Netmarble 4Q 2022 and FY 2022 Earnings Results

Key insights

6 takeaways

01
Netmarble reported a 2022 annual revenue of KRW 2,673.4 billion, a 6.6% increase, but annual EBITDA dropped 57.6% to KRW 127.8 billion due to rising operating costs from the integration of SpinX and Ludia Inc.See it on page 4
02
The company recorded a Q4 2022 operating loss of KRW 19.8 billion and a net loss of KRW 456.6 billion, the latter significantly impacted by impairment charges on intangible assets.See it on page 6
03
International markets remain critical to the business, accounting for 84% of total annual revenue, with North America serving as the primary driver at 51% of Q4 revenue.See it on page 7
04
Q4 2022 revenue fell 8.7% year-over-year to KRW 686.9 billion, a decline attributed to the stabilization of existing titles and a lack of major new game launches.See it on page 5
05
The revenue portfolio is heavily weighted toward casual games at 48%, followed by RPGs at 27% and MMORPGs at 16%, with Marvel Contest of Champions remaining the top individual contributor at 13% of Q4 revenue.See it on page 8
06
Netmarble plans to pivot toward growth in 2023 by launching new titles across mobile, PC, and console, including Meta World: My City, Solo Leveling: ARISE, and Arthdal Chronicles.See it on page 11

Summary

Netmarble’s financial results for the 2022 fiscal year reflect a period of revenue growth tempered by significant profitability challenges. The company reported annual revenue of KRW 2,673.4 billion, representing a 6.6% increase over the previous year. However, annual EBITDA declined by 57.6% to KRW 127.8 billion, largely driven by increased operating costs associated with the full integration of subsidiaries SpinX and Ludia Inc. The fourth quarter of 2022 saw revenue of KRW 686.9 billion, an 8.7% year-over-year decrease attributed to a lack of major game launches and the stabilization of existing titles.

Geographically, the company maintains a strong international presence, with overseas markets accounting for 84% of total annual revenue. North America remains the primary regional driver, contributing 51% of revenue in the fourth quarter. By genre, the portfolio is diversified across casual games (48%), RPGs (27%), and MMORPGs (16%). Key revenue-generating titles include Marvel Contest of Champions, which accounted for 13% of fourth-quarter revenue, followed by Jackpot World and various other casual and RPG titles.

The company faced substantial bottom-line pressure in the fourth quarter, reporting an operating loss of KRW 19.8 billion and a net loss of KRW 456.6 billion. These figures were heavily impacted by non-operating losses, including significant impairment charges on intangible assets. Despite these headwinds, the company is focusing on a robust 2023 release schedule, planning to launch several new titles across mobile, PC, and console platforms, including Meta World: My City, Solo Leveling: ARISE, and Arthdal Chronicles, to drive future growth and portfolio expansion.