Nexon Q3 2024 Earnings Prepared Remarks

Key insights

7 takeaways

01
Nexon achieved record Q3 2024 results with ¥135.6 billion in revenue (up 13% YoY) and ¥51.5 billion in operating income (up 11% YoY).See it on page 2
02
The company targets ¥750 billion in annual revenue and ¥250 billion in operating income by 2027, supported by a 15% revenue CAGR and 17% operating income CAGR.See it on page 4
03
Dungeon&Fighter grew 142% YoY, primarily driven by the successful launch of its mobile version in the Chinese market.See it on page 2
04
MapleStory’s hyperlocalization strategy drove a 23% revenue increase outside of Korea, hitting record levels in Japan, North America, and Europe.See it on page 5
05
The First Descendant, a key horizontal growth title, generated approximately 75% of its global revenue from Western markets.See it on page 3
06
Nexon plans to generate ¥100 billion in additional revenue by 2027 through new titles including The First Berserker: Khazan, ARC Raiders, and The Kingdom of the Winds 2.See it on page 4
07
The company is bolstering shareholder returns by doubling its year-end dividend forecast and authorizing a ¥20 billion share repurchase program.See it on page 7

Summary

Nexon’s third-quarter 2024 earnings report outlines a strategic focus on long-term growth through a dual-pronged approach of vertical franchise expansion and horizontal portfolio diversification. The company achieved record-breaking quarterly results, with revenue reaching ¥135.6 billion, a 13% year-over-year increase, and operating income rising 11% to ¥51.5 billion. These results underscore the effectiveness of the company’s ongoing investment in live operations and the successful integration of new intellectual properties, despite minor topline impacts from foreign exchange fluctuations.

The vertical growth strategy centers on revitalizing established franchises such as Dungeon&Fighter and MapleStory. Dungeon&Fighter experienced 142% year-over-year growth, largely propelled by the launch of its mobile iteration in China. Simultaneously, the MapleStory franchise demonstrated the efficacy of a hyperlocalization strategy, with revenue outside of Korea increasing by 23% and reaching record levels in Japan, North America, and Europe. These efforts are supported by a commitment to player-centric updates and long-term content roadmaps designed to sustain revenue compound annual growth rates through 2027.

Horizontal growth initiatives are anchored by the launch of The First Descendant, which saw significant traction in Western markets, where approximately 75% of its global revenue originated. The company continues to expand its pipeline with upcoming titles such as The First Berserker: Khazan, ARC Raiders, and The Kingdom of the Winds 2. These investments in innovation and new platforms are intended to drive a total of ¥100 billion in additional revenue by 2027.

To support its mid-term financial targets—which include a 15% revenue CAGR and a 17% operating income CAGR through 2027—Nexon has implemented a new shareholder return policy. This includes doubling the year-end dividend forecast and authorizing a ¥20 billion share repurchase program. While the company anticipates temporary fluctuations in financial growth due to continued investment in development and infrastructure, leadership maintains high confidence in its ability to reach annual revenue and operating income goals of ¥750 billion and ¥250 billion, respectively, by 2027.