Nexon Consolidated Financial Results for the Three Months Ended March 31, 2021

Key insights

6 takeaways

01
Nexon reported Q1 2021 revenue of ¥88,313 million and operating income of ¥43,321 million, representing year-over-year growth of 6.7% and 4.3% respectively.See it on page 7
02
Net income for Q1 2021 declined by 7.8% year-over-year to ¥46,034 million despite operational gains.See it on page 12
03
Financial projections for Q2 2021 indicate a contraction in performance, with revenue expected to range between ¥142,763 million and ¥147,908 million.See it on page 2
04
The anticipated Q2 downturn is driven by projected declines in user engagement for flagship titles MapleStory and Dungeon&Fighter across China, North America, and Korea.See it on page 8
05
Rising operational expenditures are expected in the coming period due to new compensation policies and an increased reliance on outsourcing.See it on page 8
06
Nexon maintains a stable financial foundation with an 82.9% equity ratio and has diversified its asset strategy with a $100 million investment in Bitcoin.See it on page 5

Summary

Nexon achieved steady growth during the first quarter of 2021, reporting revenue of ¥88,313 million and operating income of ¥43,321 million. These figures represent year-over-year increases of 6.7% and 4.3%, respectively, fueled primarily by robust performance in the Korean market and a broader expansion of mobile gaming initiatives. Despite these operational gains, net income attributable to owners of the parent company fell by 7.8% to ¥46,034 million. The company maintains a stable financial foundation, evidenced by an 82.9% equity ratio, and has diversified its asset strategy through a $100 million investment in Bitcoin.

Looking ahead to the second quarter of 2021, the company anticipates a contraction in financial performance. Projections suggest revenue will fall between ¥142,763 million and ¥147,908 million, with net income expected to range from ¥54,118 million to ¥57,483 million. This downward trend is attributed to challenging year-over-year comparisons and a projected decline in user engagement for flagship titles such as MapleStory and Dungeon&Fighter across major markets, including China, North America, and Korea.

Operational expenditures are also expected to rise, driven by the implementation of new compensation policies and increased reliance on outsourcing. While the company remains in a strong position, it continues to navigate the persistent economic uncertainties introduced by the global COVID-19 pandemic. Strategic adjustments, including the issuance of equity-based stock options for directors, reflect a focus on long-term organizational stability despite the anticipated short-term volatility in core gaming segments.