Netmarble 1Q 2021 Earnings Results

Key insights

6 takeaways

01
Netmarble reported Q1 2021 revenue of KRW 570.4 billion, a 7.0% year-over-year increase but an 8.6% decline quarter-over-quarter due to a lack of new game launches.See it on page 2
02
International markets remain the primary revenue source, accounting for 71% of total earnings, with North America leading at 36% of the total.See it on page 6
03
Operating profit for the quarter was KRW 54.2 billion, while net profit reached KRW 61.9 billion.See it on page 5
04
Revenue is driven by a diversified portfolio led by 'The Seven Deadly Sins: Grand Cross' (15%), 'MARVEL Contest of Champions' (12%), and 'Seven Knights 2' (11%).See it on page 7
05
Operating costs totaled KRW 516.2 billion, with a 10.6% quarterly decrease in marketing spend offset by a 4.1% rise in labor costs due to recruitment and salary adjustments.See it on page 8
06
The company plans to accelerate growth in the remainder of 2021 with a pipeline including 'Ni no Kuni' in June, followed by 'Seven Knights Revolution', 'MARVEL Future Revolution', and 'Merge Fantasy Island'.See it on page 9

Summary

Netmarble’s first-quarter 2021 earnings results reflect a period of moderated financial performance characterized by a lack of major new game releases. The company reported quarterly revenue of KRW 570.4 billion, representing a 7.0% increase year-over-year but an 8.6% decline quarter-over-quarter. Operating profit reached KRW 54.2 billion, while net profit stood at KRW 61.9 billion. These figures indicate a contraction compared to the previous quarter, primarily attributed to the soft performance of existing titles and the absence of significant new product launches during the period.

The company maintains a strong international presence, with overseas revenue accounting for 71% of total earnings. North America remains the largest regional market at 36%, followed by Korea at 29% and Europe at 12%. The revenue portfolio is well-diversified across genres, with RPGs, MMORPGs, and casual games comprising the bulk of the company's output. Key revenue drivers include The Seven Deadly Sins: Grand Cross, which contributed 15% of total revenue, followed by MARVEL Contest of Champions at 12% and Seven Knights 2 at 11%.

Operating costs for the quarter totaled KRW 516.2 billion. While marketing expenditures decreased by 10.6% quarter-over-quarter due to the lack of new launches, labor costs rose by 4.1% as the company increased recruitment for upcoming titles and implemented salary adjustments. Looking ahead, the company has outlined a robust pipeline for the remainder of 2021, including the launch of Ni no Kuni in June, followed by the release of Seven Knights Revolution, MARVEL Future Revolution, and Merge Fantasy Island in the second half of the year.