Nexon Earnings for Second Quarter 2019

Key insights

6 takeaways

01
Nexon reported Q2 2019 revenue of ¥53.9 billion, marking a 13% year-over-year increase as-reported, or 20% on a constant currency basis.See it on page 2
02
Net income for the quarter reached ¥19.1 billion, exceeding initial outlooks due to favorable foreign exchange gains on U.S. dollar-denominated cash deposits.See it on page 1
03
Nexon acquired Embark Studios, led by Patrick Söderlund, to serve as the foundation for the company's future development strategy in Western markets.See it on page 1
04
Core revenue growth was driven by the sustained performance of key franchises, specifically Dungeon&Fighter, MapleStory, and FIFA ONLINE 4.See it on page 1
05
For Q3 2019, Nexon projects revenue between ¥51.6 billion and ¥56.0 billion, with expected operating income ranging from ¥20.6 billion to ¥24.4 billion.See it on page 2
06
Management is currently streamlining PC and mobile operations in North America and Korea to align with platform convergence trends while maintaining over 60 live games globally.See it on page 1

Summary

Nexon’s financial results for the second quarter of 2019 highlight a period of robust growth driven by the sustained performance of core franchises, including Dungeon&Fighter, MapleStory, and FIFA ONLINE 4. The company reported quarterly revenues of ¥53.9 billion, representing a 13% year-over-year increase as-reported, or 20% on a constant currency basis. Operating income reached ¥13.0 billion, while net income totaled ¥19.1 billion, the latter exceeding initial outlooks due to favorable foreign exchange gains on U.S. dollar-denominated cash deposits.

The company’s strategic focus remains on long-term live operations and the expansion of its intellectual property portfolio. A significant development during this period was the acquisition of Embark Studios, which is intended to anchor Nexon’s future development strategy in Western markets under the leadership of Patrick Söderlund. Management is currently streamlining PC and mobile operations in North America and Korea to better align with platform convergence trends, while simultaneously investing in new technologies to facilitate the creation of innovative gaming experiences.

Looking ahead to the third quarter of 2019, the company anticipates a year-over-year decline in revenue, projecting a range between ¥51.6 billion and ¥56.0 billion. Despite this near-term fluctuation, leadership emphasizes that the underlying health of its enduring franchises remains strong. The company continues to operate over 60 live games across more than 190 countries, maintaining a commitment to leveraging legacy success to fund new development and technological advancement. Financial projections for the upcoming quarter include an expected operating income of ¥20.6 to ¥24.4 billion and net income of ¥21.8 to ¥25.0 billion.