Netmarble 1Q 2020 Earnings Results

Key insights

6 takeaways

01
Netmarble reported 1Q 2020 revenue of 532.9 billion KRW, an 11.6% increase year-over-year, despite a 4.0% decline from the previous quarter.See it on page 2
02
Operating profit fell to 20.4 billion KRW due to increased marketing expenditures for new title launches in March.See it on page 4
03
Net profit reached 57.5 billion KRW, driven by non-operating income including foreign exchange gains, dividend income, and equity method investments.See it on page 5
04
International markets account for 71% of total revenue, with North America serving as the largest regional contributor at 33%.See it on page 6
05
The company's revenue is distributed across RPGs (37%), casual games (27%), and MMORPGs (25%), led by titles such as Marvel Contest of Champions, Seven Deadly Sins, and Lineage 2 Revolution.See it on page 7
06
Netmarble plans to sustain growth through an aggressive 2020 release schedule featuring Blade & Soul Revolution, Stone Age World, and BTS Universe Story.See it on page 9

Summary

Netmarble’s first-quarter 2020 earnings results reflect a period of strategic investment and revenue diversification, characterized by a focus on global market expansion and a robust pipeline of new game titles. The company reported quarterly revenue of 532.9 billion KRW, representing an 11.6% increase year-over-year, though a 4.0% decline compared to the previous quarter. Operating profit reached 20.4 billion KRW, reflecting a contraction in margins attributed primarily to increased marketing expenditures associated with the launch of new titles in March.

Despite the pressure on operating margins, the company achieved a significant turnaround in net profit, which reached 57.5 billion KRW. This growth was bolstered by substantial non-operating income, including gains from foreign exchange, dividend income, and equity method investments. The company maintains a strong international presence, with overseas revenue accounting for 71% of total earnings. North America remains the largest regional market at 33%, followed by Korea at 29%, Japan at 12%, and Europe at 10%.

The game portfolio demonstrates a balanced distribution across genres, led by RPGs at 37%, casual games at 27%, and MMORPGs at 25%. Key revenue drivers include established titles such as Marvel Contest of Champions, Seven Deadly Sins, and Lineage 2 Revolution. Looking forward, the company has outlined an aggressive release schedule for the remainder of 2020, featuring titles like Blade & Soul Revolution, Stone Age World, and BTS Universe Story. These efforts are part of a broader strategy to sustain growth through a diversified global lineup and continued investment in high-performing intellectual properties.