Operating income reached 30.7 billion won ($27.3 million) in the July-September period from 47.4 billion won a year ago, the company said in a regulatory filing.
Sales, however, rose 16 percent on-year to a quarterly record high of 599.3 billion won, the company said.
Kakao said its operating income plunged due to increased investments in new businesses, such as Kakao Mobility, that the company recently launched in an effort to secure new growth engines.
Kakao said the revenue from its content platform remained steady at 306.7 billion won, with the figure representing a 17 percent on-year increase.
The advertising sector's sales grew 10 percent on-year to 167.1 billion won over the cited period on the back of revenue growth of its mobile advertising.
The music content sales also expanded by 11 percent on-year to
136 billion won in the third quarter due to steady revenues from its streaming service, Melon.
Kakao said it will keep up efforts until the end of this year to expand its foothold by wrapping up a merger with its entertainment affiliate, Kakao M. The tieup will allow the company to move forward on various business collaborations.
Kakao said the decision is aimed at bolstering its entertainment content based on the users of Melon, which is currently operated by Kakao M.
Shares of Kakao were trading at 100,500 won as of 11:00 a.m. on the Seoul bourse, up 5.13 percent from a day earlier. The earnings were announced before the local market opened. (Yonhap)