Nexon First Quarter 2016 Financial Results

Key insights

5 takeaways

01
Nexon reported Q1 2016 revenue of 57.5 billion yen, an 11% year-over-year increase driven by strong performance of Dungeon&Fighter in China and titles in Korea.See it on page 2
02
The company recorded a net loss of 6.3 billion yen and an operating income of 3.7 billion yen, primarily due to a 22.6 billion yen impairment loss on its subsidiary, gloops.See it on page 1
03
Adjusted operating income would have reached 26.3 billion yen without the one-time impairment charge, exceeding the company's initial expectations.See it on page 1
04
Nexon expanded its mobile portfolio by acquiring Big Huge Games, developer of DomiNations, and securing access to the mobile RPG HIT through an equity investment in NAT Games.See it on page 1
05
The company projects Q2 2016 revenue to be between 37.5 and 40.3 billion yen as it continues to focus on its global free-to-play online and mobile gaming strategy.See it on page 2

Summary

Nexon’s financial results for the first quarter of 2016 demonstrate a period of robust revenue growth alongside significant one-time accounting adjustments. The company reported revenues of 57.5 billion yen, representing an 11% year-over-year increase that exceeded internal expectations. This performance was primarily driven by strong engagement in key markets, specifically the success of Dungeon&Fighter in China during the Lunar New Year season and positive momentum from PC and mobile titles in Korea.

Despite the revenue growth, the company recorded an operating income of 3.7 billion yen and a net loss of 6.3 billion yen. These figures were heavily impacted by a 22.6 billion yen impairment loss related to the goodwill of its subsidiary, gloops, as well as foreign exchange losses on cash deposits and receivables. Excluding the one-time impairment charge, operating income would have reached 26.3 billion yen, surpassing the company’s initial outlook.

Strategic growth remained a core focus during this period, characterized by an expansion of the company’s development footprint. Nexon acquired Big Huge Games, the developer of the mobile title DomiNations, and made an equity investment in NAT Games to secure access to the mobile RPG HIT. These moves underscore a broader corporate strategy to strengthen partnerships with global developers and broaden the company’s portfolio of high-performing mobile and PC titles. Looking ahead to the second quarter of 2016, the company projects revenues between 37.5 and 40.3 billion yen, with continued emphasis on leveraging its global development network to maintain its position in the free-to-play online and mobile gaming sectors.