KRAFTON FY2023 Q2 Earnings Release

Aug, 2023 Investor Relations
2Q 2023 Earnings Results
2023. 8. 9

Financial statements included in this document are consolidated results of KRAFTON, Inc. (the “Company”) and its subsidiariesand 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 been 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 any 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 arising 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 egal proceedings.
Disclaimer

2023 2Q Results at a Glance
Note: (1) Service resumed on May 29, 2023 after a 10- month suspension from July 28, 2022 (2) Studio acquisitions and minority stake in vestments to be completed from January to May 2023, (3) Post-IPO studio acquisitions and minority stake investments
Key financial Highlights
Operating Profit Revenue Operating Profit Margin
Key performance
3
PUBG PC Revenue
YoY 35%↑ May 29 th
Resumed Service 4tudio InWestments
131.5 bn 387.1 bn
715
/(2)
(3)
(1)
34 % KRW KRW

PC / Console
4
PUBG PC/Console Maintaining Sustainable Global Live Service with Diverse Updates and Improved Monetization
Enhancing In & Out Game Experience under F2P + No P2W Key Live Service Content for 3Q23
Tactical Gears Renewal New Arcade Mode:
BluebombRush
Progressive Skin: Deadly Dollhouse SLR Survivor Pass: The Big Score Aston Martin & Seasonal
Workshop Street Fighter 6 Collaboration
New Weapon Dragunov Miramar Map Sub Update

Mobile
5
PUBGM Generating Solid Traffic and Revenue Led by Growth in New Regions, BGMI Revenue Contribution Expected in 2H23
Live Service Expanding Traffic and Revenue IP Collaborations and Revamping Service in India
New Pass System RP A Series Dinoground
Mode
Karol G Collaboration Skin & Voice Pack X
-Suit Upgrade Skin Dragon Ball Collaboration Skins & Mode
India BGIS 2023 Esports Tournament
Aston Martin Vehicle Skins BGMI Login Event

Scale-Up the Creative
Scale -Up the Future Growth Potential with Transition from a Global Game Company into a Global Publisher
6
Note: (1) To be completed in August 2023 (2) Incubating projects as of August 2023
“High Quality Games to
Scale -Up Future Growth Potential”
10
2021
14
2022
24+
2023~2026
Games to be Launched (2)
Vector North
(ame 4tudio InWestments in 2023 +2 in progress
(1)
1. Publishing Accountability
Studio/Project supervised by Champions
Virtual Organization System
2. Publishing Organization
Publishing by HQ (1PP & 2PP)
Restructuring to strengthen 2PP
3. Discovering New Creative
6
“The Creative”
Team of max 30 developers
Soft Launch in 1.5 years Expand Minority Investments
Securing additional 2PP Titles

Beyond Game
7
Focusing on Enhancing Efficiency in Game Development and Discovering New Gameplay Through AI and Deep Learning
Deep Learning R&D Objectives and Core Technologies Project Migaloo
 Deep Learning/AI technology applied to develop core
open-world features and content
 Content creation and distribution using sandbox tools
TTS Language Model
& Chatbot
Image Generation 3D Avatar & Animation
① Game Dev Efficiency ②
New Gameplay

2Q223Q224Q221Q232Q23
영업이익 영업이익률
165.8
144.6126.2 283.0
88.6 131.1 139.1
178.5
117.0
319.7
282.4 254.7
348.2
244.9
9.6
11.7 67.7
7.2
19.0 5.7 8.4
12.2 4.8
6.1
0 .0
100.0
200.0 300.0
400.0
500.0
600.0
2Q22
3Q224Q221Q232Q23
PC 모바일 콘솔 기타
2Q23 Financials
8
Net Profit
Revenue
KRW bn
KRW bn KRW bn
Operating Profit
Revenue
Operating
Profit
423.6 433.7 473.8538.7
387.1
131.5
39%33%27% 53%
34%
QoQ
decline from stabilized revenue in 2Q23
Net Profit
194.0 226.4
(165.4) 267.2
128.5
46%
52%
-35% 50% 33%
2Q22
3Q224Q221Q232Q23
당기순이익 당기순이익률
Impairment loss
of Intangible Assets
KRW -149.2bn
Revenue stabilized due to seasonality and major content updates concentrated in 2H23
KRW 387.1bn (-28.2% QoQ, -8.6% YoY)
KRW 131.5bn (-53.5% QoQ, -20.7% YoY)
KRW 128.5bn (-51.9% QoQ, -33.7% YoY)
Mobile PC Console Etc. Operating Profit OP Margin 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
9
KRW bn
2Q223Q224Q221Q232Q23 QoQYoY
Operating Costs
257.7 289.1 347.6 255.7 255.6 -0.0% -0.8%
% of Revenue
60.8% 66.7%73.4%47.5%66.0%18.5%p 5.2%p
Personnel
94.2 98.9 63.4 100.8 103.2 2.4%9.6%
Platform Fees /Cost of Revenue
(1) 50.1 47.8 57.7 46.7 32.2 -31.2% -35.8%
Paid Commissions 81.5 85.2 102.7 61.6 70.6 14.6% -13.5%
Marketing 11.3 19.7 81.2 5.1 8.7 70.5% -23.3%
Share -based Payment Expenses
(8.4)7.8 (9.7) 10.0 9.1 -9.8% N/M
Others 29.0 29.7 52.4 31.4 31.9 1.5%10.0%
Operating Profit
165.8 144.6 126.2 283.0 131.5 -53.5% -20.7%
% OP Margin
39.2% 33.3%26.6%52.5%34.0%-18.5%p -5.2%p
Adj. EBITDA (2) 177.4 174.5 160.3 319.0 167.7 -47.4% -5.4%
% Adj. EBITDA Margin
41.9% 40.2%33.8%59.2%43.3%-15.9%p 1.5%p
• (Personnel) 2Q23 +2.4% QoQ, +9.6% YoY
• Increased QoQand YoY due to increase in headcount
• (Paid Commissions) 2Q23 +14.6% QoQ, -13.5% YoY
• Increased QoQon expenses related to PGS1 Esports event, decreased YoY from BGMI service suspension
Operating Costs KRW 255.6bn (-0.0% QoQ, -0.8% YoY)

Adj. EBIDTA (1)
Operating Profit / Adj. EBITDA
10
Note: (1) Adj. EBITDA = EBITDA + Share -based payment expenses, (2) Reversal of Share- based payment expenses
• 2Q23 Adj. EBITDA decreased 5% YoY, with Adj. EBITDA margin of 43%
165.8
144.6
126.2 283.0
131.5
39%
33%
27%53% 34%
2Q22
3Q224Q221Q232Q23
영업이익 영업이익률
Operating Profit
177.4 174.5
160.3 319.0
167.7
(8.4)
7.8
(9.7) 10.0
9.1
42%
40%
34%59%
43%
2Q22
3Q224Q221Q232Q23
조정 EBITDA 주식보상비용 조정 EBITDA 마진
185.8
166.7170.0
309.0
(2)
(2)
158.6
Operating ProfitKRW 131.5bn (-53.5% QoQ, -20.7% YoY)
Adj. EBITDA KRW 167.7bn (-47.4% QoQ, -5.4% YoY)
Unit: KRW bn Unit: KRW bn
Operating Profit OP Margin Share
-based
payment expenses Adj. EBITDA Margin Adj. EBITDA

Net Profit
11
Note: (1) Impairment loss of Intangible Assets (KRW -149.2bn )
(2) Gains and Losses on Valuation using equity method included in other income and expense
구분 2Q223Q224Q221Q232Q23
Non -operating Profit 94.5 169.1(349.1) 79.428.0
Non-Operating Income 108.9 206.1(40.2) 141.8 85.3
Other Income 101.3196.2(49.8) 131.9 74.0
Finance Income 7.59.99.69.911.3
Non-Operating Expense 14.4 37.0308.9 62.457.3
Other Expense 12.835.5306.0 (1) 60.5 54.9
Finance Expense 1.6 1.52.81.92.3
Profit Before Income Tax 260.3 313.7(222.9) 362.4159.5
Non-Operating Profit & Profit Before Income Tax Net Profit
194.0 226.4
(165.4) 267.2
128.5
46%
52%
-35% 50% 33%
2Q22
3Q224Q221Q232Q23
당기순이익 당기순이익률
• 2Q23 Net Profit decreased YoY due to decreased Operating Profit and FX effects impacting Non -operating Profit
Profit Before Income Tax KRW 159.5bn (-56.0% QoQ, -38.7% YoY)
Net Profit KRW 128.5bn (-51.9% QoQ, -33.7% YoY)
Unit: KRW bn
Unit: KRW bn
Impairment loss of
Intangible Assets KRW -149.2bn
Net Profit Net Profit Margin

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