Yes. Hello. I'm from NH Investment & Securities. I am Jae-min Ahn. I would like to ask about two or three questions. My first question relates to the recent fire incident at Kakao. I would like to understand what the financial impact is going to be for Q4 in terms of any losses from on the revenue line item and potential compensation to your users. I think you've mentioned this briefly in your presentation, will we and do we need to expect any changes with regards to the business direction as NK had previously stepped down? Also would like to understand what the long-term implication is for your investment into infrastructure. My second question relates to the fact that Kakao is seeing quite significant level of increase in its number of subsidiaries, and there is also growing criticism from outside. Would like to understand what the company's position is with respect to the growing number of subsidiaries within Kakao. Hello, this is Simon, the CEO. I will respond to your first question, and then I will have our SVP, Jay, respond to your second and the third question. The fire incident that we recently experienced was an opportunity and an occasion for us to once again really understand that the Kakao is truly an essential service that is being provided to the entire population. It was an opportunity for us to have an awakening and really look back on the fact that we had some shortcomings with regards to such service offerings. I do expect that in the process of living up to the duties that we have against the society, there could be some short-term costs that may be generated, but we believe that financial impact will be short-term and one-off. We were able to successfully restore the service. However, I believe that it will take more time for us to earn back the trust from our user base. Basically, through these efforts, through the compensation and the countermeasures that we will put in place going forward, we wish to lay the basis for enabling a more long-term and more stable services which our users can trust. For your information, in terms of the financial impact that includes the revenue loss as well as a short-term financial impact with regards to user compensation is expected to be around KRW 40 billion. With regards to the specific plan for support, we have not yet finalized the package, so it would be difficult for me at this point in time to share with you the specific details. We will receive the filing for damages that our users and partners have experienced up until November the sixth. Once we come up with an appropriate support related guideline, we will come back to you and share that information with you. Also, relating to that first question, you mentioned NK's resignation and any potential impact that will have on the overall direction of the company strategy. As I mentioned during my presentation, even before being appointed as the CEO of Kakao, as the head of the CAC Center from the beginning of this year, together with NK, we have consulted very closely with regards to the strategic direction for Kakao service and its business. We have worked together in setting the new vision for the company, and we already have in place a roadmap that will be implemented up until next year with regards to the service, with regards to services and businesses. Of course, the specific details may change as we implement this roadmap, but in terms of the big framework regarding the growth strategy of KakaoTalk, there will not be any changes. Now, having said that, number one priority for the company as of today is to respond to and deal with the recent incidents that we have experienced and make sure that we have preventive measures in place so that such failures do not repeat itself. Because of that, there may be about a one or two month delay in the services that we have been working on. However, for us, what is the most important is for us to earn back the trust from our Kakao users, and we will endeavor, and we will do our utmost to make sure that all the plans that we've put in place are well implemented. This is Jay. I will respond to your question about our long-term infrastructure investment. Infrastructure investment, especially including data centers, help to drive Kakao's infrastructure capabilities, and at the same time, we expect it's going to help us be more cost efficient. As of today, we are renting out data center space, and we are paying rentals and electricity and utilities fees, all in all amounting to about KRW 150 billion per year. From a short-term perspective, as we expand Kakao and its affiliates, we are expecting rise in infrastructure demand. If we think about the actual running of our own IDC centers, there will be headcount related costs and operational costs, as well as additional depreciation costs for the buildings and fixtures. However, from a long-term perspective, by operating our own data centers, we will be able to manage our costs more efficiently and be able to operate our service in a more stable manner. Just to provide you an update with regards to the construction of the data center. In order to preemptively respond to a higher demand for data as we are seeing a rise in traffic from our Kakao services as well as expansion and broadening of our cloud business, we have been implementing our own data center build out plan since 2018. We are in the process of building a data center at Ansan, the Hanyang University's campus. That would be the number one data center, which is expected to be completed by 2023 and is targeting on operation from January of 2024. The second data center, we have entered into an MOU with Seoul National University's Siheung Campus as well. Now, the fact that we are building a data center inside the campus of university, this is something that is rarely seen in even other global cases. We have chosen that location, so that we can fully leverage our cooperation with the academia and also, our interests aligned with the universities and academias, and the fact that we could train and nurture a talent for a cloud business going forward. That's why we were able to receive very positive conditions in getting the idle lot of land that these university campuses had, and we were able to significantly reduce the investment burden. In terms of the CapEx, supported by very steady financial stream of Kakao, in 2017, the CapEx amount was about KRW 100 billion, which increased to KRW 370 billion as of 2021, and on Q3 2022 cumulative basis, we have spent above KRW 456.3 billion in CapEx. Basically with the expansion of Kakao's services and its business, we have seen rise in investment into tangible assets, which include servers and other infrastructure, and with the groundbreaking of number one data center end of 2021, we are seeing significant rise in tangible investment for construction in process since end of 2021. However, the actual spending is not going to be all at once. We will be fully able to support this from the cash flow that we generate from our operations as the relevant CapEx spending is going to be spent and allotted across a, over a period of time. Responding to your question about growing concern over a large number of subsidiaries under Kakao Group, I think what's important is not to look at the simple number itself, but the characteristics of who these subsidiaries are. If you look at all the subsidiaries under Kakao Group, small size companies with less than 30 headcount account for 80% of our total subsidiary profile. If you look at these small companies, what they do is they are IP producing studios that are, you know, coming up with webtoons, web novels, and producing games, musics, and video content. These are small studios and developers who actually produce and create the original IPs. They are mostly in the areas of content production, and there are also other startup companies as well. If you set aside these small scale studios and developers, the actual number of, I guess, major sized subsidiaries under Kakao is less than 10. Aside from these, content producers, most of the subsidiaries are startups. From the very beginning of our business, we have taken an approach of investing into a startup and growing together with these startups side- by- side. At Kakao, we have been driving growth of all of these, entrepreneurship-based startups, within our group. Going forward, Kakao will continue to live up to its social duty and its status and make sure that we come up with the most optimal ways to invest into the overall startup ecosystem. We will take the next question, please. The next question will be presented by Jong-Hwan Shin from Korea Investment & Securities. Please go ahead with your question. Thank you. I would like to pose two questions. First is on your marketing expense guidance. In the second quarter, you've guided that you were looking at about 7%-8% of marketing expense against the revenue. Would like to understand whether you will be at. You could expect actually lower marketing costs as against the revenue less than 7%. I would like to get some color on that aspect as well. Second part of this question is, if you look at your other expense, it is KRW 60 billion and you've been experiencing quite steep QoQ rise for some time now. I would like to understand which business is driving this steep rise in other expense, and is it not possible to control this line item for the benefit of improving your profitability? Another part of the question is, as of September 30th, you introduced Bizboard on the Friends tab. If I look at the first-week metrics, I see that you're making about KRW 8-9 billion in revenue on a monthly basis based on the selling out of the inventory as of and after the first week after the release. I would like to understand what the current metrics looks like. Are you still making that KRW 8- KRW 9 billion in revenue every month? This is Jay. Responding to your question about marketing spend in Q3, our marketing spending is against the revenue posted 6%. For each of the business line, Kakao Piccoma in particular has been quite aggressive in spending its marketing, excuse me, let me stand corrected there. Previous quarter, the businesses have been quite aggressive in spending marketing costs, while Piccoma and Kakao Entertainment, as we enter into this quarter, have been much more conservative. Hence, we've seen a decline in the marketing spend. On the other hand, Kakao Games have slightly increased their marketing expenditure on the back of release of a new title, Uma M usume. The reason why we have adopted this strategy is because of the uncertain macro backdrop, and we are in a market where, compared to the amount of investment that we put in, we're not getting an appropriate level of marketing result. Also, if you look at North America's story business for us, we slashed on the marketing expense because for us, at this point, our priority is to reach a break-even point. Also for Piccoma, our number one priority is to make sure that we solidify its fundamentals in terms of the key indicators, such as the conversion rate as well as the retention rate for the users. In Q3, on a cumulative basis, the percent of marketing spend against revenue reported 7.1% and on a per annum basis, we are looking to see at around 7% level. This is Jay. Responding to the question first on listing of the subsidiaries, we are fully aware of the concerns that our stakeholders have, hence we are going to revisit our IPO plan from point zero from a governance perspective. Our approach will be to have focus on protecting our shareholders, our existing shareholders, and further enhancing the shareholder value. We will closely discuss and consult with our existing group of shareholders and our investors in making the relevant decisions. On OP margin for next year, currently we are in the process of writing up our business plan, so we will be able to share with you more details later. Due to the macro headwind, this is having a negative impact on our ad business, and hence in Q4 revenue growth is actually slowing. On top of that, there was the IDC related incident. With regards to the OP margin for Q4, we are taking a more conservative stance. We will do once again our utmost to make sure that we bring all the services that we are working on at this point successfully into the market, and we will make sure we explore and identify business opportunities along the way. We will move on to the next question. The next question will be presented by Dong-hwan Oh from Samsung Securities. Please go ahead with your question. I believe that in a time where there is building criticism on the reckless expansion of Kakao's subsidiaries, you have to go back to the most important and essential aspect, which is to focus on monetization at the mother company level. Other than the Open Chat, I would like to understand whether you have other additional models to monetize, for instance, leveraging the View tab or adopting a short form video advertisement. Do you have any business models that you are currently thinking of to further accelerate monetization? Thank you very much for a very great question. This is Simon. I do appreciate your advice, the fact that rather than focusing on growth and revenue at the subsidiary level, that it is important for us to focus on monetization at the mother company level. I appreciate that advice. The current situation is that advertising business is quite large in scale. It takes up a lion's portion of the company's structure. To a certain extent, there is quite a bit of concentration, meaning 1% of advertisers are driving 70% of our revenue. I feel that we would need to explore ways to fundamentally bring improvement to this, and I think there is a good possibility that we could actually achieve that. Just as we are seeing people converse with one another through KakaoTalk, our very important strategic objective is to make sure that the businesses also communicate with one another, businesses to businesses through KakaoTalk Channel. If you look at total number of KakaoTalk Channel, there are 57,000 channels that have more than 1,000 friends and 1.6 million channels that have less than 1,000 friends. It will be quite important for us to expand that pool to include small and medium-sized advertisers as well as small merchants. I believe that we do have that potential. Now, although KakaoTalk Channel is known to be a very effective marketing tool to many of the smaller and mid-size advertisers, there existed some entry barrier. Basically, they've found it quite difficult to massively send out messages to their KakaoTalk Channel friends, so hence they were a bit inactive. There were hurdles that existed for these companies. One of the key business solutions that could remove such pain point for smaller sized advertisers is Kakao Sync. Currently, there are about 23,000 businesses that have adopted Kakao Sync, and we expect that we will need to expand this space further. One of the difficulties was that when the businesses wanted to adopt Kakao Sync, what they need is they need developers in the process. That worked as an entry point, the hurdle for the smaller to mid-sized companies. Within the year or early next year, we are planning to link it up with key e-commerce platforms, providing support and help to smaller merchants in their process of adopting Kakao Sync, and once we do that, I believe we will be able to see an uptrend. Currently, we have about 70,000 sellers and vendors on KakaoTalk Store, and only 4% of them, which are about 3,000, are sellers making use of KakaoTalk Channel marketing. Hence, once we develop a seamless business tool that could facilitate the marketing activities through the use of KakaoTalk Channel for these vendors and sellers, I believe that this will significantly help us expand our advertiser pool. As we speak, we are developing relevant tools to provide to these sellers and vendors so that they could seamlessly and easily engage in marketing activities. By next year, our plan is to expand the number of talk channels with more than 1,000 friends to 300,000. If we do that, there will be viral effect that will be created, which will then lead to natural growth. If we are able to move up to about 500,000 businesses, then we will be able to defend against slower economy and macro headwind and be able to sustain a solid and a healthy level of top line revenue. Last point I would like to mention is that it may sound a little ambiguous, depending on who defines platform, people talk about platform in many different ways. My definition of platform is that it is a connection and a nexus that brings together numerous number of suppliers with numerous number of consumers. If you look at KakaoTalk, we do have these multiple number of users. However, for it to evolve into a platform, we also need to have many number of suppliers, be that advertisers or sellers. We still do have much more to enhance and improve. I ask for your continued interest along this journey. If you look at the advertisement market, be it offline and online, the market size is more or less capped at around KRW 12- KRW 13 trillion in size. All the players are dividing up that market under that cap. If you look at business communication, the budget does not come from advertisement budget, but marketing budget and business budget can be used for that purpose. We can actually go above and beyond the market cap that we see in advertisement. Yes. Since we've spent quite a bit of time, we would now like to take the final question. The last question will be presented by Jingu Kim from Kiwoom Securities. Please go ahead with your question. Thank you. I would like to ask questions about the advertisers as well as the digital ad market trend. The different elements would be compounding one another. The reason why you feel that the digital ad market is slowing, do you think that this is a temporary phenomenon as we are seeing after COVID, more outdoor activities and higher spending on BTL? Or do you think that this is more macro and more secular in terms of the fact that people are expecting midterm economic recession? Are we seeing across the board change in the position taken by the advertisers? There could be multiple compounding elements and variables that are impacting this. Just would like to understand what the company's take is and also in that same light, how do you project the advertising market to look like going forward? [Foreign language] This is Simon. I will first paint the overall picture and then hand it over to Jay who will talk about more specific figures. I think your question itself already includes the very important element and the fact that if you look at the overall online market, penetration is already at 55%, hence the growth rate will definitely going to be slower compared to the past. When we are exposed to difficult market, you know, economic backdrop, then naturally large, especially large advertisers will start to reduce their advertising budget. These are two major reasons that are the key drivers behind the slower growth that we are seeing out in the market. That is why, as I mentioned in my previous answer, as these advertisers are shedding their ad budget, it will be important for us to develop ways so that we are not dependent on the ads, the budget of the advertisers, but dependent on their marketing budget. Marketing budget would include multiple marketing activities such as giving out discounts, mileages or giving out coupons. You know, what we want to do is we want these advertisers and businesses to actually choose Talk Channel as their first choice of marketing tool. Marketing tool of choice, we want Talk Channel to be that very tool. Once talk channel achieves that positioning, then we will be less impacted by the advertisement budget of these advertisers because this will become one of the essential activities that the companies and businesses engage in. In that process, we could benefit from that as well. If we want to generate good performance from KakaoTalk Channel, that means that we need to have a very solid foundation of KakaoTalk so that there could be a massive outbound business messages that could be effectively used by these businesses. I think it's a bit confusing because we call this messaging ad, so there is an element of confusion there, but I think soon we will be able to see these outbound messaging related budget surpass the size of the Bizboard ad budget. Underpinned by that, we hope to bring in a more robust growth. [Foreign language] Yes, this is Jay. Just to elaborate a little more, if you look at our Talk Biz advertisement in Q4, we believe that we will see some recovery in revenue as the advertisers are going to once again reactivate their marketing activities. Now, having said that, due to economic uncertainties and the fact that advertisers have slashed their ad budget as well as lower existing revenue from the IDC fire and delay in generation of new revenue from our new businesses. Despite Q4 being the high season, we think that the growth rate is going to be somewhat limited. If you look at Talk Biz on a Q3 cumulative basis, we reported 18% year-on-year growth. On the back of the fire and its impact on our top line revenue and also due to the delay in our service, refresh schedule, we expect that 2022 full year revenue would only post a growth of 15% year-over-year. Now, from short term we will of course be impacted by slower economy, but once that economy recovers, we will make sure that we are fully prepared to benefit from that recovery in terms of rising demand for advertisement. If you look at out of the total ad market, we expect the digital ad segment to continue to grow. Considering the fact that Kakao's share in that digital ad market is 15%, we think that going forward there is bigger potential for growth. Well, thank you very much. This brings us to the end of Kakao's earnings presentation for the third quarter of 2022. Once again, thank you very much for joining us this morning.