Nexon Third Quarter 2014 Financial Results

Key insights

6 takeaways

01
Nexon reported Q3 2014 revenues of 45.6 billion Yen, representing a 14 percent year-over-year increase that exceeded company forecasts.See it on page 1
02
Net income rose 69 percent year-over-year to 13.6 billion Yen, primarily driven by foreign exchange gains from the weakening Yen.See it on page 1
03
Mobile operations generated 9.7 billion Yen, with native mobile game revenues surging 50 percent quarter-over-quarter.See it on page 1
04
Operating income reached 15.1 billion Yen, a 7 percent year-over-year decline that still outperformed internal expectations due to lower marketing and headcount costs.See it on page 1
05
Growth was primarily driven by improved game quality and strong performance in the Korean market during late August and September.See it on page 1
06
Nexon continues to manage a global portfolio of nearly 150 titles across more than 100 countries using its established free-to-play business model.See it on page 2

Summary

Nexon’s third quarter 2014 financial results demonstrate a period of strong growth, with revenues and operating income surpassing initial company forecasts. The primary thesis centers on the company’s successful execution of its free-to-play strategy across both PC and mobile platforms, bolstered by significant performance gains in the Korean market during late August and September. This growth trajectory is attributed to a combination of improved game quality and effective management of operational expenses.

Financial performance for the quarter ending September 30, 2014, shows revenues reaching 45.6 billion Yen, a 14 percent increase year-over-year. Mobile operations were a standout segment, generating 9.7 billion Yen and exceeding internal projections. Notably, native mobile game revenues surged 50 percent quarter-over-quarter, accounting for nearly half of the total mobile revenue for the period. While operating income reached 15.1 billion Yen—a 7 percent decline year-over-year—the figure still outperformed expectations due to lower-than-anticipated marketing and headcount costs. Net income saw a substantial 69 percent year-over-year increase to 13.6 billion Yen, largely driven by foreign exchange gains resulting from the weakening Yen.

The scope of these results encompasses Nexon’s global operations, which span over 100 countries and nearly 150 titles. The company continues to leverage its historical expertise in the free-to-play business model to maintain its market position. Management remains focused on a robust pipeline of upcoming titles to sustain long-term growth, signaling a continued commitment to the development of unique, high-quality gaming experiences for its global user base.