NEXON Q4 2024 Earnings Prepared Remarks

Key insights

7 takeaways

01
Nexon achieved record 2024 revenue of ¥446.2 billion, a 5% year-over-year increase, though operating income fell 8% to ¥124.2 billion due to strategic investments.See it on page 6
02
The company reported a Q4 2024 operating loss of ¥1.7 billion on ¥79.7 billion in revenue, driven by underperformance in the FC franchise and the PC version of Dungeon&Fighter.See it on page 5
03
Nexon has authorized a ¥100-billion share buyback program to be executed over the next year to bolster shareholder value during its current transitional period.See it on page 8
04
A new co-development agreement with Tencent aims to stabilize the Dungeon&Fighter franchise in China by increasing production capacity and localizing content.See it on page 9
05
The company’s 2027 mid-term plan includes a pipeline of seven new titles, each projected to generate over ¥10 billion in incremental annual revenue.See it on page 4
06
Nexon maintains a strong financial position with over ¥600 billion in cash to support long-term development and consistent dividend payouts.See it on page 8
07
Management anticipates Q1 2025 headwinds due to the absence of major soccer events affecting the FC franchise and a slow start to Chinese New Year updates.See it on page 4

Summary

Nexon’s 2024 fiscal year performance was characterized by record-setting revenue of ¥446.2 billion, a 5% year-over-year increase driven by the successful launch of Dungeon&Fighter Mobile in China and the global release of The First Descendant. Despite this top-line growth, operating income declined by 8% to ¥124.2 billion, reflecting strategic investments in IP expansion and human capital. The fourth quarter proved challenging, with revenue falling to ¥79.7 billion and an operating loss of ¥1.7 billion, largely due to underperformance in the FC franchise and the PC version of Dungeon&Fighter.

The company’s 2025 strategy focuses on stabilizing and revitalizing the Dungeon&Fighter franchise through a new co-development agreement with Tencent, aimed at increasing production capacity and hyper-localizing content for the Chinese market. Simultaneously, the company is encouraged by a turnaround in the MapleStory franchise, which saw improved player metrics in Korea following a successful winter update. Looking ahead, the development pipeline remains a core pillar of the 2027 mid-term plan, with seven new titles currently in production, each projected to generate over ¥10 billion in incremental annual revenue.

To bolster shareholder value and signal confidence during this transitional period, the board has authorized a ¥100-billion share buyback policy to be executed over the next year. While the first quarter of 2025 is expected to face headwinds—including a lack of major soccer events impacting the FC franchise and a slow start to New Year updates in China—management maintains a positive outlook. The company continues to leverage its strong cash position, exceeding ¥600 billion, to support both long-term development initiatives and consistent dividend payouts.