KRAFTON FY2024 Q2 Earnings Release

Aug, 2024 2Q & 1H 2024 Earnings Results
2024. 8. 12

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 review.
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 legal proceedings.
Disclaimer
2

1H24
Results
at a
Glance
Revenue KRW 1,372.9 bn
investment
1H FY2024 Revenue Operating Profit
1H FY2024 Revenue
Game Studio Investments during Jan~Aug of FY2024
KRW 642.6 bn
11 Studios
Solid PUBG IP Performance,
Record High Half -year Revenue
Record High Half -year Operating Profit
84% of FY2023 Full -year Operating Profit
Securing Long -term Pipeline by
Discovering Global Original Creatives
Operating
profit
3

4
1H23 1H24
PUBG IP Franchise
Solid Performance on PC and Mobile, Sustaining Growth as a Global Franchise IP
NewJeans Collaboration
4
Erangel Classic Mode Myriam Fares Collaboration Upgradable X -Suit Skin UC Bonus Challenge Cricket Team Collaboration
Key Updates Key Updates Key Updates
Key Performances in 1H24 Key Performances in 1H24 Key Performances in 1H24
1) MAU: Monthly Active User, DAU: Daily Active User 2) PU: Paying User
1H23 1H24
Expansion Strategies
PUBGM • 3 New Languages
• Localized Content
• Growth of BGMI Esports
13 0 %
40 %
40 %
30 %

5
New Games Lineup
Milestones
▪ 3Q24 Global Beta Test and Gamescom Showcase
▪ 4Q24 Global Launch
Global Beta Test
▪ Conducted from August 1 stto August 11 th
▪ Regions in Korea, US, Japan, Türkiye & Expanded to iOS
▪ Non -Combat Content Different from Session -based Games
▪ Improved Combat Experience and User Interface
Genre: Extraction RPG
Platform: Mobile
Milestones
▪ 3Q24 Influencer Test and Gamescom Showcase
▪ Targeting Steam Early Access in 2024
Unique Content
▪ Customization with Gen AI, Creating NPC Dialogues with LLM
▪ Various In -game Events through ‘Community Simulation’
Genre: Life Simulation
Platform: PC (Steam)
Developing With the Fans
▪ Strengthening Fanbase with Direct Communication in Discord
5

6
Investments, 2 nd Party Publishing
6
Total of 27 Investments Until 2024, Diversifying Platform and Genre Acquiring New IP and 2PP
Eschatology Entertainment
Europe
Korea
Australia
Poland
Spain
California
Canada
Washington
North America
5
11 11
2022 2023 2024 1H
(As of Aug 2024)
2024 2H
Creatives Acquired
Japan
Integration of Tango Gameworks Dev Team
• First Game Studio Investment in Japan
• Founded in 2010, acquired by Microsoft in 2021
• Secured sizable development team in Japan
• Survival Horror Game ‘The Evil Within’ series
• Action -Adventure Game ‘Ghostwire: Tokyo’
• Rhythm -Action Genre -defining Game ‘Hi -Fi Rush’

7
India / AI
Localized Marketing and Content, Broadening Esports Discovering New Gameplay With AI Technology
1~2 New Launches for 2H24 Using Reinforced Learning and LLM
x =
“The dialogues with robots are so philosophically and emotionally impressive.” –Steam Review
AI Technology Gameplay New Experience
Speech -to -text
Generative AI
One -of -a-kind
Concept and Story
Combat by
Chanting Spells
and Voice
Command
Language Model
Solving Mysteries
as a Detective
Strong Narratives
Suspect
Interrogation
by Questions,
Conversations
Telugu Movie Marketing
Marketing Campaigns
Advertisement Awards
Hyderabad
Kochi
Gujarat
BMPS 2024
BGIS 2024
New Event
in 2024
Mumbai
BGIS 2023
Ahmedabad
BMPS 2023
Expansion in India as a Future Growth Initiative, and Exploring New Gameplay Through AI
7
“This game is sick. I want to be a magical girl.” –Steam Review

8
Mid – to – Long term Strategy
PUBG IP
Franchise
Expansion
Securing
New IPs with
Franchise
Potential
Product Synergy
▪ New PUBG IP Games in
Various Genres and Platforms
▪ Synergy with Core Product
Fandom Expansion
▪ Expand to Global Fans
▪ Reach New Generations
and Under -teen audiences
In -house Development
▪ Increased Production
▪ Production Efficiency by
Verifying Gameplay and
Marketability
2PP Investments / M&A
▪ Observe and Evaluate IPs
▪ Quick Results based on
Publishing
▪ Growth through Efficient M&A
Aiming Sustainable Growth based on PUBG IP Franchise and Securing Big IPs
+
8
Annual Value
of $10B
Annual Value
of $1B

9
2Q24 & 1H24 Financial Performance

2Q Earnings Summary
(Unit: KRW bn) 2Q 2023 1Q 2024 2Q 2024 QoQ YoY
Revenue 387.1 665.9 707.0 6.2% 82.7%
PC 117.0 243.7 191.3 -21.5% 63.5%
Mobile 244.9 402.3 499.9 24.3% 104.2%
Console 19.0 11.5 8.8 -23.6% -53.9%
Others 6.2 8.4 7.0 -17.2% 14.1%
Operating Expenses 255.6 355.4 374.9 5.5% 46.7%
Operating Profit 131.5 310.5 332.1 7.0% 152.6%
% Margin 34.0% 46.6% 47.0% 0.4%p 13.0%p
Adj. EBITDA 1) 167.7 378.5 394.0 4.1% 134.9%
% Margin 43.3% 56.8% 55.7% -1.1%p 12.4%p
Net Profit 128.5 348.6 341.4 -2.1% 165.7%
% Margin 33.2% 52.4% 48.3% -4.1%p 15.1%p
1) Adj. EBITDA = EBITDA + Share -based Payment Expenses
Operating Profit Revenue Net Profit
10
(Unit: KRW bn) (Unit: KRW bn) (Unit: KRW bn)
Increased 7.0% QoQ and 152.6% YoY based on revenue growth
Revenue KRW 707.0bn
Recorded high quarterly sales for 2 consecutive quarters
based on PUBG IP, increased 6.2% QoQ and 82.7% YoY
Operating Profit KRW 332.1bn
387.1 450.3 534.6
665.9 707.0
2Q23 3Q23 4Q23 1Q24 2Q24
131.5 189.3 164.3
310.5 332.1
2Q23 3Q23 4Q23 1Q24 2Q24
128.5 211.6
(13.2)
348.6 341.4
2Q23 3Q23 4Q23 1Q24 2Q24

117.0 121.3 167.1 243.7 191.3
244.9 309.1 342.7 402.3 499.9 19.0 12.0 17.4
11.5 8.8
6.2 7.9
7.4
8.4 7.0
2Q23 3Q23 4Q23 1Q24 2Q24
PC Mobile Console Others
Revenue Breakdown
(Unit : KRW bn) 2Q 2023 1Q 2024 2Q 2024 QoQ YoY 1H 2023 1H 2024 YoY
Revenue 387.1 665.9 707.0 6.2% 82.7% 925.7 1,372.9 48.3%
PC 117.0 243.7 191.3 -21.5% 63.5% 295.5 435.0 47.2%
Mobile 244.9 402.3 499.9 24.3% 104.2% 593.1 902.2 52.1%
Console 19.0 11.5 8.8 -23.6% -53.9% 26.3 20.3 -22.9%
Others 6.2 8.4 7.0 -17.2% 14.1% 10.8 15.4 41.7%
Revenue
Quarterly Revenue Breakdown (by Platform)
1H24 KRW 1372.9bn (39.4%↑ HoH , 48.3%↑YoY)
1H PC/Console Revenue Proportion
11
387.1 450.3
665.9
534.6
707.0
2Q24 KRW 707.0bn (6.2%↑QoQ, 82.7%↑YoY)
1H Revenue Trend
(Unit: KRW bn) (Unit: KRW bn) (Unit: KRW bn)
17.1% 17.7%
23.2%
34.8% 33.2%
143.8 154.6 194.7 295.5 435.0 19.1 8.0 24.6
26.3
20.3
1H20 1H21 1H22 1H23 1H24
PC 콘솔
951.0 920.0 946.5 925.7
1,372.9
1H20 1H21 1H22 1H23 1H24
162.9 162.6
321.8
219.3
455.3

255.6 261.0
370.2 355.4 374.9
2Q23 3Q23 4Q23 1Q24 2Q24
131.5 189.3 164.3
310.5 332.1
2Q23 3Q23 4Q23 1Q24 2Q24
158.7 197.3 191.4
336.4 358.8 9.1 (19.8) 28.3
42.1 35.2
2Q23 3Q23 4Q23 1Q24 2Q24 조정 EBITDA 주식보상비용
Operating Expenses & Profit
Operating Expenses
Operating Profit
1H24 KRW 730.3bn (15.7%↑ HoH , 42.8%↑YoY)
(Unit : KRW bn) 2Q 2023 1Q 2024 2Q 2024 QoQ YoY 1H 2023 1H 2024 YoY
Operating Expenses 255.6 355.4 374.9 5.5% 46.7% 511.3 730.3 42.8%
Personnel 103.2 121.4 129.6 6.7% 25.6% 204.1 251.0 23.0%
Platform fees / Cost of Revenue 1) 32.2 85.9 77.5 -9.7% 141.0% 78.9 163.4 107.1%
Paid Commissions 70.6 61.3 76.4 24.7% 8.3% 132.1 137.7 4.3%
Marketing 8.7 12.4 21.2 71.2% 145.1% 13.8 33.6 144.7%
Share -based Payment Expenses 9.1 42.1 35.2 -16.4% 288.7% 19.1 77.3 304.9%
Others 31.8 32.3 35.0 8.4% 10.1% 63.3 67.3 6.3%
Operating Profit 131.5 310.5 332.1 7.0% 152.6% 414.5 642.6 55.0%
% margin 34.0% 46.6% 47.0% 0.4%p 13.0%p 44.8% 46.8% 2.0%p
Adj. EBITDA 2) 167.7 378.5 394.0 4.1% 134.9% 486.7 772.5 58.7%
% margin 43.3% 56.8% 55.7% -1.1%p 12.4%p 52.6% 56.3% 3.7%p
Adj. EBITDA
Operating Profit
167.7
378.5
12
394. 0
219.7
Increased 5.5% QoQ, 46.7% YoY due to rise in personnel,
paid commissions and marketing expenses
Operating Expenses
(Unit: KRW bn) (Unit: KRW bn) (Unit: KRW bn)
2Q24 KRW 374.9bn (5.5%↑QoQ, 46.7%↑YoY)
1H24 KRW 642.6bn (81.7%↑ HoH , 55.0%↑YoY)
Increased 7.0% QoQ, 152.6% YoY based on revenue growth
2Q24 KRW 332.1bn (7.0%↑QoQ, 152.6%↑YoY)
217.0
3)
1) Platform fees / Cost of Revenue consist of Steam, market commissions, etc.2) Adj. EBITDA = EBITDA + Share -based Payment Expenses 3) Reversal of Share -based Payment Expenses

128.5 211.6
(13.2)
348.6 341.4
2Q23 3Q23 4Q23 1Q24 2Q24
159.5
280.4
26.3
465.3 458.1
2Q23 3Q23 4Q23 1Q24 2Q24
28.0 91.2
(138.1)
154.8 126.0
2Q23 3Q23 4Q23 1Q24 2Q24
Net Profit
Net Profit
Profit before Income Tax
1H24 KRW 690.0bn (247.9%↑ HoH , 74.4%↑YoY)
(KRW bn) 2Q 2023 1Q 2024 2Q 2024 QoQ YoY 1H 2023 1H 2024 YoY
Non -Operating Profit 28.0 154.8 126.0 -18.6% 349.2% 107.4 280.8 161.3%
Non -Operating Income 85.3 189.6 144.1 -24. 0% 68. 9% 227.1 333.7 46.9%
Other Income 74.0 180.7 134.8 -25. 4% 82.1 % 206.0 315.5 53.2%
Finance Income 11.3 8.9 9.3 4.2% -17.6% 21.1 18.2 -13.8%
Non -Operating Expense 57.3 34.8 18.1 -47.9 % -68.3 % 119.7 52.9 -55.8%
Other Expenses 54.9 32.5 15.7 -51.7 % -71.4 % 115.4 48.2 -58.2%
Finance Expenses 2.4 2.3 2.4 6.6% 3.5% 4.3 4.7 10.4%
Profit Before Income Tax 159.5 465.3 458.1 -1.6 % 187.2 % 521.9 923.4 76.9%
Income Tax 31.0 116.7 116.7 -0.0 % 276.5 % 126.2 233.4 84.9%
Net Profit 128.5 348.6 341.4 -2.1 % 165.7 % 395.7 690.0 74.4%
% Margin 33.2% 52.4% 48.3% -4.1%p 15.1%p 42.7% 50.3% 7.6%p
Net Profit
13
Declined 2.1% QoQ and increased 165.7% YoY due to
FX related gains
Non -Operating Profit
(Unit: KRW bn) (Unit: KRW bn) (Unit: KRW bn)
2Q24 KRW 341.4bn (2.1%↓QoQ, 165.7%↑YoY)

14
Q&A

(KRW bn ) 2023 2024
1Q 2Q 1H 1Q 2Q 1H
Revenue 538.7 387.1 925.8 665.9 707.0 1,372.9
Operating Costs 255.7 255.6 511.3 355.4 374.9 730.3
Operating Profits 283.0 131.5 414.5 310.5 332.1 642.6
EBITDA 309.0 158.7 467.7 336.4 358.8 695.2
Adj. EBITDA 1) 319.0 167.7 486.7 378.5 394.0 772.5
Non -Operating Profit 79.4 28.0 107.4 154.8 126.0 280.8
Other Income 131.9 74.0 206.0 180.7 134.8 315.5
Other Expenses 60.5 54.9 115.4 32.5 15.7 48.2
Finance Income 9.9 11.3 21.2 8.9 9.3 18.2
Finance Expenses 1.9 2.4 4.3 2.3 2.4 4.7
Profit Before Income Tax 362.4 159.5 521.9 465.3 458.1 923.4
Income Tax 95.2 31.0 126.2 116.7 116.7 233.4
Net Profit 267.2 128.5 395.7 348.6 341.4 690.0
Summary of Financial Statements
Consolidated Income Statement
1) Including FVPL (Fair Value through Profit or Loss) 15
Consolidated Statement of Financial Position
(KRW bn ) 2023 년 2Q 2024
Assets
Current Assets 3,964.4 4,436.5
Cash and Cash Equivalents 1) 3,061.4 3,333.2
Others 903.0 1,103.3
Non -current Assets 2,476.0 2,710.0
Property and equipment 257.0 255.0
Intangibles 607.8 641.8
Investment in Associates 571.3 616.0
Others 1,039.9 1,197.2
Total Assets 6,440.4 7,146.5
Liabilities
Current Liabilities 520.7 685.9
Non -current Liabilities 360.9 365.2
Total Liabilities 881.6 1,051.1
Equity
Shareholders’ equity 5,554.4 6,092.8
Paid -in Capital 4.9 4.9
Capital Surplus 1,472.0 1,473.9
Other Components of Equity 182.5 146.7
Retained Earnings 3,895.0 4,467.3
Non -controlling Interests 4.4 2.6
Total Equity 5,558.8 6,095.4

WHY We believe games will become the world’s most powerful medium .
HOW
Based on our creativity , steadfast dedication toward new challenges and
technological development ,
What
We will further expand our original IPs and build immersive, virtual worlds ,
where our fans play together and share fun moments.
We will meet everyone in the world we are building.
Our Vision
16