KRAFTON FY2023 Q3 Earnings Release

Nov, 2022 Investor Relations
3Q 2023 Earnings Results
2023. 11. 7

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 3Q Results at a Glance
Note: (1) Cumulative revenue up to 3Q23 / Total annual revenue for FY2022, (2) Full quarter comparison between 3Q23 MAU and 2Q22 MAU, just before the suspension sinc e July 28, 2022
(3) Studio acquisitions and minority stake investments to be completed from January to November 2023 , (4) Post -IPO studio acquisitions and minority stake investments
Key financial Highlights
Operating Profit Revenue Net Profit
Key performance
3
PUBG PC
Revenue up to 3Q23 / FY2022
98%
BGMI MAU
Compared to Pre -Ban Period Game Studio Investments
189.3 bn 450.3 bn
Since IPO 21
FY2023 13 (3)
(4)
211.6 bn
19%↑ (2)
(1)
KRW KRW
KRW

PC / Console
4
PUBG PC/Console Continues to Grow following F2P Transition, with Stable Live Service and New Game Experience
Live Service Updates by Communications with Users Strong Traffic and Revenue for 4Q with New Map and Skins
Erangel Map Update New Weapon
Dragunov
New PvEArcade Mode PUBG Dev Team Live Talk New 8x8km Map “Rondo”
Four Progressive Weapon Skins with Chroma

Mobile
5
Stable Traffic and Revenue from Growth in New Regions and Enhanced Monetization, Successful Resumption of BGMI
Global IP Collaborations and Premium Skins Themed Modes and India Marketing Campaign for 4Q
DragonballIP Collaboration Mode Premium X
-Suit Skins
Bi -monthly Pass System RP A Series Esports Event
BGIS 2023 Local Content for India
Enhanced Features for Popular Skins
Zombie’s Edge Themed Mode Winter Festival Themed Mode

New Games for FY2024 – Dark and Darker Mobile
Genre and Launch Schedule
 Mobile Extraction RPG developed by Bluehole Studio
 Global Launch Targeting 1H24
Gameplay Features
 Combination of Medieval Fantasy RPG, Battle Royale, Dungeon Crawler
 Explore Dungeons, Combat Monsters and Other Players to Find
Treasures and Escape
 Aiming to Secure a Leading Position in Mobile Extraction Genre
6

New Games for FY2024 – Project inZOI
Genre and Launch Schedule
 Life Simulation Game developed by KRAFTON
 Global Launch Targeting 2H24
Gameplay Features
 Experiencing the Life Players have Dreamed of
 Realistic and Immersive Gameplay based on UE5
 Players Feeling the Emotions of Life in their Own Stories
7

Scale-Up the Creative
Scale-Up the Future Growth Potential with Transition from a Global Game Company into a Global Publisher
8
Note: (1) Studio acquisitions and minority stake investments to be completed from January to November 2023, (2) Incubating projects as of November 2023, and actual games launched from 2021 to 2023 including two to be launched in 4Q23
8
Established Flyway Games
• KRAFTON’s 12 thGame Studio
• 5 Internal Projects in Development
• Soft Launch Starting from FY2024
• 13 Investments in FY2023 (1)
• Secure IPs and Strengthen Pipeline
“High Quality Games to Scale -Up Future Growth”
4
2021
Multiple Launch of both Major Titles and Creative Games Annually 2022
32+
2024~2026
Project Black Budget
• Extraction Shooter
• PUBG Studios
• Targeting Launch in 2H24
The Next Subnautica
• Adventure / Survival
• Unknown Worlds
• Targeting Launch in 1H25
Project Gold Rush
• Action -Adventure Sandbox
• Vector North
• Targeting Launch in 1H25
Major Pipeline Titles Discovering New Creatives Total Games to be Launched (2)
4
2023 5
•
Dark and Darker Mobile (2024)
• Project inZOI(2024)
• Project Black Budget (2024)
• The Next Subnautica (2025)
• Project Gold Rush (2025)
• Project Windless (2026)
• 7+ 2PP Projects (2024~)
Minority Investments in Global Studios

131.1 139.1 178.5
117.0 121.3
282.4 254.7 348.2
244.9 309.1
11.7 67.7 7.2
19.0 12.0 8.4
12.2 4.8
6.1 7.9
0 .0
100.0
200.0 300.0
400.0
500.0
600.0
3Q22
4Q221Q232Q233Q23
PC Mobile Console Others
3Q23 Financials
9
Net Profit
Revenue
KRW bn
KRW bn KRW bn
Operating Profit
Revenue
KRW 450.3bn (QoQ +16.3%, YoY +3.8%)
Operating Profit KRW 189.3bn (QoQ +44.0%, YoY +30.9%)
433.7 473.8 538.7 450.3
Growth in Operating Profit Driven by Mobile Revenue Expansion and Sustaining Efficient Cost Management
Net Profit
KRW 211.6bn (QoQ +64.6%, YoY -6.6%)
Revenue increased due to BGMI Service Resumption and PUBG Mobile Growth
387.1
144.6
126.2 283.0
131.5
189.3
33% 27%53%
34%
42%
3Q22 4Q221Q232Q233Q23
Operating Profit Operating Margin
226.4
(165.4) 267.2
128.5 211.6
52%
-35% 50%
33% 47%
3Q22 4Q221Q232Q233Q23
Net Profit Net Profit Margin
Impairment loss of
Intangible Assets – 149.2bn

Expense Breakdown
Note: (1) Platform fees / Cost of Revenue consist of Steam, market commissions, etc. (2) Adj. EBITDA = EBITDA + Share -based payment expenses
10
KRW bn 3Q224Q221Q232Q233Q23 QoQYoY
Operating Costs 289.1 347.6 255.7 255.6 261.0 2.1%-9.7%
% of Revenue
66.7%73.4%47.5%66.0%58.0%-8.1%p -8.7%p
Personnel
98.9 63.4 100.8 103.2 102.3 -0.9% 3.5%
Platform fees / Cost of Revenue
(1) 47.8 57.7 46.7 32.2 59.986.4% 25.5%
Paid Commissions 85.2 102.7 61.6 70.6 64.9-8.1% -23.9%
Marketing 19.7 81.2 5.1 8.7 18.1 108.3% -8.4%
Share -based payment expenses
7.8 (9.7) 10.0 9.1 (19.8) N/MN/M
Others 29.7 52.4 31.4 31.9 35.6 11.7% 19.9%
Operating Profit 144.6 126.2 283.0 131.5 189.3 44.0% 30.9%
% Margin
33.3%26.6%52.5%34.0%42.0%8.1%p 8.7%p
Adj. EBITDA (2) 174.5 160.3 319.0 167.7 197.317.6% 13.1%
% Margin
40.2%33.8%59.2%43.3%43.8%0.5%p 3.6%p
• (Personnel) 3Q23 QoQ-0.9%, YoY +3.5%
Increased YoY due to increase in Headcount
• (Paid Commissions) 3Q23 QoQ-8.1%, YoY -23.9%
• Decreased QoQand YoY Due to decrease in Outsourcing Costs Following Completion of TCP Development
Operating Costs KRW 261.0bn (QoQ +2.1%, YoY -9.7%)

Adj. EBIDTA (1)
Operating Profit / Adj. EBITDA
11
Note: (1) Adj. EBITDA = EBITDA + Share -based payment expenses, (2) Reversal of Share-based payment expenses
Operating Profit
KRW bn KRW bn
144.6
126.2 283.0
131.5
189.3
33% 27%53%
34%
42%
3Q22 4Q221Q232Q233Q23
Operating Profit Operating Margin
174.5
160.3 319.0
167.7
197.3 7.8 (9.7) (2)
10.0
9.1 (
19.8 )
(2)
40%
34%59%
43% 44%
3Q22 4Q221Q232Q233Q23
Adj. EBITDA Share-based Payment Expenses Adj. EBIDTA Margin
• 3Q23 Adj. EBITDA increased 13% YoY, with Adj. EBITDA Margin of 44%
Operating Profit KRW 189.3bn ( QoQ +44.0%, YoY +30.9%)
Adj. EBITDA KRW 197.3bn (QoQ +17.6%, YoY +13.1%)
166.7 170.0
309.0
158.7 217.0

Net Profit
12
Note: (1) Impairment loss of Intangible Asset ( -149.2bn)
(2) Gains and Losses on Valuation using equity method included in other income and expense
구분 3Q224Q221Q232Q233Q23
Non -Operating Profit
169.1 (349.1) 79.4 28.0 91.2
Non -Operating Income
206.1 (40.2) 141.8 85.3 103.3
Other Income
(2) 196.2 (49.8) 131.9 74.0 94.7
Finance Income 9.9
9.6 9.9 11.3 8.6
Non-Operating
Expense 37.0 308.9 62.4 57.3 12.1
Other Expenses
(2) 35.5 306.0 (1) 60.5 54.9 9.8
Finance Expenses 1.5
2.8 1.9 2.3 2.3
Profit Before Tax 313.7 (222.9) 362.4 159.5 280.4
• 3Q23 Net Profit increased QoQdue to FX effects impacting Non -operating Profit
Profit Before Tax KRW 280.4bn (QoQ +75.8%, YoY -10.6%)
Net Profit KRW 211.6bn (QoQ +64.6%, YoY -6.6%)
Non -operating Profit & Profit Before Tax Net Profit
KRW bn KRW bn
226.4
(165.4) 267.2
128.5 211.6
52%
-35% 50%
33% 47%
3Q22 4Q221Q232Q233Q23
Net Profit Net Profit Margin
Impairment loss of
Intangible Assets – 149.2bn

Summary of Financial Statements
Consolidated Income StatementConsolidated Statement of Financial Position
13
Note: (1) Including FVPL (Fair Value through Profit or Loss)
(KRW bn) 3Q224Q221Q232Q233Q23
Current Assets 3,979.2 3,892.6
4,075.3 4,006.8 4,192.3
Cash and Cash
Equivalents
(1) 3,261.1 3,125.3 3,216.0 3,054.1 3,243.1
Non -current Assets
2,321.6 2,145.2
2,237.1 2,391.1 2,477.6
Total Assets 6,300.8 6,037.8
6,312.4 6,398.0 6,669.9
Current Liabilities 480.6 411.5
398.6 492.6 529.6
Non -current
Liabilities 418.5
509.9
513.3 523.4 529.6
Total Liabilities 899.1 921.4
911.9 1,016.0 1,059.2
Paid -in Capital
4.9 4.9
4.9 4.9 4.9
Capital Surplus 1,475.1 1,448.6
1,467.7 1,470.1 1,470.3
Other Components
of Equity 288.5
190.1
188.0 206.6 223.5
Retained Earnings 3,633.0 3,467.6
3,735.0 3,695.8 3,907.8
Non -controlling
Interests 0.2
5.2
4.9 4.5 4.2
Total Equity 5,401.7 5,116.4
5,400.5 5,382.0 5,610.7
KRW bn 3Q224Q221Q232Q233Q23
Revenue 433.7 473.8 538.7 387.1 450.3
Operating Costs 289.1 347.6
255.7 255.6 261.0
Operating Profit 144.6 126.2 283.0 131.5 189.3
EBITDA 166.7 170.0
309.0 158.7 217.0
Adj. EBITDA
174.5 160.3 319.0 167.7 197.3
Non -Operating Profit
169.1 (349.1)
79.4 28.0 91.2
Other Income 196.2 (49.8)
131.9 74.0 94.7
Other Expenses 35.5 306.0
60.5 54.9 9.8
Finance Income 9.9 9.6
9.9 11.3 8.6
Finance Expenses 1.5 2.8
1.9 2.3 2.3
Profit Before Tax 313.7 (222.9) 362.4 159.5 280.4
Tax Expenses 83.1 (61.9)
95.2 31.0 68.9
Profit from
Discontinued
Operations (4.2)
(4.4) —
Net Profit 226.4 (165.4) 267.2 128.5 211.6

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