Naver Corp

KRX:035420

Q3-2025 Earnings Call

[Operator]

[Interpreted] Good morning. We will now begin NAVER's 2025 Q3 Earnings Conference Call. For the benefit of our investors joining from home and abroad, we will provide simultaneous interpretation service for the presentation and switch to consecutive interpretation for the Q&A.

[Unknown Executive]

[Interpreted] Good morning. I am [indiscernible] from the Office of Capital Markets. I would like to thank the analysts and investors for joining NAVER's 2025 Q3 Earnings Presentation. On this call, we are joined by CEO, Soo-yeon Choi; and CFO, Hee-Cheol Kim, and they will walk you through NAVER's business highlights and strategies and financial results, after which, we will entertain your questions.

Please note that the earnings results are K-IFRS based provided for timely communications and have not yet been audited by an independent auditor and hence, are subject to change after such review.

With that, I will turn it over to our CEO to present on the business highlights.

[Soo-yeon Choi, executive]

[Interpreted] Good morning. I am Soo-yeon Choi, the CEO. In Q3, NAVER continued to strengthen its foundation for new growth by advancing its services and monetization through the integration of AI technology into content and data. In search, AI briefing has been expanded to 15% coverage, leading to a notable improvement in user satisfaction and delivery, delivering a positive user experience. At the same time, the revamped home screen, along with expanded content supply through Clip and Shopping Connect as well as personalized recommendations contributed to higher usability. As a result, the loyal user base strengthened both quantitatively and qualitatively during the quarter.

Supported by these initiatives, together with NAVER's solid media influence and strong monetization capability, overall advertising revenue on the NAVER platform grew by 10.5% Y-o-Y. In commerce, NAVER strengthened a personalized experience optimized for exploration and discovery-based shopping by enhancing user benefits through services such as end delivery and membership. As a result, user engagement within the NAVER Plus Store app increased, surpassing 10 million downloads. In Q3, Smart Store GMV recorded accelerated growth with the full quarter reflection of the revised commission structure, serving as a key driver of overall performance. Going forward, NAVER will continue to enhance the customer experience through closer collaboration with Kurly and expanded application of AI-driven personalization.

Let me begin with NAVER's differentiated AI-powered search services and the performance of the search platform. To strengthen competitiveness, informational search, AI briefing launched in March, expanded its coverage to 15% of integrated search queries as of September end. It continues to enhance our usability by providing information to reinforce with highly reliable sources and improving answer satisfaction for long-tail queries. AI briefing used by more than 30 million users offers a differentiated experience by enabling summarized information consumption as well as deeper exploration through research using related questions displayed at the bottom of the main text, thereby expanding content consumption. Since its launch, the number of clicks on related questions has increased by more than 5x compared to April, the early stage of the service. This allows users to explore more topics more deeply without entering new or complex queries by naturally engaging with a wider range of NAVER's UGC, creating a virtuous cycle of content consumption.

Starting in November, NAVER will gradually test personalization in both the answer text and related question areas. In particular, for shopping and local queries, the company plans to strengthen contextual connections of businesses and explore monetization opportunities. Ultimately, NAVER aims to provide a differentiated search experience in which advertising and content are seamlessly integrated with the answer text while also exploring revenue models for the emerging AI agent environment.

The home screen revamp in August, along with the expansion of high-quality content supply, including clip and the enhancement of personalized content recommendation logic led to higher feed engagement. As a result, in September, the average daily users of the home feed and clip stabilized at 10 million users each. With improvements in the usability and recommendation areas of the home feed, user activity indicators such as content impressions and clicks continue to increase. The resulting growth in feed consumption also translated into higher advertising revenue.

The number of loyal users visiting NAVER home feed more than 20 days per month increased by over 2x Y-o-Y, while the proportion of such loyal users rose by 5 percentage points compared to the beginning of the year. This indicates that inactive users have been converted into active users, leading to the stable growth of the home feed. Also, NAVER's high-quality UGC and advertising content, together with its more advanced recommendation technology, are being effectively exposed in the right placement, thereby strengthening user engagement and lock-in. It is also expected to lead to further monetization opportunities, including advertising revenue growth.

With a solid user base and stronger engagement, along with the expanded application of AI briefing, providing a differentiated search experience, NAVER achieved a 10.5% increase in total platform advertising revenue driven by improved AI-based advertising efficiency. In Q3, continued optimization of ad placements and services using NAVER's proprietary AI technology enabled more efficient ad exposure within the same inventory, resulting in higher advertising efficiency, steady growth across key metrics and an expanded advertiser base.

NAVER is also seeking ways to further strengthen its response to commercial queries, one of the key competitive areas of its search business by delivering more satisfying search results for users while capturing additional advertising revenue. To this end, the company plans to expand efforts to identify new advertising services and optimize ad placements across its platforms, including commerce areas such as Plus store, the entertainment section, which is gradually being transitioned into a feed format.

The automated advertising campaign at Boost has demonstrated proven advertising efficiency, contributing to both performance advertiser growth and overall advertising revenue expansion. Boost Shopping, which has successfully established itself recorded a conversion performance in September that was more than 100 percentage points higher than standard search ads. Supported by this momentum, the number of NAVER performance advertisers increased more than 2x Y-o-Y. Looking ahead, NAVER is building an environment that will allow Smart Store sellers to more easily experience ad Boost shopping within the seller center while continuing to incorporate advertiser feedback and expand exposure across various placements, including Plus Store.

Furthermore, NAVER has integrated advertiser billing accounts to enable advertisers to manage campaigns under a single account and has launched a customized consulting program for advertisers that operate their campaigns directly. Next year, NAVER plans to introduce a new business agent that will design and execute growth strategies together with advertisers and business partners and evolve it into an integrated solution that analyzes business performance and competitiveness based on NAVER's high-quality data to propose practical solutions.

Next, I will discuss the key achievements of the e-commerce business. In Q3, commerce focused on enhancing personalized experiences tailored for discovery and exploratory shopping, strengthening delivery competitiveness and expanding membership benefits. As a result of these efforts, Smart Store GMV grew by 12.3% Y-o-Y. NAVER Plus Store is rapidly evolving into a structure optimized for discovery and exploratory shopping through features such as Discovery Tab, AI shopping guide and content integration. By serving as a core channel that enables a brand experience-driven purchase journey supported by each brand's unique data and content assets, along with our proprietary promotions and campaigns, the platform has helped brands achieve 40% or higher growth for 5 consecutive quarters, firmly establishing itself as a key growth driver.

NAVER plans to further refine its personalized recommendations and ranking algorithms within search to ensure that brand and SME product databases unique to NAVER are more effectively surfaced. The company will also significantly expand the application of AI personalization on the NAVER Plus Store home screen from 31% to 80%. These efforts are expected to enhance the discovery and exploration experience by connecting users with popular products and UGC while maximizing user lock-in and improving both time spent on the platform and purchase conversion rates.

From a monetization perspective, GMV generated through AI recommendations within the Plus Store increased by 48% Q-o-Q, supported by enhanced personalization and service optimization. On some placements, conversion rates for personalized recommendations were more than 10x higher than those of standard formats. Going forward, NAVER plans to further expand the application and coverage of AI recommendations by accurately identifying user intent, thereby driving meaningful growth in both adoption and GMV. Thanks to these efforts, NAVER Plus store app surpassed 10 million downloads within 6 months of its launch. In-app activity also strengthened with page views increasing by 19.4% and average session duration rising by 9.7% Q-o-Q, reflecting higher user engagement.

Membership has become a core element that not only provides shopping benefits, but also connects NAVER's broader ecosystem and encourages users to stay longer on the platform. Following the partnership with Netflix, NAVER expanded membership benefits in Q3 to include Microsoft Game Pass, Uber membership and free delivery on purchases over KRW 20,000 at Kurly N Mart. As a result, the number of active membership users increased by more than 20% Y-o-Y. In particular, the partnership with Microsoft Game Pass resulted in a 23% increase in male users in their teens and 20s compared to before its introduction, broadening NAVER's overall customer base. And in addition, fresh food purchases have also risen significantly, positioning membership as a key driver of commerce growth and a catalyst for greater content engagement across platforms.

Following the partnership with Nexon in September, NAVER announced a new partnership with Spotify, global audio and subscription streaming platform, further expanding its content offerings. Through this partnership, NAVER plans to integrate Spotify's extensive library, including 100 million songs and more than 7 million podcasts across various NAVER services, enabling users to easily discover and enjoy audio content suited to their preferences and moods. NAVER will share more details on this collaboration in the near future.

NAVER also continued its efforts to enhance user experience by strengthening delivery competitiveness. With the rebranding of N Delivery and the enhancement of free delivery and free return benefits for members, the purchase frequency of membership users increased by 13% Y-o-Y, while the membership purchase ratio rose by 1.3 percentage points Y-o-Y. These results show that stronger delivery competitiveness is driving higher purchase activity among our customers.

Following the partnership with CJ Logistics in July, NAVER introduced an early morning delivery service with Kurly in September, resulting in a significant improvement in overall delivery lead time. In addition, the implementation of cold chain system has allowed NAVER to expand the share of low-temperature product listings, which were previously restricted, thereby strengthening its product assortment competitiveness.

N Delivery GMV continued its strong growth with sellers that adopted N Delivery in the previous quarter, recording over 19 percentage points higher Q-o-Q GMV growth compared to those that had not. This clearly demonstrates that enhanced delivery competitiveness is driving both a stronger user lock-in and increased purchase activity.

The C2C segment also delivered meaningful results. Cream and Soda achieved over 15% Y-o-Y GMV growth in Q3, driven by strong sales of exclusive brand products and growing demand for trading cards in Japan. In addition, both platforms are maximizing user experience and sales efficiency through content-driven planning and browsing enhancements aligned with evolving trends.

Poshmark is expanding its app entry points through integration with the NAVER search engine while enhancing user experience by improving auto complete and search result layouts to deliver more accurate and relevant search experiences. Through the introduction of a new ad format and enhancement of ranking logic, NAVER continued to achieve growth in first-party advertising revenue, while efficient marketing execution led to improvements in both platform profitability and traffic quality, resulting in double-digit growth in GMV and revenue.

Regarding Wallapop, whose acquisition was announced last quarter, the transaction process is proceeding as planned, and NAVER will provide a more detailed update on the global C2C business performance following the completion of the acquisition.

In Q3, the core pillars of discovery and exploration-based app experience, brand membership, delivery and advertising were organically connected, creating strong synergies that reinforce the virtuous cycle from traffic inflow to purchase conversion and monetization, thereby advancing the overall growth of the platform. Going forward, NAVER will continue to leverage those organic synergies across the platform to further strengthen its solid position in the commerce market.

Next, I will provide an update on the Fintech business. In Q3, NAVER Pay TPV reached KRW 22.7 trillion, representing a 21.7% Y-o-Y increase. Non-captive payments, which accounted for 55% of total TPV grew 31% Y-o-Y to reach KRW 13 trillion, driven by higher payment activity and continued merchant expansion. In addition, through the partnership with Nexon announced at the end of September, including account and payment integration, NAVER is continuing to expand its third-party ecosystem across both online and offline channels. In the platform business, NAVER completed the acquisition of Securities Plus Unlisted in September. In line with Korea's fintech policy direction, the company aims to evolve into an integrated platform that enhances accessibility and reliability for investors in the OTC market.

Next, I will discuss Webtoon's results. In September, Webtoon Entertainment signed a global content partnership with Disney through which more than 35,000 titles from Marvel, Star Wars, Disney, Pixar and 20th Century Studios will be introduced for the first time on a new digital platform. The development and operation of this platform will be led by Webtoon Entertainment, and it will feature not only iconic titles from Disney portfolio spanning several decades, but also a selection of Webtoon original series. The new platform represents the results of an unprecedented collaboration that combining Webtoon's product and technological expertise with Disney's unrivaled IP portfolio, allowing users to enjoy Disney's iconic content all in one place. This initiative is expected to broaden Webtoon's reach beyond its existing user base, expand engagement with new global audiences and serve as an important stepping stone for global growth while also laying the foundation for an even deeper partnership with Disney in the future.

Please note that Webtoon Entertainment is scheduled to announce its earnings on November 12, U.S. local time. For more detailed information, please refer to Webtoon's earnings release.

Lastly, I will discuss the performance of the enterprise business. The B2B business within enterprise achieved new revenue generation through the monetization of GPU as a service contracts secured in the first half of the year. For LINE WORKS, the number of paid IDs continue to record double-digit growth Y-o-Y despite the high base effect from the same period last year. Services integrated with LINE WORKS such as AI node and Roger are also growing steadily as planned. In October, LINE WORKS launched its service in Taiwan and is now seeking to expand into global markets by leveraging its experience as the leading business platform in Japan.

Leveraging its full stack AI capabilities, NAVER is building a stronger track record in Korea by providing AI transformation solutions and industry-specific products tailored to both the public sector and the private sector. The company's global sovereign AI initiatives are also progressing as planned.

At the end of October, NAVER signed an MOU with NVIDIA to capture physical AI opportunities, which operates in real industrial environments and systems. Also, we secured an additional 60,000 latest GPUs and strengthened its AI capabilities. NAVER has been building industry-specific references, including the financial and energy sectors by providing neuro cloud and customized AI services to clients such as the Bank of Korea and KHNP. In a similar vein, the company is engaging discussions with multiple partners across the manufacturing industry, including the semiconductor, shipbuilding and defense to explore further collaboration opportunities. NAVER also plans to develop specialized AI models tailored to major industries and seek diverse use cases and additional business opportunities within the private cloud market, ensuring that optimized AI technologies can be swiftly adopted across sector.

Following the launch of the new administration, large-scale national policy projects have been promoted to accelerate Korea's AI transformation, including initiatives for independent foundation model development, GPU leasing projects and the establishment of SPCs for AI data centers. And NAVER is actively participating in key projects under these initiatives.

In Saudi Arabia, NAVER is finalizing the establishment of a joint venture with the Ministry of Housing, aiming to expand into super app, [indiscernible], data center and cloud businesses with the goal of commencing operations next year. The company is also pursuing various global collaborations and opportunities, including the development of an AI agent for tourism and a sovereign LLM in Thailand, participation in GPU as a Service and AI data center projects for Europe based in Morocco and human rights research collaboration with MIT to secure future robotics platforms and any plans to share further updates as these initiatives begin to take shape.

Going forward, NAVER will continue to strengthen the competitiveness of its core businesses through AI, while also adding new growth drivers for mid- to long-term expansion and laying the groundwork for global growth.

Now CFO, Hee-Cheol Kim, will discuss the financial performance.

[Hee-cheol Kim, executive]

[Interpreted] Good morning. This is CFO, Hee-Cheol Kim. I will now walk you through Q3 financial performance. Revenue in Q3 increased 15.6% Y-o-Y to KRW 3.1381 trillion, driven by solid growth across NAVER's core businesses, including advertising, commerce and fintech. Building on the previous quarter, AI-driven enhancement of advertising efficiency continued, resulting in advertising revenue growth outpacing the market rate. The full quarter impact of the revised commission structure in the commerce business further accelerated overall revenue growth, while seasonal effects from the triple holiday peak period also contributed to the increase.

Operating profit increased 8.6% Y-o-Y to KRW 570.6 billion, maintaining a solid growth trend despite higher expenses related to mid- to long-term business expansion and competitiveness enhancement supported by accelerated top line growth. The operating profit margin reached 18.2%, a slight increase from the previous quarter.

Next, I will explain the revenue by business segment. In Q3, search platform revenue increased 6.3% Y-o-Y to KRW 1.0602 trillion. Total NAVER platform advertising revenue, which includes search, display commerce, fintech and Webtoon ads grew 10.5% Y-o-Y. This reflects the combined impact of AI-based ad and service optimization, advancements in personalized ad recommendations and the continued expansion of the advertiser base.

In Q4, along with along the -- although the long holidays in October may have some impact due to fewer business days, NAVER will continue to enhance advertising efficiency through AI, expand monetization of noncommercial queries and broaden ad inventory, thereby strengthening its competitive edge in the advertising market.

Commerce revenue increased 35.9% Y-o-Y to KRW 985.5 billion. The enhanced discovery and exploration experience within the NAVER Plus Store app, expanded membership benefits and the revised commission structure all contributed positively, driving balanced Y-o-Y growth across all segments.

Commission and sales revenue grew 39.7% Y-o-Y as the enhanced discovery and exploration experience within the NAVER Plus Store app led to brand purchase growth, driving an increase in Smart Store GMV. The full quarter impact of the revised commission structure also contributed with Smart Store revenue increasing 102% Y-o-Y.

Commerce advertising revenue grew 31.2% Y-o-Y, driven by advancement in AI-based recommendation ads and the full rollout of ad boost shopping in Q3. Membership revenue increased 30.5% Y-o-Y, supported by a broader user base and higher active user numbers following the addition of new benefits such as partnerships with Microsoft Game Pass and Uber and free delivery at Kurly N Mart.

Fintech revenue increased 12.5% Y-o-Y to KRW 433.1 billion. At the end of September, NAVER launched the beta service of the Connect terminal, which seamlessly links online and offline merchants. This enables NAVER to provide not only payment services within its ecosystem, but also data-driven customer management functions. Going forward, the company will focus on building an integrated online/offline ecosystem and creating new value for both users and merchants.

Content revenue increased 10% Y-o-Y to KRW 509.3 billion. Within this, Webtoon revenue based on NAVER's consolidated results in Korean won terms grew 11.3% Y-o-Y. For more details, please refer to Webtoon Entertainment's earnings announcement scheduled for November 12 local time.

SNOW Revenue increased 24.3% Y-o-Y, driven by the continued growth in paid subscribers of its camera app integrated with AI content features. Enterprise revenue increased 3.8% Y-o-Y to KRW 150 billion. The number of paid LINE WORKS IDs continued to record double-digit growth in Q3. And GPU as a Service contracts secured in the first half have begun generating revenue. The year-over-year comparison reflects the base effect from one-off revenue related to well-booked deliveries to the Jeonbuk Office of Education in the same period last year.

Next, I will discuss the detailed cost items. Development and operations expenses increased 14.2% Y-o-Y, mainly due to higher headcount from new hires, increased stock-based compensation following the rise in share price and onetime severance payments related to Poshmark's workforce optimization initiatives. Partner expenses increased 17% Y-o-Y, while infrastructure costs rose 22.7% Y-o-Y, driven by higher depreciation expenses from the acquisition of new assets such as GPUs.

Considering model training and inference for AI integration across all businesses as well as the expansion of new initiatives, including government projects, NAVER expects large-scale infrastructure investments to continue.

Marketing expenses increased 20.3% Y-o-Y, driven by promotional activities in the commerce, fintech and Webtoon businesses. Through the end of the year, NAVER plans to efficiently execute various marketing initiatives aimed at enhancing competitiveness across business units and strengthening the foundation for top line growth, including content expansion to boost engagement with the NAVER app ecosystem and promotions for Kurly N Mart launched in September.

Next, I will explain NAVER's operating profit by business segment. First, the Integrated Search Platform and Commerce segment maintained a stable profit margin of over 30% despite a slight year-over-year decline due to AI integration within services and shopping promotions while continuing to deliver solid top line growth.

In the Fintech business, despite continued growth in payment revenue, profitability declined slightly Y-o-Y due to delayed purchase confirmations caused by summer vacation seasonality and expanded promotional activities.

In content, operating losses widened due to increased production costs related to Webtoon IP business development and higher marketing expenses to strengthen global competitiveness.

In the Enterprise business, losses also expanded, driven by increased infrastructure investments for AI model training and inference. Going forward, NAVER plans to continue investing to secure future growth drivers, including investments in global platform development for Webtoon, expanded infrastructure investment in the enterprise business to support project acquisition. In the mid- to long term, however, the company will work to narrow operating losses.

Q3 consolidated net income increased 38.6% Y-o-Y to KRW 734.7 billion, driven by higher -- the overall increase in investment gains of affiliated companies, including higher equity method gains from A Holdings following the consolidation of LINE Man into LYC.

Operating cash flow remained on a stable growth trend, while Q3 free cash flow decreased by KRW 185.2 billion Y-o-Y to KRW 201.9 billion due to increased infrastructure investments. Going forward, we will continue to make capital expenditures to strengthen the competitiveness of each business unit while maintaining financial soundness through stable operating cash flow driven by top line growth and disciplined debt management.

This concludes the overview of our Q3 financial results. We will now move on to the Q&A session.

[Unknown Executive]

Before we begin the Q&A session, let me make a brief announcement. Tomorrow, NAVER will unveil its detailed strategic direction at DAN25 Integrated Conference through both on-site participation and live online streaming. We invite everyone to join and tune in.

[Operator]

[Foreign Language] [Operator Instructions] [Foreign Language] The first question will be provided by Stanley Yang from JPMorgan.

[Stanley Yang, analyst]

[Interpreted] I have two questions. Number one is related mostly to CapEx. So I understand that GPU CapEx will be increasing this year. And so I'm curious about any guidance on GPU CapEx for this year and next year and also a guidance on the total CapEx that you forecast. And also, I'm curious whether the 60,000 GPUs in the partnership with NVIDIA is included in this GPU CapEx. And along these lines also, I'm curious about management's thoughts on the potential pressure on margin that the increased depreciation expenses can bring about.

My number two question is largely about the vertical AI. I'm sure that you are engaging in a myriad of different strategies in terms of your AI verticals, especially on the B2C side in ads and shopping. I'm curious about how the extent to which AI is integrated into your services? And also along that lines, the revenue contribution. I know it's early days right now, but what do you expect for this year and in the future?

[Hee-cheol Kim, executive]

[Interpreted] To answer your first question, our AI integration efforts have resulted in very fruitful and meaningful outcomes in terms of boosting our revenue and monetization strategies with our AI briefing and also ad boost amongst other commitments and efforts. We have also communicated to investors and markets our commitment to keep on investing in the infrastructure and therefore, CapEx in terms of increasing the competitiveness of our services.

And although I can't speak to the exact figures right now, as of this year, we expect our GPU CapEx to -- including GPU CapEx, our entire CapEx to stand around the KRW 1 trillion range. And from 2026 and onwards, considering our new business expansion strategies and plans, we expect about KRW 1 trillion in CapEx to go into GPU investments alone.

And in terms of our GPU investments, although it is, of course, a proactive move on our part, this also includes our endeavors into increasing profitability as well as it includes GPU as a Service provided to the government and also public sectors as well. So with the review that we have, we will continue to actively invest in GPU with our CapEx. And also this figure will include the 50,000 NVIDIA GPUs that you mentioned.

[Soo-yeon Choi, executive]

[Interpreted] And to address your second question, when we first released the AI briefing service earlier this year, our initial goal for coverage was in the 10% range within the year closing out. However, as the business has progressed, we've come to realize that this has actually been very effective in boosting not only our loyal user base, but also our existing search business as well. And therefore, we'll be accelerating our efforts to bring this figure up to the 20% range.

And you'll know if you compare with our global platform competitors that we at NAVER have all around a comprehensive understanding of our users, which we will lean into in terms of providing numerous vertical services, including payment services, reservations, shopping, so on and so forth, which will make sure that we can be a lot more flexible in terms of the AI services that we provide.

You'll be able to hear more announcements about the exact timing and features at tomorrow's DAN event. However, by spring of next year, we plan on rolling out our AI shopping agent as well as the AI tab and integrated AI services that will be providing a lot more integrated approach to what we provide in terms of our services.

The integrated AI agent is part of our omni service strategies, and we've begun to come to the realization that this has been a significant boost in our revenue with search ads, commerce and also the local business side as well. And so as you've mentioned, it is still early days in terms of revenue contribution, but we expect strong contributions to monetization and revenue moving forward.

[Operator]

[Interpreted] The following question will be presented by Junhyun Kim from HSBC.

[Junhyun Kim, analyst]

[Interpreted] I have two questions for you. Number one is about the enterprise side. I know that there has been some variability until now with WORKS and so on and so forth. However, it seems that you are really doubling down on your commercialization efforts with the commercial divisions for GPU as a Service, AI and also Digital Twins on the move. So I'm curious about how you expect revenue to pan out moving forward. It seems that physical AI and robots are one of your focus areas. What will be some of the major key monetization pillars moving forward?

And number two, speaking to the commerce marketing expense, when can we expect these expenses to start going down until when do you think we will expect these expenses to be executed? And also on the GPU side, we talked about the GPU CapEx investments that will be going into infrastructure. When do you think that the GPU business will begin to turn a plus margin?

[Soo-yeon Choi, executive]

[Interpreted] I'll answer your first question first and speak a little bit more about the color on the R&D that we have for Digital Twins and robots. You know that in 2017, which was quite a while before the terminology or concept of physical AI really began to come to the fore, we established NAVER Labs to that end.

And our core competitive, of course, we assess lies in not hardware, but on the software side. So our focus has really been on developing our software, ARC and ALIKE. ARC will be providing management services in an integrated and comprehensive manner that can bring together robots that are from various different manufacturers, playing a role like Windows or Android sorts. And ALIKE will be able to provide accurate location and delivery services.

And we have continued to make endeavors to make sure that if you look at our technology through our efforts in R&D, our technology competitiveness and capabilities, competencies are truly global #1 and at the top. And 3 or 4 years ago, when we began the test bed at the 174 headquarters of NAVER, we were able to make sure that we can go ahead with more speed and also make sure that we can use and accelerate, compile more global references with those efforts.

Although it is still early days to really speak to the entire global market size that we can forecast, as per our expectations, we expect that our market share in terms of global robots will stand at about at least 30% in the international arena. And we are making sure that this can serve as our next growth driver moving forward.

And we are continuously working to make sure that we can create these technologies in-house and internalize these core competencies in terms of the technology that we have. And especially given that we are a full stack AI service provider based on our cloud competencies, we are working to make sure that the potential that we see in opening up new markets in Korea for tailored and customized cloud to manufacturers can really serve as a growth driver moving forward, and we will continue to focus our efforts in this area.

With the Bank of Korea and also Korea Hydro KHNP, we are continuously in negotiations about these types of customized private cloud services that we can provide, and we will be coming to you with more details and color once we can provide them to you.

[Hee-cheol Kim, executive]

[Interpreted] And speaking to your second question on commerce, you'll know that we've revamped our commission structure, and we are planning on fully leaning into the changes that we have made.

However, our focus on marketing in this arena is not just as a one-off initiative in order to boost GMV. It will be an all-around comprehensive strategy that focuses on increasing loyalty as well as other aspects, and management will continue to focus on this aspect.

And we did touch upon this topic when we were talking about GPU CapEx guidances, but we will continue to make sure that our investments are very active and aggressive on the GPU side, and this will also lead into revenue contributions and growth as well. So we will be taking into consideration the growth in revenue as well as we decide upon our investment plans in GPU.

And as is with all infrastructure investments, the direct revenue contribution in the early stages, especially is quite minimal. So this really is in the term of a long-term view with a long-term lens. And so maybe in the temporary time, there might be a slight dip in revenue because of this. However, in the mid- to long term, we are more than certain that this will be able to turn a plus.

Sorry, just a revision about one of the interpretation that was provided. The market share of 39% when we're speaking about NAVER's robot initiative wasn't NAVER's market share. It is the OS control platform market within the robot market that is expected to account for about 39% of the global market moving forward.

[Operator]

[Interpreted] The following question will be presented by Eric Cha from Goldman Sachs.

[Minuh Cha, analyst]

[Interpreted] So I have two questions for you. Number one is about AI briefing. I know that you aren't into really pushing full monetization strategies yet with AI briefing, but I'm curious about the user behavior or pattern changes that you've seen after the release. And also any updates on the performance or results in a more detailed manner would be very much appreciated.

And question number 2 is about the commerce side. I know that the uptick in take rate has really pushed up revenue this year. What do you expect for take rate next year and moving forward? Will there be some meaningful growth in take rate continuing on moving forward? And also, if you can provide us a little bit more update about any recent changes or any results regarding the Kurly partnership.

[Soo-yeon Choi, executive]

[Interpreted] First of all, to answer your question about AI briefing, when we launched AI briefing service, it really wasn't geared towards monetization side. It was more towards really ramping up our weaker side comparatively compared to our competitors that was pointed out in terms of the information-seeking queries in order to increase the quality.

And in the initial stages, we were able to find that with the coverage on information-seeking queries as well as long-tail queries, which comprise of 15 words or more that the user satisfaction was very high, and we found that the duration time spent was going up as well as Y-o-Y increase in [indiscernible].

And the search result satisfaction is, of course, important, but also tying that in with the relevant information or relevant questions is extremely important. That's something that we continue to monitor. And if you compare the relevant questions that people click on at the bottom of the AI briefing service, compared to the initial launch days, it has expanded to about fivefold. So that is one of the changes that we have seen. And the fact that it's creating a virtuous cycle where it really is encouraging users and to use the search results, but also explore upon their search results and to build upon that and also to consume content as well.

And with the increase in query coverage, I also mentioned about how we will be integrating more and more AI into the business queries as well as the commercial queries, and we're continuing to monitor very closely how this impacts our monetization strategies and also how this will impact the merchants and businesses as well.

And at NAVER Place, which comprises of restaurants and other places to go out, we've integrated AI services. And as a result, we've seen our GPR go up 2.3 fold and conversion rates increased 15%. So these are some of the positives that we've seen throughout the release that has made us really have a much more stronger confidence in expanding these services moving forward, and these will be really panning out in our AI agent services that we will be rolling out such as AI tab and so on and so forth next year.

And in terms of the shopping side, as you will know, the big boost to our revenue in terms of the shopping side has really been twofold. Number one is the increased shopping revenue that came after the release of Plus Shop and also the increase after we've integrated our services with AI.

And with the change in our commission structure as well, that has been a big boost to our revenue. We can look on the GMV side where it's been a big boost for brand stores on shopping as well, as well as in delivery. And we will be leaning into these AI verticals and looking at the commission structure revamp, we are very certain that this will be a boost in terms of increasing take rate moving forward as well.

And since the launch of the NAVER Plus Store app, we've been in talks with manufacturers about the ad inventory and placements of our stores that we have, and this will also be a meaningful contribution to revenue monetization as well.

And next, speaking to the Kurly side, our shopping strategy has really been in leveraging the lead and edge we have in AI technology and also the shopping product listings that we have in order to provide more personalized recommendations, boosting this side as well as making sure that we make improvements on to the logistics side, which has been played out as one of our weaknesses. And in this area, Kurly will be able to provide more [indiscernible]

It is still early days, so we can't talk to the exact figures. However, it is on par and progressing well as we have initially planned.

[Operator]

[Interpreted] The last question will be presented by [indiscernible] from Bernstein.

[Unknown Analyst]

[Interpreted] My question is related to the commerce side, especially the marketing expense. I am curious about the incremental increase on commerce that accounts for in the Y-o-Y increase in marketing expense.

[Hee-cheol Kim, executive]

[Interpreted] On a Y-o-Y basis as of Q3, our marketing expense has increased KRW 85 billion, and about half of that is commerce.

And from that commerce marketing expense, which is half of KRW 85 billion, half of that, again, is from the increase in the provisions that came from the increase in GMV as on the backdrop of the increase in commissions as per the structure revamp. And another half will go to the strategic promotions that we provided.

[Unknown Executive]

[Interpreted] Thank you very much for joining us, and we look forward to your continued...

[Statements in English on this transcript were spoken by an interpreter present on the live call.]