Nexon Q2 2019 Investor Presentation

Key insights

7 takeaways

01
Nexon achieved a 20% year-over-year revenue increase in Q2 2019, driven by the performance of core franchises including Dungeon&Fighter, MapleStory, and FIFA ONLINE 4.See it on page 3
02
The company reported Q2 2019 net income of ¥19,145 million and maintains a strong cash position of ¥210,749 million.See it on page 7
03
Management projects a revenue decline for Q3 2019 due to softening performance in the China-based Dungeon&Fighter and Korea-based MapleStory segments.See it on page 13
04
The board authorized a share repurchase program of up to ¥30 billion to signal confidence in long-term value despite the anticipated Q3 revenue downturn.See it on page 18
05
Nexon is actively expanding its Western development capabilities and geographic footprint, highlighted by the consolidation of Embark Studios.See it on page 5
06
Total assets reached ¥683,988 million, though the company remains heavily reliant on revenue generation within the Korean market.See it on page 26
07
Net income for Q3 2019 is expected to remain resilient due to a ¥4.7 billion step acquisition benefit and the absence of prior-year impairment losses.See it on page 13

Summary

Nexon achieved record financial performance in the second quarter of 2019, characterized by a 20 percent year-over-year revenue increase on a constant-currency basis. This growth was primarily fueled by the sustained popularity of core franchises, including Dungeon&Fighter, MapleStory, and FIFA ONLINE 4. Beyond established titles, the company is actively diversifying its portfolio and geographic footprint, evidenced by the consolidation of Embark Studios to bolster Western development capabilities and a continued focus on mobile platform expansion.

Despite the strong second-quarter results, which yielded a net income of ¥19,145 million and a robust cash position of ¥210,749 million, the company anticipates a revenue decline in the third quarter of 2019. This projected downturn is attributed to softening performance within the China-based Dungeon&Fighter and Korea-based MapleStory segments. However, net income is expected to remain resilient due to a ¥4.7 billion step acquisition benefit and the absence of prior-year impairment losses. To signal confidence in long-term value, the board has authorized a share repurchase program of up to ¥30 billion.

The company’s financial health remains anchored by a strong balance sheet with total assets reaching ¥683,988 million, though revenue generation remains heavily concentrated within the Korean market. While the outlook for the latter half of 2019 reflects both operational successes and regional volatility, future performance remains subject to inherent risks, including regulatory shifts, cybersecurity threats, and intense industry competition. These factors underscore the necessity of maintaining a disciplined approach to live game operations and strategic capital allocation as the company navigates the evolving global gaming landscape.