We will now start NAVER's 3Q 2022 Earnings Conference Call. Today's conference call, NAVER will give a presentation, and after which there will be a Q&A session for those of you participating today. For those who would like to ask a question, please press one and Star on your phone. NAVER will start their presentation. Good morning. I am Kwon Ki-moon from the IR team. Thank you for joining NAVER's 3Q 2022 earnings conference call. Joining our call today, we have Choi Soo-yeon and CFO Kim Nam-sun. In addition, please note that the presentation today is based on K-IFRS. In order to provide the results in a timely manner, the content has yet to be audited by an independent auditor and, thus, may be subject to change after such review. Now, first, I will turn it over to the CEO, Choi Soo-yeon, to present the business highlights. Good morning. I am Choi Soo-yeon, the CEO of NAVER. As macro uncertainties in Korea and abroad increase, there is increasing concern about the slowdown in growth of internet platforms. In a challenging external environment, we understand many investors are providing sincere feedback about the growth direction of the company. The CFO and myself also continue to think about how NAVER can continue sustainable growth in the mid to long term. To achieve this goal, we do believe that short-term results are important, but they need to be balanced with preemptive investments for the mid to long-term stability and also growth. This importance is something that we have been able to show you through our growth across the past two decades. In 2013, NAVER was the first in Korea to build its own data center, GAK Chuncheon. This data center has been the backbone of NAVER's wide variety of services that have been provided to users in a stable manner. Due to a high level of data backup and redundancy, even during the recent crisis, we were able to recover services within a number of hours. GAK Sejong, which will be completed next year, is also a preemptive investment to further solidify the stability of NAVER services. In addition to infrastructure investments, we will continue to review investment opportunities that have high growth potential and create synergies with our core businesses. Thus, as announced in October, we decided to acquire Poshmark. Over the mid- to long-term, we hope this investment will become a meaningful driver of growth five to 10 years down the road. Looking back on our journey, NAVER successfully introduced local UGC contents, blogs, which were the start of community services, and cafe services. It went to expand its contents via BAND, V Live, and global Webtoon services. We did not stay complacent as a search provider generating stable profits, but became the only company to successfully transform into an e-commerce player. By challenging ourselves again, connecting this to NAVER Pay, we have been able to continue both high revenue growth and core business profits. To continue NAVER's growth in the future or at the center of more significant growth going forward is our community services. Through the Poshmark acquisition, we have taken a meaningful step towards establishing community commerce as a new retail format, and thus in Korea, we continue to contemplate the community services changes that we want to create. Against this backdrop, the company launched a new community service called Open Talk and Issue Talk in the NAVER sports category last September. Users with a common interest can open a chat room to talk, recommend specific subject small group chat rooms, and provide a wide variety of contents to create an immersive communication platform. In only one month since launch, the sports Open Talks has around 2,000 chat rooms, and 42% of the participants are young users under 30, showing potential for high growth in the future. Going forward, we will expand this service to a variety of other service areas, including dramas, stocks, and other issue keywords, which have a need for real-time community. The service will increase the activity and hours that users stay at NAVER, and over the mid to long term, it can be linked to other businesses such as ads, commerce, and place to enhance business and financial synergies. In addition, we will also strengthen NAVER's unique community-based contents, which is leading the growth on the global stage, and the B2B business, which is expected to become more important in the future. First, now let me discuss the search platform business. Though third quarter is a traditional low season as working days are less due to the Chuseok holidays and amid a tighter macro environment, NAVER search platform grew 8% YOY. In particular, search ads grew more than 10% YOY, outperforming major global search platforms in North America. Due to concerning, continuing macro uncertainties, it is very difficult to accurately forecast the ad market, but we will focus our efforts on outperforming the average market growth in Korea. Since the end of COVID restrictions and summer vacation seasons, place ads have shown rapid growth in the areas of restaurants, sports, and leisure activities. In particular, since introducing competitive bidding in November last year, we have seen continuous growth in the number of active local businesses, PPC, and revenue resulting in positive performance. Though it still accounts for only a small portion of our search revenue as of September, paid advertisers to 86,000. Since the total registered NAVER Place businesses are around 2.24 million, we believe it has significant growth potential. On display ads, third quarter growth weakened a bit, which was mainly due to the high base effect of 2021, driven by performance ad growth and due to many large advertisers freezing or cutting their marketing budget on the back of concerns about an economic slowdown. Going forward, with some unlimited budget, more and more advertisers are focusing on a limited number of media platforms for their online ads. Therefore, we expect the demand for efficient marketing will increase. In order to actively adjust the evolving demand of ad clients, they were expanding the variety of a product lineup to include video and premium tech products. For example, mobile full screen ads launched in full this quarter has gained interest from fashion, luxury brands, movies, and large size commerce advertisers who prefer video advertisements. As a fresh new ad product that has not been seen on any local or international media before, we are getting positive feedback. In addition, dynamic ads, which use AI recommendation technology to provide precise targeting, have a much higher ad response rate and conversion efficiency than existing performance ads. It is being used by more than 200 Brand Stores per month, and from 2023, these ads will be applied to a wider group of areas, including NAVER Place. Though it is a challenging environment with mounting uncertainties, we have secured the broadcasting rights for the Qatar World Cup games scheduled in the fourth quarter. With this, we will actively catch the ad demand that is being concentrated on a limited number of media outlets and continue efforts to release competitive ad products that fit this environment. Next, let me move on to commerce. The e-commerce growth rate has weakened slightly with the so-called endemic, but at third quarter, commerce total growth grew by 19.1% Y-O-Y to KRW 10.5 trillion. It has shown significant growth. Product GMV on the NAVER platform, including Smart Store and KREAM, was KRW 7.1 trillion, up by 18.2% Y-O-Y, while service GMV, such as travel and booking, posted KRW 1.2 trillion, 2.1 x that of last year. Brand Stores GMV jumped 70% Y-O-Y to reach KRW 840 billion, and it continues to represent an increasing portion of total Smart Store GMV. As of the third quarter, the total number of Brand Stores is 1,206. This quarter, we had 241 new brands join in the areas of leisure, beauty and fashion. KREAM, the limited goods sales platform, is expanding into categories outside of sneakers. In this quarter, many brands that are popular with the Millennials and Gen Z have opened a brand tab so that they can directly meet users on the platform. As a result, third quarter GMV grew 2.7x that of last year. As of 3Q end, KREAM's total take rate is 3%, which is 1 percentage point higher than the second quarter. By the end of the year, we plan to improve it to the 5% level. We will continue to secure the sustainability of the platform and improve its profitability. Together with Poshmark, which will be consolidated into NAVER next year, NAVER Commerce will be focusing on fashion, C2C, and community elements that appeal to Millennials and Gen Z to address consumer trends that we want as a new retail format that strengthen the discovery function. As people engage in more outside activities in the third quarter, the total GMV for travel and bookings grew 2.1 x year-on-year to set a new historic record of KRW 1.2 trillion. In particular, plane tickets and hotels and travel and key categories such as leisure, lodging, and beauty and booking showed high growth, which translated into higher contribution in related fee revenue. In addition to existing tools such as reservations, order, and reviews, NAVER Place is focusing on upgrading its services to become an integrated website for offline businesses. As announced during our NAVER Partner's Day on November third, NAVER Shopping within December will fully launch its NAVER Guaranteed Delivery solution with the NAVER Fulfillment Alliance to further expand its quick delivery service. This is the result of a project on infrastructure expansion and technical cooperation conducted during the past year with key logistic providers like CJ Logistics. NAVER will establish a central platform to collect data along the logistics value chain to connect the service, sellers, and users. For a limited time following the launch, we will have a free promotion for the solution fee, but as time passes, the fee table will be gradually increased to ensure the take rate can be expanded. Based upon the alliance with logistic partners, NAVER Guaranteed Delivery will maintain the asset-light model of quick delivery services. For the additional burden of guaranteeing delivery, we will improve the take rate, and using branded tags, consumers will be able to check product and delivery information more intuitively and receive a guarantee on their delivery date. With the launch of this service, our delivery competitiveness in the FMCG category, which requires next day delivery, will outpace that of others. In the next three years, our target is to have quick delivery account for 50% of this category. It will be stronger competition between platform and logistics technology from the existing 1PL-focused business model in Korea. In addition, fueled by membership-based shopping and holiday booking GMV growth in the third quarter for NAVER Pay TPV stood at KRW 12.4 trillion, a year-over-year increase of 27.7%. Of this amount, non-captive TPV grew 49% YOY to KRW 4.8 trillion due to new large merchants such as LINE, in line with the end of COVID restrictions to stimulate offline TPV. We have linked up large merchants, integrated student membership benefits, and built a Kyung Hee University NAVER Pay campus zone. As a result, offline TPV doubled YOY to record KRW 800 billion. The fintech financial service lineup is also expanding steadily. Last October, for the first time in the industry, we launched a self-employed loan comparison service that covers all financial products to ensure user convenience and the accuracy of credit limits and loan pricing. Leveraging the same strengths, we are planning to launch a personal loan comparison service within the year. In the beginning, the scope of our financial institutions tied to our personal loan comparison service will be similar to that of the leading platform in the industry, but will gradually be upgraded over time. Moreover, on November third, we launched the NAVER Pay Money Hana Account and check card, which was selected as an innovative financial service. It enables users to keep their NAVER Pay top up points at the bank so that they can receive interest, deposit protection and bonus points. In addition, from January first, NAVER Securities and real estate services will be transferred to NAVER Financial. With this, we will enhance the efficiency of the Fintech business and strengthen the link between financial services and economics content to grow into a differentiated and integrated Fintech service platform. Now let me discuss our webtoons. This quarter again, NAVER Webtoon maintained its solid number one position in key markets including Korea, Japan and the US. Q3 global GMV was up 18.1% YOY and 11.9% QOQ at KRW 457 billion. Global integrated paid users reached 8.9 million users. In Japan especially, the users and profitability indicators are all growing rapidly. The number of paying users in Japan was up 29.2% YOY and 12.7% QOQ. GMV for series type content exclusive to Line Manga has grown 47% versus the start of the year, and high quality content is increasing, coupled with marketing focused on re-engagement, which has translated into high growth. The ebookjapan Line Manga system integration is going smoothly. From early next year, we are planning to increase original content, and at the end of the day, we will evolve one step further as a daily app through which users can enjoy a wide genre of work created by 6 million creators around the world, active in the webtoons and also web novel space. In North America, last October 7, we launched Wattpad's premium web novel platform, Yonder. Wattpad is a community platform that supports the growth of amateur creators and enables them to actively communicate with users. Yonder, on the other hand, is a space for users that want premium paid content. It is a business model that carries local content proven on Wattpad, but also popular local web novels and externally sourced content. Light users that communicated with writers and enjoyed light content on Wattpad will move over to the higher quality content of Yonder and Global Webtoons to become locked in as loyal users. High-quality IPs discovered in this process will be turned into videos through Wattpad Studios, creating a value chain. The launch of Yonder is an example of NAVER applying its successful business model and know-how in webtoons and web series to Wattpad, which is the largest web novel platform in the English-speaking world, but still lacks a strong business model. It is the first example of synergy that can be generated with NAVER adding value to Wattpad. For the past couple of years, NAVER's webtoon series successfully brought Munpia series and webtoon services to Korea and entered Japan to become the largest webtoon provider in the market. Now it will take this formula of success to recreate it on the world stage, including North America, where NAVER Webtoon has already produced many popular Netflix hits. Wattpad is a storage of unique IPs, some of which have been New York Times bestsellers. More than half of the revenue is generated from outside of Korea, and in order to create a virtuous cycle between Webtoon's unique business model and global IP production, and to elevate the global position of Webtoons, the company is planning to exert its best efforts to successfully IPO in the U.S. in the next couple of years. Lastly, let me explain the cloud organization restructuring that will be announced today. For the AI functions that sat in different businesses and individual B2B businesses like Works Mobile, Clova CIC, Papago and Whale, we are planning to combine them under a new cloud that is centered on the NAVER Cloud. This will not only gather the technical expertise that was scattered across the organization, but will enable us to create a more optimal and better integrated business across infrastructure, platform and solution. Strengthening cloud-based technology is also an important part to increase NAVER's, NAVER Japan's sales. As NAVER Works is already emerging as a leading SaaS provider in the Japanese market, in the future, by exploring opportunities to cooperate with Z Holdings and SoftBank, we are planning to actively support the Japan business expansion of NAVER Cloud. Amid concerns about an economic recession and a slowdown in online growth, the company was able to record solid performance in the third quarter again based on its diversified business portfolio. Macro uncertainties are expected to continue for the time being, but NAVER will continue to generate stable cash flow from its existing business, identify new growth drivers, and develop new markets to continue our growth momentum. We ask for your interest and support, and next, CFO Nam-sun Kim will walk you through the financial performance of the third quarter. Good morning. I am the CFO, Nam-sun Kim. Let me talk about the third quarter business performance. Recent concerns about the global tech industry have realized somewhat in global peers, leading to a slowdown in sales growth and weaker margins. However, NAVER has increased its top line by 20% year-over-year. Moreover, the profit generation capabilities of its core business, including search platform, commerce, and fintech, has led to meaningful quarter-over-quarter improvements and performance. NAVER's Q3 revenue was up 19.1% year-over-year and 0.6% quarter-over-quarter at KRW 2,057.3 billion. Though the significant revenue growth due to the COVID high from the second half of 2020 to 2021 is normalizing, and the fact that this quarter is a traditional low season due to the Chuseok holidays, NAVER's core businesses, which are search platform, commerce, and fintech, still outperformed its global peers. Moreover, the new acquisition on the content business also contributed to our overall top-line growth. Third quarter consolidated operating profit decreased 5.6% year-over-year and 1.8% quarter-over-quarter to KRW 330.2 billion. Operating profit dropped a little due to infrastructure expenses for the second data center and higher development operation expenses, but we are seeing some of our cost-cutting efforts started this year take effect. There was a slight improvement in marketing reward expenses related to search, commerce, and play. In addition, as a result of resource control according to business priority, total labor costs were cut flat to the second quarter. As a result, the adjusted EBITDA margin, which excludes depreciation on infrastructure investments and stock-based compensation that changes according to the share price, our adjusted EBITDA margin improved 1.4% quarter-over-quarter to 22.5%. Next, let me discuss our revenue by business line. In the third quarter, search platform was up 8.0% year-over-year but down 1.0% quarter-over-quarter at KRW 896.2 billion. Search ad revenue grew 10.6% year-over-year and 0.6% quarter-over-quarter, while DA revenue grew 2.3% year-over-year but dropped 5.3% quarter-over-quarter. In addition, when taking into consideration the tighter macro environment and decrease in business days due to the Chuseok holidays, we believe the overall performance was sound. In particular, amid increasing global macroeconomic uncertainties due to a broad long-tail based advertising pool and stable business model that includes flexible bidding, SA was able to address market volatility and outperformed global peers. In the case of display ads, growth moderated as large advertisers cut their overall marketing budget and because of the high base effect of performance ads that recorded a record high growth in 2021. However, NAVER will strengthen its NAVER-only high efficiency product line up and increase ad serving pages and expand ad sales to off-NAVER domains to once again fuel growth momentum. Commerce revenue was up 19.4% Y-o-Y and 4.3% Q-o-Q to KRW 458.3 billion. By area, commerce ads grew 12.3% Y-o-Y and dropped 2.1% Q-o-Q. Shopping DA revenue dropped temporarily due to macroeconomic tightening and the winter fashion low season, but SA drove growth by increasing 13.2% versus the previous year. Commission and sales revenue grew 28.8% year-over-year and 13.2% quarter-over-quarter because of strong GMV in new verticals, including Brand Stores. As the GMV contribution of Brand Store and travel booking, which have a higher take rate and KREAM increase while take rates gradually increase, commission and sales revenue growth is outpacing GMV growth. The subscription revenue for memberships jumped 41.4% year-over-year and 42.7% quarter-over-quarter with an increase in paid users. As users were locked in after subscribing, membership-based shopping GMV is also growing steadily. Fintech revenue was up 22.5% year-over-year and 0.2% quarter-over-quarter at KRW 296.2 billion. Non-captive and offline TPV were much higher than the previous year, but flat on a quarter-over-quarter basis due to the low season, including the Chuseok holidays. Contents revenue increased 77.3% year-over-year and 3.9% quarter-over-quarter to KRW 311.9 billion. In particular, Webtoon sales, which accounts for 86% of total contents revenue, grew by 106.7% year-over-year and 6.9% versus the previous quarter. This includes the consolidation of acquisitions like ebookjapan and Munpia. When excluding this, the growth was 26.4% year-over-year and 7.3% quarter-over-quarter. In addition, there was also a change in the accounting treatment in revenue as Webtoon writers were signed. From the last year-end, as new contracts are signed or existing contracts renewed, a portion of revenue is recognized on a gross basis from the previous net basis. When eliminating this change, Webtoon sales increased 13.1% year-over-year and 2.4% quarter-over-quarter. Cloud and B2B revenue maintained a growth of 10% year-over-year, but due to a temporary suspension in Clova device shipments, future tech R&D revenue decreased. Next, let me move on to expenses. Within development and operating expenses, labor cost was up year-over-year due to new acquisitions in the second quarter and third quarter and new hires for business expansion. Due to efforts to slow down the pace of hiring, the absolute amount was flat quarter-over-quarter. The others within development and operating expenses increased due to new space-related expenses such as the 1784 HQ depreciation cost and lease fees for Pangyo Tech One. Partner expenses, which mostly is revenue linked expenses such as ads, payment, and content fees, increased 31.6% year-over-year due to the acquisition of ebookjapan last quarter, but was flat on a core quarter-over-quarter basis. Infrastructure expenses increased 19.3% year-over-year and 7.6% quarter-over-quarter to KRW 152.2 billion because of depreciation related to the data center and other costs. The fact that NAVER was not complacent on essential infrastructure investment such as redundancy, which is key during a crisis, is the proof of the stability and robustness of NAVER services. While keeping top priority on service and safety, we will continue to explore ways to increase the efficiency of our infrastructure expenses. Lastly, marketing increased due to the acquisition of ebookjapan and the global business expansion of contents. Due to efforts to optimize search, commerce and reward programs that the growth has slowed to 17.5% year-over-year. On a quarter-over-quarter basis, it was actually down 0.6% at KRW 331 billion. In the second quarter call, we shared the P&L by segment so that you would be able to understand the current status of each business line better. This quarter, I believe the improvement in our core business P&L is a more important story than the fact that we were able to keep our top line growth. First, to talk about the segment margin for search platform and commerce combined, it improved 0.9% Q-o-Q to 33.9%, showing a rebound. In detail, search platform maintained a high segment margin similar to the second quarter, while margins in commerce improved on the back of efforts to cut marketing spend. Reward points are strategically being granted mostly on programs that can achieve high ROIs. For Shopping SaaS and certain Shopping Live programs which have weaker additional revenue uplifts versus the points payment, we have selectively lowered the percentage points of points that are granted in these programs. The segment margin of Fintech improved due to an increase in seasonal booking revenue, higher financial ad revenue, and one-off decrease in operational expenses. The optimization of certain reward and promotional programs has also helped the improvement. However, from the fourth quarter, we believe the margins will be back in line with more normal levels. With the launch of self-employed loans and personal loan comparison services in the second half of 2022, we are planning to expand our premium high-value-add financial service portfolio. In Contents, the loss increased due to an increase in marketing and labor costs for Webtoons and Snow, and an increase in expenses related to acquired companies. Going forward, we will continue efforts to rationalize operating expenses, including marketing. Webtoon marketing was used to activate ebookjapan and Line Manga users in which new user acquisition is taking place. As a result, in the third quarter, Japan paid users grew 29.2% year-over-year and 12.7% on a quarter-over-quarter basis. For your reference, Webtoon marketing efforts will be focused on reactivating profitable users rather than acquiring new users in the future. In particular, the P&L profile of Webtoon may go up and down in the short term due to global business expansion and newly acquired companies. As the CEO mentioned before, in order to successfully IPO Webtoon globally, our business target would be to maintain healthy growth and gradually improve profitability quarter over quarter to reach break even at the time of the IPO. That is how we will be operating our business. This quarter, cloud P&L was flat QoQ to the second quarter when excluding the reversal of stock compensation expenses. Externally, market growth is slowing and the environment is challenging. By continuing the expense optimization efforts that we showed effect in the third quarter, we will do our best to maintain a full-year margin of 16%. Consolidated profit declined 28.3% YOY, but increased 46.1% QoQ to KRW 231.6 billion. In addition to the YOY decline in the operating profit on the non-operating side, non-operating items such as a decrease in equity method income from Z Holdings and FX translated losses on foreign currency bonds issued by NAVER had a larger impact. The QoQ increase was due to the valuation gains on financial assets and equity method assets that were more than enough to offset less equity method valuation gains and higher FX translation losses on foreign currency bonds. Q3 free cash flow increased KRW 111.9 billion QoQ to record a - KRW 77.8 billion, which is due to an increase in adjusted EBITDA and QoQ decreases in income tax payments. Next, I would like to talk about the financial impact and funding plans of the Poshmark acquisition to be closed in January 2023. As mentioned, before, and as we have shared, the acquisition cost will be financed with some of the $500 million cash of Poshmark and NAVER's excess cash balance and NAVER's also available debt. In order to minimize the impact of the exceptionally weak Korean won against the US dollar, the company is planning to use US dollars held or hedged and also US dollar-based borrowings. To decrease the debt that has increased due to the acquisition, we are planning to securitize future operating cash flow and certain investment assets. We expect the leverage ratio increase due to this acquisition to return to the current level within the next two years, and thus we believe the impact on our financial matrix will be limited. In order to improve the efficiency of NAVER's stretched balance sheets, which has been the concern of many investors, we have already started to securitize some investment assets with limited strategic value. In addition, cash outflows for fund investments, which has increased during the past couple of years, are also being curbed. Lastly, let me discuss our shareholder return policy. The value of shareholder return efforts in the second half of 2022 is a total KRW 137.1 billion, which will be executed in a special quarterly dividend in November. As mentioned during the second quarter, this includes KRW 85.7 billion in unused balance from the total FY 2021 shareholder return resources of KRW 162 billion and KRW 51.4 billion deferred shareholder return from the fiscal year of 2020. Our new shareholder return policy to start next year will be announced at the beginning of 2023. This concludes my presentation, and we will now start the Q&A session. Thank you. 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 star and number one. For cancellation, please press star two, that is star and two on your phone. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per participant. The first question will be presented by Eric Cha from Goldman Sachs. Please go ahead. Thank you very much for giving me the opportunity to ask the question. I have a question relating to your advertisement business and your global business. First, relating to your search platform, the growth rate has been quite robust for your search ad above 10% and display ad above 2%. It seems like the macro headwind had an impact mostly on the display ad. Would like to understand what your outlook is as you enter into Q4 regarding the advertisement business. To respond to the slowing down macro factor, what are your strategies to counter the challenge? Could you explain whether, especially around your new products, because it seems in the past when there were slower growth, the company launched new products to fuel additional growth, so it'll be helpful if you could provide some elaboration there. Also at the same time, can you share with us what your outlook is for that segment? Second question relates to your global strategy. In the domestic market, NAVER, underpinned by its capabilities in search, was able to grow its dominance in other segments such as commerce and Webtoon. If we look at your capital allocation plan, it seems that going forward, you are putting more emphasis on growing your global overseas business. I would like to understand what you foresee as a potential synergy that you will be generating, especially from the new acquisitions. It would be helpful if you could also mention, because currently the investors are slightly concerned about the relatively high user acquisition costs that we're seeing from Poshmark, your recent acquisition. Can you explain as to how you're going to manage that? Hello. I will respond to your first question. It is true that if you look at the overall macro environment, there are uncertainties, and the economic growth outlook has been downgraded recently. The global peers also for the second half in 2023 have adjusted their growth trend. The market sentiment is degrading as well. We see that there are growing uncertainties on the external side, and we see a lot of companies slashing their budgets as well. Still, we're gonna do our best to bring about double-digit growth in the fourth quarter. Regarding the outlook for 2023, due to quite a bit of uncertainties that still exist, once we get more color on our plans, we will then come back to you and provide you with more specifics on the guidance. Regarding NAVER's strategy to overcome these challenges, we believe that advertisers are going to be much more concentrating on specific advertising media like the online platform, and we believe that NAVER is well-positioned to leverage this opportunity by introducing highly efficient advertisement products as well as premium products. In the fourth quarter, we also won a broadcasting right for the World Cup Games, and hence we believe we will be able to cater to the needs of our advertisers. Under search, through place advertisement and for display ads through performance ads, we plan to further expand a NAVER off platform or non-captive base of customers and users. In that regard, we plan to also expand our inventory of advertisement. Regarding the global business, yes, you are right. From a mid- to long-term horizon, our overseas and global business is going to be one of our very essential pillars. What we plan to do is, we have accumulated know-how in terms of technology tools as well as services that NAVER has built within the domestic market. We believe that there will be a lot of synergistic opportunities for us to drive top-line revenue growth and bring down costs in terms of cost savings through our acquisitions such as Poshmark and Z Holdings. Well, you asked about the user acquisition cost for Poshmark. Regarding more details, I think it would be helpful if you could refer to the script and the relevant materials which we shared on October the fourth during the 1-hour session, where we presented and where we received questions regarding the Poshmark acquisition and the following synergies. Now, specifically going to the user acquisition cost, if you were to compare Poshmark with other C2C peers in the global market and in North American market, you will see that that figure is not necessarily high at all. Recently in the press, there was a mention of Poshmark's marketing expense being elevated. If you really look at the specific data, you will see that compared to Poshmark, its competitors actually entail bigger extent of loss. Also its competitors are much more dependent on marketing spend, as well as they're experiencing more inefficiencies in that expense. Just to add one more point on the user acquisition cost. If you look at the cost per new user after the change in Apple's iOS privacy-related policies, as a function of that, there has been an across-the-board increase in the user acquisition costs for all of the players. This was similarly seen in all of the platforms that do business off of the internet platform. If you look at Poshmark, its CAC did not rise, and it actually converged at around $7 per user. Poshmark was able to successfully control that increase within a certain limit. Going forward, Poshmark is a platform that really leverages its capabilities in engaging the community, and we will focus more on retaining our user base rather than overly focusing on new user acquisition. Competitors to Poshmark are also adopting similar strategies, but we expect that as we are able to elevate user retention, we will be able to reduce marketing dependency and also trigger organic growth. The next question will be presented by Stanley Yang from JPMorgan. Please go ahead with your question. Thank you. I would like to pose two questions. Would like to understand what your estimates for labor cost rises for next year. If you could give us a breakdown between your core businesses of ad and commerce versus other business segments, that would be helpful. Also looking at the OP margin trend, in Q3, we saw a rebound for ad and commerce. Do you expect there to be a gradual uptrend going forward? Second question relates to your NFA, the fulfillment strategy. It's now become very important for the e-commerce business to be able to provide an effective delivery service because users are now really looking at delivery as an important decision-making factor for selecting which e-commerce they're going to use. Can you give us an update as to what your midterm assessment is for your NFA strategy? Do you continue to really focus on asset light model in the future? Please an update on quick commerce as well. Regarding the labor cost increase because we're currently in the process of writing up the business plan, please understand that I won't be able to give you the specific growth rate or the breakdown between ad and commerce. Since labor cost rise follows the number of hires, if I could share with you the trend for new hires this year with the acquisition of new entities and expanding our businesses, there were some essential need for hiring, which drove up the total number of headcount, but we are in the process of normalizing or slowing down that hiring process. Hence, going forward, we will continue to focus on headcount management from the mother company level, and also we will make sure, however, we do appropriate hiring so that we do not lose on the growth momentum of our subsidiaries. Now, regarding the ad and commerce business margin, it is encouraging to see that our margin is showing a rebound trend, and that is thanks to our strategic investment as well as the cost efficiencies that we are gaining. In terms, rather than really being bogged down by specific margin figure, what's important is for us to continuously drive top line revenue and bring about cost efficiencies so that we lay the basis for continuous expansion of the margin, and we will do our utmost to bring that. Just although cautiously, hence I believe that I will be able to say that we do expect a continuous uptrend in margin figure. Regarding the question on NFA, our logistics strategy is very closely mirroring and linked to our overall ecosystem strategy. NAVER wishes to not dominate all of the business areas, but rather focus on growing the overall ecosystem. That basically is the gist of our strategic approach, and same applies to our logistics. Therefore, we decided to partner up with multiple number of providers, and so the speed may not have been as fast, but thanks to such efforts, in December, we will be launching the Guaranteed Delivery service under NAVER. We will continue to be asset light and be able to provide the strength that NAVER has to our user base in terms of the extensive merchandise database and the lowest price possible, and the guaranteed delivery to our users. To the SMBs, we will be able to provide them the advantage of a relatively lower commission than the take rate, and also provide users with more choice, which also includes quick delivery. NAVER's platform basically and also eventually we will also be providing data related solutions, the merchant solutions, so that we could eventually improve on the take rate. 마지막으로 질문 주신 퀵 커머스 시장에 대한 어프로치 역시 저희의 전략은 매우 유사합니다. 저희가 직접 하기보다는 주요 대형마트와의 제휴를 통해서 현재 장보기 서비스에서 제공하고 있는 익일, 새벽, 당일 배송 유형 등을 계속해서 운영해 나갈 예정이면, 이고요. 올해 연말부터는 다양한 슈퍼마켓과의 연계를 통해서 1시간 내 장보기도 가능한 새로운 배송 유형을 도입하는 것으로 계획하고 있습니다. Now for the quick service, we are also adopting a similar strategy. What we will be doing is that rather than doing all the logistics services on our own, we are partnering up with hypermarkets, and we are providing various different types of delivery formats, the early morning delivery, the same day delivery and the day after D+1 delivery. We are at this point developing a new format, which we are trying to release by the end of the year in collaboration or in partnership with supermarkets. We plan to also allow a delivery within one hour. 다음으로 질문해 주실 분은 키움증권의 김진구 님입니다. The next question will be presented by Kim Jin-gu from Kiwoom Securities. Please go ahead with your question. 네, 질문 기회 감사드립니다. 두 가지 질문드릴 거고요. 첫 번째로 저는 광고주 동향에 대해 좀 여쭤보고 싶은데요. 연초 이후에 포스트 코로나 그리고 매크로 불확실성이라는 두 가지 변수가 존재를 하는데, 해당 과정에서 광고주의 총 예산 중에서 디지털 광고에 대한 집행 비중에 대한 어떤 변화가 있었는지, 그리고 향후 해당 비중의 방향성에 대해서 회사는 좀 어떻게 판단을 하시는지 말씀을 부탁드리도록 하겠고요. 두 번째 질문은 내년 실적 가이던스 또는 주요 사업별 공개 가능하신 목표치가 있으시면 좀 말씀을 해주시고, 최근 기사화된 네옴시티 관련된 사업적 협력 여지나 강조해 주실 사항이 있으시면 함께 말씀을 부탁드리도록 하겠습니다. 감사합니다. Thank you. I would like to ask two questions. First regarding the trend, in terms of the advertisers. Since the beginning of the year on the back of post-COVID and macro uncertainties, we'd like to understand the extent of the advertisers advertising budget cut, and excuse me, and you know, their focus on digital use. Have you seen any changes and fluctuations in the allocation of such budget for the digital advertisement? Also, what do you think is going to be the direction going forward? Secondly, give us a guidance for the performance next year. If you could also share per business segment, that would be helpful. Recently we've seen a press coverage on NEOM City. Can you tell us as to what you're expecting from that participation? 광고주들의 예산 집행은 1분기부터 전 세계 국내외 트렌드를 보시면 아시겠습니다만은 줄고 있는 것은 엄연한 사실이고요. 다만 디지털에 대한 Allocation이 오프라인에 대한 Allocation과 뭔가 정책적인 변화가 있는지에 대해서는 그거는 아닌 것 같습니다. 어차피 이미 디지털 Penetration이 한국과 같은 선진국의 경우 특히 한 60~70% 넘는 상황에서는 Allocation의 문제라기보다는 전반적인 매크로 환경에 따른 광고주들의 예산 축소, 이 영향이 가장 크다고 생각 들고 있고요. Regarding the advertisers budget, as you've clearly seen globally and also in Korea since Q1 of this year, there's been a clear cut in the budget that they're employing, but it's not necessarily any strategic change between the allocations of digital versus offline. The digital penetration already for countries like Korea, which is highly matured, is around 60%-70%. Actually this is not a matter of an allocation of the budget, but it's more of a response to the macro headwind. 특히 글로벌 상황과 한국을 비교해도 그와 유사한 트렌드에 대한 증거들이, 증상들이 좀 나타나고 있습니다. 가령 Google 같은 경우에는 점점 검색 광고의 성장세가 급격히 둔화되고 있는데요. 보통 검색 광고가 이 광고 시장에서는 가장 소비자의 의도를 확실히 알 수 있는 거기 때문에 Top of the funnel, 즉 Display부터 먼저 예산이 줄고 맨 마지막에 검색 광고의 예산이 줄어드는 그런 현상을 목격할 수가 있는데, 지금 Google 같은 경우에는 검색만 이번 분기에 4% 성장에 불과했고, YouTube는 오히려 역성장하는 추세를 볼 때에는 글로벌 현상에서부터 많은 시사점을 저희가 얻을 수 있을 것 같은데요. Also, if you compare between global versus Korea, we see very similar signs of that. Looking at Google, their search ad growth has significantly plummeted. Search ad is an indicator that really shows the intent of the consumers when it comes to the advertising market. Because basically the decline actually starts from the top of the funnel, which is the display ad, and then it trickles down to SA, search ad. The fact that Google is seeing only about, you know, 4% of growth from search ad, and also YouTube is posting a negative minus growth. We can get quite a bit of implications from this global phenomenon. 물론 유튜브의 역성장에 대해서는 Short form content 광고 시장의 Inventory와 수요 공급의 mismatch 때문에 발생한다는 유튜브 경쟁진들의 가설도 있긴 있는데, 이러한 이슈도 있을 수 있겠으나 어쨌든 전반적인 Display 광고 대비 Search 광고의 구조적인 차이에서 기인하는 것으로 보고 있고요. 그런 반면 네이버는 오히려 이번 분기에 Search- Of course, YouTube, the fact that it's recorded a negative growth, the management, one of the key thesis or the hypotheses is that the short form content advertisement related inventory issue, as well as the mismatch between demand and supply is the main driver of that negative growth. It's more of the fact that there exists a structural difference between the DA and SA, and we believe that the key driver behind that is due to the structure of SAs. Comparing to that, the fact that NAVER was able to bring about more than 10% growth in its search ad is very encouraging, very much encouraging. We could say that the Korea macro backdrop had a less impact as versus global. Now, having said that, one can never avoid the macro trend. In Q4, we believe that the combined search platform growth is going to underperform the growth rate we've seen in Q3. Once again, we won't be able to share with you any specific figure on that. Now, usually we do not give our guidances for the following year. As mentioned during our five-year plan that was shared at the beginning of the year, for next year, our target is to bring about mid-teens, mid-10% growth. Now, regarding the Saudi visit recently, basically, this will be an opportunity for us to showcase to our global partners the cutting edge ICT technology that NAVER owns in relation to the smart buildings and smart cities, which include the robots, cloud, AIs, and digital twin. However, it is too early for us to share any specific agreements or contracts. It's hard to say whether that is in the pipeline. Since we're running out of time, we will take the final question. The last question will be presented by Ahn Jae-min from NH Investment & Securities. Please go ahead with your question. Hello, I'm Jae-min Ahn from NH Investment & Securities. I would also like to ask two questions. First, relating to your commerce business in Japan. Since last year, you've been testing the Smart Store, but we don't yet see any visibility in terms of the official launch. Can you give us an update? Second, I personally believe that Poshmark going forward from mid to long-term perspective can become a very strong driver of NAVER's global business growth. You know, as investors, we are concerned about the profitability and the P&L. You did mention in last conference call that you don't foresee any significant improvement in year 2023. Poshmark was making profit in 2021, and then in 2022 it was making a loss. When do you expect to see a turnaround from Poshmark earnings? Smart Store solution roadmap. Regarding the Smart Store business, we are, as we speak, collaborating together with LINE for the release of this product, and we have a roadmap in place whereby we will be bringing Smart Store to Yahoo! JAPAN Shopping and PayPay continuously. For our approach for Japanese market is quite similar to what we have achieved in Korea, in that across search, commerce and payment, what we're doing is we are not just making the take rate as our key revenue source of Smart stores, but Smart Store is the most optimized search tool that works as a means for us to acquire the database relating to the shopping of the users. The key revenue source of this business model is the shopping search ad. That is through which we make up or we generate the significant portion of the revenue. That really differentiates NAVER's business model. As we speak, we are collaborating and cooperating with Z Holdings. Once again, on that collaboration, most important element is the shopping search ad. We want to be able to bring that and apply that to Yahoo Shopping. As we speak, we are conducting live tests against the Yahoo search users. What we are planning to do is that by next year, we are making the preparations so that we could see the shopping search ad come up and the search results of Yahoo by next year. Just to provide some more elaboration regarding what NAVER's vision is with regards to Z Holdings, I hope, I'm sure we will have an opportunity later on to be able to share with you more detailed plans. Just to briefly share with you two major drivers is that NAVER is positioning itself as a technology and solutions provider in the B2B area, and that will be the source of revenue through search ad as well as Smart Store, we will be the technology provider to Yahoo, which will form a additional revenue stream for us. In terms of the progress of this arrangement, because it's currently bound by confidentiality, I won't be able to share any specifics, but in terms of the key contract terms and conditions, we are currently working to come to an execution of the contract by the or be within the year. The second driver is, as you've seen from our balance sheet, Z Holdings is one of the key assets of our company. Also Z Holdings has an extensive internet-related portfolio within the Japanese market. We believe that it will be important and that it will be possible for us to bring NAVER's capabilities that we've accumulated in the domestic market regarding search and advertising content as well as pay and implement that to Z Holdings. Also Z Holdings has a very strong market share even in Messenger, which NAVER doesn't, in the domestic market. We believe that in terms of the business performances, we would also have an opportunity to benefit from the equity method gains as well. Poshmark를 인수했던 순기업가치는 네이버 전체 시가총액의 5%도 안 되는 비중이며, 그 실제로 이미 비즈니스 모델이 탄탄하게 입증된 회사로서, 그런 반면 매출 기여도는 5%를 상회하는, 더 큰 영향을 끼치고 있습니다. Now responding to question about the Poshmark. If you're thinking about the pro forma impact, you have to think about the proportionality. If you look at Poshmark that and the acquisition, basically their net corporate enterprise value is less than 5% of NAVER's total capital capitalization. Also Poshmark is a company that is using a proven business model, but its revenue contribution is about slightly higher than 5%. 최근에 또 영업적자로의 진입에 대해서도 말씀드리면, 그 영업적자의 절대값 역시 상대적으로 적은 편이고, 오히려 구분 손익을 보셔서 알겠지만 네이버의 많은 신사업 부문들 중에 이보다 훨씬 큰 적자의 폭을 절대적으로 기록하고 있는 부문들도 많이 있어서 오히려 상대적으로는 네이버의 pro forma 영향이 수익성에 전체적인 영향에 상당히 작은 비중을 차지하고 있습니다. Also, looking at the operating loss of Poshmark on an absolute value basis, it is small. You've seen from our segment P&L of other NAVER subsidiaries, other new businesses of NAVER, they entail some businesses a bigger extent of deficit or loss. On a relative basis, basically its mix out of our pro forma profit is relatively low. 앞으로 단기 그리고 중장기적인 수익성의 개선 프로필에 대해서도 이미 저희가 10월 4일날 상세한 설명을 드려서 구체적으로 다시 반복드리진 않겠습니다마는, 그때 말씀드린 것처럼 향후에 이, 삼년 동안 성장과 수익성을 잘 균형을 잡고, turnaround 역시 보일 수 있을 것을 기대를 하고 있습니다. Now, in terms of our short term and mid to long term improvement in profitability, we share with you the details on October the fourth. I will not repeat myself, but in 2 to 3 years' time, what we will be doing is striking a very good balance between growth and profitability, and hence we do expect, we will be able to reach turnaround. 이상으로 2022년 3분기 실적 발표를 마치겠습니다. 오늘 참석해 주신 투자자 여러분들께 감사드리며, 앞으로도 많은 격려와 성원 부탁드립니다. 감사합니다. Well, this brings us to the end of the Q3 2022 earnings presentation. Thank you very much to investors for joining us this morning, and we look forward to your continued support. Thank you.