Netmarble 4Q 2023 & FY 2023 Earnings Results

Key insights

7 takeaways

01
Netmarble reported full-year 2023 revenue of KRW 2,501.4 billion, a 6.4% year-over-year decline, though Q4 revenue grew 5.4% quarter-over-quarter to KRW 664.9 billion.See it on page 4
02
Q4 EBITDA surged 146.5% to KRW 60.4 billion, driven by the performance of 'Seven Knights Idle Adventure' and 'MARVEL Contest of Champions'.See it on page 4
03
International markets generated 83% of total annual revenue, with North America serving as the primary contributor at 45%, followed by Korea (17%) and Europe (12%).See it on page 6
04
Despite achieving a Q4 operating profit of KRW 17.7 billion, the company recorded a Q4 net loss of KRW 195.0 billion due to tax impacts from the liquidation of holdings.See it on page 5
05
Revenue is well-distributed across the portfolio, with the top 10 titles accounting for 62% of earnings and no single game exceeding 12% of total revenue.See it on page 8
06
Operating costs in Q4 were managed at KRW 647.2 billion, aided by a 12.5% reduction in marketing spend due to a lack of new game launches during the quarter.See it on page 9
07
The company plans to drive growth in the first half of 2024 by launching four new titles, including 'Arthdal Chronicles: Three Factions', 'Solo Leveling: ARISE', and 'Raven 2'.See it on page 10

Summary

Netmarble’s financial results for the fourth quarter and full fiscal year of 2023 reflect a period of operational transition and strategic focus on revenue diversification. For the full year, the company reported revenue of KRW 2,501.4 billion, representing a 6.4% decline compared to the previous year, with EBITDA also falling by 6.4% to KRW 115.8 billion. Despite these annual declines, the fourth quarter showed positive momentum, with revenue reaching KRW 664.9 billion—a 5.4% increase quarter-over-quarter—and EBITDA surging by 146.5% to KRW 60.4 billion, driven largely by the performance of Seven Knights Idle Adventure and updates to MARVEL Contest of Champions.

The company maintains a strong international presence, with overseas markets accounting for 83% of total annual revenue. North America remains the largest regional contributor at 45%, followed by Korea at 17% and Europe at 12%. The game portfolio is balanced across genres, led by casual games at 43% and RPGs at 38%. Revenue concentration is relatively distributed, as the top 10 titles account for 62% of total earnings, with no single game dominating the portfolio beyond 12%.

Operating costs for the fourth quarter were managed at KRW 647.2 billion, benefiting from a 12.5% reduction in marketing expenditures due to a lack of new game launches during the period. While the company achieved an operating profit of KRW 17.7 billion in the fourth quarter, it recorded a net loss of KRW 195.0 billion for the same period, primarily attributed to a temporary increase in corporate tax resulting from the liquidation of holdings. Looking ahead to the first half of 2024, the company plans to bolster its growth through the release of four new titles, including Arthdal Chronicles: Three Factions, Solo Leveling: ARISE, and Raven 2.