KRAFTON FY2023 Q1 Earnings Release

May, 2023 Investor Relations
1Q 2023 Earnings Results
2023. 5. 9

Financial statements included in this document are consolidated results of KRAFTON, Inc. (the “Company”) and its subsidiaries an d have been
prepared in accordance with K -IFRS.
Financial results and operational performance included herein have been prepared for investors’ convenience only and have not be en audited by an
independent auditor; as such, certain part (s) of this presentation are subject to change, upon completion of the audit revie w.
Company makes no representations as to the accuracy or completeness of the information herein, nor does the Company assume an y d uty to
update any information, given that this presentation has been prepared based on currently available data.
Company shall not have any liability for any loss arising from any use of this presentation or its contents or otherwise aris ing in connection with this
presentation, as this should not be construed to be related to any investment decision making and shall not be used for any l ega l proceedings.
Disclaimer

2023 1Q Results at a Glance
Note: (1) Incubating Projects as of May 2023, (2) Studio acquisitions and minority stake investments to be completed from January t o M ay 2023, (3) Post -IPO studio acquisitions and minority stake investments
Key financial Highlights
Operating Profit Record High Quarterly Revenue Operating Profit Margin
Key performance
PUBG PC/Console Revenue
70% YoY 24 + Projects
Scale -Up the Creative Studio Investments
283.0 bn 538.7 bn 53 %
4 12/(2) (3) (1)

PC / Console
4
PUBG PC/Console Recorded the Highest Ever In -game Revenue with Expanded Traffic and New Monetization Content
User
Engagement
Monetization
Survivor Pass Key Monetizations Map Update Progressive Skin Mode Update Esports Dev Content/Features
2023 Live Service plan
6YEars and 6eyond
Steampunk Bundle Yourshop
2Q
Survivor Pass: The Big Score
Intense BR
Progressive Skin Global Partner Team Skin
Clan System
Map Rotation Update
To be Unveiled in 3Q
3Q
Scheduled in July Arcade Center
Map Update
Progressive Skin Global Partner Team Skin
Gunplay Update
4Q
Progressive Skin PGC Pick’em
Map Update
To be Unveiled in 4Q
Scheduled in 4Q Tutorial Update
New Map

Mobile
5
Solid Mobile Revenue Trend Driven by the Traffic Growth in New Regions and Live Service Content Innovations
“New Diverse Content Tailored to User Engagement Expanded Traffic Inflows in Emerging and Some Key Markets”
5thAnniversary Mode UGC Mode World of Wonder
ROYAL PASS Payload Mode
Bugatti Collaboration
Gold Level Skins
Progressive Skins
Bearbrick Collaboration
New Content Attracting Healthy Traffic Enhanced Monetization with High -quality Content

Scale -Up the Creative
Scale -Up the Future Growth Potential with Transition from a Global Game Company into a Global Publisher
Scale -Up the Creative in 2023 2024 and Beyond
“Strengthen Game Development Process
and Publishing Capabilities”
6
2
Strengthen Game Development Process
More meticulous evaluations, reviews, tests across the entire dev process
3
KRAFTON as a Global Publisher
HQ will focus on discovering creatives,development support, and publishing
1
“Project Pipelines + Minority Investments”
krafton
1PP Black Budget
1PP The Next Subnautica
1PP Project Windless 1PP Project Gold Rush
2PP
2PP
2PP
2PP
2PP
Minority Investments between Jan ~ May 2023
2PP
1PP Project Impact
“Scale -Up Future Growth Potential
with High Quality Games”
10
2021
14
2022
24+
2023~2026
(2) Healthy Communication
between HQ and Creative Studios
Virtual Organization for Each Game Project

7
Project Migaloo
▪ Virtual Friends just like usual friends who play games together
▪
▪ ▪ Programming, art, personal avatars, 3D modeling, game design
Game Development Efficiency
▪ AI/Deep Learning technology applied to develop core
components and content in the open -world
Diffusion Chatbot AI
STT / TTS Reinforcement Learning

1Q23 Financials
Revenue KRW 538.7bn (+13.7% QoQ , +3.0% YoY)
8
Operating Profit KRW 283.0bn (+124.3% QoQ , -10.1% YoY)
Revenue Operating Profit
KRW bn KRW bn KRW bn
Net Profit
Net Profit KRW 267.2bn (Turned to Profit QoQ , +9.0% YoY)
Solid revenue from strong PC revenue and favorable seasonality for mobile, PUBG PC led the growth setting a new record high f or quarterly revenue
Rose QoQ on sound revenue growth leveraging PUBG IP, Increased 12% YoY from 1Q22 OP of 261.7bn when excluding share -based payment expens es
(16.2)
433.7 423.6
523.0
473.8
538.7
(165.4)
Mobile PC Console Etc. Operating Profit OP Margin
Impairment loss of
Intangible Assets
KRW -149.2bn
Net Profit Net Profit Margin

Expense Breakdown
Note: (1) Platform Fees/Cost of Revenue consist of Steam, market commissions, etc, (2) Adj. EBITDA = EBITDA + Share -based payment expenses
• (Personnel) KRW 100.8bn (+59.0% QoQ , -6.9% YoY)
•Declined YoY due to the limited increase in headcount
• (Paid Commissions) KRW 61.6bn (-40.0% QoQ , +10.3% YoY)
• Declined QoQ on falling expenses related to Esports and outsourcing , Rose YoY on higher server and engine costs
Operating Costs KRW 255.7bn (-26.4% QoQ , +22.9% YoY)
9
KRW bn 1Q22 2Q22 3Q22 4Q22 1Q23 QoQ YoY
Operating Costs 208.0 257.7 289.1 347.6 255.7 -26.4% 22.9%
% of Revenue 39.8% 60.8% 66.7% 73.4% 47.5% -25.9%p 7.7%p
Personnel 108.3 94.2 98.9 63.4 100.8 59.0% -6.9%
Platform Fees /Cost of Revenue (1) 51.6 50.1 47.8 57.7 46.7 -19.0% -9.4%
Paid Commissions 55.8 81.5 85.2 102.7 61.6 -40.0% 10.3%
Marketing 17.5 11.3 19.7 81.2 5.1 -93.7% -70.9%
Share -based Payment Expenses (53.2) (8.4) 7.8 (9.7) 10.0 n/a n/a
Others 28.0 29.0 29.7 52.4 31.4 -40.0% 12.3%
Operating Profit 315.0 165.8 144.6 126.2 283.0 124.3% -10.1%
% OP Margin 60.2% 39.2% 33.3% 26.6% 52.5% 25.9%p -7.7%p
Adj. EBITDA (2) 280.5 177.4 174.5 160.3 319.0 99.0% 13.7%
% Adj. EBITDA Margin 53.6% 41.9% 40.2% 33.8% 59.2% 25.4%p 5.6%p

Operating Profit / Adj. EBITDA
• Adj. EBITDA increased 14% YoY, with Adj. EBITDA margin of 59%
Operating Profit KRW 283.0bn (+124.3% QoQ , -10.1% YoY)
Adj. EBITDA KRW 319.0bn (+99.0% QoQ , +13.7% YoY)
Operating Profit
Unit: KRW bn Unit: KRW bn
Adj. EBIDTA (1)
Note: (1) Adj. EBITDA = EBITDA + Share -based payment expenses, (2) Reversal of Share -based payment expenses
Operating Profit OP Margin
333. 7
185.8 170.0
166.7
309.0
10
Share -based payment expenses Adj. EBITDA Margin Adj. EBITDA

Net Profit
Profit Before Income Tax KRW 362.4bn (Turned to Profit QoQ , +8.9% YoY)
Net Profit KRW 267.2bn (Turned to Profit QoQ , +9.0% YoY)
Non -Operating Profit & Profit Before Income Tax
Unit: KRW bn
Net Profit
Unit: KRW bn
11
• Net profit rose QoQ and YoY on increased non -operating profit impacted by low base from impairment of intangible assets in 4Q22 and FX effects, with net profit margin of 50%
Note: (1) Impairment loss of Intangible Assets (KRW -149.2bn)
(16.2)
Impairment loss of
Intangible Assets
KRW -149.2bn
Net Profit Net Profit Margin
(16.2)

Summary of Financial Statements
Consolidated Income Statement Consolidated Statement of Financial Position
12
Note: (1) Including FVPL (Fair Value through Profit or Loss)
(KRW bn) 1Q22 2Q22 3Q22 4Q22 1Q23
Current Assets 3,715.7 3,811.0 3,979.2 3,892.6 4,075.3
Cash and Cash Equivalents (1) 2,913.6 3,079.2 3,261.1 3,125.3 3,216.0
Non -current Assets 2,054.2 2,117.7 2,321.6 2,145.2 2,237.1
Total Assets 5,769.9 5,928.7 6,300.8 6,037.8 6,312.4
Current Liabilities 529.4 434.7 480.6 411.5 398.6
Non -current Liabilities 393.7 416.2 418.5 509.9 513.3
Total Liabilities 923.1 850.8 899.1 921.4 911.9
Paid -in Capital 4.9 4.9 4.9 4.9 4.9
Capital Surplus 1,474.1 1,475.1 1,475.1 1,448.6 1,467.7
Other Components of Equity 155.1 191.1 288.5 190.1 188.0
Retained Earnings 3,212.7 3,406.6 3,633.0 3,467.6 3,735.0
Non -controlling Interests 0.1 0.2 0.2 5.2 4.9
Total Equity 4,846.8 5,077.9 5,401.7 5,116.4 5,400.5
(KRW bn) 1Q22 2Q22 3Q22 4Q22 1Q23
Revenue 523.0 423.6 433.7 473.8 538.7
Operating Costs 208.0 257.7 289.1 347.6 255.7
Operating Profit 315.0 165.8 144.6 126.2 283.0
EBITDA 333.7 185.8 166.7 170.0 309.0
Adj. EBITDA 280.5 177.4 174.5 160.3 319.0
Non -Operating Profit 17.8 94.5 169.1 (349.1) 79.4
Other Income 37.0 101.3 196.2 (49.8) 131.9
Other Expenses 24.3 12.8 35.5 306.0 60.5
Finance Income 6.7 7.5 9.9 9.6 9.9
Finance Expenses 1.6 1.6 1.5 2.8 1.9
Profit Before Income Tax 332.7 260.3 313.7 (222.9) 362.4
Income Tax 84.5 63.0 83.1 (61.9) 95.2
Profit from
Discontinued Operations (3.0) (3.4) (4.2) (4.4) –
Net Profit 245.2 194.0 226.4 (165.4) 267.2

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