NEXON Q2 2024 Earnings Prepared Remarks

Key insights

7 takeaways

01
Nexon reported strong Q2 2024 growth with a 30% year-over-year revenue increase and a 64% surge in operating income.See it on page 4
02
The launch of Dungeon&Fighter Mobile in China was a primary growth driver, maintaining a top-ranking position for over 11 weeks.See it on page 2
03
The First Descendant achieved significant global traction, with console players accounting for approximately 60% of its North American user base.See it on page 2
04
Aggregate revenue for the company's three core franchises—Dungeon&Fighter, MapleStory, and FC—grew by 57% during the quarter.See it on page 5
05
Nexon is executing a ¥100 billion share repurchase program, having completed ¥30 billion of the total as of July 2024.See it on page 6
06
The company is expanding its partnership with Tencent to localize and publish two titles from Embark Studios for the Chinese market.See it on page 3
07
Despite exceeding net income expectations, the company anticipates higher Q3 expenses due to increased marketing, platform fees, and cloud service costs for new titles.See it on page 5

Summary

Nexon achieved record-breaking financial results in the second quarter of 2024, reporting a 30% year-over-year increase in revenue and a 64% surge in operating income. This performance was primarily driven by the successful launch of Dungeon&Fighter Mobile in China, which maintained a top-ranking position for over 11 weeks, and the global release of the new IP The First Descendant. The latter achieved significant traction on Steam, particularly in North America, where console players accounted for approximately 60% of the user base.

The company’s growth is anchored in its IP Growth Initiative, a dual-track strategy focused on extending established franchises—such as Dungeon&Fighter and MapleStory—to new platforms and markets, while simultaneously investing in original titles like The First Descendant and the upcoming ARC Raiders. To further expand its global footprint, the company has partnered with Tencent to localize and publish two titles from Embark Studios for the Chinese market.

Financial performance in the second quarter was bolstered by a 57% aggregate revenue growth across the company’s three primary franchises: Dungeon&Fighter, MapleStory, and FC. Despite higher performance-based bonuses and increased operational costs, net income exceeded expectations, aided by an ¥8.2 billion foreign exchange gain. Looking ahead to the third quarter, the company projects continued revenue growth, though it anticipates higher marketing expenses, platform fees, and cloud service costs associated with new title launches. Additionally, the company is continuing a ¥100 billion share repurchase program, with ¥30 billion already executed as of July 2024.