Kakao Mobility posted revenue growth of 16.4% in the first quarter of this year, its highest reading since the fourth quarter of 2023. The strong performance follows the company's first-ever annual operating profit topping 100 billion won last year. Its accumulated deficit is shrinking while cash is piling up.
Yet the market's view of Kakao Mobility's future remains cautious. With limited room for growth in its core taxi platform business and continued pressure from financial investors (FIs) to recover their funds, it is uncertain whether the company can sustain its growth momentum. Some point out that for the numbers on its books to be properly valued, the monetization of physical artificial intelligence (AI) and autonomous driving—the businesses it has touted as future growth engines—must soon come into view.
Double-Digit Growth for Three Straight Quarters; Deficit Resolution in Sight
According to the Financial Supervisory Service's electronic disclosure system Wednesday, Kakao Mobility's first-quarter consolidated revenue stood at 182.6 billion won, up 16.4% from a year earlier. It marked double-digit growth for three consecutive quarters. Over the same period, operating profit rose 153% to 28.4 billion won.
Financial soundness is also improving. The accumulated deficit, which had been flagged as an obstacle during past initial public offering (IPO) efforts, fell from 183 billion won at the end of 2024 to 130 billion won at the end of last year, and further declined to 104.1 billion won in the first quarter of this year. The pace of reduction has accelerated as the company posted net profit of 51.4 billion won for last year and 25.6 billion won in the first quarter of this year. At the current pace, projections suggest the deficit could be fully resolved sometime next year.
Liquidity is also ample. As of the end of the first quarter, cash and cash equivalents exceeded 544 billion won. A company with annual operating profit in the 100 billion won range has thus amassed roughly five times that amount in cash.
R&D Expensed in Full: "Actual Earnings Strength Beyond the Numbers"
Kakao Mobility is channeling this cash into future mobility fields such as autonomous driving, robot delivery, and AI. Research and development (R&D) spending rose from 72.3 billion won in 2024 to 77.3 billion won last year, and the company already spent 19.5 billion won in the first quarter of this year alone. R&D as a share of first-quarter revenue reached 10.7%.
What stands out is the accounting method. Kakao Mobility records most of its R&D costs not as intangible assets but as immediate current-period expenses (selling, general and administrative costs). This conservative stance contrasts with typical IT platform companies, which capitalize development costs to defer expense recognition. Had it capitalized development costs, operating profit would have appeared higher than it currently is, according to industry analysis.
"Platform companies tend to maximize profitability by cutting marketing or R&D once they enter a stable phase," an investment industry official said. "Kakao Mobility, by contrast, is increasing its R&D investment, showing a determination to break through the limits of its existing business with future businesses."
Structural Limits of a 2.8% Commission Rate; FI Recovery Pressure a Constant
The problem is the growth potential of the taxi platform business that underpins current earnings. Following monopoly controversies and the implementation of a coexistence plan for the taxi industry, the commission rate for affiliated taxis has fallen to around 2.8%. It is a structure in which profit gains are limited even as transaction volume grows. The recent deterioration in the overall taxi industry, which has caused equity-method losses at some taxi-related subsidiaries, is also a burden.
A Kakao Mobility official said, "The affiliated taxi business has entered a stabilization phase, and we are continuing balanced growth by expanding into bikes, delivery, and parking," adding, "We are reviewing management efficiency measures to reduce the impact of the worsening corporate taxi business environment."
FI demands for an exit are another variable. Kakao Mobility attracted investment from a consortium led by global private equity firm TPG in 2017, but its listing has been stalled for years. As the investment enters its ninth year, pressure to recover the funds is growing ever greater.
"The Key Is When Technology Turns Into Profit"
Ultimately, some point out that to lift its corporate value to the next level, the company must connect future businesses such as AI, autonomous driving, and robotics to actual profit. The company is accelerating its investments, including the establishment of a physical AI division early this year, but it will take time for these businesses to translate into full-fledged earnings.
An industry official said, "Kakao Mobility's current financial statements are excellent even among platform companies," but added, "Since the market values companies based on future growth potential rather than current earnings, the point at which AI and autonomous driving convert from 'technology' into 'profit' will be the key variable for future corporate value."
