Good morning and good evening. Thank you all for joining the conference call for the Soop earnings results. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star and one on your phone during the Q&A. Now we will begin the presentation on Soop's fourth quarter of fiscal year 2025 earnings results.
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Hello, everyone. My name is Min-won Lee, and I lead the Business Support division here at Soop. After I provide an overview of our fourth quarter 2025 operational and financial highlights, our CEO, Young-woo Choi, and I will host a Q&A session to answer your questions.
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Although platform revenue was relatively flat this quarter, we saw significant momentum in our advertising sector thanks to subsidiaries synergies and massive BTL engagement. Notably, our strategic focus on gaming content continues to pay off, as evidenced by the steady rise in user engagement and viewing traffic across the platform.
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We are currently driving a company-wide integration of our global and Korea platforms. By the first quarter or the second quarter at the latest, we expect to unveil a unified Global One platform where domestic and international streamers and users can interact freely. This will serve as a pivotal momentum for our qualitative leap in platform revenue and our broader global expansion.
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Our fourth quarter revenue reached KRW 119.3 billion, representing a 5% decrease quarter over quarter, but a 7% increase year over year.
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For the full year 2025, annual revenue reached KRW 469.7 billion, a 14% increase year over year. Breaking this down, platform revenue totaled KRW 331 billion, up 1% year over year, while advertising revenues saw a significant jump to KRW 131.9 billion, marking 61% year over year growth.
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Platform revenue for the fourth quarter was KRW 775 billion, down slightly by 8% quarter over quarter and 6% year over year. This decline is primarily attributed to a shift in content consumption for categories like gaming, which drive high traffic and engagement but currently have a relatively lower contribution to donation revenue.
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In the third quarter, advertising revenue reached KRW 40.2 billion, growing 3% quarter over quarter and a robust 45% year over year, fueled by strong performance in BTL advertising and our subsidiaries. To break it down further, platform advertising revenue rose 3% quarter over quarter, but saw a 6% decline year over year. Meanwhile, content-based advertising decreased 4% quarter over quarter, but maintained a steady growth of 6% on a year over year basis.
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Next, I will discuss our operating expenses. In the fourth quarter, operating expenses totaled KRW 91.5 billion, an increase of 2% quarter over quarter and 9% year over year. According to the nature of the expenses, variable costs such as payment processing fees were KRW 13.1 billion, down 10% quarter over quarter and 2% year over year. Ad related commission fees rose 53% quarter over quarter, but decreased 23% year over year to KRW 15 billion. Content production costs were KRW 200 million, representing a 98% quarter over quarter and 95% year over year decrease. Regarding fixed costs, personnel expenses were KRW 300 million, up 4% quarter over quarter and 27% year over year.
Fees related to broadcasting rights and others increased significantly to KRW 11.3 billion, up 64% quarter over quarter and 63% year over year. Streamer support funds were KRW 2.8 billion, up 11% quarter over quarter, but down 8% year over year. Network usage fees rose 6% quarter over quarter and 37% year over year to KRW 6.2 billion, while depreciation and amortization increased 1% quarter over quarter and 12% year over year, totaling KRW 6 billion.
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Operating expenses for the year were KRW 347.7 billion, up 16% from the previous year, resulting in an operating profit of KRW 122 billion, an 8% increase year over year.
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Operating profit for the fourth quarter was KRW 27.8 billion, representing a 23% decrease quarter over quarter and a slight 0.1% decline year over year. The operating margin for the period stood at 23.3%.
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For your reference, there was an adjustment of approximately KRW 2.9 billion during the year-end audit, resulting in a reduction in operating expenses and an upward revision of operating profit. This was the result of correcting duplicate recognized commission fees related to Ad Balloon revenue sharing, along with the reversal of accrued expenses for which payment obligations have expired. Any further adjustments arising from the audit will be disclosed in our annual business report.
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Our net profit for the fourth quarter was KRW 23.1 billion, representing a 22% decrease quarter over quarter and an 11% decline year over year.
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Regarding the 2025 dividend, we are planning a total payout of KRW 36 billion, which translates to KRW 3,380 per share. As our previous three-year shareholder return policy has concluded, we're excited to announce a new three-year framework for 2026 through 2028. To enhance transparency and predictability, we plan to shift the basis of our shareholder returns from FCF to consolidated net income, with a target payout ratio of at least 25% of our annual consolidated net income.
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Lastly, please refer to the annual balance sheet included in our materials for more details. This concludes our formal presentation, and we'll now open the floor for your questions.
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Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two, on your phone.
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The first question will be provided by Eric Cha from Goldman Sachs. Please go ahead with your question.
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First of all, thank you for the opportunity to ask a question. I have two questions. First, I see that the platform revenue has weakened, and I would like to know the reason behind it. What could be the strategy to increase the momentum, and what is the trend of the January market situation like? Second, when the new CEO takes the handle, I would like to know what his strategies are to increase the momentum for the overseas market. Regarding making the Global One platform, what are the strategies that you uphold?
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I would like to address the first question first. Regarding the platform revenue, the reason why it's showing weak numbers compared to the last numbers is because our online payment result hasn't been included. In order to have the numbers reflected, it'll take some time. If those numbers are reflected, I'm pretty sure the numbers will grow. We have seen previously when we were trying to change the online payment system that it took time to reflect the numbers. It will take some time to show, so you should be able to see the numbers in our next report. In order to address the second question, we are trying to operate One-Build of platform in order to have a lot of synergy effect. We see this as a long-term project. We've been doing a lot of work with Thailand and with Taiwan with some of the exclusive content.
In order to amplify this kind of effect, we're trying to integrate lots of functions that we only had in our domestic website. For example, we would like to provide some translating service which has been only given to the foreign users, but we're going to slowly expand this kind of function to also the Korean users. Another effect of which result we would like to see is, since this is a live stream program, we need a lot of communities to communicate together and come together as a whole. Once we implement this One-Build project, we're going to have a lot of promotions to amplify the effect and have lots of communities come together and have communications as a one whole global platform.
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Currently there are no participants with questions. Please press star one, star and one to give your question.
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Currently there are no participants with questions. We will wait for a second until there is another question.
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The following question will be presented by Junhyun Kim from HSBC. Please go ahead with your question.
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Thank you for the chance to ask a question. First of all, after looking into the operational revenue, I have a question about the live streaming service market. It seems like we have a lot of competitors in the market coming up with many different kinds of content. I think that this also can be assumed that the market might get smaller in the future. I would like to know what the management has to offer as a strategy in order to survive in this competitive market situation.
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Internally, and also through many global insight reports, it is shown that the live streaming market isn't going down. It is actually on the rise. There are a lot of competitive short form platforms that are shown through social media and like TikTok, and it seems like all those talent-based creators are interested in live streaming broadcastings. We have a lot of creators in the domestic market who are interested in doing live streaming shows on our platform, and we are trying to have more streamers come into our channel or our platform in order to host their live streaming shows. I think these short platforms and also our live streaming content has to coexist in the market. I don't think we are to be considered as competitors in the market.
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Currently, there are no participants with questions. Please press star one, star and one to give your question.
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The following question will be presented by Hyok-joong Lee from Daiwa Securities. Please go ahead with your question.
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Thank you for the opportunity to ask you a question. I would like to ask you regarding the platform becoming one. The two platforms of domestic and global platform becoming one. And if the platform gets interconnected, I wonder if only the subtitle service alone could have everybody globally and domestically enjoy the content in the same way. Before, there was a similar scenario where they used content, but there were some restrictions in regards to content going universal. But in terms of very popular content on Soop, we wonder if those content could be delivered the same just with the providing of subtitles. So in order to go global or have more content to be globalized, I wonder if providing subtitles is the only strategy that you are going to have.
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I think it'll all depend on the content of the streaming content that we're going to be providing. We are actually having a global integration project, and it's on the way. We have already opened up some service channels. For now, we have a lot of Korean content creators to stream their shows globally at the same time to foreign viewers, and it has been receiving positive reviews. We're also having some foreign streamers do the shows on our Korean platform at the moment with the subtitles provided. Right now, with only the subtitle, it seems like the viewers and the content creators are having a wholesome interaction on our channels. Of course, for now, we're not providing any objective content through our channels, such as news or documentaries, and most of our viewers are based on fans who are interested in the individual talent.
They already have a lot of interest in our talent online, so that's why we're very confident that even with just the subtitles provided, we won't be losing any viewers, but we would be able to deliver enough content for them to enjoy. We already have an experience of streaming live shows with the foreign channel with only the subtitles, and it is still being streamed with popularity. We also had a bigger show already being streamed without subtitle, but people are used to enjoying it through providing their subtitles themselves. Now, if they come onto our website, they'll be able to use our subtitle service, which means it would be easier for people to enjoy those kind of shows.
We are also planning not only to provide subtitles, but also, in several months, we'll be providing a multi-translating service, which would provide simultaneous translating service on the website at the same time. I think we would be able to reach more global viewers.
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Currently, there are no participants with questions. Please press star one to give your question.
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Currently, there are no participants with questions. We will wait for a second until there is another question.
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Thank you everyone for your participation. This concludes the fourth quarter 2025 earnings call for Soop. Have a wonderful day, and our CEO, Choi Young-woo, would have some words.
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First of all, thank you for your time, and I would like to give you two messages. In 2026, we're all focusing on that One-Build project for our global expansion. For now, we have a lot of Korean streamers trying to stream their content to foreign viewers. We are actually negotiating with the foreign streamers in each country in order for them to stream live shows on our platform as well. We are trying to have more Korean streamers to shoot videos abroad, and we're trying to take them abroad to other countries in order to communicate with the foreign viewers.
Please look forward to that kind of content, and you would be able to see more of that towards the end of the transition of the first quarter. In regards to our advertising revenue, last year, we've seen a steady growth in the advertising revenue, and we are trying to create more revenues through our commerce website and also the benefit pages so the users of our platform could enjoy more things through our platform with those new services. We're trying to create more content and more activities for all the users for both domestic and foreign viewers. I hope you guys would look forward to our activities in the future.