Netmarble 1Q 2024 Earnings Results

Key insights

6 takeaways

01
Netmarble reported Q1 2024 revenue of KRW 585.4 billion, a 12.0% decrease quarter-over-quarter and a 2.9% decline year-over-year, primarily due to a lack of new game launches.See it on page 3
02
The company recorded an operating profit of KRW 3.7 billion and a net loss of KRW 9.9 billion, the latter of which was partially offset by tax effects from asset liquidations.See it on page 4
03
Operational efficiency measures led to a 10.1% quarter-over-quarter reduction in operating costs, driven by a 1.8% decrease in labor costs and a 20.5% cut in marketing spend.See it on page 7
04
North America remains the company's largest market, accounting for 48% of total revenue, followed by Korea at 17% and Europe at 13%.See it on page 6
05
Casual games now represent 47% of total revenue after a 7 percentage point quarter-over-quarter increase, with social casino titles like Jackpot World and Lotsa Slots serving as key drivers.See it on page 5
06
Growth in the second half of 2024 is expected to be driven by a pipeline of five upcoming titles, including Raven 2, The Seven Deadly Sins: Idle Adventure, King Arthur: Legends Rise, RF Online Next, and Demis Re:Born.See it on page 8

Summary

Netmarble’s first-quarter 2024 earnings results reflect a period of transition characterized by a lack of new game launches, which directly impacted top-line performance. The company reported revenue of KRW 585.4 billion, representing a 12.0% decrease quarter-over-quarter and a 2.9% decline year-over-year. Operating profit reached KRW 3.7 billion, while the company recorded a net loss of KRW 9.9 billion, though this loss was mitigated by the base effect of corporate taxes following the liquidation of previous holdings.

The revenue portfolio remains geographically diverse, with North America serving as the primary market at 48% of total revenue, followed by Korea at 17% and Europe at 13%. By genre, casual games accounted for 47% of revenue, followed by RPGs at 33% and MMORPGs at 9%. Key revenue drivers included titles such as Jackpot World, Lotsa Slots, Cash Frenzy, and MARVEL Contest of Champions. The increase in the casual game segment’s revenue share by 7 percentage points quarter-over-quarter highlights the continued strength of the company’s social casino and casual portfolio.

Operational efficiency remained a focus throughout the quarter, as evidenced by a 10.1% quarter-over-quarter reduction in operating costs. This was achieved through workforce optimization, which lowered labor costs by 1.8%, and a 20.5% reduction in marketing expenditures due to the absence of new releases. Looking ahead, the company has outlined a robust pipeline for the remainder of 2024, including the launch of Raven 2 and four additional titles—The Seven Deadly Sins: Idle Adventure, King Arthur: Legends Rise, RF Online Next, and Demis Re:Born—to drive growth in the second half of the year.