic AI experiences within KakaoTalk in the second half of this year and secure over 10 million monthly active users (MAU) for its AI services by year-end. The strategy is to first broaden the user base before progressively expanding revenue models through transactions, subscriptions, and advertising. To this end, the company is collaborating with partners in high-frequency usage areas such as commerce, reservations, travel, and payments, and plans to rapidly expand connections with external services using ‘PlayMCP,’ an open platform based on the Model Context Protocol (MCP).
“The competitiveness in the agentic AI era lies not simply in creating superior models, but in understanding users’ context and intent and connecting them to real-world actions,” CEO Chung said. “Based on the daily user touchpoint of KakaoTalk and the technology and service ecosystem we have accumulated, we will accelerate the era where every South Korean naturally utilizes their own AI agent.”
Meanwhile, Kakao’s disclosed second-quarter 2026 results confirmed the financial foundation for expanding AI investments. Kakao’s consolidated second-quarter revenue was ₩2.1 trillion (approximately $1.5 billion), with operating profit of ₩277 billion (approximately $195.3 million), up 9% and 36% year-over-year, respectively. Both revenue and operating profit are all-time quarterly highs. The operating profit margin improved by approximately 3 percentage points year-over-year to 13%, while operating expenses rose only 6% to ₩1.82 trillion (approximately $1.3 billion), clearly demonstrating a profitability-focused growth structure.
Looking at performance by segment, the platform division led growth. Platform revenue rose 17% year-over-year to ₩1.23 trillion (approximately $867.5 million). Within this, Talk Biz revenue increased 12% to ₩643.2 billion (approximately $453.5 million). Specifically, advertising and subscription revenue grew 14% to ₩399.9 billion (approximately $282.0 million), driven by a 20% increase in business messaging revenue based on solid demand from financial sector advertisers, while display advertising utilizing KakaoTalk surfaces surged 28%, buoyed by increased user activity and the performance of new ad products.
The Talk Biz commerce segment also maintained solid momentum. Integrated commerce transaction volume, including gifting and Talk Deal, rose 9% year-over-year to ₩2.7 trillion (approximately $1.9 billion). Notably, “self-purchase” transaction volume within gifting—where users directly buy products for their own use—surged 39%, driving growth. Consequently, Talk Biz commerce revenue increased 10% to ₩243.2 billion (approximately $171.5 million).
Platform other revenue, which includes mobility and KakaoPay, rose 22% to ₩587 billion (approximately $413.9 million). Kakao Mobility performed well in its existing business and last-mile logistics operations, while KakaoPay achieved record quarterly revenue and operating profit, driven by financial revenue growth and double-digit growth in payment and platform services.
Content segment revenue edged up just 1% year-over-year to ₩868.2 billion (approximately $612.2 million). Music revenue rose 8% to ₩558.4 billion (approximately $393.7 million), helped by the expansion of major intellectual property (IP) performances, while media revenue increased 5% to ₩99.1 billion (approximately $69.9 million) due to a higher number of productions in progress. In contrast, story revenue was sluggish at ₩210.7 billion (approximately $148.6 million).
Second-quarter capital expenditures (CAPEX) were ₩188 billion (approximately $132.6 million), up ₩88.5 billion (approximately $62.4 million) year-over-year and ₩70.4 billion (approximately $49.6 million) quarter-over-quarter. The CAPEX-to-revenue ratio also expanded from 6% in the previous quarter to 9%. The company explained that capital expenditures increased due to concentrated server purchases in the second quarter, which is interpreted as a preemptive investment for building AI infrastructure.
Kakao’s second-quarter results and AI strategy announcement are drawing market attention. While existing core businesses such as advertising, commerce, and payments are growing evenly and generating stable cash flow, the plan is to use this as a foundation to accelerate the next-generation growth engine: the AI business. In particular, the move beyond presenting a vague AI vision to clearly specifying concrete revenue models—fees, subscriptions, and advertising—along with the target year of 2028 is capturing investor interest.
How Kakao integrates AI agent services into KakaoTalk, a platform with over 40 million monthly active users, and the speed at which this translates into actual revenue are expected to be key variables determining the company’s future stock price and corporate value.