NHN Q3 Operating Profit Jumps 113% on AIDC Expansion, Government GPU Prep

NHN announced on the 10th that it posted its best-ever quarterly performance in the third quarter of this year, driven by growth in its AI GPU business and payment revenue. On a consolidated basis, third-quarter revenue came to KRW 758.3 billion, up 21.2% from a year earlier and 0.1% from the previous quarter. Operating profit rose 112.6% year on year and 1.5% quarter on quarter to KRW 58.8 billion, while net profit climbed 115.8% year on year to KRW 38.9 billion. Both revenue and operating profit marked quarterly highs.

By segment, the payments business continued to grow, and the technology business also maintained its growth momentum. In contrast, game revenue declined.

The technology segment stood out in particular. Revenue from the segment rose 53.6% year on year to KRW 171.7 billion. NHN Cloud saw revenue increase 75.5% from a year earlier on the back of expanded AI GPU services, while remaining in the black.

Against this backdrop, NHN Cloud plans to expand its AIDC operating scale to about 100MW by the end of next year. It is also preparing to participate in government projects using next-generation GPUs.

Through its government GPU build project, NHN Cloud has sold out five years' worth of GPU capacity for external customers at 'Factory X Seoul,' the Seoul Yangpyeong region it operates. In August, it also added NVIDIA B300 GPUs to the Gwangju National AI Data Center. Revenue generation has also begun in the Krafton GPU cluster project.

NHN Cloud is pursuing data center expansion to respond to rising GPU demand as these GPU-related businesses continue to grow. Accordingly, it is moving quickly to secure data centers.

NHN Cloud plans to operate an AI data center with a capacity of about 100MW, including existing facilities, by the end of 2027. To that end, it has secured a commitment to lease a 20MW facility at the Pohang AI Data Center, which is scheduled to be completed in the fourth quarter of next year.

It also plans to build its own 10MW facility in the Gwangju Research and Development Special Zone. The 'Jangseong Pine AI Data Center,' being developed in Jangseong County in the integrated special city of Jeonnam Gwangju, will have a capacity of 26MW and NHN Cloud plans to lease it.

NHN Cloud plans to secure additional data centers in the Seoul metropolitan area in Gasan, Seoul, and Gajwa, Incheon, and to deploy more than 1,700 B300 GPUs. Customer agreements are in the final stages, and services are scheduled to roll out sequentially from January next year. Revenue will be recognized after services begin.

The company plans to use the new data centers to introduce next-generation GPUs. Kim Dong-hoon, CEO of NHN Cloud, said the newly secured data centers can all be equipped with the liquid-cooling infrastructure needed to operate NVIDIA's Vera Rubin.

NHN Cloud is also planning to participate in next year's government GPU build project. Kim Dong-hoon, CEO of NHN Cloud, said the company is preparing with participation in mind. He also said next year's government project is expected to be worth about KRW 4 trillion, and that the model to be introduced is expected to be Vera Rubin or later.

The company also addressed the profitability of its GPU business. Ahn Hyun-sik, CFO of NHN, said that based on its experience so far, it is sustaining profits of nearly 30% on a direct-cost basis. He explained that this direct-cost figure reflects the direct costs of providing GPU services and is separate from operating margin.

The company said it is difficult to provide a concrete sales outlook for the GPU business because there are many variables. However, CFO Ahn said he expects revenue from new businesses using B300s and that it should be on par with Factory X Seoul, which is based on existing B200s. He also said he expects improved operating efficiency as GPU generations are replaced.

At the same time, NHN Cloud is strengthening its private cloud business. Innogrid was added as a subsidiary in July, and its results will be reflected starting this third quarter. The company plans to leverage Innogrid's cloud management and virtualization technologies.

The company plans to expand cooperation in the public, defense, and financial sectors. This is aimed at targeting markets with high security requirements.

Revenue from the payments segment rose 21.5% year on year to KRW 397.6 billion. NHN KCP's total transaction value increased 30.5% to KRW 17.3 trillion. Overseas merchant transaction value jumped 75.4%, and the share of overseas merchants in total transaction value reached 25.3%, the highest on record. Payco swung to a profit. However, growth in web board games is expected to slow.

In the payments segment, NHN is pursuing stablecoins and AI agent-based payments as new growth engines. To flesh this out, NHN KCP joined Google Agent Payments Protocol 'AP2' and the Linux Foundation's Agentic AI Foundation (AAIF), and is expanding related technology cooperation.

Payco is focusing on improving profitability and aiming to turn annual profit next year. At the end of August, it introduced online payment services to Baedal Minjok, while revenue from its corporate welfare solution business and coupon business increased. Jung Woo-jin, CEO of NHN, said the company is focusing on expanding profitability-driven businesses with a goal of turning an annual profit next year.

Revenue in the game segment rose 10.7% year on year to KRW 131 billion, but fell 6.2% from the previous quarter. Web board games led the growth, with revenue up 16.2% year on year. The increase in web board game revenue was driven by deregulation, the Chuseok holiday, and the success of offline tournaments.

NHN forecast that even if the effects of deregulation continue, the pace of growth in web board game revenue will slow next year. President Jung said that while the deregulation effect is continuing, the growth trend is expected to moderate.

Accordingly, NHN is seeking to secure new users by expanding offline hold'em tournaments through the 'Hangame Poker Tour (HPT),' and has set next year's revenue growth target at around 10%. In terms of its gaming business direction, the company has focused on trimming low-profit services and concentrating on domestic web board games and Japanese mobile games.

At the same time, as NHN continues its business restructuring, it ended service for 'Gunz Up! Mobile' in May, is set to end service for 'Darkest Days' on the 24th, and plans to end service for its webtoon platform 'NHN Comico' in January next year. As a result, the number of consolidated subsidiaries also declined. CFO Ahn said there were 56 consolidated subsidiaries as of the end of the third quarter, down 9 from a year earlier and down 2 from the previous quarter. NHN also completed the merger by absorption of NHN Investment in September.

Jung Woo-jin, CEO of NHN, said balanced growth across core businesses and the continued profitability trend led to the company's best-ever quarterly result in the third quarter. He added that stablecoins, AI agent payments, and GPU services were identified as future growth engines, and said the company will establish a solid growth foundation by positioning itself as a leading player in those business areas.

Source: TECHWORLD · Kim Seung-gi
Original: https://www.epnc.co.kr/news/articleView.html?idxno=409494

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