Quarterly Securities Report: The First Quarter of the 23rd Fiscal Year

Key insights

6 takeaways

01
Nexon reported a significant Q1 2024 downturn, with revenue falling 12.6% to ¥108,418 million and operating profit dropping 48.2% to ¥29,146 million compared to the same period in 2023.See it on page 6
02
The revenue decline was primarily driven by underperformance in core titles Dungeon&Fighter and EA SPORTS FC ONLINE relative to their strong 2023 results.See it on page 5
03
To bolster shareholder value, the board authorized a share buyback program of up to ¥30 billion to be executed between May and July 2024, in addition to a ¥5.0 per share dividend.See it on page 37
04
Despite operational headwinds, the company maintains a strong financial position with total assets of ¥1,177,945 million and an 81.0% equity ratio.See it on page 12
05
While Asian markets faced revenue pressure, North America and Europe emerged as growth regions for the company during the quarter.See it on page 24
06
The company recorded a ¥6,135 million impairment loss on goodwill related to the consolidation of Nitro Studio Co., Ltd.See it on page 32

Summary

Nexon experienced a challenging start to the 23rd fiscal year, characterized by a year-over-year decline in financial performance for the first quarter of 2024. Revenue fell by 12.6% to ¥108,418 million, while operating profit saw a significant contraction of 48.2% to ¥29,146 million. This downturn was largely attributed to reduced contributions from core titles such as Dungeon&Fighter and EA SPORTS FC ONLINE, which faced difficult comparisons against the exceptionally strong results recorded during the same period in 2023. Despite these headwinds, the company maintained a robust balance sheet with total assets reaching ¥1,177,945 million and a high equity ratio of 81.0%.

Geographically, the company’s performance remained diverse, spanning operations in Japan, Korea, China, North America, and other international markets. While established Asian markets saw revenue pressure, North America and Europe emerged as notable areas of growth. Financial stability was further supported by foreign exchange gains and the reversal of loss allowances, which helped bolster the profit before tax to ¥54,239 million. However, the quarter also necessitated a ¥6,135 million impairment loss on goodwill associated with the consolidation of Nitro Studio Co., Ltd., reflecting ongoing adjustments in the company’s investment portfolio.

Capital management remains a central priority, as evidenced by the reduction in basic earnings per share to ¥42.77 and the strategic cancellation of treasury shares. To enhance shareholder value, the board has authorized a new share buyback program of up to ¥30 billion, scheduled for execution between May and July 2024, alongside a dividend payment of ¥5.0 per share for the preceding fiscal year. By balancing disciplined investment commitments—such as capital allocations to the Smash Capital Fund—with proactive capital returns, the company aims to navigate current market volatility while maintaining its long-term financial health.