Nexon First Quarter 2017 Financial Results

Key insights

7 takeaways

01
Nexon achieved record-breaking Q1 2017 performance with 74.8 billion yen in revenue, a 30% year-over-year increase, and 39.8 billion yen in operating income.See it on page 1
02
Growth was primarily driven by the PC title Dungeon&Fighter in China, which benefited from strong Lunar New Year updates and increased item sales.See it on page 1
03
Net income reached 19.9 billion yen, falling short of projections due to a 15.9 billion yen foreign exchange loss on U.S. dollar-denominated assets.See it on page 1
04
The mobile title DomiNations surpassed $100 million in lifetime revenue, contributing to the company's positive mobile segment performance alongside HIT and HIDE AND FIRE.See it on page 1
05
Operating income was impacted by a 2.7 billion yen impairment loss related to subsidiary goodwill and game intellectual property.See it on page 1
06
Management projects Q2 2017 revenues between 41.3 and 44.8 billion yen, with operating income expected to range from 11.2 to 14.0 billion yen.See it on page 1
07
The company continues to execute a strategy of reinvesting recurring revenue from established hits into a new development pipeline, supported by community engagement efforts like the 20,000-attendee Nexon Developers Conference.See it on page 1

Summary

Nexon achieved record-breaking financial performance for the first quarter of 2017, marking the highest quarterly revenue, operating income, and net income since the company’s 2011 initial public offering. This growth was primarily driven by the sustained success of live operations, particularly the strong performance of the PC title Dungeon&Fighter in China, which benefited from effective Lunar New Year updates and increased item sales. Additionally, the company saw positive contributions from mobile titles such as HIT and HIDE AND FIRE, while the mobile game DomiNations surpassed $100 million in lifetime revenue.

Financial data for the quarter ending March 31, 2017, shows total revenues of 74.8 billion yen, representing a 30% year-over-year increase. Operating income reached 39.8 billion yen, bolstered by the high-margin Chinese market, though this was partially offset by a 2.7 billion yen impairment loss related to subsidiary goodwill and game intellectual property. Net income totaled 19.9 billion yen, falling below initial projections due to a 15.9 billion yen foreign exchange loss on U.S. dollar-denominated cash deposits and accounts receivable.

The company maintains a global scope, servicing over 100 titles across 190 countries, with headquarters in Tokyo and roots in the Korean market. Looking ahead to the second quarter of 2017, management projects revenues between 41.3 and 44.8 billion yen, with operating income expected to range from 11.2 to 14.0 billion yen. The company continues to prioritize a strategy of reinvesting recurring revenues from established hits into a robust pipeline of new properties, supported by active engagement with the developer community, as evidenced by the 20,000 participants at the 11th Nexon Developers Conference.