Nexon Q3 2023 Earnings Prepared Remarks

Key insights

7 takeaways

01
Nexon achieved its sixth consecutive quarter of double-digit growth with 120.3 billion yen in revenue, a 23% year-over-year increase, and a 47% rise in operating profit to 46.3 billion yen.See it on page 3
02
Core franchise performance drove results, led by a 46% year-over-year revenue increase for MapleStory, supplemented by contributions from FC Online and Blue Archive.See it on page 3
03
The company is scaling its global footprint, recording record-breaking revenue in Korea and a 78% year-over-year growth surge in North American and European markets.See it on page 9
04
Nexon is pivoting toward a development model that uses proprietary technology to enable smaller, agile teams to produce AAA-quality titles, exemplified by the beta success of The Finals and The First Descendant.See it on page 6
05
Junghun Lee is scheduled to succeed Owen Mahoney as global CEO in March 2024, marking a significant leadership transition for the company.See it on page 2
06
The company is accelerating its 100 billion yen share repurchase program, with completion expected by February 2024.See it on page 13
07
Management projects continued momentum with a forecast for a seventh consecutive quarter of double-digit revenue growth in Q4 2023.See it on page 3

Summary

Nexon reported strong financial performance for the third quarter of 2023, marking its sixth consecutive quarter of double-digit year-over-year revenue growth. The company achieved 120.3 billion yen in revenue, a 23% increase compared to the previous year, and a 47% rise in operating profit to 46.3 billion yen. This growth was primarily driven by the sustained performance of core franchises, specifically MapleStory, which saw a 46% year-over-year revenue increase, alongside contributions from FC Online and Blue Archive.

The company’s growth strategy centers on two pillars: maintaining stable, long-term revenue from established Virtual World franchises and developing highly differentiated new titles that layer additional revenue on top of existing earnings. This approach is supported by proprietary technology investments designed to enable smaller, more agile development teams to produce AAA-quality games, thereby reducing the high costs and risks typically associated with industry-standard development models. Recent successes in this pipeline include the positive reception of The Finals and The First Descendant during beta testing.

Geographically, the company saw record-breaking quarterly revenues in Korea, while North American and European markets experienced significant growth of 78% year-over-year. Looking ahead, Nexon anticipates a seventh consecutive quarter of double-digit revenue growth in the fourth quarter of 2023. The company also announced a leadership transition, with Junghun Lee set to succeed Owen Mahoney as global CEO in March 2024. Furthermore, the company remains committed to shareholder returns, having accelerated its 100 billion yen share repurchase program, which is expected to be completed by February 2024.