Shift Up 3Q 2024 Results

Key insights

7 takeaways

01
Shift Up reported 58 billion KRW in Q3 2024 revenue, a 52.3% year-over-year increase but an 11% decline compared to the previous quarter.See it on page 5
02
Operating profit reached 36 billion KRW with a 61.3% margin, though this represents a 21% decrease quarter-over-quarter due to softening revenue from Goddess of Victory: Nikke and Stellar Blade.See it on page 8
03
Operating expenses rose 11.1% to 22.4 billion KRW, driven by an 11% increase in labor costs and a headcount expansion to 314 employees.See it on page 7
04
The company plans to launch a PC version of Stellar Blade in 2025, with management projecting that PC sales may exceed console performance.See it on page 10
05
Goddess of Victory: Nikke is scheduled for entry into the Chinese market in 2025 to drive further growth.See it on page 9
06
Development of the new title Project Witches is underway with a target release window set for after 2027.See it on page 11
07
Net profit for the quarter was 23.5 billion KRW, impacted by 3.7 billion KRW in non-operating losses from foreign exchange fluctuations and IPO-related costs.See it on page 8

Summary

Shift Up’s third-quarter 2024 financial results reflect a period of stabilization following the initial launch surge of its major titles. The company reported quarterly revenue of 58 billion KRW, representing a 52.3% increase year-over-year but an 11% decline quarter-over-quarter. Operating profit reached 36 billion KRW with an operating margin of 61.3%. While profitability remains robust, the quarter saw a 21% decrease in operating profit compared to the previous period, largely attributed to a decline in revenue from both the Goddess of Victory: Nikke and Stellar Blade franchises.

The financial performance was impacted by a 11.1% increase in operating expenses, which totaled 22.4 billion KRW. This rise was primarily driven by an 11% growth in labor costs, reflecting performance-based incentives and an expanded headcount of 314 employees. Additionally, non-operating losses of 3.7 billion KRW, stemming from foreign exchange fluctuations and one-time IPO-related costs, contributed to a net profit of 23.5 billion KRW for the quarter.

Looking ahead, the company is focused on sustaining long-term IP value through strategic updates and market expansion. Goddess of Victory: Nikke is preparing for a 2025 entry into the Chinese market, while Stellar Blade is slated for a PC platform expansion within 2025, with management anticipating that the PC version may outperform console sales. Development continues on the new title Project Witches, with a target launch window set for after 2027. The company maintains a strategy of diversifying its revenue streams through merchandising and IP licensing, including upcoming adaptations of the Destiny Child intellectual property.