KUKKA Reaches '10 Billion Won Revenue' Milestone, Aims for Turnaround Through Business Expansion

As South Korea's representative floriculture startup, KUKKA has surpassed 10 billion won in annual revenue for the first time since its founding, bearing the fruits of full-scale top-line growth. Although operating deficits continue, the company is rapidly reducing its losses through business expansion and structural improvements. However, financial challenges that must be overcome for sustainable survival and future growth still remain, such as accumulated deficits and high selling, general, and administrative (SG&A) expenses weighing down profitability.

10 Years of Ups and Downs: Top-line Growth and the Shadow of Profitability

Looking at KUKKA's financial trends over the past 10 years (2016-2025), the process reveals how the company achieved explosive growth alongside its goal of innovating the floriculture market, but at the same time, was burdened with the challenge of deteriorating profitability behind the scenes.

In 2016, KUKKA posted about 2.57 billion won in revenue and 90 million won in operating profit, showing a smooth start by recording 4.26 billion won in revenue and 240 million won in operating profit the following year in 2017. However, in 2018, revenue faltered to 3.9 billion won, resulting in an operating loss of 770 million won and turning to a deficit, and in 2019, it recorded an operating loss of 2.13 billion won despite 4.5 billion won in revenue. Subsequently, going through the COVID-19 pandemic, its top line grew even larger. Following a revenue of 6.63 billion won (operating profit of -990 million won) in 2020, it expanded its size to 9.83 billion won in 2021, but the deficit also surged to 3.72 billion won.

In particular, the company faced a major crisis in 2022 when revenue decreased to 7.11 billion won, while its operating loss peaked at a staggering 5.14 billion won. CEO Park Chun-hwa recalled the time to the media as "a hellish period when I thought the survival probability was 0%." However, after undergoing restructuring, the company gradually recovered its performance with a revenue of 8.32 billion won (operating profit of -2.16 billion won) in 2023 and 9.1 billion won (operating profit of -1.47 billion won) in 2024. Finally, in 2025, it succeeded in achieving 10.29 billion won in revenue for the first time since its foundation while simultaneously reducing its operating loss to the 1.04 billion won level.

Still a Heavy 'SG&A' Burden, Cumulative Investments Largely Depleted

Despite reducing the scale of losses alongside revenue growth, the task KUKKA must resolve for a turnaround is the burden of SG&A expenses. As of 2025, KUKKA's SG&A expenses stand at about 6.9 billion won, accounting for 67% of total revenue for the year (10.29 billion won).

Looking at the major SG&A items, labor costs (salaries) accounted for the largest portion at about 3 billion won, and 1.35 billion won was spent on advertising and promotional expenses. Additionally, the expenditure portion for payment commissions (about 490 million won) and transportation costs (about 730 million won) is large, which signifies a highly burdensome profit structure in which marketing costs and platform infrastructure fees are essentially required to maintain and grow revenue within the fiercely competitive consumer market.

Nevertheless, through the company's efforts, the proportion of SG&A expenses is continuously being reduced. A representative example is rent, which amounted to 870 million won in 2024 but decreased by about 350 million won to 520 million won in 2025. This appears to be partially due to the withdrawal of offline showrooms such as flower cafes. Compared to 2022, when revenue was 7.1 billion won and SG&A expenses were 8.6 billion won—a scale larger than revenue—there is evident cost management, though it still leaves something to be desired.

The consecutive deficits extending over 8 years led to a deterioration of the capital structure. Starting with an investment of 3 billion won at an estimated enterprise value of about 17 billion won from KB Investment and others in 2018, the company has attracted a cumulative total of 17.8 billion won in external investments, including raising 1 billion won at an estimated enterprise value of about 47 billion won from ROI Investment Partners and others in 2025.

As of the end of 2025, KUKKA's unappropriated retained earnings (accumulated deficits) reached -17.03 billion won. As mentioned earlier, the company has steadily built up 17.78 billion won in capital reserves through external investment attraction, but it can be said that the accumulated deficits have practically depleted most of this surplus.

Winning Move Towards a Turnaround in 2026

According to recent media reports, KUKKA appears to be expanding its core business structure beyond its initial main model, the 'flower subscription service,' to an 'online flower market' where consumers can directly purchase bulk flowers at near wholesale prices. In addition to this, the company has plans to pursue overseas expansion in earnest.

Ultimately, considering its current financial status and cash flow, KUKKA is standing at a critical crossroads where it must achieve a complete annual turnaround or attract additional bridge investments in 2026 for continuous corporate operation. We root for KUKKA, which has led the culture of the floriculture industry by transforming flowers from a 'gift for a special day' into a 'part of daily life,' to grasp both dazzling growth and financial stability in 2026 based on its structural improvements thus far.