Netmarble 4Q 2021 & FY 2021 Earnings Results

Key insights

7 takeaways

01
Netmarble reported 2021 annual revenue of KRW 2,505.9 billion, a 0.8% increase, while Q4 revenue grew 20.4% year-over-year to KRW 751.3 billion.See it on page 5
02
International markets accounted for 73% of 2021 annual revenue, with North America serving as the primary driver at 43% of Q4 revenue.See it on page 7
03
The acquisition of SpinX Games significantly impacted the portfolio, with the casual gaming segment growing to represent 40% of total revenue by the end of Q4.See it on page 8
04
Annual EBITDA declined 20.3% to KRW 305.8 billion, primarily due to rising labor costs from salary increases and expanded development teams.See it on page 4
05
Q4 operating profit fell 30.3% year-over-year, though net profit rose 4.2% driven by non-operating gains from equity investments in HYBE.See it on page 6
06
Operating expenses in Q4 increased 28.1% year-over-year to KRW 693.8 billion, attributed to higher marketing, commission costs, and intangible asset amortization.See it on page 10
07
The 2022 strategy focuses on a diversified multi-platform portfolio, including the launch of six blockchain-integrated titles and the formalization of ESG management.See it on page 11

Summary

Netmarble’s financial results for the fourth quarter and full fiscal year 2021 demonstrate a period of strategic expansion and revenue growth, largely driven by the acquisition of SpinX Games and the global launch of key titles. For the full year 2021, the company reported revenue of KRW 2,505.9 billion, representing a modest year-over-year increase of 0.8%. However, the fourth quarter showed significant momentum, with revenue reaching KRW 751.3 billion, a 20.4% increase compared to the same period in the previous year.

The company’s revenue remains heavily weighted toward international markets, which accounted for 73% of total annual revenue. The integration of SpinX Games significantly bolstered the casual gaming segment, which grew to represent 40% of the total revenue portfolio by the end of the fourth quarter. North America emerged as a primary geographic driver, contributing 43% of quarterly revenue. Despite top-line growth, annual EBITDA declined by 20.3% to KRW 305.8 billion, a trend attributed primarily to rising labor costs associated with salary increases and the expansion of development teams.

Operating expenses for the fourth quarter reached KRW 693.8 billion, reflecting a 28.1% year-over-year increase. This rise was fueled by higher commission costs, increased marketing expenditures, and the amortization of intangible assets related to recent acquisitions. While operating profit for the fourth quarter saw a year-over-year decline of 30.3%, net profit rose by 4.2% due to non-operating gains, including capital increases from equity investments in HYBE.

Looking ahead, the company is prioritizing a diversified portfolio for 2022, with plans to launch a wide array of titles across mobile, PC, and console platforms. The roadmap includes the release of several high-profile games and a strategic push into blockchain gaming, with six titles scheduled for release throughout the year. Additionally, the company has formalized its commitment to sustainability by establishing an ESG Management Council and preparing for its inaugural annual ESG report.