Netmarble 3Q 2022 Earnings Results

Key insights

6 takeaways

01
Netmarble reported a Q3 2022 revenue of KRW 694.4 billion, a 14.4% year-over-year increase driven by new global game launches.See it on page 4
02
The company recorded a net loss of KRW 277.5 billion and an operating loss of KRW 38.0 billion, largely due to foreign currency translation losses and increased operating costs.See it on page 5
03
EBITDA declined 64.4% year-over-year to KRW 20.8 billion, impacted by one-off severance payments at the subsidiary Jam City.See it on page 4
04
Operating costs rose to KRW 732.4 billion, fueled by higher commission fees, increased labor expenses, and sustained marketing investments.See it on page 9
05
International markets generated 83% of total revenue, with North America serving as the largest regional contributor at 48%.See it on page 6
06
The revenue portfolio is diversified by genre, with casual games accounting for 47% of total earnings, followed by RPGs and MMORPGs.See it on page 7

Summary

Netmarble’s third-quarter 2022 earnings results reflect a period of revenue growth tempered by significant profitability challenges. The company reported quarterly revenue of KRW 694.4 billion, representing a 14.4% increase year-over-year and a 5.1% increase quarter-over-quarter. This top-line growth was primarily driven by the full-quarter recognition of global releases from the second quarter and new titles launched during the third quarter, such as Seven Knights Revolution.

Despite the revenue gains, the company faced substantial financial headwinds, reporting an operating loss of KRW 38.0 billion and a net loss of KRW 277.5 billion. Profitability was negatively impacted by a sharp increase in non-operating expenses, specifically foreign currency translation losses resulting from unfavorable exchange rate fluctuations. Additionally, EBITDA fell to KRW 20.8 billion, a 64.4% year-over-year decline, largely attributed to one-off severance payments associated with the subsidiary Jam City. Operating costs rose to KRW 732.4 billion, driven by higher commission fees, increased labor expenses, and sustained marketing investments for new game launches.

The company maintains a strong international presence, with overseas markets accounting for 83% of total revenue. North America remains the largest regional contributor at 48%, followed by Korea, Europe, and Southeast Asia. The revenue portfolio is diversified across genres, led by casual games at 47%, followed by RPGs and MMORPGs. Looking ahead, the company is focused on expanding its portfolio through upcoming releases, including Charlotte’s Table and The King of Fighters ARENA, while showcasing new titles like Paragon: The Overprime and Solo Leveling: ARISE at industry events to drive future growth.