Q1 2024 Earnings Prepared Remarks

Key insights

6 takeaways

01
Nexon reported strong Q1 2024 financial results, achieving ¥108.4 billion in revenue, ¥29.1 billion in operating income, and ¥35.9 billion in net income, driven by FC ONLINE, FC MOBILE, and Blue Archive.See it on page 4
02
The company is banking on the May 21 launch of Dungeon&Fighter Mobile in China to revitalize the franchise and offset ongoing performance weaknesses in the PC version of the game.See it on page 2
03
Nexon has authorized a ¥30 billion share repurchase program and increased its semi-annual dividend to ¥7.5 per share to bolster shareholder value.See it on page 5
04
Q2 2024 revenue is projected to range between ¥92.3 billion and ¥104.7 billion, with growth from new titles like The First Descendant expected to be tempered by difficult year-over-year comparisons.See it on page 4
05
Management is prioritizing operational efficiency and creative synergy by integrating MapleStory operations and maintaining disciplined control over marketing and human resources expenditures.See it on page 6
06
Despite overall positive financial performance, the company noted lower-than-anticipated revenue from the title THE FINALS and persistent challenges within the in-game economy of the PC version of Dungeon&Fighter in China.See it on page 4

Summary

Nexon’s first-quarter 2024 financial results exceeded expectations, with the company reporting ¥108.4 billion in revenue, ¥29.1 billion in operating income, and ¥35.9 billion in net income. This performance was primarily driven by the strong momentum of FC ONLINE, FC MOBILE, and Blue Archive. While the company faced challenges regarding the in-game economy of the PC version of Dungeon&Fighter in China and lower-than-anticipated revenue from THE FINALS, disciplined management of marketing and human resources costs contributed to the overall positive financial outcome.

The company’s strategic focus for the remainder of the year centers on stabilizing its core franchises and expanding its mobile footprint. A primary objective is the May 21 launch of Dungeon&Fighter Mobile in China, which is expected to revitalize the franchise and attract both existing and new players. Simultaneously, management is prioritizing long-term growth through a refined franchise management strategy, starting with the integration of MapleStory operations to improve creative synergy and efficiency.

Looking toward the second quarter, Nexon anticipates revenue between ¥92.3 billion and ¥104.7 billion. While new titles such as The First Descendant and ongoing content updates are expected to support growth, these gains will likely be offset by difficult year-over-year comparisons and continued weakness in the PC version of Dungeon&Fighter. To bolster shareholder value, the company has increased its semi-annual dividend to ¥7.5 per share and authorized a ¥30 billion share repurchase program. The long-term corporate strategy remains focused on improving profit margins through top-line growth, operational efficiency, and the development of enduring intellectual property.